March 26th, 2009 | By Paul Cherner
The U.S. General Accounting Office (“GAO”) recently issued a scathing report about the DOL’s handling of FLSA investigations. The title of the report is “Wage and Hour Division’s Complaint Intake and Investigative Processes Leave Low Wage Workers Vulnerable to Wage Theft.”
In response, the new DOL Secretary, Hilda Solis, issued a News Release stating that she takes the issues raised by the GAO report seriously and will be hiring 250 new field investigators to refocus their efforts on enforcement of wage-hour laws. This is a one-third increase in that investigative staff. Employers can anticipate more vigorous enforcement of these laws and should prepare now by conducting an audit of thier compliance with the FLSA
February 19th, 2009 | By Paul Cherner
The American Recovery and Reinvestment Act of 2009 (a/k/a “the stimulus plan”) contains several provisions intended to assist unemployed workers maintain their health insurance coverage pursuant to their COBRA rights. Essentially, the law provides that unemployed workers will only have to pay 35% of the cost of their COBRA coverage, with the remaining 65% to be subsidized by the federal government. This subsidy can last for a period of up to 9 months, unless certain specified events shorten the time period.
These provisions apply to almost all unemployed workers who are involuntarily terminated between September 1, 2008 and December 31, 2009. A “second chance” is provided to those individuals who were terminated during that time period but may have declined COBRA. These workers are allowed 60 days after receiving a new notice of these enhanced rights to decide to take COBRA coverage at the subsidized rate. It is very important that these workers receive a detailed “enhanced notice” about their rights under this new law as soon as possible. The Secretary of Labor is directed to issue a model enhanced notice by March 19, 2009 and employers must send an enhanced notice by April 18, 2009. All COBRA notices issued after February 17, 2009 must also include an explanation of the rights granted under this new law.
Employees who previously elected COBRA, if eligible for this subsidy, will be entitled to reimbursement or a credit for the 65% of COBRA premiums that they may pay for the period beginning February 17, 2009. High income individuals are not eligible for this subsidy.
There are many additional details included in these provisions and the Secretary of Labor will also be issuing regulations to further define these rights and obligations and the procedures to follow. Employers should consult with legal counsel or a knowledgable COBRA administrator as to how to proceed to implement these new requirements.
Pursuant to IRS requirements, you are hereby informed that this information is not intended to be tax advice that should be relied upon for purposes of avoiding taxes and/or penalties.
February 4th, 2009 | By Paul Cherner
On January 30, 2009, President Obama issued three Executive Orders that impact federal contractors. These Orders are pro labor and are intended to reverse positions taken during President Bush’s administration.
Nondisplacement of Qualified Workers Under Service Contracts - this Executive Order provides for the continuation of employment of employees who are working pursuant to a service contract with the federal government, when that contract is awarded to a new contractor or subcontractor who will be performing the same or similar services at the same location. The successor contractor and/or subcontractor will be required to offer the existing nonmanagerial and nonsupervisory employees the right to continue their employment under the new contract before being permitted to hire other employees. The Order exempts certain contracts and permits a contracting agency to exempt other contracts or subcontracts if the agency determines that the application of these rules would impair their ability to procure services on an economic and efficient basis.
Notification of Employee Rights Under Federal Labor Laws - this Executive Order requires all federal contractors and subcontractors to post a notice in all places where employees covered by the National Labor Relations Act work, informing them of their rights under the federal labor laws. The Secretary of the U.S. Department of Labor has 120 days to initiate rulemaking to specify the size, form and contents of this notice, which is to be posted during the term of the contract.
Economy in Government Contracting - this Executive Order requires that costs associated with activities undertaken to persuade employees to exercise or not exercise their rights to bargain collectively through representatives of their own chosing (e.g. unions) should be treated as “unallowable” and a federal contractor may not be reimbursed for such costs. The Federal Acquisition Regulatory Council has 150 days to adopt rules and regulations needed to implement this Order.
December 30th, 2008 | By Paul Cherner
Expect increased activity in the labor and employment law arena from Washington, DC in 2009. The Labor Movement invested more than $300 million and countless volunteer hours to help elect President-elect Obama and enlarge the Democratic majority in Congress and it expects both to enact new legislation and initiate administrative activities that will benefit labor unions and workers.
The number one priority of the labor movement is the Employee Free Choice Act (“EFCA“). EFCA would dramatically change the rules with respect to union organizing of employees by allowing a union to bypass the NLRB’s secret ballot election procedure. If EFCA is enacted, an employer would be required to recognize a union as the representative of its employees after the NLRB has verified that a majority of the employees have signed union authorization cards. After recognition, the employer and the union would have 90 days to negotiate their first collective bargaining agreement. If they are unsuccessful, a mediator from the Federal Mediation & Conciliation Service (“FMCS“) would then become involved in the negotiations. If a contract is not agreed to in the following 30 days, the issues will be submitted to an arbitrator, who will have the power to make a final and binding decision on all open issues. President-elect Obama was a sponsor of the EFCA bill when he was a Senator and Representative Hilda Solis (nominee for Secretary of Labor) voted for it when it passed the House in 2007. It is very likely that EFCA will be enacted, but not necessarily in the first 100 days of the new administration and there may be some modifications made to the proposed collective bargaining procedures and/or to a proposed statutory fine process for unfair labor practices.
President-elect Obama will be able to appoint 3 new Board Members to the 5 member National Labor Relations Board (“NLRB“) and to designate a new Chairman and General Counsel of the Board. These appointees are likely to be more favorable to unions and workers than those appointed during the Bush administration. Also pending in Congress is the “RESPECT” bill, which is intended to reverse a prior NLRB decision that broadly defined which employees were supervisors and thus exempt from union organizing efforts.
The U.S. Department of Labor (“DOL“) is expected to get increased funding and enlarge its staff, so that it will become more active in investigating and enforcing the numerous laws within its purview. There are serious efforts to increase the minimum wage (“FLSA“) and to enact new safety rules (“OSHA“). There is also talk of revising the 2004 DOL regulations pertaining to overtime exemptions, so that more employees will be entitled to overtime.
Several organizations that advocate for a more family friendly workplace are expected to make an effort to have the Family & Medical Leave Act (“FMLA“) require paid leave. There are several states that have recently passed such legislation. The recently promulgated FMLA regulations are not expected to be changed in the near future.
President-elect Obama also has the opportunity to appoint the Chairman, General Counsel and Commissioners to the Equal Employment Opportunity Commission (“EEOC“) and that agency is expected to increase its enforcement efforts during the new administration. Pending in Congress is the “Lilly Ledbetter Fair Pay Act”, intended to reverse the holding of a U.S. Supreme Court case, by allowing an individual to file an employment discrimination charge based on the last date that they were adversely affected by the alleged discrimination.
There are numerous other labor and employment bills pending in Congress which may be enacted as a result in the change in Congress and the administration, so stay tuned for an exciting 4 years.
December 18th, 2008 | By Paul Cherner
There have been many names floated in the media as potential candidates to be Secretary of Labor in the new administration. Almost all share the same characteristic, that they are pro-union, which is expected given the strong support of President-elect Obama by labor unions and their members.
According to recent news reports, it looks like Congresswoman Hilda Solis (D – CA) is the likely nominee. She began her career in the Carter White House Office of Hispanic Affairs and then worked as a budget analyst with the Office of Management and Budget. She served two years in the California Assembly and six years in the California Senate, before being elected to Congress in 2000.
She is the only Member of Congress on the board of American Rights at Work, a pro-union group headed by former Congressman David Bonior, who has been part of the transition team dealing with the Labor Department.
SEIU President Andy Stern praised the likely selection of Solis, stating: “We’re thrilled. She’s been as strong a voice for justice for SEIU workers like our janitors and homecare workers as we’ve ever had.”
Solis will be expected to be at the forefront of the unions’ efforts to enact the Employee Free Choice Act (“EFCA”) within the first 100 days of the new administration. EFCA is expected to substantially change the rules involved in organizing employees and, if passed in its present form, will likely result in a significant increase in the number of unionized workers. Solis would seem to be an ideal choice to lead the legislative battle in Congress to enact this new law, given her substantial experience as a legislator and her Congressional contacts.
