From the legal perspective, the Obama Administration’s promise of transformational change has been making its presence felt in the employment law area. There’s more here than the anticipated effects of the recent health care bill that was signed into law last week.
For starters, there are new laws. Some of those laws are good news for employers, for example, the Hiring Incentives to Restore Employment (HIRE) Act. Our economy can’t run on all cylinders until unemployment is brought under control. Incentives that help put people back to work are a good thing. HIRE helps employers by allowing them to retain the employer portion of the Social Security tax that is ordinarily remitted. It improves cash flow.
Along with new laws, the current administration has ushered in new interpretations of existing laws. Dozens of wage and hour law opinions favorable to employers that were issued in the waning hours of the Bush Administration were withdrawn shortly after the new president was sworn in. Depending on which side of the discussion you are on, you might say that was bad.
When court decisions ran counter to administration policy, such as in the Lilly Ledbetter case, new legislation was passed to address the issue. The Lilly Ledbetter Fair Pay Act of 2009, for example, amends the Civil Rights Act of 1964, and basically resets the statute of limitations for the filing of equal-pay lawsuits with each new paycheck. Previously, an employee had 180 days to file suit from the day they first received “unequal” pay. Since years often passed before someone would try to sue for equal pay, the statute of limitations, or the time the law provided to file a suit had long passed. Now, the statute of limitation resets with each new paycheck. The date is no longer static. It’s rolling.
The administration has pumped up the budget for the Equal Employment Opportunity Commission (EEOC), increasing it 7 percent over 2009. A chunk of that money has been spent on enforcement hiring. The EEOC is now proactively pursuing their own claims against employers at a rate we’ve never seen before. They are not merely reacting to complaints brought by employees. They are finding causes of action to file against employers on their own. Popular areas are minimum-wage violations, working off the clock violations, and failure to compensate properly for overtime hours. The commission has also made it easier than ever before for employees to file claims against employers. They can now start the filing process online.
Earlier this week President Obama announced two recess appointments to the National Labor Relations Board, one day after Congress adjourned for the Easter recess. It is expected that these recess appointments could give the board time to engage in significant rulemaking given the political makeup of the board. The term of the only Republican on the board is set to expire in August, leaving a three-member quorum, all of whom are pro-labor Obama appointees. The results could be downright ugly if you’re a business owner.
Altogether, these employment law changes will have a profound effect on rebuilding the American middle class. Unfortunately, these changes are not without cost. It’s a cost that will be borne by American businesses.