Biden Urges Companies to Provide Time Off for Vaccinations

Steering clear of a federal mandate, the Biden administration called on all employers to provide paid leave for workers to receive the COVID-19 vaccine and recover from vaccination side effects.  The administration also called on large employers to provide individuals with information on where and how they can be vaccinated.

Information and incentives:  The administration is asking large employers to take advantage of their resources to provide accurate and up-to-date information on the vaccines, including the benefits of vaccination, through in-store messaging and public service announcements (PSAs).  Employers are also asked to provide incentives such as:

  • Discounts for vaccinated individuals,
  • Product giveaways or rewards, and/or
  • Point-of-purchase promotions.

Employers that wish to make a public commitment to getting their employees and communities vaccinated can fill out a form provided by the White House here.

In response to an HR Policy letter, the EEOC stated it will update guidance on vaccine incentive programs.  HR Policy Association, along with several business groups, urged the EEOC to issue additional guidance to clarify the extent to which employers may offer vaccination incentives to their employees.  Questions remain on whether these incentives violate federal labor and employment laws, including anti-discrimination laws such as the Americans with Disabilities Act (ADA).  Before additional guidance is provided, employers should carefully consider the value of their incentives. 

Contact Margaret Faso

Former Union Official to Take on New SEC Policy Role

SEC Chairman Gary Gensler announced several staffing decisions for high profile roles with the Commission, including Heather Slavkin Corzo as policy director.  In a previous role at the AFL-CIO, Ms. Corzo advocated for limitations on stock buybacks, the inclusion of employee representatives on company boards, and tighter regulations on private equity firms.

Prior to the SEC, Ms. Corzo served as the director of capital markets policy at the AFL-CIO as well as head of U.S. Policy at the Principles for Responsible Investment, a network of asset owners focused on ESG concerns.  Her professional experience will likely provide Mr. Gensler with a clear understanding of what labor unions and public interest advocates would like to see from the SEC. 

The policy director is a new role, perhaps indicating the Chair seeks more direct control over policy.  Previously, policy priorities were pushed directly from the SEC's regulatory divisions.  Mr. Gensler also announced one of his highest profile division leadership decisions, selecting Alex Oh to lead the Enforcement Division, which will include a new taskforce to examine misleading statements from companies regarding climate change risks. 

Outlook:  Ms. Corzo's appointment likely indicates Mr. Gensler will pursue a more progressive regulatory agenda.  She will be a key figure in efforts to require enhanced corporate disclosures regarding climate change risks and political spending. 

Contact Andrew Maletz

PRO Act Picks Up Key Senate Supporter

Sen. Joe Manchin (D-WV) said he would cosponsor the Protecting the Right to Organize (PRO) Act (S. 420/H.R. 842), leaving only three Senate Democrats who have not expressed support or opposition to the measure.  Manchin pledged to work with “my colleagues on both sides of the aisle” to find the bipartisan support needed to obtain the 60 votes necessary for passage under current Senate rules.

Focus now shifts to 3 Democratic holdouts:  Senate Majority Leader Chuck Schumer (D-NY) has indicated he will bring the bill to the Senate floor if it has all 50 Democratic votes. Arizona Senators Kyrsten Sinema and Mark Kelly, and Virginian Mark Warner, are the remaining Democratic holdouts.  They each represent states with Right to Work laws that would be preempted by the PRO Act.  This did not deter Manchin, however, whose state also has such a law.  

Is the filibuster still a safeguard?  The House has already passed the PRO Act.  However, even with all 50 Democrats plus tie-breaking Vice President Kamala Harris, the bill would still need to pick up 10 Republican votes to achieve the 60 votes needed to cut off debate in the Senate.  As of now, there are not sufficient Democratic votes to change the rules to eliminate that requirement.  There may be an effort to attach the bill to a budget reconciliation measure, which could not be filibustered.  But those measures may only include taxation and spending provisions, and the Senate Parliamentarian has taken a strict approach to interpreting that requirement.

Evolving views of moderates:  In the last major labor law battle (over the so-called “card check” bill, which was far more modest than the PRO Act) moderate Senate Democrats were the key to preventing its passage.  At the time, their opposition was more crucial, since the Democrats held 60 Senate seats for a brief period during the Obama administration.  What is disconcerting is that in the current Congress those Democrats perceived as moderates in both the House and Senate seem to be far less reluctant to sign onto a bill that is far more sweeping.  This is also occurring at a time when there is a rift between large companies and many Republicans, who ordinarily form solid opposition to such measures.  

Why it’s important:  Congressional labor debates have apparently evolved from scrutiny of specific measures—such as card checks—to a simplistic debate over whether unions should be empowered in general.  Thus, actions like Manchin’s are ominous.  The business community will need to double down on its efforts to ensure that members of Congress, regardless of any favorable views about unions generally, are aware of the enormous implications of the PRO Act for employers, employees, and the overall economy. 

Contact Daniel Yager

House Democrats Reintroduce Leading Bill to Lower Drug Prices

The Democrats' Lower Drug Costs Now Act (H.R. 3) would enable Medicare to negotiate drug prices and allow employer plans access to those rates, a move which is estimated to lower drug costs but would impact the U.S. pharmacy supply chain.

H.R. 3 is estimated to save employers $43.1 billion in drug costs over the next ten years, according to the Office of the Actuary for the Centers for Medicare and Medicaid Services  However, it would disrupt the U.S. pharmacy supply chain in unexpected ways.

Some experts disagree on the benefits of H.R. 3, with the Congressional Budget Office projecting eight to 15 fewer new drugs being brought to market over the next 10 years.

The far-reaching legislation would, among other things:

  • Create a “fair price drug negotiation program” in which the HHS Secretary would negotiate with drug manufacturers on a “maximum fair price” for up to 250 of the costliest drugs in the U.S. without competition—including insulin;

  • Limit the price to no more than 120% of the volume-weighted average price in six other countries (a.k.a., international price index) while indexing future increases to inflation;

  • Require manufacturers to offer negotiated prices to individuals in employer and individual health plans; and

  • Penalize manufacturers that refuse to negotiate with an excise tax up to 95% of the price of the drug until an agreement is reached.

Separately, three GOP committee leaders introduced the Lower Costs, More Cures Act (H.R. 19), which would lower costs, prohibit “pay for delay” agreements, improve transparency, and prevent the use of abusive spread pricing and related practices in Medicaid.

Outlook:  Passage of H.R. 3 is a high priority for Speaker Pelosi and some version of it is likely to be included in a budget reconciliation bill that will move in Congress this year.  However, while lowering drug prices is also a goal of President Biden and Majority Leader Schumer they may not be willing or able to go as far as the House.  With just 50 votes in the Senate to work with any one Senator could blow up a deal and the pharmacy supply chain is likely to pull out all of the lobbying stops to make their case with members.  Whether this dynamic leads to a compromise that focuses on inflation caps, greater transparency, and other pro-competition reforms remains to be seen.

Contact D. Mark Wilson

Mental Health Webinar: Addressing Employee Burnout

HR Policy's latest mental health webinar focused on the key factors contributing to employee burnout and the best practices companies can use to keep employees engaged. 

Burnout is not just an individual issue but an organizational issue.  Burnout is now included in the World Health Organization's Classification of Diseases and is defined as "a syndrome conceptualized as resulting from chronic workplace stress that has not been successfully managed."  Individuals experiencing burnout often face the following six circumstances:

  • Unsustainable workload,
  • Perceived lack of control,
  • Insufficient rewards for effort,
  • Lack of supportive community,
  • Lack of fairness, and
  • Mismatched values and skills.

How can leaders identify burnout at both the individual and organizational level?  Alison Cupito, Global Mental Health Program Lead, Inclusion & Diversity at Accenture, discussed how leaders can identify burnout and provided tips for alleviating the pressures that can lead to burnout.  Accenture's Mental Health Ally program aims to break workplace stigma on mental health by providing easy access to mental health training to all employees.  This program builds personal awareness around mental health and also allows employees to be trained as Mental Health Allies to serve as confidential resources for their peers. 

Recognize and thank employees for their work:  Theresa Monti, Vice President, Total Rewards and HR Systems, The Kroger Company, discussed the importance of taking time to simply thank employees during stressful or busy times.  This recognition provided many employees with comfort knowing they were not alone and were supported by their employer.  Understanding the different individual, team and organizational stressors allows organizations to effectively address burnout.  Data already available to employers, such EAP benefits utilization, can provide useful information on where employees may need additional help. 

:ead by example and put on your oxygen mask first.  The best way for leaders to show employees that their mental health matters is to take care of themselves as well.  Managers can lead by example by being authentic about their own challenges, empowering their team through flexibility and trust, setting boundaries around workload, building knowledge on mental health, and continually recognizing employees for their work. 

HR business partners and call centers crucial to employees feeling heard.  Lisa Bisaccia, former Executive Vice President and Chief Human Resources Officer at CVS Health, closed out the webinar by stating: "Employees in HR have had to become empathetic listeners to provide a non-judgmental ear for colleagues."  Many individuals reaching out to HR are not looking for immediate solutions or to change a policy, but are "calling to be heard." 

Contact Margaret Faso

President’s Jobs/Infrastructure Plan Calls for Increased Employer Penalties

As part of his American Jobs Plan, President Biden “is calling for increased penalties when employers violate workplace safety and health rules,” as his American Family Plan will likely include a national paid leave program.

Higher civil monetary penalties (CMPs) in the future?  As part of any budget reconciliation bill, which only requires 51 Senate votes and cannot be filibustered, Congress could significantly increase the monetary penalties for a wide variety of workplace violations including in the areas of wage and hour, OSHA, ERISA, and immigration.

Higher CMPs would add teeth to DOL’s renewed enforcement focus on worker misclassification under the FLSA (see additional story). 

The American Jobs Plan also calls for passing the Protecting the Right to Organize (PRO) Act, which cannot be done through budget reconciliation, but could be partially implemented through the budget appropriations process.

Paid leave on the horizon?  Separately, President Biden’s American Family Plan, which is expected to roll out next week, will likely include a national paid leave program and expanded subsidies for child care.

Outlook:  Increasing CMPs is an easy way to generate revenue to offset other spending priorities, so it is highly likely this proposal will make it into the infrastructure bill.

Contact D. Mark Wilson

H-2B Visa Increase Highlights Need for Workers of All Skill Levels

After determining that the needs of American businesses cannot be met by the available U.S. workforce, the Department of Homeland Security issued a supplemental increase of 22,000 H-2B temporary non-agricultural worker visas.  The move underlines perennial labor force shortages of both low-skilled and high-skilled workers and the need to raise visa caps to help fill the resulting job vacancies. 

Demand annually exceeds the cap of 66,000 available H-2B visas.  Despite rhetoric against foreign workers, President Trump raised the H-2B cap each year of his presidency in response to pressure from business groups. 

There are vigorous requirements to protect U.S. workers.  Employers seeking to hire workers on these additional H-2B visas must certify with the U.S. Department of Labor that no American workers are available to fill the role and continue efforts to recruit U.S. workers.  Meanwhile, employers must pay high-skilled workers on H-1B visas at least the same wage rate as paid to other employees with similar experience and qualifications or the prevailing wage for the occupation in the area of employment, whichever is higher.

The pandemic may serve as a case study for the impact of fewer temporary work visas.  In June of 2020, President Trump banned the issuance of most new H-1B visas for high-skilled workers and L-1 visas for intracompany transfers.  H-1B visas plunged 94% from June to December of 2020, compared with the same period a year earlier.  Similarly, L-1 visas fell 95%.  Yet according to the Wall Street Journal, the vacant jobs did not go to American workers, but rather went unfilled or moved overseas.

Why it's important:  President Biden allowed the ban on new visas to expire at the end of March.  However, the view that foreign workers on temporary visas are harmful to American workers is on display in several Biden administration rulemakings seeking to make it more difficult to hire early-career workers on H-1B visas.  These are facing legal challenges from employers and others as violating the Immigration and Nationality Act.   

Contact Daniel Chasen

Department of Labor Renews Focus on Worker Classification Enforcement

The Biden administration’s chief wage and hour regulator has directed DOL investigators to place an emphasis on independent contractor misclassification and joint employment relationships as part of a new enforcement focus.  Stricter regulations on both issues are likely forthcoming as well. 

"We need to figure out who an employer is, and we need to figure out who the employee is,” said Jessica Looman, the principal deputy administrator and acting leader of the Department of Labor’s Wage and Hour Division, in an interview with Bloomberg Law, “in order to get [workers] the protection under the law.” 

New rules expected:  The Biden Department of Labor is expected to issue its own worker classification and joint employer regulations, although the move to withdraw the Trump-era independent contractor rule is currently under legal challenge. 

More funding, more staff for enforcement:  The Wage and Hour Division is gearing up for the new enforcement directives by seeking a significant increase to its funding and staff.  Earlier this month, the White House proposed a budget for the 2022 fiscal year that included spending $14.2 billion on the Department of Labor—a 14% increase in the agency’s annual budget.  The proposed budget increase—at least in part—was specifically aimed at increasing enforcement resources.  Whether the proposed budget receives congressional approval is unclear, but it is possible that it could be pushed through as part of the next reconciliation bill. 

Contact Greg Hoff

DOL Issues Cybersecurity Guidance for ERISA-Covered Retirement Plans

For the first time, the DOL’s Employee Benefits Security Administration (EBSA) issued cybersecurity guidance for plan sponsors, plan fiduciaries, record keepers, and plan participants, including on how to protect retirement benefits.

The guidance covers: 

Harriet Pearson, HR Policy Privacy Counsel and Partner, Hogan Lovells, said:  “DOL’s new cybersecurity guidance is a good example of how HR data privacy and security is already addressed by federal laws that are specific to the employment context.  As a practical matter, CHROs and their teams will likely want to confirm that their companies’ actions align with the guidance, particularly with respect to how they oversee the third-parties hired to administer such plans.”

Click here for a brief on the guidance by Pearson and Paul Otto, privacy and cybersecurity partner at Hogan Lovells. 

Contact Daniel Chasen

Micro Bargaining Units Return to the NLRB

The Republican majority on the National Labor Relations Board approved a bargaining unit of 15 workers in a union election at an IKEA distribution center in California, foreshadowing a return to more frequent approval of such “micro” units as was seen under the Obama administration.

The Board upheld a regional director’s decision that allowed for a union election for a unit of 15 technicians at the distribution center.  IKEA had argued that the unit should have included more than 400 other workers. 

Micro units have been a contested labor issue since the Obama NLRB created a new standard in 2011 that made it easier for unions to organize smaller groups of employees such that a single workplace could become “fractured” into multiple micro units.  In addition to fragmenting a workplace’s policies, allowing micro units can better enable unions to win elections by cherry-picking groups of workers in smaller units that are more likely to vote for union representation. 

While the Trump NLRB tossed the Obama-era standard and made it much more difficult to approve smaller bargaining units, it is likely that the result at the IKEA distribution center will become more common as Democrats regain the majority at the current Board later this year. 

Outlook:  The IKEA case demonstrates how easily the fragmentation of a workplace can occur even with a Republican Board.  A Democratic-controlled NLRB, which is expected to be installed later this year, will likely make it even easier.

Contact Greg Hoff

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