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GEORGIA CHAPTER CMAA and GSGA
25th Annual Club Officers’ Day
April 23, 2012
The Standard Club
“Government Matters: 2012 Update”
At 9:55 a.m. Mike Waldron welcomed everyone to the meeting and thanked The Standard Club for hosting the event
and introduced the speaker for the meeting. Greg Butterfield, President of the Georgia State Golf Association and
Chris Clark, President of Georgia Chapter CMAA gave opening remarks.
Brad Steele’s Bio
As the NCA’s chief lawyer and lobbyist, Brad Steele brings a wealth of knowledge from the executive, legislative and judicial
branches of government to the position of Vice President of Government Relations and General Counsel.
Mr. Steele earned his Bachelor’s Degree in Government and Politics from George Mason University, graduating with the
highest distinction. He then began his time in government working for the Vice President of the United States, for a Member of
Congress and then as a senior staff member with a national political committee.
Following his years in politics, Steele studied law in England at Oxford University and obtained his law degree at the University
of Oklahoma. Upon graduation, he returned to his home state of Indiana to open his own practice. In addition to private practice,
he served as a county, city and town attorney for several communities throughout the state and as an Indiana court judge. In
2006, he returned to Washington and since has been the voice of the private club industry on Capitol Hill for the NCA.
Brad Steele:
National Club Association
Our Mission:
“To defend, protect and advance the interests and well-being of private, social and recreational clubs”
NCA makes sure the private club industry’s voice is heard:
On Capitol Hill
In the agencies
In the statehouses
In the courthouses
Today’s Roadmap
Political Landscape & Outlook
Legislative Action in 2012
Regulatory Action in 2012
House of Representatives
Balance of Power
242 Rs – 190 Ds
o Rep. Gabrielle Giffords (D-Ariz.) resigned
o Rep. Donald Payne (D-N.J.) lost his battle with cancer
o Rep. Jay Inslee (D-Wash.) resigned to run for Gov.
The ’12 outlook – House stays R (25 seats)
Redistricting will cause races to be interesting
o Four of the 11 Republican seats in Illinois will likely flip
o Three of the seven Democratic seats in North Carolina will likely flip
Eleven Member v. Member primaries
o Rep. Dennis Kucinich (D-Ohio) lost
o Rep. Dan Manzullo (R-Ill.) lost
Senate
Balance of Power
53 Ds (w/2 independents) – 47 Rs
41 Republicans
The ’12 outlook
23 Ds and 10Rs are up for re-election
o Seven Ds have declined to run again (Nebraska, North Dakota, Virginia, Wisconsin, Hawaii,
New Mexico and Connecticut)
o Three Rs have opted to retire (Texas, Arizona and Maine)
Rs have a very good shot at flipping 5 seats – Nebraska, North Dakota, Virginia, Montana, & Missouri
Ds have a very good shot at flipping 3 seats - Maine, Massachusetts & Nevada
Wisconsin & Hawaii are toss-ups with no D incumbents
Could be a split Senate or 51 Ds or Rs after election
The Patient Protection and Affordable Care Act
Two year anniversary was on March 23rd
With no other changes, the law will go into effect on January 1, 2014
New for 2012 – the W-2 reporting requirement
Requires employers to disclose all money spent for health insurance premiums by both the employer
and employee on the W-2 form
o Clubs with more than 250 W-2s last year are exempt for 2013
Still not taxable income yet…
o President proposed removing the tax exemption in 2011
Since its passage, there have been only two major changes to the Law:
Full repeal of the 1099 reporting requirement
o Major breakthrough for private clubs – 1yr. debate
o The House passed it 314-112; the Senate passed it 87-12; the President signed it
Repeal of the Free Choice Voucher
o If certain employees decline the plan, the club would have had to pay its premium contribution
to the employee and the employee could keep any excess after buying insurance
o The President actually asked for this to be removed
Still the same requirement to notify employees about American Health Benefit Exchange – Starts 2013
You must disclose:
o What services it provides
o How to contact it
o That employees may be eligible to get a tax credit or subsidy
o That employees may lose the employer’s contributions, but that any payment they make for
insurance will be tax exempt
Same fines under the “employer mandate”
Clubs that meet the 50 full-time employee threshold and do offer insurance will be fined up to $3,000
for each employee who
o Declines the plan, enrolls in an Exchange plan and receives a tax credit or subsidy
Clubs that meet the threshold and don’t offer insurance will be fined up to $2,000 per full-timer (less
the first 30) if
o One employee enrolls in an Exchange plan and receives a tax credit or subsidy
The same new Medicare taxes starting 2013
For unearned income, a 3.8% tax on net investment income (interest and dividends) for those making
more than $200K/$250K
Clubs need to budget for a potential decrease in revenue
With the payroll tax increase alone, a club with 50 families at $500 could lose over $100,000
And, still the same indirect fees and taxes on private clubs
A fee on drug manufacturers
Starting next year, a 2.3% tax on medical device makers (a bill to repeal this tax has been filed)
Starting in 2014, an insurance comp. fee for all policies sold – a.k.a. the “Health Insurance Tax” (HIT)
o This is expected to cause a nearly 4% premium increase
Starting in 2018, a 40% tax on high dollar policies
All of these new costs will be added to your club’s insurance premium
CBO’s new projections issued in March
Total cost for ’10-’19 was $938 billion
o Revised cost for ’12-’21 is now $1.8 trillion
o But, all programs don’t start until 2014 and ’14-’23 cost is now projected to be $2.6 trillion
More employers will stop offering insurance
o $15 billion more in employer mandate penalties
o 4 million employees will go into the Exchange (2.5%)
o More subsidies paid by the government for those enrollees
o Greater pressure on Congress to tax private club members to cover this new cost
The Final hope for change – the courts
The key federal case is the Florida case
o 26 state attorney generals sued the government
o The Federal District Court Judge declared the individual mandate unconstitutional and struck
down the law
The 11th Circuit Court of Appeals
o The appellate court agreed the individual mandate is unconstitutional, but allowed the law to
stand
o The dissenting judge said the mandate was fine and quoted a decision by Justice Kennedy to
bolster his rationale
SCOTUS heard 6 hours of arguments (2 on mandate; 1 ½ on severability) with a June ruling
The PPACA and the 2012 election
If the President loses, the Republican President will support full repeal
If the House stays in Republican control, a full repeal bill will pass
The problem is the Senate
o Even if the Senate flips, it will still take 60 votes to bring a full repeal bill to the floor
o There is little chance Rs will win more than 51 seats, which means persuading 9 Ds to vote for
repeal – not likely to happen
o McConnell’s staff believes some defunding could pass
The American Job Protection Act
It repeals the PPACA’s “employer mandate”
The employer mandate forces businesses to keep their employee numbers under 50 to avoid the
PPACA’s fines
o If you have more than 50 employees, you will likely downsize if you can
o If you have less than 50 employees, you will likely think twice about expanding
The employer mandate also creates a strong disincentive to offer health insurance
o Will completely alter the way 160 million Americans get insurance
The bill has 210 co-sponsors in House and 40 in the Senate
The Jobs and Premium Protection Act
It repeals the Health Insurance Tax (HIT)
This tax comes in the form of a new government fee levied on all health insurance policies sold
Naturally, the insurance companies will pass this cost to its consumers
o Thus, it is ostensibly a new federal tax on all clubs
The tax will raise costs for clubs and limit your ability to grow and create jobs
The bill has 125 co-sponsors in the House and 10 in the Senate
E-Verify Legislation
House bill to make E-Verify mandatory
Allows a phase-in over 18 months
Has a safe harbor for clubs that rely on the program and later find out an employee is illegal
Prohibits civil suits for discrimination or wrongful termination
No required re-verification unless a SS No-match
www.uscis.gov to enroll
Georgia’s E-verify law begins for clubs on July 1st
Clubs with 100-499 employees must use E-Verify on July 1st
Clubs with less than 100 employees must use it on or before July 1st 2013.
Potential Tax Increases
January 1, 2013, the marginal income tax rate will go up
The 28% rate will jump to 31%
The 33% rate will jump to 36% and
The 35% rate will jump to 39.6%
Capital gain rate increases from 15% to 20%
Families making $500K will pay >$11K more
With 20 such families at your club, you could lose more than $200,000/yr.
The President’s budget
Hikes dividend rate from 15% to individual rate
Adds “Buffett Rule” & cuts deductions for wealthy
H-2B Wage Regulation
DOL’s wage rule hikes wages by nearly $4.50/hour
Rule was to be effective on 9/30/11
NCA and our allies on the H-2B Workforce Coalition sued to stop this regulation
Rule delayed until 11/30/11, then Congress acted
Congress passed DOL’s spending bill for FY12 and removed funding for this rule
Delayed implementation of the rule until 10/1/12
House Appropriations believes Congress will extend this well into next year
H-2B Program Regulations
DOL’s rule completely overhauls the H-2B program – effective 4/23
Corresponding employment:
o Clubs must pay the U.S. worker the prevailing wage if they do “substantially the same work”
as H-2B worker
o Not for U.S. workers who have been employed at least 1 year and whose responsibilities aren’t
cut back
Clubs must pay H-2B workers 75% of their hours in a 12 week period – whether they work or not
Full-time for H-2B workers is 35 hours – not 30
Club must post a “workers’ rights poster” from DOL in all necessary languages
Clubs must pay transportation, hotel, food & visa costs for H-2B workers or reimburse in 1st week
o Club must provide transportation costs to U.S. workers & offer housing if offered to H-2B
workers
Clubs must offer the job to a U.S. worker up to 21 days before the H-2B work is to start – even if the
H-2B worker is already on the way
“Temporary” is now 9 months not 10
A federal lawsuit was just filed in Florida
Hoping for a stay and then for defunding
NLRB Regulations
NLRB is 5 member board that governs relations between unions and employees
Majority selected by the President
It can issue regulations and establish case law
On 1/1/12, the NLRB lost one of its members
The former Gen. Counsel for SEIU and AFL-CIO
His recess appointment ended and the Board had only 2 members
Thus, it was legally unable to function
On 1/4/12, the President recess appointed 3 new members:
1. The former General Counsel for the IUOE and former Board member of the AFL-CIO Lawyers’
Coordinating Committee
2. A former staffer for DOL and Sen. Ted Kennedy
3. And, to balance it out, a Republican appointee
First time a President recess appointed anyone when the Senate was still in session
Lawsuit was filed regarding the legality of these appointments – Sen. McConnell joined
The NLRB’s Poster Rule – was to start 4/30
Clubs must display a “Notification of Employee Rights” poster describing:
o How employees can unionize
o What constitutes unfair labor practices
However, the poster does not state how employees may decertify a union
If 20% of your employees don’t speak English, then you must have a translated version
It must also be posted on the internet or intranet site if personnel rules/policies are posted there
The NLRB’s poster Rule
Failure to post the notice is an “unfair labor practice” in and of itself
NCA’s issue with the rule is that disgruntled employees will have more of an opportunity to file
unfounded claims against the club or bring the union into the club
o If this happens, immediately contact club counsel before responding to employees
NCA and our allies sued to stop the rule
o DC District Court upheld the rule, but S.C. District Court struck it
o We appealed the DC ruling and the reg. is stayed until the appeal is resolved – at least through
November
“Quickie Election” Rule – Effective 4/30
Allow unions to call for an election within 10-21 days of a petition being filed
Severely limits the workers’ ability to receive complete information about union costs
Severely limits the employer’s ability to effectively prepare for a union election battle
Promotes union “stealth campaigns”
o This is where union organizers quietly secure the necessary votes and then call for an election
The House passed a bill to kill the “Quickie Election” Rule on 11/30/11
No action in the Senate
On the same day, the NLRB passed the rule by a vote of 2-1
Sen. Michael Enzi (R-Wyo.) filed a Jt. Resolution of Disapproval to stop the rule
Must pass the House and Senate and be signed by the President
Litigation initiated in this matter, too
Filed in the DC Dist. Court – waiting for ruling
NLRB Litigation
Cases that will help unions organize
Specialty Healthcare
o NLRB ruled that unions are entitled to select smaller subsets of larger employee groups to
organize
o Burden is now on employers to prove that excluded employees “share an overwhelming
community of interest” with the smaller subset
Lancaster Symphony Orchestra
o NLRB ruled musicians were employees, not independent contractors, and could vote on
forming a union
o Since orchestra set work hours, pay schedules, dress code and standards for behavior, they
were “employees”
Roundy’s, Inc.
o Will allow union access to your club during business hours to campaign if you let others into
the club to solicit during business hours (Red Cross, United Way, etc.)
The “Gag” Rule
DOL issued a proposed rule that will severely impact a club’s ability to get legal advice during a union
organizing campaign
If a club hires a lawyer to help with almost any aspect of a union campaign, then it must file
complicated disclosures reports with DOL – a paperwork nightmare
The lawyers must also file reports disclosing all clients seeking labor advice and the fees charged
o Many law firms will pull back from this type of work
Without lawyers, most clubs will be unable to effectively and legally give their side of the story
NLRB and DOL
Together, the NLRB regulations/rulings and the DOL rule mean unions:
Will have more agitated workers because of the poster
Will have a quicker “official” election campaign
Will be able to target a smaller subset or workers
Will be able to include your caddies and other ICs
Will be able to come onto your property during business hours to conduct the campaign
Will be less likely to encounter opposition because you can’t find legal advice
Brad D. Steele
VP of Government Relations and General Counsel
National Club Association
1201 15th Street NW, Suite 450
Washington, DC 20005
202-822-9822
steele@nationalclub.org
www.nationalclub.org
