As the HR Policy Association formally released its health care reform plan this week, the Association's Chairman called on Congress to “make tough choices and take bold action to fix our health care system.”  HR Policy Chairman J. Randall MacDonald, Senior Vice President of Human Resources for IBM Corporation presented the plan to Congress in testifying before the House Ways and Means Committee on behalf of IBM and the Association.  Mr. MacDonald told the Committee: “A successful health care reform agenda will build a patient-centered, accountable and competitive health care market place that delivers effective outcomes and improved unit costs.”  Members of the Committee were impressed with IBM’s own sizeable return on investment in wellness and prevention programs and ability to hold costs below trend.  The strength of the employment-based system was the primary focus of the hearing and Mr. MacDonald cautioned that while employers are open to broad reform solutions, Congress should not start from scratch, but instead build upon the employer-based system.  He warned against threatening employer coverage by weakening ERISA preemption or limiting the existing tax exclusion for employer provided benefits.  The latter point in particular drew strong agreement from the AFL-CIO's Gerald Shea. MacDonald underscored the importance of not undermining employer coverage by pointing out that "the majority of Americans - more than 160 million - receive health care through employment-based coverage, and most Americans who do so are pleased with it."

Ways and Means Testimony

Press Release

 The Association's health reform position paper, An Agenda For Mutual Responsibility, seeks to build upon the existing combination of employer coverage, a private market, and government programs to ensure all Americans have health care coverage within a sustainable system.  On release of the plan, HR Policy's Health Care Policy Committee Chairperson Johnna Torsone, Executive Vice President and Chief Human Resources Officer of Pitney Bowes Inc., said: “We look forward to using the Association’s plan to work with Congress and the President to take the necessary steps to transform our health care system.”  The plan's recommendations are based on the view that our health care system is plagued not only by a coverage problem, but also cost and quality problems that have resulted in millions of uninsured Americans, barriers to coverage, and uneven quality.  The Association’s reform position includes the following specific recommendations:

• maintaining the existing ERISA preemption framework and tax exclusion for employer-provided benefits;
• an individual mandate for everyone to maintain public or private coverage and sliding scale subsidies to help low- and moderate-income people afford coverage;
• changes to insurance regulations to insure guaranteed-issue coverage;
• restructuring government programs to reimburse providers based on value;
• creating incentives and changes to reimbursement to strengthen primary care and care coordination; and
• investments in comparative effectiveness and great transparency about the relative cost and quality of treatments.

In other encouraging news on health reform, the Senate Finance Committee released policy options on delivery system reforms that are generally consistent with the recommendations in the Association's reform plan.  The delivery reform options did not elicit strong dissension from Committee members from either party who reviewed the recommendations in a six-hour "walk through" meeting this week. 

Association Health Reform Plan

Finance Committee Delivery Options

Finance Committee Press Release

The SEC is considering revamping how executive compensation is reported in the Summary Compensation Table of proxy statements as part of its forthcoming disclosure rulemaking.  In an Associated Press article, SEC Chairman Mary Schapiro provided more detail on the issues under consideration, including:

• requiring greater disclosure of how companies manage risk "from financial issues to climate change," and how compensation is affected;
• expanding disclosure of employees outside the proxy officers by explaining the structure of their bonus programs for the broader work force giving more information about the ''kind of conduct [that] is incentivized by paychecks;'' and
• requiring greater disclosure of how boards use peer group comparisons.

The SEC may propose the new rules as early as June.  As the Association's Center On Executive Compensation has repeatedly noted, the current summary compensation table provides a total compensation number that mixes current year compensation with a portion of potential future long-term compensation that may not be earned.  The Center has developed a model alternative disclosure to remove this apples-to-oranges comparison. 

AP Article on SEC Disclosure

Specter EFCA Statement

 President Obama has moved to fill two of the three open seats at the National Labor Relations Board, including a lawyer with prolific writings urging changing the law to favor unions.  Filling the open Democrat seats, the President announced his intention to nominate Craig Becker, a Chicago attorney who serves as Associate General Counsel to both the SEIU and the AFL-CIO, and Mark Pearce, a union-side attorney with the Buffalo firm of Creighton, Pearce, Johnsen & Giroux.  The remaining seat would be filled by a Republican whose name has not yet emerged.  Mr. Becker has written extensively over the years and, in a 1993 law review article, proposed virtually eliminating the employer role in union representation elections, which he views as "anomalous."  He writes: "So long as the law construes employers and unions as equals in union elections, industrial democracy will remain as much a legal fiction as liberty of contract."  Further, Mr. Becker believes many changes could be made without Congress having to change the statute, including:

• denying employers any role in NLRB proceedings that determine which group of employees the union would represent (”appropriate unit”);
• removing the election itself from the workplace and barring employers from placing observers at the polls;
• barring employers from being able to challenge election results based on objectionable conduct by the union or participate in unfair labor practice cases involving such union conduct; and
• establishing a “body of new campaign rules” for employers that would seek to prevent an employer from “exploit[ing] its authority as employer to augment the impact of its speech.”

Becker Law Review Article

 Several member companies have told us there is a strong need for increasing the level of global labor and employment relations knowledge and skills within global corporations.  To address this need, the week of July 27-31 in Washington, DC, we will be conducting a new program for high potential HR professionals, designed specifically to build their capabilities in the effective management of labor and employment relations in a global company.  This intensive program will involve:

• preparatory assignments preceding the workshop;
• completion of a practical and company-specific global HR project;
• expert external consulting support in the completion of the project; and
• a five-day knowledge and skills building workshop.

If your company is interested in sending one or more members of your HR team to this program, register at the link provided or contact Jay Harvey (jharvey@hrpolicy.org) or Tom Hayes (tom.hayes@beerg.com) and we will follow up with you in more detail.

Registration Form

 As the U.S. debates whether to move toward more European-style labor laws, the image often portrayed of more cooperative labor-management relations in the EU is being tarnished by recent events.  As reported in this week's BEERG newsletter:

• the phenomenon of "bossnapping" has now reached Belgium, where the employees of a U.S.-based chemical company blockaded managers in their offices for several hours in order to exert pressure on severance negotiations;
• workers in EdF and GdF, the French electricity and gas utilities recently cut power and gas supplies to consumers in order to push a claim for a 10% pay increase and an end to the outsourcing of jobs; and
• workers from the German automotive supplier, Continental, ransacked company and local authority offices after a court rejected their claim that the company was in breach of its information and consultation obligations when it announced its intention to close plants in France and Germany without first consulting its EWC.

The newsletter reports that public tolerance of such incidents is waning, with governments denouncing such actions and threatening to take legal action. Yet, press reports in France quote the workers involved as saying that “they are determined to press ahead with the struggle against free-market forces.” In further sign of hardening attitudes on the management side, the American automotive company Molex filed a lawsuit for sequestration after two managers were held for two days by workers — a departure from many of the other  "bossnapping" cases, in which managers and workers agreed to keep the affair in-house and avoid going to court.

BEERG Newsletter (5/1/2009)

A recent document issued by the EEOC suggesting "best practices" could very well turn into test cases that the new Commission may bring against employers.  The recommendations included in "Employer Best Practices for Workers with Caregiving Responsibilities" go beyond existing federal EEO requirements   In stating that employers should not engage in any "stereotyping" about employees and caregiving, the EEOC suggestions include "encouraging employees to request flexible work arrangements" and "determining whether a voluntary, rather than mandatory, overtime system would meet the needs of the organization."   It remains to be seen whether employers who fail to do this could become subject to an EEOC complaint.

EEOC Guidance

Someone will have to pay the economic price if EFCA passes, according to a new policy brief released this week by Applied Economic Strategies.  The brief, released in collaboration with HR Policy, rebuts claims that EFCA would be good for the economy.  Among other things, the study shows:

• states with higher unionization rates have significantly slower GDP growth rates;
• job growth is slower in high union density states and increasing union influence will slow state GDP growth and per capita income growth;
• based on the results of the recent LECG study, passage of EFCA will lead to higher unemployment rates – for every 1.5 million workers who are organized under EFCA, 600,000 Americans would lose their jobs the following year; and
• EFCA would slow wage growth. 

AES Policy Brief

Senators Dick Durbin (D-IL) and Chuck Grassley (R-IA) have reintroduced legislation that would severely restrict the ability of employers to obtain H-1B and L-1 visas.  Contending that the current law enables companies to use the visas to "replace qualified American workers," the bill would:

• require all employers to undertake a rigorous process prior to submitting an H-1B application, regardless of the percentage of their workforce comprised of visa-holders;
• expand the authority of DOL to conduct audits of companies with H-1B workers, while requiring audits of some companies;
• require more rigorous review of visa applications by DOL; and
• require a separate application for each L-1 visa and establish a process for DOL to investigate, audit and penalize L-1 employers.

Bill Description

S. 887

H.R. 2077

 There were several activities this week marking so-called "Equal Pay Day," with DOL Secretary Hilda Solis vowing to "work to close the pay gap that is taking millions of dollars out of the pockets of families across the country and undermining our economic stability.”  Yet, a Joint Economic Committee unveiled another side of the issue supporting arguments that the gap is not necessarily a reflection of discriminatory pay practices.  A GAO report found that the pay gap between men and women in the federal government has declined from 28 percent in 1988 to 11 percent in 2007.  Though the study was limited to the federal government, what is noteworthy is that the GAO acknowledged that, after accounting for certain measurable differences, such as education, years of service, etc., the unexplained portion of the pay gap shrinks to just seven percent.  These factors are rarely considered in studies used to bolster more severe wage discrimination laws.  Moreover, GAO said that, despite the gap that still remains, its “analysis neither confirms nor refutes the presence of discriminatory actions.”  Meanwhile, Sen. Tom Harkin (D-IA) and Del. Eleanor Holmes Norton (D-DC) reintroduced the Fair Pay Act (S. 904/H.R. 2151) to establish comparable worth (i.e., equal pay for jobs that are equivalent in terms of skills, effort, responsibility and working conditions) as a standard for sex-, race-, and national origin-based wage discrimination.

GAO Report on the Gender Pay Gap