Policy Matters Newsletter - January 31, 2023

Labor Agencies Beware: Congressional Oversight To Kick Up In 2023. Shortly after Kevin McCarthy’s (R-CA) ascension to the speakership, the House of Representatives reinstalled Virginia Foxx (R-N.C.) as chair of the Committee on Education and the Workforce. Almost immediately after renewing her chairmanship, Representative Foxx issued letters to Marty Walsh at the DOL, Lauren McFerran at the National Labor Relations Board, Charlotte Burrows at the U.S. Equal Employment Opportunity Commission, and the White House Counsel’s Office regarding OFCCP, outlining the Committee’s intention to aggressively pursue oversight of those agencies. These agencies find themselves in the cross-hairs of two important institutions: (1) a Supreme Court seemingly hostile to any attempt to regulate through administrative action with the somewhat unexpected invocation of the Major Questions doctrine and (2) a House of Representatives intent on slowing down the work of such agencies through protracted investigations. 2022-2024 will be an interesting time to observe what these agencies can accomplish in light of these stressors.

The NLRB Recently Has Been, And Plans To Be, Very Busy. As we noted here, and as Seyfarth explained in these blog posts, during 2022, and especially the end of 2022, the NLRB was particularly active in rendering precedential decisions and engaging in rulemaking regarding, for example, joint employment under the NLRA. In Thryv, Inc., 372 NLRB No. 22 (Dec. 13, 2022), the Board majority ruled that any “make-whole remedy” must include compensation for any “direct or foreseeable pecuniary harm,” a significant expansion of the pool of damages an aggrieved employee may recover upon an unfair labor practice finding. And the NLRB does not plan to slow down — in a recent interview, Chair McFerran praised the Board’s activity in 2022, and also noted important decisions facing the Board in 2023, including worker classification, employee-handbook policies, and confidentiality in arbitration. And the NLRB General Counsel, Jennifer Abruzzo, has signaled since her ascension to the position a very aggressive enforcement philosophy. Stay tuned.

OSHA And EPA Civil Penalties Increase for 2023. As Seyfarth summarized here, the U.S. DOL and U.S. EPA have published their 2023 increases to civil penalties. Penalties for non-serious violations increased about $1,000 and $10,000 for repeat violations and or willful violations.

Legislation Supporting Working Mothers Tucked Into 2023 Omnibus Spending Bill. As we noted here, and Seyfarth noted here, at the end of 2022, the President signed the Consolidated Appropriations Act of 2022, which, apart from general appropriations, also included (1) the Pregnant Workers Fairness Act (H.R. 1065) and (2) the PUMP for Nursing Mothers Act (S. 1658): the former requires employers to provide reasonable accommodations for pregnant workers without reference to accommodations offered for other conditions; the latter expands protections for nursing parents who need a private lactation space and certain break times during work. Employers that already include pregnancy as a disability covered under their disability accommodation policies and practices should still review those policies to account for the new federal law nuances, including the interactive process framework. Additionally, employers should review their lactation policies to ensure they comply with the PUMP Act. The EEOC is authorized to issue regulations or guidance regarding these new statutes and we will monitor and activity on that front.

Will Your Entity Be Audited By The OFCCP? As Seyfarth noted here, the OFCCP has posted its FY 2023 Corporate Scheduling Announcement List (CSAL), providing advance notice of 500 compliance reviews the OFCCP will likely begin scheduling imminently. The list is comprised of 500 federal contractor and subcontractor establishments for the following types of compliance evaluations: 452 Standard Establishment Reviews; 24 Corporate Management Compliance Evaluations; and 24 Functional Affirmative Action Program Reviews. Federal contractors and subcontractors should review the list to determine whether they are likely to be the subject of one or more of these upcoming compliance reviews.

EEOC 2023 Enforcement Priorities. In this space, we have had more than one occasion to discuss the dearth of action out of the EEOC in 2022, and how that is likely to change in 2023. Well, the EEOC has officially released for public comment its enforcement priorities for 2023, and employers should brace. As Seyfarth explained here, the EEOC intends to focus on: (1) eliminating barriers in recruitment and hiring (noting explicitly that it is interested in employers’ use of artificial intelligence and automated systems in that regard); (2) protecting vulnerable workers from underserved communities from employment discrimination (immigrant and migrant works, workers with developmental or intellectual disabilities, individuals with arrest or conviction records, and LGBTQI+ individuals, among many other categories); (3) equal pay, (4) access to the legal system, (5) remedying systemic harassment, and (6) selected emerging and developing issues (catch all). On an industry basis, companies in construction, technology, and staffing should be particularly alert to EEOC enforcement activities. The same is true of companies that use contingent workers, or that employ significant numbers of workers from those vulnerable communities listed.

While the EEOC is finally moving ahead, it is still deadlocked with regard to major policy or regulatory actions because the Commission is still deadlocked at 2 Democrats and 2 Republicans. The third proposed Democratic Commissioner, Kalpana Kotagal’s nomination did not make it through the 117^thCongress. While Ms. Kotagal has already been renominated and the Democrats now have a working majority in the Senate 51-49 (though that number includes three independents), there is a clear priority to confirm Biden judicial nominees and the HELP Committee has not yet been formally organized. While the Kotagal nomination may have a clearer path to success, it is still not a priority, so there may be further delay. The same can be said for EEOC General Counsel nominee Karla Gilbride. And as noted, the EEOC is in the crosshairs of House Republican oversight and investigation, and Chair Foxx has made it clear that the EEOC is a prime target for House review and hearings.

CA CRD Issued additional SB 1162 FAQs. Pay transparency legislation is all the rage, from California to New York, but those pieces of legislation have left most employers with more questions than answers, particularly as it relates to SB 1162 in California, which we discussed here and here. As Seyfarth summarized here, on January 19, 2023, California’s Civil Rights Department (CRD) released FAQs regarding compliance with the legislation. The FAQs provide information regarding the data that must be provided and requirements for the two separate reports, described as: (1) Employee Pay Reports; and (2) Labor Contractor Employee Reports.  However, the FAQs seemed to have extended the reach of the legislation by expanding the definition of who is covered by the reporting obligation from “employees” to “workers” thereby including Independent Contractors and even temporary contract workers.

WARNING: NJ WARN Act Gets Major Overhaul Increasing Burden On Employers. As Seyfarth explained here, amendments to New Jersey’s WARN law, effective April 10, 2023, transform the statute from a notice statute like FED WARN into a penalty statute that potentially restates employers’ benefit plans and/or holds executives personally liable for certain events. The amendments also expand from 60 to 90 days the time period that employees must receive notice before the employee is subject to a reduction in force.

At Will No More In NY. Traditionally, almost every state and locality in the Union — save for Montana — has operated under an at-will employment structure wherein an employee can be terminated for any reason, regardless of cause. New York city is slated to join the small slate of for cause jurisdictions: on December 7, 2022, the New York City Council introduced Int. No. 837. which would apply to all employers, prohibiting discharging New York City employees without just cause or a bona fide economic reason. The bill provides that a termination based on just cause must (1) use progressive discipline and (2) have provided to the employee and posted at the workplace or job site its written policy on progressive discipline.

Illinois to Become Third State to Enact Paid Leave Law. A federal paid leave program was a short-lived dream with the introduction of the Build Back Better Act, but that went nowhere fast, leaving it to the states to legislate in that space. Well, Illinois heeded the call — on January 10, 2023, both chambers in the Illinois Legislature passed the so-called Paid Leave for All Workers Act (the “Act”), S.B. 208, mere days into the new legislative session. As Seyfarth summarized here, the Act will require all employers in Illinois to provide up to 40 hours of paid leave per year to their workers, to be used for any reason. Illinois would join Maine and Nevada as the only states with such a mandate.