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HR’s Priority the Next Four Years: Compliance

June 10, 2021

By Anthony Kaylin, courtesy of SBAM Approved Partner ASE

The Biden administration has released their proposed budget, and there is a big boost of spending for the Department of Labor’s worker protection agencies.  Although the labor market will be tight, and HR focus on talent may overtake any other initiatives, compliance cannot be an afterthought for HR.  Further, recent appointments to the worker protection agencies, including National Labor Relations Board, reinforce the need for HR to ensure proper attention and resources are available for compliance activities.

To begin with, the Biden proposed budget would provide increases totaling nearly $300 million in the worker protection agencies, including:  $73 million for OSHA; $67 million for MSHA (Mine Safety Health Administration); $35 million for the OFCCP (Office of Federal Contract Compliance Programs); and $37 million for EBSA (Employee Benefits Security Administration).  In addition, The American Jobs Plan would further bolster the worker protection agencies with an additional investment of $7.5 billion over 10 years. These increases would rebuild enforcement capacity, expand whistleblower protection programs, and increase outreach and compliance assistance.

What this means, for example, is that OFCCP will increase its employee count from a current 451 to 639 (compared to its highest level of 755 in 2011).  The budget itself would increase from $105 million to $140 million.  Enforcement activity would increase from 400 or so Supply and Service audits to an additional 1,400 for a total of 1,800.  Any federal contractor being audited understands the resources expended to defend an audit, especially if audits are dragged out by the agency for a multitude of reasons.

Jenny Yang, the former Chair of the EEOC, was named as Director of OFCCP.  With her background, the agency is expected to tackle and focus on pay inequity and disparity as well as racial inequity, which will greatly impact organizations, especially as they prepare for talent acquisition.  Smaller contractors especially will be hard pressed on resources, particularly with pay equity audits.

Wage and Hour will be a thorn to employers with a renewed focus on worker misclassification.  It will focus on fully enforcing the other areas under its purview, including prevailing wages and family and medical leave.   Wage and Hour has been very active on pay theft and similar issues.  Every week they announce a number of settlements. 

David Weil was nominated by President Biden to head up the U.S. Department of Labor’s Wage and Hour Division.  He will be reprising the role he held during the Obama administration.  Weill shook up employers when he published his memo that all contractors are employees of the company they contract with.  As this approach is expected to be reinstituted, employers such as Uber and Grubhub are to be hardest impacted. But employers overall will need to audit their contractor workforce to determine if they are walking a fine line to liability (not only pay but of all benefits).

In addition, union-side labor and employment attorney Gwynne Wilcox will bring the five-member National Labor Relations Board to its full complement. Wilcox is a senior partner at Levy Ratner, P.C., a New York City union-side labor and employment law firm. She has devoted her career to representing unions and their members in negotiations, arbitration, and before the National Labor Relations Board and other administrative agencies.   Obama era labor law, much of which was overturned by the Trump administration, will likely make a comeback, especially the joint employment Ferris-Browning interpretation and social media and respectful workplace limitations on employers. 

HR will have its hands full the next four years and will likely be short-handed with retirements and employer investments in the field.  As such, ASE will be an even more important resource for compliance – from wage and hour to whistleblowing to federal contractor compliance. 

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