Leading People. Leading Organizations.

1. D WASHINGTON UPDATE Leading People. Leading Organizations. SHRM CLA Webinar February 5, 2014 Kathleen Coulombe, Senior Advisor, Government Relations Chatrane Birbal, Senior Advisor, Government Relations Nancy Hammer, Senior Government Affairs Policy Counsel

2. Agenda Latest news from inside Washington Policy Issues for 2014 Regulatory action to watch Q&A

4. Congress Job Approval: 13% in January, Up Slightly December Gallup, January 14, 2014

5. State of the Union Laid out presidential priorities, including: Minimum Wage Increase Government Sponsored Retirement Immigration Reform Compensation Equity Unemployment Insurance Extension

6. Public Policy Items in 2014 Debt Ceiling Increase Unemployment Insurance Extension Retirement Security & Tax Reform Labor Relations Health Care Immigration Reform

7. Debt Ceiling Increase U.S will hit the debt ceiling on Friday, February 7. Treasury Department will be able to take action that delays ceiling through end of February. Congress likely to act.

8. Unemployment Insurance Extension Attempts at passing an extension failed mid-January despite the Senate invoking cloture. Majority Leader Harry Reid (D-NV) has revived the effort this week. In an effort to garner republican support, Leader Reid offered Sen. Jack Reed’s (D-RI) amendment to S 1845 that would extend EUC through March 31st and seek to “pay for” the extension largely through a pension smoothing proposal that would permit employers to reduce pension contributions, resulting in money available to be spent in the economy and presumably increase tax revenue. The amendment would also prohibit the payment of unemployment compensation (UI,EB or EUC) to individuals with annual adjusted gross income of $1 million or more in the year prior to their applying for unemployment compensation. This is similar to an earlier proposal from Senator Coburn (R-OK) and includes not only the prohibition against making such payments but no federal funding for administration of the provision. The provision would affect a very small number of applicants but provides some savings. "What we are going to do is offer a fully paid for three-month extension of unemployment insurance.“ Majority Leader Harry Reid, (D-NV)

9. Retirement Security & Tax Reform President unveiled MYRA during the State of the Union. Senator Tom Harkin (D-IA) introduced the Universal, Secure, and Adaptable (USA) Retirement Funds Act of 2014. Expect legislation to be introduced and marked up in the House Ways and Means Committee by Chairman Dave Camp (R-MI), focusing on tax reform. SHRM continues to advocate on this issues as Chair of the Coalition to Protect Retirement

10. President Obama and Congressional Democrats have initiated national conversation on “income equity,” advocating for increasing the minimum wage and passing the Paycheck Fairness Act. Proposal of increasing the federal minimum wage to $10.10 was raised in the State of the Union. 76% of Americans are in favor of a wage increase. Labor Relations

11. Labor Relations • Major labor-management legislation unlikely be moved this year. • Labor relations policy will be addressed by the Federal agencies. • Workplace Flexibility • Advocates continue to push expansion of FMLA/paid sick leave at state and local level but enactment at federal level impossible. • Obama Administration’s focus on workflex will continue. • Successful efforts on “comp time” in the House unlikely to translate to the Senate.

12. Health Care • Efforts to delay regulatory or amend PPACA legislatively may increase if enrollment continues to lag. • Congressional oversight and regulatory guidance continues. • Tax-deferred status of health care benefits could become a target in tax reform. • Next steps for employers: • Employers and group health care plans continue implementation efforts. • Await and focus on additional guidance from federal agencies. • Review 2014 requirements and beyond. • H.R. 2575, the Save American Workers Act, introduced by Rep. Todd Young, (R-IN). Is the House version of the Sen. Susan Collins (R-ME) bill, 40 Hours is Full-Time Act.  HR 2575 would repeal the 30-hour classification for purposes of the employer mandate under the Affordable Care Act.

13. Immigration Reform House Republicans Release Standards Employment Verification and Workplace Enforcement “In the 21st century it is unacceptable that the majority of employees have their work eligibility verified through a paper based system wrought with fraud. It is past time for this country to fully implement a workable electronic employment verification system.”

14. SHRM and Council supports: Creation of a fully electronic verification system that integrates the paper-based Form I-9 into the E-Verify system and moves toward a more secure system that authenticates identity and verifies employment eligibility providing better certainty that the person being hired is authorized to work in the U.S. Providing employers with a voluntary option to use a knowledge-based authentication (KBA) system if they used it for 100 percent of their new-hire verifications to assure the highest level of certainty, significantly improving the prevention of identity theft in the employment verification process. Strengthening the safe harbor for employers for decisions made based on information provided by the E-Verify system.

15. Specifically, we are seeking an amendment that would: Streamline the employment verification process with a voluntary identity authentication mechanism as a fully available option to employers for employment verification within 18 months of enactment. The voluntary identity authentication program will use multi-dimensional technology to verify an individual’s identity through publicly available databases (including Social Security, Homeland Security, U.S.-VISIT and passport and visa). This voluntary authentication program replaces a four-stage, document driven process with modern tools to prevent the use of stolen identities to achieve work approval. This new approach of identity authentication is needed because the verification system in the bill remains vulnerable to identity theft.

16. Support the Identity Authentication Amendment to H.R. 1772 (Legal Workforce Act) and Make E-Verify More Reliable, Secure H.R. 1772 mandates E-Verify for all employers, but does not provide for adequate identity authentication – failing to protect against unauthorized workers and leaving employers unfairly open to liability. Adopt an identity authentication amendment, which would preserve H.R. 1772’s underlying E-Verify requirements and add a critical but voluntary step for employers to accurately verify identity. A coalition of Washington, DC based organizations are meeting with House members to garner support. Representatives of the meat and poultry industry, in-house immigration professionals and the human resources professionals – including the Food Manufacturers Immigration Coalition (FMIC), the National Association of Manufacturers (NAM), Council for Global Immigration and the Society of Human Resource Management (SHRM) – support the Identity Authentication Amendment to H.R. 1772.

17. A-Team Target States 2010-2014 For more information about the A-Team contact, Chatrane Birbal Chatrane.Birbal@shrm.org or 703/535-6476.

19. Hear from thought-provoking, informed keynote speakers who will dissect the issues of the day, including an up-to-the-minute analysis of politics and the upcoming 2014 elections and behind-the-scenes views of the Supreme Court. KEYNOTE SPEAKERS PAUL BEGALA,Political analyst, commentator and professor atGeorgetown University. TUCKER CARLSON,Co-host, “Fox and Friends Weekend,” and editor-in-chief,“The Daily Caller.” JEFFREY TOOBIN,Best-selling author and staff writer forThe New Yorker. CARLY FIORINA,Chairman of GOOD360 and Former California Senate Candidate. MIKE AITKEN,SHRM's Vice President of Government Affairs.

20. State of the Union, January 2014 “Some require Congressional action, and I’m eager to work with all of you. But America does not stand still – and neither will I. So wherever and whenever I can take steps without legislation to expand opportunity for more American families, that’s what I’m going to do.”

21. White Housefocus on long-term unemployment • final stage; 31 rules at the proposed stage East Room of the White House January 31, 2014 http://www.whitehouse.gov/photos-and-video/video/2014/01/31/remarks-president-giving-long-term-unemployed-fair-shot U.S. Department of Labor Secretary of Labor Tom Perez

22. U.S. Department of Labor - OLMS • Persuader rule – date pushed off until March 2014 • Proposed rule published June 21, 2011 and comments submitted Sept. 21. • For more than 50 years, DOL has distinguished between “direct” and “indirect” contact with employees, requiring direct contacts to be reported but NOT requiring the following types of advice to be reported: Providing draft speeches to an employer; training supervisors, drafting policies, etc. • DOL states that “the current interpretation of "advice" has resulted in significant underreporting of employer and consultant persuader agreements. • HR concern: Expanded definition is too broad and may drive consultants and law firms from the marketplace. Could include seminars and webinars.

23. U.S. Department of Labor - OFCCP • Possible Proposed Rules to Revise Sex Discrimination Guidelines • Could be issued by May 2014 • Current sex discrimination guidelines have not been updated in more than 30 years—regulatory lookback • New Compensation Data Collection Tool • Could be issued early 2014 • Used to identify contractor likely to engage in sex- and race-based compensation discrimination • Industry-wide analysis

24. U.S. Department of Labor- WHD • Definition of “Spouse” under FMLA – expected March 2014 • Revised definition of spouse under FMLA in light of US v. Windsor • Right to Know • Long-term initiative to enhance transparency under Fair Labor Standards Act • Disclosure to workers of their status as the employer’s employee or independent contractor status and, if an employee, how their pay is computed • Proposed Worker Classification Survey at OMB for review and approval. • Many believe this survey will be used to justify the need for a right-to-know rule

25. Healthcare Reform • Final Rule regarding the 90-day waiting period and other technical amendments • Nondiscrimination provisions under ACA • Prohibitions against discrimination on the basis of race, color, national origin, sex, age and disability (section 1557 of ACA) Final Rule from IRS on pay-or-play and reporting requirements

26. Equal Employment Opportunity Commission • Commissioner Chai Feldblum confirmed by Senate for another 5-year term on Dec. 12 • New Issues: • November meeting on national origin discrimination in the workplace • Unfinished Business: • May 2013 Wellness meeting • Leaves of absence as a reasonable accommodation under ADAAA • Credit Checks • Senator Elizabeth Warren introduced Equal Employment for All Act (S. 1837) • Amends Fair Credit Reporting Act to prevent employers from discriminating against employees on the basis of their credit report. • Exception for jobs that require a national security clearance or where credit information is otherwise required by law. • Does NOT include exceptions for positions in the financial services or banking industries. • 2010 EEOC meeting – part of its focus on eliminating barriers in employment

27. National Labor Relations Board • “Ambush” or “Quickie” Election Rule – No date set • Initially introduced in June 2011 • Makes changes to pre- and post- union election procedures in order to ease unionization • Enforcement of the rule was stayed after the US District Court for the District of Columbia held that the NLRB did not have a proper quorum to pass the rule. • New NLRB properly appointed and renewed action on the rule expected • National Labor Relations Board v. Noel Canning • Whether the President’s recess-appointment power may be exercised: • during a recess that occurs within a session of the Senate, or only those that occur between sessions; • to fill vacancies that exist during a recess, or only those that first arose during that recess; and • when the Senate is convening every three days in pro forma sessions.

28. QUESTIONS??

29. Government Affairs Contact Information: Mike Aitken Vice President, Government Affairs Office: 703-535-6027 Cell: 703-625-1784 Mike.Aitken@shrm.org Chatrane Birbal Senior Advisor, Government Relations Office: 703-535-6476 Cell: 917-627-4682 Chatrane.Birbal@shrm.org Bob Carragher Senior Advisor, State Affairs Office: 703-535-6268 Cell: 571-251-1135 Robert.Carragher@shrm.org Kathleen Coulombe Senior Advisor, Government Relations Office: 703-535-6061 Cell: 571-263-2454 Kathleen.Coulombe@shrm.org Nancy Hammer, Esq. Senior Government Affairs Policy Counsel Office: 703-535-6030 Cell: 703-598-8585 Nancy.Hammer@shrm.org Lisa Horn Director, Congressional Affairs Office: 703-535-6352 Cell: 703-731-4669 Lisa.Horn@shrm.org