Employers Beware: Change Is In the Air

Now that the election dust has settled, employers need to gear up for potential major changes in labor and employment law.  The election of Obama and Biden, along with Democratic majorities in both the Senate and the House, signal that new employment-related legislation will be one of the many changes promised by the Democratic ticket. Significant employment–related legislative items in the new administration may include the following:

Paid sick leave: Two identical bills in the House and the Senate, commonly known as the “Healthy Families Act,” require public and private employers with more than 15 employees to provide paid sick leave to their full and part-time employees.  Employees working more than 30 hours per week would accrue up to seven days of paid sick leave annually, while part-time employees (those working more than 20 hours per week) would receive a pro rata share of paid leave.  The leave could be used on an hour-by-hour basis or in the smallest increment that the employer’s payroll system tracts.  Leave would be granted for the employee’s illness or medical visits or the care for a sick child, parent, spouse, domestic partner or other individual related by blood.  The Democratic majority has identified these bills as a major legislative priority and Obama is a co-sponsor of the Senate bill.

Prohibition of Sexual Orientation Discrimination: House Bill 3685, the employment Non-Discrimination Act of 2007, proposes to amend Title VII to prohibit discrimination based on sexual orientation and requires employers to provide reasonable access to facilities consistent with the employees’ identified gender. This bill previously passed the House by a sizable margin and appears to be gaining momentum, particularly after dropping language prohibiting discrimination based upon “gender identity. ” Obama previously indicated that he supports this bill. 

Equal Pay Act Amendments: Dubbed the “Paycheck Fairness Act”, this House bill seeks to amend the Equal Pay Act (EPA) and the Fair Labor Standards Act (FLSA) to further eliminate gender-based wage discrimination. The Bill removes caps on compensatory and punitive damages for EPA violations, and either eliminates completely or makes it much more difficult for employers to assert defenses for wage differential such as where pay disparity flow from factors other than gender.  The Bill also proposes to amend the FLSA to prohibit employers from precluding employees from discussing their wage information. The Bill recently passed the House by a sizeable margin and will proceed to the Senate, where a similar bill co-sponsored by Obama was recently introduced.

Arbitration Agreements: Labeled the Arbitration Fairness Act (H.R. 3010/S. 1782), these Bills propose to amend the Federal Arbitration Act to prevent employers from requiring employees to agree to arbitrate future employment disputes as a condition of employment.  These Bills remain pending in their respective chambers, but appear to be gaining legislative support.  It is unclear whether Obama actively supports or opposes these Bills, but it is likely that Obama would sign one of the Bills if passed by Congress. 

New Statute of Limitations for Title VII and Equal Pay Act Claims: Two House and Senate bills propose to amend Title VII statute of limitations for gender discrimination and equal pay act claims.  These bills would restart the statute of limitations each time an employee receives a check or a retiree receives an annuity check, thus potentially permitting suits years after the original discriminatory decision.  The bills would also permit family members of employees and others affected by alleged discrimination to sue.

Change in Union Voting Rules: The Employee Free Choice Act (EFCA) is one of the most attention-grabbing bill of those currently pending.  The EFCA would amend the National Labor Relations Act (NLRA) election process for employees to become unionized.  This bill eliminates the traditional secret ballot process for union elections and instead requires the National Labor Relations Board to certify a union if a majority of employees sign authorization cards.  If signed into law, the EFCA would be a landmark change in collective bargaining process.  The House passed its version in 2007, but it stalled in the Senate and both versions have been fairly dormant this year.  However, Obama is a cosponsor of the Senate version of the EFCA and has signaled that it will be an early and major legislative priority for his administration.  Moreover, both Obama and Biden support the Re-Empowerment of Skilled and Professional Employees and Construction Trade Workers (RESPECT) Act, which reverses the current unionization exclusion for front-line working supervisors under the NLRA.  This means that employers would no longer be able to rely on the loyalty of front-line supervisors to represent them in union-organizing campaigns, since such supervisors stand to become union members in the same collective bargaining unit as the employees they supervise.

Minimum Wage Increases: Effective July 24, 2008, the federal minimum wage increased to $6.55 per hour and is scheduled to increase to $7.25 in 2009.  During the campaign, Obama supported future minimum wage increases, including potentially beyond the $7.25 increase scheduled in 2009.

Immigration / Employment Verification: Obama initially supported last year’s proposed “comprehensive immigration reform” bill proposed by President Bush, with Senator McCain being one of the bill’s primary sponsors.  In the absence of a comprehensive bill, many states and both parties have increasingly focused on the employment verification programs.  Notably in September 2008, Congress approved only a six-month extension of its federal E-Verify Program, which expires in March 2009, suggesting that the new administration will have an early debate on immigration-related issues.

In conclusion the Obama-Biden ticket pledged that “change is on the way” if elected.  That change includes substantive changes in employment laws and legislation which will have a significant impact on employers across the land. Strasburger is here to help guide mystified employers through the many changes that might unfold in 2009.

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A partner with the law firm STRASBURGER & PRICE, LLP, Ms. Breckenridge counsels companies in all areas of labor and employment law, and in a variety of business disputes.