Washington Retail Insight - March 10, 2006

Volume 11, Number 5
March 10, 2006

In Today's Edition:

• NRF Tells Commerce Secretary Immigration Bill Needs Work

• Senate Committee Could Vote on Small Business Health Plans

• NRF Says RFID Legislation Not Necessary

• Congressional Outlook

• NRF Events

NRF Tells Commerce Secretary Immigration Bill Needs Work

     NRF President and CEO Tracy Mullin this week told Commerce Secretary Carlos Gutierrez that retailers and restaurant owners have serious reservations about immigration reform legislation pending in Congress.

     New employment verification provisions in the bill would be unduly punitive for employers and need to be revised before the measure becomes law, Mullin said. Congress also needs to include provisions allowing illegal immigrants currently working in the United States to become eligible for legal residency, she said.

     Mullin said NRF supports improvements to border security but that the employment verification language would expand a pilot program that is "error-prone and not ready for prime time." The provisions "need to be addressed so that we get the reform we all want to see," she said.

     Mullin said the legislation is of particular concern to NRF's National Council of Chain Restaurants division.

     Mullin and Gutierrez spoke by telephone on Wednesday as part of a series of calls the Cabinet member is making to trade association executives and other CEOs to seek support for Bush Administration immigration policy. Gutierrez has been a frequent participant in NRF activities, meeting with retail CEOs at Macy's in New York last November during the holiday shopping season and speaking before the NRF summer Board of Directors meeting last June.

     The Senate Judiciary Committee last week began consideration of a broad immigration reform measure sponsored by Chairman Arlen Specter, R-Pa., that would tighten border security, increase enforcement of immigration laws, designate illegal immigration as a criminal rather than civil offense, and increase penalties for a variety of immigration-related crimes. The bill includes provisions from a number of pending Senate bills and shares a number of provisions with narrower legislation passed by the House in December.

     Of key interest to retailers and restaurants is a provision in the bill that would expand the 10-year-old "Basic Pilot Program" for employment verification, making it mandatory for all U.S. employers. The program allows employers to either go on-line or place a telephone call to check whether a would-be worker is a U.S. citizen or has the proper legal documentation to work in the United States. The program has been in operation on a pilot basis since 1996, but only 3,600 of the nation's estimated 8.4 million employers have participated, and those that have joined have reported numerous delays, errors, inconveniences and other problems.

     The expanded program would be phased in over a five-year period, starting with a small number of employers and eventually being mandated for all companies. Employers could be charged a fee for participation, and those who fail to use the system or knowingly hire or retain an illegal alien would face fines as high as $5,000 per employee. Employers would still be required to file the I-9 forms already collected to confirm a worker's legal status under current law.

     NRF and NCCR recognize that some form of employee eligibility verification must be part of the solution to the illegal immigration problem, but have encouraged Congress and the Administration to craft a system that is reasonable and fair to employers and employees, and proven effective before it is implemented for all employers. Current databases at the Social Security Administration and Department of Homeland Security should be purged of faulty data before being used as the basis for a new program. The Basic Pilot Program should not be used as the foundation for a new program, and any new program should be phased in and shown to have a minimal error rate before all employers are required to use it. In addition, the cost to employers of any new equipment such as magnetic card readers or biometric devices should be taken into consideration.

     The Senate bill also includes a provision that would allow illegal aliens working in the United States since 2004 to apply for a temporary visa allowing them to work legally. To obtain the visa, however, the individual would have to admit being in the country illegally, acknowledge that he or she is subject to deportation, undergo a medical exam, show that he or she had paid U.S. taxes, and his or her employer would be required to pay a $500 fee and provide an affidavit of employment. Even under those requirements, the worker could still be deported if he or she became unemployed for more than 45 days, and would not be put on a path to legal permanent residency. NRF and NCCR are concerned that few of the nation's estimated 11 million undocumented workers would come forward to participate in the program, leaving it ineffective in dealing with the 5 percent of the workforce believed to be here illegally.

     The bill also includes a temporary worker program that would allow an employer to apply for foreign workers to fill jobs if U.S. workers could not be found in the company's geographic area. The new H-2C visa would allow a foreign worker to enter the United States for three years and be renewable for a second three-year period provided that the worker remained employed.

     The House in December passed its own version of the bill, H.R. 4437, the Border Protection, Antiterrorism and Illegal Immigration Control Act of 2005, sponsored by House Judiciary Committee Chairman James Sensenbrenner, R-Wisc. The House bill includes similar employment verification provisions, but is far more punitive and fails to address employers' temporary and long-term workforce needs.

     For more information, contact NCCR Vice President for Government Relations Scott Vinson or NRF Senior Director and Government Relations Counsel Elizabeth Treanor Oesterle at (202) 783-7971.

Senate Committee Could Vote on Small Business Health Plans

     A Senate committee is expected to vote next week on NRF-backed legislation that could break the years-long stalemate over efforts to let small businesses band together to get better rates on employee health insurance.

     The Senate Health, Education, Labor and Pensions Committee is scheduled to consider S. 1955, the Health Insurance Marketplace Modernization and Affordability Act, sponsored by Chairman Michael Enzi, R-Wyo., on Wednesday.

     Much like Association Health Plan legislation passed repeatedly by the House, the legislation would allow businesses and trade associations to pool their members in Small Business Health Plans in order to purchase insurance coverage at rates available to large groups. Unlike AHPs, the plans would not be able to self-insure, and would not have federal preemption of state insurance laws provided under the Employee Retirement Income Security Act. State insurance commissioners would retain jurisdiction over the plans, but the bill would establish a Department of Health and Human Services commission to streamline state regulations with uniform standards for rating, underwriting, consumer protection, market conduct, plan oversight and other issues.

     The HELP Committee took up the legislation this week and rejected a number of Democratic amendments before postponing further action until next week. Consideration by the full Senate could come in early May.

     NRF has strongly supported AHP/SBHP legislation since the concept was first proposed, seeing it as a means to help small businesses bring skyrocketing employee health costs under control and as part of a multi-component plan for addressing health insurance costs for all retailers. AHP bills have passed the House at least half a dozen times in recent years, most recently last July, but have met strong resistance in the Senate until now. 

     "In a year when retailers are again facing significant increases in health care premiums, S. 1955 would allow small retailers the opportunity to band together through bona fide trade and professional associations to purchase affordable health benefits," NRF Senior Vice President for Government Relations Steve Pfister said in a letter to committee members. "By joining together, small employers will enjoy greater bargaining power, economies of scale and administrative efficiencies. Small Business Health Plans will level the playing field and give participating small employers the same advantages as Fortune 500 companies and unions."

     Of the approximately 45 million uninsured Americans, more than 11 million are small business owners or employees and their families. Small businesses make up the majority of retailers, with more than 90 percent of retail firms employing fewer than 20 employees. Enactment of SBHPs would save small businesses approximately 13 percent of the cost of employee health care benefits.

     For more information, contact NRF Vice President for Government and Political Affairs Rob Green at (202) 626-8195.

NRF Says RFID Legislation Not Necessary

     Existing laws are adequate to address most privacy concerns related to Radio Frequency Identification, and RFID-specific laws are not yet necessary.
     That was one of the key messages as NRF co-sponsored a conference on RFID in Washington last week that drew dozens of state retail association executives and private sector representatives from across the nation.

     Sessions during the "Myths and Facts of Electronic Product Codes and RFID: Focus on the States" conference included a hand-on demonstration of the technology, an overview of EPCglobal, the organization formed to administer electronic codes and RFID, and a variety of strategies for dealing with state efforts to regulate RFID.

     NRF Vice President and Government and Industry Relations Counsel Maureen Riehl and NRF Technology Advisor Richard Varn told conference participants March 3 that a patchwork of conflicting state-by-state regulations won't work for technology that needs to operate with national standards to be effective. If any regulation of RFID is necessary, it should be done on a nationwide basis, they said.

     Varn, the former chief information officer for the state of Iowa, said existing laws on computer crimes, computer hacking and general privacy statutes adequately address most if not all privacy concerns raised about RFID. With RFID still years away from widespread item-level deployment in retail stores, it is premature to pass legislation that singles out the technology for special treatment, he said. Lawmakers should regulate bad behavior if it occurs, but should not regulate the technology itself, he said.

     Varn, who has prepared a state-by-state matrix of RFID-related legislation for NRF, has testified on the issue before a number of state legislatures across the country and repeated his message this week during an appearance before New Hampshire legislators on Wednesday.

     For more information, contact NRF Vice President and Government and Industry Relations Counsel Maureen Riehl at (202) 626-8121.

Congressional Outlook:

House: Returns 2 p.m., Monday, March 13.

Senate: Returns 10 a.m., Monday, March 13.

NRF Events:

• March 29-30, Taxation Committee, Washington, D.C.
• April 26-28, Committee on Employment Law, Longboat Key, Fla.

     For information on NRF events, contact Eileen Pryor at (202) 626-8114 or pryore@nrf.com.

     Washington Retail Insight is published each week that Congress is in session by the National Retail Federation, 325 7th St. NW, Washington, D.C. 20004. To unsubscribe, send a blank e-mail to:
leave-nrfgovtrelations-169150C@lists.easent.net

Copyright 2006 National Retail Federation