Let’s look at the Biden agenda and how you can prepare your business for the changes that are likely to come. It has been less than 100 days since President Biden took office, but the early signs indicate numerous issues that employers will need to grapple with over the next four years. We take a look at each of them and offer thoughts on how employers can prepare now for the changes that are likely to come from the Biden agenda.
Key Hallmarks of the Biden Agenda
Diversity and Inclusion
Based on individuals who have been confirmed to date, President Biden boasts the most diverse cabinet in American history, and for good reason. He is modeling one of his administration’s highest priorities—advancing equity for all. One of the expected outcomes is increased fairness in the workplace.
While it seems to be on the radar of large corporations, diversity and inclusion is important for businesses of all sizes. It makes sense now to look at your workforce demographics, evaluate how they came to be, and assess whether they are truly representative of your target customer, marketplace, and community. To create true alignment, proactively look at your recruiting and retention practices to ensure you are drawing from the widest, most diverse talent pool. Then, understand how to create a culture to support diversity and inclusion.
Diversity and inclusion is not exclusively about race. Gender plays an important role, and we expect that pay equity, which was cast into the spotlight by the US Women’s Soccer in 2019, will be elevated on the Biden agenda. In fact, President Biden just signed an executive order establishing a Gender Policy Council within the White House geared toward promoting gender equity. While the gender gap in pay has seen some improvement, women still only earn 79% of what men do.
Beyond the male/female disparity, employers need to ensure that all people working in similar positions and who have equal tenure are paid the same. If there is a difference, you need to clearly document why—say for example one employee has a special skill or a different level of education.
Until recent COVID-related regulations, most mandated leave acts have been on a federal level and typically have been reserved for companies that have 50 or more employees. We believe that increased leave regulations impacting employers of all size will be very much in play during the Biden presidency. Will you be ready? Are your employees cross trained? Are there operating procedures for all positions? Do you know where to turn for temporary staff to augment employees out on leave?
$15 Federal Minimum Wage
Debated as part of the latest stimulus bill, the $15 federal minimum wage dispute won’t be going away anytime soon. If and when it’s passed, all businesses will need to reexamine their operations. What can be automated? What efficiencies can be gained through different processes? Consider this: can a smaller team of A players do the work of a larger team of B and C players?
With President Biden hinting at more open borders than his predecessor, we foresee more employees—whether documented or not—coming into the labor market. For employers, this means being deliberate with internal processes to ensure administrative compliance for workers who may not be from the US. The penalties for missed paperwork or documents that are incorrect can be steep, and working Visas can be tricky. In the worst case, your business can be red flagged for non-compliance and wind up on another government agency’s watch list.
Retirement Savings Plans
The federal SECURE Act, passed in December 2019, offered small businesses a tax credit of up to $1,500 over three years for establishing a workplace retirement plan. A few months earlier, Governor Murphy signed The New Jersey Secure Choice Saving Program establishing a state-sponsored plan and requiring many companies to offer employees either their own plan, or the New Jersey plan. This takes effect in early 2022.
The Biden administration has also proposed creating an automatic 401(k) for workers who do not have access to a workplace retirement account. The proposal includes replacing the tax deduction for these retirement accounts with a flat tax credit for retirement contributions, regardless of your income.
If your business does not offer a retirement plan, you should be examining how to get one. At some point, your business will most likely be mandated to offer this benefit. The administration of 401(k)s and other group retirement plans are tricky for employers because of fiduciary and compliance responsibilities. It’s best to consult with a professional, expert advisor for guidance.
Getting Ready for the Biden Agenda
From a financial standpoint, the most important action to take now is an honest evaluation of your labor levels. Do you really have all the right people in the right seats? Could you have less seats with more capable people? In the past, as your workload increased, was your instinct and your answer to add people rather than evaluate processes?
Who are the experts and professionals you rely on? You should evaluate how you are handling HR administration, employee relations and increased regulation. If you have a DIY approach, if your HR function isn’t centralized, or if you need strategic guidance, especially keeping up with all the new regulations on the horizon, an outsourced HR advisor might be just the thing for you.