Category: Administrative & Regulatory

Understanding the Four Goals of Biden’s “American Rescue Plan”

President Joe Biden announced his plan for a new COVID-19 relief package on January 20, 2021 – the day he took office. He, along with Democrat leadership, attempted to gain bipartisan support for the legislation, but ultimately failed to gain Republican support to proceed with the measure. Instead, Democrats will use the budget reconciliation process to pass the relief package with a simple majority vote.

In total, it is a $1.9 trillion plan with the stated goals of: (1) funding a comprehensive COVID response plan, (2) delivering relief to working families, (3) supporting communities that are struggling, and (4) protecting against future cyberattacks. Read on for the top details to know about the plan:

  • The comprehensive COVID response includes creating a national vaccination program, scaling up testing, and working to re-open schools.
  • The relief for working families is the most wide-ranging of the goals. It consists of:
    • Direct payments of $1,400 per person to households under a certain income threshold across America.
    • Increasing the minimum wage from $7.25 per hour to $15 per hour by 2025.
    • Expanding unemployment insurance benefits by providing an additional $400 per-week supplement to those in need through August 2021. This measure will also expand benefits for “gig” workers and extend the amount of time that unemployed individuals can qualify for payments.
    • Working to solve hunger problems by extending the 15 percent SNAP benefit increase and investing $3 billion in WIC.
    • Expanding tax credits for low- and middle-income families to $3,000 from $2,000 for any child 17 and younger.
    • Boosting and expanding Medicaid coverage by allowing state programs to penalize drug companies for drug pricing hikes. It also includes new incentives to encourage states to expand Medicaid under the Affordable Care Act. This would be the first expansion of ACA subsidies in over 10 years.
  • To support communities, the plan aims to:
    • Provide support for small businesses.
    • Provide $130 billion for K-12 schools to access the resources they need in order to safely reopen by hiring more staff and putting in place new testing protocols. It may also include $25 billion for childcare centers and $35 billion for colleges and universities.
    • Send $350 billion to state, local, and territorial governments, along with $20 billion for public transit systems. This is an area of partisanship, as Democrats have been pushing for more funding for several months and Republicans see it as a bailout.
  • The cybersecurity efforts included are largely in response to the recent SolarWinds breach of federal systems. The plan funds modernization of federal IT and networks. The Administration also indicated that the modernization will assist with the COVID-19 vaccine process.

The timing for this bill is still up in the air. President Biden set a deadline of March 14 for passage, as that is when the current funding for extended unemployment insurance expires. That will require Congress to work quickly, and they are attempting to meet the deadline; however, Congress is simultaneously working to confirm Biden’s nominees to his administration and holding an impeachment trial for former President Trump.

Congress’s process began last week when the House and Senate passed and adopted a budget resolution. Over the next few days, House committees will work on marking up and drafting legislation, which will then get sent to the Budget Committee, the Rules Committee, and, eventually, to the floor for a vote. After its expected passage in the House of Representatives, the bill will be sent to the Senate, where it is also expected to pass on a party-line vote. Finally, it will be sent to President Biden for his signature.

© 2020 Foley & Lardner LLP

ARTICLE BY Jared B. Rifis and Kate M. Merrill of Foley & Lardner LLP
For more, visit the NLR Coronavirus News section.

Heavy Metals In Baby Food Pose Concern For Baby Food Industry

On February 4, 2021, the U.S. House of Representative’s Committee On Oversight and Reform (Subcommittee on Economic and Consumer Policy) issued a report entitled “Baby Foods Are Tainted With Dangerous Levels of Arsenic, Lead, Cadmium and Mercury“, which sent ripples of concern through the consumer ranks and the baby food industry. Heavy metals in baby food has received attention before, but never before in such a significant way from a House Subcommittee report like the one published this month. The findings and the proposed changes to regulations for the baby food industry that the subcommittee put forth will have significant compliance impacts on companies, as well as open certain baby food companies up to litigation risks that cannot be ignored.

Findings In the House Report

On November 6, 2019, the House Subcommittee requested internal documents from seven of the largest manufacturers of baby food in the United States, which included companies making both organic and conventional products. The request was prompted by reports that alleged that there are high levels of heavy metals in baby foods, specifically arsenic, lead, cadmium and mercury. The Food and Drug Administration (FDA) and World Health Organization (WHO) have both found these heavy metals to be dangerous to human health, especially infants and children. Four of the baby food manufacturers complied with the House Subcommittee’s request.

From the documents obtained from the four companies, the House Subcommittee concluded that there was evidence that “commercial baby foods are tainted with significant levels of toxic heavy metals,
including arsenic, lead, cadmium, and mercury.” The report said that internal company standards “permit dangerously high levels of toxic heavy metals, and documents revealed that the manufacturers have often sold foods that exceeded those levels.”

The FDA currently has maximum allowable limits for the heavy metals at issue in certain circumstances, including 10 parts per billion (ppb) of arsenic, 5 ppb of lead, and 5 ppb of cadmium in bottled water. The Environmental Protection Agency has also set the permissible level of mercury in drinking water at 2 ppb. However, the House Subcommittee concluded that  “the test results of baby foods and their ingredients
eclipse those levels: including results up to 91 times the arsenic level, up to 177 times the
lead level, up to 69 times the cadmium level, and up to 5 times the mercury level.”

The FDA indicated that it is reviewing the House Subcommittee’s report. It also noted that the heavy metals at issue in the report are present naturally in the environment and can enter baby food through the soil, water or air.

Recommendations From the House Report

As a result of its findings, the House Subcommittee outlined five recommendations:

(1) Mandatory testing – this would require baby food manufacturers to test finished products (not just ingredients) for heavy metals. The House Subcommittee urged the FDA to set this requirement;

(2) Labeling – the Subcommittee proposed that the FDA require baby food manufacturers to list all heavy metals in the finished product on labelling so that consumers are aware of the elements’ prsence;

(3) Phase Out – the House Subcommittee urged manufacturers to voluntarily phase out heavy metals from products entirely, or at least phase out products that have high amounts of ingredients that test high in heavy metals;

(4) FDA Standards – the Subcommittee urged the FDA to set limits for permitted heavy metals in baby foods; and

(5) Parental Vigilance – the report urges parents to avoid baby foods that contain ingredients that test high in heavy metals. The Subcommittee indicated that implementing recommendations 1 through 4 would inform parents to make determinations soundly.

Immediate Litigation Impact

The day after the House Subcommittee’s report was published, three major baby food companies were sued for selling products with elevated levels of certain heavy metals. One such lawsuit was filed in New Jersey, while the other was filed in California. While the class actions lawsuits present several legal theories for liability, the one that may have some weight with courts is the simple allegation that the products were unsafe for consumption by the very class (infants and babies) for which the products were made.

Baby food has been on California’s Proposition 65 target list for quite some time, and many companies that manufacture or sell baby food products in California have been receiving customer and retailer inquiries regarding heavy metals in baby food products. Companies have also begun testing baby food products to ensure compliance with Prop 65 regulations. Ensuring proper responses to consumer and retailer inquiries, compliance auditing of ingredients and end products, and developing risk management plans are key for any company right now in the baby food industry, especially with the potential for future FDA regulations.

©2020 CMBG3 Law, LLC. All rights reserved.

ARTICLE BY John Gardella of CMBG3 Law
For more, visit the NLR Biotech, Food, Drug section.

Five Tips for Enhancing Your Virtual Proceedings

In 2020, you learned to provide advocacy for your clients outside of the courtroom through use of online platforms. Conducting virtual trials and arbitrations has now become a common procedure. If you are looking for ways to improve the quality of your online proceeding, I have five pieces of advice to offer you.

1. Check Your Setup.

You don’t want any tech mishaps during your virtual proceeding. Take the time to prepare your setup so that everything goes off without a hitch. You will want an external monitor—or two—connected to your laptop. Use one screen to see all the participants and the other screen to show exhibits displayed on the screen share. A quality webcam is a must-have, ideally one with 1080p resolution. You will need clear audio too, and I recommend either headphones embedded with a microphone or a USB microphone attached to your computer. If you’re able to work from an office, turn a conference room into your “presentation room.” Set up a dedicated videoconference computer with a simple backdrop and have everyone examine witnesses there. Finally, a week or two before your proceedings begin, test out your equipment and software, and make sure all the features work for every party in the proceeding.

2. Get a Host.

If you want the smoothest virtual proceeding, you’ll need a host. Most courts have a host for online proceedings, but for arbitrations, the parties may need to find their own. All parties should agree on one neutral vendor to act as host. The host will then assign a technician to focus on connectivity, security, technical troubleshooting, and ensuring everything flows well. Having this agreement in place will alleviate virtually all of your potential technical problems.

3. Use a Hot Seat Operator.

As with an in-person hearing, a hot seat operator is vital when proceedings are virtual. The host and hot seat operator should not be the same person. This way, the hot seat operator can focus on pulling up exhibits, showing demonstratives, and running video clips, instead of on troubleshooting connectivity. You don’t need the hot seat operator with you physically in order to present evidence. Last year, I worked on a virtual arbitration; the host was in Florida, the attorneys were in Europe, and I was in the hot seat, presenting evidence from California—and it all worked perfectly.

4. Pick a Platform.

There are many video conference platforms available. Most courts are using Zoom, Webex, or Skype. However, if you are planning a virtual arbitration, you will likely have a choice. After using a number of platforms, my personal preference is Zoom. It is the industry standard, and for a good reason. It has a user-friendly interface and easy screen-sharing capabilities. Zoom is also highly secure. It has 256-bit TLS (Transport Layer Security) encryption, and all shared content can be encrypted. With these security measures, along with a meeting password and the waiting room enabled, you will have a secure meeting.

5. Focus on Details.

Practice makes perfect for a virtual proceeding. Examining witnesses over a virtual platform is an art form, so make sure you rehearse over a videoconference. Additionally, it’s critical to be prepared, especially when you are operating in a remote setting. Set up a messaging service such as Slack or Microsoft Teams, so your whole team can easily communicate in writing while your arbitration is in session. You don’t want messages popping up all the time when you are sharing your screen, so make sure you’ve turned off notifications or consider using a separate laptop for messaging with your team. Be prepared by making backups of all your important documents and have a backup laptop and a backup Wi-Fi provider, such as a cellular hot spot, in case the internet goes out while you’re in session.

Conducting your proceedings over a virtual platform can offer you so many benefits. First, it allows you to continue to serve the needs of your clients despite court closures. Second, it is allows you forgo travel expenses and spend more time at home. Who doesn’t want more time and money? Most importantly, when you put in place an expert team and follow the tips I’ve provided, virtual proceedings offer you a way to vigorously and effectively advocate for your client.

© Copyright 2002-2020 IMS ExpertServices, All Rights Reserved.

ARTICLE BY Jeff Dahm of IMS ExpertServices
For more, visit the NLR Law Office Management section.

Virginia is for… Cannabis Lovers… in 2024?

While adult-use cannabis legalization has been gaining popular support across the country, many state legislatures have been slow to translate that support into legislative action.  That is changing in Virginia.  In 2020, Virginia decriminalized the simple possession (up to an ounce) of cannabis while providing a civil penalty up to $25.  On February 5, 2021, the Virginia House and Senate took another significant step further when both passed bills approving adult-use cannabis legalization in Virginia.  Senate Bill 1406 passed on a 23-15 vote.  House Bill 2312 passed on a 55-42 vote.

There are differences in the bills that must be resolved in a conference committee.  However, an adult-use legalization bill is likely to pass through conference and be sent for Governor Ralph Northam’s signature.  Governor Northam has already stated his support for legalizing adult-use cannabis.  With passage, Virginia would become the 16th state to legalize recreational cannabis, but only the 3rd state to do so solely through the legislative process.

Key Rules and Penalties Found in Both Bills:

  • Adults who are 21 or older can possess up to one ounce of cannabis or an equivalent amount of cannabis product.
  • A household can cultivate up to two mature and two immature cannabis plants at their primary residence.
  • Possessing more than an ounce of cannabis remains punishable by a civil fine up to $25.
  • Possessing more than five pounds could result in up to 10 years in prison.
  • Possession on school grounds could result in up to 6 months in jail.
  • Bringing any cannabis into Virginia would be punishable by up to 1 year in jail.

Regulatory and Licensing Framework Found in Both Bills:

  • A Cannabis Control Authority, governed by a five-member board of directors, will be created to regulate the adult-use cannabis market.
  • Licensing priority will be given to social equity applicants.
  • A Cannabis Business Equity and Diversity Support Team will be created.
  • A Cannabis Public Health Advisory Council will be created to make public health recommendations.
  • Requirements for seed-to-sale tracking, packaging, and labeling, including state-created risk information and warning labels, are included.
  • A state tax of 21% would be levied at the point of sale.  Localities could impose their own tax up to 3%.
  • Portions of the tax revenue would be earmarked for pre-K education for at-risk children and substance abuse treatment and prevention, among other things.

Both bills also provide automatic expungement of misdemeanor marijuana–related offenses and allow for petitions for expungement of marijuana-related felonies under certain circumstances.

The House and Senate bills differ in the role and scope of local government involvement.  The Senate bill allows localities to ban cannabis stores by voter referenda.

Both bills set January 1, 2024 as the earliest date for beginning the retail sale of cannabis.  As Virginia moves forward toward 2024, the regulatory framework will continue to grow in size and complexity at both the state and local levels.

Copyright © 2020 Womble Bond Dickinson (US) LLP All Rights Reserved.
ARTICLE BY Morgan E. Persinger of Womble Bond Dickinson (US) LLP
For more, visit the NLR Biotech, Food, Drug section.

COVID-à manger: COVID-19 Takes a Bite out of French Lunch Traditions

The COVID-19 pandemic has changed dining habits across the world, as governments have shut down and restricted indoor and outdoor dining.  Even where restrictions have eased, many avoid sit-down dining out of concern for COVID-19 exposure and rely on take-away for their restaurant meals.  Clearly, the COVID-19 pandemic has limited dining options.

France, however, has decided to provide workers with a new, previously forbidden, dining option, although it remains to be seen how palatable it will be to French employees.  The Labor Ministry has decreed that to contain the spread of COVID-19, French workers now may eat lunch at their desks, which prior to the pandemic, Article R.4428-19 of the French Labor Code prohibited.

Gathering around a table for lunch with friends and colleagues has been long-standing French tradition, reflecting the country’s customs, habits and tastes.  The decree is intended to allow workers to return to the workplace and still limit the spread of COVID-19, by permitting them to lunch alone at their own workspace.  Until now, employers that allowed employees to eat lunch at their desks were subject to a fine, if caught, and employees who ate at their desks faced unspecified disciplinary action.

The French government has long been active in imposing regulations to prevent employers from exploiting their workers and in protecting workers’ rights, such as by imposing a 35-hour workweek, implementing the “right to disconnect” and mandating lunch hours.  Workers have become accustomed to dining out for lunch, and traditionally consider this time away from their work stations as an opportunity to refresh their bodies and minds prior to returning to work for the afternoon.  This simply is part of the French concept of maintaining a proper work-life balance.

While the French government continues to encourage remote work wherever possible, the new measure reflects the government’s effort to encourage businesses to reopen, where they can, with measures in place that will protect employees’ workplace health and safety.  Allowing workers to eat lunch at their desks offers workers and their employers a safer dining option, though arguably at the expense of traditional French cultural norms.  It is yet another example of how the COVID-19 pandemic has challenged, and changed, customary workplace standards.

©2020 Epstein Becker & Green, P.C. All rights reserved.

ARTICLE BY Erika C. Collins and Ryan H. Hutzler of Epstein Becker & Green, P.C.
For more, visit the NLR Global law section.

Snowy Owls and Constituted Authorities

On January 27, 2021, a snowy owl was seen in New York City’s Central Park for the first time in 130 years.  Nine days later, on February 5, 2021, something almost as rare occurred – the Internal Revenue Service released a private letter ruling dealing with Section 103 of the Internal Revenue Code.[1]  In PLR 202105007, the IRS determined that a nonprofit corporation that amended its articles of incorporation to change its purposes and come under the control of a city became a “constituted authority,” within the meaning of Treas. Reg. 1.103-1(b), of the city that could issue tax-exempt bonds on behalf of the city.

The coincidence of these infrequent events involving ornithology and quasi-governmental entities calls to mind the field guide Johnny Hutchinson prepared on the tax classifications of various species of the latter, which was an homage to Roger Tory Peterson’s Field Guide to Birds, a seminal work in the canon of the former.  February is a good time to brush up on both.      

[1] of 1986, as amended.

© Copyright 2020 Squire Patton Boggs (US) LLP

ARTICLE BY Michael A. Cullers of Squire Patton Boggs (US) LLP
For more, visit the NLR Tax section.

President Biden Revokes ‘Buy American and Hire American’ Executive Order

On January 25, 2021, President Joe Biden signed Executive Order (EO) 14005 entitled “Ensuring the Future Is Made in All of America by All of America’s Workers,” which directs federal government agencies to “maximize the use of goods, products, and materials produced in, and services offered in, the United States.” While this order directs all agencies to follow this policy via the federal procurement and budgetary process, it also revoked the “Buy American and Hire American” executive order (EO 13788), which President Trump signed on April 18, 2017. Otherwise known as BAHA, EO 13788 had a stated goal of protecting U.S. workers, promoting job growth, and protecting the integrity of the U.S. immigration system.

The BAHA executive order prompted several federal agencies to issue numerous policy memos, with the net result being substantial changes to adjudication standards for applications for various immigration benefits. In October 2017, following the directives of BAHA, U.S. Citizenship and Immigration Services (USCIS) issued an updated policy memo that altered the longstanding policy of deferring to prior adjudications where the petitioner, beneficiary, and underlying facts remained unchanged from a previously approved petition for the same employee. USCIS issued the updated policy to “help advance policies that protect the interests of U.S. workers.” The updated policy created additional challenges for employers to get routine extension of stay petitions approved for workers who were already in the United States and where there had been no significant changes in the job details subsequent to the last petition’s approval.

The BAHA executive order has resulted in an overall increase in the rates of requests for evidence (RFE) and case denials. As recently as fiscal year (FY) 2020, H-1B RFE rates reached almost 30 percent, down from slightly more than 40 percent in FY 2019. Furthermore, H-1B visa petition denial rates exceeded 26 percent in FY 2020 and 34 percent in FY 2019 for cases where an RFE had been issued. For L-1 visa petitions, RFE rates had reached slightly more than 54 percent in both FY 2020 and FY 2019. Petitions for L-1 visas saw denial rates exceeding 43 percent in FY 2020 and 49 percent in FY 2019 for cases where an RFE was issued. In contrast, pre-BAHA RFE rates hovered around 21 percent for H-1B petitions and just over 30 percent for L-1 petitions. Denial rates before BAHA were generally about 20 percent for H-1B petitions post-RFE, and L-1 visa petitions were denied at about a 33 percent rate after receiving an RFE.

It remains to be seen how USCIS visa petition adjudication standards will change in the coming years, and particularly whether RFE and denial rates will drop following the end of the Trump administration and the revocation of BAHA. However, employers can expect that there will be a shift in immigration policy under the Biden administration with a more favorable view towards high-skilled business immigration.

ARTICLE BY Brian D. Bumgardner and
Andrew G. Drozdowski of Ogletree, Deakins, Nash, Smoak & Stewart, P.C.
For more, visit the NLR Government Contracts, Maritime & Military Law section.

Biden Directs Review of Immigration Policies, Seeks to Reduce Unnecessary Barriers

On the same day his nominee for Secretary of the Department of Homeland Security (DHS), Alejandro Mayorkas, was confirmed, President Joe Biden signed several Executive Orders regarding immigration, including one that directs complete review of policies.

The first, “Restoring Faith in Our Legal Immigration Systems and Strengthening Integration and Inclusion Efforts for New Americans,” is of particular interest to the business community.  It sets up a task force to conduct a top-to-bottom review of recent changes that have created barriers to legal immigration, including employment based. This will include a review of the public charge rule, fee increases, and streamlining of the naturalization process, among others. Recognizing the difficulties created over the past four years by the many unpublicized rule, policy, and guidance changes, this Executive Order directs a comprehensive agency review of all immigration-related regulations, orders, guidance documents, policies, and other similar agency actions that impede access to fair and efficient adjudications. It likely will include a review of the policies that led to a 21% denial rate and a 47% Request for Evidence (RFE) rate for H-1B petitions in FY 2020.

The second looks to roll back damaging asylum policies and develop an effective strategy to manage asylum cases across the region.

The third creates a task force to reunify families that were separated at the border.

These latest Executive Orders build on changes already made since January 20, 2021, including:

These Executive Orders and policy announcements are consistent with the administration’s stated goal of creating an immigration system that is more welcoming to immigrants and to the employers who rely on them. President Biden recognizes that “new Americans fuel our economy, as innovators and job creators, working in every American industry and contributing to our arts, culture, and government.”

Jackson Lewis P.C. © 2020
For more, visit the National Law Review Immigration section.

 

DOL Ends PAID Program: Creating a Catch-22 for Employers; Cross Your Fingers or Come Clean?

Following the anticipated agenda of the new Biden administration, on January 29, 2021, the Department of Labor immediately ended the Payroll Audit Independent Determination program (the “PAID Program”) first launched in 2018 by the Department’s Wage and Hour Division. Ending the PAID Program signals that, under the new administration, the Wage and Hour Division will be increasingly focused on payroll policies and practices and will seek to penalize employers without first providing an opportunity to self-report and remedy mistakes.

Employers who fail to comply with the minimum wage and overtime provisions of the Fair Labor Standards Act (FLSA) expose themselves to liability for payment of any back wages owed, which are then doubled as liquidated damages, plus certain costs and fees, including attorney fees an employee incurs in pursuing an action against the employer. The PAID Program provided employers potential relief from the significant penalties resulting from a minimum wage or overtime violation, which often happens without any intent or malice on the employer’s part. Under the program, employers could audit their minimum wage and overtime payroll practices, and if such an audit uncovered any FLSA violations, the employer could self-report the same and work with the Department of Labor to ensure all back wage payments were made. Upon doing so, the employer would obtain a release of any FLSA claims relating to the error and avoid potential liability for liquidated damages, other civil penalties, and employees’ attorney fees.

With the PAID Program cancelled, employers who discover minimum wage and overtime violations are left with difficult choices as to remedying such violations. This cancellation, in fact, creates a catch-22 situation for employers—does the employer cross its fingers and hope the violation is never uncovered, or does it come clean and pay its employees back wages, only to signal the violation and open the door for a lawsuit and the associated liquidated damages, penalties and employee attorney fees? While individual circumstances would dictate how the employer should react, of course, losing the opportunity to remedy the situation, make the employees whole, and avoid multiplied liability is an unfortunate development for employers.

As the cancellation of the PAID Program is a likely harbinger of the Biden administration’s treatment of wage and hour issues, now is a good time to review your payroll policies to ensure compliance with the FLSA. This is particularly important for employers who offer pay differentials or other bonus-type payment programs, including those who provide such payments as a reward to their employees for in-person work during the COVID-19 pandemic.

© 2020 Davis|Kuelthau, s.c. All Rights Reserved

ARTICLE BY Anthony J. Steffek of Davis|Kuelthau, s.c.
For more, visit the NLR Labor & Employment section

Biden Administration Issues “Regulatory Freeze” Memo

On January 20, 2021, the administration of President Joseph R. Biden, Jr. issued a “regulatory freeze” memorandum for the heads of executive departments and agencies to ensure that President Biden’s appointees or designees have an opportunity to review any new or pending rules (the Memo). Pursuant to the memo, rules that have been sent to the Office of the Federal Register but that have not yet been published must not be published until a department or agency head appointed or designated by the new administration reviews and approves the rule. In addition, the memo directs department and agency heads to consider postponing rules that have been published in the Federal Register but that have not yet taken effect to seek additional public comment on issues of fact, law and policy raised by the rules and thereafter to take appropriate action.

Although the SEC is not an executive department or agency but rather an independent regulatory agency of the U.S. federal government, there is, some ambiguity about whether the memo applies to SEC rules. In addition the SEC may choose to will voluntarily follow the memo’s directives and recommendations.

The regulatory freeze memo is available here. 

© 2020 Vedder Price
ARTICLE BY John S. Marten, Nathaniel Segal and Jacob C. Tiedt of Vedder Price
For more, visit the NLR Election Law / Legislative News section.