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September 2018

With time running out, Congress prepares to punt…

Congress is getting ready to do what it does best: Kick the can down the road.

With the fiscal year ending on Sept. 30, the country faces a possible government shutdown, if Congress fails to pass all the spending bills required to keep federal agencies operating after that date. To avoid the shutdown, congressional leaders came up with an ambitious plan to combine the usual twelve (12) spending bills into a more manageable four (4) bills. It appears they will fall short of passing all four by Sept. 30.

In the past, when they’ve failed to pass all the spending bills by the end of the fiscal year, Congress has used massive “continuing resolutions” that extended government funding at the past year’s levels until lawmakers finally could agree on individual spending levels.

But this year is different because President Trump has vowed he won’t sign another continuing resolution unless it contains full funding for his proposed border wall with Mexico. Since Democrats and many Republicans have pledged to block full funding for the wall, lawmakers faced an impasse—and the possibility of another government shutdown.

With a little over 30 days before the hotly contested mid-term elections, just about no one in Congress wanted that to happen. Republicans were deeply worried that, as the party in power, they would be blamed for a shutdown. And, Democrats weren’t sure they would escape all blame.

So, Republican and Democrat leaders got together and came up with a deal to postpone battles over several controversial issues until Dec. 7, thus avoiding a shutdown just before the elections. Specifically, lawmakers agreed to postpone fights over funding the border wall and reauthorizing the Violence Against Women Act (VAWA), two issues that have bitterly divided both the House and Senate.

The deal would then include a continuing resolution to fund any other parts of the government for which Congress had not yet approved spending.

The White House is not party to that deal, and no one is sure at this point whether President Trump will sign such a continuing resolution.

Congressional Republicans think he is on board, but they have experienced his mercurial moves in the past and worry that he will refuse to sign the bill at the last minute.

Complicating matters, there are still several unresolved controversies over urgent non-spending bills. They include Republican proposals to impose tougher work requirements on food stamp recipients as part of renewing farm programs that expire on Sept. 30 and an impasse over including new meal and rest rules for truck drivers as part of legislation to renew the operating authority of the Federal Aviation Administration (FAA), which also expires on Sept. 30.

Congress will have to pass special extensions to avoid a shut-down of farm programs and the FAA, if agreement on these issues can’t be reached by Sept. 30.

NLRB proposes new joint employer standard…

The National Labor Relations Board (NLRB) has proposed new rules that would overturn the Board’s controversial Obama-era ruling that held companies responsible for the labor policies of franchisees and sub-contractors.

The NLRB’s policies in this area have broad impact on employer responsibilities under the National Labor Relations Act (NLRA), including wages, working conditions, work rules and union activities. While widely associated with franchise-franchisee relationships, these NLRB policies impact subcontracting activities of all types.

Under a 2015 NLRB ruling in a case involving Browning-Ferris Industries, a company could be deemed a joint-employer even if its “control” over the essential working conditions of another business’s employees was indirect, limited and routine, or contractually reserved but never exercised. The Board threw out a 30-year precedent that made one company responsible only if it has “direct and immediate” control over the essential working conditions of another company’s workers

The Browning-Ferris decision currently is on appeal to the United States Court of Appeals for the District of Columbia Circuit.

However, the current Republican majority on the NLRB isn’t waiting for the appeals court to rule. The new Board is proposing a rule to replace the standard established in the Browning-Ferris decision.

The new rule would say that employers are responsible for another employer’s employees only if they “possess and actually exercise substantial direct and immediate control” over the other company’s employees’ conditions of employment like hiring, firing, discipline, and supervision. And, the proposal goes on to say that indirect influence and contractual reservations of authority no longer would be sufficient to establish a joint-employer relationship.

This marks the second effort by the Trump-appointed majority on the NLRB to reverse the Browning-Ferris ruling. Last year, the NLRB voted 3-2 to overturn Browning-Ferris. But, that ruling was vacated by the Board in February of this year because of an alleged conflict of interest by one board member’s participation in the case.

Current Board Chairman John Ring insists that this conflict issue has been resolved, leading to the new proposal on joint employers.

Anyone interested in submitting comments on the new proposal to the NLRB has 60 days to do so.

Tax Reform 2.0 advances in Congress…

Republican leaders in Congress haven’t given up on passing more tax legislation.

Building on last December’s massive tax overhaul legislation, the House Ways and Means Committee has approved legislation to make several major, temporary provisions of that law permanent.

While the new law lowered both corporate and individual tax rates, most of the provisions affecting individuals and families, including new brackets, lower rates and a greatly expanded standard deduction, are set to expire after tax year 2025. The House committee bill would make those changes permanent. It would also expand retirement savings options in both employer-provided 401(k) plans and individual retirement accounts (IRAs).

House leaders have tentatively set a vote on the committee proposal for late this month, but they face opposition from within their own party as Republicans from high-tax states want to repeal the $10,000 limit on deducting state and local taxes that was part of the December tax bill.

Tax Reform 2.0 is given no chance of Senate approval

If it matters to lawmakers at this time, the Congressional Joint Committee on Taxation estimated that the package approved by the Ways and Means Committee would reduce revenue to the government by $631 billion through 2028.

Justice again differs from the EEOC on hiring guidelines…

Civil rights organizations have gone to court over a split within the Trump administration involving employer rules that bar hiring workers with criminal backgrounds.

The case involves an Obama-era ruling by the Equal Employment Opportunity Commission (EEOC) that discourages employers from following such blanket hiring policies because they may have a disparate impact based on race or national origin.

With the state of Texas challenging that EEOC rule, the U.S Department of Justice (DOJ), which shares enforcement of civil rights laws against employment discrimination with the EEOC, told the U.S. Court of Appeals for the Fifth Circuit that DOJ will not enforce the EEOC policy.

The clash in the Fifth Circuit marks the latest public disagreement between the Justice Department and the EEOC, which still has a majority of members appointed by President Obama. Last year, Justice opposed the EEOC in the U.S. Court of Appeals for the Second Circuit, arguing that federal civil rights protections do not extend to gay and lesbian workers.

In this latest case, Texas sued to block the EEOC guidance on hiring people with criminal records, arguing the state should have the right to refuse to hire convicted felons without further consideration. Texas said the guidance conflicts with state laws that do not allow businesses to hire certain individuals with criminal histories for certain jobs.

That led the NAACP Legal Defense Fund and the National Employment Law Project to urge the appeals court to reject the U.S. Justice Department’s “about-face” on the EEOC policy.

“Excluding people with records from meaningful employment opportunities is a surefire recipe for slower economic growth, more widespread poverty, increased recidivism, and additional legal liability for employers,” said Phil Hernandez, staff attorney at the National Employment Law Project. “That’s why everyone in Texas and across the country—even people without records—have an undeniable stake in preserving the EEOC’s Guidance.”

High Court ruling could undo rulings by OSHA administrative law judges…

A recent U.S. Supreme Court decision on the legality of administrative law judge (ALJ) appointments could lead to overturning many rulings by ALJs in the Occupational Safety and Health Administration (OSHA).

ALJs function as judges for a federal department or agency and preside over trials and rule on claims or disputes involving administrative law. They can issue fines, penalties and citations. Their decisions have the full force of law when they involve enforcing federal rules and regulations.

In June, the Supreme Court ruled that ALJs appointed by the Securities and Exchange Commission (SEC) violated the Appointments Clause of the U.S. Constitution because they were appointed by SEC staff employees. The Appointments Clause requires that an “inferior Officer” such as an ALJ be appointed by the President or, if permitted by statute, by the “Head” of a department.

The High Court sent the case back to the SEC for a new hearing before a properly appointed ALJ.

In July, the Sixth Circuit U.S. Court of Appeals held that ALJs within the federal Mine Safety and Health Administration (MSHA) are “inferior officers” and subject to the appointments clause as well, overturning a decision because the ALJ involved had been appointed improperly.

Lawyers familiar with administrative law are now suggesting that the appointment of ALJs at OSHA by the OSHA chairman may also be subject to legal challenge based on the Supreme Court and Sixth Circuit decisions. While Congress has authorized the OSHA chairman to appoint ALJs, the Sixth Circuit ruled in the MSHA case that this role can only be delegated to the full commission and not just the chairman.

Congress may try to clarify sales tax rules for online sales…

Look for congressional efforts next year to once again provide a framework for states seeking to require out-of-state retailers to collect sales tax on their online sales.

The new legislation will be in response to a June Supreme Court ruling that opened the door for states to compel collection of sales taxes by out-of-state internet merchants. The June ruling overturned a 1992 high court decision which had limited when states could compel such sales tax collections.

While the court praised a South Dakota law compelling the sales tax collections, the justices declined to provide specific criteria for what would make such a sales tax law constitutional.

This issue had divided lawmakers for several years leading up to the June Supreme Court ruling. Small business groups have long been concerned that state laws to compel collection of sales taxes would be unduly burdensome on smaller merchants because of the thousands of state and local tax jurisdictions across the country, while state lawmakers bridle at restrictions on their ability (or lack thereof) to gather tax revenue from online sales.

One bipartisan group of House members has already come forward with a proposal to define when and how states can compel smaller businesses to collect sales taxes.

“Our bill will protect small businesses and internet entrepreneurs from excessive regulatory burdens,” said Rep. Jim Sensenbrenner, R-WI, one of the sponsors.

The bill, similar to unsuccessful proposals prior to the Supreme Court’s ruling, would prohibit requiring retailers with less than $10 million in sales to collect sales taxes until Congress approves an interstate compact to simplify sales tax collections. Sensenbrenner’s bill is co-sponsored by Reps. Anna Eshoo, D-CA, Jeff Duncan, R-SC and Zoe Lofgren, D-CA.

The bill was praised by the National Taxpayers Union, which has been critical of the Supreme Court ruling. But the National Conference of State Legislatures called the bill “an unwarranted intrusion on state authority which if enacted would continue the competitive advantage online sellers enjoy over Main Street sellers."