Beltway Buzz, September 22, 2023

Funding Update: Shutdown Looms. How—and when—the federal government will be funded after September 30, 2023, continued to be the main focus of our elected members of Congress this week. Of course, attention is now primarily trained on the U.S. House of Representatives, as for the second consecutive week, House Republicans were forced to scuttle their plans to vote on short-term government funding legislation. Legislative stalemates can change quickly on Capitol Hill, but as of now, it is likely that the federal government will shut down, beginning October 1, 2023.

How Will a Federal Government Shutdown Impact Employers? We know from experience that any federal government shutdown will have a significant impact on employers.

• Mandatory v. Discretionary Spending. It is important to remember that the debate swirling in Washington, D.C., is focused on discretionary government spending, not mandatory spending. The former is controlled through the annual appropriations process, while the latter is governed by separate laws. This means that Social Security, Medicare, Medicaid, and veterans programs will not be impacted by a shutdown.
• Economic Impact. According to a Congressional Budget Office report, the last federal government shutdown—which lasted from December 22, 2018, to January 25, 2019—resulted in $11 billion loss in economic output.
• Federal Contractors. Federal contractors should expect delays when dealing with their contracting agencies, as many agencies will be operating with skeleton crews. For this reason, contractors may find it difficult to access agency facilities or systems. Contractors themselves may have to consider furloughs, as well, if work is delayed or stopped.
• Federal Agencies. Federal labor and employment agency activities will likely be curtailed, as non-excepted government employees (colloquially sometimes referred to as “nonessential” employees) may be furloughed. The Office of Management and Budget requires agencies to develop contingency plans detailing how they will operate in the event of a shutdown, but even the White House’s landing page for these plans is out of date or lacks working links. The Buzz will have more information on this next week as agencies update their plans in preparation for a shutdown.

For more information on how a federal government shutdown could affect immigration-related benefits, please join us for our upcoming webinar, Immigration Consequences of a Possible Federal Government Shutdown, which will take place on Thursday, September 28, 2023, from 2:00 p.m.–3:00 p.m. EDT. The speakers, James J. Plunkett and Caroline Tang will examine potential impacts, particularly those related to the disruption of certain immigration services, and provide key takeaways for companies that employ foreign nationals. Please register here.

EEOC Releases Strategic Enforcement Plan. On September 21, 2023, the U.S. Equal Employment Opportunity Commission (EEOC) released its Strategic Enforcement Plan for Fiscal Years 2024–2028. The strategic enforcement plan (SEP) is intended “to focus and coordinate the agency’s work over a multiple fiscal-year (FY) period to have a sustained impact with regard to advancing equal employment opportunity.” The SEP’s subject matter priorities include the following:

• “Eliminating Barriers in Recruitment and Hiring.” The EEOC will focus on the use of artificial intelligence in hiring and recruiting “where such systems intentionally exclude or adversely impact protected groups.” The Commission will also focus on attempts to steer or channel workers into specific jobs based on protected traits.
• “Protecting Vulnerable Workers and Persons from Underserved Communities from Employment Discrimination.” The Commission will focus on “policies and practices that impact particularly vulnerable workers and persons from underserved communities,” which include, but are not limited to, migrant workers, individuals with intellectual or mental health disabilities, LGBTQI+ workers, low-wage workers, and survivors of gender-based violence.
• “Addressing Selected Emerging and Developing Issues.” This includes “[t]echnology-related employment discrimination” enforcement of the Pregnant Workers Fairness Act, as well as attention to “[discrimination influenced by or arising as backlash in response to local, national, or global events, including discriminatory bias arising as a result of recurring historical prejudices.”
• “Advancing Equal Pay for All Workers.” The EEOC will investigate employer practices “such as pay secrecy policies, discouraging or prohibiting workers from asking about pay or sharing their pay with coworkers, and reliance on past salary history or applicants’ salary expectations to set pay.”
• “Preserving Access to the Legal System.” The EEOC will scrutinize arbitration provisions, as well as “overly broad waivers, releases, non-disclosure agreements, or non-disparagement agreements.”
• “Preventing and Remedying Systemic Harassment.” According to the SEP, the “EEOC will continue to focus on strong enforcement with appropriate monetary relief and targeted equitable relief to prevent future harassment.”

Foxx Presses Su on EBSA Enforcement. House Committee on Education and the Workforce Chair Virginia Foxx (R-NC) continues to scrutinize Acting Secretary of Labor Julie Su’s management of the U.S. Department of Labor (DOL). This week, she sent a letter to Su noting that, according to stakeholders, “EBSA is failing to conduct its enforcement in a timely manner, creating unacceptable burdens for retirement plan sponsors and negatively impacting retirement savers, retirees, and their families.” In addition to lengthy investigations,

Plan sponsors also report there often appears to be no direction or purpose to the investigations, and they are trapped in investigations that lack an objective, an enforced progress schedule, or an endpoint. There seems to be no limit on the amount of document requests, interviews, and questions an investigator may ask. The result is increased compliance costs, which harm those participating in employer-sponsored retirement programs.

Chair Foxx requests “[a]n explanation of any timeframes or internal guidance imposed on the timeliness of conducting and closing out investigations,” as well as “[a]n explanation of the specific steps taken to close all persisting investigations and the consequences to investigators, their supervisors, and EBSA management if investigations are allowed to languish beyond efficient timeframes.” The letter follows on the heels of recent letters from Chair Foxx to Su challenging the DOL’s rulemaking practices and interpretation of reportable persuader activity.

Dress for Success. This week, Senate Majority Leader Chuck Schumer (D-NY) pulled on a thread that threatens to unravel the entire U.S. Senate: he instructed the sergeant at arms to refrain from enforcing the Senate’s “business attire” dress code. Senator Schumer’s move is likely tailored to accommodate Senator John Fetterman (D-PA), who has a more casual approach to work wear. But because the buttoned-up dress code is woven into the fabric of the Senate’s traditions, this won’t be a seamless transition. In fact, behind clothed doors, Senator Joe Manchin (D-WV) is already circulating a resolution to return to the traditional dress code. Only time will tell if Senator Manchin can stitch together the necessary votes.