December 1, 2023
In 2022’s year-end wrap-up, we wrote about the then-recent midterm elections and how they would bode for the 118th session of Congress.
While the Republicans held a small majority in the U.S. House of Representatives, it was predicted that it would be hard for the speaker of the House to gain control of his party and that has been the case, with Rep. Kevin McCarthy (R-Calif.) out and Rep. Mike Johnson (R-La.) now the House speaker.
While it’s important to understand the political backdrop of Congress and how its functions may affect legislative activity, the American Rental Association’s (ARA) members and board have an agenda to pursue.
It’s important to remember that when it comes to government affairs, ARA takes action on two fronts: The association doesn’t just get involved in legislative matters, but also regulatory.
Let’s first look at three regulatory issues that have come about to which ARA is responding:
OSHA heat illness rule. The Occupational Safety and Health Administration (OSHA) is in the process of developing a potential standard for Heat Injury and Illness Prevention in Outdoor and Indoor Work Settings. OSHA’s proposed standard could have a significant impact on ARA members as it is broad in scope and would apply to work in all industries in which OSHA has jurisdiction. The standard could require employers to:
- Create and update a written Heat Injury and Illness Prevention Program (HIIPP). Employers with 10 or fewer employees could be exempted from implementing a written HIIPP.
- Identify heat hazards, either by monitoring weather conditions or measuring work area heat conditions using the heat index or ambient temperature and humidity. These measurements could trigger certain employer obligations when temperatures reach established thresholds.
- Adopt practices including providing suitably cool water and ample opportunities to drink water, acclimatizing new and returning employees, providing rest breaks in a cool or shaded area, supervising employees for signs and symptoms of heat illness, altering work schedules, and providing personal protective equipment (PPE) such as cooling vests and wetted garments to protect against heat stress.
- Establish and implement written medical treatment and emergency response procedures when signs and symptoms of heat stress are reported or observed.
- Train supervisors and employees on heat stress identification and prevention, including environmental monitoring and emergency response, in a language and at a literacy level that employees understand.
- Maintain records reflecting temperature monitoring data, heat illnesses and injuries even if they only require first aid, and all heat acclimatization records for new and returning employees.
- Establish procedures to effectively communicate and coordinate with other employers at multi-employer work sites, such as obligating host employers to communicate procedures for protecting all workers on site from heat-related hazards, including contractors and independent contractors, vendors and staffing agencies.
As part of its ongoing heat illness prevention rulemaking effort and in accordance with federal requirements, OSHA plans to convene a Small Business Advocacy Review (SBAR) Panel. The panel will listen to small entity representatives (SERs) who would potentially be affected by the standard.
ARA has applied to be a SER on the SBAR Panel but has not received confirmation on whether the application has been accepted. Regardless, ARA will continue to be involved in the creation of this new standard at whatever level we are able to and will follow it throughout the creation process so that when the rule goes into effect, ARA members will be fully informed on how it affects their businesses.
H-2B visas. The H-2B program extends visa classifications to noncitizens coming to the U.S. to temporarily perform nonagricultural service or labor. Equipment and event rental members rely on this program and these people to supplement their U.S. workforce needs during seasonal surges.
ARA is an active member of the H-2B Workforce Coalition. Besides equipment and event rental, other industries represented in the coalition include lodging, landscaping, seafood, restaurants, tourism, equine, forestry, mobile outdoor amusement, golf courses and others.
The H-2B coalition has been working to secure funding for the program and to enhance the returning worker provisions of the H-2B visa program; however, a setback was experienced in September when Returning Worker Exemption language was stripped out of the 2024 Homeland Security Appropriations bill.
In the fall of 2023, the Department of Labor (DOL) proposed a law, “Modernizing H-2 Program Requirements, Oversight and Worker Protections.” ARA will submit comments to address 11 provisions contained in the proposal, including new whistleblower protections, enhanced consequences for charging prohibited fees to visa workers and a “due diligence” mandate for employers.
Overtime rule. Under the federal Fair Labor Standards Act (FLSA), employees are entitled to receive premium overtime pay when they work more than 40 hours per week unless the employee is considered exempt from these requirements. Employees whose primary duties fall under the executive, administrative and professional (EAP) exemption, who are paid on a salary basis, and whose compensation meets the minimum salary level are exempt from overtime requirements.
The Biden administration’s proposed rule would require employers to pay overtime to workers who make less than approximately $60,000 per year. That’s up considerably from the current threshold set in 2019 during the Trump administration of $35,568. The reclassifications resulting from a higher minimum salary could harm currently exempt junior and mid-level employees — who would have to be reclassified from salaried professionals to hourly wage earners — due to the need to control overtime costs. DOL is rushing to enact overtime rule changes without evidence that the current regulations adopted in 2019 are failing to protect employees. The changes could be effective as early as May 1, 2024.
On the legislative side, ARA is pursuing the following initiatives:
Catalytic converters. Based on input from members, ARA is a member of the PART (Preventing Auto Recycling Theft) coalition — a 20-plus member group concerned about catalytic converter theft. Catalytic converters are being stolen at an increasingly higher rate due to the valuable metals they contain — rhodium, platinum and palladium — which remove toxic elements from exhaust gases as they exit the vehicle. Thieves can easily steal converters from vehicles and since they are not readily traceable, there is a lucrative market for these stolen parts.
In response, H.R. 621/S. 154 — the PART Act — has been introduced. If enacted, this law would help law enforcement by demanding that converters be identifiable and creating a more transparent marketplace that would deter theft.
The National Insurance Crime Bureau (NICB) estimates that these thefts have increased by 1,215 percent between 2019 and 2022. Stolen converters can bring anywhere from $20 to $350 on the black market, with replacement costs averaging over $2,500. Because this crime frequently involves trafficking stolen parts across state lines, a federal framework is needed to aid the efforts of local law enforcement.
H.R. 621 was introduced in the House by Reps. Jim Baird (R-Ind.), Betty McCollum (D-Minn.), Angie Craig (D-Minn.), Randy Feenstra (R-Iowa) and Michael Guest (R-Miss.). The same legislation in the Senate was introduced by Sens. Amy Klobuchar (D-Minn.), Mike Braun (R-Ind.), Ron Wyden (D-Ore.) and J.D. Vance (R-Ohio). ARA has signed onto a coalition letter to House and Senate Commerce Committee leadership, as well as sent its own letter to members of the Senate.
Taxes. The Tax Cut and Jobs Act (TCJA) enacted several tax provisions which ARA members have enjoyed, including bonus depreciation, provisions on how much interest businesses can deduct, changes to expensing of research and development costs as well as provisions that give passthrough entities special rules that keeps their passthrough income from being taxed as ordinary income. The full expensing provisions have begun phasing out in 2023. The passthrough entity provisions, Section 199(A), will expire in 2025 along with changes in the estate and gift tax. This means ARA will have a very full tax agenda for the next several years as the provisions in TCJA that are not permanent begin to unwind.
John McClelland, Ph.D., is the American Rental Association’s (ARA) vice president for government affairs and chief economist.
