Middle-Market Public Policy Roundup

Lawmakers return to Capitol Hill this week to kick off the second session of the 116th Congress. In the first public policy roundup of 2020, we look at the status of two joint-employer rulemakings, which the Department of Labor and the National Labor Relations Board are expected to finalize in January. In addition, we look at a possible replacement for an SEC commissioner whose term was extended while the agency sought a successor.

Joint-Employer Rules Likely to Come in January

The nation’s labor regulators may soon amend rules determining when a company can be on the hook for certain legal violations alleged by an employee.

The Department of Labor and the National Labor Relations Board will likely approve changes to their “joint employer” rules in January.

In late December, the White House approved DOL’s final rule to limit liability for companies with franchising, staffing and other contract agreements that often give rise to potential joint-employer arrangements, clearing the final rule for imminent release.

Change also could come soon from the NLRB. Lauren McFerran, the sole Democrat on the agency’s governing board, left after her term ended on Dec. 16, making the Republican-supported joint-employer revision almost certain.

If passed, the rulemaking would continue the Trump administration’s deregulatory streak and resolve an issue for the business community, which has supported a more narrow definition of what constitutes joint-employer liability after it was expanded under President Barack Obama in 2015.

Currently, under the National Labor Relations Act, a company that exerts “indirect” or “limited and routine” control over employees of another organization could qualify as a joint employer and be implicated in legal disputes or be forced to negotiate with labor unions. Meanwhile, the DOL’s standard, which has not been meaningfully revised in over six decades, establishes that an employer that is “not completely disassociated” could be liable for labor law violations under the Fair Labor Standards Act.

Both of these standards have caused concern among franchisers and other companies that rely on contracted labor. The ambiguity in these regulations offer little protection, even if laborers are employed through franchisees or subcontractors.

ACG has submitted letters to both the DOL and NLRB in support of revising the standard for determining joint-employer status.

Read more about the joint-employer issue and its impact on the construction industry in the January/February edition of Middle Market Growth.

Aide Could Succeed SEC Commissioner

The counsel serving under SEC Commissioner Robert Jackson could soon be elevated to replace him.

Caroline Crenshaw, an attorney who has worked under Jackson since January 2019, has been named a possible successor.

Senate Democratic Leader Chuck Schumer sent Crenshaw’s name to the White House for the post, according to reporting from Reuters. The White House is expected to accept the nomination, which is typical when filling seats formerly occupied by the opposing party.

Crenshaw has worked as an attorney for the SEC since 2013 and served under former commissioner Kara Stein.

By law, the political affiliations of SEC commissioners must remain balanced. Current rules require the body to have no more than three commissioners who belong to the same political party. There are currently two Republicans and one Democrat on the commission. Jackson serves as an independent along with SEC Chairman Jay Clayton.

Although Jackson’s term ended in June 2019, commissioners are permitted to continue serving at the agency for a maximum of 18 months or until the Senate selects a replacement.

If nominated and confirmed, Crenshaw would be expected to succeed Jackson in early 2020.

Financial Services Committee Announces January Committee Schedule 

House Committee on Financial Services Chairwoman Maxine Waters, D-Calif., announced several committee meetings for the month of January:

• January 14 at 10:00 a.m. – The full Committee will convene for a hearing titled “On the Brink of Homelessness: How the Affordable Housing Crisis and the Gentrification of America Is Leaving Families Vulnerable.”
• January 14 at 2:00 p.m. – The Subcommittee on Consumer Protection and Financial Institutions will convene for a hearing titled “The Community Reinvestment Act: Reviewing Who Wins and Who Loses with Comptroller Otting’s Proposal.”
• January 15 at 10:00 a.m. – The Subcommittee on National Security, International Development, and Monetary Policy will convene for a hearing titled “A Persistent and Evolving Threat: An Examination of the Financing of Domestic Terrorism and Extremism.”
• January 15 at 2:00 p.m. – The Subcommittee on Investor Protection, Entrepreneurship and Capital Markets will convene for a hearing titled “Overseeing the Standard Setters: An Examination of the Financial Accounting Standards Board and the Public Company Accounting Oversight Board.”
• January 29 at 10:00 a.m. – The full Committee will convene for a hearing titled “The Community Reinvestment Act: Is the OCC Undermining the Law’s Purpose and Intent?”
• January 30 at 10:00 a.m. – The full Committee will convene for a hearing titled “Rent-A-Bank Schemes and New Debt Traps: Assessing Efforts to Evade State Consumer Protections and Interest Rate Caps.”
• January 30 at 2:00 p.m. – The Subcommittee on Housing, Community Development and Insurance will convene for a hearing titled “Examining the Availability of Insurance for Nonprofits.”
• January 31 at 9:30 a.m. – The Task Force on Financial Technology will convene for a hearing titled “Is Cash Still King? Reviewing the Rise of Mobile Payments.”