Tag: Consolidated Appropriations Act

First Major Overhaul of Cosmetics Regulation Since FDR Administration

As part of the Consolidated Appropriations Act, 2023, President Biden signed into law the Modernization of Cosmetics Regulation Act of 2022 (“MoCRA”). This is the first major reform of cosmetics regulation since the Federal Food, Drug, and Cosmetic Act (“FDCA”) became law in 1938.[1] MoCRA implements new compliance requirements on the cosmetics industry and also significantly expands the U.S. Food and Drug Administration’s (“FDA”) authority to oversee and regulate cosmetics.

New Obligations for Cosmetics Industry

MoCRA imposes the following new requirements on “responsible persons”[2] and “facilities.”[3] We note that certain of these regulatory requirements may differ for entities considered small businesses under MoCRA.

  • Facility Registration and Product Disclosure. All facilitates (domestic or foreign) that manufacture or process cosmetic products for distribution in the United States must register with FDA by December 29, 2023. Registration is biennial. Further, responsible persons must annually submit cosmetic product listings to FDA and disclose key product information, such as ingredients.
  • Adverse Event Recording and Serious Adverse Event Reporting. Generally, responsible persons must keep records of any adverse events related to products used in the United States for six years and submit any “serious adverse events” to FDA within 15 days of the responsible person’s receipt of the report. MoCRA broadly defines what constitutes a serious adverse event, when compared to other FDA regulatory product categories (e.g., dietary supplements).[4]
  • Labeling Requirements. To improve the reporting of adverse events, responsible persons must include contact information on product labels. Additionally, product labels must identify any fragrance allergens in the product. Labels for products intended for use only by licensed professionals must also indicate that only licensed professionals may use the product.
  • Safety Substantiation Requirement. Responsible persons must ensure that a product is “safe” and keep records “adequately substantiating” the product’s safety.[5] Products without adequate safety substantiation may be considered adulterated under the FDCA. MoCRA also contains a provision stating that it is the sense of Congress that animal testing should not be used for safety testing on cosmetic products and should be phased out with the exception of appropriate allowances.

Increased FDA Oversight of Cosmetics

MoCRA significantly expands FDA’s enforcement authority over the cosmetics industry.

  • Issue Mandatory Recalls. FDA now has mandatory recall authority if the agency concludes there is a reasonable probability that a cosmetic is adulterated or misbranded and the use of the cosmetic will cause serious adverse health consequences or death.
  • Access Records. If FDA has a reasonable belief that a cosmetic product (or one of its ingredients) is adulterated and presents a threat of serious adverse health consequences or death, the agency has authority to access records relating to that product.
  • Suspend Facilities. FDA may suspend a facility’s registration if the agency determines that a cosmetic product manufactured or processed by that facility has a reasonable probability of causing serious adverse health consequences or death and there is a reasonable belief that other products from the same facility may be similarly affected.
  • Federal Preemption. MoCRA explicitly preempts any state or local laws that differ from the federal cosmetics framework regarding facility registration and product listing, good manufacturing practices (“GMPs”), records, recalls, adverse event reporting, or safety substantiation.

Forthcoming FDA Rulemakings and Reports

MoCRA directs FDA to promulgate rules regarding the following three issues. Importantly, the cosmetics industry will have opportunities to provide comment on the proposed rules.

  • GMPs. FDA must establish GMP regulations consistent with national and international standards. Cosmetic products manufactured or processed under conditions that do not meet FDA’s forthcoming GMP regulations may be considered adulterated. The agency must issue a proposed rule by December 29, 2024 and a final rule by December 29, 2025.
  • Fragrance Allergens. FDA must publish regulations to identify fragrance allergens. Cosmetic product labels that do not include fragrance allergen disclosures required by such regulations may be considered misbranded under the FDCA. The agency must issue a proposed rule by June 29, 2024 and a final rule no later than 180 days after the public comment period.
  • Talc. FDA must issue regulations to establish required standardized testing methods for detecting and identifying asbestos in talc-containing cosmetic products.

In addition to the above rulemakings, FDA must issue a report within the next three years on the use of per- and polyfluoroalkyl substances (“PFAS”) in cosmetic products.

Footnotes

  1. MoCRA amends Chapter VI of the FDCA.
  2. A “responsible person” is defined as a manufacturer, packer, or distributor of a cosmetic product whose name appears on the label of that product.
  3. “Facilities” are defined as any establishment (including an establishment of an importer) that manufactures or processes cosmetic products distributed in the United States. MoCRA specifically exempts from registration certain facilities, such as those that (i) only label, relabel, package, hold, or distribute cosmetics products; and (ii) manufacture or process products solely for use in research and evaluation.
  4. “Serious adverse events” are defined as adverse events that result in (i) death; (ii) a life-threatening experience; (iii) inpatient hospitalization; (iv) a persistent or significant disability or incapacity; (v) a congenital anomaly or birth defect; (vi) infection; or (vii) significant disfigurement (including serious and persistent rashes, second- or third-degree burns, significant hair loss, or persistent or significant alteration of appearance); or that require – based on reasonable medical judgment – a medical or surgical intervention to prevent one of the outcomes described above.
  5. “Safe” is defined as a cosmetic product (and its ingredients) that is not injurious to users under the labeling or customary/usual usage. A cosmetic product (or its ingredients) should not be considered injurious solely because it can cause minor and transient reactions or minor and transient skin irritations in some users. Further, “adequate substantiation” of safety means tests or studies, research, analyses, or other evidence or information that is considered, among experts qualified by scientific training and experience to evaluate the safety of cosmetic products and their ingredients, sufficient to support the product’s safety to a reasonable certainty.

Article By Christopher Hanson of Nelson Mullins. Paul Clowes, Law Clerk in the Greenville office, contributed to the drafting of this post.

For more biotech, food, and drug legal news, click here to visit the National Law Review.

Copyright ©2023 Nelson Mullins Riley & Scarborough LLP

Complying With New Federal Pregnant Workers Fairness Act, PUMP for Nursing Mothers Act

The new Pregnant Workers Fairness Act (PWFA) and the Providing Urgent Maternal Protections for Nursing Mothers Act (PUMP For Nursing Mothers Act) were adopted when President Joe Biden signed the Consolidated Appropriations Act, 2023 on Dec. 29, 2022.

PWFA: Pregnancy Finally Given Disability-Like Protection

The PWFA applies to employers with at least 15 employees and becomes effective on June 27, 2023.

Like the Americans with Disabilities Act (ADA), the PWFA includes the obligation to provide reasonable accommodations so long as they do not impose an undue hardship. Many courts have determined that pregnancy alone was not a disability entitled to accommodation under the ADA. Under the PWFA, employers will be required to provide reasonable accommodations to employees and applicants with known temporary limitations on their ability to perform the essential functions of their jobs based on a physical or mental condition related to pregnancy, childbirth, and related medical conditions.

The PWFA adopts the same meaning of “reasonable accommodation” and “undue hardship” as used in the ADA, including the interactive process that will typically be used to determine an appropriate reasonable accommodation.

The PWFA provides that an employee or their representative can make the employer aware of the employee’s limitations. It also provides that an employer cannot require an employee to take a paid or unpaid leave of absence if another reasonable accommodation can be provided. Of course, that does not mean the employee gets the accommodation of their choice. The statute provides a defense to damages for employers that, in good faith, work with employees to identify alternative accommodations that are equally effective and do not cause an undue hardship.

Practical Advice for PWFA Compliance

  1. Employers do not have to have a policy for every rule or practice that applies in the workplace. However, if an employer has a reasonable accommodations policy, that policy should be reviewed and updated, as necessary.
  2. Human resources professionals are not the only ones who need training. If managers are not trained as well, they may unwittingly say something in response to an employee’s question that is inconsistent with your policies and practices.
  3. Create a process to follow when employees request an accommodation due to pregnancy-related limitations. The process should be similar to the ADA process, including requesting supporting documentation from the treating healthcare provider. Have employees in states or cities that have adopted versions of the pregnant workers fairness law or other similar laws that are more generous than the federal PWFA? The federal PWFA does not preempt more generous state and local laws. Therefore, any policy, practice, or form may need to be modified depending on where employees are located. As an example, some city and state laws, except in specific circumstances, prohibit employers from requesting medical documentation to confirm an employee’s pregnancy, childbirth, or related medical conditions as part of the accommodation process.
  4. Like under the ADA, when an employee requests an accommodation under the PWFA, Human resources professionals should think about how to make this work, not this will never work. This simple shift in approach makes finding a reasonable accommodation that does not impose an undue hardship on operations more likely.

PUMP for Nursing Mothers Act

The PUMP for Nursing Mothers Act expands existing employer obligations under the Fair Labor Standards Act (FLSA) to provide an employee with reasonable break time to express breast milk for the employee’s nursing child for one year after the child’s birth. The employer obligation to provide a place to express milk shielded from view and intrusion from coworkers and the public (other than a bathroom) continues.

Except for changes to available remedies, the amendment to the FLSA took effect on December 29, 2022. The changes to remedies will take effect on April 28, 2023.

What Changed Under PUMP for Nursing Mothers Act

The PUMP for Nursing Mothers Act covers all employees, not just non-exempt workers. The break time may be unpaid unless otherwise required by federal or state law or municipal ordinance. Employers should ensure that non-exempt nursing employees are paid if they express breast milk during an otherwise paid break period or if they are not completely relieved of duty for the entire break period. Exempt employees should be paid their full weekly salary as required by federal, state, and local law, regardless of whether they take breaks to express breast milk.

With some exceptions, the law requires employees to provide notice of an alleged violation to the employer and give the employer a 10-day cure period before filing a suit.

Employers with fewer than 50 employees can still rely on the small employer exemption, if compliance with the law would cause undue hardship because of significant difficulty or expense. Crewmembers of air carriers are exempted from the law. Rail carriers and motorcoach services operators are covered by the law, but there are exceptions and delayed effective dates for certain employees. No similar exemption is provided for other transportation industry employers.

Practical Advice for PUMP for Nursing Mothers Act Compliance

  1. Educate the HR team and front-line managers on the update to the law and refresh them on the process for providing break time and private spaces to express breast milk.
  2. Like the PWFA, the law does not preempt state law or municipal ordinances that provide greater protection than provided by the PUMP for Nursing Mothers Act. Depending on where employees are located, policies, practices, and the private space provided to express breast milk may need to be modified.
  3. Creativity is the key to being able to come up with staffing solutions and private spaces for nursing mothers to express breast milk. Nothing in the law requires employers to maintain a permanent, dedicated space for nursing mothers. A space temporarily created or converted into a space for expressing breast milk and made available when needed by a nursing mother is sufficient if the space is shielded from view and free from intrusion from coworkers and the public. In other words, allowing an employee to use an office with a door that locks would be convenient, but not practical for many worksites. Depending on the workplace settings, privacy screens, curtains, signage, portable pumping stations, and partnerships with other employers to provide private spaces for nursing mothers are all possibilities.

For more election & legislative news, click here to visit the National Law Review.

Jackson Lewis P.C. © 2023

An Investment Worth Making: How Structural Changes to the EB-5 Program Can Ensure Real Estate Developers Build a Good Foundation for Their Capital Projects

The United States has made major changes to the rules governing its EB-5 program through the enactment of the EB-5 Reform and Integrity Act of 2022 (RIA). The RIA was a component of H.R. 2471—the Consolidated Appropriations Act, 2022—which President Biden signed into law on March 15, 2022. And while the RIA made many sweeping changes to the EB-5 landscape, including establishing an EB-5 Integrity Fund comprised of annual funds collected from regional centers to support auditing and fraud detection operations, two changes in particular are pertinent to developers funding capital investments. First, the RIA altered how developers calculate EB-5 job creation. Second, the RIA prioritizes the processing and adjudication of EB-5 investment in rural area projects, and it tweaked the incentives for high unemployment area and infrastructure projects. Paying careful attention to each of these two areas will enable developers to maximize the benefits afforded to it through the changes enacted by the RIA.

THE RIA MODIFIES JOB CREATION CALCULATIONS

New commercial enterprises under the EB-5 program must create full-time employment for no fewer than 10 United States citizens, United States nationals, or foreign nationals who are either permanent residents or otherwise lawfully authorized for employment in the United States. The RIA made three major changes to how regional centers measure job creation to meet this 10-employee threshold:

  • First, the RIA permits indirect job creation to account for only up to 90% of the initial job creation requirement. For example, if a developer invests in a small retail-residential complex that will eventually create 30 new jobs with the retail stores that will move into the shopping spaces, the developer could count only nine of those jobs toward the 10-employee threshold.
  • Second, the RIA permits jobs created by construction activity lasting less than two years to account for only up to 75% of the initial job creation requirement. The RIA does allow for these jobs to count for direct job creation, however, by multiplying the total number of jobs estimated to be created by the fraction of the two-year period the construction activity will last. For example, if construction on the small retail-residential complex will last only one year and create 100 new jobs, then the RIA would calculate 50 new jobs (100 total jobs multiplied by one-half (one year of a two-year period)) but the developer could count only 7.5 of those 50 jobs toward the 10-employee threshold.
  • Third, while prospective tenants occupying commercial real estate created or improved by the capital investments can count toward the job creation requirement, jobs that are already in existence but have been relocated do not. Therefore, if a restaurant is opening a new location in the small retail-residential complex, the developer could count toward those new jobs toward the job creation requirement. If the restaurant is just moving out of its current location into a space in the retail-residential complex, however, the developer could not count those jobs toward the job creation requirement.

THE RIA CREATES NEW EB-5 VISAS RESERVED FOR TARGETED EMPLOYMENT AREAS AND INFRASTRUCTURE PROJECTS

Under the previous regime, the U.S. government would set aside a minimum of 3,000 EB-5 visas for qualified immigrants who invested in targeted employment areas, which encompassed both rural areas and areas that experienced high unemployment. Now, the RIA requires the U.S. government to set aside 20% of the total number of available visas for qualified immigrants who invest in rural areas, another 10% for qualified immigrants who invest in high unemployment areas, and 2% for qualified immigrants who invest in infrastructure projects. Therefore, at a minimum, the RIA reserves nearly a third of all total EB-5 visas issued by the U.S. government for rural projects, high unemployment area projects, and infrastructure projects. Furthermore, and most significantly, the RIA provides that any of these reserved visas that are unused in the fiscal year will remain available in these categories for the next fiscal year.
The changes to the reserved visa structure create significant incentives for qualified immigrants to invest in rural, high unemployment area, and infrastructure projects. If, for example, the United States government calculates that it should issue 10,000 visas in Fiscal Year 1, then the RIA mandates reserving 2,000 visas for rural projects (20% of total), 1,000 for high unemployment area projects (10% of total), and 200 for infrastructure projects (2% of total). These numbers are significant when considering the RIA’s roll-over provision because it pushes projects in these categories to the front of the line for the green card process. If only 500 of the 20,000 visas for rural projects are used in Fiscal Year 1, then the 1,500 unused visas set aside for rural projects roll over to the next fiscal year. Therefore, if the United States government issues 10,000 new visas in Fiscal Year 2, then 3,500 visas will be reserved for rural projects in the new fiscal year (the 1,500 rollover visas from the previous year plus a new 20% of the total number of visas per the RIA), and the high unemployment area and infrastructure project reserved visas would have a new 1,000 (10% of total) and 200 (2% of total) visas in reserve, respectively.

The RIA changed the structures for investing in both targeted employment areas and non-targeted employment areas, however. The RIA raised the minimum investment amount for a targeted employment area by over 50%, increasing the sum from its previous level of US$500,000 to its new level of US$800,000. The RIA similarly raised the non-TEA, standard minimum investment amount from its previous level of US$1 million to now be US$1.05 million.  Additionally, the RIA modified the process for the creation of targeted employment areas: While under the previous regime, the state in which the targeted employment area would be located could send a letter in support of efforts to designate a targeted employment area, the post-RIA EB-5 regime now permits only U.S. Citizenship and Immigration Services to designate targeted employment areas.

IMPLICATIONS AND RECOMMENDATIONS

The new developments resulting from the RIA will have tangible effects on developers seeking to fund new capital investments. The percentages caps imposed on indirect job creation, relocated jobs, and other categories toward the job creation requirement will likely lengthen the amount of time spent on project creation and completion. These changes also likely should incentivize developers to focus their job creation metrics toward directly created jobs rather than through indirectly created ones. While these changes might increase the length of projects, the broadening of visa reserves through both the percentage caps and the creation of the rollover provisions will likely increase the number of projects in rural areas and high unemployment areas. Developers should carefully consider the composition of their job creation goals and calculate workforce sizes in line with these new requirements. Additionally, developers seeking to ensure they are able to succeed in obtaining visas for their desired employees by avoiding the typical backlog of visa applicants through the EB-5 program should consider investing in rural and high unemployment area projects to take advantage of the broadened application pool.

Article By Brian Graham, Adriana Reyes, and Gregory T. Lewis of K&L Gates

For more immigration legal news, click here to visit the National Law Review.

Copyright 2022 K & L Gates

Consolidated Appropriations Act, 2021: Unemployment Relief

The latest round of COVID-19 relief in the Consolidated Appropriations Act, 2021 will revive many aspects of unemployment relief rolled out in the CARES Act in March, although the Act reduces many of the original features.

The Act provides $286 billion for unemployment relief, which includes the following:

  • Reinstates enhanced federal unemployment insurance, providing an additional $300 per week for all workers receiving unemployment benefits through March 14, 2021. This replaces the earlier $600 added subsidy that expired in July.
  • Expands and extends the Pandemic Unemployment Assistance (PUA) program through March 14, 2021. Coverage extends to the self-employed, gig workers, and others in non-traditional employment.
  • Extends the Pandemic Emergency Unemployment Compensation (PEUC) program through March 14, 2021, providing additional weeks of federally funded unemployment benefits to individuals who exhaust their regular state benefits.
  • Increases the maximum number of weeks an individual may claim benefits through regular state unemployment plus the emergency federal programs to a total of 50 weeks.
  • Allows workers who have PUA/PEUC time left on March 14, 2021 (and who remain otherwise eligible) a “transition period” to continue to use the time for an additional three weeks, through April 5, 2021.
  • Affords states options for retaining an individual’s 2020 weekly benefit amount through March 14, 2021, ensuring that individuals will continue to receive maximized state benefits through the duration of PUA/PEUC as the new benefit year rolls in.

The Act also includes a technical amendment that confirms that shared work plans qualify as unemployment benefits for purposes of the $300 subsidy payment. For new filers, some states may reinstate the waiting week for receipt of benefits, as the Act reduces reimbursement from 100% to 50%.

Jackson Lewis P.C. © 2020
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