Employment and Labor Law Legislation

2012 Employment and Labor Law Legislation

Even though the Democrats continue to hold the White House and a (slimmer) majority in the Senate in 2012, many pro-employee bills remain “in committee,” going nowhere. However regulatory bodies such as the National Labor Relations Board (NLRB), the Office of Federal Contract Compliance Programs (OFCCP) and the Equal Employment Opportunity Commission (EEOC) are beefing up both their regulations and their compliance enforcement programs to push employers in the direction that their unsuccessful legislative efforts of the last two years would have pushed them to go.

What follows is a summary of major bills that are pending at this time.

FEDERAL

Paycheck Fairness Act reintroduced on Equal Pay Day: April 12, 2011 was the day on which, according to supporters of the Paycheck Fairness Act, women’s earnings since January 1 of 2010 equaled those of men as of December 31, 2010. On the 12^th the bill was reintroduced in the House of Representatives by Rep. Rosa DeLauro (D-CT) and the Senate by Sen. Barbara Mikulski (D-MD). The American Civil Liberties Union (ACLU) was on hand to lend its support. The bill failed to make it through the Senate last year and died at that time. This year, it would again have to make it through the Senate as well as a Republican-dominated House before it could go to President Obama for signature

Employment Non-Discrimination Act

On April 6, 2011, the Employment Non-Discrimination Act (ENDA) was introduced in the House of Representatives by U.S. Rep. Barney Frank (D-MA). Like earlier versions of this legislation introduced in prior Congressional sessions, ENDA would expand the anti-discrimination protections of Title VII of the Civil Rights Act of 1964 to protect individuals based on their sexual orientation or gender identity.

ENDA would make it unlawful for employers to do the following:

(1) Fail or refuse to hire or to discharge any individual, or otherwise discriminate against any individual with respect to the compensation, terms, conditions, or privileges of employment of the individual, because of such individual's actual or perceived sexual orientation or gender identity; or

(2) Limit, segregate, or classify the employees or applicants for employment of the employer in any way that would deprive or tend to deprive any individual of employment or otherwise adversely affect the status of the individual as an employee, because of such individual's actual or perceived sexual orientation or gender identity.

As proposed, ENDA would also prohibit adverse employment actions against an employee based on real or perceived sexual orientation or gender identify of a person with whom the employee associates. As with other non-discrimination legislation, ENDA would prohibit retaliation against an employee for exercising rights under the Act or opposing an alleged discriminatory practice.

Paycheck Fairness Act

Pay discrimination continues to be an issue for legislators as well as Obama Administration appointees like the head of Office of Federal Contract Compliance Programs (OFCCP), Patricia Shiu. Although the OFCCP does not enforce the Equal Pay Act, Ms. Shiu is reportedly a champion of gender equity. She is deputy assistant secretary to the Labor Secretary.

On September 13, 2010 Senate Majority Leader Harry Reid (D-NV) re-introduced the long-pending Paycheck Fairness Act (S. 3772) and indicated his intent to call a vote on the measure before the 2010 mid-term elections. But on November 18, 2010, the Senate blocked a motion to move on the bill, effectively defeating the Paycheck Fairness Act for that session of Congress (see above).

Fair Pay Act – Unlike the Paycheck Fairness Act that is aimed at providing easier grounds to sue employers, the Fair Pay Act seeks to change the way pay is determined. Proponents of pay equity legislation supported the introduction of new legislation by Sen. Harkin (D-IA) and Delegate Holmes-Norton (D-D.C.) that would require employers to use a system of “comparable worth” in setting wages for their employees. Not to be confused with the Paycheck Fairness Act, this comparable worth bill is called the Fair Pay Act.

The National Association of Manufacturers reports that this proposal goes much further than the Paycheck Fairness Act, since it broadens the Equal Pay Act to include more invasive definitions of gender-based discrimination. This bill would require employers to publicly disclose job categories and how much employees in these categories are paid. (H.R. 2151/S. 904).

This more controversial sister legislation to the Paycheck Fairness Act went down without serious consideration with the close of the 2010 Congressional session. As of September 30, 2011 the Fair Pay Act has not been reintroduced.

Payroll Fraud Prevention Act

The Payroll Fraud Prevention Act was introduced in the Senate on April 11, 2011. This proposed legislation is aimed at rooting out misclassification of independent contractors. The legislation would impose new reporting requirements on employers, increase penalties for classification violations, and establish new protections for workers who believe they have been misclassified.

Key elements of the proposed bill include these:

Requiring employers to maintain records that accurately reflect worker status as either an employee or non-employee
Establishing that worker misclassification is a violation of the Fair Labor Standards Act (FLSA)
Requiring employers to notify workers of their classification as employee or non-employee
Increasing penalties for employers for who misclassify their employees as independent contractors
Promoting the DOL use of targeted audits of industries with a high incidence of worker misclassification

The topic of worker misclassification is also high the DOL’s agenda. It is possible that the DOL may soon issue regulations that cover much of the same ground as the Payroll Fraud Prevention Act.

The Employee Free Choice Act (EFCA) - This highly controversial piece of legislation would have radically change labor law if passed. As of this update the legislation has not been reintroduced for consideration by the 111th Congress. However on June 20 and 21^st the Department of Labor and the National Labor Relations Board issued notice of proposed rulemaking that effectively implements parts of EFCA. For more information on the proposed rules see the overviews in the Regulations section below.

STATE

Michigan Leads Nation on Unemployment Compensation Insurance reform – In exchange for extending unemployment benefits for the long-term unemployed through the end of 2011, Governor Snyder and the GOP-controlled House and Senate enacted a law that reduces the state benefit entitlement for laid-off workers from 26 weeks to 20 weeks beginning in 2012. It also goes after unemployment fraud in Michigan. This bill was signed into law March 28, 2011

The bill amends the Michigan Employment Security Act to do the following:

Create the "Special Fraud Control Fund" and require amounts recovered for unemployment insurance fraud violations to be deposited into the Fund
Require money in the Fund to be spent first on packaged software that had a proven record of success with the detection and collection of unemployment benefit overpayments and then for administrative costs associated with the prevention, discovery, and collection of unemployment benefit overpayments
Allow the recovery of interest on the amount of improperly paid unemployment benefits
Double the amount of damages that may be recovered for a second or subsequent fraud violation involving less than $500
Require interest and penalties collected for improperly paid benefits to be paid into the proposed new fund.

Additional Unemployment Legislation Proposed in Lansing - In June, bills were introduced in the Michigan House and Senate to correct a quirky penalty employers pay when an employee working at two or more jobs gets laid off from one of them. The employer still providing a job gets charged for the unemployment benefits the employee receives for being laid off from the first employer. House Bill 4394 would stop the practice of “continuing employer” for unemployment benefits when another employer lets the employee go.

This legislation prohibits the state from combining two business entities' unemployment accounts while a request for redetermination or an appeal is pending. The state has typically merged accounts when it's found a business transferring payroll to another entity with a better unemployment tax rate, commonly referred to as SUTA Dumping (State Unemployment Tax Act).

In the state Senate no action on SB 12, the Senate version of the House Bill was taken.

The legislation makes several changes for businesses, including increasing the wage base employers pay unemployment taxes on and shortening their experience window from five years to three years. The latter change permits companies to get rid of bad jobless claim years more quickly. Small businesses also can spread their unemployment tax payments out over the year.

For jobless workers, the legislation requires that after 10 weeks of state assistance they take a job if it pays at least their area's prevailing wage or is 120% more than their assistance check, even if it is outside of their field of training. They would also have to conduct a "systematic and sustained search for work," with various reports on their progress due to the state.

Workers who fail to keep their training up to date, steal from the business or are let go after missing three consecutive days of work without informing their boss would also not be eligible for jobless benefits under the bill.

Unemployment Trust Fund Solvency - Michigan is currently $3.2 billion in debt to the federal fund not including interest. This loan is supposed to be paid back from the solvency tax paid by employers that have a negative balance due to their employment experience. All employers pay automatic penalties imposed by the Federal government when their state is in arrears. The tax penalties increase as time goes by and until the state reimburses the Federal government. The Snyder administration is proposing a corrective measure that would re-finance the debt through a bond purchase. An employer assessment would pay back the bond. This would also include moving the taxable wage base for employers back to the $9,000 level previously set before year 2000. The Snyder administration believes Michigan can never re-pay the $3.1 billion without this corrective move. It is believed the bond approach would settle this debt in 8-10 years.

This may take the shape of changes to the disqualification rules such as what is discharge for gross misconduct or continued eligibility for benefits when a job is offered and rejected by any person who is receiving benefits.

In December, Governor Snyder signed the legislation into law.

Michigan Looks to Change Its Prevailing Wage Law – This legislation introduced in Lansing is intended to save millions of taxpayer dollars on construction projects by repealing Michigan's current prevailing wage law.

The package of bills would eliminate Michigan's current prevailing wage law. They would exempt economic development contracts and include provisions to specifically make school construction projects more affordable. Federal prevailing wage standards will still exist.

Michigan's prevailing wage law requires that contractors on state-supported construction projects pay union wages. The law covers state projects and projects undertaken by local governments with state funding, no matter the size of the contribution.

The Mackinac Center estimates that construction costs are increased by 10-15% due to the current law. These additional costs are passed onto Michigan taxpayers. Prevailing wage laws also have been found to limit the number of available jobs within the construction industry.

"Michigan has one of the most restrictive prevailing wage laws in the country," said Rep. Brad Jacobsen, R-Oxford. "The current law requires the state to pay significantly higher wages than is necessary to complete state contracts. It's time to repeal this law and save our state and our taxpayers from paying too much for our construction projects."

As of June 30, 2011, House Bills 4224, 4225 and 4226 is in the House Oversight, Reform and Ethics Committee.

Workers Compensation Law In Process of Amendment

On December 19, 2011, Governor Snyder signed into law House Bill 5002, which significantly amends the Worker's Disability Compensation Act and increases the standards on employees seeking benefits. The law takes effect immediately. The new law makes the following changes:

Injuries must be medically distinguishable. In order to qualify for worker's compensation, an employee will now need to show that his or her injuries are "medically distinguishable" from pre-existing conditions.
Mental disabilities must arise out of actual events and an employee's perception must be grounded in fact or reality. Mental disabilities are compensable only if the employee claiming a mental disability proves that it arose out of actual events of employment,and that his or her perception of the actual events is reasonably grounded in fact or reality.
"Wage earning capacity" redefined. "Wage earning capacity," as used to determine whether an employee is disabled for purposes of wage loss benefits, is now defined to include wages that an employee is capable of earning at a job reasonably available to that employee, whether or not wages are actually earned.
Employee must seek reasonably available work. The law places an affirmative duty on an employee to seek work reasonably available to that employee when he or she seeks wage loss benefits. Under this provision, a good-faith job search will be considered to determine whether jobs are reasonably available.
Employee terminated from reasonable employment not entitled to wage loss benefits. If an employee is terminated from reasonable employment for fault of the employee, the employee is considered to have voluntarily removed himself or herself from the work force and is not entitled to any wage loss benefits.

FEDERAL REGULATORY

NLRB Changes Support Employee Free Choice Act Goals despite EFCA Not Passing

In April, 2010 the President made the “recess appointments” of two highly pro-labor members to the National Labor Relations Board. Recess appointments do not require the approval of the Senate, although those appointed only sit until the current session of Congress adjourns. The appointments of Craig Becker and Mark Pearce to the NLRB dramatically changed the political orientation of the Board. Although there have been no evident signs to date, some observers predict that this newly constituted NLRB will actually enable implementation of some provisions of EFCA without new legislation, i.e., by fiat or by new regulation(s).

On June 22, 2010, the Senate confirmed two of the three persons that are sitting in recess appointments. Mark Pearce and Brian Hayes. Craig Becker, former general counsel to the Service Employees International Union and a well-documented pro-labor activist, was passed over by the Senate and will remain a recess appointment. The 2011 recess appointment were due to terminate automatically on December 31, 2011. President Obama is considering two appointments for 2012, however as of the publication of this update, it has not been determined whether these will be recess appointments or go through the Senate’s confirmation process.

The Democratically controlled NLRB continues to try and change the labor landscape through its pro-labor decisions and regulations. It has been suggested that the NLRB can get much of the EFCA initiatives through by its regulatory and case decision process.

NLRB Legal Counsel Closes Out “Runaway Shop” Charge Against Boeing – Congress Contemplates Legislation to Stop Action By NLRB

In April, 2011, the NLRB’s acting general counsel filed an unfair labor practice complaint. The complaint was aimed at stopping Boeing from starting production at its new plant because the NLRB believed the $2 billion dollar plant’s sole purpose was to escape unionization and the labor contracts it has at its other US facilities. Typically when an employer is cited for an unfair labor practice for moving away from a unionized operation, the work itself moves also, with the subsequent loss of union jobs. In this case, despite the NLRB’s allegations, no work left Boeing’s main Puget Sound facility. In fact, Boeing’s business and work in Puget Sound has increased and the facility has added jobs. Boeing built the facility in South Carolina for additional production capacity. It subsequently added 1,000 jobs to the area surrounding its new facility. It is expected to add 1,000 more when fully operational.

In December, Boeing and the International Brotherhood of Machinists settled long standing work issues and agreed that new production on its 737 aircraft would come to its Washington plants. The Machinists union agreed to drop its complaint with the NLRB and the NLRB closed the case.

Protecting Jobs From Governmental Interference Act (Response to Boeing ULP Charge)

In response to the NLRB’s move against the Boeing plant, Rep. Tim Scott (R-SC) introduced the Protecting Jobs from Government Interference Act (H.R. 2587) on Monday, July 18, 2011. This legislation will prohibit the NLRB from dictating where a private business can and cannot locate jobs in the United States.

Under current law, the NLRB has more than a dozen remedies at its disposal to hold employers accountable for unlawful labor practices, including the authority to order a private company to relocate or transfer existing or planned employment. The legislation amends the National Labor Relations Act to prohibit the NLRB from ordering any employer to relocate, shut down, or transfer employment under any circumstance. Upon enactment, the limitation on the NLRB’s authority will apply to all cases that have not reached final adjudication before the Board.

As of September 30, 2011 this bill has been passed by the House of Representatives. It is now in the Democrat controlled Senate where it is not expected to get to a vote.

National Labor Relations Act Poster

Enacted by regulation, the National Labor Relations Board is requiring all employers to post a notice about employee rights to organize a union. This posting requirement is known as “Notification Of Employee Rights Under The National Labor Relations Act.”

As of December 23, 2011 the requirement has been postponed until April 30, 2012.

A bill that would repeal the NLRB notice posting rule was introduced in the U.S. House of Representatives. The Employee Workplace Freedom Act (HR 2833) would repeal the NLRB’s final rule, published in the Federal Register on August 30, 2011, and would prohibit the Board from ever again either promulgating, or enforcing rules requiring employers to post notices relating to the NLRA. Posters are out and available at the NLRB website or through ASE.

Proposed Rule Changes Impacting Employer Union Organizing Response and Elections

On June 20 and 21 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 Quickie Election Rule

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 adopted as final in December do the following:

Provide an NLRB hearing officer the ability to limit the evidence that could be introduced at a representation case hearing
Provide the hearing officer the authority to deny a party the right to file a brief
Eliminate a party’s right to have the NLRB review a decision by a regional director to direct an election
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
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
Prohibit pre-election appeals and consolidate all appeals to be heard only after the election takes place
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.

Workforce Democracy and Fairness Act

In response to the proposed quickie election rules and another NLRB decision that sought to change the way the Board is allowed to determine the appropriateness of the proposed bargaining unit, legislation called the Workforce Democracy and Fairness Act was introduced earlier this year in the House of Representatives. This legislation was proposed to counter the NLRB’s decision in Specialty Healthcare and further ensure at least a 35-day waiting period for an organizing election to be held. The House of Representatives voted to pass this bill on the same day the NLRB was pushing forward with its rules change to expedite elections - November 30^th. The vote was 234-188. However, although it passed in the House, it is not expected to survive when taken up by the Senate.

DOL LMRDA Rulemaking Proposal

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.

As of December 2011 these rules remain under review after the initial comment period that closed in October.