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Legislative and Regulatory Agenda

Legislative and Regulatory Agenda

The NAPEO Board of Directors has approved a federal legislative and regulatory agenda for 2017-18. The agenda was developed by the NAPEO Federal Government Affairs Committee (FGAC).

The process of determining a new federal agenda for NAPEO began after the election of Donald Trump and the new Congress. Members of the FGAC determined that the new administration and Congress created a unique opportunity for the PEO industry to push a pro-active legislative and regulatory agenda. Both the FGAC and the Legal Advisory Committee (LAC) developed a list of potential federal issues to consider, and the NAPEO membership was also surveyed to see which federal issues were most important to the PEO industry. From those efforts, a list of potential federal legislative and regulatory issues was developed for consideration by the FGAC. 

NAPEO's 2017-2018 Federal Legislative and Regulatory Agenda 

Overview

NAPEO has two policy objectives which guide the 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. 

PEO Industry Legislative Priorities

  • Attach a legislative fix to tax reform that amends the Small Business Efficiency Act to  address the following problems with the law and/or the IRS’s interpretation of the law:
    • 85 Percent Rule
    • Self-Employment (SECA v. FICA)
    • Required contract language
    • Double taxationAdd language to reconciliation bill that creates a definition of “closed Multiple Employer Plans” under ERISA, for the purpose of clarifying/recognizing the PEO employee benefits business model in ERISA.
  •  Add language to reconciliation bill that creates a definition of “closed Multiple Employer Plans” under ERISA, for the purpose of clarifying/recognizing the PEO employee benefits business model in ERISA.

  • ACA Repeal/Replace: Achieve recognition of the PEO healthcare model through ACA replacement and/or other healthcare reform legislation.

 Additional Legislative Priorities

  • Monitor Association Health Plan (AHP) and other healthcare reform legislation for potential risks to/opportunities for the PEO industry.

  • Support enactment of comprehensive tax reform legislation, and monitor any such legislation for potential risks to/opportunities for the PEO industry.

PEO Industry Regulatory Priorities 

  • Form 5500: Ask the Department of Labor to revise the instructions for PEOs that file the Form 5500 to permit multiple employer plans to separately submit their lists of participating employers and contribution percentage estimates in a manner in which the information remains confidential and is not made available to the public.
  • Engage the Occupational Safety and Health Administration to determine the feasibility of obtaining clarification that the PEO client is primarily responsible for workplace safety obligations at the client worksite. 
  • Ask the Office of Federal Contract Compliance Program to clarify that neither a PEO nor all of the PEO’s clients are federal subcontractors simply because a PEO has a client that is a federal contractor or subcontractor.
  • Equal Employment Opportunity Commission (EEOC):
    • Ask the EEOC to clarify that the responsibility for filing the EEO-1 form is determined at the client level.
    • Ask the EEOC to clarify that if a client of a PEO is required by law to file an EEO-1 form, that obligation does not extend to the PEO or the rest of its clients who would otherwise not be required to file an EEO-1 form.
  • Ask the Immigration and Customs Enforcement agency to clarify the responsibilities of a PEO under E-verify, addressing the following issues:
    • PEO and client compliance responsibilities under E-Verify
    • Compliance with E-Verify for individuals and clients that are already in a PEO relationship
    • Creating an E-verify compliance safe harbor for PEOs 
  • Continue efforts to improve the IRS PEO certification program and obtain favorable clarification of the rules and responsibilities of CPEOs.