How a Biden Presidency Would Impact HR Policy Priorities
November 06, 2020
It appears that the voters have spoken in favor of continued divided government, avoiding, for now, a tectonic shift in human resources policy. Still, assuming projections hold, a Joe Biden presidency with a slim Republican Senate majority could provide an effective platform for several key policy changes that would significantly impact your companies.
This bitterly contested election took place in the most unusual year in recent memory, marked by a global pandemic and its economic impact, the racial justice movement, and growing economic and philosophical divisions among citizens. While partisanship is bound to continue (and it may be weeks before the final results are known), a small Republican margin in the Senate would likely mark a continuation of incremental legislating.
Biden's legislative agenda will only move if he can garner support of a majority of Senate Republicans, a requirement Majority Leader Mitch McConnell (R-KY) has steadfastly maintained. The outstanding question is whether the business community and employee advocates come together and solve issues through compromises that can gain a majority of GOP Senators, as well as the White House and House Democrats, who appear to have a smaller caucus next year.
Short of such compromises, a Biden administration would make aggressive use of executive orders and his regulatory authority to get things done outside of Congress, much as we have seen under the Trump and Obama administrations. His appointments to the Cabinet and independent agencies would carry particular significance.
The following is an issue-by-issue outline of the election’s likely immediate impacts on human resources public policy.
Employment and Labor Issues—Paid Leave, Equal Pay, and Labor Law Reform: COVID relief is expected to be a Biden administration's first priority in 2021, and HR issues will feature prominently in those discussions.
- Large employers should expect an early discussion of COVID-based emergency paid FMLA leave for caregiving and paid sick leave for individuals, but without the government assistance provided to small employers earlier this year. This would set the stage for a debate over permanent paid leave programs going forward. Recognizing that many of our members support the goals of paid leave and already provide generous leave benefits, the Association is focused on obtaining relief from the administrative complexities imposed by widely divergent state and local leave laws.
- The expansion of equal pay laws also will be an early priority, but Republican control of the Senate would be a major hurdle for pay equity proponents. It also could provide greater room for a more practical approach than Democrats have discussed so far.
- A President Biden would withdraw the Executive Order limiting D&I training for federal contractors, and in time, could adopt other orders requiring contractors to disclose board diversity and workforce demographic data.
- With slim prospects for comprehensive labor law reform, Biden would likely issue an executive order to mandate prospective federal contractors to report whether they or their subcontractors have violated a wide variety of state and federal labor laws when bidding on contracts. Such an order could also prohibit federal contractors from opposing union organizing efforts, even when done lawfully.
- Once appointees have been confirmed to the various employment policy agencies, ambitious new regulations and more aggressive enforcement policies would follow. New independent contractor and joint employer rules expanding employer liability would be in the crosshairs.
Executive Compensation—All Eyes on the SEC: A new administration and expected new SEC Chair—cementing a Democratic majority in the Commission—would signal a different agenda for executive compensation and governance issues. Among these would be inequality and corporate responsibility.
- The SEC would likely suspend the implementation of the final rules mandating greater proxy advisory firm accountability and higher thresholds for resubmission of shareholder proposals and seek to revise the rules through notice and comment periods.
- ESG Standard: The SEC would also almost certainly prioritize a regulation mandating company disclosure of environmental, social and governance factors, including an expansive mandate to disclose human capital metrics such as workforce diversity, turnover and training.
- Dodd-Frank Rules: The SEC would likely seek to complete the Dodd-Frank rules on clawbacks and pay for performance disclosure.
- Even with a Republican Senate, Congress may revisit issues such as board diversity disclosure, the tax deductibility of executive compensation, including deferred compensation, and limit or prohibit stock buybacks.
Health Care—Strengthening the ACA, Public Option? Health care will again be a top priority—as it was four years ago. The first measure will be COVID relief, which may contain several health care provisions of significance to large employers.
- The House-passed COVID relief bill (HEROES Act) would create a 100% COBRA subsidy for former employees and a partial subsidy for furloughed employees, prohibit balance billing for COVID-19 testing and treatment, and allow greater flexibility for HSAs. HR Policy and its American Health Policy Institute continue to advocate for these provisions along with permanently addressing all surprise medical bills and increasing transparency.
- A broader debate on adoption of a public option under the ACA is not likely in the near term, but expect advocacy groups to press their case. Our American Health Policy Institute will continue to educate members and advocate for employer-based care in the near term.
- Expect a broader debate on how to fix the ACA should the Supreme Court invalidate the entire law.
- Expect a Biden administration to advocate for measures addressing the cost of care, including by expanding ACA premium and cost-sharing subsidies, providing funding for state reinsurance programs, encouraging states to expand their Medicaid programs, and lowering drug prices by having Medicare negotiate public and private prices.
- The new HHS transparency rules would remain and could potentially be expanded.
- The President and Congress will need to address the Medicare Hospital Insurance Trust Fund, which is projected to become insolvent in 2024, meaning an increase in payroll taxes, benefit cuts, or both. This could become a vehicle for moderate compromises on health care and other tax and spending legislation.
- The mental health crisis will continue, but a potential government response remains vague. The Association has partnered with The Path Forward to provide resources to members and will engage with Congress and the administration to expand access to mental health care.
Immigration—work visas in the spotlight: While a Biden presidency would overall be more immigration-friendly, it is not at all clear whether this would extend to skilled worker visas. For now, the Trump administration has moved against H-1B visas with a duo of interim final rules that challenge employers’ ability to hire such workers. Both are being challenged in court by the business community, with amicus curiae support by HR Policy (see separate story). Notwithstanding the legal proceedings, H-1B visas for high-skilled workers could remain under regulatory siege. It is unclear whether the Biden administration will undo the regulations. If they are reversed, the Biden campaign’s immigration plan would seem to suggest that further regulations may be on the way.
The policy landscape going in 2021 provides an excellent opportunity for the Association to demonstrate its effectiveness. Your role in helping the Association set priorities and educate policymakers will be essential to helping shape the outcome. More to come in the weeks ahead. In addition, federal policy will be an important focus of our 2021 virtual CHRO Summit in March.