The administration has been very active not only in the labor space, but also in environmental regulations and tobacco regulation.”

Any time a presidential administration is facing an election year, it tends to ramp up its regulatory activity in an attempt to get as much of the current president’s agenda on the books as possible. This is true whether it is facing reelection, as President Biden currently is, or if it is a lame duck administration. Biden’s team is no exception. At the time of this writing, we know that the administration has been very active not only in the labor space, but also in environmental regulations and tobacco regulation. For this article, we’ll focus on the administration’s labor agenda.

The Joint Employer Rule

In October, the National Labor Relations Board (NLRB) finalized the joint employer rule, which has the potential to entirely upend the franchise business model as well as complicate many other contractual agreements and branding arrangements.

The NLRB withdrew a rule finalized under President Trump that required that one employer actually enforce authority over certain essential terms and conditions of employment of another company’s worker in order to be considered in a joint employer relationship with that other company vis-a-vis that employee. The NLRB replaced it with a rule similar to one President Obama had implemented that significantly expanded the universe of potential joint employer relationships by saying that one employer need only have the ability to influence an essential term or condition of another company’s employee in order to create a potential joint employer relationship, whether or not it had ever actually exercised that authority. This much broader definition has the potential to create many new joint employer relationships where they did not previously exist.

As this article goes to press, NACS has joined a number of other business trade groups, led by the U.S. Chamber of Commerce, in filing a legal challenge to that new rule. At least partially in response to that challenge, the NLRB pushed back the effective date of the rule from December 26, 2023, to February 26, 2024.

This much broader definition has the potential to create many new joint employer relationships where they did not previously exist.”

Classifying Workers

While the NLRB was finalizing the joint employer rule, the U.S. Department of Labor (DOL) was busy proposing new rules of its own, expected to be finalized in early 2024, that could also significantly impact our industry.

First, the DOL has proposed making it much harder for a company to classify workers as independent contractors rather than actual employees. While this proposal is thought to be primarily targeted at gig economy workers such as ride share drivers and food and retail delivery drivers, it would have much further-reaching impacts.

Notably, the rule could impact convenience retailers’ relationships with contractors it may use for things like landscaping, snow removal or maintenance, depending on a number of factors. NACS filed comments opposing the change in the DOL’s stance on these workers.

Raising the Salary Threshold

The DOL also proposed a significant change in the salary threshold of the so-called white-collar exemption to the overtime rule. The rule was last updated in 2020 to reflect current salary levels, and NACS believes the existing rule continues to do its job in that regard. DOL has proposed significantly increasing that salary level from the current $684 per week ($35,568 per year) to $1,059 per week ($55,068 per year.) DOL arrived at that number by significantly changing the methodology used in calculating the salary threshold. The DOL then went a step further, mandating that the salary be updated automatically every three years using the new methodology.

Such a dramatic change in the minimum salary for this rule would have a detrimental impact on many workers in our industry and others, as companies may seek to change some workers from salaried to hourly pay or take other actions to better rein in costs associated with compliance.

Companies may seek to change some workers from salaried to hourly pay.”

The proposal is also similar to one attempted by the Obama administration that was ultimately struck down by a federal court before it went into effect. NACS filed comments opposing the proposal and expects to see a final version in early 2024. If the DOL doesn’t reverse course, it is likely that its rule will face legal challenges as well.

Beyond the NLRB and DOL, the administration is pushing for organized labor priorities in places such as the Occupational Safety and Health Administration (OSHA) with its new “walk around” rule proposal, which would allow a designated union representative to accompany OSHA inspectors during on-site visits. The Federal Trade Commission is also in on the act as it has inserted labor-focused provisions in its proposal to regulate mergers and acquisitions as well.

Keep an eye on convenience.org and the NACS Daily newsletter, where the NACS government relations staff will provide frequent updates as these proposals and more move through the regulatory process.