Federal HR Public Policy Update
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1 Federal HR Public Policy Update Winchester, VA May 22, 2013 Michael Layman SHRM Government
2 Federal HR Public Policy Update Politics Fiscal issues Tax reform Health care reform Immigration reform Agency updates Legislation Questions 2
3 Politics Congress Divided Congress has meant less congressional productivity The 112 th Congress 3
4 Politics Fewer mavericks, more polarization, less compromise Over the past three decades, voting overlap between GOP and Dems has been disappearing, resulting in a more polarized Congress National Journal Vote Ratings in the Senate* Most liberal Republican senator MORE LIBERAL Most conservative Democratic senator 1982 DDDDDDDDDDDR DDDDDDDDDDDR DDDR DDR DDR DDR D R D R D R DDD RRRD RRDDRRDDDDRRRD RRRRRD RRRRRRRRRRRRRRRRRRRRRRRRRR 1994 DDDDDDDDDDDDDDDDDDDDDDDDDDDDDR DDDDDDDDDDDR DDDDDDDDDDR DDDR DDRRRRRD RRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRR 2002 DDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDRRD RRRRRD RRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRR 2010 DDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRR R MORE CONSERVATIVE *Souce: National Journal s Vote Ratings
5 Politics Fewer swing seats, more polarization House Makeup by Cook Partisan Vote Index Democratic (D+5 or Greater) Swing (D+5 to R+5) Republican (R+5 or Greater) Number of Seats Source: Cook Political Report,
6 Fiscal issues 6
7 Fiscal cliff, sequestration, etc. How did we get here? $16.83 trillion national debt $1 trillion+ annual federal budget deficit Bipartisan Budget Control Act of 2011 signed into law in August 2011 Raised debt limit Cut federal spending by $1 trillion over 10 years Created the Joint Select Committee on Deficit Reduction, the Super Committee Failure of Super Committee in Nov triggered $1.2 trillion sequester over next 9 years in discretionary and mandatory spending effective Jan $85 billion sequestration began on March 1,
8 Fiscal issues WARN Act of 1988 and sequestration Covers private employers with 100 or more employees Requires employers to provide notice 60 days in advance of plant closings and mass layoffs STATUS: DoL guidance on July 30, 2012 stated federal contractors are not required to provide WARN Act notices for employees of government contracts funded from accounts sequestered on March 1,
9 Fiscal cliff deal American Taxpayer Relief Act of 2012 (P.L ) signed into law by President Obama on Jan. 2, 2013 Extended the Bush era tax cuts for individuals making less than $400,000 and married couples making less than $450,000 Payroll tax cut allowed to expire Extended Work Opportunity Tax Credit (WOTC) through Dec. 31, WOTC allows employers to claim credit equal to 40% of the first $6,000 of wages for one of eight targeted groups. 9
10 Fiscal cliff deal Employee Educational Assistance ***Big SHRM victory Fiscal cliff deal made permanent Section 127 of the Internal Revenue Code Section 127 allows an employer to provide employees with up to $5,250 per calendar year tax free in tuition, fees, and books for courses at the undergraduate and graduate levels Section 127 was set to expire on Jan. 1, 2013 as part of the Bush tax rates SHRM is co chair of the Coalition to Preserve Employer Provided Educational Assistance ( 10
11 Fiscal cliff deal projected to add trillions to deficit Effects of American Taxpayer Relief Act of 2012 on Federal Deficit $0T $-0.4T $-0.8T $-1.2T $-1.6T Source: Congressional Budget Office, The Budget and Economic Outlook: Fiscal Years 2013 to 2023, February 5,
12 Fiscal cliff and beyond Dec. 31, 2012 Debt ceiling reached, tax rates expired Jan. 2, 2013 President signed American Taxpayer Relief Act to make Bush era tax rates permanent Jan. 31, 2013 Congress passed bill to suspend debt ceiling March 1, 2013 Sequestration budget cuts began May 18, 2013 U.S. debt ceiling reinstated Sept. 2013?? U.S. faces threat of default 12
13 Health care reform 13
14 Health care reform Supreme Court upheld constitutionality of Patient Protection and Affordable Care Act (PPACA) on 6/28/12 Implementing regulations are being promulgated Despite House vote to repeal PPACA on 5/16, efforts to repeal and replace are dead with Obama re elect Or are they? United Food and Commercial Workers president wrote May 20 op ed that the president s statement to labor in 2009 (that workers could keep their health care plan) is simply not true for workers. House Republicans will continue to scrutinize law IRS admission that it scrutinized conservative advocacy groups provides fresh ammunition to attack PPACA, given IRS critical role in the law 14
15 Health care reform Public opinion of PPACA Public Opinion of ACA Among all Adults Favorable Unfavorable 40% unfavorable 37% favorable Source: Kaiser Health Tracking Poll
16 Health care reform Public opinion of PPACA Public Opinion of ACA by Income Bracket (March 2013) Source: Kaiser Health Tracking Poll. 16
17 Health care reform 2013 employer requirements: Employer reporting on W 2 forms Health FSA changes Medicare payroll taxes and retiree drug subsidies Employer notifications 17
18 Health care reform 2014 employer requirements: Employer mandate Individual mandate Automatic enrollment State health insurance exchanges Insurance reforms for grandfathered plans 18
19 Health care reform SHRM s Health Care Reform Resource Page 19
20 Immigration reform Immigration and Nationality Act of 1965 Immigration Reform and Control Act of 1986 Immigration Act of 1990 Abolished national origins system Established preference system for family and employmentbased immigration from around the globe Established DOL labor certification Legalized undocumented persons who entered prior to Jan. 1, 1982 Imposed penalties on employers who hire undocumented workers Required employers to verify status on Form I 9 Updated preference categories and quotas to reflect changing economy and worldwide demand Favored high skilled employment based immigration Imposed annual cap on H 1B and H 2B visas 20
21 Immigration reform Comprehensive immigration reform is a top issue in 2013 E Verify extended for three years until Sept. 30, 2015 U.S. Citizenship and Immigration Services temporary work visas for skilled foreigners (H 1B) cap reached on April 5 States have passed their own immigration laws; Arizona, Virginia and others have required certain employers to use E Verify on new hires 21
22 Immigration reform States States that require some or all employers to register with E Verify 22
23 Immigration reform Federal Gang of Eight in both House and Senate (slide) Any legislation would likely mandate employment verification, provide path to citizenship and create new visa category SHRM/American Council on International Personnel ( partnership is big part of the debate Obama Administration continues worksite enforcement 23
24 Immigration reform Senate Gang of Eight Marco Rubio (R-Fla.) Republicans Member of the Gang of 8, which unveiled bipartisan immigration reform legislation in the Senate Sponsor of Immigration Innovation Act of 2013 Dick Durbin (D-Ill.) Democrats Supports non deportation of illegal immigrants brought to the U.S. as children Sponsor of the DREAM Act Member of the Gang of 8, which unveiled bipartisan immigration reform legislation in the Senate Member of the Gang of 8, which unveiled bipartisan immigration reform legislation in the Senate Has voted to oppose the DREAM Act John McCain (R-Ariz.) Jeff Flake (R-Ariz.) Member of the Gang of 8, which unveiled bipartisan immigration reform legislation in the Senate Supports creation of temporary worker program Member of the Gang of 8, which unveiled bipartisan immigration reform legislation in the Senate Has voted to oppose the DREAM Act Lindsey Graham (R-S.C.) Supports creation of pathway to earned citizenship Member of the Gang of 8, which unveiled bipartisan immigration reform legislation in the Senate Chuck Schumer (D-N.Y.) Michael Bennet (D-Colo.) Bob Menendez (D-N.J.) Source: National Journal Research, Member of the Gang of 8, which unveiled bipartisan immigration reform legislation in the Senate Supports measures to help foreigners studying science, engineering, technology or math work in the U.S. Member of the Gang of 8, which unveiled bipartisan immigration reform legislation in the Senate Co sponsor of the DREAM Act 24 24
25 Immigration reform Senate bill Border Security, Economic Opportunity and Immigration Modernization Act (S. 744) New system is just Form I 9 plus mandatory E Verify Would require all employers to use E Verify within 5 year phase in period 5,000+ employees will be phased in within 2 years 500 4,999 employees phased in within 3 years All employers, including agricultural employers, phased in within 4 years Photo matching: As part of the E Verify system, every non citizen will be required to show a biometric work authorization card or biometric green card 25
26 Immigration reform House bills Legal Workforce Act (H.R. 1772) Eliminates the current paper based I 9 system Requires an employer to attest, during the verification period and under penalty of perjury, that the employer has verified that an individual is not an unauthorized alien SKILLS Visa Act To be introduced tomorrow (May 23) by House Judiciary Committee Chairman Bob Goodlatte (R VA) and House Oversight Committee Chairman Darrell Issa (R CA) 26
27 Immigration reform Path to citizenship Republicans Democrats Many, though not all, Republicans oppose granting illegal immigrants amnesty, arguing that this may create an incentive for more illegal immigrants to come to the U.S. Both GOP and Democratic politicians want to make more H1-B visas available to attract skilled foreign workers to the U.S. Many Democrats support creating a pathway to earned citizenship for illegal immigrants to naturalize the million undocumented workers currently living in the U.S. Source: National Journal Research,
28 Equal Employment Opportunity Commission (EEOC) Jacqueline Berrien, Chair (D) Constance Barker (R) Chai Feldblum (D) Victoria Lipnic (R) Jenny Yang (D) General Counsel David Lopez 28
29 Equal Employment Opportunity Commission (EEOC) April 2012 EEOC approved enforcement guidance related to consideration of arrest and conviction records in employment decisions April 2012 EEOC issued final rule amending the Age Discrimination in Employment Act (ADEA) regulations on the Reasonable Factors Other Than Age (RFOA) defense 29
30 Equal Employment Opportunity Commission (EEOC) EEOC guidance to come? Employer use of consumer reports and credit information Leave as a reasonable accommodation under the Americans with Disabilities Act Compliance requirements that ADA, GINA, and other federal EEO laws impose on employer wellness programs 30
31 2010 SHRM survey Conducting Credit Background Checks Only 13 percent of employers consider credit information for all job applicants. Most employers that use credit checks (47 percent) only perform checks on applicants for certain positions. If a negative credit incident is found, the vast majority of employers (87 percent) give the applicant an opportunity to explain the circumstances of the incident. Only specific credit information affects hiring decisions. Pending debt lawsuits (64 percent) and accounts in debt collection (49 percent) were cited as issues most likely to affect their decision to extend a job offer. 31
32 National Labor Relations Board (NLRB) Mark Pearce, Chairman (D) VACANCY (R) Sharon Block (D) Richard Griffin (D) Obama recess appts VACANCY (R) General Counsel Lafe Solomon 32
33 National Labor Relations Board (NLRB) NLRB rule requiring employers to post 11x17 notices in the workplace STATUS: The DC Circuit vacated rule in its entirety in NAM v. NLRB on May 7, 2013 NLRB rule altering Representation Election Procedures ( Quick election rule or Ambush election rule ) STATUS: Federal district court invalidated NLRB s quick election rule in May Board appeal to DC Circuit not expected until probably Summer
34 National Labor Relations Board (NLRB) NLRB Specialty Healthcare decision STATUS: NLRB is regularly applying the Specialty "overwhelming community of interest test NLRB Banner Health decision STATUS: NLRB ruled July 2012 that employer s concern for the integrity of its investigations is outweighed by employees Section 7 rights to engage in concerted activity for mutual aid and protection Federal court challenge to NLRB recess appointments STATUS: In Jan. 2013, D.C. Circuit ruled in Noel Canning that appointments were unconstitutional. Case petitioned to Supreme Court 34
35 Preventing Greater Uncertainty in Labor Management Relations Act H.R introduced by Rep. David Roe (R TN) in wake of D.C. Circuit ruling in Noel Canning that President s Jan NLRB recess appointments were unconstitutional Legislation would prohibit the NLRB from taking any action that requires a quorum until it has a quorum Would also prohibit the NLRB from implementing, administering, or enforcing any decisions finalized on or after Jan. 4, 2012 STATUS: House passed H.R by vote on April 12,
36 Working Families Flexibility Act (H.R. 1406) Introduced by Rep. Martha Roby (R AL) Legislation would amend the FLSA to allow private sector employers option of offering hourly employees the choice of compensatory time off or pay for overtime hours worked Would require employee to have worked minimum of 1,000 hours within the last 12 months to be eligible for comp time Would allow employees to accrue up to 160 hours of comp time per year and to cash out unused comp time STATUS: House passed H.R by vote on May 8,
37 Fair Minimum Wage Act (S. 460, H.R. 1010) Introduced by Sen. Tom Harkin (D IA) and Rep. George Miller (D CA) Bill would amend the FLSA to raise the hourly minimum wage by $2.85 an hour in three increments: $8.20 an hour 90 days after enactment, $9.15 an hour 12 months after enactment and $10.10 an hour 24 months after enactment The minimum wage would be indexed annually to inflation based on the Consumer Price Index 36 months after enactment The legislation would also increase the minimum wage for tipped employees as well to $3.00 an hour 90 days after enactment, with incremental increases raising it eventually to 70 percent of the regular minimum wage 37
38 Healthy Families Act (S. 631, H.R. 1286) Introduced by Sen. Tom Harkin (D IA) and Rep. Rosa DeLauro (D CT) Would require employers to provide 56 hours/year of paid sick leave Full time employees working more than thirty hours per week year round or 1,500 hours Part time employees working more than twenty hours per week or 1,000 hours would receive prorated share of leave Leave may be used on an hour by hour basis or in the smallest increment used by employer s payroll system 38
39 Paycheck Fairness Act (S. 84, H.R. 377) Introduced by Sen. Barbara Mikulski (D MD) and Rep. Rosa DeLauro (D CT) PFA would amend the Equal Pay Act to limit the factors employers can use in making pay decisions to only seniority, merit and quantity/quality of production Would empower the EEOC and the Dept. of Labor to collect wage information from employers of all sizes Would subject employers to unlimited compensatory and punitive damage liability under the Equal Pay Act (in addition to double back pay) 39
40 Employment Non Discrimination Act (ENDA, S. 815, H.R. 1755) Introduced by Sen. Jeff Merkley (D OR) and Rep. Jared Polis (D CO) ENDA aims to prohibit employment discrimination on the basis of sexual orientation or gender identity In February, Chairman Tom Harkin (D IA) of Senate HELP Committee promised ENDA will move this year in the Senate 40
41 We want you! For the SHRM Advocacy Team Team Two participation levels: HR Advocate or Advocacy Captain 41
42 Thank you! Contact me anytime: Michael Layman Government Affairs 42
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