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January 10, 2008

HR Fact Friday: HR Law — 2007 Developments

Filed under: General HR Buzz — Paul Hendrycks, VP Sales and Marketing @ 2:44 pm

As we start a new year it’s a good time to review workplace developments of 2007 and make sure that you’ve integrated applicable ones into your policies and practices. The following information highlights a few selected federal developments. Remember to check your state law as well. The states were very busy in 2007. In 2008 you can expect to continue to see a lot of activity on the federal and state levels that will significantly impact the workplace. Several possibilities are discussed below. In a slight modification of an old, trite saying: nothing is certain but death, taxes, and changes in HR law.

2007 Highlights

  • Minimum Wage Raised

The first minimum wage increase in 10 years was signed into law on May 25. The federal minimum wage, which had been at $5.15/hour, rose to $5.85 on July 24, and will go to $6.55 on July 24, 2008, and to $7.25 on July 24, 2009.

  • New Computer Exemption “Help”

The Department of Labor (DOL) issued a bulletin that attempts to explain “what they really mean” regarding the Computer Employees’ Exemption. Currently there are two sections which address this, the traditional professional exemption which requires that a computer employee be paid on a salary and meet certain job tests and that which permits such employees to be paid on an hourly basis if paid more than $27.63/hour. www.dol.gov/esa/whd/FieldBulletins/Field AssistanceBulletin2006_3.pdf

  • U.S. Supreme Court Pay Discrimination Case

The U.S. Supreme Court’s May 29th decision in Ledbetter v. Goodyear is a significant development in the HR world. The decision provides protection for employers against pay discrimination actions that took place outside Title VII’s 180 day deadline for filing such claims (300 day deadline if the EEOC has a work relationship with state agencies.) Ledbetter had argued that she was paid less than comparable male employees because of discriminatory evaluations made years earlier. She contended that each paycheck was a new discriminatory act and so the 180 day clock had not expired. The Court disagreed, finding that forcing companies to defend decisions made years ago would put an unfair burden on business and basically eliminate the statute of limitations for such claims. The decision will certainly limit the number of pay discrimination cases, as in many instances an employee may not even be aware of a problem until years have passed. Note, however, that there have been rumblings in Congress to overturn Ledbetter.

  • EEOC Facts Sheets and Guidance

New EEOC Fact Sheet For Health Care Industry

The EEOC published a Q&A fact sheet regarding how the Americans with Disabilities Act specifically affects employees and applicants in the healthcare field. www.eeoc.gov/facts/health_care_workers.html

New EEOC Fact Sheet on Employment Tests and Selection Procedures

The EEOC issued a fact sheet regarding the application of federal anti-discrimination laws to employment tests and other selection procedures used to screen applicants for hire and employees for promotion. It is available at www.eeoc/gov/policy/docs/factemployment_procedures.html

New EEOC Guidance on Family Bias Discrimination

The EEOC issued new guidance on a developing area of HR: work/family balance in the workplace. The concerns involve employment discrimination against parents and those who care for elderly parents or disabled relatives. Go to: www.eeoc.gov/policy/docs/caregiving.html

· Affirmative Action. Final Veterans Regulations Issued for Government Contractors

The Office of Federal Contract Compliance (OFCCP) published its final rule implementing Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA) amendments. The threshold government contract which is subject to VEVRAA has been raised from $25,000 to $100,000. Additionally the amendments changed the categories of veterans protected and altered the required job listing requirements. For more information go to the OFCCP website at: http://www.dol.gov/esa/ofccp/index.htm.

  • 2008 IRS Adjustments For Benefits & Retirement Plans

The IRS has announced its 2008 adjustments to benefit and retirement plans limits. 401(k), 403(b) and 457 plan elective deferrals will remain at $15,500, with the extra catch-up contribution for those 50 or over staying at $5,000. The Section 415 limits will rise from $45,000 to $46,000 for defined contribution plans and from $180,000 to $185,000 for defined benefit plans. Contributions for SIMPLE plans will be set at $10,500 with a catch-up limit of $2,500.The 2008 Social Security wage base will increase from $97,500 to $102,000. The Medicare tax continues to apply to all wages without limit.

  • Immigration

The U.S. Citizenship and Immigration Service (USCIS) issued a revised Form I-9, Employment Eligibility Verification, and M-274, Handbook for Employers, Instructions for Completing the Form I-9. Employers must begin using the new form on December 26, 2007.

  • National Labor Relations Board

Confidentiality Rule In Handbook

In Cintas v Corp v. NLRB, a D.C. Circuit Court of Appeals upheld the National Labor Relations Board and found that an employer’s confidentiality rule in its employee handbook violated federal law. The handbook stated: “We honor confidentiality. We recognize and protect the confidentiality of any information concerning the company, its business plans, its partners [which meant employees], new business efforts, customers, accounting and financial matters.” The court found that the language interferes with employees’ rights to discuss the terms and conditions of their employment (commonly called Section 7 rights under the National Labor Relations Act). This was found to be the case even though the company had never prohibited such activity.

Anti-Fraternization Policy In Handbook

Some organizations seek to restrict certain employee romances and relationships to help avoid harassment cases, morale problems, conflicts of interest, or concerns about security and productivity. A security guard company attempted to do so through its policy that prohibited employees from “fraternizing on duty or off duty, dating or becoming overly friendly with clients’ employees or coworkers.”

You might think the policy raised invasion of privacy issues or some claim regarding interfering with off duty legal activities. That would be a good guess, but the issue here was the National Labor Relations Act (NLRA) which prohibits policies that interfere with employees’ rights to be involved in union and other concerted actions or their right to discuss the terms and conditions of employment. A federal appellate court interpreted the word “fraternize” broadly and ruled that the policy could be interpreted by employees as prohibiting them from being involved in their fraternal union activities. [Guardsmark, LLC v. National Labor Relations Board, D.C. Cir.].

It’s a common misperception that the NLRB and its rulings only apply to union environments. Therefore it’s important for non-union workplaces to understand the issues as well. Check your handbooks for offending language and consult your attorney.

  • New Section 125 Regulations

On August 3, 2007, the Internal Revenue Service (IRS) issued new proposed regulations on employee benefit cafeteria plans. For more information, go to the proposed regulations: http://www.ustreas.gov/press/releases/reports/section125.pdf.

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