FEBRUARY 2021 WASHINGTON REPORT
The House and Senate are out this week, following former-President Donald Trump's acquittal and marathon budget hearings on pandemic relief. House Democrats are aiming to hold a floor vote on their relief package next week, ahead of a March 15 deadline when key unemployment provisions expire. The package would dole out $1,400 in aid payments, bump up unemployment benefits by $400 a week, and provide more than $16 billion in relief for the food and agriculture industry.
Democrats are attempting to pass Biden's plan using the budget reconciliation process, which will allow Democrats to push the legislation through Congress with a simple majority vote. Most Republicans are not on board with Biden's $1.9 trillion plan. They argue the price tag is too high and the bill should be more targeted, adding that Democrats are pushing for way too much in state and local aid.
Democrats' reliance on the budget reconciliation process to pass pandemic relief could come at a steep cost for other spending programs, including certain farm subsidies, unless lawmakers take action to head off billion-dollar budget cuts required by "pay-as-you-go" rules. Nonetheless, the process is moving forward. The House Budget Committee will combine the various pieces of the pandemic bill into a reconciliation package, and the Rule Committee will determine the procedures governing debate over the package before it heads to the floor. Then, the Senate will need to pull together and vote on its own version of the bill. The two chambers must then reconcile the differences in their two bills before a final bill is sent to Biden's desk.
Meanwhile, Biden's picks to lead the Agriculture and Labor Departments are still awaiting Senate confirmation. The Senate HELP Committee cleared Marty Walsh's nomination for Labor 18-4 last week, setting him up for a full Senate vote. The Senate agreed to take up Tom Vilsack's nomination for Agriculture on February 23. Both nominees have thus far enjoyed broad bipartisan support.
Over in the House, longtime IBA friend Representative G.T. Thompson (R-PA) steps into the ranking position on the Agriculture Committee. Rep. Thompson will serve as the counterpart to new Chairman David Scott (D-GA). There are some new faces on the Committee: Representative Michelle Fischbach (R-MN), Representative Tracey Mann (R-KN), Representative Randy Feenstra (R-IA), Representative Michael Cloud (R-TX), Representative Barry Moore (R-AL), and Representative Mary Miller (R-IL). Chairman Scott says that a hearing on climate change is at the top of his to-do list for the Committee.
In this month's Washington Report, IBA will detail our advocacy efforts and explain the news items affecting our members. IBA wrote to the Federal Motor Carrier Safety Administration (FMCSA) seeking expedited confirmation that federal mask mandates do not apply to commercial drivers operating in teams. IBA also submit our Bakers' Checkoff Survey data to Agriculture secretary-nominee Tom Vilsack, demonstrating that a Breadbasket Checkoff program does not enjoy industry support. The Washington Report will explain the Biden Administration's efforts to undo the prior administration's labor policy and congressional jockeying to overturn decades of labor law. If your business has any questions, please email IBA General Counsel Elizabeth Velander.
REGISTER FOR IBA’S VIRTUAL SPRING MEMBERSHIP MEETING
IBA is pleased to announce its Virtual Spring Membership Meeting will be Tuesday, March 16th from 2:00 – 4:00 pm. This event will bring together bakers and allieds for a special industry-wide event. The IBA team will give a detailed update of our advocacy projects in Washington and beyond. IBA members are encouraged to bring their questions about key issues in baking. Our regulatory update will include:
Labor & Employment – state worker classification and multiemployer pension reform update
Nutrition Policy – pending changes to school nutrition and the 2020 Dietary Guidelines for Americans
Labeling – ensuring compliance with the Nutrition Facts Panel and Bioengineered Food rules
Baking Industry – wheat checkoff and commodity markets update
Please register for the meeting using the event portal on IBA’s website. Thanks to our sponsors, IBA meetings remain free of charge for members and their guests.
IBA SEEKS EXPEDITED CLARIFICATION ON
MASK MANDATES FOR TEAM DRIVERS
Following President Joe Biden’s Executive Order on Promoting COVID-19 Safety in Domestic and International Travel, both the Center for Disease Control (CDC) and the Transportation Security Administration (TSA) issued mask mandates for individuals traveling both domestically and abroad. The Independent Bakers Association (IBA) wrote to the Federal Motor Carrier Safety Administration (FMCSA) to request expedited clarification that these mask mandates do not apply to commercial truck drivers operating in teams:
Dear. Ms. Joshi:
Thank you for the opportunity to provide feedback on the Centers for Disease Control (CDC) notice and order requiring persons to wear masks while on conveyances and transportation hubs. The Independent Bakers Association (IBA) appreciates the efforts FMCSA has taken to address workplace safety during the COVID-19 pandemic.
IBA strongly supports the use of face coverings to prevent the spread of the virus that causes COVID-19. However, IBA is concerned about the effect the recent CDC order may have on the commercial truck drivers operating in teams. IBA would like expedited confirmation that team drivers are not required to wear a mask in three scenarios: (1) when doing so would create a risk to workplace health, safety, or job duty as determined by the relevant workplace safety guidelines or federal regulations; (2) where the driver cannot wear a mask, or cannot safely wear a mask, because of a disability as defined by the Americans with Disabilities Act (42 U.S.C. 12101 et seq.); and (3) when the co-driver is in the sleeper berth, with the curtain drawn.
The health and safety of our member companies’ employees and those around them is of the utmost importance. IBA’s interpretation of the CDC order provides team drivers with the flexibility they need in order to perform their job safely. Many team driving operations work together for days, if not weeks, at a time, and may encounter scenarios in which wearing a mask could pose a safety risk to not only the team drivers, but also those they share the road with.
As IBA works with our member companies to ensure that compliance with the CDC order, we are seeking an expedited confirmation that our interpretation is correct. We understand that the CDC order and related TSA security directives were written with passenger carriers in mind, not freight trucks. In the absence of a more targeted approach, IBA believes that our interpretation is a common-sense application of the CDC order to commercial truck drivers operating in teams.
Click here to view the full letter.
IBA SUBMITS CHECKOFF SURVEY RESULTS TO USDA
The Independent Bakers Association (IBA) President Nick Pyle submit the results of IBA’s checkoff survey in a letter to Tom Vilsack, President Joe Biden’s pick for Agriculture secretary:
Dear Mr. Secretary:
Today I write on behalf of the independent segment of the U.S. wholesale baking industry regarding the proposed Grain Foods Industry (“Breadbasket”) Checkoff Promotion Program, actively considered and nearly promulgated during the Trump Administration. The sponsor of the order, the Grain Foods Foundation (GFF) thankfully withdrew it in late October. The proposed order published on the Federal Register website called for a deferred industry referendum.
Starting in November 2020 and continuing through January 2021, the Independent Bakers Association (IBA) conducted a comprehensive industry survey of wholesale bakers exceeding 500,000 cwt annual bread flour usage. Our survey revealed less than 26% of bakers support a checkoff program. Furthermore, 90% of respondents support an “up-front” industry referendum, including many who favor a checkoff. IBA recognizes the initial order only called for assessments for bread flour users greater than 750,000 cwt flour. Our understanding is that threshold would be lowered in a talked about “revised proposal” to make up for revenue lost for a carve-out of institutional or non-retail baked goods.
Based on the overwhelming lack of industry support shown in our survey, IBA requests that the Biden Administration discontinue any further efforts to proceed with the Breadbasket Checkoff Program. The industry clearly does not wish to repeat the failures of the last breadbasket checkoff endured in the 1980’s, which this association and others fought to terminate. Many states currently operate successful wheat promotion checkoffs funded by growers. Frankly, a lot of the proposed activities of the Breadbasket Checkoff are redundant to current programs with decades of successful proven operation.
If the U.S. Department of Agriculture (USDA) is compelled to actively again consider a Breadbasket Checkoff, it should be subject to an up-front referendum. Furthermore, that referendum should be one-baker one-vote, not based on proportional flour usage. One of IBA’s strongest tenets is to protect the independent segment of the baking industry from industry-wide programs supported by a few larger players. In this case we are talking about a proposed $15 million annual “Bread Tax.”
Click here to view the full letter.
COVID RELIEF BILL INCLUDES MULTIEMPLOYER PLAN RESCUE
House Democrats’ plan to rescue multiemployer pension plans is included in COVID relief legislation. A House Ways and Means Committee aide confirmed that the legislation uses language from House Education and Labor Chair Bobby Scott's (D-VA) Emergency Pension Plan Relief Act, which is backed by Democrats on the House Ways and Means and the Senate HELP and Finance committees.
Scott’s approximately $52 billion bill to rescue failing multiemployer pension plans mirrors the multiemployer pension plan provisions included in both iterations of the HEROES Act. The measure would create a special "partition" relief program within the Pension Benefit Guaranty Corp. (PBGC) — meaning the PBGC would take on liability for enough participants that the plan becomes financially healthy — for certain failing plans. Using an expedited application process, qualified plans could apply to receive enough Treasury Department funds to pay full benefits for 30 years.
Plans that would be eligible include those in "critical and declining" status between enactment of the legislation and 2022; plans with an approved application for a suspension of benefits; ones in "critical" status that are less than 40 percent funded and have an active-to-inactive participant ratio of less than 2-to-3 between enactment and 2022; and plans that became insolvent after Dec. 16, 2014.
Some conservatives counter that the price could be brought down by paying out reduced benefits; others question the logic of pouring additional money into a splintering system. But the measure has backing from a wide range of outside groups, including the AARP, AFL-CIO and U.S. Chamber of Commerce.
BIDEN ADMINISTRATION CLEARS WAY FOR LABOR AGENDA
The Biden Administration is setting the stage for new pro-employee labor laws and policies. Among the flurry of executive orders Biden issued upon taking office was a regulatory freeze of the Department of Labor’s (DOL) final rule Independent Contractor Status Under the Fair Labor Standards Act. DOL subsequently moved to delay the effective date until May 7, 2021. IBA and other members of the Coalition to Promote Independent Entrepreneurs wrote to DOL, urging it to not delay the effective date because the rule does not reflect a policy change that warrants reconsideration by a new administration. Instead, the rule merely provides much needed clarity to the application of the “economic realities” test and reflects an objective distillation of the court decisions that have applied the test.
DOL also withdrew opinion letters addressing the independent contractor/employee distinction under the Fair Labor Standards Act (FLSA). It stated that the opinion letters were issued “prematurely…based on rules that have not gone into effect” namely, the final rule Independent Contractor Status Under the Fair Labor Standards Act, which was scheduled to take effect March 8, 2021. DOL’s move to delay the rule’s effective date to May 7 and withdrawal of DOL opinion letters will buy the Biden Administration more time to see whether the rule fits within Biden’s pro-employee labor agenda.
The Biden Administration is working quickly. In less than three weeks, Washington saw President Biden’s firing of National Labor Relations Board (NLRB) General Counsel Peter Robb, removal of Robb’s Deputy General Counsel Alice Stock, and appointment of Peter Sung Ohr as acting General Counsel. This move is seen as a step to creating a more union-friendly NLRB. Mr. Ohr promptly announced rescission of 10 individual policy directives issued by his predecessor.
On February 4, Congressional Democrats followed these actions by introducing the Protecting the Right to Organize Act of 2021 (PRO Act), which is almost identical to a similar bill passed by the House last March. The 2021 version of the PRO Act retains many of the controversial and far-reaching amendments to the National Labor Relations Act (NLRA). The bill would rewrite decades of labor law to strengthen workers’ ability to form unions, including by empowering the National Labor Relations Board to levy fines on employers who retaliate against workers for attempting to organize. Biden campaigned on the promise that he would enact the PRO Act. But business groups, like IBA, are staunchly opposed. IBA will push Congress to reject the PRO Act and will be sharing numerous resources with members, including fact sheets and grassroots materials.
The most concerning aspects of the PRO Act include:
removing workers' right to a secret ballot and institute "card check;"
handing over confidential employee data to union without consent;
eliminating state "right to work" laws and allowing forced union dues;
removing the ban on secondary boycotts;
allowing intermittent strikes; and
instituting numerous Obama-era labor policies, including joint-employer, ambush elections, micro-unions, and the persuader rule.
The PRO Act would also codify the “ABC” test to deem independent contractors’ “employees” covered by the NLRA. Implementing the ABC test through the PRO Act would compel employers to terminate independent contractor relationships or submit to the added burdens of converting independent contractors to regular employees despite the preference of many contractors to remain independent. California’s adoption of the ABC test met significant backlash, with California voters ultimately passing a costly and controversial ballot measure to exempt firms like Uber and Lyft from having to classify their gig workers in the state as employees rather than as independent contractors.
Senator Tim Scott (R-SC) and Representative Elise Stefanik (R-NY) plan to respond by introducing a more business-friendly bill, the Modern Worker Empowerment Act. This bill would amend the Fair Labor Standards Act (FLSA) to harmonize the definition of employee with the common law. The IRS states that under common-law rules anyone who performs services for you is your employee if you can control what will be done and how it will be done. This is so even when you give the employee freedom of action. What matters is that you have the right to control the details of how the services are performed.
IBA supports the Modern Worker Empowerment Act. The bill represents a significant action toward reducing regulatory uncertainty and thereby revitalizing independent entrepreneurship. Conforming the definition of the term “employee” for purposes of the FLSA with other federal statutes would provide much needed certainty and predictability to independent entrepreneurs and their clients, while also enabling government agencies to more efficiently.
FDA PUBLISHES FOOD TRACEABILITY EXPLANATORY MATERIALS
The U.S. Food and Drug Administration (FDA) held a series of three virtual one-day public meetings at the end of 2020 to discuss the recently released proposed rule “Requirements for Additional Traceability Records for Certain Foods” (Food Traceability Proposed Rule). The purpose of the public meetings was to discuss the proposed rule, and to support the public's evaluation and commenting process on the proposed rule.
Following each of the public meetings FDA posted a video recording and transcript on our public meeting webpage. FDA is now publishing the remaining materials discussed at the meetings, the six slide presentations. One of those slide presentations, the supply chain example discussed by Andrew Kennedy from FDA’s Office of Food Policy and Response, is being published together with a video of his presentation and a more detailed overview of the example that was presented.
The supply chain example discussed during the public meetings was of a salad kit prepared with cherry tomatoes, iceberg lettuce, and other foods, focused on the tomato grower, salad kit maker, distributor, and retail store. At the public meetings, FDA explained that this is only one example and it does NOT represent the only way data could be kept and shared under the proposed requirements.
These materials add to other recently released resources including an FAQ prepared based on questions received from stakeholders. None of the posted materials make changes to the proposed rule.
Interested parties are encouraged to submit comments during the comment period, which has been extended until February 22, 2021. If your company would like to submit comments, please contact Elizabeth Velander, IBA General Counsel
OEHHA PROPOSES PROP. 65 SHORT-FORM WARNINGS REVISION
California’s Office of Environmental Health and Hazard Assessment (OEHHA) released a regulatory proposal last month that would revise Proposition 65’s short-form safe harbor warnings, in a substantial departure from the current regulations. This is the second time in a year OEHHA has attempted to “clarify” the Prop. 65 warning regulations.
The proposed changes only permit short-form warnings on products with 5 square inches of label space or less and only when the package shape or size cannot accommodate the full warning. The warning will be required to:
Include the hazard symbol currently required;
To state "WARNING" in all caps
To name at least one of the listed chemicals causing the exposure risk and the type of risk and
Where both types of risks are present at least one of the chemicals from each type
The short form warning will not be allowed for catalog and internet sales. OEHHA will add a separate section for the use of short form warning for food product sales. IBA is working with other stakeholders to push back against the proposal.
BE DISCLOSURE DEADLINE APPROACHES
While it is nearly one year away, the mandatory compliance date for the USDA Agricultural Marketing Service’s (AMS) National Bioengineered Food Disclosure Standard rule is fast approaching, and it has implications across the supply chain. Starting on Jan. 1, 2022, all retail food and beverage packaging must comply with the standard, known in the food industry as the “BE Rule” or “NBFDS.” This means that all mandatory bioengineered (BE) disclosures must be indicated on retail products, and companies must maintain records to substantiate their BE labeling decisions.
The new BE rule introduces some new terminology with specific regulatory definitions and a new “BE Food List.” Moreover, when it comes to commonly used highly refined ingredients originating from the BE Food List — such as corn oil from BE corn and sugar from BE sugar beets — decisions to not use the BE label require recordkeeping to substantiate the absence of detectable levels of modified genetic material.
Documentation turns on AMS guidance for selecting testing methodologies or acceptable validation of refining processes. However, this guidance was not issued until July of 2020, leaving many suppliers and manufacturers unsure of whether existing industry refining and testing processes would meet AMS standards for the purposes of making a BE labeling decision. Since the process for designing and producing a product label can take 18 months to two years, the AMS guidance could not come soon enough.
There are some questions about whether the Biden Administration will seek changes to the rule or its implementation. At the time of this writing, former USDA Secretary Tom Vilsack was tapped by President-elect Biden to lead USDA once again. Secretary Vilsack was reported to have had a major role in getting Congress to compromise and get the law passed, but the rule was finalized under Secretary Sonny Perdue. Whether Secretary Vilsack will seek changes to the rule or its implementation is unknown at this time.
IBA joining other FBIA members to request enforcement discretion until 1/1/23. If your business is experiencing difficultly due to the BE disclosure rule, please contact Elizabeth Velander, IBA General Counsel
IBA Virtual Spring Membership Meeting
March 16, 2021
2:00 - 4:00 pm
IBA 47th Annual Convention
Tuesday-Thursday, June 22-24, 2021 - Washington, DC
If held virtually: Wednesday - Thursday afternoon, June 23-24, 2021
Independent Bakers Association
316 F Street NE, Ste 206
Washington, DC 20002
T: (202) 333-8190
Nicholas Pyle, President: email@example.com
Alexis Fobes, Member Accounts: firstname.lastname@example.org
Elizabeth Velander, General Counsel: email@example.com
Kayla Lunde-Kobilinsky, Communications: firstname.lastname@example.org