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.
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 4,500+ 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) face 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 subregulatory 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.
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.
Michael Lotito and Maury Baskin are co-chairs of Littler’s Workplace Policy Institute.
James Paretti is a shareholder in Littler’s Workplace Policy Institute.
