This Week in HR Policy - 12/18/2015 - News for Chief Human Resource Officers From HR Policy Association [Links to full text of stories at bottom of email]

TWO YEAR DELAY TO "CADILLAC TAX" RAISES DOUBTS ABOUT ITS LONG-TERM PROSPECTS

SEC DIRECTED TO UNDERTAKE DISCLOSURE REFORM IN TRANSPORTATION BILL SIGNED BY PRESIDENT

HILLARY CLINTON SUGGESTS ACA DEFINITION OF FULL-TIME EMPLOYEE MAY NEED TO BE REFORMED

FINAL BUDGET PACKAGE ELIMINATES MOST RIDERS, KEEPS BAN ON SEC POLITICAL SPENDING DISCLOSURE REQUIREMENT

CRUZ H-1B BILL WOULD MAKE HIRING GUEST WORKERS SIGNIFICANTLY MORE COSTLY FOR EMPLOYERS

SUPREME COURT RULING ON CONSUMER ARBITRATION A GOOD SIGN FOR EMPLOYMENT AGREEMENTS

ASSOCIATION MEMBERS CONTRIBUTE RECOMMENDED "ACTIVE SHOOTER" PREPAREDNESS AND PREVENTION STRATEGIES AND PROGRAMS TO HR POLICY WEBPAGE

SEATTLE BECOMES FIRST JURISDICTION TO ENACT "GIG ECONOMY" LEGISLATION

BEERG: 2016 OUTLOOK HIGHLIGHTS SAFE HARBOUR AND GLOBAL UNION FEDERATIONS

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TWO YEAR DELAY TO "CADILLAC TAX" RAISES DOUBTS ABOUT ITS LONG-TERM PROSPECTS

Earlier this year, the American Health Policy Institute hosted a forum which, for the first time, brought employers and labor together to discuss their common concerns regarding the "Cadillac Tax;" this week, Congress took a welcome step towards addressing those concerns.  The budget deal, passed today by Congress and expected to be signed by the President, delays the 40 percent excise tax on so-called high value health insurance plans for two years, until 2020, and raises questions regarding whether the tax will ever actually go into effect.  The broad application of the Cadillac Tax is a major concern for all businesses because of the disruption it would cause to employer-sponsored health care benefits as well as its unpopularity on both sides of the political divide.  The delay means that businesses now have more time to prepare for the tax, and also that opponents of the tax will have an opportunity to push for its complete repeal after President Obama leaves office.  President Obama has been reluctant to change any part of his Affordable Care Act (ACA), and delaying the Cadillac Tax, as well as the ACA taxes on health insurance and medical devices, marks the first time the President has been willing to accept any significant tax changes to his signature health care legislation.  The American Health Policy Institute has been a leading voice in the case against the tax, publishing multiple studies and op-eds on the topic. Top

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SEC DIRECTED TO UNDERTAKE DISCLOSURE REFORM IN TRANSPORTATION BILL SIGNED BY PRESIDENT

The recently adopted transportation bill requires the SEC to accelerate the pace of its project to reform the corporate disclosure regime, including executive compensation disclosures, in an effort to reduce reporting burdens and eliminate "duplicative, overlapping, outdated, or unnecessary" information.  The provision addressing disclosure reform was approved shortly after Keith Higgins, the SEC's Director of the Division of Corporation Finance, announced his intention to embark on a comprehensive review of executive compensation disclosures this year.  The mandate in the transportation bill, however, now provides specific deadlines and accountabilities.  Specifically, the transportation law:
  • Requires the SEC by June 2, 2016 to issue regulations which "scale or eliminate" requirements of Regulation S-K, which includes executive compensation disclosures in the proxy statement, to reduce reporting burdens and streamline the disclosure reporting requirements by getting rid of "duplicative, overlapping, outdated, or unnecessary" information.

  • Within a year of enactment, requires the SEC to publish a study on Regulation S-K, and within a year after publication to issue rules based on the study to:

    • Determine the best method to modernize and simplify the reporting requirements to reduce costs and burdens on companies;

    • Emphasize a more company focused approach to disclosure which would provide investors with material information while avoiding boilerplate language; and

    • Evaluate methods of information delivery and presentation and explore methods for discouraging repetition and the disclosure of immaterial information.
The SEC will have until June 2, 2016 to issue regulations allowing a summary page in the 10-K as long as they include cross-references to more fulsome disclosure elsewhere in the Form 10-K.  Disclosure reform has been a priority of SEC Chair Mary Jo White, but it has received limited consideration due to Congressionally-mandated rules under Dodd-Frank and other laws.  While it is not known which disclosures and requirements the SEC would seek to scale back or eliminate, a comprehensive disclosure reform effort has the potential to improve the quality of corporate disclosures while also making it easier for companies to comply.  The Association's Center On Executive Compensation will be engaging the SEC throughout the process. Top

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HILLARY CLINTON SUGGESTS ACA DEFINITION OF FULL-TIME EMPLOYEE MAY NEED TO BE REFORMED

This week, Democratic presidential candidate Hillary Clinton suggested she is not in favor of the Affordable Care Act's 30-hour definition for full-time employees.  According to Secretary Clinton, the ACA has "some unfortunate incentives that discourage full-time employment."  She went on to say "we've got to change that," although she did not say how she would amend the law, mentioning rather that she wants to "look at all the employment rules."  Under the ACA, the definition of full-time employee is set at 30 hours per week, instead of the 40-hour standard under the Fair Labor Standards Act.  "I really worry about it because there is a trend to try and move more and more people into part-time work," Clinton said.  While bipartisan bills (S. 30 and H.R. 30) have been introduced to change the definition to 40 hours, it is unlikely Congress will move the bills before 2017. Top

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FINAL BUDGET PACKAGE ELIMINATES MOST RIDERS, KEEPS BAN ON SEC POLITICAL SPENDING DISCLOSURE REQUIREMENT

Despite a strong push for a reversal of the NLRB "joint employer" rule, the final budget bill passed by Congress today does not include that or any other labor-related "riders," but it does prohibit the SEC from issuing new rules requiring public companies to disclose political and lobbying expenditures to shareholders.  Notable items in (or out of) the package include:
  • SEC Political Disclosure Ban – The rider blocks the SEC from pursing political and lobbying spending disclosure rulemaking.  However, it will remain a priority for unions and other interest groups, who can be expected to advocate strongly in favor of the disclosure in the 2016 presidential election year.  The inclusion of the provision in the omnibus spending deal is significant, as there has been considerable pressure on SEC Chair Mary Jo White to undertake the disclosure, and the SEC has received over one million public requests on its website.

  • Cadillac Tax and Other ACA Items – In addition to the two year delay in the excise tax on high value employer health plans (see separate story), there were two additional items involving the Affordable Care Act—a two year moratorium on the Medical Device Tax and a one year moratorium on the tax imposed on health insurance companies' offerings of fully insured products.

  • Funding for Implementation of Blacklisting Rule – The package specifically excludes any funding of an important component of the Fair Pay and Safe Workplaces (a.k.a., Blacklisting) Executive Order.  The Order contemplates an Office of Labor Compliance within the Department of Labor to assist the contracting officers in the various federal agencies in applying the Executive Order, which requires determinations regarding the severity of adjudicated and alleged labor law violations by contractors, and their efforts to comply.  The Office thus will not be funded in 2016.  However, the package does not include a rider prohibiting a final rule on the Order, thus allowing it to proceed next year, as expected.

  • No NLRB Joint Employer Rider – The package does not include a reversal of the NLRB's controversial "joint employer" rule in its Browning-Ferris Industries decision.  However, the efforts to include the rider generated strong support from the business community as well as indications of significant Democratic support.  Clearly, this issue is not going away.

  • Visa Waivers – The omnibus includes the Visa Waiver Program Improvement Act of 2015 (H.R. 158), which will require foreign nationals who have traveled to Iraq, Syria, or other countries of concern in the last five years to obtain a non-immigrant visitor visa from a U.S. embassy in order to travel to the U.S.  No exceptions for business travelers are included.

  • No Fiduciary Rule Rider – The omnibus does not include a provision prohibiting DOL from proceeding with its fiduciary rulemaking, despite strong bipartisan opposition to the rule.
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CRUZ H-1B BILL WOULD MAKE HIRING GUEST WORKERS SIGNIFICANTLY MORE COSTLY FOR EMPLOYERS

In a preview of what a Ted Cruz Administration could mean for high-skilled immigration, Senators Cruz (R-TX) and Jeff Sessions (R-AL) have introduced the American Jobs First Act of 2015, which would set a minimum wage for temporary H-1B visa workers so high that it would almost render the visa program meaningless.  According to Sen. Cruz, the bill (S. 2394) "aligns the program with its original intent, [and] does more to prevent employers from using the program to replace hard-working American men and women with cheaper foreign labor."  Specifically, S. 2394 would:
  • Require employers to pay H-1B workers at least $110,000 per year;
  • Prevent employers from bringing on an H-1B worker within two years of a strike, lockout, layoff, furlough, or other type of involuntary employee termination; and
  • Eliminate the Optional Practical Training Program (OPT), which provides a means to work via a student visa in the U.S. for at least 12 months.
Eliminating OPT puts this bill at odds with the Administration's effort to finalize regulations to extend the time science, technology, engineering and math students can work in the U.S. under their student visas from the current 29 months to 36 months.  S. 2394 joins two other H-1B reform bills, S. 2266 by Senate Judiciary Committee Chairman Chuck Grassley (R-IA) and Dick Durbin (D-IL) and S. 2365 by Sen. Bill Nelson (D-FL), giving Chairman Grassley a number of approaches for reforming the H-1B program next year. Top

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SUPREME COURT RULING ON CONSUMER ARBITRATION A GOOD SIGN FOR EMPLOYMENT AGREEMENTS

A Supreme Court decision this week upheld an arbitration agreement in a consumer case, signaling that the Court will also likely uphold an arbitration agreement regarding employment claims in a case it will hear later this term.  In DirecTV v. Imburgia, Justice Stephen Breyer delivered a strong rebuke to lower court judges attempting to evade the Federal Arbitration Act by invalidating arbitration agreements on the basis of state law.  Later this term, the Court will hear MHN Government Services, Inc v. Zaborowski, a case where an arbitration agreement based on employment claims was denied because of a state law that prevented the arbitration provision from being separated from other allegedly invalid contract terms.  Both cases come out of California, where progressive judges have made clear their objection to arbitration agreements.  Given the holding in DirecTV and that the workers in MHN are making a similar argument to the consumers in DirecTV, most observers are expecting the Court to uphold the arbitration agreement in MHN. Top

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ASSOCIATION MEMBERS CONTRIBUTE RECOMMENDED "ACTIVE SHOOTER" PREPAREDNESS AND PREVENTION STRATEGIES AND PROGRAMS TO HR POLICY WEBPAGE

The recent tragedies in Paris, Colorado Springs and San Bernardino have created heightened concerns around workplace safety, and our member companies are responding in a variety of creative and effective ways.  Responding to our request, HR Policy members contributed recommended "active shooter" preparedness strategies, programs, and materials they are currently using, which we have compiled on the HR Policy Active Shooter Prevention and Preparedness webpage in order to raise the level of safety of employees overall.  Among highly recommended programs were those from the Center for Personal Protection and Safety, the Department of Homeland Security, and a brief educational video from the Houston Police Department titled, "Run. Hide. Fight."  A number of member companies also provided detailed insight into their respective "active shooter" prevention and preparedness strategies.  HR Policy encourages that the webpage and the information therein be shared widely in order to help prevent and prepare for such tragedies, and welcomes further insights and recommendations. Top

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SEATTLE BECOMES FIRST JURISDICTION TO ENACT "GIG ECONOMY" LEGISLATION

This week, Seattle enacted controversial legislation to allow drivers for Uber and Lyft, taxi drivers, and other "for-hire" drivers to form unions, making Seattle the first jurisdiction in the country to respond legislatively to the employment issues implicated by the so-called "gig economy."  Under the ordinance, an entity can apply to the city to become a “qualified driver representative” (QDR), a non-profit organization that would collectively bargain on behalf of the drivers.  The law contains very specific requirements regarding the personal information the companies would have to provide the QDRs and a minimum of hours of driving time for drivers to qualify.  Instead of a secret ballot election conducted by a governmental entity similar to that under federal labor law, a QDR will become the exclusive bargaining representative for drivers with a particular company when a majority of qualifying drivers submit statements of interest.  Companies will then have to meet and bargain in good faith with the QDR over vehicle safety, hours, pay, and other terms and conditions.  The law contains similar provisions enabling the drivers to later get rid of the QDR as their representative, but again does not allow for a secret ballot election.  Importantly, the measure is limited to drivers with human passengers, excluding Amazon drivers for the Flex and Prime Now services.  Amazon, based in Seattle, is currently facing a lawsuit seeking class-action status over its treatment of drivers for its Prime Now service.  Uber and Lyft both released statements criticizing the vote because it will threaten the flexibility that drivers enjoy under the current arrangement as well as the privacy of the drivers.  The new law will likely face a legal challenge under the National Labor Relations Act, under which courts have generally favored a strong NLRA preemption, as well as under antitrust law. Top

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BEERG: 2016 OUTLOOK HIGHLIGHTS SAFE HARBOUR AND GLOBAL UNION FEDERATIONS

A special edition of BEERG's newsletter this week contains a number of projections from prominent sources, including BEERG's Derek Mooney, who writes that chief negotiators of a new Safe Harbour for international transfers of personal data sounded positive about successfully negotiating a new agreement by the end of January 2016.  Mooney also highlights the use of social media by workers to outmaneuver union leaderships, most notably in September when 65 percent of Fiat Chrysler workers rejected their first UAW agreement.  When the deal was presented again, the UAW used its own Facebook pages and YouTube videos to better explain the details of the tentative agreement.  Expect to see this having repercussions in 2016 as unions play catch-up on social media.  Auret Van Heerden, President & CEO of Equiception Inc., writes that the Global Union Federations have completed their mergers and consolidations and are retooling their old campaign strategies.  The convergence of campaign tactics between students, NGOs and unions is most explicit in the International Union League for Brand Responsibility, which brings together unions in 13 countries with support from groups like United Students Against Sweatshops (USAS), Labour Behind the Label, the Clean Clothes Campaign (CCC) and the Asia Monitor Resource Centre (AMRC).  Importantly, most of the companies' representatives in these and similar groups are from Corporate Social Responsibility departments, not from HR.  Next year is expected to bring numerous skirmishes over company restructuring and relocation, living wage campaigns and calls for collective bargaining, a focus on precarious work and attempts to organize in previously closed labor markets.  Read these and other observations in the full BEERG Global Labor Newsletter here. Top

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