The Infrastructure Bill Has Support and Division

July 06, 2021
Inside HR
Employee & Labor Relations
Strategic Planning
Read time: 4 mins

President Biden’s Infrastructure Bill had a very large agenda attached to it when first introduced. Initially, it was a $2 trillion plan that included everything but the White House’s kitchen sink. The Bill also includes a proposal to increase corporate tax revenues to fund the many projects included under the umbrella of the Bill.

The Bill has been met with many challenges, including split support for the PRO (Protecting the Right to Organize) Act, and the Paycheck Fairness Act. The PRO Act was created to support organized labor, but has struggled to pass because it also includes items such as changing the qualifications for independent contractors and providing unions access to all employee personal contact information during the voting process. The Paycheck Fairness Act was not passed, in part, because Senators felt it significantly restricted the ability for employers to base pay on factors that have always been the basis for compensation decisions such as education, relevant work experience, and skill. They also felt it duplicated other Federal laws, such as the Equal Pay Act, Title VII, Age Discrimination in Employment Act, and the Lilly Ledbetter Fair Pay Act, so it would be redundant.

The failure of these pieces of legislation has stalled the passing of the entire Infrastructure Bill. While they have passed the House, they have not had success passing the Senate; therefore, have not reached the President’s desk for signature. On June 24, 2021, a compromised version of the Infrastructure Bill won bipartisan support, but also essentially split the focus of the original Bill into two separate initiatives. The current plan has a price tag of $1.2 trillion of spending over the first 5 years and addresses “hard” infrastructure initiatives aimed to improve transportation, internet, and energy systems across the country.

The “human” side of the Infrastructure Bill is what is struggling to gain bipartisan support. Here is what employers should know about this portion of the Infrastructure Bill:

The American Jobs Plan includes the PRO Act. Although this has not passed on its own, it eliminates the ability for states to administer their own right-to-work laws, among other things. Right-to-work states do not require payment of union dues, so employees of unionized companies have the option to join a union or not to join. Currently, 28 states are right-to-work states, including Wisconsin and Iowa, so this would require changes in more than half our states.

The American Jobs Plan would redefine Independent Contractor qualifications. It is proposed that the California-based ABC test be used to determine if a worker qualifies as an independent contractor or an employee of the company. This portion is highly controversial and would reclassify jobs such as free-lance writers and journalist, artists, and consultants. Workers would need to satisfy all three of the following conditions in order to qualify.

  1. The worker may independently perform work without the control or direction of the employer.
  2. The work done is outside the usual course of business performed by the company worked for.
  3. The worker regularly performs work, either by established trade, occupation, or business that is consistent with the services being provided.

The American Jobs Plan would eliminate the ability to pay subminimum wages to individuals with disabilities. The FLSA, in its original 1938 version, included a wage waiver intended to help people with severe disabilities obtain work. Some states have since banned this, but the law would remove it from the FLSA.

The American Jobs Plan calls for increased penalties for employers who knowingly violate workplace safety and health rules. It is anticipated that $10 billion would go toward helping OSHA increase the number of inspections in response to complaints, which fell during the COVID pandemic despite an increased number of claims.

The American Jobs Plan will help create jobs in conjunction with the “hard” portion of the Infrastructure Bill. These jobs would be under union contract so workers are assured payment of prevailing wage. This portion is anticipated to increase pay for thousands of workers across the country.

The American Jobs Plan calls to provide tax credits for businesses that build on-site child-care facilities. The Biden Administration believes that this will provide additional jobs for child-care providers while also providing parents with more accessible and dependable child-care resources.

Studies done by the Wharton School of Business show that the “hard” side of the Infrastructure Bill would increase revenue and reduce debt by 2050, which has helped gain the support of Congress. On the other hand, another Wharton study predicts the items included in the American Jobs Plan would increase spending and decrease output over the same period of time.

While the Infrastructure Bill has support in the areas of improving transportation, internet, and energy systems, members of Congress have stated they would not support it with the addition of initiatives included in the American Jobs Plan. It is felt that other methods will be used to pass those portions separately in an effort to move forward.

MRA will continue to watch the progression of these laws to keep members informed of changes that will affect the workplace.

Source: Thomas Franck, CNBC; JD Supra