The Obama Administration:
Possible Impact to Employers
 Now that the momentous 2008 election process has come to a close, employers across the U.S. are wondering what to watch for with a new administration and a same-party Congress. Given the recent economic downturn, the impact of the election on American businesses will be of particular interest.
One clue to the potential wave of the future will be the platform on which President-Elect Barack Obama campaigned. While we will be in a “wait-and-see” mode to determine which of these programs will come to fruition, following are a few initiatives Obama included in his platform and which will likely be proposed during his administration:
Jobs, Wages and Small Business:
-
Increase in the minimum wage, as well as a move to index it to inflation (would mean an annual 2-3% growth in wages);
-
Two-year plan offering employer tax credits of $3,000 for each new job created;
-
Increase in taxes for wage earners with incomes over $250,000 (including small business owners and entrepreneurs);
-
Elimination of capital gains taxes on small business investors;
-
Extension of write-offs for equipment purchases by small businesses;
-
Transition to permanent Research and Development tax credit;
-
Significant reforms to union organizing rules, including changes in labor election systems and the imposition of mandatory binding arbitration;
-
Significant crackdown on companies who employ illegal immigrants, as well as electronic verification of employee status;
-
Tax credits or reductions for lower income families and seniors;
-
Mandatory bid processes instituted for any federal project or contract over $25,000; and
-
Expansion of Small Business Administration and micro-loan programs, as well as the implementation of a Women-Owned Business contracting program.
Healthcare, Benefits and Family Medical Leave:
-
New mandate requiring employers to offer health coverage or make contributions to private coverage. Alternative: mandatory contributions by employers to a government health plan (“play or pay”) that would offer guaranteed coverage to anyone who applies.
-
Federal pool to provide up to a 50% tax credit on employer premiums paid for employees by small businesses into the government plan. Other reimbursement programs for employers are being contemplated for catastrophic coverage;
-
Requirement by 2012 that all parents provide healthcare coverage for their children;
-
New limits on malpractice insurance premiums for physicians;
-
Programs to allow the importation of prescription drugs;
-
Change in tax regulations allowing a penalty-free withdrawal of 15% of individual qualified retirement accounts up to $10,000 (income tax would apply);
-
Expansion of the Family Medical Leave Act (FMLA) to cover companies with 25 employees (down from the current 50 employee threshold), as well as the purposes for which the leave can be used (school activities, elder care, etc.);
-
Establishment of a national initiative to encourage workplace flexibility;
-
Broad adoption of a standards-based electronic health information system; and
-
National exchange to help Americans access private health insurance vendors and information, as well as provide oversight of private programs to ensure quality and compliance.
These initiatives and others proposed by President-Elect Obama could mean sweeping changes for employers across the country. It is critical that employers, either through internal resources or external experts, continue to assess the impact of new legislative and regulatory programs. Of course, it is not possible to predict which initiatives will actually become reality, but one thing for certain is that in 2009 organizations must be poised and ready to deal with important legislative changes.
Author: Aimee Lowry, Practice Leader, Helios HR
|
