Divided Government and Workplace Policy in 2023

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With Democrats maintaining control of the Senate and Republicans taking charge of the House of Representatives following Election Day 2022, there are implications for workplace policy. Split control of the federal government means we should not expect significant legislative progress in the 118th Congress. Instead, workplace issues will be addressed by federal regulatory actions, court decisions and state legislation.

Before I turn to those areas, I should note there is still time for the current Congress to act on several important policy issues and nominee confirmations. For example, the ability of employers to offer pre-deductible coverage of telehealth services for many workers will expire at the end of December. SHRM successfully advocated for the restoration of telehealth flexibilities in March, and we will keep seeking their extension. Telehealth services allow employees to access providers at their convenience and they make more options available, including mental health care.

Looking forward to the next two years, regulatory actions by the Biden administration will likely be the main driver of federal policy. Most notably, the Department of Labor Wage and Hour Division (WHD) will directly shape workplace policy with multiple actions related to the Fair Labor Standards Act. SHRM is tracking a proposal that would rescind the 2021 “core factors” test for classifying workers as independent contractors or employees and replace it with a “totality of circumstances” test. The new rule is expected to be finalized in early 2023.

Employers should also be aware WHD plans to change the overtime exemptions rule. Currently, employees making $684 per week or approximately $35,568 a year who are bona fide executive, administrative and professional employees are not entitled to overtime pay. Employees making less than this threshold or who do not meet the bona fide classifications are entitled to one-and-a-half times their regular rate of pay for working overtime. WHD is expected to revise these minimum salary thresholds upwards.

Global mobility is another area of focus for SHRM. As workforce shortages continue, the Department of Homeland Security is likely to keep using its discretionary authority to issue additional supplemental H-2B visas in 2023 and explore other ways to expand workplace immigration.

Moving to the judicial branch, we are monitoring the potential for the Supreme Court to curtail the regulatory authority of the executive branch.  With its ruling in West Virginia v. EPA that the Environmental Protection Agency exceeded its authority by requiring power plants to use specific technology, the court appears more willing to diminish the implied power of federal agencies to regulate. Any change to agencies’ authority to regulate American businesses could affect employer-provided health care, retirement and labor and employment law.

The Supreme Court may also reverse precedent regarding race-based considerations in college admissions, opening the door to challenges of race-conscious workplace practices like remedial measures and disparate impact and treatment claims.

I expect state legislatures to be more active than Congress when it comes to changes to workplace policy. I have talked with numerous journalists recently about the likelihood that several states will follow the lead of California and New York City in adopting legislation that requires employers to post salary ranges in every job posting.  

Artificial intelligence, or AI, is also in the news these days. New AI legislation or regulation will likely focus on audits of systems used by employers to help make employment decisions and create liability for employers if a system is deemed discriminatory.

Changes to employer-provided health care regulations focused on family planning will also continue, with some states taking action to codify abortion rights and others imposing new restrictions that could affect employer-provided health plans.

In closing, I think it is worth noting that HR leaders have a vital role in helping organizations navigate federal and state laws and regulations. And they are called on to ensure that politics are not a source of division or discord in the workplace.

As the next presidential election approaches, I encourage the HR community to read SHRM’s 2022 Politics at Work Study and identify ways to improve civility at work. We should have the courage to invite candid conversations about the issues people bring to work with them every day. We will count on HR professionals to lead the way.

The SHRM Blog does not accept solicitation for guest posts.

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