I just flew back from DC…. And man, are my arms tired J
In all seriousness, I spent the first half of last week in Washington DC at SHRM’s annual Legislative & Employment Law Update. If you haven’t been before, consider it.
After two days in sessions and hearing keynote speakers, including Ana Navarro and Sally Kohn (political commentators on CNN) and Chris Wallace (anchor on Fox News Sunday), Wednesday was spent lobbying. While scary for the novice, like myself, SHRM could not make this process easier. They bussed us from the hotel to Capitol Hill, fed us breakfast, gave us talking points and leave behinds, set up the meetings with our Senator and Congressmen’s offices, and even gave us cash for lunch. The Wisconsin delegates met together with a legislative aide in Tammy Baldwin’s office (D- WI), as well an aide in Ron Johnson’s office (R-WI). Meetings with our congressmen were on our own (or sometimes in pairs) depending on congressional districts. We had a large gap in time between Senate and House visits, so we got gallery passes and watched the Senate in action (House was in recess). And we even got to ride the underground train from Senate to the Capitol (thanks to Ron Johnson’s staff). If you have any interest in the legislative process, this is an event not to be missed next year!
SHRM found attorneys from around the country who are in the know regarding the current political environment to come and provide their predictions for the next 2-4 years. Here are the top issues as I heard them:
SHRM has long advocated for repeal of the so-called Cadillac tax and continues to do so. Expect to see traction for repealing that this year. In addition, the original leaked version of the American Health Care Act included a cap on the tax exclusion employees enjoy for their healthcare premiums. Due in part to lobbying by SHRM and other business-interest groups, the cap was taken out of the released American Health Care Act, which is currently being considered in the House. This means employees would pay taxes on the value of their health insurance beyond a certain cap, increasing overall taxes that employees pay. Even though this is not presently being considered in any introduced legislation, expect this issue to persist and we’ll hear about again in tax reform or when deciding the budget for 2018 fiscal year.
Takeaway: Watch carefully and advocate for your position with your legislators.
California, Massachusetts, and Puerto Rico recently passed laws to strengthen pay equity laws. If the federal government doesn’t do more here, expect more states and municipalities to pass similar laws. Puerto Rico and Massachusetts did include an affirmative defense as part of the law, or safe harbor if you will, for employers who regularly conduct pay audits and can show they have made progress to eliminate discrepancies before the state began auditing the employer. More and more municipalities and states are considering a ban on requesting an applicant’s pass salary history, which perpetuates any pay discrimination that occurred at prior employers. Finally, expect the EEOC to re-evaluate its EEO-1 pay data reporting requirements, which are in effect now (first report due March, 2018). EEOC won’t have a Republican majority until July, so we don’t expect changes any sooner. And we don’t expect the EEO-1 pay data reporting will go away completely, but likely be revised (including perhaps use of base compensation annualized, making the data easier to collect for employers).
Takeaway: Conduct pay equity analysis (using a law firm if you think there could be issues) and take steps to reduce unexplained gaps in pay between protected classes.
Expect greater reliance on employers to enforce immigration laws. This includes greater enforcement of I-9s. To date, only ICE has really done audits to review I-9s, but DOL and OFCCP have the authority to do these audits as well. So if you are subject to one of these audits in the near future, don’t be surprised when they ask for your I-9 folder. SHRM is advocating for a revised system where the I-9 interacts with E-verify, cutting down on the administrative burden for employers that use E-verify.
Takeaway: Conduct an internal I-9 audit and ensure employees responsible for completing the I-9s are well trained to do so.
As stated above, EEOC commission control will change over in July, 2017. At that point, we expect 3 Republicans and 2 Democrats on the Commission, headed up by a Republican. However, that does not mean EEOC enforcement will stop. Acting Chair Vicky Lipnic has expressed priorities on age discrimination, given our aging workforce, and pay equity. EEOC recently updated its strategic initiatives, which also include ADA compliance – both ensuring that qualifications required to do the job are job-related and not resulting in discrimination; and addressing employer’s inflexible leave policies that fail to consider leave as a reasonable accommodation for those qualified individuals with a disability.
Takeaway: Among other things, review leave policies to ensure you are considering extended leave for those with disabilities and that any qualifications, such as a requirement to be in the office 100% of the time, are truly job-related.
Mandated leave laws
States and municipalities continue to pass mandated leave laws, such as paid sick leave. In Wisconsin, we have a law that keeps municipalities from passing their own paid sick leave. But if you are a multi-state employer, this fact provides little solace for you as you may have to contend with 20+ different laws in drafting your sick leave policy. SHRM co-wrote legislation with Representative Mimi Walters (R-CA), which is expected to be introduced in the House later this month. The law would amend ERISA, so employers could use ERISA’s pre-emption clause to avoid having to comply with this myriad of state and local laws. Instead, they would voluntary opt into providing paid leave benefits consistent with this bill.
Takeaway: Watch for the legislation to be introduced and make your voice heard if this is an issue for your company.
Remember that DOL law that was set to go into effect December 1, 2016, but was halted at the eleventh hour? It’s still on appeal at the 5th circuit. DOL has delayed its response brief several times, in an effort to wait until a new Secretary of Labor is confirmed and can decide how to move forward (but expect him to withdraw from the case). In anticipation of the DOL withdrawing, AFL-CIO moved to intervene, which would allow them to continue the case in place of DOL (and try to get the $913/week threshold upheld). But also expect the DOL to go through proposed rule-making process in an effort to raise the minimum salary threshold from the current $455/week to something less than $913/week.
Takeaway: If you already provided raises or converted employees to non-exempt in anticipation of this rule, watch the DOL and the litigation if you intend to move employees back down or stop raises until they even out. If you halted any efforts to move employees’ wages last November, don’t throw your plans away and watch carefully so you can react accordingly.
Want to stay on top of these issues or get involved? Join SHRM’s A-Team! And mark your calendars for next year’s annual SHRMLeg conference. I hope to see you there!