Bush Administration warns that it will veto ENDA.  In an October 23, 2007, Statement of Administration Policy on the Employment Non-Discrimination Act (ENDA) (H.R. 3685), the Bush Administration stated that the legislation, which would protect employees against workplace discrimination on the basis of sexual orientation, raises “concerns on constitutional and policy grounds,” and, if given to the President to sign, his advisors would recommend that he veto the bill. The statement can be found at: http://www.whitehouse.gov/omb/legislative/sap/110-1/hr3685sap-r.pdf. As originally introduced, ENDA would have extended protections to employees based on their actual or perceived gender identity also, but sponsors of the legislation, including its drafter, Representative Barney Frank (D-Mass), decided to separate out the gender identity provision in order to garner more support for the measure. On October 15, Speaker of the House Nancy Pelosi (D-Cal) announced, in a meeting with GLBT civil rights organization, the Human Rights Campaign (HRC), and other GLBT advocacy groups, that while ENDA will move forward in the House without gender identity protections she was committed to revisiting a fully-inclusive version of the bill (H.R. 2015) in the House once enough support for it to pass was secured. The House was expected to vote on ENDA, along with an amendment proposed by Representative Tammy Baldwin (D-Wis) that would have restored protections to employees based on their actual or perceived gender identity on October 24. However, national media outlets report that House Democratic leaders have decided to postpone a vote on ENDA. According to a statement the Speaker’s Office, the delay has nothing to do with the Statement of Administration Policy and instead from issues surrounding Baldwin’s amendment and whether there are enough votes to restore gender identity protections to the bill. “The Leadership is working closely with Congresswoman Baldwin to develop an accurate count of members supporting her amendment and will then make decisions for scheduling the bill for the House floor. We do not anticipate that this process can be completed this week,” said Drew Hammill, press secretary for the Speaker.

SCHIP heads back to the White House, veto expected.  On November 1, 2007, the US Senate in a 64-30 vote, passed revised legislation (H.R. 3963) reauthorizing and expanding the State Children’s Health Insurance Program (SCHIP). The bill, which failed to win a veto-proof majority, includes provisions proposed by Senators Chris Dodd (D-Conn) and Hillary Rodham Clinton (D-NY) amending the Family and Medical Leave Act to allow up to six months of unpaid leave for primary caregivers to care for servicemembers injured in combat. On October 25, the House passed new legislation reauthorizing and expanding SCHIP, which also included the leave provisions for caregivers of servicemebers by a 265-142 vote, which was insufficient to override a presidential veto. President Bush is expected to veto the bill as he did a near-identical measure (H.R. 976) on October 3, which the House failed to override. Bush objects to the bill’s proposals to significantly increase funding for the program and to increase the federal tobacco tax to pay for it. Currently, spouses, parents and children of injured servicemen and women can receive 12 weeks of unpaid leave under the FMLA. In addition to expanding leave, the bill would prohibit discrimination in employment against a family member who is caring for a recovering servicemember. The amendment would also provide 52 workweeks of job protection during which caregivers cannot be denied retention in employment, promotion or any benefit of employment on the basis of the servicemember's absence from employment.

Tancredo introduces "no-match" letter legislation.  US Representative Tom Tancredo (R-Colo), a leading anti-illegal immigration proponent and candidate for the Republican nomination for president, introduced legislation on October 23, 2007, seeking to nullify a recent decision Northern District of California Judge Charles Breyer, who granted a preliminary injunction stopping the Department of Homeland Security (DHS) from implementing its "no-match" regulation, including mailing or otherwise sending to employers Social Security Administration (SSA) "no-match" letter packets that have DHS guidance letters explaining the regulation. The regulation describes the legal obligations of an employer under the Immigration Reform and Control Act of 1986 (IRCA) when receiving a "no-match" letter from the SSA or a "notice of suspect documents" letter from US Immigration and Customs Enforcement (ICE), DHS's, largest investigative arm. The "no-match" letter is accompanied by a DHS guidance letter explaining the regulation, most notably stating that employers can risk civil and criminal liability if they do not respond to the mismatch situation. The final regulation also describes "safe-harbor" procedures that employers can follow in response to receiving such a letter and procedures to be followed in order to resolve the mismatch and thereby be certain that DHS will not use the letter as any part of an allegation that the employer had constructive knowledge that the employee referred to in the letter was an alien not authorized to work in the United States. Tancredo's bill (H.R. 3950) would approve DHS's final rule relating to employers who receive "no-match" letters from the Commissioner of Social Security.

USCIS announces centralized filing location for H-2A temporary agricultural worker program.  As part of a series of reforms publicized by Homeland Security Secretary Michael Chertoff and Commerce Secretary Carlos Gutierrez to strengthen border security and address immigration challenges, US Citizenship and Immigration Service (USCIS) has announced a new customer service initiative to improve the H-2A (temporary/seasonal agricultural worker) petition process. To accomplish this goal, USCIS will institute a series of changes to provide agricultural employers with an orderly and timely flow of legal workers while protecting laborers' rights. Among the first of these changes is the establishment of a special USCIS unit dedicated to processing H-2A petitions at the USCIS California Service Center (CSC). The CSC has established special mailing addresses for all H-2A filings. Effective October 17, H-2A petitioners are encouraged to use the following addresses for all H-2A petitions.

Labor/Wage Hour     Top of Page

House Education and Labor Committee approves changes to WARN Act.   By a vote of 26-18, the House Education and Labor Committee passed the Early Warning and Health Care for Workers Affected by Globalization Act (H.R. 3796), a bill designed to reduce the impact of plant closures and mass layoffs caused by trade. The WARN Act currently requires 60 days’ notice to full-time workers. Companies that fail to notify employees could be liable for double back pay for each day they failed to make a required notice. In addition, the bill would extend the time period workers can continue their Consolidated Omnibus Budget Reconciliation Act (COBRA) insurance coverage. Workers over the age of 55 can pay for COBRA coverage until they obtain health care through a new employer or until they become eligible for Medicare at age 65. Current law allows workers to continue their health benefits under COBRA for 18 months. Passed by the committee on October 18, the bill would amend the Worker Adjustment and Retraining Notification (WARN) Act and require employers to notify full-time and part-time workers 90 days in advance of a plant closing or layoff.

General Counsel's Office transfers cases under Interregional Assistance Program.  The office of the NLRB General Counsel has issued Memorandum OM 08-8, an order covering the transfer of cases under the Interregional Assistance Program (IRAP) from October 1, 2007 through January 31, 2008. During that period, from time to time, cases filed in Region 4 will be transferred to Region 29; cases filed in Region 5 will be transferred to Region 3 and Region 6; cases filed in Region 21 will be transferred to Region 14 and Region 17; cases filed in Region 19 will be transferred to Region 8 and Region 26; cases filed in Region 24 will be transferred to Region 20, Region 25 and Region 28; and cases filed in Region 32 will be transferred to Region 20. These cases will automatically transfer back to the Regions in which they originated and processing of these cases will continue in those Regions, to the extent necessary, upon the earliest of the following: issuance of a letter by the Regional Director of the transferee Region deferring further proceedings on the charge pursuant to the Board's Collyer/Dubo policy, completion of the investigation with recommendations for further processing in the originating Region, or closing of the case.

Rail safety bill clears House. The House of Representatives voted 377 to 38 to approve the Federal Railroad Safety Improvement Act of 2007 (H.R. 2095), which will reauthorize the Federal Railroad Administration (FRA) with an amount of $1.1 billion over the next four years. Congress last passed legislation to reauthorize the FRA in 1994. That authorization expired in 1998. H.R. 2095 requires the Secretary of Transportation to develop a long-term strategy for improving railroad safety, which must include a plan and schedule for reducing the number and rates of accidents, injuries, and fatalities involving railroads. The bill imposes new work rules that require longer rest periods and work shifts for rail workers that generally cannot exceed 12 hours. It also increases the number of rail safety inspection and enforcement personnel. The bill also requires all Class I railroads to implement a positive train control system (PTC), which is a collision avoidance system that protects against human performance failures.

OFCCP submits proposed rule on race and ethnic categories for OMB review.  The Department of Labor has submitted to the Office of Management and Budget (OMB) for review a proposed rule that would amend certain sections of the Office of Federal Contract Compliance Programs' (OFCCP) regulations to correspond to the new Employer Information Report (EEO-1 Report), as published in the Federal Register on November 28, 2005 (70 FR 71294). The proposed rule was submitted for OMB review on October 1, 2007. The OFCCP's current regulations implementing Executive Order 11246 (EO 11246) require federal contractors to collect, maintain and report information about the gender, race and ethnicity of their employees in the five race and ethnic categories used in the previous EEO-1 Report: Whites, Blacks, Hispanics, Asians/Pacific Islanders and American Indians/Alaskan Natives. In addition, this year, employers, including federal contractors, began reporting data about the racial, ethnic and gender composition of their workforces on a revised Employer Information Report, commonly known as the EEO-1 Report. Previously, the EEO-1 Report form had called for workforce data to be broken down by nine job categories and the five race and ethnic categories mentioned above.

Employee Benefits Top of Page

EBSA provides guidance on furnishing individual benefit statements.  The US Department of Labor's Employee Benefits Security Administration (EBSA) has released Field Assistance Bulletin 2007-03, which provides guidance to its national and regional offices relating to the timeframe for furnishing pension benefit statements by certain individual account plans. The bulletin provides that plan administrators of individual account plans that do not provide for participant direction of investments will, in the absence of further guidance, be deemed in good faith compliance with the law if benefit statements are furnished to participants and beneficiaries on or before the date the Form 5500 annual return/report is filed by plans, but not later than the last date on which the plan administrator is required to file the report, including any extensions. The bulletin supersedes guidance on this issue set forth in Field Assistance Bulletin 2006-03. Field Assistance Bulletins are available on EBSA's Web site at www.dol.gov/ebsa.

Panel clears Mental Health Parity bill for full House vote.  After approving it in subcommittee last week, the House Energy and Commerce Committee became the third and final committee to vote in favor of the bipartisan Paul Wellstone Mental Health and Addiction Equity Act (H.R. 1424). The legislation would require group health insurance plans offering coverage to employers with 50 or more employees to provide parity for mental health services on the same terms as the care they provide for physical ailments. Group health plans would not have to offer mental health benefits under the bill, but those that do would be required to offer similar terms and conditions as for medical and surgical benefits. The committee approved the legislation by a 32-13 vote on October 16, 2007. The Senate in September passed similar legislation (S. 558) but, unlike the House bill, the Senate’s version would not require health plans to cover the same mental health and substance-related disorders included in the plans available to federal employees. The legislation’s sponsors, Representatives Patrick J. Kennedy (D-RI) and Jim Ramstad (R-Minn), said they look forward to working with the Senate to reach a compromise. Despite considerable bipartisan support for the bill, some Republican lawmakers object, finding that the legislation would impose excessive new mandates on employers that would result in higher insurance costs. The Energy and Commerce Committee is one of three House committees that share jurisdiction over the legislation. The other two committees – Education and Labor, and Ways and Means – previously approved the bill.

EBSA releases interim final, proposed regs to comply with PPA annuity provider selection provisions. EBSA has released interim final and proposed regulations to comply with the Pension Protection Act of 2006 (PPA, P.L. 109-280) annuity provider selection provisions. Previously, both defined benefit and defined contribution plans were required to meet the "safest available annuity standard" in selecting an annuity provider to distribute benefits. The interim final regulations require only defined benefit plans offering an annuity option to meet the higher "safest available annuity" standard. The proposed regulations provide a new safe harbor applicable to annuity provider selection by fiduciaries of defined contribution individual plan accounts, such as 401(k) plan accounts.

Payroll Top of Page

Modest social security increase still larger than expected. Social Security beneficiaries will see a modest 2.3% increase in their monthly checks in 2008 as a result of inflation. The 2.3% cost-of-living adjustment, or COLA, will produce an estimated average monthly benefit of $1,079 for all retired workers in 2008, $35 a month more than in 2007. However, $2.90, or 8.3%, of that increase will be eaten up by a rise in the standard premium paid by beneficiaries enrolled in Medicare Part B in 2008. The COLA increase will be applied to this coming year's benefits, beginning with benefits for December 2007, which are first payable in January 2008.

IRS issues proposed regulations on "source of compensation." Newly proposed regulations would provide guidance on the determination of the source of compensation for labor or personal services, particularly in regard to artists and athletes, through the application of a new "events basis" rule. Under the "events basis" rule, the source of the compensation, whether within or without the US, can usually be determined by considering, under the facts and circumstances of the case, the location of the event for which the person is compensated. Thus, under the proposal, the source of the compensation is the location where the event is held. Additional guidance is provided regarding whether or not the individual is compensated as an employee and for circumstances involving services performed in multiple locations.

IRS releases 2008 inflation adjustments.  The IRS has released the inflation-adjusted tax rate tables for tax years beginning in 2008, as well as the 2008 standard deduction and personal exemption amounts. The 2008 standard deduction is $10,900 for surviving spouses and for individuals who file joint returns, $8,000 for heads of households and $5,450 for unmarried individuals and married persons filing separate returns. The personal exemption for tax years beginning in 2008 has been increased to $3,500. The threshold amounts at which the phaseout of the tax benefit of the personal exemption begins and ends and the "applicable amount" for triggering the phaseout of itemized deductions have also been determined.

IRS officials clarify provisions of proposed cafeteria plan regs.  IRS and Treasury Department representatives clarified provisions of the recently released proposed regulations on Code Sec. 125 cafeteria plans (see CCH Payroll Management Guide Report Letter 2003, dated August 14, 2007.) They reported that portions of those regulations apparently have caused worry among some practitioners and employers. During a luncheon sponsored by the District of Columbia Bar, Tax and Employee Benefits committees, one representative from the Treasury and another from the IRS addressed issues within the proposed regulations, including group term life insurance coverage and new-hire provisions.

Pension Law Top of Page

DOL announces final rule on default investment alternatives for participant-directed plans.   US Secretary of Labor Elaine L. Chao today unveiled a final rule establishing qualified default investment alternatives, making it easier for employers to automatically enroll workers in their 401(k) and other defined-contribution plans. The final rule, which resulted from the Pension Protection Act (PPA), is projected to increase retirement savings in 401(k)-type plans by as much as $134 billion by 2034. "This is a key component of the Pension Protection Act and will help many more workers and their families build a nest egg for a secure and comfortable retirement," said U.S. Secretary of Labor Elaine L. Chao. The regulation implements PPA provisions providing relief to plan fiduciaries who invest the assets of participants who do not provide investment direction (such as automatically enrolled workers) in "qualified default investment alternatives" or QDIAs. The QDIAs described in the rule will encourage the investment of employee assets in investment vehicles appropriate for long-term retirement savings. "The new default options will be an essential element in the success of automatic enrollment plans to help workers achieve retirement security," said Assistant Secretary of Labor Bradford P. Campbell. "This regulation will ensure that workers in qualified default alternatives are automatically invested in a mix of fixed income, equity and other assets appropriate for long-term retirement savings."

PBGC announces flat-rate premium increase for plan year 2008. The Pension Benefit Guaranty Corporation (PBGC) has announced that the per-participant, flat-rate premium for plan year 2008 will be $33.00 (up from $31.00 for Plan Year 2007) for single-employer plans and $9.00 (up from $8.00 for Plan Year 2007) for multiemployer plans. The premium rates are adjusted for inflation each year based on changes in the national average wage index, as required by the Deficit Reduction Act of 2005 (signed into law on February 8, 2006). These new rates are expected to be updated within PBGC's e-filing application called "My Plan Administration Account" ("My PAA") in January 2008. When My PAA is ready, filers will be able to prepare and submit Estimated Filings for plan year 2008 (for which February 29, 2008 is the earliest filing due date for calendar year plans). Initially, only Estimated Filings will be allowed for plan year 2008 due to the substantial changes that are required as a result of the Pension Protection Act of 2006, particularly with respect to the variable-rate premium. My PAA will be updated for these changes to allow sufficient time to prepare and submit filings due October 15, 2008 (for calendar year plans).

Proposed IRS regulations specify benefit limitation rules for underfunded DB plans.  The IRS has issued proposed regulations, reflecting provisions of the Pension Protection Act of 2006 (PPA, P.L. 109-280) which impose limits on benefits and benefit accruals on underfunded single-employer defined benefit plans and restrict the use of certain funding balances maintained for defined benefit pension plans. Generally, the proposed regulations would apply to plan years beginning on or after January 1, 2008. Pending issuance of final regulations, the proposed regulations may be relied upon for plan qualification purposes.

PBGC issues proposed rules for administrative review of agency decisions.  The PBGC proposes amending its regulation on Administrative Review of Agency Decisions (29 CFR part 4003) to clarify that the agency's appeals board may refer certain categories of appeals to other PBGC departments for a written response and to remove determinations under section 4022A of the Employee Retirement Income Security Act of 1974 (ERISA) from the scope of part 4003. The proposed amendments also include minor clarifying and technical changes to the rules for administrative review of agency decisions.

Social Security Top of Page

SSA seeks comments on proposed information gathering activities.  The Social Security Administration is soliciting comments from the public regarding a number of new forms and other information-gathering activities prior to clearance by the Office of Management and Budget (OMB), as well as for some activities for which clearance has already been sought. Specifically, the SSA wants feedback on the need for the information solicited; its practical utility; the accuracy of the agency's burden estimate; ways to enhance the quality, utility and clarity of the manner in which the information is collected; and ways to minimize the burden on respondents, including the use of automated collection techniques or other forms of information technology. The forms and other information gathering activities for which comments are sought are listed in two issues of the Federal Register, October 10, 2007, and October 18, 2007.

Comments due November 9, 2007. Comments are due on November, 9, 2007, for the following new data collection requests: Authorization for SSA to Disclose Tax Information for your Appeal of Your Medicare Part B Income-Related Monthly Adjustment Premium Amount (SSA-54); Race & Ethnicity Qualitative Research (voluntary focus groups to assess reactions to proposed form that would collect race/ethnicity data). These data collection requests, which appear in the October 10, 2007, Federal Register (72 FedReg 57629), have already been submitted to OMB for approval.

Comments due November 17, 2007. Comments on the following proposed data collection requests, which appear in the October 18, 2007, Federal Register (72 FedReg 59132), and have already been submitted to OMB for approval, are due November 17, 2007: Request for Corrections of Earnings Record (SSA-7008); Statement of Agricultural Employer (Year Prior to 1988; and 1988 and later) (SSA-1002-F3 and SSA-1003-F3); Medical Report (General) (SSA-3826-F4); Travel Expense Reimbursement; Beneficiary Recontact Report (SSA-1587-OCR-SM); Certificate of Coverage Request (for workers and employers wishing to establish exemption from foreign social security taxes); Incorporation by Reference of Oral Findings of Fact and Rationale in Wholly Favorable Written Decisions (Bench Decision Regulation); Request for Proof(s) from Custodian of Records (SSA-L707); and Protection and Advocacy for Beneficiaries of Social Security (PABSS)-Program Performance Report (new) (information used to evaluate performance of programs designed to provide information and advice to beneficiaries about obtaining vocational rehabilitation and employment services and provide, if necessary, advocacy to secure, maintain or regain, employment).

Comments due December 17, 2007. Comments on the following proposed data collection requests, which also appear in the October 18, 2007, Federal Register, have not yet been submitted to OMB for approval, and are due December 17, 2007: Advanced Notice of Termination of Child's Benefits & Student's Statement Regarding School Attendance (SSA-1372- BK and SSA-1372-BK-FC); and, Acknowledgement of Receipt (Notice of Hearing) (HA-504).

SSA announces 2.3% benefit increase for 2008; taxable wage base rises to $102,000.  Monthly Social Security and Supplemental Security Income benefits for more than 54 million Americans will increase 2.3 percent in 2008, the Social Security Administration announced October 18. Social Security and Supplemental Security Income benefits increase automatically each year based on the rise in the Bureau of Labor Statistics' Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), from the third quarter of the prior year to the corresponding period of the current year. This year's increase in the CPI-W was 2.3 percent. The 2.3 percent Cost-of-Living Adjustment (COLA) will begin with benefits that nearly 50 million Social Security beneficiaries receive in January 2008. Increased payments to more than 7 million Supplemental Security Income beneficiaries will begin on December 31. Some other changes that take effect in January of each year are based on the increase in average wages. Based on that increase, the maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $102,000 from $97,500. Of the estimated 164 million workers who will pay Social Security taxes in 2008, nearly 12 million will pay higher taxes as a result of the increase in the taxable maximum. A fact sheet showing the effect of the various automatic adjustments is located at http://www.socialsecurity.gov/pressoffice/factsheets/colafacts2008.htm.