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LAS VEGAS—The Obama administration is gliding toward the end of its second term, looking to lock up unfinished policy matters such as revision of the Fair Labor Standards Act (FLSA) rules and expedited union elections, as Republicans and Democrats gear up for the 2016 presidential elections, reflected Michael P. Aitken, the Society for Human Resource Management’s (SHRM’s) vice president for government affairs, at his June 29, 2015, concurrent session on “The Washington Outlook” at the SHRM 2015 Annual Conference & Exposition.
“President Obama in his last State of the Union address promised an aggressive regulatory and executive approach” during his final years in office, Aitken said. Major federal agency actions include soon-to-be-issued regulations from the Department of Labor limiting professional exemptions under the FLSA, recent Equal Employment Opportunity Commission (EEOC) regulations limiting financial incentives in workplace wellness programs and EEOC guidance on pregnancy discrimination.
“Many issues are being teed up for 2016 should Democrats win the presidency, especially if Congress flips to the Democrats,” Aitken said. The Democrats’ wish list includes measures to advance fair pay and labor-management relations.
SHRM has taken an advocacy leadership role on many of these issues, including leading employer coalitions on the FLSA overtime rules and workplace flexibility. On proposed House amendments to the Federal Acquisition Regulations (FAR) that would prevent organizations with FLSA violations in the past five years from being awarded federal contracts, “SHRM strongly opposes the amendments as they circumvent already-established procurement and debarment procedures in the FAR and would unfairly prevent a significant amount of employers from competing for federal contracts,” Aitken said.
SHRM is also leading efforts on the proposed Working Families Flexibility Act, which would give private-sector employers the option of offering their hourly employees the choice of compensatory time off or pay for overtime hours worked.
SHRM has taken an active stance on the National Labor Relations Board (NLRB) “ambush” union election regulations. A final rule reissued by the NLRB in December went into effect on April 14, 2015. The rule revises the process for union elections, expediting the period of time between the filing of an NLRB election petition and the election itself. “SHRM filed a lawsuit on Jan. 5 challenging the legality of the rule, and 96 SHRM state councils and chapters and over 4,600 individual members submitted their own comments to the NLRB during the comment period on the rule,” he noted.
In light of this month’s Supreme Court ruling upholding federal subsidies under the Affordable Care Act (ACA), “if you’re still waiting to see what’s going to happen with the law before complying with all of its coverage and reporting requirements, it’s time to get moving,” Aitken said.
The Supreme Court ruling ended one of the last substantive challenges to the law, he said, which would now be “very difficult to repeal, even with a Republican president and Congress.” However, changes to aspects of the law felt to be most onerous to employers are possible and could even be passed on a bipartisan basis (although they could still face a presidential veto). For instance, SHRM is taking a leadership role in efforts to repeal the looming 40 percent excise tax on high-value health plans, set to take effect in 2018.
Another possible revision would increase the definition of full-time worker under the ACA from the statute’s current 30 hours of work per week to the more-traditional 40-hour workweek, as proposed in the House’s Save American Workers Act and the Senate’s Forty Hours Is Full Time Act. “A possible compromise that could attract Democratic support would be a number between 30 and 40,” Aitken noted.
The Preserving Employee Wellness Programs Act, introduced in the House, reaffirms that the ACA allows employers to offer wellness programs that are tied to a financial reward for employees who participate. The bill also clarifies that an employee’s spouse may participate in such programs as well. SHRM supports the legislation.
While President Obama signed an executive order in November 2014 granting temporary legal status for up to 5 million undocumented aliens, Congress is unlikely to move forward on comprehensive immigration reform but may see a series of focused immigration bills on border security, worksite enforcement and possibly green card reform. Meanwhile, the H-1B visa statutory cap of 85,000 was hit in April, with the number of applications exceeding 200,000, Aitken said.
The E-Verify system for checking the legal status of workers will expire at the end of the year, absent congressional reauthorization.
“SHRM and its strategic affiliate, the Council for Global Immigration, is part of the dialogue and advocacy effort on immigration reform,” he noted.
“Mandated paid leave continues to be a focus of the Obama administration, Congress and advocacy groups,” Aitken pointed out, “but the real action on this issue is happening on the state level.” Several states and localities have enacted paid-sick-leave requirements, he noted, including California, Connecticut and Massachusetts. Meanwhile, some have mandated paid-family-leave insurance programs, including California, New Jersey, Rhode Island and Oregon.
On the tax reform horizon, one potential target for new revenue is by paring down federal tax exemptions on employee benefits. For instance, the deduction for employer-sponsored health insurance amounts to $248 billion annually, and deductions for employer-sponsored retirement plan contributions and earnings amount to $137 billion. “Both Republicans and Democrats have recently considered eliminating or limiting these tax breaks as a way to generate revenue,” Aitken warned.
CEBS, is an online editor/manager for SHRM. Follow him on Twitter
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