July 1, 2021 | General | Posted by Bob Greene, Senior HR Industry Analyst at Ascentis
The First 100 Days: The Impact of New Executive Orders on HCM (Part I)
April 29, 2021 marked the end of the first hundred days of the Biden Presidency, and the new administration has been busy! In two previous blogs, we covered the HCM-impacting details of The American Rescue Plan Act, and the specific and significant changes to COBRA health continuation programs that it brought about. In this blog, we will review some of the Executive Orders which the new Administration has brought into effect, and how they impact HR, Payroll and Workforce Management.
Diversity and Employee Training & Development
On September 22, 2020, President Trump signed Executive Order 13950. Applicable to employers who are federal contractors only, the Order would have placed unprecedented restrictions on the content that employers could use when training their employees on diversity, equity and inclusion. The Order, as well as two follow-on memoranda from the Office of Management & Budget, detailed prohibitions on the teaching of concepts like “critical race theory,” “white privilege,” “systemic racism,” and “unconscious bias,” to employee groups, among others. Violations of the Order could result in full debarment from the federal contracting process, which contractors know can be an “extinction level event” for organizations completely dependent on federal contracts for their revenues.
Based on the questions that came in from Ascentis thought leadership webinar attendees at the time, employers reacted … well … negatively, to these restrictions, to say the least. Many employers carefully “tiptoe” their way through the employee cultural impact of events that increase employee scrutiny of diversity and inclusion issues at work.
We mention that the Order “would have placed” these restrictions because, on December 23, 2020, a US District Court judge enjoined the Trump Administration from enforcing the order, finding that the various civil rights groups bringing an initial challenge to the E.O. had “…a likelihood of success in proving that the Executive Order violated their constitutional rights.” Technically, the Order remained on the books, but couldn’t be enforced.
On his first day in office, January 20, 2021, President Biden revoked E.O.13950, via E.O.13985, and directed all federal agencies to “…review and identify proposed and existing agency actions related to or arising from Executive Order 13950. The head of each agency shall, within 60 days of the date of this order, consider suspending, revising, or rescinding any such actions, including all agency actions to terminate or restrict contracts or grants pursuant to Executive Order 13950…” As a result, the situation for federal contractors engaged in conducting internal training of their workforces reverts to the “status quo ante” and no federal rules attempt to dictate to employers what content they can, and cannot, include in that training.
Addressing Discrimination Based on Sexual Orientation and Gender Identity
Also on his inauguration day, President Biden signed E.O.13988, “Preventing and Combatting Discrimination on the Basis of Gender Identity or Sexual Orientation.” The Order observes, in pertinent part: “Discrimination on the basis of gender identity or sexual orientation … often overlaps with other forms of prohibited discrimination, including discrimination on the basis of race or disability. For example, transgender Black Americans face unconscionably high levels of workplace discrimination, homelessness, and violence, including fatal violence.”
This Order largely reinforces what is already the law of the land: On June 15, 2020, the U.S. Supreme Court ruled, in Bostock v. Clayton County and Altitude Express v. Zarda (590 U.S. ___), that employment nondiscrimination as prohibited by Title VII of the Civil Rights Act of 1964 and related laws does include discrimination on the basis of sexual orientation and gender identity. Further action on this issue occurred on January 25, 2021, when President Biden welcomed transgender individuals wanting to serve their country in uniform back into the military, by revoking two previous Presidential Memoranda from the Trump Administration, which had made it the official policy of the USA to disqualify all transgender individuals from eligibility to serve in the armed forces (“with limited exceptions”).
Establishing Mask Mandates…. or Not?
Under the prior Presidential Administration, during the height of the pandemic, not a single federal mandate was issued for wearing masks in public, distinguishing the US from many other nations, particularly in Europe. On January 21, 2021, President Biden signed E.O.13998, “Promoting COVID-19 Safety in Domestic and International Travel.” The scope of this Order implicitly recognizes the limits of Presidential executive orders in general – mandating masks in and on all forms of interstate and intrastate travel (air, trains, buses) as well as in related properties (airports), but not in any private transportation, and reserving a decision on mask mandates for all workplaces pending a report back from OSHA that was due April 15 (per E.O.13999, “Protecting Worker Health and Safety”), was delayed and delivered to the White House on April 29, and still hasn’t been turned into any form of nationwide mandate as of this writing.
Still, as employees resume business travel, HR departments must remain vigilant of travel restrictions and changes to those rules. Currently, the mask mandate on all forms of federally regulated travel, including planes and airports, was extended once from its original May 11 expiration date, to September 13. Additionally, there continue to be COVID-related travel restrictions in effect in many countries around the world, as well as a handful of states within the US. Business travelers should be aware of these restrictions before beginning their travel.
Bye Bye, BAHA?
Under the prior Presidential Administration, a series of Executive Orders attempted to clamp down on foreign guest workers’ access to jobs in America. Trump Administration E.O.13788 (“Buy American, Hire American” or “BAHA”), in particular, was the most draconian of these orders. Some of its impacts included:
- Reducing the number of work visas issued in various categories of employment
- Increasing the number of visa denials and requests for evidence (“RFEs”) for H1-B visa petitions – in some calendar quarters, tripling these impediments on a quarter-over-quarter basis.
- Attempting to revoke all H-4 visa Employment Authorization Documents (EADs) for the spouses of H1-B visa holders (although this revision never got through all the administrative law steps needed to fully take effect). In some regions (e.g., S.T.E.M. workers relocating to costly Silicon Valley), this rule alone would have stopped many foreign workers from taking these jobs.
On January 26, 2021, President Biden signed E.O.14005 (“Ensuring the Future is Made in All of America by All of America’s Workers”) revoked in full, revoked in part, or superseded a total of five previous E.O.s, including E.O.13788, “Buy American, Hire American.” It established a new Made in America Office within the Office of Management & Budget, headed by a “Made in America” Director, as well as a new waiver process for Made in America manufacturing.
When these actions are seen in the context of the immigration and visa revisions intended to be included in the U.S. Citizenship Act of 2021 (H.R. 1177, if passed into law – more about that in Part II of this blog), these reforms would improve the operations and efficiency of the work visa system in the US to a level not seen in recent history, and are seen by the immigration proponents as returning control of the process of attracting foreign workers to key jobs in various industries back to the HR Departments and organizations that deem such foreign worker hires to be necessary.
Worker Organizing and Empowerment
Under the prior Presidential Administration, two Executive Orders established, and then extended, a national council on upskilling the American workforce. Under the Trump Administration, E.O.13845 (“Establishing the President’s National Council for the American Worker”) established an advisory council for American workers, with 10 executive branch members, and focused on upskilling the American workforce using technology and expanded apprenticeships. While “labor unions” were included in the order, there was no provision to actually meet with them to accomplish these tasks.
President Biden’s E.O.14025 (“Worker Organizing and Empowerment”) revoked that Order. E.O. 14025 is written to be entirely labor union-centric in its scope. The order:
- Replaces the National Council for the American Worker with the new Task Force on Worker Organizing and Empowerment
- Increases the size of the Task Force to 25, including every cabinet secretary and director in the executive branch
- Makes Vice President Harris the Chair of the Task Force and Labor Secretary Walsh the Vice Chair
- Directs the Task Force to meet with the National Labor Relations Board, the Federal Labor Relations Authority, and the National Mediation Board, among others, on a regular basis
- Challenges the Task Force to “… identify executive branch policies, practices, and programs that could be used, consistent with applicable law, to promote my Administration’s policy of support for worker power, worker organizing, and collective bargaining. This identification shall include policies, practices, and programs that could be used to promote worker power in areas of the country with hostile labor laws, for marginalized workers (including women and persons of color) and hard-to-organize industries, and in changing industries.”
Increasing the Federal Minimum Wage
On April 27, two days shy of the 100-day mark, and the eve of President Biden’s first address to a joint session of Congress, he signed E.O. 14026 (“Increasing the Minimum Wage for Federal Contractors”). This effort had a bit of a tale (“tail) to tell.
The last federal minimum wage increase was signed into law July 24, 2009. At $7.25 per hour, it is just 17% above the 2021 federal poverty level for a single person and well below the FPL for families of two or more. As of 2020, about 1.1 million people in the US earn at or below the federal minimum wage:
- That is about 1.5% of the US working population
- These workers split 2/3 women and 1/3 men
- They split about 48% age 24 and under, while 52% are age 25 and up
- 42% are full-time at that wage, while 57% are part-time
The Biden Administration tried to include a nationwide minimum wage increase in the American Rescue Plan Act, but had to abandon the effort when the Senate Parliamentarian ruled it out of order for a budget reconciliation bill.
At his address to a joint session of Congress two days after signing this Order, Biden implored the legislators to send him a bill to sign, to “…raise the minimum wage to $15. No one … working 40 hours a week should live below the poverty line.” It appears that the current party split in the Senate makes that unlikely.
So, since a President cannot legally, by executive order, raise the minimum wage for all American workers, but can do so for the employees of federal contractors, this Order does just that, effective January 30, 2022. By raising the minimum wage to $15 per hour for all employees of federal contractors, the Order gives an eventual increase to 390,000 workers averaging about $3,000 per year each. The effect will be gradual, since the new minimum wage will have to be included in each new federal contract, or contract renewal. “In-flight” contracts are unaffected until they are up for renewal.
There are many good reasons for employers to establish their own, higher-than-statutory, internal minimum wage; please read our blog on the subject for more information.
Strengthening the Affordable Care Act
President Biden has made no secret of his admiration and appreciation of the ACA; in some ways, the new President takes an opposite view of the law and its impact on health care from his predecessor in the role. The new President has taken many steps in his first hundred days to bolster and protect the ACA, and we recently recapped those in a blog reviewing the Supreme Court’s latest upholding of its constitutionality; that blog can be found here.
President Biden has issued a total of 42 Executive Orders in his first 100 days – obviously an aggressive first level of engagement for a new national Chief Executive. To see the full list, complete with “drill-down” to the details of each order, the Federal Register Index of Presidential Executive Orders is a good place to start.
Bob Greene currently serves as Senior HR Industry Analyst at Ascentis. Bob’s 40 years in the human capital management industry have been spent in practitioner, consultant and vendor/partner roles. As practitioner, he managed payroll for a 5,000-person bank in New Jersey. As consultant, he spent 8 years advising customers in HRMS, and payroll and benefits system design as well as acquisition strategies. Bob also built a strategic HCM advisory practice for Xcelicor (later acquired by Deloitte Consulting.)