Factbox-US Labor Policy Will Face Legal Challenges Next Year According to Reuters

© Reuters. FILE PHOTO: A construction worker walks along the balcony of a newly constructed building at The Wharf development in Washington, U.S., October 4, 2022. REUTERS/Kevin Lamarque

By Daniel Wiesner

(Reuters) – The Biden administration and the Democratic-led US labor commission will roll out a major set of jobs policies in 2023 but could be stymied by challenges from business groups and government groups. Republican-led states have criticized the measures.

The following rules are likely to face lawsuits in the new year, including a claim that federal agencies have no reason to waive Trump-era policies deemed beneficial to business: industry and anti-union workers.


The US Department of Labor in October announced a proposal to make it more difficult for companies to treat workers as independent contractors, a change that is expected to shake up the ride-hailing, transportation and logistics industries. goods and other industries that rely on contract labor.

The proposal would require workers to be treated as employees, entitled to more benefits and legal protections than contractors, when they are “economically dependent” on a company. Studies show that most federal and state employment laws only apply to company employees, who can cost employers up to 30% more than independent contractors create.

The final rule, expected in the spring, will replace the Trump-era rule that says workers own their own businesses or potentially work for competing companies, for example. as a driver for Uber (NYSE:) and Lyft (NASDAQ:), may be considered a contractor.

The dramatic break with the Trump-era standard will likely be at the heart of lawsuits challenging the new rule. Federal law requires agencies to provide adequate explanation for their decision to withdraw and replace existing rules. Businesses and trade groups are also likely to attack the content of the new rule, arguing that the way it defines employment is inconsistent with federal law and creates uncertainty about the legal status of many workers.


The National Labor Relations Board, an independent body with a Democratic majority last year, moved in September to make it easier for workers and unions to hold accountable companies over labor law violations by franchisees and their contractors, proposes reinstating an Obama-era standard heavily criticized by trade groups.

This rule would treat companies as “general employers” under federal labor law when they have indirect control over working conditions such as scheduling, hiring, and firing. as well as monitoring. A rule adopted by the board in 2020 when it had a majority of Republican appointees, the rule was overruled in court, requiring companies to have “direct control”. and immediately”.

The new proposal, to be finalized next year, will broadly affect industries like manufacturing and construction that rely heavily on staffing agencies and contractors to supply workers and brands like McDonald’s Corp (NYSE:) generally does not engage with franchisees’ everyday workplace issues.

Lawsuits targeting the rule will likely argue that the Trump-era board’s narrower view of general employment more loyal to federal labor laws and the new rule would be confusing and destabilizing determine collective bargaining by making it unclear which company is accountable for various workplace issues.


Weeks after announcing the joint employment proposal, the NLRB said it would rescind a Trump-era rule that made it easier for workers to dissolve unions, saying it could impede employees’ rights to make unions. decide freely, be informed about union representation.

The 2020 rule prohibits NLRB employees from delaying elections while related lawsuits alleging illegal labor practices are being filed. For decades, unions have regularly filed so-called “blockage charges” to delay certification revocation votes and elections they believe they will lose.

Unions and worker advocates have said that blocking charges is an important tool to prevent employer coercion and effectively remove them to ensure that some elections were held under illegal conditions.

Business groups can bring major challenges to the rule in court, arguing that it undermines workers’ right to freely choose or refuse union representation.


Thousands of businesses contracted with the federal government are preparing to raise the minimum wage that some 330,000 workers pay, from $15 an hour to $16.20, effective next month.

President Joe Biden, a Democrat, issued an executive order last year increasing the minimum wage for federal contract workers from $10.95 to $15, and the Labor Department then passed a rule implementing the raise. The rule also ties future increases to inflation and eliminates lower minimum wages for tipping workers.

The second pay increase under the regulation comes as eight Republican-led states are challenging the Biden administration to significantly increase wages for federal contract workers. The states in a pair of lawsuits in the federal courts of Arizona and Texas say only Congress has the power to make a change that would have such a dramatic impact on the US economy. The administration in its pending motions to dismiss the lawsuits says the president has broad authority to regulate federal contracts.

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