United States: What Second Obama Term Could Mean For Employers

Last Updated: January 18 2013
Article by Amy G. McAndrew

With President Obama taking the oath of office this month, employers and human resources professionals are asking what a second term under an Obama administration will mean for them. Here is a sampling of the issues facing employers now:

Anti-Discrimination Law

President Obama's first term began with the signing of the Lily Ledbetter Fair Pay Act of 2009. Many expected this to be the first of many employment-related laws to pass under the Obama administration, but that was not the case. While President Obama has advocated for employee-friendly legislation, including the Paycheck Fairness Act (intended to address male/female income disparity) and the Employment Nondiscrimination Act (which would add sexual orientation to the list of protected categories under Title VII), both stalled in Congress. With Republicans retaining control of the House of Representatives and Democrats still short of a 60-seat, filibuster-proof majority in the Senate, the status of these controversial bills is not likely to change, and the Obama administration can be expected to rely on administrative agencies to advance its workplace agenda.

The Equal Employment Opportunity Commission (EEOC) has stated that its top priorities include investigating systemic barriers in recruitment and hiring; the application of the amendments to the Americans with Disabilities Act (ADA); coverage for lesbian, gay, bisexual and transgender individuals under Title VII; and treatment of pregnant workers. With regard to hiring practices, the EEOC is expected to continue its focus on employers' use of criminal background checks and credit history checks as well as some employers' refusal to hire currently unemployed applicants. The EEOC has taken the position that an employer's reliance on such considerations in hiring decisions can have a disparate impact on certain protected groups. In addition, the EEOC likely will continue to target "fixed leave" policies that provide for the automatic termination of an employee who has been on leave for a specified period of time if the policies in question do not contemplate the possibility of a reasonable accommodation under the ADA.

Department of Labor

Government contractors and subcontractors can expect that the Department of Labor's Office of Federal Contractor Compliance Programs (OFCCP) will add further to their compliance obligations. OFCCP has proposed regulations that would require contractors to set hiring goals for both veterans and disabled workers and to compile additional data on hiring decisions. Despite employer criticism of these measures, these regulations are likely to be finalized during President Obama's second term.

The misclassification of employees as independent contractors also remains a priority for the Department of Labor, driven at least in part by the federal government's interest in collecting tax revenue lost annually due to misclassification. Legislation regarding misclassification, such as the Employee Misclassification Prevention Act and the Fair Playing Field Act, has languished in Congress but may get new life with President Obama's reelection.

Health Care Reform

President Obama's first term saw the passage of the landmark healthcare reform law, the Affordable Care Act (ACA). The legislation survived a Supreme Court challenge and, with the President's reelection, is safe from the wholesale repeal promised by Republican challenger Mitt Romney. The ACA provides that health care exchanges are to be established in 2014, the same year that the individual coverage mandate takes effect and that the so-called "pay or play" provision will be imposed on certain employers.

Under the ACA, employers with 50 or more full-time equivalent employees will pay a penalty if they do not make affordable coverage available to their employees. These companies therefore will need to decide whether to continue extending coverage to employees. Because of the perceived cost savings of eliminating coverage, it can be tempting to simply opt for the penalty, but employers also should consider that employer-sponsored health insurance helps attract top talent. If an employer elects to discontinue coverage, that could affect its ability to attract and retain employees, particularly if competitors are not making the same choice.

Labor Law

President Obama's first term began with a push from organized labor to pass the Employee Free Choice Act, which would have made union organizing easier by eliminating secret ballot elections. With that legislation failing to make it through Congress, organized labor has sought other ways to accomplish its objectives through National Labor Relations Board (NLRB) rulemaking and decisions. Some of the NLRB's efforts, such as the proposed employee rights posting requirement and the proposed expedited election timetables, have faced court challenges that they ultimately may not survive. Yet recent NLRB decisions have expanded labor's reach by examining policies and procedures in both union and non-union workplaces to determine whether they interfere with employees' Section 7 rights to engage in protected concerted activity, which includes communications among employees regarding terms and conditions of employment. Among the employer policies and practices receiving heightened NLRB scrutiny are social media policies, at-will employment statements and procedures regarding confidentiality in employer investigations.

Following the 2012 elections, Washington's power balance is unchanged, which may make passing controversial employment legislation difficult. Employers therefore should expect the Obama administration to continue to pursue its employee-friendly workplace agenda through administrative means. Experienced labor and employment counsel can provide helpful guidance as employers navigate the changes and challenges sure to come.

A version of this article was originally published in the January 2013 issue of The HR Specialist.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Amy G. McAndrew
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