The 115th Congress and the Trump Administration:

The Washington Outlook for HR Public Policy

PA SHRM Legislative & Legal ConferenceNancy Hammer, Sr. Government Affairs Policy Counsel

Lisa Horn, Director of Congressional Affairs, SHRMMay 5, 2017

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@SHRMLobbystLisa

#SHRM@PA_SHRM

@HammerSHRM

What We Will Cover

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Current Washington Environment

Trump Administration Priorities

Congressional Priorities

Key HR Issues

Health Care Immigration Labor and Employment Tax and Benefits

SHRM A-Team Update

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Republicans control the House in the 115th Congress with 241 Republicans to 194 Democrats. *

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.

U.S. House of Representatives

*Results of 2016 elections, but several vacancies exist as Representatives are confirmed for Administration positions

U.S. House of Representatives

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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.

U.S. Senate

U.S. Senate

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The president’s party has lost Senate seats in 19 of 26 midterms; their only gains occurred during the president’s first term

Congressional Job Approval

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President Trump Job Approval

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Presidential Transition

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About 4,000 presidential appointees must be replaced

Over 1,000 will require Senate confirmation

Presidential Appointments – Department of Labor

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Secretary of DOL Nominee: Alexander Acosta

Head of Divisions within DOL: Wage & Hour, OSHA, EBSA, ETA, ODEP, VETS, BLS

Office of Federal Contract Compliance Programs

Department of Labor

Presidential Appointments – Department of Labor

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March 30 Committee (party-line) Vote – now to floor of Senate – April 27

Regulations under scrutiny: Overtime, Fiduciary Rule

Has been confirmed by Senate for 3 previous government posts

Department of Labor

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Executive orders, memoranda and proclamations signed by President TrumpExecutive Order Date Details

Enforcing regulatory reformFull text Feb. 24, 2017

• This order instructs every federal agency to designate a “Regulatory Reform Officer” within 60 days

• These officers would be in charge of overseeing reform initiatives from earlier executive orders

• The order references Trump’s January 30th executive order to offset the number and cost of new regulations (among other executive orders from previous administrations)

Reducing federal regulation Full text Jan. 30, 2017

• This order requires any executive department or agency that proposes a new regulation to identify two regulations to be repealed

• For fiscal year 2017 it also instructs that the total (incremental) cost of all new regulations and repealed regulations should be no greater than zero

• For fiscal year 2018, the director of the Office of Management and Budget is required to set a maximum total cost of all new and repealed regulations for each agency–this maximum may not be exceeded “unless required by law or approved in writing” by the OMB director

Review manufacturing and industrial regulationsFull text

Jan. 24, 2017• This memorandum orders the commerce secretary to begin a 60-day review of regulations for

American manufacturers, with the aim of finding ways to expedite permitting and relevant federal processes

Reorganizing the executive branchFull text March 13, 2017 • The order instructs the director of the OMB to propose a plan to reorganize the executive

branch and eliminate “unnecessary” federal agencies and agency programs

Trump Administration Regulatory EOs

DOL Regulatory Landscape - Overtime

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The DOL rule would have doubled—to $47,500—the salary threshold below which workers would automatically be eligible to earn overtime;

December 1, 2016 effective date; Federal court enjoined November 22, 2016 Obama’s DOL appealed to Fifth Circuit court of appealsNext court date – June 30 (second government delay)Acosta statement SHRM supports reasonable increase in salary level

DOL Regulatory Landscape

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Executive Order on Fair Pay and Safe Workplaces (a.k.a. “Blacklisting”)

Executive Order on Paid Leave for Federal Contractors?

Vulnerable Obama Administration Regulations

DOL Regulatory Landscape – Administrator Interpretations

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DOL Interpretive Guidance on Misclassification of Workers

DOL Interpretive Guidance on Joint Employer

Vulnerable Obama Administration Regulations

DOL Regulatory Landscape

Presidential Appointments - EEOC

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Equal Employment Opportunity Commission (political balance required)

Commissioner—five positions (five-year terms of office)

General Counsel (four-year term of office)

Acting Chair Victoria Lipnic – President must appoint permanent chair

Acting Chair Victoria Lipnic

EEOC Regulatory Landscape

Regulatory Landscape - EEOC

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EEO-1 Compensation & Hours-Worked Reporting March 2018 effective date for 2017 compensation information

EEOC Proposed Enforcement Guidance on Harassment Comment submitted for review

Task Force on Workplace Harassment -https://www.eeoc.gov/eeoc/task_force/harassment/report.cfm

April 5, 2017 Meeting - State of the Workforce and the Future of Work

EEOC Regulatory Landscape

Regulatory Landscape - EEOC

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EEOC National Enforcement Priorities 2017-2021

1) Eliminating Barriers in Recruitment and Hiring2) Protecting Vulnerable Workers, Including Immigrant and

Migrant Workers, and Underserved Communities from Discrimination

3) Addressing Selected Emerging and Developing Issues* Pregnancy accommodation, LGBT discrimination, gig economy, joint employer

4) Ensuring Equal Pay Protections for All Workers5) Preserving Access to the Legal System6) Preventing Systemic Harassment

EEOC Regulatory Landscape

National Labor Relations Board Trump Appointments - Political balance is not required, but, by

tradition, no more than three members are from the same party.Members —five positions (five-year terms of office)General Counsel (four-year term of office) Cases Ripe for ReviewJoint Employer (Browning-Ferris)Micro-bargaining Units (Specialty Health Care) Arbitration Agreements w/Class Action Waivers (D.R.

Horton; Murphy Oil)

Presidential Appointments - NLRB

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Chairman Phillip Miscimarra

NLRB Regulatory Landscape

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Executive Orders

New HHS Secretary Tom Price

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HHS options to unilaterally dismantle the ACA

23Sources: Sarah Kliff, “Today in Obamacare: 17 ways Tom Price can start dismantling the ACA,” Vox, February 10, 2017; Nicholas Bagley and Adrianna McIntyre, “Executive actions Trump could take to change the ACA,” The Incidental Economist, January 23, 2017.

HHS Options to Dismantle ACA

Immigration Reform

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Hillary Clinton

Donald Trump

Trump Recommits to Hard-Line Immigration Stance

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President Trump's Executive Orders Border Security and Immigration Enforcement Improvements – Includes first steps for construction of a physical wall on the southern border.

Enhancing Public Safety in the Interior of the United States – Cuts off federal funding for sanctuary cities.

Protecting the Nation From Foreign Terrorist Entry Into the United States – Called the "extreme vetting" executive order, includes a ban on entry for foreign nationals from 6 countries (Iran, Libya, Somalia, Sudan, Syria and Yemen), as well as a pause on refugee programs. Also includes increased visa interview requirements.

Buy American and Hire American– To bolster protections for certain American-made goods and calls for a review of the H-1B visa program for skilled workers. Directs federal agencies to more strictly enforce H1-B visa laws and propose reforms to the program to prevent fraud and abuse and ensure visas are awarded to the most-skilled applicants.

Trump Administration EOs on Immigration

Immigration Reform

Prevention of fraud and

abuse in the immigration

system

• Instructs rulemaking and guidance that could cover all visa categories

H-1B reallocation

• Instructs agencies to suggest reforms to ensure H-1Bs are awarded to the “most-skilled or highest paid” beneficiaries.

Signed 4/18/17 by President Trump The order has instructions for four federal agencies (DHS, DOJ, DOL, DOS)

• “Buy American & Hire American” Executive Order

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Immigration Reform

What could be on horizon for H-1Bs?

Increased feesAn adjusted wage

scale (revised prevailing wages)

DOJ EnforcementReallocation of visas favoring the highest

skilled and paid

• “Buy American & Hire American” Executive Order

Immigration Reform

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Immigration Reform

Support creating an entirely electronic employment verification system that protects against identity theft through knowledge-based authentication (KBA) option.

Health Care

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Health Care

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177+ million Americans and their families have health insurance through employer-sponsored plans.

16x the number of individuals who get their coverage through the Affordable Care Act’s (ACA’s) federal or state exchanges.

Health Care

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55.7%

16.3%

19.6%

16.3%

4.7%

9.1%

0.0% 20.0% 40.0% 60.0%

Employment-based

Direct purchase

Medicaid

Medicare

Military health care

Uninsured

Rate of health care coverage of U.S. population, 2015

The vast majority of Americans have employment-based coverage

Source: “Health Insurance Coverage in the United States: 2015,” US. Census Bureau, September 2016.

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H.R. 1628, the American Health Care Act (AHCA) vote canceled. Reduces employer mandate penalty Reduces individual mandate penalty Creates a continuous coverage requirement surcharge Repeals the Health Insurance Tax Repeals increase of tax on HSAs Repeals the limit on contributions to FSAs Delays the excise tax on high-value health care plans State Flexibility (Essential Health Benefits and Community Rating)

Congress is still likely to consider targeted legislative proposals to make modifications to the ACA, as well as regulatory changes.

Health Care

Health Care

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Highlights from CBO’s scoring of the American Health Care Act

Health Care

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The Preserving Employee Wellness Programs Act (H.R. 1313)

Introduced on March 2 by Rep. Virginia Foxx (R-NC), Chairwoman of the House Education and Workforce Committee.

Provides uniformity to the regulation of wellness programs and clarify that such programs are consistent with the ADA and GINA.

Protects employer-sponsored wellness programs. The bill reaffirms the ACA that allows employers to offer wellness programs tied to a financial reward for employees who participate.

SHRM supports the legislation.

Middle Class Health Benefits Tax Repeal Act (HR 173 / S.58)

Bipartisan legislation introduced in the House by Representatives Joe Courtney (D-CT) and Mike Kelly (R-PA) and in the Senate by Martin Heinrich (D-NM) and Dean Heller (R-NV) to amend the Internal Revenue Code.

The legislation repeals the 40 percent excise tax on employer-sponsored health coverage valued at more than $10,800 for individual coverage and $29,100 for families, which is scheduled to go in effect on January 2020.

The repeal would be effective for tax years after December 31, 2017.

SHRM supports the legislation.

Health Care

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Health Care

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Percentage of employers with plans that will be subject to taxation by the specified year if they make no changes to their current plans.

Estimates based on data from Mercer National Survey of Employer-Sponsored Health Plans 2016; premium trended at 6%, excise tax threshold trended at 3% in 2021 and 2% in future years. CBO proposal threshold trended at 2% beginning in 2020, and Patients First Act proposal threshold trended at 2% beginning in 2016.

State and Local Paid Leave Laws

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Paid Leave Legislation

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Working Families Flexibility Act (S.801/HR 1180) – Would allow private employers to offer comp time to employees. Employees would be allowed to accrue up to 160 hours

Healthy Families Act (S. 636/HR 1516) – Requires employers with 15 or more employees to provide up to 56 hours of paid sick leave

FAMILY Act (S. 397/HR 947) – Creates a paid family leave insurance fund through a payroll tax to provide partial wage replacement for FMLA qualifying events

Proposals to address maternity leave are high on Trump Administration priority list for first year

Workplace Flexibility Policy Options

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21st Century Workflex Policy

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Tomorrow’s Workplace Doesn’t Work By Today’s Rules

Workplace Flexibility in the 21st Century Act

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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 to all employees will automatically satisfy all state and local requirements.

Provides participating employers flexibility and predictability in designing workplace flexibility offerings, rather than a patchwork of conflicting government mandates.

Key Areas of Tax Reform

Tax and Benefits

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TAXATION OF EMPLOYER-SPONSORED

BENEFITS

ENTITLEMENT REFORM

AUTO ENROLLMENT FOR PENSION

PLANS

PBGC REFORM

CORPORATE VS.

INDIVIDUAL TAX REFORM

Tax reform will be a focus of the 115th Congress and second budget reconciliation legislation for 2018.

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 educational tax credits; including Section 127 employer-provided educational assistance.

Groups continue to engage in various congressional working groups to discuss impacts of changes to the tax treatment of retirement and benefit plans.

Tax and Benefits

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Tax and Benefits

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Source: Joint Committee on Taxation, “Estimates of federal tax expenditures for fiscal years 2016-2020,” January 30, 2017.

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 ExpendituresBillions of dollars,

FY 2016-2020

Tax and Benefits

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Pension and Budget Integrity Act of 2017 (HR 761 / S.270)

SHRM-supported, bipartisan legislation introduced in the House and Senate.

Would ensure that Pension Benefit Guaranty Corporation (PBGC) premiums are no longer counted in general fund revenue, eliminating the incentive for legislators to raise premium costs to pay for unrelated initiatives and programs.

Employer Participation in Student Loan Assistance Act (HR 795)

Bipartisan legislation introduced in the House by Representatives Rodney Davis (R-IL).

Expands Section 127 of the Internal Revenue Code to include student loan repayment.

As Chair of Coalition to Preserve Employer-Provided Educational Assistance, SHRM supports this legislation.

The 21st Century Workplace is:

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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.

SHRM Advocacy Team: Advancing the Profession

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Ensures the voice of HR is heard by policy decision-makers via a “local network”

Helps inform legislators of policy impacts upon employers and employees in her/his district

SHRM members are constituents who develop credible and influential relationships with elected officials

9,000+ Active A-Team Members!

700+ Advocacy Captains!

Pennsylvania

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Melissa Sims Philadelphia PAEvelyn Reed Philadelphia PAMichelle Mott Cranberry Township PAJohn Breon York PADiane Campanile West Chester PADaniel Krautheim Springfield PASusan McMenamin Lansdale PAScott Kramer Chalfont PAWilliam Scandone New Hope PATiffany Bloyer Waynesboro PALoretta Hartley Middleburg PAJohn Wolfe Lewisburg PAPhyllis Hartman Freedom PABurnett Coke Plymouth Meeting PAEapen Johnson Lansdale PAJoshua Parkes Wyndmoor PARoslyn Schaffer Glenside PAJoseph Welsh North Wales PAJanet Manuel Pittsburgh PAKristen Hovorka Palmyra PACynthia Karchner Bethlehem PAShane Ulrich Lititz PACheryl McCann Pittston Township PAKelly Scott Moon Township PAFaith Ann Stipanovich Carnegie PA

2017: Get Active!

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PERSISTENCEis the answer, and a sense of humor helps

Quentin L. Cook

Get Involved: www.advocacy.shrm.org

The Last Word

Lisa HornDirector, Congressional AffairsLisa.Horn@shrm.org

Twitter: @SHRMLobbystLisa

1800 Duke StreetAlexandria, VA 22314

+1-703-535-6352 Direct

Contact Info

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Nancy HammerSenior Government Affairs Policy CounselNancy.Hammer@shrm.org

Twitter: @HammerSHRM

1800 Duke StreetAlexandria, VA 22314

+1-703-535-6030 Direct