Policy Matters Newsletter - April 2021

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Ruling From Parliamentarian Gives Democrats an Extra Shot at Reconciliation.  At the onset of the Biden Presidency, Senate Majority Leader Chuck Schumer sat for an interview with NBC News in which he telegraphed a so-called “ace up his sleeve.” Well, I think we now know the identity of the Ace: The most important policy news on the federal level to drop since the last newsletter is the Parliamentarian’s ruling that the majority party in the Senate -- the Democrats, via Kamala Harris for those uninitiated -- may pass three reconciliation bills this year. Democrats were already celebrating the fact that they could pass two reconciliation bills this year, but this ruling from the parliamentarian gifts Democrats a much-needed windfall to pass their increasingly expensive agenda. Indeed, in an interview on NBC News, Senator Bernie Sanders, Chair of the Budget Committee, noted that the ruling is “important because it gives us a little more flexibility. . . . [t]hey don`t have to push everything into one bill.” Note that Bernie used the pronoun us, even though he is not technically a Democrat.

So, what will Democrats do with this gift? While such a prognostication is folly to those who do not caucus with the Senate Democrats, it is worth noting that, due to the Democrats’ razor thin Senate majority, the party will need full buy in -- including from more moderate members like Senators Manchin and Sinema, both of whom have demonstrated willingness to break party rank -- to pass legislation through reconciliation.

So Much Consternation Over an Acronym: Workplace Safety ETS. Almost a whole month after President Biden’s March 15 deadline, we continue to wait with bated breath for OSHA’s promulgation of a COVID-19 emergency temporary standard (“ETS”). However, this week, reports surfaced that Secretary of Labor Marty Walsh put the ETS on hold, pending further analysis. Seyfarth’s own Brent Clark opined to Bloomberg that, given rising rates of vaccination, “OSHA is running headlong into that there is no emergency.” Indeed, for OSHA to issue an ETS, section 6(c) of the Occupational Safety and Health Act requires “that employees are exposed to grave danger from exposure to substances or agents determined to be toxic or physically harmful or from new hazards, and . . . that such emergency standard is necessary to protect employees from such danger.” Where COVID-19 vaccines demonstrate high rates of effectiveness, particularly at preventing serious illness and death, the longer OSHA delays releasing an ETS, the harder it will be to justify that an “emergency standard is necessary to protect employees” from “grave danger.” 

Another hurdle to OSHA’s current ETS efforts is DOL’s position under the Trump Administration. As former Secretary of Labor Eugene Scalia wrote to AFL-CIO President Richard Trumka, President Trump’s DOL thought an ETS unnecessary, as it would not add anything beyond the safety measures employers had already implemented.  OSHA under the prior administration pointed to existing regulations and the general duty clause of the OSH Act as sufficient tools to ensure worker safety in the face of the COVID-19 pandemic. In response to a June 11, 2020 order from the U.S. Court of Appeals for the D.C. Circuit deferring to OSHA’s decision not to issue an ETS, former Solicitor of Labor Kate O’Scannlain and former Principal Deputy Assistant Secretary for OSHA Loren Sweatt issued a joint statement expressing their pleasure with the court’s decision and noting its agreement with the Department “that OSHA reasonably determined that its existing statutory and regulatory tools are protecting America’s workers and that an emergency temporary standard is not necessary at this time.” If OSHA changes course to issue an ETS now, court challenges seem likely based on the complications discussed here. 

ETS, for the first time in a long time, is all over the news media, representing a microcosm of the struggles the Biden administration will have in pressing its bold agenda, often swimming against the current established by the previous administration. As we often write in this space (including in at least three of today’s blurbs!), stay tuned.

DOL Requests Information On Prevailing Wage Computation For H1-B Workers. On April 1, 2021, the Department of Labor issued a request for information, soliciting comments from “interested parties to provide information on the sources of data and methodologies for determining prevailing wage levels covering employment opportunities that United States (U.S.) employers seek to fill with foreign workers on a permanent or temporary basis through certain employment-based immigrant visas or through H–1B, H–1B1, E–3 nonimmigrant visas.” The Department intends to use the information gathered in formulation of a potential new notice of proposed rulemaking that would revise the calculus for determining the prevailing wage of such workers, with an eye toward “ensur[ing] the employment of certain immigrant and nonimmigrant workers does not adversely affect the wages of U.S. workers similarly employed.”

Sneaky: Will Controversial Provisions of PRO Act Land In President Biden’s Jobs Plan? Not coincidentally, President Biden introduced his rather large infrastructure package in Pittsburgh, Pennsylvania, at a carpenters union training center. While the text of the full proposal is not yet available to the public, the White House Fact Sheet -- which mentions unions 24 times! -- summarizing the proposal specifically states that:

President Biden is calling on Congress to update the social contract that provides workers with a fair shot to get ahead, overcome racial and other inequalities that have been barriers for too many Americans, expand the middle class, and strengthen communities. He is calling on Congress to ensure all workers have a free and fair choice to join a union by passing the Protecting the Right to Organize (PRO) Act, and guarantee union and bargaining rights for public service workers. His plan also ensures domestic workers receive the legal benefits and protections they deserve and tackles pay inequities based on gender.

As Kyllan Kershaw, National Vice Chair of the firm’s Labor Management Relations practice group, recently noted during one of our podcasts, the PRO Act is basically a giant wish list for labor, but faces an unlikely path to enactment. Currently, the Plan would only “call[] on Congress to . . . pass[] the Protecting the Right to Organize (PRO) Act” However, tying some of the PRO Act provisions to infrastructure makes passage more likely. While we are unsure which provisions of the PRO Act will be included, we remain confident some, if not all, of the provisions of the PRO Act will make their way into the final product. Stay tuned!

We Are, After All, Still In A Pandemic. As Seyfarth summarized here, Massachusetts Governor Charlie Baker signed into a law an Act Financing a Program for Improvements to the Unemployment Insurance Trust Fund and Providing Relief to Employers and Workers in the Commonwealth. Among other provisions, the law addresses the solvency of the unemployment compensation fund and includes tax relief for employees and employers. While the bill sent to the Governor contained provisions that would have expanded paid sick leave for reasons related to COVID-19, the Governor exercised his line-item veto power to  send the sick leave portions of the bill back to the Legislature with suggested revisions. Employers in the Commonwealth should not pop the champagne yet, however -- the Massachusetts Legislature will assuredly amend what was sent back and provide the Governor with a more palatable measure. As always, stay tuned.

Hazard Pay Ordinances: So Hot Right Now. This author recalls, what seems like a millennium ago, but was only December 2020, the employer community -- especially grocers -- rightfully up in arms over a proposal from the Los Angeles City Council to increase pay for certain grocery and pharmacy workers by $5 an hour; around the same time, the Long Beach City Council proposed additional pay for the same workers of an additional $4 an hour. Despite legal challenges, both ordinances survived. And, as Seyfarth noted here, as of March 19, 2021, roughly 47 cities and counties had enacted or at least considered such proposals. The number of localities mandating hazard pay is anticipated to grow, with ordinances in American Canyon, Coachella, Daly City, Irvine, San Francisco, and San Jose most recently going into effect.

Paycheck Fairness Act, H.R. 7. The Paycheck Fairness Act, which we've previously reported on, portends stricter standards and larger penalties for claims of pay discrimination against employers. Current law prohibits employers from paying different wages to men and women unless the differences are based on seniority, merit, production, and "any other factor other than sex."  H.R. 7 would replace "any other factor" with "a bona fide factor" and expand the definition of sex to include sex stereotypes, sexual orientation and gender identity, pregnancy, and sex characteristics.  It also would expand protections against retaliation and prohibit employers from relying on salary history in compensation and employment decisions.  Perhaps most alarmingly for employers, the bill would allow employees to pursue class action lawsuits. As reported previously, these increased burdens could negatively impact employees and employers alike.  Seyfarth will continue to track this important bill.

Personnel as Policy Is Not Just For Government: How Walsh Appointment is Changing the Composition of K Street. Three high profile former aides to recently confirmed Department of Labor Secretary Marty Walsh (see our podcast on him for further detail) have fortuitously entered the Washington, DC lobbying world. Alexis Tkachuk, who was Walsh's Chief Labor Counsel, was hired by Uber Technologies, Inc. to lobby on issues relating to employment matters and the gig economy, according to a lobbying registration form posted online a couple weeks ago.  The Department of Labor under Walsh is expected to crack down on the misclassification of independent contractors, which is an issue Uber will certainly be engaged in. Joe Rull, former director of Walsh's mayoral campaign and later his Chief of Operations, and Eugene O'Flaherty, Chief Legal Officer for Walsh's entire tenure as Mayor of Boston, have also joined the K Street ranks.  How much influence these former Walsh aides will have on labor policy remains to be seen, but the lobbying landscape of Washington is rapidly transforming with this new administration, and this is a reflection of those appointee policy preferences.

CDC Extends its Eviction Moratorium.  But Didn’t A (Second) Court Just Rejects CDC’s Authority To Do The Same? Yes. Three days before its expiration, as Seyfarth has recently covered, the Centers for Disease Control extended its eviction moratorium through June 30, 2021.  Seyfarth reported on previous successful challenges in Federal District Court to the moratorium, but a Circuit Court has now weighed in.  In a case captioned Tiger Lily v. HUD, the Sixth Circuit recently issued an order denying the government's motion staying implementation of an underlying court's decision finding that the CDC's moratorium issuing the moratorium exceeded its authority under the law. Technically, the Sixth Circuit's decision was not a decision on the merits of the case, but rather a procedural ruling denying the government's request for an emergency stay of the lower court’s order. That said, the Sixth Circuit's order certainly signaled that it is unlikely to rule in the government's favor. In the meantime, the Biden Administration seems intent on extending and enforcing the eviction moratorium for as long as it possibly can.

We Knew This Was Coming: Lawsuit Challenges DOL IC Classification Decision. The Coalition for Workplace Innovation filed a lawsuit in the Federal District Court for the Eastern District of Texas challenging the Biden Administration's delay in implementing a Department of Labor rule making it easier for employers to classify workers as independent contractors. That rule was finalized by the Trump Administration, but it has not yet gone into effect. The lawsuit also asks the Court to invalidate a pending proposal to rescind that same rule, which we've previously reported on. Seyfarth has been on the front lines of this issue since the beginning, led by the incomparable Camille Olson and Larry Lorber, assisting with drafting comments to the original proposal, the proposed delay, and the proposed rescission.

Although it is certainly possible for the Court to block both the delay and withdrawal, the Biden Labor Department would only need to issue a new rule rescinding that rule with an appropriate notice and comment period in compliance with the Administrative Procedure Act, of course. The real question is what that new rule would be. The Biden Administration certainly favors enhancing worker protections, including making it more difficult to classify them as independent contractors. This is clear, for example, in the PRO Act, which Seyfarth has reported and podcasted on previously.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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