PUNCHING IN: Here Comes Congress, Unions Mull Cuts

Punching In

Monday morning musings for workplace watchers

By Chris Opfer and Ben Penn


Congress Quick Out of Gate | Chris Lu Chat| Union, Pension Trimming

Chris Opfer: And they’re off! Lawmakers usually ease into a new session of Congress, especially in an inauguration year. The first couple weeks are often more social than substantive, with a focus on getting new members settled in, hammering out committee assignments and preparing for the pomp and circumstance that comes with the commander-in-chief’s swearing in. This time, however, Republican leaders in both chambers appear ready to take advantage of their Capitol control fast.

The House and Senate are set to convene Tuesday, and the GOP majority is expected to get down to work on undoing a sundry assortment of Obama administration initiatives. The list probably starts with the Affordable Care Act, but there are sure to be some labor and employment items on the chopping block as well. The Senate HELP Committee is also tentatively slated to debate Andrew Puzder’s nomination for labor secretary in a Jan. 12 hearing. That’s more than a week before President-elect Donald Trump even gets sworn in.

Any thoughts on which labor and employment regulations are headed to the scrap heap? Want to guess which tasks will be given to Congress and what changes are likely to come out of DOL? Give us a shout via email at copfer@bna.com and bpenn@bna.com, or on Twitter: @ChrisOpfer and @BenjaminPenn.

Ben Penn: As much as I’d like to go directly to the source for answers, Trump’s DOL landing team members are bound by nondisclosure agreements and haven’t been forthcoming. But Chris Lu, the man leading the lame-duck department’s effort to pass the baton smoothly to Trump and Puzder’s crew, will be sitting down with me this week. Deputy Labor Secretary Lu has been guiding the DOL transition by briefing the incoming team on the agency’s ongoing initiatives. 

Ultimately, the new administration can completely reorder the list of priorities and has already said it will be reconsidering certain regulations. But maybe Lu can tell us where he sees room for continuation, perhaps on some less polarizing issues like job training and the gig economy. Drop me a line if you have any other thoughts on what I should be asking him.

CO: About those cuts at the Service Employees International Union. Bloomberg Businessweek’s Josh Eidelson reported last week that the country’s second-biggest union is planning to slash nearly a third of its annual budget. The move is cast as a response to the incoming Trump administration and an effort to streamline operations to more effectively combat an expected assault from the GOP-controlled White House and Congress.

“Budget cuts” is often code for “layoffs,” but the SEIU’s belt tightening doesn’t necessarily mean some of the union’s internal workers will be out of a job. Kate Bronfenbrenner, a labor professor at Cornell University, told Bloomberg Law reporter Tyrone Richardson last week that the SEIU likely will try to cut non-payroll costs first.

“They could look at things that are big costs, such as conventions and their buildings,” Bronfenbrenner said. “Union members don’t like cutting staff because if you cut staff that means they don’t get done quickly with services like negotiating contracts. The staff reduction could also mean you can’t organize members and you may lose key fights.”

Ty also pointed out to us that SEIU isn’t the only labor group looking to trim expenses. International Association of Machinists President Bob Martinez unveiled a proposal back in September to eliminate as much as $7 million in expenses in the coming years. That includes plans to reconsider headquarter worker salaries and to restructure certain departments.

BP: In other union news, participants in an Iron Workers local pension fund are considering whether to approve the fund administrator’s proposal to reduce benefits. Bloomberg Law’s David Brandolph tells us the proposal is intended to keep the plan from becoming insolvent. It was submitted pursuant to the Multiemployer Pension Reform Act of 2014, also known as the Kline-Miller Act for bipartisan sponsors John Kline and George Miller.

“That law was designed to prevent financially troubled multiemployer pension plans from going insolvent and needing assistance from the Pension Benefit Guaranty Corporation, which insures the nation’s corporate defined benefit plans,” Brandolph says. “The local participants are the first to vote on such a rescue petition and the vote follows the Treasury Department’s recent approval of the fund’s application to cut benefits.”

Workers participating in the pension plan have until Jan. 20 to vote on the proposal.

Kline and Miller have both since retired from Congress, but the pension reform law is just starting to get some use. Two bricklayers' pension funds are seeking approval for similar cuts.

CO: That about wraps it up for us. Daily Labor Report subscribers can check back in during the week for more info on the action in Congress, Ben’s conversation with Chris Lu, and a closer look at the Iron Workers vote, among other news.

We’re punching out. See you here next Monday morning. Happy New Year!

Bloomberg Law® helps labor and employment law practitioners provide rapid, accurate and complete advice to clients by bringing together trusted, market-leading Bloomberg BNA content like Daily Labor Report® and treatises like Covenants Not to Compete: A State-by-State Survey and The Developing Labor Law, with a fully integrated, innovative legal research platform.  Click here to request a free trial.