2003 Priorities      Top of Page

Republicans’ work force priorities. Republican members of the House Committee on Education and the Workforce have identified their key work force priorities for early 2003. In a release issued January 8, 2003, Committee Chairman John Boehner (R-OH) said the "ambitious legislative agenda would focus on enhancing security, freedom, and prosperity for American families and investor to reflect today's changing economy." Among the priorities outlined by Boehner:

• Enhancing pension security. Republicans will reintroduce the Pension Security Act, which will mirror the bill passed by the House last April.

• Providing personal reemployment accounts. Key committee Republicans will work with President Bush to advance a proposal for a plan that would give states 3.6 billion dollars to 1.2 million workers most in need of help getting back to work. The funds would allow states to offer accounts of up to $3,000 each to eligible individuals to purchase job training and key services, such as childcare and transportation, to help them look for a job and get back to work quickly. Grant recipients would be able to keep the balance of the account as a cash reemployment bonus if they become reemployed within 13 weeks.

• Creating association health plans for small business. Boehner identified expanding access to quality, affordable health care as the top health care priority for the Committee. members expect to move early this year on the Small Business Health Fairness Act (HR 1774), legislation introduced by Reps. Ernie Fletcher (R-KY) and Cal Dooley (D-CA), which would create association health plans (AHPs) to allow small businesses to join together through bona-fide trade associations to purchase health insurance.

• Expanding welfare reform. Republican Committee members hope to reauthorize the 1996 legislation and enact added reforms by increasing work requirements and boosting child care funding.

• Amending the FLSA to allow flextime. The Committee will reintroduce legislation introduced previously by Rep. Judy Biggert (R-IL) to amend the Fair Labor Standards Act, legislation first enacted in 1938, to allow for flextime for employees in the private sector.

• Reauthorizing the Workforce Investment Act. The Committee's efforts will focus on reauthorizing the Act, and improving the system, which provides for programs to assist adults facing skill shortages to gain the skills to succeed in the contemporary work force.

• Enhancing union accountability and democracy. Republican members on the Workforce Protection Subcommittee will hold further hearings on union democracy issues and focus on enhancing the accountability of union leaders and the Beck rights of union members.

ABC legislative priorities. In its recently released legislative agenda, the American Benefits Council urged Congress to reign in health care costs, expand health care coverage and address problems it perceives in the pension system. The council is made up of benefits professionals in major corporations.

Significantly, 86 percent of the council's surveyed members reported they were "very concerned" about rising health care costs. Respondents said if costs continue to rise at current double-digit rates, it could adversely affect employers' ability to provide quality health coverage.

In its policy agenda, the council expressed concern that a Patients' Bill of Rights could increase costs further by exposing employers to liability for health care decisions. Rather than a legislative remedy, the council said that "strong, enforceable patient protections will be achieved by the implementation of comprehensive regulatory standards for the fair and timely review of all health care claims." The council also is wary of expanded mental health parity legislation because it could result in increased health care costs.

To expand health care for uninsured Americans, the council urged Congress to take an incremental approach. Any changes in tax policy, including new tax credits, should not undermine the current employer-based system, the council said. It supports legislation to allow the rollover of up to $500 in unspent funds in flexible spending accounts and efforts to promote consumer-driven health plans.

On retiree health care coverage, the council said it "recommends legislation be enacted to clarify that it is not a violation of the Age Discrimination in Employment Act to provide a higher level of health care coverage to early retirees than is provided after an individual reaches eligibility for Medicare."

On the pension front, the council urged action on pension interest rate reform--specifically, the prompt enactment of "a comprehensive, permanent pension rate reform by using a consistent and conservative corporate bond benchmark." The council said Congress should make permanent the pension and retirement savings provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001. Any pension reform, according to the council, should include greater access to investment advice, with protections against employer liability for advice given.

Benefits      Top of Page

Blackout periods. Section 101(i) of the Employee Retirement Income Security Act of 1974, was enacted on July 30, 2002, as part of the Sarbanes-Oxley Act of 2002. It provides that written notice must be given to affected participants and beneficiaries of individual account plans of any "blackout period" during which their right to direct or diversify investments, obtain a loan or obtain a distribution under the plan may be temporarily suspended. A final rule issued under this section contains guidance to plan sponsors, administrators, participants and beneficiaries regarding the requirements for furnishing such notices. The final rule is effective January 26, 2003, and applies to blackout periods starting on or after January 26, 2003.

Penalties. Final rules that implement the civil penalty provision in section 502(c)(7) of ERISA, also adopted as part of the Sarbanes-Oxley Act of 2002, establish procedures relating to the assessment of civil penalties by the Department of Labor for failures or refusals by plan administrators to provide required notices of a blackout periods. They are effective January 26, 2003.

Health care options. The American people would be given an opportunity to craft a new national health care system under a proposal from Sen. Ron Wyden, D-OR, and Sen. Orrin Hatch, R-UT. The proposed bill would create a working group to solicit public comment online and during meetings across the country about various health care options. The working group then would report to Congress on its findings. The Wyden-Hatch legislation would call on congressional committees with jurisdiction over health care to craft legislation that reflects the public's priorities. If the committees fail to act within six months, any member of Congress could force a vote on the issues. 

employment law      Top of Page

Affirmative action. The US Supreme Court has set April 1, 2003, as the date for oral arguments in two cases challenging the University of Michigan's consideration of race and ethnicity in its undergraduate and law school admissions decisions (Grutter v Bollinger, Dkt No 02-241 (law school); Gratz v Bollinger, Dkt No 02-516 (undergraduate)). The Court's decision in these cases could impact the use of affirmative action in areas outside of education, such as employment and government contracting. 

FMLA. Can states be sued for money damages under the Family and Medical Leave Act? The US Supreme Court will soon decide whether or not they can. Like recent decisions in past state immunity cases, the court appeared to be closely divided on the issue.

The FMLA clearly says state employers are covered. But the state of Nevada in the case before the court claims Congress overstepped its authority to subject states to suits in federal courts. Under the 11th amendment, states enjoy immunity from federal suits brought by individuals. But the 14th amendment allows Congress to override that immunity in some circumstances -- for instance, to protect against discrimination. This case revolves around the key issue of whether the FMLA is an anti-discrimination statute designed to provide equal protection to individuals. Oral arguments in Nevada Department of Human Resources v. Hibbs (No. 01-1368), took place on January 15. A decision is expected by the end of June.

New bills. New bills were introduced over the month that would:

• prohibit discrimination in contracting on federally funded projects on the basis of certain labor policies of potential contractors, (H106, Government Procurement Bias Prohibition); 

• amend Title XIX of the Social Security Act to require criminal background checks on drivers providing Medicaid medical assistance transportation services (H 364); and

• create a system of background checks for certain workers who enter people's homes (H 439, Domestic Consumer Safety Act).
  
  

Labor Law       Top of Page

Whistleblower reversal. The Department of Labor reversed course on its interpretation of a recently enacted whistleblower law designed to protect private sector workers. The reversal expands the scope of the law and could provide more workers federal protections under the statute.

The whistleblower provision is contained in the Sarbanes-Oxley Act, the corporate responsibility bill enacted last year. The provision made federal whistleblower protections available to employees of publicly traded companies. The Labor Department last year stated that the only disclosures protected by the new whistleblower provision would be those made to duly authorized committees with ongoing investigations. Disclosures made to individual members of Congress would not be protected. However, after much lobbying by Senators Grassley and Leahy, the Department reversed its earlier position and stated that complaints to individual members of Congress are protected, even if the member is not conducting an ongoing committee investigation.

Labor agreements. The US Supreme Court has denied a petition for certiorari of a ruling by the Court of Appeals for the District of Columbia Circuit which upheld President Bush's executive order banning project labor agreements in federal construction contracts. The petition, rejected Monday, January 27, 2003, was filed by the AFL-CIO's Building and Construction Trades Department and other parties. The appellate court held that the President had constitutional authority to issue the order, which provided that entities receiving federal assistance for a construction project may not require or prohibit contractors from entering into a project labor agreement. The High Court's decision to let the appellate ruling stand effectively upheld the constitutionality of the Bush executive order.

New bill. A new bill was introduced over the month that would amend the Fair Labor Standards Act of 1938 to provide more effective remedies to victims of discrimination in the payment of wages on the basis of sex (S 76, the Paycheck Fairness Act).

Payroll      Top of Page

W-4 deadline. Employees claiming exemption from federal income tax withholding must file a new Form W-4 (Employee's Withholding Allowance Certificate) by February 18 to continue the exemption in 2003. The 2002 certificate claiming exemption from withholding expires on February 18 and, if no new certificate is filed, employers must begin withholding federal income taxes from affected employees' wages.

EIC refund. Employers are required to notify each employee who worked during the year and from whom no income tax was withheld that they may be eligible for a tax refund generated by the earned income credit. However, any employee who has not had any income tax withheld because he or she claimed exemption from withholding on Form W-4, Employee's Withholding Allowance Certificate, need not be notified.

Pension      Top of Page

Retirement savings policy. A reported Bush Administration proposal to implement sweeping changes in retirement savings policy would only add to long-term deficits, according to economists at the Center on Budget and Policy Priorities. Details of the plan have not yet been released. CCH has attempted to obtain Treasury's comments on the plan, but a Treasury spokeswoman refused to comment.

According to Robert Greenstein, Executive Director of the Center, the Bush administration is seeking additional tax cuts, on top of existing proposals, which would expand the availability of Roth IRAs. The proposal, according to Greenstein, would eliminate the Roth IRA adjusted gross income restrictions and increase the annual contribution limit to $7,500. The proposal purportedly would also create a new type of tax-free savings account and would phase-out traditional IRAs, to which contributions generally have been deductible.

Cash balance plan controversy. On January 30, 2003, 217 Senators and House members, mostly Democrats, sent a letter to President Bush urging the administration to reconsider its position with regard to cash balance plans because of potential adverse effects on older employees. The regulations would overturn a Clinton-era moratorium prohibiting companies from converting their traditional defined benefit pension plans to cash balance plans

Critics of the regulations, issued by the department on December 10, argue that workers can lose up to 50 percent of their retirement benefits when companies force them into cash balance plans. Senator Harkin, D-IA, wants the Treasury Department to withdraw its proposed regulations and replace them with a rule that makes it clear a conversion from a traditional plan to a cash balance plan can amount to age discrimination.

Form 5500. The US Department of Labor's Pension and Welfare Benefits Administration, the Internal Revenue Service and the Pension Benefit Guaranty Corporation announced the release of information copies of the Form 5500 return/reports to be used by employee benefit plans for plan year 2002 filings.

The Form 5500 and Form 5500-EZ for plan year 2002 are essentially unchanged from 2001. However, certain modifications have been made to reflect changes in the law or regulations, to improve forms processing and to clarify the instructions. For example, there are several new principal business activity codes (line 2d), and several new plan characteristics codes for lines 8a and 8b;

safety     Top of Page

Ergonomic committee meeting. The National Advisory Committee on Ergonomics met for the first time on January 22 in Washington, charged with the responsibility to advise the Occupational Safety and Health Administration on ergonomic guidelines, research, outreach and assistance.

The Committee does not have to deal with enforcement or with a regulatory approach. "We want you to help us reduce the best available science to practice," said OSHA Administrator John Henshaw. "We need strategies that a plant manager, a front-line supervisor or a small business owner can readily adopt and use right now to prevent musculoskeletal disorders and help workers immediately."

Last year OSHA announced a four-prong approach to ergonomics, following a congressional cancellation of its regulatory plan. The four-part approach includes industry-specific guidelines, enforcement through the Occupational Safety and Health Act's general duty clause, outreach and assistance and research. Three industries -- nursing homes, retail groceries and poultry processing -- have worked with the agency to develop the first set of voluntary, industry-specific guidelines.

The 15-member Committee is made up of representatives from industry, academia, labor, and the legal and medical professions. It is chartered for two years and is expected to meet two to four times per year.

Training centers. Twenty Training Institute Education Centers have been announced, this almost doubling the number of centers that currently offer training courses on Occupational Safety and Health Administration standards and occupational safety and health issues. OSHA's previous training program included 12 centers. The new program has been expanded to include 20 centers at 35 locations throughout the country.

The 20 centers will complement the OSHA Training Institute, the agency's primary training center in Illinois. The centers are primarily responsible for training private sector personnel and federal personnel from agencies outside OSHA.

The educational centers will also assist the agency in administering the OSHA Outreach Training Program--the agency's primary way to train workers in the basics of occupational safety and health. Through the program, individuals who complete a one-week OSHA trainer course are authorized to teach 10-hour or 30-hour courses in construction or general industry safety and health standards. These individuals go on to train thousands more students each year. In FY 2002, 254,000 people received training from the train-the-trainer program. 

Identity theft prevention. Getting Social Security Numbers off of most public documents will help curb the growing problem of identity theft, according to a group of lawmakers who have introduced a bill to limit the number’s use. "The goal of this legislation is straightforward -- to get Social Security numbers out of the public domain so that identity thieves can't access the number,” said Sen. Dianne Feinstein, D-CA. at a Jan. 27 press briefing on Capitol Hill. Each incident costs each victim about $20,000 and two years to clear up. The Social Security Number Misuse Prevention Act would:

• Prohibit the sale or display of Social Security numbers to the general public; 

• Remove Social Security numbers from government checks and driver's licenses; and 

• Require Social Security numbers to be taken off of public records published on the Internet.

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