Business Continuity
3 Ways A Biden Administration Will Impact Your Business
As Inauguration Day is about eight weeks away, you might be wondering how will a Biden presidency affect your business. Here are three things that I believe could very likely happen.
Infrastructure spending
Back in July, the Democratically-controlled House passed a $1.5 trillion infrastructure bill that includes, among other things, spending on reducing emissions, more electric vehicles and trains, upgrading schools and hospitals, extending broadband coverage, making the nation's drinking water supply and vehicles safer as well as making security refinements to our energy grid. Biden fully supports this bill.
And believe it or not...so do the Republicans. Well, not all of it. But the GOP and the Trump administration have in the past proposed their own version of infrastructure spending—as much as $1.7 trillion—which would also do much of the same, although with less emphasis on the environmental and "green" aspects that have been a priority for Democrats.
The bottom line is that there is going to be some type of infrastructure spending in 2021 and the years thereafter. It's widely agreed that the country's airports, roads, electrical, broadband, and energy systems need an overhaul. A bill like this will certainly benefit all those companies that are directly or indirectly in the construction business. But it could also benefit any other firm that redirects their marketing efforts for their services to the benefactors of this potential spending boom. Follow the money, right?
A more active labor department
Joe Biden is pro-union and pro-labor and it's expected that his Labor Department will reflect those positions. So what does that mean for businesses?
I wouldn't bet on a $15 per hour national minimum wage, as this is something that will need Congressional approval and will likely face stiff opposition. But Biden's Labor Department will likely pursue and increase to overtime wages to the approximately $47,000 levels previously proposed by the Obama administration (it's currently about $35,500) which means that employees who make up to that amount may be entitled to overtime wages for any time spent over 40 hours per week.
A Biden Labor Department will also be more active in enforcing and creating new rules that it hopes to improve safety and lessen the occurrences of harassment and discrimination. His department would likely enable employees to more easily form unions and to collect more benefits if they're deemed to be part of a "joint-employer" relationship. Biden is also a proponent of eliminating non-compete clauses from employment agreements to make it easier for employees to leave their jobs and move to competitors. Look for more power put into the hands of OSHA (the Occupational Safety and Health Administration), the EEOC (the Equal Employment Opportunity Commission) and the NLRB (the National Labor Relations Board) as well.
A re-look at independent contractors
In 2019, California passed a law called AB5 that significantly impacted the way employers in that state could classify the independent contractors they used for their businesses. In effect, the law said that companies that used independent contractors—or 1099 workers—to generate revenue for their business (as opposed to just perform outside services) would need to classify these workers as employees and pay them the benefits therein. That law was contested by some of the big ride sharing firms like Uber and Lyft who ultimately received exemption via a public vote in November. But it still stands for many other businesses.
Joe Biden is a supporter of that law. He has said that independent contracting rules should be re-visited and potentially changed so that people who are entitled to the benefits of an employee can receive them. Changing these rules could be challenging, and if Congress needs to get involved he would probably not get far. But many experts believe that, with the help of his Treasury (that oversees the IRS) and Labor secretaries, some of the "rules" over classification could be changed without Congressional involvement because—at least for now—no new taxes would be levied.
If this happens, it could pose a serious challenge to many businesses (like mine) who contract with outsiders to provide services for our customers, and then bill out this work. The Trump administration has left this issue alone. But a Biden administration will probably have a very different take and it wouldn't surprise me to see changes in this area coming during his presidency.
I'm ignoring other issues here for sake of space. For example, a Biden administration's trade policies will affect businesses, as well as the potential for new environmental regulations. Depending on the compromises he's willing to make, we could see some form of tax legislation come about over the next few years, as well as further enhancements to the Affordable Care Act. But many of these things do need Congressional approval, and with the Senate being so definitively split it will not be an easy course. But in the meantime, you can be assured that the three things I mentioned above could very likely happen. Which means that you should be preparing for them just in case they do.