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Legislative Affairs

2010 Summary

PIHRA – LEGISLATIVE AFFAIRS COMMITTEE

June 9, 2010 Update on Federal Labor and Employee Benefits Laws and Regulations

On June 9, SHRM hosted a conference call for Governmental Affairs volunteers and provided an update on what is left on the Congressional calendar for the year, as well as news on anticipated regulatory developments from the Department of Labor and the EEOC. Mike Aiken, Kathleen Coulombe, and Bob Carragher provided reports. Human resource professionals should watch for developments on the following issues:

Protecting Older Workers Against Discrimination Act (H.R. 3721 and S. 1756): This bill would overturn the United States Supreme Court’s June 2009 opinion in Gross v. FBL Financial Services. Distinguishing ADEA age discrimination claims from Title VII claims, the Court held in Gross that a person bringing an ADEA disparate-treatment claim must prove that age was the “but-for” cause of the challenged adverse employment action, not simply “a” motivating factor. The Court also explained that, for purposes of ADEA claims, the burden of persuasion does not shift to the employer to show that it would have taken the action regardless of age, even when a plaintiff has produced some evidence that age was one motivating factor in that decision. Gross makes it more difficult for individuals to prove age discrimination.

The bill would amend not only ADEA, but any federal discrimination, retaliation, or whistleblower statute. SHRM would prefer a narrower approach. Possible amendments to the bill are under discussion. The bill would apply to ADEA claims pending on or after June 17, 2009.

Employment Non-Discrimination Act of 2009 (ENDA): ENDA (S. 1584 and H.R. 3017) would create a new protected class for sexual orientation and gender identity. The bill states, in part, that it shall be an unlawful employment practice for an employer—

· to fail or refuse to hire, to terminate, or to otherwise discriminate against any individual with respect to the compensation, terms, conditions, or privileges of employment because of the individual's actual or perceived sexual orientation or gender identity; or

· to limit, segregate, or classify employees or applicants in any way that would deprive or tend to deprive the individual of employment, or would otherwise adversely affect the status of the individual as an employee, because of the individual's actual or perceived sexual orientation or gender identity.

The employer must provide reasonable access to adequate shared shower or dressing facilities that are not inconsistent with the employee's gender identity as established with the employer at the time of employment or upon notification to the employer that the employee has undergone or is undergoing gender transition. The bill does not address restrooms. The bill shall not be construed to require the construction of new or additional facilities.

Employers may require employees to adhere to reasonable dress or grooming standards, provided that the employer permits any employee who has undergone gender transition prior to the time of employment, and any employee who has notified the employer that the employee has undergone or is undergoing gender transition after the time of employment, to adhere to the same dress or grooming standards for the gender to which the employee has transitioned or is transitioning.

The bill shall not be construed to require an employer to treat an unmarried couple in the same manner as the covered entity treats a married couple for purposes of employee benefits.

The bill would be effective 6 months after enactment. It does not prevent related actions under state or local law.

Work-Life Balance Award Act (H.R. 4855): The Work-Life Balance Award Act was developed as a bipartisan effort, and SHRM has endorsed the bill as introduced. In April, SHRM testified before the House Education and Labor Subcommittee on Workforce Protections in favor of this bill. The bill would establish in the Department of Labor an annual award (the Work-Life Balance Award) for employers that have developed and implemented work-life balance policies. An employer desiring consideration for the award will submit an application to the newly established Work-Life Balance Advisory Board, which will develop criteria for recipients of the award.

The Paycheck Fairness Act: The House has already passed the Paycheck Fairness Act (H.R. 12 and S. 182) but, at this stage, it would not appear that the bill will pass the Senate this year. There have been recent efforts made to determine the level of existing support for the bill, but it does not appear to be picking up much steam. We should keep an eye on it, however. The bill is opposed by SHRM.

In summary, the Paycheck Fairness Act would amend the part of the Fair Labor Standards Act of 1938 (FLSA) known as the Equal Pay Act to revise remedies for, enforcement of, and exceptions to prohibitions against sex discrimination in the payment of wages. Among other changes, HR 12 provides that the “bona fide defense” shall apply only if the employer demonstrates that such factor: (1) is not based upon or derived from a sex-based differential in compensation, (2) is job-related with respect to the position in question, and (3) is consistent with business necessity. Furthermore, the defense would not apply where the employee demonstrates that: (1) an alternative employment practice exists that would serve the same business purpose without producing such differential, and (2) the employer has refused to adopt such alternative practice.

H.R. 12 would also prohibit retaliation for inquiring about, discussing, or disclosing the wages of the employee or another employee in response to a complaint or charge, or in furtherance of a sex discrimination investigation, proceeding, hearing, or action, or an investigation conducted by the employer. Employers who violate the law could be liable for punitive damages, and an action to enforce the law could be brought as a class action.

Employee Free Choice Act (EFCA): It seems very unlikely this bill will pass, or even come up for a vote, in this election year. Employers should watch, however, for new regulatory developments from the NLRB.

Section 127 (Employer-provided Education Assistance): Currently, section 127 of the Internal Revenue Code allows an employee to exclude from income up to $5,250 per year in assistance provided by his or her employer for educational courses. Section 127 benefits are set to expire at the end of 2010. This is a popular benefit, and there is bipartisan support for making section 127 benefits permanent. S. 2851 would remove the sunset date, and make other changes in educational benefits. SHRM is supporting a measure that will permanently extend section 127 benefits (but will not address the other issues covered by S. 2851), and which should be introduced in the House soon. SHRM will provide a notice to members when the bill is introduced, along with a link to a website that is being created in support of the effort to change the law and remove the sunset date.

Regulatory Update: Agencies are gearing up to issue regulations to reflect the new administration’s policies and initiatives, as well as to implement new laws. Some areas where we might expect to see new developments include:

The Office of Federal Contract Compliance Programs (OFCCP) is reviewing all rules on hiring military veterans, disabled individuals, and construction industry workers to strengthen affirmative action compliance.

The Department of Labor’s regulatory agenda for 2010 indicates that the agency will seek to expand the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA) reporting requirements. The regulations currently contain a statutory provision that creates an “advice” exemption from reporting requirements relating to consultants who persuade employees as to their collective bargaining rights. A proposed revised interpretation would narrow the scope of the advice exemption.

A White House initiative, called the “High Road” contracting policy, is under consideration and could be announced in the coming weeks. When awarding federal contracts, the government would score bidders on various criteria, including whether the potential contractor has been in compliance with labor and employment laws. The government would also consider the wages and benefits offered by the contractors.

This spring or summer the EEOC should be issuing final regulations for employers and health plans under the Genetic Information Nondiscrimination Act.

This fall, the EEOC should be issuing proposed regulations under the ADA Amendments Act.

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This is only a brief synopsis of certain laws and regulations. The terms of the laws and regulations summarized can be detailed and complex, and this summary does not purport to cover every aspect of each law or regulation. This summary does not constitute legal advice. Employers should consult their own legal counsel concerning whether and how these laws and regulations should be implemented, and whether there are other labor and employee benefit legal standards that need to be put into place or updated.

PIHRA District 14