Immigration reform, the implementation of the Patient Protection and Affordable Care Act (PPACA) and legislation calling for the raising of the minimum wage are some of the pressing public-policy issues HR professionals should be keeping track of in 2013, said Michael P. Aitken, pictured above, vice president of government affairs for the Society for Human Resource Management (SHRM).
Speaking March 11, 2013, at the SHRM Employment Law & Legislative Conference in Washington, D.C., Aitken presented the workplace regulatory agenda and HR public-policy initiatives that President Barack Obama and the 113th Congress will put forward in 2013 and what the implications are for the workplace.
The current fiscal year 2013 budget projects a deficit of more than $1 trillion for the fifth consecutive year and a U.S. national debt of more than $16.4 trillion, leading lawmakers to take up tax reform and deficit reduction efforts. Because of their tax-deferred status, employee benefits generate the largest annual loss in revenue to the federal treasury, according to the Congressional Budget Office. As a result, it is expected that public-policy efforts to reform the tax code and bring down the federal deficit will involve an examination of employer-sponsored retirement and health care plans, Aitken said. Additionally, other employer-provided benefits, such as transit and education assistance, could be re-examined as part of comprehensive tax reform.
“These are certainly going to be part of the conversation,” he said. “When you go back home you’ll need to talk to the folks in your organization about how those changes might affect your ability to recruit, retain and compete in the 21st century.”
A recent Gallup survey found that 71 percent of respondents backed raising the minimum wage to $9. President Obama made the proposal in his 2013 State of the Union Address.
“SHRM has not traditionally engaged in the minimum wage issue, but it is one of those issues that will be featured a lot during this congressional term,” said Aitken.
House and Senate Democrats have proposed increasing the minimum wage by $2.85 an hour in three increments, ultimately reaching $10.10 two years after enactment. They’ve also proposed annually indexing the minimum wage to inflation based on the Consumer Price Index and increasing the minimum wage for tipped employees.
“There’s talk of this moving quickly,” said Aitken, especially in the Senate. “The prospects of passage in the House are much more limited, but I could see this gaining some traction and interest in this current environment.”
SHRM doesn’t expect much labor legislation to move in the 113th Congress, said Aitken, but he told those in attendance to pay attention particularly to labor initiatives of the Department of Labor (DOL) and the Equal Employment Opportunity Commission (EEOC).
Possible regulatory activity in 2013 includes:
- Proposed affirmative action regulations regarding people with disabilities.
- Proposed affirmative action regulations regarding veterans.
The EEOC’s Strategic Enforcement Plan, released December 2012, highlighted several priorities:
- Eliminating barriers in recruitment and hiring.
- Protecting immigrant, migrant and other vulnerable workers.
- Enforcing equal pay laws.
- Preserving access to the legal system.
- Preventing harassment.
There’s nothing unexpected about this guidance, said Aitken. The plan serves as a heads-up, because these are the areas the agency will likely focus on.
“They’ll be looking at an employer’s use of criminal background checks, whether or not your employment applications discriminate against the unemployed, and looking at sexual orientation and gender identity harassment,” he said.
Department of Homeland Security (DHS) Secretary Janet Napolitano recently said that immigration reform is the president’s No. 1 issue. In addition, bipartisan groups in both the House and Senate have been working to develop legislative proposals to reform the immigration system, making it likely that some type of immigration reform could occur during the 113th Congress.
“These are the best prospects for comprehensive immigration reform we’ve seen since 2006-07, but the devil will be in the details,” said Aitken.
SHRM and its affiliate, the American Council on International Personnel (ACIP), support:
- A mandatory federal electronic employee verification system, based on E-Verify.
- Some pathway to citizenship for undocumented individuals who are currently illegally in the U.S.
- Reform of the green card process, which could include making green cards available by eliminating backlogs and per-country limits and by ultimately providing a market-based cap.
- Reform of the temporary visa programs.
“ACIP is taking a chunk of the lead on immigration reform efforts this year,” said Aitken.
He reminded the audience that DHS released the new, revised Form I-9 March 8, 2013.
“That I-9 is different from the old one, and you do have to start using it within 60 days,” he said.
Health Care Reform
HR needs to really pay attention to the regulations rolling out regarding PPACA, Aitken said. The 2012 election did not change the implementation of PPACA, and efforts to repeal it will not be successful, he said. As the regulations continue to roll out, “we have seen an uptick in questions coming in to the SHRM Knowledge Center about health care.”
“What you really need to think about is where you want to be in terms of health care as a part of your compensation package, not just in the next 12 months but even in the next five years,” he said.
Executive agencies have been promulgating regulations and guidance to implement many of the PPACA’s provisions that address employer requirements. While several elements of the law already have gone into effect, both the individual mandate and the mandate for employers to provide health care coverage become effective in 2014.
According to a recent Gallup survey, fewer Americans reported having employer-based health coverage in 2012 than in 2008, 2009 and 2010. The percentage is slightly down from 2011.
But the majority of employers still offer health coverage—right now.
“I suspect that most employers are taking a longer-term view and seeing what happens as PPACA is implemented in its full force before they make their decisions,” Aitken said.
SHRM is looking at a couple of proposed rules that have come out this year:
The Internal Revenue Service (IRS) issued a proposed rule on Jan. 2, 2013, which applies to large employers (50-plus employees), making them subject to a penalty if they fail to offer full-time employees minimum essential coverage or they offer coverage but one or more full-time employees qualifies for a tax credit to buy insurance on the exchange.
SHRM is making suggestions to the IRS on allowing a safe harbor for new employers setting up a benefits package and allowing employers to exempt certain types of employees from the count (for example, minor dependents or employees covered under the policy of another family member).
A Department of Health and Human Services (HHS) proposed rule on the verification of health care subsidy eligibility is another opportunity for SHRM to comment, Aitken said.
Exchanges must verify whether applicants seeking tax credits to buy coverage on an exchange are enrolled or eligible for an employer-sponsored plan. The proposed rule defines how regulators will do that, how employers will be notified, and the process for appealing the determination. This will be key for employers because penalties are measured on a per employee basis.
SHRM believes that the United States must have a 21st century workplace flexibility policy that meets the needs of both employers and employees, Aitken said. The Society has partnered with the Families and Work Institute to educate employers about the business benefits of workplace flexibility and encourage the voluntary adoption of flexible workplace strategies through a joint initiative known as “When Work Works.” The Sloan Award for Excellence in Workplace Effectiveness and Flexibility, which recognizes model employers of all types and sizes for their innovative and effective workplace practices, is offered through this program.
“The Obama administration continues to work with SHRM and others on voluntary initiatives to try and move employers to adopt flexible work programs and we do expect to see ‘comp time’ legislation in the House this year,” he said.
Roy Maurer is an online editor/manager for SHRM.
Follow him at @SHRMRoy