Washington Outlook for HR Public Policy
Michael P. Aitken
SHRM Vice President of Government Affairs
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Washington Outlook for HR Public Policy
Environment
Americans name
dissatisfaction with
Government as top
problem
Source: Gallup, April 13, 2017
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Washington Outlook for HR Public Policy
The Presidency
President Trump
Job Approval
Source: Real Clear Politics, April 18, 2017
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Washington Outlook for HR Public Policy
Environment
•
“America First” running headlong into domestic and international
realities, priorities and responsibilities:
➢Syria
➢North Korea
➢Russia
•
Governing in the majority is proving to be difficult:
➢ Complicated “stuff”
➢ Freedom Caucus vs. Main Street Republicans
➢ Slim majority in the Senate
➢ Hyper-partisan environment in Washington
•
Early legislative efforts on health care reform may be a preview of
things to come on:
➢ Fiscal Year 2017 Spending Bill
➢ Health Care Part II
➢ Tax Reform
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Washington Outlook for HR Public Policy
Congress
Congress approval
drops to 20%
after February high
Source: Gallup, April 11, 2017
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Washington Outlook for HR Public Policy
Congress
House of Representatives
House Republicans control the House with
238 Republicans to 193 Democrats; 4 vacancies.
•
•
•
•
Why control of the House is important:
Oversight hearings;
All tax legislation must originate in the
House;
Party in control of House tightly controls
policy and;
Need 2/3 of House to override a presidential
veto.
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Washington Outlook for HR Public Policy
Congress
Since 1862 the
President’s Party has
lost ground in the
House in
36 of 39
midterm elections
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Washington Outlook for HR Public Policy
Congress
U.S. Senate
Republicans control the Senate in the 115th Congress
with 52 Republicans to 46 Democrats, and
2 Independents.
Why control of the Senate is important:
• Oversight hearings;
• Confirms presidential appointments and
judges with simple majority;
• Approves treaties and;
• Magic number for control in the Senate
is 60, not 51. Need 60 votes to ensure
agenda moves forward.
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Washington Outlook for HR Public Policy
Congress
U.S. Senate
The President’s Party
has lost Senate seats in
19 of 26 midterms;
only gains occurred
during the President’s
first term
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Washington Outlook for HR Public Policy
Labor-Management/Civil Rights Issues
•
President Trump announced a freeze of all federal regulations for
60 days.
➢ The “2 for 1” Rule
– Creates a Regulatory Reform Office in each agency
– Reports due to agency heads in 90 days
– Focus on regulations that eliminate/inhibit jobs, outdated or
costs exceed benefits
•
Aggressive regulatory and executive action from the Obama
Administration will be specifically under review:
➢ Executive Order on Paid Leave for Federal Contractors
➢ EE0-1 Compensation Data Collection Rule
•
NLRB Board actions will be reviewed:
➢ Browning-Ferris
➢ Specialty Health Care
➢ D.R. Horton
2017 Public Policy
Agenda
Labor and Employment
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Washington Outlook for HR Public Policy
Labor-Management/Civil Rights Issues
•
•
•
Federal court issues preliminary injunction on OT Rule. Trump
Administration has asked for a 60 day extension to June 30 to consider
an appeal. Next steps could include:
➢ Appeal overturns injunction
➢ Trump Administration withdraws appeal and stays regulation
➢ Trump Administration issues a revised regulation
Expect changes in agency guidance and enforcement strategy:
➢ New philosophy on worksite enforcement
➢ DOL Interpretive Guidance on Misclassification of Workers
➢ DOL Interpretive Guidance on Joint Employer
2017 Public Policy
Agenda
Labor and Employment
EEOC been very active also:
➢ Final Guidance on Sex Discrimination
➢ Final Wellness Rules under ADA and GINA
➢ EEOC Best Practices to Prevent Harassment and draft guidance
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Washington Outlook for HR Public Policy
State and local paid sick leave laws, by administrative district
Requirements vary by jurisdiction
Labor-Management/Civil Rights Issues
Paid sick laws gain
momentum in
some
east & west coast
states & cities
Source: Work Place Fairness, “State and local paid sick leave laws,” Your
Rights, 2017; “Paid sick leave,” National Conference of State Legislatures,”
February 8, 2017; National Partnership for Women and Families, 2017.
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Washington Outlook for HR Public Policy
Labor-Management/Civil Rights Issues
Mandatory paid family leave state policies
■ No paid leave legislation
■ Family leave policy, joint employer-employee payroll contributions
■ Family leave policy, employee payroll contribution ■ Family leave policy, employer payroll contributions
Four states & D.C.
will offer paid
parental leave to
new parents
Source: “Paid Family Leave,” National Conference of State
Legislatures, 2017.
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Washington Outlook for HR Public Policy
Labor-Management/Civil Rights Issues
•
Proposals to address maternity/paternity leave are high on
Trump Administration priority list for first year.
•
Predictable scheduling proposals are gaining traction in the
states.
•
Congress will also consider legislation in May to allow private
sector employees the choice of receiving compensatory time off
or pay for overtime work.
2017 Public Policy
Agenda
Labor and Employment
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Washington Outlook for HR Public Policy
Labor-Management/Civil Rights Issues
•
Bob Carr greets Rep. Walters at
#SHRMLeg Hill Day Breakfast
Representative Mimi Walters (R-CA) is expected
to introduce SHRM-developed legislation that
would expand paid leave and workplace
flexibility opportunities for all employees:
➢ Employers that choose to participate by
offering a minimum threshold of paid leave
and a flexible work option will satisfy all
state and local requirements.
➢ Amends ERISA, providing employers
flexibility and predictability in workplace
flexibility programs, rather than a
patchwork of conflicting government
mandates.
Workplace
Flexibility in the
21st Century Act
of 2017
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Washington Outlook for HR Public Policy
Labor-Management/Civil Rights Issues
2017 Public Policy
Agenda
Labor and Employment
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Washington Outlook for HR Public Policy
Labor-Management/Civil Rights Issues
•
•
Introduced in the House by Representative Virginia Foxx (R-NC),
Chairman of the House Education and Workforce Committee, and in
the Senate by Lamar Alexander (R-TN), Chairman of the Health
Education, Labor and Pensions Committee, the resolution uses the
Congressional Review Act (CRA) to disapprove of the Fair Pay and Safe
Workplaces “Blacklisting” rule.
The rule would have required prospective federal contractors and
their subcontractors (with contracts valued at more than $500,000)
to disclose to the government, actual or perceived 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.
•
H.J. Res.37 passed the House on by a 236 to 187 and the Senate by a
vote of 49 to 48.
•
Signed into law by President trump on March 27.
Joint Resolution for
Congressional
Disapproval of Fair
Pay and Safe
Workplaces Rule
(H.J. Res. 37)
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Washington Outlook for HR Public Policy
Labor-Management/Civil Rights Issues
•
2017 Public Policy
Agenda
Labor and Employment
Issues on the horizon for HR:
 Freeze/Review/Rescind recent
federal regulations
 Regulatory reform
 Paid leave/Workplace flexibility
 Compensation equity
 Labor-Management issues
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Washington Outlook for HR Public Policy
•
Repeal of the Affordable Care Act (ACT) is one of President Trump’s
major priorities in the first 100 days of his Administration…..but proved
to be too difficult.
•
President signed Executive Order on January 20.
Health Care Reform Issues
2017 Public Policy
Agenda
Health Care Reform
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Washington Outlook for HR Public Policy
• Congress passed a Budget Resolution on January 13 that
provides the budgetary reconciliation framework that allows
for repeal of the tax provisions of the ACA.
Health Care Reform Issues
• Use of the budget reconciliation process allows the Senate to
pass repeal of the tax provisions of the ACA with 51 votes
instead of the 60 votes needed to override a filibuster.
•
House Speaker Paul Ryan outlined three steps Congress and
the Trump Administration will now take to replace the ACA:
2017 Public Policy
Agenda
Health Care Reform
1. Pass the American Health Care Act.
2. Make additional changes to the rules that govern the ACA
through the regulatory process.
3. Work with Democrats to pass legislation to address the
insurance elements of the ACA that need reform.
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Washington Outlook for HR Public Policy
Health Care Reform Issues
Rate of health care coverage of U.S. population, 2015
0.0%
20.0%
40.0%
Employment-based
55.7%
Direct purchase
16.3%
Medicaid
19.6%
Medicare
Military health care
Uninsured
60.0%
16.3%
The vast majority of
Americans have
employment-based
coverage
4.7%
9.1%
Source: “Health Insurance Coverage in the United States: 2015,”
US. Census Bureau, September 2016.
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Washington Outlook for HR Public Policy
Health Care Reform Issues
11%
Average 2017 increase in
health care costs
79%
Increased
73%
•25% increased 1% to 5%
77%
•41% increased 6% to 10%
•18% increased 11% to
16%
Stayed the same
19%
15%
17%
•16% increased 16% or
more
5%
Decreased
•Note: n = 599. Only respondents
whose costs increased from 2016
to 2017 were asked this question.
2017 (n = 832)
2016* (n = 575)
2015 (n = 687)
Organizations’
Health Care
Coverage Costs
Increased Again in
2017
8%
6%
Note: Respondents who answered “don’t know” were excluded from this analysis.
*Data are from SHRM’s 2016 Strategic Benefits Survey—Health Care.
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Washington Outlook for HR Public Policy
Health Care Reform Issues
•
Legislation introduced by the House Republican Leadership to
repeal and replace tax elements of the ACA.
•
Reduces the employer mandate penalty to zero for failure to
provide health care coverage. The employer mandate will remain
and would have to be repealed through future legislation.
•
•
Reduces the penalty to zero for failure for an individual to
maintain minimum essential coverage. The individual mandate
will remain and would have to be repealed through future
legislation.
American Health
Care Act
(H.R.1628)
Both the reductions in the employer and individual penalties
would be effective beginning after December 31, 2015.
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Washington Outlook for HR Public Policy
Health Care Reform Issues
•
Creates a new continuous coverage requirement surcharge to encourage individuals to obtain health care
coverage. To avoid a 30 percent premium surcharge, individuals must prove that they did not have a gap in
creditable coverage beyond 63 continuous days during the 12 months preceding coverage.
•
Delays excise tax on high cost employer-sponsored health coverage to benefits exceeding certain
thresholds ($10,200 for individual coverage and $27,500 for family coverage). Under current law, the tax is
scheduled to go into effect in 2020. This bill changes the effective date for taxable periods after December
31, 2025.
•
Repeals the Health Insurance tax after December 31, 2016.
•
Reduces the increased tax for distributions for non-qualified medical expenses from a Health Savings
Accounts (HSA) to 10 percent from 20 percent. This change is effective for distributions after
December 31, 2016.
•
Repeals the $2,500 limit of contributions by employers and employees to health care Flexible Spending
Accounts for taxable years beginning after December 31, 2016.
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Washington Outlook for HR Public Policy
Health Care Reform Issues
•
Introduced by Chair of the House Education and Workforce Committee
Virginia Foxx (R-NC) to provide uniformity to employer-sponsored wellness
programs under the Affordable Care Act (ACA), Genetic Information
Nondiscrimination Act, and the Americans with Disabilities Act.
•
The bill reaffirms the ACA wellness provisions that allows employers to
offer financial incentives of up to 30 percent of the cost of the wellness
program the employee selects for employees who voluntarily participate
in the program.
•
Under the legislation, the bill clarifies that the manifested disease or
disorder of a family member of an employee will not be considered an
unlawful connection of genetic information if it is voluntarily collected as
part of a wellness program.
•
SHRM supports the legislation.
Preserving
Employee Wellness
Programs Act
(H.R.1313)
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Washington Outlook for HR Public Policy
Health Care Reform Issues
•
2017 Public Policy
Agenda
Health Care Reform
Other issues on the horizon for HR:
 Protecting employer-based system
 Taxation/Cap of employer-sponsored
health care coverage
 Support for employer-sponsored
wellness programs
 Medical malpractice reform
 HSA Expansion/Coverage mechanisms
 Insurance market reforms???
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Washington Outlook for HR Public Policy
Immigration Reform Issues
• E-Verify and four other immigration laws extended to April 28, 2017 as part
of FY 2017 budget bill but will need to be extended again in April.
• The 115th Congress will likely consider immigration enforcement issues and
could also include a focus on employment-based visas as well.
• Immigration reform was a major issue in 2016 Presidential Campaign and
migration issues are also at the forefront of the international community.
• President Trump has promised a focus on border security and interior
enforcement, including worksite enforcement:
─ Direct DOL to investigate abuses of H-1B Program
─ Possible Executive Order on Worksite Enforcement
─ Possible repeal of DACA Executive Order
─ Executive Order - Protecting the Nation from Foreign Terrorist Entry Into
the United States.
2017 Public Policy
Agenda
Immigration Reform
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Washington Outlook for HR Public Policy
Immigration Reform Issues
Hillary Clinton
Donald Trump
President Trump
recommits to
hard-line
immigration
stances
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Washington Outlook for HR Public Policy
Immigration Reform Issues
Employers using E-Verify, FY 2001-2015
Percentage of employers across all industries, states and
U.S. territories
More than 10% of
U.S. employers
use E-Verify
Fiscal year
Source: United States Citizenship and Immigration Services, “E-Verify
overview,” 2017; United States Census Bureau, Statistics of U.S. Businesses
Historical Data, 2017.
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Washington Outlook for HR Public Policy
Immigration Reform Issues
Support
Would Not Support
89%
Eliminates Form I-9
Authenticates identity
Includes strong safe harbor
Provides brief period to resolve work
authorization disputes
Avoids allegations of employment-based
discrimination
Includes photo matching
11%
94%
6%
95%
5%
92%
8%
95%
5%
Employers support for
a mandatory electronic
verification system
becomes stronger
when it includes
specific features
84%
16%
Note: n = 389-395. Results of scaled items were consolidated into
“Support” and “Would Not Support” dimensions for reporting purposes
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Washington Outlook for HR Public Policy
Immigration Reform Issues
•
2017 Public Policy
Agenda
Immigration Reform
Issues on the horizon:
 Border security/Interior enforcement
 Increased focus of employment-based
visa process
 Stepped-up worksite enforcement
 Mandated E-Verify
 Merit based immigration system
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Washington Outlook for HR Public Policy
•
2017 Federal Budget
➢ Congress passed and President Obama signed a second Continuing
Resolution (CR) to fund the federal government through April 28,
2017.
•
•
•
Congress will need to pass and President Trump will need to sign
another spending bill at that time for 2017. Fights expected on:
➢ Spending policy
➢ Reconciliation proposals
Debt ceiling limit will need to be extended early in 2017 as current
“reset” expired on March 16, 2017. Secretary Treasury Steven
Mnuchin will need to take “extraordinary measures” to fund
essential payments.
Tax and Benefits Issues
2017 Public Policy
Agenda
Budget
Federal National Debt
 Deficit of $587 billion in 2016 but current federal debt is over $19.9
trillion dollars. Deficit projected to hit $1.1 trillion a year by 2025.
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Washington Outlook for HR Public Policy
Tax and Benefits Issues
The Federal Government Spent Almost $4 Trillion in 2016
Federal Spending
& Revenues in
FY 2016
Source: Congressional Budget Office, 2017.
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Washington Outlook for HR Public Policy
Tax and Benefits Issues
•
Tax reform likely next focus of the 115th Congress.
•
Speaker Paul Ryan’s Better Way to Develop Bold Agenda for a Confident
America included a task force on tax reform.
•
Significant changes to employer-sponsored benefits will be part of any tax
reform discussion. The tax reform task force included recommendations
to:
➢ Review current tax incentives for employer-provided retirement and
pension plans to determine what incentives will remain.
➢ Consolidate many of the higher education tax credits; including
Section 127, employer-provided educational assistance.
•
Social Security and Medicare Reform may be part of the overall budget
and tax discussion.
•
Groups continue to engage in various congressional working groups to
discuss impact of changes to the tax treatment of retirement and
benefit plans.
2017 Public Policy
Agenda
Tax Reform
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Washington Outlook for HR Public Policy
Tax and Benefits Issues
Ten Largest Individual Tax Expenditures Projected to Cost the Government
Over $4.7 Trillion from 2016 through 2020
Estimated revenue
loss from 10 largest
individual tax
expenditures
Billions of dollars,
FY 2016-2020
Source: Joint Committee on Taxation, “Estimates of federal tax expenditures
for fiscal years 2016-2020,” January 30, 2017.
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Washington Outlook for HR Public Policy
Tax and Benefits Issues
•
2017 Public Policy
Agenda
Budget and Tax Reform
Issues on the horizon:
 Corporate & individual tax reform
 Incentives to save for retirement
 Taxation of employer-sponsored benefits
 Entitlement reform ???
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Washington Outlook for HR Public Policy
1) INNOVATIVE: The 21st Century Workplace provides employers
and employees the flexibility to address how, when and where
work is accomplished and allows for the design of employee
benefit programs that attract and retain employees, while
managing the fiscal realities of modern business.
2) FAIR: The 21st Century Workplace provides fair employment
practices in hiring, training and compensation, regardless of
non-job-related characteristics, and encourages practices that
meet the goals of the organization and the needs of its
employees.
3) COMPETITIVE: The 21st Century Workplace gives employers the
ability to attract, recruit, hire and train talent, as needed, to
remain competitive in a global economy.
#21CenWork
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Washington Outlook for HR Public Policy
SHRM Advocacy
Representing SHRM Advocacy
▪ 2017 - SHRM “reached out” to by public
policy makers 60+ times on workplace
issues to date.
▪ SHRM members testified 6 times thus far
in 2017 in public policy forums.
Leslie Christ, SHRM-CP, (pictured on the far left), Crystal Frey,
SHRM-SCP, (seated next to Leslie) testifying at House
Subcommittee on Workforce Protections
Frank Cania, SHRM-SCP, serving as a
witness before the House Committee on
Small Business
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Washington Outlook for HR Public Policy
SHRM A-Team Statistics
SHRM Advocacy
(as of April 2017):
✓ 9,300+ active members.
✓ 700+ Advocacy Captains designated across
the country in 50 states.
✓ 100% of Congressional Districts Complete.
✓ Off to a fast start: 250 meetings during ELLC
and over 225 here at CALSHRM Leg
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Washington Outlook for HR Public Policy
Contact
Michael P. Aitken
Vice President
Government Affairs
[email protected]
Twitter: @SHRMVPAitken
1800 Duke Street
Alexandria, VA 22314
+1-703-535-6027 Direct
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