The Washington Report – A PPAI Exclusive

Welcome to The Washington Report

Through our legislative contacts and lobbyists, we have access to information, insight and analysis that you won’t see published anywhere else. Information that will help you better understand how what happens in D.C. can affect your business and employees at home. Information that will help you become more aware and better prepared to advocate for your business, profession and industry.

Welcome to The Washington Report. I hope you enjoy it.

ACCESS TO CAPITAL

It is amazing what happens when you put the “small business” tag on a complicated issue that only a tenth of the folks in Washingtonunderstand.  Washington is in the midst of a rare bipartisan frenzy to enact a law to allow “smaller” businesses to gain more access to equity investments.  Congress has passed the “Jumpstart Our Business Startups Act” (H.R. 3606).  The bill is actually the combination of several separate bills that change various aspects of securities law and Securities and Exchange Commission (SEC) regulations that are believed to deter smaller firms from seeking equity investments.  The headliner is the concept of “crowdfunding” which allows you to seek modest investments amounts via the Internet and social networking media.  We are not overly excited about this bipartisan gestureMost existing businesses we know are looking for credit and debt financing.  The President will sign the bill later this week.

POSTAL SERVICE REFORM

Some Washington dishes require a little more time in the oven.  PPAI is supporting efforts to help the United States Postal Service (USPS) help itself.  PPAI has been working to secure passage of S. 1789, the 21st Century Postal Service Act, introduced by Senators Susan Collins (R-ME) and Joe Lieberman (I-CT).  Among other things, the bill would give the Postmaster General access to money the USPS has overpaid into one of its pension funds (Federal Employees Retirement System, or FERS) and use it to offer buyouts or retirement incentives to reduce the active postal workforce by 100,000 or more employees over the next several years.

The bill would also allow the USPS to offer non-postal products or services if the PRC has determined that the products and services: 1) make use of USPS’s processing, transportation, delivery, retail network, or technology; 2) are consistent with the public interest and a demonstrated demand for the USPS to offer them; 3) do not create unfair competition with the private sector; and 4) have the potential to improve the USPS’s financial condition.  Said Senator Collins:   “More than 80 percent of the Postal Service’s expenses are workforce-related. The failure to rein in these costs threatens not only the viability of the Postal Service, but also the livelihoods of Postal Service workers themselves.  The worst possible outcome for these workers would be for the Postal Service to be unable to meet its payroll – and that is a very real possibility for next year if we do not all act together to achieve reforms.”

Recently, the Senate turned back the effort to debate the merits of the bill.  There is still a lot of concern about the possibility of cutting back delivery services and closing some processing facilities, issues to which the sponsors are sensitive.  The vote was a test of whether the Senate was ready to deal with those issues.   The answer was “no.”  We expect the sponsors to bring up the bill again in the next month and there will be probably be modifications to find the 60 votes necessary to overcome a filibuster.

A DIFFERENT POINT OF VIEW

PPAI has long supported the principle that our marketplace and industry practices should allow distributors and promotional consultants to determine the nature of their business relationship.  There is a long-standing practice in our industry for some promotional consultants to operate as independent contractors.  Not everybody in Congress agrees with that point of view.  Some in Congress would prefer to restrict the ability to promotional consultants to conduct business as independent contractors.  Representative Jim McDermott (D-WA) has introduced H.R.4123, Fair Playing Field Act of 2012 and Senator John Kerry (D-MA) has introduced the companion bill, S. 2145.  The bills would curtail a section of tax law known as Section 530 that permits industries to use independent contractors if it has been the long-standing practice of the industry.  PPAI opposes the legislation as it has done in past Congresses, as this is not the first time these bills have been introduced.

SAFETY AWARENESS PROGRAMS

PPAI has worked for decades to educate the federal government’s Department of Labor (DOL) about the value of safety awareness programs.  The DOL has long had concerns about programs that “discourage” employees from reporting injuries.  DOL continues to provide insights on where they draw the line between valuable safety awareness programs and those they perceive as inappropriate.  In a recent memo, DOL said this to their field inspection staff:

“Some employers establish programs that unintentionally or intentionally provide employees an incentive to not report injuries.  For example, an employer might enter all employees who have not been injured in the previous year in a drawing to win a prize, or a team of employees might be awarded a bonus if no one from the team is injured over some period of time.  Such programs might be well-intentioned efforts by employers to encourage their workers to use safe practices.  However, there are better ways to encourage safe work practices, such as incentives that promote worker participation in safety-related activities, such as identifying hazards or participating in investigations of injuries, incidents, or ‘near misses.’  OSHA’s Voluntary Protection Program (VPP) Guidance materials refer to a number of positive incentives, including providing tee shirts to workers serving on safety and health committees; offering modest rewards for suggesting ways to strengthen safety and health; or throwing a recognition party at the successful completion of company-wide safety and health training.

“Incentive programs that discourage employees from reporting their injuries are problematic because an employer may not ‘in any manner discriminate’ against an employee because the employee exercises a protected right, such as the right to report an injury.  If an employee of a firm with a safety incentive program reports an injury, the employee, or the employee’s entire work group, will be disqualified from receiving the incentive, which could be considered unlawful discrimination.  One important factor to consider is whether the incentive involved is of sufficient magnitude that failure to receive it ‘might have dissuaded reasonable workers from’ reporting injuries.  In addition, if the incentive is great enough that its loss dissuades reasonable workers from reporting injuries, the program would result in the employer’s failure to record injuries that it is required to record.  In this case, the employer is violating that rule, and a referral for a recordkeeping investigation should be made.   This may be more likely in cases where an entire workgroup is disqualified because of a reported injury to one member, because the injured worker in such a case may feel reluctant to disadvantage the other workgroup members.”

We see signs of progress in the language, but PPAI will continue our “educational efforts.” 

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