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.