The Washington Outlook
from the California
1
Employers Perspective
Michael P. Aitken • April 10, 2015
The Washington Outlook from the
California Employers Perspective
Environment
Americans Name Government as the No. 1 U.S. Problem
2
Source: Gallup, March 12, 2015
The Washington Outlook from the
California Employers Perspective
Environment
In U.S., Worries About Terrorism, Race Relations Up Sharply
3
Source: Gallup, March 17, 2015
The Washington Outlook from the
California Employers Perspective
President Obama 2015 SOTU Pledges
Issue Area
4
The Presidency
Pledge
Budget and Taxes
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Work for tax reform which lowers taxes on working families and closes tax loopholes
Create a new tax cut of $3,000 per child per year to help reduce childcare costs
Work to simplify tax code on individuals and businesses
Increase top tax rates on capital gains and dividends
Climate/Energy
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Will veto any bills which roll back environmental protections
Economy
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Will veto any bills which attempt to further roll back Dodd-Frank
Help states adopt paid leave laws, and push for a federal bill providing seven days of paid leave
Push for gender-equal pay legislation
Push for an increased minimum wage
Education
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Provide federal access to free community college
Work with Congress to help reduce monthly payment sizes of existing student loans
Extend internet access to every classroom
Health Care

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Will veto any bills which remove access to health insurance
Launch Precision Medicine Initiative to advance disease cures and increase access to personalized
medicine (similar to House’s 21st Century Cures Initiative)
Immigration

Will veto any bills which roll back executive immigration actions
Infrastructure

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Will push for bipartisan infrastructure plan in Congress
Expand internet access to all communities and assist development of faster networks
International Affairs
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Receive trade promotion authority from Congress
Push for closure of Guantanamo Bay
Urge Congress to pass an AUMF resolution against ISIL
Work for Iran nuclear deal (pledge to veto any additional sanctions bill)
Push for congressional action on cybersecurity legislation
Other


Protect net neutrality
Issue report on administration’s attempt to strengthen privacy protections in domestic surveillance
programs
Source: 2015 State of the Union Address, WhiteHouse.gov
The Washington Outlook from the
California Employers Perspective
The Presidency
Average Presidential Vetoes per Two-Year Term of Congress
5
The Washington Outlook from the
California Employers Perspective
Proposed Rules Can Be Blocked By Public, Congress, the Courts
President Orders
Creation of Rule
Congress
Recommends
Rule
Agency Proposes
Rule
!
Agency Notices
Problem
Process and Obstacles for Enacting and
Enforcing Federal Rules
Public Comments
on Regulation
An agency may decide to
scrap the proposed
regulation after reviewing
comments from
interested parties and
other government
officials
Rule is
Finalized /
Published
In Federal
Register
Congress/President
Can Review
Congress may pass a
Resolution of Disapproval
prior to the rule’s
enactment, which, if
signed by the President,
will void the rule
Rule is
Enacted
If the rule is
challenged in court, a
judge can prevent
enforcement with an
injunction and may
eventually strike
down the rule
Congress may pass
new legislation
restricting agencies’
ability to enforce the
rule
Analysis
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The public comment period is the main obstacle to finalizing a rule; comments from knowledgeable insiders can significantly alter
or eliminate the rule
Congress can pass a Resolution of Disapproval under the Congressional Review Act to stop a regulation, but the president must
sign it in order for the regulation not to take effect; only one resolution of disapproval has ever been signed to halt a regulation
Opponents of a regulation can halt a rule’s enactment by successfully challenging the rule in court or lobbying for laws to limit the
powers of enforcing agencies
The Washington Outlook from the
California Employers Perspective
The Presidency
President Obama Job Approval
7
Source: Real Clear Politics, April 7, 2015
The Washington Outlook from the
California Employers Perspective
The Presidency
Race for 2016 is on… Republican Presidential Nomination
8
Source: Real Clear Politics, March 31, 2015
The Washington Outlook from the
California Employers Perspective
The Presidency
Race for 2016 is on… Democratic Presidential Nomination
9
Source: Real Clear Politics, March 31, 2015
The Washington Outlook from the
California Employers Perspective
Environment
Americans Rate Nurses Highest
U.S. Views on Honesty and Ethical Standards in Professions
10
Source: Gallup, December 8-11, 2014
The Washington Outlook from the
California Employers Perspective
Congress
No Sign of Improvement in Americans’ – and Republicans’ –
Views of Congress
11
Source: Gallup, March 16, 2015
The Washington Outlook from the
California Employers Perspective
Congress
Every State Legislature Is More Productive Than Congress
Percentage of Bills Enacted as Law in Most Recent Legislative Session
Legend
0-10%
WA
10-25%
MT
VT
ND
OR
25-50%
MN
ID
>50%
SD
NV
MI
NE
CO
PA
IA
UT
CA
NY
WI
WY
IL
KS
AZ
Congress Enacted 3%
of Bills Introduced
in the 113th Congress
ME
OK
NM
MO
KY
WV VA
NC
TN
AR
SC
MS AL
TX
OH
IN
NH
MA
RI
CT
NJ
DE
MD
GA
LA
AK
FL
HI
Analysis
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As measured by the percentage of bills introduced that were enacted as law, every state legislature was more productive than Congress in 2014
The least productive state legislature, Minnesota, enacted 5% of all introduced bills, which was still higher than Congress’ 3% rate
Although comparisons are difficult because not all bills are of equal importance, these percentages illustrate the relative ease with which state
legislatures pass laws compared to Congress
Whereas Congress has experienced years of gridlock and divided government, many state governments are unified under one party and have
simpler procedures for drafting and passing legislation
12
Sources: National Journal Research; GovTrack.us; StateNet.com.
The Washington Outlook from the
California Employers Perspective
Congress
Republicans Win Record Majority in House
Control of the 113th House (2012-2014)
Control of the 114th House (2014-2016)
Democratic
Republican
234
201
AK
Total Seats
Democrats: 201
Republicans: 234
247
188
AK
Total Seats
Democrats: 188
Republicans: 247
Analysis
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Republicans won a total of at least 246 seats in the House, their largest majority since 1928
An expanded GOP majority in the House means that Speaker Boehner will have an easier time passing legislation in the
House without Democratic support, and Republicans will also have an easier time holding on to their majority in future
elections
The Washington Outlook from the
California Employers Perspective
Congress
Republicans Win Solid Majority in Senate
Control of the 113th Senate (2012-2014)
Control of the 114th Senate (2014-2016)
Democratic
Republican
Independent
2
2
45
53
54
44
Total Seats
Democrats: 44
Republicans: 54
Independents: 2
Total Seats
Democrats: 53
Republicans: 45
Independents: 2
Analysis
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Having won most of this year’s competitive races, Republicans secured 54 Senate seats, flipping the Senate from
blue to red
Since Republicans expanded their majority to 54 seats, they will have an easier time passing legislation in the Senate
because they will need fewer Democratic defections to overcome filibusters (which require a 60 vote supermajority)
The Washington Outlook from the
California Employers Perspective
Labor-Management/Civil Rights Issues
2015 Public Policy Agenda – Labor and Employment

Union supported legislation not seriously in the mix; but may see Republican
approaches to:
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President Obama in SOTU promised an aggressive regulatory and executive approach:
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Compensation Equity
Workplace Flexibility
Labor-Management
Proposed 541 Overtime Regulation.
EEOC Guidance on Pregnancy Discrimination.
Executive Order on Compensation Data Collection for Federal Contractors.
Executive Order on Sex Discrimination Guidelines.
Executive Order on Fair Pay and Safe Workplaces.
Presidential Memorandum on Paid Family Leave for Federal Employees.
The Washington Outlook from the
California Employers Perspective
Labor-Management/Civil Rights Issues
2015 Public Policy Agenda – Labor and Employment
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Full NLRB Board will mean increased activity:
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SHRM will an advocacy leadership role on many of these in the 114th Congress and
in the executive branch:
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Browning-Ferris / Specialty Health Care / D.R. Horton.
FLSA Overtime Rules
NLRB Ambush Regulations
FAR Proposed Regulations
Compensation Equity
Workplace Flexibility
The Washington Outlook from the
California Employers Perspective
Labor-Management/Civil Rights Issues
2015 Public Policy Agenda – Labor and Employment
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Mandated paid leave continues to be a focus of the Obama Administration, congress
and advocacy groups:
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In addition, several states and localities have enacted paid sick leave requirements:
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Healthy Families Act (H.R.932/S.497)
The Family Medical Leave and Insurance Act
California
Connecticut
Massachusetts
….while others have paid family leave insurance programs:
> California
> New Jersey
> Rhode Island
The Washington Outlook from the
California Employers Perspective
Labor-Management/Civil Rights Issues
Joint Resolution for Congressional Disapproval of
NLRB Representation Case Procedures (S.J. Res 8)
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
Introduced in the House by Representative John Kline (R-MN), Chairman of the
House Education and Workforce Committee, and in the Senate by Lamar Alexander
(R-TN), Chairman of the Health Education, Labor and Pensions Committee, the
resolution use the Congressional Review Act (CRA) to disapprove of the NLRB’s
“Ambush Election” rule.

S.J. Res.8 passed the Senate by on March 4 by a vote of 53 to 46 and passed the
House on March 19 by a 232 to 186.

For the resolution to be effective, the resolution must be signed by the President, or
in the case of a veto, override the President's veto by two-thirds of both Houses of
Congress.

President Obama vetoed the legislation on March 31, 2015.
The Washington Outlook from the
California Employers Perspective
Labor-Management/Civil Rights Issues
Americans Approve of Unions but Support “Right to Work”
Union approval at 53% while 74% favor right to work laws
19
Source: Gallup August 28, 2014
The Washington Outlook from the
California Employers Perspective
Labor-Management/Civil Rights Issues
National Labor Relations Board
Final Rule to Amend Representation Election Procedures
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
Final rule was reissued by the NLRB in the Federal Register on December 15 and
is nearly identical to regulations proposed in 2011. The Rule is scheduled to go
into effect on April 14, 2015.

The rule revises the process for union representation elections, expediting the
period of time between the filing of NLRB election petition and the election itself.
The regional director could set a pre-election hearing to begin seven days after a
hearing notice is served and a post-election hearing 14 days after the tally of
ballots.
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Provides for the electronic filing and transmission of election petitions.
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Employers will be required to turn over private employee information to the NLRB
and the petitioning party, including employee telephone numbers and e-mail.
The Washington Outlook from the
California Employers Perspective
Labor-Management/Civil Rights Issues
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SHRM filed a lawsuit on January 5 challenging the legality of the rule. In particular,
the lawsuit raises the following issues:
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Shortened time frame between the filing of an NLRB representation case
petition and election;
Failure to establish a record supporting new election rules;
Detrimental changes to the Board election proceedings and;
Changes to voter list rules infringe on employee privacy rights.
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96 SHRM state councils and chapters and over 4,600 individual members
submitted their own comments to the NLRB during the comment period on the rule.
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SHRM member Roger King of Jones Day testified before the NLRB in April 2014
on these issues.
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SHRM member Steve Browne also testified before the House Education and
Workforce committee on the rule in March, 2014.
The Washington Outlook from the
California Employers Perspective
Labor-Management/Civil Rights Issues
Department of Labor
Proposed Rule to Amend 541 Overtime Regulations
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
President Obama sent a presidential memorandum to the Department of Labor (DOL)
on March 13, 2014, directing Agency to “modernize” and “simplify” the Section 541
rules.

Under the FLSA 541 Regulations, an employee qualifies as exempt from overtime if
he or she satisfies a “duties test” (under the Executive, Administrative, Professional,
Computer and Outside Sales regulations) and the employee is paid on a “Salary
Basis.”

Although we have not seen a proposal, we understand the changes may include
doubling the “Salary Basis” amount from $455 dollars a week ($23,660 annually) to
$910 dollars a week ($47,320 annually).
The Washington Outlook from the
California Employers Perspective
Labor-Management/Civil Rights Issues
23
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Proposal will also modify the “duties test” making changes to definitions and
possibly changing key terms and elements, particularly in the “primary duty” area.

DOL held a series of listening events over the last several months, four specifically
with SHRM and our members.
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Proposed rule is anticipated to be released by DOL in the first quarter this year.
The Washington Outlook from the
California Employers Perspective
Labor-Management/Civil Rights Issues
Department of Labor
Executive Order on Fair Pay and Safe Workplaces Act under the
Federal Acquisition Regulations

Signed by the President on July 31, the Executive Order requires prospective federal
contractors and their subcontractors (with contracts valued at more than $500,000) to disclose
to the government, labor violations of 14 different federal and state labor laws and the
equivalent state laws that occurred during the previous 3-year period of time.

Laws covered include the FLSA, OSHA, the NLRA, Davis Bacon, the Service Contract Act, 503
of the Rehabilitation Act, USERRA, FMLA, Title VII of the Civil Rights Act, the ADA, ADEA;
among others.
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Contractors must disclose whether any of the following has been rendered against them for:
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Administrative merits determinations
Arbitral awards or decisions
Civil judgments
The Washington Outlook from the
California Employers Perspective
Labor-Management/Civil Rights Issues
25

Federal contractors would also be required to disclose to each individual employee their
particular classification as an independent contractor or employee.
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The order would also prohibit employers with federal contracts of at least $1 million
from requiring employees from entering into pre-dispute arbitration agreements for
disputes arising out of Title VII of the Civil Rights Act or from torts related to sexual
assault or harassment.

The Executive Order is effective immediately but applies to any contracts entered into
on or after final regulations go into effect.

The proposed rule has been sent to OMB and we expect it to be issued sometime this
spring.
The Washington Outlook from the
California Employers Perspective
Health Care Reform Issues
2015 Public Policy Agenda – Health Care Reform

Supreme Court is expected to decide case on the constitutionality of health care credits for
coverage purchased through public exchanges in King v. Burwell.
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Successful PPACA repeal in 2015 unlikely but 114th Congress will pursue several changes:
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Definition of Full Time
Application of Excise Tax
Protection of Employer Wellness Programs
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Second PPACA enrollment period for exchanges ended on February 15.
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Congressional oversight and regulatory guidance continues.
 EEOC proposed regulations on wellness programs.
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Tax-deferred status of health care benefits could become a target in tax reform in Congress.
The Washington Outlook from the
California Employers Perspective
Health Care Reform Issues
Premium Costs Likely to Rise if Supreme Court Strikes Down
Subsidies for States Operating on Federal Exchanges
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The Washington Outlook from the
California Employers Perspective
Health Care Reform Issues
2014 to 2015 Change in Organizations’
Overall Health Care Coverage Costs
Change in Costs
Percentage Increase in Costs
Decrease
6%
Of
organizations
that reported
decreased
costs, 84% saw
a decrease of
10% or less.
Stay the same
17%
Increase, 77%
1% - 5%
6% - 10%
11% - 15%
16% or more
Note: n = 687. Respondents who answered "don't
know" or "not applicable" were excluded from this
analysis.
28
21%
38%
16%
24%
Note: n = 492. Only respondents who indicated a change in the costs
from 2014 to 2015 were asked this question. Percentages do not
total 100% due to rounding.
Source: Health Care Reform—2015 Update ©SHRM 2015
The Washington Outlook from the
California Employers Perspective
Health Care Reform Issues
Will Your Organization Restructure Its
Health Care Options to Avoid the Excise Tax?
The excise tax (“Cadillac tax”): A tax scheduled to take effect in 2018 to reduce health care use and costs by
encouraging employers to offer plans that are cost-effective and by engaging employees in sharing in the cost of care. It
is a 40% tax on employers that provide high-cost health benefits to their employees.
Yes, we have made changes to our
plan to avoid the excise tax
9%
We are/will be conducting analyses
and exploring different health care…
24%
We have not yet begun to consider
the issues around the excise tax
13%
We are awaiting guidance on the
excise tax before making any changes
14%
Not applicable; we did not ever offer
a health care plan that would…
Don't know
20%
More than onehalf of
organizations
(53%) will not be
affected by the
excise tax or are
taking action to
avoid the tax.
19%
Note: n = 714. Percentages do not total 100% due to rounding.
29
Source: Health Care Reform—2015 Update ©SHRM 2015
The Washington Outlook from the
California Employers Perspective
Health Care Reform Issues
As a Result of the ACA Employer Mandate
Has Your Organization Considered Reducing the Number of Hours Worked
for Some Full-Time or Part-Time Employees?
Yes, we have already
reduced employee hours
Yes, we plan to reduce
employee hours
Yes, but we have
decided NOT to reduce
employee hours
No, we have not
considered reducing
employee hours
2%
14%
1%
6%
6%
8%
On average, 19% of employees
were affected at organizations that
reduced or plan to reduce hours.
Full-time employees
(n = 688)
Part-time employees
(n = 607)
91%
72%
Note: Respondents who answered "don't know" or "not applicable" were excluded from this analysis.
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Source: Health Care Reform—2015 Update ©SHRM 2015
The Washington Outlook from the
California Employers Perspective
Health Care Reform Issues
Total ACA Exchange Enrollment at 10 Million
Analysis
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The 2014-2015 enrollment period was roughly half as long as the 2013-2014 period, spanning 93 days instead of 182
Original CBO projections estimated 13 million enrollees by the end of the 2015 period; HHS set a lower goal of 9 million
HHS exceeded its own goal, with 10 million individuals actually enrolled as of the enrollment period’s closing on Feb. 15, 2015
The Washington Outlook from the
California Employers Perspective
Health Care Reform Issues
Save American Workers Act (H.R. 30)
Forty Hours is Full Time Act of 2015 (S.30)

Legislation introduced in the House by Representatives Todd Young (R-IN) and Dan Lipinski
(D-IL) and in the Senate by Senators Susan Collins (R-ME) and Joe Donnelly (D-IN) to
amend the Internal Revenue Code to:
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Modify the definition of “full time” for the hours worked requirement for health care
coverage under the Patient Protection and Affordable Care Act from 30 hours a week to
40 hours.
Clarify that the number of hours counted toward a "full-time equivalent" employee to be
174 hours per month as opposed to 120 hours per month under current law.

The House passed the bill on a bipartisan vote of 252 to 172 on January 8 and was referred
to the Senate. SHRM supports the measure.

President Obama has threatened to veto the legislation.
The Washington Outlook from the
California Employers Perspective
Health Care Reform Issues
Preserving Employee Wellness Programs Act (H.R. 1189 & S. 620)
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
Legislation introduced in the House by Representatives Todd Young (R-IN) and John Kline
(R-MN) and the Senate by Senator Lamar Alexander (R-TN) reaffirms that employers legally
may offer financial incentives that reduce health insurance premiums for employees who
participate in employer-sponsored wellness programs.

The bill reaffirms the Affordable Care Act that allows employers to offer wellness programs
tied to a financial reward for employees who participate. The bill also clarifies that an
employee's spouse may participate in the program as well.

Under the legislation, employees would have up to 180 days to request and complete an
alternative wellness program if it's medically inadvisable or unreasonably difficult for them to
participate in the original program.
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SHRM supports the legislation.
The Washington Outlook from the
California Employers Perspective
Immigration Reform Issues
2015 Public Policy Agenda – Immigration Reform
34

President Obama signed an executive order in November 2014 granting up to three
years deferred deportation and work authorization for up to 5 million undocumented
aliens.

President Obama has threatened a veto over any attempt by Republican leaders in
Congress to rollback the executive order.

The 114th Congress is unlikely to move forward on “comprehensive immigration” but will
see a series of focused immigration bills on border security, worksite enforcement and
possibly, Green Card reform.

The H-1B Visas are available beginning next week but the number of applications is
expected to be above 172,500 far surpassing the statutory cap of 85,000.

The SHRM/Council for Global Immigration partnership is part of the dialogue and
advocacy effort.
The Washington Outlook from the
California Employers Perspective
Immigration Reform Issues
Immigration Executive Action Refocuses Deportation
Efforts, Expands Work Authorization
Key Provisions in President Obama’s November 2014
Executive Action on Immigration
Pillar of Reform
Keep families together and protect those who
came to the U.S. as children
Actions Taken
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Change deportation priorities to target severe
offenders
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Modernize immigrant and nonimmigrant visa
programs and applications
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Expands DACA (deportation relief for undocumented immigrants who entered the country prior to the age of 16)
to those who are currently older than 30 and to those who entered the U.S. before Jan. 1, 2010
Creates Deferred Action for Parents (DAP) for immigrants who entered the U.S. before January 1, 2010 and
have at least one child who is a U.S. citizen or green card holder
Grants, under DACA and DAP, work authorization and 3 years of deportation relief for successful applicants
Provides provisional waivers of unlawful presence to individuals who have resided in the U.S. for at least 180
days and are the children of U.S. citizens or the spouse or children of lawful permanent residents
Reforms “Secure Communities” program (current Administration policy on immigration enforcement, requiring
local authorities to send information of any individual arrested and fingerprinted to be sent to Homeland Security
for potential deportation) to only focus on deporting serious criminals and repeat offenders
Targets immigrants who have entered the U.S. or were already ordered to be deported in 2014
Clarifies and investigates a number of rules regarding visa availability and national interest waivers
Authorizes parole, on a case-by-case basis, to eligible investors, researchers, and entrepreneurs, who would
otherwise be ineligible for a national interest waiver
Allows application fees to be paid by credit card
Analysis
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President Obama signed the executive order in response to outcry from members of the Democratic base and Latino communities
frustrated at a lack of progress on immigration after the 2012 election cycle
The executive action has faced limited criticism from a policy perspective, but backlash regarding potential executive overreach from
Republicans in Congress (particularly given the timing of the order immediately following major Democratic losses in the 2014 elections)
looks to be setting up a fight in the 114th Congress to potentially repeal the action
The Washington Outlook from the
California Employers Perspective
Immigration Reform Issues
The Legal Workforce Act (H.R.1147)

Introduced in the House by Representative Lamar Smith (R-TX) and Chairman of the
Judiciary Committee Bob Goodlatte (R-VA), the Legal Workforce Act is focused on worksite
enforcement. The legislation would real the current paper-based Form I-9 and require
employers to participate in an electronic verification system.

Federal contractors to use the system on the date of enactment. Participation by other
employers would be as follows:
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employers with 10,000 or more employees,6 months after enactment;
employers between 500 and 10,000 employees,12 months after enactment;
employers between 20 and 500 employees,18 months after enactment; and
employers with less than 20 employees, 24 months after enactment.
Agricultural employers would not be required to use the system 36 months after enactment.
The Washington Outlook from the
California Employers Perspective
Immigration Reform Issues
37

Employers would attest through the electronic verification system that they had
examined the new hire’s employment and identification documents to ensure
authenticity. The bill also allows employers to do the attestation on paper as well.

Employers would be required on the date the offer of employment is extended and
ending at the end of the third business day after the employee has been hired, to use the
employment verification system. The offer of employment may be conditioned on passing
the verification system.

Employees would be required to attest they are authorized to work legally in the U.S. and
would face criminal sanctions of up to two years in jail and civil penalties for violations of
the attestation provisions.

Creates a knowledge based authentication pilot program to address the issue of identity
theft and the use of fraudulent documents in the employment verification
process. Employers can access the pilot within 24 months of enactment.
The Washington Outlook from the
California Employers Perspective
Immigration Reform Issues
38

The legislation would allow federal immigration law to preempt any state law in
regard to: 1) employer fines for immigration-related issues or 2) requiring
employers to verify work status or identity for work authorization purposes. States
could, however, continue to award business license on the basis of compliance
with the federal system. However, state law enforcement would be allowed to
enforce the federal provisions and collect the fines.

The House Judiciary Committee approved the Legal Workforce Act by a vote of
20 to 13 on March 3.
The Washington Outlook from the
California Employers Perspective
Immigration Reform Issues
CFGI and SHRM will Continue to Educate and Advocate
RECRUIT AND RETAIN
TALENT
39
TOOLS TO HIRE A
LEGAL WORKFORCE
The Washington Outlook from the
California Employers Perspective
Tax and Benefits Issues
2015 Public Policy Agenda

2016 Federal Budget Process
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Federal National Debt
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A “CRomnibus” was signed into law to fund most of the government through
2015. Funding for DHS was provided under a separate bill as a result of the
fight over President Obama’s Executive Order on Immigration .
Both the House and Senate are trying to pass a unified budget resolution in
April/May to set the budget and spending parameters for 2016.
Fights likely to occur over sequestration caps, limits on defense spending and
Better projected deficit of $486 billion in 2015 but current federal debt is over
$18 trillion dollars. Deficit projected to hit $1.1 trillion a year by 2025.
Treasury Secretary Jacob Lew indicated that the U.S. had reached the
statutory debt limit on March 15. The debt limit will need to be extended by
the fall to prevent default.
The Washington Outlook from the
California Employers Perspective
Tax and Benefits Issues
2015 Public Policy Agenda

Tax Reform
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Congressional leaders and the White House have signaled that tax reform is an
area of potential bipartisan work in the 114th Congress.
Significant changes to employer sponsored benefits are part of the tax reform
discussion.
Senators Hatch and Wyden launched an effort earlier this month to explore tax
reform. SHRM is engaging the Savings and Investment working group to
discuss impacts of changes to the tax treatment of retirement plans.
Senate & House Concurrent Resolutions on Retirement to be introduced within
the next two months.
Any tax reform efforts will need to take place within a very small window, likely
June – July.
The Washington Outlook from the
California Employers Perspective
Tax and Benefits Issues
Tax Increase Prevention Act of 2014 (P.L. 113-295)

Signed into law by President Obama on December 19, the law retroactively extends
several tax provisions through December 31, 2014. These include:
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Employer-provided transit and vanpool benefits from $130 to $250;
Employer wage credit for activated military reservists;
Work Opportunity Tax Credit, which allows businesses to claim a tax credit equal to
40 percent of the first $6,000 of wages paid to new hires of one of eight targeted
groups;
Employer wage credit for activated military reservists;
The law also allows sponsors of multi-employer pension plan to take an additional five
years to amortize their funding shortfalls to these plans. Multi-employer plans that are
deemed in “endangered status” (generally less than 80% funded) or “critical status”
(generally less than 65% funded or the plan is expected to become insolvent within a
certain period) are provided additional flexibility in meeting their funding obligations.
These provisions both expire on December 31, 2015.
The Washington Outlook from the
California Employers Perspective
Tax and Benefits Issues
Exclusions from Taxable Income Account for
Most Tax Expenditures
Total: $461B
$33B
Capital gains
on assets
$43B
Social Security
and other
benefits
FY 2013 Cost of Major Tax Breaks
Pension
contributions
and earnings
$137B
Total
$186B
Employersponsored
health
insurance
$248B
Charitable
contributions
Total
$161B
$39B
Mortgage
interest
$70B
$161B
State and
local taxes
$77B
Exclusions
from Taxable
Income
Total
$118B
Child tax credit
$57B
Earned income
tax credit
$61B
Tax
Deductions
Preferential Rates on
Capital Gains and
Dividends
Tax Credits
Analysis


43
The top 10 most expensive tax expenditures will cost the federal government roughly $900B in FY 2013
Both Republicans and Democrats have recently considered eliminating or limiting these tax breaks as a way to
generate revenue
The Washington Outlook from the
California Employers Perspective
Michael P. Aitken
Vice President
Government Affairs
[email protected]
Twitter: @SHRMVPAitken
1800 Duke Street
Alexandria, VA 22314
+1-703-535-6027 Direct
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