Reprint - Opelika & Auburn News, Sunday, Nov. 9, 2008
The election of Barack Obama has some Alabama employers quaking in their boots. Look into the crystal ball and prepare for dramatic changes in employment law and labor activity from unions to sick leave to ergonomics. Employers can expect to see more new workplace regulations now than during any time in the last two decades. The Democrats are teeing up several bills, and some issues demand attention immediately.
Employee (Union) Free Choice Act?
One issue looms far above all the others for Alabama Employers -- the Employee Free Choice Act (EFCA). Obama supports the Employee Free Choice Act. This legislation would make it easier for unions to organize and would require the National Labor Relations Board (NLRB) to certify a union if a majority of the employees sign cards in support of the union. Employees could sign authorization cards before a company even gets wind of a union drive. Under current rules, union elections must be conducted by secret ballot (unless the employer agrees to a card-check format). Obama also supports legislation that would overrule NLRB decisions defining “supervisor” (supervisors are ineligible to join unions). Most troubling for employers is a provision in the proposed legislation that states when the employer and the union can not agree on a contract within 90 days, either party can ask for federal mediation -- which could lead to binding arbitration at which time an arbitrator would set wages and benefits. Employers fear such "first-contract arbitration" would take away a great deal of their flexibility in employment decisions, and make them less competitive and profitable. The EFCA also expands penalties for violations of the National Labor Relations Act, including penalties of up to $20,000 per offense, treble back pay, and increased use of injunctions to remedy alleged violations. Nothing in my 28 years working as a management labor attorney, including the Civil Rights Act of 1991, FMLA and ADA, would change our labor and employment laws as dramatically as passage of the EFCA.
The Healthy Families Act.
This bill would require employers with at least 15 employees to provide seven paid sick days per year. The measure failed to gain traction during the previous session of Congress, but was co-sponsored by Obama in the Senate. Once the paid leave Pandora’s box is opened, expect the Democrat-controlled Congress to gradually expand the number of additional paid sick days.
The Lilly Ledbetter Fair Pay Act.
This bill, aimed at reversing a Supreme Court ruling, would make it easier for employees to sue for pay discrimination. Each time an employee receives a paycheck or pension payment, the time period for filing a claim would be restarted. The bill passed the House last year and was introduced in the Senate this year but failed to advance. Obama is a strong supporter of this measure as well.
The Civil Rights Act of 2008.
This bill would create more headaches for employers than a jackhammer in the ear. It would eliminate caps on compensatory and punitive damages awarded in discrimination cases; eliminate pre-dispute arbitration agreements (in which workers agree to arbitrate any complaints with the company, rather than in court, in order to render unenforceable any agreements already signed); and allow plaintiffs in wage-and-hour lawsuits to recover compensatory and punitive damages in addition to the back pay currently allowed. Obama was a co-sponsor of this bill in the Senate.
In 2000, the Federal Occupational Safety and Health Administration introduced ergonomic standards for the workplace. Business groups attacked the standards saying that they would cost employers as much as $100 billion to implement and the new rules were overturned by Congress in 2001. Obama strongly supports these standards.
Patriot Employer Act of 2007 (Good Employer / Bad Employer).
Would provide. This bill would give tax breaks to companies that keep jobs in the United States, maintain their corporate headquarters here, pay a certain level of wages, stay neutral during organizing drives, pay at least 60 percent of the healthcare premiums of employees, prepare workers for retirement and support workers who serve in the military. It is a blueprint showing how Obama would define who is and is nota good employer.
The Americans with Disabilities Act Restoration Act.
Effective January 1, 2009, this bill reverses four Supreme Court decisions that narrowed the definition of what constitutes a disability, thereby limiting who would be covered by the ADA. Under the Restoration Act, courts and employers can no longer consider mitigating measures, such as medicine or a device, to determine whether a person is disabled. There is more this monumental Act effects and regulations are on the way from the EEOC.
Immigration Reform - Again.
Obama supports employer use of the federal E-Verify program and increasing the number of visas allowed, but shares labor concerns that H-1B workers are sometimes used to substitute for American workers and would likely put more restrictions on how employers can use the visas. He will likely sign any reasonable bill put in front of him. Don’t expect ICE to lose its teeth under Obama.
Employer Healthcare Tax.
Obama is calling for a new national healthcare plan that would cover the 47 million Americans who don't have health insurance. Part of the cost of that plan would come from employers. Under Obama's proposal, employers that don't provide a "meaningful" contribution to their workers' health coverage will have to pay the government a percentage of their payroll. This money would go toward the national plan.
FMLA Expanded for the Small Business.
Obama wants to expand the Family and Medical Leave Act to cover smaller employers, i.e. those with 25 or more employees. Under current rules, employers with 50 or more employees are covered. He also wants to allow workers to take leave for eldercare needs, give parents up to 24 hours of leave each year to participate in their children's academic activities, and cover leave for employees to address domestic violence. He would also encourage states to adopt paid leave laws by starting a fund that could be tapped to offset costs. The Serviceman’s Act went into effect earlier this year and expect the DOL to publish sweeping new FMLA regulations before Bush leave office.
Minimum Wage Increase(s).
Obama wants to raise the minimum wage and index it to inflation. This would mean that the minimum wage would increase every year. He plans on raising the national minimum wage from $6.55 to $9.50 an hour and requiring all employers to automatically enroll workers in 401(k) or IRA plans.
The EEOC has previously adopted comprehensive guidelines prohibiting discrimination based upon gender and associations with those persons who have disabilities. Obama can be expected to support aggressive enforcement of these guidelines by the EEOC.
New DOT Drug Testing Regulations.
New drug testing regulations from the Department of Transportation became effective in the fall of 2008 which requires that every DOT policy be updated to clearly give covered employees notice of the new circumstances under which an employee's refusal is considered a DOT violation as well as information on other changes.
Independent Contractor Proper Classification Act of 2007.
Introduced in the U.S. Senate in 2007 by Obama, this bill would amend the Revenue Act of 1978 to require employers to treat workers misclassified as independent contractors as employees. The individual paid by a 1099 could, after the fact, petition the IRS for a determination of the individual's status for employment tax purposes and, if successful, seek an award of expenses, including expert witness fees and reasonable attorneys' fees for the individual against the taxpayer in any case in which the individual achieves reclassification.
Embolden EEOC, DOL & NLRB.
As the principal administrative agencies utilized by the Office of the President to pronounce and enforce his employment agenda, employers will find each of these agencies to be Waking Tigers; who many say have been in slumber mode during the Bush Administration. Any Charge of Discrimination, DOL Investigation and NLRB Charge should be treated as a serious matter and responded to by experienced legal counsel. Aggressive agendas and actions of these agencies during the Clinton Administration provides a sampling of the path that they will most likely follow in the Obama Administration.
What really frightens employers is that all the above backlog of employment-related bills are like planes circling an airport, all ready to land with union bosses and civil-rights attorneys in charge of the tower acting as traffic controllers. There are several strategies for what steps employers need to be taking over the next few weeks and months to prepare for these immediate and long-term airport landings. Whether it's “Change We Need,” only time will tell. Clearly "Change” has come and timely risk reduction strategies are critical to success under an Obama Administration.
10 Practical Steps Alabama Employers Need to Take Now to Brace for Change.
- Participate in a comprehensive employment law audit;
- Upgrade your employee handbook and forms;
- Begin job posting and conduct interview training of supervisors;
- Institute an open-door/grievance procedure;
- Upgrade all job descriptions in light of new ADA defnintions of disabilities and determine essential duty requirements;
- Adopt “Best Place to Work” practices;
- Adopt/upgrade solicitation and literature distribution policy;
- Institute exit interview procedure;
- Institute effective and defensible termination procedures;
- Prepare to win every Unemployment Compensation case.