The Coronavirus And The Balance Of Power Between Employers And Employees – Forbes

Stronger rights for employees is an unexpected silver lining to the otherwise negative effects of ... [+] the coronavirus.

Throughout American history, theres been an ebb and flow to the power of the employee. The early stages of the industrial revolution showed the vulnerability of the American worker. In response, there was a rise in collective bargaining and labor unions. Yet the influence of collective action didnt take full effect until the New Deal.

But things flipped back after the 1981 strike of air traffic controllers. When then-President Ronald Reagan fired the striking workers and hired replacements, this led to a long-term weakening of labor union power.

In the past decade or so, the power pendulum has shifted back and forth between employers and employees. But the most recent swing appears to be due to the coronavirus pandemic and in the workers favor. Lets take a more detailed look and begin by examining the employment landscape in the years leading up to the arrival of the coronavirus.

Employers Have the Upper Hand

Employers have had several recent and notable advantages over their employees.

In 2017 the U.S. Supreme Court (SCOTUS) handed down two rulings that severely hindered employee rights. First, there was Epic Systems Corp. v. Lewis. In this case, SCOTUS concluded that employers may require their employees to individually arbitrate employment disputes and forego their right to collective legal action.

Next, there was Janus v. AFSCME. Here, SCOTUS overturned decades-old precedent and ruled that public employers could no longer require their employees to pay union dues.

Attempts to pass federal legislation to mandate a $15/hour minimum wage or provide for paid family and medical leave had also failed. Additionally, caregiver discrimination was legal under federal law.

And not only had Congress failed to raise the minimum wage to $15 an hour, there had been no increase in the last 12 years. This had resulted in a 21% drop in earnings for the minimum wage worker due to inflation.

Gig workers were having trouble getting the same rights as employees. For example, Californias voters approved Proposition 22 in November 2020. This law gives gig-economy employers the right to classify their workers as independent contractors instead of employees.

While a California court just ruled that Proposition 22 violated Californias constitution (this decision is expected to be appealed), this hasnt stopped other states, like Massachusetts, from trying to follow Californias lead.

But due to political and social changes, the tide began to shift back in the employees favor.

Employees Get More Rights

Before the coronavirus, a major reason for greater employee power was due to the #MeToo movement. The effect of this increased awareness of sexual harassment, abuse and discrimination has been enormous.

Theres been an increase in the use of clawback provisions when wrongful behavior involves sexual misconduct by executives. Toxic corporate culture gets more attention, which can lead to legal action. And the Tax Cuts and Jobs Act no longer allows an employer to deduct the payment of money to settle a sexual harassment or abuse claim when the settlement is subject to a nondisclosure agreement.

Most federal employees are now eligible to take up to 12 weeks of paid parental leave, thanks to the Federal Employee Paid Leave Act (FEPLA).

The U.S. Department of Labor updated its regulations to make it easier for workers to be eligible for minimum wage and overtime pay under the Fair Labor Standards Act (FLSA).

States like Washington, D.C., Maryland and Virginia began cracking down on employers abusing noncompete agreements, especially with lower-wage earners.

Finally, in Bostock v. Clayton County, Georgia, SCOTUS determined that sexual orientation and gender identity discrimination was illegal under Title VII of the Civil Rights Act of 1964.

This trend has continued with the coronavirus pandemic, although less through legislative or judicial methods and more through economic forces.

How the Coronavirus Has Continued to Shift Power Back to Employees

One of the biggest effects of the coronavirus has been with the labor market. Specifically, employers have trouble filling their open positions.

The enhanced unemployment benefits have been blamed, which some believe encouraged too many people to stay home and not work. But when those benefits ended, any effect on the worker shortage has been minimal.

The reasons for this labor market dynamic are probably best explained in someones Ph.D. dissertation, but some of the reasons likely include:

Whatever the reasons, workers are now more likely to quit to find a better job or strike to improve their working conditions at their current job.

But its not just employees feeling more comfortable with switching careers or taking collective action. Corporate boards that decide how companies are run are feeling the pressure to do more for workers in light of the coronavirus.

Corporate law has long established the legal duty of a corporate board to identity organizational threats and take reasonable measures to reduce or eliminate those threats. And its safe to say that the coronavirus poses both an economic and health threat to companies and their workers.

This means that corporate boards are likely to support the use of vaccine mandates for their workers, as well as other coronavirus risk mitigation measures, like wearing masking and regular testing. This makes sense, given how workers are more likely to support a vaccine or mask mandate than oppose it.

Corporate boards must also oversee these policies and take the necessary steps to also comply with applicable federal, state and local guidelines and laws.

The Bottom Line

Before the pandemic, the U.S. labor market was primed for major changes, especially for the benefit of employees. The coronavirus might be the push needed to bring about these changes.

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The Coronavirus And The Balance Of Power Between Employers And Employees - Forbes