UPDATE ON RECENT AND PENDING HR LEGISLATION AND REGULATION Presented by Lon R. Williams, Jr. Bracewell & Giuliani LLP 1445 Ross Avenue, Suite 3800 Dallas,

UPDATE ON RECENT AND PENDING HR LEGISLATION AND REGULATION

Presented by

Lon R. Williams, Jr.Bracewell & Giuliani LLP

1445 Ross Avenue, Suite 3800Dallas, Texas 75202

214.758.1086817.886.6750

Texas Higher EducationHuman Resources Association

January 25, 2011

Pending Federal HRRelated Legislation

New Congress – Stay Tuned

The following legislation was pending in the prior Congress and may or may not be introduced in the current Congress:

• Employee Free Choice Act • Employment Non-Discrimination Act ("ENDA") (H.R. 3017, S. 1584) • OSHA Legislation Protecting America's Workers Act of 2009 (H.R.

2067, S. 1580) Also, Mine Safety Act (H.R. 5663, S. 3671)• Comprehensive Immigration Reform for America's Security and

Prosperity Act (H.R. 4321)• Family-Friendly Workplace Act (H.R. 933)• Family Fairness Act (H.R. 389)• Emergency Influenza Containment Act (H.R. 3991)• Fair Pay Act (H.R. 2151, S. 904)

New Congress, continued

• Paid Vacation Act (H.R. 2564)

• Working Families Flexibility Act (H.R. 1274)

• Alert Laid Off Employees in Reasonable Time Act ("ALERT") (H.R. 2077)

• COBRA Premium Assistance Extension (S.3549)

• Taxpayer Responsibility, Accountability and Consistency Act of 2009 (S. 2882, H.R. 3408)

• Employee Misclassification Prevention Act (S. 3254, H.R. 5107)

• Protecting Older Workers Against Discrimination Act (H.R. 3721, S. 1756)

• Direct Care Workforce Empowerment Act (HR 5902; S. 3696)

• The Arbitration Fairness Act (H.R. 1020, S. 931)

• Balancing Act of 2009 (H.R. 3047)

DREAM Act Defeated in Senate

• On December 18th a 55-41 Senate vote fell five votes short of the 60 needed to begin debate on the proposed Development, Relief, and Education of Alien Minors Act (S. 3992), which would provide a path to citizenship for many younger immigrants

Balancing Act of 2009 (H.R. 3047)

• Would consolidate proposed changes to the FMLA into one proposal, incorporating provisions from the Domestic Violence Leave Act (H.R. 2515), Family and Medical Leave Enhancement Act (H.R. 824), Family and Medical Leave Insurance Act (H.R. 1723) and Healthy Families Act (H.R. 2460)

Balancing Act of 2000, cont.

• Would provide 12 weeks of paid FMLA leave• Would create a Family and Medical Leave Insurance Fund funded

by new tax on employers and employees• Would require up to 7 days of paid sick leave per year

Employee Free Choice Act ("EFCA")(H.R. 1409, S. 560)

• Would amend the National Labor Relations Act to make it easier for employees to gain union representation by a majority signing union authorization cards in lieu of a majority vote in an election – 50% +1 employees in Bargaining Unit sign cards then union

would be certified to represent employees

Paycheck Fairness Act

• In December the Paycheck Fairness Act was defeated by 2 votes in the Senate.

Paycheck Fairness Act (H.R. 12, S. 182)

– Originally part of Lilly Ledbetter Fair Pay Act, passed in 2009– Would increase penalties under Equal Pay Act ("EPA")– Would allow compensatory and punitive damages under EPA– Would limit affirmative defense available to employers:

• Currently, EPA provides that employers may justify pay differential between female and male employees showing disparity is based on “any factor other than sex

• Bill would require that the “other factor” must be a “bona fide factor,” such as education, training or experience

• Employer would have to demonstrate that the factor is not based on a sex-based differential, is job-related and is consistent with business necessity

Paycheck Fairness Act, cont.

• Would expand prohibition on retaliation against workers who discuss or disclose compensation of co-workers when employees respond to complaint or charge regarding pay discrimination

• Would make it easier for plaintiffs to organize a class action– Bill uses “opt out” method and eliminates "opt-in" currently

under EPA

Arbitration Fairness ActHR 1020 – S.931

• Would have prohibited mandatory arbitration in employment relationships

Equal Employment for All Act (H.R. 32)

• Reintroduced in House to amend the Fair Credit Reporting Act• Would prohibit use of consumer credit checks against prospective

and current employees for purpose of making adverse employment decisions (including hiring, promotions, transfers and terminations)

• Would prohibit use of consumer credit reports, even if worker consented

• Would allow use only if job at issue required among other reasons, for national security or Federal Deposit Insurance Corporation clearance, was for state or local government agency or a supervisory, managerial, professional, or executive position at financial institution

Protecting America's Workers Act (H.R. 190)

• OSHA overhaul legislation reintroduced on January 5th• Higher civil and criminal penalties for violation of OSHA; enhanced

whistleblower protections; covers public employees; and broader rights for family members of injured workers to participate in settlement negotiations

Recently Passed FederalHR Legislation

Health Care Reform:Patient Protection & Affordable Care Act (as amended by Reconciliation Act)

• On March 23, 2010, President Obama signed the Patient Protection and Affordable Care Act into law ("PPACA")

• Shortly thereafter, on March 30, 2010, a modified version of the House's Reconciliation Bill was signed into law, making changes to the broader heath care reform law enacted on March 23

Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010

• The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010, enacted December 17, 2010, included many extensions to tax credits and exclusions that affect employers and employees.

• Included a two-year extension of a tax break for employer-provided tuition assistance

• Temporary Extension of Unemployment Insurance and Related Matters - Postponed the termination of the program until June 9, 2012.

Telework Enhancement Act

• More than 1 million federal employees could be eligible to telecommute after President Barack Obama signed the Telework Enhancement Act (H.R. 1722) into law on December 9, 2010

Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank")

• "Say-on-Pay"• President signed into law July 21, 2010• Gives shareholders right to vote on executive compensation

including golden parachutes in publicly traded companies and financial institutions.

• Includes pay of CEO, CFO and the three other highest paid officers• Shareholders may vote at least every 3 years• Completely advisory• Takes effect for shareholder meetings in 2011

Cont'd – Dodd-Frank

• Dodd-Frank also requires that every federal financial services agency establish an Office of Minority and Women Inclusion by January 20, 2011

• Agencies (i.e., FDIC and NCUA) required to develop standards for "increased participation of minority-owned and women-owned businesses in the programs and contracts of the agency" and standards for "assessing the diversity policies and practices of entities regulated by the agency"

• Will force federal contractors to deal with 2 sets of regulations and guidelines – those enforced by OFCCP and those promulgated by new diversity and inclusion offices

Cont'd - Dodd-Frank

• Expands whistleblower protections to wide range of financial services industry employees and allows employees proceeding under Sarbanes-Oxley Act ("SOX") to sue in federal court, bypassing administrative process

• Protects such employees from retaliation for disclosing information about fraud or unlawful conduct related to consumer financial products, and covers employees that extend credit, service loans, provide real estate settlement services, and provide financial advice – including credit counseling to consumers

• Claims are exempt from mandatory arbitration agreements that protected activity was a contributing factor in an adverse employment action

• Clarifies that SOX whistleblower protections apply to employees of subsidiaries or publicly traded companies

• Statute of limitations for actions alleging fraud against the government is 3 years

Mental Health Parity Act

• Group health plans that provide medical and surgical benefits and mental health or substance use disorder benefits must apply same financial requirements and treatment limitations to both coverage areas

• Law does not apply to employers with < 50 employees or to group health plans that experience a 1% or more increase in costs because of mental health parity provisions

• Law does not force employers to provide mental health coverage

Franken Amendment

• Generally, the Franken Amendment prohibits covered contractors and subcontractors from requiring employees to arbitrate certain employment claims– "Covered Contractor" = Any Department of Defense contractor

with a contract over $1 Million • Specifically, Franken Amendment prohibits a covered contractor

from requiring its employees or independent contractors to arbitrate:– (i) claims arising under Title VII; or– (ii) any tort related to or arising out of sexual assault or

harassment • Covered contractors also prohibited from enforcing any provision of

an existing agreement which requires such claims to be arbitrated, and are required to get certifications from any entities with subcontracts in excess of $1 Million on a covered contract that the subcontractor is in compliance with Franken Amendment

Recent Federal

HR Regulations

Employee Rights Poster Required by Federal Contractors

• Mandated as of June 20 a poster advising employee's right to join or not join a union and describing union and employer misconduct – Federal contractors and subcontractors are required to post this

employee rights notice in their workplaces • Under DOL's final rule, employees may file complaints with the

Labor Department about contractors that do not post the notice, and contractors who violate the regulation could have their federal contracts suspended or canceled

Mental Health Parity Act

• Mental Health Parity Regulations Effective Dates:– Regulations effective April 5, 2010, for plan years

beginning on or after July 1, 2010 – Calendar-year plans must comply with the new

regulations beginning with the 2011 plan year

Mental Health Parity ActFAQ's on Website

• Guidance posted July 1st on Department of Labor's Employee Benefits Security Administration website http://dol.gov/ebsa/faqs

GINA Title II Regulations

• EEOC issued final regulations on November 9, to implement Title II of the Genetic Information Nondiscrimination Act (GINA)

• These final regulations became effective on January 10, 2011! • Among other provisions, the regulations include model safe harbor

language that employers are strongly encouraged to use when lawfully requesting medical information from an employee, physician or other third party

• Regulations do not restrict an employer from receiving genetic information inadvertently after it requests health-related information if the employer warns employees not to provide genetic information.

Dodd – Frank Say-on-Pay Rules

• On November 18, 2010, comment period ended for employers to comment on proposed regulations implementing the Dodd-Frank Act Section 951 say-on-pay requirements

Health Care Reform:PPACA

• July 14, 2010, HHS issued regulations under the PPACA requiring new (i.e., "non-grandfathered") health plans to cover listed preventative services and eliminate cost-sharing requirements for such services

• Must cover such services without charge to patients

• Applies to those who enroll in non-grandfathered health plans after September 23, 2010

• Grandfathered plans are exempt from the requirement

• Healthcare services covered are:

– Preventive services

– Vaccines

– Pediatric care

– Prevention for women

Electronic I-9 Forms

• On July 22 final rule published by Homeland Security which amended I-9 regulations

• Took effect August 21st• Regulations clarify:

– I-9 Form must be completed within 3 business days of the date hired

– The use of paper, electronic systems or a combination of paper and electronic systems is acceptable

– Employers may but are not required to copy verification documents

ADA Amendments Act (ADAAA)

• On September 23, 2009, the EEOC published its proposed regulations implementing and interpreting the ADAAA:– Public comment period expired on November 23,

2009– Proposed regulations would require employers to

revise policies, train or re-train HR personnel and supervisors in dealing with disability issue, and focus on reasonable accommodation issues and the interactive process between the employer and the disabled employee

EEOC Approved Regulations for ADA Amendments Act

• EEOC approved a final set of regulations for ADAAA at the end of December 2010– Five Commissioners voted privately and unanimously to

approve the long-awaited regulations• ADAAA final regulations were released to the Office of

Management and Budget (OMB) and other federal agencies for review and comment

• Once OMB approves the regulations, they will be published in the Federal Register

• Review by OMB could take several months

Breast Feeding Regulations

• The DOL on December 21, 2010, announced that it is seeking comments on provisions of the Fair Labor Standards Act (FLSA) that require employers to provide nursing mothers with reasonable break time and a private space for expressing breast milk while at work

Nursing Mothers Entitled Reasonable Breaks - Fact Sheet #73

• Fact sheet issued by DOL - Wage and Hour Division explains employers' obligations under the PPACA

• Employers must provide reasonable unpaid break time and a private place for breast-feeding employees, titled "Break Time for Nursing Mothers under the FLSA"

• Applies only to non-exempt employees– Federal law does not require employers to compensate nursing

mothers for the breaks while nursing– Employer with less than 50 employees at all work sites exempt

if undue hardship

Comment Deadline for Proposed NLRA Rights Poster

• The NLRB has published a Notice of Proposed Rulemaking that would require many employers to notify employees of their rights under the National Labor Relations Act (NLRA) by posting a notice

• The proposed rule would apply to private-sector employers subject to the NLRA, excluding agricultural, railroad and airline employers

• Public can submit comments on the proposal until February 22, 2011

CIS Extends Comment Period on E-Verify Self-Check proposal

• Homeland Security's Citizenship and Immigration Services published a notice in the December 14 Federal Register extending the comment period regarding a new self-check service that would allow U.S. workers to enter data into the E-Verify system to ensure that information related to their work eligibility is accurate.

DOD Final Rule Bars Mandatory Arbitration

• The Defense Department is barring certain defense contractors and subcontractors from requiring employees or independent contractors to arbitrate claims under Title VII of the 1964 Civil Rights Act or torts arising out of sexual assault or harassment, according to a final rule published in the December 8 Federal Register

DOT Proposes Commercial Driver Cell Phone Bans

• Interstate commercial truck and bus drivers would be prohibited from reaching for, holding, or dialing their cell phones while driving, and employers that allowed their drivers to use cell phones while driving would be subject to a penalty of up to $11,000, under a Federal Motor Carrier Safety Administration proposed rule published in the December 21 Federal Register

HR Related Administrative Action

DOL FY 2011-2016 Strategic Plan

• Wage and Hour Division and Department of Treasury joint initiative regarding misclassification of employees as independent contractors is Strategic Goal No. 1

Health Care Reform:PPACA

• IRS on December 2 provided final guidance on the small employer tax credit included in health care reform legislation under tax code Section 45R

Health Care Reform:PPACA

• The Obama Administration is continuing to grant businesses waivers from the Patient Protection and Affordable Care Act's minimum annual limits

Health Care Reform:PPACA

• On September 20, 2010, the DOL, Health and Human Services (HHS) and the Treasury issued new frequently asked questions on the Patient Protection and Affordable Care Act and grandfathered health plans, internal appeals and external review, coverage of children, out-of-network emergency services and highly compensated employees

DOL Posts Enforcement Data Online:

• The DOL has made an online searchable database available of enforcement data collected from the W&H Division, OFCCP, EBSA, OSHA, and MSHA – Previously, only OSHA and MSHA made their enforcement data

available online • Database will include detailed information (to be updated quarterly)

regarding closed investigations, such as:– Number of FLSA violations per employer;– Amount of back wages an employer has "agreed to pay;"– Number of employees an employer has "agreed to pay;"– Type of violation; and– Amount of civil penalties assessed

• Database will likely be tracked by plaintiffs' employment lawyers interested in potential litigation – something employers should keep in mind when considering to voluntarily resolve a DOL investigation

Bridge to Justice Program

• DOL to refer work to Plaintiffs' Bar• Effective December 13, 2010, DOL launched its "Bridge to Justice"

alliance with the American Bar Association • DOL hopes to bring together employees with private counsel to

pursue claims under FLSA or FMLA• Complaining employees may be provided a toll-free telephone

number to ABA's attorney referral program• Under Program, individual and counsel entitled to an "expedited

disclosure" outside FOIA

2011 Tax Withholding Tables Implementation Deadline

• The IRS has released instructions to help employers implement the 2011 cut in payroll taxes, along with new income-tax withholding tables that employers will use during 2011

• Employees’ Social Security tax withholding rate is reduced from 6.2 percent to 4.2 percent of wages paid.

• Employers must start using the new withholding tables no later than January 31, 2011

New Emphasis on Enforcement of Federal Labor Statutes

• The DOL is committed to tougher enforcement of labor laws to reverse a culture of noncompliance that has developed over the past 10 years, Labor Solicitor M. Patricia Smith said October 21st.

OFCCP Agenda

• The Obama Administration is attempting to overhaul the Labor Department's OFCCP.

OFCCP Discontinues I-9 Inspections

• The OFCCP will no longer inspect federal contractors' I-9 forms during onsite compliance reviews, OFCCP Director Patricia Shiu stated on November 16

E-Verify Changes Designed to Improve Accuracy

• A set of initiatives designed to improve the accuracy and efficiency of E-Verify was announced on March 17, 2010

• Goal of initiatives is to streamline the processes and investigation for claims of immigration bias and employer misuse of the E-Verify System

• Included in the initiatives is a new telephone hotline for workers and job seekers who want information on E-Verify, along with two training videos that outline E-Verify's processes and policies and explain the rights of employees and responsibilities of employers under the program

• The training videos can be seen online at www.dhs.gov/e-verify.• The new hotline number is (888) 897-7781 and was set to be

activated on April 5, 2010

E-Verify Includes U.S. Passport Photo Capability

• The E-Verify program now includes U.S. passport photo matching, which will enhance the integrity of the program by enabling E-Verify to automatically check the validity and authenticity of all U.S. passports and passport cards presented for employment verification checks, Homeland Security announced on November 10th.

EEOC Litigation

EEOC recently filed a nationwide class action complaint against a for-profit education provider alleging practice of checking the credit histories of job applicants and employees is racially discriminatory under Title VII of the 1964 Civil Rights Act

EEOC

• EEOC has increased its staffing to more than 2,500 employees• Attacking case backlog

– Will devote resources to volume of discrimination Charges, investigating and litigating systemic cases, issuing final regulations under the ADAAA and ADEA

• The Systemic Program– EEOC recovered record $404 million in monetary relief for private

sector discrimination in FY 2010– In systemic cases, investigation and litigation of discrimination claims – Affecting classes of employees or job applicants on 465 pending

systemic investigations– Employers can expect increased activity from EEOC in 2011 in:

• Disability discrimination• Hiring Discrimination

Retaliation Charges

• Retaliation Charges rose to 36.3 percent of 2010 charges• Race discrimination charges filed rose to 35.9 percent of Charges• All Charge numbers under all of laws EEOC enforces rose in 2010

Immigration

• Obama Administration interested in targeting employers• Criminal Prosecutions

– ICE has increased administrative fines and paper audits– In recent audit with no unauthorized worker, ICE fined employer

$1 million for I-9 paperwork violations– Criminal prosecutions of employers have risen – ICE now investigates employer without employer's knowledge

for months before notice of I-9 inspection – ICE's policy to use I-9 audits to lay foundation for criminal

prosecutions

Immigration Handbook for Employers

• Homeland Security released on January 5 "Handbook for Employers" to help employers understand I-9 process

• Includes new visual aids for completing the Form I-9; expanded guidance on processing of employees in certain visa category

ICE's IMAGE Program

• Immigration and Customs Enforcement's Mutual Agreement between Government and Employers (IMAGE) program implemented to help employers comply with immigration laws

• Voluntary program intended to strengthen employment and help employers verify that their employees are authorized to work

• Program participants are "IMAGE certified" by ICE• To become IMAGE certified, employees subject to an I-9 audit and

other checks by ICE• Requires participating companies to join E-Verify

OSHA's Severe Violator Enforcement Program

• Announced on April 22 by OSHA and focuses additional enforcement on "recalcitrant employers who endanger workers by demonstrating indifference to their responsibilities under the law"

• Employers that meet certain criteria demonstrating their indifference to OSHA could be subjected to enhanced enforcement, including "mandatory follow-up inspections, increased company/corporate awareness of OSHA enforcement, corporate-wide agreements, where appropriate, enhanced settlement provisions, and federal court enforcement"

• Program now being implemented

OSHA Enforcement

• Under the Obama Administration, OSHA inspectors have increased the number of citations for alleged health and safety violations and are shifting their attention to high-risk sectors and repeat violators

Criminal Prosecutions of OSHA Violations

• Head of OSHA on January 18 stated that state and local prosecutors may be asked to pursue criminal charges against violators of worker safety laws

• Also on January 18th President Obama in the Wall Street Journal singled out worker health and safety as an important policy area for his administration

Revised Agency Interpretations of FLSA Provisions

• In March and June of 2010, the Labor Department's Wage and Hour Division issued Administrator's Interpretations with respect to the FLSA which deviated from the agency's previously stated positions:

• FLSA:– March Interpretation: DOL concluded that employees who perform the

"typical" duties of a mortgage loan officer do not qualify as exempt administrative employees under the FLSA

• Reversal of position taken in 2006 DOL opinion letter

– June Interpretation: DOL indicated that even if the time a bargaining unit employee spends donning and doffing clothes is excludable from compensatory time, changing clothes can be a principal activity that starts the continuous workday

• Reversal of position taken in 2007 DOL opinion letter

Revised Agency Interpretations of FMLA Provision

• In June 2010, the Department of Labor issued a new Interpretation #3 clarifying a preexisting FMLA regulation:

• FMLA:

– Clarified the definition of "son or daughter" under Section 101(12) of FMLA as it applies to an employee standing "in loco parentis" to a child

– Agency concluded that either day-to-day care or financial support may establish an in loco parentis relationship where the employee intends to assume the responsibilities of a parent with regard to a child

• "Neither the statute nor the regulation restrict the number of parents a child may have under the FMLA"

• "A simple statement asserting that the requisite family relationship exists is all that is needed"

Texas HR Related Legislation

• Session started January 11, 2011• Already over 900 Bills introduced• Over 48 involving employers• Over 140 involving employees

S.B. No. 314

• Employees would not be disqualified for unemployment benefits if employee leaves work as result of employee or family member's sexual assault

H.B. No. 471

• Would require workers' secret ballot election when determining whether to be represented by union

H.B. No. 335

• A state agency would not be allowed to implement a provision of a federal health care reform law unless it submits a report.

• The report would have to describe an expenditure incurred in implementing a provision of a federal health care reform if:– The provision would:

• Require a person to purchase health insurance or similar health coverage;

• Require an employer to provide health insurance or similar health coverage to employees;

• Impose a penalty on an employer who does not provide health insurance or similar health coverage to employees;

• Expand eligibility for the state Medicaid program or state child health plan program;

• Create a health insurance coverage mandate affecting a person; or• Create a new health insurance or similar health coverage program

that is administered by Texas or a political subdivision of Texas.

H.B. No. 296 

• During any detention or arrest made by a peace officer or law enforcement agency of this state or of a political subdivision of this state, the officer or agency shall make a reasonable attempt, if practicable, to determine the immigration status of the person detained or arrested

• The investigation of a person's immigration status may not serve as the grounds for the detention or arrest and may not unlawfully prolong the period in which the person is detained or is maintained in custody by the officer or agency

H.B. No. 276

• Relating to the minimum wage an employer shall pay to each employee not less than the greater of– $6.15 an hour; or – the federal minimum wage under Section 6, Fair Labor

Standards Act

H.B. No. 177

• Relating to the requirement of citizenship or lawful presence in the United States for issuance or renewal of certain occupational licenses, driver's licenses, and identification certificates

• An applicant for a license must establish employment eligibility if the applicant is: – applying for an original license; or– renewing a license and the applicant has not previously

established employment eligibility

H.B. No. 126

• Relating to required drug testing for applicants and recipients of unemployment compensation benefits

• Each individual who files a claim for benefits or receives benefits under this subtitle must submit to drug testing

• An applicant or recipient of benefits who does not successfully pass a drug test required under this section is disqualified for unemployment benefits

H.B. No. 68

• Relating to notice concerning the use of criminal history information in an employer's hiring process

•  Not later than the 10th day after the date an employer notifies an applicant that the employer will not be making an offer of employment to the applicant based wholly or partly on criminal history information concerning the applicant, the employer shall provide the applicant a written explanation containing: – an identification of the specific arrest, detention, indictment or

charge, or disposition that influenced the decision  

S.B. No. 64

• Relating to the right of an employee who is a victim of a crime to time off from work to attend court proceedings related to that crime

• An employee who is a victim of a crime or the parent or guardian of a victim of a crime is entitled to time off to attend court proceedings related to the crime

QUESTIONS ?

Lon R. Williams, Jr.

Bracewell & Giuliani LLP

1445 Ross Avenue, Suite 3800

Dallas, TX 75202

(214) 758-1086; (817) 886-6750

[email protected]