GrayRobinson Labor & Employment E-lert: The Biden Administration Delays the Trump DOL's Independent Contractor Rule and Other Recent Reversals Impacting Employers

By: Matthew A. Bowles, Associate

Tampa, Fla. –  March 9, 2021 – On March 2, 2021, the DOL delayed the effective date of its new independent contractor rule from the original March 8, 2021 date to May 7, 2021. The DOL finalized the new rule in the final days leading up to President Biden’s inauguration. For those accustomed to the whiplash effect that a new administration can have on labor and employment law, the delay of the independent contractor rule does not come as a surprise. In particular, the independent contractor rule benefits employers which drew the disapproval of pro-employee organizations. The DOL specifically expressed its intent to evaluate the rule in order to determine whether the rule aligns with “the FLSA’s purpose . . . to broadly cover workers as employees.”  The DOL recently delayed another rule finalized during the final days of the Trump Administration. On February 24, 2021, the DOL announced the delay of its new FLSA tip rule. The DOL pushed the effective date of this new rule back from March 1, 2021 to April 30, 2021. Employers should pay close attention to both DOL rules in the coming months as the DOL may revise same.

 The Biden Administration is actively reversing employment related agency action as well. The Wage and Hour Division recently terminated its Payroll Audit Independent Determination (“PAID”) program. The PAID program encouraged employers to self-report any discovered FLSA violations by allowing such employers to avoid litigation, damages, and/or penalties. In the agency’s press release, the agency stated that the “PAID program enabled employers to avoid accountability.” The agency further provided that its current “resources are sufficient for helping employers comply without relieving them of their legal obligations.” Employers who discover that they are in violation of the FLSA are once again faced with a Hobson’s choice. Such employers may choose to discreetly address the violations and hope that any impacted employees do not file a lawsuit and/or a complaint with the DOL, or employers may advise the DOL of the FLSA violations and prepare for the ensuing damages and/or penalties associated with same.

On the day of his inauguration, President Biden terminated NLRB General Counsel Peter Robb whose Senate confirmed term did not expire until November 2021. The termination is unprecedented in recent history and quite controversial as there is growing concern regarding the politicization of the role. On February 1, 2021, Acting General Counsel Peter Ohr announced the rescission of ten NLRB General Counsel Memoranda issued during the Trump Administration. Employers who relied on the rescinded NLRB memos should adjust their labor practices accordingly.

The Biden Administration’s expeditious pace in reversing Trump era labor and employment related rules, regulations, and guidance may only continue to accelerate, especially with regards to COVID-19. The CDC and OSHA already issued new COVID-19 related guidance for employers in the wake of the new administration and employers should expect the agencies to release additional guidance in the near future. Notably, the EEOC remains silent as to any COVID-19 related or other guidance under the Biden Administration. On March 6, 2021, President Biden terminated EEOC General Counsel Sharon Gustafson after she refused to resign. A Biden appointed General Counsel may refocus the EEOC’s enforcement priorities. However, the EEOC currently maintains a three-to-two Republican majority of Commissioners which may allow stability in guidance and rulemaking for the near future. Although President Biden recently named Commissioner Charlotte A. Burrows Chair of the EEOC and Commissioner Jocelyn Samuels as Vice Chair, both Democrats, Republican Commissioners will maintain a majority until July 1, 2022, when Commissioner Janet Dhillon’s term expires.

We will continue monitoring the Biden Administration’s impact on employers, as well as COVID-19 related agency updates and circulate same as pertinent updates become available.