Last month we discussed pending U.S. Supreme Court cases that may affect employers. This month I address one specific nomination President-Elect Trump made for his incoming cabinet that should interest employers.

Perhaps the most interesting move Trump made was to nominate Oregon Rep. Lori Chavez-DeRemer as the new Secretary of Labor.

The Department of Labor (DOL) wields broad authority over employers, enforcing such laws as the Fair Labor Standards Act (FLSA), the Occupational Safety and Health Act (OSHA), and the Family and Medical Leave Act (FMLA). And while the National Labor Relations Board (NLRB) is an agency independent of the DOL, under a Memorandum of Understanding, the DOL works closely with the NLRB to further goals they share.

Chavez-DeRemer served one term as a republican representative to Congress from Oregon and was narrowly defeated by a democratic challenger in November 2024. Chavez-DeRemer’s nomination for Secretary of Labor was met with some astonishment and suspicion across the political spectrum.

In its November 22, 2024, news release, the AFL-CIO noted Congresswoman Chavez-DeRemer was one of only three Republicans to cosponsor the Protecting the Right to Organize (PRO) Act (which would strengthen the rights of federal employees to unionize) and one of eight Republicans to cosponsor the Public Service Freedom to Negotiate Act.

AFL-CIO President Liz Shuler further stated: “But Donald Trump is the president-elect of the United States – not Rep. Chavez-DeRemer – and it remains to be seen what she will be permitted to do as Secretary of Labor in an administration with a dramatically anti-worker agenda.”

To the contrary, Sean O’Brien, general president of the International Brotherhood of Teamsters, stated in an op-ed for Compact magazine: “Rep. Lori. Chavez-DeRemer is the exact type of champion for the American worker that Republicans should get behind if they are serious about becoming the working-class party.”

O’Brien was the first Teamsters president to speak at the Republican Convention in July 2024. And some pundits suggest Chavez-DeRemer’s nomination is the result of O’Brien whispering in Trump’s ear. However, the Teamsters as an organization are silent on Chavez-DeRemer’s nomination.

So, what does Chavez-DeRemer’s nomination mean for employers? So far, Republicans in Congress have been quiet on this nomination. Business advocates have expressed some reservations.

I think the key issues are joint employment and the classification of independent contractors and employees. Even while supporting the PRO Act, Chavez-DeRemer expressed reservations on some measures in the act, specifically the Biden administration rule that would have made it easier for the DOL to find that subsidiaries and franchisees are liable for the wage and hour violations of parent companies.

Chavez-DeRemer voted for Joint Resolution 98, which would have nullified the final rule issued by the National Labor Relations Board, titled Standard for Determining Joint Employer Status, and published on Oct. 27, 2023. That rule states an entity may be considered a joint employer of another employer’s employees if the two share or codetermine the employees’ essential terms and conditions of employment.

President Biden vetoed this resolution that would have returned the standard to the broader interpretation that required «substantial direct and immediate control» to establish joint employer status.

Historically, the joint employer and independent contractor versus employee standards have moved similarly. So, how will Chavez-DeRemer view standards on determining whether workers are independent contractors or employees?

The PRO Act would have applied the ABC test. This test allows employers to classify workers as independent contractors only if three elements are met. The employer must show that a worker:

1. Is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact.
2. The worker performs work that is outside the usual course of the hiring entity’s business.
3. The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.

The final rule established in 2024 disavowed the ABC test but rejected the previous rule that gave priority to the business’s control and the worker’s opportunity for profit or loss to show that an employer properly classified a worker as an independent contractor.

It is reasonable to project that Chavez-DeRemer will, in accordance with the new administration, support rules that narrow the joint employer rule and restrict when sub-entities are liable for the decisions of parent organizations. And it follows that Chavez-DeRemer will support rules that allow employers greater latitude in classifying workers and independent contractors as opposed to employees.

Of course, no one, including me, has a crystal ball. But employers probably can anticipate, if Chavez-DeRemer is confirmed as Secretary of Labor, relaxed standards on joint employment and worker classification while preparing for continued relaxed rules supporting employees’ right to unionize and collectively bargain.

The Employers Council makes available to its members resources on interpreting and applying changing labor and employment standards to their workplaces. And Employers Council consulting and enterprise-level members may speak directly with our human resources professionals and employment attorneys at any time for advice on making sound employment decisions.