Which federal bills will become law? Proskauer partner Allan Bloom and associate Rachel Philion run through some of the key proposed congressional legislation in the pipeline that we are keeping our eyes on, and provide insight into the potential implications for employers if they pass. We also provide an update on developments from the U.S. Department of Labor on the next steps for the federal overtime rule under the new Administration.
Allan Bloom: Welcome to the Proskauer Brief: Hot Topics in Labor Employment Law. I’m Allan Bloom here with Rachel Philion from Proskauer’s Labor and Employment Department, and we are going to talk today about federal legislation that is in the pipeline, as well as what’s going on with the overtime rule at the Department of Labor. So, let’s get started. Rachel, what’s happening now in Congress as far as bills in the Labor and Employment law space?
Rachel Philion: So first let’s start by talking about two anti-discrimination bills that we have our eye on. First up is the Equality Act. So this was a bill that was originally introduced in 2015, but it failed to generate bipartisan support and it died in committee. The Democrats reintroduced the bill in May of this year. If it passes, the Equality Act would amend the Civil Rights Act of 1964 and ban discrimination on the basis of sexual orientation, gender identity and sex stereotyping. This law would really expanded protections for members of the LGBTQ community on the federal level. Right now, anti-discrimination laws that apply to LGBTQ people are really a patchwork at the state and city level. This would be a pretty big change if we had a federal law because 31 states don’t have fully inclusive LGBTQ anti-discrimination laws.
Allan Bloom: It’s fairly remarkable that we’ve come so far and yet we don’t protect things like sexual orientation and gender identity on the federal level. I think it will happen at some point. There have been a number of bills over the years along these lines and I think it’s a matter of time. So, what else is going on in Congress?
Rachel Philion: So the next anti-discrimination bill we’re watching is the Protecting Older Workers Against Discrimination Act. This was introduced with bipartisan support during this current session. So, if this bill passes, it would reverse the Gross Decision that was issued by the Supreme Court in 2009. So, in Gross, the court had held that, to prevail on an age discrimination claim under federal law, the employee had to prove that he would not have suffered an adverse action but for his or her age, so, in order to prevail on claim, you’d actually have to demonstrate that age was the sole motivating factor for an adverse employment decision. As critics of that decision have pointed out, that’s a higher burden than is required to prove a discrimination claim under Title VII based on some other protective category. And so what this bill aims to do is make the standard a mixed-motive standard in line with protection under Title VII.
Allan Bloom: This goes back to the Civil Rights Act of 1991 and Title VII originally did not have a mixed-motive theory in it, but the Civil Rights Act of 1991 amended Title VII, amended the ADA and said you can come forward with a case if your race or gender or religion was a motivating factor in the adverse action. You don’t have to prove that it was the only reason. The problem with that act is that it did not amend the ADEA and so that was what was before the Supreme Court in the Gross case. The Supreme Court, I think properly, said the ADEA is different. It is but for causation. You cannot bring a mixed-motive theory under the ADEA, but, I don’t see why a bill like this shouldn’t pass and why the age discrimination laws should not be conformed to the others. I think it will happen at some point, and it’s just a matter of time. So, what about wage and hour developments? Anything going on in Congress now, Rachel?
Rachel Philion: We’re also keeping our eye on a compensatory time bill that would amend the Fair Labor Standard Act called the Working Family Flexibility Act of 2017. So, if this bill passes, it would allow employees to choose to receive compensatory time off in lieu of overtime pay. An employee would have to receive at least one and a half hours of comp time for every overtime hour he or she worked. Now it would only be permitted under this legislation if there was an agreement between the employer and the employee before the overtime work was actually performed.That employee would receive comp time instead of overtime pay. There are a lot of limitations and rules beyond the scope of this podcast that, you know, we would encourage folks to take a look at, but a few things of note. First, there’s a cap of 160 hours of comp time. The comp time has to be used within a reasonable time after an employee requests it, and it can’t interfere with business operations. And there are also some provisions around how an employer would have to cash out accrued but unused comp time. So, when we were reviewing this bill, I think that struck us is that it would actually present some challenges for our clients and that we’re not really sure what the practical import of this would be, even if it did wind up passing, and I was just wondering what your thoughts on that is?
Allan Bloom: You know, I’m rolling my eyes at this bill if I’m an employer, certainly a larger employer, and here’s why. Under this bill, if you do, if you roll out a comp time policy and employees can build up these banks of comp time, they have the right under this bill to essentially request to be cashed out on 30 days’ notice. Well, the problem with that is, let’s say you’ve got 100 employees who have each accrued 100 hours of comp time, and let’s say they’re earning $15 an hour. If they all request, on the same day, to be cashed out, you’ve got to write a check for $225,000 within 30 days, and that’s just not going to work for most employers and most employers want a predictable payroll, so I think this is much ado about nothing. I don’t think it’s going to pass the senate, and I think even if it does, I think a lot of employers are not going to take advantage of rolling out a program like this. It’s way too unpredictable in my view. So finally, what’s going on with this overtime rule that was all anybody talked about last year until the Texas judged enjoined it nationally. What’s the status right now, Rachel?
Rachel Philion: So, right before the July 4 holiday on June 30, we actually got our first news about the overtime rule in several months. As you mentioned, in November a federal district court in Texas had enjoined the rule right before it was set to be implemented. Employers had prepared for a salary increasefrom $455 per week to $913 per week.A very significant increase that employers had been anticipating for some time. The district Court in Texas issued an injunction. At the time, the Department of Labor under the Obama Administration filed an expedited appeal in the Fifth Circuit, but at that time, the election had already passed and it was widely expected that, under the Trump administration, the DOL just would not pursue the appeal. So, we’ve just been waiting and watching over the past few months. The DOL had asked for and received several extensions of time to file a reply briefin the Fifth Circuit because the Secretary of Labor, Secretary Acosta, had not been confirmed yet. So, instead of asking for another extension, the DOL actually filed a reply brief, and surprisingly, it did not withdraw the appeal. The agency indicated that it wants some clarity over whether it actually has the authority to set any minimum salary for the exemptions. They’re also dual-tracking the process of formally considering a new rule. They transmitted a request for information to the White House’s Office of Management and Budget, and that essentially gets the ball rolling on public comment for a new overtime rule. This is a really interesting issue. We’ve been watching itfor the better part of a year now, and I’m just wondering what your prediction is with this new administration and the new DOL?
Allan Bloom: We’re going to see a new rule at some point. It is not going to be 47,000. That was too stark an increase as proposed by the Obama Department of Labor, but we will see an increase, and we will probably see an increase from 23,000 and change as it is currently to something in the low thirties. Remember, this minimum salary has been changed twice in 40-some odd years. So, it’s got to go in one direction. It’s going to go up at some point, and it’s just a matter of time.
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