Recently, the Employers Counsel Network (ECN) met in Alexandria, Virginia, where several notable speakers stopped by to provide their insights on current developments in the employment arena at the national level and to share their predictions for President Barack Obama’s second term. The first post looked at the personnel turnover at federal agencies, the extensive reach of the Occupational Safety and Health Administration’s Directorate of Whistleblower Protection Programs (DWPP), and enhanced enforcement efforts from the Office of Federal Contract Compliance Programs. The second post focused on how the National Labor Relations Board (NLRB) keeps pushing forward with its agenda despite questions about the legitimacy of the current Board as well as recent operational changes at the Equal Employment Opportunity Commission (EEOC). This post will detail information about federal legislative issues and bills provided in the ECN sessions.
Economy, jobs remain top concerns
Partisan rancor continues to fester in Washington, D.C. According to Michael Aitken, vice president of government affairs for the Society for Human Resource Management (SHRM), both communism and the late Hugo Chavez currently poll more favorably than Congress. Despite the attention gun control and immigration reform have received of late, few Americans view either as among the nation’s top problems. The top issues continue to be the economy in general and unemployment and jobs, followed by the federal debt and health care.
Federal legislation on comp time
U.S. Representative Martha Roby (R- Alabama) has introduced legislation to amend the Fair Labor Standards Act (FLSA) to allow private-sector employers the option to give their hourly employees the choice of compensatory time off (at time and a half) or pay for overtime hours worked. State and federal government employers already have the ability to use comp time, but the FLSA currently prevents private employers from offering it to their employees.
Also known as the Working Families Flexibility Act, HR 1406 would require an employee to have worked a minimum of 1,000 hours within the last 12 months to be eligible for comp time. It would allow employees to accrue up to 160 hours of comp time a year and “cash out” unused comp time within specified periods of time. Employees would be permitted to use their accrued comp time upon request within a reasonable time, provided their use of comp time wouldn’t unduly disrupt the employer’s operations. SHRM supports the bill, but it is currently opposed by unions.
Increasing the minimum wage
Seven in 10 Americans now say they would support raising the federal minimum wage to $9 an hour. The Fair Minimum Wage Act (S 460 and HR 1010) has been introduced in both the Senate and the House. The Act would amend the FLSA to incrementally raise the federal minimum wage to $10.10 over the next two years. The minimum wage would then be indexed annually to account for inflation. The proposed legislation also would increase the minimum wage for tipped employees incrementally so that it would eventually be 70% of the regular minimum wage.
Immigration reform
The Border Security, Economic Opportunity, and Immigration Modernization Act of 2013 (S 744), introduced in the Senate by the “Gang of Eight,” proposes a comprehensive overhaul of the nation’s immigration laws, including enhanced employment verification requirements. The legislation would add several new steps to the verification process, raising concerns about its burdensomeness. For example, an employer would attest on a new “form” that it had verified a new hire’s employment and identification status by examining certain documents.
In addition, the bill would require employers to verify the identity of each person hired using the “photo tool” program or another identity authentication program to check that the individual hadn’t stolen anyone’s identity. The photo tool program is an enhancement to the U.S. Citizenship and Immigration Services’ (USCIS) E-Verify system. It’s designed to help employers comply with immigration law by detecting some forms of identity fraud in the employment eligibility process.
The proposed legislation also would clear the current green card backlog and would increase the H-1B visa cap to 110,000 per year. Employers would be required to post job openings on the Department of Labor’s (DOL) website for 30 days and attest to the nondisplacement of U.S. workers for 90 days before and after filing the Labor Certification Application (LCA). It would create a new three-level prevailing wage system for most employers, effectively adjusting wages upward. There’s concern that under the proposal, employers would pay their foreign national workers more than their U.S. workers.
NLRB and Noel Canning
The House recently passed the Preventing Greater Uncertainty in Labor-Management Relations Act (HR 1120) in response to the D.C. Circuit’s Noel Canning ruling. The bill prohibits the National Labor Relations Board (NLRB) from taking any action that requires a quorum of its members until it actually has a quorum. It also prohibits the NLRB from implementing, administering, or enforcing any decisions finalized on or after January 4, 2012. The bill isn’t expected to be passed by the Senate; it was intended to send a message to the Obama administration.
Taxes and benefits
The American Taxpayer Relief Act was passed by Congress on January 1, 2013, and signed into law by the president on January 2. The bipartisan tax deal didn’t address tax reform or the debt limit, but it revised tax rates on high earners, modified the estate tax, and extended the Bush-era tax cuts. The Act also extends, among other things:
- Internal Revenue Code Section 127, allowing employers to provide up to $5,250 per year tax-free in tuition, fees, and books to employees for undergraduate and graduate-level courses;
- The provision giving employers a tax credit of up to $150,000 for acquiring, constructing, rehabilitating, or expanding property used for a childcare facility;
- The exclusion from income of up to $10,000 in adoption expenses paid through an employer assistance program; and
- An increase in the monthly exclusion for employer-provided transit and vanpool benefits (through December 31, 2013).
Lobbyists for employers are closely watching all proposals relating to the tax treatment of employer-operated health insurance plans. SHRM’s Aitken suggested at the ECN meeting that the easiest solution would be to place a maximum limit on the amount of deductions rather than seeking to rewrite the tax code.
Bottom line
Despite congressional gridlock, the DWPP, the OFCCP, the NLRB, and the EEOC continue to push ahead with President Obama’s agenda for his second term. Employers should keep an eye on developments in the employment arena because the months ahead look to be full of significant changes and challenges.
Sophie E. Zdatny is an attorney with Dinse, Knapp & McAndrew, P.C. in Burlington, Vermont. She has a general litigation practice in both state and federal court, with a concentration in insurance coverage and employment law. She may be contacted at szdatny@dinse.com.