LEGISLATION UPDATE

Oct. 1, 2003
Proposed federal legislation could affect many businesses in the electrical industry.With a presidential election coming up, many in the electrical industry

Proposed federal legislation could affect many businesses in the electrical industry.

With a presidential election coming up, many in the electrical industry are watching their pet legislative issues closely.

Upcoming legislation involving estate taxes could seriously impact owners and employees of family-owned businesses, as well as anyone with a sizable estate. Currently, businesses worth upwards of $1.3 million are subject to an average effective estate tax rate of 44% - the highest rate levied by any government in the world. Arguing that the government needs the tax money it gets from large estates, Clinton vetoed Republican-led legislation to phase out the estate tax, or death tax. Tim Feldman, vice president for the National Electrical Manufacturers Association (NEMA), Rosslyn, Va., however, sees the estate tax as a burden on small businesses. "It's a question of fairness," he said. "Income is taxed when you earn it, it's taxed when you save it, and it's taxed when you die. It's just not good tax policy, not good fiscal policy, and it's not good for creating capital."

Although insiders say product liability reform has only a slight chance of passing, it is again on the agenda in Washington. The main goal is to limit frivolous personal injury suits - suits in which manufacturers and distributors can be named. Although the House passed H.R. 2005, which would institute an 18-year statute of repose for durable goods, the White House and trial lawyer lobby are big hurdles for this legislation.

Other types of lawsuits are the subject of a different debate. The Patients' Bill of Rights Act, which would set minimum standards for health coverage of employees, also gives patients the right to sue their HMO, and in many cases, their employer.

"The rhetoric in the newspaper is that employees can't sue their HMO (under the proposed bill)," Feldman said, "but most companies are self-insured." Without an HMO to sue, the business becomes the liable insurance provider. This has the potential to hike up rates and even cause employers to leave workers with the burden of insuring themselves. But, the slim chance of any legislation getting through during this session has forced both Gore and Bush to formulate their own patients' bills.

Although patients' rights are at least being looked at, some distributors say their rights are being overlooked in another upcoming vote. In an effort to prevent the practice of bid shopping, Congress is currently looking at legislation protecting the rights of subcontractors - but not wholesalers and suppliers - involved in government work.

The proposed legislation would require government contractors to list their subcontractors and would penalize contractors for unnecessary changes in the lists. Electrical distributors should be aware, though, that under these proposed laws, the contractor is not obligated to use a distributor who has made a bid to supply materials.

An issue affecting all levels of distribution employees is currently tucked away in the Minimum Wage Increase Act of 2000, which was passed by the House and is currently under consideration by the Senate.

The House voted to exempt inside salespeople from the current laws governing overtime. This exemption would level the playing field between inside and outside salespeople by allowing inside salespeople to work more flexible hours. It would also take away the advantage that retail employees already enjoy because of their exemption in some cases.

"It's a basic equalization matter," said Alan Kranowitz, senior vice president for government relations, National Association of Wholesaler-Distributors (NAW), Washington, D.C. "Inside salespeople are missing out on a lot of commissions they could be getting." Some distributors are worried the Senate may not include the same provision for inside sales exemption in its version of the minimum wage bill. That issue is currently being discussed in committee.

The business world's worries over inside sales reform might soon be replaced by concerns over the Occupational Health and Safety Administration's (OSHA) new ergonomics standards regarding musculoskeletal disorders, such as carpal tunnel syndrome and other repetitive motion injuries in the workplace.

Congress does not dictate which regulations OSHA passes, but lawmakers are currently debating appropriations bills that would deny OSHA the necessary funding to enforce these regulations. There is a chance, however, that regardless of what Congress does, OSHA could use current resources to enforce these rules.

The new 1,000-page ergonomics rulebook applies to millions of workplaces. Estimates of the costs to business range from $4 billion to $100 billion. The science behind OSHA's ergonomics rules is being questioned by many, and Republicans are asking OSHA to wait for the results of a study by the National Academy of Sciences in Washington, D.C., before unleashing inspectors who might mandate workplace changes.