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What a Democrat-controlled House means for labor laws and the minimum wage

November 08
18:52 2018

The results of the midterm elections will likely bring more attention to key labor issues that would benefit workers, experts say, but passing legislation in a divided Congress will be difficult.

“In addition to greater levels of oversight, we believe it is likely that House Democrats will make labor and employment issues a key focus of their domestic agenda, and initiate legislative proposals on a number of hot-button labor and employment issues,” Paretti wrote.

However, that agenda may not gain much traction. While the House is now majority-Democrat for the first time in nearly a decade, the Republican Senate is likely to block many of their measures, Economic Policy Institute, the Washington, D.C. left-leaning think tank, said.

There is likely to be “minimal” immediate impact on workers from the midterm results, said Ric Edelman, co-founder of Virginia-based Edelman Financial Engines and author of “The Truth About Retirement Plans and IRAs.”

‘We’re going to see gridlock for two years and everybody will be positioning themselves for 2020.’

—Ric Edelman, author of ‘The Truth About Retirement Plans and IRAs.’

“It doesn’t matter what the Democrats want to do. They don’t control the Senate or the White House. You’re going to see a lot of bills being offered and they’re not going to go anywhere. We’re going to see gridlock for two years and everybody will be positioning themselves for 2020.”

There has already been some victories for workers. The minimum wage will go up in Arkansas and Missouri following the passage of ballot initiatives there. After Democrats won a majority in the House, workers can expect a number of laws on the agenda meant to benefit them, labor relations attorney James Paretti, a partner at Washington, D.C. firm Littler Mendelson, wrote in a post-election analysis.

This includes worker-friendly issues like increased overtime pay, promoting workplace unionization, and banning compulsory arbitration of sexual harassment cases.

Democrats have plans to take on many labor issues once the new Congressional session begins in January. On Sept. 9, 2018, Democratic House Representatives Mark DeSaulnier of California, Mark Pocan of Wisconsin, Donald Norcross of New Jersey and Debbie Dingell of Michigan released “The Future of Work: Findings and Policy Recommendations,” a report outlining legislative priorities for labor.

Here are some of the issues that Democrats plan to push:

Compulsory arbitration on the chopping block

Compulsory arbitration came into focus during the #MeToo women’s rights movement in the past year. Under compulsory arbitration, employees must settle claims against management confidentially and out of court.

Critics say companies can use these measures to bury accusations and keep repeat offenders employed.

“This means that a worker who is not paid fairly, discriminated against, or sexually harassed, is forced into a process that overwhelmingly favors the employer — and forced to manage this process alone, even though these issues are rarely confined to one single worker,” the Economic Policy Institute said.

Many employees agree to compulsory arbitration as a terms of employment when they first sign contracts to start a new job. Paretti said he expects Democratic lawmakers to make efforts to limit or ban this practice completely.

Employees could gain more rights to overtime pay

Currently, the level set for “white-collar overtime exemption” is at $ 455 per week, or $ 23,660 a year — meaning employees who make more than that can’t collect overtime pay for working more than the federal standard of 40 hours per week.

Democrats have said they plan to increase the overtime salary threshold to $ 47,476 — double the current level. They also want to tie this minimum to inflation, and allow Congress to retain the rights to continue to increase it under certain circumstances.

Targeting wage theft

House Democrats say they want to create stronger penalties for “wage theft,” when an employee is denied pay that their employer owes them. Often this occurs when employers fail to pay employees for overtime or force them to work off the clock, House representatives said.

These “stolen wages” total $ 50 billion per year, according to one estimate from the Economic Policy Institute. Stolen wages can reduce the average low-wage worker’s take-home pay by 10% or more, or $ 2,634 per year.

To combat this, Democrats want more funding for the The Wage Theft Prevention and Wage Recovery Act. This act imposes a minimum civil penalty of $ 2,000 if employers violate minimum wage and overtime protections. Repeat offenders can be fined up to $ 10,000. It would also increase the amount of time employees can wait before claiming owed wages from past theft from two years to four years.

Raise the number of sick days

Democrat representatives said in the “Future of Work” paper that they want to raise the number of federally mandated sick days to 7 days. There are currently no federal legal requirements for paid sick leave, according to the U.S. Department of Labor, but under the Family Medical Leave Act workers are allowed up to 12 weeks of unpaid time off for certain medical issues. Many employers use this as their maternity leave policy.

Establish paid family leave

House Democrats want to establish “a 12-week paid family and medical leave standard, administered through a national paid leave fund,” according to the “Future of Work.” The U.S. is the only developed nation in the world that does not offer paid family leave, though it is supported by the majority of Democrats and Republicans.

Overall, 70% of voters believe that political party shouldn’t matter when it comes to supporting a national paid family and medical leave policy, but parties differ on how to fund it.

Republicans tend to support tax cuts for businesses that provide family leave to allow them to pay for it. Democrats tend support a national-paid fund all businesses can draw from. The Family and Medical Insurance Leave (FAMILY) Act is a bill co-sponsored by Representative Rosa DeLauro of Connecticut and Senator Kirsten Gillibrand of New York, both Democrats.

Some 68% of Democrats, 61% of Independents, and 60% of Republicans support Senator Gillibrand’s FAMILY Act, according to a survey from Washington, D.C. women’s advocacy non-profit The National Partnership for Women and Families.

Minimum wage increases

House Democrats have promised to “raise the federal minimum wage,” according to the “Future of Work.” This comes as a “Fight for $ 15” campaign to increase the minimum wage to $ 15 per hour has gained support in several U.S. states. The current federal minimum wage is $ 7.25 and was last increased in 2009.

Some 71% of Americans say they support raising the minimum wage to $ 10 an hour, “even if it also increases the cost of food and service to customers,” according to a 2018 poll from the National Restaurant Association.

Meanwhile, 29% said they would prefer to keep the minimum wage the same, “even if the average food service employee can’t make ends meet. Those who oppose it say it will increase costs of small business owners rendering them unable to keep their doors open. And other opponents say it will raise prices, and, ultimately, impede the ability of employers to hire more staff.

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Kari Paul is a personal finance reporter based in New York. You can follow her on Twitter @kari_paul.

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