2018 Omnibus Funding Bill Keeps Government Open, Minus the Critical Joint-Employer Rider

On March 23, 2018, the last day before a potential government shutdown, Congress passed and the president is expected to sign a massive $1.3 trillion omnibus spending bill to fund the federal government through fiscal year (FY) 2018. Although traditionally legislative “riders” to such omnibus spending bills are sometimes added for legislation that is unable to pass Congress as stand-alone bills, this year’s bill did not include the heavily lobbied joint-employer fix to reverse the National Labor Relations Board’s (NLRB) controversial Browning-Ferris Industries decision, which had been a priority for the business community.

Browning-Ferris Rider Fails

The NLRB’s recent decision in Hy-Brand Industrial Contractors, Ltd., by a new 3-2 Board majority, reversed Browning-Ferris only to be vacated due to an unprecedented recusal standard from the NLRB’s inspector general. Thus, the failure of Congress to add a rider “fixing” Browning-Ferris means that, for the indefinite future, employers must comply with the standard that deems “potential” and “indirect” control sufficient to make two separate entities joint employers for each other’s union organizing, collective bargaining, and unfair labor practices. The NLRB’s Browning-Ferris joint-employer standard has leaked over to wage-and-hour issues under the Fair Labor Standards Act (FLSA) and liability under the Occupational Safety and Health Act and is a major concern for franchise operations and contractor-subcontractor relationships. The issue is currently pending before the Supreme Court of the United States in three consolidated cases (National Labor Relations Board v. Murphy Oil USA, Inc., Epic Systems v. Lewis, Ernst & Young LLP v. Morris), and a decision is expected by June 2018.

Legislation reversing Browning-Ferris, the Save Local Business Act (H.R. 3441), has already passed the House by a bipartisan vote of 242-181. Business is lobbying the Senate to take up the bill, which is threatened by a potential Senate filibuster.

Transportation Preemption Rider Fails

The omnibus funding bill also failed to include the heavily lobbied rider addressing the application of state meal and rest break requirements for interstate truck drivers. The current law creates a complicated quilt of differing state regulations applicable to interstate truck drivers who drive through various states. The rider, referred to as “F4A,” would have clarified that the Federal Aviation Administration Authorization Act of 1994 preempts state laws and regulations for meal and rest breaks.

Tip-Pooling Fix Passes

The one legislative “fix” that survived on the omnibus funding bill was for tip pooling under the FLSA. The bill makes clear that employers may not share employees’ tips with managers or supervisors, without regard to whether servers receive gratuities in addition to the minimum wage. The language provides for a private right for employees to sue for recovery of tips that they had been required to pool, along with liquidated damages and authorizes the Secretary of Labor to impose civil monetary penalties for violations.

Other Notable Provisions

The omnibus FY2018 spending bill provides for $12.2 billion for the U.S. Department of Labor (DOL), which is a $192 million increase over FY2017. Components of the budget for the DOL and related agencies are:

Occupational Safety and Health Administration (OSHA)

The FY 2018 omnibus bill flat funds OSHA at $553 million, which is $9.5 million over the administration’s requested funding. The overall spending amount cuts enforcement funding, but makes up the difference in compliance assistance (including a $3.5 million increase that must be spent for Voluntary Protection Programs).

Office of Federal Contract Compliance Programs (OFCCP)

The bill increases FY 2018 funding by $2 million to a level of $40.2 million, which is $8.5 million over the administration’s request.

Equal Employment Opportunity Commission (EEOC)

The bill sets FY2018 funding at $379.5 million, which is an increase of $15 million to address the increase in sexual harassment charges.

National Labor Relations Board (NLRB)

FY 2018 funding is $274 million, which is the same as 2017 levels, but is $16 million above the administration’s request.