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Employment and Labor Law Legislation

2015  Employment and Labor Law Legislation

A summary of the 2014 Midterm Elections results in Michigan:

  • Michigan’s Senate Republicans gained one seat to increase their majority to 27-15.
  • Michigan’s House Republicans also increased their majority, from 59-50 (with one independent) to 63-47.
  • Republican Governor Rick Snyder was re-elected for a second term, beating Democrat and pro-labor challenger Mark Schauer.
  • Former U.S. Congressman Gary Peters, a Democrat, became Michigan’s junior U.S Senator

On the Federal side:

  • The Republicans picked up nine Senate seats to bring their total to 54 from 45. Thus Republicans hold a majority in the Senate for the first time since 2006.
  • In the U.S. House of Representatives, where Republicans already held a majority, the midterm election saw the GOP strengthen its majority in the House to 245 seats vs. 188 seats for the Democrats. Republicans will hold their largest majority since the late 1940s.

For detailed information on 2014 federal and state proposed and passed legislation as well as federal and state regulatory changes see the archived 2014 Employment and Labor Law Legislation page here. [Link]

What follows is a summary of major federal and state bills and regulations that are under consideration or pending to date in 2015 (updated 5/26/15)

FEDERAL

NOTE: More recent legislative or regulatory initiatives can be found at the end of the section. If  the law or regulation is ongoing, it can be found at the end of the section on that law or regulation.

 

IMPORTANT NOTE: SINCE 20I4 MARKED THE END OF THE LEGISLATURE'S SESSION, THE FOLLOWING PROPOSED LEGISLATION HAS BEEN REMOVED FROM CONSIDERATION. HOWEVER, LEGISLATORS TYPICALLY RE-INTRODUCE SIMILAR PROPOSALS AT THE START OF THE NEW SESSION.

Protecting Affordable Coverage for Employees Act (PACE)

At this writing a bill (HR 1624) is quickly moving through the U.S. House and Senate that will amend the definition of small business and protect small business owners from possible increases in healthcare premiums under the Affordable Care Act (ACA). Both the House and Senate passed the bill, and the President is expected to sign it.

Under the ACA, the definition of the state-based small group market is scheduled to change in January 2016 from 50 employees minimum to 100 employees minimum. This bill would allow individual states to exercise the option of expanding the definition of small employer to cover employees up to 100 in size.

Though projections vary, the consensus is this will result in an increase in premiums for those employers that choose to remain in the pool because the risk pool for non-small employers will reduced, thereby causing their premiums to increase. (updated 10/6/2015)

 

Ban the Box—The Fair Chance Act

The Fair Chance Act (S. 2021) was introduced by U.S. Senator Cory Booker (D-NJ) and U.S. Representative Elijah Cummings (D-NJ-7). Cosponsors of the bill include U.S. Sens. Sherrod Brown (D-OH), Ron Johnson (R-WI), Tammy Baldwin (D-WI), and Joni Ernst (R-IA); along with U.S. Reps. Darrell Issa (R-CA-49), Sheila Jackson Lee (D-TX-18), Earl Blumenauer (D-OR-3), Bonnie Watson Coleman (D-NJ-12), Cedric Richmond (D-LA-2), John Conyers (D-MI-13), and Bobby Scott (D-VA-3).

The act would require federal contractors and federal agencies to “ban the box” on job applications.

“Ban the box” refers to the section on job application forms that asks whether the applicant has ever been convicted. The law would require that question to be removed from application documents. For the more than 70 million Americans who have criminal convictions, this barrier to employment early in the hiring process can serve as categorical disqualification, which is a barrier to their being able to provide for themselves and their families. Studies have shown that an inability to find employment is one of the leading causes of reoffending.

Under “ban the box,” employers would retain the ability to inquire about past convictions or conduct background checks regarding a potential employee before making an employment decision. Positions related to law enforcement and national security duties and positions that require access to classified information would be exempted (updated 9/15/15).

Pregnant Workers Fairness Act

The U.S. Supreme Court’s decision this spring in Young v. United Parcel Service, Inc. stated that pregnant workers who seek redress to complaints of disparate treatment through indirect evidence need to do so through the McDonnel Douglas burden shifting framework. Some legislators in Washington believe this is too complex a requirement. Democratic Rep. Jerrold Nadler  introduced a bill (HR 2654) that would make the following unlawful employment practices:

 (1) Failing to make reasonable accommodations to known limitations to the pregnancy, childbirth, or related medical conditions of job applicants or employees, unless the accommodation would impose an undue hardship on the employer’s business operation

(2) Denying employment opportunities based on the need of the employer to make such reasonable accommodations

(3) Requiring such job applicants or employees to accept an accommodation that they choose not to accept

(4) Requiring protected employees to take leave if another reasonable accommodation can be provided for their known limitations

(5) Taking adverse action against an employee because she requests or uses a reasonable accommodation related to her pregnancy, childbirth, or related medical conditions.

Democratic Sen. Robert Casey introduced the Senate version of the same bill (S. 1512). (Updated 7/15/2015)

Employee Rights Act Resurrected

Late in July Republican lawmakers reintroduced legislation that would require unions to get “opt in” approval before dues could be deducted from workers’ paychecks, get rid of “card check” authorization for unionization and strikes, roll back the NLRB’s so-call “quickie election” rule, and require union recertification after significant workforce turnover. Rep. Tom Price introduced the bill (H.R. 3222).

The resurrected proposal:

Provides paycheck protection, requiring unions to get “opt in” approval before dues can be used for purposes other than collective bargaining;

Eliminates “card check” methods and protects personal liberty by requiring secret ballots for votes on whether to unionize or to strike;

Negates the recent NLRB “ambush election” rule — the NLRB’s case representation procedures rule, also dubbed the “quickie election” rule;

Requires union recertification to ensure that unions still have the support of their members after significant turnover in the workforce; and.

Prevents union coercion and criminalizes union threats while correcting some needless disparities in the National Labor Relations Act.
                                                                   (Updated from CCH What’s New 7/30/2015)

NLRB Reform Act

This bill is designed to rein in the General Counsel to the National Labor Relations Board, end partisan advocacy by splitting board members between parties, and encourage timely decision-making by including budgetary disincentives for gridlock. It would turn the NLRB from an advocate to an umpire and keep the general counsel from operating as an activist for one side or the other.

The Workforce Democracy and Fairness Act

The Workforce Democracy and Fairness Act (HR 3094) guarantees workers the ability to make a fully informed decision in a union election, ensures employers are able to fairly participate in the election process and reasserts the NLRB’s responsibility to address critical election issues. The proposed law would ensure workers have enough time to make an informed decision in a union election by prohibiting any election from taking place in fewer than 35 days; provide employers at least 14 days to prepare their case to present before a NLRB election officer and protect the right to raise additional concerns throughout the pre-election hearing; and reassert the board’s responsibility to address critical issues before certifying a union, This bill is currently in the Education and the Workforce Committee. (Updated 5/1/2015)

Bill introduced to reverse NLRB’s Joint Employer Status Decision

A House bill was quickly introduced September 9th to roll back the National Labor Relations Board’s decision redefining joint employer status under the National Labor Relations Act. This bill will be called the Protecting Local Business Opportunity Act and would define joint employer status only if the employer (e.g., the franchisor) has “actual, direct and immediate” control over the franchisee’s employees.

As of this update the bill had not been assigned a number. (updated 9/15/15)

The Employee Privacy Protection Act

The Employee Privacy Protection Act (HR 4321) allows workers to control the disclosure of their personal information to union organizers. This bill is currently in the Education and The Workforce Committee. (Updated 5/1/15)

Executive Order Requiring Paid Sick Leave for Employees of Federal Contractors

On Labor Day (September 7, 2015) President Obama signed an Executive Order (EO) mandating up to 7 paid sick days for employees of federal contractors. The Paid Sick Leave will cover broader circumstances than are provided by the FMLA, and is accrued year to year. However is does not require a payout when the employee terminates.   The EO will not be effective until 2017.  The Department Of Labor will be issuing proposed regulations implementing this order. (updated 9/15/15)

Paid Sick Leave

Healthy Families Act (H.R. 1286/S. 631 would require employers with 15 or more employees to allow workers to earn up to seven days of paid sick time per year. Employees would be able use this time for themselves or for a family member. This Act would require employers to post a notice of a summary of the act in conspicuous locations on the employer's premises or in employee handbooks.

National Legalized Medical Marijuana Law

On March 10, 2015, a Senate bill with bipartisan support was proposed to allow those states with legalized medical marijuana to operate without risk of federal law violations. The Compassionate Access, Research Expansion and Respect States (CARERS) Act, was introduced by Sens. Cory Booker (D-N.J.), Rand Paul (R-Ky.) and Kirsten Gillibrand (D-N.Y.). If passed, the bill would have primarily four effects:

  • It would allow those states with legalized medical marijuana (23 states,  along with 12 others that allow limited use of low THC products for medical treatment) to operate their programs without risk of federal prosecution;
  • It would reclassify marijuana under the Controlled Substances Act from a Schedule I drug to a Schedule II drug. Schedule II drugs are those that are accepted as less dangerous and seen as having some medical value. Thus, it would allow for more research into the potential medical benefits of marijuana;
  • Banks would not have to fear legal challenges to working with medical marijuana businesses. Medical marijuana retailers in other states have faced challenges working with financial institutions, obtaining lines of credit and the ability to accept credit cards. These challenges have led to the operations of cash-only businesses, which have, in turn, led to increased risks of crime. Without the risk of charges pertaining to money laundering, financial institutions can work with medical marijuana retailers as they would any other business; and,
  • Physicians with the Department of Veteran Affairs could prescribe medical marijuana.  Many of the illnesses for which medical marijuana is prescribed (e.g., PTSD, spinal cord injuries, traumatic brain injuries, residual limb pain) are suffered by veterans.  However, because they operate under the umbrella of the federal government, physicians with the Department of Veteran Affairs have been unable to prescribe medical marijuana, even if they are located in a state that has legalized the product.

NLRB “Ambush Election” Rule Resolution to Stop Implementation of the Rule

On March 31, 2015 the President signed a Memorandum of Disapproval effectively “pocket’ vetoing Senate Resolution 8. This was a joint resolution of disapproval that would have stopped  the National Labor Relations Board (NLRB) from implementing its “ambush election” rule. The Resolution passed the House by a vote of 232 to 186 and the Senate by a 53-46 vote.

VA Budget and Choice Improvement Act

President Obama has signed a bill exempting individuals from being counted by employers as employees for purposes of the Affordable Care Act’s (ACA) employer mandate for any month that such individual has medical coverage under Tricare or the Veterans Administration (VA). The exemption will be applied retroactively for months beginning after December 31, 2013. The bill, known as the “VA Budget and Choice Improvement Act,” is contained in Title IV of the “Surface Transportation and Veterans Health Care Choice Improvement Act of 2015” (the Highway bill) (H.R. 3236), which was signed by President Obama on July 31, 2015. Section 4007 of the Highway bill amends section 4980H(c)(2) of the Internal Revenue Code to effect the veteran exemption.

The bill should help employers hire more veterans by providing them relief from the ACA’ Section 1513 mandate (P.L. 111-148), which states that if a business has at least 50 full-time employees, it must provide them with health insurance even if they are already getting health insurance elsewhere. Prior to the bill’s enactment, if a veteran was receiving heath care from the VA, he or she was still counted toward the 50-employee threshold. This situation may have incentivize companies to turn away veterans, not because they didn’t want to hire them, but because the ACA made it too expensive to hire them. The bill simply exempts veterans who are already getting health care through Tricare or the VA from counting toward the ACA employer mandate threshold. This should encourage businesses to hire more veterans without fear of the ACA tax or penalty.

The bill also (1) requires the VA to develop a plan to consolidate all non-VA provider programs by establishing a new, single program to be known as the “Veterans Choice Program,” to furnish hospital care and medical services to veterans; and (2) helps veterans with a service-connected disability save for health care costs through health savings accounts (HSAs).   (Updated August 7)

Workplace Democracy Act

Senator Bernie Sanders (I-VT) announced that he and ten other Senators are co-sponsoring a re-do of the Employee Free Choice Act (EFRA). If passed and signed by the President, the bill — a verbatim reiteration of two provisions of the Employee Free Choice Act in the 110th & 111th Congresses — would:

  • certify a union as the exclusive bargaining representative based on a card-check process rather than the current preferred method of NLRB secret ballot election; and
  • allow a third-party arbitrator to impose wages, benefits, hours, work rules and other contract terms on parties unable to negotiate a contract in 120 days      (Updated 10/20/2015)

STATE

The 2013/1014 session wrapped up December 31, 2014. Any legislation pending at the time must be reintroduced in the 2015/2016 and start the legislative process over again.

IMPORTANT NOTE: SINCE 20I4 MARKED THE END OF THE LEGISLATURE'S SESSION, THE FOLLOWING PROPOSED LEGISLATION HAS BEEN REMOVED FROM CONSIDERATION. HOWEVER, LEGISLATORS TYPICALLY RE-INTRODUCE SIMILAR PROPOSALS AT THE START OF THE NEW SESSION.

Prevailing Wage Law – Last year the Michigan House Republican caucus (which spearheaded the passage of Right-to-Work) announced its plan to pick up repeal of Michigan’s prevailing wage law. This was one of the first legislative priorities the state GOP set when it won control of the Michigan legislature and the governorship.

The prevailing wage law requires state-financed or sponsored projects for which a state agency, university, community college or school district is the contracting agent to pay workers a wage of at least the level of other construction workers in a given region.

Opponents of the law estimate that it costs Michigan upwards of $250,000,000 each year. Organized labor sees this as a further attack on it.

Advocates for small business continue to oppose this law. In its Small Business Agenda for 2014, the Michigan branch of the National Federation of Independent Businesses calls for the repeal of the state’s Prevailing Wage Law, saying in part

. . . The state’s current prevailing wage law acts as a “super minimum wage” that sets wages much higher than local construction wages determined by fair competition in the free market. NFIB will be supporting legislation that will eliminate the prevailing wage requirement on public construction projects financed with state taxpayer dollars.

In the runup to the November elections, Senate Majority leader Richardville and Governor Snyder stated this issue was not high on their agendas. However, Richardville’s tenure as Senate Majority leader ended December 31, 2014. The current Majority Leader, Arlan Meekhof, was a sponsor of Michigan’s Right-to-Work law and has expressed interest in eliminating the prevailing wage law.

Repeal of Prevailing Wage Law

Three bills (S 1 and HR 4001, 4002 and 4003) were introduced in January 2015 to repeal the fifty-year old law requiring state and local governments to require contractors doing work for them to pay a wage higher than market rate for work they use private businesses for. Prevailing wage is used primarily in the construction industries doing state government projects.

In February 2015 Governor Snyder expressed opposition to the bill and agreed not to sign any bill repealing prevailing wage in exchange for Democrat support for road funding. Michigan House Speaker Kevin Cotter stated that this legislation would be tabled until after Summer 2015.

On May 13, 2015 the Senate Michigan Competitiveness Committee reported out a package of bills that would repeal the Prevailing Wage laws.  On May 14 the Michigan Senate passed the bills but the House did not act on them.

In May the Protecting Michigan Taxpayers organization announced it would lead a petition drive to put the issue of repealing Michigan’s Prevailing Wage laws on the 2016 ballot. According to state law, if the petition drive succeeded it would put the onus back on the legislature to pass a bill; if the legislature did so, the bill would become law without the governor’s signature. If it did not, question would go on the 2016 ballot for an up-or-down vote by the general population. The overall effect of the petition drive, if successful, would be to take the governor and his promised veto completely out of the equation.

In October the petition putting repeal of prevailing wage to a general election vote was withdrawn due to challenged and/or duplicate signatures, which the supporters of the petition acknowledged to be the case. The petition campaign sponsor, called Protecting Michigan Taxpayers, has stated its intention to start the petition process over to ensure the integrity of the process.

If they succeed in submitting the necessary number of signatures to the State Board of Canvassers, the scenario  would once again revert to the legislature, and potentially back to the voters, as described above. In the meantime efforts to get the repeal bill passed in Michigan’s House of Representatives this fall is gaining momentum. Speaker of the House Kevin Cotter is quoted as stating he sees no scenario where the House does not vote to enact the prevailing wage repeal. The Senate has already voted to pass the repeal, and Majority Leader Arlan Meekoff states there is little question the Senate will also pass some version of prevailing wage repeal again. (Updated 10/31/2015)

In a related development, the Michigan Supreme Court heard oral arguments the week of October 13th challenging whether municipalities have the power to require contractors to pay union-scale wages and benefits on local building projects.  As the new term for Michigan’s Supreme Court starts up this was one of the first cases it heard. (Updated 10/20/2015)

Parolee Hiring Assistance Legislation Introduced in 2014 (HB - 5216, 5217, 5218)

A package of bills designed to encourage businesses to hire parolees was introduced in the House on January 9, 2014.  HB 5216  allows the state Department of Corrections to issue a “Certificate of Employability” to parolees just prior to their release. Under 5217, hiring someone with such a certificate would provide certain protections to employers from either civil or criminal liability for negligent hiring in the event the individual runs into legal problems in the context of his or her employment. HB 5218 offers similar protections to licensing boards to encourage them to issue licenses to otherwise-qualified ex-convicts.

With bipartisan support, all three bills were passed by the House. On December 3rd the Michigan Senate voted to pass bills 5216 and 5217 with immediate effect upon signature by the governor. Governor Snyder signed the bills December 16, 2014 (Updated 12/17/2014)    

Michigan authorizes veterans’ preference in private employment

Governor Rick Snyder has signed into law a bill authorizing private employers to adopt and apply a veterans’ preference employment policy.

The law, which defines a “private employer” as a sole proprietor, corporation, partnership, limited liability company, or other private entity with one or more employees, provides that a veterans’ preference employment policy shall be in writing and shall be applied uniformly to employment decisions regarding the hiring or promotion of veterans or the retention of veterans during a reduction in the workforce.

Public Act 508 (H. 5418), is effective immediately. (Updated 1/19/2015)

Paid Sick Leave

On February 5, 2015 Democrats introduced bills that would require Michigan employers to provide one hour of paid sick leave for every thirty hours of work. The bills would  allow workers to take sick time off to care for themselves or loved ones, including a same-sex partner, grandparents, children and other close family members.

On a related issue, the Michigan GOP has initiated legislation that would prohibit local “sick Pay” ordinances  intended to create wage and benefit boosts in local municipalities potentially causing a patchwork of employment laws throughout the state. (Updated 2/6/2015)

Paid Sick Leave Ballot Proposal Submitted

A new ballot proposal initiative that would accrue one (1) hour of paid sick leave for every forty (40) hours worked was submitted to the Michigan Board of Canvassers by a coalition group on July 13, 2015.

To proceed to a statewide ballot vote, supporters will have to gather 253,000 signatures from registered voters in Michigan. It would then go to the state legislature which would have forty (40) days to act. If the legislature does nothing or rejects the proposal it would then go to a vote of the electorate. The earliest vote in Michigan at this point would be November of 2016. The legislature could also put up a competing proposal. (Updated 7/14/2015)

Garnishment

Michigan Public Act 14 (H. 4119), L. 20157 amends Michigan’s garnishment law.  The law is applicable to writs of garnishment issued after September 30, 2015 so that a garnishment made after that date would remain in effect until the balance of the judgment is satisfied.  It also requires a plaintiff to pay a $35 fee (up from $6) to the employer at the time the garnishment is served. New procedures will include allowing the garnishee to cure an identified failure after an entry of default but before a default judgment is entered; making a garnishment or a notice of failure invalid or unenforceable unless it is served on the garnishee in accordance with the Michigan Court Rules; and specifying that garnishments have priority in the order in which they are received, with three exceptions: An order of income withholding for child or spousal support under the Support and Parenting Time Enforcement Act; a levy to satisfy a tax liability; and a levy of restitution for overpayment of benefits under the Michigan Employment Security Act would all have priority over a garnishment. (updated 5/19/15)

Payroll Deductions Public Act 15 (H. 4120), L. 2015 amends Michigan’s law regulating payment of wages and fringe benefits to allow an employer to deduct from an employee’s wages without the employee’s written consent an amount the employer paid of an employee’s debt under a default judgment, provided: (1) the employer gives the employee a written explanation of the deduction at least one pay period before the wage payment affected by the deduction was made; (2) the deduction was not greater than 15% of the gross wages earned in the pay period the deduction was made; (3) the wage deduction was made after the employer had made all deductions expressly permitted or required by law or a collective bargaining agreement, and after any employee-authorized deduction; and (4) the deduction did not reduce the regularly scheduled gross wages otherwise due the employee to a rate that was less than the state minimum wage rate or the federal minimum wage rate, whichever was greater. (updated 5/19/15)

Job Training Bills

(SB 69, SB 70 and SB 71) The Senate Education Committee unanimously recommended a bill package modifying the state's New Jobs Training Program to the Senate.

The program began in 2008 and pairs community colleges with Michigan businesses by allowing participating colleges to sell bonds to fund skilled training, which is repaid by withholding payments to the Department of Treasury for each employee in a new job.

SB 69, SB 70 and SB 71, sponsored by Sens. Darwin Booher (R-Evart), Peter MacGregor (R-Rockford) and Phil Pavlov (R-St. Clair), respectively, would eliminate a 2018 sunset, remove a $50 million cap on the program after 2016 and grandfather in program participants to allow them to pay their employees 175 percent of the minimum wage in place at the time the agreement was signed. 

Bills taken up by Michigan House as HB 4404.

 (HB 4404) - The bill would amend the Michigan Employment Security Act (MESA) to expand the allowable use of the Contingent Fund to include administration of the Talent Investment Agency in the Department of Talent and Economic Development, created by Executive Order 2014-12. Under current law, the Contingent Fund may be used for the administration of the Unemployment Insurance Agency (UIA), which was moved to the Talent Investment Agency by Executive Order 2014-12. The proposed change also would allow for Contingent Fund revenues to be used to support workforce training programs.

The Contingent Fund is split into two effective accounts. The first account contains Solvency Tax collections. These are collected from employers with negative unemployment insurance experience account balances if the State has outstanding Federal unemployment insurance (UI) advances under Title XII. These taxes have not been collected since Michigan's most recent Title XII loans were repaid in early 2012. The second account contains collections from penalties and interest paid by UI claimants and employers who engage in activities not permitted under MESA.

This bill was passed by the House 4/29/2015, passed in the Senate 5/26/2015 and signed by Governor 6/11/2015 (Updated 6/12/2015)

Employment Non-Compete Agreements

Representative Lucido (R-Washington Township) introduced HB 4198 which would severely restrict non-compete clauses in employment agreements.  The bill has been referred to the House Commerce and Trade Committee, and Representative Lucido is interested in moving the bill through committee as soon as possible.

Right to Work – Public Employment

State Rep. Gary Glenn, (R-Midland), introduced two bills expanding right to work in public employment further. The first bill would extend Right to Work provisions to public safety personnel, the only group exempted in the 2012 Michigan law that bans a requirement that employees pay union dues as a condition of employment.  The other bill, which would impact even more workers statewide, would ban all public sector unions from representing anyone who is not a dues-paying member of that union.

"It would amend state law for government employee unions and would say that government employee unions can represent only employees who voluntarily join and pay dues," Glenn said.

He said the bill would impact anyone employed in the public sector, including public school teachers and all state, county and city employees. He's current seeking co-sponsors for the two bills before they are introduced in the state House.

Right to Work – Revisions to Law

State Rep. John Churkin (D-Roseville) introduced two bills in August to amending the public sector Right to Work law. HB 4819 revises the right to work law to restore former provision removed by Right to Work law.

The second bill HB 4820, allows for a requirement for agency fee for non-union members in bargaining agreements and as a condition of employment in the public sector.

Both bills were referred to Commerce and Trade Committee.

Payment of Salary to Union Officials and Elimination of Pension Calculation from Union Salaries – Public Employment

SB 279 and 280 would end the practice of school districts paying the salary of employees on leave to serve as union officials.

Bill 279 would no longer have union official state funded pensions calculated of their union salaries.

SB 280 would prohibit paid release time for union officials — for instance, a paid period of time where a teacher leaves the classroom to serve as the head of his or her local union or in the Michigan Education Association or American Federation of Teachers — from being included in collective bargaining agreements.

The bills would apply to all state and local government employees who are not firefighters or police officers.

On July 29th the Michigan Supreme Court upheld the public sector Right-to-Work law. (Updated 7/30/2015)

MIOSHA Amendment

Bill SB 213  removes a provision that requires an employer to notify the Michigan Occupational Safety and Health Administration within eight hours of a workplace fatality or of any hospitalization of three or more employees suffering from a workplace-related accident, illness or health hazard.

Ms. Schuitmaker (R-Lawton) the bills sponsor said her bill represents something that has already been changed in federal law and implemented as of January 1, and the state's Department of Licensing and Regulatory Affairs asked her to make the change.

This bill is in the Senate Commerce Committee for review and discussion.  (April edition)

Local Preemption

This legislation was reintroduced from the prior session. It is intended to combat a national trend of local governments passing local mandates on employers.  This new law will prevent local governments from creating a patchwork of regulatory requirements by passing ordinances that mandate things like sick leave, fringe benefits, wage level and conditions of employment.

FEDERAL REGULATORY

 

 

DOL proposes new exempt salary requirements

On July 6, 2015 the Wage and Hour Division of the DOL published a Notice of Proposed Rule Making (NPRM) to change the salary requirements for exempt classifications:

  • The minimum guaranteed salary level will be increased from $455 per week to the 40th percentile of weekly earnings for full-time salaried workers (currently $921 per week, or $47,892 annually);
     
  • The "highly compensated employee" exemption, which enables employers to meet a simpler "duties" test as long as a higher minimum guaranteed salary is met, will be increased from $100,000 to the annualized value of the 90th percentile of weekly earnings of full-time salaried workers ($122,148 annually); and
     
  • The DOL will establish a mechanism for automatically updating the minimum guaranteed salary calculations on a going-forward basis. If adopted, using the standard of the 40th percentile of weekly earnings for full-time salaried workers (based on certain other assumptions) will result in the minimum guaranteed salary increasing to approximately $970 a week ($50,440 a year) in 2016.

Although the NPRM does not make any specific changes to the duties tests, the DOL invited public comments on the extent to which the "duties" test should be adjusted, particularly in light of the proposed changes to the minimum salary level. Specifically, the DOL requests public input on the following:

  • What, if any, changes should be made to the duties tests?
     
  • Should employees be required to spend a minimum amount of time performing work that is their primary duty in order to qualify for exemption? If so, what should that minimum amount be?
     
  • Should the DOL look to the State of California's law (requiring that more than 50% of an employee's time be spent exclusively on work that is the employee's primary duty) as a model? Is some other threshold that is less than 50% of an employee's time worked a better indicator of the realities of the workplace today?
     
  • Does the single standard duties test for each exemption category appropriately distinguish between exempt and nonexempt employees? Should the DOL reconsider its decision to eliminate the long/short duties tests structure?
     
  • Is the concurrent duties regulation for executive employees (allowing the performance of both exempt and nonexempt duties concurrently) working appropriately or does it need to be modified to avoid sweeping nonexempt employees into the exemption? Alternatively, should there be a limitation on the amount of nonexempt work? To what extent are exempt lower-level executive employees performing nonexempt work?

Although any changes of the duties test should come from a new NPRM, it is unclear whether the duties test will be included in the final regulations.

The DOL also noted that it is considering whether to include additional examples of specific occupations to provide further guidance in administering the exemptions, particularly within the computer-related fields. In addition, the DOL stated that it is considering whether to allow nondiscretionary bonuses to satisfy some portion of the standard salary requirement.

The DOL's public comment period runs through September 4, 2015.  However, any final regulations are expected not to be effective until 2017.

 

Blacklisting Federal Contractor Regulations and DOL Guidance

President Obama issued Executive Order (EO) 13673, “Fair Pay and Safe Workplaces,” on July 31, 2014. The EO applies to federal contractors and subcontractors. The Department of Labor (DOL) published a proposed guidance to help other federal agencies implement the EO. The agencies are the Federal Acquisition Regulatory Council (FAR Council), the Department of Labor (Department), the Office of Management and Budget (OMB), and the General Services Administration (GSA) who also published proposed regulations as well.   Specifically, the EO requires federal contractors with $500,000 or more in federal contracts to report whether during the preceding three-year period there have been any administrative merits determination, civil judgment, or arbitral award or decision rendered against them for violations of 14 identified federal labor laws and executive orders or equivalent State laws. They must also report the same for any covered subcontractors working under the contract. They must do this reporting at pre-award as well as during the contract period. The EO requires the contracting agency or agencies to include this requirement in their solicitations. 

In addition, contractors and subcontractors will be required to provide their workers on federal contracts with information each pay period regarding how their pay is calculated (a wage statement) and provide notice to those workers whom they treat as independent contractors.  Each contracting agency will have a Labor Compliance Advisor (LCA) to assist in any determination of serious, repeated, willful and pervasive violations by federal contractors or subcontractors. Contractors will be required to report on themselves and their subcontractors (if the subcontract exceeds $500,000 and is not for commercially off-the-shelf items).  These advisors will liaise with the DOL for assessing the level of the violation.

 

During the performance of the covered contract, the EO requires contractors to update their disclosures semi-annually and obtain similarly updated information from their subcontractors. The proposed FAR regulations propose a phased-in approach to subcontractor reporting.

The FAR regulations and DOL Guidance were published May 28th and comments are expected by July 27, 2015

 

Proposed Rule Changes Impacting Employer Union Organizing Response and Elections

On June 20 and 21 of 2011 the Department of Labor and the National Labor Relation Board proposed rules changing a decades-long interpretation and application of the National Labor Relations Board. On June 20, 2011 the Department of Labor (DOL) issued proposed regulation tightening the interpretation of “advice” under the Labor-Management Reporting and Disclosure Act (LMRDA). On June 21st, the National Labor Relations Board (NLRB) issued proposed rules that it says will “streamline” the union election process.

NLRB Ambush/Quickie Election Rules (Formally Known as “Streamlined” Elections) – (Note: Final rules published December 12, 2014.)

New Rules went into effect April 14, 2014.

History

On April 30, 2012 the NLRB Quickie Election Rule was promulgated.  One of the NLRB’s primary duties under the law is to protect the free and fair secret ballot election to determine whether employees choose to be represented by a union or not. The new rules do the following: 

  1. Provide an NLRB hearing officer the ability to limit the evidence that could be introduced at a representation case hearing
  2. Provide the hearing officer the authority to deny a party the right to file a brief
  3. Eliminate a party’s right to have the NLRB review a decision by a regional director to direct an election
  4. Eliminate current language that requires an election to be conducted within 25-30 days, thereby permitting elections to be held before the 25-day period. The amended rules call for 21 days or fewer
  5. Eliminate a party’s right to have the NLRB review any decisions by a regional director or an administrative law judge regarding post-election disputes
  6. Prohibit pre-election appeals and consolidate all appeals to be heard only after the election takes place
  7. Allow direct election appeals to the Board before an election only in  “extraordinary circumstances”

The Board believes that the proposed rule amendments would remove unnecessary barriers to the fair and expeditious resolution of questions concerning representation; that they would simplify representation-case procedures and render them more transparent and uniform across regions; eliminate unnecessary litigation and consolidate requests for Board review of regional directors’ pre- and post-election determinations into a single, post-election request; and would allow the Board to more promptly determine if there is a question concerning representation and, if so, to resolve it by conducting a secret ballot election.

On January 22, 2014 the Federal Register reported that the National Labor Relations Board rescinded its Quickie Election rule. This meant the rules governing organizing elections went back to the way they were previous to December 11, 2011. The restoration pertained to 29 CFR Parts 101 and 102, and confirmed the NLRB’s statements of procedures and rules and regulations to the D.C. District Court’s “mandate that ‘representation elections will have to continue under the old procedures,’” the Board said. Given the circumstances, the NLRB found it unnecessary to provide notice and comment on the restoration.

On February 6, 2014 the National Labor Relations Board issued new proposed “Quickie” Election rules under the reconstituted Board. See above summary. These rules are virtually the same as the previous rules that had been rescinded

On March 27, 2014 new legislation was introduced that would change the rules surrounding NLRB elections and establish legal protections for how NLRB oversees elections. The bill would:

  • Guarantee workers the time to gather all the facts to make a fully informed decision in a union election. No union election will be held in fewer than 35 days.
  • Ensure that employers are able to participate in a fair union election process. The bill provides employers at least 14 days to prepare their case to present before an NLRB election officer and protects their right to raise additional concerns throughout the pre-election hearing.
  • Reassert the board’s responsibility to address critical issues before a union is allowed to represent workers. The board must determine the appropriate group of employees to include in the union before the union is certified, as well as address any questions of voter eligibility.
  • Empower workers to control the disclosure of their personal information. Employers would have seven days to provide a list of employee names and one additional piece of contact information chosen by each individual employee.

See more information above at the Federal Legislation update section. (Updated 5/5/14)

DOL LMRDA Rulemaking Proposal – Persuader Regulations

The DOL states that its new rulemaking allows for more transparency by requiring employers to disclose  whom they are using to provide advice on influencing employees in connection with union organizing and bargaining. Currently employers are only required to disclose consultants they have hired who speak directly to employees on these matters. They are not required to file reports identifying outside consultants who are only giving advice to the employer.

Under the proposed rule, employers will have to report any arrangements with consultants that issue communications on behalf of an employer designed to “directly or indirectly persuade workers concerning their rights to organize or bargain collectively.”

This proposed disclosure requirement, the Labor Department states, also includes information about “union avoidance” seminars and conferences offered to employers by lawyers and labor consultants. This is because the Labor Department states such seminars “involve reportable persuader activity.”

ASE’s position is that both rules significantly curtail employers’ rights to communicate to and inform employees about what unionization means and how it may adversely affect them. ASE is in opposition to any restrictions or the imposition of regulations that curtail the employer’s right to maintain its business free from union influence or organization.

The Persuader Rules remain under review by the White House and the latest information from the Department of Labor on when they may be issued is December, 2015 (updated 5/27/15)

Wage and Hour update definition of spouse in FMLA

The Department of Labor issued a Final Rule on February 25, 2015 revising the regulatory definition of spouse under the Family and Medical Leave Act of 1993 (FMLA).   The rule change updates the FMLA regulatory definition of “spouse” so that an eligible employee in a legal same-sex marriage will be able to take FMLA leave for his or her spouse regardless of the state in which the employee resides. Previously, the regulatory definition of “spouse” did not include same-sex spouses if an employee resided in a state that did not recognize the employee’s same-sex marriage. Under the new rule, eligibility for federal FMLA protections is based on the law of the place where the marriage was entered into whether in country or outside of the US. This “place of celebration” provision allows all legally married couples, whether opposite-sex or same-sex, to have consistent federal family leave rights regardless of whether the state in which they currently reside recognizes such marriages.  The effective date for the rule is March 27, 2015.

With the Supreme Court’s decision in Obergefell et. al. v. Hodges, all states must recognize same sex marriage.  It is likely that the regulations will be updated one more time to incorporate the decision.  To access forms under the current rule, click here.

OFCCP issues Proposed Sex Discrimination Guidelines Regulations

On January 28, 2015, the Department of Labor’s Office of Federal Contract Compliance Programs (“OFCCP”) announced a Notice of Proposed Rulemaking (“NPRM”) to update its Sex Discrimination Guidelines (the “Guidelines”). It is a total rewrite of the current regulations. The NPRM was published in the Federal Register on January 30, 2015, followed by a sixty-day comment period.

The OFCCP had not substantively updated the Guidelines since 1970 despite forty-five years of changes in discrimination laws through legislation and court decisions.  While the proposed regulations seek to update requirements in accordance with “existing law and policy,” many of the provisions go beyond the parameters of current statutory and other legal obligations, including:

  • The adoption of the “implicit bias” theory of discrimination because “[r]esearch clearly demonstrates that widely held social attitudes and biases can lead to discriminatory decisions, even where there is no formal sex-based (or race-based) policy or practice in place” despite the Supreme Court’s explicit rejection of the implicit bias theory in Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2553-54; 
  • A new requirement that aligns with the EEOC’s controversial guidance that contractors must provide light duty to all pregnant employees regardless of whether an impairment substantially limits a major life activity even though the issue is pending before the Supreme Court in Young v. UPS;
  • A new requirement that contractors allow transgendered individuals to use the restroom of his or her choice (despite Congress’s decision not to enact Employment Nondiscrimination Act); 
  • A prohibition on contractors imposing a shorter maximum amount of pregnancy leave as compared to the maximum time off allowed for other types of medical or short-term disability leave;
  • More robust protections regarding compensation discrimination which include Equal Pay Act protection.

A final rule is expected by end of 2015. (updated 6/30/15)

OFCCP issues final rule on LGBT Executive Order

On December 3, 2014, the OFCCP announced its final rule on regulations to implement an Executive Order (EO) signed this summer by President Obama which bans discrimination against LGBT workers by federal contractors. The final rule, which was published December 9, 2014, revises the OFCCP’s regulations at 41 CFR Parts 60-1, 60-2, 60-4, and 60-50. It does not require contractors to conduct any data analysis with respect to the sexual orientation or gender identity of their applicants or employees. Nor does it require contractors to collect any information about applicants’ or employees’ sexual orientation or gender identity. However, contractors may ask applicants to voluntarily provide this information, although doing so may be prohibited by state or local law. In any event, the rule prohibits contractors from using any information gathered to discriminate against an applicant or employee based on sexual orientation or gender identity. The rule was slated for publication in the Federal Register on December 9, 2014, to take effect 120 days thereafter. It will apply to covered contracts entered into or modified on or after that date.   The final rule and related information, including a FAQ, is available on the OFCCP’s website. This rule may be subject to multiple litigations once effective by Faith based organizations for an exception based on the Hobby Lobby Supreme Court Case as well as employer groups for violating the Administrative Procedure Act process.

OFCCP Issues final regulations on Pay Transparency

These pay transparency requirements will apply to all contractors and subcontractors covered by the non-discrimination and Affirmative Action provisions of Executive Order 11246, including contractors who are not required to develop written Affirmative Action Plans. Thus, an organization that meets the criteria will be covered if it:

•Has a single federal contract, subcontract, or federally-assisted construction contract worth more than $10,000, or

•Has federal contracts or subcontracts that, combined, are worth more than $10,000 in any 12-month period, or

•Has government bills of lading, or

•Serves as a depository of federal funds, or

•Is an issuing and paying agency for U.S. savings bonds and notes in any amount.

The Final Rule will apply to contracts entered into or modified on or after January 11, 2016. Contracts are considered “modified” if there is any alteration in their terms and conditions, including supplemental agreements and extensions.  Employees cannot be disciplined for asking about or discussing their own or other employees’ pay and benefits, and applicants cannot be discriminated against for asking about or discussing employees’ compensation. Specifically, the Equal Opportunity Clause is revised to include the following language:

The contractor will not discharge or any in manner discriminate against any employee or applicant for employment because such employee or applicant has inquired about, discussed, or disclosed the compensation of the employee or applicant or another employee or applicant. . . .

This non-discrimination provision does not apply if the employee has access to the employer’s compensation information as part of his or her job responsibilities. The following language is also included in the revised Equal Opportunity Clause:

This provision shall not apply to instances in which an employee who has access to the compensation information of other employees or applicants as part of such employee’s essential job functions discloses the compensation of such other employees or applicants to individuals who do not otherwise have access to such information, unless such disclosure is in response to a formal complaint or charge, in furtherance of an investigation, proceeding, hearing, or action, including an investigation conducted by the employer, or is consistent with the contractor’s legal duty to furnish information.

Compensation is defined as “any payments made to, or on behalf of, an employee or offered to an applicant as remuneration for employment, including but not limited to salary, wages, overtime pay, shift differentials, bonuses, commissions, vacation and holiday pay, allowances, insurance and other benefits, stock options and awards, profit sharing and retirement.”

Contractors must use language prescribed by the OFCCP in notifying applicants and employees of their rights. This mandatory language must be included in existing employee handbooks or other manuals, and must be posted electronically or in conspicuous places. The OFCCP will also be updating the “EEO is the Law” poster to include this notice. Presumably, this required language and the updated poster will be provided before the January 11, 2016, effective date. (updated 9/15/15)

EEOC issues Wellness Regulations

Many different laws govern wellness programs, including HIPAA, ACA, Civil Rights Act, Equal Pay Act, Age Discrimination in Employment Act, Genetic Information Nondiscrimination Act, and the ADA. On April 16, 2015, the Equal Employment Opportunity Commission (EEOC) released proposed regulations covering wellness programs that involve disability-related inquiries or medical examinations.  The DOL, Treasury and HHS jointly issued regulations related to the Wellness Program exception to the nondiscrimination rule in 2006, and these regulations were updated in 2013 following the passage of the ACA.  The EEOC did not participate in these regulations.

The EEOC proposed regulations diverge from the DOL regulations in important respects.  First, in contrast to the DOL regulations, which do not restrict the size of reward under a participatory wellness program, the proposed EEOC guidance seeks to extend the 30% maximum award to participatory wellness programs that require employees to answer a health questionnaire with disability-related inquiries or take medical examinations.

A second difference relates to how the proposed regulations apply the 30% limit in general.  The EEOC proposed regulations set the maximum reward at 30% of the self-only cost of coverage (taking into account both the employee and employer share of the cost).  The DOL regulations allow a reward to be a maximum of 30% of the cost of family coverage if the wellness program is extended to covered dependents.  Additionally, the ACA allows the DOL to increase the 30% limit to 50%, and the DOL has done so by expanding the 30% limit by an additional 20% to the extent that the additional percentage is in connection with a program designed to prevent or reduce tobacco use.  The EEOC regulations do not contain similar flexibility.

Last, the EEOC regulations require that employers provide a detailed notice to participants separate from other notices already required under the HIPAA. 

Comments were to be submitted by June 19th.  A final rule is expected by end of 2015. (updated 6/30/15)

NLRB backs off on attempt to weaken right-to-work

Since President Obama came into office, the National Labor Relations Board (NLRB) has established a  pervasive culture of union favoritism. However the board surprised many this week when it stepped back from an attempt to undermine state right-to-work laws.

Since 1947, states have been allowed to prohibit compulsory union membership through laws known as “right to work.” However, in April, the board signaled a move toward reversing decades of precedent and diminishing important worker rights provided by these state-based laws. On July 8 reporter Kent Hoover of The Business Journals reported that

The NLRB suspended requests for briefs on whether it should allow to unions to collect fees in right-to-work states from non-union workers who are represented by unions in grievance procedures. . . In a case involving a non-union worker at Buckeye Florida Corp., an administrative judge ruled that a United Steelworkers local violated the National Labor Relations Act by making him pay a fee for representing him in a grievance case. The union appealed this ruling, prompting the NLRB to ask for legal opinions as to whether it should change existing rules against unions charging non-members a “fair share” fee for processing grievances. The union withdrew its appeal after the grievance case was settled in the worker’s favor, and the NLRB then withdrew its request for briefs on the “fair share” issue.

(Updated 8/5/2015):

NLRB makes a side attack on Right to Work states

The NLRB discarded a 53-year-old standard that allowed the union dues checkoff to cease after a collective bargaining agreement (CBA) expired.  The Service Employees International Union Healthcare Wisconsin (SEIU) filed an unfair labor practice that Lincoln Lutheran of Racine (Lincoln) violated Section 8(a)(5) and (1) when, on March 19, 2013, it ceased dues check-off for unit employees after the CBA between the parties expired.  The case went before an Administrative Law Judge (ALJ) for adjudication, who found for Lincoln in 2014.  On appeal to the NLRB, the Board voted along party lines to discard the decades-long rule and overrule the ALJ.  The impact of this decision is to effectively make it appear to employees that the expired CBA is still in effect.  In a Right-to-Work state like Michigan, this approach could confuse employees intending to drop out of the union when the contract expires, making them hesitate to act by giving them the impression the contract hasn’t expired.  Further, in any case, it enriches the union by collecting dues from employees who do not wish to pay them, leaving those employees no recourse to collect these payments since they were declared by the NLRB as legal payments.  Source: Lincoln Lutheran of Racine and Service Employees International Union Healthcare Wisconsin, SEIU-HCWI, Case 30–CA–111099

(Updated 9/8/15)

Two amendments were added before passage on June 17th. One amendment grandfathers existing Living Wage ordinances passed through January 1st. The second amendment allows cities to negotiate terms and conditions of vendor contracts outside of wages and benefits The legislation was signed by Governor Snyder  June 30,2015 (Updated 6/30/2015)

Increase Minimum Wage for Tipped Workers

Coordinating with the April 14, 2015 Equal Pay day that symbolizes how far into the year a women must work to earn what men earned in the previous year, Michigan Democrats introduced a  set of bills intended to address pay disparity in Michigan:

SB 373 Proposed legislation is in the works by State Senate Democrats to increase and eventually eliminate the tipped worker minimum wage which is currently set at $3.10/hour. This is $5.05/hr. less that minimum wage workers in this state.(Updated 6/3/2015)

Accelerates Minimum Wage Increase

SB 391 amends Michigan’s minimum wage law to increase the minimum wage from $8.50/hour beginning 1/1/2016 to $11.20/hr. from $8.90/hr. to $13.10/hr. in 2017 and from $9.25/hr. to $15.00/hr. in 2018.

Referred to committee. (Updated 6/11/2015)

LABOR

HB 4482 - (Plawecki) Requires an employer to disclose certain wage information upon requests. Amends 1978 PA 390 by amending section 13a (MCL 408.483a), as added by 1982 PA 524.To Commerce and Trade

 

HB 4537 - (LaFontaine) Protects employee who was absent from work to provide emergency civil air patrol services from adverse employment action. To Commerce and Trade

WAGE DISCRIMINATION

HB 4483 and SB 272- (Hovey-Wright) Modifies provision regarding wage discrimination based on sex, and increases fine. Amends 1931 PA 328 by amending section 556 (MCL 750.556).To Commerce and Trade

HB 4486, SB 269, 273 & 285 - (Love) Establishes commission on pay equity and specifies duties. Amends 1976 PA 453 (MCL 37.2101 to 37.2804) by adding section 202b

HB 4487 SB 269, 273 & 285 - (Driskell) Prohibits discrimination for failing to provide equal compensation for comparable work under certain circumstances. Amends 1976 PA 453 by amending sections 102, 103 and 202 (MCL 37.210, 37.2103 and 37.2202), section 102 as amended by 1992 PA 124, section 103 as amended by 1999 PA 202 and section 202 as amended by 2009 PA 190.

HB 4488 SB 269, 273 & 285 - Driskell) Requires pay equity compliance certification for private businesses that contract with the state. Amends 1976 PA 453 by amending section 209 (MCL 37.2209), and by adding section 209a.

HB 4489 SB 269, 273 & 285  - (Pagan) Requires posting in workplace of state and federal pay equity laws.

HB 4490 SB 269, 273 & 285 - (Guerra) Establishes survey of compensation practices within public and private sectors. Amends 1978 PA 609 by amending section 3 (MCL 408..903), as amended by 1981 PA 131.

HB 4491 SB 269, 273 & 285 - (Brinks) Expands prohibition of discrimination in the workplace for purposes of minimum wage. Amends 2014 PA 138 by amending section 13 (MCL 408.423).

HB 4492 SB 269, 273 & 285 -  (Durhal) Allows additional remedies under the Elliott-Larsen Civil Rights Act for discrimination actions under the workforce opportunity wage act. Amends 2014 PA 138by amending section 9 (MCL 408.419).

All Bills were referred to the committee on Commerce and Trade

EMPLOYMENT DISCRIMINATION

HB 4486 SB 269, 273 & 285  - (Hovey-Wright) Creates Michigan award for equal pay in the workplace program. Referred to the committee on  Commerce and Trade.

HB 4538 - ELLIOTT-LARSEN (Hoadley) Includes sexual orientation and gender identity or expression as categories protected under the Elliott-Larsen Civil Rights Act. Amends 1976 PA 453 To Commerce and Trade

FEDERAL REGULATORY

DOL proposes new exempt salary requirements

On July 6, 2015 the Wage and Hour Division of the DOL published a Notice of Proposed Rule Making (NPRM) to change the salary requirements for exempt classifications:

  • The minimum guaranteed salary level will be increased from $455 per week to the 40th percentile of weekly earnings for full-time salaried workers (currently $921 per week, or $47,892 annually);
     
  • The "highly compensated employee" exemption, which enables employers to meet a simpler "duties" test as long as a higher minimum guaranteed salary is met, will be increased from $100,000 to the annualized value of the 90th percentile of weekly earnings of full-time salaried workers ($122,148 annually); and
     
  • The DOL will establish a mechanism for automatically updating the minimum guaranteed salary calculations on a going-forward basis. If adopted, using the standard of the 40th percentile of weekly earnings for full-time salaried workers (based on certain other assumptions) will result in the minimum guaranteed salary increasing to approximately $970 a week ($50,440 a year) in 2016.

Although the NPRM does not make any specific changes to the duties tests, the DOL invited public comments on the extent to which the "duties" test should be adjusted, particularly in light of the proposed changes to the minimum salary level. Specifically, the DOL requests public input on the following:

  • What, if any, changes should be made to the duties tests?
     
  • Should employees be required to spend a minimum amount of time performing work that is their primary duty in order to qualify for exemption? If so, what should that minimum amount be?
     
  • Should the DOL look to the State of California's law (requiring that more than 50% of an employee's time be spent exclusively on work that is the employee's primary duty) as a model? Is some other threshold that is less than 50% of an employee's time worked a better indicator of the realities of the workplace today?
     
  • Does the single standard duties test for each exemption category appropriately distinguish between exempt and nonexempt employees? Should the DOL reconsider its decision to eliminate the long/short duties tests structure?
     
  • Is the concurrent duties regulation for executive employees (allowing the performance of both exempt and nonexempt duties concurrently) working appropriately or does it need to be modified to avoid sweeping nonexempt employees into the exemption? Alternatively, should there be a limitation on the amount of nonexempt work? To what extent are exempt lower-level executive employees performing nonexempt work?

Although any changes of the duties test should come from a new NPRM, it is unclear whether the duties test will be included in the final regulations.

The DOL also noted that it is considering whether to include additional examples of specific occupations to provide further guidance in administering the exemptions, particularly within the computer-related fields. In addition, the DOL stated that it is considering whether to allow nondiscretionary bonuses to satisfy some portion of the standard salary requirement.

The DOL's public comment period runs through September 4, 2015.  However, any final regulations are expected not to be effective until 2017.

Blacklisting Federal Contractor Regulations and DOL Guidance

President Obama issued Executive Order (EO) 13673, “Fair Pay and Safe Workplaces,” on July 31, 2014. The EO applies to federal contractors and subcontractors. The Department of Labor (DOL) published a proposed guidance to help other federal agencies implement the EO. The agencies are the Federal Acquisition Regulatory Council (FAR Council), the Department of Labor (Department), the Office of Management and Budget (OMB), and the General Services Administration (GSA) who also published proposed regulations as well.   Specifically, the EO requires federal contractors with $500,000 or more in federal contracts to report whether during the preceding three-year period there have been any administrative merits determination, civil judgment, or arbitral award or decision rendered against them for violations of 14 identified federal labor laws and executive orders or equivalent State laws. They must also report the same for any covered subcontractors working under the contract. They must do this reporting at pre-award as well as during the contract period. The EO requires the contracting agency or agencies to include this requirement in their solicitations. 

In addition, contractors and subcontractors will be required to provide their workers on federal contracts with information each pay period regarding how their pay is calculated (a wage statement) and provide notice to those workers whom they treat as independent contractors.  Each contracting agency will have a Labor Compliance Advisor (LCA) to assist in any determination of serious, repeated, willful and pervasive violations by federal contractors or subcontractors. Contractors will be required to report on themselves and their subcontractors (if the subcontract exceeds $500,000 and is not for commercially off-the-shelf items).  These advisors will liaise with the DOL for assessing the level of the violation.

During the performance of the covered contract, the EO requires contractors to update their disclosures semi-annually and obtain similarly updated information from their subcontractors. The proposed FAR regulations propose a phased-in approach to subcontractor reporting.

The FAR regulations and DOL Guidance were published May 28th and comments are expected by July 27, 2015

Proposed Rule Changes Impacting Employer Union Organizing Response and Elections

On June 20 and 21 of 2011 the Department of Labor and the National Labor Relation Board proposed rules changing a decades-long interpretation and application of the National Labor Relations Board. On June 20, 2011 the Department of Labor (DOL) issued proposed regulation tightening the interpretation of “advice” under the Labor-Management Reporting and Disclosure Act (LMRDA). On June 21st, the National Labor Relations Board (NLRB) issued proposed rules that it says will “streamline” the union election process.

NLRB Ambush/Quickie Election Rules (Formally Known as “Streamlined” Elections) – (Note: Final rules published December 12, 2014.)
New Rules went into effect April 14, 2014.

History

On April 30, 2012 the NLRB Quickie Election Rule was promulgated.  One of the NLRB’s primary duties under the law is to protect the free and fair secret ballot election to determine whether employees choose to be represented by a union or not. The new rules do the following: 

  1. Provide an NLRB hearing officer the ability to limit the evidence that could be introduced at a representation case hearing
  2. Provide the hearing officer the authority to deny a party the right to file a brief
  3. Eliminate a party’s right to have the NLRB review a decision by a regional director to direct an election
  4. Eliminate current language that requires an election to be conducted within 25-30 days, thereby permitting elections to be held before the 25-day period. The amended rules call for 21 days or fewer
  5. Eliminate a party’s right to have the NLRB review any decisions by a regional director or an administrative law judge regarding post-election disputes
  6. Prohibit pre-election appeals and consolidate all appeals to be heard only after the election takes place
  7. Allow direct election appeals to the Board before an election only in  “extraordinary circumstances”

The Board believes that the proposed rule amendments would remove unnecessary barriers to the fair and expeditious resolution of questions concerning representation; that they would simplify representation-case procedures and render them more transparent and uniform across regions; eliminate unnecessary litigation and consolidate requests for Board review of regional directors’ pre- and post-election determinations into a single, post-election request; and would allow the Board to more promptly determine if there is a question concerning representation and, if so, to resolve it by conducting a secret ballot election.

On January 22, 2014 the Federal Register reported that the National Labor Relations Board rescinded its Quickie Election rule. This meant the rules governing organizing elections went back to the way they were previous to December 11, 2011. The restoration pertained to 29 CFR Parts 101 and 102, and confirmed the NLRB’s statements of procedures and rules and regulations to the D.C. District Court’s “mandate that ‘representation elections will have to continue under the old procedures,’” the Board said. Given the circumstances, the NLRB found it unnecessary to provide notice and comment on the restoration.

On February 6, 2014 the National Labor Relations Board issued new proposed “Quickie” Election rules under the reconstituted Board. See above summary. These rules are virtually the same as the previous rules that had been rescinded

On March 27, 2014 new legislation was introduced that would change the rules surrounding NLRB elections and establish legal protections for how NLRB oversees elections. The bill would:

  • Guarantee workers the time to gather all the facts to make a fully informed decision in a union election. No union election will be held in fewer than 35 days.
  • Ensure that employers are able to participate in a fair union election process. The bill provides employers at least 14 days to prepare their case to present before an NLRB election officer and protects their right to raise additional concerns throughout the pre-election hearing.
  • Reassert the board’s responsibility to address critical issues before a union is allowed to represent workers. The board must determine the appropriate group of employees to include in the union before the union is certified, as well as address any questions of voter eligibility.
  • Empower workers to control the disclosure of their personal information. Employers would have seven days to provide a list of employee names and one additional piece of contact information chosen by each individual employee.

See more information above at the Federal Legislation update section. (Updated 5/5/14)

DOL LMRDA Rulemaking Proposal – Persuader Regulations

The DOL states that its new rulemaking allows for more transparency by requiring employers to disclose  whom they are using to provide advice on influencing employees in connection with union organizing and bargaining. Currently employers are only required to disclose consultants they have hired who speak directly to employees on these matters. They are not required to file reports identifying outside consultants who are only giving advice to the employer.

Under the proposed rule, employers will have to report any arrangements with consultants that issue communications on behalf of an employer designed to “directly or indirectly persuade workers concerning their rights to organize or bargain collectively.”

This proposed disclosure requirement, the Labor Department states, also includes information about “union avoidance” seminars and conferences offered to employers by lawyers and labor consultants. This is because the Labor Department states such seminars “involve reportable persuader activity.”

ASE’s position is that both rules significantly curtail employers’ rights to communicate to and inform employees about what unionization means and how it may adversely affect them. ASE is in opposition to any restrictions or the imposition of regulations that curtail the employer’s right to maintain its business free from union influence or organization.

The Persuader Rules remain under review by the White House and the latest information from the Department of Labor on when they may be issued is December, 2015 (updated 5/27/15)

Wage and Hour update definition of spouse in FMLA

The Department of Labor issued a Final Rule on February 25, 2015 revising the regulatory definition of spouse under the Family and Medical Leave Act of 1993 (FMLA).   The rule change updates the FMLA regulatory definition of “spouse” so that an eligible employee in a legal same-sex marriage will be able to take FMLA leave for his or her spouse regardless of the state in which the employee resides. Previously, the regulatory definition of “spouse” did not include same-sex spouses if an employee resided in a state that did not recognize the employee’s same-sex marriage. Under the new rule, eligibility for federal FMLA protections is based on the law of the place where the marriage was entered into whether in country or outside of the US. This “place of celebration” provision allows all legally married couples, whether opposite-sex or same-sex, to have consistent federal family leave rights regardless of whether the state in which they currently reside recognizes such marriages.  The effective date for the rule is March 27, 2015.

With the Supreme Court’s decision in Obergefell et. al. v. Hodges, all states must recognize same sex marriage.  It is likely that the regulations will be updated one more time to incorporate the decision.  To access forms under the current rule, click here.

OFCCP issues Proposed Sex Discrimination Guidelines Regulations

On January 28, 2015, the Department of Labor’s Office of Federal Contract Compliance Programs (“OFCCP”) announced a Notice of Proposed Rulemaking (“NPRM”) to update its Sex Discrimination Guidelines (the “Guidelines”). It is a total rewrite of the current regulations. The NPRM was published in the Federal Register on January 30, 2015, followed by a sixty-day comment period.

The OFCCP had not substantively updated the Guidelines since 1970 despite forty-five years of changes in discrimination laws through legislation and court decisions.  While the proposed regulations seek to update requirements in accordance with “existing law and policy,” many of the provisions go beyond the parameters of current statutory and other legal obligations, including:

  • The adoption of the “implicit bias” theory of discrimination because “[r]esearch clearly demonstrates that widely held social attitudes and biases can lead to discriminatory decisions, even where there is no formal sex-based (or race-based) policy or practice in place” despite the Supreme Court’s explicit rejection of the implicit bias theory in Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2553-54; 
  • A new requirement that aligns with the EEOC’s controversial guidance that contractors must provide light duty to all pregnant employees regardless of whether an impairment substantially limits a major life activity even though the issue is pending before the Supreme Court in Young v. UPS;
  • A new requirement that contractors allow transgendered individuals to use the restroom of his or her choice (despite Congress’s decision not to enact Employment Nondiscrimination Act); 
  • A prohibition on contractors imposing a shorter maximum amount of pregnancy leave as compared to the maximum time off allowed for other types of medical or short-term disability leave;
  • More robust protections regarding compensation discrimination which include Equal Pay Act protection.

A final rule is expected by end of 2015. (updated 6/30/15)

OFCCP issues final rule on LGBT Executive Order

On December 3, 2014, the OFCCP announced its final rule on regulations to implement an Executive Order (EO) signed this summer by President Obama which bans discrimination against LGBT workers by federal contractors. The final rule, which was published December 9, 2014, revises the OFCCP’s regulations at 41 CFR Parts 60-1, 60-2, 60-4, and 60-50. It does not require contractors to conduct any data analysis with respect to the sexual orientation or gender identity of their applicants or employees. Nor does it require contractors to collect any information about applicants’ or employees’ sexual orientation or gender identity. However, contractors may ask applicants to voluntarily provide this information, although doing so may be prohibited by state or local law. In any event, the rule prohibits contractors from using any information gathered to discriminate against an applicant or employee based on sexual orientation or gender identity. The rule was slated for publication in the Federal Register on December 9, 2014, to take effect 120 days thereafter. It will apply to covered contracts entered into or modified on or after that date.   The final rule and related information, including a FAQ, is available on the OFCCP’s website. This rule may be subject to multiple litigations once effective by Faith based organizations for an exception based on the Hobby Lobby Supreme Court Case as well as employer groups for violating the Administrative Procedure Act process.

OFCCP Issues final regulations on Pay Transparency

These pay transparency requirements will apply to all contractors and subcontractors covered by the non-discrimination and Affirmative Action provisions of Executive Order 11246, including contractors who are not required to develop written Affirmative Action Plans. Thus, an organization that meets the criteria will be covered if it:

•Has a single federal contract, subcontract, or federally-assisted construction contract worth more than $10,000, or

•Has federal contracts or subcontracts that, combined, are worth more than $10,000 in any 12-month period, or

•Has government bills of lading, or

•Serves as a depository of federal funds, or

•Is an issuing and paying agency for U.S. savings bonds and notes in any amount.

The Final Rule will apply to contracts entered into or modified on or after January 11, 2016. Contracts are considered “modified” if there is any alteration in their terms and conditions, including supplemental agreements and extensions.  Employees cannot be disciplined for asking about or discussing their own or other employees’ pay and benefits, and applicants cannot be discriminated against for asking about or discussing employees’ compensation. Specifically, the Equal Opportunity Clause is revised to include the following language:

The contractor will not discharge or any in manner discriminate against any employee or applicant for employment because such employee or applicant has inquired about, discussed, or disclosed the compensation of the employee or applicant or another employee or applicant. . . .

This non-discrimination provision does not apply if the employee has access to the employer’s compensation information as part of his or her job responsibilities. The following language is also included in the revised Equal Opportunity Clause:

This provision shall not apply to instances in which an employee who has access to the compensation information of other employees or applicants as part of such employee’s essential job functions discloses the compensation of such other employees or applicants to individuals who do not otherwise have access to such information, unless such disclosure is in response to a formal complaint or charge, in furtherance of an investigation, proceeding, hearing, or action, including an investigation conducted by the employer, or is consistent with the contractor’s legal duty to furnish information.

Compensation is defined as “any payments made to, or on behalf of, an employee or offered to an applicant as remuneration for employment, including but not limited to salary, wages, overtime pay, shift differentials, bonuses, commissions, vacation and holiday pay, allowances, insurance and other benefits, stock options and awards, profit sharing and retirement.”

Contractors must use language prescribed by the OFCCP in notifying applicants and employees of their rights. This mandatory language must be included in existing employee handbooks or other manuals, and must be posted electronically or in conspicuous places. The OFCCP will also be updating the “EEO is the Law” poster to include this notice. Presumably, this required language and the updated poster will be provided before the January 11, 2016, effective date. (updated 9/15/15)

EEOC issues Wellness Regulations

Many different laws govern wellness programs, including HIPAA, ACA, Civil Rights Act, Equal Pay Act, Age Discrimination in Employment Act, Genetic Information Nondiscrimination Act, and the ADA. On April 16, 2015, the Equal Employment Opportunity Commission (EEOC) released proposed regulations covering wellness programs that involve disability-related inquiries or medical examinations.  The DOL, Treasury and HHS jointly issued regulations related to the Wellness Program exception to the nondiscrimination rule in 2006, and these regulations were updated in 2013 following the passage of the ACA.  The EEOC did not participate in these regulations.

The EEOC proposed regulations diverge from the DOL regulations in important respects.  First, in contrast to the DOL regulations, which do not restrict the size of reward under a participatory wellness program, the proposed EEOC guidance seeks to extend the 30% maximum award to participatory wellness programs that require employees to answer a health questionnaire with disability-related inquiries or take medical examinations.

A second difference relates to how the proposed regulations apply the 30% limit in general.  The EEOC proposed regulations set the maximum reward at 30% of the self-only cost of coverage (taking into account both the employee and employer share of the cost).  The DOL regulations allow a reward to be a maximum of 30% of the cost of family coverage if the wellness program is extended to covered dependents.  Additionally, the ACA allows the DOL to increase the 30% limit to 50%, and the DOL has done so by expanding the 30% limit by an additional 20% to the extent that the additional percentage is in connection with a program designed to prevent or reduce tobacco use.  The EEOC regulations do not contain similar flexibility.

Last, the EEOC regulations require that employers provide a detailed notice to participants separate from other notices already required under the HIPAA. 

Comments were to be submitted by June 19th.  A final rule is expected by end of 2015. (updated 6/30/15)

NLRB backs off on attempt to weaken right-to-work

Since President Obama came into office, the National Labor Relations Board (NLRB) has established a  pervasive culture of union favoritism. However the board surprised many this week when it stepped back from an attempt to undermine state right-to-work laws.

Since 1947, states have been allowed to prohibit compulsory union membership through laws known as “right to work.” However, in April, the board signaled a move toward reversing decades of precedent and diminishing important worker rights provided by these state-based laws. On July 8 reporter Kent Hoover of The Business Journals reported that

The NLRB suspended requests for briefs on whether it should allow to unions to collect fees in right-to-work states from non-union workers who are represented by unions in grievance procedures. . . In a case involving a non-union worker at Buckeye Florida Corp., an administrative judge ruled that a United Steelworkers local violated the National Labor Relations Act by making him pay a fee for representing him in a grievance case. The union appealed this ruling, prompting the NLRB to ask for legal opinions as to whether it should change existing rules against unions charging non-members a “fair share” fee for processing grievances. The union withdrew its appeal after the grievance case was settled in the worker’s favor, and the NLRB then withdrew its request for briefs on the “fair share” issue.

(Updated 8/5/2015):

NLRB makes a side attack on Right to Work states

The NLRB discarded a 53-year-old standard that allowed the union dues checkoff to cease after a collective bargaining agreement (CBA) expired.  The Service Employees International Union Healthcare Wisconsin (SEIU) filed an unfair labor practice that Lincoln Lutheran of Racine (Lincoln) violated Section 8(a)(5) and (1) when, on March 19, 2013, it ceased dues check-off for unit employees after the CBA between the parties expired.  The case went before an Administrative Law Judge (ALJ) for adjudication, who found for Lincoln in 2014.  On appeal to the NLRB, the Board voted along party lines to discard the decades-long rule and overrule the ALJ.  The impact of this decision is to effectively make it appear to employees that the expired CBA is still in effect.  In a Right-to-Work state like Michigan, this approach could confuse employees intending to drop out of the union when the contract expires, making them hesitate to act by giving them the impression the contract hasn’t expired.  Further, in any case, it enriches the union by collecting dues from employees who do not wish to pay them, leaving those employees no recourse to collect these payments since they were declared by the NLRB as legal payments.  Source: Lincoln Lutheran of Racine and Service Employees International Union Healthcare Wisconsin, SEIU-HCWI, Case 30–CA–111099

(Updated 9/8/15)

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