White House clears calendar to move regulations

Apr 15, 2024

With help from Lawrence Ukenye

QUICK FIX

PRESSING AHEAD: The Biden administration’s full-speed effort to finalize a battery of rules before summer arrives is rankling some folks who are being left in the dust.

The White House’s Office of Management and Budget wrapped up its review of a pair of Labor Department rules, one that would expand overtime pay guarantees and another raising professional obligations on certain forms of retirement investment advice.

However, at least two parties who booked meetings with the administration to discuss the latter issue say that OMB abruptly canceled on them and left them in the dark.

“We haven’t heard much — it’s mostly inferring from the cancellation of the meeting that we won’t have a chance to provide our thoughts,” said John Grady, the president-elect of the Alternative & Direct Investment Securities Association. “More work could and should be done to calculate the impact of this rule.”

“OMB has shown a disregard for input from the public,” attorney Kent Mason of the firm Davis & Harman LLP, whose clients include several financial institutions opposed to the rule, told POLITICO in an email after his meeting was canceled. “We knew that OMB was rubber stamping the final rule. So, what this has done is publicly confirm that.”

The administration held 18 meetings on the fiduciary proposal and nearly that many on the OT language. OMB’s Office of Information and Regulatory Affairs notes that it “may finish review of a regulatory action before a scheduled meeting. In that case, OIRA may need to cancel the meeting.”

"This is not unusual,” an OMB spokesperson told POLITICO.

Still OIRA’s language also pledges to “make every effort to notify requesters as soon as possible if a meeting needs to be canceled,” something the rule’s critics say did not happen in this instance. Plus, it arguably runs counter to the spirit of the administration’s effort to increase participation in the regulatory process and make it easier to schedule these sorts of meetings.

Republicans in Washington are closely tracking the administration’s handling of the fiduciary rule in particular, with House Education and the Workforce Chair Virginia Foxx saying it “gives rise to serious questions as to whether the agency has extended due consideration to stakeholder input,” in a statement last week.

However, the real risk of such process complaints comes when a policy is being challenged in court, where the specter of the “arbitrary and capricious” test, the Administrative Procedure Act, and other federal constraints have tripped up several other Biden labor policies.

GOOD MORNING. It’s Monday, April 15. Welcome back to Morning Shift, your go-to tipsheet on labor and employment-related immigration. Work-from-home is apparently disrupting entrepreneurs in the home-burglary space. Send feedback, tips and exclusives to nniedzwiadek@politico.com and lukenye@politico.com. Follow us on X, formerly known as Twitter, at @NickNiedz and @Lawrence_Ukenye.

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On the Hill

HOW THINGS WORK: Tax-advantaged savings accounts were designed to help the middle-class invest toward their retirement, and Congress in 2022 passed a sweeping overhaul of the system on a wide, bipartisan basis.

However a yearlong POLITICO investigation found that Secure 2.0 and its predecessor bills have expanded the system well beyond its goal of helping the middle class, our Benjamin Guggenheim reports.

Former administration officials, Capitol Hill aides and other people who work on retirement legislation told POLITICO that the industry initiated many, if not most, of the policies that became law. They described a closed-door system in which congressional aides — many of whom would later go on to work in the industry — collaborated openly and regularly sought advice from former colleagues employed by financial service companies and groups.

“The 401(k) industry owns Congress,” said Daniel Hemel, a professor and tax law scholar based at NYU School of Law. “Either lawmakers were trying to pull a fast one on the American people or lobbyists were trying to pull a fast one on Congress. I don’t know which story is better.

More hill news: “Skills-based hiring for contractors advances in the House,” from the Government Executive.

IN THE STATES

WAR OVER WAGES: This fall, California voters will have the chance to set the nation’s highest minimum wage at $18 per hour. But it's been a surprisingly subdued affair, our Jeremy B. White reports.

A ballot initiative to raise California’s wage floor has been met so far with shrugs from unions and industry coalitions that fiercely fight over the minimum wage levels elsewhere.

In a state where In-N-Out Burger cashiers make $20 per hour, Long Beach hotel workers earn $23 and medical assistants statewide will soon earn $25, the question of an $18 hourly rate just may be less salient.

More state news: “Legislature votes to eliminate carve-outs to state minimum wage — and other labor news,” from the Minnesota Reformer.

Unions

BAD DRAM: A judge at the National Labor Relations Board determined that whiskey purveyor Woodford Reserve illegally undermined union organizing efforts at its Kentucky distillery, The Associated Press reports.

The company granted pay raises, sweetened time-off policies and gave workers product freebies in an effort to deter unionization, according to administrative law judge Andrew Gollin's ruling.

“The 2022 unionization effort failed, but Gollin set aside the election results and said Woodford Reserve and its parent company should recognize and bargain with a local Teamsters union,” according to the AP.

More union news: “NYC Council staff union approves first-ever contract,” from Gothamist.

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Around the Agencies

EEOC PRESSES WORKDAY: The Equal Employment Opportunity Commission is urging a federal judge to force software company Workday to face a class-action suit for allegedly using AI tools to discriminate against applicants, Reuters reports.

“The EEOC in its brief urged a federal judge to reject Workday's pending motion to dismiss the case on grounds that it is not an employer or employment agency under Title VII and laws banning discrimination based on disability and age.”

More agency news: “Legal Sieges on President’s Power Threaten Contractor Watchdog,” from Bloomberg Law.

In the Workplace

BEATING THE HEAT: Florida Gov. Ron DeSantis signed a bill blocking heat protections for workers after lawmakers in Miami-Dade County stressed the importance of keeping agricultural workers safe from extreme heat, the Miami Herald reports.

Republican and some lobbyists argued concerns from the southern part of the state would create regulations that would be too difficult for employers to follow and that existing heat protections were sufficient.

Immigration

THE MAINE ISSUE: Maine, like many states, has an aging population and an imbalance between the number of job openings and people available and willing to work them, The New York Times reports.

Immigrants have stepped in to fill this gap, helping businesses stay afloat and strengthening Maine’s economy, while also raising complicated political questions that lawmakers (like in D.C.) have struggled to answer.

“The new supply of immigrants has allowed employers to hire at a rapid pace without overheating the labor market. And with more people earning and spending money, the economy has been insulated against the slowdown and even recession that many economists once saw as all but inevitable as the Federal Reserve raised interest rates in 2022 and 2023.”

Related: “How immigrant workers in US have helped boost job growth and stave off a recession,” from The Associated Press.

WHAT WE'RE READING

— “Generative AI Is Changing the Hiring Calculus at These Companies,” from The Wall Street Journal.

— "Shawn Fain, president of the UAW: ‘Workers realized they’ve been getting screwed for decades’" from The Guardian.

— “Actors Are Making Thousands of Dollars Through Fake Video Podcast Ads,” from Bloomberg.

THAT’S YOUR SHIFT!

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