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BPAA Biweekly Federal Policy Updates - November 1, 2019

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  • U.S. Department of Labor schedules two additional webinars on the Fair Labor Standards Act’s overtime final rule: The final rule updates the earnings thresholds necessary to exempt executive, administrative and professional employees from the Fair Labor Standards Act’s (FLSA) minimum wage and overtime pay requirements, and allows employers to count a portion of certain bonuses and commissions towards meeting the salary level. The new thresholds account for growth in employee earnings since the thresholds were last updated in 2004. Due to the overwhelming response received for the overtime final rule webinar on November 4, the Wage and Hour Division has scheduled two additional webinars to provide compliance assistance on the final rule on:
    • Provisions of the final rule so that employers can comply with the changes and inform workers and their advocates of their rights.
    • Specific changes that the final rule will make when it becomes effective on January 1, 2020
    • Detailed information about new materials and resources available on the overtime final rule website

Throughout the webinar, participants will have the opportunity to submit questions. Wage and Hour Division hosts will answer as many of those questions as possible following the presentation. The webinar will be presented on November 12, 2019, at 1:00 p.m. Eastern Time and on November 19, 2019, at 1:00 p.m. Eastern Time. After registering, you will receive an email with detailed log-in information for the webinar.


  • Department of Labor Deflates the 80/20 Rule & Inflates the Tip Pool: Executive Summary: On Monday, October 7, 2019, the Department of Labor (DOL) proposed a new 80/20 rule and tip pooling regulation.
    • First, the proposed regulation, if finalized, will permit employers to take a tip credit regardless of the amount of non-tip generating work (such as cleaning tables or folding napkins) a tipped employee performs as long as it is performed contemporaneously with his/her tipped duties, or within a reasonable time immediately before or after performing tipped duties.  
    • Second, the proposed regulation eliminates some regulatory restrictions regarding tip pooling when the employer does not take a tip credit. If the proposed rule is finalized, employers who do not take a tip credit will be permitted to include “back-of-the-house” employees who usually do not receive tips (such as cooks and dishwashers) as part of a tip pool.
    • Lastly, the existing rule prohibiting employers from keeping employees’ tips or participating in tip-pooling arrangements will remain. Read the full article here:
    • In their Notice of Proposed Rulemaking (NPRM), the Department states that it proposes to:
      • Explicitly prohibit employers, managers, and supervisors from keeping tips received by employees;
      • Remove regulatory language imposing restrictions on an employer’s use of tips when the employer does not take a tip credit. This would allow employers that do not take an FLSA tip credit to include a broader group of workers, such as cooks or dishwashers, in a mandatory tip pool.
      • Incorporate in the regulations, as provided under the CAA, new civil money penalties, currently not to exceed $1,100, that may be imposed when employers unlawfully keep tips.
      • Amend the regulations to reflect recent guidance explaining that an employer may take a tip credit for any amount of time that an employee in a tipped occupation performs related non-tipped duties contemporaneously with his or her tipped duties, or for a reasonable time immediately before or after performing the tipped duties.
      • Withdraw the Department’s NPRM, published on December 5, 2017, that proposed changes to tip regulations as that NPRM was superseded by the CAA.
      • This NPRM will be available for review and public comment for 60 days. The Department encourages interested parties to submit comments on the proposed rule.The Department’s current NPRM publishes on October 8, 2019. Anyone who submits a comment (including duplicate comments) should understand and expect that the comment, including any personal information provided, will become a matter of public record and will be posted without change to



  • Bloomberg Government reports - Kudlow Says White House Working on Tax Cuts Ahead of Election: The White House is holding informal talks about a second round of tax cuts to announce during the 2020 presidential campaign, President Donald Trump’s top economic aide Larry Kudlow said Friday, reiterating previous remarks. “There’s nothing formal in the process, I don’t have any details,” Kudlow said in an interview on Fox Business Network. “But we would like to see some middle class tax cuts.” Kudlow said the plan will be released next year, in time to be a campaign issue ahead of the 2020 election. Republicans are hoping to run on the message of a strong economy and draw comparisons with their Democratic rivals who are proposing tax increases to pay for expanded government services.
    • Kudlow said the administration is getting guidance from Representative Kevin Brady, the top Republican on the House Ways and Means Committee who helped pass the 2017 tax cuts, which slashed the corporate tax rate to 21% and cut individual taxes. The White House plans to talk to members of the Senate, he said.
    • Trump made a similar promise to cut middle-class taxes before last year’s midterm election as House Republicans struggled to counter Democratic talking points that the 2017 overhaul mostly benefited the wealthy. The president’s proposal caught Republicans off guard, and nothing advanced as Brady tried to cast it as part of a unified GOP plan to extend the 2017 cuts.
    • Republican leaders say they support the idea of more tax cuts, but they haven’t detailed what a plan would look like.


  • Bloomberg Government reports - Warren Would Fund Medicare for All by Taxing Companies, Rich: Democratic presidential hopeful Senator Elizabeth Warren rolled out a wide-ranging menu Friday to fund her multitrillion-dollar Medicare for All plan, a defining moment that fleshes out her vision to remake one-fifth of the U.S. economy. The plan would redirect most employer-based health care spending to the government so it can put all Americans into Medicare, while slapping a wave of taxes on large corporations and the wealthy, cracking down on tax evasion, reducing defense spending and putting newly legalized immigrants on the tax rolls. Her advisers also lowered the estimate of Medicare for All’s price-tag to $20.5 trillion over 10 years from the $34 trillion the Urban Institute predicted, by using the new Medicare-for-All negotiating power to slash administrative spending, drug prices and provider payments. The proposals stake out Warren’s clearest position yet on a deeply divisive issue of paramount importance for voters. Rather than devise a health-care plan of her own, she made the strategic decision to adopt that of fellow progressive candidate, Senator Bernie Sanders, but until now, hasn’t said how she’d pay for it.
    • That’s prompted harsh criticism from her moderate rivals, including former Vice President Joe Biden and Mayor Pete Buttigieg, who propose adding a public option for people who don’t have private health insurance. They’ve insisted Warren will have to raise taxes on middle-class Americans. She insists that’s unnecessary.
    • Speaking a roundtable of Bloomberg reporters and editorsto Bloomberg Television shortly after Warren presented the cost for her proposal, House Speaker Nancy Pelosi said Democrats should seek to build on the Obama administration’s Affordable Care Act, and not Warren’s Medicare for All, as they seek to topple President Donald Trump in 2020.
    • Read the breakdown of her tax plan at the Tax Foundation: Reviewing Elizabeth Warren’s Tax Proposals to Fund Medicare for All.


  • 2020 State Business Tax Climate Index: The Tax Foundation’s State Business Tax Climate Index enables business leaders, government policymakers, and taxpayers to gauge how their states’ tax systems compare. While there are many ways to show how much is collected in taxes by state governments, the Index is designed to show how well states structure their tax systems and provides a road map for improvement.
    • The 10 best states in this year’s Index are:
      • Wyoming
      • South Dakota
      • Alaska
      • Florida
      • Montana
      • New Hampshire
      • Nevada
      • Oregon
      • Utah
      • Indiana
    • The absence of a major tax is a common factor among many of the top 10 states. Property taxes and unemployment insurance taxes are levied in every state, but there are several states that do without one or more of the major taxes: the corporate income tax, the individual income tax, or the sales tax. Wyoming, Nevada, and South Dakota have no corporate or individual income tax (though Nevada imposes gross receipts taxes); Alaska has no individual income or state-level sales tax; Florida has no individual income tax; and New Hampshire, Montana, and Oregon have no sales tax. Read more at the Tax Foundation.
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