Home – Wage & Hour: What Does 2014 Hold for Employers?

Wage & Hour: What Does 2014 Hold for Employers?

 While employers might think they are in for a quiet year, some legal experts say to expect a time of “significant changes to workplace policy” from all levels of government. With the government weighing in on everything from the minimum wage to whether workers should be paid to change clothes, and with pay-related claims coming in faster than ever, Wage and Hour will remain one of the hot-button topics in employment law.  

For an overview, we turned to two recent articles written by Littler Mendelson attorneys Ilyse Schuman and Michael J. Lotito, as well as updates posted by attorneys with FoleyHoag LLP and Fisher & Phillips LLP.  

With Congress at a stalemate on just about every issue introduced from both sides of the dome, one area appears to be bipartisan, wide open, antiquated and outdated, and ripe for change, the Littler Mendelson attorneys say: employment law. Employers need to be prepared for sweeping changes across the board from the Department of Labor (DOL), the Equal Employment Opportunity Commission (EEOC), the National Labor Relations Board (NLRB), and the Department of Health and Human Services (HHS).

Department of Labor

The DOL will be busy crafting regulatory rules that will have sweeping ramifications for employers nationwide, particularly with government contractors and the home health-care industry, affecting overtime pay, hourly compensation and rising costs to the employer, writes Schuman in an article.i In their co-authored piece, Schuman and Lotito provide a list of some of the DOL’s strategies:

1-Persuader Rule.  The union-friendly Persuader Rule, a highly controversial proposal of the DOL’s Office of Labor-Management Standards (OLMS), if implemented, would potentially:

  • Narrow the interpretation of the “advice exemption” portion of §203(c) of the Labor-Management Reporting and Disclosure Act (LMRDA)
  • Increase employer reporting requirements by expanding union-related activities
  • Impact the attorney-client confidentiality privilege, especially for small businesses with no in-house counsel
  • Strengthen the labor movement, especially during organization movements
  • Require electronic filing of the employer Form LM-21 Receipts and Disbursements Report mandated by §203(b) of the LMRDAii  

2-Office of Federal Contract Compliance Program (OFCCP). This agency proposes revisions in order to update federal contractor and subcontractor sex discrimination guidelines, potentially resulting in costly and complicated compliance with affirmative action and EEO. As well, a data collection tool is being proposed to gather information to identify contractors most likely to discriminate based on sex and race. A new affirmative action rule is slated to be implemented by April 2014 and is intended to update the archaic 30-year-old rules to close up effective-use disparity gaps among women and minorities, Schuman and Lotito write.

3-Occupational Safety and Health Administration. New programs such as the Injury and Illness Prevention Program (I2P2) that by September 2014 will require employers to adopt guidelines to ensure the safety and well-being of their employees by promoting worker safety and health-hazard prevention. Other OSHA initiatives include, Schuman and Lotito write:  

  • Electronic Recordkeeping for injury and illness data
  • Infectious Disease Standards to diminish infectious disease exposure, especially for health-care workers
  • Whistleblower Protection Regulations that afford whistleblower complaint procedure transparency and protection under the following statutes: Affordable Care Act of  2010, §1558; Corporate and Criminal Fraud Accountability Act of 2002, § 806; National Transit Systems Security Act; Surface Transportation Assistance Act; Federal Railroad Safety Act; Consumer Financial Protection Act; Seaman’s Protection Act; FDA Food Safety Modernization Act; and the Employee Protection Provision of the Moving Ahead for Progress in the 21st Century Act
  • Occupational Exposure measures to enforce protection from toxins such as crystalline silica, beryllium and combustible dust

4-Wage and Hour Division (WHD). Schuman and Lotito write that the WHD is expected to move forward with a number of modernizations to the current regulations such as the definition of “spouse” under the Family and Medical Leave Act (as a result of the United States v. Windsor landmark ruling); employee status transparency (“Right to Know” rule); and the recent unanimous ruling by the Supreme Court (“donning and doffing” of protective gear is not compensable under Section 203(o) of the FLSA) (Sandifer v. United States Steel Corp.) and thus complainants could not recover, a development written about by FoleyHoag LLB attorneys Robert A. Fisher, Christopher Feudo and Lyndsey M. Kruzer.iii The Collective Bargaining Agreement (CBA) establishes the rules of compromise between the Employer and the Union that tax dollars should not be wasted on de minimis arguments. In reaching its decision, the Supreme Court had to first define “clothes” as it was defined in 1949, when the Act was passed, then determined what constituted “changing” into “non-clothes” that would warrant compensatory time.  The Court decided “glasses, earplugs, and a respirator” were not considered clothing and the time it took to put these on took very little time, write attorneys at Fisher & Phillips LLPin a recent alert.iv

5. Healthcare Reform.  The Employee Benefits Security Administration (EBSA), HHS and the IRS will continue to fine-tune the ACA provisions such as releasing a final rule regarding the 90-day waiting period limitation, final regulations on the “play or pay” mandate with new reporting requirements and discrimination prohibition as provided in the Affordable Care Act, § 1557.  It is still unknown, however, how employers and employees will be affected after the final regulations are in place, Shuman and Lotito write.

6. Retirement Benefits.  The EBSA will take another stab at redefining “fiduciary” insofar as retirement and other employee benefit plans, participants, beneficiaries and owners of IRAs are concerned under ERISA, Shuman and Lotito write.  Who is the fiduciary?  What role does the fiduciary play?  Much contention surrounded this rule in 2011 and final rules regarding governing annual funding notices, target date disclosure and amendment of the abandoned plan program are all to be implemented soon.

National Labor Relations Board

Substantial changes in the labor arena are in the works now that the Board’s five members are Democrats, say Shuman and Lotito.  This is not necessarily good news, being that the Board intends to finalize the persuader rule, initiate broader, more expansive changes to the union election process and rules, and its reach will extend beyond union to non-union as well.  By increasing the strength of unionization, it could seriously fetter the employer’s voice in labor negotiations.

Equal Opportunity Commission

Workplace discrimination for non-American people of national origin is on the EEO’s radar, particularly with the influx of immigrants in the last 10 years, as well as implementing new definitions of sex discrimination provisions with LGBT coverage under Title VII, examining negative screening tools that may affect hiring protected classes such as pre-employment tests, background and date of birth screenings, accommodating pregnancy leave as to similarly situated employees, and targeting employer protocol that may dissuade employees from filing discrimination claims or obstruct EEOC investigations.  

In addition, the EEOC will revisit screening tools such as leaves of absences, criminal background and credit checks to eliminate unfair recruitment and hiring obstacles.  Employer wellness programs are also under scrutiny.  What was once science fiction is now science fact with Genetic Information Nondiscrimination Act (GINA), the ADA and HIPAA were all reviewed on May 8, 2013 during an employer wellness EEOC hearing.  The ACA and EEOC may be opposing forces in the healthcare cost control versus employer-sponsored wellness programs.

Congress is going to be very busy juggling the upcoming employment changes, regulations, guidelines and programs.  It should have no choice but to work together to make the most sense out of modernizing ancient doctrines to bring them into the 21st Century.  

i Littler Mendelson:  “United States: House Subcommittee Examines Implications Of DOL's Home Healthcare Rule” (Last Updated: December 30 2013); Article by Ilyse W. Schuman (www.mondaq.com/.../Legislative+Update+for+the+Week+of+November+18+2013)

ii Littler Mendelson:  Publications (January 16, 2014) “Workplace Policy Institute: A Look Ahead to Legislative and Regulatory Changes in 2014” Authors: Ilyse Schuman and Michael J. Lotito (www.littler.com/.../workplace-policy-institute-look-ahead-legislative-and-regulatory-chang)

iii FoleyHoag, LLP’s Labor and Employment Alert:  “Supreme Court Decision Clarifies Approach to Donning-and-Doffing Cases Under the FLSA” January 31, 2014  (www.foleyhoag.com/.../supreme-court-decision-clarifies-approach-to-donning-and-doffing-cases-under-the-flsa)

iv Fisher and Phillips, Attorneys at Law, “Supreme Court Clarifies Meaning Of ‘Changing Clothes’ Under The Fair Labor Standards Act” January 27, 2014.  (www.laborlawyers.com/supreme-court-clarifies-meaning-of-changing-clothes-under-the-fair-labor-standards-act)