While much of the press reports about the U.S. House of Representative’s passage of the Economic Stimulus bill center on the size of it, there’s a lot of details that haven’t yet been explored.  Because the bill’s prospects are looking (somewhat) favorable, it’s time to look at some of the specifics that relate to employment law.

At the outset, it is interesting to note that there is a "buy American" provision in the bill that would mostly bar foreign steel and iron from infrastructure projects — a clause that some are criticizing.  That provision could have a direct impact on work in the United States — but could also increase the costs as well.  Copyright 2009, Daniel A. Schwartz


You can find all the details of H.R. 1 here (and it should be noted that the Senate version has some differences). But there are a couple of other provisions in H.R. 1 that also relate to labor and employment law, including:

  • Prevailing Wage Rates – While not much of a surprise, Sec. 1111 provides that all laborers and mechanics will be paid prevailing wage rates on any contracts funded directly or indirectly by government funds.
  • E-Verify Even with the delay in the E-Verify implementation until at least May 2009, the House version of the bill (Sec. 114) requires all entities that get a contract under this stimulus plan must participate in the government’s E-Verify program.  This is not terribly surprising since other federal contractors need to comply with the new E-Verify rule, but it is made explicit in this bill. 
  • DOL Funding — The Bill (Title IX) calls for spending $4B to the Department of Labor, which can then provide grants for adult employment and training, youth summer jobs, training in high growth and emerging industry sectors. The Bill would also provide funds for community service employment for older Americans and to assist state unemployment insurance departments.  In addition, $300M will be allocated for construction and rehabilitation of various Job Corps Centers.
  • Incentives to Hire Unemployed Veterans and "Disconnected Youth" – Section 1421 provides companies with tax incentives to hire recent veterans and "youth" between ages 16-25 who are not in school and not "readily employable" because of a lack of "basic skills". 
  • COBRA Assistance – Sec. 3002 would provide for some assistance paying premiums under COBRA continuation coverage. COBRA typically applies to employees who have been laid off and are allowed to continue their insurance so long as they pay the premiums.  For employers, this bill provision should be followed because they may want to change their severance structure in light of the government’s provision of additional benefits. 

With a bill this large, it is important for employers in all industries to stay on top of the specific provisions.  And President Obama has already signaled that the provisions in this bill will need be modified before final passage in the Senate (and committee).   The Senate is expected to start debate on its version of the bill early next week.