Industry experts react to midterm elections
Experts on health care, benefits, and retirement assess the impact on legislation, regulation, and the benefits industry.
Emily M. Dickens – Corporate secretary and chief of staff at the Society for Human Resource Management
It’s time for HR to get to work educating legislators. With divided power at the federal level, the states will become more active on issues that impact work, the worker and the workplace. And the influx of female perspectives will bring to the forefront legislative agendas that address equity issues, sick and family leave, the minimum wage, pay equity and workplace culture.
When it comes to workflex and paid leave, momentum for paid leave continues to grow, signaling there may be room for middle ground.
SHRM will continue to advocate for the Workflex in the 21st Century Act, which would offer both paid leave and workflex options and benefit both employees and employers.
On workplace immigration, immigration reform requires bipartisanship. With a split Congress, HR must highlight the need for having access to skilled workers, protecting U.S. workers, closing the skills gap and providing employers with the necessary tools to hire a legal workforce.
SHRM will advocate for access to global talent, an efficient and predictable immigration system, and a fully electronic and integrated I-9 and E-Verify system.
With workforce development, look for Democrats to put emphasis on pro-union proposals, which will be met with opposition from Senate Republicans and President Trump.
This provides an opportunity for HR to educate decision-makers on policies that strengthen employer-provided educational assistance (Section 127 of the tax code), apprenticeship programs and other initiatives that help employers invest in workforce development and training.
Regarding workplace equity, legislation in the House will likely focus on gender equity, including pay equity and prohibiting the use of salary history in hiring. With momentum of the #MeToo movement, there likely be democratic proposals to limit the use of arbitration and non-disclosure agreements.
James A. Paretti, Jr. & Michael J. Lotito – Attorneys at Littler Mendelson P.C.
Representative Bobby Scott (D-VA), who is widely anticipated to be the Chair of the House Education and Labor Committee, is expected to pursue an aggressive oversight and legislative agenda on the labor front.
In addition to greater levels of oversight, we believe it is likely that House Democrats will make labor and employment issues a key focus of their domestic agenda, and initiate legislative proposals on a number of hot-button labor and employment issues.
House Democrats are likely to pursue an aggressive legislative agenda through hearings and committee consideration, with a number of bills potentially making it to the House floor for consideration.
Ban compulsory arbitration: Long a focus of employee advocates — and given new weight by way of the #MeToo movement — we expect to see efforts to limit if not ban completely compulsory arbitration of sexual harassment cases and workplace disputes more generally.
Increase entitlement to overtime: Another likely initiative from House Democrats will be to codify Obama-era white collar overtime rules (struck down by a federal court), which would have raised the minimum salary threshold for overtime eligibility to $47,476 (more than double current law), and provided indexed updates of the minimum wage every three years.
Promote workplace unionization: Foremost, the so-called ‘Workplace Democracy Act’ would make it easier for workers to form unions by way of “card check” procedures, contrasting with the current secret-ballot process and potentially subjecting workers to union pressure and intimidation. The bill would also expand the definition of joint employment for collective bargaining purposes, require mandatory arbitration to obtain a first contract, and generally tilt NLRB union election rules in workers’ favor.
Expand liability of joint employers: If card check proves too far a reach for some moderate congressional Democrats, we can be reasonably certain that legislation will be reintroduced to codify the Obama-era NLRB definition of ‘joint employer,’ which would impose liability and bargaining obligations on a broad range of employers that have little or no control over the working conditions of independent contractors or franchisee employees.
Raise the minimum wage: In the midst of a national campaign by organized labor to raise the federal minimum wage to $15/hour, House Democrats are likely to make legislation increasing the minimum wage and indexing it in the future a front-and-center piece of their legislative agenda.
Require mandatory sick and paid leave: Supporters of increased leave mandates can be expected to highlight legislative proposals requiring employers to provide paid sick leave, and paid family and medical leave, through a government-run (and potentially employer-financed) system.
Given that Republicans will continue to control the Senate, the chance of any of these bills making it to the president’s desk (where they would almost surely face a veto) seems slight.
That said, we fully expect that House Democrats will use these “message” bills to frame issues for the 2020 elections, and highlight key policy priorities.”
What about the Senate/? In the face of two more years of gridlock, there is a chance that Senate Republicans, House Democrats and the White House may compromise and come together on measures enjoying broad bipartisan support, such as infrastructure improvement, although the two sides differ widely on how best to pay for these investments.
Lacking such cooperation, Senate Majority Leader Mitch McConnell (R-KY) will likely focus the Senate on doing what it has done best in the last two years: confirming presidential nominations, most notably, federal judges.
At the same time, two years into the Trump administration, hundreds of key political appointee slots remain unfilled or pending Senate confirmation, slowing the progress of the administration’s regulatory agenda.
If no ‘grand bargain’ is struck in the lame duck session of Congress (by which a number of Republican and Democratic nominees would be agreed upon to be “packaged” and confirmed in short order), the next Senate session will be pressed to turn to filling a number of still-vacant positions, including the Assistant Secretary for Occupational Safety and Health, the Department of Labor’s Wage and Hour Administrator, and open seats on the Equal Employment Opportunity Commission, National Labor Relations Board, and other agencies.
Scott Behrens – Director, government relations at Lockton Benefit Group
Sam Henson – Director, legislative and regulatory affairs at Lockton Retirement Services, on Lockton’s blog
The American people have ushered in a new political dynamic by handing Democrats control of the House and reinforcing Republican control of the Senate. The consequences of the 2018 midterm elections will be wide ranging and will certainly impact the future of health care and retirement plan policy.
Health care policy remains contentious: Health care policy has consistently been reported one of the most important, if not the most important, issues in the midterm elections. There are some sharp partisan divides that we expect to continue to be fleshed out over the next two years and beyond. A divided Congress likely makes significant policy changes unlikely, though not impossible, over the next two years.
Nevertheless, Republicans are expected to continue efforts to chip away at the Affordable Care Act. A divided Congress will make that challenging and will put a microscope on executive actions.
To date, President Donald Trump has bet on policies that provide insureds, states and payers of healthcare flexibility to help stabilize and reduce health care costs (e.g., expansion of association health plans, short-term limited duration insurance, and health reimbursement arrangements).
Notably, this flexibility has given states more power, and we’ll soon know how that transfer of authority is worked out once most state legislative sessions begin in early 2019.
For their part, Democrats will likely continue to push to strengthen the ACA. Policies to fund certain ACA subsidies and reinsure risks taken by insurers in the individual market remain priorities.
The big question is how strongly Democrats will push some form of single-payer system. Multiple iterations of expanded government involvement in healthcare have already been proposed, ranging from a true single-payer system to a Medicare-buy-in option for older Americans not yet eligible for the program under current law.
The divided government will make actual policy difficult, but the debate bears watching, because it will likely shape Democratic action next time they gain power in both chambers.
Where we may see some bipartisan support is in price transparency and cost containment policies. This may include expanded restrictions on balance billing, increased access to telehealth and limited expansion of health savings accounts.
Retirement policy is more bipartisan, but does it have enough momentum? While Congress is divided on healthcare policy, surprisingly both Republicans and Democrats generally agree when it comes to retirement policy.
There is strong bipartisan support for retirement legislation in both the House and Senate with a good chance to pass in the last months of the current Congress. If there is a hurdle, it will be the GOP itself, which has seen leadership in the Senate clash with leadership in the House on who should drive legislation.
Keep an eye on the Senate’s Retirement Enhancement and Savings Act and the House’s Family Savings Act. Both bills share several common proposals, including open multiple-employer plans, simplified disclosures, annuity safe harbors and tax incentives for plans that encourage savings.
But there also are provisions unique to both bills, the most significant being that the FSA calls for the creation of Universal Savings Accounts, which would have a $2,500 contribution limit and would have tax treatment similar to Roths.
With time ticking, the GOP will need to come together and support one of the two bills to get some retirement legislation through before the next Congress.
Even if that doesn’t happen, not all is lost. With the Democrats now in control of the House, Rep. Richard Neal, Democrat from Massachusetts, is likely to be chairman of House Ways and Means Committee, and he considers retirement to be one of his biggest priorities.
Thus, it appears that retirement policy is a real opportunity for the parties to produce some meaningful legislation early in the next Congress.
Fisher & Phillips LLP attorneys Benjamin Ebbink and Richard Meneghello in JD Supra — The top 10 things to expect in labor and employment law
Worker-friendly bills expected to pass the House…then stall in the Senate: Eager to repay the support they received that vaulted them into power, employers can expect to see a slew of worker-friendly measures introduced and passed in the House.
It would not be surprising to see newly installed members of Congress swiftly pass a series of bills aimed directly at employers.
Among them, you might see a repeal of the Epic Systems case that cleared the use of class waivers, a full-scale prohibition on mandatory arbitration agreements, measures to limit right-to-work laws, a passage of card-check provisions to streamline union organizing, a return of the expansive persuader rule, the expansion of the worker-friendly ABC test for determining independent contractor status, and a boosting of the federal minimum wage towards $15 per hour.
However, most of these actions would be largely symbolic and would amount to nothing in the end. The Republican Party continues to control the Senate, and in fact expanded their slim margin of power in yesterday’s election.
There is almost no scenario imaginable where any of these measures would clear the Senate hurdle, although a more moderate increase to the federal minimum wage might not be out of the question.
House members could throw their weight around: Many congressional candidates ran on a platform to provide a check on the Republican leadership in the White House and Congress, and they will look to fulfill their campaign pledges once in office.
By using their power to seek additional information, hold hearings, and levy more control over executive activity, the new House could provide sufficient oversight over several federal agencies — namely the U.S. Department of Labor and the National Labor Relations Board — to slow down their agenda.
Expect to see the USDOL’s effort to provide a more balanced overtime rule and the NLRB’s move to return the joint employment rule to a more measured level both caught up in the political turmoil that will descend on the nation’s capital.
New House leadership could turn attention to labor and employment matters: Chatter among those in the know would seem to indicate that Congressman Bobby Scott (D-Virginia) will be the new Chair of the Committee on Education and the Workforce. He currently serves as the minority Ranking Member, and many believe his tenure on the committee will lead his fellow Democrats on the committee to install him into the top position once the new Congress is sworn in this coming January.
He is widely regarded as a progressive member of the House and would probably bring his philosophy to matters of federal labor and employment law.
Paid sick leave might be top House priority: Of all of the measures expected to be pushed by the new House, it seems fairly likely that paid sick leave will be on the top of the agenda when it comes to realistic goals.
After all, many Republican members of Congress have indicated support for such a law, and even President Trump has provided words of support for some form of paid sick leave. The devil is in the details, however, and it remains to be seen what form of paid sick leave would be agreed upon by the Senate and the president.
Some Republicans have floated the concept of a voluntary paid sick leave program, or one that is borne by employees themselves through a reduction in Social Security or other benefits, which has not been well received by Democratic leadership.
Employers should monitor this development to see if House and Senate members can work out a bipartisan solution that would be amenable to all and to President Trump.
Immigration will also be a priority for new House: Perhaps the most hot-button issue of the day, immigration will continue to be a matter of significant attention and interest when the new Congress is sworn in this January.
Now that Democrats are about to control the House, they will almost certainly seek to curb some of the more controversial positions taken by the White House. You can expect to see greater oversight attempted over the administration’s aggressive immigration agenda, but it is an open question as to whether they will be able to have a significant impact.
House could get bogged down by anti-Trump activity: Another possibility that could emerge in the coming months is that of complete gridlock and contentious wrangling between the House, the Senate, and the White House as new House members get swept up in anti-Trump sentiment.
Some candidates campaigned on a platform that led them to promise impeachment proceedings, subpoena requests, oversight hearings, and any other mechanism available to them to throw a monkey wrench into the Trump administration’s activity.
Such actions could eat up valuable time and resources and distract the new House leadership from accomplishing their legislative and policy goals, including labor and employment initiatives.
Senate could streamline consent and approval activity: While the House has been flipped, the Senate remains red, and this could free up senators to move forward to approve appointments that have been held up in political limbo while the fate of the midterm elections remained uncertain.
Expect to see action at the USDOL and the Equal Employment Opportunity Commission in short order to add key leadership personnel.
Expect stability at the Labor Department: Although news reports in the last several months have hinted at major shakeups at several federal agencies soon after the midterms were concluded — including at the Departments of Justice, Homeland Security, Defense and Interior, to name a few — there has been nary a word about the fate of USDOL Secretary Alexander Acosta.
By all accounts, President Trump has been pleased with Acosta’s no-drama personality and the relatively smooth operations at the Labor Department, so most expect Acosta to survive what could be a mass exodus.
Another attack on the ACA awaits its final fate: While the Republican-controlled Congress could not kill the Affordable Care Act in 2017 or 2018, its fate could still hang in the balance in the coming months and years.
A legal challenge filed by current House members seeking to strike down the entire law has been pending in a Texas federal court for several months. Many expect that the judge on the case has been waiting until the midterm elections were concluded before issuing his ruling so as to not introduce a political element into the proceedings. But now that the elections are behind us, a decision may soon be forthcoming.
If the law is struck down, you can expect an immediate appeal to the 5th Circuit Court of Appeals — and a probable stay in the proceedings delaying any sort of immediate revocation of the law — and then yet another round at the U.S. Supreme Court.
Future elections may never look the same: Finally, employers and others may see an entirely new kind of election season in 2019 and beyond given a recent monumental ruling from the Supreme Court. The recent decision in Janus v. AFSCME struck down the ability of public sector entities to automatically collect fees from non-union members.
Now that non-union employees are no longer obligated to finance union efforts to support anti-employer legislation and progressive candidates, you can expect to see a potentially devastating impact on the finances of public sector unions—and the worker-friendly causes they generally support at all levels of government across the nation.
This could lead to a new kind of election season where unions play a less pivotal role in the outcomes of local and federal elections.
Stay tuned to next year’s elections and the blockbuster 2020 elections that are just a short 24 months away to see what kind of impact Janus has on the national landscape.
A divided Congress that is unable to pass significant employment legislation — whether it be pro-employer or pro-worker — means that we are likely to continue to see the drive for legislative changes pursued at the state, or even local, government level.
You will likely continue to see a hodgepodge of local labor policies that vary from jurisdiction to jurisdiction, which can pose compliance challenges if you operate across large areas or multiple regions.