Beltway Buzz – Ogletree & Deakins
DOL Appeals Reinstatement of Independent Contractor Rule. Late last week, the administration filed its notice of appeal of the recent decision by the U.S. District Court for the Eastern District of Texas to reinstate the Trump-era independent contractor rule. Even though the rule remains in place, independent contracting arrangements will continue to be an enforcement focus of the U.S. Department of Labor (DOL), particularly in the hospitality, healthcare, janitorial, and construction industries. Also, the National Labor Relations Board (NLRB) is in the process of making changes to its test for independent contractor status. This all means that the independent contractor landscape will continue to remain uncertain for some time.
Wage and Hour Bill on the Move. Last week, the Buzz discussed the Wage Theft Prevention and Wage Recovery Act (H.R. 7701, S. 4174) and the dramatic changes it would make to the Fair Labor Standards Act. This week, the U.S. House Committee on Education and Labor voted to approve the bill and advance it to the floor of the U.S. House of Representatives. At this time, there is no word on when—or if—the full House will vote on the bill. A companion bill in the Senate has twenty-eight cosponsors (twenty-seven Democrats and Senator Bernie Sanders [I-VT], who caucuses with the Democrats).
Bill Makes Changes to ERISA Claims Process. The same House committee also advanced the Mental Health Matters Act (H.R. 7780) this week. Tucked into the bill is the Employee and Retiree Access to Justice Act of 2022, which would significantly impact claims made pursuant to the Employee Retirement Income Security Act (ERISA). Specifically, the bill would prohibit agreements that provide for predispute arbitration of such claims and also limit post-dispute arbitration unless certain conditions are satisfied. The bill would also ban discretionary clauses in ERISA plans, meaning that courts would use the de novo standard of review when adjudicating benefit denial claims (potentially leading to expensive and drawn-out claim processes and patchwork interpretations). The bill now heads to the House floor.
Taxing Employer Speech. With the Protecting the Right to Organize (PRO) Act stalled in the U.S. Congress, Democratic and Independent members of Congress are turning to the tax code to benefit big labor. The recently introduced No Tax Breaks for Union Busting Act (S. 4192) would prohibit employers from deducting business expenses that result in a complaint issued by the NLRB or that relate to so-called “captive audience meetings,” among other activities. The bill also would establish an Internal Revenue Service reporting requirement for “[a]ny employer who attempts to influence the employer’s employees with respect to labor organizations or labor organization activities….” Like the failed “persuader” rule, the bill is an attempt to discourage employers from speaking to employees about the pros and cons of unionization.
Davis-Bacon Reg. Proposal Advances. This week, the DOL’s Wage and Hour Division (WHD) closed the public comment docket on its proposed changes to its Davis-Bacon Act (DBA) regulations. A number of the comments filed by national business organizations and trade associations focused on the unprecedented nature of the rule—that it would overturn settled decisional law and expand the scope of the DBA’s coverage to new types of construction-related activity and new industries—while failing to adequately address the DOL’s complicated wage determination process. The administration is likely hoping to issue the final regulations before the end of the calendar year.
Labor Secretary Seeks More Funding. Secretary of Labor Martin Walsh made the short trip to Capitol Hill this week to testify before the U.S. House Committee on Appropriations’ Subcommittee on Labor, Health and Human Services, Education, and Related Agencies on the administration’s proposed fiscal year (FY) 2023 DOL budget. Secretary Walsh’s written testimony provides stakeholders with a glimpse of DOL’s current priorities:
- The administration is requesting more than $700 million (about $89 million more than current funding) “to help OSHA [the Occupational Safety and Health Administration] rebuild its rulemaking and enforcement capacity, expand its whistleblower protection program, and increase its outreach and compliance assistance. This investment will support OSHA’s efforts to double the number of inspectors by the end of President Biden’s first term.”
- “The FY 2023 Budget increases funding to the WHD by more than $56 million over the FY 2022 enacted level. This funding increase will enable WHD to hire, train, and equip enforcement staff to better protect essential workers by safeguarding their pay and recovering back wages, with particular emphasis on the workers most vulnerable to wage violations and exploitive labor conditions.”
- For the Office of Federal Contract Compliance Programs (OFCCP), the administration is requesting about $39 million dollars above current funding levels “to fully enforce employment antidiscrimination requirements to ensure federal contracting consistent with America’s promise to all workers in America. Included in this increase is $3.2 million to enable OFCCP to meet the increased need for its services as a result of the BIL [Bipartisan Infrastructure Law]. This funding will allow OFCCP to build its capacity to remove systemic barriers that workers in underrepresented communities face to accessing good jobs in construction and other growth industries that the BIL will bolster.”
Funding for the federal government runs through September 2022, so expect these funding discussions to heat up towards the end of summer.