May 2021 Government Affairs Update

President Biden Releases American Families Plan

President Biden recently announced the second phase of his proposed infrastructure package titled the American Families Plan. The plan calls for increased investments in public education and child care, establishes a national paid family and medical leave program, and would automatically tie the length and amount of unemployment benefits to current economic conditions. The plan would also raise $1.5 trillion in taxes on high-income Americans to pay for the cost of the new programs.

At this time, the American Families Plan has not been drafted into legislative text. BSCAI is currently reviewing the proposal and will keep members informed of the latest developments. Below you will find a summary of key provisions outlined in the plan.

American Families Plan

Paid Leave:

• Creates a national comprehensive paid family and medical leave program. The program would ensure workers receive partial wage replacement for birth of a child, care for a seriously ill loved one, deal with a loved one’s military deployment, find safety from sexual assault, stalking, or domestic violence, heal from a serious illness, or take time to deal with the death of a loved one.
• Guarantees 12 weeks of paid parental, family, and personal illness/safe leave by year 10 of the program, and also ensure workers get three days of bereavement leave per year starting in year one.
• Provides workers up to $4,000 a month, with a minimum of two-thirds of average weekly wages replaced, rising to 80% for the lowest wage workers.

Taxes:

• Raises the top tax rate on the wealthiest Americans to 39.6%.
• Increases capital gains taxes to 39.6% for households making over $1 million.
• Ends practice of “stepping-up” the basis for capital gains in excess of $1 million ($2.5 million per couple when combined with existing real estate exemptions) unless the property is donated to charity. Includes exemption for family-owned businesses and farms that are given to heirs who will continue to run the business.
• Eliminates Section 1031 exchanges when capital gains are greater than $500,000.

Unemployment Insurance:

• Calls on Congress to automatically adjust the length and amount of unemployment benefits workers receive based on current economic conditions. 

Education:

• Provides $109 billion for two years of free community college.
• Invests $80 billion in Pell Grants, which would help students seeking a certificate or a two- or four-year degree.

Biden Administration Announces Increase in H-2B Visas

The Department of Homeland Security (DHS) recently announced that they will be authorizing a supplemental increase of 22,000 visas for the H-2B Temporary Non-Agricultural Worker program. The additional visas will be made available in the coming months via a temporary final rule in the Federal Register.

Employers seeking H-2B workers must test the U.S. labor market and certify in their petitions that there are not enough U.S. workers who are able, willing, qualified, and available to do the temporary work for which they seek a prospective foreign worker and that employing H-2B workers will not adversely affect the wages and working conditions of similarly employed U.S. workers. The supplemental increase will require businesses seeking H-2B workers to engage in additional recruitment efforts for U.S. workers.

The additional visas will only be made available to employers that attest that, if they do not receive workers under the cap increase, they are likely to suffer irreparable harm. Additionally, the temporary final rule will allow employers to immediately hire H-2B workers who are already present in the United States without waiting for approval of the new petition. The supplemental increase is based on a time-limited statutory authority and does not affect the H-2B program in future fiscal years.

BSCAI will keep members updated as these additional visas are made available. 

DOL Sends Draft Emergency Temporary Standard on COVID-19 for Regulatory Review

On April 26, the Department of Labor (DOL) transmitted a draft version of a federal Emergency Temporary Standard (ETS) on COVID-19 to the Office of Management and Budget (OMB) for regulatory review. The text of the ETS will be reviewed by OMB for at least two weeks before being published in the Federal Register. OMB is required by statute to review all Executive Branch regulations before final publication.

The ETS originated from President Joe Biden’s Executive Order on Protecting Worker Health and Safety (EO 13999) signed in January which tasked DOL with considering emergency temporary standards on COVID-19 in the workplace. 

At this time, the draft text of the ETS has not been made public. BSCAI is closely monitoring the status of the ETS and will update members accordingly once the text becomes available.

Tax Credits Available for COVID-19 Paid Leave; Includes Employee Vaccinations

The Internal Revenue Service (IRS) and the Treasury Department recently released further details of tax credits available under the American Rescue Plan to help small businesses, including providing paid leave for employees receiving COVID-19 vaccinations.

The additional details, provided in a fact sheet by the IRS, include information about the employers eligible for the tax credits. It also provides information on how these employers may claim the credit for leave paid to employees related to COVID-19 vaccinations.

Eligible employers, such as businesses and tax-exempt organizations with fewer than 500 employees and certain governmental employers, can receive a tax credit for providing paid time off for each employee receiving the vaccine and for any time needed to recover from the vaccine.

The COVID relief law signed by President Biden in March allows small and midsize employers, and certain governmental employers, to claim refundable tax credits that reimburse them for the cost of providing paid sick and family leave to their employees due to COVID-19, including leave taken by employees to receive or recover from COVID-19 vaccinations.

The tax credits are available to eligible employers that pay sick and family leave for leave from April 1, 2021, through Sept. 30, 2021. The paid leave credits are tax credits against the employer's share of the Medicare tax.

IRS Issues Guidance on Safe Harbor for PPP Tax Deductions

The Treasury Department and the Internal Revenue Service recently issued guidance for certain businesses that received first-round Paycheck Protection Program (PPP) loans but did not deduct any of the original eligible expenses because they relied on guidance issued before the enactment of the Consolidated Appropriations Act signed in December of 2020.

Under prior guidance, businesses that received PPP loans to cover payroll costs, interest on covered mortgage obligations, covered rent obligation payments, and covered utility payments could not deduct corresponding expenses.

With the enactment of the Consolidated Appropriations Act, businesses now may claim these deductions even though they received PPP loans to cover original eligible expenses. These businesses can use the safe harbor provided by this guidance to deduct those expenses on their return for the immediately subsequent year.

President Biden Signs Executive Order on Worker Organizing and Empowerment

President Biden recently signed an executive order establishing the White House Task Force on Worker Organizing and Empowerment. The task force will be dedicated to mobilizing the federal government’s policies, programs, and practices to assist workers in joining unions and bargaining with their employers.

The task force will be chaired by Vice President Kamala Harris and vice-chaired by Department of Labor Secretary Marty Walsh and will include more than twenty cabinet members and heads of other federal agencies.

The task force will be required to submit recommendations to President Biden within 180 days on specific actions the federal government can take to promote worker organizing and collective bargaining in the public and private sectors and to increase union density.

A fact sheet released by the White House can be found here. BSCAI is reviewing the executive order and will be monitoring future actions by the task force.

DOL Withdraws Independent Contractor Rule

The U.S. Department of Labor (DOL) formally withdrew the Independent Contractor Rule which was finalized in the final month of the Trump administration. The department cited the following reasons for withdrawing the rule:

• 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.
• 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.

BSCAI will be closely monitoring future actions by DOL as it pertains to independent contractors and will keep members updated on the latest developments.