June 13, 2021

Volume XI, Number 164

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June 11, 2021

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US Federal Labor Viewpoints – Week of May 3, 2021

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

  • Biden Administration Labor Leadership Updates

  • April Jobs Report

  • Independent Contractor Rule Withdrawn

  • Montana Governor Launches Return-to-Work Bonuses; South Carolina Curbs Federal, Pandemic-Related Unemployment Benefits

  • Unemployment Insurance (UI) Overpayment Guidance

  • Labor and Commerce Secretaries Stress Apprenticeships

  • National Advisory Committee on Apprenticeship | Nominations Sought

  • Direct Care Workers Legislation Introduced

  • H-2A Program | Herding or Livestock Production Applications

  • Forced Labor | Nitrile Glove Imports Seized

  • **Upcoming Congressional Hearing**


Biden Administration Labor Leadership Updates.  This week, the Senate Health, Education, Labor, & Pensions (HELP) Committee scheduled a business meeting for May 12 to vote on the following nominations:

  • Jennifer Abruzzo to serve as General Counsel of the National Labor Relations Board (NLRB);

  • Seema Nanda to serve as Solicitor for the U.S. Department of Labor; and

  • Jocelyn Samuels, for a new term on the U.S. Equal Employment Opportunity Commission.


April Jobs Report.  On Friday, the U.S. Department of Labor announced the U.S. economy added fewer jobs than economists had expected in April – 266,000 jobs added vs. the one million anticipated by economists.  The U.S. unemployment rate rose from 6.0 percent to 6.1 percent.  March’s original job report of an estimated total of 916,000 jobs added was revised down to 770,000; February’s report saw an upward revision to 536,000 from 468,000 jobs added.


Independent Contractor Rule Withdrawn.  The Labor Department announced on May 5 that it was withdrawing the previous Administration’s Independent Contractor Rule, effective May 6.  The Rule would have eased businesses’ ability to legally consider workers as independent contractors.  The Department cited the following as reasons for the action:

  • The independent contractor rule was in tension with the Fair Labor Standards Act’s (FLSA) text and purpose, as well as relevant judicial precedent;

  • The rule’s prioritization of two “core factors” for determining employee status under the FLSA would have undermined the longstanding balancing approach of the economic realities test and court decisions requiring a review of the totality of the circumstances related to the employment relationship; and

  • The rule would have narrowed the facts and considerations comprising the analysis of whether a worker is an employee or an independent contractor, resulting in workers losing FLSA protections.

The Labor Department also stated the decision would avoid a reduction:  (1) in workers’ access to employer-provided fringe benefits such as health insurance and retirement plans; and (2) in other benefits such as unemployment insurance and workers compensation coverage.  U.S. Secretary of Labor Marty Walsh said of the action:

Legitimate business owners play an important role in our economy but, too often, workers lose important wage and related protections when employers misclassify them as independent contractors. We remain committed to ensuring that employees are recognized clearly and correctly when they are, in fact, employees so that they receive the protections the Fair Labor Standards Act provides.”

The Biden Administration’s action does not replace the regulation; therefore, it does not provide a new interpretation of when workers can function as independent contractors and when they must be classified as employees under federal law, entitling them to minimum wage and overtime pay.  The Biden Administration will revert to the longstanding multi-factor test established by judicial precedent.

House Education & Labor Committee Chairman Bobby Scott (D-Virginia) and Workforce Protections Subcommittee Chairwoman Alma Adams (D-North Carolina) welcomed the Labor Department’s action, stating:

The Trump administration’s independent contractor rule would have undermined the basic minimum wage and overtime protections that workers have relied upon for more than 80 years.”  They added, “The trend of employers misclassifying their employees as independent contractors is making it [stet] more for hardworking people to provide for themselves and their families.  . . .  Today’s announcement is also good for businesses that follow the rules and are put at a disadvantage when their competitors are allowed to cut corners.”

House Education & Labor Committee Ranking Member Virginia Foxx (R-North Carolina) criticized the Labor Department’s withdrawal of the Independent Contractor Rule.  She stated:

Withdrawing the independent contractor rule will create unnecessary uncertainty for the nearly 19 million workers currently action as their own bosses and creating a life that suits their unique needs.  This move by the [Labor Department] is just another Democratic attempt to wield power and dictate how Americans should live their lives.”


Montana Governor Launches Return-to-Work Bonuses; South Carolina Curbs Federal, Pandemic-Related Unemployment Benefits.  On May 4, Montana Governor Greg Gianforte (Republican) announced two measures to address the state’s workforce shortages and to incentivize workers to return to re-enter the labor force.  He noted the state’s unemployment rate is at just 3.8 percent, near pre-pandemic lows.  Montana became the first state to fully opt out of the federal unemployment benefit programs enacted since the start of the COVID-19 pandemic.  In sum, the Governor stated the State of Montana will:

  • Launch a return-to-work bonus program, utilizing federal funds authorized by the American Rescue Plan Act. The return-to-work bonuses will be paid to unemployed individuals who rejoin the labor force and accept and maintain steady employment for at least one month.

  • End the state’s participation in federal pandemic-related unemployment benefit programs and transition to pre-pandemic unemployment insurance eligibility and benefits by the end of June.

On Thursday, South Carolina Governor Henry McMaster (Republican) cited “unprecedented” workforce shortages across the state and joined Montana in opting out of federal, pandemic-related unemployment benefit programs, effective June 30.  South Carolina’s Department of Employment and Workforce cited Montana’s decision in a memorandum to Governor McMaster.  The state reported a 5.1 percent unemployment rate, compared to a national rate of 6.1 percent.


Unemployment Insurance (UI) Overpayment Guidance.  The Labor Department’s Employment and Training Administration (ETA) issued an Unemployment Insurance Program Letter on May 5 that provides states with guidance on addressing unemployment insurance benefit overpayments established by states for programs authorized by the Coronavirus Aid, Relief, and Economic Security (CARES) Act.  The guidance includes the following updates on the CARES Act unemployment benefit programs:

  • States may choose to waive recovery of overpayments under certain circumstances when an individual is not at fault. This includes circumstances when the state initially found the individual eligible for unemployment benefits during a given week but the individual received payments from the wrong CARES Act unemployment benefit program.

  • Participating states must generally refund payments recovered prior to this guidance’s issuance if the state determines the individual meets the waiver provisions. The Labor Department recognizes it may take participating states up to a year to process any applicable refunds.

  • In cases where individuals collected CARES Act benefits fraudulently, states must assess monetary penalties in addition to requiring repayments. Individuals who defrauded the program may also face criminal prosecution.


Labor and Commerce Secretaries Stress Apprenticeships.  On Monday, May 3, Secretary Walsh and U.S. Secretary of Commerce Gina Raimondo travelled to Connecticut to reiterate the importance of supporting the American Jobs Act and apprenticeships.  Secretary Raimondo stated at a tour of General Dynamics-Electric Boat in Groton, Connecticut:

With the workforce investment in the American Jobs Plan, we will be able to create over one million new registered apprenticeship slots that will allow workers to earn while they learn. But we can’t do this in a silo – we must engage local businesses to ensure we are providing workers the skills they need for current job openings and holding businesses accountable to hire local talent.”

Secretary Walsh added:

At the Department of Labor, we are focused on making sure apprenticeships provide skills in the growing industries that we need to win the future, while prioritizing workers who were shut out in the past – in particular people of color and women.”

Following the tour, Secretaries Walsh and Raimondo participated in a virtual round table on investing in the American workforce with representatives from IBM, CVS, Chicago Women in Trades, the International Union of Painters and Allied Trades (IUPAT), and other unnamed workforce development organizations.  The Secretaries stressed the proposed $48 billion investment in American workforce development infrastructure in the American Jobs Plan would create one to two millions new registered apprenticeship slots.


National Advisory Committee on Apprenticeship | Nominations Sought.  On May 4, the Labor Department announced it is seeking nominations for members to serve on the National Advisory Committee on Apprenticeships (ACA).  U.S. President Joe Biden’s direction that the Department to reinstate the committee.  The re-establishing ACA charter will be filed May 19, 2021.  Interested parties have until June 3 to submit nominations.


Direct Care Workers Legislation Introduced.  On May 4, House Education & Labor Committee Chairman Scott, along with Representatives Susan Wild (D-Pennsylvania) and Susie Lee (D-Nevada, introduced the Direct Creation, Advancement, and Retention of Employment (CARE) Opportunity Act (H.R. 2999).  The bill would invest more than $1 billion over five years in training to increase opportunities for direct care workers.  The Members noted the bill aligns with the American Jobs Plan, which calls for significant investments to meet increased demand for home and community-based services.  The Direct CARE Opportunity Act would:

  • Invest in strategies to recruit, retain and advance the direct care workforce pipeline;

  • Implement models and strategies to make the field of direct care more attractive, including training, career pathways, and mentoring;

  • Encourage retention and career advancement in the direct care sector;

  • Respond to the needs of an aging population; and

  • Support the health and wellbeing of those needing direct care services in order to prevent institutionalized care.

A fact sheet on the bill is available here and the legislative text here.


H-2A Program | Herding or Livestock Production Applications.  On May 6, the Labor Department announced a Notice of Proposed Rulemaking related to the adjudication of temporary need for employers seeking to hire for herding or production of livestock on the range jobs under the H-2A program.  This action follows a November 2019 settlement agreement where the Department agreed to engage in this rulemaking.  Specifically, consistent with the court-approved settlement agreement in Hispanic Affairs Project, et al. v. Perez et al., No. 15-cv-1562 (D.D.C.), this rulemaking proposes to rescind the regulatory provision at 20 CFR 655.215(b)(2).  The provision governs the period of need for range occupations, to ensure the Department’s adjudication of temporary or seasonal need is conducted in the same manner for all applications for temporary agricultural labor certification.  Interested parties have until June 7 to submit comments.


Forced Labor | Nitrile Glove Imports Seized.  On May 4, U.S. Customs and Border Protection (CBP) personnel in Cleveland, Ohio, seized a shipment of 3.97 million nitrile disposable gloves due to information that the gloves were allegedly made by forced labor.  CBP officers said the gloves were produced in Malaysia by a subsidiary of Top Glove.  CBP issued a forced labor finding on March 29 based on evidence of multiple forced labor indicators in Top Glove’s production process, including debt bondage, excessive overtime, abusive working and living conditions, and retention of identity documents.  Any person or organization that has reason to believe merchandise produced with the use of forced labor is being – or is likely to be – imported into the United States can report detailed allegations by contacting CBP through the e-Allegations Online Trade Violation Reporting System or by calling 1-800-BE-ALERT.


Upcoming Congressional Hearing.  On Thursday, May 13, the House Education & Labor Subcommittee on Workforce Investment is scheduled to hold a hearing titled, “Workforce Innovation and Opportunity Act Reauthorization:  Creating Opportunities for Youth Employment.”

© Copyright 2021 Squire Patton Boggs (US) LLPNational Law Review, Volume XI, Number 132
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About this Author

Stacy Swanson, Public Policy Specialist, Squire Patton Boggs Law Firm
Public Policy Specialist

Stacy Swanson helps sovereign governments successfully navigate Washington and understand United States Government policy. She regularly provides clients with strategies which effectively leverage existing relationships to advocate policy objectives before the legislative and executive branches of the U.S. government. 

202-457-5627
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