American Health Care Act

Friday, June 16, 2017

Mid Florida SHRM Legislative update[1]

Health Care

American Health Care Act

·  House bill provides framework for Senate

·  CBO score of House bill started formal Senate process on May 24th

·  House bill and individual provisions reviewed by Senate parliamentarian to ensure they comply with the rules

·  Senate staff drafting provisions on where there is agreement

·  Caucus will resolve outstanding issues during June; remaining bill will be drafted

·  Unclear when bill will be publicly available –before or after CBO scores the bill

·  CBO will likely take one to two weeks to score Senate bill

·  Senate cannot vote on bill without CBO score

·  Sen. Heller expected to offer amendment to waive budget rules and repeal Cadillac Tax

o  Similar amendment in 2015, passed with 90-10 vote

·  Conference committee to resolve differences between House and Senate bills unlikely

·  House will have to vote on Senate bill

·  Leadership hopes to complete process by August recess

·  Working with Rep. Fox and Walberg on new wellness program bill that would deem programs that comply with the ACA regulations to be in compliance with ADA and GINA

o  Wellness program bill will pass House, but fate uncertain in Senate

·  With AHCA passage employers would get regulatory relief to:

o  Reduce ACA reporting burdens;

o  Ease limitations on, and increase flexibility for HSAs;

o  Reverse individual OOP limit in family health plans; and

o  Some recognition of importance of ERISA preemption

·  Democrats starting to rally around single payer approach

Executive Compensation

Dodd-Frank Pay Ratio Repeal

·  House –Financial CHOICE Act 2.0

o  Repeal: pay ratio, financial svcs incentive comp (Section 956), hedging

o  Reform: clawbacks, say on pay

o  Proxy advisory firm reform

o  NOT pay for performance

·  Senate –Under Development; Exec Comp Low Priority

·  SEC Pay Ratio Focus

o  Need 3 Republican Commissioners (only Chairman Clayton confirmed, no other nominations yet)

o  Comment period for “compliance difficulties” closed 3/23

o  Revise pay ratio rules? 2018 disclosure delay?

States/Cities with Pay Ratio Laws Passed or Pending

·  Tax or fee bills

o  Portland, OR (passed, effective 1/18)

o  Connecticut

o  Illinois

o  Massachusetts (separate, U.S.-only calculation)

o  Minnesota

o  Rhode Island

o  San Francisco

·  Denial Economic/Tax Assistance: Connecticut

Workplace Regulation

Gender Pay Equity; Federal

·  EEOC EEO-1 (Equal Pay) Report

o  Prime contractors and first-tier subcontractors must file annual Equal Pay Report for each establishment, including headquarters location

§  Reports due March 2018 but Acting EEOC Chair signaling reopening

o  Aggregate data by race, gender, and ethnicity for each EEO-1 job category: total number of employees; total W-2 earnings; total hours worked

o  EEOC to use the data to generate industry standards for

§  Assessing individual contractor compensation data

§  Conducting contractor self-assessments

§  Comparing each contractor’s summary statistics to the relevant industry standard to prioritize compliance evaluations

State and local levels

·  Issues involved

§  Standard -equal pay for “same,” “similar” or “comparable” job?

§  Employer justifications/defenses for pay differences

§  Increased transparency

§  Availability of and reliance upon salary history

§  Remedies for violations

Paid Leave

President Trump’s Paid Family Leave Proposal

·  Six weeks of paid parental leave to new mothers and fathers, including adoptive parents

·  Provided through State unemployment insurance programs funded by employer payroll taxes

·  Gives States “broad latitude to design and finance program,” but “required” to provide at least six weeks

·  Will require Congress to amend UI law

·  Requests $709 million in 2018 for State start-up and administrative costs

·  Reported to cost $18.5 billion over ten years

·  Paid for by UI system reforms:

o  Reduce improper payments

o  Help unemployed workers find jobs more quickly, and

o  Require States to maintain adequate UI trust fund reserves30 States do not have sufficient reserves and will have to raise payroll taxes on employers

·  Some State paid family leave programs are paid for by employees (CA, RI) or jointly (NJ, NY)

Rep Mimi Walters (R-CA) Workplace Flexibility Proposal

·  “Workplace Flexibility in the 21st Century Act”

o  Voluntary for employers

o  Defines a “Qualified Flexible Work Arrangement Plan” (QFWA) under ERISA

o  Would preempt some state and local laws

o  To qualify, a QFWA Plan must offer:

§  Certain paid leave benefits to all U.S. employees, and

§  At least one flexible work arrangement

§ 

·  Paid Leave Standard

o  Number of days determined by employer size and employee tenure

o  For employers with 1,000 or more employees:

§  16 days for employees with less than 5 years’ service

§  20 days for employees with 5 or more years

o  Prorated for part-time employees

§  Part-time coverage determined through calculation based on full-time designation –employer determines “full-time”

Joint Employer

Business community working with Rep. Byrne to draft legislation

·  Would amend definition of employer under FLSA, NLRA, OSHA, ADA, ADEA, FMLA Title VII, MSAWPA

o  “Joint employer” depends on whether an entity directly, actually and immediately exercises significant control over the essential terms and conditions of employment, including hiring, firing, discipline, supervision and direction of employees who are employed by the other entity

o  Five factor test and no single factor determines

o  Routine supervision, contractually mandated brand standards, training, and provision of technology/computer systems don’t trigger

·  Entity’s benefit contributions do NOT create joint employment

·  Preempts state and local law

·  New 4thCircuit Court Test for FLSA in MD, NC, SC, VA, and WW

o  Employers must be “completely disassociated” with respect to a worker regarding sharing, agree to allocate responsibility for, or otherwise co-determining —formally or informally, directly or indirectly —the essential terms and conditions of a worker’s employment

o  Six non-exhaustive factors determine if employers are completely disassociated

§  Power to direct, control, or supervise workers;

§  Power to –directly or indirectly –hire or fire workers or modify terms and conditions of employment;

§  Permanency and duration of the relationship between employers;

§  Whether one entity controls, is controlled by, or is under common control with other entity;

§  Whether one or both entities own or control the worksite, independently or in connection with one another; and

§  Whether entities jointly determine responsibility over handling payroll, providing workers’ compensation insurance, paying payroll taxes, and providing the facilities, equipment, tools, or materials necessary to complete the work.

NLRB

·  Awaiting nominations

o  Pressure on White House to fill positions

o  Congressional letters

o  HR Policy/business community letter urging quick action

o  Wall Street Journal editorial

·  A full agenda

o  Ambush elections

o  Micro-units

o  “Joint employer” expansion

o  Scrutiny of workplace policies’ impact on “concerted activities”

Overtime Rule

·  Expansion of Fair Labor Standards Act overtime coverage

o  Increase in minimum salary for white collar exemptions from $24,660 annually to $47,476

·  Enjoined by Federal district court in November

·  Most HR Policy members had already implemented changes

·  Further action awaiting review by new DOL

Obama Executives Orders

·  Blacklisting –Repealed

·  Paid Leave –No action taken yet

·  Ban on LGBT discrimination –Expected to stand

·  $10.10 minimum wage –No action taken yet

·  Prohibit policies restricting wage disclosures –Expected to stand

·  Ban on “human trafficking” in supply chains –Expected to stand

·  Posting notice of labor rights –No action taken yet

Proposal to Merge OFCCP and EEOC

·  Trump budget proposes merging OFCCP into the EEOC by 2019

o  Greater policy coordination, management efficiency, and cost-effectiveness

o  Will benefit employers and employees by consolidating oversight of federal equal employment opportunity under one roof

·  Agencies currently have a Memorandum of Understanding for collaborating on enforcement where there is overlapping jurisdiction (federal contractors)

·  Merger will enable “seamless sharing of enforcement data and expertise, operational efficiencies, expanded compliance assistance to employers, improved customer service, and fully aligned policy”

·  Reduce burden on employers by consolidating enforcement requirements

o  Employers would not have to provide duplicative information to two agencies if an EEOC complainant were also part of an OFCCP compliance evaluation

Legislative Trends in State Capitols

·  Late May –California gender pay equity bill advanced

o  Require large employers 250+ to collect and publish online specified information on gender pay differentials

·  Predictive scheduling –Minnesota, New York…

·  Paid sick leave –Arizona, Illinois, Maine…

Immigration

Administration Critical of Work Visa Arrangements, Especially H-1B

·  Executive orders

o  Mandates AG, Secretaries of Labor, State, and Homeland Security recommend reforms

o  Orders studies on alleged work visa abuses

·  Agency action

o  DOL, DOJ, Homeland Security, USCIS increased scrutiny of H-1B program

o  Premium processing of H-1B visa applications suspended temporarily

o  More likely to come

·  Could see regulatory action in future

·  Pending legislation not gaining much headway—yet

·  Potential Restrictions on Work Visas (H-1B)

o  Reducing cap number and duration of stay

o  Minimum salary (e.g., $100K)

o  Priority for companies paying even higher amount

o  Stricter rules for “H-1B dependent” companies (≥15% of U.S. employee population)

o  Elimination of lottery system

o  Minimum training requirements

o  Eliminate allowing experience as an equivalency to a degree[2]

[1] HRPA Deep Dive, 06/12/2017

[2] HRPA Deep Dive, 06/12/2017