Biden Administration’s Spring Regulatory Agenda
The Biden Administration recently released its Spring 2023 Regulatory Agenda. The Agenda outlines the Administration’s Federal regulatory priorities and provides updates on pending and anticipated regulatory rulemakings. The Agenda includes updates on several rulemakings of importance to TAUC members:
The NPRM proposes to:
TAUC and the Construction Employers of America (CEA) submitted comments in support of the proposed rule.
While we will have to wait to see the final rule, the framework in the proposed rule was more consistent with longstanding judicial precedent on which employers have relied to classify workers as employees or independent contractors under the FLSA. The goal of the proposed rule is to provide guidance on worker classification to combat employee misclassification, which is rampant in the construction industry and provides employers who misclassify an unfair advantage over law-abiding businesses.
Among other things, the proposed rule would:
House Committee Defeats Attempt to Limit Use of PLAs on Aviation Projects
During its consideration of the reauthorization of Federal Aviation Administration (FAA) programs, the Transportation and Infrastructure Committee defeated an amendment to prohibit the use of PLAs on FAA funded projects. The amendment, offered by Representative Scott Perry (R-PA), was defeated by a vote of 22-42. Several republicans voted with all democratic committee members on the vote.
Perry also offered an amendment proposing to raise the threshold on projects required to pay workers prevailing wage from $2,000 to $150,000. That amendment was defeated on a voice vote.
We anticipate seeing similar attempts to limit the application of David Bacon and use of PLAs as amendments offered to annual appropriations bills later this summer.
NLRB Expands Definition of Employee
The National Labor Relations Board (NLRB) issued a ruling that revised the standard it applies to determine whether a worker is an employee who has the protections of the National Labor Relations Act (NRLA), or an independent contractor who is not protected by the NLRA. The 3-1 decision overturned a Trump-era ruling, which had made it easier for companies to define their workers as independent contractors. The new ruling returns an Obama-era test, which, among other factors, elevates how much a worker depends on a single company for their income. The ruling also relegates a Trump-era test, which had elevated how much independent contractors could leverage their business acumen to generate more income.
New Protections for Pregnant Workers to Take Effect
The Fiscal Year 2023 Omnibus Appropriations bill included more than $1.7 trillion dollars in spending, but it also included enhanced protections for pregnant workers, which are scheduled to go into effect at the end of June 2023. The Pregnant Workers Fairness Act (PWFA) requires businesses with more than 15 employees to provide “reasonable accommodations” for workers who are managing pregnancy, childbirth, or related medical issues. However, the Equal Employment Opportunity Commission (EEOC), which is tasked with enforcing the law, still has not released regulations on how it will apply PWFA.
Project Delivery and Permit Reform
The agreement reached between President Biden and House Republicans to suspend the Federal debt ceiling included reforms to the National Environmental Policy Act (NEPA) to speed federal environmental reviews and permitting requirements for infrastructure projects. The provisions would set time limits on Federal environmental reviews, allow developers to deal with a single federal agency, and reduce duplicative forms and reviews. Specifically, it would set a one-year deadline for finalizing environmental assessments and a two-year maximum for environmental impact statements for construction projects.
It also expands Fast-41, an existing federal program that allows stakeholders to expedite federal permitting for infrastructure projects by helping to improve project coordination, transparency, and predictability.
Inflation Reduction Act Implementation and Guidance
The bonus applies to facilities created using domestically produced iron, steel, and other manufactured products. To receive the bonus, steel and iron manufacturing processes must occur domestically.
The tax credits are available to developers who locate projects in areas that had historically relied on fossil fuels for jobs and tax revenue. To qualify for the credit, at least 0.17 percent direct employment, or at least 25 percent local tax revenues, must be related to the extraction, processing, storage, or production of fossil fuels. Areas must also face above average rates of unemployment. The tax credit is also available for eligible projects being developed on brownfield sites.
Treasury and IRS released an NPRM for the Low-Income Communities Bonus program. The program provides a boost to the Investment Tax Credit for solar and wind projects located in low-income communities. The NPRM includes recommendations on how to expedite the application process and create transparency in the application process. Final guidance on this program is expected later this year.
Supreme Court on Collision Course with NLRB
In 2017, Glacier Northwest, Inc. was working towards a new collective bargaining agreement with its truck drivers when the truck drivers decided to call a strike. During the strike, the truckers left concrete in their trucks, eventually ruining it. Glacier Northwest sued the trucker’s union for damages in a case that eventually made its way to the Washington Supreme Court. The Washington Supreme Court dismissed the concrete company’s lawsuit for damages. Last year, the National Labor Relations Board (NLRB) ruled that the original lawsuit was an unlawful retaliatory tactic, a decision which caused some controversy. Historically, the NLRB does not regulate how groups use the legal system to settle disputes.
However, in an 8-1 decision, the United States Supreme Court ruled against the Washington Supreme Court, arguing the Washington Supreme Court was incorrect in dismissing the concrete company’s lawsuit. The Supreme Court decision indicates the concrete company’s lawsuit can and should move forward.
GAO Releases Report on Non-Compete Agreements
Working with the Federal Trade Commission (FTC) and Department of Justice, the Government Accountability Office (GAO) released a study on non-compete agreements. The study found that approximately 18% of workers are subject to noncompete agreements (NCAs) and that 38% of workers had been subject to an NCA at least one point in their career. NCAs are normally associated with senior level positions, and the study backed this up, finding that more than 98% of respondents that use NCAs require them for executives and salaried managers. However, among respondents that use NCAs, 69% and 72% of companies require them for part-time and hourly workers respectively.
The study concluded that few workers who sign NCAs were able to negotiate the terms of the agreement. It also concluded that NCAs restrict job mobility and potentially reduce wages and the rate of new firm creation.
The FTC is working on a proposed rulemaking that would ban non-compete employment agreements.