Recap of Federal and State Legislation Discussed at SHRM’s
2013 Legislative Conference in WashingtonD.C.
Robert L. Kilbride
The following is a summary and highlights of new or proposed federal and state legislation and rules affecting the workplace. I have bolded areas that I thought our members would be particularly interested in knowing about or following.
INTRODUCTION
Americans’ approval of Congress is at 15% in February 2013, one percentage point higher than in January and exactly matching the 15% average for all of 2012.
More than eight in 10 Americans (81%) disapprove of the way Congress is handling its job.
House has also become more “polarized” along ideological lines.
The party in control of the House tightly controls policy.
Senate has also become more “polarized” along ideological lines.
All HR professionals should pay close attention to regulatory initiatives by the DOL, EEOC and NLRB.
Efforts to increase the minimum wage and enact pay equity law expected in the Senate.
Advocates continue to push for expansion of FMLA/paid sick leave at state and local level but enactment at federal level impossible. Connecticut currently has a mandatory paid leave law.
Obama Administration’s focus on workflex will continue.
Efforts on “comp time” legislation (for private employers)is expected in the House this year.
The federal sequester went into effect on March 1. The sequestration will trigger $984 billion worth of cuts over the next nine (9) years in both discretionary and mandatory spending.
The 2013 sequester will apply equally between defense ($42.7 billion) and non-defense (42.7 billion) programs for a total of $85.4 billion. The $42.7 billion in non-defense cuts will come from both mandatory (entitlement) and discretionary (non-entitlement) programs.
U.S. Faces Threat of Default
If no action is taken to suspend or raise the debt ceiling and Congress fails to reach a debt reduction deal, the U.S. could default on its debt obligations, throwing financial markets into a tailspin.
Recent congressional action impacts the following:
- Internal Revenue Code Section 127 has been permanently expanded to allow an employer to provide up to $5,250 per year tax-free in tuition, fees, and books to employees for courses on the undergraduate and graduate levels.
- Also permanently extends the provision that provides employers a tax credit of up to $150,000 for acquiring, constructing, rehabilitating or expanding property used for a child care facility. SHRM supported this extension.
- Extends the Work Opportunity Tax Credit (WOTC) through December 31, 2013. The WOTC allows employers to claim a credit equal to 40 percent of the first $6,000 of wages for one of eight targeted groups (families receiving benefits under the Temporary Assistance to Needy Families program, qualified ex-felons, designated community residents, vocational rehabilitation referrals, qualified summer youth employees, qualified food and nutrition recipients, qualified SSI recipients, and long-term family assistance recipients).
President Obama and Congressional Democrats have also advocated for increasing the minimum wage and passing the Paycheck Fairness Act.
HR professionals should keep a focus on the federal agencies particularly EEOC and DOL. Regulatory activity possible early in 2013 includes:
-Proposed Affirmative Action Regulations – 503
-Proposed Affirmative Action Regulations – Veterans
-DOL proposed a survey on worker misclassification
Minimum Wage
- In U.S., 71% Back Raising Minimum Wage
- Most Democrats and independents, and half of Republicans, favor increase to $9
- Seven in 10 Americans say they would vote “for” raising the minimum wage to $9 per hour if given the opportunity, while 27% would vote against such a bill. The proposal, made by President Barack Obama in his 2013 State of the Union speech, is backed by over 90% of Democrats and self-described liberals, and by over two-thirds of independents and moderates. Republicans are evenly split on the proposal, while conservatives tilt slightly in favor.
NEW OR PROPOSED FEDERAL LEGISLATION
- The Fair Minimum Wage Acts (S. 460 & H.R. 1010)
Introduced in the Senate by Tom Harkin (D-IA) and in the House by George Miller (D-CA), the legislation would amend the Fair Labor Standards Act (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 Paycheck Fairness Act (H.R. 377)
-Introduced in the House by Representative Rose DeLauro (D-CT), the legislation would amend the Equal Pay Act (EPA) to essentially limit pay differentials in employment.
-The bill amends the EPA to essentially limit pay differentials to seniority, merit, production or “any other factor other than sex” such as education, training, or experience.
Shifts the burden of proof to the employer to demonstrate that the pay differential is:
- Not discriminatory on the basis of sex,
- “Job related” to the specific position, and
- Consistent with business necessity.
Employees may overcome the business necessity defense if the employee presents evidence demonstrating that an alternative employment practice could have served the same business purpose without producing a gender differential, and that the employer refused to adopt that alternative practice.
Employees may also publicize their co-workers’ salaries and employers would be prohibited from restricting employees from disclosing or discussing the wages of other employees.
- Equal Employment Opportunity Commission (EEOC)
Strategic Enforcement Plan (SEP)
On December 28, 2012, EEOC approved its SEP that highlighted six high priority areas:
-Eliminating Barriers in Recruiting and Hiring
-Protecting Immigrant, Migrant and Other Vulnerable Workers
-Addressing Emerging and Developing Issues
-Enforcing Equal Pay Laws
-Preserving Access to the Legal System
-Preventing Harassment Through Systemic Enforcement and Targeted Outreach
- Family & Medical Leave Act
The final DOL rule emphasizes that DOL is not returning to a system requiring employers to track FMLA leave in smallest increment allowed by payroll. Instead, rule specifically mentions that employers were “universally opposed” to eliminating varying increments and, therefore, DOL retained the current system.
MISCELLANEOUS FEDERAL LEGISLATION
Americans Widely Support Immigration Reform Proposals
Greatest support for employers’ verifying new hires’ legal status
At least two-thirds of Americans favor each of five specific measures designed to address immigration issues – ranging from 68% who would vote for increased government spending on security measure and enforcement at U.S. borders, to 85% who would vote for a requirement that employers verify the immigration status of all new hires. More than seven in 10 would vote for a pathway to citizenship for undocumented immigrants now living in this country.
Health Care Reform Issues
Next steps for employers:
-Employers and group health care plans continue implementation efforts.
-Await and focus on additional guidance from federal agencies.
-Review not just 2013 requirements but 2014 and beyond.
Next steps for employers in 2013
-Employers and group health care plans continue implementation efforts.
-Employer reporting on Tax Year 2012 W-2 forms (required).
-Health FSA changes - $2,500 cap.
-Medicare payroll taxes and retiree drug subsidies.
-Employer notifications.
Next steps for employers in 2014
-Employers mandate.
-Individual mandate.
-Automatic enrollment for new employees.
-State health insurance exchanges must be operational.
-Insurance reform requirements for grandfathered plans.
MISCELLANEOUS STATE LEGISLATION
There was no mention of any major workplace legislation in the State of Florida. Here are some examples of other state legislation that could get traction in Florida in the future.
- Off Duty Conduct– Policies by employers affecting off duty conduct is either illegal or severely restricted- California and 28 other states have these laws.
- Paid Sick Leave – trend is starting to develop in some employee friendly states.
- Criminal Background Checks – Barred in Mass. and the City of Philadelphia. Cal. limits the types of convictions that can be considered. Some states permit checks only after a conditional offer is made.
- Sexual Orientation Protection- 21 states protect, legislation proposed in Texas and Pa.
- Gender Identity Protection - 16 states protect, legislation proposed in Hawaii
- Discrimination Against Unemployed Job Applicants– Three states prohibit (North Carolina, Oregon and Colorado). Proposed legislation in Ohio and Pa.
- Discrimination Against Hiring Victims of Domestic Violence- NYC prohibits, Hawaii proposes legislation
- Discrimination Against Hiring the Homeless – Rhode Island prohibits, California proposes legislation.
- Workplace Bullying Laws- proposed in Mass. and Maryland.