On January 20, 2010, President Obama renominated Service Employees International Union (SEIU) associate general counsel Craig Becker to the National Labor Relations Board. The Senate returned Becker’s controversial nomination to the White House on December 24 when it adjourned sine die.

In 2009, the Senate HELP Committee voted 15-8 in favor of sending Becker’s nomination to the Senate floor, but Sen. John McCain (R-AZ) immediately placed a “hold” on Becker’s nomination, effectively barring a vote on the nomination. Sen. McCain will likely re-issue a hold on the nomination.

President Obama’s other two pending NLRB nominees, Democrat union attorney Mark Pearce and Republican Senate staffer Brian Hayes, did not receive floor votes after their unanimous approval by the HELP Committee, but their nominations were not returned to the White House. President Obama and Senate Democrats seek Senate consideration of all three nominations in a bloc, in line with recent Senate confirmation practices.

Becker’s nomination will be considered again by the Senate HELP Committee. If approved a second time by the committee, Senate Democrats are expected to seek cloture to limit debate and bring the nomination to the Senate floor for a vote.  It is unclear whether Senate Democrats will be able to overcome Sen. McCain’s hold.

Core Provisions: This resolution calls for the mandatory use of the E-Verify program by employers of workers within the United States as well as enforcement policies that hold both employers and employees responsible for violations of United States immigration law. The resolution also states that it is a “critical responsibility” of the Federal Government to install and sustain border infrastructure and manpower to control the United States borders and protect from unauthorized passage of persons or contraband. Additionally, the resolution states that no immigration reform adopted by Congress should legalize, condone, or grant amnesty for the otherwise unlawful entry or presence of individuals in the United States.

Status: Rep. Jason Chaffetz (R-UT) and twenty-one co-sponsors introduced the resolution on January 21, 2010. It was referred to the House Committee on the Judiciary and the Committees on Education and Labor, and Homeland Security on the same day.

On January 4, 2010, the Supreme Court set New Process Steel L.P. v. NLRB for oral argument on March 23. In November, the Supreme Court granted certiorari in New Process Steel to address the legality of NLRB decisions issued by the current two-member National Labor Relations Board. As a result of political impasses in the final year of the Bush administration and the first year of the Obama Administration, three vacancies on the Board have gone unfilled for nearly two years, leaving only two Board members, Democrat Wilma Liebman and Republican Peter Schaumber, to issue decisions. Before losing its quorum, the Board delegated its decision-making authority to the remaining two Board members. Five federal courts of appeal, including most recently the Tenth Circuit in December, have upheld the decisions of the two-member Board, while the D.C. Circuit ruled in New Process Steel that the decisions were invalid. A decision is expected by the end of June.

On December 24, 2009, the Senate returned seven nominations to the White House as it adjourned sine die until January 20, 2010. The returned nominees included Craig Becker, an Service Employees International Union (SEIU) associate general counsel who had been nominated by President Obama to the National Labor Relations Board on July 9, 2009. 

The Senate HELP Committee voted 15-8 in favor of sending Becker’s nomination to the Senate floor, but Sen. John McCain (R-AZ) immediately placed a “hold” on Becker’s nomination, effectively barring a vote on the nomination. Sen. McCain requested a hearing on Becker’s nomination because he had “concerns regarding Mr. Becker’s written views, which indicate that he would prevent employers from having a role in union representation elections in their workplaces by doing away with requiring fair, secret ballot union elections when requested by an employer.” HELP Committee Chairman Tom Harkin (D-IA) stated that a hearing was not necessary and departed from longstanding Senate practice.

According to a Congressional Research Service report, under Senate rules, unconfirmed nominations are returned to the president at the end of a session or when the Senate adjourns for more than 30 days unless the Senate unanimously consents to holding the nomination over until the Senate reconvenes. President Obama’s options include resubmitting Becker’s nomination in January, making a recess appointment of Becker, or submitting a new nominee. The White House has not issued any statement on the return of the Becker nomination.

President Obama’s other two pending NLRB nominees, Democrat union attorney Mark Pearce and Republican Senate staffer Brian Hayes, did not receive floor votes after their unanimous approval by the HELP Committee, but their nominations were not returned to the White House.

On December 19, 2009, President Obama signed the FY 2010 Defense Appropriations Bill (H.R. 3326) into law. The bill, which passed the Senate 88-10 on December 19, 2009, was nearly held up by a strategic Republican filibuster the previous day, achieving cloture by only four votes (63-33). The filibuster was aimed at stalling the progress of Democratic-sponsored health reform legislation concurrently under consideration in the Senate. The House of Representatives had previously approved the FY 2010 Defense Appropriations Bill on September 16 by a 395-34 vote.

The bill includes provisions to extend unemployment and COBRA benefits and also prohibits Defense Department contractors and subcontractors from requiring their employees and independent contractors to agree to arbitrate certain claims. Those provisions are discussed in greater detail in the Washington Labor & Employment Wire’s previous post on the House’s passing of this legislation.

The FY 2010 Defense Appropriations Bill is Public Law No: 111-118.

Core Provisions: This legislation would amend the Internal Revenue Code to modify the rules concerning the treatment of independent contractors to make it more difficult and costly for businesses to incorrectly classify employees as independent contractors.

In addition to significantly increasing the amount of penalties associated with filing tax returns with incorrect information concerning individuals’ employment status, the bill would change the “safe harbor” provisions of section 530 of the Revenue Act of 1978, which allows employers to designate employers as independent contractors for employment tax purposes, regardless of the workers status as an independent contract under common law test, unless the employer has no “reasonable basis” for such treatment. The amended safe harbor provision would only considered a business to have such a reasonable basis for classifying a worker as an independent contractor if it, or its predecessor, has not treated any other individual holding a substantially similar position as an employee since December 31, 1977, and the business’s treatment of the worker as an independent contractor is in reasonable reliance on: (1) “a written determination … addressing the employment status of the individual or an individual holding a substantially similar position” with the business; or (2) ” a concluded examination (for employment tax purposes) of whether the individual (or an individual holding a substantially similar position) should be treated as an employee ….”

If passed into law, the bill would also grant individuals classified as independent contractors the right to petition the Secretary of the Treasury for a determination of their status for employment tax purposes.

Status: Senator J. Kerry (D-MA) introduced the legislation on December 15, 2009, and it was referred to the Senate Committee on Finance.

On Wednesday, December 16, President Obama signed into law the Fiscal Year 2010 Consolidated Appropriations Bill (H.R. 3288).  This omnibus appropriations legislation provides additional funding to the Department of Labor, the National Labor Relations Board, and the Equal Employment Opportunities Commission, among other federal agencies.  The bill passed in the Senate by a 57-35 vote earlier this week, and previously passed the House by a vote of 221-202. 

On December 16, 2009, the House approved the FY 2010 Defense Appropriations Bill by a 395-34 vote. This most-recently approved version of the Defense Appropriations Bill includes provisions to extend unemployment and COBRA benefits and also prohibits Defense Department contractors and subcontractors from requiring their employees and independent contractors to agree to arbitrate certain claims. 

If signed into law, the bill would extend from nine to fifteen months the 65-percent COBRA health insurance subsidy for individuals who have lost their jobs. While the previous extension of COBRA benefits passed by Congress earlier this year applied to individuals who were involuntarily terminated between April 1, 2008 and December 31, 2009, this bill would extend the job loss eligibility date to February 28, 2010. In addition, the bill would extend previously expanded unemployment benefits, including increased payouts and longer duration of benefits, through February 28, 2010.

The Defense Appropriations Bill would also prohibit defense contractors or subcontractors from entering into or enforcing any agreement with their employees or independent contractors that would require them to arbitrate claims under Title VII of the Civil Rights Act of 1964 or any tort related to or arising out of sexual assault or harassment, including assault and battery, intentional infliction of emotional distress, false imprisonment, or negligent hiring, supervision, or retention. This provision would apply to contracts over $1 million that are awarded more than sixty days after the effective date of the Act. The bill would, however, allow the Secretary of Defense to waive this prohibition if necessary to avoid harm to the national security interests of the United States.

The bill now moves to the Senate for consideration. The Senate previously passed a different version of this appropriations bill in October.

On Sunday, December 13, 2009, the Senate approved the $446.8 billion fiscal year 2010 consolidated appropriations bill (H.R. 3288), on a 57-35 vote. The omnibus bill consolidates six of the seven remaining fiscal year 2010 appropriations bills: the Commerce, Justice, Science, and Related Agencies Appropriations Act (H.R. 2847); the Departments of Labor, Health and Human Services, Education and Related Agencies Appropriations Act (H.R. 3293); the Financial Services and General Government Appropriations Act (H.R. 3170); the Military Construction and Veterans Affairs Appropriations Act (H.R. 3082); the Department of State, Foreign Operations, and Related Programs Appropriations Act (H.R. 3081); and the Transportation, Housing and Urban Development and Related Agencies Appropriations Act (H.R. 3288). 

Under this omnibus appropriations bill, the Department of Labor, the National Labor Relations Board, and the Equal Employment Opportunity Commission will all receive increased funding in FY 2010. The Department of Labor’s budget will increase $431 million from FY 2009, the National Labor Relations Board’s budget will increase $20.8 million from FY 2009, and the Equal Employment Opportunity Commission’s budget will increase $23 million from FY 2009. In total, under the bill the Department of Labor will receive $13.3 billion in discretionary funding, the National Labor Relations Board will received $283.4 million, and the Equal Employment Opportunity Commission will receive $367.3 million.  

If signed into law, the bill will also provide funding for the Justice Department’s Civil Rights Division ($145 million), the Federal Mediation and Conciliation Service ($46.7 million), the National Mediation Board ($13.5 million), the Occupational safety and Health Review Commission ($11.7 million), the Federal Mine Safety and Health Review Commission ($10.4 million), the U.S. Commission on Civil Rights ($9.4 million), and the National Council on Disability ($3.3 million).

As noted in the Senate Appropriations Committee summary, the bill would also present additional targeted funding for unemployment insurance program operations ($3.2 billion), dislocated worker employment and training ($1.4 billion), the Department of Labor’s “worker protection” agencies that regulate pensions, mine safety and health, occupational safety and health, wage and hour rules, and federal contractor compliance ($1.6 billion), and military veteran’s employment and training ($256 million).

The House previously approved the omnibus bill on December 10, 2009, on a 221-202 vote. The legislation now moves to the White House to be signed by the President. President Obama is expected to sign the bill.

On December 7, 2009, the Department of Labor’s Employee Benefits Security Administration (”EBSA”) published its semi-annual regulatory agenda for regulations selected to be reviewed or developed over the next twelve months. Included in the agenda are the following significant regulatory items in the final rule and proposed rule stages. While EBSA has published a schedule for these items, the published dates are tentative and subject to change.

Regulations in Final Rule Stage

In December 2009, EBSA intends to issue a final rule clarifying the prohibited transaction exemption created by the Pension Protection Act of 2006. EBSA previously sought written comments and suggestions concerning this rule. The exemption would allow investment advice provided under an “eligible investment advice arrangement” to be provided to participants or beneficiaries of certain individual account plans. As defined in section 408(g)(2) of the Employee Retirement Income Security Act (ERISA), an “eligible investment advice arrangement” covers arrangements under which advisor fees do not vary with the selection of differing investment options, or under which investment options are selected on the basis of statutorily-compliant computer models. The final rule would provide additional guidance as to what types of computer models are satisfactory and would require the Secretary of Labor to create a model fee-disclosure form. EBSA also indicated in its semi-annual regulatory agenda that it plans on issuing a notice of proposed rulemaking in February 2010, which would narrow the scope of the prohibited transaction exemption as initially proposed by the Bush Administration.

On January 5, 2010, the comment period for the interim final rule implementing anti-genetic discrimination in covered group premiums under the Genetic Information Nondiscrimination Act (GINA) will end. The interim final rule was adopted in October 2009 and became effective on December 7, 2009. GINA prohibits group health plans and health insurers from denying coverage or charging higher premiums to an individual based on a genetic predisposition towards developing certain diseases and disorders. The rule provides, among other things, guidance regarding the prohibition on plans and issuers from requesting or requiring genetic testing, as well as the prohibition on the collection of genetic information. In addition to the formal prohibition of genetic-based discrimination, the rule establishes civil penalties under ERISA.

In January 2010, EBSA intends to issue final rules establishing a safe harbor period of seven days during which money withheld by employers or paid by participants for contribution to a plan would not be considered “plan assets” under Title I of ERISA or the related provisions of the Internal Revenue Code. Because plan assets are subject to fiduciary duties and other obligations, the amendment seeks to provide greater certainty to plan sponsors and fiduciaries, as well as plan participants, as to whether particular participant contributions held by an employer constitute plan assets. 

In April 2010, EBSA plans on issuing an interim final rule concerning the implementation of the Mental Health Parity and Addiction Act of 2008. That act requires that annual or lifetime dollar limits on mental health benefits be no lower than medical or surgical benefits offered under a group health plan. In response to an April 2008 Request for Information, EBSA received over 400 comments raising concerns over compliance with these parity provisions. Accordingly, EBSA anticipates issuing an interim final rule that will provide regulatory guidance regarding these provisions. 

In April 2010, EBSA plans to issue a final rule requiring that multiemployer plan administrators provide plan participants, beneficiaries, representatives, or contributing employers copies of written documents relating to the plan’s funding and financial condition within 30 days of receiving a written request. This final rule implements the new plan disclosure requirements set forth in the Pension Protection Act of 2006. EBSA intends to publish a separate regulation at a later date establishing civil penalties under section 502(c)(4) of ERISA for noncompliance with this provision.

In September 2010, EBSA plans to issue final rules implementing portions of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and subsequent related legislation, including the Children’s Health Insurance Program Reauthorization Act of 2009.

In September 2010, EBSA plans to issue a final rule clarifying what information must be provided to plan participants and beneficiaries to allow them to make informed investment decisions. The rule may amend regulations governing ERISA section 404(c) plans. According to EBSA, the rule will specifically cover the disclosure of information concerning plan fees and expenses.

Regulations in Proposed Rule Stage

In June 2010, EBSA plans to issue a notice of proposed rulemaking intended to bring the definition of “fiduciary” in line with the current practices of plan managers, individual plan participants, and investment advisors. Under ERISA’s regulatory definition, a “fiduciary” administers plans by controlling plan operations, selecting service providers and managing plan assets. The rule would amend the definition of “fiduciary” at 29 C.F.R. § 2510.3-21(c) to include individuals rendering investment advice for a fee, as set forth under section 3(21) of ERISA. EBSA is issuing this rule in response to concerns that the current definition of “fiduciary” may inappropriately limit the types of investment advice that trigger fiduciary duties on the part of investment advisors.

In August 2010, EBSA intends to issue a notice of proposed rulemaking that would satisfy requirements of the Pension Protection Act of 2006 by requiring administrators of defined benefit plans to provide annual funding notices to pension plan beneficiaries and participants. Further, in September 2010, EBSA intends to issue a notice of proposed rulemaking that would satisfy requirements of the Pension Protection Act of 2006 by requiring ERISA-covered plans to provide individual pension benefit statements to plan participants and beneficiaries at designated intervals. Under the proposed rule, the designated intervals would differ with the type of account plan.  Individual account plans providing for individual direction would be required to provide quarterly statements, individual account plans not permitting individual direction would be required to provide annual statements, and defined benefits plans would be required to provide statements every three years.