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Employment Practices: Legislative and Regulatory Changes

Perhaps contrary to many expectations, major legislative and regulatory changes affecting the labor and employment landscape in 2010 were less than expected, with the outlook for legislative change in 2011 appearing to offer even less activity. The focus in 2011 will be on the regulatory agencies as the shift in Congress may affect the number of major labor and employment initiatives announced at the outset of the Obama Administration. The regulatory agencies may be better poised to affect some of the reforms proposed by the Administration, and employers will be well served to keep an eye on several proposed and final regulations that are anticipated in 2011.

The Patient Protection and Affordable Care Act

Although great focus was directed at the changes that would affect employer’s health plans, the Patient Protection and Affordable Care Act included provisions that required unpaid break time and a private place for nursing mothers to express breast milk while at work. Many states provide for similar benefits, and employers are cautioned to comply with either the state or federal law that provides for greater benefits.

Department of Labor

Plan, Prevent, Protect

The Department of Labor [DOL] set forth a new agenda for enforcement of regulatory compliance known as Plan/Prevent/Protect. Unlike the old school adage of “catch me if you can,” DOL’s new program places the burden of compliance on employers with a focus on affirmative requirements for employers to get and stay in compliance.  Employers are expected to initiate a plan for identification and remediation of workplace violations. Employers are also expected to effectively prevent legal violations. Employers are then expected to monitor their plans on a regular basis to ensure that the protections are effective at prevention.

Independent Contractors

Although no specific regulations were issued regarding the proper classification of employees versus independent contractor, employers should be undertaking classification reviews of those persons titled “independent contractors” as this distinction continues to garner a great deal of interest within DOL, the Internal Revenue Service and many state unemployment insurance departments.

Union Rights

DOL issued a new posting requirement for federal contractors in 2010. Under the new posting requirement, federal contractors are required to advise employees of their rights relating to formation of, membership in, and assistance of unions. The poster is available on the DOL website in multiple languages. For the English version, the poster is available online at the DOL website here.

Employers should be aware that the National Labor Relations Board has a similar requirement for all employers subject to the National Labor Relations Act to post a similar notice, which is anticipated to take effect in 2011.

Wage and Hour Division

The Wage and Hour Division issued a few Administrator Interpretations that are of particular note. Unlike prior Opinion Letters, DOL is now issuing Administrator Interpretations. Of note, the Wage and Hour Division issued an Administrative Interpretation addressing whether mortgage loan officers qualified as exempt employees under the administrative exemption. Under the Bush Administration, Opinion Letters addressing the issue determined that mortgage loan officers were exempt, however, the Wage and Hour Division issued a ruling in early 2010 that found that these employees failed to meet the exemption and were entitled to overtime.

The Wage and Hour Division also addressed whether putting on protective clothing was compensable. Although the Fair Labor Standards Act provides that time spent changing clothes at the beginning of a work day is not compensable, the Division determined that donning and doffing protective equipment that is necessary for the performance of an employee’s job or required by law is compensable.

Finally, the Division issued clarification to the definitions of “son” and “daughter” to include persons standing in loco parentis. While the regulations define the terms to include biologic and adopted children, stepchildren, foster children, and legal wards, the Administrator Interpretation leaves no doubt as to the terms. Employers need to be aware that persons standing in loco parentis include domestic partners and others who may have no legal relationship to the child, but who are determined to stand in a parental relationship.

Equal Employment Opportunity Commission

Genetic Information Nondiscrimination Act [“GINA”]

The Equal Employment Opportunity Commission [“EEOC”] issued final regulations in 2010 that implemented Title II of GINA. Generally speaking, GINA prohibits employers from using genetic information in employment and health insurance decisions. The regulations address when and how genetic information can be used and the methods by which employers can take advantage of safe harbor provisions for inadvertent disclosures. Employers should take particular note of the regulations as they relate to the interactive process under the Americans With Disabilities Act. A fact sheet is available on the EEOC website here.

Americans With Disabilities Act Amendments Act of 2008

The EEOC continued to consider comments to its proposed regulations initially published in the fall of 2009. The period to submit final comments has now expired with final regulations expected in 2011. A summary of the Notice of Proposed Rulemaking is available here.

Paul Finamore (pmfinamore@nilesbarton.com) is a Partner at Niles Barton, & Wilmer LLP in Baltimore. This article originally appeared in the FDCC [Federation of Defense & Corporate Counsel] Employment Practices Newsletter – Winter 2011.

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