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Recent and Pending Legislation Update: Employers Beware!
July 2008
Introduction
While the nation's focus turns towards the 2008 Presidential election, employers should remain aware of the variety of employment related legislation currently before Congress. This awareness is especially important when many of the Acts highlighted in this article are sponsored by current Presidential candidates. Certainly, the proposed legislation may be significantly altered through amendments or could lose the support of important proponents as political considerations influence stances. However, informed employers have the ability to effectively prepare for and respond to these, in some instances, potentially dramatic changes in the workplace.
This update provides a brief description of the pending and recently-passed legislation, as well as the significant changes called for under each piece of legislation. Developments with these bills may be tracked by utilizing the Library of Congress website, http://thomas.loc.gov/, and simply entering the corresponding bill number into the search engine, or, alternatively, by contacting Arnstein & Lehr LLP.
Genetic Information Nondiscrimination Act (S. 358, H.R. 493)
The Genetic Information Nondiscrimination Act (GINA) prohibits employers of more than 15 employees and health insurers from making employment decisions or adjusting benefits solely on the basis of an individual’s genetic information. The definition of “genetic information” is broad and includes information from an individual’s own genetic tests, the genetic tests of an individual’s family members, or the occurrence of a disease in the family members of the individual. While many states already have such protections, this bill will effectively eliminate genetic discrimination throughout the country. GINA passed the Senate unanimously on April 24, 2008, was concurred with by the House on May 1, 2008, and was signed into law by President Bush on May 21, 2008. GINA becomes effective in October 2009.
Fair Pay Restoration Act (S. 1843, H.R. 2831)
The Fair Pay Restoration Act is a direct response by some members Congress to the Supreme Court's decision in Ledbetter v. Goodyear Tire & Rubber Company, 127 S.Ct. 2162 (2007). In Ledbetter, the Court held that Title VII requires employees to sue within 180 days immediately following the first time their pay is influenced by discriminatory practices. Both houses of Congress reacted by proposing a bill that vastly enlarges employees rights to sue based on discriminatory conduct and, in turn, also increases the potential liability of employers. Under this legislation, in addition to retaining the right to sue within 180 days following the first time a discriminatory practice occurs, employees would gain a fresh 180-day filing period each time they become subject to or affected by such discriminatory practices. Practically, this means each time wages are paid at rates influenced, in whole or in part, by a discriminatory practice, the employee has a new 180-day period in which to file a charge. Additionally, among the remedies already available to employees bringing charges under Title VII is two years of back pay where similar or related discrimination or unlawful employment practices occurred outside the 180-day filing window. Importantly, this bill's effective date would be May 28, 2007, the day before the Ledbetter decision and apply to all claims pending on or after that date. This bill would apply to discrimination claims brought under Title VII, the Age Discrimination in Employment Act, the Americans with Disabilities Act, and the Rehabilitation Act pending on or after that date. The House passed its version of this bill in late-July. However, efforts to pass the bill in the Senate have temporarily been suspended, and President Bush has also threatened to veto the bill in any event. Therefore, the chances it will become law during this administration are slim.
Equal Remedies Act of 2008 (S. 2554, H.R. 5129)
In early January, as part of the Civil Rights Act of 2008, the Equal Remedies Act was introduced. The fundamental purpose of this legislation is to eliminate the caps on the amount of damages available in employment discrimination cases brought under Title VII. Currently, compensatory and punitive damages are capped based on size of the employer, ranging from $50,000 for employers who employ between 14-101 workers up to $300,000 for employers who employ 500+ workers. This proposed legislation would entirely remove the statutory caps and, as a result, greatly increase an employer's potential liability in discrimination cases. The Equal Remedies Act is currently in Committee in both the House and Senate and is, therefore, unlikely to become law in the near future, especially since President Bush has threatened to veto the bill.
R.E.S.P.E.C.T. Act (S. 969, H.R. 1644)
In response to National Labor Relations Board ("NLRB") rulings which arguably broadened the National Labor Relations Act's ("NLRA") definition of "supervisor," members of the House and Senate proposed the R.E.S.P.E.C.T. Act (Re-empowerment of Skilled and Professional Employees and Construction Tradeworkers). This proposed legislation would amend the NLRA's definition of "supervisor," resulting in a narrower scope of employees who would qualify as supervisors. Under the language of the R.E.S.P.E.C.T. Act, in order to qualify as a supervisor, employees must devote a "majority of [their] worktime" to management tasks over other employees. This differs from the current NLRB stance which only requires 10% of employee time be devoted to management tasks. Removed from the list of activities an employee must engage in to be considered a supervisor is the authority to "assign" others and "responsibly to direct them." Effectively, this legislation would disqualify many supervisors currently considered management personnel. Further, the many protections of the NLRA would now be available to supervisors, potentially disrupting the balance of management versus labor in the workplace. The R.E.S.P.E.C.T. Act is currently in Committee in the House and Senate.
The ADA Amendments Act seeks to restore rights its sponsors claim have been taken away from disabled Americans as a result of various actions by the federal courts and relevant administrative bodies. While similar versions of the bill were presented in both the House and Senate, the House recently passed its version of the bill. This bill contains two especially significant provisions. First, the bill would redefine "disability" to mean a "(i) physical or mental impairment; (ii) a record of a physical or mental impairment; or (iii) being regarded as having a physical or mental impairment." No longer would the impairment need to substantially limit one or more of the major life activities of the individual to be a covered disability. Second, when determining if an employee has a disability, employers may not consider mitigating measures the individual might use to help control the disability or whether the impairment is episodic, in remission, or latent. The practical effect of this Act would be to widely broaden the class of employees protected under the ADA and significantly increase the burden on employers to accommodate that enlarged class of employees. While the House recently passed its version of the bill, it remains uncertain whether the Senate will pass its version of the bill.
Employee Free Choice Act (S. 1041, H.R. 800)
The Employee Free Choice Act passed the House on March 1, 2007, but its consideration in the Senate is essentially done for this session of Congress, as its proponents were unable to gain the necessary votes to block opponents from engaging in a filibuster. However, as the bill is sponsored by leading Democratic candidates, it could see new life with an administration change. In the version currently before Congress, this bill would amend the NLRA in a number of ways. First, the NLRB would be required to certify and recognize a union based simply on the majority of employees signing card authorizations. This eliminates the step of holding a secret ballot after a petition to unionize has been submitted to the NLRB. Second, if the parties fail to reach agreement in the first contract negotiations within 90 days, either party may refer the matter to the Federal Mediation and Conciliation Service ("FMCS"). If the FMCS is unable to bring the parties to agreement within 30 days, the matter is referred to binding arbitration. The results of this arbitration are binding upon the parties for two years, absent written agreements to modify. Finally, the civil penalties and remedies are greatly increased. The NLRB is required to seek injunctions against employers suspected of interfering with, terminating, discriminating or retaliating against employees seeking to unionize. Also, remedies are increased to include back pay and two times the amount of back pay in the form of liquidated damages. Fines of $20,000 per violation are added and may be imposed for willful violations of the employees' rights during the organization drive.
Independent Contractor Proper Classification Act (S. 2044)
This bill is aimed at clarifying the standards used to classify workers. If enacted it will restrict employers' ability to classify workers as independent contractors by closing loopholes in the Revenue Act of 1978. Significantly, this bill would grant workers the right to petition the Secretary of the Treasury for a determination of their status as employees or independent contractors. Employers are prohibited from retaliating against an employee for filing such a petition. If the petition results in a finding of status misclassification, the Secretary must notify the Department of Labor. The bill calls for increased cooperation between the Secretary of Treasury and the Department of Labor in the investigation and tracking of misclassification cases. Finally, employers would be required to inform employees of their rights to seek a determination, their tax obligations, the federal protections unavailable to independent contractors, and to retain information on each worker classified as an independent contractor. If passed, this bill could have a serious impact on employers who rely upon independent contractors, as the expanded workers rights would lead to increased financial and legal liabilities for employers. Currently, this bill sits in a Senate Committee with no further action reported.
English-Only Workplace Legislation (S. 2453, H.R. 4464)
In late 2007, members of the House and Senate failed to garner enough support for an amendment to the Consolidated Appropriations Act 2008 which would have banned the EEOC from initiating Title VII lawsuits against employers for enforcing English-only policies in the workplace. Without this restriction, the EEOC continues to pursue lawsuits on behalf of those allegedly discriminated against in the workplace based upon their use of a language other than English. While the number of "English-only" lawsuits annually filed by the EEOC is relatively small, liabilities and penalties can be substantial. Recent settlement agreements have included fines in the millions of dollars, outright restrictions on employers from instituting any English-only policies, and compulsory implementation of monitoring and training programs.
Undeterred, proponents of the previous legislation introduced new bills aimed at the same goal. The House version, titled “The Common Sense English Act,” contains findings which spell out that the impetus for the bill is to counteract the EEOC’s recent English-only litigation. The Common Sense English Act simply amends Title VII to state “it shall not be an unlawful employment practice for an employer to require employees to speak English while engaged in work.” The Senate version, titled “Protecting English in the Workplace Act,” contains this same provision. Additionally, the Senate bill contains provisions which, in practice, would allow workers to speak a language other than English when not engaged in work (i.e., during bona fide meal periods, rest periods, or any other breaks during which the worker is not required to perform work duties). Further, under this bill the determination of whether a break qualifies as a “bona fide meal period” or a “rest period” is guided by definitions already contained within the Code of Federal Regulations. Employers must remain informed of any developments on this issue which has instigated proposed legislation on the state and national level. As reliance upon an immigrant workforce continues to rise, this legislation could significantly impact policies towards and treatment of multi-lingual employees. The current versions of these bills remain in Committee in both the House and Senate.
Employee Changing Room Privacy Act (H.R. 5228)
The Employee Changing
Room Privacy Act, a bi-partisan bill introduced in February 2008,
essentially prohibits employers from engaging in video or audio monitoring
of employees in areas where it is reasonable to expect employees would
change clothes (i.e., in a restroom or dressing room). Additionally,
employers may not use the results of any prohibited monitoring to discipline
employees. Further protection for employees is contained in a
non-retaliation provision that explicitly protects employees who have filed
claims. This bill charges the Secretary of Labor with oversight and
enforcement and provides for judicial review of hearing results in the
federal court of appeals. An employer found in violation of the Act is
liable for a fine of up to $18,000 per violation. Civil remedies available
to an employee include an injunction and/or damages not to exceed $25,000.
The bill also permits the recovery of attorney’s fees. Finally, employees
are afforded a 7-year statute of limitations, which commences when either
the employer engaged in a violation or when the employee should have been
aware of the violation, whichever is later. While newly introduced and
subject to amendment, as currently written, this bill would significantly
impact the rights and potential liability of employers, especially if the
employer currently maintains monitoring devices in
The Patriot Employers Act of 2007 (S. 1945)
In August 2007, the “Patriot Employers Act” was introduced to purportedly reward companies that invest in American jobs, pay decent wages, provide good benefits, and support their employees when they are called to active duty. Among other things, companies would be designated as “patriot employers” and receive a 1% tax credit if they: (1) pay at least 60% of employee health insurance premiums; (2) pay each worker an hourly wage of at least $7.80 per hour; (3) don’t outsource work over seas; (4) provide employees with a pension plan; and (5) agree to “neutrality” in union organizing drives.
While employers who agree to these conditions will receive a 1% tax credit on all corporate profits, among other potential disadvantages, they will be giving up their rights under the National Labor Relations Act to inform employees about unions and their potential drawbacks, essentially consenting to the unionization of the work force. Currently, the Patriot Employers Act is in Senate Committee with no further action reported. A substantially similar bill, the “Eagle Employers Act,” is in committee in the House (H.R. 5907).
Executive Order 12989
On June 6, 2008, President Bush signed Executive Order 12989 requiring federal contractors to use E-Verify to confirm the identity and work authorization of all employees working on federal contracts. The Order applies to federal contractors and subcontractors in the United States who meet the minimal monetary threshold for the contract of $3,000. It also requires contractors and subcontractors to: (1) enroll in E-Verify program within 30 days of a contract award, (2) begin verifying the employment eligibility of all new employees of the contractor or subcontractor that are hired after enrollment in E-Verify, (3) continue using E-Verify for the duration of the contract, and (4) confirm the employment eligibility of all existing employees who are directly engaged in the performance of federal contract work. Since the obligations pursuant to the Order do not become effective until a final rule is published by the relevant federal agency, employers are invited to submit comments to the rule up until August 11, 2008. At some point, thereafter, the Order will become final and applicable to federal contractors and subcontractors.
Conclusion
The foregoing pending and recently-passed legislation could have a profound impact on employers throughout Illinois and elsewhere. We will provide additional notices and information when there are any major developments with these Acts. In the meantime, if you have any questions regarding the potential consequences of the Acts, or any other employment related questions, please contact your Arnstein & Lehr LLP employment law attorney.
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