January 2019 Government Update

NLRB Further Extends Deadline for Joint Employer Proposal Extended Following Court Ruling

The National Labor Relations Board (NLRB) has announced that it is further extending the comment deadline for a new joint employer rulemaking until Jan. 28, following a federal Appeals Court panel ruling against an Obama-era rule that broadened the definition of joint employer liability. BSCAI plans to sign on to comments from the Coalition for a Democratic Workplace defining the need for "direct and immediate control” for joint employer liability.

Under the current NLRB proposal, an employer may be found to be a joint-employer of another employer’s employees only if it possesses and exercises substantial, direct and immediate control over the essential terms and conditions of employment and has done so in a manner that is not limited and routine. Indirect influence and contractual reservations of authority would no longer be sufficient to establish a joint-employer relationship. NLRB is expected to return to the traditional standard for joint employer liability later this year.

In a 2 to 1 decision last month, a federal Appeals Court panel ruled the Obama-era NLRB was too broad in defining circumstances where “indirect control” could subject companies to joint employer liability. The court remanded the case to the NLRB because the Board failed to explain whether its consideration of “indirect control” implicated the workers’ essential terms and conditions of employment and did not adequately define the factors that constitute indirect control.

Deviating from the long-held standard for joint employer liability, in 2015, the NLRB under President  Barack Obama broadened the definition of what constitutes a joint employment relationship. In the case involving Browning-Ferris Industries (Browning-Ferris), the Board decided that a joint employment relationship could exist even when companies have “indirect or unexercised control” over workers.

Building service contractors have had to deal with the additional risk created by the Obama-era rule. Although the Trump-era NLRB is looking to return to a traditional standard for joint employer liability, until those changes take effect employers should bear in mind that there is uncertainty regarding the rule.

White House Office Reviews Overtime Pay Proposal

The Department of Labor (DOL) has sent a new proposal regarding overtime pay eligibility for review to the White House’s Office of Information and Regulatory Affairs (OIRA). It is unclear how long the rule will be under review at OIRA, and there are no details yet on the content of the proposal. The Fall 2018 Unified Agenda of Regulatory and Deregulatory Actions suggested a new overtime proposal would be released in March 2019.

A federal district court permanently invalidated changes made to the Obama-era Overtime Rule on August 31, 2017. That followed a November 22, 2016, preliminary injunction barring enforcement. The final rule was scheduled to take effect on Dec. 1, 2016 and would have expanded overtime eligibility for 4.2 million employees.

Labor Secretary Alex Acosta in public comments has expressed support for increasing the threshold for overtime pay eligibility that was last updated in 2004. The period for OIRA review of a regulation is typically 90 days, but the review deadline can be extended and OIRA does have authority to return a rule to an agency (such as DOL) for reconsideration.

IRS Issues Pass-Through Deduction Compliance

The Internal Revenue Service (IRS) has issued final regulations and guidance for business structured as pass-through entities (sole proprietorships, partnerships, trusts, limited liability corporations, and S corporations) to deduct up to 20 percent of qualified business income. The announcement helps alleviate some concerns from pass through entities that a final rule would not be issued in time for the filing of 2018 tax returns. The IRS estimates that between 17 and 40 million American business owners will be able to take advantage of the new pass-through deduction, and is generally available to applicable small business owners with income below $315,000 for married couples filing jointly and $157,500 for single filers without limitations.

Fatal Injuries for Janitorial Service Workers Increased in 2017

The Bureau of Labor Statistics (BLS) recently announced fatal workplace injuries for 2017 as part of the annual Census for Fatal Occupational Injuries (CFOI). There was a noticeable increase in fatal injuries for janitorial service workers (NAICS Code 56172) in 2017 compared to 2016. BLS reports that janitorial service workers had 38 fatal injuries in 2017. That compares to 16 fatal injuries in 2016. Drilling down on the incidents, there were 10 fatalities related to falls, slips, and trips in 2017 after having none in 2016. In addition, there were 12 fatalities related to transportation after having 5 fatal injuries related to transportation in 2016.

The report serves as a reminder to employers and employees alike about the importance of workplace safety. OSHA has a Quick Card for reference to help protect workers falls, slips, and trips. There is also a reference card for safe driving practices for employees.

Overall, there were 5,147 fatal work injuries recorded in the United States in 2017, down slightly from the 5,190 fatal injuries reported in 2016. The fatal injury rate decreased to 3.5 per 100,000 full-time equivalent (FTE) workers from 3.6 in 2016.

Partial Government Shutdown Continues

Parts of the federal government have now been shut down for over a month as the White House and congressional Democrats continue to disagree over funding for construction of a wall along the U.S. – Mexico border. In a national television address on Saturday, President Trump offered to extend for three years the legal status of 1 million immigrants who are part of the Deferred Action for Childhood Arrivals (DACA) and Temporary Protected Status (TPS) programs. In exchange, the president proposed $5.7 billion for 234 miles of border barriers.

Speaker of the House Nancy Pelosi (D-CA) and congressional Democrats have rejected the president’s latest proposal. House Democratic Leadership plans to hold a vote this week on the six spending bills that were agreed to by House and Senate negotiators last year but were never brought to the floor. Speaker Pelosi and Senate Minority Leader Charles Schumer (D-NY) have maintained that congressional Democrats will not discuss border wall funding with the White House until the entire federal government is reopened.

Senate Majority Leader Mitch McConnell (R-KY) plans to bring a bill to the floor this week that includes President Trump’s latest proposal and would also fund the parts of the government currently shut down through the end of Fiscal Year 2019—that ends on September 30. However, in order for such legislation to pass in the upper chamber, at least seven Democrats would have to join all 53 Republicans in supporting the president’s proposal. That does not appear likely as the stalemate continues between Republicans and Democrats over funding for a border wall and the quarter of government that is shut down.

Some of the departments and agencies affected by the shutdown include Housing, and Urban Development (HUD), Department of Agriculture (USDA), Department of Treasury, Environmental Protection Agency (EPA), and Department of Transportation (DOT).

Sen. Gardner Introduces Two-Year HIT Delay

Sen. Cory Gardner (R-CO) has introduced the Health Insurance Tax Relief Act (S. 172) to provide a two-year delay of the Health Insurance Tax (HIT) that was created as part of the Affordable Care Act (ACA). The HIT is levied against companies offering fully insured plans that is then passed on to employers and employees in the form of higher premiums. Sens. Jeanne Shaheen (D-NH), John Barrasso (R-WY), Doug Jones (D-AL), Tim Scott (R-SC), and Kyrsten Sinema (D-AZ) joined Sen. Gardner in introducing the bill.

The HIT is suspended for 2019 but is set to return in 2020 unless there is congressional action extending the moratorium. According to America’s Health Insurance Plans (AHIP), if implemented in 2020, the HIT would levy $16 billion in fees on health insurance, including increases of $479 per family in the small-group market and $458 in the large-group market.

OSHA Reminds Employers to Remain Vigilant About Potential Winter Hazards

The U.S. Department of Labor's (DOL) Occupational Safety and Health Administration (OSHA) reminds employers to stay vigilant when it comes to weather-related hazards that can put employees at risk when temperatures plummet in winter months. Although most of the work that building service contractors perform occurs indoors, slippery floors near entrances and electrical issues from the use of space heaters are among the concerns for employers attempting to ensure a safe work environment.

Of course, for many parts of the country, including areas that do not traditionally have harsh winter weather, it is important to prevent slips when removing snow and ice from the walkways of a building. OSHA recommends spreading deicer as quickly as possible after a winter storm. Among the safety reminders from OSHA concerns when walking on snow and ice is unavoidable. In those instances, OSHA recommends wearing footwear with good insulation and traction, and that workers taking shorter steps while walking at a slower pace than normal.