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BPAA Biweekly Federal Policy Updates - March 22, 2019

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TAX UPDATE

  • Bloomberg Government - House Ways and Means Panel Sets March 27 Hearing on 2017 Tax Law: House Ways and Means Committee will have a hearing March 27 on the Republican tax overhaul of 2017 and “who it left behind,” Chairman Richard Neal, a Democrat, said in a statement.  Neal, of Massachusetts, has said repeatedly he wants re-examine the tax law, while Senate Democrats have derided the new law as a tax scam that benefits the wealthy
    • NOTE: The law reduced the corporate tax rate to 21 percent and put in place a $10,000 cap for state and local tax deductions Republicans used a fast-track budget process to pass the bill in the Senate, enabling them to move legislation without Democratic support

 

  • The Tax Cut and Jobs Act was a protein boost, not a sugar high: Recent release of full year 2018 Gross Domestic Product figures illustrates how the Tax Cut and Jobs Act (TCJA) that passed Congress in December 2017 boosted U.S. investment, growth and incomes. TCJA cut both personal and corporate income taxes. Personal federal taxes in 2018 were 7.9 percent of GDP, down from 8.3 percent of GDP in both 2017 and 2016, the last year of President Barack Obama’s administration. The most significant TCJA effect was on federal corporate taxes, for which full-year data are not yet available. In 2018’s first three quarters, federal corporate taxes fell by 0.7 percent of GDP, a nearly 50-percent reduction from the comparable 2017 level of 1.5 percent of GDP. Overall, the 2018 federal tax take appears lower in 2018 than 2017 by 1.1 percent of GDP.
    • Far from producing a “sugar high,” as sometimes charged, TCJA was a protein booster. Tax savings were channeled primarily into savings and investment rather than consumption.
    • Personal consumption expenditures were lower in 2018 than 2017 by 0.3 percent of GDP, while investment increased by 0.5 percent of GDP to its highest level since before the financial crisis.
    • The investment boom is especially evident in numbers for the fourth quarter; private long-term investment, excluding residences, reached a level surpassed by just one previous quarter since 2001. Read more here at The Hill.

 

LABOR UPDATE

  • Politico reports - Overtime Rule Open for Public Comment: The Labor Department's proposal to expand overtime eligibility to 1.1 million additional workers will publish in the Federal Register this morning, starting a 60-day clock for the public to submit comments. Under the proposed rule, the all-important salary ceiling (under which virtually all workers must be paid time-and-a-half whenever they work more than 40 hours in a given week) would rise to $35,308, up from the current $23,660. According to DOL, the rule would extend overtime eligibility to 1.1 million workers, or 2.8 million fewer than the number to whom the 2016 Obama administration rule extended eligibility. (The Obama rule was struck down by a district court judge in Texas before it took effect.)
    • More information about the proposed rule is available at www.dol.gov/whd/overtime2019. The Department encourages any interested members of the public to submit comments about the proposed rule electronically at www.regulations.gov, in the rulemaking docket RIN 1235-AA20. Comments must be received by May 21, 2019 to be considered.

 

  • US Chamber of Commerce: Judge Imposes Massive New Data Reporting Requirements on Your Human Resources Department. First Report Due by May 31:
    • In 2016 the Obama administration created a new EEO-1 form for all employers with more than 100 employees (and federal contractors with more than 50). The Trump administration blocked the new form, but now a federal judge has issued an order to force the administration to require employers to submit the 2016 form this year.
    • The new form that employers would be required to submit expands the amount of information to be provided to the government by more than 26 fold, requiring for the first time data on wages and hours worked for all employees cross-matched by race, ethnicity, and sex within 12 proposed pay bands.
    • The U.S. Chamber’s research indicates that this would impose an annual reporting cost of $400.8 million on employers. Finally, despite all the cost and burden, the new data will be useless in helping to identify pay discrimination.
    • Unless there is further legal action to prevent it, this new form, with its extremely burdensome data requirements that no employer has been collecting, will be due in less than 80 days.

 

  • Bloomberg Government reports - HR Group Wants a Paid Leave Policy Do-Over: The largest human resources association plans to focus on employer-friendly policies for workplace flexibility and leave in 2019, but that doesn’t mean it will continue to back legislation it supported last year. As paid leave discussions in Congress evolve, the lack of bipartisan support for the Workflex in the 21st Century Act, as well as a renewed push for paid family leave, means that the Society for Human Resource Management will start over on endorsing a policy for paid leave, Emily Dickens, corporate secretary and chief of staff at SHRM, said March 19. “We had some concerns about the fact that you only had a Republican sponsor and no sponsors on the other side,” Dickens said during a press briefing at SHRM’s annual Employment Law & Legislative Conference. SHRM has more than 300,000 HR professional members.
    • “We want to find something that works for everyone, and this gives us nothing but space and opportunity to go back to all the partners and say, ‘If you could have a bill that everyone could agree on, what are the things that you all could really agree on,’ and try and broker that discussion,” Dickens said.
    • Last June, SHRM CEO Johnny C. Taylor Jr. called for passage of the proposal because it helped employers navigate a growing patchwork of state and local paid leave laws. The Workflex in the 21st Century Act, sponsored by former Rep. Mimi Walters (R-Calif.), would have exempted employers from state and local paid leave obligations if they gave workers a certain amount of general paid leave that could be used for medical, family, bereavement, vacation, and other reasons.
    • Proposals from both sides of the aisle have already been introduced in 2019:
      • The Child Rearing and Development Leave Empowerment (CRADLE) Act, from Sens. Joni Ernst (R-Iowa) and Mike Lee (R-Utah), would enable new parents to receive paid leave through early access to Social Security benefits in exchange for postponing Social Security.
      • The FAMILY Act, introduced by Sen. Kirsten Gillibrand(D-N.Y.) and Rep. Rosa DeLauro (D-Conn.), would create a national insurance fund paid for by both employers and employees.

 

  • Congressman Phil Roe (R-TN-1) - The Damaging Effects of a $15 Minimum Wage: All Americans deserve to be compensated fairly for the work they do. Having previously helped to manage a business for over 30 years, I know from firsthand experience nothing makes you feel better than knowing an employee will be able to live comfortably and retire with peace of mind about their financial security. Washington needs to get out of the way, keep taxes low, reduce unnecessary regulations, and pave the way for economic growth and job creation. That’s why I was proud to support the Tax Cuts and Jobs Act, which resulted in 3.1 percent GDP growth in 2018. It seems like common sense to me to keep this going. Instead, House Democrats have a radical proposal to more than double the minimum wage to $15 per hour as part of their bill, H.R. 582, the Raise the Wage Act of 2019, which I voted against when it was considered in the House Education and Labor Committee. According to an analysis of the bill, this raise will cost two million jobs and will hit the oldest, youngest, and lowest-skilled employees the hardest. The worst aspect of this legislation is that it treats small towns and rural areas as if they have the same labor markets and cost of living as large metropolitan urban areas. Some estimates indicate the cost-of-living in Washington, D.C. is 96.1 percent higher than Johnson City, Tennessee. Even within the state of Tennessee, the median home cost in Nashville is 189.4 percent higher than Newport. Cities and towns across America are different – different jobs, opportunities and costs-of-living – which is why a national $15 per hour minimum wage is so harmful. Read the full article here.
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