What Will Obama's Second Term Mean for Employers?

Originally published by: LittlerNovember 14, 2012

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Now that the election-generated dust has settled, employers are left wondering how the results will impact their operations in the coming four years. In many respects, not much has changed as result of the 2012 elections. The House of Representatives is still controlled by Republicans, and the Senate by Democrats, albeit by a slightly larger margin. Federal agencies will continue to pursue their agendas with their current political appointees. While a more detailed analysis of the election's implications can be found here, the following is a brief overview of what employers can expect on the legislative/regulatory front.


Given that it was an election year and Republicans held a majority in the House of Representatives, few labor- and employment-related bills were enacted this year, and none that were ground-breaking. Although union and employee-friendly bills could advance during the next legislative term, they will still face expected opposition in the House. Measures that stalled in the 112th Congress such as the Employment Nondiscrimination Act (ENDA), Paycheck Fairness Act, Protecting Older Workers Against Discrimination Act (POWADA), and the Robert C. Byrd Mine and Workplace Safety and Health Act will likely remain stalled in the next session. Still, unless Democrats are able to regain a significant number of seats in the House of Representatives during the 2014 midterm elections, few significant labor and employment bills are expected to be enacted during this time. There has been some speculation, however, that comprehensive immigration reform could be the President's next legislative priority.

Regulations and other Agency Activity

In the months leading up to the election, federal agency rulemaking and related activity came to a virtual standstill. In fact, agencies have yet to release their Spring 2012 unified regulatory agendas, which offer some insight into their regulatory priorities. Now that the election is over, however, it is anticipated that agency activity will once again pick up speed. In fact, many predict that the backlog of proposed and final regulations will be issued within the next couple of months, if not weeks.

The National Labor Relations Board (NLRB) had been particularly active this year, issuing several decisions and agreeing to revisit past ones dealing with employer social media policies, micro bargaining units, graduate student union organizing, off-duty access, and the duty to provide witnesses statements gathered from internal investigations, among other closely-watched issues. The Board itself is facing a number of judicial challenges, including one contesting the validity of two members' recess appointments, and others challenging rules issuing on representation elections and notice posting requirements. Emboldened by the election results, the Board may continue to pursue its increasingly ambitious agenda.

Subagencies within the Department of Labor, meanwhile, are expected to advance some particularly contentious rules, including those permitting domestic caregivers to earn overtime and the minimum wage, and those that would broaden the scope of reportable activities by substantially narrowing its interpretation of the "advice exemption" in Section 203(c) of the Labor Management Reporting and Disclosure Act (LMRDA).

The agency's Employee Benefits Security Administration (EBSA) is expected to re-propose a rule that would clarify who constitutes a "fiduciary" under ERISA when providing investment advice to retirement plans and other employee benefit plans, while the Occupational Safety and Health Administration (OSHA) is developing a proposed rule implementing a new injury and illness prevention program (I2P2).

A number of Office of Federal Contract Compliance Program (OFCCP) proposed rules are pending, including one that would amend the nondiscrimination and affirmative action requirements regarding individuals with disabilities for federal contractors and subcontractors, and another that would amend regulations regarding a contractor's and subcontractor's affirmative action and nondiscrimination obligations towards protected veterans under the Vietnam Era Veterans' Readjustment Assistance Act of 1974 (VEVRAA). The agency is also considering the development and implementation of a new compensation data collection tool, and a revision to its sex discrimination guidelines. Employers can also expect to see continued agency efforts by the DOL and Department of Justice to combat retaliation against whistleblowers, and worker misclassification.

The agencies are expected to release their full regulatory agendas before the year is out.


The Supreme Court's June decision upholding the Affordable Care Act's individual mandate ensured that the health care reform law would remain viable for the foreseeable future. Although new challenges to the law persist, employers must prepare for the law's additional provisions – including the "pay or play" employer mandate – to take effect in the coming years, especially now that President Obama will remain in office.

Now that the election is over, employers can expect agencies charged with implementing the law to release a slew of proposed and final regulations. Outstanding final regulations include those defining which benefits are considered "essential" that qualified health plans must provide, what criteria will be used to classify a worker as "full time" and how "minimum value" is defined for purposes of the employer Pay-or-Play penalty.

Fiscal Cliff

A looming issue heading into the new year is whether a solution can be reached on certain federal budget issues by January 2, 2013. Failure to do so will result in a sequestration of funds under the Balanced Budget Emergency Deficit Control Act. If a solution cannot be found by that date, the President is required to cut discretionary defense spending and discretionary non-defense spending by uniform percentages, estimated to be approximately 10% and 8%, respectively. How Congress and the White House deal with the impending "fiscal cliff" will foretell much about the political climate in Washington in the next two years.

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