Policy Matters Newsletter - February 12, 2021

The Fight For $1.9: Administration Remains Committed To Passing COVID-19 Legislation, Even Without Republican Backing. Unlike previous updates on the “will they won’t they” back-and-forth of COVID-19 / Stimulus Legislation under the previous administration, this time we can say with confidence that stimulus legislation will get to the President’s desk and he will sign it, likely sometime in mid-March, so stay tuned. In the previous two iterations of the newsletter, we outlined the substantive contours of the package; in this version, we will focus on the procedure likely to be used to pass the legislation.

As readers of this newsletter will recall, at the outset of this Presidency and the new Congress, there was much chatter about a bipartisan package to address the pandemic. Indeed, to kick off negotiations, President Biden invited ten republican Senators to the White House to discuss the issue. However, soon after the meeting and the republican announcement of a package the President deemed much too small, the President announced that he was prepared to move the legislation through the process known as reconciliation, which would not require republican votes. The U.S. House of Representatives approved the Senate's 2021 budget resolution (S. Con. Res. 5) on Feb. 5, 2021, laying the groundwork for the budget reconciliation process. The 2021 budget resolution includes instructions giving committees of jurisdiction until Feb. 16 to draft a COVID-19 relief bill that would include up to $1.9 trillion in spending and revenue loss – the cost of President Joe Biden's "American Rescue Plan," as follows:

House of Representatives

Committee	Deficit Increase Amount
Agriculture	$16.1 billion
Education & Labor	$357.9 billion
Energy & Commerce	$188.5 billion
Financial Services	$75 billion
Foreign Affairs	$10 billion
Natural Resources	$1 billion
Oversight & Reform	$350.7 billion
Science, Space & Technology	$800 million
Small Business	$50 billion
Transportation & Infrastructure	$95.6 billion
Veterans Affairs	$17 billion
Ways & Means	$940.7 billion

 Senate

Committee	Deficit Increase Amount
Agriculture, Nutrition & Forestry	$22.7 billion
Banking	$89.3 billion
Commerce, Science & Transport.	$35.9 billion
Environment & Public Works	$3.2 billion
Finance	$1.3 trillion
Foreign Relations	$10 billion
Health, Education, Labor & Pensions	$305 billion
Homeland Security & Gov't Affairs	$50.7 billion
Indian Affairs	$8.6 billion
Small Business & Entrepreneurship	$50 billion
Veterans Affairs	$17 billion

 This week, committees in the House began the process of marking up and passing the bills that will make up the final reconciliation bill. Indeed, on Wednesday, the Education and Labor Committee became the first committee to pass its portion of the package delegated to the committee, including a minimum wage increase coupled with funds for school reopenings and new Covid-related labor standards. Just yesterday, the House Ways and Means committee passed the previously marked up measure that would appropriate $1,400 checks at the income levels ($75,000 per individual) initially proposed.

Will A Minimum Wage Increase Be Included In The Stimulus Package? As noted above, the reconciliation measure passed through the House Labor Committee would increase the minimum wage to $15 an hour by 2025 and ensure that tipped workers, youth workers, and workers with disabilities are paid the full federal minimum wage. House democrats pushed forward despite the President’s hesitancy regarding the same just last Fridays. Senate majority leader Chuck Schumer refused to say firmly whether he believes a minimum wage increase would survive the Senate’s reconciliation procedures. The CBO scored a potential increase in the minimum wage, finding that the move would boost jobless rolls by 1.4 million by 2025 and would increase budget deficits by $54 billion over 10 years.  According to the chair of the House Labor Committee, “The CBO’s report strengthens the case for gradually raising the minimum wage through the Covid-19 rescue package.” Although several democratic Senators such, as Senator Manchin of West Virginia, have opposed an increase to $15 per hour, Democrats have continued attempts to increase the minimum wage, as evidenced by the introduction of a stand-alone measure to do the same, which Seyfarth summarized here.

A Lot Is Changing Rapidly, And The Regulatory Landscape Surrounding Student Loans Is Not Spared. The democrats policy priority to forgive approximately $50,000 in student loans has been making headlines, and is receiving backing from powerful members of Congress. Our very own Bill Hanlon recently summarized the issue in a fantastic piece, which was republished through Westlaw! In his piece, Bill recounts how the Chair of the Financial Services Committee in the House, Maxine Waters, proposed that the President “issue an executive order to promptly forgive up to $50,000 of debt for each federal student loan borrower and pause all student loan payments and interest accrual until the economy can recover.”  This debate is playing out on the front pages of newspapers and in news rooms across the Nation. Stay tuned as we continue to follow this intriguing policy issue. 

Speaking Of Abrupt Policy Change: DOL To Rescind Trump Era Religious Contractor Exemption. In January, before the current President took his oath, the Department of Labor published a final rule that provides the same exemptions for federal contractors already allowed to churches and other “religion-exercising organizations” to avoid discrimination liability for hiring, firing, or other employment decisions motivated by religious belief. Just this week, the DOL’s Office of Federal Contract Compliance Programs told a Southern District of New York judge Tuesday and a District of Oregon judge Wednesday that it “intends to propose rescission” of the rule “in the near future,” requesting stays in separate cases brought in January by a group of states and labor unions challenging the regulation. As such, federal contractors should be aware that they will not receive the same protection from anti-decimation laws they were afforded under the Trump administration.

California, And Its View Of Employment Issues, Comes East In The Form Of Julie Su At The DOL. Before Mayor Walsh was nominated as the Secretary of Labor, Julie Su, the head of California’s Labor Department (referred to regionally as the Labor and Workforce Development Agency (LWDA)) had a swingers shot at securing the nomination. As we now know, that did not come to fruition. This week, however, the Biden administration nominated Julie Su as the Deputy Secretary at the DOL. Seyfarth’s California-based attorneys are well versed in Su’s somewhat rocky tenure at the LWDA. The announcement concerns this author as it relates to employer misclassification laws on the federal level. Specifically, Su was in charge of the state agency tasked with enforcing California’s controversial AB 5, which makes it exceedingly difficult for employers to classify workers as independent contractors as opposed to employees, and all that designation entails. President Biden has expressly endorsed the ABC Test, and a version of the same test is already firmly planted in the house-passed PRO Act. Will the marriage between Su and the Biden administration result in some kind of ABC Test[1] federally? Time will tell, but it is going to take quite a push, and we here sat the PMN will continue to follow Julie Su’s with a watchful eye.

While not necessarily apropos of the discussion of Julie Su, while we are discussing the DOL, we believe it is worth mentioning that the US Chamber of Commerce has endorsed Marty Walsh as the Secretary of Labor.

Speaking Of Worker Classification, How Does That Affect The Retail Industry? Recently, a Federal Court in Massachusetts – which employs a worker classification scheme similar to California’s – found that a the retail business in question must treat its “vendor associates” as employees, not independent contractors, under the Massachusetts version of the ABC Test. The crux of the court’s ruling was that the work vendor associates performed was within the usual course of the defendant’s business, and should thus be classified as employees and all of the benefits that entails.  Seyfarth published a helpful summary of the decision here.

Paid Leave Goes Federal.  House Oversight and Reform Committee Chairman Carolyn Maloney recently introduced the Comprehensive Paid Leave for Federal Employees Act, which provides up to 12 weeks of paid time off to care for a sick spouse, child or parent or for an employee’s own personnel medical condition. The legislation would cover the vast majority of federal employees, including Postal Service workers, who aren’t part of the original paid parental leave program Congress established nearly a year ago. There has been some bipartisan backing, but most republicans remain adamantly against the legislation, making the prospects of enactment slim given the razor thin margins in both Congressional chambers.

Newly Comprised NLRB Does Away With Trump-Era Guidance. President Biden’s hand-picked general counsel at the NLRB, Peter Ohr, recently withdrew ten guidance memos previously issued by sacked general counsel Peter Robb, touching on, inter alia, evaluating pre-election neutrality agreements, duty of fair representation charges, and restrictions on agency investigators receiving documentary evidence. Ohr has pledged to submit his own memoranda to supersede those rescinded. 

Hazard Pay Ordinances Are All The Rage In California. As Seyfarth noted here, the city of Long Beach in Southern California has passed a bill that would bump grocery worker pay by $4 an hour during the pandemic. The LA Board of Supervisors is working on a similar measure that would boost grocery worker pay by $5 an hour, as Seyfarth summarized here. Hard on the heels of the Long Beach announcement, Montebello and Oakland passed premium-pay ordinances requiring a pay bump for grocery and drugstore employees. The California Grocers Association has filed suit to enjoin each of the above-mentioned ordinances on NRLA preemption and equal protection grounds.

Executive Order 14005: “Ensuring the Future is Made in All of America by All of America’s Workers.” Recently, President Biden issued an executive order that sets forth the new Administration’s policy of utilizing the federal procurement process to maximize the use of goods, products, and materials that are US-origin. The Executive Order does not make any substantive changes to the Buy American Rules, but rather calls for a review of existing rules. Seyfarth published a helpful summary of the order and its potential implications here. ard

Employers Beware: House Reintroduces Employment Legislation; Faces A Winding Path To Enactment. Not only have House Democrats reintroduced the heavily labor-centric PRO Act, they have also reintroduced Paycheck Fairness Act, HR 7. Democrats in the House are intent on moving legislation of concern to employers at a brisk pace, but will run in to procedural hurdles that will slow down the democrats desired pace of legislating, particularly in the Senate. Stay tuned.

 

[1] It should be noted that, as Seyfarth explained here, the Department of Labor has finalized a rule for Independent Contractor classification, which was scheduled to become effective but has been temporarily frozen by the Biden administration.  Under the freeze, the effective dates of the final rule would be postponed from March 8, 2021 to May 7, 2021. Ultimately, the temporary may result in permanent withdrawal through issuance of new final rules.

 

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The Policy Matters newsletter is a publication of Seyfarth's Government Relations & Policy Practice and is authored by Leon Rodriguez, Scott Mallery, and Larry Lorber. Leon Rodriguez is a Partner in Seyfarth's Washington, DC office and chairs the firm's Government Relations & Policy Practice Group (GRPG); Scott Mallery is Counsel in Seyfarth's Sacramento, CA office; and Larry Lorber is Counsel in Seyfarth's Washington, DC office.