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.

Congress: New Year, Same Shenanigans. Federal lawmakers returned to Washington, D.C., this week to kick off the second session of the 118th Congress. Unfortunately, not much has changed from 2023—at least not in the U.S. House of Representatives. With government funding for agriculture, energy and water, military construction and veterans affairs, and transportation expiring on January 19, 2024—one week from today—legislators are already scrambling to avoid a partial government shutdown next week. As a result, leadership in both chambers is taking steps to pass a continuing resolution to avoid such a scenario (and those discussions are off to a rocky start). Of course, while trying to resolve this immediate crisis, Congress hasn’t even started to address funding for the U.S. Department of Labor (DOL), National Labor Relations Board (NLRB), U.S. Equal Employment Opportunity Commission (EEOC), and U.S. Department of Homeland Security (DHS), which expires on February 2, 2024. At this time, it is unclear whether the continuing resolution that is being negotiated will cover this second batch of spending bills.

House Votes to Rescind NLRB’s Joint-Employer Rule. Earlier today, the House passed H.J. Res. 98 to rescind the NLRB’s joint-employer rule. The vote was 206–177, with eight Democrats voting in favor of the resolution. No word yet on when the Senate might vote on a companion measure, which has been introduced by Senators Joe Manchin (D-WV) and Bill Cassidy (R-LA). (For more on Senator Cassidy’s recent scrutiny of the NLRB, please see “Senator Cassidy Blasts NLRB” below.) The White House has stated that President Biden will veto the measure if it arrives on his desk.

DOL Finalizes Independent Contractor Rule. On Wednesday, January 10, 2024, the DOL published in the Federal Register its final rule, “Employee or Independent Contractor Classification Under the Fair Labor Standards Act.” The rule repeals and replaces the current independent contractor regulation promulgated during the Trump administration, which established a commonsense test that focused on an individual’s control over his or her work, and his or her opportunity for profit or loss. In contrast, the new rule sets forth a complicated and confusing “totality-of-the-circumstances analysis of the economic reality test” that will likely lead to more workers being classified as employees. Margaret Santen, William E. Collins Jr., and Taylor E. Gillan have the details. Even before the final rule was officially published in the Federal Register, Senator Cassidy, the ranking member of the Senate Committee on Health, Education, Labor and Pensions (HELP), announced that he would introduce a Congressional Review Act resolution to rescind the rule. The rule will go into effect on March 11, 2024.

Inching Closer to Paid Leave? This week, the bipartisan Paid Family Leave Working Group in the House of Representatives released a framework for potential paid leave legislation. The framework focuses on the following four pillars:

1. Public-private partnership pilot. The working group is considering legislative options establishing public-private partnerships “to facilitate standing up and operating state-run programs … [for] states that have existing paid leave programs and those seeking to establish a new one.”
2. Coordination and harmonization of paid leave benefits across states. This pillar introduces the concept of an “Interstate Paid Leave Action Network (I-PLAN)” that would convene, in part, to develop “equivalency standards so that multi-state employers can design paid uniform, nationwide leave programs that will satisfy the quantitative benefit elements of each state’s employer-based plan requirements and help employees better navigate and access available benefits.”
3. Small employer pooling for paid leave insurance. This concept would “authorize small employers to join association-style insurance pooling plans, with the goal of pooling risk and lowering the cost of providing paid family leave.”
4. Improvements to paid leave tax credits for small businesses and working families. The working group will explore ways to “improve the reach and accessibility” of paid family and medical leave tax credits.

The debate over paid leave still has a long way to go, but it has been making incremental progress, particularly following the federal emergency leave programs that were established during the COVID-19 pandemic.

Su Renominated. This week, President Biden renominated Julie Su—currently serving as both acting secretary of labor and deputy secretary of labor—to be secretary of labor. Su was originally nominated on February 28, 2023, following the departure of then-secretary of labor Martin Walsh. The full Senate never voted on her nomination, as Senator Manchin publicly opposed Su, and her nomination was returned to the White House upon the conclusion of the first session of the 118th Congress. At the moment, it is not clear whether the situation in the Senate will improve for Su this time around.

Senator Cassidy Blasts NLRB. This week, Senate HELP Committee Ranking Member Bill Cassidy (R-LA) released a report titled “The Biden Administration: Politicizing National Labor Law to Help Their Union Bosses.” The report focuses on allegations of election mismanagement by the Board in favor of unions, as well as the Board’s recent changes to its election rules and its decision that aligns with unions’ card check strategies. The report concludes by noting that “the minority staff for the HELP Committee will continue to investigate the NLRB’s politicized conduct to ensure that the Board, General Counsel Abruzzo, and all regions make every reasonable effort to maintain neutrality and carry out their statutory mission of promoting all employee choice, and not just a choice for unions.”

Justice Holmes: Often Quoted, Sometimes Wrong. Supreme Court of the United States Justice Oliver Wendell Holmes, Jr., retired from the Supreme Court on this day in 1932. Holmes was nominated by President Theodore Roosevelt and was confirmed to the high court in 1902. Holmes is one of the most cited Supreme Court justices and was known for some of the most well-known turns of phrase in the Court’s jurisprudence, though some of those have not stood the test of time. For example, in Lochner v. New York (1905), which struck down a New York law prohibiting bakery workers from working more than sixty hours each week, Holmes dissented, writing that the Constitution “does not enact Mr. Herbert Spencer’s Social Statics.” In Buck v. Bell (1927), Holmes authored the majority opinion that upheld the constitutionality of the Virginia Sterilization Act of 1924, as well as the forced sterilization of twenty-one–year-old Carrie Buck, writing, infamously, “Three generations of imbeciles are enough.” Finally, in Schenck v. United States (1919), Holmes wrote for the majority of the Court and upheld the convictions of Charles Schenck and Elizabeth Baer for criticizing the draft during World War I under the Espionage Act of 1917 because their actions (i.e., wartime dissent) were not protected by the First Amendment. In an aside (or “dicta”), Holmes wrote, “The most stringent protection of free speech would not protect a man in falsely shouting fire in a theatre and causing a panic.” Thankfully, Schenck was subsequently overruled by Brandenburg v. Ohio (1969).