Policy Matters Newsletter – September 2021

Seyfarth Shaw LLP

A lot of relevant policy matters have happened over the past two weeks. We have seen significant progress on the dual-track infrastructure plan; this year’s legislative session in California came to a close, bringing heftier obligations for certain employers in the golden state; and finally, Joe Biden set the private employer community ablaze when he announced that the administration will require private employers to ensure their workforces are either vaccinated or show a weekly, negative test. Let’s dig in!

Step By Step: House Advances Reconciliation Proposal; Senate Barrier Looms. As we noted here, about two weeks ago, the House of Representatives held a key vote instructing various committees to start the markup process for the reconciliation bill that includes President Biden’s “soft infrastructure” priorities. The procedure decided on in the House set a September 27 deadline for House action on the bipartisan Senate infrastructure bill, so time was of the essence to prepare the reconciliation measure to fit Speaker Pelosi’s goal of passing both measures together. Impressively, 13 house committees laboriously marked up the legislation to glue together much of the President’s economic framework into a $3.5 Trillion package. The proposal itself, while certain to change around the margins, would constitute the largest investment in social programs in decades. While the top dollar appropriation is undoubtedly the story of the package, the language does currently contain some prohibitions / requirements employers should be cognizant of, as noted below.

Reconciliation Proposal Contains Changes to the NLRA. As we noted here, and podcasted here, more progressive legislation such as the PRO Act was always highly unlikely to get through the Senate, but pieces of the Act were always likely to splinter into a larger reconciliation package. Well, now that we have seen some of the markup, that is precisely what happened in the House Education and Labor Committee. As currently constituted, the bill would, inter alia, prohibit employers from permanently replacing striking workers, from locking out employees, and from requiring employees to attend captive audience meetings during union organizing campaigns. The language of the measure released by the committee includes a number of the penalty provisions set forth in the PRO Act, i.e.,  civil penalties up to $50,000 per violation for unfair labor practices and personal liability for directors and officers. Currently, and historically, the NLRB has only awarded “make-whole” or restorative remedies like back pay or reinstatement to an employee’s position. These new, more punitive measures could prove costly and difficult for employers. 

These provisions will undoubtedly be challenged under the Byrd Rule once this moves to the Senate, leaving those provision’s fate in the hands of the unelected parliamentarian. While forecasting legislative outcomes is always folly, we here at the PMN are hard-pressed for arguments as to why these provisions can be included in the reconciliation package. Indeed, just this year, as we noted here, the parliamentarian already ruled that Congress cannot force employers to raise the minimum wage through reconciliation.

Beefed Up Paid Leave Program Most Likely To Proceed Through Reconciliation. Through its own markup process, The House Ways and Means Committee released language providing for a comprehensive, federal paid leave program. The language, interestingly, includes no specific tax hikes to pay for the program, presumably relying on revenue from the general fund to support the program that would provide for up to 12 weeks of paid leave -- that can be taken incrementally -- and expands the FMLA’s definition of individuals to whom a worker can provide qualifying care, i.e., domestic partners, grandparents, etc. Employers that provide paid leave could receive reimbursement for up to 90 percent of their costs. The paid proposed leave program has a better chance of surviving the Byrd Rule in the Senate since it involves taxing and spending, but it remains an open question.

If You Did Not Take The Carrot, You Might Get The Stick: Joe Biden and Workplace Vaccines. We all remember fondly the days of state, and other entities, offering certain benefits for getting the vaccine, including lotteries, hunting rifles,  scholarships, and even free beer. While that carrot approach worked for some, it did not reach the millions needed to sufficiently vaccinate the population. As such, in a speech announcing the Administration’s intended path forward on combating the pandemic, Joe Biden, in what many would consider a controversial move, spoke directly to the unvaccinated portion of the population: "We've been patient," Biden said. "But our patience is wearing thin, and your refusal has cost all of us."

As part of the initiative, the administration will require vaccinations for health care workers at Medicare and Medicaid participating hospitals, and all contractors with the federal government. Even more relevant to this space, though, the administration will also direct OSHA to issue an emergency temporary standard requiring all employers with 100 or more employees to ensure either (1) employees are vaccinated or (2) show a weekly negative COVID-19 test. Notably, OSHA can issue an ETS without going through the formal notice and rulemaking process that tends to slow down the implementation of other federal agency rulemaking. The plan also requires covered employers to provide paid time off for employees to get vaccinated and recover from any side effects related to the vaccine. It is expected that this vaccine requirement will apply to more than 80 million private sector workers, though it is still unclear exactly how it will be implemented and on what timeline.

The implications of the administration’s moves in this regard are too far-reaching for a comprehensive summary in this limited space. A good place to start however, is this excellent piece put together by our Seyfarth colleagues who are experts in workplace safety initiatives. As a bit of good news for employers navigating the most recent workplace requirements surrounding vaccination, Seyfarth released a vaccine playbook, which will be modified as vaccine requirements evolve. We have fielded numerous specific questions covering this new so-called “mandate.” There will undoubtedly be lawsuits surrounding OSHA’s jurisdiction to enforce such requirements. If you have specific questions, please reach out to your favorite Seyfarth counsel.

House Ways and Means Chair Proposes Union Dues Tax Deduction.  House Ways and Means Chair Richard Neal released his tax plan to be included in the budget reconciliation bill, which includes a slate of corporate and individual increases that is designed to generate nearly $3 trillion.  Buried in the giant, controversial tax plan is a small provision allowing workers to claim up to $250.00 in union dues as an above-the-line tax deduction.  Although that is of course not a very significant amount of money and unlikely to cover the total annual cost of union dues for any individual member, it is likely to be controversial among employers and business groups because union dues have historically not been deductible for federal income tax purposes.  Including that deduction in a tax plan that is already unpalatable to the business community will make it even more difficult to pass the Senate with 51 votes.

California Legislative Session Comes To A (Comparatively) Quiet End. September 10, 2021 marked the end of the legislative session. And while there were some obviously concerning measures passed to the Governor for consideration -- see e.g., SB 62, SB 331, and AB 701 -- this session did not carry a headliner like AB 5 or AB 2257. This year’s calmer legislative session was in stark contrast to the past two years, which saw a menstrual cup tossed from the Senate gallery in 2019 and chaos stemming from tech issues and quarantined lawmakers in 2020. For a more in-depth summary of measures that did, and did not, pass to the Governor’s desk, see Seyfarth’s piece out of its California offices .

Charlotte, NC, Joins The List of Localities Expanding Employment Protections. Sitting in the Red (trending purple) state of North Carolina, the more liberal city of Charlotte passed an ordinance adding familial status, sexual orientation, gender identity and gender expression, veteran status, pregnancy, and natural hairstyle to the list of classes protected by the City’s non-discrimination in employment ordinance. For a fantastic summary of the measure, see Seyfarth’s piece here.

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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