• Thomas Hart

What Employers Need To Know About Marty Walsh As Secretary of Labor


Last week flooded our timelines with a lot of news, and, as a result, many of us may have overlooked a critical announcement- Boston Mayor Marty Walsh is closer to become the country’s next Secretary of Labor. This made him the first union member to undertake this role in about 50 years. This particular news is crucial for those who are a part of the employment community,, as the workplace policy is often influenced by the head of the Labor Department. Needless to say, this shift has piqued the interest of most employers who are now wondering what this will mean for them. This article highlights the opinions of many experts, with the aim of offering a glimpse into the future in terms of the U.S. Department of Labor’s decisions. Essentially, it is expected that this move will result in the reemergence of the worker-centered policy that was employed under Obama’s leadership.


What Does The USDOL Do?

A Cabinet-level role, the Secretary of Labor, steers the U.S. Department of Labor (DOL), which is a federal agency with the most far-reaching influence over employers across the country. The internal workings of the American workplace are impacted every day by the agency. The body imposes various laws pertaining to employers and unions. Furthermore, it formulates a host of regulations and directives associated with different workplace laws. This agency’s jurisdiction covers more than 30 agencies, boards, offices, and programs, all of which play unique roles in relation to labor and employment law.

Within the DOL, there are popular agencies and offices, which are: the Wage and Hour Division (WHD), the Occupational Safety and Health Administration (OSHA), as well as the Office of Federal Contract Compliance Programs (OFCCP). Please note that the DOL’s decisions also encompass rules related to family leave, independent contractor classification, joint employment, the gig economy, immigration law, and pay equity.


Who Is Marty Walsh?

Now, since you understand the responsibilities undertaken by the DOL, it’s a good idea to learn more about the potential leader of the agency. He is still a potential leader, as the Senate must still confirm this transition, which may not be challenging as the Democrats finally regained power in that arena. If his particular nomination is approved by the Senate in short order, it is important for employers to get acquainted with his background to build up their expectations accordingly.

In a few ways, the ideologies of Walsh resemble those of President Biden, who is a self-proclaimed “union man.” In fact, just a few months, Biden addressed the AFL-CIO and stated that he aspires to become the strongest labor president America has ever witnessed. As Walsh has been nominated, it is safe to state that Biden is taking the required steps to live up to his campaign remarks.

There are a few prominent pieces of information that must be addressed with respect to Walsh. To begin with, he was an early cancer survivor, and he was born to Irish immigrant parents. When he was just 21 years old, he started working for Laborers’ Union Local 223 in Boston, just like his father. Gradually, he became the union’s president before getting elected to function as a Massachusetts state representative. He retained this position for 16 years, during which period he started attending night school and earned a degree at Boston College. He went on to become the head of the Building and Construction Trades Council, which encompassed 20 local unions. In 2014, he became the Mayor of Boston 2014 and had served all these years diligently.

While those who have analyzed his entire career deemed him to be an “old-fashioned labor Democrat”, many people focused on his inclination towards the working-class labor movement. He became popular as a very flexible leader as he worked in tandem with management, while in the realm of social issues, he was always admired as a progressive liberal. For instance, as the leader of the Boston union umbrella group, he was fully committed to streamlining the development agency of the city to facilitate the simplification of the approval process for construction projects. This move was appreciated by both workers and management. As a progressive leader, he has remained vocal about his support for LGBTQ workers’ rights, climate change actions, and immigrant rights.

As a result, people consider Walsh to be a leader targeting rational solutions to various problems, as he promotes unity and consensus-building. However, his first priority will be the workers, labor unions, and other groups whom he considers have been working as the economy’s backbone while trying to enjoy a middle-class life. “As Secretary of Labor, I’ll work just as hard for you as you do for your families and livelihoods. You have my word,” he had tweeted. What will be the impact of this philosophy on employers once he takes up his new role? Here are a few of our predictions.


Workplace Safety

Since the world is still glaring at the pandemic, employers are greatly concerned about Walsh’s treatment of workplace safety issues. In terms of OSHA and workplace safety and health issues, it is safe to assume that he would direct his efforts towards constructing an emergency temporary standard for COVID-19. Previously, Trump largely depended on the issuance of COVID-19-based citations that fall under the Occupational Safety and Health Act’s ‘general duty clause.’ However, since it would be challenging to enforce the general duty clause, which is a general standard that is limited even under OSHA’s citations, it would be safer to formulate an emergency temporary standard in order to offer guidance that is more specific in nature pertaining to the actions that must be undertaken by the employers to protect workers and mitigate the spread of COVID-19. On the basis of Walsh’s history with unions, along with his leadership style, which focuses on building consensus, it is most likely that he will resort to seeking input from various sources when creating a temporary standard.

Apart from actively dealing with issues pertaining to COVID-19, it is possible that Walsh will also expand OSHA’s enforcement program and resume the various regulatory changes implemented by the Obama Administration, which were inadvertently ceased by the Trump administration. When it comes to enforcement, the total number of OSHA inspectors are 761 today, marking the lowest number ever in its history. About a decade ago, there about 1,000 working inspectors. Biden had already promised that he would raise the total number of inspectors and, with Democratic control of Congress, will also request funding for this move. Needless to say, Walsh will be spearheading this effort. Approximately, the hiring and the training of these inspectors would take 18 months, and thus, employers must get ready to undergo more inspections starting very soon.

When it comes to the regulatory side, experts are forecasting that Walsh will again resume rules dating back to the Obama-era. For instance, Walsh may choose to revive the rule that requires employers to report certain injury and illness information of employees to OSHA instead of merely recording them. This information will be displayed on OSHA’s website. When it was originally conceived, the business community was not very accepting of it, and that may not change even now.

Walsh may emphasize imposing the 2016 anti-retaliation rule, which was not enforced during the Trump era. According to this rule, employers were partially prohibited from retaliating against employees if they choose to report work-based injuries or illnesses. This particular rule affected the ability of the employers to incorporate a few kinds of workplace safety incentive programs, post-accident drug testing practices, as well as injury and accident reporting programs.


Joint Employment and Independent Contractors

On his first day of tenure, there are two prominent issues that Walsh will be required to deal with. Firstly, the future of the joint employment rule and secondly, the independent contractor rule. Experts have predicted that these two rules may not be promoted by the Biden administration and the Walsh DOL, as they have demonstrated certain unwillingness pertaining to these rules.

The joint employment rule came into effect in March 2020. Its purpose was to offer unambiguous information pertaining to the employment status of workers who argue that legal obligations are owed to them by more than one particular business organization at a time, under the Fair Labor Standards Act. Since September, this rule was shelved. A New York federal judge struck down this specific rule, citing “major flaws” as well as its disinclination to federal law. It is expected that when Walsh is appointed as the head of the DOL, the agency will make no attempts to revive this rule. Instead, it may turn to a solution that aligns with the Obama-era standard, which worked to capture multi-participant arrangements, which includes outside-party management, joint ventures, staffing services, employee leasing, temporary help, subcontracting, a few types of “job sharing,” and dedicated vendors or suppliers, adding them to the joint employment paradigm.

On the other hand, the independent contractor rule is quite recent and was finalized just a week ago, to become effective starting March 8. It purposes to simplify the process of classifying workers as independent contractors for employers. This is a useful shift, particularly for gig economy companies as well as those that are launching initiatives resembling such gigs. However, even this rule may become extinct. It was already announced by President Biden that the rule would be frozen before it goes on to become a law. It is highly likely that unions, worker advocates, and state attorneys general will challenge this rule in court as it was executed at a rapid pace and it does not qualify past regulatory muster. It is also predicted that the DOL, under Walsh, will either welcome these new challenges or will act against the rule with full force. As business advocates might also file litigations to salvage the rule, it is likely that Walsh would make a move to implement novel rulemaking that works for the workers. Regardless of how this unfolds, this year will witness several twists and turns, particularly for the employers.


Pay Equity And Affirmative Action

When working as a state legislator and the Mayor of Boston, Walsh has been an emphatic advocate for narrowing the pay gap between genders and among races

The first state to launch an equal pay law was Massachusetts. However, prior to that, Walsh associated with the Boston Women’s Workforce Council for the execution of the 100% Talent Compact, wherein more than 250 employers from the Boston-area, pledged to work towards narrowing the gender and racial wage gap by launching various initiatives. The employers decided to assess their pay data as well as practices to understand if there is any wage gap. In case there is, they planned to employ measures to mitigate them, provide wage-based data anonymously to highlight the gender and race wage gaps in Greater Boston, and partake in quarterly briefings as well as an annual Effective Practices Conference to discuss various successful interventions that they had launched, and become informed about modern research and management practices that can help bolster wage equity. When he was a mayor, his office associated with the American Association of University Women to initiate WorkSmart, which was a program offering free workshops to women, so they are equipped with the skills required to successfully negotiate for higher salaries.

Apart from the implementation of various measures to close the pay gap, Walsh has been a vocal endorser of the importance of closing the opportunity gap. He has enthusiastically spoken for the Massachusetts Pay Transparency and Pipeline Advancement Act. If it is passed, organizations employing more than 100 employees are required to report both the gender and race of employees with specific management titles publically, and a fund must be established to work towards the professional development for employees in entities with the highest disparities.

How does this affect the country’s employers? It is possible that these are the exact philosophies that would be proposed by the DOL once he begins to head it. As Secretary of Labor, Walsh will probably work on the implementation of various strategies that are meant to close the pay gap as well as the opportunity gap nationally, which may include a rise in investigations related to pay gaps in tandem with enforcement actions against federal contractors. It is also possible that Walsh would end up joining President Biden to promote the passage of the Paycheck Fairness Act, which was paused in the Senate when Trump was in charge.

Moreover, there may be some changes in the scene for employers who work in tandem with the federal government and are therefore required to adhere to a set of nondiscrimination laws, particularly those that are executed by the Office of Federal Contract Compliance Programs (OFCCP). For federal contractors, this move could mean an emphasis on diversity, equity, and inclusion, starting with the support of the rescission of Executive Order 13950 by the DOL, which is an order that restricted the abilities of the employer to provide training on various topics including systemic racism and unconscious bias.

Under the leadership of Walsh, there could be a rise in enforcement activity. Interestingly, under the Trump administration, more was recovered by OFCCP when compared to what was recovered in the last eight years. This could be attributed to the various rules and measures that the Obama administration has put in place, which slowly took root during the last term. However, as workers will enjoy increased priority under Walsh, it is possible for further enforcement by the agency during this term. Moreover, there will a continued interest in contractor’s practices in relation to promotions, veterans, and individuals with disabilities.


Wage And Hour Law

The Walsh DOL will essentially make three serious moves in terms of the wage and hour law. During the Trump administration, the practice of issuing opinion letters was revived, specifically to offer guidance to employers in relation to complicated issues pertaining to wages and hours.

Although it is still ambiguous whether Secretary Walsh will stick to this practice, it is safe to assume that he will withdraw an array of letters issued by the Trump administration, which covers several topics, such as the exempt status of certain employees, determining non-exempt employees’ hours worked and the computation of the regular rate for overtime purposes.

Second, Secretary Walsh will leverage the DOL’s conventional rulemaking authority to attempt the unwinding of various key developments in laws related were enforced in the last four years. Essentially, he will focus on repealing various rules enforced by the Trump administration pertaining to the application of the tip credit as well as the dynamic workweek, to the minimum wage and overtime requirements of FLSA.

Third, under Walsh, the DOL’s Wage-Hour Division will most likely enhance its enforcement efforts. In July 2020, an interesting announcement was made by the DOL that liquidated damages against employers will not be sought in investigations pertaining to wage and hour. It can be expected that Secretary Walsh will re-enforce this specific implementation tactic, which will most likely be the first of many such steps that will be undertaken in the near future.

Moreover, Walsh will offer support to President Biden’s efforts to raise the federal minimum wage to $15 per hour. When it comes to amending federal law for improving minimum wage, the DOL lacks direct authority. However, it is safe to state that Walsh will be a vocal supporter of these efforts, which will be kicked off sometime in 2021.


Employee Leaves

Walsh stated that he would fight to help working people, and thus, we predict that the DOL will propose the expansion of current FMLA rights to the maximum extent.

Under Walsh, the DOL would also act as a proponent of the passage of paid family leave by Congress. When Congress passed the ordnance to provide six weeks of paid leaves for city employees who became parents, he was mayor of Boston. He supported the ordinance in a 2015 Opinion piece in the Boston Globe, which was titled “Paid parental leave is a must for working families.” In this piece, he advocated for the passage of paid parental leave for Boston city employees. He stated that the expansion of paid leaves would be accompanied by a rise in fulfillment, positivity, as well as productivity among the workforce, adding that the workplace policies haven’t been keeping up with changing American families.

For a long time, federal paid family leave was a part of the Democratic platform. However, President Biden or congressional leadership has not prioritized paid family leave, possibly due to the economic challenges posed by COVID-19. However, his reasons for endorsing paid leave complements his views on the current Family Medical Leave Law. The DOL under Walsh would most likely construe the current FMLA authority in relation to the increased access to allow as much as possible while adhering to the current statutes. The employers must get ready for this move as well.


Immigration

The majority of employers may not be acquainted with the fact that when it comes to workplace immigration issues, the USDOL plays a small role, and thus, Walsh may attempt to influence this matter. When it comes to immigration policy, the Department of Labor’s role is associated with the protection of wages for U.S. workers.

This is accomplished through two kinds of processes with similar names. Labor Condition Applications establish safe harbor wages and conditions to protect foreign workers, and they seek employers’ attestations to confirm that no U.S. worker is harmed due to the recruitment of foreign labor. Second, the Labor Certification records that a particular employer couldn’t locate qualified U.S. workers to fill their permanent or temporary positions.

Under the Trump administration, the computation of standard safe harbor wages for foreign workers in Labor Condition Applications was raised artificially with no justification or support through statistics. Through litigation, these alterations were eventually struck down. This change would have affected the employers’ ability to leverage crucial temporary visas for professionals (H-1B) and seasonal workers (H-2).

When Walsh was mayor of Boston, he was clear about his support for immigrants and immigration policies. Moreover, he went on to reaffirm the status of Boston as a sanctuary city, and this move was made during the same time that Trump threatened to eliminate federal funding for cities making such moves.


Conclusion

Our plan is to continue tracking every move made at the USDOL and will consistently update you in relation to various crucial topics.

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