WORKPLACE REGULATION: Policy Battles to Continue at State and Local Level

August 29, 2017

The Association's State and Local Committee is monitoring legislation, creating policy networks, and developing products to influence the shape of policy across the country as activists shift their attention to the states on a litany of HR Policy priority issues.  Led by Teri Plummer McClure, Chief Human Resources Officer of United Parcel Service, Inc., and now comprised of 18 companies, the committee is partnering with Littler Mendelson's Workplace Policy Institute to monitor and analyze legislation on topics of importance to HR Policy Members.  The committee will soon release a series of resources for key policymakers in state capitals regarding the real-world effects of bills they are considering, starting with a white paper analyzing gender pay laws recently enacted in states such as Massachusetts and Oregon.  
State and Local Activity  Key issues to watch at the state and local level include, among others: 
  • Paid Leave:  With federal efforts seeming to have stalled, the march to pass new and expand current paid leave benefit mandates continues in state and local legislatures.  Proponents have seen numerous successes: in 2011, Connecticut was the first state to pass a paid sick leave law.  There are now 40 such measures across the nation, including in 7 states, 2 counties, and 31 cities.  Paid family and medical leave, another expanding paid leave trend, also continues to gain popularity.  Paid leave advocates have openly claimed this movement to be a strategy to force federal legislative action, bringing the question of federal preemption to the forefront. 
  • Preemption of Local Laws:  States are increasingly using preemption legislation to standardize a variety of issues and hit the brakes on proliferating laws at the municipal and county level, including wage and hour provisions. 
  • Pay Ratio:  San Francisco and Portland, Oregon have each instituted mandates related to pay ratio.  At the state level, pay ratio-related proposals have recently been seen in Hawaii, Minnesota, Rhode Island, Connecticut, Illinois, and Massachusetts. 
  • Joint Employer:  On the positive side, nine states this year have passed legislation specifying that a franchisor is not the employer of its franchisees or its franchisees' employees.  The popularity of such measures is testimony to the widespread confusion as to the nature of the joint employer relationship.  In the absence of clarity at the federal level, this trend is expected to continue. 
  • Gender Pay:  While gender pay continues to be a hot topic, a new prohibition intended to eradicate disparities has become increasingly popular: the banning of employer inquiry into salary history during the interview process and in making hiring decisions.  States and localities that have passed such measures this year include Massachusetts, Delaware, Oregon, New York City, and Philadelphia, with more considering a ban. 
  • Scheduling Rights:  Mandates pertaining to predictive scheduling are gaining traction in more liberal states and localities such as San Francisco, Seattle, New York City, and Oregon, with similar legislation being considered in an additional twelve states and four municipalities. 
  • Right to Work:  Missouri became the 28th right-to-work state this year, but another right-to-work measure failed after weeks of intense debate in the Republican-held New Hampshire House of Representatives. 

Overtime Rule  This fall, the Labor Department will be reviewing all of the comments it receives on the extensive set of questions it asked on how the agency should revise the Obama-era overtime rule.  Importantly, the request for information does not start the formal rulemaking process for updating the rule or describe a proposed replacement.  In November 2015, a federal judge in Texas blocked the Obama administration's final overtime rule from taking effect, a decision which is now on appeal in the Fifth Circuit.  In June, DOL told the appeals court that it will not issue a new proposed rule until after the court affirms the agency has the authority to use an employee's salary as a basis for determining overtime eligibility.  Public comments are due on September 25, 2017, and HR Policy intends to submit a comprehensive response. 

Republican Majority Finally Emerging at NLRB  After a slow start, the administration is finally moving towards restoring balance to the National Labor Relations Board—a task that, given the extent and number of the Obama-era NLRB's decisions, will not happen overnight.  The Senate will consider the final Trump nominee to the NLRB, William Emanuel, after returning from the August recess.  In confirming Emanuel, the Senate would shift the NLRB majority over to the Republicans, who are now tied 2-2 with Democrats on the board after NLRB Member Marvin Kaplan's nomination in early August.  However, another Republican vacancy will occur in December, when Chairman Phil Miscimarra steps down, which means the administration and Senate will need to act quickly to retain the Republican majority.  In November, the term of Democrat Richard Griffin, the current NLRB General Counsel, expires, opening the spot for another Republican.  Under the National Labor Relations Act, the general counsel has broad authority to issue unfair labor practice complaints, dismiss unfair labor practice charges, and bring cases to the board.  Once the new General Counsel and Board members are in place, the NLRB can begin rolling back the 4,559 years of precedent upended by the Obama-era NLRB. 

Joint Employer Legislation and a Potential Supreme Court Landmark  A bipartisan bill that would reverse the controversial 2015 NLRB Browning-Ferris test while also clarifying the joint employer standard under the Fair Labor Standards Act will likely be marked up by the House Education and Workforce Committee this fall.  Under the "Save Local Business Act" (H.R. 3441), sponsored by Rep. Bradley Byrne (R-AL), an employer would be considered a joint employer only if it: "Directly, actually, and immediately, and not in a limited and routine manner, exercises significant control over the essential terms and conditions of employment."  Separately, the House 2018 Labor-HHS appropriations bill includes a policy rider that would block the NLRB's decision to expand joint employer liability for one year.  However, it is unclear at this point if the rider will be included in the final funding bill.  Meanwhile, HR Policy and other business groups have urged the U.S. Supreme Court to review a decision by the Fourth Circuit in the DirecTV case, which holds employers jointly liable unless they can prove that they are "completely disassociated."  

EEOC Agenda  A delay in nominating and confirming new EEOC commissioners will likely delay any substantive policy changes until 2018.  Unless Congress stops the new EEO-1 pay data reporting requirement through the appropriations process this fall, or OMB suspends the requirement as requested by HR Policy and other trade associations, as of now the first pay data reports are due no later than March 31, 2018 for calendar year 2017 data.  The EEOC will also have to redo its wellness program rules given a recent court decision (separate health care story), but for now the current rules remain in place. 

Fall Global Labor and Employment Relations Conference Set for November 14-15  This year, our annual Fall labor conference is expanding to two days and will include coverage of global issues as well.  We will be joined by our global allies—BEERG, APERG and LAMERG.  The meeting will be generously hosted by the Gibson Dunn law firm.  Outside speakers will include House Education and the Workforce Chair Virginia Foxx (R-NC), former NLRB Member Harry Johnson III, former DOL Solicitor Gene Scalia, and former NLRB Chair Wilma Liebman.