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01/09/2017

EMPLOYMENT LAW DEVELOPMENTS 2017 AND BEYOND!

Written by: Bob Dunlevey of Dunlevey, Mahan & Furry

It's shaping up to be a landmark year for changes affecting both employers and employees.  Many new laws and regulations sponsored by the Obama administration recently were enacted or will take effect in January 2017.  Will they be rolled back?  We will find out after January 20, 2017 when Donald Trump becomes the 45th President and benefits from Republican control of both Houses of Congress in its 115th Session.  It is anticipated that the new administration will enact significant measures to rebalance the rights and protections of employees with the rights and obligations of employers.  In addition, President-elect Trump will quickly seek to fill Judge Scalia's Supreme Court position, along with 103 Federal District Court and Appellate Court judicial vacancies. Also lurking is the proposed Midnight Rules Relief Act which permits Congress to nullify last minute regulations and actions by President Obama in a wholesale fashion.  It is estimated that between November 8 and December 31, 2016, 145 regulations were issued at a cost to the American public of $21 billion – the most since 1933 – 4.5 regulations per day. 

          During President Obama's administration, he attempted to carry out his legislative agenda by first imposing new regulations on federal contractors over which he had more power than the private sector.  Such things as the Fair Pay and Safe Workplaces Executive Order requiring government contractors to report labor law violations when bidding, the Paid Sick Leave regulations which gives employees 56 hours of leave each year, Pay Transparency provisions, LGBT non-discrimination mandates, and the enhanced federal minimum wage of $10.20 all came our way. In addition, the National Labor Relations Board, the Wage-Hour Division of the Department of Labor, and OSHA became far more aggressive.  For example, the infamous FLSA overtime rules were issued making overtime available to five million more workers, but these regulations are on hold and the EEOC expanded the EEO-1 reporting obligation making employers annually report W-2 pay data by gender, race and ethnicity.  OSHA created new injury reporting requirements which also limit post-accident drug testing and safety incentive programs, and raised penalties by 78%.   

          President-elect Trump has nominated for Labor Secretary Andy Puzder, current CEO of a national fast food chain.  He appears sympathetic to business leader concerns and opposes the new overtime rules and any substantial increase in the minimum wage.  Puzder's position is a powerful one.  President-elect Trump will have the opportunity to appoint a majority of the members to the National Labor Relations Board changing the complement to three Republicans and two Democrats. He will also appoint the new NLRB General Counsel who sets the litigation and enforcement priorities for the Board.  A new EEOC Chairman and its General Counsel will also be selected by him.  These key posts will set the tone and agenda for those agencies, which is anticipated to be more employer friendly.

          But where the federal government may become less aggressive toward employers and revise the regulatory scheme to decrease the burden on employers, surely states and municipalities will continue their aggressive initiatives on such things as minimum wage, paid sick leave, parental leave, LGBT rights, pay equity, and predictable advanced work scheduling for employees.  These state and municipal initiatives will present significant problems for employers because the agenda of interest groups driving local legislation is oftentimes radical.  Multi-state employers will find it even harder to keep track of their legal obligations as state and local legislators adopt a wide variety of inconsistent labor laws.

          Here are a few of the predictions for labor/employment activities in the Trump administration –

  • The new FLSA overtime rules which are on hold will be revised and installed with modification – expect the $455 per week salary requirement to be increased by $100 - $200 but not to the current $913 per week in the most recent regulations now on hold – automatic escalator provisions to raise the salary requirement periodically will go away.
  • The federal minimum wage will be increased from $7.25 per hour to approximately $9.50 per hour over multiple years and numerous states will enact their own minimum wage requirements moving toward $13 per hour.
  • E-Verify, which requires certain employers to check on the legal status of workers before hire, will be broadened to require all employers to ensure that their applicants and employees are properly documented to work – stronger enforcement will be seen in an effort to weed out the estimated 5% of the U.S. workforce which is undocumented.
  • Employer paid sick leave for maternity purposes of six weeks will be enacted in hopes of staving off the initiative to modify the FMLA to make its 12 weeks fully compensable.
  • The NLRB will modify its overzealous rulings restricting the rights of employers to promulgate rules and regulations pertaining to employees' use and abuse of social media and restrictions on policies and work rules within employee handbooks. The expansion of the joint employer doctrine which causes separate entities to be co-liable will eventually revert to the prior less stringent standard.
  • OSHA's prolific promulgation of new Standards will slow dramatically and its new interpretation of restrictions on safety incentive programs and post accident drug testing will be modified to make both more workable for employers. But, the enhanced penalty structure which caused a 78% increase in fines last year will not be rolled back.
  • The Affordable Care Act will be repealed but will be replaced with a somewhat similar structure with limited federal insurance subsidies, no employer mandate, no "Cadillac tax" and competition across state lines for health insurance companies – the transition will be slower than anticipated.
  • Unionization in the private sector will continue to be quite limited at about 6.7% but public sector unionization will remain at the high level of approximately 35%.
  • Multi-employer pension plans will continue to face long term unfunded vested benefit shortfalls causing some employees to receive less retirement benefits than promised but Congress will not enact further legislation to correct the problem.

          So, get ready for a "wild ride" in 2017 – changes are coming.  If you haven't consulted with your labor and employment law counsel for some time, chances are you will be chatting in 2017.

          For additional information or assistance use your Association legal Services Plan, contact attorney Gary Auman at (937) 223-6003.