On October 1, 2008, as part of a compromise financial rescue plan intended to address the country’s credit crisis, a bipartisan Senate majority passed H.R. 1424 by a 74-25 vote. Taken up after the House failed to pass a financial rescue plan on September 29, the Senate bill includes additional “sweeteners” intended to make the package more palatable to House members who voted down the House version of the financial bailout plan.

Of particular interest to employers, the Senate bill also includes a “mental health parity” provision which had been previously passed by overwhelming majorities in the House (H.R. 6983) and Senate (H.R. 6049) in separate bills on September 23, 2008. Like these previous bills, the mental health parity provision of H.R. 1424 requires health plans providing mental health coverage to provide mental health coverage in the same manner as other physical health conditions. The Senate bill exempts group health plans of employers with fewer than 50 employees from these new requirements.

On September 26, 2008, by a margin of 264-158, the House voted to extend unemployment insurance benefits (H.R. 7110). The bill provides over $58 billion in funding for transportation infrastructure projects and $6.5 billion for unemployment benefits.

Earlier on September 26, the Senate failed to pass similar unemployment benefit provisions as part of an economic stimulus bill (S. 3604). The bill, sponsored by Majority Leader Harry Reid (D-NV) and Sen. Robert Byrd (D-WV), fell 8 votes short of the 60-vote threshold required to overcome a Republican filibuster, obtaining only a 52-42 majority.  Republicans objected to language in the bill extending a ban on offshore drilling.

The unemployment insurance provisions of both bills would provide jobless workers who have exhausted their benefits with 7 more weeks of benefits, with additional 13-week extensions to workers in the 20 states (and the District of Columbia) with unemployment rates above 6 percent.

Following the failure of S. 3604 to receive 60 votes, the Senate may take up the House bill, which itself would then face a potential filibuster. The unemployment provisions could also be attached to other legislation, such as a potential financial system bailout bill.

The Bush Administration has announced its opposition to both the House and Senate bills and has promised a veto of both. It objects to the cost of the unemployment benefit provisions, as well as the precedent set by the extension of benefits, which follow a previous extension in July 2008.

On September 24, 2008, the House passed by a voice vote the Railroad Safety Improvement Act (H.R. 2095), which increases rail employee training standards and modifies hours of service requirements. 

H.R. 2095, which also includes provisions reauthorizing Amtrak and providing funds to various rail safety initiatives, gained recent momentum following a tragic California train accident on September 12. Supported by the major rail unions and industry groups, the Act would provide resources to the Federal Railroad Administration (”FRA”), create minimum training standards for railroad workers, and strengthen FRA enforcement powers. H.R. 2095 requires the FRA to establish a certification program of conductors and requires a study on certification of other classes and crafts of rail employees.

The bill enhances various hours-of-service requirements to address fatigue among train and signal employees, who are currently forbidden from being required to be on duty more than 12 consecutive hours. H.R. 2095 provides that all train and signal employees are provided at least 10 consecutive hours of uninterrupted rest following 12 hours on duty (although this requirement would be suspended three years for passenger train employees during an FRA study of the issue). It also ensures that train and signal employees receive 48 consecutive hours off duty at their home terminals after each six days being on duty, and 72 consecutive hours off duty at their home terminals in the event they are required to work a seventh day.  

H.R. 2095 caps “limbo time,” the time spent by rail crews after completing service awaiting transportation or being transported to the point of final release. Although paid time, “limbo time” counts neither as time on duty or time off duty and does not currently count against the maximum daily 12 hours of service.

H.R. 2095 requires railroads to develop plans to limit and manage worker fatigue and prohibits railroads from interfering with or delaying medical treatment of injured workers and forbids disciplining workers for requesting treatment. It also mandates the implementation of a positive train control system by Class I railroads and intercity passenger and commuter railroads by the end of 2015. A positive train control system would allow for automatic control and stopping of locomotives in the event of a missed signal, providing a backup safety system in the event of a human error.

Although the compromise bill maintains widespread bipartisan support, Sen. Tom Coburn (R-OK), has stated he will delay the bill because it provides $1.5 billion to the Washington Metropolitan Area Transit Authority. This procedural delay requires Democratic Senate leadership to hold a cloture vote on the bill.

Core Provisions: This legislation would amend the provisions of the Employee Retirement Income Security Act, Public Health Service Act, and Internal Revenue Code permitting group health plans to establish limitations or restrictions on the amount, level, extent, or nature of the benefits or coverage for similarly situated individuals enrolled in the plan or coverage.  The new language would clarify that such limitations must be explicit and clear and disclosed to the plan sponsor in advance of the point of sale to the plan.  The plan sponsor and issuer of the coverage would be required to make available to participants and beneficiaries prior to their enrollment and upon their enrollment, a description of such limitations and restrictions in an easily understandable form.

Status: Rep. Burgess (R-TX ) introduced the Health Insurance Source of Injury Clarification Act on September 16, 2008, and it was referred to the House Committees on Energy and Commerce, Education and Labor, and Ways and Means.  On September 17, 2008, the House Energy and Commerce Committee held a mark-up session and ordered H.R. 6908 to be reported by a voice vote.

Core Provisions: This legislation would provide for additional emergency unemployment compensation by amending the Supplemental Appropriations Act to extend benefits for jobless workers who have exhausted their benefits.  The bill would augment individuals’ benefit amounts by the lesser of 50 percent of the regular compensation payable to the individual during the benefit year under state law, or 13 times the individual’s average weekly benefit amount for the benefit year. The legislation’s phase-out provisions provide for no augmentation of benefits after March 31, 2009.

Status: Rep. McDermott (D-WA) introduced H.R. 6867 on September 10, 2008, and it was referred to the House Committee on Ways and Means.

Core Provisions: H.R. 6799 would amend the Internal Revenue code to provide for unemployment savings accounts that would be treated like IRAs for tax purposes. Although workers could contribute to these accounts to protect them during periods of unemployment other than following termination for gross misconduct, this legislation would not diminish an employer’s obligation to pay state or federal unemployment taxes or reduce an individual’s entitlement to unemployment benefits. Employees would be limited to annual contributions of $5,000 (indexed to inflation) and employers could provide matching contributions up to the full amount of the employee’s contribution. Once an account-holder begins receiving Social Security retirement benefits, the individual would be prohibited from making any more contributions to the Worker Savings Account (WSA), but would be able to rollover WSA funds into an IRA or 401(k) plan.

Status: Rep. McHugh (R-NY) introduced the Worker Savings Account Act of 2008 on August 1, 2008, and it was referred to the House Committee on Ways and Means.

Core Provisions: This legislation would direct the Secretary of Labor to establish a program to make grants to states to assist employers in providing incumbent worker training. The federal government’s share of the costs would top out at 50 percent. Grant funds could not be used to pay wages or lost revenue connected with the incumbent worker training, and could not fund training to prepare the employee to assume the responsibilities associated with the job that the employee holds with the employer.

Status: Rep. Kagen (D-WI) introduced H.R. 6797 on August 1, 2008, and it was referred to the House Committee on Education and Labor.

Core Provisions: This legislation is intended to prohibit activities that assist, encourage, direct or induce unauthorized aliens to reside in the United States. Among many other provisions, the LEAVE Act would make the E-Verify system permanent and would mandate verifying work eligibility of new hires using E-Verify. Employers of more than 250 individuals, certain federal contractors and subcontractors, and federal agencies would be required to verify the eligibility of new hires within one year of enactment, with other employers being phased into the requirement two to four years after enactment. All employers would also be required to use E-Verify to confirm eligibility of all current employees by four years after enactment. An employer would not be liable for hiring an unauthorized alien if the hiring was due to an unknown E-Verify error as long as the employer terminated the unauthorized alien upon being informed of the error.

The LEAVE Act would also require the Commissioner of Social Security to notify employers annually of employees whose Social Security numbers do not match their name or date of birth in the Commissioner’s records, and the employer would then have 30 days to correct the mismatch or terminate the employee. The Commissioner would also monitor employment-based information for indicia of identity theft, such as an individual with concurrent earnings from more than one employer over an extended period.

The legislation also includes provisions in many different areas intended to deter illegal immigration and better enforce existing immigration laws. These include provisions protecting “identity security,” prohibiting residential mortgages and rentals to illegal aliens, denying Social Security credit for individuals who were unlawfully present at the time of the work, prohibiting illegal aliens from obtaining financial services, and increasing border and law enforcement efforts.

Status: Rep. Miller (R-CA) introduced the LEAVE Act on August 1, 2008 and it was referred to the House Judiciary, Oversight and Government Reform, Education and Labor, House Administration, Financial Services, Ways and Means, and Homeland Security Committees.

Core Provisions: This legislation would create a National Commission on State Workers’ Compensation Laws to study and evaluate characteristics of current state workers’ compensation schemes including benefit amounts, “bad faith delays” in benefit payments, provisions ensuring adequate medical care and free choice of physician, rehabilitation, filing periods, waiting periods, compulsory or elective coverage, administration, due process rights, and the relationship between workers’ compensation and other types of insurance (public or private).

The Commission would be composed of 14 members, 10 of whom would be political appointees, no more than six of whom could be from the same political party. The Secretary of Labor, Secretary of Commerce, Secretary of Health and Human Services, and Secretary of Education would be ex officio Commission members. The legislation requires at least three members that represent injured workers, three members that represent insurance carriers or employers, and one member of the general public. 

The Commission would have the authority to hold hearings, issue subpoenas, take testimony, and receive evidence. The Commission could submit interim reports of its findings to the President and Congress, but would be required to submit a final report of its findings and recommendations not later than 18 months after the date of the statute’s enactment, and the Commission would terminate 19 days after this final report is submitted. The final report would include the Commission’s recommendations for improvements in benefit levels, medical care, administration of state workers’ compensation systems, insurance practices, due process and evidentiary hearings and reduction of bad faith handling and delays, as agreed upon by a majority of Commission members.

Status: H.R. 6714 was introduced on July 31, 2008 by Rep. Baca (D-CA) and referred to the House Committee on Education and Labor.

By a margin of 416-12, the House voted on June 19, 2008 to attach provisions extending unemployment insurance benefits into the Iraq and Afghanistan war supplemental bill (H.R. 2642), which also funds increased veterans’ benefits and Midwestern flood relief.  Incorporation of these provisions into the war supplemental appropriation virtually assures passage, given the strong bipartisan support for the war appropriation bill.

The move to attach the unemployment benefits provisions into the war supplemental appropriation follows the passage last week of the Emergency Unemployment Compensation Act of 2008 (H.R. 5749) by a margin of 274-137 on June 12. In the face of a presidential veto and hesitancy by the Senate Democratic leadership to take up the bill on a stand-alone basis, Democratic leaders in the House opted to change tactics and attach unemployment benefits to H.R. 2642.

The unemployment insurance provisions of H.R. 2642 closely resemble those of the Emergency Unemployment Compensation Act, and provide jobless workers who have exhausted their benefits with 13 additional weeks of benefits, with additional 13-week extensions to workers in states with the highest rates of unemployment. In order to achieve bipartisan passage, House Democrats agreed to drop a controversial provision of the stand-alone bill that would have eliminated the current 20-week work requirement to receive federal benefits.  Absent that provision, the Bush Administration has indicated support for the extension of unemployment benefits.

The Iraq and Afghanistan war supplemental bill, including the unemployment benefit provisions, now moves to the Senate for consideration.