Policy Week in Review – May 23, 2025

Supreme Court Allows Trump Firing of NLRB Member Wilcox

Late Thursday, the Supreme Court issued an order that essentially extends a previous order issued by Chief Justice John Roberts in April that barred National Labor Relations Board (NLRB) Member Gwynne Wilcox and Merits Systems Protection Board Member Cathy Harris from their jobs as they challenge their terminations in court. The order issued yesterday explains that because the Constitution vests the executive power in the president, pursuant to Article II, he may remove without cause executive officers who exercise that power on his behalf.  It states, “The stay reflects our judgment that the Government is likely to show that both the NLRB and MSPB exercise considerable executive power.” The order also disagrees with arguments made by Wilcox and Harris that their case also implicates the constitutionality of for-cause removal protections for members of the Federal Reserve, stating that the “Federal Reserve is a uniquely structured, quasi-private entity.”  Justices Kagan, Sotomayor and Jackson dissented.  

House passes “One Big Beautiful” Budget Reconciliation Bill 

Early Thursday morning, the House passed, by a narrow 215-214 vote, its budget reconciliation bill, which extends the Trump tax cuts from his first administration, adds new tax breaks, and increases funding for border security and immigration enforcement, among other provisions. Some of the key payfors include sharp new immigration fees, modifications to student loan repayment programs, repeal of clean energy tax credits and cuts to Medicaid funding. The bill now moves to the Senate for consideration where major changes are expected.  The budget reconciliation process, however, allows for expedited passage in the Senate with only a simple majority – 51 votes needed.  Senate Majority Leader John Thune (R-SD) wants to pass the bill in the senate chamber by the July 4th holiday. 

NLRB Acting General Counsel Cowen Issues Memorandum on Settlement Agreements 

NLRB Acting General Counsel William Cowen recently issued a Memorandum addressed to all NLRB regional directors, officers-in-charge, and resident officers, providing guidance on settlement agreements.  While the Memo affirms that Regions have discretion to tailor remedial relief to the circumstances of each case, it instructs that nonmonetary remedies should not be automatically sought, but rather “limited to cases involving widespread, egregious, or severe misconduct.”  

House Workforce Protections Subcommittee Holds Hearing on Protecting Independent Contractor Status 

The House Workforce Protections Subcommittee Chair Ryan Mackenzie (R-PA) held a hearing on May 20, titled “Empowering the Modern Worker,” to examine the merits of independent work and the flexible working arrangements it provides, the repercussions of restrictive state laws governing worker classification, and the need for clarity and consistency in the law. Chair Mackenzie highlighted two legislative solutions sponsored by Representative Kevin Kiley (R-Ca), including the “Modern Worker Empowerment Act,” which would establish a clear and predictable test for worker classification, and the “Modern Worker Security Act,” which would provide a federal safe harbor that allows companies to voluntarily provide portable benefits to independent contractors without the legal risk. Read here for a recap of the hearing and highlights of witness testimony.

Senate HELP Committee Advances DOL Nominees  

The Senate Health, Education, Labor, and Pensions (HELP) Committee voted this week to approve several of the president’s Department of Labor nominees, including:  Julie Hocker to serve as assistant secretary of labor for the Office of Disability Employment Policy; Wayne Palmer to serve as assistant secretary of labor for Mine Safety and Health; and Henry Mack III to serve as assistant secretary of labor for the Employment and Training Administration. These nominations will now move to the Senate floor for a final vote at a later date.  

Senate Passes No Tax on Tips Legislation 

On Tuesday, the Senate passed via unanimous consent the bipartisan “No Tax on Tips Act,” sponsored by Senator Ted Cruz (R-TX), which would allow a tax deduction of up to $25,000 per tax year for tips received and reported by eligible employees who earn $160,000 or less. The bill now goes to the House for consideration.  A similar provision to eliminate federal income tax on tips was included in the House reconciliation bill that passed on Thursday, but that tax deduction would expire on December 31, 2028.  Both proposals seek to advance the “no tax on tips” campaign promise made by President Trump. 

House Subcommittee on Higher Education and Workforce Development Holds Hearing on DEI Policies in Higher Education 

Chair Burgess Owens (R-UT) of the House Subcommittee on Higher Education and Workforce Development held a hearing on May 21, titled “Restoring Excellence: The Case Against DEI,” to examine DEI policies in higher education. In his opening statement, Chair Owens stated, “Despite the Supreme Court ruling against affirmative action, it appears universities are still playing semantic word games with their admissions processes. They are continuing to discriminate against students based on their race but under different names. DEI adherence in these institutions continues to be a large factor in staff promotion and tenure and continues to feed the lack of ideological diversity among faculty. Students are forced to participate in DEI programming in order to graduate. Accreditors, instead of holding institutions accountable for student outcomes, are imposing on them DEI requirements.” Read here for a recap of the hearing and highlights of witness testimony. 

Bipartisan, Bicameral “Second Chance Reauthorization Act” Introduced 

The “Second Chance Reauthorization Act of 2025” was introduced on May 21 by Senators Shelley Moore Capito (R-WV) and Cory Booker (D-NJ), along with Representatives Carol Miller (R-WV) and Danny Davis (D-IL). The legislation would reauthorize reentry programs designed to help previously incarcerated individuals become productive, working members of society by providing them with career training services and support programs to reduce the rate of recidivism and encourage labor force participation. 

OSHA Issues Updated Guidance on Site-Specific Targeting Inspections 

On May 20, 2025, the U.S. Department of Labor issued a press release updating the Occupational Health and Safety Administration’s (OSHA) Site-Specific Targeting (SST) inspection program focusing on workplaces with the highest injury and illness rates, effective immediately. OSHA’s SST inspection program is the agency’s primary planned inspection program for non-construction workplaces with 20 or more employees. This guidance replaces previous agency-issued guidance from 2023 and will terminate two years from the effective date, unless replaced. For further Littler analysis, read here. 

DOJ Outlines Plans to Enforce the False Claims Act Against Recipients of Federal Funds that Knowingly Violate Civil Rights Laws 

On May 19, 2025, Deputy Attorney General Todd Blanche issued a memorandum, “Deputy Attorney General Blanche Memo: Civil Rights Fraud Initiative,” announcing an initiative to “utilize the False Claims Act to investigate and, as appropriate, pursue claims against any recipient of federal funds that knowingly violates federal civil rights laws.” For further Littler analysis, read here.

DOJ Expands Corporate Whistleblower Program to Include Immigration Law Violations 

The stakes for non-compliance with federal immigration law have just increased exponentially. On May 12, 2025, the U.S. Department of Justice’s Criminal Division unveiled its new White Collar Enforcement Plan (“Enforcement Plan”) titled, “Focus, Fairness, and Efficiency in the Fight Against White-Collar Crime.” The Enforcement Plan amended the Division’s Corporate Whistleblower Awards Pilot Program (CWAPP) to include “violations by corporations of federal immigration law.”  For further Littler analysis, read here.