Policy Matters Newsletter - July 29, 2022

Sens. Schumer and Manchin Finally Agree On Contours Of Next Reconciliation Package.  We have been following, and reporting on, the saga surrounding the next democrat only package, originally designated the Build Back Better Act. The status of this measure has bounced from optimism to hopelessness for most of the current administration, mostly hanging on the demands of moderate Senator Joe Manchin, who has successfully shrunk the package from its original, lofty and broad policy aims. Last week was one of hopelessness for those rooting behind Build Back Better when Sen. Manchin said he would not vote for a bill that includes climate or tax-related provisions.

Just this week, though, Senator Manchin apparently reversed course, announcing that he had reached a deal with Senate Majority Leader Charles E. Schumer on a party-line bill to raise taxes and spend on climate change and health care programs. The measure would raise an estimated $739 billion through, among others, levying a 15% corporate minimum tax, increased IRS enforcement of the reformed tax code, and closing the carried interest loophole. The bill would appropriate a total of  $433 Billion to, among others appropriations, invest in domestic energy production and manufacturing, reduce carbon emissions by roughly 40% by 2030, and extend the expanded Affordable Care Act program through 2025. Senator Manchin announced his support of the measure on his website, noting that the reconciliation legislation “will address record inflation by paying down our national debt, lowering energy costs and lowering healthcare costs.”  The President joined the chorus, acknowledging the laborious negotiations, but celebrating a finish line in sight — “The work of the government can be slow, and frustrating, and sometimes even infuriating. Then the hard work of hours and days and months of people who refuse to give up pays off. History is made. Lives are changed."

Hours before this announcement, the Senate easily passed separate legislation that includes $52 billion in grants and incentives for US semiconductor manufacturing. In our most recent legislative update, we spoke of the deadlocked conference concerning the United States Innovation and Competition Act of 2021, which appropriates money for chip manufacturing,  a deadlock likely caused by the inclusion of certain pro-worker provisions in the House-passed version. Just hours before the announcement of the broader reconciliation packaged summarized above, the Senate passed this measure without the pro-worker provisions. Progressives are probably not thrilled with that outcome, but should be elated at the movement on the reconciliation package when the semiconductor legislation already passed. A real cake and eat situation for congressional democrats.

CROWN Act Goes Live In Massachusetts. As Seyfarth explained here, numerous states have passed legislation to outlaw discrimination in the workplace because of natural hairstyles, almost universally calling the legislation the Create a Respectful and Open Workplace for Natural Hair Act (“CROWN Act”).  Indeed, a federal version CROWN Act passed the House of Representatives back in March; the measure has seen no action since moving to the Senate. With Governor Baker’s signature earlier this week, Massachusetts became the latest state to amend its workplace discrimination laws to include discrimination based on race-related hairstyles. As Seyfarth noted here, this measure was inspired by a number of highly publicized incidents related to grooming policies or hairstyle rules in various settings, including one prominent instance in which a Massachusetts school came into the spotlight for punishing two Black students for wearing hair extensions

Excessive Heat Measure Moving At Quite The Clip. Back in May, we reported on Vice President Harris’ announcement of a new OSHA emphasis program for heat illness aimed at protecting millions of workers from heat illness and injuries by conducting heat-related workplace inspections before workers suffer preventable injuries. At the time of the announcement, not many could predict that this past week would see record-breaking temperatures across the Union. While the heat wave continued to linger, the House Labor and Education Committee passed a bill by a 27-19 party-line vote directing the Occupational Safety and Health Administration to issue a rule protecting workers from excessive heat far sooner than the agency originally planned. While the party-line vote does not portend well for the future of the measure, it clearly evinces this administration’s focus on heat illnesses.

Biden Finally Nominates W&H Administrator After David Weil Hindenburg. We have been following the tale of who will be the next wage and hour administrator at the DOL ever since Dr. David Weil’s nomination and confirmation to return to the U.S. DOL ended unceremoniously with his withdrawal from consideration. In the piece in May, we spoke of Jessica Looman, who has occupied the position as “acting” Administrator since June 21, 2021. Well, this week, President Biden nominated Ms. Looman for the position of Wage and Hour Administrator, not acting. While Ms. Looman will likely not rankle GOP feathers the way Dr. Weil did, it is unclear whether she will garner any GOP support for her confirmation. Stay Tuned.

The End is Near: COVID-19 List B Document Temporary Policy Ends. As we have discussed time and time again, since the onset of the pandemic, flexibility over employers verifying employment eligibility on the form I-9 has been of paramount importance.  As we noted here, DHS warned back in March that it would be ending its COVID-19-related temporary policy allowing employers to accept expired List B documents when verifying an employee’s work eligibility on the Form I-9. Well, earlier this week, as Seyfarth summarized here, earlier this week, USCIS issued a reminder regarding DHS’ termination of the COVID-19 temporary policy allowing employers to accept expired List B documents for the Form I-9; employers now can only accept unexpired List B documents.

Decriminalizing Marijuana—Federal Edition. Late last week, a group of Senate Democrats introduced the so-called “Cannabis Administration and Opportunity Act” which supporters claim would end prohibition on cannabis by removing cannabis from the federal list of controlled substances, and empowering states to implement their own cannabis laws. Not only would the measure remove cannabis from the list of controlled substances, it would also, among many other provisions: establish a “Center for Cannabis Products” within the FDA to regulate production, labeling, distribution, sales, and retail elements of the cannabis industry;  require the Department of Transportation create a standard for cannabis-impaired driving; eliminates the tax code’s restriction on cannabis businesses claiming deductions; and Directs HHS to increase the diversity and availability of cannabis products for research purposes. A helpful summary of the measure and its many other noteworthy provisions can be found here. Seyfarth’s own Blunt Truth Blog has also been following this measure.

EEOC COVID-19 Guidance Pivot. The COVID calculus has changed, and with that change comes new guidance from the EEOC. The updated guidance moves from a “direct threat” analytical approach to a greater focus on analyzing “business necessity” as employees return to the workplace. For example, as it relates to testing, the EEOC previously took the position that that screening testing was allowed under the ADA, even though such tests qualify as medical examinations under the ADA, because “an individual with the virus will pose a direct threat to the health of others.” However, the updated guidance replaced the direct threat language to provide that employers who want to conduct mandatory COVID testing for screening purposes will need to show that it is “job-related and consistent with business necessity” within the meaning of the ADA. The EEOC goes on to identify a number of considerations for employers to take into account in determining whether a business necessity justifies mandatory screening testing. Seyfarth compiled a helpful summary of the new guidance — it is worth a read.

More Controversy Surrounds So-Called Captive Audience Meetings. Back in April, we discussed this memorandum issued by NLRB General Counsel Abruzzo in which she notes that she will urge the Board to reverse its current precedent permitting employers to require attendance at so-called “captive audience meetings,” which typically occur during work time and are intended for employers to present their opinions on unionization. Five staffing companies have banded together to challenge the constitutionality of the memo. The challenge alleges that the policy established by the memorandum violates the First Amendment by “restrict[ing] employer speech on the basis of its content, viewpoint, and speaker.” Plaintiffs “seek a declaration that this new guidance interpreting ‘unfair labor practices’ is unconstitutional and an injunction preventing Defendants from taking action under this new interpretation against Plaintiffs’ businesses.” Stay tuned — we will  be following this lawsuit as litigation ensues.

HHS To Propose Rule to Strengthen Nondiscrimination Under The ACA. This week, HHS issued a proposed rule for comment revising the implementing regulation for Section 1557 of the ACA, and proposes provisions intended to be more effective in protecting people from discrimination in healthcare. The rule is consistent with the President’s executive orders on preventing discrimination, protecting access to reproductive healthcare, and promoting equity. In a nutshell, the proposed rule: Reinstates the scope of Section 1557 to cover HHS’ health programs; align regulatory requirements with Federal court opinions to prohibit discrimination on the basis of sex including sexual orientation and gender identity; and explicitly prohibits discrimination in the use of clinical algorithms to support decision-making in covered health programs and activities. HHS has promulgated a helpful fact sheet on the proposed rule. Our very own Leon Rodriguez will be hosting a webinar on this very topic. Stay tuned for the details.

FTC and NLRB Team Up On Training, Information Sharing, and Communication. The Federal Trade Commission (FTC) and the National Labor Relations Board (NLRB) have joined forces in their joint mission to uncover and prosecute unfair labor practices. This Memorandum of Understanding (MOU) outlines expectations that are intended to enhance coordination “[t]o better root out practices that harm workers in the ‘gig economy’ and other labor markets, to enhance the enforcement of federal laws and regulations administered by the agencies, and to promote interagency collaboration through information sharing, cross-agency training, and coordinated outreach.” This interagency partnership aligns with the Administration’s push towards enforcing unfair labor practices and strengthening worker organization. Specifically, the MOU identified the following common regulatory interests, among others: labor market developments, claims and disclosures about earnings and costs associated with gig and other work, and noncompete and nondisclosure provisions.