Advocacy & Government Affairs

Reconciliation Bill Signed Into Law Contains Key Tax Wins for Wholesale Distribution Industry

President Trump signed the One Big Beautiful Bill Act into law on July 4 after the reconciliation bill passed the Senate and House earlier in the week with razor thin margins.

The bill contained several wins for wholesaler-distributors. The final version omitted the 50% cap on the ability of S-corps and partnerships to deduct state and local income taxes and made the 199A deduction permanent. NAW played a key role advocating for these provisions in our role as a leading member of the Main Street Employers Coalition, a group of trade associations representing individual and family-owned businesses.

Finally, the legislation did not modify the tax treatment of last-in, first-out (LIFO) accounting. As lead of the LIFO coalition, NAW was proactive in advocating for the importance of LIFO over the past year and released numerous documents outlining the importance of the provision in the tax code including commissioning a PwC economic study and working with the Tax Foundation to release a research paper on the issue.

NAW played a key role in advocating for pro-business tax cuts in the bill.

• Prior to passage of the bill, NAW CEO Eric Hoplin, NAW Board Chair Kevin Short, and NAW Institute Board Chair J.D. Ewing attended an event at the White House and heard President Trump tout the benefits of the One Big Beautiful Bill Act (as seen in the image above).

• NAW’s Alex Hendrie wrote an op-ed in the Washington Examiner highlighting many of the tax provisions in the bill that would help small businesses and workers. The op-ed was re-posted by President Trump’s social media accounts.

• NAW also released a statement praising the bill after it was passed by the House and Senate, noting many of the provisions that will help the industry.

What’s Next? While the legislation has been signed into law, the Treasury Department will issue guidance and rulemaking on many specific tax provisions over the coming months including those that may impact wholesaler-distributors.

For instance, in implementing the 100% depreciation for factories and structures, Treasury needs to issue several definitions including “qualified production activity” and “substantial transformation of the property.” We believe distribution facilities could fall under this provision.

The no tax on overtime provision allows Treasury to issue guidance to “prevent abuse” of the provision and also requires employers to include qualified overtime compensation on Form W-2. The legislation also places new Foreign Entity of Concern (FEOC) limitation on the claiming green energy credits, which will be fleshed out by Treasury guidance.

Passage of the bill is also an opportunity to highlight the economic footprint of the wholesaler-distribution industry in creating jobs and investing in local communities. Throughout our advocacy of the bill, NAW highlighted many examples of how the 2017 tax cuts helped wholesaler-distributors.

Key tax provisions in the final bill can be found below and a detailed summary from PwC is available here.

Individual Tax Provisions

• Makes lower individual tax brackets permanent. Provides an additional year of inflation adjustment for tax brackets 10%, 12%, and 22%.

• Makes standard deduction permanent and increases it to $32k for married filers/$16k for single filers.

• Makes child tax credit permanent, increases credit to $2,200 and indexes to inflation.

• Allows taxpayers to deduct up to $25k of qualified tipped income per year for four years. Begins phasing out for incomes of $150k for single filers/$300k for married filers.

• Allows taxpayers to deduct up to $12.5k/$25k of qualified overtime income per year for four years. Begins phasing out for incomes of $150k for single filers/$300k for married filers.

• Provides $6,000 additional deduction for seniors aged over 65 earning less than $75k for single filers/$150k for married filers.

• Provides $10k deduction for vehicle loan interest, phasing out for taxpayers with $100k for single filers/$200k married filers.

• $1,000 charitable deduction for non-itemizers.

• $40,000 SALT cap from 2025 to 2029. Provision begins phasing out at $500,000.

Business Provisions

• Permanent 20% pass-through deduction for S-corporations and partnerships.

• Makes death tax exemption of $15 million for single filers/$30 million for married filers permanent.

• Permanently restores 100% bonus depreciation.

• 100% bonus depreciation for factories for four years.

• Permanently restores full expensing for research and experimental.

• Modifies TCJA international provisions and establishes 14% rate for GILTI, FDII and BEAT.

• Repeals and limits green energy tax provisions enacted in the 2022 Inflation Reduction Act. A summary of the changes can be found here.

• No changes to the Last-in, First Out (LIFO) inventory accounting method that is utilized by many wholesaler-distributors.

Trump Pushes Back July 9 Tariff Deadline to August 1, Floats New Tariffs

The White House appears to have extended the July 9 deadline for foreign countries to negotiate trade deals with the U.S. Now, the administration has said that countries that fail to negotiate a deal by August 1 will face higher tariff rates.

President Trump has began sending letters today to a dozen foreign countries detailing the tariff rates they will face starting August 1. According to his Truth Social account, Japan, Korea, Malaysia, and Kazakhstan will face 25% tariff rates, South Africa will face 30% tariffs rates, and Laos and Myanmar will face 40% tariff rates.

Many of these rates differ slightly from the rates released during the April 1 liberation day announcement, and the administration has said they could impose additional tariffs on countries that have not been negotiating in good faith.

Trump also threatened an additional 10% tariff on countries which side with policies adopted by the BRICS, the coalition of nations comprised of Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Indonesia, Iran and the United Arab Emirates.

Vietnam Trade Deal: Last Wednesday, Trump announced the U.S. had reached a trade deal with the U.S. Trump said in a social media post that the imports from Vietnam will face a 20% tariff rate and a 40% tariff rate on “transshipping” or goods passing through Vietnam. In exchange, Vietnam will charge zero tariffs on U.S. products and will avoid the 46% reciprocal tariff rate that was proposed by Trump in April. Besides Trump’s social media post, further details on the agreement have not yet been released. According to Politico, the agreement will be finalized in the coming weeks, and Vietnam will provide preferential market access for U.S. agriculture and industrial products.

What About Other Trade Deals? Administration officials have also hinted that they are close to striking trade deals with several other countries. Reports have indicated that the European Union is stepping up efforts to strike a trade deal in principle with the U.S. by this week. It is unclear what that would entail but reports indicate it would include a 10% baseline tariff rate.

NAW-backed Efforts for Federal AI Moratorium Excluded from Reconciliation Package

Despite its initial inclusion in the May-passed House of Representatives version of the One Big Beautiful Bill tax reconciliation package, a provision prohibiting state and local governments from enacting and/or regulating certain artificial intelligence (AI) initiatives was excluded from the final, enacted bill last week. The evolution of this provision, outlined below, will certainly serve as a foundation for future developments of a federal AI regulatory framework.

House Provision: Championed by Energy and Commerce Committee Chairman Brett Guthrie (R-KY), the original House-backed moratorium would have prevented state and local governments from enacting and/or enforcing its own AI-related regulations for 10 years, unless the provision:

• Had the primary purpose and effect of removing legal impediments to facilitate the deployment or operation of covered AI models and systems or streamlining licensing, permitting, routing, zoning, procurement, or reporting procedures in a way that facilitates the adoption of covered AI models and systems;

• Does not impose any substantive design, performance, data-handling, documentation, civil liability, taxation, fee, or other requirement on covered AI models and systems, unless those requirements are imposed by Federal law or are imposed in the same manner on comparable non-AI systems and models; and

• Does not impose a fee or bond unless it is reasonable and cost-based and treats covered AI models and systems in the same manner as comparable models and systems.

Senate Provision: Due to the Senate Byrd rules around the reconciliation process, Commerce, Science and Transportation Committee Chairman Ted Cruz (R-TX) reworked the provision to meet budgetary requirements. In doing so, Sen. Cruz tied the moratorium to eligibility requirements for states and localities to receive federal broadband development funds through the Broadband Equity, Access and Deployment (BEAD) program.

Senate Democrats and a group of Republicans – including Sens. Josh Hawley (R-MO), Marsha Blackburn (R-TN) and Kevin Cramer (R-ND) – publicly opposed this provision and threatened to bring forth an amendment to remove it from the larger bill. In an effort to remedy Republican concerns, Sen. Cruz worked with Sen. Blackburn to propose changes to the moratorium by reducing its duration to 5 years and adding exemptions for child online safety and publicity rights laws.

Ultimately, the proposed changes failed to remedy the concerns of the opposition and the Senate passed an amendment to remove the moratorium from the package by a vote of 99-1, with Sen. Thom Tillis (R-NC) voting no.

What’s Next: It remains unclear how congressional Republicans will move forward to legislate on AI at the federal level. As recently as last week, House Energy and Commerce Chairman Brett Guthrie (R-KY) reiterated his support for a federal AI policy framework that stops “50 other standards”. Although Sen. Cruz ultimately voted to remove the moratorium from the reconciliation package, he seems to remain in favor of such a policy and expressed that President Trump supported the initiative as well.

NAW supported the AI moratorium proposal and joined with supply chain partners to urge Congress to pass this measure as part of the reconciliation package. The potential for 50 different AI regulatory standards across the U.S. will make the innovation and adoption of this technology increasingly more difficult for the wholesale distribution. As such, NAW will continue to monitor federal and state level proposals on AI policy and keep the industry apprised of any further developments.

Department of Transportation Announces Pro-Trucker Agenda

On June 27, the U.S. Department of Transportation (DOT) announced a package of new initiatives and regulatory updates designed to improve the lives of America’s truck drivers. The announcement comes as a response to President Trump’s Executive Order on Enforcing Commonsense Rules of the Road for America’s Truck Drivers.

DOT’s press statement outlined the key actions in the package:

• Expand Truck Parking

• Problem: 40% of truckers spend over an hour a day searching for parking – costing our national economy billions in wasted time. It’s also a safety issue – forcing truckers to park in harms way.

• Solution: DOT is advancing more than $275 million in funding to expand truck parking availability and opening up additional grant programs and discretionary grants for truck parking projects.

• Remove One-Size-Fits-All-Mandates

• Problem: Mandating speed limiters on heavy-duty trucks isn’t just an inconvenience – it is a safety hazard when drivers are forced to go slower than the flow of traffic.

• Solution: DOT is withdrawing the proposed rulemaking to mandate speed limiters so professional drivers can operate their vehicles safely.

• Modernize Driver Resources

• Problem: The Federal Motor Carrier Safety Administration’s (FMCSA) online tools are outdated and a pain to use.

• Solution: FMCSA is launching new digital assets that are more user-friendly, modernizing the Consumer Complaint database, and updating the DataQ system so it is more transparent.

• Slash Red Tape and Crack Down on Bad Actors

• Problem: Burdensome regulations make it harder for truckers to do their job while failing to go after bad actors.

• Solution: FMCSA is proposing to eliminate 1,800 words from federal regulations, which will save truckers time and money. Concurrently, the agency has renewed its focus on unlawful double brokering—a practice that directly harms drivers.

NAW will continue to track and monitor these developments.

Note From NAW’s Director of Litigation and Legal Policy Karen Harned on Trump v. CASA

On Friday, June 27, the Supreme Court issued a decision in Trump v. CASA. Although the underlying case concerns the constitutionality of birthright citizenship, this decision focused exclusively on the constitutionality of nationwide injunctions.

NAW filed an amicus brief in the case along with several other trade associations. In our brief, we urged the Supreme Court to approve the use of nationwide injunctions, arguing that they are a traditional and lawful form of equitable relief, and they are essential when federal actions have broad national effects. NAW asserted that limiting injunctions to only the named plaintiffs makes little sense when the challenged government action applies nationwide. Representative associations must be allowed to seek such relief on behalf of all their members, even those not individually named, to prevent widespread disruption. NAW urged the Court to preserve nationwide injunctions as a critical tool for protecting businesses from regulatory whiplash and ensuring a level playing field.

Opinion Summary

Unfortunately, the Supreme Court disagreed with us. In a 6-3 decision written by Justice Amy Coney Barrett, the Court held that nationwide injunctions were not an appropriate form of equitable relief. The Court explained that universal injunctions do not have roots in historical legal practices, either in English courts or in early American courts, and Congress never gave that authority to federal courts. These broad injunctions also bypass proper class action procedures, which require strict legal standards under Rule 23 of the Federal Rules of Civil Procedure. The Court held that nationwide injunctions improperly enable courts to interfere with the executive branch. The Court granted the government’s request to narrow the injunctions but left protections in place for the individual plaintiffs in the lawsuits. The ruling emphasizes that when the executive branch acts unlawfully, courts should correct it within the limits of their own power, not by overreaching. As Justice Barrett said at the close of the opinion:

“No one disputes that the Executive has a duty to follow the law. But the Judiciary does not have unbridled authority to enforce this obligation—in fact, sometimes the law prohibits the Judiciary from doing so … [F]ederal courts do not exercise general oversight of the Executive Branch; they resolve cases and controversies consistent with the authority Congress has given them. When a court concludes that the Executive Branch has acted unlawfully, the answer is not for the court to exceed its power, too.”

Impact of Court’s Ruling on NAW and Its Members

As you know, NAW currently has litigation challenging Biden-era rules that it believes are illegal. And last year, we were successful in obtaining a preliminary injunction stopping Biden’s overtime rule that would have significantly increased the salary levels for exempt employees from taking effect. When NAW challenges the legality of a regulation on behalf of its members, it typically asks for a preliminary injunction or for the rule to be vacated as illegal under Section 706 of the Administrative Procedure Act (APA). The good news is that the Supreme Court explicitly stated in footnote 10: “Nothing we say today resolves the distinct question whether the Administrative Procedure Act authorizes federal courts to vacate federal agency action. See 5 U. S. C. §706(2) (authorizing courts to “hold unlawful and set aside agency action”).” As a result, we may still engage in litigation asking for that relief and, according to our counsel in the case, we still have the option of asking for a preliminary injunction under the APA, as well. The Court’s decision in Trump v. CASA does not change that. Moreover, Justice Kavanaugh, in a separate concurring opinion reiterated that an injunction under Section 706(2) is still available to parties, like NAW, when challenging the legality of a final agency action.

That said, Justices Thomas and Alito, in a separate concurring opinion said they would have gone farther. They think that nationwide injunctions are unconstitutional under Article III. As a result, they likely would not permit injunctions like those NAW has successfully secured under the APA.

As a practical matter, NAW may still challenge agency actions and ask under the APA for a preliminary injunction or that a rule be vacated. But storm clouds are threatening. The Court’s decision in Trump v. CASA is going to serve as a strong signal to courts to look very skeptically at requests for injunctions, period — including those requested under Section 706 of the APA. Moreover, Justice Thomas, in particular, has a lot of former clerks who now serve as judges in courts across the country and may well share his views on the unconstitutionality of this form of relief. As a result, NAW will be looking for opportunities to continue to make the case for why this type of relief is so critically important to the wholesaler-distributor community and businesses generally when challenging agency overreach.

What’s Next

Trump v. CASA further exemplifies the need for NAW to participate in legal challenges on behalf of our members to provide an “umbrella” of protection to our entire membership rather than to individual companies. Your company being a member of NAW and participating in the LPC is one step to ensure you benefit from any injunctions we are awarded.

Senate Races to Finalize Tax Bill

Over the last week, Senate committees have been scrubbing the reconciliation bill to ensure that it complies with the Byrd Rule and qualifies for the lower, 50-vote threshold. The Senate Parliamentarian ruled over the weekend that several provisions related to the financial services and agriculture/SNAP portions of the bill were found to not comply with the Byrd Rule and will have to be removed.

NAW continues to support the effort to extend and pass new pro-business tax provisions into law, and released a statement last week praising the Senate product. At the same time, we continue to urge lawmakers to take steps to improve the bill.

What Happens Next? It is expected that senators will not complete the tax section of the bill until Tuesday. From there, the Senate will make additional changes to the bill and take the legislation to the Senate Budget Committee where it will be prepped to go to the floor for a full vote.

Senate Majority Leader John Thune is hoping to begin floor action on the bill on Thursday or Friday and will likely go into the weekend. He has said the Senate will stay in session until the bill passes, although lawmakers are currently scheduled to be out next week for the July 4 break. Under the rules of reconciliation, senators must go through a vote-a-rama, where any senator can offer any amendment to the bill as long as it fits within various rules including being germane to the underlying bill and fitting in the top line revenue and spending targets.

What About the House? Lawmakers are aiming is to “pre-conference” the bill and have the Senate make changes to the legislation that are acceptable for the House so that the lower chamber can return and quickly take up and pass the Senate bill in order to meet the self-imposed July 4 deadline. The alternative would be the House amending the Senate version or voting to go to conference, both of which would likely delay passage of the bill until August.

How Does the Bill Differ from the House Version? The Senate bill modifies various House provisions bill – for instance, it lowers the SALT cap on individuals back down from $40,000 to $10,000, lowers the 199A deduction back down from 23% to 20%, reduces the tax benefit of Trump priorities like no tax on tips and no tax overtime. In exchange for this, it makes several business provisions like R&E expensing and 100% depreciation permanent instead of five years, and reduces the scope of new taxes on charities and foreign remittances.

While provisions are subject to change, here are major provisions in the Senate bill as of now:

Individual Tax Provisions

• Makes lower individual tax brackets permanent. Provides an additional year of inflation adjustment for tax brackets 10%, 12%, and 22%.

• Makes standard deduction permanent and increases it to $32k for married filers/$16k for single filers.

• Makes child tax credit permanent, increases credit to $2,200 and indexes to inflation.

• Allows taxpayers to deduct up to $25k of qualified tipped income per year for four years. Begins phasing out for incomes of $150k for single filers/$300k for married filers.

• Allows taxpayers to deduct up to $25k of qualified overtime income per year for four years. Begins phasing out for incomes of $150k for single filers/$300k for married filers.

• Provides $6,000 additional deduction for seniors aged over 65 earning less than $75k for single filers/$150k for married filers.

• Provides $10k deduction for vehicle loan interest, phasing out for taxpayers with $100k for single filers/$200k married filers.

Business Provisions

• Permanent 20% pass-through deduction for S-corporations and partnerships.

• Denies the ability of S-corporations and partnerships to deduct state and local income taxes.

• Makes death tax exemption of $15 million for single filers/$30 million for married filers permanent.

• Permanently restores 100% bonus depreciation.

• 100% bonus depreciation for factories for four years.

• Permanently restores full expensing for research & experimental.

• Modifies TCJA international provisions and establishes 14% rate for GILTI, FDII and BEAT.

• Repeals and limits green energy tax provisions.

• No changes to the Last-in, First Out (LIFO) inventory accounting method that is utilized by many wholesaler-distributors.

Trump Admin Continues Trade Negotiations as July 8 Deadline Approaches

We are now 15 days away from President Trump’s self-imposed deadline to negotiate 90 trade deals in 90 days before the expiration of the pause on reciprocal tariffs.

It is unclear whether reciprocal tariffs will go into effect on the 60+ countries that appeared on the White House’s list released in April or whether there will be an additional pause. Trump has previously threatened tariffs on some countries if they did not negotiate with him.

The federal administration released more details on the one agreement – which they have termed the U.S – UK Economic Prosperity Deal, and can be found here.

There remain signs that the U.S. may be making progress toward some additional trade agreements. Following a meeting with Trump at the G7 last week, Canadian Prime Minister Mark Carney said he wanted a trade deal in 30 days. Meanwhile, the EU has signaled increasing willingness to negotiate with Trump. In saying that, it appears difficult for foreign countries to figure out who to negotiate with in the administration, with one report saying that Commerce, Treasury, and USTR often do not appear to be on the same page.

Meanwhile, Treasury Secretary Bessent has said he expects to meet again with Chinese counterparts in several weeks to continue discussions and take stock of where trade relations stand following the bilateral London meeting. 145% reciprocal tariffs on China are paused until August 12, so the U.S. has some time to make progress on an agreement.

Since the last federal GR update, there has been little developments on pending litigation to Trump’s authority to impose global tariffs over IEEPA. As we stated in the last update, two cases blocking the administration’s authority to impose reciprocal tariffs, 10% global tariffs, and China, Mexico and Canada fentanyl retaliatory tariffs are currently moving through the appeals process.

In addition, various Section 232 investigations into timber and lumber, copper, critical minerals, pharmaceuticals, semiconductors, trucks, and commercial aircraft and jet engines remain ongoing, and the administration could impose additional tariffs on these products soon.

NAW Applauds Supreme Court Decision That Opens Courthouse Doors to Those Harmed By Regulation

On June 20, the U.S. Supreme Court issued a 7-2 decision authored by Justice Kavanaugh in Diamond Alternative Energy, LLC v. EPA. The Court agreed with NAW and ruled that businesses have standing to challenge illegal regulations in court when they can demonstrate (1) harm from the illegal regulatory action and (2) stopping the action will redress those injuries.

• In Diamond Alternative Energy, fuel producers challenged the legality of a waiver the Environmental Protection Agency (EPA) granted the State of California, which allowed the state to set more stringent greenhouse gas emission standards for automobiles than EPA requires. Among other things, California’s regulations require all passenger vehicles sold in the state to have zero emissions by 2035.

As we articulated in our amicus brief to the Court, NAW has received numerous complaints from its members about the negative impact California’s unattainable greenhouse gas emission standards will have on their business. Any business that can prove it is negatively impacted by an illegal regulatory action should have the opportunity to challenge it in court.

NAW Joins Supply Chain Partners to Urge Federal Government to Address Anticipated Port Congestion

As we continue to advocate for the important role of wholesaler-distributors in the U.S. supply chain, NAW joined our business community partners in a letter urging the Trump Administration to engage with all supply chain stakeholders to address concerns about anticipated port congestion and supply chain disruption.

In this letter to the U.S. Secretaries of Transportation and Commerce as well as the Chairman of the Federal Maritime Commission, NAW and our partners relay our concern that tariff implementation changes, especially with China, will recreate the supply chain challenges we faced during the COVID-19 pandemic. This includes severe port congestion, inaccessible vessel capacity and containers, higher freight rates, and shipment delays. We also urge the administration to reconstitute the White House Supply Chain Disruption Task Force to address these issues proactively and as soon as possible. The full letter can be accessed below.

Read the full letter

NAW to Testify at OSHA’s Hearing on the Proposed Heat Rule

On June 16, the Occupational Safety and Health Administration (OSHA) began a two week informal public hearing on the heat injury and illness prevention rulemaking.

• The hearing was originally scheduled during the Biden Administration and the Trump Administration decided to proceed with the scheduled hearing.

• It remains unclear what OSHA will do with the rulemaking, as the Trump administration has not made its intentions clear.

On June 25, Lauren Williams, Vice President of Government Relations, will testify on behalf of NAW reiterating the organization’s comments filed earlier this year which called on the agency to withdraw the proposal.

• NAW said we share OSHA’s mission to protect workers, however, the proposed rule exceeds OSHA’s legal authority, is overly broad, and threatens to undermine the operational needs of NAW members that are so vital to the economy. The proposal’s “one-size-fits-all” approach is unworkable.

June 30: NAW Webinar on DEI Employer Compliance at Federal and State Levels

Join NAW’s Legal Policy Center (LPC) team and legal experts on Monday, June 30th from 2:00-3:00 PM ET for a deep dive into federal and state laws governing diversity, equity, and inclusion (DEI) and the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP)

This webinar will provide key insights on compliance obligations, enforcement trends, and what wholesale distributors should do to align their workforce practices with evolving legal standards. Members will also have the opportunity to engage directly with experts and ask questions relevant to their organizations.

To register for next week’s webinar, click the button below.

Register Here

Senate Faces Time Crunch Passing Tax Bill by July 4 Recess

The Senate continues debating how to amend the House-passed One Big Beautiful Bill Act, with the goal of sending the bill to the President’s desk by the July 4 recess.

NAW has been meeting with Senate offices on the industry’s priorities and communicating how many provisions within the bill will help wholesaler-distributors. If you are interested in sharing information on how the bill will impact your company, please email us at GR@naw.org.

The Senate is in session for the remaining three weeks of June so while it is possible they hit this goal; they face a time crunch given a number of outstanding issues remain with the tax portion of the bill. Regardless, if they fail to pass the bill by July 4, they have several weeks of session in July to pass the bill before the August recess. This is viewed as a more serious deadline given that is when the U.S. will hit the debt ceiling.

Outstanding issues include:

SALT: The Senate is still debating whether to make changes to the house provision lifting the cap on state and local taxes (SALT) to $40k. There is a desire for senators to lower the cap given that there are zero Senate Republicans in blue states. Some House Republicans have warned any changes to their SALT compromise could threaten the ability of the House to pass the Senate’s bill.

Business provisions: Senators are pushing to make several business provisions permanent including extending the duration or making permanent R&D expensing, bonus depreciation and interest deductibility. The House bill enacted these provisions for five years, however there is a desire amongst senators to make them permanent to provide business certainty.

Green energy credits: The House bill repealed several green energy credits, phased out others, and imposed restrictions on foreign sourcing and transferability of credits. There is a desire amongst several senators to scale back the scope of the repeal, however there is little unity in these efforts. Some senators want to push back repeal of some credits to provide predictability to already announced projects, while others want to protect specific credits based on specific state interests.

Other tax pay-fors: The House bill included a number of new taxes or tax increases designed to offset the total cost of the bill including a tax on private foundations, a denial of SALT deductions for pass-through businesses that do not qualify for 199A based on being a specified service business, and a tax on remittances sent to non-U.S. citizens outside of the country. We believe it is possible that the Senate will scale back or modify many of these provisions.

Spending reforms/deficit reduction levels: In addition to tax provisions within the bill, the Senate continues to grapple with how to address spending reforms including changes to Medicaid and welfare programs. The House-passed bill contains $1.25 trillion in spending cuts, a level significantly below the $1.5 to $2 trillion sought by fiscal conservatives in the lower chamber. In addition, several senators have voiced a desire to go further on spending reduction given the nation’s significant deficit and increased spending since the COVID-19 pandemic.

As the Senate continues drafting their changes to the tax bill, we expect that many provisions will be dialed up or down, which could result in changes to some provisions important to wholesaler-distributors. Despite these possible changes, we expect most policies to still be similar to the House bill.

Individual provisions:

• Permanence of 2017 individual tax cuts – individual tax brackets, standard deduction, child tax credit, higher AMT thresholds. repeal of various itemized deductions.

• Expansion of child tax credit to $2,500 for four years, indexed to inflation thereafter.

• Expansion of standard deduction by $1,000 ($2,000 for married filers).

• Above the line deduction on tipped income for four years

• Above the line deduction on overtime income for four years

• New $4,000 deduction for seniors for four years

• No tax on car loan interest for four years

• Lifts SALT cap to $40,000, phasing out beginning at $500,000.

Business provisions:

• Permanence of 199A pass-through deduction and expansion to 23%

• Expansion of death tax exemption to $15 million ($30 million for married filers)

• Restores 100% bonus depreciation for five years

• 100% bonus depreciation for factories for four years

• Restores R&E expensing for five years

• Makes 2017 international tax provisions (GILTI, FDII, BEAT) permanent

• Repeals and limits green energy tax provisions

• No changes to the Last-in, First Out (LIFO) inventory accounting method that is utilized by many wholesaler-distributors.

U.S. Officials Meet with Chinese Counterparts on Easing Trade Tensions

Treasury Secretary Scott Bessent, U.S. Trade Representative Jameson Greer, and Commerce Secretary Howard Lutnick are meeting today in London with a Chinese delegation led by Vice Premier He Lifeng. According to reports, the meeting is expected to focus on rare earth minerals, export controls, and provide a framework on future trade talks.

This meeting follows a call President Trump had with Chinese President Xi last week to ease tensions after Trump had earlier said talks were breaking down and China had not fulfilled commitments made following the bilateral meetings in Switzerland.

As of now, there appears to be optimism that both sides can make progress on easing trade tensions. As a reminder, 145% reciprocal tariffs on China remain paused until August 12, however 30% tariffs remain in effect (20% fentanyl tariffs and 10% global tariffs).

Meanwhile, the United States Trade Representative has opened its public comment period for the Section 301 investigation into China’s Targeting of the Maritime, Logistics, and Shipbuilding Sectors for Dominance.

• The administration has proposed fees on foreign made and operated ships.

• The comment period closes July 7.

• If you are interested in sharing your perspective on these shipping fees with NAW please reach out to GR@naw.org.

What about the courts?

Late last month, the Court of International Trade ruled that the administration did not have authority to impose tariffs under the International Emergency Economic Power Act (IEEPA). The U.S. District Court for D.C. issued a similar ruling in a different case the same day. The federal government quickly filed, and received a stay on an injunction blocking collection of tariffs and both cases are moving through the appeals process. As of now, there has been little movement in either case. Regardless of how the courts rule on appeal, we expect the cases to ultimately make their way to the Supreme Court.

Even if successful, it is unclear how impactful these lawsuits will be. For one, they only apply to the 10% global tariffs, reciprocal tariffs on foreign countries that are paused until July 9, and China, Mexico and Canada fentanyl retaliatory tariffs, not the 25% tariffs imposed by the administration under Section 232.

In addition, as we noted in our previous update, the administration has other avenues to impose tariffs including using Section 122 of the Trade Act to impose a tariff of up to 15% on imports for 150 days or using Section 338 of the Tariff Act to impose tariffs on countries that are determined to have discriminated against U.S. commerce.

What about other trade deals?

The 90-day pause on reciprocal tariffs on 60+ trading partners expires July 8 and as of now, only one country – the United Kingdom – has reached a trade deal with the U.S. In recent weeks, the administration has nudged other countries to come to a deal including asking them to send their best offer last week and the threat to impose 50% tariffs on the European Union made several weeks ago.

Rumors persist that deals with other countries remain close, however the complexity of making these deals has slowed any progress. Nevertheless, multiple trading partners including Vietnam, Japan, Canada, and India continue to meet with U.S. officials.

What about other tariffs?

The administration announced it was increasing steel and aluminum tariffs to 50%, which went into effect June 4. A White House fact sheet can be found here. Trump has threatened new tariffs on iPhones and later said he would impose tariffs on all smart phones. As of now, the administration has taken no steps toward imposing these tariffs.

On the other hand, Section 232 investigations into timber and lumber, copper, critical minerals, pharmaceuticals, semiconductors, trucks, and commercial aircraft and jet engines are ongoing and new tariffs could be announced on these products in the coming weeks and months. We will continue to keep you updated on future developments.

Congress Continues to Consider AI Moratorium for States

As part of the broader reconciliation discussion, congressional Republicans continue to explore avenues to include a federal preemption of state legislative that would impede innovation and deployment of artificial intelligence (AI) technology.

The final version of the One Big Beautiful Bill Act included a provision on AI that would prohibit state and local governments from enforcing any law or regulation for 10 years that “limits, restricts, or otherwise regulates AI”. This is unless the law or regulation:

• Removes legal impediments to AI deployment and/or operation;

• Facilitates the deployment and/or operation of AI systems;

• Streamlines licensing, permitting, routing, zoning, procurement, or reporting procedures using AI;

• Does not impose any substantive design, performance, data-handling, documentation, civil liability, taxation, fee, or other requirement on AI models and/or systems

Given the “Byrd Rule” in the Senate’s reconciliation process, which limits provisions in a reconciliation bill to those solely related to budgetary items, this moratorium faces an uphill battle. Last week, Senate Commerce Committee Chair Sen. Ted Cruz (R-TX), who has publicly supported a state and local AI moratorium, introduced revised language that would tie the preemption language to a state’s requirements to gain access to federal BEAD program broadband funds. Senate Republicans are hopeful the revised provision will have a greater chance before the chamber’s parliamentarian in advancing through the reconciliation process. Earlier this week, NAW joined coalition partners in a letter to senators supporting the AI moratorium. Likewise, NAW continues to engage with policymakers and thought leaders across the technology sector, and attended the AI+ Expo for National Competitiveness in Washington, D.C. last week to highlight the importance of the wholesale distribution industry’s voice in these conversations.

NAW Urges Oregon to Delay Implementation of the Packaging EPR Law

On June 4, NAW sent a letter to the Oregon Department of Environmental Quality requesting a one-year delay of the July 1, 2025, effective date or, at a minimum, enforcement of the Plastic Pollution and Recycling Modernization Act (RMA).

The RMA is an extended producer responsibility (EPR) law for packaging which requires the “producer” of the covered product to be responsible for its products along the entire lifecycle.

• Oregon’s law requires certain companies that sell packaged items, food serviceware or paper products into Oregon to join a “Producer Responsibility Organization (PRO)”.

• Producers pay the PRO, which funds the end of life management of those materials, which includes processing and recycling.

In the letter, NAW stated the delay was necessary given the widespread confusion and a substantial number of outstanding questions from parties who must register, with what organization they must register, and what products are covered by the law. NAW will keep members updated on any developments around enforcement.

DOL Launches Opinion Letter Program

On June 2, the U.S. Department of Labor announced it was launching its opinion letter program. Opinion letters are official written opinions offering practical advice from the agency on how a law applies to a specific workplace situation, giving employers and workers timely insight into their obligations and rights.

Who can request opinion letters: Anyone can request letters, including workers, employers, employment associations, lawyers, human resource professionals, unions and industry leaders.

What agencies does it cover:

• The Wage and Hour Division will issue opinion letters.

• The Occupational Safety and Health Administration (OSHA) will provide letters of interpretation.

• The Employee Benefits Security Administration will release advisory opinions and information letters.

• The Veterans’ Employment and Training Service will issue opinion letters.

• The Mine Safety and Health Administration (MSHA) will provide compliance assistance resources through its new MSHA Information Hub, a centralized platform offering guidance, regulatory updates, training materials and technical support.

To learn more, visit the Department of Labor’s Opinion Letter Webpage.

Federal Court Strikes Down Trump Tariffs, Appeals Court Reinstates

Last night, the Court of International Trade ruled that President Trump does not have authority to impose tariffs under the International Emergency Economic Power Act (IEEPA). On Thursday, a federal appeals court granted the Trump administration’s request to pause the lower court ruling. The pause will remain in effect until the appeals court can rule on the administration’s motion for a longer-term pause of the lower court decision, which could take until mid-June. The appeals court gave the plaintiffs until June 5 to respond to the government’s stay. We will continue to keep you updated as the lawsuit progresses and more information becomes available.

How Does this Impact Existing Tariffs?

The ruling yesterday overturned the 10% global tariffs, reciprocal tariffs on 60+ countries (which are currently paused until July 9), tariffs on China (currently paused until August 12) and retaliatory tariffs for the fentanyl crisis on Canada, Mexico and China. This ruling does not impact tariffs imposed under Section 232 of the Trade Expansion Act, including 25% tariffs on automobiles and parts and 25% tariffs on steel and aluminum. The ruling also will not impact the ability of Trump to impose new industry specific tariffs that have been floated on pharmaceuticals, lumber and timber, critical minerals, smart phones and other products.

What Happens Next?

The original ruling gave the government 10 days to remove the tariffs. The Department of Justice filed an emergency motion Thursday morning for a stay to the U.S. Court of Appeals, arguing the lower court ruling is “unprecedented and legally indefensible.” The administration also threatened to go to the Supreme Court asking them to block the ruling as early as Friday if the appeals court did not rule.

Regardless of what happens next, the administration has other avenues to re-impose these tariffs. For instance, they could use Section 122 of the Trade Act to impose a tariff of up to 15% on imports for 150 days, subject to an extension by Congress. The law allows this if there is a “large and serious” balance of payment deficit, and “imminent and significant” dollar depreciation or coordination with other countries to “correct an international balance of payments disequilibrium.” The President could also use Section 338 of the Tariff Act to impose tariffs on countries that are determined to have discriminated against U.S. commerce.

As of now, it is unclear how the ruling will impact ongoing negotiations with other countries. Rumors have persisted over the past few weeks that the U.S. has been close to finalizing trade agreements with a number of countries.

Separately, a judge in the D.C. District Court struck down the tariffs for two plaintiffs that brought the case. The judge in this case stayed the order for 14 days to allow the ruling to be reviewed in the Court of Appeals. There are other cases challenging the tariffs so it is possible there will be additional and conflicting rulings coming from the courts in the coming weeks and months.

Reconciliation Tax Package Passes House

House Republicans passed their One Big Beautiful Bill Act Thursday morning on a vote of 215-214. The legislation will now go to the Senate, with the goal of passing the bill and sending it to President Trump’s desk by July 4. NAW strongly supported the legislation. Our statement praising passage of the bill can be found here and our letter of support can be found here.

The Senate will attempt to pass the bill under a “current policy baseline,” a budget procedure that makes it easier to extend tax policies that are currently in law but expire at the end of the year. They will also amend the bill with their own priorities which could include narrowing the deduction on state and local taxes, paring back Medicaid spending reforms, or repeal of green energy credits. In addition, some senators are calling for further spending cuts and making some business provisions related to research and experimentation (R&E) and expensing permanent.

As it stands, the legislation contains key priorities for wholesaler-distributors and workers. A summary of key provisions is below. A more detailed breakdown of seven provisions that may impact wholesaler-distributors can be found below the summary.

Individual provisions:

• Permanence of 2017 individual tax cuts – individual tax brackets, standard deduction, child tax credit, higher AMT thresholds. repeal of various itemized deductions.

• Expansion of child tax credit to $2,500 for four years, indexed to inflation thereafter.

• Expansion of standard deduction by $1,000 ($2,000 for married filers).

• Above the line deduction on tipped income for four years

• Above the line deduction on overtime income for four years

• New $4,000 deduction for seniors for four years

• No tax on car loan interest for four years

• Lifts SALT cap to $40,000, phasing out beginning at $500,000.

Business provisions:

• Permanence of 199A pass-through deduction and expansion to 23%

• Expansion of death tax exemption to $15 million ($30 million for married filers)

• Restores 100% bonus depreciation for five years

• 100% bonus depreciation for factories for four years

• Restores R&E expensing for five years

• Makes 2017 international tax provisions (GILTI, FDII, BEAT) permanent

• Repeals and limits green energy tax provisions

Key Provisions That May Impact Wholesaler-Distributors

Restoration of Full Expensing of Research and Experimental (R&E) Expenditures

Summary: The bill restores the ability of taxpayers to immediately deduct domestic research and experimental expenditures made between December 31, 2024 and January 1, 2030. Since 2022, businesses have been required to amortize R&E expenses over five years (15 years for research conducted outside of the U.S.). This provision may benefit wholesaler-distributors with R&E expenditures.

What Qualifies: R&E expenditures generally include all costs involved in experimental or laboratory activities intended to discover information that eliminates uncertainty concerning product development or improvement.

Examples of qualifying costs include salaries for those engaged in R&E efforts, overhead incurred to operate and maintain research facilities (e.g., utilities, depreciation, and rent), and materials and supplies used and consumed in the course of research or experimentation (including amounts incurred in conducting trials).

R&E expenditures exclude expenses like quality control testing, management studies, consumer surveys, advertising or promotions, or the acquisition of another’s patent, model, production, or process.

100% Expensing for Factories

Summary: The proposal creates a 100% deduction for costs associated with constructing new factories and improvements to existing factories.

This provision may benefit some wholesaler-distributors investing in new warehouses/facilities.

What Qualifies: This bill limits the deduction to qualified production property defined as “nonresidential real property used by a taxpayer as part of a qualified production activity.”

In order to qualify, any property must be placed in service in the U.S, construction must begin after January 19, 2025 and before January 2029 and it must be placed in service before January 1, 2033. Any part of the property used for office space (i.e. space used for administrative services, sales activities, software engineering) does not qualify for the deduction.

The term ‘qualified production activity’ means the manufacturing, production (limited to agriculture and chemical production), or refining of a qualified product. The activities of any taxpayer do not constitute manufacturing, production, or refining of a qualified product unless the activities of such taxpayer result in a substantial transformation of the property comprising the product.

The Treasury Secretary will issue regulations/guidance regarding what constitutes “substantial transformation of the property.”

Tax Deduction for Overtime Pay

Summary: The proposal provides a federal income tax deduction equal to the qualified overtime compensation that an individual receives during the taxable year. The provision sunsets at the end of 2028.

This provision may impact the workforce of wholesaler-distributors.

Who Qualifies: This deduction cannot be claimed by any individual defined as a highly compensated employee, based on the IRS definition (generally $160,000 in 2025). This deduction is allowed in addition to the standard deduction, and requires a social security number in order to claim.

The provision contains language preventing a taxpayer from claiming a double tax benefit from this deduction and the no tax on tips deduction.

“Qualified overtime compensation” is defined as overtime compensation paid to an individual required under section seven of the Fair Labor Standards Act that is in excess of the regular rate at which such individual is employed.

Limitation on State and Local Tax Deduction for Some Pass-through Businesses

Summary: The provision contains new limitations on the ability of pass-through businesses (S-corporations, partnerships etc.) to deduct state and local taxes (SALT). Under the provision, pass-throughs that qualify for 199A are eligible to continue deducting SALT. However, those that do not qualify are hit with the new $40,000 limit on SALT.

We believe the new limitations in this provision will not significantly impact wholesaler-distributors.

What Qualifies: The proposal creates a $40,000 cap on state and local taxes for individuals. The provision applies to 1) state, local & foreign real property and income taxes, 2) state and local personal property taxes, 3) state general sales taxes, and 4) real-estate taxes paid by cooperative housing corporations.

The proposal creates some exceptions, including an exception allowing SALT deductions for qualifying entities carrying on a qualified trade or business based on Section 199A.

A qualifying entity is a partnership or S-corporation for which at least 75% percent of the gross receipts of the business are derived in a qualified trade or business. A qualified trade or business is a business that is not engaged in a “specified service trade or businesses (SSTB).” An SSTB is typically a business where the principal asset is the reputation or skill of its employee/owner and includes services such as health, law, accounting, consulting, financial services, brokerage services etc.

Increase in Employer Provided Child Care Credit

Summary: The proposal increases the employer-provided childcare credit to 40% of qualified childcare expenditures (50% for eligible small businesses) in addition to 10% of qualified referral expenses allowed under present law. The total credit limit is increased to $500,000 ($600,000 for small businesses), adjusted for inflation. An eligible small business is defined under the section 448c gross receipts rule.

This provision may benefit wholesaler-distributors that provide childcare facilities.

What Qualifies: Qualified childcare expenditures include costs associated with constructing or expanding a childcare facility, costs with running a childcare facility including training employees, providing scholarship programs, etc.

The proposal expands the definition of qualified childcare expenditures to include amounts paid or incurred under a contract with a third-party that contracts with one or more qualified childcare facilities to provide childcare services. In addition, the definition of qualified childcare facilities is expanded to allow for qualified childcare facilities that are jointly owned or operated by the taxpayer and other entities or persons.

Repeal and Restrictions on Green Energy Credits

Summary: The legislation eliminates the majority of green energy credits passed in the Inflation Reduction Act of 2022 including credits for residential green energy, clean energy generation, manufacturing, and electric vehicles. Currently, most of these credits are set to expire at the end of 2032. They are being repealed to offset other tax provisions within the legislation.

The provision terminates the ability to transfer credits for facilities placed in service after 2027, and contains prohibitions on the ability of foreign companies to benefit from the credits.

These provisions may impact wholesaler-distributors purchasing electric vehicles or those in the residential industry.

What is Repealed:

1) Residential Energy Credits – repealed at the end of 2025

• Residential Clean Energy Credit (25D) i.e. residential solar

• Energy Efficient Home Improvement Credit (25C) i.e. home building

• New Energy Efficient Home Credit (45L) i.e. heat pumps, insulation

2) Electric vehicle credits – repealed at the end of 2025

• Previously Owned Clean Vehicle Credit (25E)

• Commercial Clean Vehicle Credit (45W)

• Alternative Fuel Vehicle Refueling Property Credit (30C)

• The Clean Vehicle Credit (30D) is repealed at the end of 2026. A transition rule reinstates the 200,000 vehicle cap per manufacturer for 2026. The credit is disallowed for any manufacturer that hit the 200,000 cap prior to 2025.

3) Clean Energy credits

• Clean Electricity Investment Credit (48E) – Repealed except for projects that begin construction before 60 days of the bill being enacted and that are completed before 2029.

• Clean Electricity Production Credit (45Y) – Repealed except for projects that begin construction before 60 days of the bill being enacted and that are completed before 2029.

• Clean Energy Manufacturing Credit (45X) – Terminated for wind technology in 2025. Phase out for other technologies begins in 2029 and is eliminated in 2029.

• Clean Hydrogen Production Credit (45V) -– Repealed at the end of 2025.

• Biofuels (45Z) – Extended to 2031 (was previously scheduled to expire in 2027).

• Carbon Capture and Sequestration (45Q) – Not limited except for new restrictions on transferability.

Extension of 100% Bonus Depreciation

Summary: The 2017 Tax Cuts enacted 100% bonus depreciation for five years through 2022. Beginning 2023, the provision has begun phasing down 20% through 2027 (i.e. 80% in 2023, 60% in 2024). The provision restores 100% depreciation for property acquired after January 19, 2025 and before January 1, 2030. Starting 2030, this provision expires with no phasedown.

The provision will benefit wholesaler-distributors investing in property.

What Qualifies: Qualified property includes property that has an applicable recovery period of 20 year or less under MACRS (modified accelerated cost recovery system), computer software other than software required to be amortized under IRC 197, water utility property, and a qualified film, television or live theatrical production.

Property that must be depreciated under the Alternative Depreciation System (ADS) does not qualify.

The bonus depreciation deduction is allowed for both regular tax and alternative minimum tax purposes, but is not allowed in computing earnings and profits.

Trump Calls for 50% Tariffs on EU as Negotiations Break Down

The Trump administration is continuing to negotiate with foreign trading partners ahead of their self-imposed deadline of July 8, when the pause on reciprocal tariffs on roughly 60 countries expires.

• There are rumors that the U.S. is close to announcing deals with as many as two dozen countries.

• It is unclear what these deals will entail but we believe these announcements will likely be similar to the U.K. deal which was heavy on future commitments and light on specific details.

Whether tactic or threat, earlier today, Trump called for 50% tariffs on the European Union (EU) starting June 1 after saying that the EU was being difficult in negotiations. He also threatened 25% tariffs on Apple products if they did not start manufacturing in the U.S.

The administration has said that 10% global tariffs will likely remain in effect unless foreign countries offer an “exceptional” deal to the U.S. At the same time, they have said that reciprocal tariffs could be reimposed on other foreign countries if they are not negotiating in good faith – similar to the threat to impose 50% tariffs on the EU.

Meanwhile, 125% tariffs on China remain paused until August 12, with 30% tariffs currently in effect. The administration also continues 232 investigations into several industries including pharmaceuticals, trucks, lumber & timber, and semiconductors, and could impose 25% tariffs on these industries similar to the tariffs on automobiles and on steel and aluminum.

U.S. Senate to Consider Swipe Fee Legislation in Coming Weeks

This week, U.S. Senators Roger Marshall (R-KS) and Dick Durbin (D-IL) filed their Credit Card Competition Act (CCCA) as an amendment to be added to the crypto-related GENIUS Act being considered on the Senate floor.

• The CCCA aims to reduce credit card swipe fees by requiring U.S. banks with over $100 billion in assets to add a second network to their Visa- or Mastercard-enabled credit cards.

• It is hoped that competition among network providers will help drive interchange costs down for merchants, and bring some relief to wholesaler-distributors.

Why it matters: Wholesaler-distributors’ tight average profit margins makes our industry especially vulnerable to increasingly high swipe fees. It also threatens our ability to continue hiring, reinvesting, and keeping costs low for consumers.

What’s next: The Senate is expected to consider the amendment as part of the debate of the GENIUS Act upon its return to Washington the week of June 2. We urge you to reach out to your Senators and ask them to support the CCCA.

Resources:

• NAW Issue Brief of Credit Card Swipe/Interchange Fees

• Merchant Payment Coalition Resources

Congress Votes to Stop California’s Clean-Air Waivers

Under President Biden, the U.S. Environmental Protection Agency (EPA) granted three separate waivers to the state of California granting the state the power to enforce their own vehicle emissions standards.

• One waiver allowed the state to effectively phase out the sale of new gasoline powered internal combustion engines (ICEs) by 2035.

• A second allowed California to set stricter Nitrogen Oxide engine emissions standards, and

• A third gave California the ability to set emission standards for heavy-duty vehicles.

On Thursday May 22, the Senate voted to nullify all three EPA waivers using the Congressional Review Act (CRA), a strategy that is not without controversy, and will likely to be litigated in federal court.

• Senate Republicans voted to change the Senate rules to proceed with the CRA vote. The Senate parliamentarian referred to the House Government Accountability Office (GAO) report that stated Congress cannot use the CRA to nullify the California emissions waiver, as it did not meet the standard of a “rule.”

• California Attorney General Rob Bonta said that the state will sue the Trump administration to protect its ability to set its own vehicle emissions rules.

The House of Representatives has already passed the three joint resolutions and President Trump is expected to sign them into law.

EEOC Opens 2024 EEO-1 Data Collection

On May 20, the U.S. Equal Employment Opportunity Commission (EEOC) announced it was opening the 2024 EEO-1 Component 1 data collection.

The EEOC did remove the option for employers to classify employees as “nonbinary.” The agency said this move was a “non-substantive change” necessary to comply with President Trump’s Executive Order to eliminate the use of categories beyond male and female across the federal government.

For more information on which employers must file, see EEOC’s FAQs.

Other Resources:

• 2024 EEO-1 Component Data Collection Inspection Booklet

• Fact Sheets

• 2024 EEO-1 Component 1 Data Collection

The deadline to submit and certify reports is June 24, 2025.

OSHA Updates Inspection Program

On May 20, the Occupational Safety and Health Administration (OSHA) announced it updated the inspection program that directs agency enforcement resources to establishments with the highest rates of injuries and illnesses based on injury and illness data.

OSHA’s Site-Specific Targeting Program is the primary planned inspection program for facilities with 20 or more employees. Using OSHA Form 300A data from calendar years 2021-2023, establishments may be selected for inspection based on:

• High injury and illness rates from 2023 data.

• Upwardly trending injury and illness rates based on 2021-2023 data at or above twice the 2022 private sector average.

• Injury and illness rates markedly below industry averages.

• Failure to submit an OSHA Form 300A in 2023.

Supreme Court Lets Trump Fire Biden Labor Board Members

On May 22, the U.S. Supreme Court granted the Trump administration’s emergency request to fire the heads of the National Labor Relations Board (NLRB) and the Merit Systems Protection Board (MSPB). The vote was 6-3, with all the liberal justices in dissent.

“The stay reflects our judgment that the Government is likely to show that both the NLRB and MSPB exercise considerable executive power. But we do not ultimately decide in this posture whether the NLRB or MSPB falls within such a recognized exception; that question is better left for resolution after full briefing and argument. The stay also reflects our judgment that the Government faces greater risk of harm from an order allowing a removed officer to continue exercising the executive power than a wrongfully removed officer faces from being unable to perform her statutory duty.”

What’s next: The ligation will continue in the lower court over the President’s power to fire NLRB Chair Gwynne Wilcox and MSPB member Cathy Harris.

House Republicans Release Long Awaited Tax Legislation

On Friday night, the Ways and Means Committee released the first portion of tax legislative text for the GOP reconciliation bill. This section makes permanent and expands existing individual, small business and international tax policies enacted in the 2017 tax cuts.

The Committee released the second portion of their tax bill this afternoon, which contains business provisions, new tax provisions proposed by President Trump, and repeals several tax provisions as revenue offsets.

While we are still reviewing the legislation, it contains many key wins for wholesaler-distributors, such as an expansion and permanency of 199A, restoration of bonus depreciation and research and development (R\&D) expensing, and an increase in the death tax exemption for family-owned businesses.

The legislation also contains no provision repealing or modifying the Last-in, First-out (LIFO) inventory accounting method utilized by many distributors. In addition, several rumored tax offsets like raising the top income tax rate and creating a new cap on the ability of businesses to deduct state and local taxes were not included in the legislation.

Timeline:The Ways and Means Committee is planning to markup this legislation tomorrow at 2pm with the goal of passing the combined reconciliation bill through the full House before Memorial Day. While this timeline is achievable, lawmakers face several challenges

Lawmakers remain divided over how to address the cap on state and local tax (SALT) deductions. Several blue state Republicans continue to push for a higher deduction than has been proposed by Ways and Means Republicans and remain in negotiations with House leadership.

Lawmakers also face a balancing act of ensuring sufficient spending cuts and tax cuts. As of time of writing, it appears this bill contains $4 trillion in tax cuts, which under the reconciliation instructions require other congressional committees to find $1.5 trillion in spending cuts. However, many conservative lawmakers have pushed for spending cuts of at least $2 trillion so it is unclear if they will support this compromise.

Below are key provisions within the Ways and Means tax package:

Expands and makes 199A pass-through deduction permanent. The bill makes the 199A pass-through deduction for S-corporations, LLCs,sole proprietorships, and partnerships permanent and raises the deduction from 20% to 23% effective 2026. The legislation also modifies phase-in of limitations by replacing the W-2 wages and specified service business limitations with a new two step process.

Permanently Increases death tax exemption. The legislation permanently raises the estate tax exemption and generation-skipping transfer tax exemption to $15 million (double for married filers) effective 2026. This amount is indexed to inflation.

Makes 2017-enacted individual tax brackets permanent. Tax brackets under the legislation:

• 37% for incomes over $639,275 ($767,150 for married filers)

• 35% for incomes over $259,925 ($519,850 for married filers)

• 32% for incomes over $204,700 ($409,400 for married filers)

• 24% for incomes over $107,200 ($214,400 for married filers)

• 22% for incomes over $50,275 ($100,550 for married filers)

• 12% for incomes over $12,375 ($24,750 for married filers)

• 10% for incomes $12,375 or less ($24,750 or less for married filers).

Expands and makes standard deduction permanent. The bill makes the doubled standard deduction enacted in the 2017 tax cut permanent. In addition, the bill provides a $1,000 increase for single filers ($2,000 for married filers) for tax years 2025 through 2028. Therefore, in 2026, the standard deduction will be $16,300 for single filers ($32,600 for married filers).

Increases and makes child tax credit permanent. The bill makes the doubled child tax credit (CTC) enacted in 2017 permanent. In addition, the legislation increases the CTC to $2,500 for tax years 2025 through 2028. The CTC is indexed for inflation after 2028. The proposal requires the taxpayers and children to have valid social security numbers in order to claim the credit.

Enhanced employer-provided child care credit. Increases the credit from $150,000 to $500,000 and the percentage of qualified expenses covered to 40 percent. In other words, a business must spend $1.25 million on child care related expenses to receive the full $500,000 credit.

Extension of other 2017 individual tax provisions. The legislation makes permanent several other individual tax provisions set to expire at the end of the year including:

• Alternative Minimum Tax Exemption and phase-out thresholds

• Limitation on deduction for Qualified Residence Interest

• Various deductions including qualified residence interest, moving expenses, wagering losses, and miscellaneous itemized deductions

• Various policies related to ABLE accounts including increased contribution levels, savers credit, and allowance of rollovers from qualified tuition programs

Repeals R&D Amortization. Starting 2022, businesses had to amortize the cost of R&D expenses over a five-year period (15 years for foreign research) rather than immediately deduct these expenses. The legislation restores R&D immediate expensing for domestic research effective 2025 for five years.

Restores 100% full business expensing. Bonus depreciation began ramping down 80% in 2023, 60% in 2024, 40% in 2025 and expires fully in 2027. The legislation extends 100% bonus depreciation through 2030. The legislation also increases the 179 small business expensing from $1 million to $2.5 million.

Extension of 2017 international tax provisions. The proposal retains existing deductions for global intangible low-tax income (GILTI) and foreign derived intangible income (FDII). Under the proposal deductions, businesses can deduct 50% of their GILTI and 37.5% from their FDII. The proposal retains the base-erosion anti-abuse tax (BEAT) at 10%.

$30,000 SALT Cap. Raises the cap on state and local tax (SALT) deductions to $30,000 with a phase out level beginning at $400,000 AGI. There is no allowance for married filers. The provision disallows pass-throughs that do not qualify for 199A from claiming the SALT cap.

Restores EBITDA Business Interest deduction. Starting 2022, the ability of businesses to deduct net interest was limited to 30% of earnings before interest and taxes (EBIT). Previously the deduction was 30% of earnings before interest, interest, taxes, depreciation and amortization (EBITDA).

No tax on tips. Creates an above-the line deduction for qualified tips. Includes guardrails to prevent workers from switching their income to tips. Not permitted for highly compensated employees ($160,000 in income in 2025). Effective for tax years 2025 to 2029.

No tax on overtime. Creates an above-the line deduction for overtime pay under Section 7 of the Fair Labor Standards Act. Not permitted for highly compensated employees ($160,000 in income in 2025). Effective for tax years 2025 to 2029.

Enhanced Deduction for Seniors. Provides a $4,000 deduction for seniors for tax years 2025 to 2029 (age 65 or older). Provision begins phasing down at AGI of $75,000 ($150,000 married filers).

No tax on car loans interest. Provides a $10,000 deduction for car loans for automobiles assembled in the U.S. The deduction is effective for tax years 2025 to 2029 and phases out at AGI of $100,000 ($200,000 for married filers).

Immediate expensing for structures. Provides a 100% deduction for structures for agriculture, manufacturing and resource extraction. Structures must begin construction between January 19, 2025 and January 1, 2029 and must be competed before January 1, 2033.

Repeal of Lower 1099-K reporting requirements. The 2021 American Rescue Plan changed reporting requirements requiring third party payment organizations to issue a 1099-K form to any independent contractor earning $600. This provision restores the previous levels of $20,000 on over 200 transaction, which existed prior to 2021.

Tax on college endowments. Raises the 1.4% tax on investment income of colleges to 7% for colleges with endowments worth $750,000 to $1.25 million per student, 14% for colleges with endowments of $1.25 million to $2 million per student and 21% for colleges with endowments of $2 million or more per student.

Green Energy Credits. The bill repeals several credits created or expanded in the Inflation Reduction Act passed by Democrats in 2022.

Credits repealed at the end of 2025 include:

• Previously-owned clean vehicle credit

• Clean vehicle credit

• Qualified commercial clean vehicles credit

• Alternative fuel vehicle refueling property credit

• Energy efficient home improvement credit

• Residential clean energy credit

• Clean hydrogen production credit

• New energy efficient home credit (2026 for homes that began construction before May 12)

Begins phasing out in 2029, fully repealed in 2032:

• Clean energy production credit

• Clean electricity investment credit

• Zero emission nuclear power production credit

Trump Announces Trade Deals with China and U.K., Preps Industry Specific 232 Tariffs

China Trade Deal: The Trump administration announced progress with China in trade talks following a two-day meeting in Geneva, Switzerland. Under the agreement, the U.S. and China will both pause 115% tariffs effective May 14 for 90 days.

Both countries have agreed to “establish a mechanism to continue important discussions about trade and economics” and will take actions to stem the flow of fentanyl and fentanyl precursors from China into North America.

Under the agreement, Chinese goods will still be hit by 10% global tariffs, 20% tariffs enacted earlier this year in response to the fentanyl crisis and existing Section 301 and Section 232 tariffs on specific products such as steel & aluminum and automobiles. The 10% global tariffs and 20% fentanyl tariffs do not stack with 301 and 232 tariffs.

Resources:

• White House Press Release

• Joint U.S.-China Statement

• White House Fact Sheet

U.K. Trade Deal: Trump also announced a trade deal with the United Kingdom on Thursday. Under the deal, the U.K. agreed to increase market access on American energy, agriculture and aerospace products.

• Go deeper:White House Fact Sheet

The agreement reduces tariffs on U.K. automobile manufacturers – the first 100,000 vehicles imported into the U.S. by each manufacturer will face 10% tariffs. Additional vehicles will face the 25% tariff.

The 10% global tariff will remain in effect on the U.K. The deal is not finalized, and more details will be released in the coming weeks. Much of the deal announced calls for future negotiations – for instance, the deal calls for further discussions on lowering steel and aluminum and pharmaceutical tariffs.

This is not a true trade agreement, as official agreements have to be approved by Congress and would be codified in law. Rather, this is an agreement between Trump and the U.K., and could be withdrawn or modified unilaterally by a future president. The two sides say that have agreed to “non-binding general terms” to finalize a future free trade agreement.

There are rumors that the US is close to trade deals with other major trading partners including Vietnam, Japan, Korea, Taiwan, and India.

Tariffs Currently In-Effect:

• 25% tariffs on Canada and Mexico for non-USMCA compliant goods. Tariffs are suspended for USMCA compliant goods. Goods are considered compliant if they meet a number of factors, including verification that the goods meet content of origin requirements.

• 25% global tariffs on steel and aluminum. These tariffs went into effect on March 12. The Commerce Department is accepting submissions on derivative steel & aluminum products processed in a foreign country using steel or aluminum that was manufactured in the U.S. Besides this exemption process, businesses will not be able to receive new exclusions or renew existing exclusions that were granted after 2018.

• 25% tariffs on all goods from any country that imports Venezuelan oil. The 25% tariff will lapse one year after a country ceases importing Venezuelan oil, with the administration having the option of revoking the tariff sooner.

• 25% tariffs on imported passenger vehicle and light trucks, and on automobile parts and components. Auto tariffs went into effect on April 3 while tariffs on automobile parts will go into effect on May 3.

• 10% global tariffs. These tariffs do not stack on top of other 25% tariffs (steel and aluminum, Canada and Mexico, autos and auto parts) or the paused reciprocal tariffs.

• 20% tariffs on China. 10% tariffs were enacted on China on February 4 and March 3 through the International Emergency Economic Powers Act in response to China’s role in fentanyl crisis. These tariffs do not stack with other 25% tariffs.

Tariffs Delayed:

• Reciprocal tariffs on 60+ trading partners. Trump announced a 90-day pause on reciprocal tariffs on April 9 which expires July 9. The full list of reciprocal tariffs including countries and rates can be found here.

• Products exempt include autos and automobile parts, steel and aluminum, products listed in Annex II (including pharmaceuticals, semiconductors, lumber, critical minerals, and energy) and  smart phones and electronics. Most of the exempt products are or may soon be hit by industry specific 25% tariffs.

• 125% Reciprocal tariffs on all imports from China. These tariffs were enacted following trade escalations after April 2. They have been paused for 90 days effective May 14.

Tariffs Threatened/Proposed:

Trump has initiated numerous investigations into imports under Section 232 of the Trade Expansion Act, which allows the President to impose trade restrictions including tariffs on certain products.

• Trucks. The Commerce Department announced a 232 investigation on April 25, with comments due on May 7. Trump has floated 25% tariffs on trucks that could be announced shortly after the comment period closes.

• Critical Minerals. The Commerce Department announced a 232 investigation on April 25, with comments due on May 7. Trump has floated 25% tariffs on critical minerals that could be announced shortly after the comment period closes.

• Semiconductors. The Commerce Department announced a 232 investigation on April 16, with comments due on May 7. Trump has floated 25% tariffs on semiconductors that could be announced shortly after the comment period closes.

• Pharmaceuticals. The Commerce Department announced a 232 investigation on April 16, with comments due on May 7. Trump has floated 25% tariffs on pharmaceuticals that could be announced shortly after the comment period closes. NAW submitted comments on the 232 pharmaceutical investigation, which can be found here.

• Lumber and Timber. The Commerce Department launched a 232 investigation into Timber and Lumber which closed April 1. The Department is also seeking public comments due May 12 on unfair subsidies. Although this is not explicitly linked to potential tariffs, there will likely be some crossover. Trump has floated 25% tariffs on lumber and timber, but it is unclear when these will be announced.

• Copper. The Commerce Department launched a 232 investigation into Timber and Lumber which closed April 1. Trump has floated 25% tariffs on copper, but it is unclear when these will be announced.

• Commercial Aircraft, Jet Engines & Parts. The Commerce Department announced their intention to launch a 232 investigation into commercial aircraft, jet engines and parts. The notice is scheduled to be published in the Federal Register on May 13. Assuming the Department allows a 21-day comment period, comments would be due June 3.

House Passes NAW-Backed Supply Chain Resiliency Bill

On April 28, the House of Representatives passed the Promoting Resilient Supply Chains Act of 2025 (H.R. 2444) by a unanimous voice vote. This bipartisan legislation would:

• Codify the Supply Chain Center housed in the Department of Commerce into law;

• Ensure the Commerce Department continue to monitor and respond to disruptions in critical industries and supply chains;

• Require the Commerce Department to establish a Supply Chain Resilience Working Group to make recommendations for a strategy to improve the security and resiliency of supply chains for critical industries

This bill was introduced by Rep. John James in the House and Sens. Maria Cantwell, Marsha Blackburn and Lisa Blunt-Rochester in the Senate. The Senate companion bill (S. 257) awaits consideration on the Senate floor.

NAW has endorsed the bill and sent this letter to House leadership urging its passage ahead of the floor vote last month. We will continue to work to ensure this bill becomes law and keep members updated of future developments.

DOL Issues Guidance on Independent Contractor Misclassification Enforcement

On May 1, the U.S. Department of Labor (DOL) issued a field assistance bulletin on how to determine employee or independent contractor status when enforcing the Fair Labor Standards Act (FLSA). The press release stated that as DOL reviews the Biden 2024 final rule, which is currently being challenged in federal court, agency investigators are directed not to apply the 2024 rule’s analysis in enforcement matters.

“The division will rely on longstanding principles outlined in Fact Sheet #13 and further informed by the reinstated Opinion Letter FLSA2019-6, which addresses classification in the context of virtual marketplace platforms. This approach provides greater clarity for businesses and workers navigating modern work arrangements while legal and regulatory questions are resolved.”

Trump Administration Announces Reciprocal Tariffs

Yesterday, President Donald Trump announced 10% across the board universal tariffs on imports from all countries, effective April 5. The 10% will rise to a “reciprocal tariff” rate for roughly 60 countries effective April 9. Trump announced these tariffs at a Rose Garden ceremony at 4:00 pm on Wednesday attended by steelworkers, autoworkers, cabinet members, and members of Congress. This is the latest in several rounds of tariffs announced by the President in his first few weeks in office.

NAW will be hosting  webinar for wholesaler-distributors next Tuesday, April 8 (more details below). In the interim, please read below for an update on how things stand as of this moment.

Resources:

• White House Fact Sheet

• Executive Order

• USTR Explanation of Reciprocal Tariff Calculation

• USTR X Post on Ten Unfair Trade Practices

• White House List of Supportive Statements of Tariffs

Exemptions: The reciprocal tariffs will not apply to steel, aluminum, automobiles and auto parts (which already have a 25% tariff), copper, pharmaceuticals, semiconductors, lumber (products which Trump has suggested may be hit with a 25% tariff in the future), any other products that may be subject to Section 232 tariffs in the future, energy, and other critical minerals not available in the U.S.

• A full list of products can be not subject to the tariffs can be found in the Annex II list here.

What’s Next?

The White House has said these tariffs will remain in effect until the President “determines that the threat posed by the trade deficit and underlying nonreciprocal treatment is satisfied, resolved, or mitigated”. Trump has also said that the imposition of tariffs should be the start of the negotiation process with other countries. Treasury Secretary Scott Bessent warned other countries not to retaliate, stating that would lead to further U.S. tariffs.

Meanwhile, the Senate passed a resolution last night to terminate the emergency declaration used as the basis for the President’s tariffs against Canada on a vote of 51 to 48. Four Republicans — Senators Collins, McConnell, Murkowski and Paul voted for the resolution. However, the vote is largely symbolic as the resolution will not be taken up by the House of Representatives and is not expected to reach the President’s desk. In closed meetings many Republican lawmakers have privately criticized the tariffs, but most are publicly praising Trump’s actions and giving him room to negotiate better trade relations with foreign trading partners.

How Are Other Countries Responding?

Canada has consistently stated it would impose retaliatory measures against the U.S. in response to tariffs. Similarly, European Commission President Ursula von der Leyen put out a statement promising to respond to tariffs but also offering to negotiate with Trump.

On the other hand, Mexico has been far more restrained and is reportedly considering new tariffs against China, an effort likely to designed to negotiate with Trump. Vietnam is planning to send its deputy PM to the U.S. to discuss tariffs, while Taiwan has offered to cut some of its own tariffs and buy more U.S. energy.

There have been media reports suggesting that foreign countries will partner to combat U.S. tariffs. Trump warned the EU and Canada not to work together against tariffs in a Truth Social post last week. Following a joint economic dialogue between China, Japan, and South Korea, Chinese media suggested that the three countries will jointly respond to U.S. tariffs, a claim that has been downplayed by Japan and South Korea.

Other Tariffs Currently in Effect/Proposed:

• On February 1, Trump announced an additional 10% tariff on imports from China. This was later increased to 20% and went into effect on March 4. These tariffs stack on top of existing China tariffs.

• Executive Order

• White House Fact Sheet

• February 10, Trump signed an Executive Order (EO) expanding steel and aluminum tariffs to imports from all countries and raising the aluminum tariffs to 25%, in line with the steel tariffs. Under this EO, businesses will not be able to receive new exclusions or renew existing exclusions that were granted after 2018. These tariffs went into effect on March 12.

• Executive Order

• White House Fact Sheet

• On March 24, President Trump announced he would impose a 25% tariff on all goods from any country that imports Venezuelan oil. The 25% tariff will lapse one year after a country ceases importing Venezuelan oil, with the administration having the option of revoking the tariff sooner. These tariffs went into effect on April 3.

• Executive Order

• White House Fact Sheet

• On March 27, Trump announced he would impose 25% tariffs on imported passenger vehicle and light trucks, effective April 2, and on automobile parts & components, effective May 3. A process will be set up for automobiles imported from Mexico & Canada to certify the percentage of U.S. content, so that the tariff only applies to non-U.S. content.

• Executive Order

• White House Fact Sheet

NAW Webinar on Tariff Policy – April 8

Join NAW’s Government Relations team and industry experts on Tuesday, April 8th from 3:00-4:00 PM ET for an update and in-depth look at the Trump Administration’s latest tariff policies and their potential impact on the wholesale distribution industry.

This members-only webinar will provide key insights into regulatory changes, cost implications, and strategic approaches to mitigate risks and optimize supply chains. Members will also have an opportunity to engage and ask questions to help navigate the dynamic tariff landscape in 2025 and beyond.

To register for next week’s webinar, click below:

Register for the webinar

Trump Set to Impose Significant Tariffs on April 2

President Trump is set to announce a broad set of tariffs including reciprocal tariffs on numerous trading partners and additional tariffs on specific industries and sectors on April 2, which he has termed “Liberation Day”.

There is significant uncertainty of what specifically will be unveiled on April 2, and President Trump and his advisors have offered mixed signals on how far the administration will go on tariffs.

• President Trump said on Sunday that reciprocal tariffs will include all nations, not just those that the U.S. has a significant trade imbalance. He also threatened imposing additional tariffs on the European Union and Canada if they team up against the U.S.

• However, earlier this month, National Economic Council Director Kevin Hassett said that tariffs would target 10 to 15 countries which the U.S. has a trade deficit with and exempt over 100 countries. He also suggested that not all of these countries would necessarily be impacted as the U.S. is already negotiating with some of these trading partners.

• This past weekend, White House Senior Trade Advisor Peter Navarro suggested the administration will go big on tariffs, arguing they will raise $600 billion per year and should be a positive for Americans as they will be used to finance middle class tax cuts.

Prior to the April 2 deadline, federal agencies must submit several dozen reports to the President over topics ranging from imposing global tariffs, addressing U.S. trade deficits, creating an “External Revenue Service” to collect tariff revenue, whether the U.S. should retain existing trade agreements, and how to improve the U.S. industrial and manufacturing base.

Here is the current state of play on Trump’s many tariff proposals:

• On March 24, President Trump announced he would impose a 25% tariff on all goods from any country that imports Venezuelan oil. The 25% tariff will lapse one year after a country ceases importing Venezuelan oil, with the administration having the option of revoking the tariff sooner. The Executive Order can be found here and a White House Fact Sheet can be found here.

• On March 27, Trump announced he would impose 25% tariffs on imported passenger vehicle and light trucks, effective April 2, and on automobile parts & components, effective May 3. The Executive Order can be found here and a White House Fact Sheet can be found here.

• 25% global steel and aluminum tariffs went into effect on March 12, and Trump recently said he has no intention of granting exemptions on these tariffs.

• 25% tariffs on Canada and Mexico have been delayed until April 2.

• Trump has said he will begin imposing retaliatory tariffs on April 2, where tariffs will be imposed on foreign trading partners based on what they impose on the U.S. It is unclear how these will be calculated although they have said they want to include a broad set of metrics calculating the tariffs including non-tariff trade barriers, policies that limit U.S. market access, discriminatory taxes and Value Added Taxes, and policies that distort exchange rates.

• Trump has also suggested he will impose several other tariffs on April 2 including 25% tariffs on the European Union and 25% tariffs on several sectors, including on pharmaceuticals and microchips. It is unclear if there will be exclusions granted on any of these tariffs.

NAW Webinar on Tariff Policy – April 8

Join NAW’s Government Relations team and industry experts on Tuesday, April 8th from 3:00-4:00 PM ET for an update and in-depth look at the Trump Administration’s latest tariff policies and their potential impact on the wholesale distribution industry.

This members-only webinar will provide key insights into regulatory changes, cost implications, and strategic approaches to mitigate risks and optimize supply chains. Members will also have an opportunity to engage and ask questions to help navigate the dynamic tariff landscape in 2025 and beyond.

To register for next week’s webinar, click the button below.

Register for the Webinar

Congress Aims To Finalize Budget Plan Ahead of Easter, Setting up Tax Bill

The U.S. Senate is aiming to move forward on the budget process by taking up and amending the U.S. House’s budget proposal later this week. This would set up Congress to pass a reconciliation bill containing much of Trump’s legislative agenda including tax cuts and tax extension, spending cuts, permitting reform, border security, and raising the debt ceiling.

As of now, lawmakers are awaiting a ruling from the Senate Parliamentarian over whether they are able to utilize a “current policy baseline” which assumes policies in effect today remain in effect, making it easier to extend tax provisions that are set to expire at the end of the year. It is believed the Parliamentarian is likely to allow Senate Republicans to utilize this baseline.

Once they have a ruling, Senators are expected to pass a budget later this week, with the goal of then passing it in the House ahead of the two-week Easter recess starting the week of April 14.

House Speaker Mike Johnson continues to set a goal of passing the reconciliation bill through both chambers by Memorial Day weekend, which is extremely ambitious. Nevertheless, House lawmakers on the tax-writing Ways and Means Committee have had numerous closed-door meetings over the last month ironing out differences over tax policy. Given this, we expect House Republicans to be ready to begin moving their tax bill in May we expect the process to drag into the summer.

NAW Member CEOs Pen Op-eds on Importance of Tax Law Extension

NAW has been working with wholesaler-distributors to educate lawmakers on the importance of pro-business tax policy and highlight how the industry invests in their workforces and local communities. As part of this effort, two CEOs of NAW member companies recently published op-eds in local publications.

On March 22, Jim Derry, CEO of Field Fastener published an op-ed in the Rockford Register Star. Derry discussed his 35 years of running Field Fastener and expanding the business from 12 to 360 team members. He made the case that the 2017 tax cuts helped his business invest by “hiring new team members, increasing wages, provided more generous benefits and career development, and even giving our team members paid time off for volunteering”.

On February 20, Kathryn Poehling Seymour published an op-ed in Cap Times. Serving as the CEO of First Supply, a fifth generation Wisconsin business, Poehling Seymour explained that the 2017 tax cuts allowed “significantly increased investments across our operations, technology, facilities and people to drive long-term growth”, including a new state-of-the-art distribution center that will soon open and create 80 new jobs.

If you are interested in writing a similar op-ed, please reach out to us at ahendrie@naw.org.

SEC Drops Defense of Climate Disclosure Rule

On March 27, the Securities and Exchange Commission (SEC) voted to end its defense of the Biden Administration rule requiring disclosure of climate-related risks and greenhouse gas emissions (GHGs). The rule, adopted by the SEC in March 2024, requires publicly traded wholesaler-distributors to disclose:

• Direct and indirect GHGs;

• “Scope 3” emissions, or those that come from a company’s value chain, including emissions associated with the products and services it sells to and purchases from other companies

Enforcement of the rule has been stayed since April of last year, and the move to no longer defend it in court signals a potential shift in the rule’s future. It is likely the SEC will begin the process to unwind the rule itself in the coming months.

NAW filed an amicus brief in June 2024 opposing the rule as part of the State of Iowa v. SEC federal case that led the Commission to delay implementation indefinitely. In the brief, we explain how both public and privately held wholesaler-distributors would be impacted, as the rule would have had a cascading effect throughout the supply chain.

Trump Administration Warns Against Unlawful DEI-Related Discrimination

On March 19, the U.S. Equal Employment Opportunity Commission (EEOC) and the U.S. Department of Justice (DOJ) released technical assistance documents focused on educating the public about unlawful discrimination related to “diversity, equity, and inclusion” (DEI) in the workplace.

Acting EEOC Chair Andrea Lucas said, “Far too many employers defend certain types of race or sex preferences as good, provided they are motivated by business interests in ‘diversity, equity, or inclusion.’ But no matter an employer’s motive, there is no ‘good,’ or even acceptable, race or sex discrimination.”

On March 24, Andrea Lucas was renominated to serve another term on the Commission.

The EEOC and DOJ released two technical documents on the topic:

• What To Do If You Experience Discrimination Related to DEI at Work
• What You Should Know About DEI-Related Discrimination at Work

NAW Files Amicus Urging Supreme Court to Rein in IRS Overreach

On March 24, NAW filed an amicus brief to the U.S. Supreme Court in Commissioner of the Internal Revenue Service (IRS) v. Zuch. This case concerns whether a taxpayer’s statutory right to contest a proposed IRS levy before it happens becomes moot if the IRS collects the owed amount through other means and abandons the levy.

Jennifer Zuch challenged a levy, claiming $50,000 in tax payments she made with her ex-husband were wrongly applied to his tax debt instead of hers. While she fought the case, the IRS seized her refunds, then dropped the levy and declared the case moot. The Amicus Brief can be found here.

Florida & Wisconsin Kick Off Election Season

Tomorrow’s off-year elections in Florida and Wisconsin aren’t just routine political atmosphere check-ins; they’re pivotal elections that will impact major legislation in this Congress and could help shape the 2026 midterms.

Florida: Special House elections are being held for two congressional districts to replace Republicans Mike Waltz and Matt Gaetz.

• These elections could give Speaker Mike Johnson’s 218-213 GOP House majority vital breathing room on the eve of consequential budget and tax votes, or they could set off alarm klaxons.

• Close elections in traditionally red districts reflect potential voter discomfort with uncertainty on everything from tariffs to “noise” in the news and are a reminder of GOP’s inability to motivate coalitions without Trump on the ballot.

Wisconsin: A change in Wisconsin’s Supreme Court could influence redistricting, a vital outcome when three straight close national House elections make it conceivable that one or two seats could decide a future House majority.

• The national attention and funding are a biproduct of Wisconsin’s swing state status, with both conservatives and progressives feeling this state should be in their camp.

The bottom line: An evening of underperformance for the GOP will test party unity in Washington, D.C. and see party leadership face “every man for himself” dissension in upcoming votes when almost any legislation of consequence will be party line.

• What’s next: Democrats have two vacancies and both those special elections are many months away.

Live in Florida and Wisconsin? Find your local voter resources by visiting NAW’s Election Center.

SEC Nominee Says he Will End the Injection of “Woke Factors” into Investment Decisions

Paul Atkins, a nominee to be a Member of the Securities and Exchange Commission (SEC), testified before the Senate Banking Committee last week. Atkins said that if he was confirmed he would end practices that support those making investment decisions using environmental, social and governance (ESG) metrics.

At the hearing, Atkins said “I want to get politics out of the financial markets, and out of how the SEC interacts with the financial markets.”

NAW will continue to monitor any developments around SEC enforcement.

Canada & Mexico Tariffs Go Into Effect, Further Tariffs Loom

President Trump moved forward with 25% tariffs on Canada and Mexico on March 4 in addition to imposing an additional 10% tariffs on China. In a White House fact sheet, the administration argue that Canada and Mexico have failed to take adequate steps to stop the flow of fentanyl and illegal migration into the U.S.

The de minimis exemption has been temporarily reinstated, meaning imports from Canada and Mexico under $800 will avoid the tariffs. The administration has stated that they do not currently have “adequate systems” in place to collect these duties so it is possible they will remove the exemption in the future. President Trump has also issued “a one-month exemption on any auto coming through USMCA” through April 2 when global reciprocal tariffs are slated to go into effect.

NAW issued a statement on these tariffs arguing that they will lead to cash flow challenges and supply chain issues for distributors, diverting capital away from hiring, wages, training and expansion.

NAW Statement on Tariffs

Some Congressional Republicans have raised concerns with the tariffs, but most have been unwilling to directly criticize Trump this early into the administration. Others have praised Trump for getting tough on foreign adversaries and have argued that some short-term pain is worth the trade-off to enact Trump’s goal of reducing the trade deficit and helping U.S. manufacturing.

How Are Canada and Mexico Responding?

Canadian Prime Minister Justin Trudeau announced 25% tariffs on C$30 billion of US imports immediately and said tariffs on another C$125 billion would take effect in 21 days. Ontario Premier Doug Ford, who has seen increased prominence due to Trudeau’s imminent departure as Prime Minister, has said he will cut off electricity exports to the U.S. in response to the tariffs.

Meanwhile, Mexican President Claudia Sheinbaum said she would announce Mexico’s response on Sunday, which will include retaliatory tariffs on the U.S.

What Are The Prospects of a Deal On Canada & Mexico Tariffs?

President Trump has been known to change course with little warning as seen when he abruptly announced a one-month delay on Mexico and Canada tariffs in February. While it is impossible to predict what the President will do next, it currently appears that he is determined to move forward with imposing a broad range of tariffs on foreign trading partners.

Trump appears to enjoy a good relationship with Mexican President Sheinbaum, and she has taken steps to appease Trump including offering to impose tariffs on China, taking steps to reduce the number of illegal crossings at the U.S.-Mexico border and steps to reduce the flow of fentanyl. While these steps were not enough to avoid tariffs, this strong relationship increases the possibility of a future deal.

On the other hand, Trump and Trudeau do not have a good relationship, which could hinder the prospects of a deal in the future. While this could change depending on who Trudeau’s successor is, the relationship between the U.S. and Canada has significantly deteriorated.

What’s Next on Tariffs?

Global steel & aluminum tariffs of 25% will go into effect on March 12. These tariffs are in addition to existing tariffs, so will stack on top of the 25% Canada and Mexico tariffs.

President Trump’s Day One Executive Order requires his agencies to release reports on April 1 outlining potential steps toward achieving an “America First Trade Policy.” Federal agencies are exploring multiple topics including imposing global tariffs, addressing U.S. trade deficits, creating an “External Revenue Service” to collect tariff revenue, whether the U.S. should retain existing trade agreements, and how to improve the U.S. industrial and manufacturing base.

In recent days, Trump has repeatedly referenced April 2 as a day when more tariffs will go into effect, indicating that he is seeking to move immediately after the release of reports.

Trump has said that 25% tariffs on automobiles and possibly semiconductors and pharmaceuticals will go into effect then and has also suggested 25% tariffs on Europe.

Trump has also said he would begin implementing reciprocal tariffs on April 2. It is believed that Trump will impose these tariffs on a case-by-case basis against other countries to ensure the U.S. is treated equitably with foreign trading partners and to reduce the trade deficit. In addition to tariffs, it appears that Trump wants to take into account a broad set of metrics when considering reciprocal tariffs including non-tariff trade barriers, policies that limit U.S. market access, discriminatory taxes and Value Added Taxes, and policies that distort exchange rates.

Further Resources

United States Trade Representative Jamieson Greer released a document on Monday on President Trump’s 2025 trade policy agenda where he outlines three goals:

The Tax Foundation has an excellent write up on the economic & budgetary impact of all the tariffs implemented and proposed by the administration. This document is continually updated as new tariffs are announced.

Congressional Republicans Remain Divided Over Tax & Budget Bill

House and Senate lawmakers continue to work on passing a reconciliation bill containing President Trump’s legislative priorities including tax, border security, and spending cuts.

The two chambers have spent months debating whether they should try to pass one or two bills this year. Each chamber passed their own versions of budget resolutions last month, the first step in unlocking reconciliation to pass President Trump’s legislative priorities.

On February 25, the House passed their budget resolution which included reconciliation instructions to pass all of Trump’s priorities in one bill and allowed for a maximum of $4.5 trillion in tax cuts and a minimum of $1.5 trillion in spending cuts.

President Trump had indicated he was leaning toward the House approach but had no strong preference, However, at the time, it was not clear if the House was capable of passing their budget. Now that they have, it appears that Congress will be moving forward with the one bill approach.

What’s next: Senators are determining how to proceed and are expected to take up and modify the House budget resolution. However, given other priorities, such as government funding, it is not expected to do so until the week of March 24 at the earliest.

Meanwhile, House Republicans on the Ways and Means Committee will be holding all-day, closed door meetings next Monday, Tuesday and Wednesday to begin making specific decisions on their tax bill.

Dockworkers Approve New Labor Contract

On February 25, nearly 99% of members of the International Longshoremen’s Association (ILA) voted in favor of a new 6-year master contract agreement.

• The extension to the Master Contract will be effective October 1, 2024, through September 30, 2030.

• It is reported that the agreement will allow terminal operators and ocean carriers to introduce limited automation equipment in container handling, linking it to guarantees to protect union jobs.

The ILA stated the new contract includes:

“a record shattering 62 percent wage increase; full protections against automation; Accelerated wage raises for new ILA workers; Full container royalty funds returned to the ILA; Raises in contributions to money purchase plans; A strengthening of the International’s health care plan called MILA; and a resolution of the Vacation and Holiday dilemma, among many other benefits.”

The United States Maritime Alliance (USMX) voted to approve the contract in January. The contract will be signed by both parties on March 11.

NAW Opposes the Introduction of the PRO Act

On March 4, NAW and 70 groups sent a letter to Congress opposing the introduction of the Richard L. Trumka Protecting the Right to Organize (PRO) Act. The bill is scheduled to be introduced by Senator Bernie Sanders (I-VT) and Representative Bobby Scott (D-VA) on March 5.

Why it matters: This bill would limit workers’ right to secret ballot union representation elections, allow government bureaucrats to unilaterally impose contracts on the private sector, trample free speech and debate, jeopardize industrial stability, and limit opportunities for small businesses and entrepreneurs.

What’s Next: NAW will continue to educate Members of Congress on the threats the PRO Act poses to workers, employers and our economy. The bill is not expected to move given Republican control of the House and Senate.

NAW Opposes Senator Hawley’s Faster Labor Contracts Act

On March 4, Senators Hawley (R-MO), Moreno (R-OH), Booker (D-NJ), Peters (D-MI), and Merkley (D-OR) introduced the Faster Labor Contracts Act, one of five bills that is apart of Senator Hawley’s labor policy framework.

Why it matters: The legislation would require employers to finalize negotiations with newly elected unions within a specified timeframe or face “binding interest arbitration of first contracts”. This means that a federal government bureaucrat will dictate exactly what is included in the first contract. This can include wages, benefits, pensions, safety procedures, and every other aspect of workplace policy for a newly organized facility will be imposed by the federal government’s designee.

NAW is opposed to the legislation as it will impose government interference into private sector contracts which will harm workers, employers and the economy. NAW is educating Senate offices of the harm this legislation will cause the industry and urging Senators to oppose this bill.

Treasury Department Scales Back Corporate Transparency Act

On Sunday, March 2, The Treasury Department announced that it would not enforce any penalties or fines against U.S. citizens or reporting companies for noncompliance with the Corporate Transparency Act (CTA). The agency announced it would be issuing proposed rulemaking narrowing the CTA to only apply to foreign reporting companies.

NAW issued a statement praising this announcement as a win for small businesses across the country. However, even though the Treasury Department is not enforcing the law, the CTA remains on the books and litigation is ongoing. NAW continues to file amicus briefs to ongoing litigation in the ongoing constitutional challenges to this law and we will work with Congress to roll back the law permanently.

Congress (Again) Faces Government Funding Deadline

Congress faces a looming government shutdown with funding set to expire midnight on March 14. As of now, House Republicans are pushing a continuing resolution (CR) that funds the government through the end of the 2025 Fiscal Year with no unrelated items, a strategy supported by Trump.

House Democrat leadership has not indicated whether they would support this strategy, however some Democrats have called for government shutdown over the Department of Government Efficiency (DOGE) led by Elon Musk. Given the narrow majority in the House and the 60-vote threshold in the Senate, it is possible that Democrats could block a funding bill if they are unanimous in their opposition.

Lawmakers expect to release their CR over the weekend and begin voting on it next week, which leaves little time to pass a bill before March 14.

Senate Commerce Committee Examines Rise in Cargo Theft

On February 27, the U.S. Senate Commerce Subcommittee on Surface Transportation, Freight, Pipelines, and Safety held a hearing focused on the rise in cargo theft across the country. Specifically, the hearing focused on crimes within the supply chain by organized crime groups such as brokering scams, fraudulent trucking companies, and train robberies.

By the numbers: According to a report from logistics security firm CargoNet, 3,625 cases of cargo theft were reported in 2024 across the U.S. and Canada, a 27% increase over 2023.

To address this trend, Representative David Valadao (R-CA) introduced the Safeguarding Our Supply Chains Act last Congress, bipartisan legislation that would:

• Establish a Supply Chain Crime Coordination Center in the Dept. of Homeland Security’s Innovation Lab to collect and analyze fraud/theft-related data and identify regions with high volumes of organized crime.

• Create a Supply Chain Fraud and Theft Task Force made up of federal, state and local stakeholders and law enforcement to address cargo theft throughout transportation systems an detect, disrupt, and deter organized theft groups.

NAW will continue to monitor federal actions taken to combat cargo theft that may impact the wholesale distribution industry.

If policy on cargo theft prevention is of interest to you and your company, please let us know at GR@NAW.org.

Stanion Wholesale Hosts Tax Champion

Rep. Estes with Stanion leaders CEO Bill Keller, his wife Cindy Keller, Exec. VP Marc Stinson, and Wichita Branch Manager Cameron Reimer

In the opening weeks of a tax debate that will shape the industry for the decade to come, Stanion Wholesale Electric hosted Representative Ron Estes (R-KS) for a tour of their Wichita facility.

• Rep. Estes, a champion of business-friendly tax policies, was updated on how key tax provisions help wholesaler-distributors thrive and best serve the communities where they operate.

Why it matters: By hosting your elected officials, you play a crucial role in showing lawmakers firsthand how legislative decisions impact your business and help gain their support for key policies.

• How does it happen? NAW facilitates the entire process, including invitations and coordinating with the Congressional office to identify a suitable date for everyone’s schedules.

• It’s easy: NAW will provide best practices to guarantee that the visit is productive, fun and time-efficient.

What’s next: Email GR@naw.org a facility, or facilities, you’d be interested hosting and we’ll let you know the information we need to begin the process.

Trump Announces Global Steel & Aluminum Tariffs

On Monday, February 10, President Trump signed an Executive Order (EO) expanding existing steel and aluminum tariffs to all imports. In 2018, Trump announced 25% tariffs on steel and 10% on aluminum but exempted many countries including the European Union, the United Kingdom, Japan, Australia, Canada, and Mexico.

This latest EO applies the 2018 tariffs to all countries and raises the aluminum tariff from 10% to 25%.

• As drafted, the tariffs will apply to all goods entering the U.S. for consumption or withdrawn from warehouse for consumption on or after March 12.

• The administration argues that foreign subsidies and other unfair trade practices have harmed domestic manufacturing, reducing their ability to meet national defense & infrastructure needs.

Businesses will not be able to receive exclusions to these tariffs as the EO removes the ability of the Commerce Secretary to consider any new product exclusions or renew existing ones. Therefore, preexisting exclusions will only remain in force per their agreed upon term. The only exception is for derivative steel or aluminum processed in a foreign country that originates from U.S. manufactured steel or aluminum.

These tariffs would be imposed on top of other tariffs, which could result in a 50% tariff on imports from Canada and Mexico if the 25% tariffs floated on these countries go into effect on March 4. Retaliatory tariffs proposed by Canada and Mexico are also paused until this date, with all three countries committing to entering into negotiations earlier this month in exchange for postponing the tariffs.

Read more:

• White House EO

• White House Fact Sheet

• Holland & Knight Analysis

• Tax Foundation Economic Research

Trump Admin Prepping Reciprocal Tariffs

On Thursday, February 13, the President signed an Executive Order (EO) announcing the “fair and reciprocal plan” to ensure the U.S. is treated equitably with foreign trading partners and to reduce the trade deficit. In determining the extent to which a trade relationship is unbalanced, the EO allows the administration to take into account all tariffs, discriminatory taxes, non-tariff trade barriers, exchange rate distorting policies, or policies that limit U.S. market access or impede fair competition.

What’s Next? The EO directs federal agencies to investigate the economic harm to the U.S. of foreign trade practices, and propose remedies.

Following an April 1 deadline multiple government agencies must submit reports to the President offering recommendations to reform trade and tariff policy.

• We believe the administration could seek to move quickly on imposing some reciprocal tariffs following the April 1 deadline.

• This will likely begin a wave of country by country actions that could drag on throughout the year.

• The EO also directs the Office of Management and Budget to assess all potential fiscal impacts of the plan to the federal government within 180 days.

Read more:

• White House EO

• White House Fact Sheet

Big Picture: On his first day in office, Trump signed an EO announcing the intention to pursue an “America First Trade Policy.” Even as the administration continues threatening tariffs on foreign trading partners, they are setting the groundwork for a broad transformation of U.S. tariff and trade policy through this EO. The EO instructs government agencies to compile reports and offer recommendations covering several areas of tariff/trade policy by April 1. Topics include:

• The causes of the U.S. “large and persistent” annual trade deficits in goods, as well as the economic and national security implications and risks resulting from such deficits.

• The feasibility of establishing and the best methods for designing, building, and implementing an External Revenue Service (ERS) to collect tariffs, duties, and other foreign trade-related revenues.

• Any unfair trade practices by other countries and appropriate actions to remedy such practices under applicable authorities, examples have included the European Union’s (EU) use of the VAT tax.

• A full economic and security review of the United States’ industrial and manufacturing base to assess whether it is necessary to initiate investigations to adjust imports that threaten the national security of the U.S.

• The impact of all trade agreements — including the World Trade Organization Agreement on Government Procurement (Buy American and Hire American) and the Economic and Trade Agreement Between the Government of the United States of America and the Government of the People’s Republic of China.

See also: White House EO on America First Trade Policy

NAW Opposes Senator Hawley’s Labor Framework

Recently, Senator Josh Hawley (R-MO) announced a pro-union “legislative framework” and asked his colleagues for support.

• While the Senator has not released any specific legislative language, the provisions described mirror provisions of the Protecting the Right to Organize (PRO) Act introduced by Sen. Bernie Sanders (D-VT) and the Warehouse Worker Protection Act introduced by Sens. Sanders, Edward Markey (D-MA) and Elizabeth Warren (D-MA).

• Both bills and the Hawley framework are strongly opposed by NAW and threaten the rights of workers and the employers, by changing the rules for how and when union organization elections take place, allowing for ambush elections and backdoor organizing, and preventing opportunities for employers to meet with their employees.

NAW and the Coalition for a Democratic Workplace led a letter signed by 43 organizations asking senators to oppose the Hawley framework.

• In addition, the Coalition for Workplace Safety sent a similar letter in opposition.

• NAW has been busy meeting with Senate offices on the topic, especially focused on some of the newly elected senators.

Congress Moves Forward With Competing Budget Reconciliation Plans

Lawmakers in the U.S. House and Senate continue to debate the best approach to achieving President Trump’s legislative priorities.

• The House prefers passing one massive reconciliation bill with all of their priorities while the Senate prefers splitting the bills into two – one early reconciliation bill containing border security, defense spending, and permitting reform and a second reconciliation bill containing tax cuts and spending reduction.

The Senate budget resolution passed the Senate Budget Committee on Wednesday night and is expected to take up their budget resolution on the floor later this week.

• The resolution grants congressional committees with jurisdiction over immigration, border and defense with the budget authority to spend a combined $450 billion.

• The resolution also instructs committees with jurisdiction over permitting, education, and agriculture to find savings but does not allow for any tax reduction.

The House budget resolution which passed the House Budget Committee on Thursday night and would allow a maximum of $4.5 trillion in tax cuts and a minimum of $1.5 trillion in spending reduction.

• However, before final passage of the resolution, conservatives on the Committee brokered a deal reducing the tax cuts dollar for dollar (up to $4 trillion) for every dollar of spending reduction below $2 trillion.

• The resolution also raises the debt ceiling, which will be breached sometime over the summer, for two years.

What’s Next? Senate leadership plans to hold a vote on their budget resolution this week. As part of Senate rules, lawmakers must go through an extensive floor process which allows up to 50 hours of debate on the Senate floor. A process know as “vote-a-rama”

Meanwhile, House leadership intends to hold a vote on their budget resolution the week of February 24 when they return from their President’s Day recess.

• With only a two-seat majority, Speaker Johnson will have a difficult time getting this resolution through the House and balancing the various positions of his members.

Neither chamber can begin working on their reconciliation bill until the same budget resolution passes both chambers, so eventually the House and Senate will have to come to an agreement on their one-bill versus two-bill. So far, President Trump has declined to take a firm position, and media reporting has suggested that his own aides remain split on the best path forward.

What Does This Mean for Tax Policy?The timeline on passing a tax bill extending or making permanent the 2017 individual and small business/S-Corp tax cuts remain unclear given the uncertainty surrounding the budget process.

However, assuming the $4.5 trillion topline tax cut numbers are adopted, lawmakers would have little margin to enact all of the tax priorities of the President and Congress. A January 10 analysis by the Treasury Department found that extending all of these tax cuts would cost $4.2 trillion, while a May 2024 estimate by the Congressional Budget Office found it would cost $4.6 trillion.

The high cost of extension would crowd out other tax priorities such as lifting the cap on state and local taxes (SALT) or restoring full expensing of Research and Development. This would put pressure on sunsetting tax cuts within the 10-year window to lower their cost or to include offsetting tax increases to get below the $4.5 trillion figure.

r wholesaler-distributors, this could mean Congress has to dial back the number of years that the 199A pass-through deduction is extended or put tax offsets like the LIFO (last-in, first-out) inventory system on the table.

Some tax writers in Congress continue to push for lawmakers to use a “current policy” baseline in passing the tax cuts, which would make extending the Trump tax cuts cost zero. However, given the tight margins in Congress and the concern of many members about the ballooning deficit, we believe this is unlikely.

NAW Files Amicus Brief on FTC Non-compete Litigation

While the Federal Trade Commission’s (FTC) proposed ban on non-compete clauseswas overturned by a federal court last year, the Commission continues to challenge the case, Ryan LLC v. FTC in the U.S. Fifth Circuit Court of Appeals. NAW, together with nine other trade associations, filed an amicus brief urging the court to side with the plaintiff and maintain the lower court ban on the FTC’s rule.

While we are optimistic that the appeals courts will uphold the Northern District of Texas ruling blocking the ban on non-competes, the Trump Administration has not paused existing litigation from the previous administration so it remains necessary to engage. At this stage, we have no indication that the Trump Administration would pursue a similar ban on non-competes so are hopeful this case will be dropped soon.

See also: NAW Amicus in support of Ryan v. LLC before Northern District of Texas

Trump Announces Tariffs on Canada, Mexico, China

On Saturday, Trump signed executive orders (EO) implementing 25% tariffs on imports from Canada and Mexico, and an additional 10% tariff on imports from China. The only announced exemption was lower, 10% tariffs on energy resources from Canada. The EOs also end the de minimis trade exemption which exempts packages worth less than $800 from tariffs.

Trump imposed tariffs under the International Emergency Economic Powers Act, a law which gives the president broad authority to regulate international commerce. He justified these tariffs by arguing Canada and Mexico failed to stop the flow of fentanyl and undocumented immigrants into the U.S.

Today, he walked back the tariffs on Mexico announcing a one-month delay of tariffs in exchange for the deployment of 10,000 Mexican soldiers at the Mexico-U.S. border and a commitment from both sides to continue negotiating. At this stage, it is unclear what specifically the two leaders will be negotiating.

Canada has announced retaliatory tariffs of 25% on 1,256 U.S. exports including on food, agriculture, textiles and furniture. Energy and technology were not included in this list, with a second list expected to be published in the coming days.

The Chinese Commerce Ministry has said they will file a lawsuit with the World Trade Organization and that they will “take necessary countermeasures to firmly safeguard its rights and interests.”

As the president has unilateral authority to impose or withdraw tariffs, it is difficult to predict what will happen in the coming days. Trump frequently uses tariffs as a negotiating tactic to extract other concessions from foreign countries and will continue to do so. On the other hand, businesses should expect tariffs to be imposed under this administration given Trump and his allies frequently talk about the trade deficit and the desire to increase tariffs on foreign imports in exchange for cutting taxes on Americans.

NAW has communicated our opposition to new tariffs directly to the White House and will continue to do so. We specifically discussed the disruptive and inflationary impact these tariffs would have on our supply chains and American consumers. NAW will continue to work behind the scenes to defend our industry and the free market system.

President Trump Fires NLRB Board Member and EEOC Commissioners

National Labor Relations Board:President Trump fired Board Member Gwynne Wilcox and general counsel of the Board Jennifer Abruzzo. The removal of Member Wilcox is unprecedented, and she has stated she will challenge the lawfulness of her removal under the statutory malfeasance provision. Her term was scheduled to expire in August 2028.

This leaves the Board with two members: Chairman Marvin Kaplan and David Prouty.

With only two members, the Board lacks a quorum to do business until successor members are confirmed by the Senate.

Equal Employment Opportunity Commission:President Trump fired two of the Commission’s Democrat members Charlotte Burrows and Jocelyn Samuels as well as the general counsel Karla Gilbride. Burrows and Samuels have stated they are looking at their legal options to challenge their termination.

This leaves the Commission with two members: Acting Chair Andrea Lucas and Commissioner Kolpana Kotagal.

The Commission needs three members to have a quorum and therefore can’t move forward with any significant policy changes until new members are confirmed by the Senate. Routine litigation can still be commenced without Commission approval, but it limits the agency’s ability to start high-profile litigation.

House Republicans Prepping Vote on Budget Resolution as First Step of Extending Tax Rates

House Republican leadership aim to have the Budget Committee markup a budget resolution this week, the first step in passing a reconciliation bill containing tax and other Trump priorities such as border security, deficit reduction and permitting reform.

Speaker Johnson wants the budget resolution passed by the House and Senate by the end of the month and last week convened House lawmakers in Florida to discuss this plan.

• Under reconciliation, lawmakers must pass a budget before beginning to craft tax legislation.

• More information on reconciliation can be found here.

What’s next: It’s unclear if House Republicans will be able to proceed with the Budget resolution due to internal disagreements. Conservatives want more spending cuts with some lawmakers asking for trillions of dollars of spending cuts in exchange for extending the current tax rates.

In addition, tax writers proposed passing a budget under a “current policy baseline” which would assume currently enacted but soon expiring tax rates do not need to be offset. Some deficit hawks oppose this plan, arguing that extending current tax rates should be offset. While House Republicans have said they want to pass a tax package by April or May, we expect policy disagreements to delay this goal given the tight margins in both the House and Senate. Other outstanding policy disagreements include how to address the cap on state and local taxes (SALT), whether to make expiring tax rates permanent or temporarily extend them, what specific spending and tax offsets to include, and which of President Trump’s tax campaign promises to include.

One bill or two?

While House Republicans intend to pass one big bill with all of President Trump’s priorities, Senate Republicans continue to call for doing two bills – one early in 2025 containing border security and permitting reform and one later in the year containing tax and spending. If House Republicans continue to encounter delays and disagreements over the budget resolution, pressure to pivot to this two bill strategy will increase.

NAW Urges OSHA to Withdraw Heat Illness Prevention Proposal

On January 14, in response to the Occupational Safety and Health Administration’s (OSHA) proposed rulemaking, Heat Injury and Illness Prevention in Outdoor and Indoor Work Settings, NAW submitted comments urging the agency to withdraw the proposal.

NAW said we share OSHA’s mission to protect workers, however, the proposed rule exceeds OSHA’s legal authority, is overly broad, and threatens to undermine the operational needs of NAW members that are so vital to the economy. The proposal’s “one-size-fits-all” approach is unworkable.

Read NAW’s comments in response to the proposal:

• NAW/NRF’s Comments

• Coalition for Workplace Safety’s Comments

What’s Next: OSHA will review the comments submitted by the public in response to the Biden Administration’s heat proposal and determine next steps.

Bipartisan Group of Senators Reintroduce Supply Chain Resiliency Legislation

On January 27, a bipartisan group of U.S. Senators reintroduced the Promoting Resilience in Supply Chains Act (S. 257) to task the U.S. Department of Commerce to strengthen American supply chains for critical industries and emerging technologies.

Specifically, the bill would:

• Enact further responsibilities for the U.S. Department of Commerce’s International Trade Administration (ITA) to promote resiliency and stability in U.S. supply chains

• Create a new government-wide “Supply Chain Resilience Working Group to prepare for and respond to supply chain shocks by mapping, monitoring and modeling U.S. supply chains for critical industries and emerging technologies in consultation with the private sector.

Reintroduced by Senators Maria Cantwell (D-WA) and Marsha Blackburn (R-TN), the bill has also been co-sponsored this Congress by newly-elected Senator Lisa Blunt Rochester (D-DE) who championed the legislation as a member of House of Representatives last Congress. The Promoting Resilience in Supply Chains Act was passed in the House 390-19 in May 2024, but saw no action in the U.S. Senate.

The Senate Committee on Commerce, Science and Transportation plans to consider the legislation in Executive Session this Tuesday, February 4. Below is a statement of support that NAW released on the bill:

NAW Statement:

“The National Association of Wholesaler-Distributors (NAW) thanks Senators Cantwell, Blackburn and Blunt Rochester for reintroducing the Promoting Resilient Supply Chains Act. The wholesale distribution industry plays a critical role in the U.S. supply chain and ensuring its strength and resiliency is pivotal to the success of the United States economy. This legislation builds a framework for public-private collaboration aimed directly at protecting and promoting our nation’s critical supply chains. NAW looks forward to working with the senators to pass the bill this year.”

Administration Update

The Trump Administration, alongside the U.S. Senate, have begun working through the “advice and consent” process of the Presidential Cabinet at record pace. As of the morning of Monday, February 3, six of President Trump’s cabinet nominees have been confirmed by the Senate. Below is an overview of this process thus far, and a preview of expected confirmation hearings/votes in the coming weeks.

Confirmed Cabinet Officials:

Secretary of State:Former Senator Marco Rubio (R-FL) was confirmed 99-0 on Inauguration Day (January 20)

Secretary of Defense:Cable television host Pete Hegseth was confirmed 51-50 (with the tie-breaking vote of Vice President Vance) on January 24

Secretary of Homeland Security:Former South Dakota Governor Kristi Noem was confirmed 59-34 on January 25

Secretary of the Treasury:Businessman Scott Bessent was confirmed 68-29 on January 27

Secretary of Transportation:Former U.S. Representative Sean Duffy (R-WI) was confirmed 77-22 on January 28

Secretary of the Interior:Former North Dakota Governor Doug Burgum was confirmed 79-18 on January 30

To Be Considered During the Week of February 3:

Full Senate Confirmation Votes:

• Energy executive Chris Wright as Secretary of Energy

• Former Florida Attorney General Pam Bondi for U.S. Attorney General

• Former U.S. Representative Doug Collins (R-GA) for Secretary of Veterans’ Affairs

• Businessman and former professional football player Scott Turner for Secretary of Housing and Urban Development

• Russell Vought as Office and Management and Budget Director

Committee of Jurisdiction Votes:

• Former Rep. Tulsi Gabbard (D-HI) for Director of National Intelligence

• Robert Kennedy Jr. for Secretary of Health and Human Services

• Kash Patel for Director of the FBI

• Brooke Rollins for Secretary of Agriculture

Another Win for Wholesaler-Distributors at the Supreme Court!

Today, the U.S. Supreme Court ruled unanimously in EMD Sales, Inc. v. Carrera in favor of wholesale distribution company E.M.D. Sales, Inc and its interpretation of the Fair Labor Standards Act (FLSA). In its decision, the Court reversed the lower courts’ decisions and found that employers must only meet a ‘preponderance of the evidence’ standard when demonstrating that an outside sales employee is exempt from federal minimum wage and overtime requirements. A converse ruling would have also made it difficult for wholesaler-distributors to prove exemptions under the FLSA.

Background

Heard by the Court in November 2024, this case involved three salespeople for E.M.D. Sales, a food product distribution company in Washington D.C., who sued the organization for failing to pay overtime when they worked more than 40 hours per week. E.M.D. argued that the employees qualified for the ‘outside salesman’ FLSA exemption. The district court previously held that E.M.D. failed to prove the exemption applied by “clear and convincing evidence,” and the 4th Circuit followed its precedent and affirmed.

NAW’s Position

Ahead of oral arguments, NAW’s Legal Policy Center (LPC) filed an amicus brief, joined by the International Foodservice Distributors Association (IFDA), urging the Court to adopt the “preponderance of the evidence” standard, which aligns with the operational realities of the industry while supporting fair labor practices. The brief provided significant background to the Court on who outside salespeople are, why they are important to businesses, and how tracking their hours for overtime purposes is extremely difficult.

Learn More

Read the U.S. Supreme Court’s full 9-0 opinion below:
SCOTUS Decision

Questions? Please email NAW’s Director of Litigation and Legal Policy Karen Harned or V.P. for G.R. email me Lauren Williams.

NAW Statement on Legal Victory

NAW’s Chief Government Relations Officer, Brian Wild, issued the following statement:

“The Supreme Court’s ruling today was right on the law and policy when it comes to the standard of proof employers must meet when defending exemptions to the Fair Labor Standards Act (FLSA). On the law, the Court correctly held that the higher clear and convincing standard is the exception, not the rule. Barring exceptional circumstances, the heightened standard should only apply when Congress or the Constitution requires it. As a matter of policy, the FLSA’s exemptions were carefully designed to protect employees, while ensuring employers are able to effectively and efficiently run their businesses and serve their customers.”

ILA and USMX Reach New Tentative Master Contract Agreement

On January 8, the International Longshoremen’s Association (ILA) and United States Maritime Alliance (USMX) announced they reached a tentative agreement on all items for a new six-year Master Contract. The ILA and USMX will continue to operate under the current contract until the new contract is ratified, averting any work stoppage on January 15.

What’s next: NAW will continue to monitor the situation and update members on any developments.

ILA and USMX Joint Statement:

“This agreement protects current ILA jobs and establishes a framework for implementing technologies that will create more jobs while modernizing East and Gulf coast ports – making them safer and more efficient, and creating the capacity they need to keep our supply chains strong.”

“This is a win-win agreement that creates ILA jobs, supports American consumers and businesses, and keeps the American economy the key hub of the global marketplace.”

Corporate Transparency Act Update

Litigation over the constitutionality of the Corporate Transparency Act (CTA) remains ongoing. On Friday, NAW filed an amicus brief with the U.S. Supreme Court urging the Court not to lift the injunction blocking enforcement of the CTA. The injunction was issued by the U.S. District Court for the Eastern District of Texas in the case Texas Top Cop Shop, Inc., et al. v. Garland, et al.

The federal government appealed this ruling in December, and it has already been overturned and reinstated once.

We expect the Supreme Court to rule on this challenge as early as this week.

In addition to the injunction on CTA enforcement, the underlying case, which found the CTA unconstitutional, is also being appealed by the government, with oral arguments expected March 25.

In addition, we are expecting the Eleventh Circuit Court of Appeals to issue a ruling on another case filed in the Northern District of Alabama that found the CTA unconstitutional.

Meanwhile, in Congress lawmakers are preparing to re-introduce legislation repealing the CTA. Senator Tommy Tuberville (R-AL) and Representative Warren Davidson (R-OH) will reintroduce their legislation, which NAW supported last Congress.

Trade/Tariff Update

In recent days, media reports have suggested President Trump could impose tariffs through a national emergency declaration after taking office. This would allow him to carry through on his vow to impose global tariffs of 10 or 20 percent on all imports across the board.

Any action would likely occur through the International Emergency Economic Powers Act (IEEPA) .

The IEEPA gives the President broad authority to regulate economic activity through a variety of means including blocking international financial transactions, seizing U.S.-based assets held by foreign nationals, and restricting exports.

While the law has never been used to impose tariffs, President Trump did threaten tariffs on Mexico in 2019 citing the IEEPA; however, he did not ultimately follow through.

President Nixon used the Trading with the Enemy Act (TWEA), a predecessor law of IEEPA, to impose tariffs.

Another news report suggested that Trump would only apply global tariffs to “critical” imports, such as those related to national defense, healthcare, and energy; however, this was later refuted by Trump on social media.

NAW opposes tariffs as direct taxes on the supply chain that raise costs and harm businesses and consumers. While there are cases where tariffs are justified for national security purposes, they should be a last resort.

NAW will work to educate lawmakers and federal agencies about the damage tariffs cause to the wholesale distribution industry. In addition, NAW will work through the regulatory process to lessen the impact of tariffs imposed on the supply chain.

Tax Update

Lawmakers continue to debate the timing and process of passing a tax bill in 2025.

Last week, President Trump appeared to back House Republicans and throw his support behind doing one comprehensive bill that would include tax, border security, permitting reform and other priorities.

However, several days later, Trump told Senators that while he preferred doing one bill, he was also open to their preference of doing immigration/energy first then tackling tax later in the year.

Over the weekend, President Trump hosted several groups of lawmakers including members of the conservative House Freedom Caucus to discuss their priorities and a group of Republicans from blue states to discuss the state and local tax deduction.

Regardless, lawmakers are gearing up for the tax fight. The Ways and Means Committee is holding its first hearing of 2025 on Tuesday, January 14 entitled “ The Need to Immediately Make Permanent the Trump Tax Cuts for Working Families and Small Businesses.”

NAW submitted comments to the hearing urging lawmakers to make the 199A deduction for S-corps and other pass-throughs permanent, to preserve the 21 percent corporate rate, and to retain the LIFO deduction in law.

Go deeper: The letter can be found here.

Lawmakers are also preparing to reintroduce key tax legislation. Senator Steve Daines (R-MT) and Representative Lloyd Smucker (R-PA) will reintroduce the Main Street Tax Certainty Act on January 23, legislation which makes the 199A deduction permanent.

The legislation is a key priority of NAW and last Congress had the support of 195 House members and 35 Senators, and we expect a similar strong showing this year.

NAW Calls on the ILA and USMX to Return to Port Labor Negotiations

On December 6, NAW and 266 trade associations sent a letter to the International Longshoreman’s Association (ILA) and the United States Maritime Alliance (USMX) urging them to return to the bargaining table ahead of the January 15 port labor contract expiration.

The letter states that it is critical that our ports and terminals have the ability to modernize their systems and processes in order to remain globally competitive and be able to handle the continuing rise of trade volumes, both imports and exports, through our ports.

Why it matters: On November 12, the two parties returned to the bargaining table, but the ILA walked away on November 13over concerns with automation at the ports. If a new contract is not agreed upon ahead of the January 15 expiration, ILA may go back on strike.

What ILA is saying: The ILA recently posted about their fight against automation, stating they have concerns with USMX’s push to expand the use of semi-automated rail-mounted gantry cranes (RMGs).

What USMX is saying: “Modernization and investment in new technology are core priorities required to successfully bargain a new Master Contract with the ILA – they are essential to building a sustainable and greener future for the U.S maritime industry.”

DOL Appeals Federal Court Decision that Struck Down Overtime Rule

The Department of Labor (DOL) has appealed the U.S. district judge’s recent decision which struck down the department’s regulation increasing the salary threshold for the “white collar” overtime exemption under the Fair Labor Standards Act (FLSA). DOL has appealed the decision to the Fifth Circuit Court of Appeals.

• NAW is monitoring to see if the agency will seek to expediate the appeal, if they do, we will oppose that effort.
• Moreover, with the change of administration, the new leadership at the DOL could choose to withdraw its appeal of the rule.

Why it matters: The recent legal victory comes as a result of a lawsuit brought by NAW and a coalition of trade associations who argued DOL exceeded its authority under the FLSA, and the rule is arbitrary and capricious under the Administrative Procedure Act.

What this means: The overtime minimum salary threshold is set back to $35,568, and the minimum salary threshold for highly compensated employees to $107,432. Employers should be aware, some states have salary thresholds that exceed the FLSA threshold, including Alaska, California, Colorado, Maine, New York, and Washington.

NAW Submit Comments with NAED on Data Center Growth

On November 4, NAW submitted joint comments to the (NTIA) in collaboration with our partners at the https://www.naed.org/ (NAED) on the role of the wholesale distribution industry in the growth of data centers.

The comments focused on the following three priorities for companies in electrical distribution and other relevant sectors to continue supporting data center growth:

1. Addressing existing permitting challenges at the federal, state and local level to overcome existing regulatory bottlenecks and meet increasing domestic demand
2. Classifying wholesaler-distributors as “critical industries” and enhancing public-private partnerships
3. Expanding access to technical, non-traditional and apprenticeship programs in order to recruit and retain the talent necessary to build this infrastructure

To access the full comments, click the button below:

NAW-NAED Comments

Lawmakers Debate Timing and Contents of Tax Legislation

Timing: Senate Majority Leader John Thune (R-SD) has floated doing a reconciliation bill in the first 30 days of the Trump administration that includes border security and permitting reform and leaving tax until later in the year. House Ways and Means Chairman Jason Smith (R-MO) opposes this plan, arguing that they should do tax in the first major bill given the complexities in passing a bill and the benefits to small businesses and families from passing tax cuts.

Deficits: Lawmakers are also debating the size of the bill and how much the bill should increase the deficit. Senate Finance Chairman Mike Crapo (R-ID) has argued that since the Trump Tax Cuts are current policy, they should not have to be fully offset by other tax increases or spending cuts, while House Budget Chair Jodey Arrington (R-TX) has argued the bill should be fully offset.

Big Picture: Lawmakers will continue to disagree over specifies of the tax bill over the next few months even as they all agree on the need for a major tax package that helps small businesses and families.

Even so, the core of the tax bill is already set. Lawmakers broadly agree on the need to extend the 2017 Trump Tax Cuts including the 20% deduction for S-corporations and small businesses. Lawmakers will also likely include many of the promises Trump made on the campaign trail such as ending taxes on tips, overtime and social security benefits.

Trump Economic Nominees: Scott Bessent, Trump’s nominee to run the Treasury Department is little known in D.C. policy circles and follows the trend of Trump picking someone from Wall Street to work on economic policy.

On the other hand, Kevin Hassett is a long-time policy wonk in D.C. who worked at Trump’s Council of Economic Advisors in the first administration & has had stints at the American Enterprise Institute. Expect Hassett to largely espouse long held Republican views on taxes and economic policies.

Trade/Tariff Update

Since our last update, Trump threatened tariffs of 25% on imports from Canada and Mexico if they did not secure the border. However, like in his first term, it is unclear whether this is a real threat or a negotiating tactic. Trump has already met with Canadian Prime Minister Justin Trudeau and there appears to be efforts to come to a deal between the two countries to stop the tariffs from going into effect.

In his first term, Trump routinely threatened to impose tariffs, yet often backed off after receiving concessions from other countries or businesses. We expect this to continue in his second term.

Trump has selected Jamieson Greer for United States Trade Representative and Howard Lutnick for Commerce Secretary, and both are expected to skew closely to the incoming President on trade. It is expected that any new tariffs will also include a process for receiving exclusions for products that are deemed to be important for economic or national security purposes.

NAW will be surveying members in January to gather more information about how tariffs may impact your business.

DOJ Appeals Injunction Striking Down Corporate Transparency Act

As we reported last week, a judge in the Eastern District of Texas issued a nationwide injunction blocking enforcement of the Corporate Transparency Act. This ruling comes less than a month before the CTA filing deadline which would have required every business entity with fewer than 20 employees or $5 million in revenues to file a form documenting their beneficial owners with the Financial Crimes Enforcement Network (FinCEN).

As expected, the Department of Justice filed an appeal to lift the ruling on Thursday December 5th at the 5th Circuit Court of Appeals. As of now, it is not clear when this appeal will be heard, which could create confusion for businesses as the filing deadline under the CTA statute is January 1, 2025.

What’s Next? Given this uncertainty, there is an effort on Capitol Hill to delay the filing deadline by one year, with Punchbowl reporting on Friday that several sources said that the provision was considered being added to the broader Defense funding bill that will be passed before the end of the year.

Trump SEC Pick Opposes Climate Disclosure Rule

Paul Atkins, Trump’s pick to lead the Securities and Exchange Commission has a long record of opposition to the Climate Disclosure Rule. If confirmed, it is expected he would prioritize repealing the rule.

The climate disclosure rule was finalized last March but paused in April following several lawsuits. The rule requires publicly traded companies to disclose direct and indirect greenhouse gas emissions.

The rule also initially proposed the disclosure of “Scope 3” emissions, which are those that come from across a company’s value chain, including emissions associated with the products and services it sells to and purchases from other companies. This would have impacted privately held companies including every wholesaler-distributor but was dropped from the final rule.

NAW Urges Senate to Reject NLRB Chair McFerran Nomination

On December 3, NAW and 52 organizations sent a letter urging members of the Senate to reject the nomination of Lauren McFerran to serve another term as Chair of the National Labor Relations Board (NLRB).

As discussed previously, during McFerran’s tenure on the Board she has pushed an extreme policy agenda, which has overturned decades of precedent and been invalidated and even condemned by the Supreme Court and other federal courts.

Additionally, the NLRB’s own Office of the Inspector General and federal courts have identified her mismanagement and malfeasance of the Board.

On Monday, Majority Leader Schumer filed cloture on Lauren McFerran’s nomination to serve another term on the NLRB. The vote is set for Wednesday. NAW continues to urge Senators to oppose the nomination.

Update on Debt Limit

Congress and the White House continue negotiating over a deal to raise the debt ceiling ahead of the June 1 deadline.

The situation is extremely fluid and changes daily, sometimes hourly. This is not unusual for debt ceiling negotiations – they are inherently chaotic with both sides posturing and taking shots at each other through the media before eventually coming to an agreement late in the process.

Speaker Kevin McCarthy (R-CA) and President Joe Biden are meeting regularly, while their designees – Representatives Patrick McHenry (R-NC) and Garret Graves (R-LA) and Counselor to the President Steve Richetti and Budget Director Shalanda Young – are also meeting daily to negotiate. While progress is being made, a deal remains far away.

At this stage, Republican are pushing for a spending cut next year, long-term spending reduction, work requirements, and permitting reform.

In recent days, Democrats appear to have moved off their position of demanding a “clean” debt ceiling extension with no additional provisions and are believed to have floated some spending reductions; however, they remain far apart from Republican proposals. The White House appears open to freezing – but not reducing – spending next year, and they have proposed modest, not substantial long-term spending reduction. Their progressive base opposes work requirements or permitting reform and it is unclear whether either proposal will make it into a final agreement.

The Administration also floated some progressive proposals including tax hikes and drug pricing reform, but these were immediately rejected.

While June 1 is the current deadline, there is significant uncertainty over the exact date that the debt ceiling will be breached. Treasury Secretary Janet Yellen recently stated it is “highly likely” that the debt ceiling will be breached “as soon as June 1,” leaving some uncertainty in her prediction.

Others disagree with that date. For instance, Goldman Sachs’ chief political economist predicted the debt ceiling would be hit on June 8, while some have noted that quarterly tax payments are due June 15, which would give the federal government significant resources to make it through July and part of August.

The uncertainty exists in part because the statutory borrowing cap was hit in January and the Treasury Department has been using “extraordinary measures” to temporarily delay the deadline and continue making payments on debt and other outlays.

In the months following, Congressional Republicans and the White House met just once and instead took shots at each other through the media. The dynamic only changed after House Republicans, somewhat unexpectedly, united to pass a bill last month to raise the debt ceiling and reduce government spending.

This legislation raised the debt ceiling through either March 31, 2024, or the accumulation of $1.5 trillion in new debt, whichever comes first. In exchange, the bill establishes a cap on discretionary spending at Fiscal Year 2022 levels and limits spending growth to 1 percent per year through Fiscal Year 2033.

The proposal also contains a number of Republican priorities including rescinding unobligated COVID-19 federal spending; blocking President Biden’s proposal to forgive up to $20,000 in student loan debt; repealing green energy tax credits and $80 billion in IRS funding passed by Democrats last year; reforming welfare programs like SNAP and TANF; reforming the permitting process; and increasing domestic energy production.

It appears Democrats believed that Republicans would not be able to unite behind one proposal and were caught flat footed. To date, the Senate has not proposed any debt ceiling agreement and the White House has not publicly released any proposal to raise the debt ceiling besides calling for a “clean” extension, so the House Republican legislation remains the only debt ceiling proposal that has been released.

Progressive lawmakers have warned that Biden could see a backlash from his left wing base if he agrees to Republican demands while more centrist Democrats have complained that the White House has not seriously pushed a deal of revenue raisers in exchange for spending reductions in negotiations.

Progressives have called on President Biden to invoke the 14th Amendment to declare the debt limit unconstitutional, however this is highly unlikely to happen. It has never been done before and Secretary Yellen declared it “legally questionable” and said that it could create a Constitutional crisis.

While both sides remain far apart, it is possible a deal could come together quickly ahead of the June 1 deadline.

The House has been in session this week and is out next week, while the Senate has been out of session this week and is scheduled to be back in session next week. However, lawmakers in both chambers have been given notice that they may have to come back to vote at any time including weekends with 24 hours’ notice.

House Republicans intend to adhere to their rule requiring a bill to be out for 72 hours before they hold a vote so they could come back earlier than 24 hours before a vote.

While we do not know the final product, it is most likely that the pathway toward an eventual deal being passed by Congress is through support from more moderate or mainstream members of both parties and opposition from conservatives and progressives.

Update on Labor Issues

Nomination of Julie Su to be Secretary of Labor: The nomination of current Deputy Secretary of Labor (DOL) Julie Su to serve as Secretary of Labor has stalled in the U.S. Senate, with a party-line vote advancing her out of the Health, Education, Labor, and Pensions (HELP) Committee last month doing little to give her nomination momentum.

Su, whose background as Secretary for the California Labor and Workforce Development Agency helped earn her nomination to the #2 post at DOL in 2021, has seen her nomination wither under further scrutiny of that same record. Business groups, including NAW, have broadly opposed her ascension to the top spot for reasons including her mismanagement of California unemployment claims; her support of the radically unpopular AB5; and the massive regulatory burdens faced by her state’s job creators during her time as labor commissioner. You can learn more about NAW’s opposition by clicking here.

NAW has continued working with likeminded business groups to oppose this nomination, and it appears opposition from the business community has had some impact, as Senate Majority Leader Chuck Schumer, a month after her committee passage, has yet to schedule a vote on Su’s nomination. At this time, there is thought that in-cycle Senators Joe Manchin (D-WV), Kyrsten Sinema (I-AZ), and Jon Tester (D-MT) could vote against the nomination on the floor. Even with President Biden’s White House doubling down on the nomination, Su’s path remains rocky.

FTC Non-competes Update: Citing unnamed sources, a recent Bloomberg Law article stated that the Federal Trade Commission will likely not vote on a final version of its proposal to ban non-competes until next year. As the article notes, the FTC is expected to follow the normal process for rulemaking and will consider what, if any, changes to make to the final rule after reviewing the 27,000 comments filed on the draft rule.

As a reminder, the FTC issued a notice of proposed rulemaking (NPRM) to ban non-compete clauses in January, opening a time window for public comments. The comment period for the NPRM ended in April and NAW submitted comments on the rule which can be found here. NAW also signed onto a coalition comment letter led by the Chamber of Commerce on the NPRM.

We will continue updating you as the issue develops.

Update on “White Collar Exemption” Overtime Rule: A new rule from the Wage and Hour Division (WHD) changing the “white collar exemption” from the payment of overtime has been anticipated since the beginning of the Biden Administration. We most recently heard that a new rule might be released this month, but that is increasingly unlikely. NAW and allied organizations have urged DOL to abandon this rulemaking, including organizing broad participation in a WHD “listening session” more than a year ago in which NAW and a significant number of our member associations participated.

It is possible that the rule has been delayed because DOL does not have a Senate-confirmed WHD Administrator. President Biden’s first nominee, David Weil, was the architect of the Obama-era overtime rule which was successfully challenged in court in a case in which NAW was a plaintiff; because of that record business opposition to his nomination was broad and deep. The nomination languished in the Senate for almost a year until three moderate Democrat Senators joined Republicans in opposing Weil and the nomination was withdrawn. The President subsequently nominated WHD Principal Deputy Administrator Jessica Looman to the post, but her confirmation has not yet been confirmed by the Senate

We are informed that WHD still intends to promulgate a new rule, despite the intense business opposition. The opposition will be reinforced this week in a letter to the Department, signed by numerous trade associations, which NAW helped organize. We will keep you updated on any new information as it becomes available.

Legislation Addressing Truck Driver Shortage Introduced: Last week, Representatives Rick Crawford (R-AR) and Henry Cuellar (D-TX) introduced H.R. 3408, the DRIVE Safe Integrity Act. This legislation looks to provide safe avenues for 18- through 20-year-olds to begin careers in interstate trucking. Currently, these young career starters are permitted in 49 states to use commercial trucking licenses but are blocked by federal rules from participating in interstate commerce, meaning a 20-year-old can drive a commercial truck from El Paso, TX to Texarkana, TX (818 miles), but not from Texarkana, TX to Texarkana, AR (across State Line Avenue).

Disappointingly, a pilot program passed as part of the 2021 bipartisan Infrastructure Investment and Jobs Act has been bogged down by thorny rules from the Biden Department of Transportation (DOT), meaning a 3,000-person pilot program has seen fewer than a dozen enrollees thus far. The DRIVE Safe Integrity Act will help ensure the DOT administers the pilot program in the spirit of the law, making it easier for young Americans looking to choose a vocation to choose trucking careers that involve interstate commerce.

The DRIVE Safe Coalition, of which NAW is a member, has sent a letter to the House Committee on Transportation & Infrastructure in support of this legislation. To learn more about the bill and to read the letter, you may click here.

Tax Update

Senator Steve Daines (R-MT) last week re-introduced his Main Street Tax Certainty Act, which would make the 199A 20 percent passthrough deduction permanent. The 199A deduction, which provides important tax relief to S-corporations, partnerships, sole-proprietorships, and LLCs, is scheduled to sunset at the end of 2025.

NAW sent a letter, led by our coalition partners at the Main Street Employers and S-Corp Association, signed by more than 140 other trade associations. The legislation was reintroduced with 14 Republican cosponsors, indicating strong support from Senators. Moving forward, NAW and other allies in Congress will work to increase the number of cosponsors. Sen. Daines’ legislation is unlikely to be passed into law this Congress but is an important marker to show support for making the 199A deduction permanent.

A House companion for this legislation has not yet been introduced. Last Congress, the bill was led by Representative Jason Smith (R-MO) who is now chairman of the Ways & Means Committee. Committee chairmen often hand off their signature bills to other members of the committee; however, it is not yet known whether Chairman Smith will hand off the bill or seek to reintroduce it himself.

The Ways & Means Committee is also reportedly developing an economic package that they hope to consider sometime over the summer. The timeline on this package being introduced or voted on is uncertain given the looming debt ceiling deadline. Originally, it was expected they would introduce legislation in late May; however, this has reportedly been pushed back to June or July.

It is expected that the package will include extensions of a number of expired tax provisions such as bonus depreciation, deductibility of business interest and R&D expensing. It is also possible that the proposal will include individual tax relief and repeal parts of the Democrat’s reconciliation bill passed last year including green energy credits.

Some lawmakers have suggested extending parts of the 2017 tax bill that are set to expire in 2025 including 199A, however we currently believe this is unlikely given this deadline is several years away.

Debt Ceiling Update

The past few months have seen House Republicans and President Joe Biden exchange political broadsides over the debt ceiling with virtually no real negotiation taking place. Republicans have called for raising the debt ceiling in combination with spending cuts and regulatory reform while the President has insisted on a clean debt ceiling increase free of cost-cutting policies. Both sides have accused the other of being irresponsible and threatening to default on the debt, yet both sides have not met in person in months.

In an attempt to put pressure on Biden to negotiate, House Republicans last week released their first legislative proposal to raise the debt ceiling and reduce government spending.

The legislation raises the debt ceiling through either March 31, 2024, or the accumulation of $1.5 trillion in new debt, whichever comes first. In exchange, the bill establishes a cap on discretionary spending at Fiscal Year 2022 levels and limits spending growth to 1 percent per year through Fiscal Year 2033.

The proposal also contains a number of Republican priorities including rescinding unobligated COVID-19 federal spending; blocking President Biden’s proposal to forgive up to $20,000 in student loan debt; repealing green energy tax credits and $80 billion in IRS funding passed by Democrats last year; reforming welfare programs like SNAP and TANF; reforming the permitting process; and increasing domestic energy production.

Even after the introduction of the GOP proposal, President Biden continues to refuse to meet in-person with Speaker Kevin McCarthy.

House Republican leadership intends to hold a vote on the bill today or tomorrow before leaving town for a one-week recess. At this time, it is not clear if they have the 218 votes needed for passage.

As of Tuesday, Republican leadership insisted the bill could not be changed; however, as many as 10 Midwest lawmakers opposed repeal of ethanol tax credits in the bill – more than enough to sink the legislation given every Democrat is expected to vote no. Several conservative members also wanted to see the bill strengthened in some ways such as adding stronger work requirements to the welfare reform section of the bill. Others did not want to vote for a debt ceiling increase at all.

On Wednesday morning, Republican leadership announced an amendment that removed repeal of the ethanol credits and strengthened work requirements in an attempt to win over skeptical lawmakers. While this has reportedly won over many holdouts, it has angered some moderates who were told the bill was not open for amendment.

Republicans hold a narrow majority and can only afford to have four members vote against the legislation, meaning changes or delays to the bill remain possible.

Even if the bill passes the House, it is dead on arrival in the Democrat-controlled Senate, and President Biden has already criticized the bill.

Nonetheless, there is some evidence that Speaker McCarthy’s release of the bill is putting pressure on vulnerable Democrats. In the last week, several Democrats in the House and Senate have called on the President to reverse his position – that he would not negotiate a debt limit with spending restraints – and begin negotiating with Republicans over adding other items to a debt ceiling package. Senate Republicans have so far echoed the calls of their House counterparts in urging Biden to negotiate.

One complication to the debt ceiling fight is that it remains unclear when the deadline will be hit.

The statutory borrowing cap was officially hit in January and the Treasury department has been using “extraordinary measures” to temporarily delay the deadline and continue making payments on debt and other outlays.

While initial estimates forecast the debt ceiling would be hit in August or September, more recent estimates from financial institutions have warned the date could be June or July due to lower than expected tax receipts and a slowing economy.

Non-compete Ban / Federal Trade Commission Update

In January, the Federal Trade Commission (FTC) issued a notice of proposed rulemaking (NPRM) to ban non-compete clauses, opening a time window for public comments. The comment period for the NPRM ended last week and NAW submitted comments on the rule which can be found here. NAW also signed onto a coalition comment letter led by the Chamber of Commerce on the NPRM.

As a reminder, the proposal would impose a blanket ban on all non-compete clauses and would apply that ban retroactively to all existing agreements. The proposed rule could also extend to other covenants like non-disclosures and non-solicitations if they are deemed to be overly broad in scope. The FTC also asked for input on alternative proposals that would impose a more limited ban on non-competes such as a ban limited to an income threshold or a category of workers. More information on the NPRM can be found here and here.

Moving forward, the FTC will consider input provided on the NPRM and will almost certainly move forward with a final rule in the months ahead. There has been some conjecture that the FTC will move quickly to release a final rule that will be narrowed in some ways, possibly exempting highly-compensated employees from the ban.

We will continue updating you as the issue develops.

On a related note, the House Energy and Commerce Innovation, Data, and Commerce Subcommittee held a hearing last Tuesday examining the Federal Trade Commission’s Fiscal Year 2024 Budget. FTC Chair Lina Khan and Democrat Commissioners Rebecca Slaughter and Alvaro Bedoya testified before the Subcommittee. There are currently no Republican Commissioners following the resignation of Christine Wilson in protest of Chair Khan’s running of the FTC.

The hearing was an opportunity for lawmakers to discuss policies being pushed by the agency. Republican lawmakers criticized the agency for its overreach, partisanship, and lack of transparency, and noted the historically low levels of staff morale and high turnover under this administration. Democrats defended the agency and pointed to the work the agency had done to protect consumers. Topics discussed included data privacy, protecting children from big tech, ensuring the FTC had the proper tools to win monetary compensation for consumers, stopping junk fees and preventing monopolies in areas such as healthcare and agriculture.

There was virtually no discussion of the FTC’s non-compete proposal; however, this could be because the proposal is still in the early stages of the regulatory process.

There was also no mention of the FTC’s plans on another NAW priority – holding Amazon accountable for its anticompetitive behavior toward third party sellers.

While recent news reports have suggested the FTC could move forward on a lawsuit against Amazon for its anti-competitive behavior, it remains unclear when or if a suit will be initiated. Obstacles remain to progress on holding Amazon accountable.

First, the FTC has been launching lawsuits and investigations across a wide range of industries and issues so their bandwidth to focus on any single suit is limited – especially one against a large company like Amazon that would require significant resources.

Second, the FTC is extremely unpopular with Republicans due to their belief that the agency is unaccountable and overly partisan. While these same lawmakers typically believe big tech should be reined in, their opposition to the Biden FTC precludes them from supporting any action taken by the agency.

Congressional Update

After a slow first couple of months, Congress has begun to pick up the pace with a flurry of Committee activity in recent weeks. In fact, at the end of March, House Republicans held 42 committee hearings in a single day, the most in a single day in history.

These hearings are part of House Republican efforts to establish a body of work that highlights their policies to their conservative base and builds a case to push messaging bills later in the year that contrast with the policies of Democrats and President Biden. For instance, Republicans on the House Ways and Means Committee have held several hearings outside of DC on the state of the economy to build consensus on their tax and economic growth policies.

Many of these hearings are also taking place due to the House Republican rules requiring any bill to receive a legislative markup before it can be considered on the House floor.

However, while this activity is keeping lawmakers and staff busy, the number of hearings occurring simultaneously means that very few are receiving significant media attention or getting the attention of voters.

House Republicans have also introduced a border security package which they hope to bring to the House floor in the coming months. While this was a key issue that many conservative lawmakers campaigned on in 2022, it is unclear whether it has the votes to pass because of the concerns of many moderate Republicans. The bill is purely a messaging exercise – it contains no reforms to encourage more legal immigration or address the workforce shortage and is dead on arrival in the Senate.

More broadly, the Senate’s tight, 51-49 majority means that Democratic Leader Schumer must have all Democrats in attendance in order to get anything done. Senator John Fetterman (D-PA) recently returned to the Senate following a two-month absence for clinical depression, and Dianne Feinstein (D-CA) has been absent from the Senate since the beginning of March. Of note: Senator Feinstein serves on the Judiciary Committee, and her extended absence has made it impossible for the Committee to report out the President’s judicial nominations, leaving vacancies unfilled on the US courts.

Labor Update

As we have reported before, the resignation of Secretary of Labor Marty Walsh earlier this year resulted in the automatic elevation of Deputy Secretary Julie Su to Acting Secretary, and President Biden formally nominated her to be Secretary shortly thereafter.

The business community had a generally cordial relationship with Secretary Walsh, who was a union organizer but with a track record of competency rather than confrontation. As one of his labor-union critics described his tenure as DoL Secretary: “While the National Labor Relations Board has become very proactive in handing down pro-worker judgments and slapping violators with fines and unfavorable rulings, the DOL has been quieter under Walsh’s leadership.” That was clearly preferable for business.

Secretary nominee Su’s track record puts her much closer to the pro-union, anti-business activism of the NLRB, and her nomination has drawn significant and growing opposition from the business community. Su’s mismanagement as Labor Secretary for the State of California of the state’s COVID unemployment benefit program resulted in payments of more than $30 billion in fraudulent claims, and she was an active advocate of the controversial California AB5, which would have virtually eliminated the ability of a worker to be an independent contractor and crippled California’s vibrant gig economy. In addition, the ongoing west coast port labor negotiations have raised serious concerns about Su’s lack of experience and lack of Marty Walsh’s recognized skill at handling tough labor negotiations.

While only a few business groups initially opposed her nomination, the opposition has strengthened as more becomes known about her record. NAW sent a letter to the Senate opposing the Su nomination, and joined more than 30 business organization in signing an additional letter. An additional letter will be sent in a few days with even more groups signing on to join the opposition.

The Senate Health, Education, Labor and Pensions (HELP) Committee held a hearing on the Su nomination last week, leaving her critics unconvinced that she could capably run the department and convinced of her pro-union and anti-business bias.

Su’s nomination was confirmed this morning by a party-line vote of 11-10, but her confirmation by the full Senate remains uncertain.

Healthcare Update

The House is holding a number of hearings on healthcare issues this week.

The Education and Workforce Subcommittee on Health, Employment Labor, and Pensions is holding a hearing entitled “Reducing Health Care Costs for Working Americans and Their Families.” The Partnership for Employer-Sponsored Coverage (P4ESC), a coalition of business groups which includes NAW submitted a statement for the record.

This statement outlines many of the priorities of the coalition including preserving and strengthening employer-sponsored coverage, providing employers with relief from burdensome healthcare regulations, addressing high medical costs, and promoting innovation and diversity in the design of employer health plans.

P4ESC also submitted a statement for the record for an Energy and Commerce Subcommittee on Health hearing entitled “Lowering Unaffordable Costs: Legislative solutions to increase transparency and competition in healthcare.” The comments noted that rising healthcare costs are a significant challenge for employer-sponsored health coverage and urged lawmakers to take steps to make the healthcare system more transparent.

On the Senate side, lawmakers are in talks to bring up a healthcare bill that would include price transparency measures, reforms to the practices of Pharmacy Benefit Managers, and a price cap on insulin.

The Senate HELP Committee is expected to consider multiple bills dealing with PBMs and increasing access to generic medications next Tuesday, May 2nd and will hold a hearing on the high costs of Insulin on May 10. Given this timeline, it is possible that the full Senate could consider legislation in late May or in June.

Tax Update

The White House released President Joe Biden’s Fiscal Year 2024 Budget proposal last week.

While there are a number of concerning tax increases that would impact the wholesale distribution industry, the budget is dead on arrival in the Republican controlled House of Representatives and the one-vote Senate Democrat majority. Instead, like all Presidential budgets, it is largely an aspirational messaging document that provides information on the White House’s policy priorities, provides clues on what Biden and other Democrats will campaign on in 2024, and serves as a basis for legislative proposals that will be pushed the next time Democrats control the White House and both chambers of Congress.

In total, the budget called for $4.7 trillion in higher taxes over the ten-year budget window and almost $2 trillion in new spending. As a result, the budget reduces the deficit by almost $3 trillion relative to the existing federal baseline.

Tax increases included in the budget relevant to wholesaler-distributors include:

• Increasing the 3.8 percent Net Investment Income Tax (NIIT) to 5 percent and applying it to all S-Corporation and partnership income above $400,000.
• Increasing the top individual tax rate from 37 percent to 39.6 percent including on main street businesses organized as S-corporations and partnerships.
• Raising the corporate tax rate from 21 to 28 percent.
• Additional limitations on the ability of passthrough businesses to deduct business losses.
• Doubling the top capital gains tax rate from 20 percent to 39.6 percent.
• Raising taxes on family-owned businesses by narrowing existing grantor trust rules.
• Imposing a new, 25 percent minimum tax on large S-Corp and passthrough businesses with assets greater than $100 million.

Although none of these tax increases stand a chance of passing this Congress, it is still important to educate lawmakers on the damage these proposals could do to wholesaler-distributors. As such, NAW released a press release criticizing the proposed tax increases in the Budget on Thursday. You can find the NAW statement here. NAW also signed onto a letter led by the S-Corporation Association and signed by 85 trade associations in opposition to these tax increases which can be found here. NAW will continue to educate and update lawmakers on these harmful proposals.

On a related note, several House Democrats released legislation to repeal roughly a dozen tax credits and deductions utilized by the oil and gas industry. One of the proposals would repeal the last-in, first out (LIFO) deduction for large oil and gas companies.

While this legislation would not directly impact wholesaler-distributors that utilize LIFO and is purely a Democrat messaging bill with little chance of passing Congress, NAW takes seriously any threat to the LIFO inventory accounting method, even if the threat is not aimed at wholesaler-distributors. NAW will be reaching out to lawmakers through the LIFO Coalition to explain the importance of the provision and to highlight the significant opposition efforts to repeal the deduction in full or in part.

Amazon Update

Senator Amy Klobuchar (D-MN) held a hearing last week on the need to rein in Big Tech including Amazon. The hearing was titled “Reining in Dominant Digital Platforms: Restoring Competition to Our Digital Markets” and was held in the Senate Judiciary Subcommittee on Competition Policy, Antitrust, and Consumer Rights. Witness testimony and a video of the hearing can be found here. The hearing focused on Senator Klobuchar’s American Innovation and Choice Online Act (AICOA), legislation supported by NAW that would prevent Amazon’s unfair treatment of third-party sellers. The hearing also focused on Open Market App Act, legislation that also reins in Big Tech but is unrelated to NAW’s Amazon issue. This was the first action taken by the new Congress to push AICOA and It is expected that Sen. Klobuchar will soon formally reintroduce the bill and bring it for consideration before the Senate Judiciary Committee. One new challenge in passing the legislation is the increasing unpopularity of the FTC and Chair Lina Khan among Republicans and business groups. These critics argue the FTC is out of control and is pushing sweeping regulations on businesses and the U.S. economy including their proposal to ban noncompete clauses. Given this viewpoint, many Republicans are hesitant to cosponsor legislation that would give the Biden FTC more authority. A Bloomberg article that can be found here provides more information.

On the hearing itself, it was encouraging that no Senator or witness defended Big Tech. Even critics acknowledged the need to act to rein in Big Tech although viewpoints on what should be done varied greatly.

Sen. Klobuchar noted that Big Tech spent at least $200 million running ads against her bill and $90 million on lobbying. Despite this, there is bipartisan support for the legislation. She bemoaned the fact that the rest of the world, including the EU, is ahead of the US in reining in Big Tech. She also referenced how Amazon bullies third party sellers.

Ranking Member Mike Lee (R-UT) acknowledged the size and power of Big Tech and stated that he agreed that Congress should act to rein them in but worried that solutions being proposed could harm the economy. He talked about the need for crafted, targeted solutions rather than empowering unelected, unaccountable bureaucrats and said he does not want to give more power to the Biden FTC.

Six other Senators spoke at the hearing – Chuck Grassley (R-IA), Sheldon Whitehouse (D-RI), Dick Durbin (D-IL), Richard Blumenthal (D-CT), Mazie Hirono (D-HI), and Alex Padilla (D-CA).

Sen. Padilla was the only one that was critical of the legislation and specifically mentioned his concern that the restrictions on Big Tech preferencing could have unintended consequences that harm consumers and businesses.

The other five Senators all supported AICOA and discussed the need to act now, the challenges with adequately regulating Big Tech, the fact the EU has already taken action to rein in Big Tech, and how the bill is targeted to addressing specific issues like self-preferencing and data collection.

Five witnesses appeared before the Committee including three that supported the legislation and two that had concerns with the bill.

The supporters of the legislation discussed the need to update antitrust law to properly regulate Big Tech, with some calling for the creation of a new federal agency to specifically regulate Tech. They believed AICOA is a targeted, narrowly crafted approach, with some arguing that Congress should go even further.

The witnesses speaking in opposition to AICOA argued the bill was poorly crafted and that it contained vague, confusing, or overly broad definitions. They also argued the bill would have unintended consequences that could harm consumers and businesses. While they both criticized the bill, they did not defend Big Tech and acknowledged the need for reforms and legislation.

Federal Trade Commission Non-compete Clause update

As we previously noted, the FTC released a notice of proposed rulemaking (NPRM) to ban non-compete clauses. Last week, the FTC announced it would extend the comment period for 30 days from March 20 to April 19. This extension is welcome news given that over 100 trade associations including NAW had requested the FTC to extend the comment period shortly after the rule was first published.

As a reminder, the proposal would impose a blanket ban on all non-compete clauses. The proposed rule could also extend to other restrictive covenants like non-disclosures and non-solicitations if they are deemed to be broad in scope. Certain businesses like banks and nonprofits that are outside of the FTC’s jurisdiction would be exempt and there would be a narrow sale of business exemption allowing non-competes for an individual who owns at least 25 percent of the business. More information on the NPRM can be found here and here.

Congressional Update

The House is out of session this week and will return next week for a two-week session before taking another two-week recess. The Senate is in session and will be in for the next three weeks. They continue to focus on confirming executive and judicial nominations and holding Committee hearings.

Last week, House Republicans announced that H.R. 1, would be the Lower Energy Costs Act, legislation to lower energy costs, increase energy independence, and enact permitting reform. H.R. 1 is designated each Congress to the Majority party’s top legislative priority. Specific legislative text has not yet been released; however, the bill will be voted on in the last week of March and will contain proposals from three House Committees – the Energy & Commerce, Natural Resources, and Transportation & Infrastructure.

Labor Update

As we mentioned in our last Update, controversy continues to surround the nomination of current Deputy Secretary of Labor Julie Su to succeed outgoing Secretary Marty Walsh in the top post. After reviewing Ms. Su’s record going back to her time as Secretary of the California Labor & Workforce Development Agency, NAW has announced opposition to the nomination, and sent a letter today to members of the Senate Health, Education, Labor and Pensions (HELP) Committee urging the senators to vote against the nominee.

In the labor space, NAW has concerns about the President’s proposed budget. Although budgets submitted by the sitting President never become law, and in fact almost never are even considered by Congress, a President’s budget is usually seen as aspirational, and often provides insight into the chief executive’s legislative and policy priorities. While the most notable proposals in President Biden’s budget are the more-than-four-trillion dollars in tax increases, his proposed increased in budgets for the Department of Labor and the National Labor Relations Board send a clear signal that NAW will have to maintain our focus on those agencies in the months to come:

Biden Budget Request: On March 9, the Biden administration released its FY24 budget request. It includes a $1.5 billion increase for DOL, an approximately 11% increase from FY23, and a 25% increase in funding for the NLRB. The budget request also includes calls for up to 12 weeks of paid family and medical leave and urges Congress to require employers offer a minimum of 7 paid sick days to employees

1. Latest on the Government Omnibus Spending Bill and Russian Oil Import Ban

Last night, the House passed a $1.5 trillion federal omnibus spending bill ahead of Friday’s deadline. The House has also approved a short-term funding bill that gives the Senate until March 15th to complete work on the omnibus. The bill included $13.6 billion in military and humanitarian aid to Ukraine. Democrats had discussed including tax provisions in the funding legislation, but they were ultimately excluded. That decision came despite the pleas of lawmakers and business groups to include temporary provisions known as “extenders” and an intense effort to revive the now-expired employee retention tax credit.

However, the spending bill did ensure that the bi-partisan infrastructure law passed last year would now be fully funded. Lawmakers and transportation officials have been warning for months that full implementation of the infrastructure law isn’t possible because government funding is constrained at last year’s levels.

On Tuesday, President Biden announced an import ban on Russian oil, natural gas and coal. President Biden had come under growing bipartisan pressure from Congress to sanction Russia's energy industry, but hesitated due to concerns about rising energy prices and opposition by U.S. allies. To read Executive Order 14024, click HERE.

The House also overwhelmingly passed a bill last night banning U.S. imports of Russian oil. Speaker Pelosi characterized the legislation as a compliment to the executive actions of President Biden. It’s still not clear whether the bill will be considered in the Senate. Majority Leader Schumer praised Biden’s decision to ban Russian energy imports but so far has made no commitment to having his chamber take up separate House legislation.

2. Latest From Department of Labor (Dol) & National Labor Relations Board (NLRB)

Both DoL and the NLRB are pursuing aggressive policy and rulemaking agendas that could seriously impact NAW members. We can’t cover all of them in one update, but the following are the immediate initiatives most likely to effect wholesaler-distributors:

Wage and Hour Division (WHD) rulemaking on the Fair Labor Standards Act (FLSA) “white collar exemption” to the overtime rule.

As you may recall, in 2015 the Obama Administration proposed a rule on the overtime exemptions which, among many other things, would have increased the threshold salary for exemptions from $23,660 to more than $47,000. NAW filed comments with DoL on the rule and arranged a meeting in 2016 with DoL and White House officials at which three NAW member company CEOs discussed the impact of the proposed rule on their companies.

NAW then joined other associations as a plaintiff in a lawsuit challenging the rule, which was eventually invalidated by the court. Subsequently the DoL in the Trump Administration promulgated a new rule, raising the salary threshold to $35,568.

The Biden DoL has announced that they plan to promulgate a new rule, even though the current rule has been in effect for less than three years. While they have not released any details on their proposal, a few members of Congress have sent a letter to WHD recommending a threshold salary of at least $82,732 by 2026, indexed to inflation. DoL has made no comment on that recommendation.

NAW and 109 other trade associations (including about twenty NAW member associations) sent a letter to WHD in late January requesting stakeholder meetings as they develop the rule. A month later WHD responded, offering one 90-minute meeting for the entire group of 110 associations. We rejected that offer, since it would have allowed less than one minute of input from each group, and insisted on industry-specific meetings, and many more of them.

As of today, WHD has agreed to a number of industry stakeholder meetings through the end of April, with a “manufacturing and wholesale” listening session for one hour in late April. There were 38 manufacturing and distribution associations on the letter to DoL requesting industry meetings, so again they offered a completely inadequate amount of time for serious input if all 38 groups were invited to participate.

Speaking with DoL officials yesterday, we asked that they separate manufacturing and distribution into separate meetings (retail has a separate meeting), but so far, they remain committed to combining both industries into a single 60-minute session. They did, however, however, set up a much smaller meeting so that participants will have the opportunity to provide substantive input.

As we did in the previous rulemakings on the OT rules, NAW will be asking for member input on how changes to the regulations would impact you. We rely on the information from our members to inform our meetings with DoL/WHD, and our comments during the regulatory process, so please take a few minutes to respond to our survey(s) when we send them out.

NAW had a virtual meeting with the Acting Administrator of the Wage and Hour Division last week to discuss their "Warehouse and Logistics Worker initiative (see below), and during that call we asked her why the Department was pursuing a new overtime rule when the existing regulations were promulgated not-yet three years ago. She made it very clear in her response that WHD was determined to proceed with this new initiative.

Finally, Bloomberg ran a story this week on the business community interactions with DoL on the overtime issue in which NAW is referenced.

WHD’s New “Warehouse and Logistics Worker Initiative”

As you may already know, last month the Department of Labor announced a “worker initiative” to ensure that worker rights are protected in the warehouse, logistics and distribution industries. While the press release announcing this initiative does not mention the wholesale distribution industry specifically, the "Fact Sheet" on the initiative does.

Fact Sheet #10: Wholesale and Warehouse Industries Under the Fair Labor Standards Act (FLSA):

There are some problems and misconceptions which Wage and Hour investigations commonly disclose in the wholesale and warehouse industry. These include:

• The misapplication of the executive or administrative exemptions to non-exempt persons, such as clerical workers, working foremen, dispatchers, and inside salespersons.
• Employment underage minors, especially in the operation of forklifts and paper balers.
• The misconception that salaried employees need not be paid overtime.
• Failure to pay employees for all hours suffered or permitted to work, including time spent taking inventory, completing paperwork, etc. beyond the normal schedule.
• Failure to maintain time records on salaried or piece rate employees.
• Giving compensatory time off in lieu of overtime pay.
• Considering certain employees to be "contract labor" and thus, not covered by the Act's provisions.
• Deductions made for reasons other than board, lodging, etc., in overtime work weeks.

At this point there is no specific action to which to respond, and no indication that DoL will promulgate a rule or seek public or stakeholder input. While they do not describe in any detail what this initiative will do, they include “vigorous enforcement to increase compliance” as one course of action.

NAW and the International Warehouse Logistics Association, along with a number of NAW member associations, sent a letter to Jessica Looman, the WHD Acting Administrator, asking for a meeting to discuss this initiative. They have agreed to meet with us, and we are waiting for a meeting to be scheduled.

In addition, we had a separate virtual meeting with Jessica Looman last Friday, at which we provided wholesale distribution industry data – average non-non-supervisory wage, percentage of employees with access to benefits, etc. – and explained that given the current worker shortage, employers who underpay or mistreat their employees don’t have those employees for long. Her response was to describe “other employers” who deliberately exploit and underpay the most vulnerable workers.

Of note: this initiative will not be limited to responding to complaints received by the department but will include “direct” investigations initiated by DoL. The agency may, but is not required to, notify an employer in advance if they have been targeted for an audit.

We will of course keep you posted on developments with both this new initiative and the FLSA overtime rulemaking. And again, our ability to respond effectively to these initiatives depends on our having accurate information from our members, so please respond to the surveys we will be sending out in the next weeks.

NLRB cases:

As a reminder: The National Labor Relations Act covers virtually all employers, whether or not any employees in the company are unionized. According to the NLRB website: “As a practical matter, the Board’s jurisdiction is very broad and covers the great majority of non-government employers with a workplace in the United States, including non-profits, employee-owned businesses, labor organizations, non-union businesses, and businesses in states with `Right to Work’ laws.”

NAW has signed onto several amicus briefs recently opposing decisions and actions of the NLRB and expect to participate in additional cases as Board actions warrant. Among the issues on which we’ve recently signed onto amicus briefs:

Specialty Health Care: In this original case, the Obama Board changed the standard for what constitutes an “appropriate collective bargaining unit,” allowing unions to organize “micro bargaining units” of a small number of employees within a larger workforce. For example, the Board deemed appropriate a bargaining unit consisting of just the employees in the cosmetics and fragrance department in a Macy’s store. The Trump Board reversed the Obama Board, restoring the previous standard. The Biden Board is now considering a case, American Steel, proposing to again change the standard to allow micro bargaining units. NAW has joined this amicus brief

Handbook Rules: The Obama NLRB invalidated dozens of typical employee handbook rules that were “facially-neutral” but which employees could “reasonably construe” as interfering with their protected rights to organize. Among the invalidated rules were those dealing with confidentiality of internal investigations, prohibitions on video or audio taping on the business property, use of profanity or sexually explicit language in the workplace, criticism of the employer on social media, employee contact with the media on employer-related matters, etc. The Trump Board reversed the Obama Board, restoring a more balanced approach that could consider an employer’s “legitimate justifications associated with the rule.” The Biden Board has invited interested parties to submit briefs in the Stericycle, Inc. case on “whether the Board should adopt a new legal standard to apply in cases where an employer’s maintenance of a facially-neutral work rule is alleged to violated Section 8(a)(1) of the National Labor Relations Act.” The Board is expected to revert to the Obama Board’s standard. NAW has signed onto an amicus brief in this case.

Independent contractors: Both the Board and DoL are aggressively challenging the right of employers to hire individuals as independent contractors (IC) rather than employees. The agencies are specifically accusing employers of misclassifying workers as ICs to avoid having to pay benefits, despite consistent polls showing that an overwhelming majority of ICs choose to work independently. In one initiative, WHD and the NLRB are “collaborating to strengthen the agencies’ partnership through greater coordination in information sharing, joint investigations and enforcement activity, training, education, and outreach” on a variety of issues, including ICs. NAW has joined an amicus brief in the Atlantic Opera case, opposing the Board’s efforts to rewrite the standard for determining whether a worker is an IC or an employee.

Labor Legislation: While it seems clear that the radical pro-union PRO Act will not pass this year, unions and their allies persist in finding other ways to advance their agenda in Congress. The House recently passed the America COMPETES Act, intended to increase US competitiveness with China. But at the last minute, an unrelated labor amendment was added to the House bill. The amendment applies labor provisions to entities receiving certain funding under the bill. The provisions would require funding recipients and their contractors and subcontractors to 1) agree to recognize any union base on card check (i.e., without a secret ballot election) and 2) agree to let an arbitration panel set the terms of collective bargaining agreements if parties do not come to an agreement within 120 days. Both provisions were part of the Employee Free Choice Act, which Congress rejected years ago. Senate allies are fully aware of these provisions, and we are working with them to ensure that the labor language is dropped from the “conference report” on the legislation.

3. Employer Resources

As businesses and the economy continue to emerge from the Coronavirus Pandemic, it can be hard to decipher how new regulations and laws may impact your business. To help you manage these issues NAW is providing information about reports, webinars, and seminars that you may find useful:

Webinar from Covington Law Firm: Infrastructure Act Domestic Preference Requirements

Wednesday, March 23, 2022 | 11 a.m. - 12 p.m. EDT

Members of Covington’s Government Contracts practice will host a webinar to address the Buy America and Buy American provisions in the new Infrastructure Investment & Jobs Act (IIJA). To register, click HERE.

Topics in discussion will include:

• An overview of the new domestic preference provisions included in the IIJA’s “Build America, Buy America Act,” including requirements for federal grants and procurements
• Key takeaways on how these requirements modify existing Buy America/Buy American requirements, including the March 2022 Buy American Final FAR Rule
• Best practices for sourcing and supply chain management given evolving domestic preference requirements
• Open questions and key developments to watch in the coming months

1. Latest on the Bipartisan Infrastructure Framework (BIF)

As we have previously reported, the Senate-passed Bipartisan Infrastructure Framework (BIF) was sent to the House of Representatives, where it is still sitting in limbo. You may remember that Speaker Pelosi interrupted the Congressional break in August to bring the House back to DC to work on their reconciliation bill – the $3.5 trillion tax and spending bill – that was being "dual-tracked" with the BIF. However, after the attempted uprising by the Democratic moderates, Speaker Pelosi promised that there would be a vote on the BIF by September 27th, whether the reconciliation bill was ready for floor action or not.

As of this writing, Speaker Pelosi is sticking with her promise to bring the BIF forward early next week. But the nearly 90-member Progressive Caucus within the Democratic party has threatened to vote against the BIF unless it is coupled with the larger reconciliation package, which is not yet entirely written. And the moderate Democrats have told the Speaker they will not vote for the reconciliation bill until and unless the BIF is passed. This standoff remains unresolved.

The Progressive Caucus believes that if the BIF is passed on its own, the reconciliation bill (which contains many of their policy priorities) could well be defeated because the moderate Democrats will be free to oppose the more expensive social agenda once the BIF has passed. According to reports, at least 50 members of the Progressive Caucus have committed to voting against the BIF.

On the opposite side of the coin, moderates are standing by their demand for a vote on the BIF prior to consideration of reconciliation and are angered by the Progressives’ vow to defeat the infrastructure bill. There is a genuine possibility that Speaker Pelosi will not be able to stop her moderates from voting against reconciliation (and remember the Speaker can only lose three votes and maintain a majority vote to pass legislation).

During "normal times," an actual infrastructure bill such as the BIF would likely garner a fair number of bipartisan votes, as shown when 19 Republican Senators voted for the BIF nearly two months ago. However, Speaker Pelosi's decision to tie the BIF to the reconciliation bill alienated many Republicans who would otherwise support the infrastructure legislation, and they see support for the BIF as leading to inevitable passage of the massive reconciliation bill. As of a recent count, fewer than a dozen Republicans are leaning towards voting for the BIF. This number could very well shrink even further now that the Republican leadership team has announced it would be urging the Republican caucus to vote no.

According to some sources, should the BIF fail next week, Democrats in the House and Senate may try to fold many parts of that legislation (if not the entire bill) into the reconciliation package as a sweetener for the spurned moderates to persuade them to vote for reconciliation. Although a lot can change between now and the tentative vote on Monday, as of this moment, it appears that the likelihood of the BIF passing the House of Representatives is getting slimmer by the minute.

2. Latest on the Reconciliation Tax-and-Spend Bills

There’s really little substantive progress to report since our update last week. In the House of Representatives, all 13 committees have reported their pieces of what is now being combined into the massive $3.5-3.9 trillion bill. Having the most direct impact on business, the Ways and Means Committee reported a bill that would raise about $2.1 trillion in new taxes, the overwhelming majority of which would come from employers.

The substance has not changed, and neither has the political stand-off that has dominated the conversation in Washington for weeks. As we report above, the success or failure of the massive reconciliation bill is inextricably entwined with the $1.2 trillion infrastructure bill.

On Wednesday the President met – in separate meetings – with Congressional Democratic leaders, members of the Progressive Caucus, and moderate Democratic Representatives and Senators, all to find a path forward on the reconciliation bill. Based on reports on the meetings, no decisions were made, and no compromises reached.

But in the world of spin for which Washington is noted, Thursday the Democratic leaders announced that they had agreed to a “framework” of options to pay for their spending proposals – although none of them would provide any information on what that “framework” contained.

The Politico story covering the meeting ran with a headline that read “Democrats hatch secret pay-for-it plan in bid for unity on spending dreams” and led the story with this:

Democratic leaders are racing to project momentum on turbulent negotiations over President Joe Biden's social spending plans as Congress hurtles toward critical deadlines next week. So far, though, those last-ditch efforts to tout unity are only fueling more confusion.

Congressional Leaders seemed to confirm that conclusion. As reported by Roll Call: Senate Majority Leader Chuck Schumer said, “`It's a menu of options and it will pay for whatever’ the agreed-to price tag ends up being.” And Speaker “Pelosi described it as `an array of agreements that we have depending on what the need is.'"

The House Budget Committee will consider – “mark-up” – the reconciliation bill on Saturday, so we may soon see what the “framework” and/or secret pay-for-it plan” are.

Republicans view the unusual Saturday mark-up of the reconciliation bill as part of the continuing effort to show momentum rather than being a serious effort to legislate and point to the many incomplete parts of the bill to make their point.

Specifically, there is the required Congressional Budget Office (CBO) “score” on only 4 of the 13 committee bills that make up the reconciliation bill. Moreover, several committee-reported pieces of the bill have failed to comply with the reconciliation spending instructions from the Budget Committee – in other words, their bills spend more money than they were authorized to spend.

Despite the lack of CBO scores and problems with committee bills not complying with their instructions, the Speaker sent a letter to House Democrats today saying she plans to move both the BIF and the reconciliation bill next week. And then attention moves to the Senate.

And once the process does move to the Senate, it gets even more confusing: the Byrd Rule prohibiting extraneous policies in reconciliation bills will take center stage, and the bill will be subjected to a “Byrd Bath” during which provisions deemed by the Parliamentarian to be out of order will be removed from the bill and become “Byrd droppings.” Really, but more on that later.

3. President Biden’s Employer Vaccine Mandate and the OSHA ETS

As you all know, the President recently issued an Executive Order instructing the Occupational Safety and Health Administration (OSHA) to promulgate a rule mandating that all employers with more than 100 employees require their employees to either be vaccinated or take a weekly COVID test.

OSHA has begun the process of developing a rule and new Emergency Temporary Standard (ETS). While we do not yet know a great deal, NAW is a member of the business-focused Coalition for Workplace Safety, which will be deeply involved in this process.

What we have learned:

• It is expected that OSHA will move quickly, perhaps producing a rule in 4-6 weeks
• There will be no public comment period or stakeholder involvement as they develop the rule
• The ETS will take effective immediately in states where OSHA has direct jurisdiction
• The 22 states with state OSHA plans covering both public and private sector employers will have 30 days to implement the rule
• You can find a list of the 22 states with OSHA plans, and a link to the OSHA website for more information HERE
• Stakeholders will have an opportunity to comment on the ETS after it is published in the Federal Register and submitted comments will help shape a final rule that will replace the ETS. OSHA intends to issue the final rule 6 months after the release
• OSHA and federal agencies will work to ensure the ETS is consistent with the vaccination mandates imposed on federal contractors
• The ETS testing/vaccination requirement will not extend to remote employees who are physically isolated from co-workers
• Employers will need to provide employees with PTO or allow employees to use existing PTO to obtain vaccinations and recover from vaccination side effects
• The 100-employee threshold for coverage applies to the employer – not just a single worksite.

There are obviously a lot of unanswered questions among them:

• Who will pay for the COVID testing for employees who decline to get vaccinated?
• How will the $14,000 fine “per violation” work?
• How will employers be expected/allowed to verify vaccinations and tests?
• Will the rule specify what level/type of vaccine will satisfy the mandate?
• Will there be specified procedures for handling employees who refuse to vaccinate or test?

Whatever the final details and answers to questions, it is expected that the rule will be challenged in court – likely immediately after its release.

We will be following this closely and will keep you apprised as we learn more.

4. Latest on Protecting Federal Procurement and Addressing Amazon’s Anticompetitive Acts

Last week, NAW announced its support of Representative Veronica Escobar’s (D-TX-16) “Federal Acquisition E-Commerce Fairness and Competition Act.” H.R. 5217 will remedy a serious flaw in how the federal government is testing e-commerce platforms for departments and agencies to purchase products. This legislation will broaden competition and instill fairness benefitting American taxpayers.

Every day, Amazon commits unfair acts against small businesses and distributors that sell on Amazon’s marketplace. This bill restores Congressional intent by requiring GSA to expand its pilot program by testing at least 3 commercial e-commerce portal models and prevents Amazon from being both a platform manager and supplier. NAW is committed to fighting unfair acts by monopolistic companies and we urge Congress to quickly pass the House Judiciary committee’s bi-partisan antitrust bills.

Please CLICK HERE to contact your Member of the U.S. House of Representatives to co-sponsor the Federal Acquisition E-Commerce Fairness and Competition Act. You can compose and send your message easily using our E-Alert Take Action page. The process is quick and talking points are included.

NOTE: If you are a first-time Take Action user, you may be sent an email asking for verification before your message is sent to your member of Congress. This is a security measure put in place to protect you. And, after your message is sent, you may receive a follow-up email – another security measure – confirming you used our Take Action process.

To view NAW’s letter supporting the Federal Acquisition E-Commerce Fairness and Competition Act, CLICK HERE.

To view Representative Escobar’s press release on H.R. 5217, CLICK HERE.

5. Latest on the NAW-American Job Creators Ad Campaign

NAW and several of our partners have been hard at work to defend business in the current reconciliation bill fight. Next week, thanks to the support of many distributors and others in the business community, our coalition—America’s Job Creators for a Strong Recovery—will announce a $1 million advertising campaign targeted to congressional districts across the country. We are one of the few coalitions on the air with an outright defense of business and a message of how higher taxes hurt families, workers, and businesses. More to come next week.

6. Latest on Other Issues Impacting NAW Members

NAW Endorses Reintroduction of Pro-Consumer, Pro-Business Legislation:

Yesterday, the Partnership for Employer-Sponsored Coverage Coalition, which NAW helps manage, sent a letter to Representative Mike Thompson (D-CA-5) and Representative Adrian Smith (R-NE-03) supporting H.R. 5318, the Commonsense Reporting Act.

The bipartisan Commonsense Reporting Act provides consumers with help during the annual health coverage open enrollment process, employers with relief from the burdensome reporting requirements, and Exchanges with an additional tool to verify tax credit and subsidy eligibility. This bill also protects the privacy of individuals’ Social Security numbers, authorizes the electronic transmission of reporting information, and establishes oversight of reporting verification.

NAW continues to fight to ensure that employer-sponsored coverage is strengthened and remains a viable, affordable option for millions of American workers and their families for decades to come.

Click HERE to read our letter of endorsement for H.R. 5318, the Commonsense Reporting Act.

Please CLICK HERE to contact your Member of the U.S. House of Representatives to co-sponsor this pro-consumer, pro-business legislation. You can compose and send your message easily using our E-Alert Take Action page. As noted above, the process is quick and talking points are included.

7. Latest on the Economic Recovery and Re-Opening the Workplace

As the Coronavirus Pandemic continues to impact the United States economy and businesses across the nation, it can be hard to decipher how new regulations and laws may impact your business. To help you manage these issues NAW is providing information about reports, webinars, and seminars that you may find useful:

From Covington: Opening the Doors: Return-to-Workplace Considerations During COVID-19:Part Ten: Preparing for President Biden’s Employer Vaccine Mandate

Whether a company is an essential business that has operated throughout the pandemic or is expecting to re-open in the coming weeks or months, several challenges must be addressed to provide a safe environment in which employees can work, while at the same time mitigating risk and restoring operations. This alert will address employers' key questions concerning when and how the Biden Administration will implement regulatory measures through OHSA to achieve the Administration's goal of "Vaccinating the Unvaccinated.” To read more, click HERE.

From Reed Smith Law Firm: It continues: Virginia updates its permanent COVID-19 workplace safety standard

On August 26, 2021, the Virginia Department of Labor and Industry’s (DOLI’s) Safety and Health Codes Board (Board) voted 8 to 5 to update and continue its COVID-19 permanent workplace safety standard. That vote came despite the fact that the bulk of COVID-19 business requirements issued by Virginia Governor Ralph Northam ended on May 31... Continue Reading

From Littler Law Firm: Mandatory Employee Vaccines – Coming to A State Near You?

While available vaccines have proven highly effective to date, COVID-19 continues to spread, particularly among unvaccinated populations. This post provides basic information on employee vaccination mandates issued at the federal and statewide levels. To read more, click HERE.

From McGuireWoods: Frequently Asked Questions About the New COVID-19 Vaccine Executive Actions

As McGuireWoods noted in a September 10, 2021, alert, President Biden’s broad six-part strategy to combat the COVID-19 pandemic is raising many questions for employers. While employers await the much-anticipated regulations, a few answers to questions regarding the proposed federal vaccine requirements already are available. Read on for answers to frequently asked questions about the COVID-19 vaccine executive actions. To read more, click HERE.

From Reed Smith Law Firm:Biden announces major COVID-19 vaccine requirements for employers

On Thursday, September 9, 2021, President Biden issued a memorandum, “Path Out of the Pandemic” (the Memo), announcing a six-pronged national strategy to combat COVID-19. Among other things, President Biden has ordered the Department of Labor’s Occupational Safety and Health Administration (OSHA) to develop and issue an Emergency Temporary Standard (ETS) to require all employers... Continue Reading.

1. Tax Podcast

ICYMI, earlier this month, NAW Chief Government relations Officer Jade West did a podcast on the state of play in Congress on reconciliation and tax hikes. You can listen to it HERE.

2. Latest on the Economic Recovery and Re-Opening the Workplace

As the Coronavirus Pandemic continues to impact the United States economy and businesses across the nation, it can be hard to decipher how new regulations and laws may impact your business. To help you manage these issues NAW is providing information about reports, webinars, and seminars that you may find useful:

From Littler Law Firm:
Mandatory Employee Vaccines – Coming to A State Near You?

In recent weeks, several states and municipalities have announced that, in essence, they are requiring certain categories of workers to be vaccinated. Generally, under these types of mandates, workers who decline vaccination must comply with measures that do not apply to their vaccinated counterparts, such as weekly COVID-19 testing and/or mask wearing. Depending on the jurisdiction and the sector involved, however, unvaccinated workers might not have such alternatives. To read more, click HERE.

From Littler Law Firm:
OSHA Publishes Updated COVID-19 Guidance in Light of Rising Delta Variant Cases

On August 13, 2021, OSHA issued updated guidance to better align with the Centers for Disease Control and Prevention’s July 27, 2021, recommendations, given the rising cases of the COVID-19 Delta variant. The guidance’s purpose is to summarize the CDC’s “substantial or high transmission” guidance and assist employers in recognizing and abating COVID-19 hazards in the workplace. To read more, click HERE.

From Reed Smith Law Firm
To Mandate or Not? FAQs on Mandatory Vaccine Programs for Employers

Late last year, the U.S. Food and Drug Administration (FDA) issued the first approvals for a COVID-19 vaccine. Shortly thereafter, the U.S. Equal Employment Opportunity Commission (EEOC) issued guidance on the interplay between federal anti-discrimination law and vaccine-related issues, including the permissibility of mandatory employer vaccination policies. The below FAQs address some of... Continue Reading

Webinar from Littler Law Firm: The Biden Labor Agenda:
What Lies Ahead
September 16, 2021 | 2:00 p.m. ET

Eight months into the Biden Administration, a series of executive orders, rule-making activity, and legislative efforts have signaled an intent to dramatically shift labor and employment policies in ways that are concerning for businesses still reeling from the pandemic. More change is coming in the fall, as recent pro-labor appointees take control of the federal agencies regulating the workplace.

In this presentation, we will examine the workplace policy agenda that the Biden Administration has begun to pursue, identifying a variety of topics that may affect employers in the months and years to come. These include anticipated changes at the U.S. Department of Labor, NLRB, and EEOC, impacting such issues as joint employment, independent contractors, employee handbooks, union organizing, minimum wage, workplace safety, affirmative action, and government contracts. The latest developments regarding the PRO Act, COVID, and other pending legislation will also be discussed.

To register, click HERE.

From Reed Smith Law Firm:
As of August 2021, 19 states enact COVID-19 related liability shields

On July 15, 2021, we released an article discussing the Texas liability shield for businesses against COVID-19 related claims. Texas, however, is not the only state to enact such a shield. We have drafted a summary of the 19 states that have enacted COVID-19 liability shields to date. For simplicity, we have summarized the... Continue Reading

Survey From Littler Law Firm:
Employers Increasingly Consider Vaccine Mandates as COVID-19 Delta Variant Spreads

Littler, the world’s largest employment and labor law practice representing management, has released the results of its COVID-19 Vaccine Employer Survey Report: Delta Variant Update, completed by 1,630 in-house lawyers, C-suite executives, and human resources professionals across the United States. While most employers surveyed are still encouraging, rather than requiring, vaccinations, the data shows an increasing openness to such mandates amid rising infection and transmission rates. To read more, click HERE.

1. Latest on Bipartisan Infrastructure Deal

The bipartisan infrastructure framework (BIF)that was agreed to between President Biden and a group of 22 senators is continuing to move forward, though time is running short to get it done. Senate Majority Leader Chuck Schumer wants to vote on the bill before the Senate leaves for their August recess; however, there are only a few legislative days left before that recess and the framework is still having some kinks ironed out and the actual legislation has yet to be written.

While we wait for details of the spending priorities in the bipartisan plan, debate continues on whether and how the spending in the plan will be “paid for.” One specific proposal has generated significant debate, and significant controversy: an increase in funding for the IRS to facilitate more audits and resulting tax payments. This is part of the continuing debate over the “tax gap” – taxes that are owed but not paid.

The Biden Administration’s tax plan included a proposal to address the tax gap by requiring banks to provide information to the IRS on their account holders’ financial transactions of $600 or more – both business and individual customers. This proposal was designed to allow the IRS to increase audits of upper-income earners to increase tax collection, but it was – not surprisingly – wildly unpopular, and it was generally assumed it was “going nowhere.”

Now the sponsors of the BIF compromise have brought the idea back by proposing more IRS funding to increase tax collection to offset the spending in their plan. The BIF sponsors have said that the Biden bank reporting requirement will not be in their proposal and have promised further “safeguards” to ensure that increased IRS funding will not lead to abuse of power by the IRS – an issue of particular concern to Republicans because of the IRS targeting of conservative groups for increased tax scrutiny almost a dozen years ago. Adding to resistance to the idea, previous “tax gap” compliance measures have targeted small- and mid-sized businesses (in two instances the proposals were so onerous they were repealed before taking effect), so small business advocates are very leery of yet another tax gap initiative.

To complicate matters further, Democrats in the Senate are moving forward with a significantly larger (and partisan) Democrat-only budget framework, which would start the budget reconciliation process. On Tuesday night Senate Democrats on the Budget Committee agreed to a $3.5 trillion top-line spending level for the reconciliation bill that will be the vehicle for the bulk of President Biden’s “human infrastructure” agenda. Although the $3.5 trillion budget blueprint is a significant downgrade from the originally envisioned $6.5 trillion, it still may not get the support of all 50 Senate Democrats (which it will need to pass). Moderate Senators like Kyrsten Sinema (D-AZ) and Joe Manchin (D-WV) have expressed concern about adding to the national debt and are pushing for the legislation to be fully (or at least mostly) paid for. Meanwhile, on Senator Schumer’s left flank, progressive members and environmental groups are concerned that the $3.5 trillion does not allow for enough spending on climate change measures.

The only way to pass the bipartisan infrastructure bill is for Democrats to achieve total party unity and convince at least 10 Republican senators to support the legislation. But by pursuing the $3.5 trillion reconciliation bill in tandem, Senator Schumer is walking a tight-rope and must ensure that he does not implicitly link the two bills together, or else he risks losing Republicans who may be supporting the bipartisan bill. Thus far, there still seems to be hope of finding a way forward on a bipartisan infrastructure package … But Charlie Brown always thought he had a chance to kick the football that Lucy held for him.

Finally, we would appreciate your feedback on the proposal to increase IRS funding, enforcement, and audits to offset infrastructure spending.

BIF sponsors are asking business groups to support their proposal to increase IRS funding to pay for the infrastructure spending, arguing that addressing the “tax gap” with increased IRS funding should be an acceptable alternative to increased business taxes.

We are watching this closely, waiting to see what safeguards against IRS abuse are proposed, and to see whether the IRS funding would in fact be proposed INSTEAD of other taxes, or in addition to them.

In the interim, we would really appreciate your feedback on this issue:

• Would you support more IRS funding to address the tax gap or facilitate increased audits of upper income earners as a general policy?
• Would you support that increase in IRS funding and tax collection activity only if it were proposed in lieu of business tax hikes?

2. Latest on PPP Loans

We reported last fall that the Small Business Administration (SBA) was requiring borrowers of large PPP loans (over $2 million) to complete and submit extensive and detailed financial information on a “loan necessity” Form 3509 as part of their application for loan forgiveness. Presumably related, we have also heard from PPP borrowers, both NAW members and members of other industry associations, that the SBA has been extremely slow in processing forgiveness applications for large loans. See our update #105 HERE.

We have just learned that the SBA is no longer requiring borrowers to complete and submit Form 3509 with their forgiveness application. We are expecting a formal announcement of that shortly from the SBA but have heard from both lenders and SBA staff, all of whom confirm that the form is no longer required and that an SBA announcement to that effect is imminent. Probably not coincidentally, we have also recently heard from some large loan borrowers that their loan forgiveness applications have been approved.

We will of course keep you posted if we learn of any changes in in the SBA’s withdrawal of Form 3509.

3. Latest on the Federal Government vs. Amazon

Last Friday, President Biden issued an Executive Order (EO) focusing on competition throughout the economy. Part of the order specifically targeted the predatory tactics and unfair competition of Big Tech, including Amazon. The order overlaps with the House's recent bipartisan antitrust legislation passed a few weeks ago. In particular, the order focuses on three aspects of the giant tech platforms' behavior:

• Their acquisitions of potential competitors
• Their gathering of consumers’ personal data
• Their competition with small businesses

You can read NAW’s press release on the Executive Order HERE.

Meanwhile, the House continues to fight over revisions to the antitrust package, which, as of late last month, House Majority Leader Steny Hoyer (D-MD-4) said wasn’t ready for floor consideration. Last week, House Republicans, led by Minority Leader Kevin McCarthy (R-CA-23) and Representative Jim Jordan (R-OH-4), rolled out their own alternative antitrust plan. Their proposal includes overhauling Section 230 of the Communications Decency Act and mandates that the companies publicly list content moderation decisions.

According to a story published in Politico, a members-only phone call by the Congressional Progressive Caucus this week broke out into a fight between Representative Zoe Lofgren (D-CA-19) and supporters of the antitrust bills aimed at Big Tech. As reported, after several members expressed support for the antitrust bills during the call, Representative Lofgren called the legislation shoddy, and said that the committee advanced the bills in a hasty, bungled process. She had offered similar criticism during last month's 29-hour markup.

Regardless of what happens on the Hill, President Biden’s EO indicates he may not be afraid to accomplish some of these changes on his own. Both Amazon and Facebook have now formally requested that Federal Trade Commission Chair Lina Khan be recused from any antitrust investigation targeting the companies, arguing her past statements about the e-commerce giants create the appearance that she has prejudged them.

Chair Khan will first consider whether she wants to recuse herself. Depending on her decision, the issue would then go before the FTC to review and decide, based on whether "a disinterested observer may conclude that [the commissioner] has in some measure adjudged the facts as well as the law of a particular case in advance of hearing it." Chair Khan previously declined to pledge to recuse herself from the agency's probes of tech giants, saying she would “seek the guidance of the relevant ethics officials at the agency and proceed accordingly.” 

4. Latest on the Economic Recovery and Re-Opening of the Workplace

As the Coronavirus Pandemic continues to impact the United States economy and business across the nation, it can be hard to decipher how new regulations and laws may impact your business. To help you manage these issues NAW is providing information about reports, webinars, and seminars that you may find useful:

Webinar from Littler Law Firm:
The Legal Implications of the Wandering Worker
Friday, July 23, 2021 | 9:00 am-12:00 pm EDT

Due to increased flexibility to work from home during the COVID-19 pandemic, workers are on the move, taking advantage of the opportunity to “wander” and work temporarily from a variety of remote locations. Increasing numbers of employers are observing that remote work may be here to stay even after sheltering restrictions are relaxed. This new normal of employees working from other locations triggers unexpected compliance issues that employers must appreciate and address. Littler Cleveland attorneys will present a lively discussion of the “wandering worker” challenges, including:

• Wage and hour compliance
• ADA accommodations
• Workplace safety and workers’ compensation
• Privacy and information security
• Tax considerations

To register click HERE.

Stateside Associates publishes a daily report about State and Local Government responses to the evolving situation. To read their latest report, click HERE.

We are also providing a link to a spreadsheet that includes state and local COVID-19 response information provided by MultiState Associates. To view their spreadsheet, click HERE.

1. Latest on Congressional Antitrust Bills Targeting Amazon

Last week, the House Judiciary Committee passed six bipartisan bills targeting the abusive and anticompetitive practices of the four largest tech monopolies in the country. In particular, the American Innovation and Choice Online Act and the Ending Platform Monopolies Act, sponsored by Reps. David Cicilline (D-RI-1) and Pramila Jayapal (D-WA-7), would prohibit Amazon from abusing their power in ways that harm competition and third-party sellers. Together, these bills will restore competition on Amazon Business’ (B2B) marketplace by preventing them from using their market power to pick winners and losers, favor their own products, or otherwise distort the marketplace through abusive conduct.

To read NAW’s press release from last week, click HERE.

The road ahead for these bills remains long and uncertain. House Speaker Pelosi has given a general thumbs-up to the antitrust push and supports bringing these bills to the floor. However, there are several Silicon Valley Democrats who have pushed back on these bills claiming that they go too far and will ultimately be bad for their constituents. Some conservatives are also upset that these bills do not include language to prevent these tech companies from censoring conservative speech. House Republicans, led by Minority Leader Kevin McCarthy (R-CA-23) and Rep. Jim Jordan (R-OH-4), rolled out their own alternative this week. Their proposal includes overhauling Section 230 of the Communications Decency Act and mandates that the companies publicly list content moderation decisions. Politics aside, last week was a major step in NAW’s long journey to curb Amazon’s anti-competitive and abusive actions.

In 2019, NAW engaged on a mission to urge the Federal Trade Commission (FTC) and Members of Congress to end Amazon Business’ monopolistic mistreatment of third-party sellers. Amazon Business (the company’s B2B unit) has taken the B2B marketplace, in which NAW members operate, by force. The FTC has opened an investigation into Amazon’s conduct in several areas, including that of the Business to Consumer (B2C) market. In early 2020, we held a meeting with the FTC to discuss Amazon Business’ mistreatment of its third-party sellers in the B2B marketplace. We made the case that Amazon’s exploitative conduct in B2B commerce mirrors the playbook it has executed in the B2C marketplace. Unchecked, Amazon’s dominance threatens to cripple the highly competitive B2B system which exists in our country.

Around the same time, the House Judiciary Antitrust Subcommittee was underway with its own investigation into Amazon’s abusive treatment of third-party sellers. In several meetings with Subcommittee Members and staff, we demonstrated how Amazon Business is anything but competitive. Like its B2C business, Amazon plays “both sides” of B2B by selling its own products in direct competition against third-party sellers who sell on Amazon Business. In late 2020, the Subcommittee released its blockbuster report detailing allegations of anti-competitive abuses by tech’s most powerful companies, including Amazon, and offered a menu of policy remedies on how to clamp down on their anticompetitive and abusive practices. Investigation of Competition in Digital Markets, Majority Staff Report and Recommendations, Subcommittee on Antitrust, Commercial and Administrative Law, Committee on the Judiciary, House of Representatives, pages 237-339 (October 2020) https://judiciary.house.gov/uploadedfiles/competition_in_digital_markets.pdf

On a similar but separate mission, NAW continues our fight to stop Amazon from securing a government granted monopoly. Section 846 of the FY’18 National Defense Authorization Act (Public Law 115-91) established a framework for determining whether commercial e-commerce portals would be appropriate for government agencies use to make non-contract purchases of commercial off-the-shelf (COTS) products. The law charged the General Services Administration (GSA) with establishing and managing the testing of three models. Although the General Services Administration (GSA) identified three credible e-commerce purchasing channels, its June 2020 award tests only one model, the Amazon platform. All other e-commerce models are excluded. GSA’s award to three vendors, the most prominent being Amazon Business, ignores the explicit Congressional direction to test several e-commerce platforms. GSA’s selection of Amazon as the gatekeeper reduces competition for the federal customer and forecloses access to the federal market.

Since its award, GSA has released no meaningful information addressing the progress and challenges of its pilot marketplace. Amazon’s inability to protect the federal purchaser from counterfeit and illicit products presents significant risk but does not appear to be addressed by GSA’s requirements beyond that it is a vendor responsibility. Nor is there any indication that the obligations associated with Section 889 of the National Defense Authorization Act for 2019 as to Chinese manufactured telecommunications equipment are being fulfilled.

We are currently working with Rep. Veronica Escobar’s (D-TX-16) office on legislation that would require the GSA to expand its proof-of-concept testing to include the other two portal models mandated by Congress and prevents Amazon from selling its own products against third-party sellers on its marketplace. We are also requesting that the Government Accountability Office (GAO) conduct an independent study and report on the business practices of dominant online platform operators in the business-to-business digital market.

2. Latest on Bipartisan Infrastructure Deal

In March, President Biden put forward his American Jobs Plan, a massive $2.3 trillion “infrastructure” proposal which was to be paid for by raising the corporate income tax rate from 21 to 28 percent, ending subsidies for fossil fuel companies, increasing the global minimum tax from approximately 13 percent to 21 percent, and deficit spending. The American Jobs Plan also proposed funding many things which have never traditionally been considered “infrastructure” like home healthcare and the Protecting the Right to Organize (PRO) Act, which is the union boss wish list of the past 70 years. This extremely broad view of what comprises “infrastructure” immediately made the legislation a non-starter for Republicans, as well as some moderate Democrats.

However, over the past several weeks there have been productive negotiations between the White House and Senate Republicans to find a path forward on an infrastructure bill, which resulted in the bipartisan compromise that was announced last week. The funding was scaled back and many of the provisions that Republicans believed to be extraneous were shelved. Finally, last week President Biden and a bipartisan group of 21 Senators (11 Republicans, 9 Democrats, and 1 Independent) announced that they had come to an agreement on a $1.2 trillion infrastructure package and, for the first time in a long while, Washington D.C. seemed to be working again.

The compromise bill was composed of many of the traditional physical infrastructure policies put forward by President Biden in the American Jobs Plan, and although the bill has yet to be officially written, the White House has released a fact sheet on the framework with the broad policy ideas and funding levels – the framework can be viewed HERE.

But as soon as Washington seemed to be in harmony with Republicans and Democrats pedaling together, a fistful of sand was thrown into the gears. During the press conference announcing the bipartisan deal, President Biden bluntly stated that “I expect that in the coming months this summer, before the fiscal year is over, that we will have voted on this bill, the infrastructure bill, as well as voted on the budget resolution. But if only one comes to me…I’m not signing it. It’s in tandem.” In other words, the President said he would not sign the infrastructure bill he had just agreed to unless Congress also passes and sends to him a “reconciliation” bill with additional spending and trillions of dollars in tax hikes.

Republican negotiators were blindsided and threatened to walk away from the deal, and over the weekend the White House scrambled to put out the fires and save this delicate compromise. The White House sent out a lengthy clarification statement trying to walk back the President’s very clear statement that he would not sign an infrastructure bill without a tax hike-reconciliation bill reaching his desk at the same time. You can read the Administration’s clarification statement HERE.

The cleanup has seemed to work for now, with several Republican Senate negotiators saying they were back on board and that they trust the President to keep his word and sign an infrastructure bill if one reaches his desk, irrespective of the possible passage of the tax-hike reconciliation bill.

The separation of the two measures will allow NAW and our allies in the business community to aggressively advocate for enactment of the infrastructure bill and equally aggressively oppose the Administration’s proposed tax increases as separate and distinct measures, as they should be, rather than having support for the much-needed infrastructure measure be jeopardized by burying it in tax hikes.

Even though in recent history passing an infrastructure bill has been the proverbial football that Lucy pulls out from under Charlie Brown, it appears that Congress is closer to passing a true infrastructure package today than at any other time in at least a decade.

There is still much work to be done and NAW will continue to monitor the situation and provide our members with updates on the progress of this important issue.  

3. Latest on President Biden's Labor Policy

According to Harvard Professor Benjamin Sachs,“President Biden is being hailed as the most pro-union president in a generation.” Professor Sachs is “optimistic,” and the business community worried, that the description will be accurate.

Early in his administration, President Biden issued an “Executive Order [EO] on Worker Organizing and Empowerment.” This EO argued that “the Federal Government has not used its full authority to promote and implement [the] policy of support for workers organizing unions and bargaining collectively with their employers” and that “it is the policy of my Administration to encourage worker organizing and collective bargaining.” The EO created a “Task Force on Worker Organizing and Empowerment” to “identify executive branch policies, practices, and programs that could be used, consistent with applicable law, to promote my Administration’s policy of support for worker power, worker organizing, and collective bargaining” and to “identify statutory, regulatory, or other changes that may be necessary to make polices, practices, and programs more effective means of supporting worker organizing and collective bargaining.”

Pro-union appointments, nominations and policies have followed.

Personnel:

Just hours after taking the Oath of Office, President Biden fired the General Counsel of the National Labor Relations Board, an appointed position with a specific term of office. No incoming president of either political party has terminated a sitting GC for the entire 70-year history of the Board.

Pro-union activists were nominated and/or appointed to fill key positions at the Department of Labor, the National Labor Relations Board, and the Equal Employment Opportunity Commission. Just to name a few of his appointments:

• Marty Walsh, former construction trade union official, to be Secretary or Labor
• Jennifer Abruzzo, executive at the Communications Workers of America, to be General Counsel of the National Labor Relations Board
• Sharon Block, former Obama NLRB member, to run the office that oversees federal regulatory issues (OIRA), who wrote that “OIRA can be a force for making sure that the most progressive regulations get through the gate"
• Gwynne Wilcox, former member of the Board of the AFL-CIO Lawyers Coordinating Committee, to the NLRB.

Legislation:

The top priority of the Administration and their allies in Congress is enactment of the Protecting the Right to Organize (PRO) Act, a combination of pro-union polices that includes:

• Repealing all 27 state Right to Work laws
• Making secondary boycotts legal
• Prohibiting employer “captive audience” meetings during a union campaign
• Making intermittent strikes “protected concerted activity"
• Allowing employee access to employer email systems for union organizing activity
• Increasing penalties on employers for unfair labor practices

The PRO Act has already passed the House of Representatives and has 47 co-sponsors in the U.S. Senate. Senate Majority Leader Chuck Schumer has said he will bring the PRO Act up for a vote as soon as it has 50 co-sponsors.

As enacting the PRO Act is labor’s top priority, defeating it is the top priority of the business community. The Coalition for a Democratic Workplace, which NAW helps manage, is leading that effort, and a member of our Government Relations team – Seth Waugh – co-chairs CDW’s Lobbying Committee and is leading the fight to prevent passage in the Senate.

Regulatory Actions:

The Department of Labor has begun what is expected to be an ongoing effort to repeal or reverse Trump Administration labor regulations, beginning with their reversal of the Independent Contractor and Joint Employer rules of the previous Administration.

Also, the director of the Wage and Hour Division (WHD) under President Obama, David Weil, has been re-nominated to that position. It was under his direction that WHD promulgated the Fair Labor Standards Act “white collar exemption” rule that would have raised the minimum salary for exemption from $23,000 to more than $50,000 (the final rule raised it to $47,000). NAW was a plaintiff in the lawsuit that resulted in that rule being overturned, but if Weil is confirmed to that position again, we anticipate he will again propose FLSA rules changes.

Summary:

We fully expect that the aggressive pro-union agenda of the Biden Administration will result in court challenges, as did the Obama-era rules and regulations. The Coalition for a Democratic Workplace led the effort against many of the rules and regulations throughout the Obama Administration – a summary of those actions can be found HERE. NAW is fully committed to again participate in the effort to fight pro-union legislation and regulations in Congress and in the courts. 

4. Latest on Other Issues Impacting NAW Members

Supreme Court Tosses Lawsuit Challenging Obamacare:

On July 17, the Supreme Court threw out a lawsuit threatening the entirety of Obamacare. The court ruled in a 7-2 finding that Republican-led states behind the case lacked standing to challenge the health care law. The case argued that Obamacare was rendered unconstitutional after Congress eliminated the penalty for not having health insurance. Four of the court's conservative justices joined with the three-member liberal wing to reject the lawsuit.

The opinion by Justice Stephen Breyer was joined by the court’s two other liberal justices and all but two conservatives, including Trump appointees Brett Kavanaugh and Amy Coney Barrett. By finding that Republican-led states could not contest a change to the law, the conservative justices were essentially shielded from grappling with larger questions about whether Obamacare was no longer constitutional. "[W]e conclude that the plaintiffs in this suit failed to show a concrete, particularized injury fairly traceable to the defendants’ conduct in enforcing the specific statutory provision they attack as unconstitutional," Justice Breyer wrote.

The ruling will give new energy to Democratic efforts to build on Obamacare, through richer insurance subsidies and potentially a public option. However, the prospects for other Democratic health care priorities are uncertain. President Biden has avoided substantive debate on his campaign proposals, like lowering Medicare’s eligibility age, government-mandated drug price negotiations and creating a government-run insurance option. With razor-thin margins in Congress, Democrats have just a small window to deliver on their health care plans before the 2022 midterm elections. As we mentioned in the last GR report, Senate Health Committee Chair Patty Murray and House Energy and Commerce Chair Frank Pallone have started collecting feedback on a public option.

The Chairs issued a Request for Information (RFI) to the general public, which is very unusual. Their letter asks for input on who should be eligible to join a government-run plan, how to structure its benefits, and how to maintain a network of doctors. The July 31st deadline they set for input just before Congress’ August recess leaves little time to make actual progress this year. You can read the RFI HERE. The Partnership for Employer-Sponsored Coverage (P4ESC), which NAW helps manage, is currently drafting comments to the RFI which we will share with you in a future update.

5. Latest on Economic Recovery and Re-Opening the Workplace

As the Coronavirus Pandemic continues to impact the United States economy and businesses across the nation, it can be hard to decipher how new regulations and laws may impact your business. To help you manage these issues NAW is providing information about reports, webinars, and seminars that you may find useful:

From Bloomberg Law:

Masks Off—Navigating the Covid-19 Vaccine Era: Legal Insight

Employers face challenging times with return-to-work policies, especially surrounding the Covid-19 vaccine. Baker Botts attorneys break down the legal issues surrounding masks, vaccines, and privacy issues and offer recommendations for workplace guidelines. To read the full article, click HERE.

Stateside Associates publishes a daily report about State and Local Government responses to the evolving situation. To read their latest report, click HERE.

We are also providing a link to a spreadsheet that includes state and local COVID-19 response information provided by MultiState Associates. To view their spreadsheet, click HERE.

1. Latest on the EEOC's Guidance for Employers Offering Vaccine Incentives

In our previous update, we reported that the U.S. Equal Employment Opportunity Commission (EEOC) finally published requested guidance for employers on offering vaccine incentives. Specifically, they have provided “new information about how the Americans With Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA) apply when an employer offers incentives for employees to provide documentation or other confirmation of vaccination when an employee gets a vaccine in the community or from the employer or its agent.”

You can access the EEOC’s announcement of their new guidance HERE with links to their additional documents.

In addition, McGuireWoods law firm has released their own “EEOC Issues New COVID-19 Vaccine Guidance for Employers” analysis on this topic that you might find useful. You can access the McGuireWoods piece HERE.

As you may remember, NAW joined a group of more than 40 allied trade associations in sending a letter to the EEOC requesting guidance on the offering of incentives to employees to encourage them to get vaccinated. We specifically asked the commission for guidance on “the extent to which employers may offer employees incentives to vaccinate without running afoul of the Americans With Disabilities Act and other laws enforced by the EEOC.”

You can read our letter to the EEOC HERE. The letter was sent on February 1st. 

2. Latest on OSHA's COVID-related "Emergency Temporary" Safety Rule

As discussed above, last month the Centers for Disease Control (CDC) issued new guidance for fully vaccinated people. Although it was a welcomed relief for many, it also created as much confusion for businesses as it clarified. In response, the Occupational Safety and Health Agency (OSHA) posted an update to their webpage stating that they were reviewing the CDC guidance. The OSHA guidance was further complicated by the fact that the Biden Administration had issued an executive order directing OSHA to investigate the need for an Emergency Temporary Standard (ETS) regarding COVID-19, which OSHA submitted to the White House Office of Information and Regulatory Affairs (OIRA).

During a congressional hearing yesterday, Labor Secretary Marty Walsh testified that the OSHA ETS is focused only on healthcare settings. OSHA just released the new Healthcare ETS this afternoon. OSHA has also updated their guidance for all industries.

You can view the updated OSHA guidance for all industries HERE.

You can view the new OSHA Healthcare ETS HERE.

You can read OSHA’s FAQs HERE. 

3. Latest on Infrastructure, Social Spending, Tax Increases, and "Reconciliation"

There have been a lot of reports on the Biden/Congressional Democratic majority plans to pass two more significant spending and tax measures, in addition to the already-enacted $1.9 trillion American Rescue Plan. Much of that discussion has focused on when and whether the Democratic-controlled Senate will try to pass one or both additional bills through a “reconciliation” process.

Reconciliation is a Congressional procedure that limits debate on legislation in the Senate so that it cannot be filibustered and can therefore pass with just 51 votes instead of the 60 needed to “invoke cloture” – cut off debate – on regular bills. And it is critically important because reconciliation allows the Senate majority – of either Party and even in a tied 50-50 Senate like we have today – to completely bypass the minority members and pass legislation with just the Majority’s votes.

Reconciliation “instructions” are part of the Congressional budget so must be passed by both houses of Congress as part of their Budget Resolution. Reconciliation can only be used to pass legislation dealing with money – taxes, spending, and the debt limit. It cannot be used to enact legislation unrelated to taxes and spending. And it has been used infrequently in the past.

But reconciliation is being considered in a whole new dimension today, with Senate Majority Leader Chuck Schumer (D-NY) talking about passing a massive infrastructure bill, and possibly an equally large social policy bill, using reconciliation to short-circuit GOP opposition.

We have written a white paper on the reconciliation process and how Senator Schumer planned to use it this year, which you can read HERE.

4. Latest on President Biden's Executive Action on Labor Issues

On the campaign trial, President Biden vowed to be the “strongest labor president you have ever had” and has echoed that statement multiple times thus far during his presidency. But despite the President’s vow and the recent wave of anti-business activists who have won elected office, according to the Bureau of Labor Statistics only 6.3% of private sector workers are union members, down significantly from the unionization high water mark of 35.7% in 1953. In fact, the recent overwhelming rejection of unionization at the Amazon warehouse in Alabama (not exactly a highly regarded company at the moment) seems to show that today unions have less appeal among private sector workers than at any other time in American history.

But President Biden is finding that even with control of the White House and Democratic majorities in the House and Senate, pushing his controversial pro-labor agenda across the finish line is proving to be a harder task than expected. Perhaps in anticipation of the challenges of enacting some of the more egregious pro-labor items via legislation, the White House embraced the Obama method of a “phone and a pen” to also focus on executive actions.

On April 26th President Biden signed an executive order creating a “Task Force on Worker Organizing and Empowerment” which will be wrapping up the first round of listening sessions with labor unions on June 11th. This task force is chaired by the Vice President and is charged with identifying policies and programs to promote worker organizing and collective bargaining. White House labor policy staffers who are assisting with this task force have specifically asked labor unions to only bring forward proposals that can be accomplished through executive action and not through legislation. This will likely mean that the Biden Labor Department will start to systematically roll back many of the regulations or deregulatory activities that occurred during the Trump administration. With the task force including 13 cabinet officials and multiple agency heads, the White House is taking an all-of-government approach to issuing new union friendly regulations and policies across as wide a spectrum as possible.

NAW will continue to monitor any recommendations from this White House task force as well as any legislative proposals and keep you apprised of the situation.

5. Latest on Other Issues Impacting NAW Members

On May 26th, House Energy and Commerce Committee Chairman Frank Pallone (D-NJ) and Senate Health, Education, Labor and Pensions (HELP) Committee Chairwoman Patty Murray (D-WA) announced their plans to develop legislation to establish a public option for health coverage. A public health insurance option was a major staple of President Biden’s health agenda during the campaign. However, President Biden recently has focused on infrastructure and taxes, not health care. And, with razor-thin majorities in both the House and Senate, Democrats would have a difficult time passing legislation to enact a public option this year, which Republicans oppose.

The Chairs issued a Request for Information (RFI) to the general public, which is very unusual. Their letter asks for input on who should be eligible to join a government-run plan, how to structure its benefits, and how to maintain a network of doctors. The July 31st deadline they set for input just before Congress’ August recess leaves little time to make actual progress this year. You can read the RFI HERE. The Partnership for Employer-Sponsored Coverage (P4ESC), which NAW helps manage, is currently drafting comments to the RFI which we will share with you in a future update.

NAW is adamantly opposed to a public option. Some public option proposals would allow employees to opt out of their employer’s plan in favor of the public option plan. Absent a firewall, the cost of the employer’s plan could spiral as healthier employees migrate out of the plan, severely impacting a plan’s health risk adjustment and threatening plan availability and affordability for other employees and their families.

6. Latest on Economic Recovery and Re-Opening of the Workplace

As the Coronavirus Pandemic continues to impact the United States economy and businesses across the nation, it can be hard to decipher how new regulations and laws may impact your business. To help you manage these issues NAW is providing information about reports, webinars, and seminars that you may find useful:

From Reed Smith Law Firm:

Is that a smile that I see? Pennsylvania businesses adjust reopening plans as the statewide mask mandate is scheduled to be lifted

On May 27, 2021, Pennsylvania Acting Health Secretary Alison Beam announced at a press conference that Pennsylvania’s statewide masking order is slated to be lifted in its entirety effective June 28, 2021. This announcement comes on the heels of the Wolf Administration’s May 4, 2021 announcement that all COVID mitigation orders in Pennsylvania would be... Continue Reading

Webinar from Nixon Peabody:

Impactful Solutions: Understanding new COVID-19 guidance and rulemaking impacting workplace safety

Wednesday, June 16 | 10:30 a.m., Pacific

Public health guidance and state rule making have been changing rapidly. This webinar will help employers navigate safety compliance and prepare for re-openings. Join us as we discuss the following topics that impact your business:

• New developments and amendments to state OSHA regulations including Cal/OSHA’s COVID-19 ETS
• Federal ETS guidelines
• Updated CDC guidance
• Continued COVID-19 considerations

To register, click HERE.

From Reed Smith Law Firm:

New Jersey expands COVID changes to include employers not open to the public

New Jersey Governor Phil Murphy announced the lifting of COVID-19 mask requirements for certain employers, while continuing to require masks for others. In a point of frustration for many New Jersey employers, the requirements seemed to require masking and social distancing in an inconsistent manner, and imposed greater... Continue Reading

From Reed Smith Law Firm:

Virginia adopts new laws effective July 1 that continue to transform the employment landscape

Following last year’s wave of new employment laws (previously covered as follows: Part 1, Part 2, and Part 3), Virginia has adopted a variety of new laws that will take effect July 1 and continue to transform the Commonwealth’s employment law landscape. Virginia employers should carefully review these new laws to ensure compliance in this... Continue Reading

From Reed Smith Law Firm:

New York State Department of Labor confirms that New York State paid sick leave applies to COVID-19 vaccine recovery time

As we previously reported, over the past year, New York State has adopted a statewide sick leave law, paid leave for COVID-19 vaccination, and paid quarantine leave. Last week, the New York State Department of Labor (NYSDOL) issued guidance on the use of New York State Sick Leave (NYSSL) as it pertains to employees receiving... Continue Reading

Stateside Associates publishes a daily report about State and Local Government responses to the evolving situation. To read their latest report, click HERE.

We are also providing a link to a spreadsheet that includes state and local COVID-19 response information provided by MultiState Associates. To view their spreadsheet, click HERE.  

1. Latest on President Biden's Proposed Tax Increases

New New Coalition – America’s Job Creators for a Strong Recovery – to oppose Biden tax increases:

NAW and four allied business groups recently joined together to organize a new tax coalition – America’s Job Creators for a Strong Recovery – to respond to the Biden Administration’s proposed business tax increases. Like all NAW’s legislative coalitions, this one will lobby against the tax increases; however, this new coalition has a different primary mission: to work with consultants and a polling firm to try to shape public opinion on the tax hikes. President Biden and his allies consistently argue that taxes should be increased on businesses and the “wealthy” because they don’t pay enough in taxes and should be required to “pay their fair share.”

Given that the average effective tax rate in distribution and several other industries has always been at or higher than the statutory rates, the “fair share” argument is a false narrative, but polls consistently show that voters believe it. The mission of our new coalition is to conduct public opinion surveys, determine if voters change their minds when given more – and more accurate – information, and mount a targeted media campaign to convince both voters and members of Congress to oppose the Biden tax increases.

We officially launched the coalition yesterday with more than 30 members (including many NAW member associations) and conducted a webinar on our most recent polling data. The coalition continues to grow, and as you may have seen, has caught the attention of the media. Earlier this week there were several news reports on the coalition, and NAW CEO Eric Hoplin did a Fox Business interview. Here are links to those press stories and to Eric’s interview: ·

• CNBC
• Punchbowl News
• Bloomberg News
• The Hill
• Eric Hoplin interview on Fox Business

We always appreciate any feedback and anecdotal information you can share with respect to the proposed tax increases and how they would impact your business, and we will of course keep you apprised of the new coalition’s growth and activity.

LIFO Update:

The NAW-led LIFO Coalition continues to work to ensure that LIFO repeal is not included as a “pay-for” in tax or spending legislation. We have had numerous meetings with Democratic and Republican members of the tax-writing committees in the House and Senate and continue to get great feedback and reports that LIFO repeal is not being considered – or even discussed – as the tax bills develop in Congress. Some of the key Democrats on the House Ways and Means Committee have long been, and continue to be, allies in our mission to protect LIFO, and we have been told anecdotally that Senate Finance Committee Chairman Ron Wyden (D-OR) has said he is also not considering LIFO repeal.

Despite the consistent and welcome good news, NAW and the Coalition continue to work the issue. We are currently trying to identify House Democrats who do not serve on the tax-writing committee who would be willing to sign a joint letter to Speaker Pelosi simply notifying her of their interest in protecting LIFO, so she is aware of the issue should it come up in later tax discussions. We are also working to build relationships with new members of Congress who are most likely not familiar with LIFO to provide them with background information on the accounting method. To that end, the Coalition’s consulting firm (The Herald Group) has just taken a LIFO chart and explanatory material prepared by one of the tax experts in the coalition and created a visual document explaining how LIFO works. Companies on LIFO clearly understand the issue in much greater depth, but we think this visual guide will be very useful in demonstrating LIFO as an essential business tool to members of Congress unfamiliar with inventory accounting methods.

Finally, The Herald Group is always looking for good anecdotal stories from LIFO users on the importance of LIFO to their business, and we would particularly like to include on our coalition website any videos that businesses would be willing to provide, talking about their use of LIFO. If you would consider providing either a written or video-taped LIFO comment, please let me know.

2. Latest on the Vaccine Distribution

NAW is actively involved in the vaccine in the vaccine distribution issue, working with member companies in a joint effort to get the government to involve the entire wholesale distribution industry.

Addressing International PPE Supply Shortages and Disruptions with FEMA:

Throughout the pandemic and continuing into 2021, many distributors have experienced unprecedented supply shortages and supply chain disruptions that have limited the availability of critical PPE. Items like nitrile gloves, N95 respirators, and medical syringes quickly became scarce due to both a spike in domestic demand and subsequent manufacturing and transportation constraints abroad.

NAW joined a working group of companies and industry groups that meets with the Federal Emergency Management Agency (FEMA) regularly to advance strategies to remedy these issues. Our meeting this week focused on strategies to improve the domestic supply of N95 masks and medical gloves.

State and Local Vaccine Distribution Tracker by Littler Law Firm:

As with nearly everything about this pandemic, guidance and action plans vary by state and local jurisdictions and are constantly evolving. To that end, Littler Law Firm provides links to state agency websites, vaccine allocation plans, and other guidance related to the rollout of COVID-19 vaccines, as well as basic vaccination plan phases. To see the latest updates, click HERE.

Additional Vaccine Distribution Resources:

In a previous update, we included additional information and resources on vaccine distribution, which you can access HERE.

3. Latest on Economic Recovery and Re-Opening the Workplace

As the Coronavirus continues to impact the United States economy and businesses across the nation, it can be hard to decipher how new regulations and laws may impact your business. To help you manage these issues NAW is providing information about reports, webinars, and seminars that you may find useful:

From Reed Smith Law Firm:

NJ employers ready to ditch the masks? Not so fast.

On May 24, 2021, New Jersey Governor Phil Murphy announced that he is lifting the indoor mask mandate in most circumstances effective May 28, 2021. Many New Jersey employers interpreted this to mean that they may choose to eliminate mask requirements in their workplaces beginning this Friday. However, the issuance of Executive Order No. 242... Continue Reading

From Littler Law Firm:

MIOSHA Amends COVID-19 Emergency Rules as Michigan Eases Workplace Restrictions

Effective May 24, 2021, The Michigan Occupational Safety and Health Administration (MIOSHA) revised its COVID-19 Emergency Rules. To read more, click HERE.

Webinar from Litter Law Firm:

COVID-19 in the Workplace: Recent Developments and Compliance

Challenges - Session 15

Friday, June 4, 2021 | 8:30 am-9:30 am PDT

It has become apparent that COVID-19 is going to dominate employment and labor law issues for the foreseeable future. The American workplace has become the first frontier as the pandemic creates new legal issues – seemingly every day. In response to the many questions that business leaders, human resources professionals, and in-house counsel have about facing these new legal challenges, Littler's Sacramento office created the “First Friday" webinar series. To register, click HERE.

Stateside Associates publishes a daily report about State and Local Government responses to the evolving situation. To read their latest report, click HERE.

We are also providing a link to a spreadsheet that includes state and local COVID-19 response information provided by MultiState Associates. To view their spreadsheet, click HERE.

CDC Guidelines and OSHA: As you know the CDC made clear in its lifting of the mask mandate that their guidance did not pre-empt OSHA guidelines. As of today, a Labor Department/OSHA rule imposing an “emergency temporary standard” is still sitting at the Office of Management and Budget’s (OMB) Office of Information and Regulatory Affairs (OIRA), where it was sent for their required review. As ludicrous as it is for OSHA to still be considering a temporary emergency COVID safety rule, we do not yet know if OIRA will continue with the new rule making, withdraw it, or send it back to OSHA. We and our labor-issue allies continue to monitor this situation and will let you know immediately if/when we get new information.  

1. Latest on President Biden's Proposed Tax Increases

As you know, President Biden has proposed two large spending proposals, one a traditional “hard” infrastructure bill and a second “social infrastructure” proposal. Both proposals would be “paid for” with significant tax increases on both C corporations and pass-through businesses.

A recent survey we conducted of NAW members shows that more than 70% support a traditional infrastructure bill, but that even larger majorities oppose increases in the corporate income tax rate or the individual tax rate that pass-through businesses pay – 76% and 91% respectively.

NAW is working with allies in the DC trade association community to support passage of an infrastructure bill, but to oppose the direct business taxes the President has proposed.

There are now indications that the magnitude of the Biden tax hike proposals – several trillion dollars – is causing both Democrats and Republicans on Capitol Hill to question the wisdom of the plan. For example, the proposed changes to the estate tax – repeal of stepped-up basis on capital assets and taxation of unrealized capital gains at death – is getting particular scrutiny, as this story today in Bloomberg details.

Nevertheless, those advocating for enactment of all the Biden tax increases point to public opinion polls showing that there is broad support for increasing taxes on corporations and the wealthy. But other recent polling shows that, when asked the direct question, most poll respondents say that the most anyone should have to pay in taxes is 25 percent. Clearly, both assertions cannot be correct.

NAW is now working with allied trade associations, consultants, and a polling firm to organize and launch a new coalition. The mission of this coalition is not just advocacy but will conduct polling and message testing to see how public opinion responses are impacted when the respondents learn more about the tax proposals and will include a targeted media campaign. We expect this new coalition to be announced next week.

We will of course keep you informed of the coalition effort and the status of tax legislation in Congress.

2. Latest on CDC Mask Guidelines

As we reported earlier this week, the new CDC mask guidance has raised more questions than it has answered, since they clearly stated that the CDC guidance does not preempt OSHA or EEOC guidelines.

Also, as we noted, OSHA updated its website to include this notice:

The Centers for Disease Control and Prevention (CDC) has issued new guidance relating to recommended precautions for people who are fully vaccinated, which is applicable to activities outside of healthcare and a few other environments. OSHA is reviewing the recent CDC guidance and will update our materials on this website accordingly. Until those updates are complete, please refer to the CDC guidance for information on measures appropriate to protect fully vaccinated workers.

Unfortunately, that statement remains on the OSHA website and no update to their materials has been released. And EEOC has posted nothing at all on its website on the issue. We are continuing to closely monitor OSHA and EEOC and will let you know as soon as we learn more. I

n the interim, in addition to the May 13th Littler law firm analysis we provided last Tuesday (you can access it HERE), the K&L Gates law firm has just released an excellent “U.S. Labor, Employment, and Workplace Safety Alert” on this topic that you might find useful. You can access the K&L Gates alert HERE.

3. Latest on the Vaccine Distribution

NAW is actively involved in the vaccine distribution issue, working with member companies in a joint effort to get the government to involve the entire wholesale distribution industry.

State and Local Vaccine Distribution Tracker by Littler Law Firm:

As with nearly everything about this pandemic, guidance and action plans vary by state and local jurisdictions and are constantly evolving. To that end, Littler Law Firm provides links to state agency websites, vaccine allocation plans, and other guidance related to the rollout of COVID-19 vaccines, as well as basic vaccination plan phases. To see the latest updates, click HERE.

Additional Vaccine Distribution Resources:

In a previous update, we included additional information and resources on vaccine distribution, which you can access HERE.

4. Latest on Economic Recovery and Re-Opening the Workplace

As the Coronavirus Pandemic continues to impact the United States economy and businesses across the nation, it can be hard to decipher how new regulations and laws may impact your business. To help you manage these issues NAW is providing information about reports, webinars, and seminars that you may find useful:

Webinar from Littler Law Firm:

Virtual Human Resources – Managing the Remote Workforce

Wednesday, May 26, 2021 | 9:30 am-10:30 am PDT

We are one year into the pandemic, and the latest data shows that about 33% of the American workforce continues to work remotely (from home). Managing a distant workforce has always been a challenge – think of trying to manage and coach outside salespeople. As the number of employees working from home has increased dramatically, human resources (HR) needs to refine its approach to managing the workforce. To register, click HERE.

Stateside Associates publishes a daily report about State and Local Government responses to the evolving situation. To read their latest report, click HERE.

We are also providing a link to a spreadsheet that includes state and local COVID-19 response information provided by MultiState Associates. To view their spreadsheet, click HERE. 

1. Latest on Interim Public Health Recommendations for Fully Vaccinated People

Late last week, the U.S. Centers for Disease Control and Prevention (CDC) issued new guidance for fully vaccinated people that stated, “fully vaccinated people no longer need to wear a mask or physically distance in any setting, except where required by federal, state, local, tribal, or territorial laws, rules, and regulations, including local business and workplace guidance.” This obviously created as much confusion for businesses as it clarified. However, today the Occupational Safety and Health Administration (OSHA) posted an update on its webpage that stated the agency is “reviewing the recent CDC guidance” and advised companies to “please refer to the CDC guidance for information on measures appropriate to protect fully vaccinated workers.”

It is anticipated that OSHA will update their guidance materials on their webpage, but it is unknown when exactly that will be completed. This update may be complicated by the fact that President Biden signed an executive order on January 21st directing OSHA to investigate drafting an Emergency Temporary Standard (ETS) regarding COVID-19. OSHA has now submitted an ETS to the White House, where it is being reviewed by the Office of Information and Regulatory Affairs. The contents of the ETS have not been publicly revealed, but it would be difficult to see how OSHA could propose a COVID-related emergency safety standard that did not include recommendations regarding wearing masks in the workplace.

There were already significant questions about the wisdom or necessity of OSHA imposing a new emergency COVID workplace safety rule at this stage in the pandemic when businesses are more than a year into making the accommodations necessary to ensure the safety of their workers. The new CDC mask guidance obviously reinforces questions about whether an ETS is needed, and there is speculation that OIRA could simply shelve the new rule. However, there have been no signals from the Administration suggesting how OIRA will act.

Additionally, the U.S. Equal Employment Opportunity Commission updated their website stating that the agency is also considering the impact the updated CDC statement may have on EEOC guidance that has already been issued about COVID-19 policies and anti-discrimination laws.

We will of course keep you apprised of any further developments, official government guidance, or related employer resources on these issues.

You can view the CDC statement HERE.

You can view the OSHA statement HERE.

You can view the EEOC statement HERE.

Additionally, you can view an article from Bloomberg Government about the current conundrum between the competing regulations and guidance HERE. 

2. Latest on Unemployment Insurance - Pandemic Benefit

As you know, the April jobs report was very disappointing, with only 266,000 jobs created, well below the estimated one million. President Biden said in response that the pandemic unemployment benefit had no “measurable” impact on the low jobs number and that “people will come back to work if they are paid a decent wage.”

Employer comments in general and specific feedback we have received from NAW members all contradict the President’s assertions. And consistent with employer concerns about the pandemic UI benefit, as of this past weekend 16 states have either terminated the extra payment or initiated steps to do so. Similarly, about half the states have begun to reimpose the “work search” condition for UI eligibility, and the President has asked the Department of Labor to review working with other states to do so as well.

In response to these actions, proponents of the extra UI payment are making the case that the pandemic payment should not be terminated and that the work search requirement should not be re-instated. In a May 13th commentary, the Century Foundation described the actions of governors to end the pandemic payments as “dereliction of responsibility” and “an affront to the workers in these states.” And yesterday the New York times ran a story noting that the work search requirement “presents an undue hardship.”

UI proponents use stories of specific individuals whom they argue would be harmed by reform of the UI program to make the case against any changes in the policy; and they dismiss claims that the UI benefits create a disincentive for returning to work.

We need to fight this battle in similar fashion and need specific examples of the UI benefit in fact making it difficult for employers to hire. Several NAW members have provided us with examples of job openings going unfilled, potential workers expressly turning down work because of the UI benefit, workers applying for work then not showing up for interviews or accepting jobs then not showing up for work. We have had the opportunity to share these stories (anonymously) with Senators and House members, who use our anecdotes to make the case for reform of the programs.

If you have similar anecdotal stories, please share them with us. They really do make a difference on Capitol Hill.

3. Latest on the Vaccine Distribution

NAW is actively involved in the vaccine distribution issue, working with member companies in a joint effort to get the government to involve the entire wholesale distribution industry.

State and Local Vaccine Distribution Tracker by Littler Law Firm:

As with nearly everything about this pandemic, guidance and action plans vary by state and local jurisdictions and are constantly evolving. To that end, Littler Law Firm provides links to state agency websites, vaccine allocation plans, and other guidance related to the rollout of COVID-19 vaccines, as well as basic vaccination plan phases. To see the latest updates, click HERE.

Additional Vaccine Distribution Resources:

In a previous update, we included additional information and resources on vaccine distribution, which you can access HERE.

4. Latest on the Economic Recovery and Re-Opening the Workplace

As the Coronavirus Pandemic continues to impact the United States economy and businesses across the nation, it can be hard to decipher how new regulations and laws may impact your business. To help you manage these issues NAW is providing information about reports, webinars, and seminars that you may find useful:

Webinar from NAW and Distribution Strategy Group:

Don’t Miss NAW’s Free May 19 Webinar

Focused on How Distributors Will Grow Faster Post-Pandemic

The pandemic is nearly over and it's time for distributors to apply the lessons from the last 14 months so they can grow their businesses faster in the future. Join NAW and Distribution Strategy Group for our free webinar on May 19 at 2 p.m. ET. We surveyed distributors and we'll share what they told us about their sales in the pandemic and what they're forecasting for 2021, their work-from-home policy, how their website and digital tools performed, which digital capabilities they'll invest in, and much more. Register HERE.

Webinar from Littler Law Firm:

Returning to Work in Colorado: Considerations for Employers in Year Two of the Coronavirus Wednesday, June 2, 2021 | 9:00 am-9:45 am PDT

In the second year that employers grapple with the COVID-19 pandemic, Colorado’s public health rules continue to rapidly evolve. Whether your employees have been remote since 2020 or have already returned to the worksite, there remain many rules, considerations, and best practices of which employers should be aware, including those relating to face coverings, vaccinations, social distancing, and paid sick leave. To register, click HERE.

From Littler Law Firm: Game-Changer:

The CDC Lifts COVID-19 Masking and Distancing Restrictions for Fully Vaccinated Individuals

On May 13, 2021, the Centers for Disease Control and Prevention (CDC) announced that Americans who have been fully vaccinated against COVID-19 no longer need to wear a face covering or practice physically distancing in any setting. This announcement builds on the CDC’s April 27 guidance that fully vaccinated individuals could forgo face coverings and physical distancing in outdoor settings and resume other activities. To read more, click HERE.

Stateside Associates publishes a daily report about State and Local Government responses to the evolving situation. To read their latest report, click HERE.

We are also providing a link to a spreadsheet that includes state and local COVID-19 response information provided by MultiState Associates. To view their spreadsheet, click HERE.

1. President Biden's New $1.8 Trillion American Family Plan

Today marks President Biden’s 100th day in office.Speaking to a joint session of Congress last night, President Biden unveiled his new $1.8 trillion American Family Plan. Combined with his $1.9 trillion American Rescue Plan, already signed into law, and his $2.5 trillion American Jobs Plan, currently being negotiated, it brings the total of proposed new spending to $6.1 trillion in just 100 days.

Ahead of President Biden’s speech last night, NAW released a statement regarding President Biden’s unprecedented $6 trillion in new government spending proposals that will kill more American jobs and businesses. To read the full statement from Eric Hoplin, NAW President and CEO, click HERE.

As you have most likely read, the proposed American Families Plan includes funds for childcare, paid family and medical leave, universal pre-kindergarten schooling, tuition-free community college and nutritional assistance pared with a four-year extension of the expanded child tax credit enacted in the March Covid-relief bill. President Biden’s new plan would be paid for by increasing taxes on both income and capital gains and by increased enforcement of current tax law.

The proposal would also significantly change inheritance tax law. Most of the reporting on the proposal notes that, in addition to raising the top capital gains tax rate to 39.6%, the plan would eliminate stepped-up basis on inherited assets of estates over $1 million to ensure that capital gains taxes are based on the decedent’s cost basis in the asset.

Under current law, capital gains taxes on inherited asset are paid only when the heirs sell the assets. Significantly, and most often NOT included in the reporting on the Biden plan, is that it would require that the estate pay the capital gains taxes at death, effectively deeming the assets to be sold. There are also at least two proposals in Congress that would similarly amend estate tax law to require the payment of taxes on built-up gains without the sale of the assets.

Obviously, the taxing of capital gains at death would negatively impact the ability of a business or farm owner to pass that business or farm to heirs. The Biden plan acknowledges that reality and says it will offer “protections” to privately-owned businesses so their heirs can inherit the business, but the plan offers no details or specifics on what those protections would be.

If you are interested in more information on the capital gains tax at death issue, the Congressional Research Service has prepared a good analysis which you can read HERE.

Another key component of the Biden tax plan is its emphasis on tax enforcement to increase the collection of owed-but-unpaid taxes. They would accomplish this in part by a massive increase in the IRS budget to allow significantly more audits of upper income earners.  Another part of the proposal would require banks to provide information to the IRS on the financial transactions of account holders, both business and individual. The Administration has provided no additional information or details on this particular proposal, so it is not yet known what type or size transactions the banks would be required to report to the IRS.

We will of course be closely watching as Congress begins writing the legislation that will provide specifics and details on the many as-yet-unspecified parts of the Biden proposal.

• To read the White House Fact Sheet on the American Family Plan, click HERE.
• Bloomberg has prepared a summary of the American Family Plan, which you can read HERE.

2. Latest Issue on Other Issues Impacting NAW Members

3. Latest on Vaccine Distribution

NAW is actively involved in the vaccine distribution issue, working with member companies in a joint effort to get the government to involve the entire wholesale distribution industry in the vaccine distribution effort.

State and Local Vaccine Distribution Tracker by Littler Law Firm:

As with nearly everything about this pandemic, guidance and action plans vary by state and local jurisdictions and are constantly evolving. To that end, Littler Law Firm provides links to state agency websites, vaccine allocation plans, and other guidance related to the rollout of COVID-19 vaccines, as well as basic vaccination plan phases. To see the latest updates, click HERE.

Additional Vaccine Distribution Resources:

We included additional information and resources on vaccine distribution in an earlier update, which you can access HERE. 

4. Latest on the Economic Recovery and Re-Opening the Workplace

As the Coronavirus Pandemic continues to impact the United States economy and businesses across the nation, it can be hard to decipher how new regulations and laws may impact your business. To help you manage these issues NAW is providing information about reports, webinars, and seminars that you may find useful:

Webinar from Littler Law Firm:

President Biden’s First 100 Days in Office

Thursday, May 6, 2021 | 10:00 am-10:45 am PDT

With the inauguration of President Joe Biden as our nation's 46th president, together with Democratic-controlled houses of Congress, this presentation will discuss expected and potential reforms and how the first 100 days are playing out under the Biden administration.

Topics covered include:

• COVID-19 relief package
• Executive order action
• Personnel/nominations
• Impact on labor agencies (DOL, NLRB, EEOC)
• What administration workforce priorities and initiatives can employers expect in the coming year

To register, click HERE.

Stateside Associates publishes a daily report about State and Local Government responses to the evolving situation. To read their latest report, click HERE.

We are also providing a link to a spreadsheet that includes state and local COVID-19 response information provided by MultiState Associates. To view their spreadsheet, click HERE.   

1. Latest on the Vaccine Distribution

NAW is actively involved in the vaccine issue, working with member companies in a joint effort to get the government to involve the entire wholesale distribution industry in the vaccine distribution effort.

Tax Credits Available to Provide Paid Leave to Employees Receiving COVID-19 Vaccines:

On Wednesday, President Biden announced that businesses with fewer than 500 employees will be reimbursed for any paid time off they provide employees — up to $511 per day per employee. The paid tax credit is funded by the American Rescue Plan signed into law last month. Businesses and nonprofits may receive a tax credit for up to $511 per day of paid sick leave that employees take to get the shot or recover from its side effects from April 1st through September 30th.

Guidance for small businesses on the tax credit is available on the IRS website HERE.

In February, NAW, along with 42 of our downtown allies, sent a letter to the Equal Employment Opportunity Commission (EEOC) requesting that they quickly issue guidance clarifying the extent to which employers may offer employees incentives to vaccinate without running afoul of the Americans With Disabilities Act and other laws enforced by the EEOC. To date, we have not yet received a response to our letter and no guidance has been released.

President Biden also called on all employers, regardless of size, to offer paid leave for their workers to get vaccinated, as well as urging companies to provide information about the shots and incentives to get them, like product giveaways or other rewards. "I’m calling on every employer large and small in every state to give employees the time off they need, with pay, to get vaccinated," President Biden said in a statement. "No working American should lose a single dollar from their paycheck because they chose to fulfill their patriotic duty of getting vaccinated," Biden added. To read President Biden’s full statement, click HERE.

NAW Initiatives on Vaccine Distribution: NAW & NFL Expand Partnership in Support of COVID-19 Vaccination NAW and wholesaler-distributors have continued to provide critical donations of supplies and PPE to NFL stadium vaccination sites across the country. The partnership has expanded to include 7 teams (Detroit Lions, Pittsburgh Steelers, Carolina Panthers, Atlanta Falcons, Seattle Seahawks, San Francisco 49ers, and Houston Texans), with donor distributors contributing over $450,000 worth of gloves, sanitizer, masks, wipes, and other products used to administer vaccinations.

The NFL announced recently that over two million people received vaccinations at a stadium site, and NAW is proud to lead the distribution industry in supporting the American recovery through these collective efforts. If you are interested in joining the NAW-NFL partnership, e-mail NAW’s Chief Business Development Officer, Dan Schuberth, at dschuberth@naw.org.

State and Local Vaccine Distribution Tracker by Littler Law Firm: As with nearly everything about this pandemic, guidance and action plans vary by state and local jurisdictions and are constantly evolving. To that end, Littler Law Firm provides links to state agency websites, vaccine allocation plans, and other guidance related to the rollout of COVID-19 vaccines, as well as basic vaccination plan phases. To see the latest updates, click HERE.

Additional Vaccine Distribution Resources: In a previous update, we included additional information and resources on vaccine distribution, which you can access HERE. 

2. Latest on the Infrastructure/Business Tax Legislation

The first bill – the President’s American Jobs Plan: This week, President Biden asked Republican lawmakers to come to the negotiating table with their ideas for an infrastructure package. Based on what we learned from conversations with members of Congress and/or their staff, the rough draft of the Republican counteroffer was a proposal to spend approximately $600 billion dollars with a focus on brick and mortar, or “hard,” infrastructure.

The specifics of the proposed program spending consist of:

• $299B for roads and bridges
• $61B for public transit
• $65B for broadband infrastructure
• $44B for airports
• $35B for drinking water and wastewater
• $20B for rail systems
• $13B for safety
• $17B ports and inland waters
• $14B for water storage

Unfortunately, some leading progressive Democrats rejected the GOP plan sight unseen – without there even being an actual detailed plan to present. Senator Elizabeth Warren (D-MA) said that “the Republican proposal does not meet the moment” – despite the fact that $600 billion is significantly more funding than any surface transportation legislation that has passed in recent memory. The Republican proposal is said to be paid for with user fees, such as an increase in the gas tax or a vehicle miles traveled (VMT) program, as well as unspent coronavirus relief funds. Administration offices have indicated that they would rather raise the corporate tax rate to 28 percent as a pay-for, so that President Biden can keep his pledge to not raise taxes on anyone making less than $400,000.

As of now, President Biden is continuing a dialogue with Congressional Republicans on a way forward on an infrastructure package, even without the participation of most of his Democrat Congressional colleagues. If talks between the White House and Republicans fail to produce an agreement, Democrats in Congress will turn again to their plan to pass an infrastructure bill through budget reconciliation – with no GOP input or votes. Success in that effort is not completely certain, since they would need the support of all 50 Democratic Senators and at least one – Joe Manchin of WV – has expressed reservations about using the reconciliation process. But if they should succeed, the result will be a bill much closer to the President’s more-than-2-trillion-dollar proposal, with business tax increases in the $1.5 trillion rage.

The second bill – the President’s American Family Plan: A second major spending-and-tax-increase bill is expected to be announced by the President next week, we believe just before his April 28th address to Congress. This second bill – sometimes referred to as the “human” or “social” infrastructure bill, will include an as-yet-unspecified amount of spending on social welfare, health care, and education. This spending will be “paid for” with significant increases in taxes on the individual side of the tax code, focused on increased taxes on upper income earners and the wealthy. We do not yet know what specific tax increases will be proposed, although we expect to see many of the Biden campaign tax increases in this bill, i.e., an increase in the top rate from 37% to 39.6% and an increase in the capital gains tax rate for upper income earners. Other tax proposals being offered or discussed by members of Congress include significant changes in the estate tax and repealing or rolling back the 199A deduction used by pass-through businesses. We will update NAW members as soon as we obtain reliable information on the details of this next bill. 

3. Latest on the Economic Recovery and Re-Opening the Workplace

As the Coronavirus Pandemic continues to impact the United States economy and businesses across the nation, it can be hard to decipher how new regulations and laws may impact your business. To help you manage these issues NAW is providing information about reports, webinars, and seminars that you may find useful.

From Littler Law Firm:

Arizona Joins Other States in Passing COVID-19 Liability Protection for Businesses

Arizona Governor Doug Ducey recently signed Senate Bill 1377 after a push from Republican legislators to limit civil liability exposure for “Good Samaritans” who have worked to protect and provide for Arizonans during the COVID-19 health crisis. To read more, click HERE.

Webinar from Littler Law Firm:

Not All Who Wander Are Lost: Managing Employee Relocation in the Era of Remote Work

Thursday, April 29, 2021 | 8:45 am-10:00 am EDT

American workers are on the move! According to one study, between 14 and 23 million Americans plan to relocate because of the increased opportunities for remote work resulting from the COVID-19 pandemic. But do employers know where their workers will be? To register, click HERE.

Public Hearing from the U.S. Equal Employment Opportunity Council: The U.S. Equal Employment Opportunity Commission (EEOC) will hold its first all virtual Commission hearing on Wednesday, April 28, at 10:30 a.m. (Eastern Time) to consider the impact of the COVID-19 pandemic on workers, the difficulties faced by employers in navigating potential employment discrimination issues raised by COVID-19, and future challenges the pandemic may present for employees and employers.

The hearing will be held virtually, as a videoconference, via Zoom for Government and is open to the public, in accordance with the Sunshine Act. The public may observe the livestream or connect to the audio-only dial-in by following the instructions that will be posted on www.eeoc.gov. The links and audio-only dial-in information is to be posted on Monday, April 26 and no later than 24 hours prior to the hearing.

Stateside Associates publishes a daily report about State and Local Government responses to the evolving situation. To read their latest report, click HERE.

We are also providing a link to a spreadsheet that includes state and local COVID-19 response information provided by MultiState Associates. To view their spreadsheet, click HERE.

1. Latest on the COVID-19 Relief Legislation

On Saturday, NAW is actively involved in the vaccine distribution issue, working with member companies in a joint effort to get the government to involve the entire wholesale distribution industry. 

NAW Initiatives on Vaccine Distribution

Yesterday, NAW and wholesaler-distributors across the country announced a partnership supporting mass vaccination sites at multiple NFL stadiums with donations of needed personal protective equipment and other items, including gloves, sanitizer, pumps, masks, shields, and wipes. The first mass vaccination sites to receive donations were the Detroit Lions’ Ford Field and the Pittsburgh Steelers’ Heinz Field. NAW is currently sourcing items for additional teams including the Atlanta Falcons, Carolina Panthers, and Seattle Seahawks.

To read NAW's press release, click HERE.

State and Local Vaccine Distribution Tracker by Littler Law Firm

As with nearly everything about this pandemic, guidance and action plans varies by state and local jurisdictions and are constantly evolving. To that end,  Littler Law Firm   provides links to state agency websites, vaccine allocation plans, and other guidance related to the rollout of COVID-19 vaccines, as well as basic vaccination plan phases. To see the latest updates, click HERE.

2. Latest on the Other Issues Impacting NAW Members

Payment Protection Program (PPP)

The Paycheck Protection program, enacted a year ago, has been extended several times, and was set to expire on March 31. Last week the House of Representatives passed yet another extension of the program.

Yesterday in the Senate an amendment to the legislation was offered by Senator John Kennedy (R-LA) to bar loans for anyone “convicted of a felony in relation to a riot or civil disorder during the two-year period preceding the date of the application.”  And Senator Marco Rubio (R-FL) offered an amendment to limit the SBA’s ability to prioritize any particular category of borrower over another. Both amendments failed on almost-party-line votes. 

Following defeat of the amendments, the Senate passed the House bill, extending the program until May 31, with the SBA having until June 30  to process loans. The President is expected to sign the bill when it reaches his desk.

American Recovery Plan (ARP - the Biden COVID Response Legislation) and State Taxes:

As you know, the ARP enacted into law this month included $350 billion in aid to the states and localities. The provision was very controversial, in large measure because at least 31 states reported no revenue shortfall and therefore had no need for federal aid. According to early data analysis by the Tax Foundation, “states closed out calendar year 2020 with only $1.7 billion less revenue than they generated in 2019 (a decline of less than 0.2 percent), not counting federal assistance, while municipal governments actually experienced substantial revenue growth due to rising property values.”

In response to the controversy over the state aid, Senate Majority Leader Chuck Schumer (D-NY) offered an amendment that would prohibit any state receiving federal aid from cutting state taxes – directly or indirectly. The amendment was offered at the last minute, with no notice, after a marathon 24-hour Senate session. Senators becoming aware of the amendment after the bill was passed reacted angrily to its inclusion. And the reaction from the states, especially those in which state legislatures were already considering tax legislation, was even stronger. Questions immediately arose as to the constitutionality of the federal government mandating what legislation a state legislature may enact.

As of this writing, at least one state attorney general has filed a lawsuit challenging the Schumer language, and 21 additional attorneys general have notified Treasury that they will consider a legal challenge if Treasury does not narrow the broad scope of the language. How this issue will impact your state taxes remains to be seen.

Protecting the Right to Organize (PRO) Act:

Earlier this year the House of Representatives passed the Protecting the Right to Organize (PRO) Act, which is the most pro-labor piece of legislation in decades. This radical legislation would impose policies that were rejected by the judicial system, opposed on a bipartisan basis in Congress, and/or abandoned by the agencies asked to enforce them. Unions continue to push this legislation to unfairly tip the playing field in their favor at the expense of the fundamental rights of workers to choose for themselves whether to accept or reject union representation.

Currently, 45 Senators have co-sponsored the Senate companion legislation, which Senate Majority Leader Chuck Schumer (D-NY) has publicly stated will be brought to the floor of the Senate once it has 50 co-sponsors.

This could well be the issue on which Democrats act on their threat to abolish the legislative filibuster, which would allow them to pass the entire Biden agenda, including trillions of dollars of tax increases, with no involvement of the GOP minority and no Republican votes. NAW will continue to update you about this legislation as warranted. 

NAW Applauds Introduction of INFORM Act:

On Tuesday, NAW joined with the Buy Safe America Coalition, a diverse group of retailers, consumer groups, wholesaler-distributors, and manufacturers in publicly declaring support of the introduction of the INFORM Consumers Act, legislation to increase transparency and accountability for online marketplaces amid the rapidly growing problem of illicit goods sold online. This bill would modernize consumer protection laws and require online marketplaces to collect and verify basic business information from sellers, in addition to requiring high-volume sellers to provide contact information to consumers.

To read NAW’s press release and to learn more about the bill, click HERE.

3. Latest on Economic Recovery and Re-Opening the Workplace

As the Coronavirus Pandemic continues to impact the United States economy and businesses across the nation, it can be hard to decipher how new regulations and laws may impact your business. To help you manage these issues, NAW is providing information about reports, webinars, and seminars that you may find useful.

From Reed Smith Law Firm: 

New York eliminates quarantine for domestic travel effective April 1

New York is doing away with its quarantine requirement for out-of-state travelers. By way of background, in June 2020, New York issued a COVID-19 Travel Advisory requiring certain travelers to quarantine upon entry to New York. In November 2020, New York modified its travel advisory to permit out-of-state travelers to test out of its mandatory quarantine... Continue Reading

From McGuireWoods Law Firm

Telehealth: How the Pandemic Is Shaping the Future of Remote Healthcare 

March 25, 2001

About 475 million people worldwide have received a COVID-19 vaccine, and a return to normalcy draws closer. What remains unclear, however, is how state and federal governments will regulate and reimburse for telehealth when temporary telehealth policies expire at the end of the public health emergency. Read on for a summary of proposed federal regulatory and legislative trends and state legislation that offer clues into telehealth’s post-pandemic future. To read more, click HERE.

From Nixon Peabody Law Firm:

What Employers Need To Know About the New COBRA Subsidy

For six months beginning April 1, 2021, the federal government will subsidize 100% of the cost of COBRA coverage for individuals who lose their health coverage due to an involuntary termination or reduction of hours.  Nixon Peabody explains this new subsidy and what employers need to know to administer it. To read more, click HERE.

From Littler Law Firm:

New York Enacts Paid Vaccine Leave Law

On March 12, 2021, Governor Andrew Cuomo signed legislation providing all public and private employees in New York up to four hours of paid leave per vaccine injection to obtain a COVID-19 vaccine. To read more, click HERE.

From Reed Smith Law Firm:

California requires new COVID-19 Supplemental Paid Sick Leave in 2021

On March 19, 2021, Governor Newsom signed Senate Bill 95 (SB 95), which creates, in part, new Labor Code Section 248.2.[1]  As a reminder, Governor Newsom previously signed AB 1867, which added Labor Code sections 248 and 248.1 to provide COVID-19 Supplemental Paid Sick Leave to food sector workers and employees who worked for employers... Continue Reading

From Reed Smith Law Firm:

New Jersey issues guidance confirming employers can mandate COVID-19 vaccines

New Jersey has confirmed that employers can mandate their employees be vaccinated for COVID-19. This move aligns New Jersey with federal guidance previously issued by the EEOC. Other states, such as California, have also issued similar guidance and the trend is expected to continue. Consistent with federal guidance from the EEOC, the New Jersey guidance... Continue Reading 

From Reed Smith Law Firm:

Congress extends payroll tax credits to employers voluntarily providing FFCRA paid leave and expands leave provisions

As of January 2021, providing FFCRA paid leave is optional. Employers choosing to provide FFCRA Paid Leave to their employees on a voluntary basis can now receive a payroll tax credit to cover the wages paid through September 30, 2021 (subject to applicable caps). Last year, in response to the COVID-19 Pandemic, Congress passed the... Continue Reading

Stateside Associates publishes a daily report about State and Local Government responses to the evolving situation. To read their latest report, click HERE.

We are also providing a link to a spreadsheet that includes state and local COVID-19 response information provided by  MultiState Associates. To view their spreadsheet, click HERE.

1. Latest on the COVID-19 Relief Legislation

On Saturday, the Senate approved a $1.9 trillion coronavirus relief package in a remarkable Senate session, and the House passed the Senate version of the bill yesterday. The President signed the bill this afternoon, one day earlier than expected.

A lot has been written about the bill, but much is still to be learned and as details come out, there are some surprises… The Senate process by which the bill was considered was remarkable and record setting… Democrats argue the legislation is exactly what Americans and the economy need… Republicans condemn the bill as an irresponsible spending spree largely unrelated to the pandemic. There’s little argument that the fiscal consequences of this spending will be felt for years to come.

We have not attempted to prepare a detailed summary of the many-hundred-page-bill, but have assembled some information that might interest you, and which you may not read in conventional news coverage. For example:

• The bill included three business tax increases that no one knew were there
• The Senate cast a vote that took almost 12 hours to complete
• The billions of aid for schools is not tied to schools re-opening
• Most of the Senate voters were 50-49, not 50-50 ties that would have required Vice President Harris to cast tie-breaking votes during a marathon 24-hour Senate session

You can read our brief report on these and other related items HERE.

2. Update on PPP - State "Decoupling" Issue

The CARES Act provided that forgiven PPP loans would not be taxable, and after an aggressive lobbying effort by NAW and our business allies, Congress passed legislation clarifying that the IRS could not tax PPP loans indirectly by denying the tax deductibility of business expenses paid for with a forgiven PPP loan. However, some states are “decoupling” their state tax law from the CARES Act provisions by treating forgiven PPP loans as taxable income and/or denying deductibility of expenses paid with forgiven PPP loans. The Tax Foundation has prepared an analysis of how each state is handling the issue of PPP taxability, which they are updating frequently. You can access that useful Tax Foundation report HERE.

3. Latest on the Vaccine Distribution

Earlier this week, NAW sent a letter to White House Senior Advisor for COVID Response Andy Slavitt reiterating the role distributors play in the economy and how we can help with vaccine distribution and other COVID relief efforts. We continue to focus on highlighting the role distributors are playing in helping America’s recovery and offering to do more to help move the country forward. To read the letter, click  HERE.

NAW and our member companies are partnering with the National Football League to support mass vaccination sites in stadiums across the country. When fully operational, these sites will have the capacity and vaccine supply provided by FEMA to vaccinate thousands of people each day. NAW is actively building a coalition of distributors who are committed to accelerating the administration of the vaccine and can help the NFL secure items needed to operate these mass vaccination sites. Needed items include liquid hand sanitizer (preference for larger volume pump containers), disinfectant wipes, disposable face masks, medical grade gloves (nitrile or vinyl material), and medical waste containers (disposal plastic sharps bins). 

If you would like to join us and have the ability to donate or serve as a source for purchase for any of these items, please contact NAW’s Chief Business Development Officer Dan Schuberth (  dschuberth@naw.org , 732-585-3010).

State and Local Vaccine Distribution Tracker by Littler Law Firm:

As with nearly everything about this pandemic, guidance and action plans vary by state and local jurisdictions and are constantly evolving. To that end,  Littler Law Firm provides links to state agency websites, vaccine allocation plans, and other guidance related to the rollout of COVID-19 vaccines, as well as basic vaccination plan phases. To see the latest updates, click HERE.

Additional Vaccine Distribution Resources:

In a previous update, we included additional information and resources on vaccine distribution, which you can access HERE  .

Specific Employer Issues:

In a previous update we mentioned that NAW, along with 42 of our downtown allies, sent a letter to the Equal Employment Opportunity Commission (EEOC) requesting that they quickly issue guidance clarifying the extent to which employers may offer employees incentives to vaccinate without running afoul of the Americans With Disabilities Act and other laws enforced by the EEOC. We are still waiting on a response from the EEOC, and we will update you again as soon as we receive it.

4. Latest on the Other Issues Impacting NAW Members

Protecting the Right to Organize (PRO) Act:

This week, Democrats in the House of Representatives passed the Protecting the Right to Organize (PRO) Act, a labor boss wish list that was written to increase union membership at any cost.

This radical smorgasbord of pro-union legislation has been a top priority of labor unions for several years and was passed primarily along party lines. Although, the following five Republicans voted for the bill: Jeff Van Drew (NJ); Chris Smith (NJ); Brian Fitzpatrick (PA); John Katko (NY); and Don Young (AK); and one Democrat voted against: Henry Cuellar (TX). 

Although many think that the measure is unlikely to win the 60 votes needed for passage in the Senate, that is certainly not a guarantee. Several of the newly elected Democratic members of the Senate have already co-sponsored the Senate companion bill and the executive board of the AFL-CIO has stated that it is exploring its position on eliminating the filibuster to pass the PRO Act.

From Reed Smith Law Firm: 

Labor law under the Biden administration: A preview of the PRO Act

At a union event on Labor Day in 2020, President Biden vowed to be “the strongest labor president you have ever had.”  Although he has only been in office a short time, his administration is already taking steps to honor that pledge.  Specifically, on February 4, 2021, House and Senate Democrats introduced the Protecting the… Continue Reading

Infrastructure and Reconciliation:

COVID legislation and infrastructure were the top items on President Biden's list of issues that should be taken up on a bipartisan basis. Unfortunately, as you know, Congress chose to move a completely partisan COVID bill without Republican input or votes. While the President continues to talk about a bipartisan infrastructure approach, and has met with Republicans on it, there are troubling signs in recent days.

The original price tag on an infrastructure bill was about $2 trillion, which was already enough to worry both Republicans and Democrats who have expressed concern about the extraordinary federal spending legislation enacted in the last year.  Nevertheless, in the last few days House Democrats have begun talking about an infrastructure bill of closer to $4 trillion.  And Senator Joe Manchin (D-WV), Chair of the Senate Committee responsible for most of the infrastructure issue, said that he could support a $4 trillion bill if it was paid for with tax increases.

While Senator Manchin continues to say he will not support a partisan approach to infrastructure and will not consider using reconciliation to pass a bill, Republicans and some Democrats are certain to oppose a big tax increase bill, and House Democrats are suggesting that reconciliation is the path they will pursue. 

There is broad and deep support throughout the business community for a long-overdue infrastructure bill, but there is also broad and deep opposition to raising taxes on businesses, especially as the economy continues to recover from the pandemic. Combining a highway bill with trillions of dollars in new business taxes would make it very difficult for much of the business community to get behind the much-needed legislation.  

Business Insider published an interesting story on Senator Manchin and infrastructure, with the blaring headline:   Senator Joe Manchin says Biden's infrastructure bill can be as large as $4 trillion as long as it's paid for with tax increases. You can read that story HERE.

5. Latest on the Economic Recovery and Re-Opening the Workplace

As the Coronavirus Pandemic continues to impact the United States economy and businesses across the nation, it can be hard to decipher how new regulations and laws may impact your business. To help you manage these issues, NAW is providing information about reports, webinars, and seminars that you may find useful:

Webinar from Littler Law Firm:

Navigating Difficult FMLA and ADA Issues in the Middle of a Pandemic

Tuesday, March 16, 2021 l 10-11 a.m. PDT

The COVID-19 pandemic has left an indelible impact on the workplace, causing employers to deal with a wave of medical leaves and a shift to virtual workplace. And now, with the roll-out of the vaccines, there are added wrinkles of whether to mandate them and possibly accommodate employees who challenge use of the vaccines. As a result, employers face a host of compliance issues in navigating vaccine, leave and accommodation issues. To register, click HERE.

From Reed Smith Law Firm:

From Bloomberg: 

Employer COVID-19 Vaccine Incentives –A Difficult Dilemma: Legal Insight

Some employers are offering incentives to employees to get vaccinated against COVID-19, like bonuses, days off, or gifts. R. Anthony Prather, partner at Barnes & Thornburg LLP, warns that may work, but could lead to legal problems.  Employers face a difficult choice: They can offer de minimus incentives that don’t really incent or offer larger incentives and open the company up to allegations of coercion or discrimination. To read the full article, click HERE.

From Reed Smith Law Firm:

Employers face challenges as states lift COVID-19 safety measures

The recent decline in COVID-19 infections has led numerous states to begin contemplating a roll‑back of mask mandates and related COVID-19 restrictions. Most recently, on Tuesday, March 2, 2021, Governor Greg Abbott and Governor Tate Reeves announced the imminent elimination of mask mandates in Texas and Mississippi, respectively.  Both Governors also removed all capacity limits… Continue Reading

Stateside Associates publishes a daily report about State and Local Government responses to the evolving situation. To read their latest report, click HERE.

We are also providing a link to a spreadsheet that includes state and local COVID-19 response information provided by MultiState Associates. To view their spreadsheet, click HERE.

1. Latest on the Vaccine Eligibility and Essential Services

As you all know all too well, the federal government deferred much of the decision-making on administration and eligibility of the COVID vaccine to the states and localities, making it very difficult for companies deemed essential last year to ensure that their employees are eligible to get the vaccine. While we have not found a way to streamline the process, we hope these resources will help you navigate the maze.

• The CDC has a website that provides links directly to the relevant health agency in each state with information on their vaccine programs. While we have not been able to find a single source for all the local government agencies administering the vaccine, many of the state agencies linked to on this site do provide that information for their state. CLICK HERE
• The Kaiser Family Foundation has a particularly helpful website that provides detailed information on the degree to which each state is following the ACIP recommendations, and how they differ if they are not doing so.  CLICK HERE
• The Littler Law firm website provides a frequently updated list of Statewide Vaccination Plans. CLICK HERE

Template Letters: If  you plan to contact your governor or local health department to request that your employees be deemed essential for vaccine eligibility, you might find this letter template helpful. This template is addressed to a governor but could just as readily be used to communicate with a local health department. Click HERE  for the template.

Also, in the early weeks of the pandemic we provided template letters that your warehouse employees and drivers could carry to identify themselves as essential.  Similarly, this template for a “carry letter” might be useful to your employees to identify themselves as essential when they become eligible and prepare to get the vaccination. Click HERE  for this template. 

We will continue to look for information and resources that might be helpful to you as the vaccine distribution and administration continues.

2. Latest on the Economic Recovery and Re-Opening the Workplace

As the Coronavirus Pandemic continues to impact the United States economy and businesses across the nation, it can be hard to decipher how new regulations and laws may impact your business. To help you manage these issues NAW is providing information about reports, webinars and seminars that you may find useful:

NAW’s trusted employee benefits partner, Gallagher, compiled a collection of employer resources to assist wholesaler-distributors as they develop employee vaccination plans. Gallagher’s Employer Covid-19 Vaccine Considerations and Checklist document provides an employer vaccination policy framework, consolidates links to relevant health and regulatory agencies to assist with compliance, and shares management strategies as thinking on this issue evolves. You can find that document HERE.

Gallagher has also released a webinar that offers a deeper dive into the Covid-19 Vaccine Considerations and Checklist . Click HERE.

From Reed Smith Law Firm:

Brief refresher for California employers: 2021 updates to local COVID-19 paid sick leave requirements

The Families First Coronavirus Response Act (FFCRA), requiring employers with 50-500 employees to provide supplemental paid sick leave and paid family leave to their employees, and California’s statewide COVID-19 supplemental paid sick leave requirement expired on December 31, 2020. While employers may voluntarily continue to provide FFCRA and receive tax credits through March 31, 2021… Continue Reading

Webinar from Littler Law Firm:

Not All Who Wander Are Lost: Managing Employee Relocation in the Era of Remote Work

March 11, 2021 | 2:00 p.m. ET

As the pandemic reaches the one-year mark, employers who hastily implemented mandatory remote work are faced with the reality that many of their employees have relocated to other jurisdictions – often without approval or any concrete plans to return. Join a multidisciplinary panel of Littler attorneys for a lively discussion of the current challenge of wandering workers, practical insights into the future of managing a remote workforce and embracing flexibility without compromising compliance. To register, click  HERE.

Stateside Associates publishes a daily report about State and Local Government responses to the evolving situation. To read their latest report, click HERE.

We are also providing a link to a spreadsheet that includes state and local COVID-19 response information provided by MultiState Associates. To view their spreadsheet, click HERE. 

1. Latest on the Next COVID-19 Relief Bill

Despite efforts for a bi-partisan COVID-19 relief bill, it looks as though President Biden and congressional Democrats will move forward with their $1.9 trillion relief bill, potentially without Republican support.

Yesterday, 10 Republican Senators met with President Biden to advocate for a much smaller alternative to his massive relief bill to address the pandemic. Both sides described the meeting as “productive,” however in a statement, White House Press Secretary Jen Psaki said President Biden had emphasized that Congress had to act urgently and “boldly” and had pointed out many areas of disagreement with the Republicans.

The Republican proposal  included $160 billion for vaccine distribution and development, coronavirus testing and the production of personal protective equipment; $20 billion toward helping schools re-open; more relief for small businesses; and additional aid to individuals. The package would also extend enhanced unemployment benefits of $300 a week — currently slated to lapse in March — until June 30th  .

Yesterday, Senate Majority Leader Schumer and House Speaker Pelosi introduced a fiscal 2021 budget resolution, which is the first step toward producing a reconciliation bill embodying President Biden’s relief plan. The first move for House Democratic leaders will be wrangling the votes for a budget measure this week — a critical step that unlocks the ability to pass bills with a simple majority in the Senate.  But it will also require a near-perfect vote-counting operation, as Speaker Pelosi cannot afford more than four Democratic defectors on the floor if all Republicans oppose. Senate Leader Schumer is turning his attention to Senators Kyrsten Sinema and Joe Manchin, two moderate Democrats who have not yet said how they will vote on the budget resolution. If either Senators Manchin or Sinema opposes the budget maneuver, it could force the Democratic leadership to ditch the reconciliation process altogether.

Currently, neither President Biden’s plan nor the Republican proposal includes liability protections for businesses. Senate Minority Leader McConnell made it clear in December, just before Congress passed a $900 billion relief plan without liability protection, that any new relief bill this year must include protections for businesses, universities, and health care providers. NAW is currently working with our Liability Coalition to ensure that any relief bill this year includes liability protections.

2. Latest on PPP and Employee Retention Tax Credit

The IRS has issued new guidance for companies which had PPP loans that were NOT forgiven, allowing them to take the ERTC for the 4th quarter.

You can access the IRS guidance HERE and a story on the available credit from Accounting Today HERE.

Late last week, the U.S. Department of Labor’s (DOL) Occupational Safety and Health Administration (OSHA) released updated and stronger guidance for employers and employees on identifying coronavirus exposure risks. DOL has stated that the recommendations are “advisory in nature, informational in content, and are intended to assist employers in providing a safe and healthful workplace."

You can view the updated OSHA guidance HERE.

However, President Biden’s Executive Order of January 21st also instructed OSHA to determine whether a new, temporary, mandatory COVID-related health standard is necessary, and if so, to implement that standard by March 15th.

… President Biden believes that workers should have the right to safe work environments and that no one should have to choose between their livelihoods and their own or their families’ health. … [T]he President is asking the Department of Labor to consider clarifying that workers have a federally guaranteed right to refuse employment that will jeopardize their health and if they do so, they will still qualify for unemployment insurance.

CLICK HERE for links to previous updates.