Government Affairs Update NEIL REICHENBERG IPMAHR EXECUTIVE DIRECTOR

Government Affairs Update NEIL REICHENBERG IPMA-HR EXECUTIVE DIRECTOR

Overview Last year’s session of Congress was one of the least productive ever with only 65 laws enacted Congress remains very unpopular with an approval rating according to Gallup of 13% in January – an improvement from its all time low of 9% in November While the approval rating has improved, it is below the historical average of 33%

Overview This is an election year – entire House of Representatives and 1/3 of the Senate is at stake The House of Representatives is only scheduled to be in session 97 days prior to election day & 113 days through the end of the year Given the partisanship, it will be difficult for the Congress to enact many laws

Budget Issues There was a 16 day partial shutdown of the government last year It was estimated that the shutdown took at least $24 billion out of the US economy with federal employees missing 6. 6 million days of work President has signed a $1. 1 trillion package funding the government through September 30 th Next big budget issue is the extension of the debt ceiling The Congress suspended the debt ceiling though February 7 th Treasury Secretary estimates debt ceiling needs to be extended by the end of February

Economy In December, 74, 000 jobs were added and the unemployment rate declined to 6. 7% In 2013, state and local government employment remained flat, with state and local governments increasing by 0. 2% Federal government employment declined by 71, 000, which was a 2. 5% decrease US gross domestic product grew in the third quarter by 4. 1% - fastest growth rate in almost 2 years

Legislation

Emergency Unemployment Compensation Emergency unemployment compensation program ended on December 28 th Attempts to pass an extension is stalled in the Senate Report issued in December by the Department of Labor and the Council of Economic Advisors stated that 1. 3 million individuals would lose their benefits at the end of 2013 and an additional 3. 6 million will lose access to unemployment benefits beyond 26 weeks by the end of 2014 Failing to extend the program would result in reduced consumer spending & the loss of 240, 000 jobs this year

Minimum Wage Legislation has been introduced that would increase the federal minimum wage to $10. 10 per hour by 2015 Current minimum wage is $7. 25 per hour Polls show widespread support for increasing the minimum wage

Paid Family & Medical Leave Bills would provide paid family and medical leave that would be funded by employee and employer contributions of 0. 2% of wages creating a self-funding program that the sponsors say would not add to the federal budget Benefits levels would equal 66% of an individual’s monthly wages up to a capped monthly amount that would be indexed for inflation Leave would be available to all employees regardless of the size of their employers Some states are already providing paid family leave

Mass Transit Tax Benefit On January 1 st, the mass transit tax benefit dropped from $245 per month to $130 per month As part of the American Taxpayer Relief Act, the parity between the mass transit and parking benefits was restored for 2013 The parking benefit includes an annual cost-of-living adjustment that resulted in an increase to $250/month in 2014 Legislation to increase the mass transit benefit has been introduced but has not yet been approved

Healthcare Reform People signing up for health insurance through the exchanges tend to be older, which could cause premiums to rise in the future 55% of those who signed up in the first 3 months are age 45 – 64 Only 24% are 18 – 34

Healthcare Reform IPMA-HR supports the “Forty Hours is Full-Time Act of 2013” The bill would increase threshold for ACA coverage to 40 hours per week or 174 hours per month Employers have been cutting their employees’ hours to less than 30 hours per week to avoid having to provide health insurance

Healthcare for Volunteer Firefighters On January 10 th, Treasury Department issued a notice advising that when it releases final regulations it will not require volunteer hours of bona fide volunteer firefighters & emergency medical personnel to be counted when determining full-time employees IPMA-HR expressed support for the Treasury Department’s decision According to the National Volunteer Fire Council there are more than 750, 000 volunteer firefighters & an estimated additional 200 -300, 000 volunteer emergency medical personnel

Credit Check of Job Applicants Legislation has been introduced in the Senate that would prohibit employers from requiring job applicants to disclose their credit history Employers would be prohibited from denying a person a job based on poor credit history There is an exemption for jobs requiring national security clearance The sponsors believe that poor credit history does not reflect the ability to perform a job

Employment Non-Discrimination Act By a vote of 64 -32, the Senate passed the Employment Non-Discrimination Act (ENDA) (S. 815) The bill would prohibit employment discrimination on the basis of sexual orientation or gender identity Bill would apply to public and private employers with at least 15 employees The bill would prohibit preferential treatment or quotas on the basis of sexual orientation or gender identity

Employment Non-Discrimination Act The bill would establish an exemption for religious organizations and also would not apply to members of the armed forces The EEOC and the Department of Justice would enforce the law A state would not be immune under the 11 th Amendment from a suit brought for violation of the act The bill faces an uncertain future in the House of Representatives

Immigration Reform Passed the Senate 68 -32 Stalled in the House of Representatives where they are considering a series of small bills Overhaul of the immigration system including a pathway to citizenship for an estimated 11 million undocumented immigrants and enhanced border security requirements that would cost $46 billion Bill would require all employers to use E-Verify within 4 years to determine the legal eligibility to work of every new hire

Healthy Families Act Requires one hour of paid sick leave for every 30 hours worked regardless of parttime; temporary; seasonal status Employers with equal or more generous policies would not have to change them IPMA-HR has expressed concern with this legislation

Equal Paycheck Fairness Act allows for unlimited punitive and compensatory damages against state and local employers Bill would make it easier to bring class action lawsuits IPMA-HR expressed concern with the unlimited damages allowed in the law Fair Pay Act would prohibit wage differentials for jobs dominated by one gender/race at a rate lower than that for equivalent jobs dominated by another gender/race

Protecting Older Workers Against Discrimination Act Would overturn two Supreme Court decisions that toughened the burdens of proof for employees bringing claims under the ADEA or advancing retaliation claims under Title VII of the Civil Rights Act The Supreme Court opinions required employees to show that discrimination was the sole motivation for an adverse action

Misclassification of Employees Legislation designed to address the problem of employers misclassifying employees as independent contractors has been introduced in the Senate Bill would require employers to notify employees of their classification along with information concerning their legal rights Labor Department would establish a webpage summarizing the rights of employees & independent contractors under the FLSA Improper classification of an individual as an independent contractor would double the amount of liquidated damages This issue is one of the priorities of the Labor Department

Social Media Growing number of states have enacted laws to prohibit employers from requiring or requesting that prospective and current employees disclose their user names and pass words to their personal social media accounts Similar legislation introduced in the Congress The National Labor Relations Board has issued guidance in this area that is available at http: //www. nlrb. gov/news-outreach/factsheets/nlrb-and-social-media

Pension Reform Public Employee Pension Transparency Act introduced in the Senate and House Requires public pensions to report liabilities in two ways (1) the current method and (2) using fair market value and private sector assumptions Those that refuse will not be able to issue federallytax exempt bonds

Regulatory Issues

EEO-4 IPMA-HR wrote to the EEOC seeking an update to the EEO-4 reporting form to capture more than one race/ethnicity EEOC responded that they share the concerns but the process to change is not a quick one The revised EEO-4 needs to be approved by the EEOC and the Office of Management & Budget Since the survey is only collected every other year and they give at least one year notice before collecting data in a new format, the change is likely to take at least a few more years to implement

Criminal Background Checks § In July, 9 attorneys general wrote to EEOC calling guidance “overreach” and asking it be rescinded § The EEOC clarified that under the guidance it is not illegal for employers to conduct or use the results of criminal background checks. § The EEOC contends that the guidance is simply applying the text of Title VII when it states that federal law preempts contradictory state or local law § Texas Attorney General Greg Abbott filed a lawsuit challenging the criminal background guidelines as being in conflict with Texas laws that bar convicted felons from government employment

Questions? Contact: Neil Reichenberg nreichenberg@ipma-hr. org or call (703) 549 -7100