Tuesday, March 30, 2010

New Mexico to delete question about convictions from state application

In what is hailed as leveling the playing field for individuals with criminal convictions, New Mexico has passed legislation that prevents public employers from asking job applicants about their criminal background on the initial application for employment. SB-254, sponsored by state Senator Clint Harden, amends the New Mexico Criminal Offender Act and removes the question about felony convictions from the State Personnel Office application. Public employers will have to wait until the interview phase before raising the issue.

The intent is to prevent employers from immediately disqualifying a person with a conviction, even if the person is qualified. Harden said the bill does not prevent employers from asking about conviction status, nor does the bill prevent criminal background checks. “By delaying the inquiry on conviction history until the interview process, previously incarcerated persons will be on a level playing field with other candidates with similar qualifications.” Harden noted that the question on job applications can intimidate and discourage individuals who have been incarcerated from applying for jobs, even if they are qualified for the position.

Even though public employers have to wait beyond the initial application before inquiring about an applicant’s criminal background, SB-254 does not paint them into a corner. Under the state’s Criminal Offender Act, employers can deny anyone a position based on “moral turpitude,” which could include everything from drug dealing, to sex offenses, to other violent crimes. The Act is very clear about preventing people with child abuse or child-related sex offenses from working in any public childcare facility. There is also a special exemption for law enforcement agencies.

Will SB-254 have a positive impact on the employment of individuals with criminal backgrounds? Will the rejection of a job applicant with a criminal background be blatant, occurring during the face-to-face interview? Will private employers see this as something to emulate and delete the box asking about felony convictions from their applications?

SB-254 was signed by Governor Bill Richardson on March 8 and becomes effective on May 19, 2010.

Tuesday, March 23, 2010

With health care reform bill signed, the legal challenges begin

Thirteen states have filed suit alleging that the Patient Protection and Affordable Care Act (H.R. 3590) signed into law by President Obama today is unconstitutional. The Attorneys General from South Carolina, Nebraska, Texas, Utah, Louisiana, Alabama, Colorado, Michigan, Pennsylvania, Washington, Idaho, and South Dakota joined a lawsuit filed by the state of Florida in the US District Court for the Northern District of Florida, alleging the federal government has violated the states’ rights as “sovereigns and protectors of the freedom, health, and welfare of their citizens and residents.” In addition, the suit claims the health care law infringes upon the constitutional rights of residents of the states by mandating that all citizens and legal residents have qualifying health care coverage or pay a tax penalty. By imposing such a mandate, the law exceeds the powers of the federal government under Article I of the Constitution and violates the Tenth Amendment. Additionally, the tax penalty required under the law constitutes an unlawful direct tax in violation of Article I, sections 2 and 9, the AGs allege. The lawsuit further asserts that the law infringes on the sovereignty of the states by imposing onerous new operating rules that the states must follow and by requiring states to spend billions of additional dollars without providing funds or resources to the state to help subsidize the cost of implementation. Virginia’s attorney general Ken Cuccinelli filed a separate lawsuit on behalf of his state.

Meanwhile, moments after President Obama signed the bill, the Thomas More Law Center, a Christian legal advocacy group, filed its own complaint challenging the constitutionality of the legislation in a federal district court in Michigan, seeking to permanently enjoin its enforcement. “Let’s face it,” said Richard Thompson, president and chief counsel of the Law Center in a press release announcing the lawsuit, “if Congress has the power to force individuals to purchase health insurance coverage or pay a federal penalty merely because they live in America, then it has the unconstrained power to mandate that every American family buy a General Motors vehicle to help the economy or pay a federal penalty.”

Monday, March 22, 2010

Employer responsibilities under the new health care bill

The House of Representatives passed health care reform legislation on March 21st, in a 219-212 vote on H.R. 3590, the Patient Protection and Affordable Care Act. The Senate is expected to take up the Health Care Reconciliation Act, with the goal of sending a final package to the White House, before the next scheduled Congressional recess on March 29.

Among its many provisions, the bill affects employers in a variety of ways. Starting in 2014, certain employers will be assessed a $2,000 per full-time employee, although the first 30 employees will be excluded from the assessment. This affects employers with more than 50 employees, hat do not offer coverage and have at least one full-time employee receiving a premium tax credit.

Employers with more than 50 employees, that offer coverage, but have at least one full-time employee receiving a premium tax credit, will pay the lesser of $3,000 for each employee receiving a premium credit, or $750 for each fulltime employee.

Employers with 50 or fewer employees are exempt from penalties.

Also beginning in 2014, employers that offer coverage will be required to provide a free choice voucher to employees with incomes less than 400% of the Federal Poverty Line, whose share of the premium is greater than 8% but less than 9.8% of their income, and who choose to enroll in a plan in the Exchange. The voucher amount is equal to what the employer would have paid to provide coverage to the employee under the employer’s plan and will be used to offset the premium costs for the plan in which the employee is enrolled. Employers providing free choice vouchers will not be subject to penalties for employees that receive premium credits in the Exchange.

Employers with more than 200 employees must automatically enroll employees coverage offered by the employer. Employees may opt out of coverage.

Monday, March 15, 2010

Job-related credit checks: Good for the gander? Depends on who the goose is

Here is a scenario that has played out all over the country:

You have exhausted your savings, cashed out your 401(k), your bills have not been getting paid, your mortgage is past due, and this all stems from losing your job in one of the worst economic climates since the Great Depression. Alas, you finally secure a job interview and, in fact, they are about to offer you a job. However, that employer just ran a credit check on you, and so back to the unemployment trenches you go.

Does that sound familiar? It should, as it is a problem facing applicants and employers across the country. There is certainly nothing completely new about an employer running job-related credit checks on employees—it has been going on for years. What is new is the large number of unemployed (national rate is 9.7%), and the growing list of individuals that are up to their ears in debt due to loss of employment. Businesses continue to hire at a slow pace, and so the unemployed continue to dig deeper into debt, and when they actually get an interview, they are faced with their potential employer showing them the door because the debt they incurred from losing their old job is now preventing them from getting a new job.

This is a vicious cycle, indeed. In a research report conducted by the Society for Human Resource Management in January of 2010 on conducting credit background checks, 433 randomly selected HR professionals from SHRM’s membership were polled and some of the questions and results were as follows:

  • Does your organization, or an agency hired by your organization, conduct credit background checks for any job candidates by reviewing the candidates’ consumer reports? 13% for All Job Applicants; 47% for Selected Job Applicants.
  • If a credit background check revealed information that presented the job candidate’s financial situation negatively, what types of information are MOST likely to affect your decision to NOT extend a job offer? Current outstanding judgments, 64%; Accounts in debt, 49%.
  • What is the primary reason that your organization conducts credit background checks on job candidates? To reduce/prevent theft, 54%; To reduce legal liability for negligent hiring, 27%.

When taken as a whole, these are pretty stark numbers, especially when 60 percent perform some type of credit background check on its applicants. Some states have attempted to curb this practice. The Oregon House, for example, passed SB 1045, the Job Applicant Fairness Act, which will restrict job-related credit checks and is designed to make it easier for applicants to get back to work. According to Representative Tina Kotek (D-N/NE Portland), "Oregonians are out of work, and some have fallen behind on mortgage or car payments. This makes finding employment even more important," said the bill's chief sponsor in the House. "It simply makes no sense to essentially punish a job seeker for not having a job."

Many states, as well as Congress, in fact, are looking into stopping this process. Yet, for some, mainly businesses, the question is “Why?” Is it wrong for employers to not want to hire an individual who has outstanding judgments, or because the employer feels that someone in heavy debt may potentially be more apt to engage in theft? In all factuality, businesses are in the business of making money, first and foremost. Potential threats from theft/embezzlement, as well as any legal liability from negligent hires, will certainly put a dent in any businesses’ bottom line, right? And no one would begrudge a business for not wanting to actually make, not lose, money.

So which side is right? It depends on which side of the fence you are on. And it is not just employers verses employees. Many employees working at these businesses have a stake in making sure that their company makes money, too, so they may also favor keeping these credit checks alive. The simple truth is, however, that those out of work need work, and legislation like that passed by Oregon is an attempt at making it easier for these individuals to climb out of debt. Employers, however, certainly have a right to worry that an attempt to help these unemployed individuals by banning credit checks won’t present troubling consequences for their business in the future.

Friday, March 12, 2010

EEOC Chair’s testimony in favor of Paycheck Fairness Act underscores enhanced detection and enforcement

Stuart J. Ishimaru, Acting Chair of the EEOC, testified before the Senate Health, Education, Labor and Pensions (HELP) Committee in support of the Paycheck Fairness Act (S 182/HR 12), and his remarks underscore the ways in which this legislation, if enacted, would enhance the federal agency’s ability to detect and prosecute wage discrimination. The HELP Committee’s hearing, held March 11, was dubbed “A Fair Share for All: Pay Equity in the New American Workplace.”

What would the new law do? The Paycheck Fairness Act, which has already passed the House, would allow prevailing plaintiffs to recover compensatory and punitive damages under the Equal Pay Act (EPA), which currently provides only for liquidated damages (fixed and limited) and back pay awards. In addition, the bill would allow EPA lawsuits to proceed as class actions, as governed by the Federal Rules of Civil Procedure. The bill also would modify the EPA’s requirement that men and women receive equal pay for equal work in the “same establishment.” Its language clarifies that employees would be deemed to work in the “same establishment” if they work for the same employer at workplaces located in the “same county or similar political subdivision of a state.”

The bill would also prohibit employers from retaliating against employees who have “inquired about, discussed or disclosed the wages of the employee or another employee.” But the retaliation provision does not apply to instances where an employee who has “access to the wage information of other employees as a part of that employee’s essential job functions” discloses those wages to individuals who do not otherwise have access to such information (i.e., human resource professionals). Disclosures can be made in response to a complaint or charge or in furtherance of an investigation.

Additionally, the Paycheck Fairness Act would clarify when employers may assert as an affirmative defense that a pay differential (unequal pay for equal work) is based on “factors other than sex.” Employers asserting the affirmative defense must prove those factors are “job-related” and “consistent with business necessity.”

Ledbetter Fair Pay Act meant progress to the EEOC. In his prepared remarks, Chair Ishimaru noted that the Lilly Ledbetter Fair Pay Act of 2009, which supersedes the Supreme Court’s decision in Ledbetter v Goodyear Tire & Rubber Co, Inc, was signed into law on January 29, 2009. Under Ledbetter, a compensation discrimination charge was required to be filed within 180 days of a discriminatory pay-setting decision (or 300 days in jurisdictions that have a local or state law prohibiting the same form of compensation bias), which Ishimaru called “an unrealistic expectation given the secrecy that usually surrounds pay decisions.”

The Ledbetter Act restores the EEOC’s pre-Ledbetter position that each paycheck delivering discriminatory compensation is an actionable wrong under federal equal employment opportunity statutes, regardless of when the discrimination began, Ishimaru pointed out. As noted in the Act, the statute recognizes the “reality of wage discrimination” and restores “bedrock principles of American law,” he said.

Increase in sex-based pay bias charges. Chair Ishimaru advised committee members that over the past thirteen years – from fiscal year (FY) 1997 through FY 2009 – the EEOC has received a total of 30,312 charges alleging sex-based pay bias in violation of the EPA and/or Title VII of the Civil Rights Act of 1964. This works out to an average of 2,332 charges per fiscal year (out of an average of 82,022 total charges per fiscal year over the same period), he noted.

Over the last three fiscal years, according to its Chair, the EEOC has experienced a 30-percent increase in gender-based wage bias charges. In FY 2009, the EEOC received 2,252 sex-based pay discrimination charges out of a total of 93,277 charges. Of those, 944 charges specifically alleged EPA violations – roughly one percent of total receipts. Through its administrative enforcement process alone in 2009, the EEOC obtained nearly $19 million in monetary benefits for wage discrimination victims, Ishimaru said.

Overcoming the problem of secrecy. “A number of reasons may account for the relatively small number of wage claims the EEOC receives, but the single biggest challenge the EEOC faces in identifying wage discrimination is the secrecy that surrounds pay information in the workplace,” the EEOC Chair said.

Easier to establish EPA violations. “The Paycheck Fairness Act provides essential tools toward realizing the promise of equal pay, and I look forward to working with the Senate to strengthen and move forward on this important legislation soon,” Ishimaru said in his statement to the HELP Committee. “Passage of this legislation would make it easier to establish violations of the Equal Pay Act, by clarifying the affirmative defense for ‘factors other than sex,’ and refining the ‘establishment’ requirement to comply with commonsense notions of how employers set wages.

Enhanced data collection = enhanced detection. The EEOC Chair said that the Paycheck Fairness Act would enhance his agency’s data collection capabilities, allowing the EEOC “to detect violations of the law and more readily engage in targeted enforcement of equal pay laws.”

Bigger and better remedies. He also noted that the bill “would enhance remedies to allow for compensatory and punitive damages, putting gender-based pay discrimination on a more equal footing with pay discrimination on other bases such as race.” Moreover, the bill would allow class action claims to proceed under the Equal Pay Act and under the Federal Rules of Civil Procedure, he advised.

Employers, you see where this is going . . .

Utah backers of affirmative action ban abandon effort - for now

There is a new development to note as a follow-up to the March 10, 2010, post on this blog (“Another election year, another round of state ballot initiatives to ban affirmative action”). On March 11, The Salt Lake Tribune reported that supporters of the proposed ballot initiative to amend Utah’s constitution to ban affirmative action have abandoned their efforts, at least for this election year. A two-thirds majority vote in both state houses and the governor’s signature is required to put a constitutional amendment on the ballot in Utah. According to The Salt Lake Tribune, Jeff Hartley, a lobbyist for Ward Connerly’s American Civil Rights Institute, said their side decided to stand down due to a lack of necessary votes in the Utah House where the measure was pending.

Wednesday, March 10, 2010

Another election year, another round of state ballot initiatives to ban affirmative action

A measure that would ban state affirmative action programs in Arizona will be on the state's ballot in November 2010. On June 22, 2009, the Arizona Senate, in a 17-11 vote, approved the measure (H. Con. Res. 2019), which had been approved by the House on June 18 in a 32-18 vote. The proposal does not require the governor's signature to be on the ballot. While five other states have launched similar ballot initiatives through signature-gathering campaigns, Arizona is the first state to put such a measure on the ballot via legislative action.

California businessman Ward Connerly, founder and president of the American Civil Rights Institute, testified on June 10, 2009, before an Arizona House committee in favor of the putting the initiative on the ballot. A similar anti-affirmative action measure, also spearheaded by Connerly, was proposed but did not qualify to be on the ballot in Arizona for the November 2008 election because supporters of the measure failed to gather the minimum number of signatures required.

The measure would amend Arizona’s constitution to prohibit state universities, the state, and all other state entities (including cities, towns and counties) from discriminating against or granting preferential treatment based on race, sex, color, ethnicity or national origin "in the operation of public employment, public education, or public contracting." The measure allows exceptions to the prohibition when "bona fide qualifications based on sex" are "reasonably necessary" or when necessary to establish or maintain eligibility for any federal funding. In addition, it exempts court orders or consent decrees in force when the measure becomes effective.

Utah may not be far behind. Currently, a similar ballot measure is pending in the Utah House (H.J.R. 24). If passed in both houses and signed by Governor Gary Herbert, it could appear on the ballot as soon as November 2010. According to a February 12, 2010, article in the Desert News, Connerly helped the bill’s sponsor, Rep. Curtis Oda (R-Clearfield) present the proposal.

The 2010 Arizona ballot initiative is similar to initiatives that have been passed in California (1996), Washington state (1998), Michigan (2006) and Nebraska (2008). However, Colorado became the first state to reject, by an extremely narrow margin (50.7% to 49.2%), an anti-affirmative action ballot measure in the November 2008 election.

Similar anti-affirmative action measures were proposed, but did not qualify, to be on the November 4, 2008, ballot in Oklahoma, Missouri and Arizona because supporters of those measures failed to get enough valid signatures by the respective deadlines. In April 2008, supporters of the measure in Oklahoma filed a motion to withdraw their proposal from consideration due to their failure to get the required 138,970 valid signatures. The Oklahoma secretary of state's office counted 141,184 signatures on the petition but found a large number of duplicates. Supporters of the Missouri ballot initiative failed to turn in signatures to the Missouri Secretary of State by the required May 4, 2008, deadline. (Last month, a group affiliated with Connerly in Missouri filed to withdraw a similar proposed initiative for the 2010 ballot rather than face an ACLU lawsuit challenging the language of the initiative as unconstitutional and unfair and misleading in violation of Missouri law). In 2008, proponents of the measure in Arizona failed to gather the 230,047 minimum number of signatures required. According to an August 21, 2008, statement issued by then Arizona Secretary of State Jan Brewer, supporters "initially turned in 334,735 petition signatures of which 9,148 were deemed invalid after the verification and processing of petitions by the Secretary of State's office and county recorders. A random sample of five percent of signatures was then processed by the county recorders to verify voter registration and petition signatures. That process ultimately removed another 6,532 signatures as being invalid."

All of these ballots measures were spearheaded by Connerly, who knows from experience that once such measures get on state ballots, their chances of succeeding are high. It seems Connerly and his allies have found going directly to state legislatures is a more effective way, compared to signature gathering, to get these measures before voters.

Monday, March 8, 2010

The new normal: an army of freelance workers?

As reported by Jim Axelrod of the CBS Evening News on March 6, the number of freelance workers has exploded since the start of the “Great Recession” in 2008. One-third, or 40 million workers, now call themselves freelancers. College graduates are lamenting the near total lack of job opportunities, so they’re taking on freelance work under the laudable goal not to remain idle or join the ranks of the unemployed.

“We are headed for a lower wage economy. We’ve had the best benefits, health care, retirement, that anybody on the globe had access to. But we’re no longer in that bubble, that special position, we were 20 years ago,” said CEO John Challenger of Challenger, Gray, & Christmas, an outplacement services company.

While full-time workers won’t necessarily go away, what will change is the way companies will get specific tasks accomplished; by deploying an army of freelancers who will get the job done and then leave, said Sarah Horowitz, founder of the Freelancers Union, a national membership organization offering insurance and retirement benefit to its members. Its rolls swelled by 50,000 since the start of the recession, and membership is expected to double again by 2012. Bringing in freelancers, contract workers, independent contractors, whatever the name may be, holds down the number of full-time workers and all the costs associated with their full-time status.

The report concluded with this rather chilling question: What if this way of doing business becomes the rule for the long run?

The report, as televised, is available here:

Watch CBS News Videos Online

Friday, March 5, 2010

Is age discrimination the "hot topic" we’re not talking about?

There are always numerous issues swirling throughout employment law, fighting to be the “hot topic” of discussion, be it health care, immigration or any other issue that sits daily on an employer’s plate. When the subject of discrimination comes up, most people probably think of race or sex. Not age. But think about the number of employees who would fall into the “baby boomer” category. Those individuals – born between 1946 and 1964 – have spent a significant number of years in the workforce. It becomes easy to see why age discrimination would have such a significant impact on the workplace but is it a hot topic?

According to EEOC statistics on workplace discrimination, the number of age-based charges filed in 2009 was the second highest ever. Out of the total number of charges filed (93,277), 24.4% or 22,778 were age discrimination charges. And according to a new survey by CareerBuilder, a significant number of mature workers are putting off retirement plans because of our less-than-stellar economy. The survey found that more than seven in ten workers over the age of 60 who said they were putting off their retirement were doing so because they can’t financially afford to retire. Survey respondents gave other reasons for delaying retirement, including not wanting to leave their job or workplace because they enjoy it and the need for health insurance and other benefits, but it’s important to consider what impact mature workers who remain employed will have on the workforce.

The EEOC found the issue of age discrimination compelling enough to have held a public hearing highlighting the “devastating impact” of age discrimination. The hearing included discussion on recent developments under the Age Discrimination in Employment Act (ADEA), including the effect on older workers of widespread layoffs, threats to employee benefits, and recent US Supreme Court decisions including Kentucky Retirement Sys v EEOC, 14 Penn Plaza LLC v Pyett, and Gross v FBL Fin Servs Inc.

“Whether trying to retain or obtain a job, older workers may find themselves susceptible to unlawful age-based stereotypes and discrimination,” said Acting EEOC Chairman Stuart Ishimaru. “Employers’ conscious or unconscious stereotypes about older workers may cause them to underestimate the contributions of these workers to their organizations. As a result, older workers may be disproportionately selected for layoffs during reductions-in-force. To then make matters worse, evidence suggests that older workers who lose their jobs may have more difficulty finding another job than their younger counterparts, due to age discrimination.”

The EEOC is now seeking comments for a proposed rule addressing the meaning of “reasonable factors other than age” (RFOA) under the ADEA. This follows a Notice of Proposed Rulemaking (NPRM) on disparate impact under the ADEA. In addition to requesting comments on its substance, the prior NPRM asked whether the Commission should provide more information on the meaning of the RFOA defense. Most commenters supported addressing the issue and the EEOC is publishing a new NPRM on RFOA.

These are significant developments but have they made age discrimination the hot topic of discussion?

Wednesday, March 3, 2010

Scary healthcare scenario: companies drop insurance, don’t tell employees

In an environment in which small business owners are struggling not only to meet payroll, but also to pay for employees’ increasingly expensive healthcare premiums, a disturbing practice has been reported as being on the rise: companies that drop employees’ healthcare coverage, but don‘t bother to tell them.

In a newsobserver.com article, Kristin Milam of the North Carolina Department of Insurance noted that NC state law requires that companies give their workers 45 days’ notice if they're going to drop coverage. According to Milam, employees of businesses that don't follow the law often find out their coverage has lapsed until they go to the doctor's office.

One high-profile case mentioned in the article was that of the CEO of Pace Airlines, Charles Rodgers, who was charged with terminating health insurance premiums for his 337 employees without warning. In North Carolina, Milam said, when the insurance department gets such a complaint, investigators give the employer a chance to reinstate the insurance and cover the back premiums so there's no gap in coverage. If they don't, the state pursues a case against the business.

If employees find themselves victims of such a scenario, they can check with the insurance department of their own state, which will often work with employees, walking them through their options or, as an alternative, contact the Employee Benefits Security Administration in the US Department of Labor.

This trend should serve as yet another example that--while the health care bill on the table isn’t perfect--employers and employees simply can’t afford to maintain the status quo.

Monday, March 1, 2010

Labor wonders where all its friends went

These days, organized labor might be forgiven for thinking of Ernie Ford whenever they think of their Democratic allies in Congress.

Or should that be “allies?” Probably, at least from the perspective of organized labor, who shelled out over $400 million in the last election cycle, helping Democrats to roll to a huge majority in both houses of Congress and, of course, to elect Barack Obama to the Presidency.

And what did all those dollars get? So far, it appears to have gotten labor a whole lot of nothing. Congress and the Obama administration didn’t make the Employee Free Choice Act – one of labor’s biggest wants – a priority and now, with the loss of the supermajority, that ship appears to have sailed. The President has failed to push through the nomination of long-time labor attorney Craig Becker to the NLRB. And, while muddling their way through the health care debate, the Democrats found time to consider an excise tax that unions feared would disproportionately affect union members.

All of which brings to mind Ford’s lyric, “You load sixteen tons, what do you get? Another day older and deeper in debt.”

But, as the AFL-CIO begins its annual meeting on Monday, March 1st, it’s not all gloom. The Administration has offered hints of a more pro-labor agenda.

In the Obama Administration’s Middle Class Task Force report, issued on February 26, the White House declared its commitment to passing EFCA, calling it a crucial component of providing good, quality jobs. The Administration has relented on its plan for the excise tax, pushing consideration of the tax until 2018. And the Administration has made it more-or-less official policy to encourage executive agencies to enter into Project Labor Agreements, which allow unions to set the terms and conditions of employment on construction sites.

So, with the midterm elections in sight and given the inconsistent support from their Congressional allies, where does Labor go from here?

Some have suggested that Labor needs to have its own agenda and that relying on the Democrats to advance their goals has been fruitless at best. Others suggest that its time for Labor to direct their muscle at faltering Dems, like Arkansas Senator Blanche Lincoln, who opposed Becker’s nomination and EFCA.
The meetings will likely shed some light on Labor’s direction. But with AFL-CIO president Richard Trumka stating that “enough is enough,” and demanding that the Democrats stand up to Republicans, no one should be surprised if Labor decides to bite back at their political "allies."