President-Elect Biden’s Cabinet Candidates Begin to Emerge

Once installed, President-elect Biden’s cabinet will shift the direction of policy development and enforcement practices in areas important to HR Policy Members.  The Association has provided an overview of the names being floated for the roles that have implications for the HR functions of large companies, and their status in the confirmation process.

Labor weighing in:  The labor movement hopes to establish influence in the Department of Labor with several candidates with union backgrounds, including Rep. Andy Levin (D-MI) and Boston Mayor Marty Walsh.  Another name often mentioned is Harvard Law Professor Sharon Block, who will be speaking at our Future Workplace Policy Council’s Fall conference.

Coming to terms:  Several key agencies—the NLRB, EEOC, and SEC in particular—have term limits for their respective Members or Commissioners.  In the SEC, Chair Jay Clayton announced he is stepping down early, paving the way for a Democratic majority on the Commission (see separate story here).  However, the NLRB will retain its Republican majority until at least fall of 2021, and the EEOC will remain in Republican control until mid-2022 if the Republican members of those agencies serve through the end of their terms. 

It all boils down to the Senate:  If Republicans win one or both Georgia Senate seats, they will have the ability to block nominees who are further to the left.  If Democrats win both seats, they will have an easier time approving nominees, but will need the votes of every Democratic Senator and Vice President Harris, assuming no Republicans break ranks. 

Contact Daniel Chasen

Association Considers Practical Steps for Increasing Board Diversity

"When people get to some position of prominence, they ought to remember to send the elevator back down," noted Barry Lawson Williams, founder of Williams Pacific Ventures and past director on 14 corporate boards.  Williams was joined on an HR Policy webinar by Association Director and Freddie Mac CHRO Jacqueline M. Welch in a provocative and insightful conversation on increasing board diversity.

Board diversity has gained particular importance as companies continue to engage employees and investors on their efforts to increase diversity and create cultures of inclusion.  Noting that diversity needs to “start at the top,” stakeholders such as ISS and the state of California have announced initiatives to mandate board diversity specifically on the basis of ethnicity and race.  Meanwhile, only 4.1% of Russell 3000 directors are Black despite efforts to develop boards that better reflect the broader makeup of society.

No lack of talent:  Williams outlined a new project to identify qualified Black candidates for board seats.  Initially hoping to identify several dozen, Williams and his colleagues have now identified 500 potential candidates.

Williams noted that board turnover averages about one seat per year.  To see any significant change, he observed, board turnover would need to increase.  This should be linked with filling empty seats with new, forward-looking roles, including those with expertise in risk management, international markets, customer satisfaction, or data analytics. 

If it can be measured, it can be improved:  Williams suggested HR leaders collect and disclose specific diversity information, including data on race, gender, and position. 

Williams offered practical advice for getting on a board, including focusing on developing relevant skillsets, expanding networks of sponsors, and maintaining a streamlined resume.  Such a resume would include the individual's: 1) reason for wanting to be on a board, 2) skillsets they bring, 3) vision for the board, 4) leadership and experience, and 5) references.

Relationships to build on:  In a project examining the extent to which qualified Black candidates were being overlooked in board succession planning for major Bay Area corporate boards, Williams found that relationships played a prominent role in filling board seats with Black candidates.  Other important factors included skill sets and fit (i.e., whether the candidate was able to function on a board).

Contact Daniel Chasen

Chairman Jay Clayton Departing SEC at Year End

SEC Chairman Jay Clayton (I) confirmed that he will step down from his role on the Commission, clearing the way for a Democratic majority at the agency in the coming year.  Previously, he had publicly acknowledged plans to leave the Commission following the 2020 election irrespective of the outcome.

Immediate implications for the SEC?  In the near term, the SEC will function with four commissioners, two from each party.  That likely means that any rulemaking or guidance viewed as partisan is unlikely to be approved.  Additionally, as the Democrats are unlikely to have full control of both the Senate and the House, the most recently completed rulemakings (proxy advisory reform, shareholder proposals, and HCM disclosures) are likely to go into effect as they currently exist. 

With Democrats in control, the SEC regulatory agenda is predicted to focus on revising the proxy advisory reform rules and expanding disclosures related to climate risks and human capital metrics, especially related to diversity and equal pay.  Further, the SEC will likely address the remaining, unfinished elements of the Dodd-Frank legislation including pay-for-performance disclosures.

Chairman Clayton has overseen several major policy programs over his term, including easing access to capital markets, proxy advisory reform, human capital disclosure guidance, shareholder proposal reform, and an overall commitment to principles-based disclosure rules as opposed to prescriptive disclosures. 

Potential nominees from the Biden administration include Gary Gensler and Preet Bharara.  Mr. Gensler served as the head of the Commodity Futures Trading Commission and promoted an active regulatory approach.  He is currently working with the Biden transition team on an agenda for the financial regulatory agencies.  Mr. Bharara served as the U.S. Attorney for the Southern District of New York where he pursued convictions related to the financial crisis. Financial policy stakeholders have highlighted some concerns with Messrs. Gensler and Bharara such as activist or punitive regulatory actions.  Other potential nominees include former Democratic SEC commissioners Kara Stein and Robert Jackson Jr.

Meanwhile, Chairman Clayton had some final advice for corporate insiders.  Recently, there have been reports of executive stock sales following major corporate announcements using recently developed 10b5-1 stock trading plans.  In response to the negative optics surrounding such sales, Chairman Clayton recommended companies consider a cooling-off period between the implementation of a plan and the first permitted sales.  He specifically recommended either four or six months.  He also recommended that companies avoid implementing plans when they are in possession of material non-public information. 

Outlook:  Current expectations are that the incoming Biden administration is likely to find a middle path between the centrist and progressive elements of their party.  However, Senator Elizabeth Warren (D-MA) could also be a factor, influencing the financial regulatory agenda and advocating for more progressive nominees and executive actions. 

Contact Andrew Maletz

FDA Approves First At-Home COVID-19 Test

The first rapid coronavirus test that can be taken at home and deliver results in 30 minutes was cleared for emergency use by the U.S. Food and Drug Administration, paving the way for employers to consider its use.

Clinical trials showed patients were able to perform the Lucira self-test in about two minutes and have results within 30 minutes.  The test will cost about $50.

High accuracy important:  According to Lucira, the test accurately detected 94% of the infections found by a well-established PCR test.  It also correctly identified 98% of the healthy, uninfected people.

Availability questions:  It remains unclear how quickly Lucira can ramp up manufacturing and distribution.  Further, the test will be available by prescription only.

Outlook:  Until March 2021, the test will only be available on a limited basis in point-of-care settings and health care networks that prescribe.  By the second quarter of 2021, the company plans to enable people who think they might have COVID-19 to communicate online with a medical professional through a dedicated website to arrange a prescription and overnight delivery of the test kit.

Contact D. Mark Wilson

October Mental Health Index Shows Men Particularly at Risk for Negative Mental Health Impact

The newest "Mental Health Index: U.S. Worker Edition" shows that the negative impact of COVID-19 on men’s mental health is rising.  The risk of depression and general anxiety disorder in men is up 69% and 55%, respectively, since the end of August.

COVID-19 is a source of stress that cannot be eliminated.  Research suggests there are gender differences in coping styles, with men more likely to focus on fixing the source of a problem and women more likely to focus on changing their response to the problem.  Men’s increased risk to mental health issues may be explained by the fact that the impact of COVID-19 spreads beyond an individual’s control. 

Our American Health Policy Institute and the Association are actively engaged in the distribution of the Index in partnership with Total Brain, the National Alliance of Healthcare Purchaser Coalitions, and One Mind at Work. 

If you are interested in learning more about participating, please contact Colleen McHugh at

Contact Margaret Faso

As Loneliness Presents Itself at Work, What Can Employers Do?

Loneliness is not just a quality of life issue but impacts an individual’s productivity and performance in the workplace, panelists noted during an American Health Policy Institute webinar on the impact of COVID-19 on loneliness and employee wellness.

Significant health risks accompany loneliness:  Dr. Jeremy Nobel, MD, MPH, who is on the Harvard Medical School faculty and President, Foundation for Art & Healing, presented ways employers can help employees struggling with loneliness during these times.  He referenced an employer case study evaluating Health Risk Assessment questionnaires which found employees that were identified as lonely had roughly twice the number of avoidable admissions and readmissions than employees who were not identified as lonely.  

How are employers addressing loneliness so far?  Dr. Stuart Lustig, MD, MPH, National Medical Executive for Behavioral Health, Cigna, James Garvie, SVP HR, Total Rewards and Technology, Southern Company, and Dr. Laurie Hommema, MD, Medical Director, Provider and Associate Well-Being, OhioHealth, shared the work they have been doing as employers to improve the health and wellbeing of their employees.  The panelists agreed that employers can take steps like ramping up education and awareness programs, promoting engagement and connection among employees, improving access to assistance, and continually monitoring and measuring the mental health of their employees.

Outlook:  Creating an environment which lets employees know they have avenues for support is crucial, and there are many ways to approach this.  The UnLonely Project, for example, founded by Dr. Nobel, uses the arts as a way to reduce the burden of loneliness and isolation.  The American Health Policy Institute continues to engage with The Path Forward and policy makers in advocating for evidence-based behavioral health care reform.  View a video recording of the webinar here.

Contact Margaret Faso

Trump Expected to Release "Most Favored Nation" Rule on Drug Pricing Today

After many delays, Trump is expected to issue the “most-favored nations” interim final rule on drug pricing.  The move would link government payments for medicines to lower prices paid by other developed nations.  He is also expected to introduce a separate interim final rule on eliminating drug rebates as the House passed 10 bills on drug pricing this week.

The rule could significantly increase the prices employer plans pay for drugs.  While the interim final most-favored nations (MFN) rule does not directly impact commercial drug prices, the pharmacy supply chain may increase costs on private payers as it seeks to offset the lower prices paid by Medicare.

Both rules are likely to be challenged in court.  The Pharmaceutical Research and Manufacturers of America previously called the MFN rule “irresponsible and unworkable” and many congressional Republicans oppose the proposal as a form of “price control.”

President-Elect Biden’s health care plan also supports an MFN drug pricing scheme for Medicare that is similar to President Trump’s proposed rule.

Separate rule to eliminate rebates may also be introduced.  A rule to eliminate the rebates drugmakers pay to pharmacy benefit managers may also be issued before President Trump leaves office.

The House passed a set of 10 bipartisan health care bills this week, including legislation to support new research on health disparities, improve food and drug labeling, increase funding to combat the opioid epidemic, and others.

Outlook:  There are questions around whether the MFN rule can survive court challenges and whether an incoming Biden administration would vigorously defend the rule.

Contact Margaret Faso

Mexico’s President Proposes Draft Bill to Ban Job Subcontracting

In the latest example of a global attack against subcontracting, Mexican President Andrés Manuel López Obrador unveiled a draft bill generally banning the practice in Mexico.  Under the law, companies would only be allowed to subcontract government-approved roles that provide “specialized services or carry out specialized projects that are not part of a company’s line of business.”

In Mexico, the outsourcing of certain roles or seasonal hiring through temporary agencies is a relatively common practice.  In these situations, the worker remains the employee of the agency, which helps reduce the labor cost for employers.  This would change if the draft bill is passed.  For example, a medical device maker could subcontract with a caterer, but not workers who perform manufacturing work alongside full-time employees.  In addition, a list of “specialized service” providers will be made public by the Secretary of Labor (STPS).

In comments supporting the draft bill, Mexican Labor Secretary Maria Alcalde cited 2018 estimates that put the number of subcontracted workers in Mexico at 4.6 million and growing, up from around 1 million in 2003.  The Mexican Government stated the bill will prevent abuse of the outsourcing practice it alleges functions as a loophole to allow employers to avoid paying benefits mandated by Mexican law.  Secretary Alcalde cited the case of a Cancun resort which had 802 workers with two registered as employees.  However, the draft bill could significantly limit the nation’s labor market flexibility, which will eventually compromise its intention of providing more benefits to the workers if companies decide to hold back their hiring.

Companies that illegally subcontract employees would face steep fines up to $212,000.  Further, companies benefiting from subcontracted services would be jointly and severally liable for required labor and social security obligations.  Failure to comply with this provision would mean additional tax penalties. 

Outlook:  The Mexican legislation is similar to developments elsewhere in North America and Europe, such as the California ABC legislation, seeking to reduce the practice of contracting out work that would otherwise be performed by company employees.  Companies doing business in Mexico should be prepared for a significant change in operations.  HR Policy Global will continue to work with our Latin American network of experts to monitor these important developments.  If you are interested in learning more about the impacts of this legislation, please contact Wen Dong at or Henry Eickelberg at

Contact Henry Eickelberg

California to Issue Emergency COVID-19 Workplace Safety Rule

California’s Occupational Safety and Health Standards Board has approved an “aggressive” emergency COVID-19 workplace rule that will take effect in December and could become the federal OSHA standard under a Biden administration.

The rule requires employers to implement effective COVID prevention programs, which can be part of an employer’s existing injury and illness prevention program, and must include, among other things:

  • A system for communicating with employees;
  • The identification and evaluation of COVID hazards;
  • A process for investigating and responding to COVID cases in the workplace;
  • Procedures for correcting COVID hazards; and
  • Employee training, physical distancing, face coverings, and other personal protective equipment.

Employees will be required to wear masks when indoors and outdoors if working within 6 feet of another person.

Workplaces that have an outbreak of COVID cases must take additional precautions. 

  • If a workplace has three COVID cases within 14 days, free testing must be offered to workers and continue at least once a week until no new cases are found for at least two weeks.

  • If a workplace has 20 more COVID cases within 30 days, CA employers must offer free tests to workers at least twice a week until the site goes 14 days without a new virus case, install hospital-grade air filters if the ventilation system can handle the air flow, and determine the workplace factors that contributed to the outbreak.

Employers must continue and maintain an employee’s earnings, seniority, and all other employee rights and benefits for employees who test positive and are excluded from the workplace.  Employers may use employer-provided employee sick leave benefits for this purpose and may consider benefit payments from public sources in determining how to maintain earnings, rights and benefits, where permitted by law. 

The temporary rule will stay in effect for 180 days and can be renewed every 90 days until the state decides the emergency has ended or a permanent rule is enacted.

California is the fourth state to implement emergency COVID workplace rules after Virginia, Michigan, and Oregon.

Meanwhile, the latest Employer Pulse Survey from Littler Mendelson highlighted increased employer anxiety over compliance with proliferating COVID-19 laws and regulations.  Leave laws and regulations, in particular, have vexed employers, as more than half of the companies surveyed reported facing challenges in complying with leave laws, scheduling regulations, and requests from employees for special accommodations related to the pandemic. 

Companies with more than 10,000 employees had a higher rate of expressed concern about employment law compliance.  Additionally, more than 80% of respondents from nonessential businesses said they don’t plan on requiring employees to come back to the office any time soon. 

Outlook:  An incoming Biden administration is expected to issue several new virus safety measures, including an emergency safety standard through the Occupational Safety and Health Administration.  A new COVID-19 relief bill could also include new paid sick and family leave regulations.  Employers should expect continued and increased regulations targeting workplace safety as the COVID-19 pandemic continues and a new administration begins.

Contact D. Mark Wilson

BEERG: EU to Consider Right to Disconnect

The EU Parliament will soon decide whether to draft legislation establishing “minimum requirements to enable workers who use digital tools…for work purposes to exercise their right to disconnect and to ensure that employers respect workers’ right to disconnect.”

Employers would be required to “implement the right to disconnect in a fair, lawful and transparent manner,” and “record individual working times in an objective, reliable and accessible way.”  To the final point, the directive states that “any worker shall be allowed at any time to request and obtain the record of their working times.”

The draft report by MEP Alex Agius Saliba calling on the Parliament to bring forward legislation should be voted on before year-end in committee, and will then be considered by the full Parliament early in 2021.  If the EU Commission were to react favorably to the call for legislation, it would be some time later in 2021 before a text would be presented and it would then need to be considered by the Council of Ministers.

BEERG comment:  “There is a case to be made for measures that ensure work/life balances, that safeguard personal time, and that underpin the right to privacy.  But before legislating any such measures, there needs to be a much wider dialogue involving employee voices, especially the voices of the digital workforce.  Legislators should ask them directly what they want.  The digital tools are there to do so.”

Read the full BEERG Global Newsletter here.

Contact Tom Hayes

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