The Infrastructure Bill Passed, but What About the Social Spending Bill?

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On Monday, November 15, after Congress passed a $1 trillion infrastructure bill, President Biden signed it into law. This law will pour billions into roads and bridges, transit, broadband services, airports, waterways and more. Although a majority of the provisions are related to physical structures and developments, several provisions relate to labor and employment:

  • Sec. 41101 mandates prevailing wages as determined by the Secretary of Labor in accordance with the Davis-Bacon Act for laborers and mechanics employed by contractors or subcontractors that work on a project assisted in whole or in part by funding made available under the relevant division, for example, the Energy Division.
  • Sec. 80604 ends the Employee Retention Tax Credit early. The ERTC was set to expire on Jan. 1, 2022, but the Act accelerates the end of the credit retroactive to October 1, 2021 (except for wages paid by a recovery startup business, for which the expiration date would remain unchanged).
  • Sec. 23022 imposes record keeping requirements on employers that participate in the commercial driver apprenticeship program.
  • Sec. 22427 establishes substance testing requirements for mechanical employees of railroads.
  • Sec. 60102(h)(1)(A)(iv)(I-IV) creates a prioritization process for awarding grants for broadband deployment. Groups that receive federal funds for performing broadband work must prioritize projects based on:
    • Whether it is in an area of persistent or high poverty;
    • The speed of the proposed broadband service;
    • How quickly the project can be completed; and
    • Entities that have “a demonstrated record of and plans to be in compliance with Federal labor and employment laws.”
  • Sec. 22213 amends the Amtrak Reform and Accountability Act of 1997 and places restrictions on Amtrak’s ability to contract out work within the classification of work performed by a union employees.

Unlike the Infrastructure Bill, President Biden’s social spending bill – the Build Back Better Act — remains stalled in the House. Although pared back from its original breadth, the bill still includes numerous labor and employment sections:

  • Sec. 2202 creates a federal paid family leave program. As currently drafted, eligible employees would receive 4 weeks of paid leave.
  • Secs. 21001-21003 augment funding for various federal agencies, including OSHA, the Wage and Hour Division, the NLRB and the EEOC.
  • Sec. 21004 increases potential civil penalties under OSHA and the FLSA. Similarly, Sec. 21006 increases available penalties under the NLRA, including adding personal liability for directors and officers in certain instances.
  • Sec. 136102 of the bill includes an extension and modification of the energy credit. Certain renewable energy projects would be eligible to receive five times the standard tax credit. Said projects must meet stated apprenticeship and prevailing wage requirements, which are provisions that unions continue to fight to keep in the bill.
  • Sec. 136401, regarding electric vehicles, has strong union support. The bill states that for new plug-in electric vehicles that are manufactured in the United States by unionized workers, consumers can qualify for a $4,500 tax credit. This is in addition to the existing $7,500 credit.

These provisions, particularly as to paid family leave, will certainly be subject to intense political debate, and appear unlikely to pass in their current form. Ballard Spahr will continue to monitor these developments and provide updates.

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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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