Factbox-Key US labor policies will face legal challenges in the coming year

By Daniel Wiessner

(Reuters) – The Biden administration and a Democrat-led U.S. Labor administration will implement a series of key jobs policies in 2023, but they could be stymied by challenges from business groups and Republican-led states that have criticized the measures.

The following rules are likely to face lawsuits in the new year, including claims that federal agencies had no reason to abandon Trump-era policies seen as favoring corporations and anti-union workers.


The US Labor Department unveiled a proposal in October to make it harder for companies to treat workers as independent contractors, a change expected to shake up driving, delivery and other industries that rely on gig workers.

The proposal would require workers to be considered employees, entitled to more benefits and legal protections than contractors when they are “economically dependent” on a business. Most federal and state labor laws apply only to a company’s employees, which can cost employers up to 30% more than independent contractors, studies show.

The final rule, expected this spring, would replace a Trump-era regulation that says workers who own their own businesses or have the ability to work for competing companies, such as a driver who works for Uber and Lyft, can be treated as contractors.

The sharp break from the Trump-era standard is likely to be the focus of lawsuits challenging the new rule. Federal law requires agencies to adequately explain their decision to withdraw and replace existing regulations. Businesses and trade groups are also likely to attack the substance of the new rule, arguing that the way it defines employment is inconsistent with federal law and creates uncertainty about the legal status of many workers.


The National Labor Relations Board, an independent agency that won a Democratic majority last year, moved in September to make it easier for workers and unions to hold companies accountable for labor law violations by their franchisees and contractors, proposing to revive an Obama-era standard . strongly criticized by trade groups.

The rule would treat companies as so-called “joint employers” under federal labor law when they have indirect control over labor conditions such as scheduling, hiring and firing, and supervision. A rule adopted in 2020 by the board when it had a majority of Republican appointees, which was struck down in court, required companies to have “direct and immediate” control.

The new proposal, which will be finalized in the coming year, will largely affect industries such as manufacturing and construction that rely heavily on staffing agencies and contractors to supply workers, and franchises such as McDonald’s Corp that are not typically involved in franchisees’ day-to-day workplace problems.

Lawsuits targeting the rule are likely to argue that the Trump-era board’s narrower view of joint employment was more faithful to federal labor law, and that the new rule will create confusion and destabilize collective bargaining by making it unclear which companies are responsible for different workplace problems. .


Weeks after unveiling the joint hiring proposal, the NLRB said it would roll back a Trump-era rule that makes it easier for workers to dissolve their unions, saying it could interfere with employees’ right to make free, informed decisions. decisions on union representation.

The 2020 rule prevented NLRB employees from delaying elections while related illegal labor practice cases are being litigated. Unions for decades had routinely filed so-called “blocking charges” to delay decertification votes and elections they thought they would lose.

Unions and labor advocates have said blocking fees are a critical tool to prevent coercion by employers and eliminate them effectively ensuring that some elections are held under illegal conditions.

Business groups may bring broad challenges to the rule in court, arguing that it undermines workers’ rights to freely choose or reject union representation.


The thousands of companies that contract with the federal government are bracing for an increase in the minimum wage for an estimated 330,000 workers, from $15 an hour to $16.20, to take effect next month.

President Joe Biden, a Democrat, issued an executive order last year raising the minimum wage for workers on federal contracts from $10.95 to $15, and the Labor Department then adopted a rule implementing the wage increase. The rule also tied future raises to inflation and eliminated a lower minimum wage for tipped workers.

The second pay increase under the rule comes as eight Republican-led states challenge the Biden administration’s authority to significantly raise wages for federal contract workers. The states, in a pair of lawsuits in Arizona and Texas federal court, say only Congress has the power to make a change with such a dramatic impact on the U.S. economy. The administration says in pending decisions to dismiss the lawsuits that the president has broad authority to regulate federal contracts.

(Reporting by Daniel Wiessner in Albany, New York; Editing by Alexia Garamfalvi and Mark Porter)

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