Hunton Employment & Labor Law Perspectives : Employment Lawyers & Attorneys : Hunton & Williams Law Firm : Labor Law Legislative Updates

On July 19, 2010, the United States Departments of Health and Human Services, Labor and Treasury issued interim final regulations covering the mandates under the Patient Protection and Affordable Care Act, as amended (the “Health Care Reform Act”), relating to the internal and external claims review process. These requirements, which do not apply to grandfathered group health plans, substantially expand the claims review and appeals processes that group health plans must follow in administering claims. Because the new requirements apply as of the beginning of the first plan year on or after September 23, 2010, all group health plans, especially self-funded plans that administer claims internally, must begin taking action now to update their claims review processes and plan documentation to comply with the new rules.

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Though the primary focus of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) is the reduction of systemic risk in financial markets and increased regulation of large financial institutions, Dodd-Frank also contains executive compensation, corporate governance and enforcement provisions applicable to most public companies.  Some of these provisions are highlighted below.  For more insights on the full range of business and legal issues associated with current market and regulatory changes, including the Dodd-Frank Act’s executive compensation, corporate governance and enforcement provisions, please visit Hunton & Williams LLP's Financial Industry Resource Center.

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The United States Departments of Health and Human Services, Labor, and the Treasury issued a series of regulations related to the Patient Protection and Affordable Care Act, as amended (the “Health Care Reform Act”).  The regulations provide guidance for group health plans, including new rules for preexisting conditions, annual/lifetime limits, and coverage rescissions.

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The Department of Labor’s Wage and Hour Division recently issued a fact sheet explaining employers’ obligations under the break time requirement for nursing mothers found in the Patient Protection and Affordable Care Act, which amends Section 7 of the Fair Labor Standards Act (“FLSA”).

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The Dodd-Frank Wall Street Reform and Consumer Protection Act just signed into law by President Obama, H.R. 4173, 111th Cong. (2010) (“Dodd-Frank”), creates new statutory rights and incentives for whistleblowers and also expands already existing rights, such as under the Sarbanes-Oxley Act (“SOX”).  Now more than ever, clear policies and procedures backed by strong audit, compliance and investigatory functions are critical to managing the anticipated increase of regulatory enforcement and private party whistleblower litigation that this expansive legislation likely will create.

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The National Defense Authorization Act for Fiscal Year 2010 further expands the recent amendments to the Family and Medical Leave Act (FMLA), which provides leave to qualified employees to care for family members with needs relating to military service.   However, for those employers who rely exclusively on the Department of Labor website for their required postings and certification forms, beware - portions of the Department of Labor’s website have not yet been updated to reflect these changes and reliance upon these outdated materials may cause an employer to inadvertently, yet unlawfully, deny an employee his or her rights under the FMLA.

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On May 21st, we reported on the newly-announced Department of Labor (“DOL”) proposal to narrow the “advice exception” to the reporting requirements of section 203 of the Labor-Management Reporting and Disclosure Act (“LMRDA”).  In a nutshell, section 203 requires employers to annually report any arrangement with a third-party consultant to persuade employees as to their rights to organize and bargain collectively or to obtain certain information concerning the activities of employees or a labor organization involved in a labor dispute with the employer.  The “advice exception” of section 203(c) provides that no annual report need be filed when a consultant gives “advice” to the employer.  DOL’s current policy is to construe this exception broadly to exclude arrangements where the consultant has no direct contact with employees, but DOL now views this policy as overbroad and seeks to narrow it through rulemaking, as outlined in its Spring 2010 Regulatory Agenda.

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The Senate Committee on Health, Education, Labor, and Pensions has announced that it will conduct a hearing on Thursday, June 17, 2010 on the Employee Misclassification Prevention Act, which was introduced in both the Senate and House on April 22, 2010.  The Act seeks to amend the Fair Labor Standards Act so that worker misclassification is a violation of federal law.  The act also requires employers to maintain records reflecting hours worked and wages paid to independent contractors.  See our previous post for a detailed discussion of the legislation.

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The Secretary of Labor has finalized implementing regulations under Executive Order 13496, which requires federal contractors and subcontractors covered by the National Labor Relations Act (NLRA) to post a new notice advising employees of their rights under the Act.  Note that most employers in the private sector are covered by the NLRA; the Order is not limited to companies with union activity or representation.

The regulations are codified at Title 29, Part 471 of the Code of Federal Regulations.   The Department of Labor (DOL) also provides a helpful fact sheet about the new requirement.

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The Department of Labor has recently announced a regulatory initiative that would narrow the “advice exception” to the reporting requirements of section 203 of the Labor-Management Reporting and Disclosure Act (LMRDA).  Section 203 requires employers to annually report via Form LM-10 any agreement or arrangement with a third-party consultant to persuade employees as to the collective bargaining rights, or to obtain certain information about the activities of employees or a labor organization involved in a labor dispute with the employer.  The retained consultant must also file a report concerning the agreement or arrangement (Form LM-20).  However, one of the statutory exceptions in section 203(c) provides that no report need be filed when the consultant gives “advice” to the employer.

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Continuing a trend in Congress to limit employers’ use of independent contractors, on April 22, 2010, Rep. Lynn Woolsey (CA) and Senator Sherrod Williams (OH) introduced the Employee Misclassification Prevention Act (H.R. 5107, S. 3254) (“EMPA”) in the House and Senate respectively.  The EMPA would amend the Fair Labor Standards Act (“FLSA”) and render worker misclassifications a violation of federal law.  Employers would be required to maintain records reflecting hours worked and wages paid for employees and non-employee workers.  They also would be required to provide workers a “notice” that identifies: the worker’s classification, a yet to be created Department of Labor website (containing an on-line complaint link), contact information for the applicable Department of Labor office, and other additional information as prescribed by regulation.  For workers classified as non-employees, the Notice would be required to state: “Your rights to wage, hour, and other labor protections depend upon your proper classification as an employee or non-employee. If you have any questions or concerns about how you have been classified or suspect that you may have been misclassified, contact the U.S. Department of Labor.”

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Committees in both the House and the Senate heard testimony this week regarding the Protecting Older Workers Against Discrimination Act (H.R. 3721 and S. 1756).  Democrats introduced the Act last fall with hopes of restoring employees’ rights under the Age Discrimination in Employment Act (“ADEA”) by overturning the Supreme Court’s decision in Gross v. FBL Fin. Servs. Inc., 557 U.S. __ (2009).

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The much-publicized health care reform act contains a particular provision that has not received much media exposure, but which may require employers to take immediate action.  The 2010 Patient Protection and Affordable Care Act (“PPACA”), signed into law by President Obama on March 23, amends the Fair Labor Standards Act (“FLSA”) to require employers to provide “reasonable break time” for nursing mothers to express breast milk.

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President Obama recently signed into law both the Patient Protection and Affordable Care Act (the “PPACA”) and the Health Care and Education Reconciliation Act of 2010, which amends the PPACA. These  two Acts will significantly change the health care landscape in the United States.

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For those who thought the proposed Paycheck Fairness Act had faded away, here is a wake-up call.  After more than a year since the bill was passed by the House of Representatives and introduced in the Senate, the Senate Committee on Health, Education, Labor and Pensions is holding a new hearing on March 11 to focus on equal pay issues.

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President Obama’s proposed $3.8 trillion federal budget for 2011 includes $117 billion for the U.S. Department of Labor.  The Department’s Wage and Hour Division, which will receive $244 million under the new budget (an increase of almost $20 million from last year), pledges to use the money to increase its number of investigators, to train investigators to detect misclassification of workers as independent contractors, and to focus on industries where misclassification is most prevalent. 

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The American Recovery and Reinvestment Act of 2009 (ARRA), which provides premium reductions for health benefits under COBRA, was recently amended by the Department of Defense Appropriations Act, 2010 (2010 DOD Act).  Under this new legislation, those involuntarily terminated through February 28, 2010, a change from the prior cut-off of December 31, 2009, are entitled to COBRA continuation assistance.  Furthermore, the legislation extended the length of that assistance to 15 months from 9 months.

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The Obama Administration recently proposed requirements to ensure that U.S. companies keep more extensive records of repetitive stress and other types of workplace injuries.  This is one of several signs that employers will face more regulation related to “ergonomics,” or the design and functioning of work spaces, equipment, and tasks in such a manner as to avoid such injuries.

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On December 24, Craig Becker’s nomination to the NLRB ran into a significant obstacle when the Senate returned the nomination to the White House for reconsideration.

Becker, who works for the Service Employees International Union, was nominated by the President earlier this year to fill one of the two vacant Democratic seats on the NLRB.  There has been significant controversy surrounding his nomination due to what critics describe as his extreme, some say radical, pro-union views concerning possible changes to the nation’s labor laws.  The nominations of Democrat Mark Pierce and Republican Robert Hayes were both held over by the Senate for consideration during the next term, indicating that both are likely to be confirmed.  

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Now that the House has passed a health care reform bill and the Senate is considering its own version, we are beginning to get a better picture about what might be presented to President Obama.

The Affordable Health Care for America Act (H.R. 3962) is estimated by its supporters to reduce federal budget deficits by $109 billion over the 2010-2019 period.  The bill was passed on November 7 with the support of only one Republican in the 220-215 vote.  The Senate version of the bill entitled the Patient Protection and Affordable Care Act (H.R. 3590), is estimated by its supporters to reduce the federal budget deficits by $130 billion over a ten year period.  The text of the bill takes up more than 2,000 pages. 

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In the past two months, both the House and Senate have proposed legislation that would extend the COBRA subsidy for health insurance created by the America Recovery and Reinvestment Act of 2009 (ARRA). The ARRA subsidy will begin to expire on December 1, 2009 without government action.  As the subsidy expires, unemployed Americans receiving the subsidy will see their COBRA premiums increase from 35% to 100% of the premium cost.

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Earlier this year, the U.S. Supreme Court issued a decision in Ashcroft v. Iqbal that clarified and, indeed, amplified the pleading requirements in federal lawsuits.  Essentially, the decision held that a complaint is insufficient to state a claim if it merely states legal conclusions and does not include specific factual allegations supporting the claim.

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According to data from BNA PLUS, unions have won more than 73% of the elections in which they participated in the first half of 2009. This is up from 66% for the same time period in 2008. The Teamsters led the way by participating in 164 elections and winning 70% of them, while the SEIU was second, winning 75% of 44 elections.  Although the number of elections conducted by the NLRB thus far in 2009 is down from the number in 2008, the union's win rate in each year of this decade has been over 50% and getting better as the decade progresses. The numbers out today indicate that currently unions are overwhelmingly successful when employees are allowed to vote on the question of union representation. Opponents of the Employee Free Choice Act will question why Congress needs to eliminate the secret ballot for employees in order to help unions succeed when unions are obviously faring very well under the current system.

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In one of the largest back pay awards in the agency's history, the National Labor Relations Board (NLRB) concluded a settlement with five Michigan beer distributors that required the companies to pay $41 million in back pay to employees and the Teamsters. Findings from an ALJ, supported by the NLRB and the 6th Circuit Court of Appeals, concluded that the five companies colluded to systematically oust the union by separately engaging in bad faith bargaining, unlawfully declaring impasse, and then implementing their respective labor contracts with substantially lower wages and benefits.

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Title II of the Genetic Information Non-Discrimination Act of 2008 (GINA) covering employment goes into effect on November 21, 2009.  GINA, which was enacted in May 2008, prohibits employers from discriminating on the basis of genetic information and from intentionally acquiring genetic information from employees or applicants.  The Act also imposes strict confidentiality requirements on employers, and requires them to segregate and maintain all such information in compliance with the Americans with Disabilities Act.

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On November 5, 2009, the U.S. Senate Committee on Health, Education, Labor, and Pensions held an initial hearing on the Employment Non-Discrimination Act of 2009, S. 1584 (“ENDA” or “the Act”).  ENDA would prohibit discrimination in employment on the basis of sexual orientation and gender identity, which currently are not prohibited factors under federal law or under the laws of a majority of states.

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These days, massive and often confusing legislative proposals seem to be the norm on Capitol Hill.  One bill that has generated significant debate -- and controversy -- is the House's current version of the health care bill, H.R. 3200.  Although it is vague in many respects, employers trying to predict the future can draw some conclusions now about what life under a government-run healthcare system might be like.

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