11/5/2008
The election of Barack Obama as the 44th President of the United States is an historic event. Not only will Obama serve as the nation's first African-American President, but his presidency could lead to history-making changes in America's labor and employment law.
Based on his campaign statements, expect Obama's administration to support changes in traditional labor, employment discrimination laws, medical leave requirements, employee benefits and immigration policies. These landmark changes will undoubtedly prove challenging for employers seeking to comply with federal law, as areas of law that were once familiar and easy to navigate might change entirely. Here are a few noteworthy changes to anticipate.
RESPECT Act
Passage of the Re-Empowerment of Skilled Professional Employees and Construction Tradeworkers Act would effectively overturn three National Labor Relations Board decisions collectively known as the "Kentucky River" decisions. These expanded the definition of who may constitute a supervisor to include workers that spend 10 percent to 15 percent of their time overseeing the work of others. Those decisions effectively classified hundreds of thousands of nurses, construction and professional workers as supervisors, barring them from coverage under the National Labor Relations Act . The RESPECT Act would limit the classification of supervisor to those workers who spend more than 50 percent of their time directly supervising others.
Employee Free Choice Act
While a senator, Obama co-sponsored the Employee Free Choice Act, an Act that requires the NLRB to certify a bargaining representative without an election where a majority of the bargaining unit employees have authorized designation of the representative through the signing of union cards . Currently, the National Labor Relations Act requires a government-run secret ballot election for certification. Obviously, the elimination of a secret ballot election that the Company can weigh in on will make it easier for Unions to organize.
The EFCA will also create more stringent requirements for collective bargaining. It would require parties that fail to agree to a first collective bargaining agreement within 90 days to participate in mediation with the Federal Mediation and Conciliation Service. Following the mediation, if the parties fail to reach an agreement within 30 days, the EFCA would mandate binding arbitration for formulation of a two-year contract. Additionally, the EFCA would introduce tougher penalties for failed compliance with the National Labor Relations Act.
No Replacement of Striking Workers
Obama seeks to ban the permanent replacement of striking workers.
Lilly Ledbetter Fair Pay Act
Obama will work to overturn the U.S. Supreme Court's decision in Ledbetter v. Goodyear Tire and Rubber Co. through the enactment of the Lilly Ledbetter Fair Pay Act of 2007. The Supreme Court, in Ledbetter, restricted the time period in which victims of pay discrimination can recover under the law. In that case, Ledbetter filed suit against her employer after discovering that she was being paid considerably less than male co-workers who were doing the same job. The Court held that she had filed suit too late, because she had a limited period of time in which to file after the employer's original pay decision was made.
The Ledbetter Act would provide that an equal pay violation occurs each time wages that are a product of a discriminatory compensation decision are paid. This "paycheck rule" would remove the time restrictions placed on such claims under the Ledbetter decision. Furthermore, the Ledbetter Act grants employees the right to recover up to two years of back pay preceding the filing of a meritorious charge, making non-compliance with the Equal Pay Act a costly mistake.
Paycheck Fairness Act
If the Paycheck Fairness Act is passed, it would require employers to affirmatively demonstrate that a pay differential is not based on gender. Notably, it would facilitate class action lawsuits in pay discrimination claims by automatically including employees as part of a class action, unless an employee specifically opts out. Moreover, it would allow for unlimited compensatory and punitive damages for private sector employees, even absent a showing of intent by an employer.
Employment Non-Discrimination Act
The Employment Non-Discrimination Act would amend the Civil Rights Act of 1964 to prohibit discrimination on the basis of an individual's sexual orientation. The measure would require employers to provide access to facilities that are not inconsistent with an employee's identified gender, and it would provide a special exemption for religious organizations and educational institutions supported or managed by such organizations.
Expansion of FMLA
Obama will push for an overall expansion of the Family and Medical Leave Act. First, he will work to extend coverage to private employers of 25 or more employees, rather than the current 50-employee threshold. Second, he will advocate for an expansion of the FMLA to cover leave for such purposes as care for the elderly and participation in the employee's children's academic activities at school. Obama also will work to guarantee FMLA leave for victims of domestic violence.
Paid Leave
He will require all private employers to provide seven paid sick days per annum for each employee. In addition to this requirement, he will encourage states to adopt paid leave systems for employees seeking leave under the FMLA by providing $1.5 billion in assistance to enable states to offset costs for employers. The Department of Labor will provide technical guidance to assist states and employers in compliance with these paid leave initiatives.
Employee Classification
The Independent Contractor Act of 2007, if enacted, would grant the IRS jurisdiction to determine whether a worker has been properly classified as an independent contractor or an employee. An allegation of misclassification could potentially subject an employer to a comprehensive tax audit by the IRS. This shift from determination by the courts to determination by a federal agency would render any penalties issued by the IRS difficult to appeal because a federal agency's determination is subject to reversal only if it is found to be arbitrary and capricious.
Minimum Wage
Obama will attempt to raise the federal minimum wage and index it to inflation to ensure that it rises every year.
Health Care
Obama's proposed health care plan allows small employers to purchase a low-cost public health insurance option for employees and creates a National Health Insurance Exchange to regulate private insurance providers. It also includes a re-insurance pool for employers so if an employer's health care costs exceed a certain amount, the federal government will pay the balance, provided the employer passes the savings on to its employees.
Retirement Security
Employees who have company pensions will receive detailed disclosures about their pension fund investments. Under his plan, workers will be automatically enrolled in their workplace pension plans unless they specifically opt out. Middle- and low-income employees will be eligible for a savings match program, awarding them a 50 percent match for their first $1,000 of savings.
Immigration
Obama supports the creation of a new employment eligibility verification system so employers can verify that their employees are eligible to work in the United States. He also maintains that guest worker programs must be limited to instances where the jobs offered to foreign nationals have first been offered to U.S. citizens at a decent wage.
If you have questions, you may contact me or any member of the firm's Labor & Employment Group.
