Welcome

Punching In: Big Rules Await Walsh at DOL If He Gets Senate Nod

March 1, 2021, 10:32 AM

Monday morning musings for workplace watchers

Walsh’s Priorities | Getting Social | Wage Floor Action

Ben Penn: This is shaping up as the week that Marty Walsh may shed the Boston mayor title and replace it with U.S. labor secretary. If the Senate can find room in a packed schedule to give Walsh a floor vote, he’s very likely to get easy confirmation with bipartisan support, and could be sworn in to lead the U.S. Labor Department by Friday.

Don’t expect Washington to grant Walsh much of a honeymoon period while getting accustomed to his first federal government job. He’d need to immediately weigh in on rulemaking if OSHA determines by President Joe Biden’s March 15 deadline that an emergency temporary standard protecting workers from Covid-19 is necessary.

If confirmed, Walsh would spend his initial weeks in office actively meeting with stakeholders from the business and worker advocacy communities, a source close to the mayor said. Industry lobbyists plan to use these introductory talks as a chance to caution him that an overly stringent Occupational Safety and Health Administration standard would hamper economic recovery—possibly leading Walsh to tweak the final product to make it less burdensome for employers.

Organized labor leaders will have other ideas in mind when they have Walsh’s ear, and the White House has made stronger enforcement of worker safety from the virus a key priority. So the idea of Walsh embracing a less-onerous standard is probably a business-lobby pipe dream. Still, the outcome serves as an early test of Walsh’s commitment to building consensus around DOL actions.

Here’s another regulatory fight he’d inherit: the management bar’s desire for DOL to implement Trump’s 11th-hour final rule that would smooth businesses’ ability to classify workers as independent contractors rather than employees.

Assuming DOL’s Wage and Hour Division adheres to its playbook for postponing the tip credit regulation last week, the agency would finalize this week a proposal to similarly delay by 60 days the effective date of the independent contractor rule, giving the Biden administration more time to figure out how to kill it.

If that’s the route they take, business groups are preparing to file a legal challenge asking a judge to declare the delay a violation of the Administrative Procedure Act, said three sources familiar with the plans.

This won’t come as a surprise to the department, as management groups submitted public comments last week on the proposed delay in which they teed up various potential litigation arguments, such as a claim that 19 days to weigh in on it was insufficient.

I won’t hazard a guess as to whether a lawsuit would succeed in requiring the department to maintain Trump DOL’s original effective date of March 8. But one thing is clear: The Biden DOL will have a different and narrower interpretation of which workers qualify as independent contractors. The question is how long it takes and through what mechanism the new administration cements that view into policy.

Also read: Marty Walsh’s Story Gives Him an Edge in Biden Labor Messaging

Austin R. Ramsey: Guidance the Labor Department issued earlier this year to help retirement plan administrators reduce the number of missing participants has come under fire for what some benefits attorneys say is unnecessary exposure to cybersecurity threats and identity theft.

Attorneys are seeking clarity on the Employee Benefits Security Administration’s best-practices memo that recommends plan administrators use social media sites to locate missing participants and maintain census information on plan populations.

That advice didn’t sit well with Angel Garrett, a director at Trucker Huss employee benefits law firm in San Francisco.

“I would not tell a plan fiduciary or an adviser to solely rely on social media for finding missing participants,” she said. “There are so many potential security breaches that can happen online, and these are people’s benefits that we’re talking about.”

EBSA also recommended publishing lists of missing participants on company intranet networks or emailing notices to existing employees. Garrett said that, too, opens the door for an invasion of privacy or even possible benefits theft. She recommended plan administrators put in place security protocols before they begin seeking out missing participants online.

The DOL counts participants or beneficiaries as missing when they fail to apply for benefits at retirement and don’t respond to plan communications. The department has been conducting sweeping audits nationwide since 2017 to ensure plan administrators are fulfilling their obligation to deliver plan benefits. Last fiscal year, EBSA investigators connected more than 29,000 formerly missing or unresponsive participants with more than $1.5 billion, according to the DOL.

Several attorneys said they were concerned the department is being too cavalier with social media, introducing the possibility that sensitive plan information could get in the wrong hands.

“When you reach out to contact somebody through social media, you could be contacting the wrong person,” said Kendra L. Roberson, of counsel at Covington & Burling in Washington. “Besides, participants probably wouldn’t be expecting you to contact them through social media anyway. So they might not respond just because they might think that it’s some sort of a scam.”

A DOL spokesperson said the department believes social media provides ways to remain in contact or to locate participants without sacrificing fiduciary duties to ensure confidentiality and protect personal information.

Also read: Federal Muddle Hinders Reunion of Workers With Retirement Cash

Chris Marr: The battle over a nationwide $15 minimum wage has captured a lion’s share of headlines lately, but smaller skirmishes are being fought in statehouses including Delaware, Florida, and Rhode Island.

A plan from Biden and congressional Democrats to increase the hourly wage floor to $15 nationwide might prove to be out of reach politically, especially after the Senate parliamentarian’s ruling blocked it from the reconciliation process that Democrats are using to advance the $1.9 trillion stimulus package. Senators are considering other options, such as a tax penalty on big businesses that pay less than $15 hourly.

The headwinds for a federal proposal could leave the near-term action on minimum wage to states and cities, where it’s been since the last federal increase in 2009.

Lawmakers in Biden’s home state of Delaware are expected to consider a bill this year to gradually raise the state’s minimum wage to $15 by 2026, up from $9.25 now. The state’s Democratic-majority legislature has considered and stopped short of the $15 proposal in prior sessions, but advocates for higher wages could have newfound political clout with the president pressing for a $15 minimum, too.

“I think there’ll be some definite political momentum there,” said Tim Goodrich, executive director of state government relations at the National Federation of Independent Business, which opposes higher minimum wages and plans to fight the Delaware proposal.

Legislation to increase Rhode Island’s minimum wage to $15 by 2025 has passed the state Senate and is awaiting consideration by the House. The state’s wage floor stands at $11.50 per hour.

Hawaii lawmakers, as in past sessions, are showing reluctance to pull the trigger on a $15 minimum wage law this year, considering a $12 minimum instead. Vermont’s legislature also is revisiting a possible $15 wage floor this year, after the Democratic-majority House and Senate narrowly overrode Republican Gov. Phil Scott’s veto of a smaller increase last year.

In Florida, a Republican-majority legislature is considering a proposal that swings in the opposite direction—potentially reining in the scope of a new voter-approved constitutional amendment to phase in a $15 minimum wage by 2026. The measure, which is also a proposed constitutional amendment that would need voter approval if lawmakers pass it, would allow employers to pay a lower minimum wage to prisoners, workers younger than 21, and others considered “hard to hire.”

To date, nine states plus the District of Columbia have enacted laws that call for a gradually phased-in $15 minimum wage. That includes Florida and Virginia, where state lawmakers passed it in early 2020 but with a provision that calls for a pause at $12 and another legislative vote on continuing to $15.

Also read: Pioneering Biden Economist Draws on Data and $2.13-an-Hour Past

We’re punching out. Daily Labor Report subscribers, please check in for updates during the week, and feel free to reach out to us.

To contact the reporters on this story: Ben Penn in Washington at bpenn@bloomberglaw.com; Austin R. Ramsey in Washington at aramsey@bloombergindustry.com; Chris Marr in Atlanta at cmarr@bloomberglaw.com

To contact the editors responsible for this story: Martha Mueller Neff at mmuellerneff@bloomberglaw.com; Andrew Harris at aharris@bloomberglaw.com

To read more articles log in. To learn more about a subscription click here.