Undeniably, 2020 was a year like no other. Faced with a global pandemic and a tumultuous election, employers were presented with a unique set of challenges and a myriad of new—and at times, very vague—laws and regulations. Despite the start of a new year and a new administration in just a week, much of 2020 still lingers on, including some of its novel policies. However, the new year and new administration also signal a shift in direction for labor and employment law, and employers should be prepared. Below, we summarize the most critical legal updates of 2020, highlight some of the laws we expect in 2021, and outline some important takeaways for employers moving forward.
Federal, State, and Local COVID-19 Sick Leave
One of the most significant developments to stem from the COVID-19 pandemic was the Department of Labor’s enforcement of the Families First Coronavirus Response Act (FFCRA). The FFCRA requires certain employers to provide employees with paid sick leave or expanded family and medical leave for specified reasons related to COVID-19. When Congress passed the FFCRA, it had a set expiration date of December 31, 2020. However, in passing the second round of COVID-19 relief, Congress included the option for employers to voluntarily continue to provide employees with FFCRA leave—and in turn to receive a tax credit for such qualified leave—through March 31, 2021. The decision to offer FFCRA leave or not will come down to an assessment of the employer’s needs and metrics. We have previously written on how to make that decision here.
In addition to the federal requirements, many states and localities have imposed additional paid sick leave requirements extending into 2021 that employers should note. By way of example, Colorado requires at least 80 hours of leave to be available for a public health emergency effective January 1, 2021, while New York allows for at least five days of paid COVID-19 leave with requirements varying depending on company size. Additionally, certain cities like Philadelphia, Pittsburgh, Washington, D.C., and a number of California localities, including Long Beach, Los Angeles, San Mateo County, Sacramento, and San Francisco, have imposed additional leave requirements. States like Arizona, Michigan, Washington, and New Jersey do not necessarily impose additional COVID-19 leave obligations, but they do require employers to allow employees to use state-mandated sick leave for certain COVID-19 related absences (e.g., school closures, close contact with someone who has COVID-19, or care for a family member with COVID-19, depending on the state). This is an evolving list, so employers should keep apprised of any potential new laws in the states and cities they operate in.
New Laws on Pay Equity
Pay equity has been a hot topic in the business world for years. With growing momentum from all fronts, including within the sports arena with the recent litigation surrounding the U.S. national women’s soccer team, the issue of equal pay has gained more attention. While federal pay equity laws have been in existence for decades, there has been heightened activity from states and localities to pass their own set of laws in an effort to “fill the gap” that seems to be missing on the federal front. The growing patchwork of state laws is a significant development for employers who have to ensure compliance with the laws of each and every state in which they operate.
Notably, Colorado is the latest state to begin enforcing its own pay equity law—the Equal Pay for Equal Work Act, which was effective January 1, 2021. The law requires employers in Colorado to include pay and benefit information with each job opening and to communicate promotion and job opportunity information to all current employees working in the state. Additionally, effective January 1, 2021, California has new pay data reporting requirements that call for employers with one or more workers working in California and 100 or more employees company wide to submit a full Equal Employment Opportunity and Wage report to the State of California by March 31st each year.
We expect to see the enactment of more state laws reflecting a growing and heightened emphasis on equal pay. With Democrats controlling Congress and the White House, we may also see more action at the federal level as well, including the potential passage of the Paycheck Fairness Act, which would make it easier for employees to pursue individual and collective / class actions against their employers, alleging wage discrimination on the basis of race, sex, and national origin.
Minimum Wage Increases
Over the last few years, state and local governments nationwide have passed laws steadily increasing their minimum wage rates. Effective January 1, 2021, approximately 25 states have raised their minimum wage rates. The federal minimum wage is currently $7.25, last raised over ten years ago in 2009. We expect to see the Biden administration follow the states’ leads and push for raising the federal minimum wage to $15. With the Senate now in the Democrats’ control, it is likely that there will be enough Congressional support to ensure the increase—albeit gradually over the next few years.
Anticipated Action by the Biden Administration
Beyond the laws and regulations passed to date, we expect to see a number of actions taken by the Biden administration that employers should take note of. Specifically, we anticipate that the Biden team will prioritize the following initiatives.
- Sign the Equality Act
Consistent with the June 2020 Supreme Court decision confirming that Title VII protection extends to prohibiting discrimination on the basis of sexual orientation and gender identity, President-Elect Biden has pledged to sign the Equality Act within the first 100 days of his presidency. The Equality Act, which previously passed the House of Representatives, would provide consistent and explicit non-discrimination protections for LGBTQ+ people across key areas of life, including employment, housing, credit, education, public spaces and services, federally funded programs, and jury service.
- Endeavor to Eliminate Pre-Dispute Arbitration Agreements and Class Action Waivers
Despite a Supreme Court decision in 2018 validating the enforceability of mandatory workplace arbitration agreements with class action waivers, lawmakers have since launched various efforts to alter that landscape. We expect to see Biden’s support of the Forced Arbitration Injustice Repeal Act. With much support from Democrats and already passed by the House, it would invalidate pre-dispute arbitration agreements in the employment, civil rights, consumer, and antitrust contexts. It would also require employers to litigate workplace disputes in court. We will likely see similar legislation surrounding prohibition of class action waivers, opening the door for potential class-wide liability for employment-related claims.
- Plan to Strengthen Unions and Labor Laws
Biden has made clear that he plans to strengthen unions by encouraging and incentivizing unionization and collective bargaining. Part of that effort will involve signing the Protecting the Right to Organize Act. The pro-worker legislation would provide for sweeping changes to the National Labor Relations Act, with the goal of enhancing the ability of unions to organize workers and imposing penalties on companies that interfere with workers’ organizing efforts.
Many of the new laws and regulations may involve a simple continuation of policies effected last year, but most may require a significant change in employer policies. The foregoing does not encompass the full list of legal changes we expect to see in the new year, so we encourage employers to continue to stay informed. The Labor & Employment Group at PilieroMazza will continue to monitor any significant updates and developments.