Middle-Market Public Policy Roundup
The NLRB issued a statement on its joint-employer rulemaking, the IRS made some changes to tax deductions and the government shutdown continues.
UPDATE: President Trump announced a short-term deal to reopen the government on Jan. 25, shortly after this article was originally posted. The following is an update provided by ACG Global’s Public Policy team:
President Donald Trump announced that he would sign a bill providing short term funding for the government until Feb. 15 without border wall funding. In return, the Senate and House have agreed to go to a conference in an attempt to compromise on a Department of Homeland Security appropriations package by the time government funding runs out again. The appropriations package was the focus of the government shutdown, as President Trump refused to agree to any package, not including $5.7 billion in funding for a border wall, something House Democrats were not willing to do.
Once the continuing resolution that will open the government is passed by Congress and signed by President Trump, the longest shutdown in U.S. history will come to an end, and hundreds of thousands of federal workers that were furloughed will receive back pay and go back to work. President Trump warned that if the House and Senate couldn’t come to an agreement before the new Feb. 15 deadline, he would let the government shut down again, or declare a national emergency to gain funding for the wall.
In a letter responding to lawmakers, the National Labor Relations Board issued a statement on the status of the joint-employer rule, which the agency is looking to change. At the start of a new tax season, the Treasury Dept. and Internal Revenue Service published a set of regulations for pass-through business income deductions. Lastly, Congress tries to find a way to end the government shutdown as furloughed federal workers miss a second paycheck.
NLRB Chairman Responds to Congressional Inquiry on Joint Employer
In the latest in a string of action surrounding the joint-employer rule, National Labor Relations Board Chairman John Ring responded to a letter from congressional Democrats on the issue.
Committee on Education and Labor Chairman Bobby Scott, D-Va., and Chairwoman Rosa DeLauro, D-Conn., of the Subcommittee on Labor, Health and Human Services, Education, and Related Agencies contended that a recent D.C. Circuit Court ruling upheld the current expanded definition as consistent with common law, and it said the NLRB should drop its current rulemaking.
In his response, Chairman Ring claimed that while the court upheld the common law ability to test whether an employee is a joint employer according to an expanded standard, it agreed that the current definition is too vague.
Additionally, he contended that the current rulemaking is fully within the NLRB’s authority. ACG Global’s Public Policy team doesn’t expect this to affect the current rulemaking, which is critical to provide much-needed certainty and consistency to the joint-employer standard for middle-market businesses.
While this correspondence does not appear to change the current rulemaking, it is indicative of Democratic sentiment on the issue.
IRS Issues Final Pass-Through Tax Deduction Rules
Recently, the Treasury Department announced a batch of regulations and guidance to the Internal Revenue Service on tax deductions on business income.
The regulations, published on Jan. 18, concern the ability for pass-through corporations such as S-corps, sole proprietorships, and partnerships to deduct up to 20 percent of their “qualified business income.”
The deduction is available in full for any taxpayer with a taxable income under $315,000 for joint returns and $157,000 for individual returns, and it is available for any company that is not a “specified service business” over that threshold.
Specified services businesses generally include the fields of health, law, accounting, brokerage services, consulting and all financial services. Excluded are architects and engineers.
The IRS starts processing tax returns Monday, which it will have to do with half the staff because of the ongoing government shutdown.
Government Shutdown Continues
As furloughed workers are increasingly forced to rely on food banks and short-term loans, the battle between House Democrats and President Donald Trump over $5.7 billion in border wall funding continues with little hope of reconciliation.
On Thursday, two competing Senate bills to end the shutdown—one with border wall funding and one without—both failed to pass, resetting the stalemate.
Earlier this week, Trump canceled his State of the Union address scheduled for Jan. 28. He plans to reschedule it after the end of the shutdown.
According to White House Press Secretary Sarah Sanders, Trump will not end the shutdown until at least a “large down payment” has been made on the border wall.
See last week’s policy roundup for a rundown of the current state of negotiations.
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Maria Wolvin is ACG Global’s vice president and senior counsel, public policy.
Ben Marsico is ACG Global’s manager of legislative and regulatory affairs.
