Daily Archives: June 4, 2012

The Washington Report

As I’ve shared on this blog before, through our legislative contacts and lobbyists, PPAI has 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.

This month’s report gives you insight into upcoming changes at the CPSC, the regulatory body that implements the Consumer Product Safety Improvement Act (CPSIA), Congress’ work on small business tax relief and a possible reform of the Toxic Substances Control Act (TSCA).

The Washington Report is a monthly feature for readers of this blog. I hope you enjoy it.

The Consumer Product Safety Commission (CPSC) consists of five commissioners. One Democrat’s term expired last October, creating a deadlock. However, this October the term of one of the Republicans will expire. President Obama has nominated a new Democrat to serve and a Senate committee hearing has been held on her nomination. It would seem unlikely the Republicans would allow her confirmation to proceed without some sort of deal to get a Republican confirmed. Either way, the CPSC is going to end up with a Democratic majority again at some point this year.

The Democratic nominee is Marietta Robinson, a lawyer from Michigan. During the hearing, Robinson said among other observations, “I believe one of the most important things the Commission can and must focus on doing is enforcing existing product safety requirements and making sure that violative products never enter this country in the first place. The Commission has recently enhanced its Office of Import Surveillance, which puts CPSC ‘boots on the ground’ in select U.S. ports of entry. This office also shares data with U.S. Customs and Border Protection in order to further target potentially dangerous products. If confirmed, I look forward to working with my fellow Commissioners to further strengthen this critical program.”

Senate Majority Leader Harry Reid (D-NV) says the Senate will debate the merits of S. 797, the Paycheck Fairness Act, which deals with an Equal Pay Act (EPA) issue.  It revises the “any factor other than sex” defense by requiring employers to provide non-gender reasons for the difference in wages based on a business justification.

The EPA requires that men and women be given equal pay for equal work in the same establishment. The jobs need not be identical, but they must be substantially equal. It is job content, not job title, which determines whether jobs are substantially equal. Specifically, the EPA provides that employers may not pay unequal wages to men and women who perform jobs that require substantially equal skill, effort and responsibility, and that are performed under similar working conditions within the same establishment.  Pay differentials are permitted when they are based on seniority, merit, quantity or quality of production, or a factor other than sex. These are known as “affirmative defenses” and it is the employer’s burden to prove that they apply. These are defenses the bill seeks to revise.

The bill revises the “any factor other than sex” defense by requiring employers to provide non-gender reasons for the difference in wages based on a business justification.  An employer must demonstrate that the disparity is based on a bona fide factor other than sex, such as education, training, or experience, that is: (1) not based upon or derived from a sex-based differential; and (2) related to the position in question; and (3) consistent with business necessity. Such a defense shall not apply if the employee can then demonstrate that an alternative employment practice exists that would serve the same business purpose without producing the differential, and the employer refused to adopt the alternative.

The EPA is actually part of the Fair Labor Standards Act (FLSA) but is administered and enforced by the Equal Employment Opportunity Commission (EEOC). Since the EPA is a provision of the FLSA, the basic employee threshold is that of the FLSA, which means it is generally applicable regardless of the number of employees (e.g., a retail establishment with an annual dollar volume of sales of less than $500,000 and no employees engaged in interstate commerce). The exemptions of the FLSA (e.g. white collar) do not apply.

This bill is not to be confused with the Ledbetter Fair Pay Act of 2009, which was signed into law on January 29, 2009. The law amends various other federal equal employment opportunity laws (Title VII of the Civil Rights Act, the Americans with Disabilities Act (ADA), and the Age Discrimination in Employment Act (ADEA)) to clarify discrimination occurs every time a paycheck is issued following a discriminatory compensation decision.

Senate Majority Leader Harry Reid (D-NV) also plans to have the full Senate consider his small business bill in June. S. 2237. The Small Business Jobs and Tax Relief Act would provide a one-time tax credit of up to ten percent of the incremental increase in wages paid by an employer in 2012 over 2011 wages. The incremental increase in the amount of wages eligible for the credit is capped at $5 million. His bill would also extend the temporary 100 percent depreciation bonus through 2012. At the end of 2011, the temporary bonus dropped to 50 percent and it will expire at the end of the year.

You may recall this is Senator Reid’s counter offer to the House Majority Leader Eric Cantor’s (R-VA) small business bill, H.R. 9, which the House has approved. H.R. 9 would allow profitable small businesses to reduce their taxable income by up to 20 percent for one year. A small business is one with less than 500 full time employee equivalents for the purpose of the bill. The reduction is limited to not more than 50 percent of wages paid in the year.

“The Chicago Tribune series published this week reveals that flame retardant chemicals added to furniture and other household goods are not only useless, but also toxic for our families—especially young children. The disturbing truth is that flame retardants are only one example of the many toxic substances that have made their way into American homes as a result of self-serving chemical companies and the weak, ineffective federal law that has regulated chemical safety standards since 1976. We have to come together on a bipartisan basis to pass the Safe Chemicals Act and provide Illinois families with the basic level of safety they expect,” said Senator Richard Durbin (D-IL). He is calling for passage of the Safe Chemicals Act, which would update and modernize the Toxic Substances Control Act of 1976. According to Durbin, the proposed legislation will give Environmental Protection Agency (EPA) more power to regulate the use of “dangerous” chemicals and require manufacturers to submit information proving the safety of every chemical in production and any new chemical seeking to enter the market.