The NAPEO Board of Directors has approved a federal legislative and regulatory agenda for 2019. The agenda was developed by the NAPEO Federal Government Affairs Committee (FGAC).
NAPEO's 2019 Federal Legislative and Regulatory Agenda
NAPEO has two policy objectives which guide its federal legislative and regulatory agenda:
- The federal government should not take any actions that disadvantage the PEO business model or those small businesses and their employees who rely on the PEO industry for their retirement, healthcare, and other employee benefits and tax compliance services.
- Congress and the Administration should enact legislation, regulations, and guidance that promote the PEO business model when it will result in benefits to small businesses and their employees.
- NAPEO staff, with outside counsel, is to develop a clear position establishing PEO and client worksite safety and health responsibilities under the Occupational Safety and Health Act;
- NAPEO is to advocate this position at OSHA, with the goal of finding the best means of establishing this policy at the agency.
- EEO-1 Forms
- NAPEO is to ask the EEOC to change 2006 guidance, which makes the PEO responsible for filing the EEO-1 Form of eligible clients, to make a PEO client ultimately responsible for filing their EEO-1 form; and,
- Make sure that PEOs and their non-eligible clients are not declared federal contractors if a PEO client who is a federal contractor files an EEO-1.
- IRS PEO Certification
- The main focus of NAPEO’s activities to improve the CPEO program should be at the regulatory level, using congressional leverage when appropriate.
- Look for opportunities to attach SBEA legislative fixes if appropriate legislative vehicles arise.
- Specific items of focus:
- Ask the IRS to add the paid family and medical leave tax credit to the list of tax credits with respect to the CPEO program;
- Continue to push for electronic signatures on Form 8973;
- Prohibit the IRS from imposing reporting requirements on CPEO customers;
- Eliminate (or simplify) the 85 percent rule;
- Fix the CPEO contract requirements related to the (1) recruit, hire, and fire language, and (2) CPEO maintenance of employee records;
- Clarify that an individual performing services for more than one customer of a CPEO is only subject to a single wage base; and
- Establish more robust due process procedures with respect to a proposed IRS denial or suspension/revocation of CPEO status.
- Joint Employer: Continue to support legislation and regulations that overturn the Browning-Ferris joint employer standard and replace it with a joint employer standard that is based on the possession and exercise of substantial, direct and immediate control over the essential terms and conditions of employment.
- Health and Human Services: Overturn long-time HHS prohibition against home healthcare companies that receive Medicare/Medicaid reimbursements from using a PEO.
- Affordable Care Act: Continue to support repeal of the Cadillac Tax.
- Student Loan Repayment Assistance: Make sure that PEOs are not excluded from legislation (or any agency rulemaking) that promotes student loan payment assistance.
- Retirement Legislation
- NAPEO is to ask Congress to include PEO language in retirement legislation where clarification regarding the application of employer mandates, excise taxes, credits, etc., to PEOs and/or their client employers would be helpful in determining how a law should be applied.
- NAPEO tax and benefits consultants will continue to communicate with Congressional staff on open MEP legislation to correct potential problems with language contained in open MEP legislation.
Issues to Monitor
- Form 1099: NAPEO to survey members about the gig economy/1099s and what, if any, issues may appear at the federal level to gauge the impact of a changing workforce and the implications for employers (and PEOs), and monitor litigation against PEOs involving 1099 employees.
- Department of Labor Audits against PEO-sponsored health and retirement plans: NAPEO to monitor activity and educate members on best practices and what to expect with these audits.
- Association Health Plans: NAPEO to educate membership on MEWA regulatory activity and, specifically, outreach by states to PEOs regarding M-1 filings.
- Healthcare: The Federal Government Affairs Committee is tasking the Healthcare Committee to study large group employer status for PEO sponsored health insurance, and to develop a legislative solution to obtain clarity and consensus on large group employer status for PEO-sponsored health insurance.