2023 Fall Outlook: Brace for an "All of Government" Wave

As the 2024 election season kicks off, the Biden administration and Congressional leaders face additional pressure to accomplish their priorities in an uncertain economic and political environment. Apart from must-pass spending legislation, most policy activity will rest with federal agencies and state legislatures. The administration’s “All of Government” approach to workplace regulation is now in full swing, implementing policies that will substantially change how employers and employees interact. This is all happening amid further refinement of flexible work policies and employee expectations in a tight labor market in which productivity and engagement vary. Declining employee well-being is also a serious concern, and employers are carefully evaluating (and most are reaffirming) their DEI programs following the Harvard decision. Meanwhile, the global environment continues to heat up, with gender pay equity, sustainability due diligence, and widespread in-country legislative changes top of mind.

Read on for our take on the key workforce policy issues unfolding in Washington this fall.

In Congress: so much to do, so little time.

• When the U.S. House of Representatives return to Washington the week of September 11, Speaker Kevin McCarthy (R-CA) will have three weeks to negotiate a government funding bill with the White House and address other legislative items before the September 30 fiscal year end.
  
  
• This will be a pivotal period for Speaker McCarthy and Republicans if they aim to take control of Congress in 2024. Expect messaging bills pushing back on ESG and oversight hearings on agencies that promulgate regulations impacting the workforce, including DOL, FTC, SEC, NLRB, and the EEOC.
  
  
• Despite the growing economy, the federal deficit is projected to double in 2024, putting pressure on President Biden’s spending plans and Republicans’ desire for future tax cuts. 
  
  
• An unlikely Senate confirmation means Julie Su will continue to serve as acting DOL secretary, which could be for the duration of the Biden administration.  

As we’ve seen over the last few weeks, the Biden administration will continue its “All of Government” approach to HR regulation.

• A DOL proposed rule substantially expands the number of employees eligible for overtime.
  
  
• The NLRB is expected to issue additional precedent-changing decisions after its recent decision mandating card check recognition. The agency is also expected to release its joint employer decision. With a Republican seat open, a 3-1 Board composition means the Democratic majority can continue its aggressive labor policy agenda with little resistance. Meanwhile, five states have now banned “captive audience meetings”, the latest being New York this week.
  
  
• The Occupational Safety and Health Administration (OSHA) published the “Worker Walkaround Representative Process” proposal in the Federal Register, reinstating an Obama-era policy.
  
  
• DOL is expected to issue a final independent contractor rule next month, making it more likely to find workers are employees.

Efforts to prohibit the use of non-compete agreements continue. The FTC is currently reviewing comments on its proposed rule to prohibit non-compete agreements. A final proposed rule is expected next spring.

• In Congress, attempts to prohibit the use of non-compete agreements continue by attaching the Workforce Mobility Act (H.R. 731 and S. 220) to viable legislative vehicles. Prior to the Senate adjourning for recess, Chairman Bernie Sanders (I-VT) scheduled a Senate Health, Education, Labor and Pensions Committee markup for a health care bill which included a section to prohibit the use of non-compete agreements, even though it is not directly related to the underlying legislation. The Association raised concerns about this provision and was successful in delaying the consideration of the bill.
  
  
• Five states and Washington D.C. now ban non-compete agreements, creating a growing patchwork of state-level requirements and federal rules with which employers need to comply.

SEC HCM rule expected this fall.  A proposed rule on human capital metrics should be released early this fall, which will likely be a prescriptive set of rules requiring employers to disclose quantifiable data on turnover, skills and development training, compensation, benefits, health and safety, and workforce demographics (potentially including franchises) and the use of independent contractors.

Challenges to DEI practices: In the wake of the Supreme Court ruling on Students for Fair Admissions v. Harvard and Students for Fair Admissions v. North Carolina, employers can expect increased attention to their DEI practices by outside groups, as well as by policymakers in certain states. The broader question is whether all this will drive new thinking on more effective diversity approaches. The Association will host further discussions on these issues this fall.

• At next week’s Washington Policy Conference, the Association will launch its Latino Worker Project Report, based on interviews with 150 employees from 15 companies, providing a lens on how Latino workers view their employers and how companies can more effectively recruit and engage this rapidly growing workforce segment.
  
  
• The OFCCP is expected to issue a proposed rule for modernizing affirmative action and nondiscrimination obligations for federal contractors and subcontractors in December.  

Well-being and drug prices are top health care policy issues. Lawmakers continue to focus on legislation to increase access to health care and lower costs in the supply chain, particularly as election season ramps up. Several PBM reform bills aimed at increasing transparency in the pharmacy supply chain and lowering drug prices will be voted on in the next few weeks.  

• The recent release of DOL’s proposed parity rule and legislation aimed at increasing access to mental health benefits continues to put the pressure on employers to ensure adequate networks.
  
  
• Employees rank health care benefits as the most important benefit employers offer, ahead of retirement, leave, and flexible work benefits.
  
  
• Rising health care costs, increased pressure from Washington D.C., and expanding expectations of the role of the employer in employee well-being make it all the more important that HR teams are well versed in administering health care benefits.

Outside the U.S., global employers face challenges in unifying policies in increasingly diverse workforces. Global employers are expecting unprecedented challenges in Mexico as new unions are gaining momentum, the Rapid Response Mechanism under the USMCA is increasingly leveraged, and election season is approaching in both Mexico and the U.S.

• Enactment of the new EU Pay Transparency Directive will require detailed gender pay gap reporting and increasing involvement by worker representatives. Global employers should begin drafting plans as other countries are likely to follow suit.

We invite you to join us in Arlington, Virginia next week at our September 13-14 Washington Policy Conference where we will discuss the implications of these issues on talent strategy and employee voice. We will also present the comprehensive Latino Worker Project report and explore the impact of the 2024 elections on workplace policy.