Leading People. Leading Organizations.

1. PUBLIC POLICY UPDATE Leading People. Leading Organizations. York, PA SHRMChatrane Birbal, Senior Advisor, Government Relations January 14, 2014

2. 113th Congress 2nd Session • January 7 Second Session of 113th Congress Convenes • Q1 Priorities: • Omnibus bill to fund the Federal government through September • Affordable Care Act • President Obama to pursue second-term priorities such as an immigration overhaul and a higher minimum wage • House Republican Issues Conference (Jan. 29 – 31) • State of the Union (Jan. 28) • November Congressional Elections

3. Federal Budget

4. Key Offices & Committees Involved

5. The Federal Budget Process (in Theory)

6. Continuing Resolutions Now Common

7. Debt Ceiling Deal Leads to Budget Agreement

8. Ryan-Murray Deal Strikes Balance

9. Budget Agreement Ends Dependence on CRs

10. FY2014 Appropriations Still Under Consideration

11. Affordable Care Act • The House passed its first anti-Obamacare bill of 2014, the Health Exchange Security and Transparency Act. • The legislation, which would require victims of security breaches through the HealthCare.gov insurance exchanges to be notified within two days, passed 291-122. Sixty-seven Democrats joined Republicans to vote for the bill. • “American families have enough to worry about as we enter the new year without having to wonder if they can trust the government to inform them when their personal information — entered into a government mandated website — has been compromised,” Cantor added. • House Republicans say they have no plans to let up their attack on Obamacare anytime soon, and Democrats should be prepared to confront many uncomfortable votes on the law between now and the midterm elections.

12. Immigration Reform • Status Update: President Obama and leaders of Congress continue to message immigration reform is a top priority. Even as fiscal issues remain a focus, the President calls on the U.S. House to pass reform.

14. Immigration Reform is Important to All Americans

15. Capitol Hill Visits Informational Webinar Immigration is Critical to Business Objectives

16. Capitol Hill Visits Informational Webinar Immigration Advocates Move Reform Forward Analysis • An immigration reform rally held on the National Mall early October was largely overshadowed by the government shutdown, although some lawmakers took note; Darrell Issa announced he would be submitting new legislation two weeks after the rally • While the Senate earlier passed an immigration reform bill, the House has yet to consider it; instead, House legislators have introduced new “focused” bills as part of a larger, piecemeal approach to immigration reform Source: “Immigration Advocacy Prompts Lawmakers to Consider New Legislation,” National Journal, Sept. 9, 2013. Updated Oct. 25, 2013.

17. Capitol Hill Visits Informational Webinar Immigration Reform SHRM’s & Council’s Position Provide employers with effective tools to ensure they are hiring a legal workforce. We support a mandatory electronic employment verification system that is fail-safe, easy to use, and eliminates the redundancies that exist in E-Verify. Congressional reforms should pre-empt the growing patchwork of state laws with a reliable and secure federal employment-verification system, create an integrated electronic verification system that eliminates the paper Form I-9 and incorporates an attestation system as a part of E-Verify, prevent identity theft through knowledge based authentication option, ensures a “safe harbor” from liability for good-faith program users, and applies employment verification only to new hires. Aid U.S. employers in their efforts to manage, recruit, hire, and transfer global talent. We support proposals that help employers gain access to employee talent to bolster competitiveness in the global market. We support a Trusted Employer program for a more predictable application process to better access talent and save resources; and access to highly educated and skilled employees through the immigration system providing enough visas and green cards to meet future needs and clear backlogs.

18. Capitol Hill Visits Informational Webinar Two Important Immigration Bills in the House ① The Legal Workforce Act (HR 1772): A bill that focuses on employment verification; makes E-Verify mandatory within six months to two years of enactment; preempts state laws; and while it takes steps toward modernizing the current E-Verify system further changes are needed to prevent identity theft in the verification process. (Passed in Committee June 2013) ② The SKILLS Visa Act (HR 2131): A bill that takes steps to improve the employment based immigration system; and while it provides a trusted employer program to allow for a predictable application process to better access talent and save resources, it does not provide enough green cards to meet future needs or clear existing backlogs. (Passed in Committee June 2013) *Proposed legislation will have a “significant impact” on HR and immigration professionals business practices.

19. Capitol Hill Visits Informational Webinar SHRM & Council’s Three Immigration Messages ❶Support an entirely electronic employment verification system that protects against identity theft through knowledge based authentication. ❷Support a Trusted Employer program in the SKILLS Visa Act! ❸Provide more access to green cards in the SKILLS Visa Act!

20. Capitol Hill Visits Informational Webinar ❶Support creating an entirely electronic employment verification system that protects against identity theft through knowledge-based authentication (KBA) option.

21. Capitol Hill Visits Informational Webinar ❷Support a Trusted Employer program in the SKILLS Visa Act! Increase efficiency in the immigration system with a trusted employer program that provides a predictable application process to better access talent and save resources.

22. Capitol Hill Visits Informational Webinar ❸ Provide greater access to green cards in the SKILLS Visa Act. Allow more access to highly educated and skilled employees through the immigration system to allow for global competitiveness and growth of the U.S. workforce.

23. Capitol Hill Visits Informational Webinar SHRM & Council’s Immigration Advocacy

24. Capitol Hill Visits Informational Webinar Tax Reform and Employee Benefits • With the U.S. national debt at more than $17.1 trillion, tax reform and efforts to lower the deficit are a priority for Congress and the White House. Because of their tax-deferred status, employee benefits such as retirement plans, educational assistance and health care benefits may come under scrutiny. • SHRM Position: SHRM believes that a comprehensive and flexible benefits package is an essential tool in recruiting and retaining talented employees. Every American employee should be given the opportunity to save for retirement and protect his or her family’s health. The government should facilitate and encourage voluntary employer-sponsored retirement plans and health care plans and individual savings plans.

25. Capitol Hill Visits Informational Webinar • House Ways and Means Committee 13 working groups to examine various components of tax reform. SHRM, along with the SHRM-led Coalition to Protect Retirement, submitted comments to the Retirement and Pension Working Group.   • Senators Isakson (R-GA) and Murphy (D-CT) introduced Concurrent Resolution 12, a bipartisan resolution expressing the importance of retirement savings plans.  • Senate Finance Committee Chairman Max Baucus (D-MT) and Sen. Orrin Hatch, (R-UT) released tax reform framework that essentially starts from a clean slate.  This approach would eliminate virtually all existing deductions, credits and expenditures to dramatically lower corporate and individual tax rates.

26. Capitol Hill Visits Informational Webinar SHRM’s Three Tax Reform Messages ❶Provisions that encourage savings, such as increased contribution limits and catch-up contributions for older workers, are beneficial. Tax incentives should be provided to employers that sponsor plans and to individual savings accounts on an equitable basis. ❷ Support the current tax treatment of retirement plans. Congress should preserve the current tax treatment of retirement accounts and make only changes that would give employees and employers incentives to save for retirement. ❸ TELL YOUR STORY:In your meetings with policymakers, describe how important providing a retirement account is to your employees. And tell your members of Congress how retirement benefits help you to retain and attract talented employees!

27. Tax Reform Loses Steam in 2013

28. Capitol Hill Visits Informational Webinar Compensatory Time • Family Friendly and Workplace Flexibility Act of 2013 (S. 1626) introduced by Senators Mitch McConnell (R-Ky.) and Kelly Ayotte (R- N.H.) on October 30, 2013. • The Fair Labor Standards Act (FLSA) of 1938 requires that hours of work by non-exempt employees beyond 40 hours in a seven-day period must be compensated at a rate of 1 ½ times the employee’s regular rate of pay.  • In 1978, Congress passed the Federal Employees Flexible and Compressed Work Schedules Act, which changed the FLSA to allow compensatory time for federal employees.  In 1985, comp time was extended to include state and local agencies and their employees. S. 1626 would simply extend this important benefit to the private sector. 

29. Capitol Hill Visits Informational Webinar Family Friendly and Workplace Flexibility Act of 2013 would: • Amend the FLSA to allow private sector employers to provide compensatory time to non-exempt employees • Give non-exempt employees the choice of taking overtime in cash payments or in the form of paid time off from work • Allow paid time off to accrue at a rate of 1 ½ hours for each hour of overtime worked, for a total of 160 hours of comp time per year • Permit an employer to “cash out” the comp time after 80 hours after providing the employee with 30 days of notice • Require the employer to cash out any unused comp time at year’s end at the regular time and a half rate • Proposes a flexible credit-hour program, under which the employer and employee can enter into agreements that allow the employee to work excess hours beyond the typical number of hours he or she is typically required to work in order to accrue hours to be taken off at a later time.

30. Capitol Hill Visits Informational Webinar SHRM’s Three Comp Time Messages ❶ SHRM believes that private-sector employees should be afforded the same flexibility that public-sector workers have in choosing between compensatory time or cash wages in overtime situations. As the 21st century workforce and workplace continues to evolve, now, more than ever, employees need flexibility options to manage their work-life responsibilities. ❷ HR professionals are increasingly interested in workplace-flexibility programs to help employees address their work-life needs, because these programs also increase employee engagement, improve productivity, and support organizational recruitment and retention efforts. Unfortunately, rigid and outdated wage and hour laws prohibit private businesses from offering nonexempt employees who work overtime the option of paid time off or cash wages, even though this option has existed in the public sector for more than 25 years. ❸ Please support giving private-sector employees additional flexibility options by adding your name as a co-sponsor of S. 1626.

31. Compromise Will Play Key Role in 2014

32. 2014 Midterm Elections: All Seats in Play, by Party

33. 2014 House & Senate Election Race Ratings

34. Majority of Congressional Primaries Will Be Held in June Dates of Major Party Primaries March April May June January February 4 – Texas 18 – Illinois 1 – D.C. 3 – Alabama, California, Iowa, Mississippi, Montana, New Jersey, New Mexico, South Dakota 10 – Maine, Nevada, North Dakota, South Carolina, Virginia 24 – Colorado, Maryland, New York, Oklahoma, Utah 6 – Indiana, North Carolina, Ohio 13 – Nebraska, West Virginia 20 – Arkansas, Georgia, Idaho, Oregon, Pennsylvania None None September October November 9 – Delaware, New Hampshire, Rhode Island 16 – Massachusetts 4 – Louisiana None July August None 5 – Kansas, Michigan, Missouri, Washington 7 – Tennessee 9 – Hawaii 12 – Connecticut, Minnesota, Wisconsin 19 – Alaska, Wyoming 26 – Arizona, Florida, Vermont Takeaway The majority of major party primaries will occur in June; competition is expected to be more intense within single party primaries than between opposing party candidates during November’s general election

35. Labor-Management/Civil Rights “Persuader” proposed rule • Proposed rule published June 21, 2011 and comments submitted Sept. 21. • For more than 50 years, DOL has distinguished between “direct” and “indirect” contact with employees, requiring direct contacts to be reported but NOT requiring the following types of advice to be reported: Providing draft speeches to an employer; training supervisors, drafting policies, etc. • DOL states that “the current interpretation of "advice" has resulted in significant underreporting of employer and consultant persuader agreements. • HR concern: Expanded definition is too broad and may drive consultants and law firms from the marketplace.

36. Wage and Hour Division Misclassification Survey • Proposed rule published January 11, 2013 and comments submitted March 12. • DOL proposes to collect data on whether employees understand their classification (employee vs. independent contractor) and whether they understand what that classification means for pay and benefits. • Survey designed, administered and results analyzed over a 30 month period ending March 2014. • Part of larger ‘Right to Know’

37. Odds & Ends (mostly Odds) • Federal Acquisition Regulatory Council • Proposed regulation expanding federal contractor’s obligations to combat human trafficking. Key concerns: • Requires monitoring of all subcontractors in the supply chain; • Penalties imposed on contractor for unknown conduct of any subcontractor. • Securities and Exchange Commission • Dodd-Frank • Proposed rule requires public companies to disclose the ratio of the compensation of its chief executive officer (CEO) to the median compensation of its employees. • Proposed Interagency Policy Statement on Diversity Policy and Practices • Dodd-Frank • Established an Office of Minority and Women Inclusion to “monitor the diversity efforts of the agencies, the regulated entities and the agency contractors.

38. The Cold, Hard Facts • SHRM has roughly 225,000 US members • SHRM has over 575 chapters throughout the US spread across all 435 congressional districts • SHRM has 4 paid lobbyist on staff • SHRM does nothave a political action committee (PAC) • Of the 535 Members in Congress, only 1comes from an HR background (Sen. Mike Enzi – R/WY)

39. Advocacy: A Critical Ingredient Federal Public Policy State Public Policy Member Advocacy Regulatory /Judicial Affairs

40. Positive Legislative Environment for HR =

41. Be the voice on key HR issues in the community Offer strategic educational programming for HR professionals Support SHRM strategic priority while increasing visibility on “hot” HR issues Contribute to SHAPE objectives / CLA areas of Government Affairs

42. SHRM provides speakers on advocacy and public policy issues for state council and chapter programs • Monthly HR Advocate conference calls to share successes / challenges and hear from policy insiders • Advocacy Captain Toolkit to help build HR Advocacy Teams • Sample press releases, marketing brochures, media strategies to support local A-Team program

43. SHRM Advocacy Team (A-Team) • Intended to build upon successful but ad-hoc country-wide efforts in place (DITB, DITD, conference Hill Advocacy Days) • Two participation levels • HR Advocate • Advocacy Captain • Four “soloist” lobbyists vs. “choir” of 225,000 SHRM activists • Members represent diverse opinions • Members comprise entire spectrum of employer settings

44. Purpose of the A-Team • Developed to ensure when policy decision-makers (legislators, regulators, etc.) develop workplace policy, the voice of HR is heard via a “local network” • Since MoC’s are most responsive to their constituents, informs legislators of policy impacts upon employers in her / his district • SHRM members best understand / are best suited to communicate how public policy affects employees, employers & the HR profession as a whole • SHRM’s Regional-Chapter structure & congressional districts do not align

46. A-Team Target States 2010-2014

47. Moving the Needle- Measurable Results • SHRM testified FIVE times in 2012 • SHRM provided testimony at three hearings on workplace flexibility issues held last Congress • SHRM achieved PERMANENT extension of Employer Provided Education Assistance (Section 127) • A-Team Captains & HR Advocates repeatedly called upon as a resource by legislators • Working Families Flexibility Act (H.R. 1406) passed House by a 223-204 vote • SHRM member Juanita Phillips of Huntsville, Ala. testified before the U.S. House Subcommittee on Workforce Protections in support of H.R. 1406 • HR professionals reached 358 U.S. House members by sending 1,021 letters • During the April 15-19 congressional recess, A-Team members met with 24 House offices • Notably, one of our Pennsylvania A-Team members called an undecided House Representative the morning of the vote, and hours later, that member of Congress tweeted out his support for the bill!

49. Advocacy Captain Requirements • Must be a SHRM member in good standing • Strong preference for prior or current experience as an HR professional (HR certification highly desirable) • Must live within the congressional district he / she is representing as an Advocacy Captain • Appointment is made by SHRM with input from state councils and chapter representatives, among others • Serve a two-year term beginning the first day of January and ending the last day of December. May be reappointed for additional terms. It is advisable that one serves in this position for multiple terms.

50. Advocacy Captain Job Description • Commit 30 minutes to 1 hour per month most months; up to 2 – 4 hours during months with face-to-face legislator meetings • Serve as the key advocacy contact in your congressional district • Develop and maintain (or foster) relationships with Congress & their staff • Recruit and train colleagues / allies to manage as district assets as well as successor Advocacy Captains • Understand SHRM’s priority issues and initiatives for sharing with team members • Learn SHRM’s online advocacy and feedback system • Inform legislative directors on activities in the district • Participate in on-line trainings, retraining sessions & “special insider” calls • Attend the SHRM Employment Law and Legislative Conference, as appropriate