News & Commentary

June 4, 2021

Tascha Shahriari-Parsa

Tascha Shahriari-Parsa is a student at Harvard Law School.

This morning, the U.S. Bureau of Labor Statistics released its May jobs report. It determined that 559,000 jobs were created or restored in May—around double that of April—and the unemployment rate declined by 0.3 percentage points to 5.8 percent. Labor force participation showed little change, and some of the fall in the unemployment rate is attributable to the 160,000 people who left the labor force in May. Strikingly, changes in labor force participation were divided along gender lines: 200,000 men left the labor force in May, while 148,000 women were added.

In California, the FAST Recovery Act fell 2 votes short of passing on Thursday. The Act would establish a “Fast Food Sector Council” of workers, employers, and government agency representatives, to make recommendations about wages, hours, and working conditions for the entire fast-food industry. The FAST Recovery Act has been lauded by labor law reformers, including on this blog, as a potential solution to the “fissured” workplace: the race-to-the-bottom among businesses in an industry, especially subcontractors and franchisees, who can’t afford to be outcompeted or to lose their contracts by offering higher wages than their competitors. In particular, the Act has been contrasted with Uber’s “sectoral bargaining” bill in New York, which has been criticized for banning strikes, boycotts and picketing, and for effectively creating a system of company unions.

On Thursday, the Biden administration announced the nomination of David Weil as the Wage and Hour Administrator of the Department of Labor (DOL), which Weil held previously under Obama from 2014 through early 2017. The Wage and Hour Administrator is the country’s chief enforcer of minimum wage and overtime laws. As an outspoken critic of companies like Uber that have pushed for the classification of their workers as independent contractors, Weil may have a critical role to play in reforming independent contractor status for gig workers under the DOL.

The Biden administration also announced on Thursday that TSA agents would receive Title 5 federal employee protections, including full collective bargaining rights and protections under the Merit Systems Protections Board, like virtually all other federal employees. A memo by Homeland Security Secretary Alejandro Mayorkas stated, among other things, that the “TSA will expand the collective bargaining rights of TSO employees” and ensure that its standards and processes cohere with Title 5. In other news, an audit performed by the DOL’s Office of the Inspector General reported that the DOL and states “struggled to implement” unemployment insurance (UI) programs from the CARES Act at the beginning of the pandemic. The audit identified shortcomings in DOL’s guidance and oversight of the UI programs (including untimely and unclear guidance), outdated state IT systems, and insufficient staffing resources. According to the audit, because of these issues, States “had difficulty ensuring programs were implemented and claimants were paid promptly.” This resulted in “at least $39.2 billion in improper payments” that “could have been put to better use,” as well as serious financial hardships for beneficiaries caused by the delays in the implementation of the UI programs.

The audit recommended that the Federal government help states modernize their technology, and to conduct a national study to determine the technological needs of state unemployment systems. In line with these recommendations, Senate Finance Committee Chairman Ron Wyden (D-Ore.) co-sponsored a bill to help States modernize their technology to avoid these shortcomings in the future. “If we don’t do this now, we will see the same problems during the next recession, with unacceptable levels of fraud, and jobless workers waiting months and spending hours and hours on the phone to get the benefits they have earned,” Wyden stated in a statement on Wednesday. The Labor Department also accepted the report’s recommendations and acknowledged that it had already begun enacting some of them, including a pilot initiative with states to use “modular technology”—federal UI IT systems that combine with existing state agency technology to avoid the issues that have arisen.

The New York Assembly and Senate passed Bill S.2766c/A.335OA on Wednesday, requiring general contractors in the construction industry to “assume liability for any debt resulting from” wage claims “incurred by a subcontractor.” The bill passed 50 to 13, but has yet to be signed by Governor Andrew Cuomo to become law. The bill is intended to make it easier for workers to collect unpaid wages. The New York Assembly and Senate also passed Bill S.858/A.1893 on the same day, overriding exceptions to wage violations that have been construed by courts’ narrow interpretations of existing law.

Following Richard Louis Brown’s controversial defeat of longstanding incumbent Yvonne Walker in the SEIU Local 1000 (representing California public sector workers) presidential election, Strikewave reported this week that Brown offered to pay union members to vote in the election, leading to accusations of vote buying. Brown has also been the subject of controversy for speaking positively of Janus v. AFSCME, the 2018 Supreme Court case that effectively imposed a federal right-to-work law in the public sector by prohibiting unions from collecting dues from public sector workers who are not union members but who are represented by the union. Brown campaigned on the promise of reducing dues by eliminating the local’s political spending, stating that under his leadership the local would no longer be involved in Black Lives Matter, Fight for 15, or the endorsement of politicians. Additionally, as Jason reported on Wednesday, Brown led Local 1000 to defy SEIU’s California State Council by opposing the re-election of current California Governor Gavin Newsom in the recall election, stating that the Local will “run his ass out of office”—in apparent contradiction to his promises to keep the local out of politics.

A proposed $1.2 million class action settlement between Five Guys and thousands of its California employees was rejected by a California district court earlier this week. The court noted that the representative plaintiff’s proposed settlement of $100,000 for claims under the Private Attorney General’s Act (PAGA) “stand[s] in stark contrast to the maximum potential PAGA recovery” estimated in his motion: $6,501,500. The suite itself claimed that 2,206 non-exempt employees were denied breaks required by California law, were forced to work overtime without receiving overtime pay, and other claims of wage theft. This was the third time that the court rejected a settlement motion in this case.

Enjoy OnLabor’s fresh takes on the day’s labor news, right in your inbox.