Updated: Dec 13, 2019
Posted By Bob Dunlevey of Taft Law, Friday, February 15, 2019
Already 2019 is proving to be one of the most unique periods in our country’s history when it comes to developments in Washington and the various Statehouses. It’s a “wacky” time! While, today, it is somewhat difficult to predict developments through the next Presidential election, every employer needs to take stock of what is going on in order to more effectively plan and to make their voices heard by elected officials.
In the last two years, employers have enjoyed more business friendly attitudes and actions by legislators and agencies. Deregulation has given employers opportunities to focus on their businesses instead of dealing with the regulation “de jour” previously promulgated by a myriad of agencies. For example, the NLRB in the recent past has undone many of its prior opinions having to do with handbook work rules which President Obama’s appointees to the Board found to be in violation of the National Labor Relations Act.
Rulemaking now seems to be the order of the day for various agencies even though they have sparingly used this authority in the past. Instead of agencies waiting for lawmakers to change employment laws, agencies such as the Department of Labor and the National Labor Relations Board are making their own declarations. But, advocacy groups abound and they are trying to thwart these actions. Already, the Democrat dominated House of Representatives has pledged numerous hearings to question these agencies’ rulemaking authority and the actual rules being promulgated. Representative Bobby Scott, D-Va. is heading the House Committee on Education and the Workforce and is a strong advocate for progressive workplace friendly legislation. Anticipate numerous hearings designed to thwart agencies from undoing what President Obama’s appointees did to impact the employment law setting between 2009 and 2017.
The impact of the 2020 Presidential election is already being felt. It is a traditional tactic by Presidential candidates to tout workplace issues. Of the dozen plus Democratic candidates now throwing their hats in the ring, each has spoken strongly about worker friendly regulations such as a $15 minimum wage, paid family leave, enhanced union security, and equal pay – to name just a few. But, the 116th Congress may very well experience “Washington-gridlock.” It takes 60 votes in the Senate to pass legislation and this certainly spells impasse for many worker friendly proposals. But, as these topics are discussed on the national podium and progressive policies are advanced, the movement will trickle down to the respective states. Anticipate much more legislation on worker friendly topics being placed on the states’ ballots in 2019 and beyond. The last midterm election saw progressives take control of Statehouses in Colorado, Illinois, Maine, Nevada, New Mexico and New York, among others. 94 union members were elected to State Senates, 467 union members were elected to Statehouses and over 100 American Federation of Teacher members won offices as well. Their voices will be heard and where Washington gets stalled, the Statehouses will fall victim to legislative interest groups.
Here are some of the worker friendly issues you need to watch and prepare for:
$15 minimum wage – many interest groups as well as the Democrat leadership are strongly advocating increasing the federal minimum wage from $7.25 to $15 per hour. While President Trump and Senate Republicans likely will not support it, Democrats see the issue as a strong message ahead of the 2020 election. Already, Amazon and Target have publicized the installation of a $15 minimum wage and many Statehouses are moving toward this $15 threshold. As we start 2019, 29 states already have a higher minimum wage.
Overtime exemption – anticipate changes in the salary level for employees to be exempt from overtime. Recall the prior flurry of debate and federal court litigation in Texas which shot down the Department of Labor’s proposal to require an employee to earn $47,476 per year in order to enjoy the overtime exemption. Anticipate that the threshold will move from the existing $23,660 to approximately $33,000 per year. Plan now for this outcome which will be discussed heavily this Spring.
Pay Equity – even though the federal Equal Pay Act has been in existence since 1963, discussions of equal pay for not only equal work but “similar” work has much traction. Coupled with the EEOC’s initiative to have salary history questions excluded from the applicant process and proposed EEO reports verifying the actual wages of employees, you certainly will hear much debate. But, anticipate nothing much happening at the federal level because of the laws which are already in effect. Watch the pending cases holding that employers cannot use an applicant’s past salary as a defense for setting compensation under the Equal Pay Act. The U.S. Supreme Court will probably weigh in with or without Ruth Bader Ginsburg who may leave the Bench before the next inauguration.
Paid Leave – progressives wish to take the 1993 Family and Medical Leave Act to the next step providing paid leave. The proposal sounds quite appealing to the average worker. Now 11 states and 30 local jurisdictions have some type of paid leave. 13% of employees now enjoy such. But, the devil is in the detail when it comes to the proposed Family and Medical Insurance Leave Act. This proposal includes a national wage insurance program paying a cash benefit – further government control and expanded federal involvement. It broadens entitlement for things such as school conferences, lapses in childcare, minor illnesses and preventive care. President Trump appears to be in favor of some form of paid family leave and other Republicans certainly will tout similar proposals as we move toward election 2020. Anticipate many more states passing some form of legislation. For companies in multiple jurisdictions, you will have to watch these state developments closely.
Multi-Employer Pension Plans – the unspoken current crisis equal to the 2008 financial collapse comes in the form of the 10 million workers in the 1,400 multi-employer defined benefit pension plans – financially sick plans – $48.9 billion underfunded in the private sector and $4 trillion unfunded in the public sector. Benefits have been promised but participants will have to find other ways to live in retirement as these plans go “belly-up” and the federal insurance group known as the Pension Benefit Guaranty Corporation goes bankrupt. The Congressional Committee empowered to study and make recommendations to address this national crisis missed its November 30, 2018 deadline to make any recommendations. Watch for various progressive proposals for healthier pension plans and for employers participating in these multi-employer plans to pick up the tab for these unfunded vested liabilities – a tab that no one can afford. Watch for some of the 121 plans in jeopardy to fail in the next few years.
Immigration – Immigration is discussed as a national border issue as well as in the employment setting. While E-Verify, a well-established federal system to verify whether an employee is properly able to work within our country, is currently utilized for federal government contractors, the idea of mandating all employers to utilize E-Verify has not gotten traction in Washington. Anticipate much discussion about the employment of undocumented workers but don’t expect any significant change for employers.
Right-to-Work – 27 states currently are right-to-work states which means that unions are not allowed to enter into agreements with management to compel union membership or dues. More states will soon become right-to-work. Recently, the Supreme Court in the Janus decision ruled that mandatory fair share fees for public sector employees were prohibited. The bigger story is that unions have been a strong voice for workers and for the progressive movement. They collect $4.5 billion annually in dues to engage in PAC activity. With the right-to-work legislation taking away the union’s collection of PAC money, the future campaigns aligned with their philosophies may not be as powerful.
So this is where we have been, are, and may be going. Make sure to pay attention to these developments and plan accordingly.