On March 29, 2012 Sen. Tom Harkin (D-IA) introduced a bill that seeks to make substantial changes to the workplace. Like the expansive American Jobs Act Sen. Majority Leader Harry Reid (D-NV) introduced in the fall of 2011, the Rebuild America Act (S. 2252) incorporates a whole host of employment-related provisions into a single piece of legislation. While a large portion of the bill focuses on increased infrastructure, manufacturing, and educational investment, other portions address minimum wage, worker misclassification, pension protection, and paid sick leave. Key provisions of this legislation include the following:
- The bill would initially increase the federal minimum wage to $8.10 an hour, then to $8.95 and $9.80 an hour one and two years after the bill’s enactment, respectively. The minimum wage for tipped employees would also increase initially to $3 an hour, then by an additional 85 cents per year until the hourly rate is equal to 70 percent of the federal minimum wage.
- The bill incorporates the Healthy Families Act, a measure last introduced in May 2011 that would require employers to provide employees with paid sick leave. Specifically, employees would earn one hour of paid sick time for every 30 hours worked, up to a maximum of 56 hours (seven days) annually.
- To combat worker misclassification, the bill includes components of the Fair Playing Field Act, which was most recently introduced in March as a standalone bill. This bill that would limit the use of a federal “safe harbor” that allows businesses to treat workers as independent contractors for federal employment tax purposes, regardless of the employee’s actual status under the common law test. In addition, the bill would direct the Secretary of the IRS to issue regulations and guidance clarifying who constitutes an independent contractor.
- The bill would amend the National Labor Relations Act (NLRA) to narrow the exemption for supervisors and clarify that workers misclassified as independent contractors are entitled to NLRA protections. The legislation would impose civil penalties of up to $20,000 on employers the commit unfair labor practices.
- The measure would amend the Fair Labor Standards Act (FLSA) to make it more difficult for employees to qualify for the executive, administrative, and professional exemption. Specifically, the bill would increase certain salary thresholds to potentially enable more “white collar” workers to qualify for overtime. This threshold is currently $455 a week, or $23,660 annually. This threshold would be raised incrementally to $54,340 after three years and indexed to inflation.
- The bill would amend the tax code to eliminate tax breaks for employers that ship jobs overseas.
- With respect to pension protection, the bill includes measures that would ease pension funding rules. These provisions were recently included in a transportation funding bill. The bill would also establish a retirement security commission to investigate retirement security issues and provide their findings to Congress.
Given the expansive nature of the bill and the fact that it is an election year, this bill will not likely advance as a whole.