In the early hours of March 23, 2018 the Senate passed the $1.3 trillion deal on the omnibus budget bill for Fiscal Year 2018, which will keep the federal government up and running until September 30th, 2018. The deal also includes a provision that would resolve the continuing controversy over the Labor Department’s proposed tip rule.
The following includes highlights of the bill and items that are relevant to Payroll and HR. The full bill can be found here.
Labor Department Funding
According to a summary provided by the Senate Appropriations Committee, the bill (H.R. 1625 (115-66)) would give the Labor Department $12.2 billion in discretionary funding—$192 million above its Fiscal Year 2017 funding. The spending allotment would include the following specific program appropriations:
- Veterans Employment Training (VETS) Programs: $295 million—$16 million above the Fiscal Year 2017 funding level. It includes an additional $5 million for the homeless veterans program expected to help increase program enrollment and provide additional specialized services. Funding and authority are also provided in support of the HIRE Vets program to recognize employers for their investments in recruiting, employing, and retaining our nation’s veterans.
- Rural Training Initiative: $30 million for a new dislocated worker training initiative to provide reemployment and training assistance to dislocated workers in rural areas of the country hit hardest by the recession and recovering more slowly. Funding is devoted to training those who have lost their jobs in the Appalachian and Delta regions to ensure they can adapt existing skills and learn new skills demanded by other growing industries and return to work as soon as possible.
- Apprenticeship Opportunities: $145 million—an increase of $50 million, or 53 percent, for training programs utilizing the flexible and effective apprenticeship model.
- Workforce Training Programs: $2.8 billion—$80 million more than the FY 2017 level. These funds are distributed by formula to states and localities to meet each state’s unique job training and reemployment needs.
- Governor’s Statewide Reserve: The bill again permits the full 15 percent state training grant funding reserve for governors to address a variety of statewide training needs, projects, expanded partnerships, emergency response, and other services as needed throughout their states.
- Job Corps: $1.7 billion—a $14.5 million increase above the Fiscal Year 2017 level. Taken together, the 126 Job Corps centers in all 50 states, the District of Columbia, and Puerto Rico comprise the nation’s largest career technical training and educational program for youth. About 95 percent of Job Corps students successfully attain industry-recognized certifications.
- YouthBuild: $89.5 million—$5 million above the Fiscal Year 2017 appropriations, to help at-risk high school drop-outs develop skills and knowledge to obtain industry-recognized job credentials, apprenticeships, and employment.
Although not included on the Senate Appropriations Committee summary, the Office of Federal Contract Compliance would receive of $103,476,000 under the budget deal, a slight increase over its Fiscal Year 2017 actual funding level of $104,476,000.
Tip rule deal
The budget bill would also resolve the sharp controversy surrounding the DOL’s proposed tip rule.
Specifically, the budget bill would amend the FLSA to provide that: “An employer may not keep tips received by its employees for any purposes, including allowing managers or supervisors to keep any portion of employees’ tips, regardless of whether or not the employer takes a tip credit.”
Among other things, employers who violate the new provisions would “be liable to the employee or employees affected in the amount of the sum of any tip credit taken by the employer and all such tips unlawfully kept by the employer, and in an additional equal amount as liquidated damages.” In addition, any person who violates the law could be subject to a civil penalty not to exceed $1,100 for each such violation.
Save America’s Pastime Act
Another FLSA amendment gaining notoriety in the national media is to FLSA Section 13(a)(1), which exempts from both minimum wage and overtime pay protections bona fide executive, administrative, professional, and outside sales employees or some within the computer industry. Under the proposed amendment reflected at page 1967 of the bill, minor league baseball players will too become exempt from minimum wage and overtime pay protections.
Specifically, the bill adds this language to the FLSA Sec 213(a) list of exemptions:
Any employee employed to play baseball who is compensated pursuant to a contract that provides for a weekly salary for services performed during the league’s championship season (but not spring training or the off season) at a rate that is not less than a weekly salary equal to the minimum wage under section 6(a) for a workweek of 40 hours, irrespective of the number of hours the employee devotes to baseball-related activities.
The bill would reauthorize the E-Verify program through the end of the Fiscal Year. E-Verify is the Internet-based system that allows businesses to determine the eligibility of their employees to work in the U.S.
The Act created permanent parity in the exclusions by changing the monthly transit/vanpooling limit in Code section Code Sec. 132(f)(2) to $175. However, the Act failed to include a conforming change to repeal the base-year rule in Code Sec. 132(f)(6) for transit/vanpooling. The provision repeals the transit/vanpooling base-year rule.
The budget deal would also give the EEOC $379,500,000 in funding, a substantial increase from its FY 2017 actual level of $365 million.
The NLRB would be allotted $274,224,000, the same as its FY 2017 actual funding level. Notably, the bill would also continue the prohibition on the Labor Board using any of the appropriations to fund electronic voting in union elections.
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This information is provided as a courtesy, may change and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney or Advisor.