H.R. 1723, Tribal Labor Sovereignty Act of 2025

H.R. 1723 would add Indian tribes to the list of entities that are excluded from the definition of employer under the National Labor Relations Act. Through The National Labor Relations Board (NLRB), which enforces the act, protects the rights of most private-sector employees to form a union and to bargain collectively. Adding tribes to the list of excluded employers would treat them similarly to state and local governments. Under current law, the NLRB generally asserts jurisdiction over the commercial enterprises owned and operated by tribes, even if they are located on a tribal reservation. The board does not assert jurisdiction over tribal enterprises that carry out traditional tribal or governmental functions.

The NLRB may seek remedies for labor law violations. Such remedies may include reinstatement and back pay for discharged workers and, in a few cases, criminal fines. Criminal fines are recorded as revenues, deposited into the Crime Victims Fund, and spent without further appropriation. CBO expects that H.R. 1723 would decrease the number of employers subject to NLRB oversight. As a result, CBO estimates that enacting H.R. 1723 would reduce revenues and subsequent direct spending by an insignificant amount. On net, H.R. 1723 would increase deficits by less than $500,000 in every year and over the 2026‑2035 period, CBO estimates.

CBO estimates that implementing H.R. 1723 would not significantly affect the NLRB’s operating costs over the 2026-2030 period; any change in spending would be subject to the availability of appropriated funds.

H.R. 1723 would impose a private-sector mandate by eliminating the right of employees of tribal enterprises to file a claim, individually or through a union, regarding certain labor practices.

The cost of the mandate would be the value of forgone monetary awards resulting from claims that would have been filed with the NLRB. According to the NLRB, about 20,000 to 30,000 claims are filed each year by employees, unions, and employers alleging unfair labor practices. More than half of all claims are withdrawn or dismissed, but some are settled by the parties or adjudicated by the NLRB. From 2021 to 2023, the annual cost of monetary awards, nationwide, averaged $55 million. Because the mandate would apply only to a narrow group of employees of certain tribal enterprises, CBO estimates that cost of the mandate would fall well below the private-sector threshold established in the Unfunded Mandates Reform Act (UMRA) ($206 million in 2025, adjusted annually for inflation).

In addition to the monetary awards, successful claims filed with the NLRB also may require employers to allow their employees to form a union and bargain collectively. Any effects from limiting such an outcome for tribal employees is not considered a direct cost of the mandate under UMRA.

H.R. 1723 contains no intergovernmental mandates as defined in UMRA.

The CBO staff contacts for this estimate are Justin Latus (for federal costs) and Erich Dvorak (for mandates). The estimate was reviewed by Christina Hawley Anthony, Deputy Director of Budget Analysis.