United States - Global Employment Law

Legislative Update for the Week of March 22

Littler Mendelson — Mon, 29 Mar 2010 12:27:08 -0800

House Passes Bill Extending Certain USERRA Right to Members of the National Guard
The House of Representatives overwhelmingly approved by a vote of 416-1 the National Guard Employment Protection Act of 2010 (H.R. 1879), legislation that would extend certain employment and reemployment rights to members of the National Guard who are ordered to report for full-time duty. Read the full post here. (March 26)

Health Care Reform Law Presents Unique Considerations for Collectively Bargained Plans
The new health care reform legislation has dramatic implications for all employers. While full implementation of the law is still years away, employers should begin evaluating and preparing for its impact on collective bargaining agreements today. Read the full post here. (March 26)

]]>Bill Temporarily Extending COBRA, UI Benefits Stalls
Despite last-ditch efforts, the Senate failed to approve the Continuing Extension Act of 2010 (H.R. 4851) before the two-week legislative recess, which would have extended the COBRA subsidy and emergency unemployment insurance benefits. Read the full post here. (March 26)

Republican Senators Draft Letter Opposing Potential NLRB Recess Appointment
All 41 Republican senators signed a letter written by Senators Orrin Hatch (R-UT) and John McCain (R-AZ) urging President Obama not to appoint Craig Becker as a member of the National Labor Relations Board over the upcoming two-week recess. Read the full post here. (March 26)

Senate Passes Reconciliation Bill
After a marathon of all-night Congressional proceedings, the Senate voted 56-43 on Thursday in favor of a slightly amended Health Care and Education Reconciliation Act of 2010 (H.R. 4872)--otherwise known as the reconciliation bill--containing "fixes" to the recently enacted Patient Protection and Affordable Care Act (P.L. 111-148). Read the full post here. (March 25)

DOL Changes Course on Exempt Status of Mortgage Loan Officers
In its first Administrator Interpretation Letter, the Wage and Hour Division of the U.S. Department of Labor announced on Wednesday that mortgage loan officers do not qualify as bona fide administrative employees under section 13(a)(1) of the Fair Labor Standards Act. Read the full post here. (March 25)

Bill Would Limit Executive Compensation Paid by Systemically Significant Financial Institutions
Sen. Bill Nelson (D-FL) introduced the Wall Street Compensation Reform Act of 2010 (S. 3149), legislation that would amend the tax code to create special rules for executive compensation paid at "systemically significant" financial institutions, and would condition an institution's eligibility for tax deductions on ending certain compensation arrangements and adopting new, long term compensation standards. Read the full post here. (March 25)

Reports Claim Craig Becker Likely to Receive Recess Appointment
It is becoming increasingly likely that controversial National Labor Relations Board nominee Craig Becker will be appointed as a Board member over the upcoming Congressional recess. Read the full post here. (March 24)

Supreme Court to Decide Whether Complaint Must Be Written in Order to Be Covered under the FLSA's Anti-Retaliation Provision
The U.S. Supreme Court has agreed to review the Seventh Circuit's decision in Kasten v. Saint-Gobain Performance Plastics (7th Cir. 2009), which held that an oral complaint of a violation of the Fair Labor Standards Act is not considered protected conduct under the Act's anti-retaliation provision. Read the full post here. (March 23)

HIRE Act Provides Tax Benefits to Employers that Hire and Retain Unemployed Workers

Littler Mendelson — Tue, 23 Mar 2010 14:01:07 -0800

On March 18, 2010, President Obama signed into law the Hiring Incentives to Restore Employment (HIRE) Act, a measure that provides certain "qualified" employers with limited tax breaks and financial incentives for hiring unemployed workers. The highlight of this law is a provision exempting certain employers from paying their share of 2010 OASDI (Social Security) taxes on any new hire who has been without full-time employment for at least 60 days. The maximum tax break an employer could gain per employee under this provision would be $6,621, or 6.2% of total wages paid in 2010 up to the $106,800 FICA wage cap. This tax "holiday" does not apply to the component of FICA tax covering the Medicare Hospital Insurance (HI) contribution, or other state and federal tax obligations.

]]>Another provision impacting employers is the Business Credit, which provides an income tax credit of up to $1,000 for every new employee hired under the HIRE Act and retained for 52 weeks. An employer that is already benefiting from the Work Opportunity Tax Credit (WOTC), however, may need to opt out of the HIRE credit if the WOTC benefits are greater. The HIRE Act also gives employers covered by the Railway Retirement Act (instead of FICA) a comparable tax holiday and retention arrangement.

As with any new law affecting employer taxes, the HIRE Act is somewhat complex in its administration. For a more detailed discussion of this new law and its tax implications, and guidance on how employers can best take advantage of these benefits, continue reading Littler's ASAP: HIRE Act Signed Into Law -- What it Means to Employers by GJ Stillson MacDonnell.

Legislative Update for the Week of March 15

Littler Mendelson — Mon, 22 Mar 2010 16:18:14 -0800

Proposed Rule Would Implement Executive Order Affecting Service Contractors
The Department of Labor's Wage and Hour Division published in the Federal Register a notice of proposed rulemaking that seeks to implement Executive Order 13495, Nondisplacement of Qualified Workers Under Service Contracts. The rule would require that any federal service contracts and solicitations for such contracts include a clause requiring contractors and their subcontractors to offer existing employees the right of first refusal to take positions for which they are qualified under the new contract. Read the full post here. (March 19)

Senators Unveil "Blueprint" for Comprehensive Immigration Reform
Senators Charles Schumer (D-NY) and Lindsey Graham (R-SC) released a framework for comprehensive immigration reform. Although a bill has yet to be introduced, the Senators outlined their "four pillar" reform strategy (1) "requiring biometric Social Security cards to ensure that illegal workers cannot get jobs; (2) fulfilling and strengthening our commitments on border security and interior enforcement; (3) creating a process for admitting temporary workers; and (4) implementing a tough but fair path to legalization for those already here." Read the full post here. (March 19)

]]>Employee Benefits Security Administration Announces Availability of Revised Model COBRA Notices
The Employee Benefits Security Administration will publish in the Federal Register an announcement indicating that updated model COBRA notices which group health plans and other entities are required to provide to individuals eligible for the premium reductions and additional health care coverage election periods provided by the recently-enacted Temporary Extension Act of 2010 are available at its website. Read the full post here. (March 19)

House Releases Text of Reconciliation Bill; Congressional Budget Office Provides Final Cost Estimate
The House of Representatives released the amended Health Care and Education Affordability Reconciliation Act of 2010 (H.R. 4872), a reconciliation bill that contains "fixes" to the Senate-approved Patient Protection and Affordable Care Act (H.R. 3590). Also, the Congressional Budget Office and the Joint Committee on Taxation released their preliminary cost estimate of the total health care package. Read the full post here. (March 19)

House Passes Another Temporary COBRA, Unemployment Insurance Extension Bill
The House of Representatives passed by voice vote the Continuing Extension Act of 2010 (H.R. 4851), legislation that would extend the 65% premium COBRA subsidy until April 30, 2010, and the emergency unemployment insurance benefits until May 5, 2010. On March 2, President Obama signed into law the Temporary Extension Act of 2010 (H.R. 4691), a bill that extended the COBRA subsidy until March 31, 2010, and emergency unemployment insurance benefits until April 5, 2010. Read the full post here. (March 19)

Obama Signs HIRE Act into Law
President Obama signed into law the Hiring Incentives to Restore Employment (HIRE) Act (H.R. 2847), the scaled-down jobs bill that provides employers with various tax breaks for hiring and retaining previously unemployed workers. Read the full post here. (March 18)

Bill Would Create Award for Employers that Implement Work-Life Balance Policies
Reps. Lynn Woolsey (D-CA) and George Miller (D-CA) introduced the Work-Life Balance Award Act (H.R. 4855), legislation that would establish an award for employers that develop and implement work-life balance policies, and directs the Department of Labor to create a work-life balance advisory board to develop eligibility criteria for employers. Read the full post here. (March 17)

Bill Would Provide Labor Secretary with Greater Review Over State OSH Plans
Rep. Dina Titus (D-NV) introduced the Ensuring Worker Safety Act (H.R. 4864), a bill that would allow the Secretary of Labor to review and order reforms on underperforming state Occupational Safety and Health (OSH) plans without first ordering their termination. Read the full post here. (March 17)

Subcommittee Holds Hearing on PAWA's Penalty Provisions
The Workforce Protections Subcommittee of the House Education and Labor Committee held a hearing on the penalty provisions contained in the Protecting America's Workers Act (H.R. 2067). A companion bill (S. 1580), previously introduced by the late Sen. Ted Kennedy (D-MA), would amend the Occupational Safety and Health Act by expanding its coverage, increasing whistleblower protections, and enhancing employer penalties for violations, among other significant changes. Read the full post here. (March 16)

OSHA to Revise Hexavalent Chromium Notification Requirements
The Occupational Safety and Health Administration published in the Federal Register a proposed rule that revises the notification requirements in the exposure determination provisions of the standards for hexavalent chromium ("Cr(VI)"). Read the full post here. (March 16)

Financial Overhaul Bill Includes Say-on-Pay Provisions
Senate Banking Committee Chairman Chris Dodd (D-CT) introduced comprehensive financial reform legislation that includes provisions providing public corporate shareholders with an advisory vote on executive pay, and allowing them to nominate members of the board of directors through proxy ballots. Read the full post here. (March 15)

House Begins Consideration of Health Care Legislation
In what is widely believed to be the final sprint toward health care reform, the House Budget Committee will begin markup of a 2,309-page reconciliation bill that is expected to be the vehicle for changes to the Senate-passed health care bill as well as changes to the federal student lending program. Read the full post here. (March 15)

Compensation Trend: Semiannual Bonuses

Global News Editor — Thu, 18 Mar 2010 14:29:41 -0800

Many U.S. companies, particularly those in the retail and high-tech industries, are replacing their annual incentive structure with semiannual bonuses, The Wall Street Journal reports. Changing to a semiannual bonus structure is intended to help retain key employees, decrease turnover, and increase morale as the economic climate has led some companies to cancel 401(k) contributions, freeze pay or cut salaries.

Those who argue against the wisdom of semiannual bonuses contend that under this structure employees are rewarded for short-term achievements that might not produce long-term results. However, business leaders who have instituted semiannual bonuses argue that shortened performance periods allow them to set more realistic goals for their employees.

Legislative Update for the Week of March 8

Littler Mendelson — Mon, 15 Mar 2010 15:56:24 -0800

Labor Secretary Discusses Plans for Worker Misclassification, Enforcement Initiatives During Committee Hearing
Testifying before a House subcommittee hearing, Labor Secretary Hilda Solis explained how the agency would use the $116.5 billion in proposed funds and 17,800 full-time equivalent employees outlined in the Department of Labor's fiscal year 2011 budget. Read the full post here. (March 12)

Senate Approves Bill Extending COBRA Subsidies, Unemployment Insurance Benefits, Pension Relief Measures
The Senate passed by a 62 to 36 margin the Tax Extender Act of 2009 (H.R. 4213), legislation that would extend until December 31, 2010, the 65% COBRA premium subsidies and emergency unemployment insurance benefits, both programs that are set to expire in the coming weeks. Read the full post here. (March 11)

Supreme Court to Decide Constitutionality of Certain Background Check Questions for Federal Contractors
The U.S. Supreme Court will decide whether the government violates a federal contract employee's constitutional right to informational privacy when it: (1) asks in the course of a background investigation whether the employee has received counseling or treatment for illegal drug use within the past year; and (2) asks the employee's designated references for any adverse information that may have a bearing on the employee's suitability for employment at a federal facility, when the information obtained in both scenarios is to be used for employment purposes only and is protected under the Privacy Act. Read the full post here. (March 9)

Google Execs Convicted of Violating Italian Privacy Law

Littler Mendelson — Tue, 09 Mar 2010 10:23:02 -0800

On February 24, 2010, a Milan court convicted Google's Chief Legal Officer, Global Privacy Counsel, and a former member of Google Italy's board of directors for violating Italian privacy law and imposed a six-month, suspended jail sentence. The case stemmed from a posting on Google Video® - a YouTube® predecessor - of a video depicting several teenagers bullying a classmate with Down's Syndrome. Although the Google executives had no involvement in either the posting or in the decision whether and when to remove it, Italian law imposes criminal liability on senior executives for the actions of the corporation. Prosecutors alleged that Google should be held responsible not only for permitting the video to be posted in the first instance, but also for allegedly not having acted quickly enough to remove the video after receiving a complaint.

For more information on this case and its implications for employers, continue reading What Does the Criminal Conviction for Privacy Law Violations of Three Google Executives in Italy Mean for Multi-National Employers in the U.S.? by Phillip L. Gordon at Littler's Workplace Privacy Blog.

U.S. Appellate Court Permits Practice of Tip-Pooling

Littler Mendelson — Tue, 09 Mar 2010 07:41:42 -0800

In a decision that will be well-received by hospitality and tourism employers, the U.S. Court of Appeals for the Ninth Circuit has held that employers that do not take a tip credit against the federal minimum wage when paying their employees can lawfully implement tip-pooling arrangements. In Cumbie v. Woody Woo, Inc. (pdf), No. 08-25718 (Feb. 23, 2010), the appellate court rejected the argument that a restaurant's use of a tip pool that redistributed a portion of its wait staffs' tips to kitchen employees violated the Fair Labor Standards Act (FLSA). The FLSA requires an employer to pay its employees a certain minimum wage, but recognizes in its definition of "wage" that under certain circumstances, employers of "tipped employees" may include part of such employees' tips as wage payments. An employer must pay a tipped employee a cash wage of at least $2.13 per hour, but if the cash wage is less than the federal minimum wage (currently $7.25), the employer can make up the difference with the amount an employee receives as tips, often referred to as the "tip credit."

]]>The plaintiff in Cumbie had argued that the employer was in violation of section 203(m) of the FLSA, which provides that an employer may not take a tip credit unless the employer informs employees of the FLSA's tip credit provisions and allows the employee to retain all tips earned, except where the employee participates in a tip pool with other customarily tipped employees. The employer had instituted a tip-pooling arrangement by which servers combined their tips, a portion of which was then distributed to other hourly employees who did not receive tips. The remaining portion was then paid to the servers in proportion to their hours worked. Because the employer shared the tips with kitchen staff, the plaintiff claimed that the employer was in violation of the FLSA.

The employer in Cumbie, however, did not take a tip credit, and paid its servers at or above the state's minimum wage, which was more than the federal minimum wage. The Ninth Circuit held that the FLSA does not restrict tip pooling when no tip credit is taken. The court further noted that an employment practice does not violate the FLSA unless the FLSA expressly prohibits it. Since "nothing in the FLSA purports to restrict employee tip-pooling arrangements," the employer's practice was deemed lawful.

For more information on this case and suggestions for employers that choose to implement tip-pool arrangements, continue reading The Ninth Circuit Clears the Way for Tip-Pooling Arrangements by Laurent R.G. Badoux and Jennifer L. Mora.

Legislative Update for the Week of March 1

Littler Mendelson — Mon, 08 Mar 2010 11:22:27 -0800

House Advances Jobs Bill
The House of Representatives voted 217 to 201 in favor of the Hiring Incentives to Restore Employment (HIRE) Act, the $15 billion jobs bill introduced by Sen. Majority Leader Harry Reid (D-NV) as an amendment (S. Amt. 3310) to H.R. 2847, the more expansive jobs bill that the House passed in December. Read the full post here. (March 4)

Obama Makes Final Push for Health Care Reform; Endorses Reconciliation
Telling Congress to "finish its work," President Obama urged both chambers to schedule a vote on final health care overhaul legislation in the coming weeks. While Obama did not outline a specific roadmap for reform, it is widely believed that the plan for going forward involves first having the House of Representatives vote on the Patient Protection and Affordable Care Act (H.R. 3590), the bill that the Senate approved in December, and then passing via budget reconciliation a package of changes to that bill reflected in the estimated $950 billion proposal Obama unveiled on February 22. Read the full post here. (March 3)

]]>Labor Secretary Alludes to Recess Appointment for Craig Becker
According to a report by the Associated Press, Labor Secretary Hilda Solis hinted during the AFL-CIO annual meeting that President Obama would institute controversial nominee Craig Becker as a member of the National Labor Relations Board by means of a recess appointment, possibly during the Easter recess. Read the full post here. (March 3)

Obama Signs Bill Temporarily Extending COBRA, Unemployment Benefits
President Obama signed the Temporary Extension Act of 2010 (H.R. 4691), a bill that will extend the 65% COBRA premium subsidy through March 31, 2010, and unemployment assistance benefits through April 5, 2010. Read the full post here. (March 3)

Employee Benefits Security Administration to Publish Final and Proposed Rules Affecting Employee Investment and Retirement Plans
The Department of Labor's Employee Benefits Security Administration will publish in the Federal Register a final and a proposed rule providing for greater worker investment and retirement account protections. Both rules were drafted in response to the Pension Protection Act of 2006, which amended portions of the Employee Retirement Income Security Act (ERISA) dealing with investment advice and retirement plan transparency. Read the full post here. (March 1)

Legislative Update for the Week of February 22

Littler Mendelson — Tue, 02 Mar 2010 13:53:36 -0800

Bill Would Strengthen Worker Benefits, Limit Executive Pay in the Event of Bankruptcy
Senator Dick Durbin (D-IL) and Representative John Conyers (D-MI) introduced the Protecting Employees and Retirees in Business Bankruptcies Act (S. 3033, H.R. 4677), legislation that would strengthen employees' ability to recover wages and benefits and restrict the awarding of bonuses in the event of their employer's bankruptcy. Read the full post here. (February 26)

White House Health Care Summit Fails to Resolve Differences
The White House bipartisan health care summit produced no final legislation or agreement about how to proceed with health care reform. Democrats took the position that they would not start from scratch, and Republicans claimed they would not support the proposals that have already been put forth. Read the full post here. (February 26)

]]>House Passes Bill Temporarily Extending COBRA, Unemployment Benefits
The House of Representatives approved by voice vote the Temporary Extension Act of 2010 (H.R. 4691), legislation that provides brief extensions of unemployment insurance benefits and health insurance premium subsidies under the Consolidated Omnibus Budget Reconciliation Act (COBRA), among other programs. This stopgap measure would extend the COBRA subsidy through March 31, 2010, and unemployment assistance benefits through April 5, 2010. Read the full post here. (February 26)

Final Rule Regarding Civil Penalties Against Multiemployer Plan Sponsors for Certain ERISA Violations
The Employee Benefits Security Administration (EBSA) will publish in the Federal Register a final rule that outlines procedures relating to the assessment of civil penalties against sponsors of multiemployer pension plans for certain violations of section 305 of the Employee Retirement Income Security Act (ERISA). Read the full post here. (February 25)

Senate Passes Jobs Bill
The Senate voted 70-28 in favor of the Hiring Incentives to Restore Employment (HIRE) Act, the $15 billion jobs bill introduced by Senate Majority Leader Harry Reid (D-NV) as an amendment to H.R. 2847, the more expansive jobs bill that cleared the House of Representatives three months ago. Read the full post here. (February 24)

Supreme Court Applies "Nerve Center" Approach to Diversity Jurisdiction
In what could be hailed as a victory for employers, the U.S. Supreme Court has made it less likely that a company can be sued in state court just because it conducts business in that state. Read the full post here. (February 23)

Obama Unveils Health Care Reform Proposal
President Obama's $950 billion plan contains many elements from the Senate-approved bill, including the requirement that most Americans obtain health insurance coverage and the creation of a health insurance exchange, but lacks a public insurance option included in the more expansive House legislation. Read the full post here. (February 22)

Supreme Court Clarifies Where Multi-State Employers Can Be Sued

Littler Mendelson — Tue, 02 Mar 2010 13:19:11 -0800

In what could be hailed as a victory for employers, the U.S. Supreme Court has made it less likely that a company can be sued in state court just because it conducts business in that state. Under federal statute, a corporation is to be considered a citizen of any state in which it has been incorporated and the state where it has its principal place of business. If sued in state court, a corporation can seek to have the case moved to federal court - a move often deemed advantageous for employers - if the parties are from different states.

]]>In Hertz Corporation v. Friend (08-1107) (pdf) the Court unanimously held that a corporation's "principal place of business" (or "nerve center") for the purpose of establishing the business's citizenship is the place where its high-level officers direct, control, and coordinate its activities, which typically will be its corporate headquarters. The Court rejected the Ninth Circuit Court of Appeal's test for determining corporate citizenship, which involved first determining the amount of the company's business activity state by state. If the amount of activity was considered "significantly larger" or "substantially predominant" in one state, then that state was to be the corporation's principal place of business. The Court explained that the Ninth Circuit and many other courts have focused on where a corporation's actual business activities are located, and thus have adopted "divergent and increasingly complex tests" to determine citizenship. The Supreme Court reasoned that while imperfect, using the "nerve center" test is the best approach for establishing corporate citizenship. The practical effect of this decision for employers is that it will be harder to be sued in state courts where the company is neither incorporated nor maintains its corporate headquarters.

For more information on this case and its implications for employers, continue reading In Hertz v. Friend, the U.S. Supreme Court Clarifies the Path to Federal Courts by Jim E. Hart.

Legislative Update for the Week of February 15

Littler Mendelson — Mon, 22 Feb 2010 12:45:14 -0800

Check Your Mail - Is an IRS Audit Next?
The Internal Revenue Service (IRS) will begin mailing questionnaires to 401(k) plan sponsors to gather information about compliance with applicable tax rules. The questionnaire is in response to past IRS audits that have shown significant 401(k) plan noncompliance stemming from a lack of internal controls at the plan sponsor level. Read the full post here. (February 19)

EEOC Addresses Scope of Reasonable Factors Other than Age Defense Under the ADEA
In response to recent U.S. Supreme Court opinions, the Equal Employment Opportunity Commission (EEOC) will issue a notice of proposed rulemaking in the Federal Register defining the meaning of the "reasonable factors other than age" defense under the Age Discrimination in Employment Act (ADEA). Read the full post here. (February 17)

Cynthia Attwood Confirmed to be a Member of the Occupational Safety and Health Review Commission
The Senate confirmed the nomination of Cynthia Attwood to be a member of the Occupational Safety and Health Review Commission, the independent federal agency responsible for adjudicating contests of citations or penalties resulting from an Occupational Safety and Health Administration (OSHA) workplace inspection. Read the full post here. (February 16)

English Courts Broadly Interpret the Territorial Reach of U.K. Employment Legislation

Littler Mendelson — Mon, 22 Feb 2010 11:04:24 -0800

The territorial reach of U.K. employment legislation has come under scrutiny recently. Two judgments handed down from the Court of Appeal and the Employment Appeal Tribunal (EAT) have broadly interpreted the territorial reach of the Fixed Term Employees (Prevention of Less Favourable Treatment) Regulations 2002 (the "Fixed Term Regulations"), the Race Relations Act 1976 (RRA) and the Employment Equality (Age Regulations) 2006 (the "Age Regulations"). In the first case, the Court of Appeal held that the Fixed Term Regulations could be enforced by a U.K. national who worked overseas. More worryingly in the second case, the EAT held that the RRA and the Age Regulations could be enforced by foreign nationals who work partly in England. These two judgments potentially will have significant impact on U.S. companies operating in the U.K. and/or employing U.K. nationals. For a detailed discussion of these two judgments, as well as recommendations for multinational employers, continue reading Littler's ASAP English Courts Broadly Interpret the Territorial Reach of U.K. Employment Legislation, written by John Kloosterman and Anita Vadgama.

Legislative Update for the Week of February 8

Littler Mendelson — Tue, 16 Feb 2010 13:51:44 -0800

Article Paints Grim Picture for Labor Agenda
Coming one day after the Senate rejected advancing the nomination of Craig Becker to the National Labor Relations Board, an op-ed piece by columnist Harold Meyerson in The Washington Post proclaims that the Obama administration has been "close to an unmitigated disaster" for organized labor. Read the full post here. (February 10)

Draft Senate Jobs Bill Contains Employer Hiring Incentives, COBRA and Unemployment Extensions, Pension Funding Relief
A draft of the 362-page Senate jobs bill, which has been circulating among members of Congress, includes language providing for, among other things: unemployment benefits and COBRA health insurance premium extensions; tax incentives to promote hiring; spending programs on transportation initiatives; pension funding relief; and a tax proposal designed to raise revenue from foreign-held assets and trusts. Read the full post here. (February 10)

Senate Fails to Pass Cloture Vote on Becker's Nomination
The Senate rejected advancing the nomination of Craig Becker to serve as a member of the National Labor Relations Board. Read the full post here. (February 9)

Increase in Private-Sector Discrimination Charges Indicates Emerging Trend

Littler Mendelson — Fri, 12 Feb 2010 14:06:12 -0800

The record number of certain employment-related discrimination claims filed in 2009 indicates the emergence of a trend for which employers should be prepared. The Equal Employment Opportunity Commission's (EEOC) newly-released enforcement and litigation statistics show that 93,277 workplace discrimination charges were filed during fiscal year 2009, the second-highest annual total for the agency. Private sector charges alleging disability, religion and/or national origin discrimination reached record highs, while the most frequent charges filed in 2009 alleged discrimination based on race (36%), retaliation (36%), and discrimination based on sex (30%). This year-end data also indicates that claimants received $376 million in total monetary relief through litigation, administrative enforcement and mediation.

]]>A number of reasons could account for these "near historic" levels. According to the EEOC, such possible factors include:

greater accessibility of the EEOC to the public;
increased diversity and demographic shifts in the labor force;
employees' greater awareness of their rights under the law; and
changes to the agency's intake practices that cut down on the steps needed for an individual to file a charge.

Other factors may include the fact that technology and the media have radically blurred the distinction between work-related behavior and social interaction. In addition, the downturn in the economy has introduced into many individuals' lives a level of work-related stress that cannot help but inform workplace dynamics.

Whatever the cause, employers may not be aware that some of their actions could be deemed retaliatory, adding to the number of discrimination charges filed. It would benefit many employers to evaluate their policies and practices, and take proactive measures. For an in-depth analysis of the EEOC data and recommendations on how to avoid becoming part of next year's discrimination charge statistics, continue reading The Big Picture Behind the Numbers - New EEOC Data Continues a Heightened Trend by Kevin P. O'Neill

Legislative Update for the Week of February 1

Littler Mendelson — Tue, 09 Feb 2010 09:45:58 -0800

OFCCP Releases FAQs on the Impact of the Supreme Court's Ricci Decision
The Office of Federal Contract Compliance Programs (OFCCP) has posted on its website a set of frequently asked questions about the U.S. Supreme Court's decision in Ricci v. DeStefano, the reverse discrimination case involving New Haven firefighters. Read the full post here. (February 5)

Senator Reid Files Cloture on Craig Becker's Nomination to the National Labor Relations Board
Senator Harry Reid (D-Nev.) has filed cloture on the nomination of Craig Becker to be a member of the National Labor Relations Board. Read the full post here. (February 5)

]]>Lawmakers Introduce Bills to Boost Hiring
Senators Chuck Schumer (D-NY) and Orrin Hatch (R-Utah) released details about the Hire Now Tax Cut Act of 2010, legislation that provides an exemption for an employer that hires a worker who has been without full-time work for at least 60 days from paying the employer's share of Social Security taxes on that worker for 2010. Senators Bob Casey (D-PA), Kirsten Gillibrand (D-NY), Carl Levin (D-MI) and Mark Begich (D-AK) introduced the Small Business Job Creation Tax Act of 2010, legislation which would provide employers that increase their payroll by a certain percentage a one-time tax credit of 20% for small employers and 15% for large employers (those with more than 100 full-time employees). Read the full post here. (February 5)

Senate Confirms Patricia Smith as Labor Solicitor
By a party-line vote of 60-37, the Senate has confirmed the nomination of Patricia Smith to be the U.S. Solicitor of Labor. Read the full post here. (February 4)

Department of Transportation Proposes to Amend Drug-Testing Procedures
The Department of Transportation will publish in the Federal Register a notice of proposed rulemaking to amend certain drug-testing procedures in order to conform them to the Department of Health and Human Services laboratory drug-testing requirements. Read the full post here. (February 3)

Occupational Safety and Health Review Commission Launches Open Government Web Page
As part of President Obama's Open Government initiative, the Occupational Safety and Health Review Commission has created a web site that provides information on the agency's monthly case docket, chart of case activity, and briefing notices. Read the full post here. (February 3)

Obama Unveils Stimulus Plan for Small Businesses
During his State of the Union address, President Obama proposed using $30 billion in repaid funds that financial institutions received through the Troubled Asset Relief Program (TARP) to increase the ability of small businesses to obtain loans. In addition, Obama called for tax incentives for businesses to invest in new plants and equipment, and the elimination of capital gains taxes on small business investment. Read the full post here. (February 2)

2011 Budget Targets Independent Contractor Misclassification
The fiscal year 2011 federal budget contains provisions to combat misclassification of employees as independent contractors. Included in this $3.8 trillion spending measure is a proposal--to be jointly administered by the Departments of Labor and the Treasury--to eliminate legal incentives for employers to misclassify their employees. Read the full post here. (February 2)

Obama Releases Fiscal Year 2011 Budget Proposal
President Obama unveiled a $3.8 trillion budget for fiscal year 2011, $14 billion of which is allocated to the Department of Labor. Read the full post here. (February 1)

Office of Labor-Management Standards Proposes Rescission of Union Trust Reporting Requirements
The Department of Labor's Office of Labor-Management Standards will issue a notice of proposed rulemaking on its plans to amend regulations on union trust reporting requirements under the Labor-Management Reporting and Disclosure Act. Read the full post here. (February 1)

Belgium-Based Employee Files Complaint in U.S. Alleging DCHRA Violations

Littler Mendelson — Thu, 04 Feb 2010 12:54:44 -0800

As previously reported, a recent opinion by the District of Columbia court of appeals, Monteilh v. AFSCME, 107 FEP Cases 561 (D.C. 2009), expanded the reach of the District of Columbia Human Rights Act (DCHRA) by holding that the DCHRA's anti-discrimination provisions apply to any discriminatory decision made within the district, even if the employee at issue lives and works outside the district. Filing a claim under the DCHRA is an attractive option for plaintiffs because the DCHRA covers 18 protected categories, has no requirement that an administrative claim be filed first, and only requires a plaintiff to show that discrimination was a motivating factor in the adverse employment decision.

]]>A complaint (pdf) filed on January 27 in the District of Columbia superior court could test the international reach of Monteilh. The plaintiff in Menns v. Howrey L.L.P, No. 2010 CA 000434B (D.C. Super. filed Jan. 27, 2010), is a Jamaican national who worked in the Belgian office of a law firm based in Washington, D.C. After being discharged in Belgium, she filed suit in D.C., claiming that the discharge decision was made in D.C. and alleging violations of the DCHRA (discrimination based on race and national origin; retaliation; and hostile work environment). The complaint notes that the offer letter contains an arbitration clause requiring disputes be arbitrated in D.C., but alleges that this arbitration clause applies only to matters specifically mentioned in the offer letter and not to claims of discrimination and retaliation.

Until recently, a state's intent to regulate potentially unlawful conduct (such as discrimination) outside of its borders had to be clearly articulated. Recently, however, the trend seems to be that the absence of a clearly articulated intent to limit the reach is sufficient. If the court does address the merits of the DCHRA claims in Menns, it will be interesting to observe whether the court will find that the DCHRA applies even where the employee is not a U.S. citizen and was employed outside of the United States when the alleged misconduct occurred.

This entry was written by John Kloosterman.

Legislative Update for the Week of January 25

Littler Mendelson — Mon, 01 Feb 2010 12:15:48 -0800

Agencies to Issue Interim Final Rules Under Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act
The Employee Benefits Security Administration, Internal Revenue Service and Department of Health and Human Services issued interim final rules that will: (1) replace prior regulations; (2) make changes to reflect modifications made to the original Mental Health Parity Act of 1996 definitions and provisions regarding parity in aggregate lifetime and annual dollar amounts; and (3) incorporate new parity standards. Read the full post here. (January 29)

Senate Committee to Hold Hearing on Craig Becker's Nomination to the National Labor Relations Board
On February 2, the Senate Committee on Health, Education, Labor and Pensions will hold a hearing on the controversial nomination of Craig Becker to be a member of the National Labor Relations Board. Read the full post here. (January 29)

]]>Occupational Safety and Health Administration's Proposed Rule Would Require Employers to Keep Track of Musculoskeletal Disorders
The Occupational Safety and Health Administration (OSHA) will publish in the Federal Register a proposed rule that revises its current Occupational Injury and Illness Recording and Reporting (Recordkeeping) requirements to restore a column to the OSHA 300 Log that employers would use to record work-related musculoskeletal disorders. Read the full post here. (January 28)

House and Senate Introduce Bills to Promote Job Growth
Senate Bill 2952 would take $10 billion in existing funds from the Troubled Asset Relief Program (TARP) and re-allocate it to creating jobs in the private and public sectors, and Senate Bill 2955 would create a two-year temporary jobs tax credit for businesses that hire new employees, expand work hours for their current workforce, or raise worker pay. House Resolution 4513 contains a five-point plan calling for tax relief for small business investments and capital gains, eliminating taxes on unemployment benefits for one year, and using repaid TARP funds to help pay down the national debt. Read the full post here. (January 28)

State of the Union Address Emphasizes Job Creation, But Not Organized Labor
President Obama's State of the Union Address may be more notable for its omissions than its content. Not once in the 70-minute speech did Obama mention organized labor, even though a large portion of his speech was dedicated to job creation efforts. Read the full post here. (January 28)

Massachusetts Union Members' Support for Brown Helped Dim Prospects for the Employee Free Choice Act
According to an article in Politico, 49% of union members backed the Republican state senator in his election to the U.S. Senate. By electing Brown as the 41st Republican U.S. senator, organized labor dramatically diminished the chances that its number one legislative priority - the Employee Free Choice Act - will pass Congress this year. Read the full post here. (January 27)

Department of Labor Argues State Wage and Hour Class Actions are Compatible with the Fair Labor Standards Act
The amicus brief filed by the U.S. Department of Labor in Parker v. NutriSystem Inc. (3d Cir, No. 09-3545) argues in favor of allowing both state and federal wage and hour claims to proceed in one class action, and takes the position that flat-fee compensation payments that bear no relationship to the cost of the goods sold do not fall under the FLSA's Section 7(i) retail or service sales exemption. Read the full post here. (January 26)

Occupational Safety and Health Administration Withdraws Proposed Rule Over Fit-Testing Protocols for the Respiratory Protection Standard
The Occupational Safety and Health Administration plans to withdraw its proposed rule outlining revised PortaCount quantitative fit-testing protocols, which it had intended to include in Part II of Appendix A of the agency's Respiratory Protection Standard. Read the full post here. (January 26)

Haiti Earthquake May Have Legal Repercussions for Employers

Littler Mendelson — Tue, 26 Jan 2010 14:43:37 -0800

In the wake of the devastating earthquake in Haiti, businesses operating in the United States, even those without establishments in Haiti, will be facing employment issues related to the aftermath of the tragedy and the ongoing relief effort. Companies should anticipate new employment-related questions encountered when the business and/or its employees seek to aid the relief effort, either with monetary donations or by donations of skill, expertise or goods. In addition, employers with workers and business interests in Haiti must also address various personnel issues.

]]>Many employers, for example, have been relaxing their phone use and electronic communications policies to facilitate employee contributions to relief efforts. While altruistic, this move could erode the strength of these policies, as well as any non-solicitation policies in place. To avoid the legal implications of exceptions to corporate policies, employers should consider directly controlling any relief effort involving its employees.

As another example, employers that anticipate sending employees to Haiti--or already have employees in Haiti--should determine which U.S. or relevant state laws, if any, apply to employees while abroad. Some laws, such as the Age Discrimination in Employment Act, the Americans with Disabilities Act and Title VII expressly state that they apply to employees while outside the United States, but many others do not. In addition, employers should ensure that there is adequate workers' compensation coverage for these employees. Businesses must also consider devising a plan, in conjunction with union representatives if applicable, in the event wage payments to employees working in Haiti are delayed. Employers may also want to show flexibility in providing leave to employees with family members in Haiti, and to employees already in Haiti.

For more information about the types of employment issues that may arise due to the earthquake in Haiti and similar disasters, and for workplace preparedness suggestions, see Employment Issues Following the Haitian Earthquake by Tanja L. Darrow and Jim E. Hart.

Legislative Update for the Week of January 18

Littler Mendelson — Tue, 26 Jan 2010 10:03:14 -0800

Supreme Court Eases Ban on Corporate, Union Political Spending
In a narrowly held decision that could have a significant impact on the 2010 mid-term elections, the U.S. Supreme Court has ruled that restrictions on political spending by corporations and unions are unconstitutional. Read the full post here. (January 22)

Obama Returns Craig Becker Nomination to Senate
President Obama re-submitted to the Senate his nomination of controversial candidate Craig Becker to be a member of the National Labor Relations Board. Read the full post here. (January 21)

]]>White House, Congress Target Government Contractors
President Obama ordered the Internal Revenue Service to review and report on the accuracy of non-delinquent tax status certifications submitted by aspiring government contractors. In Congress, Rep. Alan Grayson (D-Fla.) introduced a bill to prevent the federal government from awarding contracts or grants to, entering into agreements with, or otherwise promoting companies that engage in certain illegal activities, or knowingly hire an individual who has committed a crime. Read the full post here. (January 21)

How Will Brown's Win Impact Labor and Employment Law?
Scott Brown, the new junior Senator from Massachusetts, will become the upper chamber's 41st Republican member, thereby eliminating the Democrats' filibuster-proof 60-seat supermajority. As a result, a number of President Obama's legislative priorities could be derailed, including healthcare reform, the Employee Free Choice Act, and immigration overhaul. Read the full post here. (January 20)

Supreme Court to Decide Whether Judge or Arbitrator Decides if Arbitration Agreement is Unconscionable
The U.S. Supreme Court has agreed to resolve whether a court or an arbitrator has jurisdiction to determine if an arbitration agreement is unconscionable, even when the parties to the contract have clearly and unmistakably given such authority to the arbitrator. Read the full post here. (January 19)

Supreme Court to Clarify Who is Entitled to Attorney's Fees Under the Employee Retirement Income Security Act
The U.S. Supreme Court has agreed to decide whether the attorney's fees provision in the Employee Retirement Income Security Act permits courts to award such fees to prevailing parties only. Read the full post here. (January 19)

What Could Health Care Reform Mean for Employers?

Littler Mendelson — Wed, 20 Jan 2010 10:26:36 -0800

President Obama has made healthcare reform in the U.S. a major legislative priority. Whether a healthcare bill will ultimately be enacted and in what form is unclear. Democratic members of Congress are currently reconciling the Senate's Patient Protection and Affordable Care Act (H.R. 3590) with the House of Representatives' Affordable Health Care for America Act (H.R. 3962), both of which narrowly cleared their respective chambers. While these bills contain important differences, both contain a number of provisions that would dramatically change the scope and content of employer-provided health insurance.

]]>Both bills would penalize large employers that do not offer health insurance to their workers, and require those employers that do provide insurance to meet certain cost and benefits standards. In addition, the House bill would significantly restrict the ability of employers to change retiree health benefits, while the Senate bill would not. The Senate bill - but not the House bill - would impose a 40% excise tax on high-cost "Cadillac" health plans. Both bills would, among other changes: impose minimum medical loss rations on health insurers; limit the amount employees can contribute to flexible spending accounts; and institute a new premium tax on group health plans to fund comparative effectiveness research.

In essence, the various mandates, penalties, and restrictions in both pieces of legislation would necessarily force employers - if a healthcare reform bill is enacted - to examine whether it would be more costly to provide employees with health coverage or pay the fines. For a more in-depth analysis of how the various provisions in the healthcare bills would impact employers, continue reading What Does Health Care Reform Mean for Employers? The Top 10 Questions Employers Should Ask About Health Care Legislation written by Ilyse W. Schuman and Steven J. Friedman.