Congress Enacts Workforce Issues
The start of the year marked the beginning of a two-year session of Congress. Prior to adjourning in December, the Congress included in its bill funding the federal government the Pregnant Workers Fairness Act, the Providing Urgent Maternal Protections for Nursing Mothers Act, and the Securing a Secure Retirement Act.
New Session of Congress Begins – On January 3rd, the 118th session of Congress began. The November elections resulted in Republicans retaking control of the House of Representatives with a slim majority. In the Senate, the Democrats retained their majority. The new Republican majority in the House of Representatives has indicated that they plan to launch multiple investigations of the Biden Administration. With each party controlling one house of Congress, it may be more difficult to pass legislation. Two issues that the Congress will have to deal with during this session is increasing the debt ceiling to avoid the federal government defaulting on its obligations and funding the federal government during the fiscal year that will begin on October 1, 2023.
Legislation Funding the Federal Government Includes Workforce Issues – In December, the Congress passed, and President Biden signed a 4,155 page bill (H.R. 2617) funding the federal government through the end of the current fiscal year (September 30, 2023). The bill includes several workforce issues including the:
- Pregnant Workers Fairness Act – This bill requires employers with at least 15 employees to provide reasonable accommodations for pregnancy, childbirth, or related medical conditions unless the accommodation would impose an undue hardship on the employer. Reasonable accommodations would need to be arrived at through an interactive process between employees and employers similar to what is required under the Americans with Disabilities Act, and if another accommodation could be provided, employers could not require employees to take leave. Senator Robert Casey (D-PA), one of the Senate sponsors stated that the law “means if a woman is pregnant in the workforce, she can do her job and have a healthy and safe pregnancy.” The law is designed to address a 2015 Supreme Court case in Young v. UPS and would amend Title VII of the Civil Rights Act of 1964 to establish that the prohibition against sex discrimination would include employment-related discrimination due to pregnancy, childbirth, or related medical conditions. The law applies to all aspects of employment including hiring, reinstatement, termination, disability benefits, sick leave, medical benefits, seniority, and other conditions of employment covered by Title VII. The Equal Employment Opportunity Commission (EEOC) would have one year to issue regulations implementing the law. The law will become effective in 180 days after its signing, which occurred on December 29th.
- Providing Urgent Maternal Protections for Nursing Mothers Act – The Providing Urgent Maternal Protections for Nursing Mothers Act (PUMP Act) was added as an amendment to the omnibus legislation. This act amends the Fair Labor Standards Act (FLSA) to expand access to breastfeeding accommodations in the workplace. Senator Lisa Murkowski (R-AK), one of the sponsors of the bill stated, “I am encouraged to see the PUMP Act pass the Senate – good progress toward ensuring no mother ever has to choose between a job and nursing her child.” The law requires employers to provide a reasonable break time for employees to express breast milk for a two year period in a place other than a bathroom that is shielded from view and free from intrusion by coworkers and the public. If employees are completely relieved from work during the break time, the time spent does not need to be considered hours worked. Employers with less than 50 employees would not be subject to the law if it would impose an undue hardship when considered in relation to the size, financial resources, nature, or structure of the employer’s business. Before commencing an action under this law, employees shall inform the employer of the failure to comply and provide the employer with 10 calendar days to come into compliance. The Department of Labor has 60 days to issue guidance and the law becomes effective in 180 days following it being signed by President Biden.
- Securing a Strong Retirement Act - The Securing a Strong Retirement Act 2.0 (SECURE Act) was added as an amendment to the omnibus legislation and is designed to expand those who participate in retirement plans in order to increase retirement savings. Among the provisions included in the law are:
- Requiring 401(k) and 403(b) plans to automatically enroll participants upon becoming eligible. The initial automatic enrollment amount would be at least 3% but not more than 10% of salary. Annually the amount would be increased until it reached 10%. Existing plans would not have to comply as well as employers with fewer than 10 employees, businesses that have been in existence for less than 3 years, church plans, and governmental plans.
- Increasing the required minimum distribution age from retirement plans from 72 to 73 starting on January 1, 2022, and increasing the age to 74 on January 1, 2029, and 75 on January 1, 2032.
- Increasing the amount that employees who are 62, 63, and 64 can make in catch-up contributions to their retirement plans from $6,500 per year to $10,000 annually.
- Permitting employers to make matching contributions under a 401(k) plan, 403(b) plan, SIMPLE IRA or 457(b) plan for governmental employers with respect to “qualified student loan payments.” The provision will assist employees who may not be able to save for retirement due to student debt and as a result are not receiving matching contributions to their retirement plans. They would receive the matching employer contributions as long as they are repaying their student loans.
- Allowing long-term part-time workers to participate in 401(k) plans after two years of employment in which they complete at least 500 hours of service. Previously, three years of part-time work was required.
- Allowing employers to automatically enroll workers into emergency savings accounts, which are linked to employees’ retirement accounts. Workers can contribute 3% of pay up to a maximum of $2,500.
- Having the federal government provide a 50% match up to $2,000 in employee contributions, resulting in the government providing a maximum of $1,000 that would be deposited into the employee’s retirement account. Income limits would apply with the match phasing out when a single taxpayer makes between $20,500 - $35,500 and between $41,000 - $71,000 for those married filing jointly.
Neil Reichenberg is the former executive director of the International Public Management Association for Human Resources. He is an attorney, a frequent writer and speaker on public policy and human resource issues, and an adjunct faculty member at George Mason University. For questions or additional information, contact Reichenberg at firstname.lastname@example.org.