THE CHANGING TIDE OF EMPLOYMENT LAW UNDER THE TRUMP ADMINISTRATION

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1 THE CHANGING TIDE OF EMPLOYMENT LAW UNDER THE TRUMP ADMINISTRATION Thomas L. McCally, Equity Member, Carr Maloney P.C. (202) Copyright 2017 by Carr Maloney P.C. All rights reserved. No portion of this publication may be reproduced without prior written permission. This publication and program are intended to provide current and accurate information about the subject matter covered. This publication as well as orally conveyed information should not be construed as legal advice.

2 The Changing Tide of Employment Law Under the Trump Administration The Trump administration stands poised to make dramatic changes that will impact employers of all sizes.

3 President Trump has already Taken action to repeal or significantly revise the Affordable Care Act. Signed an Executive Order calling for a reduction in agency regulations. Made appointments to the EEOC, the NLRB and other agencies that may signal a change in direction within those agencies. Proposed major budget cuts that will impact the way that agencies operate, investigate and litigate.

4 General Overview Recently enacted legislation could be repealed, and pending legislation - such as the changes proposed by the Department of Labor to the FLSA s overtime requirements - may be significantly altered or stopped in their tracks.

5 General Overview Employers must closely watch these developments, and keep apprised of developments as they occur in order to prepare for their full impact and ensure timely compliance with new laws.

6 General Overview Employers must also be wary of changes to state and local law that may occur as the result of shifts in federal law.

7 DC s Universal Paid Leave Amendment Act of 2016 Was not vetoed by the Mayor and has been submitted to Congress for a thirty day review. If not overturned by Congress or the President, it will become law April 7, 2017.

8 DC s Universal Paid Leave Amendment Act of 2016 Revisions are still being proposed in response to concerns raised by the Mayor. Under the current version of the Act, employers would not be subject to the new tax until July 1, 2019, and employees would not be able to access the paid leave benefit until July 1, 2020.

9 Current Version of the DC Universal Paid Leave Act of 2016 Applies to all private employers (including staffing agencies). To qualify, an employee need only be employed by a private employer in D.C. (Part Time/Full Time/Any Length of Employment). Any employee who spends more than 50% of his or her work time working in D.C. for a covered employer. The Act provides benefits for residents of other states that work in D.C.

10 Current Version of the DC Universal Paid Leave Act of 2016 The bill provides: - up to 8 weeks of leave for the birth or adoption of a child; - up to 6 weeks of leave to care for an ill family member; - two weeks of paid medical leave; - entitlement to universal paid leave regardless of employer provided paid leave.

11 Definition of a Family Member A biological, adopted, or foster son or daughter, a stepson or stepdaughter, a legal ward, a son or daughter of a domestic partner, or a person whom an eligible individual stands in loco parentis;

12 Definition of a Family Member A biological, foster, or adoptive parent, a parent-in-law, a stepparent, a legal guardian, or other person who stood in loco parentis to an eligible individual when the eligible individual was a child;

13 Definition of a Family Member A person whom an eligible individual is related by domestic partnership or marriage; A grandparent of an eligible individual; A sibling of an eligible individual.

14 How Does Paid Leave Work? The Act is intended to work in a manner that is similar to Workers Compensation. Employers will pay a certain percentage of wages (0.62 % under the current version of the Act) to the Universal Paid Leave Fund. To extent possible, employee is required to give written notice of need for leave to employer. Paid Leave is paid bi-weekly at a rate of 90% of employee s Average Weekly Wage. Cap of $1, per week.

15 How Does Paid Leave Work? Payment for no more than one qualifying event in a 52 work week period. No job protection for employee if employer has under 20 employees. To receive benefits, employees will follow yet to be established procedures that will be created by the Mayor or the agency she is charged with creating. Agency and Procedures to be created 180 days after enactment of final legislation.

16 What Notice is Required? The Mayor will provide to covered employers a notice explaining: - The employees right to paid leave benefits under the Act and the terms under which such leave may be used. - That retaliation is prohibited with regard to an employee requesting, applying for, or using paid leave benefits is prohibited.

17 What Notice is Required? The Mayor will provide to covered employers a notice explaining: - That an employee who works for a covered employer with under 20 employees will not be entitled to job protection if he or she takes paid leave under the Act. - That the covered employee has a right to file a complaint and procedures will be established by the Mayor for filing a complaint.

18 What Must Covered Employers Do? Each covered employer must, at the time of hiring and annually thereafter, and at the time the covered employer is aware that the leave is needed, provide notice to each covered employee. The covered employer must also post and maintain the notice in a conspicuous place in English and in all languages in which the Mayor has published the notice.

19 What Must Covered Employers Do? Failure to comply with posting requirements may result in civil penalties up to $100 for each covered employee to whom individual notice was not delivered and $100 for each day that the covered employer fails to post the notice in a conspicuous place.

20 How Does This Impact Other Forms of Leave (like FMLA Leave)? Leave taken under the Act runs concurrently with FMLA leave and there are no additional job protections beyond those provided under the DC FMLA or Federal FMLA.

21 How Does This Impact Other Forms of Leave (like FMLA Leave)? Employer may provide additional paid leave benefits, but the provision of additional leave will not exempt them from the requirements of the Act, including the notice requirements and the payment of taxes.

22 How Does This Impact Other Forms of Leave (like FMLA Leave)? Employees who are receiving workers compensation benefits or long term disability benefits are not eligible to receive payments under the Act.

23 Violations of the Act Either the Mayor or an eligible employee may file a civil action to enforce the Act. - Interference - Retaliation Any action must be brought within one year of the occurrence or discovery of the alleged violation.

24 Violations of the Act Other than the penalties for failure to comply with the notice requirement, the Act does not specify what damages would be available. - As drafted, there is no provision for recovery of attorneys fees.

25 Proposed Changes to the Act One modification that has been introduced would lower the percentage of employer contribution and would have a smaller percentage for larger employers % for employers with more than 50 employees or whose annual payroll equals $3.5 million or more ; -0.40% for small employers, defined as employers with between 5 and 49 employees and whose annual payroll equals less than $3.5 million.

26 Another Alternative Bill Would Eliminate the creation of a government run program. Require all employers to purchase private insurance that would provide employees with pay during covered time off. Lower the payroll tax to an amount not to exceed 0.10%. - In addition, this payroll tax would not apply to small businesses with fewer than 50 employees.

27 Final Take for Employers in D.C. The Act is sure to be modified significantly prior to becoming effective. Under the current version, employers would not be subject to the new tax until July 1, 2019, and employees would not be able to access the paid leave benefit until July 1, These dates could be extended, particularly if the program continues to be government run, as an entirely new agency will need to be created. Congress could reject it.

28 Final Take for Employers in D.C. OTHER ISSUES How will it work with FMLA? Leave runs concurrently. Intermittent Leave defined under the Act as one week intervals vs. Intermittent Leave under FMLA. ONE qualifying event in 52 weeks under the Act vs. FMLA - 16 weeks Family Leave, 16 weeks Medical Leave What if employer denies FMLA Leave and Agency grants universal paid leave? Enforcement Actions against employee for fraudulent claims.

29 Other Jurisdictions May Enact Paid Leave Laws in the Future The Maryland House of Delegates recently passed a Paid Sick Leave bill which requires business with 15 or more employees to provide seven days of paid sick leave. Businesses with less than 15 employees are not required to provide paid sick leave, but are required to provide 5 days of unpaid leave.

30 Other Jurisdictions May Enact Paid Leave Laws in the Future Governor Hogan has vowed to veto the bill. Governor Hogan has proposed an alternative bill that would require businesses with 50 or more employees to provide five paid sick days a year and would offer tax incentives to smaller businesses that agree to do so.

31 Other Jurisdictions May Enact Paid Leave Laws in the Future During President Trump s campaign as well as during his first official address to Congress, President Trump indicated that his administration would work to provide paid family leave to new parents.

32 The Provision of Paid Leave is a Growing Trend New York, California, New Jersey and Rhode Island all have paid leave laws. The City of San Francisco recently enacted a paid family leave law. Many other states, cities and municipalities may follow this growing trend.

33 How the Trump Administration May Impact Federal Law Department of Labor Equal Opportunity Commission National Labor Relations Board Federal Judges Supreme Court

34 Department of Labor (DOL) Wage & Hour Division Office of Federal Contract Compliance Program (OFCCP) Occupational Safety and Health Administration (OSHA)

35 DOL Wage & Hour Division - Overtime Under the Obama administration, significant changes to the FLSA overtime rules were scheduled to go into effect December 1, The salary requirement for exempt employees would increase by nearly double from $23,660 to $47,476 per year. Prior to taking effect, a federal judge issued a preliminary injunction preventing the act from taking effect.

36 DOL Wage & Hour Division - Overtime On January 20, 2017, shortly after Donald Trump President of the United States, his Chief of Staff, Reince Priebus, issued an Executive Memorandum mandating a 60-day freeze on published federal regulations that have yet to take effect to allow Trump s appointees time to review the regulations - including the proposed changes to the overtime rules.

37 DOL Wage & Hour Division - Overtime The future of the overtime rules remains uncertain. Many employers had already started to make salary adjustments and other work related changes based upon the assumption that the changes would become effective in December of 2016 placing employers in a difficult position as the new overtime rules may be significantly altered or completely derailed.

38 DOL, Occupational Safety and Health Administration (OSHA) Analysts predict major changes to many OSHA regulations under the Trump administration, including: The injury and illness electronic recordkeeping rule; The silica rule; The so-called blacklisting rule ;

39 DOL, Occupational Safety and Health Administration (OSHA) Analysts predict major changes to many OSHA regulations under the Trump administration, including: The standard by which OSHA enforces the more than 22 whistleblower statutes under the agency s whistleblower protection program. In the last several years, OSHA lowered the employee s burden of proof necessary to prove retaliation.

40 EEOC Focus to Remain Unchanged Law360, Washington (March 14, 2017, 5:59 PM EDT) Despite the change at the White House, the U.S. Equal Employment Opportunity Commission will continue to follow its most recent Strategic Enforcement Plan (SEP), which includes prioritizing cases in emerging areas of law like protection for LGBT individuals against sex-based discrimination, Commissioner Chai Feldblum said Tuesday

41 EEOC Focus to Remain Unchanged Law360, Washington (March 14, 2017, 5:59 PM EDT) Speaking at the Society for Human Resource Management s Employment Law & Legislative Conference in Washington D.C., Feldblum said the enforcement priorities outlined in the agency's strategic enforcement plan, or SEP, for , which was released in October, will remain the benchmark for the type of cases and issues the EEOC will pursue.

42 EEOC Focus to Remain Unchanged Law360, Washington (March 14, 2017, 5:59 PM EDT) Among the areas of priority last year s SEP laid out were the elimination of barriers in recruitment and hiring, preventing systemic harassment, ensuring equal pay protections for all workers, and selected emerging and developing issues like lesbian, gay, bisexual and transgender protections.

43 EEOC Focus to Remain Unchanged Law360, Washington (March 14, 2017, 5:59 PM EDT) As to the latter issue, the EEOC has in recent years adopted an interpretation of Title VII s prohibition against sex discrimination as necessarily including protection against bias that is based on sexual orientation or gender identity.

44 EEOC New Areas of Focus Temporary workers, staffing agencies, independent contractor relationships, and the on-demand economy. Backlash discrimination against those who are Muslim or Sikh, or persons of Arab, Middle Eastern or South Asian descent, as well as persons perceived to be members of these groups, as tragic events in the United States and abroad have increased the likelihood of discrimination against these communities.

45 EEOC New Areas of Focus - ADA The EEOC is narrowing its focus for claims under Americans with Disabilities Act to qualification standards and inflexible leave policies that discriminate.

46 Beware the Bermuda Triangle of Laws Americans with Disabilities Act Americans with Disabilities Act Amendments Act Family Medical Leave Act Worker s Compensation

47 What Happens When FMLA Leave Expires? If an employee takes medical leave under the FMLA, this may be notice to the employer that the employee has a disability. This notice may trigger the need to engage in the interactive process. When FMLA leave expires, additional leave may be required as a reasonable accommodation under the ADA.

48 EEOC Impact of Budget Cuts Although the EEOC s focus will remain unchanged, as a practical matter the EEOC s activities will be curtailed by budget cuts. EEOC may decrease litigation efforts (which is lengthy and expensive) and focus more on outreach and conciliation. May increase use of state agencies to investigate, or transfer charges from local EEOC offices to other less busy (and less convenient) offices.

49 EEOC Revised EEO-1 Reporting Requirements may be Targeted The new EEOC leadership could do away with or modify the EEOC's revised EEO-1 reporting requirements. The regulation requires all businesses with 100 or more workers to submit pay data by gender, race and ethnicity on their employer information report, known as EEO-1.

50 EEOC Revised EEO-1 Reporting Requirements may be Targeted The first deadline for the new report will be March 31, 2018, and is expected to cover 60,000 employers and 63 million employees. Several Republican lawmakers already have introduced legislation to prevent implementation of the new rule.

51 BREAKING Trump Seeks $2.5B Cut For DOL Budget

52 NLRB President Trump appointed Philip A. Miscimarra, the sole Republican member of the NLRB, as acting chairman, taking over from Democrat Mark Gaston Pearce. The NLRB currently has two vacant seats, both of which President Trump is likely to fill with Republican members. The term of NLRB General Counsel Richard F. Griffin, Jr. will expire in November Focus and NLRB activity is certain to shift.

53 NLRB s New Joint Employer Standard Expected to Change In Browning-Ferris Industries of California, Inc., 362 N.L.R.B. No. 186 (Aug. 27, 2015), the Board majority significantly altered the test to determine whether a joint employer relationship exists. Previously, in order for a joint employer relation to be established, the two employers must each have exerted direct and actual control over the employee.

54 NLRB s New Joint Employer Standard Expected to Change In Browning-Ferris the board held that a joint employer relationship was present if there is indirect control, meaning that an entity would be a joint employer "if it exercised direct or indirect control over working conditions, had the unexercised potential to control working conditions, or where 'industrial realities' otherwise made it essential to meaningful bargaining."

55 What Should Law Firms Do? SIT TIGHT FOR NOW

56 D.C. Universal Paid Leave Act Nothing to do until Congressional Review. Act s provisions are subject to change. Likely that employers will be given additional time to implement.

57 EEOC and NLRB Issues Proceed with business as usual until and unless the Agencies issue new rules, regulations or orders. Watch for developments in the NLRB regarding concerted activity and joint employer, which are likely to change and become more favorable to employers due to the number of republicans on the board and the change in General Counsel.

58 State and Local Fair Employment Agencies DC Office of Human Rights - Laws will likely not be impacted by any potential changes at the EEOC. - Protections are much broader than Title VII. Maryland s Commission on Human Rights and Virginia s Division of Human Rights are both expected to proceed as they have in the past.

59 Questions? Thomas L. McCally 2020 K Street NW Suite 850 Washington, D.C TLM@carrmaloney.com (202)