How the American Jobs Plan Would Affect the Workplace

Allen Smith, J.D. By Allen Smith, J.D. April 2, 2021
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President Joe Biden

​The American Jobs Plan, President Joe Biden's recent $2 trillion infrastructure proposal, includes many labor-friendly recommendations.

The Protecting the Right to Organize (PRO) Act, union neutrality, and changes to wages and enforcement of health and safety regulations are part of the legislative plan on its way to Congress. Of these proposals, the PRO Act, which already has passed the House, may face the most opposition in the Senate.

PRO Act

The PRO Act would, among other provisions, change state right-to-work laws to permit unions to require workers at unionized companies to pay dues. Currently, employees in right-to-work states may choose not to pay union dues. It would also expand the definition of "employee" and limit the concept of independent contractor.

The White House's overview of the American Jobs Plan states that Biden "is calling on Congress to ensure all workers have a free and fair choice to join a union by passing the Protecting the Right to Organize (PRO) Act, and guarantee union and bargaining rights for public service workers."

Ron Holland, an attorney with McDermott Will & Emery in San Francisco, said that the American Jobs Plan's focus on infrastructure is "an easier sell to some Republicans" than the PRO Act. "You might be able to get some GOP senators on board, sufficient to overcome a filibuster," to support the infrastructure provisions.

Sixty votes are needed to overcome a filibuster. There are 50 Democrats and 50 Republicans in the Senate with Vice President Kamala Harris able to cast a tie-deciding vote.

Alternatively, parts of the American Jobs Plan might be passed through an expedited process called budget reconciliation, according to Michael Lotito, an attorney with Littler in San Francisco. With budget reconciliation, the Senate needs only a majority of votes to pass legislation. However, Lotito said the PRO Act would not qualify for approval through this process.

Holland added, "As of right now, no GOP senators support the PRO Act, and there's no indication that any will."

Union Neutrality

A separate part of the American Jobs Plan language requires companies that hold federal contracts to remain neutral during union organizing.

"A neutrality agreement is an agreement—in reality, a contract—between a union and a company that an employer will remain neutral in any organizing efforts by the union of the company's workforce," said David Pryzbylski, an attorney with Barnes & Thornburg in Indianapolis.

Most neutrality agreements go further and contain other provisions, including an agreement by the employer to voluntarily recognize the union as the employees' representative once a majority of the employees sign union authorization cards or a petition supporting the union as their representative, said Mark Kisicki, an attorney with Ogletree Deakins in Phoenix. 

If the American Jobs Plan is passed, "federal government contractors will benefit from trillions in new spending" because they would get contracts to build new roads and bridges, Lotito said. "The president will want that money to go for good union jobs. All federal contractors should expect significant contractual provisions to help make that happen, including neutrality agreements, no unresolved unfair labor practices outstanding and a positive position on unions in general."

Employment-Related Proposals

Holland noted that the American Jobs Plan proposes:

  • Eliminating subminimum wage provisions in Section 14(c) of the Fair Labor Standards Act (FLSA). The wage waiver was created under the FLSA in 1938 and was meant to help people with severe disabilities, including mental illness and developmental disabilities, find work. Some workers are paid less than $1 an hour. In May 2015, New Hampshire became the first state to ban paying subminimum wages to workers with disabilities. Maryland (in 2016) and Alaska (in 2018) have since done the same.
  • Demanding that employers benefitting from the plan's infrastructure investments follow strong labor standards.
  • Calling for increased penalties when employers violate workplace safety and health rules.
  • Requiring the companies who secure federal contracts in clean energy and infrastructure to follow prevailing wages.

Prevailing wages already are required for construction and service workers on federal contracts under the Davis-Bacon Act and Service Contract Act, said Susan Harthill, an attorney with Morgan Lewis in Washington, D.C.

She noted that the American Jobs Plan:

  • States that federal investments should be tied to project labor, community workforce, local hire and registered apprenticeships, and other labor or labor-management training programs.
  • Requests Congress to include a commitment to increase American jobs through Buy American and Ship American provisions.
  • Requests $48 billion in American workforce development infrastructure, which would focus on registered apprenticeships and pre-apprenticeships, creating 1 million to 2 million new registered apprenticeship slots.
  • Calls for $40 billion for a new Dislocated Workers Program and sector-based training, including clean energy, manufacturing and caregiving.

"Programs such as the Dislocated Workers Program and other training programs are already in place, but this plan would expand on those," Harthill said.

The American Jobs Plan seeks funding to "strengthen the capacity of labor enforcement agencies to protect against discrimination, protect wages and benefits, enforce health and safety safeguards, strengthen health care and pension plans, and promote union organizing and collective bargaining."

Harthill said this language presumably refers to additional funding for the Department of Labor (DOL), the National Labor Relations Board and the Equal Employment Opportunity Commission for enforcement purposes to hire more investigators and lawyers.

"Note that the DOL was just awarded an additional $200 million in the American Rescue Plan Act," in part directed to agencies like the Wage and Hour Division, which enforces the FLSA, and Office of the Solicitor, which meets the legal service demands of the entire department.

Plan's Impact

If enacted, the American Jobs Plan would impact employers, especially federal contractors, with new and expanded requirements, Harthill said. "Even nonfederal contractors and nonunionized workplaces would be impacted" by increased funding for enforcement agencies.

The plan would be "a historic investment in the working people of America," said DOL Secretary Marty Walsh. "This plan is what building back better looks like—21st-century infrastructure, including rail, roads, bridges and broadband; clean energy and drinking water for healthy communities; expanded job training and apprenticeships, so workers can take control of their futures; research and development to grow manufacturing jobs; investment in the essential care professions that our families and communities depend on; and equity for historically marginalized communities, so nobody gets left out."

He added, "As a former construction worker, I know a good job can change your life. As a former mayor, I know that these investments will transform struggling communities and grow local economies. As labor secretary, I stand ready to make sure these opportunities reach workers from all walks of life and in every corner of our country."

Nonetheless, "it is still early," said James Plunkett, an attorney with Ogletree Deakins in Washington, D.C. "Any final product is likely to look different than what the White House released."

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