Many of the Cabinet nominees made by President Biden are veterans of the Obama Administration. The management community is always interested in who is running the Department of Labor (DOL), and the appointment of Boston Mayor Marty Walls is relatively uncontroversial. Walls is an old friend of the President and, like the President, has a reputation as a pragmatist and consensus-builder. He comes from the building trades that are perhaps the most moderate of all labor unions, and indeed, many of the leaders of the building trades are privately Republican-oriented.
On Inauguration Day, President Biden is expected to issue a memorandum to the heads of all executive departments and agencies temporarily halting all non-emergency rule-making activities that are not yet official. The process of rolling back already effective regulations generally requires either a new rule-making effort or a resolution of disapproval under the Congressional Review Act for recently-issued rules. Efforts were made by the Trump Administration to issue new regulations in a manner it to be harder to overturn them, but the surprise election results in Georgia affect the future of these "midnight regulations."
By far the most important of these "midnight regulations" is the DOL rule making it easier for businesses to classify workers as independent contractors rather than employees entitled to overtime and minimum wage protections. This rule was published in the Federal Register on January 7, 2021. This rule adopts a simpler and shorter test for when a worker may be legally classified as an independent contractor. President-Elect Biden's press secretary has already cited this regulation as one of the "midnight rules" that the new Administration will likely try to keep from taking effect. The new rule proposes five factors to determine whether a worker is economically dependent on an employer and thus an employee. The two factors given the greatest weight are the nature and degree of an employer's control over the work and the worker's opportunity for profit and loss based on personal initiative or investment.
The new administration may either try to delay the new rule or use the Congressional Review Act to overturn it. This law allows the Senate and House of Representatives to overturn regulations finalized by the Executive Branch in the previous 60 legislative days using a fast-track process that requires a simple majority vote.
This is part of our February 2021 Newsletter.
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