Labor and Economic Development Committee
LABOR & ECONOMIC DEVELOPMENT REPORT
News, Trends and Analyses Provided by the Standing Committee on Labor & Economic Development
Volume 1, Issue 1
January 31, 2007
Federal Minimum Wage Increase Sails through House, Slow Movement in the Senate
On January 10, the House passed H.R. 2, the “Fair Minimum Wage Act of 2007” on a strong bipartisan basis making good on one of the key provisions of the House Democratic First 100 Hours Agenda. The legislation increases the federal minimum wage in three-steps over 26 months raising the wage from the current $5.15 to $7.25 per hour. Eighty-two Republicans joined all Democrats in its approval. In the Senate the Finance Committee gave voice vote approval to similar legislation on January 17. The Senate language contains over $8 billion in small business tax incentives that are offset by other tax changes in keeping with leadership commitments to operate in a pay-as-you-go environment. Among the tax provisions is an NCSL supported extension and expansion of the Work Opportunity Tax Credit. Representative Steve Conway, Chair of the Labor and Economic Development Standing Committee sent NCSL letters in support of an increase in the federal minimum wage to both the House and Senate. NCSL has received assurances that amendments such as legislation preempting state law regarding how tips are treated for minimum wage determinations and legislation preempting state health insurance regulation are “poison pills” and off the table. On January 30 the Senate invoked cloture on the bill winding down the clock on remaining debate on amendments to the bill. A final vote on passage of the bill could come by weeks end. Following Senate passage the chambers will need to conference their divergent bills, with the House remaining unconvinced that the tax package is necessary and unwilling to give up valuable “pay-for” tax provisions, it could be some time before the wage increase materializes.
DOL Releases Proposed WIA Regulations but Appropriators Aren’t Convinced
The Department of Labor (DOL) issued a notice of proposed rulemaking on WIA Amendments in the December 20, 2006 Federal Register. This proposed rule addresses changes to Wagner-Peyser merit staffing and Workforce Investment Act (WIA) provisions related to State and Local Boards structure and functions, Regional Planning requirements, and amendment/modification of State and Local WIA plans. DOL is also seeking comments on how to define administrative costs. Congress however had previously prohibited the Department from re-defining administrative costs and from permitting re-designation/elimination of local workforce areas until WIA legislation is finalized via appropriations language. This action was reaffirmed this week when the House released the FY2007 Appropriations bill and again rebuked action by the DOL prior to reauthorization of WIA. With FY2007 already well underway action on the FY2007 Appropriations bill is expected to move swiftly through both the House and Senate. NCSL may submit comments which are due February 20. If you have concerns that you would like to be expressed in NCSL comments please contact Gerri Madrid by February 12, 2007. Click here to view the proposed regulations. 
DOL Finalize “Able and Available to Work” Rule
The U.S. Department of Labor on January 16, 2006 published a final rule in the Federal Register codifying a longstanding policy requiring unemployment compensation (UC) beneficiaries to be able and available to work. The ability and availability of qualifying jobless workers to work has been a basic tenet of the federal-state unemployment insurance program since its inception in 1935. While implicitly required by state UC programs, it had not been explicitly stated in federal law until the publication of this rule. The rule does not require states to amend their laws or regulations nor does it change the eligibility requirements for UC beneficiaries. Click here to view the final rule.
IRS Issues Guidance on Pension Protection Act Provisions
On January 10, 2007 the IRS published Notice 2007-7: Miscellaneous Pension Protection Act Changes. The notice, in question and answer format, provides guidance on certain provisions of the Pension Protection Act of 2006 (PL 109-208) including early distributions to public safety officers.
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