TAUC Legislative & Regulatory Update, November 2021
TAUC Legislative & Regulatory Update, November 2021
Congressional Democrats continue to seek a path forward to finalize a reconciliation framework and advance the Senate-passed $1.2 trillion bipartisan Infrastructure Investment and Jobs Act (IIJA) in the House. Congress also faces expiration of government funding, surface transportation programs and a suspension of the debt ceiling in early December. The White House released a $1.75 trillion reconciliation framework on October 28th, setting the stage for final deliberations on the President's Build Back Better package.
It was hoped that releasing the framework of the agreement would allow for a vote on the infrastructure legislation; however, House progressives remain unwilling to advance the IIJA until the legislative text of the reconciliation bill is finalized. Moderate Senators Joe Manchin (D-WV) and Kyrsten Sinema (D-AZ) have led high-level negotiations to reduce the size and scope of the domestic spending package. While roadblocks remain, it remains likely that congressional Democrats coalesce around a reconciliation bill and send the IIJA to President Biden.
Here is an exclusive update from TAUC on policy and regulatory issues of vital interest to contractors and the union construction and maintenance industry.
Democrats Seek Consensus on Reconciliation
To spur a conclusion to negotiations over the President's Build Back Better proposal, the White House released a 10-year, $1.75 trillion framework for the reconciliation package that is currently being negotiated with Congressional Democrats. The framework also includes $2 trillion in tax increases to offset the new spending being called for. House leaders released draft legislative text for the package in advance of potential House consideration. The language introduced is not final and negotiations over the final package continue. Additional changes will be made before the House votes on the revised package.
Democrats are advancing the bill via the reconciliation process, which provides for expediated consideration of the budgetary legislation. It also allows the package to be passed with a simple majority in both the House and Senate. However, that also makes proposals subject to the Senate's Byrd rule, which requires the bill contain only budget-related provisions and prevents the inclusion of pure policy-oriented provisions.
The framework rolled out by the White House represents a significant reduction from the reconciliation package that passed the House earlier this year, which called for spending $3.5 trillion over 10-years. Major items removed from the package include paid family medical leave, two-years of free community college, and provisions to lower prescription drug prices.
The bill does include $555 billion in climate and clean energy investments programs. This includes a number of provisions to create new tax credits and restructures existing renewable energy and energy efficiency incentives within the tax code. It would establish these tax credits as two-tiered incentives, providing either a "base rate" or a "bonus rate" for energy projects being constructed with these tax credits. Under the agreement, the bonus rate for the tax credit will be equal to five times the "base rate" and applies which meet prevailing wage and apprenticeship utilization requirements. Earlier this year, TAUC sent letter to the Chairs of the House and Senate tax writing committees urging them to include these requirements as part of any legislation providing tax credits for renewable energy projects.
Additional energy related provisions include:
- Extends the 45Q tax credit, which provides increased tax credits for carbon capture and storage projects.
- Tax credits for domestic manufacturers and fabricators of solar and wind components, which are currently overwhelmingly made overseas.
- $1 billion for zero-emissions vehicle infrastructure and tax credits for new qualified plug-in electric drive motor vehicles
The cost of the package would be paid for by an extra 5 percent tax on individual income above $10 million, with an additional 3 percent increase on income above $25 million. The proposal imposing a 1 percent tax on stock buybacks and a 15 percent minimum tax on corporations that report at least $1 billion in profits to their shareholders.
As we have previously reported, there was an effort to include aspects of the Protecting the Right to Organize (PRO) Act, which lacks the 60-votes necessary to overcome an anticipated Republican filibuster in the Senate, in the budget reconciliation package. While reconciliation limits the inclusion of new policy provisions, the framework does include a scaled-back version of the proposed fines for labor violations included in the PRO Act and contained in original House budget reconciliation package. The provisions would allow the National Labor Relations Board (NLRB) to collect penalties up to $50,000 on violation of existing labor law. Those fines could be doubled in specific instances. The White House outline did not include fines for violations of newly defined labor violations in the PRO Act, including secondary boycotts.
COVID Vaccines Mandate
OSHA on November 4 issued a new emergency temporary standard (ETS) to combat COVID-19 in the workplace. The ETS applies to any employer with 100 or more employees and requires the following:
- Determine the vaccination status of each employee, obtain acceptable proof of vaccination status from vaccinated employees and maintain records and a roster of each employee's vaccination status.
- Require employees to provide prompt notice when they test positive for COVID-19 or receive a COVID-19 diagnosis. Employers must then remove the employee from the workplace, regardless of vaccination status; employers must not allow them to return to work until they meet required criteria.
- Ensure each worker who is not fully vaccinated is tested for COVID-19 at least weekly (if the worker is in the workplace at least once a week) or within 7 days before returning to work (if the worker is away from the workplace for a week or longer).
- Ensure that, in most circumstances, each employee who has not been fully vaccinated wears a face covering when indoors or when occupying a vehicle with another person for work purposes.
Various industry groups have expressed opposition to the mandate, citing various concerns, including that it could exacerbate labor shortages. Both the Federal contractor mandate and the ETS will face legal challenges.
OSHA Releases Proposed Rule on Heat-Related Regulations
On October 27th, 2021, OSHA published an Advance Notice of Proposed Rulemaking (ANPRM) in the Federal Register. The move kicks off the process of developing regulations to protect workers from indoor and outdoor heat-related hazards. OSHA seeks input from stakeholders, including information regarding "the extent and nature of hazardous heat in the workplace and the nature and effectiveness of interventions and controls used to prevent heat-related injury and illness." The information gathered in response to the ANPRM) will be used to inform OSHA in initiating a rulemaking to protect employees from heat related hazards. The comment period ends on December 27th, 2021.
OSHA is also developing a National Advisory Committee on Occupational Safety and Health Heat Injury and Illness Prevention Work Group to further incorporate feedback from industry and labor.
Department of Labor Nominations
The Senate approved Doug Parker to lead OSHA on a 50-to-41 vote on October 25th, 2021. Republicans opposed his nomination, citing concerns with policies during his tenure as Chief of the California Division of Occupational Safety and Health. He is the first confirmed OSHA head since the Obama administration. Parker will play a critical role as OSHA implements the impending vaccine mandate, publicly defending the policy amid litigation.
Early this summer, President Biden nominated David Weil to lead the Wage and Hour Division (WHD) of DOL. Following questions, the Senate HELP Committee failed to advance Weil's nomination on a tie vote. Additionally, Senator Manchin has expressed concerns with Weil, an academic and former head of WHD during the Obama administration who is skeptical of gig-economy employment schemes. Business associations have opposed his confirmation.
Earlier this month, Senate HELP Committee members questioned José Javier Rodríguez, tapped to lead the Employment and Training Administration, and Lisa Gomez, slated to lead the Employee Benefits Security Administration (EBSA). Both nominees previously served as attorneys with organized labor. Republicans on the committee emphasized concerns with the nominees' support for regulations, the proposed vaccine mandate, and unemployment benefit system management. The committee deadlocked on an 11-to-11 vote, failing to advance Rodríguez. Gomez has yet to receive a committee vote, leaving her nomination process stalled. Senate Majority Leader Schumer filed a motion to limit debate on the nomination of Rajesh Nayak to lead the policy office at DOL. The move sets the stage for a prerequisite vote before his nomination heads to the Senate floor. The Senate HELP Committee advanced Nayak by a 14-to-8 vote earlier this summer.
Department of Labor's Proposed Rule on Financial Factors in Selecting Plan Investments
U.S. Labor Department proposed a rule amending the requirements governing a fiduciary's investment duties under ERISA implemented under the Trump Administration that limited investments and related decisions only to "pecuniary" factors. The proposed rule would remove the barriers in the Trump Administration's rule that limits fiduciaries from considering factors other than just the rate of return when selecting plan investments or exercising proxy voting rights. If finalized, the proposed rule would allow trustees of construction industry collectively bargained multiemployer plans to consider factors beyond just the economic value of the investment -- such as additional man hours and plan contributions -- when assessing a fund's projected return on investment decisions. The proposed rule would also eliminate additional documentation requirements for those investment decisions required under the Trump Administration's rule.
Comments on the proposed rule are due on December 13, 2021.