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Policy Matters Newsletter – October 14, 2022 – Government Contracts, Procurement & PPP

Seyfarth Hosts Government Relations Policy
Aaand we are back to our regular scheduled
programming. On September 30 2022, Seyfarth hosted an in-person
policy summit that included four panels and a keynote conversation,
discussing what the next two years of this administration

  1. Use of and Limits to Executive Action in the
    L&E Space
    . This panel included Rajesh D. Nayak, Assistant
    Secretary for Policy, U.S. Department of Labor; Emily M. Dickens,
    Chief of Staff, Head of Government Affairs and Corporate Secretary,
    Society for Human Resource Management; Harry Litman, Journalist,
    Professor, Lawyer; the panel was moderated by Scott P. Mallery, Counsel, Seyfarth Shaw.

  2. Focus on Labor Relation This panel included
    Evan Armstrong, Vice President, Workforce, Retail Industry Leaders
    Association (RILA); Mark Codd, Vice President, Managing Director,
    IRI Consultants; and was moderated by Marshall B. Babson, Counsel, Seyfarth

  3. Immigration and the Workplace. Can we meet the
    needs of U.S. Employers? This panel included Doug Rand, Senior
    Advisor to the Director of U.S. Citizenship and Immigration
    Services (USCIS); Stuart Anderson, Executive Director of the
    National Foundation for American Policy; Chenai Kirkpatrick,
    Director, Global Policy & Regulatory Affairs, Society for Human
    Resource Management; and was moderated by Leon Rodriguez, Partner, Seyfarth Shaw.

  4. Employment Discrimination. This panel included
    Jocelyn Samuels, Vice Chair, U.S. Equal Employment Opportunity
    Commission (EEOC); Marc Freedman, Vice President, Employment
    Policy, U.S. Chamber of Commerce, Annette Tyman, Partner, Seyfarth Shaw; the
    panel was moderated by Lawrence Z. Lorber, Counsel, Seyfarth

  5. The final event from the summit was a keynote conversation between Seema Nanda,
    Solicitor of Labor, U.S. Dept. of Labor, and Scott Hecker, Senior Counsel, Seyfarth

The summit proved to be an excellent event, only minimally
affected by the arrival of Hurricane Ian. For those who were not
able to attend either in-person or remotely, a recording of the
various panels and keynote conversation can be found by clicking
the embedded links above. These links are only temporally
available, so get in while the gettin’s good.

(**Please be aware that this was a no press event and that
the content shared is confidential and only for the personal
purposes of our registered attendees to this event and clients. The
links will be active for 7 business days.)

DOL — Finally — Releases
NPRM Regarding Independent Contractors.
One of the
principal topics discussed during the first panel held during our
recent summit on executive action was federal agency rulemaking.
Fortuitously, this Tuesday, the DOL made available for public
consumption its proposed final rule regarding classification
(“IC”) of workers as either independent contractors or
employees under the Fair Labor Standards Act (“FLSA”). We
have been following and summarizing this issue since the Biden administration chose to rescind the rule
promulgated by the DOL under the former administration. The
importance of this new rule to employer community should not be

So, since it is important, what would the rule do? Well, a great
place to start is Seyfarth’s excellent piece summarizing the rule.

Besides that, what are some of the highlights? Well, unlike the
rule promulgated by the Trump administration, which provided for a
more straight-forward legal test for classification, the new rule
is essentially a return to a more ambiguous
totality-of-the-circumstances. The relevant factors to consider
include: (1) The worker’s opportunity for profit or loss
depending on managerial skill; (2) Investments made by the worker
and the employee; (3) Degree of permanence of the work
relationship; (4) Nature and degree of the business’s control
over the worker; (5) Extent to which the work performed is an
integral part of the employer’s business; and (6) Whether the
worker uses specialized skills in performing the work. Under the
proposed rule, no one factor would be dispositive or entitled to
predetermined weight.

That the DOL is attempting to place a thumb on the scale in
favor of employee classification is apparent from the guidance
issued along with the new rule. For example, as it relates to the
first factor, the proposed rule specifically notes that
“decisions by a worker that can affect the amount of pay that
a worker receives, such as the decision to work more hours or take
more jobs, generally do not reflect the exercise of managerial
skill indicating independent contractor status under this
factor.” Or, as to the fourth factor, the DOL notes that even
control required by outside factors, such as “complying with
legal obligations, safety standards, or contractual or customer
service standards may be indicative of control” and therefore
points to an employee classification.

It is well known that the majority of the employer community was
pleased with the Rule promulgated by the Trump administration, and
preferred that rule to the one recently promulgated. That being
said, the proposed rule does offer somewhat of a measured approach
that is not as daunting to the employer community as it could have

California Legislative Session Wraps Up, And There Are
Some Doozies.
September 30, 2022 marked Governor
Newsom’s last day to either approve or veto bills passed by the
Golden State Legislature. He did not veto any of the biggest
employment measures, and some of the approved measures carry some
hefty obligations. See Seyfarth’s excellent summary of those measures that passed and
those that did not. Headlining the measures signed by the Governor
is SB 1162, summarized By Seyfarth here, which expands existing requirements that
employers with 100 or more employees provide the California
Civil Rights Department
(CRD, f/k/a the DFEH) with specified
EEO-1 pay data. The new law also requires employers to submit a
second report if they have 100 or more employees hired through
labor contractors (provided at least 1 employee is in CA). Another
remarkable measure signed by the Governor was AB 2188, summarized by Seyfarth here, which amends the FEHA to make it an
unlawful employment practice to discriminate against an applicant
or an employee because of the individual’s use of cannabis off
the job and away from the workplace, or an employer-mandated drug
test that reveals the individual has nonpsychoactive cannabis
metabolites in their hair, blood, urine, or other bodily fluids. A
blow to the employer community was the Governor’s veto of SB 1262, which would have required publicly
accessible electronic indexes of defendants in criminal cases to
permit searches and filtering of results based on a defendant’s
driver’s license number or date of birth.

Evidentiary Substantiation Of The EEOC’s
Unanticipated Silence.
Recently in this space, we discussed the lack of staffing, and general
lack of action out of the EEOC. As Seyfarth summarized here, that lack of staffing translated into
this fiscal year closing with a strikingly low number of filings
from the EEOC, which begs the question: will this filing drought
continue? We do not expect such a dearth of EEOC action to persist
— with a Democratic majority inevitably to come, a generous
budget increase, and several new strategic objectives planned for
this FY 2023, a busy year may very well lie ahead.

Self Service Kiosks Are The Future, But What About The
This author grocery shops at Safeway, and I cannot
recall the last time I went through a check-out line, almost always
choosing the self-checkout kiosk option. The economic and practical
utility of such kiosks can’t be understated. But as discussed
during our recent panel, the use of AI and self-service kiosks has
abundant potential for unknowing discrimination. For example, these
kiosks can be impossible to use by people who are blind or persons
who use scooters and wheelchairs. As such, as Seyfarth summarized
here, the U.S. Access Board recently issued an
Advanced Notice of Proposed Rulemaking
(“ANPRM”) for self-service kiosks. The ANPRM notes that
the accessibility of similar equipment, such as ATMs and fare
machines, is already covered in non-public accommodation contexts.
As such, The ANPRM seeks comments regarding e.g., capabilities,
functions, or other objective criteria that should define the types
of devices covered as SSTMs or self-service kiosks and whether
requirements for ATMs and fare machines in the current ADA and ABA
Accessibility Guidelines should be updated.

NYC: First In Time To Tackle Bias in AI.
Speaking of the potential of discrimination in the use of AI, On
September 23, 2022, as Seyfarth summarized here, New York City’s Department of
Consumer and Workplace Protection (“DCWP”) released the
highly anticipated proposed rules implementing Local Law Int. No.
1894-A, which regulates the use of automated employment decision
tools (“AEDT”) in hiring and promotion decisions. The new
Rule, which will take effect on January 1, 2023, conditions the use
of AEDTs by employers and employment agencies on their compliance
with certain requirements, such as performing bias audits and
furnishing notifications to candidates and employees. For those
interested in submitting public comments on the proposed rules to
DCWP, the deadline is October 24, 2022. Comments can be submitted
through the NYC Rules website or by email to [email protected]. DCWP will hold a
public hearing on the proposed rules on Monday, October 24, 2022 at
11:00 a.m. ET which is accessible by phone and videoconference.

Warehousing Operators Beware: OSHA – New Emphasis
Federal OSHA has continued to shift its
enforcement priorities toward warehouses, logistics and e-commerce.
As Seyfarth summarized here, OSHA’s Region III — which
includes Pennsylvania, Delaware, West Virginia, and the District of
Columbia — recently issued a Regional Emphasis Program (REP)
instruction (CPL 2022-01 (CPL 4)) for Warehousing
Operations that “establishes policies and strategies to be
followed when scheduling and conducting OSHA programmed regional
emphasis inspections of warehousing, storage, and distribution yard
operations.” OSHA explained that “with the rapid growth
of e-commerce, the warehousing industry has significantly expanded.
This emphasis program will address hazardous conditions these
workers continuously face every day.” The emphasis program is scheduled to continue through August 3,

More Of The Great Loosening: NY Leads The Way.
The nation has seen a trend of restrictions instituted to protect
the populace from COVID-19 falling consistently over the past year.
New York is the latest to permit those guardrails to lapse.
Specifically, as Seyfarth noted here, Mayor Adams of NYC has announced that
the private-sector employee vaccination mandate will become
optional as of November 1, 2022. In lieu of the mandate, the City
is asking businesses to encourage their employees to get vaccinated
and stay up-to-date on boosters. Moreover, as Seyfarth noted here, New York state has also updated its COVID-19 guidance to come into line with the
CDC’s newest recommendations curtailing quarantine

Final Rule Issues Intended To “Fix” Obamacare
.” Since its inception,
so-called “Obamacare” has suffered from one consistent
loophole that kept families from qualifying for subsidized health
insurance when one member received coverage from their employer
that was considered affordable — even if the cost of covering
the entire family was unaffordable. To fix the Glitch, the
Department of the Treasury has issued a final rule that amends the regulations
regarding eligibility for “Obamacare” subsidies to
provide that affordability of employer-sponsored minimum essential
coverage for family members of an employee is determined based on
the employee’s share of the cost of covering the employee and
those family members, not the cost of covering only the employee.
This will, ostensibly, fix the glitch. The Kaiser Family Foundation
estimates that more than five million people are affected by the

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