1. Neil Reichenberg Executive Director IPMA-HR
Government Affairs Update IPMA-HR International Training Conference September 20, 2017
Neil Reichenberg
Executive Director
IPMA-HR

2. Outline Congress Overview FLSA Overtime Regulations Litigation
DOL Request for Information
DOL Opinion Letters
Independent Contractors/Joint Employment
Health Care Reform
Cost Sharing Reductions
ACA Cadillac Tax
Cash in Lieu of Benefits Case
Sexual Orientation Discrimination Litigation/Legislation
Wellness Regulations Litigation/Legislation

3. Congress
In January, Congressional Republicans indicated that by the August recess, they would:
Repeal and replace the Affordable Care Act
Pass tax reform/tax cuts
Provide funding for the border wall
None of these have occurred

4. Congress What has the Congress accomplished?
Avoided a partial government shutdown – 2 times
Extended the debt limit suspension for 3 months
Provided initial funding for Hurricane Harvey recovery efforts
Approved a new US Supreme Court justice
Through the use of the Congressional Review Act, overturned 14 regulations finalized by the Obama Administration

5. Congress Between now & the end of the year, Congress will focus on:
Aid for hurricane victims
Funding the federal government beyond 12/8
Extending the debt ceiling by 12/8
Tax reform/tax cuts
Replacement for the program shielding young illegal immigrants (“dreamers”) – needs to be done by 3/18
Funding Children’s Health Insurance program beyond 9/30
Reauthorizing National Flood Insurance Program beyond 12/8

6. Approval Ratings
How is the Administration and Republican Congress doing?
38% approval rating for the President
8% approval rating for the Congress
Economist Polls

7. FLSA Overtime Regulations Litigation
The 5th Circuit has dismissed the appeal of the order blocking the implementation of the FLSA overtime regulations
At the end of August, the District Court had granted summary judgment in the case and said that the FLSA did not preclude the DOL from setting a minimum salary basis threshold as long as it wasn’t so high as to make the employees’ duties irrelevant
The DOL had initially filed an appeal to the 5th Circuit but it was limited to the portion of the original injunction that stated the DOL lacked the authority to impose a minimum salary basis threshold of any amount

8. DOL Request for Information on FLSA Regulations
The Labor Department issued a request for information seeking public comment on the FLSA overtime regulations
Comments are due by 9/25 & IPMA-HR will be joining with ICMA and NPELRA in filing comments
To assist with preparing comments almost 500 IPMA-HR members completed a survey

9. DOL Request for Information on FLSA Regulations
Comments are likely to:
Support updating the salary basis threshold for inflation since the last adjustment in 2004, resulting in a salary basis threshold of $33-$34,000/year – 89% of survey respondents agreed
Support different salary basis threshold based on factors such as geographic location – 62% of survey respondents agreed

10. DOL Request for Information on FLSA Regulations
Advise that only 25% of survey respondents increased salaries in anticipation of the 2016 final rule and of those, only 6% reverted the salaries of exempt employees after the injunction was issued
Note that there is an almost even split as to whether the Labor Department should review and update the duties tests
Of those who submitted comments, clarification of the administrative exemption was most often cited

11. DOL Request for Information on FLSA Regulations
Rather than automatic adjustments to the salary basis threshold, close to 60% prefer a formal notice and comment period before making increases
55% would like 180 days before the new threshold becomes effective
55% would prefer it be based on the CPI

12. DOL to Resume Issuing Opinion Letters
The Labor Department announced recently that it will resume issuing opinion letters explaining how it interprets the laws it enforces
DOL stopped issuing opinion letters in 2009
Opinion letters can be request through the DOL website at

13. Independent Contractor/Joint Employment Guidance
On June 7th, the Labor Department announced that it was withdrawing informal guidance issued by the Obama Administration concerning joint employment and independent contractors
No indication whether further guidance will be issued on these issues

14. Independent Contractor/Joint Employment Guidance
The misclassification of employees as independent contractors was a major priority of the Labor Department under President Obama
The guidance letter cited an economic realities test arguing that if workers were dependent on an employer as a matter of economic reality, they should be classified as employees

15. Independent Contractor/Joint Employment Guidance
Joint employment guidance stated:
Where a joint employment relationship is found, all joint employers of a worker are liable for compliance with FLSA requirements
Vertical joint employment applies when workers have an employment relationship with one employer & the economic realities show that they are economically dependent on & thus employed by another entity involved in the work

16. Health Care Reform
Republican efforts to repeal and replace the Affordable Care Act failed
Republican bills were very unpopular, with less than a quarter of people based on several surveys expressing support
By contrast, a majority approve of the Affordable Care Act – best approval rating ever for the ACA

17. Health Care - What’s Next?
Developments include:
Senate HELP Committee held bipartisan hearings on ways to stabilize the individual insurance market & wants to develop a bill
Bipartisan group of 8 governors developed a plan to fix stabilize the market, lower premiums & encourage more state-level innovation
The Trump Administration announced
It is cutting funding by 90% for ACA outreach efforts designed to increase enrollment, but has continued paying the cost sharing subsidies each month

18. Cost Sharing Reductions
One key to insurers selling plans in the individual markets are the cost-sharing reductions that reduce out-of-pocket expenses for low income enrollees
House Republicans sued the Obama Administration claiming the Congress did not appropriate the funds for the cost-sharing reductions - District Court agreed with the House Republicans & the case was appealed by the Obama Administration
The appellate court has granted a motion filed by a group of state attorney generals to intervene as a party
Update on the litigation is due by November 30th

19. ACA Cadillac Tax
Bill (H.R. 173) introduced by Representative Courtney (D-CT) & Representative Kelly (R-PA) and would repeal the excise tax on employer-sponsored health care plans
80 cosponsors
Tax scheduled to go into effect in 2020
IPMA-HR supports this legislation

20. Cash in Lieu of Benefits Litigation
9th Circuit ruled in City of San Gabriel v. Flores that unspent dollars paid to employees as part of a bona fide flexible benefit program should be included in the regular rate calculation for determining FLSA overtime
City provided a flat dollar amount every month to be used towards the purchase of medical, dental, & vision insurance
Any unspent dollars were returned to the employee as taxable income

21. Cash in Lieu of Benefits Litigation
9th Circuit stated that since about 40-50% of the monthly amount is cashed out to employees, that the plan was not a bona fide plan resulting in the entire amount having to be included in the regular rate
IPMA-HR joined an amicus brief in support of the city’s petition for Supreme Court review
Supreme Court denied review of the case

22. Does Title VII Prohibit Sexual Orientation Discrimination?
In April, the 7th Circuit in the case of Hively v. Ivy Tech Community College became the 1st appellate court to rule that Title VII prohibits discrimination on the basis of sexual orientation
The 2nd and 11th Circuits ruled that Title VII does not cover discrimination based on sexual orientation
The 2nd Circuit granted a review by the entire circuit in the case of Christiansen v. Omicron Group and asked for the views of the EEOC
The EEOC stated that it believes Title VII prohibits sexual orientation discrimination/the Justice Department filed an amicus brief taking the opposite position of the EEOC

23. Does Title VII Prohibit Sexual Orientation Discrimination?
The plaintiffs in the Evans v. Georgia Regional Hospital case decided by the 11th Circuit have filed a petition seeking review by the US Supreme Court
The Supreme Court will rule on the petition when it returns in October
24 states have laws prohibiting sexual orientation discrimination

24. Equality Act
Congressional Democrats introduced legislation (HR 2282/S 1006) that would add sexual orientation and gender identity to other protected classes covered by Title VII of the Civil Rights Act
46 Senate cosponsors/195 House cosponsors – only 1 House Republican cosponsor

25. EEOC Wellness Regulations Litigation
AARP sued the EEOC seeking an injunction to prevent the implementation of the wellness regulations
AARP argued that the 30% wellness program participation incentives would render the program involuntary

26. EEOC Wellness Regulations Litigation
District Court for the District of Columbia denied the request since an injunction is “an extraordinary and drastic remedy”
In August, the court ruled that the regulations were arbitrary and capricious and sent them back to the EEOC for reconsideration

27. Wellness Legislation
House Committee on Education and the Workforce passed a bill (HR 1313) that would overturn EEOC’s wellness regulations
Included in the bill is a provision that would allow employers to collect genetic information if done as part of an employer sponsored wellness program
Employees who did not comply could lose the health insurance discount for wellness program participation

28. Additional Information
For additional information, please contact:
Neil Reichenberg
Executive Director
IPMA-HR