d d leading people. leading organizations. the 114 th congress and the second term obama...

D

Leading People. Leading Organizations.

The 114th Congress and the Second Term Obama Administration: What Does it Mean for HR Professionals?

Michael P. Aitken, Vice President, SHRM Government AffairsWashington Outlook

Washington State Human Resources CouncilJanuary 28, 2015

HR PUBLIC POLICY / WASHINGTON OUTLOOK

2

Environment

Mentions of Jobs as Top U.S. Problem at Six-Year Low

Source: Gallup, January 14, 2015


3

Environment

Americans Rate Nurses Highest U.S. Views on Honesty and Ethical Standards in Professions

Source: Gallup, December 8-11, 2014


4

Most States Had 30 to 50 Percent Voter Turnout in 2014

Source: Michael P. MacDonald, “State Turnout Rates, 2010-2014,” United States Election Project, November 17, 2014.

Analysis• 2014 saw low voter turnout across the board, with seven states (UT, OK, TX, TN, MS, IN, NY) dipping below 30% turnout• Most midterm elections see lower rates of participation than general elections• In 2014 the lowest turnout rate in an individual state was Indiana with 28.0%, and the highest was Maine with 59.3%

30% to 40%

50% to 60%

OH

WVVA

PA

NY

ME

NC

SC

GA

TN

KY

IN

MIWI

MN

IL

LATX

OK

ID

NV

OR

WA

CA

AZ

NM

CO

WY

MT ND

SD

IA

UT

FL

AR

MO

MS AL

NE

KS

VTNH

MA

RICT

NJ

DE

MD

DC

AK

HI

2012 Voter Turnout Rate for Midterm Elections(by Voting-Eligible Population)

20% to 30%

40% to 50%


5

The Presidency

5

President Obama Job Approval

Source: Real Clear Politics, January 25, 2015


6

The Presidency

6

President Obama 2015 SOTU Pledges

Source: 2015 State of the Union Address, WhiteHouse.gov

Issue Area Pledge

Budget and Taxes• Work for tax reform which lowers taxes on working families and closes tax loopholes• Create a new tax cut of $3,000 per child per year to help reduce childcare costs• Work to simplify tax code on individuals and businesses• Increase top tax rates on capital gains and dividends

Climate/Energy • Will veto any bills which roll back environmental protections

Economy • Will veto any bills which attempt to further roll back Dodd-Frank• Help states adopt paid leave laws, and push for a federal bill providing seven days of paid leave• Push for gender-equal pay legislation• Push for an increased minimum wage

Education • Provide federal access to free community college• Work with Congress to help reduce monthly payment sizes of existing student loans• Extend internet access to every classroom

Health Care • Will veto any bills which remove access to health insurance• Launch Precision Medicine Initiative to advance disease cures and increase access to personalized medicine (similar to

House’s 21st Century Cures Initiative)

Immigration • Will veto any bills which roll back executive immigration actions

Infrastructure • Will push for bipartisan infrastructure plan in Congress• Expand internet access to all communities and assist development of faster networks

International Affairs

• Receive trade promotion authority from Congress• Push for closure of Guantanamo Bay• Urge Congress to pass an AUMF resolution against ISIL• Work for Iran nuclear deal (pledge to veto any additional sanctions bill)• Push for congressional action on cybersecurity legislation

Other • Protect net neutrality• Issue report on administration’s attempt to strengthen privacy protections in domestic surveillance programs


7

Proposed Rules Can Be Blocked By Public, Congress, the Courts

Source: National Journal Research, 2014; Katie Weatherford, “Attempts to Use Congressional Review Act for Proposed Rules Threaten All Public Safeguards,” Center for Effective Government, March 11, 2014.

Analysis• The public comment period is the main obstacle to finalizing a rule; comments from knowledgeable insiders can significantly alter or eliminate the rule• Congress can pass a Resolution of Disapproval under the Congressional Review Act to stop a regulation, but the president must sign it in order for the regulation not

to take effect; only one resolution of disapproval has ever been signed to halt a regulation• Opponents of a regulation can halt a rule’s enactment by successfully challenging the rule in court or lobbying for laws to limit the powers of enforcing agencies

Agency Proposes Rule

Public Comments on Regulation

Rule is Finalized/Publishe

d In Federal Register

If the rule is challenged in

court, a judge can prevent

enforcement with an injunction and

may eventually strike down the

rule

Congress may pass new legislation

restricting agencies’ ability to

enforce the rule

Process and Obstacles for Enacting and Enforcing Federal Rules

Congress/President Can Review

Rule is Enacted

An agency may decide to scrap the proposed

regulation after reviewing comments from interested

parties and other government officials

Congress may pass a Resolution of Disapproval

prior to the rule’s enactment, which, if signed by the

President, will void the rule

President OrdersCreation of Rule

CongressRecommends

Rule

Agency NoticesProblem

!


8

The Presidency

8

Race for 2016 is on… Republican Presidential Nomination

Source: Real Clear Politics, December 21, 2014


9

The Presidency

9

Race for 2016 is on… Democratic Presidential Nomination

Source: Real Clear Politics, December 21, 2014


10

Congress

U.S. Congress Starts Off Year with 16% Job Approval Congress’ Job Approval Ratings, Yearly Averages

Source: Gallup, January 13, 2015


11

CongressEvery State Legislature Is More Productive Than CongressLegend

OH

WV VA

PA

NY

ME

NC

SC

GA

TN

KY

IN

MIWI

MN

IL

LATX

OK

ID

NV

OR

WA

CA

AZNM

CO

WY

MT ND

SD

IA

UT

FL

AR

MO

MS AL

NE

KS

VT

NHMA

RICT

NJDE

MD

AK

HI

Congress Enacted 3% of Bills Introduced

in the 113th Congress

Analysis• As measured by the percentage of bills introduced that were enacted as law, every state legislature was more productive than Congress in

2014• The least productive state legislature, Minnesota, enacted 5% of all introduced bills, which was still higher than Congress’ 3% rate• Although comparisons are difficult because not all bills are of equal importance, these percentages illustrate the relative ease with which

state legislatures pass laws compared to Congress• Whereas Congress has experienced years of gridlock and divided government, many state governments are unified under one party and have

simpler procedures for drafting and passing legislation

0-10%

10-25%

25-50%

>50%

Sources: National Journal Research; GovTrack.us; StateNet.com.

Percentage of Bills Enacted as Law in Most Recent Legislative Session


12

Congress

Americans’ Priorities for the New Congress

Source: Gallup, November 5, 2014


13

Source: National Journal Research; CNN Election Center; New York Times.

Republicans Win Record Majority in House

Analysis• Republicans won a total of at least 246 seats in the House, their largest majority since 1928• An expanded GOP majority in the House means that Speaker Boehner will have an easier time passing legislation

in the House without Democratic support, and Republicans will also have an easier time holding on to their majority in future elections

Control of the 113th House (2012-2014)

Democratic

Republican

Control of the 114th House (2014-2016)

AK

Total SeatsDemocrats: 188

Republicans: 247

188 247

AK


Republicans: 234

201 234

Congress


14

Congress

Racial Composition of the 114th Congress

Source: Washington Post, January 5, 2015


15

Congress

Gender Composition of the 114th Congress

Source: Washington Post, January 5, 2015


16

Source: National Journal Research; CNN Election Center; Associated Press; NBC News.

Republicans Win Solid Majority in Senate

Analysis• Having won most of this year’s competitive races, Republicans secured 54 Senate seats, flipping the Senate from blue to

red• A GOP win in Louisiana was announced on December 6, 2014• Since Republicans expanded their majority to 54 seats, they will have an easier time passing legislation in the Senate

because they will need fewer Democratic defections to overcome filibusters (which require a 60 vote supermajority)

Control of the 113th Senate (2012-2014)

Democratic

Republican

Independent

Control of the 114th Senate (2014-2016)


Republicans: 54Independents: 2

44 54


Republicans: 45Independents: 2

53 45

2 2

Congress


17

Union supported legislation not even on the stove; but may see Republican approaches to:

Compensation Equity Workplace Flexibility Labor-Management

President Obama in SOTU promised an aggressive regulatory and executive approach:

Proposed 541 Overtime Regulation. EEOC Guidance on Pregnancy Discrimination. Executive Order on Compensation Data Collection for Federal Contractors. Executive Order on Non-Retaliation for Disclosure of Compensation Info. Executive Order on Sexual Orientation and Gender Identity. Executive Order on Fair Pay and Safe Workplaces. Presidential Memorandum on Paid Family Leave for Federal Employees.

2015 Public Policy Agenda – Labor and EmploymentLabor-Management/Civil Rights Issues


18

2015 Public Policy Agenda – Labor and Employment

Full NLRB Board will mean increased activity:

“Revised” Ambush Election Rule / Specialty Health Care / D.R. Horton.

SHRM will an advocacy leadership role on many of these in the 114th Congress and in the executive branch:

FLSA Overtime Rules NLRB Ambush Regulations FAR Proposed Regulations Compensation Equity Workplace Flexibility

Labor-Management/Civil Rights Issues


19

Working Families Flexibility Act (H.R. 465)


Legislation reintroduced in the House by Representative Martha Roby (R-AL) that amends the Fair Labor Standards Act to allow private-sector employers to provide comp time, giving these employers the option of offering their hourly employees the choice of compensatory time off or pay for overtime hours worked.

The act requires an employee to have worked a minimum of 1,000 hours within the last 12 months to be eligible for comp time.

The legislation allows employees to accrue up to 160 hours of compensatory time a year and to “cash out” unused comp time within specified periods of time.


20

Employers are permitted to offer a comp time program only if it is part of a collective bargaining agreement or the employer and employee voluntarily agree in writing to the program prior to the performance of work.

Employers are required to cash-out unused comp time at the higher of the regular rate at which time was earned or the final regular rate.

SHRM is leading the effort on the Working Families Flexibility Act.

Senate companion legislation is expected to introduced by Senator Mike Lee (R-UT) in the next few weeks.



21

National Labor Relations Board Final Rule to Amend Representation Election Procedures Final rule was reissued by the NLRB in the Federal Register on December 15

and is nearly identical to regulations proposed in 2011. The Rule is scheduled to go into effect on April 14, 2015.

The rule revises the process for union representation elections, expediting the period of time between the filing of NLRB election petition and the election itself. The regional director could set a pre-election hearing to begin seven days after a hearing notice is served and a post-election hearing 14 days after the tally of ballots.

Provides for the electronic filing and transmission of election petitions.

Employers will be required to turn over private employee information to the NLRB and the petitioning party, including employee telephone numbers and e-mail.



22

SHRM filed a lawsuit on January 5 challenging the legality of the rule. In particular, the lawsuit raises the following issues:

Shortened time frame between the filing of an NLRB representation case petition and election;

Failure to establish a record supporting new election rules; Detrimental changes to the Board election proceedings and; Changes to voter list rules infringe on employee privacy rights.

Some 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.

SHRM member Roger King of Jones Day testified before the NLRB on April 10 on these issues.

SHRM member Steve Browne also testified before the House Education and Workforce committee on the rule in March.



23

Department of Labor Proposed Rule to Amend 541 Overtime Regulations President Obama sent a presidential memorandum to the Department of Labor

(DOL) on March 13, directing the Agency to “modernize” and “simplify” the Section 541 rules.

Under the FLSA 541 Regulations, an employee qualifies as exempt from overtime if he or she satisfies a “duties test” (under the Executive, Administrative, Professional, Computer and Outside Sales regulations) and the employee is paid on a “Salary Basis.”

Although we have not seen a proposal, we understand the changes may include doubling the “Salary Basis” amount from $455 dollars a week ($23,660 annually) to $910 dollars a week ($47,320 annually).



24

Proposal will also modify the “duties test” making changes to definitions and possibly changing key terms and elements, particularly in the “primary duty” area.

DOL held a series of listening events over the last several months, four specifically with SHRM and our members.

Proposed rule is anticipated to be released by DOL in the first quarter this year.



25

Department of LaborExecutive Order on Fair Pay and Safe Workplaces Act under the Federal Acquisition Regulations

Signed by the President on July 31, the Executive Order requires prospective federal contractors and their subcontractors (with contracts valued at more than $500,000) to disclose to the government, labor violations of 14 different federal and state labor laws and the equivalent state laws that occurred during the previous 3-year period of time.

Laws covered include the FLSA, OSHA, the NLRA, Davis Bacon, the Service Contract Act, 503 of the Rehabilitation Act, USERRA, FMLA, Title VII of the Civil Rights Act, the ADA, ADEA; among others.

Contractors must disclose whether any of the following has been rendered against them for:

Administrative merits determinations. Arbitral awards or decisions. Civil judgments.



26

Federal contractors would also be required to disclose to each individual employee their particular classification as an independent contractor or employee.

The order would also prohibit employers with federal contracts of at least $1 million from requiring employees from entering into pre-dispute arbitration agreements for disputes arising out of Title VII of the Civil Rights Act or from torts related to sexual assault or harassment.

The FAR Council and DOL are directed to issue regulations within 90 days. The Executive Order is effective immediately but applies to any contracts entered into on or after final regulations go into effect.



27

2015 Public Policy Agenda – Health Care Reform

Supreme Court will hear case on the constitutionality of health care credits for coverage purchased through public exchanges in King v. Burnell.

Successful PPACA repeal in 2015 unlikely but 114th Congress will pursue several changes:

Definition of Full Time Application of Excise Tax

Second PPACA enrollment period for exchanges is between November 15-February 15.

Congressional oversight and regulatory guidance continues.

Tax-deferred status of health care benefits could become a target in tax reform in the next congress.

Health Care Reform Issues


28

Source: Department of Health and Human Services, 2014.

28



29

2015 Health Care Premium Rates Generally IncreasingAverage 2015 Health Care Premium Rate Increases by State

Sources: PricewaterhouseCoopers, “A preliminary look at 2015 individual market rate filings,” August 7, 2014.

Analysis• 27 of 29 of states with publicly available data look to have some degree of premium increase; of those, 11 will

see an increase of between four and eight percent• Two states, Rhode Island and Oregon, will have lower premium rates in 2015 than in 2014

99%

0.87%

0.06%

OH

WVVA

PA

NY

ME

NC

SC

GA

TN

KY

IN

MI

WI

MN

IL

LATX

OK

ID

NV

OR

WA

CA

NM

CO

WY

MT ND

SD

IA

UT

FL

AR

MO

MS AL

NE

KS

VT

NH

MARICT

NJ

DEMD

DC

HI

AK

-2.5%-0%

0%-4%

4%-8%

8%-12%

12%-16%

>16%AZ



30

Save American Workers Act (H.R. 30)

Legislation will be reintroduced introduced in the Senate by Senators Susan Collins (R-ME) and Joe Donnelly (D-IN) and in the House by Representatives Todd Young (R-IN) and Dan Lipinski (D-IL) to amend the Internal Revenue Code to:

Modify the definition of “full time” for the hours worked requirement for health care coverage under the Patient Protection and Affordable Care Act from 30 hours a week to 40 hours.

Clarify that the number of hours counted toward a "full-time equivalent" employee to be 174 hours per month as opposed to 120 hours per month under current law.

The House passed the bill on a bipartisan vote of 252 to 172 on January 8 and was referred to the Senate. SHRM supports the measure.

President Obama has threatened to veto the legislation. 30



31

2015 Federal Budget Process

A “CRomnibus” was signed into law to fund most of the government through 2015 but it will only fund immigration-related programs for a few months in attempt to block President Obama’s Executive Order on Immigration.

Federal National Debt

Better than anticipated short term deficit in 2015 but current federal debt is $18 trillion dollars. Deficit projected to hit $1.1 trillion a year by 2025.

Debt ceiling expires in March 2015 and will need to be extended.

Tax Reform

Congressional leaders and White House have signaled that tax reform is an area of potential bipartisan work in the 114th Congress.

Significant changes to employer sponsored benefits are part of the tax reform discussion.

2015 Public Policy AgendaTax and Benefits Issues


32

Tax Increase Prevention Act of 2014 (P.L. 113-295)

Signed into law by President Obama on December 19, the law retroactively extends several tax provisions through December 31, 2014. Theses include:

Employer-provided transit and vanpool benefits from $130 to $250; Employer wage credit for activated military reservists; Work Opportunity Tax Credit, which allows businesses to claim a tax credit equal to

40 percent of the first $6,000 of wages paid to new hires of one of eight targeted groups;

Employer wage credit for activated military reservists;

The law also allows sponsors of multi-employer pension plan to take an additional five years to amortize their funding shortfalls to these plans. Multi-employer plans that are deemed in “endangered status” (generally less than 80% funded) or “critical status” (generally less than 65% funded or the plan is expected to become insolvent within a certain period) are provided additional flexibility in meeting their funding obligations. These provisions both expire on December 31, 2015.

Tax and Benefits Issues


33

Exclusions from Taxable Income Account for Most Tax Expenditures

Analysis • The top 10 most expensive tax expenditures will cost the federal government roughly $900B in FY 2013• Both Republicans and Democrats have recently considered eliminating or limiting these tax breaks as a way to

generate revenue

Exclusions from Taxable Income

FY 2013 Cost of Major Tax Breaks

Tax Deductions Preferential Rates on Capital Gains and Dividends

Tax Credits

Employer-sponsored

health insurance

$248B

Pension contributions and earnings

$137B

Capital gains on assets

Social Security and other benefits

State and local taxes$77B

Mortgage interest

$70B

Charitable contributions

$161B

$39B

$43B

$33B

Earned income tax credit

$61B

Child tax credit$57B

Total$461B

Total$186B

Total$118B

Total$161B

Tax and Benefits Issues


34

President Obama signed an executive order on November 21 granting temporary, legal status for up to 5 million undocumented aliens.

Executive order will allow undocumented aliens to live and work in the United States under a deferred action program.

President Obama has threatened a veto over any attempt by Republican leaders in Congress to rollback the executive order.

The 114th Congress is unlikely to move forward on “comprehensive immigration” but could consider a series of focused immigration bills on border security, worksite enforcement and possibly, Green Card reform.

The SHRM/Council for Global Immigration partnership is part of the dialogue and advocacy effort.

Immigration Reform Issues

2015 Public Policy Agenda – Immigration Reform


35

Immigration Executive Action Refocuses Deportation Efforts, Expands Work Authorization

Pillar of Reform Actions Taken

Keep families together and protect those who came to the U.S. as children

• Expands DACA (deportation relief for undocumented immigrants who entered the country prior to the age of 16) to those who are currently older than 30 and to those who entered the U.S. before Jan. 1, 2010

• Creates Deferred Action for Parents (DAP) for immigrants who entered the U.S. before January 1, 2010 and have at least one child who is a U.S. citizen or green card holder

• Grants, under DACA and DAP, work authorization and 3 years of deportation relief for successful applicants• Provides provisional waivers of unlawful presence to individuals who have resided in the U.S. for at least 180

days and are the children of U.S. citizens or the spouse or children of lawful permanent residents

Change deportation priorities to target severe offenders

• Reforms “Secure Communities” program (current Administration policy on immigration enforcement, requiring local authorities to send information of any individual arrested and fingerprinted to be sent to Homeland Security for potential deportation) to only focus on deporting serious criminals and repeat offenders

• Targets immigrants who have entered the U.S. or were already ordered to be deported in 2014

Modernize immigrant and nonimmigrant visa programs and applications

• Clarifies and investigates a number of rules regarding visa availability and national interest waivers• Authorizes parole, on a case-by-case basis, to eligible investors, researchers, and entrepreneurs, who would

otherwise be ineligible for a national interest waiver• Allows application fees to be paid by credit card

Key Provisions in President Obama’s November 2014 Executive Action on Immigration

Analysis• President Obama signed the executive order in response to outcry from members of the Democratic base and Latino communities

frustrated at a lack of progress on immigration after the 2012 election cycle• The executive action has faced limited criticism from a policy perspective, but backlash regarding potential executive overreach from

Republicans in Congress (particularly given the timing of the order immediately following major Democratic losses in the 2014 elections) looks to be setting up a fight in the 114th Congress to potentially repeal the action


36

The States will Keep Legislating on Immigration


37

CFGI And SHRM will Continue to Educate and Advocate

RECRUIT AND RETAIN TALENT TOOLS TO HIRE A LEGAL WORKFORCE


39

Our Greatest Asset – Our Members!

SHRM Advocacy Team: Shaping HR Public Policy


40

Developed to ensure when policy decision-makers (legislators, regulators, etc.) develop workplace policy, the voice of HR is heard via a “local network”

Since elected officials are most responsive to their constituents, informs legislators of policy impacts upon employers in her / his district

SHRM members best understand / are best suited to communicate how public policy affects employees, employers & the HR profession as a whole

SHRM members are constituents with an interest in policy that will sway legislators and develop credible and influential relationships with elected officials

The SHRM A-Team


41

There are two opportunities for engagement in the A-Team:

Advocacy Captain – As a current (or former) HR practitioner, you volunteer to serve as the HR advocacy point person in the congressional district in which you reside, as the official liaison to your member of Congress and staff. Working closely with SHRM’s Government Affairs Team, you agree to communicate regularly with your lawmaker’s office on key workplace issues of focus, and participate in A-Team trainings and events throughout the year.

HR Advocate – You agree to serve in a supporting role with your Captain and fellow A-Team members, participating in SHRM’s periodic informational webinars and in the face-to-face meeting(s) with your legislator, sharing any particular workplace issue expertise you might have on timely HR issues of legislative focus.

Both positions are eligible for recertification credit annually.

The SHRM A-Team


42

A-Team Statistics: January 2015

7,625+ active members 391 Advocacy Captains designated

across the country in 50 states. 14 Captains in

Washington=Complete!


43

THANK YOU! Current Washington State A-Team Advocacy Captains

First Name Last Name City Member of Congress – A-Team Captain

Theresa Chow Richland Rep. Dan Newhouse (REP-WA-04)

Shellene Cook Bonney Lake Rep. Dave Reichert (REP-WA-8)

Gary Danberg Bellevue Sen. Patty Murray (DEM-WA)

Jennifer Dawson-Miller Tacoma Rep. Denny Heck (DEM-WA-10)

Karin Edenholm Seattle Rep. Jim McDermott (DEM-WA-7)

Eileen Griffin Richland Rep. Dan Newhouse (REP-WA-04)

Mary Ludden Snohomish Sen. Maria Cantwell (DEM-WA)

Patrice McSherry Mercer Island Rep. Adam Smith (DEM-WA-9)

Amy Robinson Vancouver Rep. Jaime Herrera Beutler (REP-WA-3)

Abbi Rudolph Montesano Rep. Derek Kilmer (DEM-WA-6)

MaryAnn Sailors Bothell Rep. Rick Larsen (DEM-WA-2)

Nancy Slotnick Tacoma Rep. Denny Heck (DEM-WA-10)

Diane Toomey Redmond Rep. Suzan DelBene (DEM-WA-1)

Caroline Wyatt Liberty Lake Rep. Cathy McMorris Rodgers (REP-WA-5)

45

SHRM 2015 EMPLOYMENT LAW & LEGISLATIVE CONFERENCE

Hear from thought-provoking, informed keynote speakers who will help change your outlook, open your mind to new ideas and advance your career.

KEYNOTE SPEAKERS

CHUCK TODDHost of “Meet the Press” and NBC News Political Director

SALLIE KRAWCHECKOne of the Most Respected Voices on Wall Street and Owner of Ellevate

DAN ABRAMSLegal Analyst for ABC News; CEO, Abrams Research;And Founder/Publisher, Mediate.com

MIKE AITKENSHRM's Vice President of Government Affairs

REGISTRATION BEFORE JANUARY 16, 2015 FOR THE EARLIEST RATES!conferences.shrm.org/legislative


46

46

Michael P. AitkenVice President, Government Affairs

[email protected]

+1-703-535-6027

1800 Duke StreetAlexandria, VA 22314Twitter: @SHRMVPAitken

d d leading people. leading organizations. the 114 th congress and the second term obama...

Documents

tax rates

state turnout rates

hr professionals

federal access

internet access

tax reform

tax loopholes

tax code