OVERVIEW

2018

POST-ELECTION

OVERVIEW

SHRM GOVERNMENT AFFAIRS

2018

POST-ELECTION

OVERVIEW SHRM GOVERNMENT AFFAIRS SHRM GOVERNMENT AFFAIRS STAFF JOHNNY C. TAYLOR, JR., SHRM-SCP President & CEO 800.283.SHRM | [email protected] EMILY M. DICKENS, J.D. Corporate Secretary and Chief of Staff 703.535.6216 | [email protected] MICHAEL P. AITKEN Senior Vice President of Membership 703.535.6027 | [email protected] LAL BENITAH Executive Assistant, Government Affairs 703.535.6312 | [email protected]

INSIDE THIS ISSUE 3 Overview of the 2018 Election 4 Impact on the Trump Administration 4 2018 Lame-Duck Session in Congress 5 Outlook for the 116th Congress 7 2019 Policy Agenda in Washington 13 In the Federal Agencies 14 Other DOL Key Regulations to Watch 15 Impact on State Legislatures 17 2019 Policy Agenda in the States 18 Results of Ballot Initiatives/Referenda/Questions 19 2018 Electoral Charts/Maps

MEREDITH NETHERCUTT Director, Member Advocacy 703.535.6417 | [email protected] REBECCA PETERS, J.D. Director, Congressional Affairs 703.535.6467 | [email protected] CASSIDY SOLIS, SHRM-CP Senior Advisor, Member Advocacy 703.535.6086 | [email protected] JUSTIN STORCH, J.D. Director, Regulatory Affairs & Judicial Counsel 703.535.6463 | [email protected]

CHATRANE BIRBAL Director, Congressional Affairs 703.535.6214 | [email protected] PATRICK BRADY Director, Congressional Affairs 703.535.6246 | [email protected] BOB CARRAGHER Vice President, State Affairs 703.535.6268 | [email protected] JASON GABHART, J.D. Director, State Affairs, California 703.535.6299 | [email protected] NANCY HAMMER, J.D., SHRM-CP Vice President, Regulatory Affairs & Judicial Counsel 703.535.6030 | [email protected] LISA K. HORN Vice President, Congressional Affairs 703.535.6352 | [email protected]

1800 Duke Street Alexandria, VA 22314-3499 USA 800.283.7476 | Fax: 703.535.6490 | TDD: 703.548.6999 shrm.org The Society for Human Resource Management (SHRM) is the world’s largest HR professional society, representing 300,000 members in more than 165 countries. For nearly seven decades, the Society has been the leading provider of resources serving the needs of HR professionals and advancing the practice of human resource management. SHRM has more than 575 affiliated chapters within the United States and subsidiary offices in China, India and United Arab Emirates. Visit us at shrm.org.

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“It was a big day yesterday—an incredible day. Last night the Republican party defied history to expand our Senate majority and did better than expected in the House.” President Donald J. Trump at a White House press conference on the elections— November 7, 2018

EVAN EL-AMIN / SHUTTERSTOCK.COM

“I heard the president say I deserve to be the speaker. I don’t think anybody deserves anything. It’s not about what you have done, it’s about what you can do. ... I think I’m the best person to go forward, to unify, to negotiate.” Expected Speaker of the House Nancy Pelosi in comments following Election Day—November 7, 2018

ALBERT H. TEICH / SHUTTERSTOCK.COM

“The one issue that Leader Pelosi and I discussed this morning where there could be a possible bipartisan agreement would be something on infrastructure, but there could be a lot of other things.” Expected Senate Majority Leader of the 116th Congress Mitch McConnell in a victory speech—November 7, 2018

CHRISTOPHER HALLORAN / SHUTTERSTOCK.COM

2018 POST-ELECTION OVERVIEW | SHRM GOVERNMENT AFFAIRS

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Split Decision: Divided Government in Congress for 2019; Democrats Make Significant Gains in the States On the national front, voters embraced divided government once again. While awarding Democrats an anticipated majority of 35 to 40-plus seats in the House of Representatives (as we go to press, numerous House races still have yet to be called), the GOP is on track to pad its majority in the Senate, defeating three Democratic incumbents and awaiting the outcome of two other races—Florida, which is now subject to a recount, and Mississippi, which will be decided in a runoff election later this month. The “blue wave” anticipated in this year’s elections actually materialized in the states and throughout suburban congressional districts. Democrats captured at least seven governorships previously held by the GOP, and Republicans successfully fought off stiff congressional challenges in Ohio and Iowa but are awaiting the outcome of the races in Georgia and Florida. Democrats also fared well in state legislative races, where they are expected to capture nearly 325 state legislative seats when ballot counting ends, flipping control in at least seven legislative chambers throughout the country, resulting in six more states being totally under Democratic control come 2019. •• House of Representatives. On Election Night, Democratic challengers (mostly women and military veterans) in House races across the country rode a suburban wave of voter discontent with President Donald J. Trump and his policies. As such, in 2019 Democrats will control the agenda in the House, will hold the chairmanships and majorities in each committee, and are expected to conduct vigorous oversight of the president and his policies, including both past and future executive actions. •• Senate. Republicans added to their majority in the Senate but are waiting on the outcome of the Florida race as well as the runoff in Mississippi. They successfully knocked off at least three Democratic incumbents in North Dakota, Indiana and Missouri while fighting off a stiff challenge in Texas. To date, the GOP suffered defeat in two seats previously held by Republicans—Nevada and Arizona. When the 116th Congress convenes in January, Republicans will hold more seats on committees in the Senate, and President Trump’s ability to continue to fill vacancies on the federal judiciary, including the Supreme Court, will remain relatively unimpeded for the remainder of the term. •• Governorships. Democrats added at least seven governorships to their tally on Election Night and await the outcome in both Georgia and Florida, seats currently held by the GOP. These gains, coupled with the party’s success in flipping seven state legislative chambers from Republican to Democrat, are certain to usher in a more progressive state workplace agenda in 2019. Republicans succeeded in capturing the governorship in Alaska, returning that state to GOP control when the legislature convenes in January. •• Ballot measures. Voters approved ballot measures in favor of the legalization of recreational marijuana in Michigan; the legalization of medical marijuana in Utah and Missouri; graduated minimum-wage increases in Missouri and Arkansas; and expansion of Medicaid in Idaho, Nebraska and Utah.

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Overview of the 2018 Election

the House, however, was a different story for Republicans. Having to defend more seats than Democrats, at least 40

The 2018 midterm elections yielded major gains for

of which were open seats due to incumbent retirements

Democrats at the state level but mixed results in Congress.

and primary defeats, Republicans faced a stiff headwind in

While Democrats may capture up to a 40-seat majority

congressional suburban districts throughout the country in

in the House of Representatives (their best showing in a

the form of Democratic women and battle-hardened military

midterm election since the Watergate Era), Republicans

veteran challengers, a number of which were running in

defeated Democratic senators in at least three states, with

congressional districts carried by Hillary Clinton in the 2016

more losses possible as votes continue to be counted. The

presidential race in states won by Donald Trump. In the end,

task of defending 26 of the 35 Senate seats up for grabs

the suburbs proved hostile territory for Republicans in the

in the upper chamber proved daunting for the Democrats,

House. But these headwinds were not limited to federal

and President Trump’s barnstorming campaigning for GOP

House races. At the state level, Democrats made sizable

Senate candidates in battleground states paid big dividends.

gains in governorship races as well as captured nearly 325

As such, when the 116th Congress convenes in early January,

state legislative seats from Republicans throughout the

the GOP will add to its majority status in the Senate, which

country.

in turn will strengthen President Trump’s chances of filling judicial vacancies with conservative judges, including any

These gains by the Democrats in both the House and in

that might arise in the Supreme Court in the remainder of

state races will likely usher in a rash of employee-friendly

his first term. The Democrats capturing the House now

workplace policy initiatives. While the chances of them

guarantees a constitutional check will be in place beginning

becoming law in Congress will be remote given the

in 2019, with a Democratic-controlled House challenging

Republicans’ stronghold in the Senate, such measures will

the president when it considers he oversteps his authority

likely gain traction at the state level, especially in states

and conducting oversight of President Trump’s policies and

where the Democrats control the governor’s mansion along

administration for the next two years.

with both chambers of the state legislature.

On Election Night, Republicans captured at least three

The 2018 election results will also have a major impact on

Senate seats previously held by Democrats in Missouri,

the shape and direction of HR issues arising in the House

Indiana and North Dakota, while suffering two losses in

and throughout several states. For example, SHRM predicts

Nevada and Arizona, and prevailed in a nail-biter in Texas.

that Democratic proposals on such topics as the Paycheck

Florida is awaiting the results of a recount, and there is

Fairness Act, increases in the federal minimum wage and

still the runoff election later this month that will determine

the Healthy Families Act are all but certain to be resurrected

the outcome of a Mississippi Senate seat. The situation in

in the 116th Congress. However, Republican leaders in the Senate have signaled that they intend to advance alternative proposals, including proposals to encourage paid leave, efforts to amend the Patient Protection and Affordable Care Act (PPACA), and possible additional tax reform legislation.

ROB CRANDALL / SHUTTERSTOCK.COM

Republicans will also continue to focus even more intently on executive branch activities, particularly executive orders and regulations relating to immigration reform and the impact international trade has on the competitiveness of U.S. companies and workers.


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Turning to state elections, Democrats captured at least

Over the next two years, the relationship between President

seven previously-held Republican-controlled governorships,

Trump and Congress will be extremely different from what

two of which (Michigan and Wisconsin) are critical to

it was during his first two years in office. Rather than a

Democrats’ efforts to rebuilding the “blue wall” (along with

somewhat collaborative or accommodating relationship, the

Pennsylvania) in time for the 2020 presidential election.

new one is likely to be strained at best and possibly one

They, coupled with gubernatorial pickups in Maine, Illinois,

where President Trump is forced to weather a triangulation

Nevada, New Mexico and Kansas, could pose serious

over public policy and federal spending with a Republican

risks for Republicans in maintaining their hold on the

Senate and Democratic House.

White House in 2020. Republican candidates held onto governorships in Ohio and Iowa, but Florida and Georgia remain too close to call.

Impact on the Trump Administration

2018 Lame-Duck Session in Congress When members of the 115th Congress arrive back in Washington on November 13 for the “lame-duck” session, nearly 100 of the 535 senators and representatives returning

During the second half of his first term in office, President

to the Capitol will have suffered defeat either on November

Trump will be exposed to the “checks and balances” James

6 or earlier in the primary season or will have chosen to retire

Madison and the Founding Fathers embedded in the U.S.

and leave Washington at the end of the term. As a result,

Constitution as a way to rein in the powers of the presidency.

the outlook for this session (like most lame-duck sessions) is

In capturing the House of Representatives on Election Night,

uncertain at best.

Democrats in 2019 will control the chairmanships of all House committees and will have at least a three- or four-seat

Scheduled to last into December, the session could follow

majority in each committee.

one of three paths. One option is that it may end up being a long, drawn-out affair of Republicans trying to move through

Thursday after the election, President Trump held the

priority legislation on a party-line approach. A second

customary press conference at the White House to discuss

possibility is that the session will be abbreviated and will

the results of the elections and the potential impact on the

focus solely on must-pass legislation, like a short-term bill that

second half of his first term in office. During the exchange

funds the remainder of the federal government beyond the

with representatives of the national media, which lasted

December 7 deadline for the current federal appropriation,

nearly 90 minutes, President Trump commented on

along with any must-pass policy issues (such as the

Congresswoman Nancy Pelosi, the potential future Speaker

reauthorization of the national flood insurance program) that

of the House during the 116th Congress:

Congress left unfinished when it recessed back in October for the elections. A third scenario is that the president will

“I really think and I really respected what Nancy said

insist during budget negotiations on funding and policy riders

last night about bipartisanship and getting together

for several of his priorities, including elements of immigration

and uniting. She used the word ‘uniting,’ and she

reform like his border wall.

used the ‘bipartisanship’ statement, which is so important because that’s what we should be doing.

During the lame-duck session, Congress may pursue one

... It really could be a beautiful bipartisan type of

last effort to pass another package of tax-related provisions

situation.”

before the end of the year, such as the Protecting Family and Small Business Tax Cuts Act of 2018 (H.R. 6760). A year-end

The 116th Congress is certain to test the president’s

tax bill could include a proposal to make permanent many

willingness to compromise, and we should get an indication

of the provisions established by the 2017 tax law, which

of that early in 2019, if not sooner, when Congress turns its

are set to expire by the end of 2025. In addition, any such

attention to drafting a federal budget for fiscal year 2020.

proposal would likely include provisions to allow smallbusiness owners to share administrative costs of providing

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401(k) plans; the creation of universal savings accounts, where individuals can contribute up to $2,500 annually and withdraw their savings without paying taxes; and the doubling of the Child Tax Credit, among other incentives to save.

Outlook for the 116th Congress Republican gains in the Senate will strengthen the party’s ability to set the policy agenda in that chamber and to confirm President Trump’s nominations to the judiciary, as well as other presidential appointments throughout the federal government. But all

caucus potentially mounting a challenge to her speakership.

GOP and Democratic eyes will be on the outcome of the

Democrats are slated to vote on their leadership team

Arizona and Florida races. Even if they ultimately win those

sometime the week of November 26.

races, the GOP will still be short of the necessary 60 votes needed in the Senate to obtain “cloture,” or to limit debate

On the Republican side, current Speaker of the House Paul

and secure a final vote on legislation. Without the help of

Ryan (R-WI) has announced his retirement from Congress,

at least a handful of Democrats or the two Independents

effective at the end of this session. Kevin McCarthy, now a

who caucus with them, Republicans could encounter the

six-term veteran of the House representing the 23rd District

same parliamentary roadblocks they faced in trying to pass

of California who serves as Majority Leader, has already

legislation during the 115th Congress. And even if they are

expressed his interest in the Minority Leader position, as has

successful in moving legislation out of the Senate, they

Jim Jordan (R-OH), a leading player within the conservative

will encounter a majority of 35 or greater Democrats in the

Freedom Caucus. Steve Scalise, a five-term member

House, which means that any legislation that reaches the

representing the 1st District of Louisiana who currently serves

president’s desk will need to be bipartisan.

as the House Majority Whip, is interested in the Minority Whip

House of Representatives

post. Republicans will vote on their leadership positions on November 14.

Prior to the 116th Congress convening in January, Democrats must decide who will lead the party in the House. Rep. Nancy

In the key workplace committee in the lower chamber

Pelosi (D-CA), who currently serves as the House Minority

of Congress—the House Education & the Workforce

Leader, is the front-runner to be the Democrats’ choice for

Committee—Rep. Bobby Scott (D-VA) is expected to be

Speaker of the House, a position she previously held before

the next chairman. Scott, who is a 26-year veteran of the

the Democrats were voted out of power in the 2010 midterm

House and who represents the Newport News area of

elections. Current Minority Whip Steny Hoyer (D-MD) and

Virginia, is a strong advocate for the American worker.

Minority Policy Chair James Clyburn (D-SC), both of whom

Virginia Foxx (R-NC) is expected to become the ranking

won re-election on November 6, could return as Majority

member of the committee.

Leader and Democratic Policy Chair for the next Congress. However, Pelosi’s election as speaker is not a lock, with

Among other Democrats expected to be selected to

several incoming and returning members of the Democratic

chair committees addressing issues of interest to HR


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MARK REINSTEIN / SHUTTERSTOCK.COM

professionals are Jerrold Nadler (D-NY), as chairman of

•• Mark Takano (D-CA), who is expected to be the

the House Judiciary Committee with jurisdiction over

incoming chairman of the House Workforce Protections

immigration legislation, and Richard Neal (D-MA), who

Subcommittee, which has jurisdiction over such issues

is poised to assume the chairmanship of the House

as overtime and matters relating to the Occupational

Ways and Means Committee, which has jurisdiction over

Safety and Health Act.

workplace tax and benefits issues, including retirement.

•• Rodney Davis (R-IL), Henry Cuellar (D-TX), Scott Peters

Reps. Jim Sensenbrenner (R-WI) and Kevin Brady (R-TX)

(D-CA) and Elise Stefanik (R-NY) on expanding the

are considered the likely candidates to serve as ranking

dollar limits and including student loan repayment

members on the Judiciary Committee and Ways and Means

through employer-provided educational assistance.

Committee, respectively. Other House members expected to play key roles in

Senate

advancing workplace issues during the 116th Congress

With the victories over Democratic incumbents in Indiana,

include:

Missouri and North Dakota and the rebuffing of a strong challenge in Texas, Republicans are in a good position

•• Mimi Walters (R-CA), who is the prime sponsor of the

to add seats in the Senate, with the outcomes in Florida

SHRM-backed Workflex in the 21st Century Act and is

and Mississippi yet to be determined. To date, Democrats

in a tight race for re-election that has yet to be called

suffered a net loss of one seat on Election Night, which

in the 45th District, representing the Irvine area of

could grow to three depending on the outcomes of the

California.

Florida recount and Mississippi runoff. Democrats captured

•• Rosa DeLauro (D-CT), who will likely reintroduce the

two Senate seats previously held by the GOP in Arizona

Healthy Families Act, which, if enacted into law, would

and Nevada. When the 116th Congress convenes in January,

mandate that employers provide a set number of paid

Republicans will be certain to hold at least 52 seats—eight

sick and safe leave days to employees.

seats shy of a cloture-proof majority of 60 votes.

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The Senate is poised to welcome at least seven new members in 2019. Mitch McConnell (R-KY) is expected to return as Majority Leader next year. However, since John

2019 Policy Agenda in Washington

Cornyn (R-TX) is term-limited as Senate Majority Whip, John

Labor and Employment

Barrasso (R-WY) and John Thune (R-SD) will likely attempt

When the 116th Congress convenes on January 3, a

to move up the leadership ranks in the GOP Senate. On the

Republican majority will control the Senate but not the

Democratic side of the aisle, Charles E. Schumer (D-NY)

House of Representatives. Thus, and with a backdrop of the

is expected to again serve as Minority Leader, while Dick

upcoming 2020 presidential campaign, Republicans and

Durbin (D-IL) is likely to return as Minority Whip.

Democrats will use these majorities to showcase their ideas for moving the country (and the U.S. worker) forward in a time

As for the committees with jurisdiction over workplace issues,

of a tight labor market conditions and intense competition

leadership will remain the same in some and change in

from abroad. President Trump’s labor and employment

others. Lamar Alexander (R-TN), who is serving his second

positions have broadly focused on reducing regulations

term in the Senate, is expected to return as chairman of the

impacting employers, canceling specific Obama-era executive

Health, Education, Labor and Pensions (HELP) Committee,

orders, restructuring trade agreements and creating millions

while Patty Murray (D-WA) likely will remain the ranking

of new jobs. Below are some of the issues SHRM will

Democrat. The HELP Committee serves as the initial

be tracking and advocating on when the new Congress

battleground for numerous workplace policy proposals likely

convenes in early January.

to surface in the 116th Congress. FLSA OVERTIME RULES: In 2016, the United States District Charles Grassley (R-IA) is expected to chair the Senate

Court for the Eastern District of Texas issued a summary

Finance Committee, which has jurisdiction over health care,

judgment blocking the most recent update to increase

tax and pension issues, while Ron Wyden (D-OR) will likely

the salary threshold under Part 541 of the Fair Labor

return as the ranking Democrat. Lindsay Graham (R-SC) will

Standards Act (FLSA). The rule would have increased the

likely chair the Senate Judiciary Committee, which oversees

salary threshold by more than 100 percent and included an

all judicial matters, including the confirmation of Supreme

automatic salary threshold increase every three years to

Court justices, and has jurisdiction over immigration reform

maintain it at the 40th percentile in the lowest-wage census

legislation, if Grassley becomes Finance chair. The ranking

region.

member is again expected to be Dianne Feinstein (D-CA). Under Secretary Alexander Acosta, the Department of Labor Other members of the Senate likely to play key roles in

(DOL) issued a request for information soliciting input from the

addressing major workplace initiatives include:

public on many of the provisions of the rule, including setting the salary level, analyzing the duties test, creating a “regional-

•• John Cornyn (R-TX) and Dick Durbin (D-IL), on immigration issues.

based” salary threshold and providing an automatic update to the salary level.

•• Pat Toomey (R-PA) and Debbie Stabenow (D-MI), on health care matters. •• Johnny Isakson (R-GA) and Sheldon Whitehouse (D-RI), on retirement security and workplace safety measures. •• Mark Warner (D-VA), John Thune (R-SD) and Catherine

OUTLOOK: In a divided Congress, House Democrats may look to introduce legislation or use the appropriations process to derail the DOL’s anticipated Notice for Proposed Rule Making if it does not go far enough with an increase to the

Cortez-Masto (D-NV), on employer-provided educational

salary threshold and/or provide an automatic escalator. Such

assistance.

legislative proposals will face certain opposition in the Senate.

SHRM POSITION: SHRM supports an update of the salary level, but one that follows previous methodology to achieve a more equitable increase. The 2016 rule’s salary increase of over 100 percent was too far and too fast and would have


7

presented challenges for employers whose salaries tend to

In the short-term, the Senate will need to consider whether

be lower, such as small employers, nonprofits, employers

to confirm Democrat Mark Pearce to the board in a lame-

in certain industries and employers in certain geographic

duck session to another five-year term—his term expired in

regions of the country that tend to have lower costs of living.

August. Pearce has been renominated by President Trump as

SHRM opposes automatic increases that ignore economic

part of an overall package of presidential nominations.

variations of industry and location and the overall state of the economy.

SHRM POSITION: SHRM believes in the fundamental right—guaranteed by the NLRA—of every employee to make

NATIONAL LABOR RELATIONS BOARD ACTIONS: The

a private choice about whether or not to join a union. SHRM

National Labor Relations Board (NLRB) continues to pursue

supports public policy that protects an employer’s ability to

an active agenda with significant implications for employers

create reasonable workplace policies for labor-management

across most industries and sectors. Under President Trump,

relations.

the Department of Labor and the NLRB have made a concerted effort to pull back numerous workplace rules and

COMPENSATION EQUITY: Title VII of the Civil Rights Act

decisions implemented under the previous administration

of 1964, the Americans with Disabilities Act of 1990, the Age

that made union organizing easier, including a focus on

Discrimination in Employment Act of 1967 and the Equal

nonunion workplaces and increased scrutiny of whether

Pay Act of 1963 are among the laws that prohibit wage

employer policies interfere with employees’ right to organize

discrimination in the workplace. Jobs that have the same

under the National Labor Relations Act (NLRA). Due to a

functions and similar working conditions and that require

conflict-of-interest ruling involving NLRB member William

substantially the same skills must be compensated equally,

Emanuel, the Hy-Brand Industrial case was vacated, which

with allowable pay differences based on factors such as

then reinstated the “indirect control” standard for determining

experience, qualifications, seniority, geographic location and

joint-employment status established under the Browning-

performance. While gender-based disparities occur, debate

Ferris case. Legislation was introduced to restore the

continues as to whether those instances are attributable to

longstanding definition of “joint employment” and to overturn

discrimination or to legitimate pay practices or other factors.

the NLRB’s new “indirect control” standard for determining

The growing national conversation has resulted in the

whether a joint-employer relationship exists under the

introduction of multiple legislative proposals at the federal

NLRA. However, while the legislation was approved in the

and state levels to address this issue.

House of Representatives, the Senate did not consider the proposal. Legislative proposals to reform the NLRA were also

The Paycheck Fairness Act (PFA) would amend the Fair Labor

introduced but did not advance in the 115th Congress.

Standards Act to prohibit employers from retaliating against employees who discuss their compensation, prohibit a

OUTLOOK: With the 116th Congress divided, oversight

number of employer defenses for legitimate pay differentials

of the NLRB will continue with an emphasis on conflict-of-

and impose additional civil penalties for violating the law

interest eligibility for board members on issues related to

based on the size of the employer. Another proposal would

joint employment, “ambush” election procedures and others.

prohibit employers from asking prospective employees for

In a reversal of the 115th Congress, the House may consider

their salary history before making a job offer. In the absence

legislation to codify the “indirect-control” standard under the

of federal legislation being enacted, more and more states

Browning-Ferris case and to codify excelsior list requirements

are passing legislation to address compensation equity.

prescribed in the “ambush” election rule established under the Obama administration. Additionally, the House may

OUTLOOK: While the House is likely to reintroduce and

make changes to the independent contractor-employee

approve the PFA and legislation prohibiting the use of salary

determination under the Fair Labor Standards Act as well

history prior to a job offer, both are unlikely to move in a

as remove limitations on “secondary” strikes and picketing.

divided Congress. SHRM will continue to show leadership

Such legislative proposals will face certain opposition in the

on this important issue through continued dialogue with

Senate.

bipartisan policymakers about compensation equity.

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SHRM POSITION: SHRM believes that employees should

OUTLOOK: The House of Representatives will likely consider

be compensated equitably and without discrimination.

a year-end tax bill to build on the passage of the Tax Cuts

SHRM vigorously supports equal pay for equal work, with

and Jobs Act. An end-of-year tax bill could include SHRM-

allowable pay differences based on factors not prohibited

supported bipartisan proposals to strengthen and expand

by law and believes that any improper pay disparities

employer-provided educational assistance under Section

should be promptly addressed. In determining pay, SHRM

127 of the Internal Revenue Code. We anticipate a focus

supports employer flexibility to reward employees, taking

on workforce development as a possible issue garnering

into consideration legitimate business factors such as

bipartisan interest.

education, qualifications, relevant experience, skills, seniority, geographic location, performance and any collective

SHRM POSITION: SHRM encourages a national discussion

bargaining agreements. In addition, SHRM asserts that salary

about hiring from untapped talent groups such as veterans,

history should not be a factor in setting compensation.

individuals with disabilities and individuals who were formerly

Instead, compensation decisions should be based on the

incarcerated—removing barriers to hiring to ensure that all

value of the position to the organization, competition in the

individuals have opportunities for employment. In addition,

market and other bona fide business factors. Employers

SHRM supports tax incentives to strengthen and expand

should be able, however, to discuss pay expectations or

Section 127 educational assistance. SHRM chairs the Coalition

provide the pay range for the position sought.

to Preserve Employer Provided Education Assistance, which brings together a broad cross-section of nearly 100

WORKFORCE DEVELOPMENT: While the national

organizations representing employers, labor and higher

unemployment rate is 3.7 percent—the lowest since 1969—

education, all of which are committed to preserving employer-

employers are still facing a skills gap that will only get worse

provided educational assistance. For more information, visit

as the unemployment rate continues to decrease. Employers

www.cpepea.com.

and government have a dual role to play in education and training to help workers be more productive and better

CIVIL RIGHTS: Title VII of the Civil Rights Act of 1964, the

qualified for jobs at all skill levels. HR professionals report

Americans with Disabilities Act, the Genetic Information

that their most effective approach to fill full-time regular

Nondiscrimination Act and other federal laws prohibit

positions is training existing employees to take on tough-

employment discrimination on the basis of race, color, national

to-fill roles. As they upskill existing employees, employers

origin, sex, religion, disability, age and genetics. Despite

should commit to inclusive hiring practices and remove

these legal protections, the Equal Employment Opportunity

employment barriers for qualified long-term unemployed job

Commission (EEOC) receives thousands of discrimination

seekers and other nontraditional candidates including older

complaints each year. In addition, according to the “Report of

workers, veterans, low-skilled workers, workers with criminal

the Co-Chairs of the EEOC Select Task Force on the Study

histories and global talent.

of Harassment in the Workplace” (June 2016), one-third of the total charges received in 2015 included a claim of

Education and training should be encouraged as a sound

workplace harassment. The task force concluded that sexual-

investment through incentives, including employer-

harassment training, without an organizational culture change,

sponsored educational assistance programs, partnerships

fails to prevent harassment because it is “too focused on

and apprenticeships. It is anticipated that by 2025,

simply avoiding legal liability.” In cases that involved sexual

Millennial employees will represent nearly 75 percent of

harassment, 3 in 4 individuals never raised concerns with their

the workforce. Yet, unlike previous generations, they will

supervisor, manager or union representative out of fear of

struggle to purchase a home, let alone save for retirement.

retaliation or disbelief of their claim.

That’s because today 70 percent of college students are graduating with a significant amount of student loan debt.

The issue of sexual harassment in the workplace has been

Employers that offer education assistance not only provide

front and center in our national conversation in 2018. Media

a valuable benefit to their employees but also invest in their

attention and the #MeToo movement, along with the work

workforce, ensuring that their employees are prepared for

of the EEOC, have led to an increased focus on the role of

the challenges of a global labor market.

workplace culture in preventing harassment. In addition, the


9

U.S. Congress, several state legislatures and other high-profile

Columbia, Massachusetts and Washington have now enacted

workplaces are re-examining their harassment policies to

paid-family-leave insurance programs, joining California, New

ensure fairness for employees at all levels of the organization.

Jersey, New York and Rhode Island.

OUTLOOK: While efforts may be made in the 116th Congress

The Trump administration and policymakers at the federal,

to extend to all employers the provisions of the executive

state and local levels continue to put forth proposals to

order implemented under former President Barack Obama

expand workflex and paid leave. President Trump became

prohibiting federal contractors from discriminating on the

the first Republican president to call for six weeks of paid

basis of sexual orientation or gender identity, the proposal

parental leave in the fiscal year 2019 budget. In July 2018,

is unlikely to move in the Senate. Depending on year-end

a Senate Finance subcommittee examined the varying

activity in the 115th Congress, legislation may be reintroduced

paid-family-leave proposals put forward by Democrats

in the 116th Congress prohibiting the use of arbitration

and Republicans, ranging from creating a national social

agreements in sex-discrimination disputes. Additionally,

insurance paid-leave program funded through a payroll tax

legislation may be reintroduced prohibiting nondisclosure and

to providing paid parental leave to new parents who choose

nondisparagement in these same types of cases.

to delay receiving Social Security benefits. Additionally, Senior Advisor to the President Ivanka Trump continues to

SHRM POSITION: SHRM has a proud record of working

call for a bipartisan paid-family-leave plan that could secure

to end discrimination in the workplace and believes that

congressional approval.

any misconduct allegation against an employee should be resolved promptly. SHRM supports a discrimination- and

In the 115th Congress, Rep. Mimi Walters (R-CA) introduced

harassment-free workplace. SHRM believes employers

the SHRM-developed Workflex in the 21st Century Act

should have effective anti-harassment policies that enable

to allow employers the option of providing a minimum

thorough investigations of harassment complaints and hold

standard of paid leave and a flexible work arrangement to

perpetrators accountable. In addition, employers should work

all employees in exchange for pre-emption from state and

toward creating a workplace culture that does not tolerate

local paid leave and workflex requirements. Proposals to

discrimination or harassment. SHRM supports congressional

guarantee certain workers the right to request a flexible

efforts to prohibit discrimination on the basis of sexual

schedule have been a priority for Democratic policymakers

orientation and gender identity.

at both the federal and state level.

Workplace Flexibility

FAMILY AND MEDICAL LEAVE ACT: The Family and Medical

Workplace flexibility (workflex) is a strategic business practice

Leave Act (FMLA) provides eligible employees up to 12

that determines when and how work is to be done. It helps

workweeks of unpaid leave in a 12-month period in certain

organizations create a modern work environment that is

situations such as an employee’s serious health condition or

responsive to demographic, economic and technological

the birth or adoption of a child. The regulations implementing

changes, which is why a growing number of employers offer

the FMLA have resulted in administrative and compliance

flexible work arrangements such as compressed workweeks,

challenges for HR professionals, particularly when intermittent

telecommuting and flexible schedules. Additionally, most

leave is needed for an episodic medical condition. At the

employers with at least 50 employees offer some form

same time, lawmakers have continued to explore proposals

of paid leave (vacation, sick, personal, paid-time-off bank)

to expand the statute by increasing leave eligibility, covering

and, according to the 2017 National Study of Employers, 58

more employers and requiring the leave to be paid.

percent of employers offer maternity leave and 15 percent offer spouse or partner leave for the birth or adoption of a

OUTLOOK: A Democratic majority in the House could

child.

propel paid leave to the top of the congressional agenda. Various expansions to the FMLA are likely to be pushed

The Tax Cuts and Jobs Act (P.L. 115-97) included a tax credit

by Democrats in the 116th Congress, including paid FMLA

(through tax year 2019) for employers offering a paid family

leave and the Family and Medical Insurance Leave (FAMILY)

and medical leave program to all employees. The District of

Act, which would provide partial wage replacement funded

10


through a payroll tax for eligible leaves under the FMLA. The

benefits or leave requirements because they hinder flexible,

challenge will be in developing a paid-family-leave proposal

innovative approaches to meeting employees’ needs.

that can secure 60 votes in the Republican-controlled Senate. TAXES AND BENEFITS: Eleven months after the enactment

SHRM POSITION: SHRM supports the spirit and intent of

of the Tax Cuts and Jobs Act (TCJA), the issue of tax reform

the FMLA and believes that clarification of the implementing

continues to be a key component in the ongoing debate

regulations would help reduce administrative and compliance

about how to revitalize and stabilize the U.S. economy. The

problems experienced by employers and HR professionals,

TCJA maintained the tax-free status of many employee

especially challenges around episodic leave. Given current

benefits while modifying others. Employer-sponsored benefits

challenges with the implementing regulations, SHRM opposes

such as retirement plans, educational assistance programs

expansions of the FMLA at this time.

and health care benefits were preserved. Further reform efforts to build on the TCJA will have implications for both

PAID SICK LEAVE: In recent years, lawmakers at the federal,

businesses and individuals. Because employee benefits

state and local levels have proposed a range of legislative

enjoy a tax-free status and account for the largest annual

initiatives that mandate employers to provide paid sick

loss in revenue to the federal treasury, it is likely that ongoing

leave. Ten states—Arizona, California, Connecticut, Maryland,

tax reform discussions will involve a close examination of

Massachusetts, New Jersey, Oregon, Rhode Island, Vermont

employer-sponsored benefits. Eliminating tax incentives

and Washington—have implemented statewide paid-

could negatively affect an employer’s ability to offer a

sick-leave laws, joining 20 localities. Given the significant

comprehensive benefits package, including a retirement

Democratic gains in state legislative seats and governorships,

plan and educational assistance, to its employees. As HR

it is likely that more states will consider paid-sick-leave

professionals are keenly aware, in this competitive economy,

proposals in 2019.

offering an attractive benefits package is a key factor in recruiting and retaining a talented workforce.

OUTLOOK: During the 115th Congress, Democrats pushed the Healthy Families Act, which would require employers to

OUTLOOK: A new Democratic majority in the House and

provide up to seven days of paid sick leave annually, but the

on the tax-writing House Ways and Means Committee will

bill failed to gain any traction in the Republican-controlled

put a halt to Republican efforts to build on the tax reform

Congress. This bill will certainly be reintroduced in the new

momentum. Rep. Richard Neal (D-MA) will take leadership

Congress and may advance in the House, but it would face

of the Ways and Means Committee next year. In addition,

an uncertain future in the Senate. As a result, lawmakers may

there will be several new members on the committee in the

look to paid-leave proposals that can gain bipartisan support,

116th Congress since numerous members retired this year.

such as the Workflex in the 21st Century Act, which has been

The Senate Finance Committee will also have a leadership

endorsed by the Progressive Policy Institute.

change as Sen. Orrin Hatch (R-UT), current chair of the committee and a main proponent of tax reform, is retiring.

SHRM POSITION: SHRM believes that the United States

Sen. Charles Grassley (R-IA) is expected to take the reins as

must have a 21st century workplace flexibility policy that

the new chairman of the Finance Committee.

meets the needs of both employees and employers. As opposed to a one-size-fits-all government mandate on all

Congress is expected to consider technical corrections

employers, SHRM supports a new approach that reflects

legislation to address specific tax reform implementation

diverse employee needs and preferences, as well as

issues that continue to arise. Democratic legislative efforts

differences among work environments, representation,

could aim to roll back portions or make substantive changes

industries and organizational size. Such a policy should

to the tax law, which will be defeated by a Republican

support employees in meeting their work and life obligations

majority in the Senate. Lastly, as lawmakers seek to address

and, at the same time, provide certainty, predictability and

ongoing workforce development issues, SHRM-supported

stability to employers in meeting their business needs. SHRM

bipartisan proposals to strengthen and expand employer-

generally opposes government mandates on employee

provided educational assistance under Section 127 of the


11

Internal Revenue Code will be reintroduced and receive floor

leading up to the 2020 presidential election may provide

consideration in the 116th Congress.

incentive for targeted forms of immigration legislation to be considered. Given narrow margins in the congressional

SHRM POSITION: SHRM believes that a comprehensive

majorities, areas of focus could shift to proposals that both

and flexible benefits package is an essential tool in recruiting

parties want to address before the election, including

and retaining talented employees. The bedrock of sound

legislation that addresses DACA reform and border security

fiscal and savings policy is ensuring that every U.S. employee

funding, mandatory nationwide E-Verify use and agricultural

has the opportunity to save and plan for retirement and to

worker reform, reforms to temporary worker programs like

protect his or her family’s health. Continuing the current tax

H-1B and H-2B visas, efforts to enact a Trusted Employer

treatment of retirement plans, along with incentives such as

program, and reforms to the employment green card system.

an employer match, automatic enrollment and auto-escalation,

A Democratic majority in the House is also likely to engage in

are essential to employees in ensuring a financially sound

oversight of immigration enforcement and the administration’s

retirement.

executive actions.

In addition, the Society believes public-policy efforts at both

SHRM POSITION: Top talent comes from around the world.

the federal and state levels should focus on expansion of and

Talent, like business, is global. As the U.S. competes in an

access to benefits such as employer-provided educational

increasingly dynamic world, SHRM supports policies that

assistance and health care benefits.

ensure U.S. employers and the U.S. workforce are competitive and innovative. Specifically, SHRM supports modernizing

WORKPLACE IMMIGRATION: In President Trump’s first two

the employment immigration system so that it works for

years in office, immigration has been a major focus of the

employers to fill skills gaps and access top global talent,

administration. In addition to an emphasis on national security

along with providing protections, education and training for

and interior enforcement, the administration has turned its

U.S. workers. As employers are best positioned to determine

attention to the U.S. employment-based immigration system

their skills and workforce needs, reform must ensure that

through the Buy American Hire American (BAHA) Executive

they have access to enough visas to recruit, hire, transfer and

Order and subsequent regulatory and sub-regulatory efforts

retain top talent, especially those individuals educated and

(see below). These changes have made it more challenging

trained in the United States. SHRM also supports enacting

for U.S. employers to access top global talent. Additionally,

a Trusted Employer program that creates efficiencies in the

the administration is on track to increase enforcement of

employment immigration system for immigration-compliant

immigration laws nearly fourfold, including worksite audits and

employers.

investigations. To hire a legal workforce, employers need a reliable, President Trump has insisted that any legalization for

national, entirely electronic and integrated employment

Deferred Action for Childhood Arrivals (DACA) recipients be

verification system that uses state-of-the-art technology to

accompanied by funding for a border wall, significant cuts

accurately authenticate new-hire identity, ensures a safe

to legal immigration levels and elimination of the diversity

harbor from liability for good-faith program users and requires

visa lottery. The administration also supports a proposed

employment verification only for new hires.

merit-based/point-based system to access talent—set by the government, not employers—as well as a requirement for

HEALTH CARE REFORM: Employer-sponsored health

all employers to use the employment verification (E-Verify)

insurance is the foundation of health care coverage in the

program.

United States, providing quality, affordable health benefits to more than 181 million Americans. However, since the

OUTLOOK: Even with a Democratic majority in the House,

enactment of the Patient Protection and Affordable Care Act

passage of comprehensive immigration reform legislation this

(PPACA), implementation of its requirements has remained

Congress is unlikely, as it will be difficult to reach the 60-vote

challenging for employers due to the complexity of the law,

threshold to move such legislation forward in the Senate.

delays in effective dates of certain provisions, and coverage

However, the outcome of the election and the dynamics

and reporting requirements. While the employer coverage

12


mandates and state public exchange plans remain in effect,

shifted its efforts to reshaping the regulatory environment to

the individual mandate penalty has been reduced to zero and

reflect its policy priorities. The president issued a regulatory

the 40 percent excise tax on employers that provide high-

freeze and shortly thereafter issued Executive Order 13771

value health plans, known as the “Cadillac tax,” is delayed. In

directing the agencies to eliminate two rules for every

addition, health care costs continue to rise for employers and

new one and to offset the costs of any new regulations.

employees alike.

A separate executive order created regulatory reform taskforces within each agency to review regulations and

OUTLOOK: With a Democratic majority in the House,

recommend changes.

legislative efforts will aim to preserve and defend the PPACA. Lawmakers may introduce legislation to codify PPACA

The Office of Information and Regulatory Affairs (OIRA),

protections such as guaranteed renewability of coverage

estimates $23 billion in new cost savings from 176

and the elimination of pre-existing conditions restrictions. In

deregulatory actions in Fiscal Year 2018. Many planned

addition, it is likely that the House committees with jurisdiction

regulatory and deregulatory actions, however, have

over health care (the Energy and Commerce, Ways and

been slowed due to a lack of agency personnel. Key

Means, and Education and the Workforce committees)

presidentially appointed positions at the U.S. Department

will hold hearings examining actions taken by the Trump

of Labor, the National Labor Relations Board and the

administration to roll back provisions included in the health

Equal Employment Opportunity Commission are still

care law. There is growing support among Democrats

awaiting Senate confirmation. Depending on presidential

and Independents for a single-payer health care system.

priorities, some agencies, particularly those with oversight

Therefore, we can expect legislative proposals for “Medicare-

of workplace statutes, are shifting from a focus on

for-all” and “single-payer health care” to be introduced.

enforcement to a focus on compliance assistance.

Lastly, SHRM-supported bipartisan proposals to update

During its first two years in power, the Trump administration

rules governing health savings accounts (HSAs) will be

has enjoyed the freedom to pursue its regulatory actions

reintroduced. Policy changes may include allowing high-

with minimal interference from Congress. With the House

deductible health plan (HDHP) participants to maintain their

of Representatives under Democratic control, this era will

eligibility to contribute to an HSA even though the HDHP

come to an end as Democrat-controlled committees set

provides first-dollar coverage for certain chronic care services

their oversight agendas. With a Republican majority in the

and allowing first-dollar payments for telemedicine consults

Senate, however, presidential appointees awaiting Senate

and treatment at onsite medical clinics. Policymakers may also

action will likely move through the confirmation process,

offer proposals to repeal, further delay or alter the “Cadillac

possibly during the lame-duck session at the end of the

tax,” as well as legislation to ease PPACA employer reporting

year.

requirements.

U.S. Department of Labor

SHRM POSITION: SHRM remains supportive of public-

The U.S. Department of Labor (DOL) has announced

policy measures that lower health care costs and improve

initiatives that signal a shift away from enforcement to focus

access to high-quality and affordable coverage. The Society

on compliance assistance. DOL announced a new Office

believes that congressional reforms should strengthen and

of Compliance Initiatives designed to provide employers

improve the employer-based health care system.

and workers with access to information about legal rights and obligations and assistance with compliance. The office

In the Federal Agencies

was launched in late August along with two websites, www.worker.gov and www.employer.gov, with compliance resources. One example of new compliance-focused

Early in his administration, President Trump identified

initiatives is the Payroll Audit Independent Determination

the goal of decreased regulation. After dismantling key

(PAID) program, designed to help employers resolve

controversial regulations that were put in place at the end

potential overtime and minimum-wage violations.

of the previous administration, the Trump administration


13

OVERTIME REGULATIONS: The legal challenge to the

what types of pay are included in calculating the “regular rate

2016 overtime rule is on hold while the DOL considers

of pay,” which is used to calculate overtime. The current rules

updates to the rule. The challenged rule made several

exempt several forms of payment from the calculation, such

changes to the method for determining which employees

as holiday gifts and benefits contributions, but there are many

are exempt from overtime under the Fair Labor Standards

nonsalary payments that need clarification.

Act (FLSA) including dramatically increasing the salary threshold used to determine which employees are clearly

DEFINITION OF JOINT EMPLOYMENT: DOL is expected to

nonexempt and automatically updating the threshold every

issue a proposed regulation to define joint employment under

three years. The challenged rule raised the salary threshold

the Fair Labor Standards Act (FLSA). This regulation seeks to

to the 40th percentile of earnings of full-time salaried

provide clarity on when an employer-employee relationship

workers in the lowest-wage census region, more than

exists, particularly in light of the growing gig economy.

doubling its current level. The court held, however, that the

SHRM is watching this rule to make sure that it is properly

department exceeded its authority by setting a minimum

crafted and does not sweep employers into a joint liability

salary level so high—$47,476 per year—that it would

relationship with subcontractors and franchisees.

render more than 4 million people nonexempt who are currently performing duties consistent with exempt status.

National Labor Relations Board

In July 2017, DOL issued a Request for Information seeking

A full National Labor Relations Board (NLRB) has five

public input on a broad range of questions about possible

members. In a flurry of 2017 end-of-year activity, the board

changes to the rule—update to the salary threshold, validity

reversed several controversial cases including the decision

of automatic updates and potential regionally based

in Hy-Brand Industrial, which overturned Browning-Ferris and

thresholds. Throughout the late summer and fall, DOL held

reinstated the “direct control” standard for determining joint

six listening sessions across the country where SHRM

employment under the National Labor Relations Act (NLRA).

members and other stakeholders provided input to the

This momentum hit a snag due to a conflict of interest ruling

Department on how a proposed rule should be formulated.

involving board member William Emanuel, which resulted in

DOL’s most recent regulatory agenda indicated that a

the Hy-Brand Industrial case being vacated. The board is

proposed rule is expected in March 2019.

currently undertaking a rulemaking in order to define joint employment under the NLRA.

SHRM POSITION: SHRM supports an update of the salary threshold but one that follows previous methodology to

REDEFINING JOINT EMPLOYMENT: The NLRB is currently

achieve a more equitable increase. The 2016 rule’s salary

accepting comments on a regulatory proposal that would

increase of over 100 percent was too far and too fast and

reinstate the 30-year precedent of requiring “direct” and

would have presented particular challenges for employers

“immediate” control over employees’ working conditions in

whose salaries tend to be lower, such as small employers,

order to find that joint employment exists.

nonprofits, employers in certain industries and employers in certain geographic regions of the country that tend to

SHRM POSITION: SHRM supports a return to the “direct

have lower costs of living. Of equal concern, SHRM opposes

and immediate” control standard. Employers need clarity

any automatic increases. Such increases ignore economic

with regard to their obligations to employees, and this is

variations of industry and location and make it hard for HR

especially true with the rise of gig workers, workers provided

to manage merit increase for employees near the salary

through temp agencies and other work handled through

threshold.

subcontractors.

Other DOL Key Regulations to Watch

Equal Employment Opportunity Commission With presidential nominees to the Equal Employment Opportunity Commission (EEOC) still awaiting Senate

UPDATING THE REGULAR RATE OF PAY: DOL anticipates

confirmation, the commission has largely been stymied in

issuing a proposed regulation that would clarify and update

any efforts to pursue new initiatives. The commission has

14


held meetings and continued its important work focusing on

difficult to hire individuals on H-1B visas and reforms that

workplace harassment, but other issues such as pay data

would limit Optional Practical Training (OPT) for recent foreign

collection and a rewrite of sex-discrimination guidance remain

national graduates of U.S. universities.

unresolved. H-1B VISAS: The Trump administration anticipates quick WELLNESS UNDER ADA AND GINA: In May 2016, EEOC

action to propose a rule that would create an electronic H-1B

issued regulations defining when wellness programs could be

visa selection process (the “lottery”) so employers would

considered “voluntary” under the Americans with Disabilities

only have to file paper petitions for cases that have been

Act (ADA) and the Genetic Information Nondiscrimination Act

selected as part of the lottery. The administration aims to

(GINA). These rules were challenged in federal court. After the

issue the proposal prior to the April 2019 H-1B lottery, but

EEOC failed to revise the rules within the timeframe provided,

it is not clear if a final rule will be created in that timeframe.

the court determined that the rules would be vacated in

The administration aims to conduct further H-1B rulemaking,

January 2019. According to the most recent regulatory

tightening the qualifying criteria for H-1Bs, later in 2019.

agenda, EEOC anticipates issuing new wellness regulations in June 2019, presumably to replace those vacated by the

SHRM POSITION: Employers are best-positioned to

court in January. In order to see movement on this rewrite, the

determine their skills and workforce needs. For this reason,

Senate will need to take action on the pending nominations

the federal agencies must ensure that visa processes are

of the General Counsel and two new commissioners and the

fair and efficient, as employers rely on visas to recruit, hire,

reappointment of a third.

transfer and retain top talent, especially those individuals educated and trained in the United States.

SHRM POSITION: SHRM has urged the EEOC to protect the ability of employers to offer wellness programs and to

WORKSITE ENFORCEMENT: The Department of Homeland

clarify the rules by conforming the interpretation of “voluntary”

Security has kept its focus on enforcement. U.S. Immigration

programs under ADA and GINA to match the requirements

and Customs Enforcement (ICE) announced in 2017 a plan to

of the Affordable Care Act (ACA). Wellness programs are an

increase worksite enforcement, including I-9 audits, by over

important benefit to help employers control health care costs

400 percent. ICE investigations in the first seven months

and provide employees with access to preventative health

of fiscal year 2018 more than doubled the total number of

benefits.

employment verification investigations in all of fiscal year

Immigration-Related Regulatory and Executive Action

2017. Meanwhile, the Department of Justice’s Immigrant and Employee Rights Division has shifted its anti-discrimination investigations to focus on protecting U.S. workers.

The focal point of President Donald Trump’s efforts on workplace immigration has been the Buy American

SHRM POSITION: Federal agencies should focus

Hire American (BAHA) Executive Order. Specifically,

immigration enforcement efforts on bad actors, not employers

implementation of BAHA through regulatory and sub-

acting in good faith. Additionally, the federal agencies

regulatory efforts has made it difficult for U.S. employers to

should ensure that employers have the tools they need to

access top global talent.

hire a legal workforce, including creation of a voluntary pilot program for employers that integrates Form I-9 into E-Verify,

With a split Congress and limited opportunities for immigration

eliminating the outdated, duplicative paper-based Form I-9.

legislation, Trump is expected to push his regulatory agenda aggressively. At least a dozen employment immigration regulatory reforms are anticipated in the latter half of the

Impact on State Legislatures

president’s term, most of which are expected to make it even more challenging for employers to recruit, hire, transfer

The Democrats’ strong showing in the House on

and retain top global talent. Some of the most impactful

Election Day was amplified in state races, particularly at

regulations for employers are certain to include elimination of

the gubernatorial level. Leading up to Election Day, 36

H-4 spousal work authorization, changes that make it more

governorships were up for grabs, 26 of them in GOP


15

strongholds where President Trump forged surprising

California

victories in the 2016 presidential election against Hillary

Turning to the country’s most populous state, the Democrats

Clinton.

were successful in regaining a supermajority in both the Assembly and the Senate, while also securing the governor’s

When the dust had settled on November 7, Republicans

office again with the election of Gavin Newsom. Newsom

had lost at least seven governorships, including those in

actively focused his campaign on addressing workplace

Maine, Michigan, Illinois, Wisconsin, Kansas, New Mexico

issues, including increasing workplace protections for women

and Nevada. Georgia’s and Florida’s gubernatorial races

regarding discrimination and wage transparency, expanding

remain too close to call. In state chambers, the Democrats

family and sick leave, and significantly growing the number

fared very well, capturing government majorities in Maine,

of earn-and-learn apprenticeships in the state. Recapturing a

New York, New Mexico, Nevada, Colorado and Illinois.

supermajority in both houses, which has not been determined

After winning a tough race for governor in Connecticut,

as we go to press, while also holding the governor’s office,

Democrats will control the legislative agenda in 14 states

will allow Democrats, if they choose, to raise taxes and place

come 2019.

constitutional amendments on the ballot without needing any support from Republicans.

Looking at the makeup of state legislatures to be sworn into office early in 2019, Republicans will still control both

Regarding ballot initiatives in the Golden State, voters rejected

chambers and the governorship in 21 states and await the

a measure that would have repealed a fuel tax and vehicle

outcome of the Georgia gubernatorial contest, which is too

fee increase passed by the Legislature in 2017 and that also

close to call. Republican still hold a majority of the roughly

would have required a public vote on any future increases.

7,400 state legislative seats, but lost over 300 to Democrats

Voters approved a measure that allows private ambulance

on Election Night.

providers to require workers to remain on-call during paid breaks.

16


While legislation for the 2019-20 session of the Legislature

states—particularly on the East and West coasts—are likely to

can’t officially be introduced until after the legislators are

follow.

sworn in on December 3, workplace bills that failed to pass in the last legislative session are expected to be reintroduced

Localities have also been active in advancing paid-leave

early and set up for action next year. One bill is SHRM-

mandates for employees. To date, over 20 major municipalities

supported legislation that excludes from the gross income

have passed such ordinances, and others located in

of an employee amounts, not exceeding an aggregate

predominantly Republican-controlled states may soon follow.

amount of $5,250 per year, that are paid or incurred by

However, on the flip side of this debate, nearly a dozen states

an employer for the payment of principal or interest on

throughout the South and the Midwest have enacted bills

a qualified educational loan incurred by the employee.

pre-empting their cities and localities from enacting paid-leave

Assembly Member Randy Voepel (R-71, Santee) authored the

ordinances.

bill last year and has indicated that he will be introducing the bill again this upcoming session. Other potential workplace-

OUTLOOK: With a divided Congress, it will be tough to

related bills that SHRM will be tracking and advocating on

get a paid-leave bill to President Trump’s desk during the

include a bill to expand parental leave, a bill on predictive

116th Congress. Thus, states and localities will remain the

scheduling and other workplace flexibility bills.

battlegrounds for this type of legislation and the intensity over this issue is expected to grow in 2019.

Given the strong interest in workplace-related bills by the Democratic majority, it is essential that the voice of HR

Sexual Harassment

continue to be heard in California through SHRM’s presence

The issue of sexual harassment in the workplace has been

in Sacramento and our Advocacy Team members in the

front and center in our national conversation for the past

state. SHRM, in collaboration with the California State Council

two years. Media attention and the #MeToo and Time’s Up

of SHRM, will continue to advocate on behalf of the HR

movements, along with the work of the EEOC as well as

profession in this bellwether state for workplace policy.

federal and state legislatures, have led to an increased focus on the role of workplace culture in preventing harassment.

2019 Policy Agenda in the States

As such, legislators and many public- and private-sector organizations have begun to look inward, re-examining their anti-harassment policies to ensure fairness for employees at

Given that there will be a divided government in Washington,

all levels of their organizations.

with the GOP controlling the White House and Senate, states will likely see an uptick in movement around workplace policy

In response to the fact that over 75 state lawmakers since the

issues, given the fact that 14 state governments across the

last election have faced public allegations or repercussions

country are controlled by the Democrats. Below is a sampling

over sexual misconduct claims, in 2018 more than 125 bills

of employee-friendly workplace initiatives that are likely to

surfaced in state legislatures across the country designed

surface in those states in 2019.

to tackle one or more aspect of this issue. Proposals range

Paid Leave

from limiting the use of confidentiality and nondisclosure agreements to mandating anti-harassment training for

Proponents of paid-leave legislation had a good Election

legislators, their staffs, lobbyists and even certain job sectors

Night, resulting in a total of 14 states where Democrats now

within private businesses. The public’s interest in addressing

control the governorship and both state legislative chambers.

this issue is not expected to subside in 2019.

As a result, more states are likely to take up legislation designed to mandate that most employers in the state provide

SHRM President and Chief Executive Officer Johnny C.

a dedicated number of paid sick days each year for their

Taylor, Jr., SHRM-SCP, testified early this year before the

employees. Currently, 11 states have either enacted legislation

California Legislature and later addressed nearly 5,000

or passed ballot measures establishing this benefit. With the

state lawmakers and their staffs at the National Conference

surge of Democratic support witnessed on November 6, more

of State Legislatures’ Legislative Summit on the importance of changing culture, beginning at the top, in tackling


17

harassment in legislative as well as public- and private-sector

industries, and federal contractors. Proponents of this

organizations. Noting that “culture always trumps compliance,”

legislation contend that Americans who either experienced

Taylor stated that relying solely on rules, education and

job loss during the economic downturn of 2009 or were hurt

training to prevent or address sexual harassment doesn’t

financially by the downturn in the housing market continue

work. Employers can establish a healthy culture by taking

to suffer greatly, particularly in their ability to find gainful

swift action, being transparent, and being practical about

employment due to a poor credit report.

people and their relationships with one another. In addition, legislation limiting an employer’s ability to conduct

OUTLOOK: Given the Democrats’ level of success at the

criminal background checks until later in the hiring process

state level in this year’s elections, it is safe to expect that

continues to surface in states and localities regardless of

more states will consider legislation mandating education

politics. These proposals would restrict employers (both public

and in-house training on what constitutes harassment and

and, in certain instances, private) from inquiring about past

prohibiting the use of confidentiality and nondisclosure

criminal convictions on employment applications (aka “ban the

agreements in harassment cases.

box”) or from making the inquiry until after a conditional offer of

Predictive Scheduling

employment is extended. This effort was a priority during the Obama administration through its Fair Chance Pledge initiative,

A relatively new addition to the numerous workplace bills

in which U.S. corporations voluntarily pledged to “ban the box”

surfacing outside of Washington is a concept known as

on their hiring applications and afford job applicants the ability

predictive-scheduling legislation that, in part, would require

to address past convictions during the interview process.

employers (particularly in the retail and food-service industries) to provide employees with their work schedules weeks in

OUTLOOK: Similar restrictions are expected to be

advance and to compensate those employees for lost hours

considered at both the state and local levels in 2019. In

worked if their schedules are negatively adjusted on short

recent years, SHRM has testified before Congress, the

notice. As with other major workplace reforms, San Francisco

Equal Employment Opportunity Commission and the U.S.

first broke new ground on this issue when it passed the “Retail

Commission on Civil Rights on both the use and importance

Workers Bill of Rights” ordinance in 2014. Since then, Oregon

of conducting background checks on potential hires.

became the first and only state to enact this legislation, while

SHRM supports preserving employers’ ability to conduct

other localities such as Seattle, New York City, Chicago, Los

background checks for employment purposes, as they serve

Angeles and the District of Columbia have all embraced this

as an important means to promote a safe and secure work

requirement.

environment for employees and the general public.

OUTLOOK: In 2019, over a dozen states and a number of been a priority issue for fast-food and retail workers.

Results of Ballot Initiatives/ Referenda/Questions

Background Checks

Voters in 39 states and the District of Columbia decided

One of the most ambitious legislative thrusts on the state level

the fate of nearly 150 ballot measures on November 6.

in the past decade has been legislation restricting the use of

Workplace-related issues including increasing the minimum

credit checks by employers in the hiring process. Washington

wage, restricting vapor smoking in enclosed indoor

state was the first to enact such legislation in 2007; since

workplaces, upholding a recently enacted state law that

then, 10 other states have followed suit by enacting similar

banned gender identity discrimination and legalizing the

restrictions on the use of credit checks in the hiring process or

recreational use of marijuana were put before voters on

when considering promotions within an organization.

Election Day.

This legislation would limit the use of credit checks in the

Following is a brief summary of how some of the key

employment process for specific jobs categories, such as

HR-related initiatives fared in these off-year elections:

localities are poised to consider this legislation, which has

senior management, positions in the banking and financial

18


55Increasing the Minimum Wage:Voters in Arkansas and

55 Single-Payer Health Care: Voters in Colorado over-

Missouri approved ballot measures to raise the minimum

whelmingly turned back efforts to be the first state in

wage in their states gradually to $11.00 and $12.00 per

the union to adopt a universal, single-payer health care

hour through 2021 and 2023, respectively. Missouri’s

program for its residents to be known as “Colorado

increase would then be tied to the consumer price

Care.” In brief, the program would have been funded by

index to increase or decrease after 2023.

a payroll tax on all employers and employees, as well as a tax on nonpayroll income to fund the program, sched-

55Legalizing the Private Use of Marijuana: Voters in

uled to become effective in 2019.

Oklahoma, who had approved a ballot measure during

55Gender Discrimination: Over 70 percent of voters cast

their primary elections to legalize the recreational use of marijuana, were joined by voters in Michigan, who also

ballots in Massachusetts in favor of maintaining a 2016

supported this action. Voters in Missouri and Utah rati-

law prohibiting discrimination in the commonwealth

fied ballot measures to legalize the use of certain types

based on gender identity.

of marijuana for medical purposes. This trend, particu-

55Paid On-Call Breaks for EMTs and Paramedics:

larly how to control the influence of this legal product on employees while at work, continues to be a growing

Nearly 60 percent of voters in California voted in favor

challenge for HR professionals throughout the country.

of a ballot measure allowing ambulance providers in the state to require ambulance workers to remain

55Vapor Smoking in Enclosed Indoor Workplaces:

on call during breaks and to pay them at the regular

60 percent of voters in Florida embraced a constitu-

rate during those breaks. The measure also increases

tional revision banning the use of vapor-generating

training requirements for EMTs and paramedics for

electronic devices, including electronic cigarettes and

active-shooter scenarios, along with multiple casualty,

the act known as “vaping,” in enclosed indoor work-

natural disaster, violence prevention and mental health

places.

incidents.

Missouri and Utah legalized medical marijuana; Michigan legalized recreational marijuana, but North Dakota voted it down Marijuana ballot initiatives by state Recreational and medical use

Medical use

No legality

WA MT

ME

ND

OR

State

Ballot Measure

Result

MI

Recreational

Pass

ND

Recreational

Fail

MO

Medical

Pass

UT

Medical

Pass

MN SD

NY

WI

WY NV

MI PA

IA

NE UT CO

CA AZ

IL KS

OK

NM

MO

TX

HI

WV

VA

KY

NC

TN AR

SC MS

AK

OH

IN

AL

MA RI CT NJ

GA

DE

LA FL

MD DC

2018 POST-ELECTION OVERVIEW | SHRM GOVERNMENT AFFAIRS Slide updated on November 9, 2018

4

NATIONAL JOURNAL

ID

19

Composition of the 116th Congress: Senate Partisan makeup of the Senate compared to the previous Congress Seats flipped R to D (Total: 1) Seats flipped D to R (Total: 3)

115th Republican

51

51

Democrat

49

46

0

3

Not yet called

Not yet called (color outline is incumbent’s party)

116th

50 votes for majority

AS OF 11/12/18 AT 5:00 PM

*Independents Sanders and King, who caucus with the Democrats, have been included in the Democratic tally

60 votes for supermajority

7

Slide updated on November 9, 2018

Composition of the 116th Congress: House Partisan makeup of the House compared to the previous Congress

115th

116th

Republican

235

198

Seats flipped D to R (Total: 3)

Democrat

193

227

Not yet called (color outline is incumbent’s party)

Not yet called

7

Seats flipped R to D (Total: 35)

(vacant)

10

NATIONAL JOURNAL

218 votes needed to pass

20


At least 13 states now have split party control over state government Control of state government after the 2018 elections GOP legislature, GOP governor Dem legislature, GOP governor Split legislature, Dem governor Split legislature, GOP governor

NATIONAL JOURNAL

Dem legislature, Dem governor GOP legislature, Dem governor Election not yet called

3

Slide updated on November 9, 2018

2019 SHRM EMPLOYMENT LAW &

LEGISLATIVE CONFERENCE

MARCH 18 - 20, 2019 | WASHINGTON, D.C.


21

Advancing the Workplace Through Public Policy

Join Us! When Congress or state legislatures are developing workplace policy, HR’s voice needs to be heard. As advocates for the HR community, SHRM members understand and can communicate how public-policy issues may affect employees and employers. By working together, we can help advance effective workplace public policy and strive to move our profession forward.

What is the SHRM Advocacy Team? The SHRM Advocacy Team (A-Team) is a critical part of the Society’s enhanced member advocacy initiative, working to advance the interests of the HR profession in Washington and state legislatures. Made up of SHRM Advocates in key legislative districts, the A-Team works to advance the HR perspective on workplace issues by leveraging the reach and knowledge of SHRM members through grassroots advocacy.

Lend your voice to driving HR forward! We invite you to join the SHRM Advocacy Team and raise your voice in support of the HR profession.

Contact us: 1800 Duke Street, 5th Floor Alexandria, Virginia 22314 Meredith Nethercutt, Senior Associate, Member Advocacy [email protected] 703-535-6417

Learn more and sign up online: advocacy.shrm.org/about