DPE 1999 Legislative and Public Policy Report
This report summarizes final action on those issues that comprised the Department's public policy agenda for the year 1999

IMMIGRATION

H-1 (b) Guest Workers — The ink was barely dry on the 1998 legislation that temporarily increased the "caps" on the number of professional and specialized skill workers that would be allowed in to the U.S. from 65,000 to 115,00 when the high tech industry and their allies in the immigration bar were back before Congress asking for more. Since the 1999 cap had been reached by mid year legislation was quickly introduced by Rep. David Dreier (R-CA) to permanently increase it to 200,000. Upon the introduction of the Dreier bill – H.R. 2698 – the DPE prevailed upon the AFL-CIO to immediately contact all House members to indicate the Federation's opposition.

On the Senate side, Sen. Phil Gramm (R-TX) introduced the companion bill – S. 1440 – which drew immediate support from Governor Bush and Majority Leader Trent Lott who also cosponsored it. Later in the year, Sen. John McCain chimed in with his own proposals – S. 1804 –to allow in an unlimited number of H-1 (b) guest workers for a six year period. Although Congress took no action on any of these Republican-sponsored proposals before the end of the first session, they are likely to be at center stage in 2000.

In late September, DPE leadership and representatives from the AFL-CIO met with White House staff on this issue. They expressed labor's strong opposition to busting the H-1 (b) caps at a time when there is no reliable data on whether or not the alleged shortage of high tech workers really exists. We were assured that the President would oppose any changes to the existing H-1 (b) limits pending completion of a National Academy of Sciences/National Science Foundation study on high technology workforce needs which was authorized by Congress in the same 1998 legislation that raised the caps. This study is to be completed by October 2000 (see below).

In a related event that is likely to build political pressure for a new H-1 (b) legislative fix, the Immigration and Naturalization Service (INS) announced in October that, due to a computer glitch, 20,000 or more H-1 (b) workers than were statutorily allowed under the current ceilings had been certified for entry into the U.S. At present, the INS is reviewing its options and consulting with Congressional leaders about potential solutions to this monumental error. While in the past the agency has simply applied smaller "overages" to the next year's quota, immigration and employer lobbyists and their congressional friends are questioning the legal authority of the INS to do so again. As of this writing no final decision has been made.

National Science Foundation (NSF) – National Academy of Sciences (NAS) Study of High Technology Workforce Needs — The controversy surrounding legislation to amend U.S. immigration law to allow into the country large numbers of foreign, high tech guest workers has been backstopped by industry generated studies of alleged massive shortages of skilled American workers sufficient to fill vacant jobs. The principle study most often sighted by the industry was underwritten by the Information Technology Association of America, an industry lobby. Although the General Accounting Office (GAO) later debunked it, the report has nonetheless been used widely by the media and members of Congress from both sides of the aisle to rationalize support for new guest worker legislation. However, counterclaims by organized labor led by the DPE led Congress in 1998 to direct the National Science Foundation (NSF) and National Academy of Science (NAS) to undertake a study of high tech workforce needs as well as the treatment of older workers in the industry. Of the 14 members subsequently appointed to a Committee that will oversee this study, none are from organized labor and a near majority has a history of direct ties to the I.T. industry. Intervention by DPE and Chairman Bahr did, however, lead to the appointment of Eileen Applebaum, Vice President and Research Director of the Economic Policy Institute. DPE and Paul Almeida, Chairman of the Department's Committee on Engineers, Scientific and Technical Personnel continue to criticize the biased make-up of the panel. The Committee held four field hearings to solicit public testimony in 1999. Other hearings are scheduled for 2000 with a final session set for Washington D.C. in mid-April and a report due in October.

In addition the GAO, at the request of two members of Congress, is also conducting a review of high tech workforce issues. DPE and AFL-CIO representatives met with GAO staff to suggest a number of key issues that should be the focus of this effort. GAO hopes to make its report in April 2000.

Student Visas — In the political bidding war for high tech industry support that is emerging, Rep. Zoe Lofgren (D-CA) introduced a so-called "new" Democrat alternative to the GOP proposals that would bypass the H-1 (b) limits by establishing an entirely new visa category. Her bill – H.R. 2687 – would establish a five year pilot program under which foreign students who are completing a postsecondary degree in math, science, engineering or computer science could exchange their "F-1" full time or J-1 exchange student visas for a new "T" Visa. The new "T" visa would allow them to remain in the U. S. for up to five years after graduation so they could work in one of those fields. Among other flaws, the bill failed to contain:

• any limit on the number of foreign student that could make the visa swap;
• requirements to demonstrate a labor shortage exists before the new "T" Visa is granted;
• protections against worker displacement; assurances that employers engage in good faith recruitment of qualified U.S. workers;
• reporting on the economic or employment impact, and
• provisions for training current workers or U.S. resident college students who wish to pursue job opportunities in areas of alleged skills shortages.

In the Senate, Sen. Chuck Robb (D-VA) has introduced S. 1645 legislation similar but not identical to Lofgren’s bill. The Department and the AFL-CIO have communicated their opposition to these bills to congressional leadership and key members. No action was taken on these proposals prior to the end of the 106th Congress.

Nurses — In 1995 a sustained effort by the DPE ended successfully when a 1989 law that had opened the door to a huge influx of non-immigrant foreign nurses through the use of H-1 (a) employment visas was allowed to expire despite efforts by hospitals, nursing homes and other health care employers to have it continue. The program had seriously undermined labor market conditions for U.S. nurses by eroding nurse employment standards and recruitment of domestic nurses.

In 1999 a far more limited proposal was offered to address alleged shortages at inner city and rural health car facilities. Working with its affiliates and, in cooperation with the American Nurses Association (ANA), the DPE was able to limit the number of nurses to be allowed in by this legislation and the duration of their stay. As later introduced, the bills – H.R. 441 and S. 455 – authored by Rep. Bobby Rush (D-IL) and Sen. Dick Durbin (D-IL) create a limited, four year program allowing up to 500 non-immigrant nurses per year to be hired by inner city or rural facilities unable to attract or retain domestic nurses. Non-immigrant nurses would be paid a prevailing wage based on local area nurse salaries.

During deliberations on the House bill, the DPE and several affiliates made the argument that the solution to whatever shortages may exist is not foreign nurses but rather more training and better recruitment incentives for American nurses. DPE pointed out that there already are federal programs offering financial support for those who want to study nursing conditioned on their agreement to work for a time in medically under served areas. However, Congress has not appropriated sufficient resources for these programs. The legislative report accompanying the House legislation took note of DPE’s arguments. The report requested that the Secretaries of Labor and Health and Human Services determine how these incentive programs can be strengthened or new ones implemented so that dependence on foreign nurses might be ended. In the waning days of the first session, Congress completed action on this legislation and the President signed it on November 12. It is now P.L.106-95. DPE did not oppose final passage.

LABOR LAW

Independent Contractors — In 1999 legislation recommended by the Department and refined by the AFL-CIO – H.R. 1525 – was introduced by Rep. Gerald Klezka (D-WI) and Rep. Amo Houghton (R-NY) to address the problem of employer misclassifications of workers as "independent contractors." The key provision of the bill would simplify and reform the existing 20 factor common law used by the Internal Revenue Service (IRS) to determine whether individuals are employees or independent contractors. Replacing this burdensome and unworkable system would be a three factor test under which a worker would be classified as a contractor only if:

1. the employer has no control over the manner by which the individual completes the
   assigned tasks;
2. the individual can solicit and undertake other business opportunities, and;
3. the individual encounters entrepreneurial risk.

To support this most important legislation, the DPE, AFL-CIO and many affiliated unions are now reaching out to members of Congress urging them to cosponsor the legislation. When the campaign began in early May, fewer than a dozen legislators were on the bill. As of this report, 86 House members have signed up – several of them Republican. In the fall, the DPE sent a letter to all of the cosponsors thanking them for their support of the bill. Prior to the second session, the Department sent a letter to all other members urging their cosponsorship. (See Policy Letters.) The legislation has been referred to the House Ways and Means Committee.

Fair Labor Standards Act: GAO Report — In October, the General Accounting Office (GAO) issued a report on white-collar exemptions allowed under the FLSA. The report called on the Department to revise and modernize its regulations to better deal with the realities of today's world of work and narrow these exemptions.

By way of background, one of the key mandates of the FLSA is its limitation of the work-week to 40 hours. The Act requires employers to pay an hourly overtime wage for work in excess of that standard. However, Section 13 (a) (1) of FLSA provides an exemption from this requirement for those employees working in a "bona fide executive, administrative, or professional capacity." To be exempt, white-collar workers must meet each of three tests to qualify:

• the employee must be paid a salary, not an hourly wage – the salary-basis test;
• the amount of the employee's salary must indicate managerial or professional status – the salary-level test, and;
• the employee's job duties and responsibilities must involve managerial or professional skills – the duties test.

There are also subsidiary regulatory clarifications within each category. For example, to be exempt as a "professional" a worker must either: have a requisite academic degree and his or her job must also require consistent exercise of discretion and independent judgment, or; be involved in original or creative work requiring invention, imagination or talent in a recognized field.

In reviewing these tests and formulating its report, the GAO had met with labor representatives including the DPE. During these discussions it was pointed out that the tests applied under FLSA regulations did not sufficiently restrict the use of white-collar exemptions by employers. In addition, since the DOL had not adjusted the salary level test since 1975, inflation had eroded the salary standard down to near minimal wage levels. Because of this, millions of workers are now excluded from FLSA protection under the so-called white-collar exemption. Finally, the union representatives argued that the duties test for executive or managerial employees had been over simplified through court decisions, resulting in inadequate protections for low-paid supervisory employees.

The GAO's report found that the number of exempt white-collar workers had doubled from 1983 to 1998. The GAO estimated that some 19 to 26 million workers or 20% to 27% of the entire American workforce was now exempt. The report called the salary level test "meaningless" because "DOL has not updated the tests in decades." For example, the report noted that an employee making $250 weekly, or $13,000 per year could be considered an executive under current regulations. "Given the economic and workplace changes over this period, a more comprehensive look at these regulations is necessary to determine whether a consensus could be achieved on how to amend the regulations to better suit the modern workplace" the report concluded. The GAO recommended that "the Secretary of Labor comprehensively review the regulations for white-collar exemptions and make necessary changes…" The full GAO report was circulated to all DPE affiliates by the Department in early November.

Fair Labor Standards Act (FLSA): High Tech Exemption — In addition to campaigning vigorously for more H-1B guest workers whose presence have the effect of undermining wage levels and working conditions, high tech lobbyists and their congressional allies have also continued their assault on the 40 hour work week for computer specialists and other high tech workers. Even though thousands of professional workers in high tech are already excluded from FLSA overtime coverage as explained above, the 106th Congress was urged to exclude even larger numbers of this workforce from basic labor law protections.

Prior to 1990, for high tech workers to qualify for the exemption, they had to meet each of the three tests stipulated under FLSA regulations to gain eligibility for the exclusion. However, in 1990 there began a decade long, systematic effort to statutorily erode these legal definitions and protection for workers in the computer industry who typically work fifty, sixty and even seventy hour work weeks.

As passed by Congress and enacted into public law in 1990, P.L.101-580 allowed computer systems analysts, computer programmers, software engineers, and similarly skilled workers to qualify for the white collar exemption from overtime requirements even though they did not meet the three part test for exemption outlined above. The "high-tech" exemption provided that hourly workers in the computer industry were exempt if they earned more than 6.5 times the minimum wage. In 1996 the compensation test was fixed at 6.5 times the pre-1996 minimum wage rate of $4.25 (i.e., $27.63 per hour). As a result, the minimum wage increase in 1996 and any future increases would not now apply to this compensation test for the "high-tech" workers exemption.

In 1999 the assault on FLSA protections began anew with H.R. 3038 introduced by Rep. Rob Andrews (D-NJ). His bill proposed to add to the exempt categories all network and database analysts and designers as well as those who manage or train employees named in the exemptions. Thus tens of thousands of additional high tech workers who currently receive overtime protection would be eliminated from coverage by Andrews’ bill.

A GOP sponsored bill to up the minimum wage – H.R. 3081 – included the Andrews proposal even though there had been no Congressional hearings on it. The DPE rallied AFL-CIO and affiliate opposition and as a result House Democratic leaders did not support their colleague's efforts. DPE discussions with the Department of Labor also led to it being highlighted in the Secretary of Labor's letter to the Congress, which threatened a presidential veto of the GOP proposal. In the end, no action was taken. Andrews and some Republicans have also advocated the elimination of overtime pay based on bonuses and other forms of "incentive pay." Next year, the battle over minimum wage and these attempts to link it with new exemptions from FLSA coverage are likely to arise early on the Congressional agenda.

TELECOMMUNICATIONS

TV Broadcast Station Ownership Rules — DPE and its affiliates in the broadcast industry have long been concerned about the increasing concentration of ownership in the media because of its potential for undermining the free flow of ideas and divergent viewpoints in our democratic society as well as the threat to jobs and employment opportunities. In early August, the Federal Communications Commission (FCC) – in an action seen by some as a regulatory about face – relaxed its longstanding rules against multiple TV station ownership within single market areas and radio/TV cross-ownership. The rationale given for the change of regulatory direction is that the world of TV broadcasting had changed drastically in recent years. The advent of cable, satellite and Internet transmissions, it is argued, require that the rules of the game be changed to allow broadcasters to take advantage of economies of scale and compete with these new entrants. Among the key provisions of the new FCC rule:

• Duopolies — A company may now own two TV stations in a market if the second outlet is not among the top four in ratings and the market has at least eight separately owned TV stations. In addition, the coverage of the second station will not count against the existing national ownership limitation which caps total coverage to no more than 35% of national TV households;
• Radio/TV cross-ownership — A company with two TV stations may own up to six radio stations in a market if the market has at least 20 separately owned broadcast, newspaper and cable "voices".

No sooner had the votes been counted at the FCC than CBS and Viacom announced the largest marriage of mega-corporations in industry history. However, still standing between the media moguls and the altar is the 35% rule because the CBS-Viacom merger would produce a broadcast behemoth with a 41% share of the potential audience. Either the law must change, the FCC grants a waiver, or the merged entity will have to divest itself of several stations in order for the merger to proceed.

In mid-September, the House Commerce Subcommittee on Telecommunications held a one-day hearing on HR 942, legislation introduced by Rep. Cliff Stearns (R-FL) to raise the audience cap to 45%. In the same week, Sen. John McCain introduced similar legislation in the Senate to increase the cap to 50%. However, despite the deregulatory inclinations of the GOP majority, action on any proposal to lift the cap is far from certain. A major rift has developed within the National Association of Broadcasters (NAB) on this issue that pits the networks against local stations owners and has caused the disaffiliation of the Fox network. The NAB is siding with its independent station owner members in opposing increases in the caps. This has made some Republicans reluctant to move ahead. Meanwhile House Democrats, led by ranking subcommittee member Ed Markey (D-MA), are concerned about the unhealthy concentration of power if the caps were to be substantially altered. At present, no additional hearings are scheduled in the House. Even in the absence of legislative action, the industry will continue to press the FCC for further regulatory relief in this area.

Satellite TV Broadcasting — In 1999 the Congress approved legislation to lift an 11 year prohibition on the re-transmission of network TV programming via satellite television wherever such programming was available and could be received through an outside antenna. The legislation is designed to give consumers greater choice by allowing satellite providers to carry local stations and better compete with cable TV. The legislation also requires that satellite companies accept the "must carry" rule that requires by 2002 they carry local stations in their respective markets if they carry any.

The DPE has weighed in to support the Senate version, also backed by IBEW and NABET-CWA, because its treatment of the satellite industry was more comparable to that governing cable and stronger in its protection of broadcaster rights. The Senate bill called for the parties to negotiate the monetary and other conditions surrounding the grant of retransmission rights while the House legislation allowed the satellite companies to pick up local broadcasts without such negotiations. In late June the DPE communicated with conferees in support of the Senate language and reaffirmed its support as a cosignatory on a letter from several union and consumer advocate organizations. After weeks of arduous negotiations, House-Senate conferees agreed to maintain "must carry" and "retransmission consent" language that closely paralleled the stronger Senate version of the bill. (See Policy Letters.) Before adjournment, Congress approved the conference report and President Clinton signed the legislation into law.

Corporation for Public Broadcasting (CPB) — 1999 legislation to reauthorize "forward" funding for CPB for three years – H.R. 2384 – was stopped dead in its tracks because of a political controversy that arose surrounding the use of fund raising donor lists.

An inquiry by the PBS Inspector General revealed that PBS affiliates had engaged in list swapping with political groups though the number was less than 10% of total PBS stations. The investigation also found that "virtually all of the exchange or rental transactions…. were to apparently Democratic organizations." To put a halt to the practice, language was tacked on to the satellite bill (see previous article) to prohibit the exchange or sale of donor lists to political parties and bar the disclosure of donors to any non-affiliated group without the donor's consent.

The Congressional session ended with no action being taken on CPB funding reauthorization. However, at the end of the year Chairman Tauzin promised to resume consideration of the measure as well as suggestions to "reform public television" with better watchdog procedures. He was also considering a wider ranging inquiry into the role of public television in light of changes, which, he says, give the nation's viewers, an array of new options.

ARTS AND HUMANITIES

National Endowment for the Arts (NEA), Humanities (NEH) — One manifestation of the "cultural wars" that have raged on Capitol Hill over the last several years have been efforts by right-wing conservatives to eradicate funding for the Endowments. While their campaign of annihilation faltered, they were able to inflict funding reductions that have had adverse effects on both entities.

But in mid-July, the House signaled a major change in Congressional attitudes when it handily defeated an effort by right-wing conservatives to slash funding for the Arts Endowment during debate on the Interior appropriations bill – H.R. 2466. Then by only a narrow margin it rejected an amendment sponsored by Reps. Louise Slaughter (D-NY), Steve Horn (R-CA) and Nancy Johnson (R-CT) to increase funding. This marked the first time in a decade that an effort to raise NEA funding had gained significant bipartisan support while House Republican leadership refrained from pushing hard for deep funding cuts.

On the Senate side, another victory was achieved. During debate on the Interior Appropriations bill – S.1292 – the Senate first overwhelmingly defeated a proposal by Senators Bob Smith (I-NH) and John Ashcroft (R-MO) to zero out funding for the NEA. Then it approved a bipartisan amendment sponsored by GOP Senators Robert Bennett (UT) and Jim Jeffords (VT) along with Democrat Jack Reed (RI) to increase NEA/NEH funding by $4 million in fiscal 2000. This increase was in addition to a $1 million improvement in the House-passed version that had been recommended by the Senate committee.

However, the Senate victory was short lived. In conference, while House Republicans went along with a Senate recommendation for more funds for NEH they were intransigent on NEA funding. Ignoring a vote of the full House instructing them to agree to the higher Senate funding amounts, GOP hardliners on the conference committee refused to budge. Senate conferees, led by Sen. Slade Gorton (R-WA) lobbied long and hard but with time running out and pressures mounting to reach agreement, Senate stalwarts were forced to give in. As a result, in the final version of the Interior appropriations bill NEA funding was set to remain the same as 1999 – $98 million. However, as part of a year-end omnibus funding bill, under pressure from the GOP President Clinton reluctantly agreed to an across-the-board .38% spending reduction for all federal agencies. This will have the effect of reducing NEA funding below 1999 levels.

Institute for Museum and Library Services (IMSL) — Funding for IMSL received a slight increase for the next fiscal year. As passed by the Congress, H.R. 2466 increased funding by about $1 million over last year's allocation or $24.3 million for fiscal year 2000.

More Culture Wars — Besides their attacks on the Endowments, conservative extremists in the Congress have joined with fringe elements of the religious right in a war against the motion picture and television production industry. Their campaign focuses on what they deem to be objectionable content in movies and television and allegations that there is a causal link between various societal ills and the way in which sex and violence are portrayed in film and on TV.

During Senate debate on a Juvenile Justice bill (S. 254), Sen. Mitch McConnell (R-KY) offered an amendment that would cause many federal agencies to deny motion picture and television production companies the use of federal property, facilities, equipment, etc., if their productions are deemed to be excessively violent. This vague and constitutionally questionable standard would put a host of federal offices into the censorship business and open the door to arbitrary determinations that could result in U.S. production firms being capriciously denied access to important resources.

The DPE, in a letter to House-Senate conferees, opposed McConnell's amendment (See policy letters). In conference, the censorship language was dropped.

OTHER ISSUES

The DPE continues to work on other legislative matters of interest to our affiliates.

It is expected that next year the issue of state and local taxation of internet commerce and services will heat up. A federal commission, which is currently considering a range of public policy options related to how or whether such taxation should be allowed, is expected to issue its report and recommendations in the Spring. The issue is of major concern to DPE affiliates in the retail trades as well as those unions representing employees in state and local government. The DPE is monitoring proposals being recommended to the commission by the National Conference of State Legislatures along with other state and local government organizations.

An effort will also be undertaken to repeal a last minute amendment slipped into the satellite bill that adversely affects recording artists. This stealth provision, backed by the recording industry, added sound recordings to section (2) of the definition of "work for hire" under U.S. Copyright law. If sustained, this action – which caught many legislators by surprise too late in the session to reverse it – would eradicate protections written into the 1976 Copyright Act that allows the "authors" of these recordings to exercise termination rights beginning in 2013 for works that are not "works made for hire." The recording industry promoted this allegedly innocuous change to head off expected litigation between performers and the industry over whether or not grants of rights in sound recordings are subject to termination under the Act.