Congress Approves Spending and Tax Measures; Key Labor and Employment "Riders" Omitted from Bipartisan Funding Agreement

Considered the last legislative feat of 2015, Congress approved a massive tax and spending package on Friday that includes some positive and negative provisions for employers. The Omnibus Appropriations Act funds the federal government through September 2016—thus averting a possible government shutdown—and includes a separate $600 billion tax component. Of the $1.1 trillion spending portion, $12.2 billion will be allocated to the Department of Labor, $274 million to the National Labor Relations Board, and $364.5 million to the Equal Employment Opportunity Commission.  These allocations include some stipulations on how the money can be spent, but failed to block several controversial actions by the DOL and NLRB.

Notably, report language discussing sections of the appropriations measure funding the DOL and U.S. Department of Health and Human Services denied the DOL's request for funds to establish an Office of Labor Compliance to implement the "Fair Play and Safe Workplace Executive Order"—the so-called "blacklisting" initiative.  This new office is intended to play a key role in executing the executive order, which, according to the proposed rule issued in May 2015, would impose multiple new obligations on government contractors and greatly increase the risks that such contractors will confront in performing services for the government.  According to the Fall 2015 Regulatory Agenda, the Federal Acquisition Regulatory (FAR) Council plans to issue a final rule on this executive order by April 2016. Although the Appropriations legislation itself contains no such limiting language regarding the denied funds for the creation of the Office of Labor Compliance, such report language sends strong direction from Congress to the Administration about its use of funds. 

On the immigration front, the measure funds the processing of H-2B foreign labor certifications, and, according to the Senate report, "blocks the most controversial portions of the Department of Labor's new H-2B visa program and wage regulations, which would inhibit the ability of small and large businesses to expand during temporary periods of peak seasonal demand in industries such as seafood processing, landscaping, hotel and lodging, recreation, and entertainment in cases where insufficient numbers of American workers are available."

With respect to labor spending, the appropriations bill clearly stipulates:

None of the funds provided by this Act or previous Acts making appropriations for the National Labor Relations Board may be used to issue any new administrative directive or regulation that would provide employees any means of voting through any electronic means in an election to determine a representative for the purposes of collective bargaining.

However, a host of labor-related riders that had been included in earlier drafts of the funding bill were removed. Many in the employer community had hoped the NLRB would be precluded from enforcing its new expedited election rule or its new position on joint-employment in the wake of the Browning-Ferris decision.

Nor were there any stipulations on OSHA's advancement of a rule on occupational exposure to crystalline silica, or the Employee Benefits Security Administration's finalization of a rule re-defining who constitutes a "fiduciary" for the provision of investment advice under ERISA.

The bottom line is without such restrictions on spending, the federal agencies are free to pursue their ambitious regulatory agendas. With the November 2016 presidential election in mind, agencies are expected to move full steam ahead to ensure these items are finalized as soon as possible. In fact, Labor Secretary Perez has reportedly commented that he is "confident" the Wage and Hour Division's new white collar overtime rule will be published this spring. The DOL is expected to send the final OSHA silica rule to the White House Office of Management and Budget (OMB) for review by the end of next week. The Department has already sent to OMB for review the final "persuader" rule, which would broaden the scope of an employer's reporting obligation under the Labor Management Reporting and Disclosure Act (LMRDA) by substantially narrowing the "advice exemption" in Section 203(c) of the LMRDA.

Finally, the tax portion of the measure included a two-year delay until 2020 of the Affordable Care Act's "Cadillac" excise tax on high-cost health plans.  Although the Cadillac tax, unpopular with unions and employers alike, was not repealed, its delay may be its effective death knell.

The President is expected to sign this omnibus package into law. 

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.