During the State of the Union Address, President Obama announced his support for legislation to provide a tax credit for companies that hire additional employees.

The tax credit for new hires will likely focus on small businesses.  It is expected that there will be safeguards placed in the bill to prevent companies from hiring an employee and then laying the employee off after the employer receives the tax credit.  Similar legislation was discussed in 2009, but no action was taken by Congress. 

Sources say legislation currently being worked on by Senate Democrats is likely to provide a 20 percent tax credit for companies with fewer than 100 employees that hire a new employee, and a 15 percent tax credit for larger companies.  The amount of tax credits any one company could receive would be capped at $350,000.  The Senate could consider this proposal in the upcoming weeks. 

Another option being discussed is a proposal by Senators Charles Schumer (D-NY) and Orrin Hatch (R-UT) that would waive the Social Security payroll tax for any employer that hires a new employee in 2010, and offering an additional $1,000 tax credit in 2011 if the employee is kept on the payroll for 52 continuous weeks.  This proposal would apply to private sector employees only and any employer who had a lower total payroll in 2010 than it had in 2009 would have to forfeit the tax benefit.

This past Wednesday,  a U.S. District Court issued a long-awaited decision in the Chamber of Commerce of the United States of America v. Napolitano case. A number of groups including U.S. Chamber of Commerce, Society of Human Resource Management (SHRM),  and Associated Builders and Contractors, Inc., challenged the legality of an Executive Order requiring that federal contractors use E-Verify to check the employment eligibility of all newly hired employees, as well as all current employees directly working on a contract.

The groups challenged the legality of Executive Order 13464 and its implementing regulations arguing that it was neither legally justified nor practical for federal contractors to implement.  Unfortunately, the court discounted the group’s arguments deciding the case in favor of the government and ruling that the regulation should go forward.

The rule is scheduled to go into effect on September 8, 2009.  This deadline means that most federal contracts awarded, as well as solicitations issued after September 8, 2009, must include a clause mandating use of E-Verify for all employees hired during the contract period and all existing employees assigned to perform work under the contract. 

The United States Citizenship and Immigration Services (USCIS) has published information and on its website regarding application of the rule. To access the page the addresses frequently asked questions please click here.

If you have any additional questions in regard to this ruling, please contact me at (330) 572-8049 or jim.krosky@bcgcompany.com

Recent changes at the BWC (Bureau of Workers’ Compensation) will affect employers that are currently participating in the BWC’s group rating or retrospective rating programs. Effective July 1, 2009,  if an employer that participates in BWC’s Group Rating or Group Retrospective Rating Program sustains a claim within the “green year” period or the prior year, the employer will be required to attend an additional two hours of safety training annually. The training will need to be performed by the sponsoring organization, the sponsoring organization’s third party administrator, or the bureau.

We are in the process of scheduling a training session that will meet this requirement for early 2010 and will communicate this date once it is confirmed through this site and  www.bcgcompany.com In the meantime if you have any questions in regard to this information please contact me at (330) 572-8049 or jim.krosky@bcgcompany.com or visit BCG Resources, Inc. to learn more.

Updates on the Employee Free Choice Act

Last week a group of senators friendly to the labor unions decided to drop the card check provision from the bill. This was the provision that would  require employers to recognize a union as soon as a majority of workers signed authorization cards stating they wanted to join the union.

In its place these senators and union officials are looking at different ways of shortening the time to 5 or 10 days after 30 percent of workers sign the authorization cards instead of the current 60 day time period.  Other items being considered are giving unions the use of company property and to limit employer ability to hold captive employee meetings.

What hasn’t had nearly the amount of discussion but is equally concerning to employers is the binding arbitration provisions if an employer fails to reach a contract with a new union. Employers argue it would be wrong for arbitrators that would be designated by the government to dictate what an employer’s wages and benefits would be.

In addition to the arbitration provision, corporate lobbyists have indicated they would oppose fast election, arguing that such a provision would deny employers ample opportunity to educate employers about the downside of unionizing, such as strikes and union dues.

Labor leaders counter that employers will have plenty of opportunity to fight unionization, noting that many companies begin educating employees on the downside of unionization the day they are hired.

Regardless of whether the provisions listed above become law, employers should expect some reforms to labor law in the near future.

For more updates relating to the HR profession sign-up for the monthly HR Update newsletter.

Missed the Workers’ Compensation webinar? Check it out here or send it to a friend.

Presenters
Jim Krosky, SPHR – BCG & Company
Mike Agnoni, Risk Consultant – Oswald Companies
Daniel O’Brien -Atty. -  Millisor & Nobil

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