Thursday, February 25, 2016

More Employment/Workplace Related News

There’s a theme here….

Well, this is interesting! Even Congress is concerned about how it will manage with the new minimum salary level coming under the Fair Labor Standards Act! Yep, the HR Policy Association posted a brief article that is quite eye-opening. Several (Democratic) members of Congress have voiced the same concerns that the private business community has about the new salary threshold. (By the way, both President Obama and the DOL have publically shamed the business community over their concerns, saying they are unfounded.) As the article quotes Rep. Hastings, a senior member of the House Rules Committee, noted that with the reduction of office budgets over the past four years, "I don't see how we could pay overtime" for the "17 or 18 people that each of us is allowed to have—that's problematic for me." In addition, a coalition of associations representing public sector employers has asked Congress to request the Labor Department reconsider its proposed rule. They state that because the proposed salary level of (over) $50,000 "would have significant adverse consequences on public sector employers," and the "increased costs would require an increase in taxes, a reduction in both public services and employee benefits, or both." Hmmmm. Sound familiar?

Another entry from HR Policy Association deals with the proposed new "persuader" rule. This involves reportable communication, advice, consultation, etc. an employer may have in reference to union avoidance activities. This has long been a point of contention since it is often felt to infringe on attorney-client privilege. In the new proposed rule, even consultation on employee engagement surveys would be reportable. For example, some activities that may trigger the need for public reporting would be agreements with consultants to:

  • Draft, revise, or provide website content for employees, or written materials for presentation, dissemination, or distribution to employees;
  • Train supervisors or employer representatives to conduct individual or group employee meetings; and/or
  • Develop personnel policies or practices.

Since the proposed rule gives no definition or examples of what an "indirect" activity is, HR Policy Association raises the concern that any advice, counsel or assistance in the HR an employee relations area could trigger the need to report – even if there is no current union-organizing activity going on. Thirteen state attorneys general have sent a letter opposing the new rule because it would "undermine long-standing protections for confidential attorney-client communications and would place undue burdens on small business which would be singled out under the rule."

And lastly (for this week, anyway) is a newly implemented procedure by the EEOC. Up until last week, if an employee who has claimed discrimination by her employer wanted to see the employer’s position statement (the initial statement an employer makes to the EEOC after being informed of the charge), she needed to submit a request under the Freedom of Information Act (this can be a long and tedious process). However, now the EEOC will provide that statement and any "non-confidential" documentation to the employee during the investigation process, upon request. You might say that this only makes sense. But if you take that stance, wouldn’t you say it’s only fair for the employer to have the same access to the employee’s complaint? You would think, but the Freedom of Information Act still governs the employer’s requests for copies of employees’ submissions.

Friday, February 19, 2016

The End of the Line?

For this session of the Maryland General Assembly…..

It looks like the last of the employment/workplace related legislation has been submitted before the 2016 session of the Maryland General Assembly. Although, it is still possible for a bill or two to slip through.

As far as submission of bills is concerned, it’s been another active session. It remains to be seen which of the many bills thrown against the wall will actually stick.

Here are the last few that I’m following:

SB 662 - Health Benefit Plans – Special Enrollment Period for Pregnancy

For small employer health benefit plans (currently less than 50 employees/covered) This bill will add special enrollment rights for pregnancy, including the pregnancy of an eligible employee’s spouse or dependent. It will allow for enrollment any time after the commencement of the pregnancy and be available for the duration of the pregnancy. Currently employees experiencing life status changes related to dependents (birth, adoption, foster placement, marriage) can enroll in health insurance plans outside of open enrollment periods. This bill will add pregnancy to the list of special enrollment rights, including the pregnancy of a dependent.

It is unclear how this will be reconciled with IRS rules and HIPAA special enrollment rights for Sec. 125 pre-tax plans, since those rules do not include pregnancy as a qualifying event. It is also unclear why this bill should be necessary with the individual mandate under the ACA. Except for some very narrow exceptions, all individuals are mandated by the ACA to be covered under a health insurance plan. Assuming this fact, there should be few individuals who are not covered at the time of the need, whether that need is pregnancy or some other health condition.

Rules and regulations concerning timing of enrollment in group plans seek to alleviate the negative effect of adverse selection (in this case, only enrolling in health insurance when an expensive need occurs). Since insurance carriers cannot predict such a risk if this bill passes, premiums will undoubtedly rise to cover the risk. Small employers especially can least afford this additional cost.

HB 1038 - Labor Organizations - Right to Work

Prohibits an employer or a labor organization from requiring, as a condition of employment or continued employment, an employee or a prospective employee to join or remain a member of a labor organization, pay charges to a labor organization, or pay a specified amount to a third party.

This bill basically prevents forced membership in a union, or the payment of maintenance fees, agency fees, etc. to a union by nonmembers.
I believe this is long overdue. Currently, something like 11% of employees nationwide are unionized – most of them being public employees. Twenty-six states (including Virginia and West Virginia) have right to work laws. The time has come to allow all employees in Maryland the right to decide. In addition, to deny citizens’ their rights as to which organizations they wish to belong, or wish to contribute, seems uniquely un-democratic and contrary to the premises on which our country was founded.

HB 1454 - Organ Donation Leave

This bill applies to businesses with 15 or more employees. It will require up to 30 days of paid organ donation leave within 12 months; and it cannot run concurrently with FMLA leave; the leave cannot affect accrual or eligibility for any other employer-provided benefit; and includes reinstatement rights.

HB 1454 extends FMLA-like benefits and protections (for organ donation) to employees of businesses not covered under the FMLA. It layers onto several other paid leave bills/requirements submitted this session. In addition, it gives additional protected and paid leave to employees covered under FMLA (which is unpaid leave).

HB 1293 - Break Time for Expression of Breast Milk by Employees – Requirement

Requires an employer to provide break time for an employee to express breast milk for a nursing child and provide a private space that the employee can use while expressing breast milk. This requirement extends for 1 year after the child's birth. The bill applies to businesses with under 50 employees (businesses with 50 or more employees are already required to provide this break time, due to an amendment of the FLSA that was part of the ACA).

Many employers of 50 or more employees find it difficult to provide the private space that meets the law, those under 50 will most likely find it even more difficult. In addition, there is no limit to the number of breaks, or the length of breaks.

To be very clear, no one I know or associate with is against giving employees flexibility and leave that benefits them – within the means of the business. However, the problem arises with legislated, mandated benefits that make no consideration to the size or nature of the business in any realistic way. I’ve said this before, many times, one size does not fit all.

The number of laws, both enacted and proposed (federal, state and local) concerning leave benefits in particular is astounding. It is already very difficult for many businesses of all sizes to comply with laws covering the same topic, but differing in requirements. Piling on requirement after requirement, after requirement will at some point cause a business to cut back somewhere else. Something has to give; something will suffer. It may be wages, it may be other employee benefits, and it may even be jobs. All businesses have to have more revenue that they do expenses. Unlike government, business cannot survive running a deficit for very long.

Thursday, February 11, 2016

More Maryland General Assembly Workplace Law Updates…

And the story continues…..

As expected, bills presented in last year’s session are returning, with a few tweaks. Happy reading!

SB 664 - Fair Scheduling, Wages, and Benefits Act (Cross filed with HB 1175)

I believe this is the single worst employment-related bill I’ve seen presented in Maryland. SB 664 would have devastating effects on businesses of all types and sizes. I honestly can’t imagine what our legislators were thinking in drafting this.
Specific provisions:

  • Upon hiring, provide a good faith estimate of hours/days/times the employee is expected to work, including any on-call shifts.
  • On or before first day of work, provide a schedule for the first 21 days of work.
  • Provide each employee with an initial work schedule at least 21 days before the first day of the schedule.
  • Notify employee of any change(s) made to initial schedule before changes take effect and provide a revised written schedule within 24 hours of making the change.
  • Post a schedule at least 21 days before the start of each workweek that includes all schedules, for all employees (including those not scheduled to work), and update that posting within 24 hours of any change.
  • May not require an employee to work additional hours not included in schedule, unless agreed to by employee in writing. Does this prohibit requiring regular or overtime hours without getting permission from the employee? I think we know what that means.
  • If a change is made within 21 days of the first scheduled shift, one hour of "predictability pay" must be paid to the employee as a penalty for every shift that is changed. Seriously? A penalty for responding to business needs?
  • Must pay 4 hours of wages if an employee reports to work and/or is notified within 24 hours before the first hour of a shift that the shift was cancelled or the hours reduced.
  • Must post a notice of additional hours of work available, to include the process by which employees may notify the employer of a desire to work the additional hours and criteria the employer will use to determine the distribution of those additional hours.
  • Employer cannot hire new employees/independent contractors/temps until 7 days after the posting of the additional hours, and only if no current employee elects to work the additional hours. Must also document process and reason for hiring additional employees/independent contractors/temps. Wow. Just wow. No words for this.
  • Must also make reasonable efforts to offer employees training opportunities to gain skills necessary to work additional hours if different from their primary job skills.
  • Must pay same hourly wage for jobs that require substantially equal skill, effort, responsibility and duties, regardless of number of hours employee is scheduled to work. Not sure where this is going….seems too obvious to be the real intent.
  • Must have same eligibility to accrue employer-provided benefits and paid/unpaid leave (and other benefits of employment) regardless of number of hours scheduled to work. Does this prohibit having differing benefits packages for part time employees vs. full-time employees?
  • Include predictability pay in statement of earnings.
  • These provisions will be unworkable for many industries, including retail, food service, health care and manufacturing. This will essentially prevent an employer from responding to business or staffing needs in a timely fashion. Employees get sick, have family emergencies or quit, resulting in the need to change the scheduling for other staff – none of which is "predictable". Consumer demand changes, vendors and customers have needs that result in changes to production or provision of services and are not always "predictable".

    This bill also seems to prohibit a business from requiring overtime without "permission" from employees. It appears to prohibit offering different benefits to part time vs. full time employees.

    Legitimate, real world business needs and practices virtually guarantee that violations would occur.

    SB 940 - Payment of Wages - Minimum Wage and Repeal of Tip Credit

    Here we go with raising the minimum wage again. Previously Maryland passed a law with a schedule of increases in the minimum wage. SB 940 expands on that: 

    Changes the minimum beginning July 1, 2016 to $10.10 per hour, and
    July 1, 2017 to $11.90
    July 1, 2018 to $13.25
    July 1, 2019 to $14.25
    July 1, 2020 to $15.00

    And thereafter increased by the average percent growth of the CPI.

    I still can’t see that flipping burgers is worth these amounts. There is no consideration of what a job is actually worth. These efforts mistakenly equate the worth of the job with the "worthiness" of the person holding the job. That’s a social statement, not an economic factor.

    Thursday, February 4, 2016

    Maryland General Assembly Workplace Law Update

    and more…..

    As expected, Maryland delegates and senators are beginning to present bills that effect how employers in the state of Maryland operate. As of today, here are several of those bills that have the potential to adversely affect business.

    HB 401 - Equal Pay for Equal Work – Revisions

    This bill will create a commission to study, analyze and then recommend legislation/regulations to address pay disparities between men and women, and minorities and non-minorities. A very laudable endeavor! However, a couple little provisions were slipped into this bill that don’t make a great deal of sense to me as to how they will do anything to address any current or future unfair pay disparities.

    It would require an employer to include in a job advertisement/posting the minimum rate of pay; whether pay is hourly, daily, weekly, piece, salary, etc.; if the position is eligible for overtime; and whether any allowances (tip credit, meals, etc.) are included. It would also prohibit the employer from seeking salary history information without the written consent of the applicant; and prohibits employers from giving the salary history of current or former employees without written consent. It’s not clear if it would prevent an employer from asking an applicant during an initial phone screen about salary history without first getting written consent, but it doesn’t really clarify that, either. A rather serious inclusion to this bill is individual liability for violations (a supervisor, HR representative, etc., could be held individually liable in addition to the company).

    SB 481 - Labor and Employment - Equal Pay for Equal Work

    SB 481 would add gender identity to state wage discrimination laws. It would also prohibit businesses from attempts to prevent the discussion of wages by and among employees or adverse action for discussing same.

    Both state and federal laws (Equal Pay Act of 1963 and Title VII of the Civil Rights Act, the ADEA, and the ADA) prevent such wage discrimination and other than adding gender identity, this bill does not increase protections under existing laws. In addition, preventing discussion of wages is already prohibited under the NLRA.

    This is a continuation of the "layering" of laws and regulations upon businesses, and adding additional causes of action available to employees who feel they’ve been wronged. I’m not sure how piling up the heap of similar laws actually results in more protection, or even adds to the deterrence of the actions they were meant to prohibit. The increased cost and administrative burdens to comply with multiple laws covering the same topics all contribute to a very negative business environment.

    HB 580 – Maryland Healthy Working Families Act (SB0472)

    This is Maryland’s version of "Sick and Safe Leave" acts that have passed in other states and localities in the last year or so. In fact, this appears to be pretty much a duplicate of Washington D.C.’s law. And it’s not pretty…..

    The accrued paid leave requirement will apply to businesses with 9 or more employees; unpaid accrued leave will be required for those with less than 9 employees.

    If passed, this law will have a major impact on businesses. A one-size-fits-all approach never really fits anyone.

  • Leave accrues at the rate of 1 hour of leave for every 30 hours worked; employer can cap at 56 hours in a year; and can grant all leave up front, or accrue throughout the year.
  • The bill requires reinstatement of accrued, unused time if the employee is rehired within 12 months. This is not standard practice with sick leave and would add an additional liability a business must carry on its books, further increasing business costs.
  • Allowance for employees to use time not yet earned. Most employers do not allow "borrowing" of leave time; and when they do, it is often in cases of severe need only.
  • Requires the allowance for use of time for non-medical, non-illness needs. Many employers require that sick leave be used for illness of the employee only, or for the illness of an immediate family member.
  • Extends the definition of "family member" beyond what is standard and practical. Allowing use of such leave for grandparents, grandchildren and siblings, for example, in addition to what is traditionally defined as an immediate family member, is far outside the norm for leave policies; increasing direct labor costs in terms of wages, and the increased need to replace employees on leave for these additional circumstances.
  • The bill does not allow for the employer to require employees to find their own replacement for the hours the employee will not work. This is common practice in health care settings, retail and food service.
    These requirements will add significant costs to businesses and likely will have a negative effect on wages and job creation. While it’s great when an employer can afford to offer paid leave – and I believe it should if possible – not all businesses can do this. 

    Whenever a law adds to the cost of doing business, the money has to come from somewhere; it doesn’t just appear because we wish it to be so. The vast majority of employers in both Maryland and across the country are not huge, money-saturated operations. They are small and mid-size companies that struggle to produce and sell their products or services, realize some profits and treat their employees as well as they can.

    If you operate a business in Maryland and have any number of employees, I urge you to take a look at these bills and then contact your delegates and senators and let them know how they will affect your business in particular. That is the only way our elected officials will find out how their actions affect our lives.

    In other news…..back in July of last year, I wrote here about the Department of Labor’s proposal for the Fair Labor Standards Act’s exemption rules. We’ve all been waiting to find out when the final rule might be released. The DOL’s Solicitor M. Patricia Smith told attorneys at a New York State Bar Association meeting that the final rules would likely be published in July 2016. Given an effective date 60 days after the release of the final rules, employers will have to comply with the new rules by September 2016.

    As I mentioned in that prior post, you need to get ready for this:

  • Look at your current exempt-level jobs that pay below $51,000. Decide if you will raise their salary to keep them exempt, or reclassify them as non-exempt and pay the additional overtime. Analyze how many hours employees in these jobs actually work to help you decide which option makes more financial sense to your organization. Keep salary compression effects in mind…
  • Limit overtime opportunities? Will this eventually cause you to have to add to staff in order to get the work done? Which is more cost-effective for your business?
  • Reclassify the appropriate positions, but reduce pay to offset for the amount of expected overtime payments? Not a great option, but one that might be necessary for some businesses.
  • The proposed new rule will require that this minimum amount will be adjusted annually based on the 40th percentile of non-hourly paid employees. Here’s one analysis of the effect of that provision. Keep this future cost in mind.
      Finally, remember that the DOL in its proposed rules, asked questions seeking feedback about changing the duties test for exemptions to the overtime requirements. We won’t know if the duties test will be amended in the final rules (with no further public comment!), but if the test is changed, you’ll also need to analyze your exempt-level positions to see if they will still qualify under the new test. Are we having fun, yet?

      Stay tuned……….