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  • Writer's pictureFred Feiner

Democrats Certain to Bring Many Challenges for Employers

Many challenges are coming for employers in New Jersey and nationally with the Democrats now controlling both the White House and Congress. Management needs to take out the crystal ball and start preparing for the inevitable.

President Joe Biden’s choice of Obama-era regulators to lead two key agencies overseeing the financial sector signals the new administration’s intent to provide an aggressive check on the industry after four years of deregulation and a light hand under prior leadership. Need more proof a change is coming for employers? How about the nomination of Boston Mayor Marty Walsh, a former union president, to serve as Secretary of Labor? If confirmed, Walsh would be the first union member to lead the Labor Department in nearly 50 years.

Walsh has particular interest in issues such as raising the minimum wage, paid family leave and clean energy. President Biden has already issued an Executive Order directing federal agencies to lay the groundwork to require all federal contractors to pay a $15 minimum wage within his first 100 days in office.

New leadership at the Consumer Financial Protection Bureau (CFPB) will have major implications for employee rights and employer responsibilities. The CFPB plays an important role in deciding when an individual’s rights have been violated during corporate background and drug screening processes. Of all the things employers need to be concerned about, this may seem to be rather low on the totem pole, but over the last decade background check companies and employers have paid out more than $325 million to settle related litigation. Corporate risk will only grow under the new administration.

Poor background and drug screening leaves businesses open to employee and prospect lawsuits when they are denied employment and advancement opportunities. Management needs to closely review their screening practices because the new administration’s Equal Employment Opportunities Commission (EEOC) will certainly be more aggressive in reviewing violations of all shapes and sizes. EEOC complaints are legal and public image crises just waiting to happen that can cost companies millions of dollars not to mention damaged reputations.

New Jersey’s seemingly never-ending journey to legalize marijuana is stuck in neutral once again, but Federal cannabis legalization is another issue employers may need to watch. It’s safe to say that the last year has taught companies to be prepared for anything, but marijuana legalization will present special challenges. Will companies be able to screen employees for marijuana use or will it depend on job category? Many companies are already dropping marijuana from the drug panel they use to screen employees and candidates, but it remains unclear what will ultimately be legally required in New Jersey let alone nationally.

During his campaign, President Biden favored multiple employee friendly issues that are likely to result in legislation during the 117th Congress, including the $15 per hour minimum wage and the Paycheck Fairness Act, which would require companies to explain disparities in pay between men and women.

President Biden also supports proposals for paid family and medical leave such as the FAMILY Act, which would allow employees two-thirds of their salary (subject to a maximum) for up to 12 weeks. Legislation for paid sick leave and overtime protections as well as expansion of the Affordable Care Act, or Obamacare, are likely to receive attention as well. Many of these proposals have been languishing in Congress for several years, but it is a new day in Washington and employers need to prepare – now.

The above article was originally published by NJBIZ on February 1, 2021.

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