A Look Ahead at the Legal and Market Forces Affecting Employment

Almost two years into the new presidential administration, and with highly consequential and hotly debated mid-term elections around the corner, Littler’s Workforce Policy Institute’s Labor Day Report examines the state of the American workforce. The WPI offers this report to provide an overview of the U.S. labor economy, highlight employment trends, discuss key employment developments from the past year, and provide a preview of things to come.

Here is a summary of what the report covers:

State of the U.S. labor market — Today, the U.S. labor market has historically low unemployment. But at the same time, employers are challenged by a low labor market participation rate, and many workers see wage increases that sometimes lag behind inflation. Seventeen million workers want to find work or more work, 7.8 million workers hold more than one job, and 3.2 million workers are getting by with multiple part-time jobs alone.

Changing nature of work — Contingent worker classification issues of all kinds will continue to be a challenge as long as 20th century laws are applied to 21st century workforces. We will see continued experimentation of working arrangements outside the traditional employer/employee relationship, creating great strains on wage and hour laws and compliance, uncertainty with classification standards, the desire for portable benefits, the need to address retirement security, and calls for anti-discrimination laws and other workplace protections to apply more broadly.

The “skills gap” and the coming TIDE — The skills gap — the mismatch between the skills employers expect workers to have and the skills that they actually possess — continues to widen. An aging workforce and a poor educational pipeline will only exacerbate that trend. At the same time, technology-induced displacement of employees — the coming TIDE — will displace tens of millions of jobs with automation.  The need to revitalize apprenticeship and vocational training programs has never been greater.  The efforts of the president’s Apprenticeship Task Force and the recently announced National Council for the American Worker are much-needed and welcome steps toward addressing these looming issues.

Restoring balance to federal labor law — With a working Republican majority in place, WPI expects the National Labor Relations Board (NLRB) to address some of the thorniest issues via case law and a revitalized rulemaking agenda (likely addressing — as soon as this fall — contentious joint-employer rules). Controversy over appointments and even over the status of existing NLRB members will continue as the weaponization of ethics has become a standard tactic. Nevertheless, we look to the NLRB to quickly turn to key policy issues and address the several years of precedent overturned by the prior administration and the chaos it has created.

The #MeToo era will continue to impact employers — Renewed national focus both in the public and among policymakers on workplace harassment shows no signs of abating nearly a year after the #MeToo movement came to dominate the national discourse. In the absence of federal action, state and local lawmakers will continue to offer “solutions” to fill the gap. The EEOC’s 2016 report on harassment is becoming required reading as more and more companies look for fundamental cultural change to address the problem.

Challenges for the Department of Labor — The Department of Labor (DOL) faces major tasks ahead without a full complement of political appointees in place nearly two years into the administration. Employers will continue to call on the DOL to use its rulemaking authority to address issues of regular rates of pay, overtime, joint-employer status, and the classification of independent contractors. In the absence of more formal clarifications, employers will continue to press the DOL for opinion letters and sub-regulatory guidance on critical issues.

Is pay equity is the new normal? — Pay equity analysis will become increasingly common in many major companies, even as challenges to the legality of recently proposed mandates continue. The First Amendment will be tested as laws prohibiting salary history inquiries continue to abound, and courts grapple with how to balance different competing principles. State and local efforts to “strengthen” pay equity laws in their jurisdictions will continue to proliferate and will continue to be challenged.

Health care conflict, confusion, and (un)certainty — Lawsuits challenging the future of Association Health Plans will put small employers’ ability to offer heath care in doubt.  Meanwhile, a patchwork of mandated leave laws will continue to create more compliance burdens as state and local lawmakers fill the vacuum caused by Congress’s inability to enact preemptive legislation.

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Whither workplace wellness? —  Employers large and small will be forced to roll the dice on workplace wellness plans, as the EEOC’s regulations are voided and new rules are unlikely to come anytime soon. The agency heads into 2019 with the increasing likelihood of a two-member commission, and a General Counsel’s seat vacant for almost two years.

Here comes the judge(s) — The aftermath of this year’s Supreme Court Janus decision will play out in lower courts all over the country as the retroactivity of recovering dues already paid by public sector workers will be hard fought. We can expect also to see efforts to apply Janus’s expansion of First Amendment protections against compelled speech to the private sector. At the highest level, the Supreme Court is expected to tackle a number of workplace issues as its new term begins in October, likely with new Justice Kavanaugh in place. The Court will scrutinize even more closely all forms of rulemaking, as Chevron deference to administrative agency interpretation is under frontal attack.

And Littler’s WPI will be on top of all of it.

Click here to read the full WPI Report.

This was originally published on Littler Mendelson’s website. © 2018 Littler Mendelson. All Rights Reserved. Littler®, Employment & Labor Law Solutions Worldwide® and ASAP® are registered trademarks of Littler Mendelson, P.C.

Creative Commons image by Bryan Davidson

Michael Lotito is a shareholder in the San Francisco office of the labor law firm Littler Mendelson.

As co-chair of Littler’s Workplace Policy Institute (WPI), Michael Lotito strategically advises clients and policy makers on what labor and employment law might become, not just what it is today. He provides counsel in all aspects of traditional labor relations, including matters arising under the National Labor Relations Act.

A nationally recognized thought leader on workplace policy, Michael has testified before the U.S. House of Representatives and the U.S. Senate, as well as the National Labor Relations Board (NLRB) and the Equal Employment Opportunity Commission (EEOC). In his WPI role, he advocates on behalf of the employer community on a variety of issues, regularly files amicus briefs on vital workplace policy concerns and has led the management community in opposition to the federal persuader rule, which would destroy confidentiality between lawyers and their clients.

Through the Emma Coalition, a project Michael co-founded and named in honor of his granddaughter, he is at the vanguard in preparing American business and the American workforce for the future of work. As technology, especially robotics and artificial intelligence, creates not only unprecedented displacement but also unprecedented opportunities, the Emma Coalition, in cooperation with government and corporate entities, examines what skills the American workforce will need down the road and makes sure America and its people will remain competitive in the years to come. As part of this work, Michael has coauthored a widely read reportsummarizing what the future workforce can expect and how America can prepare.

Michael represents leading global companies on strategic issues impacting their workplaces, including the intersection of U.S. and international labor standards. He speaks throughout the world to management groups, sharing his passion for the development and implementation of workplace regulations that balance the legitimate needs of businesses, their workforce and society at large.

He is labor counsel to the International Franchise Association, the National Association of Manufactures’ legal compliance program, the Job Creators Network and a member of the U.S. Chamber of Commerce's labor and employment law litigation committee.

Human Resource Executive magazine has inducted Michael into its Hall of Fame of the Nation’s Most Powerful Employment Attorneys. The College of Labor and Employment Lawyers has elected him a fellow. Awarded an AV Preeminent Peer Review Rating by Martindale-Hubbell, Michael is frequently quoted by the media, including Bloomberg BNALaw360Forbes, Politico, The Wall Street Journal, CNBC, Fox Business Network and The Hill, among others. He maintains a significant social media presence and can be followed on LinkedIn and Twitter.

The Villanova University Graduate School of Human Resources named him HR Alumnus of the 20th Century.

Contact him at mlotito@littler.com.

Maury Baskin is a shareholder in the Washington, D.C. office of Littler Mendelson. He is co-chair or the firm's Workplace Policy Institute.

Maury focuses his Washington, DC-based practice on national labor policy, challenging excessive government regulation on behalf of small and large businesses, while advising employers in compliance issues. He has extensive experience in dealing with labor relations and union pressure tactics, employment discrimination and wage and hour law. He has represented a variety of industry sectors, advising clients involved in construction, government contracting, higher education, telecommunications, hospitality, security, and nonprofits.

Maury has served as lead counsel at all levels of the federal and state courts and before the U.S. Supreme Court, and has recently led successful challenges against nationwide federal labor regulations on behalf of multi-industry coalitions, including the 2016 “white collar” overtime rule and the so-called “blacklisting” rule. He has also succeeded in the courts in numerous cases involving the National Labor Relations Board (NLRB) and the Department of Labor (DOL). Maury is the Chair of Littler's Construction Industry Group and has long represented the Associated Builders and Contractors (ABC) national trade association and many of its construction industry members. On their behalf, he has been one of the leading advocates against government-mandated project labor agreements, prevailing wage expansion, and union corporate campaigns.

James A. Paretti, Jr. is a shareholder in Littler Mendelson's Washington, D.C. office.

Jim is and experienced management-side employment and labor relations attorney with in-depth political and policy knowledge of labor, pension, healthcare and employment law, regulations and legislation. He is well versed in all aspects of legislative and political processes with demonstrated knowledge in the substance of federal labor and employment policy. He has over two decades of experience working with federal legislators and policymakers, including former Speaker of the U.S. House of Representatives, chairs of the U.S. House Committee on Education and the Workforce, and senior level administration officials. 

Prior to joining Littler, Jim was chief of staff and senior counsel to the acting chair of the Equal Employment Opportunity Commission. He provided legal and political counsel with respect to all aspects of agency business, administered and managed the Office of the Chair where he was responsible for over 2,200 employees and a $375 million annual budget, and served as primary liaison to regulated stakeholders and Capitol Hill.

His extensive experience includes developing policy and providing legal counsel on the Committee on Education and Labor in the U.S. House of Representatives as well as coordinating external communications and media relations for a senior member of Congress. Jim represented corporate and nonprofit clients in employment litigation in federal and state court, before administrative agencies and in private arbitration while with two Boston firms. 

During law school, he held positions as editor as well as note and comment editor for the New York University Law Review.