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Administration Rescinds Gig Worker Rule


Last week, the Biden Administration said it is open to moving child care into the first phase of infrastructure investment if Democrats push for it. Friday’s jobs report saw women’s employment fall, alarming many Democrats who now believe funds for child care should be moved from the second infrastructure package to the first. Treasury Secretary Janet Yellen pointed to a shortage of child care as a key reason mothers weren’t returning to work. The American Jobs Plan would provide more than $25 billion to the upgrade and construction of child care facilities and provide another $225 billion into the broader child care sector, to go toward funding for providers, raising wages for workers, and improving child care affordability. The child care industry has felt the effects of the pandemic and the sector has been pushed to the brink of collapse with increased costs and decreased enrollment, which forced many facilities to close. The sector’s struggles have had an outsize impact on Black and Hispanic women, who not only account for a large number of child care workers but are more likely to struggle to find child care for their own families.

President Biden has expressed his willingness to talk with Republican lawmakers about his proposed spending plans but is prepared to back a congressional maneuver that would allow Senate Democrats to pass legislation without GOP support.

Gig Worker Rule

On Wednesday, May 5, the U.S. Department of Labor (DOL) announced that it is withdrawing the Trump administration’s business-friendly independent contractor rule, which could have major implications for the gig economy. The Trump era rule, finalized by DOL in January 2021, would have made it easier for businesses to classify their workers as "independent contractors" who are not covered by federal minimum wage and overtime protections under the Fair Labor Standards Act (FLSA) -- which requires that employees be paid at least the federal $7.25 hourly minimum wage and receive time-and-a-half pay for working more than 40 hours in a week, among other protections. Independent contractors, frequently used by app-based companies like Uber, Lyft, and DoorDash, aren't included under the FLSA.

The Trump rule set out an "economic realities" test to determine whether a worker is an independent contractor or an employee under the FLSA, which analyzed how much control workers have over their job duties and their opportunities for profit or loss, a rule change that the Trump DOL anticipated would expand businesses' use of independent contractor relationships. The Biden administration said the rule "was in tension" with the text and purpose of the FLSA and would result in workers losing protections they were owed under the law. This is a sign that the Biden DOL is preparing to take a tougher enforcement approach to worker classification. The agency says it anticipates the change will avoid a loss "in workers’ access to employer-provided fringe benefits such as health insurance and retirement plans" and "other benefits such as unemployment insurance and workers compensation coverage.”

Child Care Workforce and Facilities Act

On Tuesday, May 4, Senators Amy Klobuchar (MN) and Dan Sullivan (AR), along with Representatives Josh Harder (CA) and Jaime Herrera Beutler (WA), sent a letter to the leaders of the Senate Health, Education, Labor, and Pensions (HELP) Committee and House Education and Labor Committee to express their support for the Child Care Workforce and Facilities Act. The legislation would appropriate $100 million per year to create a new grant program to help states improve the education, training, and retention of the child care workforce and to build, renovate, or expand child care facilities in areas with child care shortages.

Click here to read the full letter.

House Appropriations Committee Hearing

On Wednesday, May 5, the House Appropriations Labor, Health and Human Services, and Education Subcommittee heard testimony from U.S. Department of Education Secretary Miguel Cardona about President Biden’s budget request for his agency. If enacted, the President’s budget would increase Department funding by 41 percent, which includes a $20 billion increase for high-poverty schools, an increase to Pell Grants, increased funding for child care and students with disabilities, and addresses issues such as student mental health.

Click here to access the video from the hearing.

House Leadership

Congresswoman Elise Stefanik (NY) has indicated that she plans to seek the top job on the House Education and Labor Committee in the new Congress. She has privately been telling her GOP colleagues that she only intends to finish out the rest of this current cycle as conference chair if she is ultimately given the No. 3 leadership position. Current Committee ranking member, Congresswoman Virginia Foxx (NC), is term-limited. Other GOP members have expressed interest in the leadership position, but so far nobody has formally stepped-up to challenge Stefanik.

Unemployment Rate

On Friday, May 7, the Department of Labor (DOL) Bureau of Labor Statistics (BLS) released the unemployment report for April, which showed payrolls rose 266,000. According to the report, more than 1 in 4 unemployed Americans have been out of work for over a year and long-term joblessness has been rising steadily throughout the COVID pandemic. Nearly 2.7 million people were unemployed for 52 weeks in April - more than double the amount in February, which represents 29%of the 9/2 million total jobless workers last month, according to the report. The unemployment rate rose slightly to 6.1%.

Click here to access the full report.

Click here to read Secretary Walsh’s statement about the jobs report.

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