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Recent Legislative Developments Most Worrisome to HR

Employment attorneys look at some of the current -- and potential -- federal laws that have affected HR leaders and their organizations.

This article accompanies What's Keeping You Up Now?

Friday, September 2, 2011
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Human resource professionals have had to remain vigilant in the face of significant legislative developments over the past few years. What keeps HR professionals up at night? Let us take a look.

Ledbetter Fair Pay Act

President Barack Obama's administration started off with much fanfare. He signed into law the "Lilly Ledbetter Fair Pay Restoration Act of 2009," the first piece of legislation signed by the president. The law rejected the U.S. Supreme Court's decision in Ledbetter vs. Goodyear Tire & Rubber Co., holding that the charge-filing deadline on compensation-discrimination claims begins to run on the date of the first allegedly discriminatory pay decision.

That law amends Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act of 1990, the Rehabilitation Act of 1973, and the Age Discrimination in Employment Act of 1967 to provide that the charge-filing periods (300 days in most states and 180 days in states that do not have a fair employment agency) would commence when: (1) a discriminatory compensation decision or other practice is adopted; (2) an individual becomes subject to the decision or practice; or (3) an individual is affected by an application of a discriminatory compensation decision or practice (including each time wages, benefits, or other compensation is paid). Thus, the statute of limitations restarts each time an employee receives a paycheck based on a discriminatory compensation decision.

ADAAA

The ADA Amendments Act was signed into law on Sept. 25, 2008, and became effective on Jan. 1, 2009. The Equal Employment Opportunity Commission issued final regulations that became effective on May 24, 2011.

The final regulations reaffirm the purpose of the ADAAA: to make it easier for individuals with disabilities to obtain the ADA's protection. The ADAAA made clear that the primary focus in ADA cases should be on whether employers complied with their obligations under the statute and whether discrimination occurred, not whether individuals are disabled under the law.

Accordingly, the regulations follow Congress' lead by providing "rules of construction" to evaluate ADA-coverage issues. These "rules of construction" are as follows:

* The term "substantially limits" is to be construed broadly in favor of expansive coverage, to the maximum extent permitted by the terms of the ADA.

* Whether an impairment "substantially limits" a major life activity should not demand extensive analysis.

* An impairment is a disability if it substantially limits the ability of an individual to perform a major life activity as compared to most people in the general population; this usually will not require scientific, medical, or statistical analysis.

* An impairment need not prevent, or significantly or severely restrict, the individual from performing a major life activity in order to be considered substantially limiting. Nonetheless, not every impairment will constitute a disability.

* "Substantially limits" is to be interpreted and applied to require a degree of functional limitation that is lower than the standard for "substantially limits" applied prior to the ADAAA.

* Except in the cases of ordinary eyeglasses or contact lenses, the determination of whether an impairment substantially limits a major life activity is to be made without regard to the ameliorative (beneficial) effects of mitigating measures. 

* An impairment that is episodic or in remission is a disability if it would substantially limit a major life activity when active.

* An impairment that substantially limits one major life activity need not substantially limit other major life activities in order to be considered a substantially limiting impairment.

* The effects of an impairment lasting or expected to last fewer than six months can be substantially limiting.

Pending Legislation

What is coming down the pike?

With a Senate in Democratic hands, and the House now controlled by Republicans, the crystal ball is a bit more cloudy.

But here are a few more bills that should result in sleepless nights for HR professionals:

Paycheck Fairness Act

The Paycheck Fairness Act -- calling for increased employer liability for compensation decisions, as well as heightened government involvement in remedying pay inequality -- once again has been introduced in both the U.S. Senate (S. 797) and the U.S. House of Representatives (H.R. 1519) on April 12, 2011.

If enacted, the legislation would alter key provisions of the Equal Pay Act of 1963. The EPA amended the Fair Labor Standards Act to prohibit employers in most instances from paying women less than men for performing the same or "substantially equal" work in the same "establishment."

Among other things, the Paycheck Fairness Act calls for stricter enforcement provisions than those available under the EPA. The legislation would:

* Make it more difficult for employers to prevail on the EPA's "any factor other than sex" defense. Under the proposed legislation, employers would have to demonstrate that any pay differential is based on a "bona fide factor other than sex, such as education, training, or experience" and, among other requirements, is "consistent with business necessity." 

* Expose employers to unlimited compensatory and punitive damages. Whereas the EPA provides for equitable relief (such as back pay awards) employers could be faced with unlimited compensatory and punitive damages under the proposed amendments. 

* Make it easier for plaintiffs to bring class action lawsuits.

The Paycheck Fairness Act would allow "opt-out" class actions under Rule 23 of the Federal Rules of Civil Procedure. The EPA, on the other hand, is governed by the Fair Labor Standards Act's procedural rules, which require plaintiffs to "opt-in" to a class action by giving written consent.

The distinction between the two provisions is important as employees need not affirmatively join a case to be included in an opt-out class action. 

* Expand the definition of "same establishment." The proposed legislation would define "establishment" to mean "workplaces located in the same county or similar political subdivision of a State." 

* Impose additional obligations on the EEOC and Department of Labor for monitoring and remedying pay inequality. The EEOC would be directed to collect pay information from employers and impose obligations on the Office of Federal Contract Compliance Programs for performing compensation-discrimination analyses

Healthy Families Act

The Healthy Families Act (H.R. 1876) was introduced in the House by Rep. Rosa DeLauro (D-Conn.) on May 12, 2011. The companion bill (S. 984) was introduced in the Senate by Sen. Tom Harkin (D-Iowa).

The bill would require employers with 15 or more employees to provide employees with up to 56 hours, or seven days, of paid sick leave each year. Employees would begin accruing hours as soon as they began working and could begin using the time 60 days after their first day of work.

Paid sick time would carry over from year to year, but employers would not have to provide more than 56 accrued hours at any time. In addition, if an employee is separated from employment with an employer and is rehired within 12 months, the employer must reinstate the employee's previously earned paid sick time.

Employees would be entitled to use paid sick time:

* For their own physical or mental illness, injury, or medical condition;

* To obtain medical care, including preventive care; and

* To care for, or help obtain medical care for, a child, parent, spouse, or "any other individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship."

The bill also would provide paid sick time for absences related to domestic violence, sexual assault, or stalking, including time spent seeking medical attention, obtaining counseling services or relocation assistance, and pursuing legal action.

The proposed legislation includes procedures for employees requesting paid sick time. Employees must "make a reasonable effort to schedule a period of paid sick time ... in a manner that does not unduly disrupt the operations of the employer." Employers would be entitled to request medical certifications if an employee is out more than three consecutive days.

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Employers with existing paid leave policies that are equivalent to, or more generous than, those set forth in the proposed legislation would not have to change their policies.

The proposed legislation also includes posting requirements and prohibits employers from:

* Interfering with, restraining, or denying the exercise of any rights under the Healthy Families Act;

* Discharging or discriminating against any individual, including a job applicant, for exercising, or attempting to exercise, any rights under the Healthy Families Act;

* Considering the taking of paid sick time as a "negative factor" in any employment action;

* Counting the paid sick time under a no-fault attendance policy or any other absence control policy; or

* Retaliating against employees who take paid sick time, oppose any unlawful practice, or are involved in proceedings under the Healthy Families Act.

FMLA "Enhancement" Act

Rep. Carolyn Maloney (D-N.Y.) introduced the Family and Medical Leave Enhancement Act of 2011 (H.R. 1440) on April 8, 2011, and it has been referred to committee.

The bill would amend the FMLA. It would expand FMLA coverage to employers with 25 or more employees.

The bill would allow employees to take an additional 24 hours per year of unpaid "parental involvement" and "wellness" leave to participate in their children or grandchildren's school and community activities; to attend to routine family and medical care needs; and to attend to the care needs of elderly individuals related to the eligible employee, including nursing home visits.

Community organizations include scouting and sports organizations.

The bill expands the definition of "grandchild" to include the son or daughter of an employee's son or daughter; however, the bill does not define elderly relative.

Under the proposed legislation, eligible employees could take unpaid leave of up to 4 hours in any 30-day period, with a maximum of 24 hours in any 12-month period. This leave is in addition to other leave entitlements under the FMLA and may be taken intermittently or on a reduced leave schedule.

Substitution of paid leave would be permitted. Employees would be required to provide at least seven days' notice, or as much as is practicable, of the need for leave. Employees must make a reasonable effort to schedule wellness leave so as not to disrupt unduly the employer's operations, subject to the approval of any health care provider. Employers may require certifications of the need for leave.

Arbitration Fairness Act

The so-called Arbitration Fairness Act (S. 987, H.R. 1873) has been re-introduced in Congress. It would amend the Federal Arbitration Act by banning mandatory, predispute arbitration agreements in employment, consumer, and civil rights matters. Under the bills, workers and consumers may consent to arbitration only after a dispute arises.  

 
The bills would broaden the authority of the courts. A provision of the legislation declares "the validity or enforceability of an agreement ... shall be determined by a court, rather than an arbitrator, irrespective of whether the party resisting arbitration challenges the arbitration agreement specifically or in conjunction with other terms of the contract containing such agreement."

The bills seek to overturn a series of U.S. Supreme Court decisions that the sponsors say have broadened the intended application of the Federal Arbitration Act. The sponsors maintain that the FAA should apply only to disputes between commercial entities of generally similar sophistication and bargaining power. 

Conclusion

In this 112th Congress, many bills have been introduced. With the House and Senate controlled by different political parties, it is less likely that any drastic changes will occur over the next year. Rather, it is likely that the next election will decide which of these bills makes it to the president's desk.

Garen Dodge is a partner with the law firm Jackson Lewis LLP. Aloysius Hogan is of counsel with Jackson Lewis. If you have questions, please contact Garen Dodge at 703-483-8323 or Aloysius Hogan at 703-483-8336.

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