In the first eight months of this year, the 111th Congress has proposed employment-related legislation that is likely to have a significant impact on employers, if passed by Congress and signed into law by President Obama. These changes include the FOREWARN Act, the ALERT Act, the Fair Pay Act of 2009, the Working for Adequate Gains for Employment in Services Act, and the Paid Vacation Act of 2009. There is no doubt that economic conditions have influenced these proposals and may also impact their passage.

 

Once Congress is back in session after Labor Day, we should see more activity on these bills and other pending legislation, assuming, of course, that health care reform does not continue to dominate the agendas of the House and Senate. Even though health care reform is an important concern and is generating substantial debate on both sides of the issue, it does not mean that other laws will not be passed. As usual, if you have any questions or comments I would appreciate hearing from you. Please feel free to contact me at 414-423-1330 or tpk@kclegal.com.

 

Introduced in the Senate and House on June 25, 2009 in response to the increase in factory closings and mass layoffs, the FOREWARN Act would amend the Worker Adjustment and Retraining Notification (WARN ) Act to require employers to give employees at least 90 days advance written notice of a plant closing or mass layoff as opposed to current notice requirement of 60 days. The list of recipients of WARN Act notices would be expanded to also include the Secretary of Labor and the governor of the state where the plant closing or mass layoff will occur.

 

The Act would also lower the employee threshold for eligible employers under the WARN Act. Currently, the Act applies to employers with at least 100 full-time employees; if passed, employers with 75 full or part-time employees would be required to comply with the WARN Act. Similar reductions would also apply to plant closings and mass layoffs. If passed, employers with at least 25 full or part-time employees (down from 50 full-time employees) and a covered mass layoff would be one that affects at least 25 employees (down from 33% of full-time employees amounting to at least 50 workers, or 500 workers). A mass layoff would also no longer have to involve a single site of employment.

 

Other proposed changes would include modifying the contents of the WARN notice, posting a WARN Act poster and an increase in potential damages to employees consisting of double back pay for each day the employer was required to provide notice, along with interest. Further, the FOREWARN Act would also prohibit an employee from waiving, deferring or losing any rights under the WARN Act without the approval of the Secretary of Labor or the attorney general of the relevant state or unless a private attorney on behalf of the affected employee negotiates the waiver/agreement.

 

On June 25, 2009, the FOREWARN Act has been referred to the Senate Health, Education, Labor and Pension Committee and the House Committee on Education and Labor.

 

The ALERT Act, which was introduced in April 2009, was proposed to amend the Worker Adjustment and Retraining Notification (WARN) Act. The WARN Act currently requires employers with 100 or more employees to provide at least 60 days notice prior to a plant closing or “mass layoff” at a single site of employment. This legislation would alter the WARN Act to expand the definition of a “mass layoff” to include an employment loss at more than one of the employer’s worksites during any 30-day period. A “mass layoff” under the ALERT Act would also include the layoff of at least 33% of the employees of the employer (excluding part-time employees) and at least 50 employees or at least 500 employees (excluding part-time employees). The ALERT Act would also increase the penalty for WARN Act violations (e.g., not providing the requisite notice prior to the plant closing or mass layoff) to double back pay for each day of violation.

 

The ALERT Act has been referred to the House Committee on Education and Labor on April 23, 2009 and, on June 4, 2009, to the Subcommittee on Workforce Protections.

 

A bill addressing the issue of comparable worth and intended to amend the Equal Pay Act provisions of the Fair Labor Standards Act (FLSA), was introduced in both the Senate and House on April 28, 2009. As drafted, the Fair Pay Act of 2009 would prohibit discrimination in the payment of wages on account of sex, race or national origin. Specifically, it would prevent employers from paying lower wages for jobs dominated by women and minorities as compared to equivalent jobs that are generally dominated by men. The Act would amend the term “equivalent jobs” to be defined as “jobs that may be dissimilar, but whose requirements are equivalent, when viewed as a composite of skills, effort, responsibility, and working conditions.”

 

In addition, the Act would also prohibit discrimination against any employee who discusses his or her wages with another employee and would allow employees who successfully pursue a claim to receive compensatory and punitive damages. Finally, for research and education purposes, the Act would require employers to provide information on wages, job positions and classifications to the Equal Employment Opportunity Commission for its technical assistance program.

 

The Fair Pay Act, on April 28, 2009, was referred to the Senate Committee on Health, Education, Labor and Pensions. Also on April 28, 2009, the House version of the bill was introduced and referred to the House Committee on Education and Labor. Since June 4, 2009 it has been in the House Subcommittee on Workforce Protections.

 

4. Working for Adequate Gains for Employment in Services Act (H.R. 2570)

The Working for Adequate Gains for Employment in Services Act (“WAGES Act”) was introduced in the U.S. House of Representatives on May 21, 2009. If passed, it would amend the Fair Labor Standards Act to gradually increase the minimum wage for employees who receive tips as part of their wages. The sponsors of the bill claim the WAGES Act is necessary since the minimum wage for tipped employees, such as waiters and waitresses, has remained unchanged for 18 years.

 

Currently, under federal law, an employer may pay a tipped employee not less than $2.13 an hour (Wisconsin’s 2009 minimum wage for tipped employees is $2.33 per hour) in direct wages if that amount plus the tips received equal at least the federal minimum wage, the employee retains all tips, and the employee customarily and regularly receives more than $30 a month in tips. If an employee's tips combined with the employer's direct wages of at least $2.13 an hour do not equal the federal minimum hourly wage, the employer must make up the difference.

 

Specifically, the WAGES Act would increase the minimum cash wage for tipped employees to $3.75 an hour beginning 90 days after the Act’s enactment, to $5.00 an hour beginning July 1, 2011, and to $5.50 an hour or 70 percent of the minimum wage for non-tipped employees (whichever is greater) beginning July 1, 2012.

 

The WAGES Act was referred to the House Committee on Education and Labor on May 21, 2009.

 

Introduced on May 21, 2009, the Paid Vacation Act of 2009 (“PVA”) also would amend the Fair Labor Standards Act to require employers with 100 or more employees to provide one week paid vacation every year. Three years after the passage of the PVA, employers with 100 or more employees would be required to provide two weeks of paid vacation every year. Further, employers with between 50 and 100 employees would be required to provide 1 week of paid vacation within three years of the passage of the PVA.

 

In order to be an eligible employee for paid vacation leave, an employee would need to have been employed for at least 12 months for the employer and have worked at least 1,250 hours during those 12 months. Employees would also be obligated to give at least 30 days’ advance noticed before taking paid vacation leave. Finally, paid vacation leave under the PVA could not be rolled over into the following year and the vacation would be in addition to any other leave benefits required by state or federal law.

 

The PVA was referred to the House Committee on Education and Labor on May 21, 2009.

 

These are difficult times for employers because some or most of these laws could be passed in their original or modified form. While these and other proposed laws, which have been discussed in my prior legislative updates (e.g, the Employee Free Choice Act and the Healthy Families Act), are being debated, the EEOC is preparing to issue its regulations for the Americans With Disabilities Act Amendment Act (ADAAA) as required by Congress. Employers continually strive to balance the changing needs of their workforce with the challenges and requirements of operating their business or organization. Successful employers will be knowledgeable of their obligations and proactively audit their employment policies to ensure their organization is in compliance to avoid claims and lawsuits.

 

Thomas P. Krukowski, Esq.
Krukowski & Costello, S.C.
http://www.krukowski.com

 

Legislative Partner