The ChamberPost

Interim-Final or Government Knows Best

by Blair Latoff

Randy Johnson and James Gelfand write on The Daily Caller:

Americans have long been fascinated—and often disgusted—by how Congress passes laws. Many citizens became irate when they learned that most members of Congress hadn’t even read the health care bill, which clocked in at about 2,300 pages. Speaker Nancy Pelosi said famously, “We need to pass the health care bill to find out what’s in it.”

...The massive health care bill leaves major decisions to the regulators who will implement the legislation. It authorizes over a hundred rulemakings, and grants an unprecedented amount of discretion to federal departments and agencies, like the Department of Health and Human Services and the Internal Revenue Service. The federal government has already begun writing regulations and rules to fill in the gaps. Unfortunately, the administration is abusing the rulemaking process, poisoning it with the same lack of transparency and steamrolling tactics used to pass the underlying bill.

Regulations matter; they have the force of law, but they are never voted on by your representatives in Congress. The system is supposed to guarantee transparency, fairness, and input from affected parties. In fact, in 1946 Congress enacted a law called the Administrative Procedure Act (APA) that was designed to keep the federal agencies accountable to people when they draft rules. It laid out a straightforward process wherein agencies first must issue a proposed version of a regulation with reasonable time for the public to comment on the proposal, before issuing a final rule. The thought was that the government could benefit from the input of those in the real world who will have to comply with the new regulation before it hardens into final form—a pretty logical assumption!

Unfortunately, these safeguards are being subverted by the administration with the issuance of so-called “interim-final” regulations, which become effective before comments are collected and evaluated by the agencies. The U.S. Chamber of Commerce has already counted at least ten different times where agencies skipped these steps.

The administration claims the rush is justified because of the timeframe in which provisions of new laws come into effect. But this is a problem created by the administration itself when it jammed through the health care legislation without thought to these important steps. Yes, the agencies are ostensibly collecting comments on the “interim-final” rules, but as the courts have noted, this is akin to giving an artist recommendations on his painting after the canvas has already dried.

...It is critically important that the government listen to the people who will be affected by regulations. If offering health insurance becomes too much of a burden on employers, they will consider dropping coverage. The more complicated it becomes to hire and retain workers, the more hesitant businesses will be to expand and create jobs. The tougher it is to obtain capital, the fewer opportunities there will be for entrepreneurs and small businesses to start or expand their operations. Regulations need to work for employers so that they can stay focused on their primary business, rather than be mired in complicated and unworkable government rules.

Read the whole thing.

Applauding the Senate for Confirming NLRB Nominees

by Randy Johnson

We are pleased that the Senate was able to reach agreement and confirm the nominations of Brian Hayes and Mark Pearce to the National Labor Relations Board. The Board functions best when it has a full complement of confirmed Members and we are now much closer to that important goal. Although the nominations of these two individuals were not controversial, it unfortunately took eleven months to confirm them because they were considered a ‘package’ with the controversial nomination of Craig Becker. As President Obama looks to fill current and future vacancies on the Board, we urge him to consider well-qualified nominees who can be quickly confirmed, rather than ideologues.

The nominations were part of a larger package of pending nominations approved by unanimous consent. This means that, at least temporarily, the Board is at full strength with three Democratic appointees and two Republican appointees. For the past year the Chamber and its Workforce Freedom Initiative have strongly opposed Craig Becker’s nomination to the Board, noting that his extreme views made him ill fit to serve. Notably, Becker was not among those confirmed for a full term.

Frivolous Litigation and the EEOC

by Randy Johnson

On Monday the U.S. Chamber filed comments in response to the Equal Employment Opportunity Commission’s (EEOC) proposed rulemaking to define an important employer defense under the Age Discrimination in Employment Act (ADEA).
 
The employer defense permits employment practices based on a "reasonable factor other than age." The EEOC would define "reasonable" so narrowly that it would be difficult for employers to demonstrate that routine business decisions meet these standards. Consequently, what should be a simple test would be changed to a fact intensive analysis and make it very difficult for employers to win even the most frivolous cases at the summary judgment stage. The Chamber asserts that this would harm businesses and American employers by defining the defense very narrowly with two very problematical results. First, legitimate economic decisions would now be open to second guessing by the EEOC and plaintiffs’ lawyers. Second, employers will find it much more difficult to defend these decisions and beat back frivolous litigation.
 
Frivolous litigation is already a significant problem under the Age Discrimination in Employment Act. In fact, last year the Equal Employment Opportunity Commission (EEOC) only found reasonable cause to believe discrimination occurred in 3% of the 20,000 claims it processed.

Unfortunately, a new proposal by the EEOC would make this problem worse. Further, it will make it much more difficult for employers to defend legitimate economic business decisions. For example, if an employer decided to close a line of business, the EEOC could review that decision as well as alternatives available to the employer. If it believed the employer’s economic decision did not seek to limit the impact on older workers, it could second guess the employer’s decision.
 
The simple fact is that employers exercise business judgment all of the time – based on what is best for their company. The EEOC would now make the most basic business decision open to scrutiny by the government and by the courts. Age discrimination laws serve an important purpose, but businesses are already struggling to keep their doors open, and with this new rule employers can expect to see more frivolous lawsuits and more time and money wasted fighting them.

Blueprint for Immigration Reform

by Randy Johnson

Today, in the Washington Post, Senators Charles Schumer and Lindsey Graham present a blueprint for immigration reform.

Our plan has four pillars: requiring biometric Social Security cards to ensure that illegal workers cannot get jobs; fulfilling and strengthening our commitments on border security and interior enforcement; creating a process for admitting temporary workers; and implementing a tough but fair path to legalization for those already here.

The U.S. Chamber of Commerce has long called for bipartisan comprehensive immigration reform legislation and has worked towards that goal over the last several years. We welcome Senators Schumer and Graham’s call to continue these efforts and we will work with all interested parties, including the unions, to achieve sound final legislation this year.

Inviting the AFL-CIO Back to the Negotiating Table on Legal Immigration

by Randy Johnson

The Chamber continues to support President Obama’s and Senators Schumer and Graham’s attempt to find a bipartisan solution to our broken immigration system. At the same time, the Chamber is disappointed at the AFL-CIO’s effective rejection yesterday, by press release no less, of their courageous attempt to find common ground. The AFL-CIO tells the Chamber to "abandon its insistence" on a new temporary worker program when they know that this is a pivotal area that must be discussed and negotiated. By taking this position, the AFL-CIO ends any realistic chance of legislation this year.

For close to two months the AFL-CIO has refused to sit together with employers and congressional staffers to air its concerns and chose instead to issue a hollow press release. The fact is that the legislation backed by the AFL-CIO allows an additional 100,000 unemployed immigrants a year to enter the country permanently through a lottery—disregarding the current needs of the economy.

Instead of allowing people to come without jobs to compete with American workers, as called for in the legislation backed by the AFL-CIO, employers support mandating that every reasonable effort be made to hire qualified Americans first. Only after employers have tried to hire U.S. workers should they be allowed to resort to a foreign workforce. At that point, employers support a new provisional visa program that gives employers, not a lottery, the primary say in which workers they need to man their businesses.

From the business perspective the most important element of immigration reform is a program to supply the U.S. economy with the workers it needs to recover from the downturn and grow in years ahead, replacing the current unlawful influx with a legal flow (blueprint here).

The new program must also give the U.S. labor market, not a commission, the primary say in how many workers enter the country annually through workable legal programs, understanding that not every worker who comes to the United States needs, or wants, to stay permanently. While we all know that the congressional calendar may make it difficult to achieve final passage this year, having the AFL-CIO walk out of the negotiations and spend its time attacking legal immigration programs does not move the goal of comprehensive immigration reform forward.

The U.S. Chamber hopes that the AFL-CIO will rejoin those working in good faith at the negotiating table.

Thank you American Workers!

by Randy Johnson

Facts on how American Employers Support their Workers 2009

• Employers spent $7,810.7 billion on total compensation in 2007.  Wages and salaries accounted for $6,355.7 billion. 
• Employers spent $1,454.9 billion on employee benefits in 2007, or 18.6% of total compensation. 

Health Benefits

• In 2007, according to Census Bureau data, 177.4 million Americans received their health insurance from employment-based coverage (this includes state and local government employers). The Henry J. Kaiser Family Foundation has estimated that as of 2006, 158 million Americans received private sector employer-sponsored coverage.
• Employers spent $532.1 billion for group health insurance in 2007, and a total of $623.1 billion for all health benefits.
• In 2007, 62.2% of the non-elderly (under the age of 65) were covered by employment-based benefits, and 70% of working Americans had private employment-based health coverage.  
• The total cost of health benefits for active employees in 2008 averaged $8,482 per employee.
• Employers are using cost containment strategies to lower costs.  Among employers with 500 or more employees offering a health management program, 26% gave their employees an incentive to participate, up from 23% in 2007.
• In 2008, employers offering account-based, high-deductible consumer-directed health plans continued to climb.  Among employers with 500 or more employees, offerings jumped from 14% to 20%. 

Retirement Benefits

• Private employers spent $199.9 billion on retirement income benefits in 2007.
• 401(k) plans are tremendously popular with employees – 81.9% of eligible employees participate in their 401(k) plan.
• 30.3% of plans permit Roth 401(k) contributions. 12.6% of those eligible are doing so. 
• The average employer contribution to 401(k) and profit sharing retirement plans was 4.4% of payroll. 
• Most companies encourage catch-up contributions for participants aged 50 or older who participate in either a 401(k) or a profit sharing plan. Catch-up contributions for participants aged 50 and older are permitted in 99.1% of these types of plan, and 33.5% of these plans offer a match on the catch-up contribution.
• For both 401(k) and profit sharing plans, the number of funds offered to plan participants increased from an average of 18 funds for participant contributions, up from 17 funds in 2003.
• Immediate vesting is present for matching contributions in 43.6% of both profit sharing and 401(k) plans.
• By 2008, 55.1% of all plans and 70.5% of plans with 1,000 or more employees now permit immediate participation in their 401(k) programs, up from 24% of plans in 1998.
• Defined Benefit retirement plans cover 43.8 million participants.  Defined Contribution plans have been on the rise, and now cover 79.8 million participants, up from 47 million in 1995.

Other Benefits

• Paid leave is one of the most common benefits offered by employers – over three-fourths of employees (including part-time workers) receive paid time off. 

• Life insurance is offered to over half of all employees in private industry. 
• Over 60% of employers with over 100 employees provide both undergraduate and graduate educational assistance to workers.
• 9,375 employers offered domestic partner benefits, including a majority (286) of the Fortune 500.

Legislative Options for Health Care Reform

by Randy Johnson

Yesterday I participated in a Senate HELP* Committee roundtable on legislative options for health care reform. With the president pushing the Congress to deliver a health care bill before the August recess, we are reaching a critical moment in the national debate. I appreciated the invitation to participate on behalf of the business community, which provides a large portion of the nation's health benefits to citizens. One of the options being discussed is a mandate that would force almost all employers to sponsor health insurance. From my written statement:

The Chamber does not believe that a mandate on employers to sponsor health insurance will make serious headway to cover the uninsured, but rather could lead to a loss of jobs. Employers who can afford to sponsor health insurance typically provide generous benefits -- and most large employers do. Employers who cannot currently afford to offer health insurance benefits will not be able to do so simply because they are mandated to do so -- small employers and businesses that operate on very small profit margins will still be unable to afford to provide benefits.

Moses could change the Nile to run red but we cannot wave a wand and create profits. If employers are required to provide some level of healthcare benefits or pay an undetermined civil penalty, the payments will come off the bottom line in some way such as lower wages and job loss and perhaps ultimately result in driving the employer out of business. That helps no one.

Another major concern within the business community is the so-called "public option"--a government-run health insurance program that would compete with private insurance. Again from the statement:

Proponents claim that a government-run plan can compete on an equal playing field with private plans, but this would put the government in the position of being both a team owner and the referee; inevitably the government would move to give unfair advantages to the "public option," just as they are considering doing now with the public financing of student loans. Even the op-ed page of the Washington Post has cited the "public option" as a backdoor way to bring the nation to single-payer, socialized medicine.

Finally there's the question of process. It's crucial that the nation move forward to help contain health care costs and improve the national quality of life, but it's just as important to take the time to get the solution right. Congress is considering imposing this new health care mandate in less than four months. I was on the Hill when Mrs. Clinton's plan was being considered and she came under much criticism for drafting the plan behind closed doors and then presenting the plan to Congress. However, there were many hearings on that bill and I would argue that it was a model of transparency and a full deliberative process compared to the absurdly accelerated process we are apparently facing now.

You can read my full written testimony online for many more details on the opportunities and dangers before us in this effort.

* The Senate Health, Education, Labor and Pensions Committee

 

Testifying before the Senate HELP Committee.

EFCA - Piercing The Union Rhetoric

by Randy Johnson

The leading arguments in favor of the misnamed-Employee Free Choice Act (EFCA) are based on shrill rhetoric castigating employers. However, facts do matter -- the more people learn about EFCA, the less they like it. As the Senate’s leading EFCA supporters push for a vote on the bill, we have issued today a comprehensive analysis* of how it would dramatically change existing labor laws without justification.

This analysis provides an important contribution to the debate over EFCA by taking a measured and analytical approach demonstrating that this bill is not justified and is not in the best interest of employees or employers.  Supporters of EFCA have been quick to demonize employers and mischaracterize existing law, but oddly enough you don’t find union leadership discussing the details of the bill, if they can help it. This is because it represents the most radical threat to balanced labor law in decades.

The Employee Free Choice Act: Piercing the Rhetoric critiques of each of EFCA’s three provisions: Card check certification for union organizing, compulsory interest arbitration of first contracts, and increased penalties on employers. It is written for non-lawyers, because it’s important that everyone understands the consequences of these issues.  While there are many discussions about potential compromises on EFCA, these alternatives are largely derived from the original version of EFCA and this analysis will remain crucial to evaluating the merits of these proposals.

* Prepared with help from Martin F. Payson, Michael J. Lotito, and Harold R. Weinrich with the law firm Jackson Lewis LLP.

Wellness in the Workplace

by Randy Johnson

In November 2007, following the publication of Leading by Example, the U.S. Chamber co-founded the U.S. Workplace Wellness Alliance with Partnership for Prevention.

The mission of the Alliance is to improve the health status of the U.S. workforce by increasing the number of U.S. businesses that incorporate sound employee health management initiatives that include worksite health promotion/wellness programs into their corporate and health care strategies.  Since 2007, the Alliance has more than tripled initial membership, and now has more than seventy-five members.

Keeping employees healthy are vital to the well-being of businesses as research demonstrates that healthy employees have fewer medical claims, are less absent, and have greater on the job productivity when compared to employees who have less healthy behaviors such as obesity, physical inactivity and tobacco use.

In 2008, the Alliance was instrumental in passage of a House resolution co-sponsored by Representatives Stephanie Herseth Sandlin (D-SD) and Charles Boustany, Jr. (R-LA) that recognizes the first full week of April as "National Workplace Wellness Week" and a similar Senate resolution sponsored by Senator Harkin (D-IA) and then Senator Gordon Smith (R-OR), recognizing the importance of workplace wellness as a strategy to help maximize employee’s health and well being.  

To celebrate National Workplace Wellness Week, the Alliance has taken out an advertisement in CongressDaily A.M., and later today, will hold an event on Capitol Hill with Senator Harkin (D-IA) and other Members of Congress, where Senator Harkin is expected to re-introduce the Healthy Workforce Act. 

Please join us in our celebration of National Workplace Wellness Week.  For more information, visit our website: http://www.uswwa.org.

E-Verify: Hands Off the Handbrake

by Randel Johnson 

As we've emphasized already, if the Congress is going to be successful at stimulating the economy, it needs to get out of the economy's way. Each new mandate or regulatory hurdle that makes it into the stimulus package will act like a handbrake just as we're trying to accelerate. The Wall Street Journal today highlights a handbrake that so far the Congress has resisted pulling: requiring any company receiving stimulus funds to participate in the Department of Homeland Security's E-Verify program.

E-Verify, if you're not familiar, is an electronic system for verifying that the Social Security number and the name given by an employee match those in the government databases. This is a proper and important role for the government, but the system must work well to be effective. The WSJ editorial highlights some of the problems with E-Verify:

In 2007, DHS commissioned an independent study of E-Verify, which concluded that "the database used for verification is still not sufficiently up to date to meet the requirements for accurate verification." The error rate was almost 10% for foreign-born U.S. citizens. E-Verify's vulnerability to identity fraud is also problematic. A person using a valid Social Security card that doesn't belong to him would go undetected by the system. Mandating use of E-Verify could provide a nice boon to an already thriving document-fraud industry.

On top of that, and perhaps even more troubling for a nation trying to move quickly, there are questions about the progam's scalability.

[T]wo weeks ago Homeland Security Secretary Janet Napolitano said the Administration would delay the rule until May 21 "to see what needs to be done to increase the capacity for the E-Verify system." If the Obama Administration is concerned that the program will buckle under the demands of 168,000 or so federal contractors, E-Verify certainly doesn't belong in a stimulus package that would require the system to determine the job eligibility of tens of millions of new hires.

It's crucial that we get employee verification right. Now is not the time to rush into a questionable program, making it harder for companies to hire.

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