Washington D.C. Employment Law Update : Washington D.C. Employment Lawyer & Attorney : Littler Mendelson Law Firm : Virginia, Tyson's Corner

By Henry Lederman

In an opinion favorable to employers who use arbitration agreements, the Supreme Court in AT&T Mobility v. Concepcion (pdf) has held that the Federal Arbitration Act (FAA) preempts a California state supreme court decision that conditioned the enforceability of a consumer arbitration agreement on the availability of class-wide arbitration. Emphasizing this country’s “liberal federal policy favoring arbitration,” the Court stated that the FAA preempts the state law rule because it “stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” Although the facts of this case centered on commercial contracts, the Court’s decision indirectly reaffirms the validity of including class action waivers in agreements to arbitrate employment disputes. Its central premise are that the FAA requires arbitration agreements to be enforced as written, that states (whether through their courts or legislatures) cannot erect obstacles to their enforcement, and that class waivers are wholly consistent with the purposes of the FAA - expedited, informal dispute resolution.

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On April 15, 2011, United States Citizenship and Immigration Services (USCIS) published a final rule (pdf), effective May 16, 2011, governing the types of acceptable identity and employment authorization documents and receipts that an employee may present to an employer when completing Form I-9. The final rule adopts without change an interim rule (pdf) that was published on December 17, 2008, and has been in effect since April 3, 2009.  Continue reading this entry at Littler's Global Immigration Counsel. 

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The Office of Federal Contract Compliance Programs (OFCCP) is proposing to amend its regulations regarding a contractor’s and subcontractor’s affirmative action and nondiscrimination obligations towards protected veterans under the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA). This law prohibits employment discrimination against specified categories of veterans by federal government contractors and subcontractors, and mandates that each covered contractor and subcontractor take affirmative action to hire and promote veterans. According to a summary included in the notice of proposed rulemaking, (pdf) the intended regulatory changes would strengthen these affirmative action provisions, describe specific actions a contractor must take to satisfy its obligations, increase the contractor’s data collection obligations, and require the contractor to establish hiring benchmarks to assist in measuring the effectiveness of its affirmative action efforts.

The proposal addresses two sets of VEVRAA regulations. Those found at 41 CFR part 60-250 generally apply to government contracts of $25,000 or more entered into before December 1, 2003. The regulations found at 41 CFR part 60-300 apply to government contracts entered into on or after December 1, 2003. The threshold amount to trigger coverage by the affirmative action plan (AAP) requirements for this group is a single contract of $100,000 or more, entered into on or after December 1, 2003. Because of the extensive changes to these regulations, the OFCCP is proposing to rescind part 60-250 in its entirety, as the agency assumes that few, if any, unmodified contracts entered into before December 1, 2003 for $25,000 or more currently exist. The agency seeks comment, however, to determine if any such contracts are still, in fact, in effect.

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A new proposed rule would impose additional reporting requirements on federal service contractors. Issued by the Department of Defense (DoD), General Services Administration (GSA), and the National Aeronautics and Space Administration (NASA), the proposal (pdf) would amend the Federal Acquisition Regulation (FAR) to require service contractors for federal agencies other than the DoD that are covered by the Federal Activities Inventory Reform (FAIR) Act of 1998 to report the following information for each covered contract by October 31 of each year:

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A bill aimed at promoting mine safety was reintroduced in the House of Representatives on April 15. The Robert C. Byrd Mine Safety Protection Act of 2011 (H.R. 1579) (pdf) would, among other things, increase Mine Safety and Health Administration (MSHA) oversight and accountability, impose new mine safety requirements, institute new whistleblower protections for miners, and increase civil and criminal penalties for mine operators charged with committing serious and repeat safety violations. A similar but more expansive bill (S. 153) was introduced in the Senate earlier this year. In addition to addressing mine safety, the Senate version would also significantly revise the Occupational Safety and Health (OSH) Act by strengthening whistleblower protections for employees in all industries, increasing employer civil and criminal penalties for repeat and/or willful violations of the OSH Act, providing greater rights for victims of accidents and their family members to participate in OSH Act proceedings, and requiring employers to begin the violation abatement process while the citation is pending.

Both versions of the Robert C. Byrd Mine Safety Protection Act failed to advance in 2010. After the measure was initially introduced as the more comprehensive safety and health bill, Rep. George Miller (D-CA) stripped the legislation of its OSH Act provisions, and reintroduced it following the November 2010 elections. Despite this effort to make the bill more palatable to those opposed to it, the House blocked its passage in December 2010. The reintroduced version is therefore unlikely to clear the House this time around. More information on this bill can be found here.

Photo credit:  dannyfroese

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A day after Congress passed a spending bill that will fund the federal government through September 2011, the House of Representatives approved by a 235-193 margin a budget plan (H. Con. Res. 34) for Fiscal Year 2012 that also sets forth appropriate budgetary levels for the next decade.

Among other things, this budget would effectively repeal and de-fund the health care reform law. Specifically, the measure would authorize the Budget Committee Chairman to “revise the allocations, aggregates, and other appropriate levels in this resolution for the budgetary effects of any bill, joint resolution, amendment, or conference report that repeals the Patient Protection and Affordable Care Act or the Health Care and Education Reconciliation Act of 2010.” In addition, the proposal, offered by Rep. Paul Ryan (R-WI), would give block grants to states to run Medicaid and establish a voucher system for Medicare.

The Senate – which has already adjourned for a two-week recess – is not expected to approve this budget. The President, meanwhile, has offered a competing budget plan. Given the divergent views on where and how federal spending cuts must be made, it is likely that another budget showdown will occur before the September 30, 2011 deadline. 

Photo credit: MBPHOTO, INC.

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A popular workplace safety initiative was shown support on Wednesday when lawmakers in both the House and Senate introduced bipartisan legislation to make it permanent. The Voluntary Protection Program (VPP) Act (H.R. 1511, S. 807) would codify the current program, authorize the grant of funds to enable it to continue, and extend its availability to small businesses.

To participate in the VPP, employers submit applications to the Occupational Safety and Health Administration (OSHA) and undergo a stringent safety assessment of their work site and safety and health management programs. If the facility meets the required safety and health standards and is approved to participate in this cooperative program, the employer is exempt from OSHA programmed inspections, investigations and certain paperwork requirements. This exemption does not apply to investigations or inspections resulting from employee complaints, fatalities, catastrophes, or significant toxic spills/releases. OSHA onsite evaluations would be conducted to ensure a high level of protection of employees, however, these onsite visits would not result in enforcement citations. Employers would also be subject to periodic reevaluations for continued participation in the program.

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The Securities and Exchange Commission (SEC) has recently issued proposed rules with other agencies to implement various sections of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010  dealing with incentive-based compensation arrangements for covered financial institutions and listing standards for compensation committees and advisers.

Incentive-Based Compensation Arrangements

The first proposal (pdf) would require brokers, dealers or investment advisers with assets of at least $1 billion to design their incentive compensation arrangements to take risk into account. Section 956 of the Dodd-Frank requires that federal regulators prohibit incentive-based payment arrangements, or any feature of any such arrangement, at a covered financial institution that the agencies determine encourages inappropriate risks by a financial institution by providing excessive compensation or that could lead to material financial loss. Generally, as discussed in a press release, the proposal would require that these incentive compensation arrangements “appropriately balance risk and financial rewards, be compatible with effective controls and risk management, and be supported by strong corporate governance.” Such measures imposed by the proposal include:

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Timed to commemorate National Equal Pay Day on April 12, various lawmakers reintroduced the Paycheck Fairness Act (H.R. 1519, S. 797) and the Fair Pay Act (H.R. 1493, S. 788), bills that would amend the Fair Labor Standards Act (FLSA) to promote pay equity. The first measure, the Paycheck Fairness Act, would amend the FLSA to provide for potentially unlimited compensatory and punitive damages in gender-based wage discrimination cases and weaken an employer’s affirmative defense against such claims, among other things. As previously discussed in this blog, the measure would:

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The NLRB’s Office of the General Counsel has issued a new memorandum (pdf) outlining the categories of cases that must be submitted to the agency’s Division of Advice.

Acting General Counsel (GC) Lafe Solomon has indicated that the current list, which was last updated in 2007, needs to be revised on account of the new agency and court decisions, as well as policy issues that have emerged in recent years.

The revised list provides some insight into the nature of cases the GC considers to be of particular importance from a policy standpoint. It also reflects current areas of the law where the GC may be seeking to overturn existing precedent or decisions issued by the Board during the previous presidential administration.  Continue reading this entry at Littler's Labor Relations Counsel.

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By Patricia Haim

The Social Security Administration (SSA) has announced that after a four year halt, it will resume sending Social Security “no-match” letters to employers. (SSA has continued to send letters to employees’ home addresses if the name and/or social security number on an employer’s W-2 form does not match the information on SSA’s database.)

This new round of no-match letters, formally referred to as “Decentralized Correspondence” (DECOR), informs employers that the information on an employee’s 2010 W-2 wage and tax statement does not match the name and/or Social Security number on file with the SSA, or lacks a SSN entirely. According to the SSA, the purpose of these letters is to obtain corrected information to help the SSA identify the worker to whom the earnings belong and to post the corrected amounts to the employee’s earnings record. SSA will not be sending out no-match letters to employers for the 2007 through 2009 tax years.

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Legislation that would expand the Family and Medical Leave Act (FMLA) to allow both private and federal employees to take parental involvement or family wellness leave was reintroduced on April 8. Specifically, the Family and Medical Leave Enhancement Act (H.R. 1440) would permit employees to take time off from work to participate in their children’s or grandchildren’s school or community organization activities (such as parent/teacher conferences, scouting or sports events), attend regular medical/dental appointments, or attend to the needs of an elderly relative, such as visiting them in a nursing home. Notably, the bill would expand who would be considered an employee “eligible” to take FMLA leave. Under this legislation, the FMLA would apply to employers with 25 or more employees within the prescribed radius, not 50 as is the current law.

An employee eligible for leave under this bill would be entitled to take up to 4 hours of leave in any 30-day period, not to exceed 24 hours during any 12-month period. This leave is in addition to other types of permissible leave. An employee may elect – or an employer may require – the substitution of any accrued paid vacation leave, personal leave, or family leave for parental involvement and family wellness leave. In order to take this leave, an employee must provide the employer with at least 7 days’ notice or as much as is practicable. An employer may require certification related to such leave.

Rep. Carolyn Maloney (D-NY), the chief sponsor of the measure, also introduced this bill during the last Congressional session. That bill failed to advance. The reintroduced version is not expected to gain significant traction this year. 

Photo credit: lovleah

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A bill introduced in the Senate last week takes aim at employers who mistakenly classify employees as independent contractors. The Payroll Fraud Prevention Act (S. 770) introduced by Senators Sherrod Brown (D-OH), Tom Harkin (D-IA), and Richard Blumenthal (D-CT), would impose new reporting requirements on employers, increase penalties for classification violations, and establish new protections for workers who believe they have been misclassified.

Among other things, the bill would:

• Require employers to keep records that reflect the accurate status of each worker as an employee or non-employee and clarify that employers violate the Fair Labor Standards Act (FLSA) when they misclassify workers.
• Require employers to notify workers of their classification as an employee or non-employee.
• Increase penalties imposed on employers who misclassify their employees as independent contractors and are found to have violated employees' overtime or minimum wage rights.
• Create a website to inform workers about their federal and state wage and hour rights.
• Provide protections to workers who are fired or otherwise discriminated against as a result of their efforts to be reclassified as employees.
• Direct the DOL’s Wage and Hour Division (WHD) to conduct targeted audits of certain industries with frequent incidences of misclassifying workers.

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Update: As expected, on April 14 the House and Senate passed the budget bill, sending the measure to the President for his signature. The Senate rejected a proposed resolution that would have de-funded the Affordable Care Act.

The eleventh-hour budget deal reached on April 8, 2011 would impact a number of healthcare and employment-related programs. Overall, the Department of Defense and Full-Year Continuing Appropriations Act of 2011 (H.R. 1473), (pdf) commonly referred to as the continuing resolution (CR) to fund the federal government though September 30, 2011, cuts approximately $13 billion in appropriations from the President’s funding request for the U.S. Departments of Labor, Education, and Health and Human Services. Some initiatives are extended under the measure, while others are reduced or eliminated entirely. A full list of the program cuts can be found here. (pdf)

Health Care

Among other casualties (pdf) of the budget deal are two programs created by the Affordable Care Act – the Consumer Operated and Oriented Plan (CO-OP) and the Free Choice Voucher programs. The CO-OP program was designed to foster the creation of qualified nonprofit health insurance issuers that would have offered qualified health plans in the individual and small group markets. These plans were intended to compete with the private insurance market.

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Update: On April 13, 2011, Senators Jeff Merkley (D-OR), Mark Kirk (R-IL), Tom Harkin (D-IA), and Susan Collins (R-ME) introduced a companion bill (S. 811) in the Senate.

Rep. Barney Frank (D-MA) has once again introduced the Employment Non-Discrimination Act (ENDA) (H.R. 1397), legislation that would create comprehensive employment anti-discrimination protections for individuals based on their sexual orientation or gender identity. The bill, which was introduced with 111 cosponsors, would make it an unlawful employment practice for an employer:

(1) to fail or refuse to hire or to discharge any individual, or otherwise discriminate against any individual with respect to the compensation, terms, conditions, or privileges of employment of the individual, because of such individual's actual or perceived sexual orientation or gender identity; or

(2) to limit, segregate, or classify the employees or applicants for employment of the employer in any way that would deprive or tend to deprive any individual of employment or otherwise adversely affect the status of the individual as an employee, because of such individual's actual or perceived sexual orientation or gender identity.

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Except for intake of discrimination charges and appeals, evaluation of any charges that might necessitate a temporary retraining order or other immediate relief, and work on on-going litigation for which an extension has not been granted, the Equal Employment Opportunity Commission (EEOC) would essentially cease operations during the looming government shutdown. As discussed in the agency’s contingency plan in the event of lapsed appropriations, should a federal government shutdown occur:

• Staff will not be available to answer questions from the public, or to respond to correspondence from the public.
• While the EEOC will accept charges that must be filed in order to preserve the rights of a claimant during a shutdown, these charges will not be investigated.
• Insofar as the courts grant EEOC’s requests for extensions of time, EEOC will not litigate in the federal courts.
• Mediations will be cancelled.
• Federal sector hearings will be cancelled, and federal employees’ appeals of discrimination complaints will not be decided.
• Outreach and education events will be cancelled.
• No FOIA requests will be processed.

The agency estimates that out of approximately 2,600 EEOC employees, about 131 staff and contract personnel, many part-time or on call, will perform the agency’s limited functions.

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By Kimberly Yates

On April 5, 2011, the Wage and Hour Division of the U.S. Department of Labor published its final amendments to regulations interpreting the Fair Labor Standards Act of 1938 (FLSA) and the Portal-to-Portal Act of 1947.

The new regulations provide specific guidance pertaining to ownership of employee tips, a description of permissible tip pooling arrangements, and clarification of the required notice to a tipped employee concerning an employer’s intent to utilize the FLSA’s tip credit. The DOL explains the amendments were driven by a need to revise regulations that are out of date as a result of “subsequent legislation.” The final amendments to the regulations, which differ in some significant respects from those the DOL originally proposed in 2008, will be effective May 5, 2011.  Continue reading this entry at Littler's Wage & Hour Counsel. 

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The Department of Labor plans to continue scaled-back operations should the federal government shut down due to lack of appropriations. According to a memorandum (pdf) issued by DOL Solicitor M. Patricia Smith, in the event of a shutdown, the agency will retain approximately 1,650 out of 16,099 employees to carry out necessary functions and to “protect life and property.” The memorandum outlines the DOL’s shutdown plans that the Office of the Solicitor (SOL) has approved; includes documentation from the heads of the various DOL sub-agencies acknowledging that their agencies will generally cease operations, with some limited exceptions; and provides the SOL’s plan “for continuing a minimal level of activities sufficient to support the excepted activities of the Department under applicable legal standards.”

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The Department of Labor’s Employee Benefits Security Administration (EBSA) is considering whether and how to modify its current standards governing the electronic distribution of employee benefit plan disclosures, such as quarterly account statements, to plan participants and beneficiaries as required under the Employee Retirement Income Security Act (ERISA). Current standards mandate that plan administrators use delivery methods that are reasonably calculated to ensure actual receipt of such information. Under certain circumstances, the electronic transmission of plan documents is permissible. According to the EBSA, research suggests that public access and use of electronic media has increased substantially since the 2002 regulations allowing electronic distribution of plan disclosures were implemented. Therefore, the agency is issuing a request for information (RFI) (pdf) “to solicit views, suggestions and comments from plan participants and beneficiaries, employers and other plan sponsors, plan administrators, plan service providers, health insurance issuers, and members of the financial community, as well as the general public on whether, and possibly how, to expand or modify” the EBSA’s current electronic disclosure practices.

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Update: On April 14, 2011, President Obama signed this measure into law.

The highly contentious expanded 1099 information reporting requirement is a step closer to becoming law. On Tuesday, the Senate voted overwhelmingly in favor (87-12) of the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011 (H.R. 4), a bill that repeals the provision included in the health care reform law requiring employers to report all payments to corporations for goods or services of $600 or more. The legislation would also repeal a similar expansion of information reporting for owners of residential real estate who rent out that property, and increase the maximum amount of health care subsidy overpayments that an individual must repay. The House passed this measure last month.

Introduced by Rep. Daniel Lungren (R-CA), this bill has enjoyed a significant amount of bipartisan support. Since the reporting requirement’s inclusion in the Affordable Care Act, representatives of the business community as well as the IRS have criticized the move, claiming the reporting obligation would impose an undue administrative burden on all parties involved. Even President Obama during his State of the Union address called for the provision’s repeal. This legislation is expected to be signed into law within the week.

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On Friday the House of Representatives approved by a 223-196 margin the Federal Aviation Administration (FAA) Reauthorization and Reform Act of 2011 (H.R. 658) without adopting a number of controversial union-related amendments to the measure. As expected, the chamber narrowly rejected by a vote of 206-220 a bipartisan amendment (pdf) offered by Reps. Steven LaTourette (R-OH) and Jerry Costello (D-IL) that would have stricken from the bill a provision that repeals the contentious new National Mediation Board (NMB) election rule. This rule, which took effect on July 1, 2010, changed the agency’s 75-year-old representation election policy by basing the voting outcome on the majority of those who actually vote, effectively making it easier for employees in the rail and air industries to unionize. The long-standing prior approach based the voting outcome on a majority of employees eligible to vote in the representation elections. As a result, employees choosing not to participate were effectively viewed as “no union” votes. Section 903 of the FAA bill restores the original voting procedure. In September 2010 the Senate failed to pass a resolution that would have accomplished the same end. Although the House has allowed the repeal language to remain in the FAA bill, the provision faces tougher odds in the Senate, which has already approved its own FAA reauthorization bill that does not include this provision. Additionally, the President has threatened to veto any legislation that would change the election rule.

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