Democrats Aim to Include Labor Law Rewrites in Budget

July 16, 2021

Senate Democrats, led by Sen. Bernie Sanders (I-VT), are seeking to include the labor reform PRO Act in their budget reconciliation bill—particularly provisions that would significantly increase fines and monetary penalties under the National Labor Relations Act.

The challenge for Sanders and others is that the budget reconciliation bill can only include tax and spending measures, while the PRO Act addresses changes in substantive law.

The only provisions in the PRO Act with budget implications are those creating monetary penalties for companies with labor violations under the National Labor Relations Act.  Unlike other employment laws, the NLRA does not include fines payable to the federal government.  The PRO Act would empower the NLRB to assess up to $50,000 in fines per labor violation, and up to $100,000 for repeat offenders, in addition to the damages normally received by workers under current law. 

The above provision and other potential parts of the PRO Act would be made part of the budget reconciliation bill, currently standing at $3.5 trillion, which Senate Democrats could pass by simple majority vote (51 votes), without any Republican support. 

Sen. Sanders has been signaling for weeks that he and other Senate Democrats have been working to include the PRO Act in the budget bill.  Any such provision would need to be considered sufficiently related to spending or revenues by the Senate parliamentarian to make it into the final budget.  While it is unclear which provisions of the PRO Act would be able to clear such a hurdle, one possibility is the creation of a higher corporate tax rate—clearly related to spending and revenue—as part of the budget that would be applied to companies not in compliance with various PRO Act provisions.

Upcoming Committee activity:  On July 22nd at 10:00 AM EDT, the Senate Health, Education, Labor and Pensions Committee will hold a hearing on the PRO Act.   

Outlook:  The PRO Act is a legislative priority of the Biden administration and Congressional Democrats.  Given the bill’s slim chances of overcoming a Senate filibuster, it is unsurprising that Senate Democrats are attempting to include some of the bill’s provisions through the budget reconciliation process.  Even if their efforts were to fail, President Biden is likely to impose some of these same provisions on federal contractors through executive order.