Beltway Buzz – Ogletree Deakins
Fourth Time’s a Charm. After three-plus weeks and three failed nominees, on October 25, 2023, the U.S. House of Representatives elected Mike Johnson (R-LA) to be the Speaker of the House by a vote of 220–209. Johnson, the fifty-sixth House Speaker in U.S. history, has a tough task in front of him, but he already has a legislative plan in place for the next twelve months. The plan calls for the passage of a continuing resolution to extend government funding into 2024 and includes timetables for addressing other major issues, such as the reauthorization of the Federal Aviation Administration and the Farm Bill. Sounds easy, right? Speaker Johnson might do well to heed the fictitious words of George Washington in Hamilton: “Winning was easy, young man—governing’s harder.”
NLRB Issues Joint-Employer Rule. Today, October 27, 2023, the National Labor Relations Board (NLRB) published its much-anticipated “Standard for Determining Joint Employer Status,” and the three-member Democratic majority didn’t pull any punches. The final rule replaces the 2020 joint-employer rule and states that two or more employers are joint employers “if the employers share or codetermine those matters governing employees’ essential terms and conditions of employment.” “Essential terms and conditions of employment” are defined as:
(1) “wages, benefits, and other compensation”;
(2) “hours of work and scheduling”;
(3) “the assignment of duties to be performed”;
(4) “the supervision of the performance of duties”;
(5) “work rules and directions governing the manner, means, and methods of the performance of duties and the grounds for discipline”;
(6) “the tenure of employment, including hiring and discharge”; and
(7) “working conditions related to the safety and health of employees.”
The final rule further defines what it means to “share or codetermine those matters governing employees’ essential terms and conditions of employment” as possessing “the authority to control (whether directly, indirectly, or both).”
What does this all mean in a practical sense? Dissenting Member Marvin Kaplan describes the impact as follows:
[T]he majority’s final rule effects an unprecedented and unwarranted expansion of the Board’s joint-employer doctrine. The majority misapprehends common-law agency principles in holding that those principles compel the Board to rescind its 2020 Rule on Joint Employer Status Under the National Labor Relations Act (the 2020 Rule) and replace it with a joint-employer standard not seen anywhere else in the law. My colleagues dispense with any requirement that a company has actually exercised any control whatsoever (much less substantial control) over the essential terms and conditions of another company’s employees. Under the final rule, an entity’s mere possession of a never-exercised contractual reservation of right to control a single essential term and condition of employment of another business’s employees makes that entity a joint employer of those employees. So does its “indirect” control of an essential term and condition, a term my colleagues fail to define or otherwise cabin.
Hours after the Board’s announcement of the final rule, Senators Joe Manchin (D-WV) and Bill Cassidy (R-LA) announced their introduction of a Congressional Review Act resolution to rescind the rule. Of course, there will also be legal challenges to the rule, of which Member Kaplan writes, “A betting person might hesitate to put money on [the rule’s] chances because, as demonstrated below, the final rule is wrong as a matter of law and unadvisable as a matter of policy.” The rule will apply to cases filed after December 26, 2023. Mark G. Kisicki, Elizabeth T. Jozsi, and Zachary V. Zagger have additional details and analysis.
U.S. Senate Confirms WHD Administrator. On October 25, 2023, the U.S. Senate confirmed Jessica Looman as administrator of the U.S. Department of Labor’s (DOL) Wage and Hour Division (WHD) by a vote of 51–46. Senator Dan Sullivan of Alaska was the only Republican to vote for confirmation. Administrator Looman has essentially been running WHD since the start of the Biden administration, serving as the agency’s “principal deputy administrator” since early 2021. She will undoubtedly play a large role in the finalization and implementation of WHD’s pending changes to its independent contractor and overtime regulations under the Fair Labor Standards Act, among other issues.
H-1B Program Changes Proposed. On October 23, 2023, U.S. Citizenship and Immigration Services (USCIS) published its H-1B reform proposal “to modernize and improve the efficiency of the H-1B program, add benefits and flexibilities, and improve integrity measures” (a proposal the Buzz has been tracking since at least 2019). Among its other proposed changes, the rule would provide a more flexible definition of “specialty occupation,” address potential fraud issues by having USCIS select registrations by unique beneficiary, clarify when changes in the H-1B worker’s worksite require amended petitions, and provide for deference to prior USCIS determinations in order to provide greater certainty to visa holders and employers. Tina H. Ho has all the details.
Foxx Requests More Time to Comment on OT Proposal. The House leadership shenanigans have derailed the day-to-day activities in the lower chamber, as much legislative and oversight activity has slowed in recent weeks. In fact, the House Committee on Education and the Workforce has postponed two hearings of interest to the Buzz: one concerning WHD’s overtime proposal and the other concerning activities at the NLRB. Still, that hasn’t stopped Committee Chair Virginia Foxx (R-NC) from pressing Acting Secretary of Labor Julie Su to grant more time for stakeholders to comment on the overtime (OT) proposal. Foxx asks for an additional sixty days, writing:
Allowing so little time for stakeholders to comment suggests that the WHD is out of touch with the resources required for smaller employers to respond to such a complex and economically significant proposal. An additional 60 days will give employers and other affected stakeholders additional time to compile employment trends in their workplaces and provide them with a “reasonable and meaningful” opportunity to provide comments, as required by the Administrative Procedure Act.
Of course, allowing more time for stakeholder input potentially hampers DOL’s strategic goals. The department undoubtedly wants to finalize the overtime rule by the summer of 2024 to avoid potential Congressional Review Act treatment in 2025.