October 2020 Government Affairs Update
House Passes Revised COVID-19 Relief Bill
Last week, the House of Representatives passed a revised “Phase 4” COVID-19 stimulus bill by a vote of 214-207. The legislation totals $2.2 trillion and addresses several areas of COVID-19 relief including supplemental unemployment insurance, expansion of the employee retention tax credit, renewal of the Paycheck Protection Program (PPP), state and local government aid, and direct payments to individuals. The bill is $1 trillion less than the House’s first Phase 4 proposal passed last May. A full summary of the legislation is below.
All House Republicans voted against the legislation along with 18 Democrats. Senate Majority Leader Mitch McConnell (R-KY) opposes the House bill and it is not expected to receive a vote in the Senate. Negotiations between the White House and Speaker Nancy Pelosi (D-CA) took place throughout the past week but both sides are far apart on a final Phase 4 bill. There remain significant disagreements over employer liability protections, supplemental unemployment insurance, and financial aid to state and local governments.
Summary of the Revised HEROES Act:
- Restores the $600 per week Federal Pandemic Unemployment Compensation (FPUC) supplement benefits starting the week of September 6 and ending January 31, 2021.
- Increases the applicable percentage of qualified wages reimbursed through the employee retention and rehiring credit from 50% to 80%.
- Does not include employer liability protections.
- Requires OSHA to issue an enforceable standard within seven days to require all workplaces to develop and implement infection control plans based on CDC guidelines.
- Renews the Paycheck Protection Program (PPP):
- Creates three distinct set-asides for targeted relief for the smallest businesses, struggling non-profits, and second loans to the hardest hit businesses:
- At least 10% of remaining and future funding for loans to businesses with 10 or fewer employees, sole proprietors and the self-employed, and for loans less than $250,000 to businesses located in LMI areas.
- b. Up to 30% of remaining and future funding for non-profit organizations of all sizes and types, including housing cooperatives to be allowed to take first-time PPP loans, with strict limits on lobbying activity and a prohibition on using PPP proceeds to pay lobbyists.
- c. Up to 50% of remaining and future funding for the secondary PPP loan program that provides second loans to small businesses with less than 200 employees and a 25% reduction in revenue year-over-year due to the pandemic.
- Clarifies that a borrower can apply for forgiveness as soon as the covered period is over, their loan has been spent, and they have the documents to substantiate they can comply with the requirements of the program;
- Allows PPP money to be used for personal protective equipment (PPE);
- Creates an application processing priority for very small businesses;
- Places limits on businesses with more than one physical location; and
- Streamlined forgiveness of small-dollar loans.
- Includes $436 billion in aid to state, local and tribal governments.
- Provides $1,200 in direct stimulus payments to individuals.
The text of the bill can be found here. A one-pager on the legislation is here. A section-by-section summary is here.
OSHA Publishes FAQ on Reporting Work-Related Cases of COVID-19
The Occupational Safety and Health Administration (OSHA) has published additional frequently asked questions and answers (FAQs) regarding the need to report employees’ in-patient hospitalizations and fatalities resulting from work-related cases of COVID-19.
OSHA’s new FAQs provide information to help employers apply the agency’s existing injury and illness recording and reporting requirements to COVID-19. Specifically, the FAQs provide guidance on how to calculate reporting deadlines for in-patient hospitalizations and fatalities, and clarify the meaning of the term “incident” as it relates to work-related COVID-19 in-patient hospitalizations and fatalities.
OSHA previously published revised enforcement guidance detailing how OSHA will enforce the recordkeeping requirements of 29 CFR 1904 for employee COVID-19 illnesses for all employers.
President Trump Signs Government Funding Bill Through December 11
Last Thursday, President Trump signed a short-term continuing resolution to fund the federal government at current levels through December 11 and avoid a government shutdown. It includes a one-year extension of the National Flood Insurance Program as well as highway and transit programs.
Federal District Court Blocks Portion of DOL Joint Employer Rule
A federal district judge in New York City recently blocked part of the Department of Labor’s (DOL) new “joint employer” rule which imposed a four-factor test for determining whether two or more businesses may be deemed as the employer for the same worker and liable under the Fair Labor Standards Act (FLSA). Specifically, the judge struck down the rule’s application to "vertical" employment relationships in which workers for a staffing company, franchisees, or other intermediary are contracted to another entity. In his ruling, the judge preserved the portion of the rule dealing with "horizontal" relationships. This includes situations in which a two separate, but “associated,” businesses “jointly” employ the same worker.
The judge found that DOL’s final rule violated the Administrative Procedures Act (APA) and conflicted with worker protections under the FLSA. In addition, the judged ruled that the DOL failed to adequately justify the basis for the new rule or account for its costs to workers. The Trump Administration said it disagreed with the decision and is currently reviewing its options to appeal the ruling.
DOL Proposes Rule to Clarify Employee and Independent Contractor Status Under FLSA
The Department of Labor (DOL) recently announced a proposed rule clarifying the definition of employee under the Fair Labor Standards Act (FLSA) as it relates to independent contractors. The proposal aims to bring clarity and consistency to the determination of who is an independent contractor under the Fair Labor Standards Act.
Proposed Rule Summary:
- Adopts an “economic reality” test to determine a worker’s status as an FLSA employee or an independent contractor. The test considers whether a worker is in business for himself or herself (independent contractor) or is economically dependent on a putative employer for work (employee);
- Identifies and explains two “core factors,” specifically the nature and degree of the worker’s control over the work, and the worker’s opportunity for profit or loss based on initiative and/or investment. These factors help determine if a worker is economically dependent on someone else’s business or is in business for himself or herself;
- Identifies three other factors that may serve as additional guideposts in the analysis: the amount of skill required for the work; the degree of permanence of the working relationship between the worker and the potential employer; and whether the work is part of an integrated unit of production; and
- Advises that the actual practice is more relevant than what may be contractually or theoretically possible in determining whether a worker is an employee or an independent contractor.
This Notice of Proposed Rulemaking (NPRM) is available for review and public comment for 30 days.