Policy Matters Newsletter - August 27, 2021

House Leadership Holds The Line On Dual-Track Infrastructure Bill(s) Strategy. Earlier this week, media concerns abounded that moderate house democrats might throw an immovable wrench in the serious progress with the dual-track infrastructure strategy. But Speaker Pelosi remained firm in her promise to hold the infrastructure bill until a budget resolution is passed and, despite protestations, the House held a key procedural vote Tuesday afternoon, approving a budget resolution that outlines the contours of a $3.5 trillion spending package. The procedural vote unlocks the reconciliation process for Democrats, permitting them to write a tax-and-spending bill that can bypass a Republican filibuster. The vote came weeks after the Senate adopted essentially the same blueprint. Pelosi’s compromise with the moderates included a commitment that the House would consider the bipartisan infrastructure proposal by Sept. 27. Stay tuned!

NLRB General Counsel Jennifer Abruzzo Telegraphs Her Pro-Labor Agenda. Earlier this month, newly installed NLRB General Counsel Abruzzo released a memorandum identifying her goals and areas of focus during her tenure. This is standard procedure for new NLRB General Counsels. That memorandum instructs regional offices to send certain cases to her office for consideration, presumably so those priority cases can be identified to send up to the NLRB with the ultimate aim of overturning precedent less favorable to labor and employees. Among other things, she is targeting the standard for determining the legality of handbook rules and workplace rules, confidentiality provisions in separation and arbitration agreements, employees’ use of company email for union organizing, property owner rights to exclude union organizers, and the standard for determining whether a worker is an employee or an independent contractor. That the composition of the NLRB changed on August 17, 2021 with the expiration of Republican Member William Emanuel’s term will only facilitate GC Abruzzo’s agenda.  Member Emanuel will be replaced by Member David Prouty, former General Counsel for SEIU 32BJ, whose confirmation we previously reported on. Employers will need to buckle up—the NLRB’s enforcement pace and scope is about to pick up in a big way.

Proposition 22—The Most Expensive Initiative In CA History—Ruled Unconstitutional. Employers, and particularly employers in the gig-economy sector, have been operating vis-a-vis classification of their workers without any true north star. The Independent Contactor rule established by the DOL during the Trump administration, in conjunction with Proposition 22 in California, at the very least provided employers some stable guidance and brighter rules when it came to properly classifying workers as employee or independent contractor. But, as we noted here, the DOL under the Biden administration has rescinded the rule, sending employers up the metaphorical creek. Additionally, last Friday, a trial court judge in Alameda County ruled that the measure violated the California Constitution and the offending provisions cannot be severed—the baby is out with the bath water, so to speak—leaving another sector of employers even further up the creek.

As we noted here, Proposition 22, which passed with surprisingly flying colors, exempts certain gig companies from needing to classify their workers as employees and pay into benefits like workers’ compensation and health insurance. Proponents of the initiative spent close to $200 million pressing for its passage. While some gig companies have vowed to press similar ballot measures in other jurisdictions, the prudence of such an expensive strategy is likely now firmly in question. The coalition of gig-workers supporting the measure has vowed to appeal. Stay tuned.

The gig worker rule provided some semblance of constancy for employers in California, and the DOL’s independent contractor rule did the same for a broader swath of American employers. Those rugs have been pulled, and employers must now retreat to stale rules and worker classification standards that do not account for the vast developments in the labor market.

AFL-CIO Trumka Unexpectedly, And Sadly, Passes Away; Succeeded by First Female! Last week, the AFL-CIO’s executive council voted to appoint Liz Shuler as President Richard Trumka’s successor following his unexpected passing. Shuler is the first woman to lead the AFL-CIO, and she will serve in that capacity until the summer of 2022, when the federation’s affiliates will gather for their annual convention to vote on President Trumka’s permanent successor. President Shuler will take office with the union membership rate nationwide on a long decline, at half of what it was in the 1980s. To reverse that trend, she will expand on her predecessor’s efforts to pass the pro-union Protecting the Right to Organize Act, which we have previously reported on, and which would make it much, much easier for unions to organize. The AFL-CIO will also continue to work to press the bipartisan infrastructure bill and try to ensure its priorities are included in Democrats' separate $3.5 trillion budget reconciliation plan.

COBRA And The American Rescue Plan. As Seyfarth noted here, the American Rescue Plan Act (ARPA), passed in March, provided for a 100% COBRA premium subsidy from April 1, 2021 through September 30, 2021. In late July, the U.S. Internal Revenue Service (“IRS”) issued Notice 2021-46, providing additional guidance on the premium COBRA assistance and tax credit provisions of the American Rescue Plan Act of 2021. As Seyfarth summarized here, the notice provides guidance on topics such as the interplay with other health coverage, which entities are eligible for the tax credit, and extended coverage periods.

Tik-Tok: Comments On Proposed $15 Minimum Wage Rule Due Today. As we noted here, last month, the DOL issued a Notice of Proposed Rulemaking that would implement Executive Order 14026, establishing a $15 per hour minimum wage for federal contractors, greatly limiting the tip credit, and abolishing the disabled workers sub-minimum wage - section 14(c) of the FLSA. The $15/hr minimum wage goes into effect on Jan. 30, 2022. Comments on the Notice of Proposed Rulemaking are due to the DOL today.

The Mandate Wave Is Rising: Once Pfizer Receives Full FDA Approval, Biden Urges Private Entities to Require COVID-19 Vaccines. As we reported previously, cities and counties have begun enacting vaccine requirements. Specifically, San Francisco is requiring proof of COVID-19 vaccination for gyms and bars; New York City has announced that it will require proof of at least one vaccine shot for indoor dining and other indoor activities; and Los Angeles is currently considering, and will soon enact, vaccine requirements for indoor restaurants, stores, gyms, bars, and other public spaces. Such a requirement would come on the heels of the Los Angeles County Board of Supervisors approval of an executive order requiring all 110,000 county employees — including those in the Sheriff’s and Fire departments — to be fully vaccinated by Oct. 1. Puerto Rico also recently issued an executive order mandating vaccines for all government employees, and recommends that all private employers follow the government’s lead in requiring vaccines. And, California school staff are now required to show proof of vaccination or undergo regular testing. With the recent FDA approval of the Pfizer vaccine, and approval of the others likely to follow, we expect more cities and states to follow President Biden’s advice and impose vaccine mandates. Stay tuned.

Say What You Will, But OSHA It Is Unquestionably A COVID-19 Guidance Machine. We here at PMN have been following OSHA and its responses to the pandemic. As Seyfarth noted here, OSHA is back with more guidance on preventing the spread of COVID-19 in light of the highly transmissible Delta variant, updating its Protecting Workers Guidance on Mitigating and Preventing the Spread of COVID-19 in the Workplace to adopt recommendations “analogous” to the July 27, 2021 Centers for Disease Control and Prevention (CDC) mask and testing recommendations for fully vaccinated people. The most significant recommendation is that employers follow the CDC’s recent updated recommendations for fully vaccinated people including wearing a mask in public indoor settings in areas of substantial or high transmission. While the guidance notes that it is only advisory, employers should be wary, particularly where the Agency points specifically to enforcement avenues, including the General Duty Clause. Implementing these recommendations, and following CDC guidance, should provide employers some peace of mind in addressing enforcement exposure.  Note: This guidance is not applicable to employers in the healthcare industry who must abide by the more restrictive ETS.

It’s Been A While Old Friend: State Attorneys General Push for Passage of PRO Act. Like OSHA, we here at the PMN have also been keeping tabs on the PRO Act, and even hosted a podcast on the topic. As we have reported, while some provisions of the Act might proceed through agency rulemaking, or splinter into the infrastructure bill(s), the Act itself faces a dizzyingly uphill battle to passage, unless the Democrats seriously reform the filibuster, ASAP. Perhaps recognizing the Act’s slim chance of passage, a coalition of 17 attorneys general, led by California Attorney General Rob Bonta, collectively penned a letter urging the U.S. Senate to pass the PRO Act. Will such an urging push 9 recalcitrant republicans to vote for the measure, or even convince Senators Manchin and Sinema to do the same? Likely not. But it is reflective of the shaky legislative ground the PRO Act sits on.

Almost Half Of U.S. States Now Permit Recreational Cannabis. As we noted here and podcasted here, the push across jurisdictions to legalize the recreational use of cannabis has led to some consternating legal question for the employer community. Well, add another chunk of the United States to jurisdictions where these issues are prevalent. As Seyfarth wrote here, on June 22, 2021, Connecticut Governor Ned Lamont signed a bill that legalized recreational marijuana use by adults 21 years and older. Employers in states where such legislation has not passed, including red states, should brace for such legislation coming to a jurisdiction near you.