Beltway Buzz, July 8, 2022

Congress Heats Up. Members of the U.S. Congress were out this week for their Independence Day break, but they are scheduled to return during the week beginning July 11, 2022, when they will begin a busy three-week legislative period leading up to the August recess (though the schedule can always change). During July, besides hammering out differences between bills in the U.S. House of Representatives and the U.S. Senate addressing competitiveness with China, the members will debate a revamped economic package that is being pushed by the Democrats. Readers may recall the Build Back Better bill the House passed in late 2021 that subsequently stalled in the Senate. That bill contained federal paid leave provisions as well as increased penalties for violations of federal labor laws. The renewed talks reportedly will address a slimmed-down proposal when compared to the Build Back Better bill and will focus on climate change, tax reform, and Medicare drug prices.

FLSA Independent Contractor Proposal Advances. On July 5, 2022, the Office of Information and Regulatory Affairs received from the U.S. Department of Labor’s (DOL) Wage and Hour Division a draft proposed rule entitled “Employee or Independent Contractor Classification Under the Fair Labor Standards Act.” As the Buzz has previously discussed, a federal court recently reinstated the DOL’s Trump-era independent contractor rule because the current DOL did not follow the proper procedures when it rescinded the rule in 2021. At this stage, it is unclear whether the DOL’s pending proposal will simply reattempt to scrap the Trump-era rule in an administratively proper way or seek to install a new test for independent contractor status.

Spending Bill Would Facilitate Electronic Union Elections. On June 30, 2022, the House Committee on Appropriations approved the Fiscal Year (FY) 2023 Labor, Health and Human Services, Education, and Related Agencies Funding Bill, sending the measure to the House floor. The bill is one of twelve annual spending bills that are supposed to be enacted annually by October 1 to fund the federal government for the upcoming fiscal year. In practice, these bills are often folded into larger omnibus or “minibus” spending packages. Amounts authorized for the DOL and the National Labor Relations Board (NLRB) are as follows (agencies such as the U.S. Equal Employment Opportunity Commission and U.S. Citizenship and Immigration Services are covered in other bills):

• $313 million for the Wage and Hour Division, an increase of $62 million above the FY 2022 enacted level
• $712 million for the Occupational Safety and Health Administration, an increase of $100 million above the FY 2022 enacted level
• $147 million for the Office of Federal Contract Compliance Programs, an increase of $39 million above the FY 2022 enacted level
• $319 million for the NLRB, an increase of $45 million above the current level. Importantly, the bill provides that within this amount, “not less that [sic] $1,000,000 shall be used to develop a system and procedures to conduct union representation elections electronically”

Of course, there is a long way to go before the bill finds its way into a final spending package that can pass Congress this fall. But congressional Democrats may push to enact the legislation—especially considering the NLRB electronic voting language—ahead of the November 2022 elections. The Buzz will keep readers updated throughout the process.

PBGC Finalizes Special Financial Assistance Regs. On July 8, 2022, the Pension Benefit Guaranty Corporation (PBGC) published its final rule for implementing the special financial assistance (SFA) for multiemployer pension plan provisions of the American Rescue Plan Act of 2021. Published almost exactly one year from the PBGC’s issuance of interim final regulations on the same matter, the final regulations make changes in response to comments received from the public. Such amendments include “changes to the methodology to calculate SFA, permissible investments for SFA funds (SFA received and any earnings thereon), the application of conditions on a plan that merges with a plan that receives SFA, and the withdrawal liability conditions that apply to a plan that receives SFA.” Comments, which will be considered only if they address the “condition requiring a phased recognition of special financial assistance in a plan’s determination of withdrawal liability,” are due on or before August 8, 2022.

Continuing Procrastination. Here is just a follow-up to the comment above about how challenging the appropriations process is for Congress. Since 1977, when the modern federal government appropriations process began, Congress has passed all appropriations bills on time (that is, by October 1 of each year) only four times (fiscal years 1977, 1989, 1995, and 1997). That means that for much of the last forty-five years, Congress has needed to enact short-term continuing resolutions to prevent government shutdowns. All told, Congress has passed 197 continuing resolutions from 1977 to 2022.