United States: Beltway Buzz, November 10, 2017

The Beltway Buzz is a weekly update summarizing labor and employment news from inside the Beltway and clarifying how what's happening in Washington, D.C. could impact your business.


Now You See It, Now You Don't—Revised House and Senate Tax Reform Proposals Differ in Treatment of Executive Compensation. As we reported in last week's Beltway Buzz, the House introduced its tax reform proposal last Thursday, which contained a surprising number of unexpected provisions that could significantly affect employee benefits and, in particular, deferred compensation arrangements ( Timothy G. Verrall has more in his article, " Brady's Bunch—Are Big Changes Coming for Employers Under the Tax Cuts and Jobs Act?"). This week, two significant new developments in the tax reform drama took place, potentially changing the landscape yet again (and most likely not for the last time). 

First, on Thursday, the House Ways and Means Committee passed, by a 24–to–16 vote, a significantly revised version of last week's House proposal, which is expected to face a full House vote next week. In a last-minute surprise, the revised House proposal eliminates most of the changes to the taxation of executive compensation that had been included in the original proposal and instead restores the current rules. Also on Thursday, the Senate Committee on Finance unveiled its own proposal, which differs substantially from the House proposal in a number of critical ways. Sticking out like a sore thumb are proposed changes to deferred compensation arrangements, even though the House version has now scrapped similar proposals. Neither bill makes any changes to the 401(k) deferral limits, although the Senate bill would prohibit employees earning $500,000 or more in a year from making "catch-up" contributions. It is also notable that neither proposal includes a repeal of the individual mandate under the Affordable Care Act—a nugget the Trump administration has been pushing for.

The House and Senate bills will have to be reconciled before being passed and sent to the president for signing. With all the wrangling over issues such as tax brackets and the elimination of deductions, "buried" employee benefits and executive compensation provisions are not likely to be the hottest topics on cable news, but they have a potentially huge impact on businesses and employees alike. (Hat tip to Richard C. Libert, Stephanie A. Smithey, and Timothy G. Verrall.)

Paid Leave Legislation Proposed. Late last week, Representative Mimi Walters (R-CA), along with Cathy McMorris Rodgers (R-WA), and Elise Stefanik (R-NY), introduced the Workflex in the 21st Century Act (H.R. 4219). The bill would preempt state and local paid leave requirements for those employers that provide a certain amount of paid leave (depending on the size of the company) and a flexible workplace arrangement (e.g., telecommuting). Robert S. Ellerbrock III has more. The voluntary nature of the bill, as well as its preemptive effect, will likely make it a popular legislative alternative for many in the business community, particularly when contrasted with other proposed leave mandates.

Joint-Employer Bill Advances. On November 7, the House passed the Save Local Business Act (H.R. 3441), which addresses the joint-employer issue created by the National Labor Relations Board (NLRB) in its 2015 decision in Browning-Ferris Industries. The bill codifies the "direct and immediate" control standard in both the National Labor Relations Act (NLRA) and the Fair Labor Standards Act (FLSA). Though the bill garnered eight Democratic votes while passing the House, it will face an uphill battle attracting the eight Democratic/Independent votes in the Senate that would be necessary to overcome a filibuster. In fact, there is not even a companion bill in the Senate. Thus, industry groups will likely use the bill as a springboard to limit implementation of the expanded joint-employer standard through a rider in government-funding legislation that needs to be enacted into law by December 8 in order to avoid a government shutdown.

New GC at NLRB. On November 8, the Senate confirmed management attorney Peter B. Robb as General Counsel (GC) of the NLRB. Robb replaces outgoing General Counsel Richard F. Griffin, Jr., and—approximately 10 months into the Trump administration—his appointment finally gives Republicans full control of both the Board and its chief prosecutor/gatekeeper. Robb had a very brief confirmation hearing, so his priorities for the GC's office are relatively unknown at this time. However, he will have four years to put his stamp on the agency.

DHS Nominee Advances. The Senate Committee on Homeland Security and Governmental Affairs held a confirmation hearing on the nomination of Kirstjen M. Nielsen to become secretary of the Department of Homeland Security (DHS). Nielsen is currently deputy to White House Chief of Staff John F. Kelly. During her confirmation hearing, Nielsen implored Congress to resolve the DACA situation legislatively, but she also noted that DACA beneficiaries would not be an enforcement priority for the DHS. A committee vote on Nielsen is expected sometime next week, though Democratic committee members are asking that Nielsen be brought back for more questioning.

TPS Update. On November 6, acting DHS Secretary Elaine Duke announced that the Temporary Protected Status (TPS) designation for Nicaraguans would be terminated by January 5, 2019. Duke also declined to make a decision on TPS beneficiaries from Honduras, meaning that the program will renew for these individuals for at least another six months, until July 5, 2018. In addition to the obvious humanitarian concerns, the TPS matter could create potential workforce problems for employers: If Congress doesn't act and these protections are allowed to expire (as well as the TPS designations for certain individuals from Haiti and El Salvador), approximately 300,000 long-term residents of the United States will lose their work authorizations.

OSHA Blacklisting Bill. We previously reported on a provision of the National Defense Authorization Act (NDAA) for Fiscal Year 2018, which would, if enacted into law, impose a limited blacklisting regime for Department of Defense contractors with regard to alleged Occupational Safety and Health Act (OSH Act) violations. In a parallel effort, Representative Mark Pocan (D-WI) recently introduced a similar bill in the House (the Contractor Accountability and Workplace Safety Act). The Pocan bill is unlikely to move in the House, and business groups are working to strip out the blacklisting language from the final NDAA package. There is an expression in D.C. that "no bad idea ever goes away." For some employers, that expression may come to mind when they learn that policymakers still want to impose some type of a blacklisting scheme after the demise of the Fair Pay and Safe Workplaces regulations.

DOL Strategic Plan. Earlier this week, the Department of Labor (DOL) made available for public comment its Draft Fiscal Years 2018–2022 Strategic Plan. According to its preamble, the "plan presents the Secretary's vision, the Department's mission, and a description of how component agencies will achieve supporting goals and strategic objectives in the next four years." Readers looking for insight into what a final overtime, persuader, or fiduciary rule—among others—might look like will be disappointed. Indeed, the document is short on specific steps and instead focuses on broad goals, such as expanding access to, as well as the types of, apprenticeship programs; and providing job training and assistance to transitioning service members and their spouses. However, DOL component agencies such as the Wage and Hour Division (WHD), the Occupational Safety and Health Administration (OSHA), and the Office of Federal Contract Compliance Programs (OFCCP) indicate in the plan that they will emphasize employer outreach and compliance assistance—perhaps a refreshing change from what some in the business community feel was an overly litigious compliance philosophy of the previous administration.

Read All About It. Roll Call has an article about Senator Dick Durbin's (D-IL) love of reading and how he often shares books with some of his colleagues. Among Durbin's recommendations have been Taming the Storm (about federal judge Frank M. Johnson, Jr.) and The Pentagon's Brain (about the military's top-secret research agency, the Defense Advanced Research Projects Agency). However, given the temperament and abilities of the current Congress, the Buzz is of the opinion that Durbin has gotten a bit ahead of himself and should probably start with recommending to his congressional colleagues children's books such as Working Together: Learning About Cooperation and Citizenship, Ruthie and the (Not So) Teeny Tiny Lie, and Mystery Math: A First Book of Algebra.

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