Biden’s Labor Management; Govt Contractor Minimal Wage & different Labor Information

This is a weekly post spotlighting labor topics in focus by the US legislative and executive branches during the previous week. In this issue, we cover:

  • Biden Administration Labor Leadership Updates

  • Recap of the President’s Remarks to Congress

  • Executive Order on Federal Contractors and Minimum Wage

  • E.O. on Worker Organizing

  • 2020 Tip Final Rule

  • Labor Department Grants

  • OSHA COVID-19 Emergency Regulation | House Hearing Postponed

  • Protecting America’s Workers Act

  • Upcoming Congressional Hearing

Biden Administration Labor Leadership Updates.  On Thursday, April 29, the Senate Health, Education, Labor, & Pensions (HELP) Committee held a confirmation hearing for Ms. Jennifer Abruzzo to serve as General Counsel of the National Labor Relations Board (NLRB) and Ms. Seema Nanda to serve as Solicitor for the U.S. Department of Labor.  In opening remarks, Senate HELP Committee Ranking Member Richard Burr (R-North Carolina) criticized the Biden Administration for what he considers its abrupt and unprecedented firing of NLRB General Counsel Peter Robb, questioning the independence and integrity of the General Counsel’s office after this action.  He also expressed concern over Ms. Abruzzo’s involvement in the Agency Review Team for Labor and questioned Ms. Nanda’s “highly partisan” background.

On April 23, U.S. President Joe Biden announced his intent to nominate Mr. Rajesh Nayak as Assistant Secretary of Labor for Policy.  On April 27, the President announced his intent to nominate Ms. Elizabeth Watson to serve as Assistant Secretary for Congressional and Intergovernmental Affairs.  Ms. Watson previously served as Labor Policy Director and Chief Labor Counsel to the House Education & Labor Committee; she currently serves as Executive Director of the Congressional Progressive Caucus Center.

Reports emerged this week that President Biden might soon nominate Mr. David Weil to serve as Wage and House Division Administrator.  Mr. Weil previously served in this role during the Obama Administration. He has supported increased government oversight of gig-economy companies, such as Instacart, DoorDash Inc., Uber Technologies Inc., and Lyft Inc.

Recap of the President’s Remarks to Congress.  In his Joint Address to Congress Wednesday evening, President Biden emphasized the plight and importance of middle class and blue caller workers, saying they, not Wall Street, built the country.  He urged Congress to send to his desk for signature the Protect the Right to Organize Act (PRO Act), adding, “[S]o we can support the right to unionize.”  The President called for Congress to approve a bill that would raise the federal minimum wage to $15 per hour and to send him the Paycheck Fairness Act, which he said would “ensure greater equity and opportunity for women.”

President Biden also outlined his third trillion dollar package – the American Families Plan (“the Plan”) – that would expand education and child care in the United States.  According to a White House fact sheet, the Plan would:

  • Create a national comprehensive paid family and medical leave program to bring the American system in line with competitor nations that offer paid leave programs;

    • Guarantee twelve weeks of paid parental, family, and personal illness/safe leave by year 10 of the program, and also ensure workers get three days of bereavement leave per year starting in year one; and

    • Provide workers up to $4,000 a month, with a minimum of two-thirds of average weekly wages replaced, rising to 80 percent for the lowest wage workers.

  • Provide $109 billion for first-time students and workers wanting to re-skill to enroll in a community college to earn a degree or credential for free;

  • Add $2 billion that would be directed towards building a pipeline of skilled health care workers with graduate degrees;

  • Support “hundreds of thousands of child care providers and workers”;

  • Ensure a $15 minimum wage for early childhood staff and ensure that those with similar qualifications as kindergarten teachers receive comparable compensation and benefits;

  • Ensure child care workers receive job-embedded coaching and professional development, along with additional training opportunities funded by the American Jobs Plan and American Families Plan; and

  • Ultimately reform unemployment insurance (UI) to automatically adjust the length and amount of UI benefits unemployed workers receive depending on economic conditions.

The fact sheet also noted the President is calling on Congress to pass the Healthy Families Act, which would require employers allow workers to accrue seven days paid sick leave per year to seek preventative care for themselves or their family.

House Education & Labor Committee Ranking Member Virginia Foxx (R-North Carolina) said of the Plan unveiled by the President:  “The American Families Plan calls for a paid sick leave mandate that is too costly and disruptive for small businesses. It also designs a child care system that works best for the federal government, not families.”  Senate HELP Ranking Member Burr stated at the above-noted confirmation hearing:  “[P]artisan legislation, like the poorly named PRO Act, masquerading as a pro-worker bill, is truly a dagger aimed at the heart of America’s free enterprise system.” 

Executive Order on Federal Contractors and Minimum Wage.  On April 27, President Biden signed an Executive Order (E.O.) on “Increasing the Minimum Wage for Federal Contractors.”  In Section 2, the order addresses contractors and covered subcontractors to the Federal Government, requiring the minimum wage to be paid to these workers be set at $15.00 per hour, effective January 30, 2022.  The E.O. also provides for the Secretary of Labor – beginning January 1, 2023, and annually thereafter – to determine the minimum wage for Federal contractors and covered subcontractors, outlining parameters for the decision and stating the Secretary must publish at least 90 days before any such new minimum wage is to take effect.

For those Federal contractors and/or covered subcontractors that are tipped workers, the E.O. states the following:

  • Beginning January 30, 2022, the federal contractor minimum wage for tipped workers be at least $10.50 per hour,

  • Beginning January 1, 2023, 85 percent of the wage in effect under Section 2 of the E.O., rounded to the nearest multiple of $0.05; and

  • Beginning January 1, 2024, and for each subsequent year, 100 percent of the wage in effect under Section 2 of the order.

The E.O. further stipulates:  “Where workers do not receive a sufficient additional amount on account of tips, when combined with the hourly cash wage paid by the employer, such that their wages are equal to the minimum wage under section 2 of this order, the cash wage paid by the employer, as set forth in this section for those workers, shall be increased such that their wages equal the minimum wage under section 2 of this order.”

The Secretary of Labor is to issue regulations by November 24, 2021, compliant with existing U.S. laws, to implement the requirements of the order.

House Education & Labor Committee Ranking Member Foxx criticized the E.O., stating:  “Mandating a $15 minimum wage for companies of all sizes doing business with the federal government will adversely impact these businesses by reducing workers’ hours, eliminating jobs, and increasing automation.” 

E.O. on Worker Organizing.  On April 26, President Biden signed an E.O. on “Worker Organizing and Empowerment” to promote his policy of support for worker power, worker organizing, and collective bargaining.  The order establishes a Task Force on Worker Organizing and Empowerment (“Task Force”), with the Secretary of Labor serving as Vice Chair over a panel that includes representatives from most of the Federal Departments and Agencies.

The Task Force will identify Executive Branch policies, practices, and programs that could be used, consistent with applicable law, to promote support for worker power, worker organizing, and collective bargaining.  This includes “policies, practices, and programs that could be used to promote worker power in areas of the country with hostile labor laws, for marginalized workers (including women and persons of color) and hard-to-organize industries, and in changing industries.”  The Task Force is also responsible for identifying statutory, regulatory, or other changes that may be necessary to make policies, practices, and programs more effective means of supporting worker organizing and collective bargaining.  Within 180 days of the date of the order, the Task Force will submit to the President recommendations for actions that would promote worker organizing and collective bargaining in the public and private sectors, toward increasing union density.  A White House fact sheet on the Task Force is available here.

House Education & Labor Committee Ranking Member Foxx characterized the Task Force as “anti-worker,” stating:  “Democrats have long been skeptical of workers’ ability to decide for themselves whether to join a union, and today’s Executive Order underscores the distrust Biden’s administration has for working class Americans.”

2020 Tip Final Rule.  On April 28, the Labor Department published a final rule delaying portions of the 2020 Tip Final Rule until December 31, 2021.  The eight-month extension of the effective date for specific portions of the 2020 Tip Rule allows the Department time to address additional questions of law, policy and fact and complete separate rulemaking related to the assessment of civil money penalties, and the application of the Fair Labor Standards Act’s tip credit provision to tipped employees who also perform non-tipped work.  Effective April 30, 2021, the following portions of the Rule went into effect:

  • A prohibition on employers, including supervisors and managers, keeping tips received by workers, regardless of whether the employer takes a credit for workers’ tips toward their obligation to pay those workers minimum wage.

  • The recordkeeping requirements for an employer that does not take a tip credit to include non-tipped workers, such as cooks and dishwashers, in nontraditional tip-sharing arrangements.

  • An employer that collects tips for tip pools must distribute tips fully no later than the regular payday for the workweek or pay period in which the establishment collected the tips.

Labor Department Grants.  On April 28, the Labor Department announced the award of five grants totaling more than $103 million to five state agencies – Kansas, Kentucky, Minnesota, Ohio and Vermont – to continue and expand pilot projects to help newly injured and ill workers remain in the workforce, part of the Retaining Employment and Talent after Injury/Illness Network (RETAIN).

On April 26, the Labor Department announced a funding opportunity of $3.5 million for up to 10 grants to increase and retain the number of women in quality Registered Apprenticeship Programs and nontraditional occupations such as those in the manufacturing, infrastructure, cybersecurity and healthcare industries.  Additional details on this opportunity are available here.

OSHA COVID-19 Emergency Regulation | House Hearing Postponed.  The House Education & Labor Committee postponed today’s scheduled hearing today titled, “Protecting Workers from COVID-19: Monitoring the Status of OSHA’s Emergency Temporary Standard.”  In a statement, Ranking Member Foxx pushed for rescheduling the hearing, stating:  “Apparently, the postponement of Friday’s hearing signals that Democrats are worried their own administration will help make the case that current scientific and economic data proves that a rushed and rigid so-called ‘emergency’ COVID-19 OSHA regulation is not necessary.”

Meanwhile, OSHA is reportedly moving forward with its Emergency Temporary Standard (ETS) for COVID-19 safety in the workplace.  The ETS is reportedly at the White House for review and could be issued before Memorial Day.  It would be take effect immediately.

Protecting America’s Workers Act.  On April 28, House Education & Labor Committee Chairman Bobby Scott (D-Virginia) – along with Representatives Joe Courtney (D-Connecticut) and Alma Adams (D-North Carolina) – reintroduced the Protecting America’s Workers Act, a bill that would strengthen and modernize the Occupational Safety & Health Administration (OSHA), for the first time since enactment of the Occupational Safety and Health Act on April 28, 1971.  Among other things, the bill would:

  • Expand OSHA coverage to 8 million state and local government employees in 24 states;

  • Mandate that employers correct hazardous conditions in a timely manner, rather than waiting until violations are litigated;

  • Re-instate an employer’s ongoing obligation to maintain accurate records of work-related illness and injuries, reversing a Trump Administration Congressional Review Act resolution;

  • Deter “high gravity” violations by providing authority for increased civil monetary penalties for serious or willful violations that cause death or serious bodily injury;

  • Expand injury and illness records that employers are required to maintain and report in order to enable OSHA to more effectively target unsafe workplaces;

  • Authorize the imposition of felony penalties against employers who knowingly commit OSHA violations that result in death or serious bodily injury and extend such penalties to corporate officers and directors;

  • Require OSHA to investigate all cases of death and serious injuries that occur within a place of employment; and

  • Establish rights for families of workers who were killed on the job by giving them the right to meet with OSHA investigators, receive copies of citations, and to have an opportunity to make a statement before any settlement negotiations.

Upcoming Congressional Hearing.   On May 3, the House Education & Labor Committee Subcommittee on Workforce Protections is set to hold a hearing titled, “From Excluded to Essential: Tracing the Racist Exclusion of Farmworkers, Domestic Workers, and Tipped Workers from the Fair Labor Standards Act.”

© Copyright 2021 Squire Patton Boggs (US) LLP
National Law Review, Volume XI, Number 124

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