Being an Employer Has Never Been More Complicated
Since passage of the Fair Labor Standards Act in 1938 establishing a federal minimum wage, Congress has passed hundreds of additional laws that govern the relationship between employers and their employees. The purpose of each of these laws is to protect workers from some abusive practice or perceived injustice being committed by employers. But in the 83 years since passage of the FLSA, there has never been a time in American history when employing people has been more complicated than in the year 2021. Congress passes laws and the labor department issues regulations. Then, employers either try to interpret those laws and regulations for themselves or, if they’re smart, they will hire an employment attorney to make certain their practices comply.
Being an employer has always been complicated, but since the onset of the pandemic Congress has created a tangled web of laws and regulations in their attempt to keep Americans on the payroll while racking up trillions of dollars of debt in the process. With each law passed, the burden and cost to comply falls squarely on America’s employers. From forced closures to ambiguous rules determining who is and who isn’t an “essential business” the pandemic has caused employers to modify accounting and tax reporting, recruiting and onboarding practices and work process flow.
The pandemic has created pent-up demand for goods and services that has resulted in the tightest labor market in over 30 years. The shortage of available labor, created in part by overly generous federal unemployment benefits, has created yet another challenge for employers. Employers are being forced to get creative to attract talent, and in many instances, are being forced to lower or even remove previous recruiting criteria just to generate applicants. According to a recent report by Manpower Group of North America, 32 percent of employers are unable to fill existing vacancies and that number increases to 68% for hourly worker vacancies. Extended unemployment benefits are a factor, but many workers have experienced significant changes in their personal circumstances due to COVID that is keeping them from re-entering the labor market.
Complicating matters further is Executive Order 14042 issued by President Biden last month creating a vaccine mandate for Federal employees and contractors, and the threat of imposing either a vaccine mandate or requiring regular testing on employers with over 100 employees. Although the mandate on private employers is already being challenged in court, it is likely that OSHA will issue Emergency Temporary Standards (ETS) while the issue is being litigated and yes, employers will be forced to comply.
In spite of all the new complexity associated with employment, there were 4.4 million new businesses started in 2020, a 24% increase over 2019. And in January of 2021, there were already over a half million startups. Whether this entrepreneurial initiative is due to necessity or opportunity, don’t expect a slowdown in employer responsibilities anytime soon. Seek professional help!