News + Events
Labor & Employment Legislative Update: The New Administration Focuses on Key Labor and Employment Legislation
February 9, 2009
Tashwanda C. Pinchback
The inauguration of President Obama, as well as the gains made by Democrats in both the U.S. House of Representatives and Senate, may significantly change labor and employment laws in America. The following labor and employment laws are quickly making their way through Congress and will likely land on President Obama’s desk where he has pledged to sign them into law.
The Paycheck Fairness Act
On January 9, 2009, the U.S. House of Representatives passed the Paycheck Fairness Act, which would require employers to show that any difference in wages for a male as compared to a female results from a "bona fide factor other than sex." Under the Act, employers would be able to use the proposed "bona fide factor" defense only if they demonstrate that business necessity demands it. The defense would not apply where the employee demonstrates that an alternative employment practice exists that would serve the same business purpose without producing a pay differential, and that the employer has refused to adopt such alternative practice. Under the current law, employers need only show that any alleged disparity was because of "any factor other than sex."
The Paycheck Fairness Act also makes it easier to bring class action lawsuits in such cases by automatically including employees in a class action suit unless they opt out, and it removes limits on punitive and compensatory damages without requiring any proof of intent to discriminate. The Act is now awaiting a vote by the Senate.
Employee Free Choice Act
The newly strengthened Democratic majority in Congress has also pledged to move quickly on the Employee Free Choice Act (EFCA). Introduced in March 2007, the proposed law would amend the National Labor Relations Act (NLRA) to permit the National Labor Relations Board (NLRB) to certify a union without a secret ballot election if a majority of workers sign cards authorizing union representation, thus making it easier for employees to organize. Labor leaders and other supporters believe the bill would help restore bargaining power to workers whose wages have fallen behind inflation in recent years. The bill also has the support of President Obama, who co-sponsored the bill as a senator and called it an essential element of his vision for restoring middle-class prosperity.
Additional Legislation
While it is too soon to tell what other changes the new administration will bring, President Obama’s support of the following bills while he was Senator and during his campaign for president may be indicative of what is to come:
• Re-Empowerment of Skilled and Professional Employees and Construction Tradeworkers (RESPECT) Act: would restrict the NLRA’s definition of "supervisor" to include a smaller group of individuals, thus increasing the number of employees who could organize a union. President Obama co-sponsored this bill and pledged in his campaign to strengthen union legislation, thereby garnering him tremendous election support from unions. The RESPECT Act is awaiting consideration by the House of Representatives.
• Civil Rights Act of 2008: would make numerous changes to the Civil Rights Act of 1964, including a removal of the caps on compensatory and punitive damages. This bill was co-sponsored by President Obama and has been referred to the Subcommittee on the Constitution, Civil Rights, and Civil Liberties.
• Employment Non-Discrimination Act: would amend Title VII to add sexual orientation as a protected class. President Obama has pledged to pass this Act and include a prohibition on discrimination based on gender identity or expression. The House passed the bill in November 2007, and it awaits further action by Congress.
• Patriot Employers Act: would amend the Internal Revenue Code to permit a taxpayer certified as a "Patriot employer" by the Secretary of the Treasury to receive a tax credit for 1 percent of such employer’s taxable income. President Obama co-sponsored the Senate version of this bill, which would apply to businesses headquartered in the United States that provide increased wages and benefits to employees and adopt a position of neutrality in unionization drives. The bill was referred to the Senate Committee on Finance in 2007.
• Forewarn Act of 2007: would amend the Worker Adjustment and Retraining Notification Act (WARN Act) to require a 90-day written notice of plant closures or layoffs, instead of the current 60-day notice; double the penalties for employers who violate the law; and apply to employers of 50 or more employees instead of 100 employees, as under the current act. The bill has been referred to the House Subcommittee on Workforce Protections.
• Employee Misclassification Prevention Act: would amend the FLSA to increase penalties and enforcement against employers who misclassify employees as independent contractors. This bill was proposed by President Obama in 2007. The bill has been referred to the House Ways and Means Subcommittee on Income Security and Family Support.
• Minimum Wage: President Obama has also expressed support for raising the minimum wage to $9.50 per hour by 2010.
• Amendments to the Family and Medical Leave Act of 1993 (FMLA): President Obama has indicated his support for expanding the FMLA to cover companies with twenty-five or more employees (currently fifty).