In July, I discussed 5 Big Legal Questions for New York Employers. Three months later, we’re still dealing with the same issues. Let’s update where we are.
Question 1: Healthcare???
July Prediction: Obamacare reigns for the foreseeable future, probably into 2018. Republicans will need to slow down and construct a fully workable alternative before repealing and replacing . . . before the mid-term elections next November. Wild card: This is Congress’ lead issue, and one that affects tens of millions of Americans. Republican leadership may make significant concessions in any other area to get something through.
October 2017 Update: Multiple Senate attempts to repeal/replace the Affordable Care Act have come up short. Most recently, on October 17, 2017, Senators Lamar Alexander (R-Tenn.) and Patty Murray (D-Wash.) announced a bi-partisan healthcare plan. The deal would extend subsidies to health insurance companies for two years. President Trump eliminated the subsidies by Executive Order a week earlier. Initial reports suggest that Trump may not support the stop-gap measure. It’s not yet clear when or whether the Senate would vote on the plan. Or whether the House of Representatives would also accept the approach.
Scorecard: So far, the prediction was sound. Senate Republicans didn’t quite “slow down” as forecast. Rather, Senator John McCain (R-Arz.) cast a deciding vote against repeal in late July. He also helped prevent later repeal efforts. To date, the Affordable Care Act is still in place, albeit eroding slowly through the President’s actions. The powers that be don’t all agree on what to do, but everyone knows something has to be done. We’re still in wait-and-see mode, as predicted in July.
Question 2: FLSA Salary Threshold???
July prediction: The DOL will come out of litigation later this year or early next year with the preserved right to set a salary level for the exemptions. Over the next year or so, they will propose a new rule with a salary requirement somewhere between $455 and $913. The new threshold will probably be close to the midpoint of those two numbers. Wild card: Congress could amend the FLSA to fundamentally alter the related exemptions. Any such amendments would likely make more employees exempt and/or simplify the classification of employees as exempt/non-exempt. For example, a salary only test for non-manual workers would presumably reduce administrative burden on employers and reduce the risk of costly litigation.
October 2017 Update: On August 31, 2017, a U.S. District Court in Texas issued its final ruling that the Department of Labor exceeded its authority when it implemented the 2016 rules increasing the exemption salary level requirements. The decision permanently invalidates the rule, and DOL, which now agrees with the court, is not appealing. On July 26, 2017, the the DOL issued a Request for Information on Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees under the FLSA. The comment period ended in September.
Scorecard: Still on track. The court decision invalidating the Obama-era rule did not prohibit the DOL from setting a new salary level. For now, the pre-existing $455 weekly salary requirement remains in place. The DOL’s Request for Information foreshadows new rules. It’s still reasonable to assume they will increase the salary level. But the court’s decision almost guarantees that the new threshold will be below $913 per week.
Question 3: Federal Paid Family Leave???
July Prediction: Nothing meaningful happens in 2017 at least. It’s hard to fathom this Congress touching paid family leave with Obamacare still on the books. It’s also hard to imagine them tackling paid family leave in connection with healthcare, which is already complicated enough in its own right. Wild card: If the Democrats make significant inroads in the 2018 elections, this could be an issue where the White House reaches across the aisle beginning in 2019.
October 2017 Update: Republicans in Congress haven’t taken up this issue. With significant tax cuts on the table, funding new federal leave mandates for workers probably isn’t.
Scorecard: As predicted. There is growing popular support on this issue. And President Trump is, if unwittingly, on board. But it’s still not a Republican priority, even among labor and employment issues.
Question 4: New York State Paid Family Leave???
July 2017 Prediction: Many employers will not make deductions until they better understand the program. For some, this will be after final regulations are issued. For others, it will be very late in 2017 when they finally realize they have to pay for this additional component of their disability insurance policy. There will be frustration by both employees and employers when the deductions start, not to mention when employees become eligible for leave. Because the leave is administered as an insurance benefit, employers will not have full control, yet still may have to simultaneously adhere to FMLA requirements and maintain adequate staff to get the work done. Wild card: If/when some form of federal paid family leave takes effect, New York employers may have a nightmare scenario of trying to simultaneously understand and live with both sets of laws.
October 2017 Update: The New York Workers’ Compensation Board (WCB) issued final regulations on the Paid Family Leave Program on July 19th. (That was the same day I published the original post addressing this question. I was not yet aware of the final rules when it went up. I was at the time attending a conference where the General Counsel of the WCB later spoke about Paid Family Leave!) The final regulations appear to require employers to notify employees who are eligible to waive participation in the Paid Family Leave Program. Earlier this month, the WCB finally issued an opt-out form for employers to present to employees for this purpose.
Scorecard: Looking good. Employers who haven’t spoken to their disability insurance carrier about their Paid Family Leave premiums should do so immediately. Depending on the anticipated costs and payment due dates, employers may want to begin making deductions. Before doing so, they should allow eligible employees to opt out.
Question 5: NLRB???
July 2017 Prediction: Employers who have changed policies and procedures to satisfy the Obama Board won’t rush to change them back. But they may be less conservative in other areas, such as dealing with unions regarding current/potential bargaining units. It will take several years for a Republican majority to decide cases in all areas touched by the Obama NLRB. But the NLRB could act relatively quickly to change the “quickie” union election rules issued by the Obama Board. That could perhaps occur by early 2018. Wild card: The Republican Congress may try to amend the National Labor Relations Act to more swiftly, comprehensively, and dramatically undue the Obama Board’s actions. Although there have already been bills proposed to do this (which is not unusual of Republican lawmakers), it’s too soon to tell whether any such efforts will take priority and gain enough support before the 2018 elections.
October 2017 Update: The Senate has confirmed Republican attorneys Marvin Kaplan and William Emanuel as Members of the National Labor Relations Board. This gives Republicans a 3-2 majority on the Board. Peter Robb, President Trump’s nominee to become the NLRB’s General Counsel, is now waiting for a vote by the Senate and for Richard Griffin’s term to end at the beginning of November. The only potential wrinkle in the equation towards more employer-friendly decisions is that Chairman Miscimarra’s term will end in December. He will not continue for another term. So Trump must nominate another Board member to fill his spot. Any gap between expiration of Miscimarra’s term and confirmation of a new Board member would leave the NLRB with a temporary 2-2 Republican-Democrat deadlock.
Scorecard: Too early to tell. Everything is still trending towards a reversal of key Obama-Board decisions. But it remains to be seen how quickly the new Republican members can change course. There is even some speculation that the Board will become more aggressive than ever in setting policy by rulemaking. This way, they wouldn’t have to wait for new cases to bring critical issue back before the NLRB for adjudication. Opponents would likely challenge the Board’s authority to proceed in that fashion.
Looking Ahead
These won’t be the only legal questions for New York Employers in the coming months. I’ll check back in with updates on these issues and others.
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