ICE Step ups Workplace Raids, Targeting California’s ‘Sanctuary Cities’

ICE Step ups Workplace Raids, Targeting California’s ‘Sanctuary Cities’

Last week, federal Immigration and Customs Enforcement agents raided 98 7-Eleven stores throughout the US, arresting 21 people, including undocumented workers and franchise owners who were caught employing them. The point of the raids was not so much the arrests themselves, but rather a show of force intended to scare employers away from employing undocumented immigrant workers by demonstrating that the federal government was serious about cracking down on them, New York Times reporter Natalie Kitroeff noted earlier this week:

[A]ccording to law enforcement officials and experts with differing views of the immigration debate, a primary goal of such raids is to dissuade those working illegally from showing up for their jobs — and to warn prospective migrants that even if they make it across the border, they may end up being captured at work. Targeting 7-Eleven, a mainstay in working-class communities from North Carolina to California, seems to have conveyed the intended message.

“It’s causing a lot of panic,” said Oscar Renteria, the owner of Renteria Vineyard Management, which employs about 180 farmworkers who are now pruning grapevines in the Napa Valley. When word of the raids spread, he received a frenzy of emails from his supervisors asking him what to do if immigration officers showed up at the fields. One sent a notice to farmhands warning them to stay away from 7-Eleven stores in the area.

Employers in Northern California, in particular, are expected to be the targets of ICE’s next round of raids, the San Francisco Chronicle reported on Wednesday, in what has been described as retaliation against the wave of “sanctuary” laws passed by numerous localities and the state of California limiting the degree to which local authorities can cooperate with federal agents in immigration enforcement. Another law passed last fall bars employers in the state from voluntarily allowing ICE agents onsite to conduct immigration inspections or to access employee records without a warrant or court order.

Read more

Business Leaders Press Congress on DACA After Judge Blocks Trump’s Order

Business Leaders Press Congress on DACA After Judge Blocks Trump’s Order

Late on Tuesday, a federal judge in California issued an injunction blocking US President Donald Trump’s order winding down the Deferred Action for Childhood Arrivals program put in place by his predecessor Barack Obama to protect undocumented immigrants who were brought into the US as children, CNN reported on Wednesday:

Judge William Alsup also said the administration must resume receiving DACA renewal applications. But the ruling is limited — the administration does not need to process applications for those who have never before received DACA protections, he said. …

The ruling came in a challenge to the Department of Homeland Security brought by the University of California and others. In his 49-page ruling, Alsup said “plaintiffs have shown that they are likely to succeed on the merits of their claim that the rescission was arbitrary and capricious” and must be set aside under the federal Administrative Procedures Act. The judge said a nationwide injunction was “appropriate” because “our country has a strong interest in the uniform application of immigration law and policy.”

The DACA program, which is based on the principle of prosecutorial discretion, was enacted in 2012 and has benefited some 800,000 individuals under 31 who arrived in the country before the age of 16, have lived in the US continuously since 2007, and are in school or have graduated. In total, up to 1.1 million so-called “dreamers” were eligible for the program, though not all who were eligible applied—potentially out of fear of “outing” themselves to the federal government as undocumented.

Trump, who campaigned on a pledge to drastically reduce legal and illegal immigration and to hasten the deportation of undocumented immigrants, ordered the DACA program canceled last September, giving Congress until March to find a legislative solution or the administration would begin phasing out its protections. Talks over a deal have stalled over disagreements between Democrats and Republicans over whether to pair it with funding for Trump’s proposed wall along the US-Mexico border. The Trump administration intends to fight Alsup’s injunction, but the court battle could drag on for years. The upshot, the Washington Post explains, is that DACA beneficiaries remain uncertain of their future status unless and until Congress acts.

Read more

What Employers Need to Know About the US Tax Reform Act

What Employers Need to Know About the US Tax Reform Act

The “Tax Cuts and Jobs Act,” which officially passed both houses of Congress on Wednesday, will have a significant impact on employers throughout the US, by lowering taxes on corporate profits and most employees’ salaries, as well as by changing the tax treatment of executive compensation and a number of other rewards. Here’s a quick look at how tax reform will affect employers and employees, and what HR leaders need to be thinking about right away:

Corporate Tax Reduced

The act permanently reduces the maximum corporate tax rate to 21 percent from 35 percent starting in 2018, while providing additional avenues for businesses to avoid being taxed at higher rates. It also includes a one-time tax cut for corporations repatriating cash currently held overseas, and introduces a territorial tax system that imposes a 10.5 percent tax on future foreign profits, benefiting American companies that do a lot of business internationally. This change, which the tech sector is cheering, is meant to encourage businesses to reinvest their foreign profits in the US, but others say this approach has long-term costs that outweigh the apparent immediate benefits.

Some companies announced that they were passing a portion of their tax windfall onto their employees, either with across-the-board bonuses or increases in their internal minimum wage. Moves like these will please President Donald Trump and Congressional Republicans, who have long argued that slashing corporate taxes would lead to higher employment and wages. To critics, however, these announcements look more like public relations plays or attempts to curry favor with the administration, while investors, not employees, are expected to see the lion’s share of the gains.

Payroll Scramble

The first thing employers will have to do in the new year in response to these tax changes is to make sure their payroll deductions reflect the new rate and bracket structure, which has been significantly altered. The bill also dispensed with the personal exemption employees are used to using to calculate their taxable income, while roughly doubling the standard deduction. Payroll management companies Paychex and ADP say they expect to make these changes quickly and that employees should start seeing the new rates reflected in their paychecks as early as February. However, the Internal Revenue Service must first produce new withholding tables, which could take more time than usual given the overhaul the bill made to the system of deductions and exemptions. Employers will have to await further guidance on this from the IRS.

Executive Pay

The tax reform bill removes from the tax code a controversial provision introduced in 1993 that capped the tax deductibility of top executives’ compensation at $1 million, unless that compensation was “performance-based.” Originally intended to rein in the explosion of CEO and CFO pay packages, the measure failed to do so, and critics say it actually backfired by encouraging companies to shift executive compensation into stock options and pay for performance. Although it is unclear how the new rule will affect the way top-level executives are paid in the long term, it does give boards some decisions to make right now in order to maximize their tax benefit, such as whether to shift a CEO’s bonus payment from 2018 to 2017 so that it remains tax deductible. For more details, SHRM’s Stephen Miller has a helpful breakdown of the bill’s impact on executive compensation and payroll in general.

Other Employee Benefits

The bill changes the tax treatment of a variety of employee benefits, such as adding a new credit for wages paid to qualifying employees on leave under the Family and Medical Leave Act, but cutting the deduction for commuter benefits. SHRM’s Stephen Miller also provides a comprehensive explanation of these effects here.

Impact on ACA and Health Insurance Market

While Congressional procedure prevented Republicans from using the tax bill to formally repeal the mandate for individual health insurance coverage created under the Affordable Care Act, the bill takes the teeth out of the mandate by zeroing the tax penalty for failing to obtain coverage. This change will have major implications for the individual insurance market, potentially driving up premiums as healthy individuals exit the market, no longer fearing a tax penalty. The bill does not address other aspects of the ACA to which businesses have objected, such as the employer mandate and the so-called “Cadillac tax” on high-value health plans, but has emboldened business groups to push for more changes to these controversial policies in the coming year. As health care policy expert Timothy Jost explains in detail, scuttling the individual mandate will have some consequences for the employer-sponsored insurance market as well.

NLRB Overrules Browning-Ferris, Reintroduces Limits on Joint Employer Liability

NLRB Overrules Browning-Ferris, Reintroduces Limits on Joint Employer Liability

Just days after the National Labor Relations Board’s general counsel sent a memo to the US agency’s regional directors advising them to pull back on the controversial “joint employer” standard adopted by the Obama administration, the board’s new Republican majority overturned the ruling on which that standard was based, the Hill reported late on Thursday:

In a 3-2 decision, the Republican-controlled board overruled the board’s previous 2015 decision in a case, known as Browning-Ferris, which found a company to be considered a joint-employer with a subcontractor if it has “indirect” control over the terms and conditions of employment or has the “reserved authority to do so.”

In a statement, NLRB said in all future and pending cases two or more entities will be deemed joint employers under the National Labor Relations Act (NLRA) if there is proof that one entity has exercised direct and immediate control over essential employment terms of another entity’s employees.

Restricting the joint employer standard was high on the policy wishlists of several employer groups, particularly the National Restaurant Association, which said it harmed the franchise model. The Trump administration was expected to act on this soon after the new Republican members of the board were seated in August and September. Labor Secretary Alexander Acosta, a longstanding critic of the Obama administration’s expanded definition of joint employers, rescinded Obama-era guidance on joint employer liability in June. Legislation has also been introduced in Congress to write the narrower definition into the National Labor Relations Act.

Read more

Trump Administration Proposes Ending Work Eligibility for H-4 Visa Holders

Trump Administration Proposes Ending Work Eligibility for H-4 Visa Holders

The US Department of Homeland Security issued a proposed regulatory change on Thursday that would take away the right of spouses of H-1B guest workers who are seeking employment-based lawful permanent resident status to work legally while awaiting their green cards, the Wall Street Journal reports.

In 2015, the Obama administration introduced a program allowing these holders of H-4 visas (the visa granted to spouses of workers on H-1Bs so that they can live together in the United States) to obtain legal authorization to work. In a notice of intent to propose a rule next year, the department says it is proposing “to remove from its regulations certain H-4 spouses of H-1B nonimmigrants as a class of aliens eligible for employment authorization.”

The notice cites the executive order President Donald Trump issued in April, titled “Buy American, Hire American,” which called on the departments of Labor, Justice, Homeland Security and State to crack down on the abuse of guest worker visa programs like the H-1B and H-4, and to amend procedures for allocating H-1B visas that award them based on merit rather than through a lottery.

Opponents of the Obama administration’s rule letting H-4 spouses work contend that it was an act of executive overreach (and are challenging it in court on that basis); the Trump administration “appears to be signaling that it intends to overturn it rather than defend it,” the Journal reports. Critics also say the previous administration did not do enough to ensure that H-4B holders did not displace American workers.

Read more

NLRB Directors Told to Pull Back on Joint Employer Doctrine

NLRB Directors Told to Pull Back on Joint Employer Doctrine

Peter Robb, who was confirmed as the new general counsel of the National Labor Relations Board last month, advised the board’s regional directors in a recent memo to submit any cases based on the Obama administration’s controversial expansion of the “joint employer” standard for liability to the Board’s Advice Division in Washington for analysis, the Washington Examiner reported late last week:

Robb cautioned the directors against issuing complaints based on the controversial standard adopted during the Obama administration and instead told them to seek advice from the Washington headquarters.

“Examples of board decisions that might support issuance of complaint but where we also might want to provide them with an alternative analysis include … Finding joint employer status based on evidence of indirect or potential control over the working conditions of an employer’s employees,” Robb said in a memorandum dated Dec. 1 to all regional directors.

In order to avoid delays, Robb also wrote in the memo that his office would not be offering new views on cases already pending in courts.

The NLRB’s Browning-Ferris decision in 2015 established a precedent for “joint employer” to include entities with which a business has indirect control, or a horizontal relationship, making them responsible for franchisees’ or contractors’ compliance with the Fair Labor Standards Act and other employee protection laws. Previously, a company was only liable for those under its direct control.

Read more

Supreme Court Lets Travel Ban Proceed Amid Legal Challenges

Supreme Court Lets Travel Ban Proceed Amid Legal Challenges

The Trump administration’s controversial travel ban, which indefinitely bars most travelers and immigrants from Chad, Iran, Libya, North Korea, Somalia, Syria, and Yemen from entering the United States, can be implemented in its current form while pending legal challenges to it are resolved, the Supreme Court ruled on Monday. According to the Washington Post, “in an unsigned opinion Monday that did not disclose the court’s reasoning, the justices lifted the injunctions” against the ban put in place by two federal judges in Hawaii and Maryland:

The justices said they expected the federal judges reviewing challenges to the order — based on what challengers say are Trump’s animus toward Muslims and lack of authority under immigration laws — to handle the cases with “appropriate dispatch.”’ … The orders from the two district judges will be reviewed this week. A panel of the U.S. Court of Appeals for the 9th Circuit is set to consider the Hawaii case Wednesday, and the entire U.S. Court of Appeals for the 4th Circuit in Richmond will consider the Maryland judge’s decision Friday.

Monday’s ruling does not mean the ban will survive its ongoing court battles, but it does suggest that if the federal judges do attempt to knock it down, the administration will petition the Supreme Court for a reversal of their rulings and may win that case.

Read more