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BPAA Biweekly Federal Policy Updates - November 30

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  • Bloomberg Government - Minimum Wage Hike Fallout to Be Examined by House Committee - A House Education and the Workforce subcommittee next week is scheduled to get into the debate about raising the federal minimum wage. This comes a month before Republicans will hand over majority control to Democrats, who are expected to push legislation intended to increase the current hourly minimum of $7.25. The Republican-controlled subcommittee Dec. 5 will hold a hearing titled “Mandating a $15 Minimum Wage: Consequences for Workers and Small Businesses.” Many Republican lawmakers have rebuffed Democratic efforts to increase the federal minimum wage in recent years, saying it could stifle hiring and force businesses to close. The last federal minimum wage increase was in July 2009. The Workforce subcommittee hearing comes amid a steady stream of worker protests across the country, some organized by Fight for $15, an advocacy group pushing to raise pay rates for traditionally low-wage jobs. The new Congress starts Jan. 3. Expected committee chairman Rep. Bobby Scott (D-Va.) has told Bloomberg Law the panel will likely address increasing the federal minimum wage as one of its first actions. Some Democrats have cited factors such as inflation as part of the reason for wanting to increase the wage to $15.
  • The Hill - House Democrat agenda, led by $15 minimum wage, threatens economic prosperity - With wage and economic growth at historic highs, and the unemployment rates among all major demographics at or near record lows, Americans have much to be thankful for this Thanksgiving. Turkey and stuffing with family and friends taste better when enjoyed with today’s job security, economic opportunity, and rising standards of living that are partially a result of the pro-growth policies enacted over the past two years. Unfortunately, this prosperity is threatened by the new Democratic House majority, whose policy priorities feature new regulations, higher taxes and reduced access to credit. Chief in Democrat policy crosshairs are small businesses, which create two-thirds of new jobs, and have seen a resurgence under President Trump reinvigorating Main Streets in the process. Take one of the top priorities of House Democrats: passing a national $15 minimum wage. The presumptive incoming speaker, Nancy Pelosi, has vowed to pass this wage floor in the first 100 hours of the new Congress. The fact that the shopworn, discredited idea of wage controls is on the front page of the Democratic policy playbook demonstrates the intellectual bankruptcy of their agenda. Read more here.
  • Bloomberg Government - Tipped Wage Policy Rollback Could Put Labor Dept. at Legal Risk - The Trump administration’s recent policy change on compensation for tipped workers when they wash dishes or clean tables will likely cause legal trouble again, some attorneys and former Labor Department staff say. The department reissued a 2009 opinion letter Nov. 8 that said waiters who rely on tips for wages, but have non-tip-producing duties that are incidental to their main job, don’t have to be paid full minimum wage for those other tasks. Controversy and confusion still abound over the guidance, also referred to as “80/20.” The 80/20 rule, originally from the Reagan administration, required employers to pay tipped workers the full minimum wage for time spent on tasks that don’t generate tips, provided those side duties make up at least 20 percent of their weekly hours. The policy has been subject to repeated changes during the past three administrations and that, among other potential issues, could leave the department open to a legal challenge, sources say. “This flip-flopping creates legal exposure for the department,” Michael Hancock, a plaintiff-side lawyer with Cohen Milstein in New York, told Bloomberg Law. Hancock was an assistant administrator for the DOL’s Wage and Hour Division in the Obama administration. The opinion letter, which isn’t fact-balanced, perhaps should have been published through the regular rulemaking process to give the public a say, Hancock said.
  • Bloomberg Government - DOL Again Asks to Delay Lawsuit Over Tips Guidance - The U.S. Labor Department again asked a judge to delay a lawsuit challenging its now-abandoned approach to workers who earn tips. More time is needed “in light of the Thanksgiving holidays and the number of parties involved,” the DOL said in a Nov. 21 request. If granted, it would push the deadline for the DOL to file an answer to a complaint business associations filed in July from Nov. 23 to Nov. 30. Employers are allowed to count tips from customers toward the minimum wage they’re required to pay under the Fair Labor Standards Act, as long as certain conditions are satisfied. The Labor Department under the Obama administration directed its wage-and-hour enforcement personnel not to count customer tips for employees who spend more than 20 percent of their work time on tasks that don’t generate tips, such as operating a dishwasher. The National Restaurant Association’s legal arm, the Restaurant Law Center, contends in a lawsuit that the DOL applied the guidance as though it carried the weight of a regulation that had gone through formal rulemaking, even though it was simply guidance the Obama administration added to DOL workers’ Field Operations Handbook that wasn’t entitled to the deference that a regulation receives. The DOL under the Trump administration walked back the guidance Nov. 8. The next day, the DOL asked for a delay so it could “more fully” prepare its response.


  • Politico - House Republicans unveil giant tax package - House Republicans Monday evening unexpectedly released a 297-page tax bill they hope to move during the lame-duck session of Congress.  The legislation would revive a number of expired tax "extenders," address glitches in the Tax Cuts and Jobs Act and make a range of changes to savings- and retirement-related tax provisions.  Other parts of the bill would revamp the IRS, provide new tax breaks for start-up businesses and offer assistance to disaster victims.  The measure amounts to House Republicans' opening bid in negotiations with the Senate. They'll need Democratic support there to move any changes, and it's unclear lawmakers will agree to any of the provisions before adjourning for the year. The bill's unveiling came only hours after Sen. Ron Wyden (D-Ore.), the ranking Democrat on the Finance Committee, complained the House GOP had provided little inkling of what exactly they want to do on taxes in the lame duck. His spokesperson later gave the measure a frosty reception. CLICK HERE to access the 2018 Green Book.
    • Brady's amendment to squelch a controversial new tax on religious organizations and other nonprofits (to expunge the levy on employee fringe benefits) is part of the guessing game over which parts of the House Republican tax package could make it through Congress before it adjourns for the year. One of the more bipartisan provisions would make numerous changes to IRS operations, aimed at improving customer service, making some enforcement changes, combating identity theft and upgrading the agency's technology, among other provisions. Before it was loaded into the package, the IRS legislation, H.R. 5444 (115), passed the House without opposition in April, quite a feat these days. Sens. Orrin Hatch (R-Utah) and Ron Wyden (D-Ore.) introduced their own package of IRS changes, S. 3246 (115), in July, and tax staffers from both chambers had started to try to find common ground.
    • Rep. Lynn Jenkins (R-Kan.), who sponsored the House bill with Rep. John Lewis (D-Ga.) as the lead cosponsor, said this week that she was happy the language was part of the year-end push for tax legislation, but she didn't handicap its chances. "We have a lot of work to get done before year end and I made a promise to my constituents to run through the tape," said Jenkins, who is retiring from the House, in a statement. Neither Lewis nor his staff would comment.
    • Cathy Koch, a former top Democratic tax staffer and policy adviser, gave favorable odds to the chances of the IRS changes making it through. "The IRS reform passed unanimously in the House and that hardly ever happens, so the Senate has to take that seriously and should take that seriously," Koch, who is now Americas Tax Policy Leader at Ernst & Young, said at a Tax Policy Center forum on Thursday.
    • Extenders: Industry groups are keeping up the pressure, though. A coalition of business, energy, transportation, construction and agriculture groups is running digital ads urging lawmakers to revive numerous tax incentives that have expired, another part of the GOP tax bill, H.R. 88 (115) . "When it comes down to it, this is about jobs. Plain and simple," said LeRoy Coleman, senior manager of strategic communications for the National Hydropower Association. "We are hopeful Congress recognizes the importance of these tax incentives to our industries. The uncertainty stifles economic growth."
    • Cost: Meanwhile, the Congressional Budget Office estimated the tax bill would cost approximately $55 billion over the next decade, Brian reported.
  • IRS Releases Proposal on Business Interest Expense Deduction - IRS issues notice of proposed rulemaking regarding the limitation on the deduction for business interest expense after the enactment of recent tax legislation. See document here
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