Twelve Timely Topics for '12

 

What better way to start a new year than with a wedding! As a result of our combination with the former firm of Schottenstein Zox & Dunn, Ice Miller LLP now has offices in Chicago; Cleveland; Columbus; DuPage County, Ill.; Indianapolis and Washington, D.C. Our Labor and Employment Group now includes over 40 lawyers and other professionals who are experienced in guiding public and private employers through the minefield of federal, state and local employment laws governing employers in these jurisdictions. We look forward to using our added depth and breadth of employment law experience to help you in the coming year.

 

In less positive news, the Mayan calendar predicts that the world will end on Dec. 21, 2012. For those of you who may be Mayan Doomsday "deniers" – or who simply want to be covered until then – we offer the following list of 12 labor and employment developments Informed Employers should be aware of heading into 2012:

 

  1. NLRB Ambush Election Rules: On Dec. 22, 2011, the National Labor Relations Board (NLRB) voted by a 2-1 margin to change election procedures in effect for over 70 years to dramatically limit the ability of employers to respond to a union organizing drive. The final rules are scheduled to take effect April 30, 2012, but are the subject of legal challenges by the U.S. Chamber of Commerce and other pro-business groups. If implemented, these new procedures will likely cut in half the amount of time employees have to consider the merits of unionization before an election is held. Proactive employers should begin educating their employees and training their supervisors NOW to avoid being ambushed when these new procedures take effect.

 

  1. Employee Rights Poster: In another early holiday gift to organized labor, the NLRB announced in August 2011, that most private-sector employers would be required to post a notice advising employees of some, but not all, of their rights under the National Labor Relations Act (NLRA). Due to another legal challenge pending in federal court, the posting date has been postponed twice, now to April 30, 2012. Employers who are interested in providing employees with the "rest of the story" concerning their rights under the NLRA should contact us to discuss whether to post a counter-notice describing some of the rights the NLRB chose to leave out.

 

  1. Expansion of Protected Characteristics: State and local governments across the country are adopting laws that prohibit employment discrimination on the basis of sexual orientation and, in some cases, transgendered status. Affected employers should update their discrimination and harassment policies accordingly. At the federal level, although sweeping legislation is unlikely to get through Congress during this election year, the U.S. Equal Employment Opportunity Commission (EEOC) has signaled its intention to reinterpret existing civil rights laws in a way that will give increased protection to protected characteristics not specifically covered by those laws, including discrimination on the basis of unemployment status and more aggressive prohibition of discrimination against individuals with a criminal background.

     
     

 

  1. Worker Misclassification Initiatives: In September 2011, the U.S. Department of Labor (DOL) and Internal Revenue Service (IRS) announced a joint initiative, which included both agencies and officials representing 11 different states, to coordinate their efforts to seek and punish employers that improperly classify workers as independent contractors or consultants, rather than treating them as employees subject to payroll taxes and other state and federal regulations. Later that same month, the IRS announced a Voluntary Classification Program that would lower the penalties for employers that self-reported improperly classified workers under certain limited circumstances. We expect these initiatives to continue in greater force in 2012, as the increasing deficits cause federal and state governments to look to maximize their tax revenues however possible.

 

  1. Home Health Care Overtime: In December 2011, the DOL issued proposed regulations that would, for all practical purposes, eliminate the Fair Labor Standards Act (FLSA) minimum wage and overtime exemption for many home health care workers. Currently, home health care workers who provide companionship services to the elderly or those who are medically infirm are not eligible for minimum wage or overtime under the law. The proposed regulations eliminate the use of this exemption by any third party employer of home care workers. That means home care workers who are employed by a business or person other than directly by the individual, family or household ultimately receiving the services will be entitled to minimum wage and overtime. To the extent an employer providing home health care, including in-home staffing agencies, is not already doing so, the proposed regulations will require more diligent tracking of hours, increased retention of records, and the payment of minimum wage and overtime. Expect activity from the DOL after February 2012 as it is accepting comments on the proposed regulations until then.

 

  1. The Patient Protection and Affordable Care Act (PPACA), a/k/a ObamaCare: The constitutionality of certain aspects of health care reform is now in the hands of the U.S. Supreme Court. Arguments are scheduled in March and a decision will likely be issued by June. One of the biggest issues to be decided is whether Congress had the power under the Constitution to mandate all persons obtain health care insurance or face penalties. The High Court’s decision on this law will affect the way health care is delivered by every employer and how it is obtained by every person. Employers with 50 or more employees must offer insurance or pay a fee of $2,000 per full-time employee in excess of 30 employees if they do not offer coverage. Employers will need to monitor this case, as the effective date of 2014 will be fast approaching. (Unless, of course, Congress or a new administration overhauls it completely in 2013.)

 

  1. Are Pharma Reps Selling or Are They Marketing?: In an effort to resolve a debate dividing federal courts, the U.S. Supreme Court will consider whether pharmaceutical sales representatives are exempt from overtime pay under the FLSA. The High Court agreed to hear an appeal from the Ninth Circuit’s decision in Christopher v. SmithKline Beecham Corp. and resolve this issue, as the Second Circuit earlier reached a different conclusion about the exemption status. According to the FLSA, the outside sales exemption applies to any employee whose primary duty is making sales or obtaining orders or contracts for services. According to DOL regulations, promotional work may or may not be considered as exempt outside sales work. The Ninth Circuit held that even though pharmaceutical sales reps do not actually sell anything (they are actually prohibited by FDA regulations from doing so), they are performing sales work. The Second Circuit held just the opposite. Depending on the outcome, the decision could impact employers outside of the pharmaceutical industry. At a minimum, employers with outside salespersons should audit their wage and hour practices now.

 

  1. Right to Work: At the state level, Indiana employers should prepare for "Right to Work, Part II," as the General Assembly considers for a second straight session whether to pass legislation prohibiting compulsory unionism in Indiana– this time with the support of Governor Daniels. Although this legislation would not impede the right of employees to form or become members of unions voluntarily, it would permit individuals in unionized workplaces to choose for themselves whether to join and pay dues to the union, which is seen as an existential threat by organized labor. Indiana employers might expect increased union militancy both in the State Capitol and on their shop floor until this legislative battle is over.

 

  1. Personal Information: Employers in the Illinois should be aware of amendments to the Illinois Personal Information Protection Act which took effect Jan. 1, 2012. They provide additional safeguards and penalties relating to the protection of personal information, including prevention and breach. Any person, entity or third-party involved in the collection of customer data covered by this legislation is subject to a civil penalty of $100 (capped at $50,000) per individual whose personal information was not disposed of properly and the Attorney General may bring a civil suit to impose a penalty.

 

  1. Social Media: This topic is a seemingly never-ending employment compliance minefield. Do you use social media at the workplace? Is your company connected by way of LinkedIn, Facebook, YouTube or Twitter? When are these sites going to pass away in favor of a new, hotter social media trend? Employers should resolve for the new year to review their social media policies and practices to ensure that social media is not being used improperly during the hiring process, that employee conduct online is properly regulated (especially with the NLRB’s over-reaching views of protected activity by employees on social media) and finally, to make sure employees are properly compensated if they are required to work at home on posts, blogs or tweets.

 

  1. Meal and Break Periods: California, which requires meal and break periods for most employees, has been the hotbed of class action litigation over these issues. But, plaintiff’s lawyers are bringing collective actions under the FLSA in other states for meal and break issues. This may be a trend, as plaintiffs are attacking off-the-clock work that includes automatic deductions for unpaid meal or break periods even though employees are required to work through them. Check your work policies and practices regarding meal and break periods. Meal periods can be uncompensated time if employees are given at least 30 minutes for the meal period and are not completely disengaged from work during that time. Eating at the workstation waiting on work is not disengaged from work. And, if the meal period is automatically calculated every pay period, make sure that employees are not working through.

 

  1. What’s next for Ohio Employers: Have you heard enough about Senate Bill 5? After voters rejected public-sector collective bargaining reform, it is not clear where these efforts will go in 2012. Stay tuned, but it’s business as usual for public sector collective bargaining. Unions in the public sector spent a lot of money to defeat Senate Bill 5, so much so that We Are Ohio, the coalition in support of the referendum, donated portions of its $700,000 plus fund balance to charity. Also, Ohio employers should be mindful that the state’s minimum wage is $7.70 for 2012.

 

If you have questions regarding any of these developments, you may contact any member of Ice Miller's Labor and Employment Group.

 

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader must consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.