Consolidated Appropriations Act, 2021 and Recent DOL Activity

Hello Friends!

We at Littler are still digesting the thousands of pages that make up the Consolidated Appropriations Act, 2021, the stimulus bill Congress passed two weeks ago, as well as Biden’s more recent American Rescue Plan proposal. We will cover both and answer your questions related to the COVID vaccines on the next home care industry presentation on January 22nd. Register Here. That said, we wanted to share an important aspect of that legislation that many of you have been clamoring for: companies now may write off expenses paid for with PPP money. This change was buried in section 276(a) of the Economic Aid to Hard-Hit Small Businesses, Nonprofits and Venues Act (which is part of the stimulus bill). As you likely know, the IRS had refused to adopt this position absent express language to this effect in the statute. There was bipartisan support for this new language, but it never seemed to make it into any of the draft stimulus bills. Further cementing this victory, the IRS has announced that an official change in its position on this issue. We know this is a welcome, albeit belated, result.

Also in the news and relevant to this industry is the DOL’s recent action taken to finalize the independent contractor rule. This rule impacts traditional registries and the online virtual marketplace platforms that facilitate caregiving services as it provides a new paradigm for analyzing whether a caregiver is truly an independent contractor or employee (focusing on two key factors – control and opportunity for profit or loss – instead of weighing seven factors). The rule is supposed to go into effect March 8, 2021, but President-elect Biden has announced his intent to issue a memorandum on his first day in office freezing the effective date of any legislation that is not yet in effect. He also has expressed an interest in derailing the rule entirely. If the rule were to become effective, the biggest question would be its impact on the Field Assistance Bulletin No. 2018-4, which provided guidance on when registries are employers under federal wage and hour law. This is because the new rule would replace any inconsistent previous interpretation of independent contractor status. So stay tuned for more developments on this front!