Each week during the first 100 days of the new administration, we will provide a recap of significant initiatives and events that will impact employers.
In week eleven, the Biden administration’s labor and employment activity includes the introduction of the American Jobs Plan, the extension of the Paycheck Protection Program, employment policy changes at the Department of Defense, and the administration’s first judicial nominees.
Administration Introduces American Jobs Plan Funded by Corporate Tax Hike
On March 31, President Biden introduced the American Jobs Plan, requesting $2 trillion over eight years to modernize the nation’s infrastructure while simultaneously creating jobs. The bulk of the spending is planned for physical improvements including airports, roads, bridges, schools, and public housing. The plan also seeks to invest billions and give tax credits to support clean energy generation and storage, electric vehicles, and energy efficiency. To pay for the plan, the President proposed a corporate tax hike over 15 years, among other modifications to the tax code.
What’s to Come: The plan comes with numerous proposals that will bring significant changes to the workforce. One particularly aggressive set of changes comes from the plan’s proposal to pass the PRO Act, a massive overhaul of federal labor law that would make sweeping changes to the National Labor Relations Act by overturning state “right to work” laws, giving the National Labor Relations Board (NLRB) the power to fine companies engaging in unfair labor practices, allowing union elections to be held off of company premises and to use electronic ballots, and allowing independent contractors to be unionized, among other things.
For employers, the plan as currently proposed may prove to be a mixed bag. On the one hand, employers in many industries, most notably construction and “green” energy, will undoubtedly benefit. However, the proposed infusion of federal spending into key industries and positive impact on employment also comes with some strings attached for employers. The plan calls for contracting with companies, contractors, and subcontractors that are strictly “American companies” with “American products”. Additionally, the Made in America Tax Plan proposes to increase the corporate tax rate from to 28% (currently at 21%), double the tax on Global Intangible Low-Taxed Income (GILTI) to 21%, impose a 15% minimum tax on corporate book income, repeal the Foreign-Derived Intangible Income (FDII) deduction, and increase corporate tax enforcement, among other measures.
The plan also contains a request for funding for the DOL, NLRB, and EEOC to “strengthen the capacity of labor enforcement agencies to protect against discrimination, protect wages and benefits, enforce health and safety safeguards, strengthen health care and pensions plans, and promote union organizing and collective bargaining.” Such an expansion of agency support presumably comes with an increase in investigations and penalties for workplace safety and health violations. Employers should pay close attention to this piece of legislation as it has the potential to create significant changes in the workplace.
Biden Signs Bi-Partisan Extension of Paycheck Protection Program
On Tuesday, the President signed into law the “PPP Extension Act of 2021” extending the Paycheck Protection Program (PPP) application deadline to May 31, 2021 from the previous deadline of March 31, 2021 and the PPP authorization through June 30, 2021. The PPP was created last year to help small businesses weather the economic hardships of the pandemic,
What’s to Come: The extension had overwhelming bi-partisan support, passing in the House 415 to 3 and in the Senate 92 to 7. The PPP extension will continue its role in keeping eligible small businesses afloat and simultaneously, keeping workers in their jobs. The extension helps to shoulder the financial implications of the pandemic on the economy. Employers seeking financial assistance to cover pandemic hardships should consider the PPP while the deadline is still open.
DOD Reverses Trump, Allowing Open Transgender Service Again
The U.S. Department of Defense issued a policy restoring its original 2016 policies regarding transgender service, once again allowing transgender people to join and openly serve in the military. The move formally repeals a Trump-era directive that effectively banned the service of transgender people.
What’s to Come: This change is a full reversal of current policy and will take significant next steps to ensure compliance. Accordingly, the policies will be effective in 30 days, allowing the various military services time to update policies and to provide guidance and possible training to leaders and service members. This may be the tip of the iceberg in a series of changes to laws and policies benefiting the LGTBQ community. The Equality Act, which would expand federal civil rights laws to protect LGBTQ individuals from discrimination in employment, housing, credit, jury service, and federally funded programs as well as public places and spaces, recently passed the House and has begun hearings in the Senate. Employers may want to carefully examine internal workplace policies and practices and make any modifications needed.
Biden Selects Diverse Judicial Nominees, Positions Judge Jackson for High Court
President Biden nominated the first set of judicial nominees of his presidency. The nominees comprised a diverse group of “trailblazers”.
Biden selected three Black women for the appellate court, including Judge Jackson for the D.C. Circuit, Tiffany Cunningham for the Federal Circuit, and Candace Jackson-Akiwumi for the Seventh Circuit here in Chicago. If nominated, Cunningham would be the first Black judge on the Federal Circuit appellate bench, and Jackson-Akiwumi would become the only Black woman on the Seventh Circuit bench. Biden also nominated federal magistrate judge Zahid Quraishi to the federal district court in New Jersey, making Quraishi the first Muslim-American federal judge in U.S. history.
What’s to Come: Biden’s nominations emphasize diversity and draw from a wide range of backgrounds including prosecutors and criminal defense attorneys as well as attorneys in government and corporate law firms. Many view Judge Jackson’s appointment to the D.C. Circuit as a pre-cursor to her ultimate nomination to the U.S. Supreme Court when an opening on the Court next arises. The nominations are a clear indicator of the administration’s continuous push to diversify positions of power across the government.