This update outlines a recently enacted law, a sampling of labor-related legislation being considered in this Congress and recent regulatory action. It includes measures that are top priorities for a number of powerful lobbying interests, including organized labor. Employers should be aware of and monitor these issues, as they may attract amendments or invite revisions that could be adverse to the business community.
On January 28, President Bush signed a new law that provides two new types of Family and Medical Leave Act (FMLA) leave related to military service. Pursuant to the new law, an eligible employee can take up to 26 weeks of leave in a 12-month period to care for a spouse, child, parent or next of kin who is a servicemember with a serious illness or injury incurred during active duty in the Armed Forces. Additionally, the law permits eligible employees to take up to 12 weeks of FMLA leave in a 12-month period for "any qualifying exigency" that arises from a spouse's, child's or parent's active duty in the Armed Forces, including an order or call to duty.
Employee Free Choice Act (EFCA)
In 2008, ECFA will continue to be a top priority for organized labor. Under ECFA, unions would no longer have to go through the National Labor Relations Board (NLRB) secret-balloting process to gain recognition. Instead of formal elections, a union could simply gain recognition if a majority of employees sign an authorization card. As a result, this legislation would allow a workplace to become unionized without the employer ever having an opportunity to present its case why unionization is not in the best interest of the employees. In addition, and even more troubling, the bill would invoke binding interest arbitration if the parties could not reach their first contract within nine months. Thus, a third party would then mandate the company's contractual obligations.
H.R. 800, the Employee Free Choice Act, passed the House of Representatives on March 1, 2007, by a vote of 241 to 185. In the Senate, it fell short of the 60 votes needed to file cloture by 51 to 48 on June 26, 2007. This was a partisan vote, with only one Republican crossing over to vote with the Democrats.
Fair Pay Legislation
Both the House and Senate have introduced bills in response to the United States Supreme Court's May 2007 decision in Ledbetter v. Goodyear Tire & Rubber Company. This decision ruled that employees who allege pay discrimination must sue their employer within 180 days after the alleged discriminatory act first affected their pay level. The bills would allow a person to sue within 180 days of receiving any paycheck affected by the alleged discrimination, not just when the level of income was determined. As a result, the legislation would make such alleged pay discrimination continually subject to a claim. It would keep in place the two-year limit on back pay. The House bill passed by a vote of 225 to 199 on July 31, 2007; the Senate bill has not received action.
The Independent Contractor Proper Classification Act
This bill would place stricter requirements on who can be classified as an independent contractor rather than an employee. If independent contractors are moved into the category of employees, employers will be required to pay higher taxes on those individuals. Additionally, such legislation would increase potential liability concerns for employers. This bill was introduced in September and has seen no further action.
The Healthy Families Act
Introduced early last year in both the House and the Senate, this legislation would mandate that employers with 15 or more employees provide seven paid sick days a year. It would apply to employees who work 30 hours a week or more; for those working 20 to 30 hours, a prorated amount of sick days would be calculated. Neither version of the bill has seen action in its respective chamber.
Re-Empowerment of Skilled and Professional Employees and Construction and Tradeworkers Act
These bills would revise the definition of "supervisor" as applied by the National Labor Relations Board, limiting those employees who can be designated as such, and therefore giving them greater opportunities to unionize. In order to be a supervisor, the employee would have to have authority over other employees for a majority of their worktime. It would also remove the terms "assign" other employees and "responsibility to direct" employees from the list of duties considered as a supervisory role. This bill was reported out of the House Committee on Education and Labor by a vote of 26 to 20 this past fall and is awaiting further action. It has not been acted on in the Senate.
New Regulations and Funding
Family Medical Leave Act (FMLA)
The FMLA provides up to 12 weeks of unpaid leave for an employee's or the employee's family member's medical conditions, as well as for the period following the birth or adoption of a child. There have been concerns about the manner in which the FMLA is applied and in some cases abused. For example, the definition of "serious medical condition" is not clear; certification requirements and disclosure restrictions make it difficult to verify legitimate reasons for leave; and shorter, incremental leave, termed "intermittent leave," is administratively difficult to enforce and has lent itself to abuse. The private sector would welcome reforms in these areas. The Bush administration has sought comment to amend these regulations and has recently expressed its intent to issue new regulations by the end of 2008.
Additionally, there have been efforts to expand permissible leave under the FMLA. For instance, legislators have sought to enlarge FMLA coverage to businesses with under 50 employees and to allow leave for other uses, such as voting or parent-teacher conferences. Reforms are likely to be difficult in the current political environment; however, efforts to broaden the FMLA may be more problematic for employers under a Democratic administration.
Office of Labor-Management Standards (OLMS)
OLMS is responsible for protecting members from corrupt union practices and for oversight of unions' financial disclosure requirements. For fiscal year 2008, Congress funded OLMS at $44.9 million, which is $12 million below the president's request and $2.8 million below the fiscal year 2007 levels. This agency was cut while the total funding for the Department of Labor was increased. A larger Democratic majority in the Congress may target this agency for more drastic funding cuts.
Equal Employment Opportunity Commission (EEOC)
On December 26, 2007, the EEOC issued its final ruling on retiree health benefits. Under the regulation, employers may spend more on benefits for retirees who are not eligible for Medicare than those who are eligible. The regulation was in response to an August 2000 United States Supreme Court decision that held that providing different health benefits to Medicare-eligible retirees from those who are not eligible was in violation of the Age Discrimination in Employment Act.
Both labor and employers tend to be in agreement on this issue because the costs of providing retiree parity would force companies to cut or eliminate retiree health benefits. However, the American Association of Retired Persons (AARP) opposes this measure and is seeking a review with the Supreme Court, asserting that the EEOC does not have the authority to promulgate this regulation. The AARP may seek redress with the legislative and executive branches, should the political climate be more favorable to its goals.