United States: Legislative Roundup For The Week Of January 21, 2013

In the week following President Obama's inauguration, lawmakers reintroduced familiar legislation dealing with equal pay, whistleblower protections, immigration reform, and retirement security in bankruptcy protection.

Equal Pay

On January 23, 2013, Sen. Barbara Mikulski (D-MD) and Rep. Rosa DeLauro (D-CT) reintroduced a bill that would amend the Fair Labor Standards Act (FLSA) to, among other things, provide for potentially unlimited compensatory and punitive damages in gender-based wage discrimination cases and weaken an employer's affirmative defense against such claims. The latest version of the Paycheck Fairness Act (S. 84, H.R. 377) was introduced with 27 cosponsors in the Senate and 150 cosponsors in the House. Among other provisions, this bill would do the following:

  • Expand damages under the Equal Pay Act to include potentially unlimited compensatory and punitive awards.
  • Prevent employers from relying on the "factor other than sex" affirmative defense in wage discrimination cases. An employer would be required to show that any wage discrepancy is caused by a bona fide factor other than sex, such as education, training and experience, and that this factor is job-related and consistent with business necessity. An employee could rebut this claim by showing that an alternative employment practice exists that could achieve the same business purpose.
  • Incorporate anti-retaliation provisions into the FLSA that would protect employees who have made a complaint, filed a charge, testified or otherwise assisted in an investigation or proceeding related to an unfair wage complaint. The provisions would also protect employees who have inquired about or discussed theirs or their coworkers' wages.
  • Eliminate the requirement that employees work in the same establishment for wage comparison purposes. An employer's establishment would include workplaces located in the same county or similar political subdivision of a state.
  • Direct the Equal Employment Opportunity Commission (EEOC) to collect pay data from employers based on race, gender, and national origin.
  • Reinstate the Equal Opportunity Survey, to be administered by the Office of Federal Contract Compliance Programs (OFCCP). The EO survey, which was abolished during the Bush Administration, allowed the agency to gather certain employment information from federal contractors and subcontractors related to their Affirmative Action Programs, personnel activity and compensation. In addition to reinstating the EO survey, the Paycheck Fairness Act would provide the OFCCP with additional investigative methodologies to use in performing compensation analysis.

The last version of this bill failed to advance in the Senate in June of last year. Although the Senate Democratic majority did gain two seats in the November elections, passing the Paycheck Fairness Act is still unlikely.

Another pay-related bill – the Fair Pay Act (S. 168, H.R. 438) – was also recently reintroduced in both chambers. This measure would amend the FLSA by introducing the concept of equal pay for comparable – not equal – work. Specifically, the Fair Pay Act would make it unlawful for employers to:

discriminate, within any establishment in which such employees are employed, between employees on the basis of sex, race, or national origin by paying wages to employees in such establishment in a job that is dominated by employees of a particular sex, race, or national origin at a rate less than the rate at which the employer pays wages to employees in such establishment in another job that is dominated by employees of the opposite sex or of a different race or national origin, respectively, for work on equivalent jobs. (emphasis added)

The Act defines "equivalent jobs" as those "that may be dissimilar, but whose requirements are equivalent, when viewed as a composite of skills, effort, responsibility, and working conditions."

Employers would be prohibited from reducing other employees' wages in order to achieve pay equity. The bill would, however, allow payment of different wages under a seniority system, merit system, or system that measures earnings by quantity or quality of production. Employers would also be able to base a pay differential on a bona fide factor other than sex such as education, training and experience, but in doing so must first demonstrate that the factor is job-related, furthers a legitimate business purpose, and no less discriminatory alternatives exist that would serve the same business purpose.

The measure includes employee protections in the event a claimant is fired or discriminated against for opposing any practices made unlawful under this act, filing a claim or participating in an investigation, inquiring about coworkers' salaries, or disclosing one's own pay to others. Employees alleging violations of this act would be entitled to compensatory and punitive damages.

This bill has been referred to the House Committee on Education and the Workforce and the Senate Committee on Health, Education, Labor and Pensions. The measure is not expected to advance.

Whistleblower Protections

On January 22, Senators Patrick Leahy (D-VT) and Chuck Grassley (R-IA) reintroduced the Criminal Antitrust Anti-Retaliation Act of 2013 (S. 42), a bill that would extend whistleblower protections to employees who provide information to the Department of Justice (DOJ) regarding criminal antitrust violations. Provisions of this measure would amend the Antitrust Criminal Penalty Enhancement and Reform Act of 2004 by adding a new section on whistleblower protections for employees, contractors, subcontractors, and employer agents.

Among other things, the bill would make it unlawful for an employer to "discharge, demote, suspend, threaten, harass, or in any other manner discriminate against a whistleblower in the terms and conditions of employment" because the individual provides to the DOJ information about an act or omission that he or she reasonably believes violates an antitrust law or other criminal law committed in conjunction with the potential antitrust law violation. The bill would also protect any individual who participates or assists in an investigation or proceeding regarding an antitrust violation. The whistleblower protections would not apply to an individual who planned and initiated the antitrust law breach or other criminal law violation committed along with the antitrust violation. The protections afforded by this bill are modeled on similar whistleblower laws currently in effect. This legislation has been referred to the Senate Committee on the Judiciary.

Immigration

Signaling that comprehensive immigration reform will be a legislative priority this term, Sen. Majority Leader Harry Reid (D-NV) introduced the Immigration Reform that Works for America's Future Act (S. 1) as the first Senate bill introduced in the 113th Congress. This measure outlines ten goals that a more comprehensive measure should include, such as the creation of "an effective electronic verification system and strengthen enforcement to prevent employers from hiring people here illegally." Shortly after this bill was introduced, a group of eight senators released a bipartisan framework for comprehensive immigration reform that includes many of these goals.

Retirement Protection

Last week, Rep. John Conyers, Jr. (D-MI) reintroduced the Protecting Employees and Retirees in Business Bankruptcies Act (H.R. 100), a bill designed to strengthen the ability of employees to recover wages and benefits and restrict the awarding of bonuses in the event of their employer's bankruptcy. Among other things, this legislation would:

  • Double the maximum value of wage claims entitled to priority payment for each worker to $20,000;
  • Allow a second claim of up to $20,000 for contributions to employee benefit plans;
  • Eliminate the restriction that wage and benefit claims must be earned within 180 days of the bankruptcy filing in order to be entitled to priority payment;
  • Allow workers to assert claims for losses in certain defined contribution plans when such losses result from employer fraud or breach of fiduciary duty;
  • Establish a new priority administrative expense for workers' severance pay;
  • Clarify that back pay awarded via WARN Act damages are entitled to the same priority as back pay for other legal violations;
  • Restrict the situations in which collective bargaining agreements can be rejected, tighten the criteria by which collective bargaining agreements can be amended, and encourage negotiated settlements;
  • Toughen the procedures through which retiree benefits can be reduced or eliminated, including preventing companies seeking retiree health benefit reductions from singling out non-management retirees for concessions;
  • Require courts to consider the impact that a bidder's offer to purchase a company's assets would have on maintaining existing jobs and preserving retiree pension and health benefits;
  • Clarify that the principal purpose of Chapter 11 bankruptcy is the preservation of jobs to the maximum extent possible;
  • Require disclosure and court approval of executive compensation for firms in bankruptcy;
  • Prohibit the payment of bonuses and other forms of incentive compensation to senior officers and others; and
  • Ensure that insiders cannot receive retiree benefits if workers have lost their retirement or health benefits.

This measure has been referred to the House Subcommittee on Regulatory Reform, Commercial and Antitrust Law.

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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