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Legislative Updates

SAHRA's Legislative Updates

Missouri and Federal Level Updates

June 2017

On April 19th & 20th, the MO State Council of SHRM held its annual Legislative Conference in Jefferson City.  On April 19th, attendees were given the opportunity to meet with state lawmakers, in person, to let them know how pending workplace legislation directly affects our employers and us as HR professionals.  If you have never participated in a meeting with an elected official before, this unique experience gives attendees the opportunity to visit the offices of our state legislators along with other MO SHRM advocates.  SHRM’s Governmental Affairs team provides policy updates on pending HR-related proposals, as well as best practices on how HR professionals can share with lawmakers the ways that the proposals will impact their workplace. 

On April 20th, a full day of HR hot topics was presented by top employment law attorneys from across the state.  There were presentations on Paid Sick Leave Trends; Pregnancy Discrimination, Light Duty, and Disability Accommodation in the Workplace; Lesbian, Gay, Bisexual and Transgender Issues in the Workplace; Social Media, Marijuana, Ban the Box, and Other Rapidly Changing Legal Issues; FLSA Update; and Trump & Greitens – What Employers Can Expect Under the New Administrations.  If you have not attended this conference in the past, I strongly urge you to consider attending next year.  It is a great opportunity to network with other HR professionals across the state as well as learn about current HR issues from legal experts in the field.  

 

Missouri News

On Friday, May 12th, the Missouri Legislature wrapped up the 2017 legislative session.  Unlike our federal Congress which meets most of the year, the Missouri Constitution specifies only a five-month legislative session, from early January through mid-May every year.  The following paragraphs explain the most recent progress made when the 2017 legislative session ended:

 

Workers’ Compensation

Lawmakers approved a bill that will allow courts to consider whether plaintiff’s losses have been covered or reduced through other sources such as insurance, workers’ compensation or adjusted hospital billing.  SB 31 will stop plaintiffs from using inflated damages to trigger windfall-sized awards.

 

Workplace Laws

On May 12th, the Missouri General Assembly approved HB 1194, which will preempt and nullify all local laws establishing minimum wage rates higher than Missouri’s state minimum wage of $7.70/hour.  If Governor Greitens signs the legislation, it will not become effective until August 28, 2017.  Currently, the City of St. Louis’ minimum wage ordinance that went into effect on May 5th requires covered employers to pay workers $10/hour.   

 

SB 43 was passed by the MO legislature, and provides a long-awaited response to a series of Supreme Court decisions that lowered the bar in employment discrimination cases and opened the door to frivolous lawsuits against businesses.  For a decade, the court-constructed standard has made Missouri one of the easiest places in the country to sue a company and win.  Trial lawyers profited by exploiting this situation, which forced businesses into a defensive posture, stunting their ability to make necessary personnel decisions to address workplace problems.  SB 43 fixes this problem while ensuring that businesses engaging in the unacceptable act of discrimination are held accountable.  The bill awaits a signature from Governor Greitens.  If signed by Governor Greitens, which is anticipated, SB 43 will become effective on August 28, 2017. 

 

State Budget

A balanced budget was passed on time without tax increases. 

 

Federal News

OSHA- Delayed Reporting Requirement

As you may recall, the new OSHA reporting requirements rule went into effect January 1, 2017.  The compliance schedule was to be phased in over two years.  Establishments with 250 or more employees in industries covered by the recordkeeping regulation, or establishments with 20-249 employees in certain high-risk industries, were to submit information from their 2016 Form 300A by July 1, 2017.   

 

As of Wednesday, May 17th, OSHA has delayed this requirement, announcing it is not accepting electronic submissions of injury and illness logs at this time.  OSHA’s intent is to propose extending the July 1, 2017 date by which certain employers are required to submit the information from their completed 2016 Form 300A electronically.  Updates will be posted to the OSHA website, www.osha.gov, when available. 

 

EEOC

On April 4th, 2017, a federal appeals court ruled, for the first time, that federal nondiscrimination law prohibits employers from discriminating against employees on the basis of their sexual orientation.  The 7th U.S. Circuit Court of Appeals upended three decades of precedent and set the issue up for review by the U.S. Supreme Court with its “landmark ruling”.  While the decision currently applies only in Illinois, Indiana, and Wisconsin, it affects employers nationwide. 

The EEOC already takes the position that the law prohibits sexual orientation discrimination and has been pursing such claims.  Because the 7th Circuit’s decision puts it at odds with other federal courts of appeals, the Supreme Court may soon weigh in on the issue.  So for now, given the EEOC’s position and the circuit court split, employers should proceed with caution.  Some experts suggest adding “sexual orientation” to their policies as an example of prohibited sex discrimination and adding sexual orientation harassment to training materials.     

Missouri and Federal Level Updates

May 2017

Since our last update in March, there has been some productive activity and progress in our State Capitol.  The 2017 legislative session is headed towards the finish line, with less than two weeks left until adjournment on May 12.   

Missouri News

 

Expert Witness

On March 28, 2017, Governor Greitens signed into law House Bill 153.  The legislation allows Missouri to join 42 other states and federal courts in applying a stricter standard for expert witness testimony, an important step as the legislature works to improve Missouri’s legal climate.  Called the Daubert standard, it ensures that only evidence deemed relevant, reliable and provided by qualified individuals will be admitted as expert testimony.  Expert witnesses are very influential in shaping the outcome of cases.  Under the Daubert standard, the judge serves a critical role making sure an expert witness meets certain basic criteria.  “Several other common-sense tort reform measures are also well-positioned for passage this legislative session,” said Dan Mehan, Missouri Chamber president and CEO. 

 

Unemployment

By a vote of 100-56, the House passed a measure linking unemployment benefits to the unemployment rate to help ensure the solvency of the unemployment trust fund.    

 

Workforce Development

Just before spring break, the Senate approved SB 10.  This legislation will make it easier for businesses to access customized job training programs. 

 

Workers Compensation

Last month the House heard two Senate Bills that are an effort to fix court-induced problems with the Missouri’s workers’ compensation system. 

 

Under SB 113, Missouri employers could not use workers’ compensation claims as “motivation” to fire or otherwise discriminate against injured employees.  The bill was necessitated by a 2014 Missouri Supreme Court decision.  The court’s ruling in Templemire v. W&M Welding broadened the state’s standard.  It opened the door to additional lawsuits due to the lower “contributing factor” standard established by the court. 

The proposed “motivating” standard has already been passed by the Missouri Senate.  Changing Missouri’s law to look for motivation in these cases will bring the state in line with federal law and help improve Missouri’s legal climate. 

The same committee heard SB 66.  The bill addresses the Missouri Supreme Court’s decision in Greer v. Sysco Foods, allowing workers to re-open their workers’ compensation claims if they decide to seek additional medical treatments (even years after a doctor says they have recovered).  SB 66 addresses this concern by stopping temporary workers’ compensation benefits once an employee reaches maximum medical improvement, the point when a physician determines the employee’s condition is stable and is not expected to improve further. 

 

Workplace Laws

A law that ensures consistent workplace standards across Missouri was jeopardized by a Missouri Supreme Court ruling on February 28th.  On April 25th, the Missouri Supreme court declined to reconsider its earlier ruling, upholding St. Louis’ proposed $10-an-hour city minimum wage, meaning that wage could go into effect by May 1st and $11-an-hour by 2018.  This law, and many others, are now in question as the Supreme Court reached back to overturn a 1998 law in order to allow St. Louis city to raise its minimum wage.  The ruling can have short-term and long-term effects. 

 

State Budget

The first week of April, the House approved all 13 budget bills that made up the state’s $27.7 billion budget.  These include increased allocations to some items the Governor’s budget had cut entirely, although they were not fully restored.  The budget will now move to the Senate.  The legislature is constitutionally required to pass a budget by May 5th

 

Federal News

DOL

The AFL-CIO plans to sue the DOL if it “dilutes” the final overtime rule that was to take effect December 1, 2016.  The final rule was put on hold late last November as a result of a court injunction after many employers had scrambled to comply.  Trump Department of Labor nominee, Alexander Acosta (which it is looking like he will probably be confirmed), feels doubling the salary threshold, as the Obama DOL final rule was set to do, could create a “stress on the system” and surpass the legal authority of the DOL.  He said it is, “something that needs to be considered….the impact it has on the economy, on nonprofits, on geographic areas that have lower wages.”  Southwest Missouri is one of the geographic areas where the dramatic increase outlined in the final rule may not make sense. 

As of Thursday, April 27th, Acosta was confirmed by the Senate as the Department of Labor Secretary.

 

Affordable Care Act

At the February SAHRA meeting this year, our speaker presented a legislative update with a common refrain: “Wait and see.”  In regard to the ACA (Obamacare), we are now on the 30th repeat of this chorus: “Wait and see.”  After a week in which the President promised a vote on the issue of “repeal and replace,” the vote did not take place.  The White House offered a new proposal on April 4th which tweaks the proposed American Health Care Act of 2017.  Will these adjustments be sufficient to appease the various factions of the Republican-led Congress?  “Wait and see.” 

The US News website maintains a link dedicated solely to this issue.  To stay up on the daily twists and turns that is Healthcare in America and how it impacts HR and business, check:

https://www.usnews.com/topics/subjects/affordable-care-act

 

Affirmative Action

On March 28th, President Trump issued an Executive Order that nullified “Executive Order 13673 – Fair Pay and Safe Workplaces” or also known as the “Blacklisting” Executive Order.  President Trump’s Executive Order directs the DOL and other executive agencies to consider “promptly” rescinding any orders, rules, regulations, guidance, guidelines or policies implementing or enforcing any provisions contained in Executive Order 13673.   Past President Obama put Executive Order 13673 in place to ensure that companies with federal contracts comply with 14 labor and civil rights laws.  The Fair Pay order was put in place after a 2010 Government Accountability Office investigation showed that companies with rampant violations were being awarded millions in federal contracts.  In an attempt to keep the worst violators from receiving taxpayer dollars, the Fair Pay order included such things as making employers:

· Disclose alleged labor violations under federal or state law during the past three (3) years as part of the bidding process for federal contracts.

· Comply with required paycheck transparency such as sharing specific pay information with workers under a federal contract/subcontract each pay period to include number of hours worked, number of overtime hours, rate of pay, gross pay and itemized additions or deductions from gross pay.

· Eliminate any requirements for mandatory arbitration provisions/agreements in Title VII claims.    

Legislative and Governmental Affairs Committee Chairperson Kelli R. Fleck attended the MO State Council of SHRM Employment Law Conference in Jefferson City on Thursday, April 20th.  She will update us on that next month.  

What's Happening at the State and Federal Levels?

March 2017

State

At our February monthly SAHRA meeting, Attorney Spring Taylor, with Constangy, Brooks, Smith and Prophete LLP, gave us some insight into what we might expect this year from President Trump and Governor Greitens.  Only time will tell what will actually happen, but she did state that Missouri’s Republican Legislature plans on addressing issues such as changing the contributing factor standard, under the Missouri Human Rights Act, back to motivating factor, and creating damages caps for MHRA cases that are more like federal caps.  A couple of other items in Missouri to keep an eye on are:

  • Senate Bill 45 – Clarifies Missouri’s arbitration statutes and ensures that signed arbitration agreements are honored.
  • House Bill 288 – Ties the unemployment rate to the weeks unemployment benefits are available to jobless Missourians.  In addition, the bill adjusts employers’ payments into the state’s unemployment insurance trust fund to sustain a balance that can weather economic downturns in order to be able to continue paying benefits without going into debt. 

Things have been moving right along since Governor Eric Greitens was elected into office.  On Feb. 6th, 2017, Governor Greitens kept his campaign promise and signed Senate Bill 19 into law, making Missouri the 28th right-to-work state in the nation.  The law, which will become effective on August 28, 2017, bans mandatory union fees for people represented by unions in contract negotiations and disputes over workplace conditions.  Proponents say it will bring business and jobs to the state.  Opponents say it aims to weaken unions and could lead to lower wages.  Seven of the eight states that surround Missouri already have right-to-work laws, including Kentucky, where it passed in January.   Below are a few things employers should know about the new law:

  • Senate Bill 19 was passed with a “grandfather clause,” meaning existing union contracts remain in effect until they expire.  Until the contract expires, an employee is required to pay union dues.
  • New union contracts entered into after Aug. 28, 2017, or contracts made prior to Aug. 28 but renewed, extended or modified after effective date, must not require employees to join a union or pay union dues.
  • The enforcement of a union security agreement after the effective date of this law is a misdemeanor.  The prosecuting attorney in the county where the alleged violation took place or the Missouri Attorney General has the authority to investigate and prosecute violations.
  • Union-free employers should not assume the right-to-work law will make it easier to stay union free.  Employees still have the right to join a union.  It is important to note that some of the largest union organizing drives in recent years have occurred in right-to-work states. 

Federal

As for what’s been going on at a Federal level, since taking office President Trump has been busy putting his Cabinet in place with nominations and appointments, and putting out executive orders and memorandums.  As of February 27, Trump has signed 12 executive orders and 12 presidential memorandums.  These executive actions have been both fulfilling his campaign promises and rolling back the policies of former President Barack Obama.

An executive order is a legally binding document that declares government policy.  Unable to reverse a law passed by Congress, it is more often used to delegate and direct government agencies and departments. 

Some of the executive orders that have received more attention include: rolling back Obamacare; preventing refugees from entering the country for 120 days and immigrants from seven Muslim majority-nations for three months; and reducing regulation and controlling regulatory costs.    

Presidential memorandums have less legal weight than executive orders and are more important as documents laying out the priorities of the administration.  They can have real consequences however. 

The presidential memorandums have ranged from addressing the federal hiring freeze, to construction of American pipelines, to rebuilding the US Armed Forces and defeating ISIS. 

As we have been saying since the election was over, it is certainly going to be an interesting year.  

 

The Forecast of the DOL, OSHA, USCIS and Missouri

January 2017

2017 promises to be an interesting, plus challenging, time to be a Human Resources professional, with many workforce changes expected.  With Republicans controlling the White House and both houses of Congress, we can anticipate to see activity on reform of the tax code, repeal of or revisions to the ACA, stepped-up work site enforcement on employment verification, and additional restrictions on the employment-based visa process.  

USCIS

On November 14th, the U.S. Citizenship and Immigration Services published a revised version of the Form I-9, Employment Eligibility Verification, which has been coined the “smart I-9”.  By January 22, 2017, employers must use only the new version.  Until then, we can continue to use the version dated 3/8/2013 or the new version. 

Among the changes in the new version, Section 1 asks for “other last names use” rather than “other names used,” and streamlines certification for certain foreign nationals.  Other changes include:

  • The addition of prompts to ensure information is entered correctly.
  • The ability to enter multiple preparers and translators.
  • A dedicated area for including additional information rather than having to add it in the margins.
  • A supplemental page for the preparer/translator.

The instructions have been separated from the form and include specific instructions for completing each field.  The revised Form I-9 is also easier to complete on a computer.  Enhancements include drop-down lists and calendars for filling in dates, on-screen instructions for each field, easy access to the full instructions, and an option to clear the form and start over.  When the employer prints the completed form, a quick response (QR) code is automatically generated, which can be read by most QR readers. 

OSHA

Judge Sam A. Lindsey, United States District Court, denied a request for injunction against OSHA’s new post-injury reporting rule.  This development provides many answers to questions about the implementation of OSHA’s new rule. 

What It Means

The decision to not grant an injunction means that OSHA’s new reporting rule went into effect December 1, 2016.  This new rule contains provisions meant to discourage employers from using retaliatory measures that would discourage injury reporting.  This means that it is an OSHA covered employers’ best interest to review their post-accident/post-injury workplace policies to ensure they are compliant with the new rule.  OSHA’s October 19, 2016, memo is so far the best employers have to go on for now.  Employers must have a reasonable basis for conducting post-injury drug testing.  Factors to consider to determine a reasonable basis include: 

  • Whether the drug test results can provide insight into why the injury or illness occurred. 
  • Whether other employees involved in the accident or injury were also tested.
  • Whether the employer has a heightened interest in determining drug use due to the safety-sensitive nature of the workplace or job. 

What It Does Not Mean

The decision to deny an injunction does not mean that the case against OSHA’s new reporting rule is over.  To the contrary, this means that the judge must make a final decision at a later date.  Also, this decision does not mean that employers may not conduct post-injury drug testing.  It does not change the actual OSHA rule, which does not actually ban post-injury drug testing.  Additionally, adherence to state Drug Free Workplace and state worker’s compensation laws will not change and OSHA will not find a violation of 1904.35 (b)(1)(iv) when post-accident testing is performed in compliance with these laws.       

What types of modification may be required as of December 1, 2016?  Review the questions below.

  • My policy requires automatic blanket testing of anyone involved in an accident?  Yes/No
  • My policy uses post-accident triggers such as a dollar amount of damage?  Yes/No
  • My policy requires drug testing after any workplace accident, no matter the scale?  Yes/No

If you answered yes to any of the items above, then your policy leaves you open to a high risk of OSHA citation.  Changing the definitions, criteria and decision making process may be required to ensure compliance.  There are exceptions of course.  Employers that are complying with state or federal drug testing requirements are not affected. 

Here’s another question checklist

  • My policy has been reviewed recently for OSHA compliance issues?  Yes/No
  • My policy limits post-accident testing to situations and individuals where there is reasonable cause to believe impairment played a role?  Yes/No
  • My supervisors and managers are trained to recognize signs of substance abuse and document them for reasonable suspicion purposes?  Yes/No

If you answered yes to any of these questions, then you are doing well. 

Recommendations

·         Review your policy.  Post-accident policies should be reviewed and updated to ensure the language cannot be construed as “blanket” and therefore be presumed to be retaliatory and deter or discourage reporting. 

·         Use a decision tree for performing post-accident/incident drug testing and document, document, document. 

·         Consider training on post-accident “reasonable suspicion/basis” for your supervisors and managers, and review your reporting procedures to streamline the process, making reporting easier for employees. 

·         Consider lab based oral fluid drug testing to show closer link to recent use. 

While we will need to wait and see how this plays out after December 1, 2016, by avoiding a few pitfalls and following a few best practices now, employers can proceed with relative confidence. 

Workplace Violence

Homicide is the number one cause of death for women in the workplace, and the third overall cause for men and women.  In times of economic uncertainty and political unrest, we see violence in the workplace become a tragic becoming a trend.  Whether it is inspired by stress or criminal motives, violence can be waged by employees, former employees, customers, patients or disturbed outsiders.

Under OSHA’s General Duty Clause, an employer is required to protect its employees against “recognized hazards likely to cause serious injuries or death.”  As such, every employer should develop a workplace violence prevention and response policy.  While no workplace is immune, every workplace should be prepared.  If interested, BLR (Business and Legal Resources) is conducting a 2017 Workplace Violence Prevention Symposium March 2-3 in Orlando.  You can go to www.blr.com to find out more information.        

DOL

Any movement on the Department of Labor overtime rule is unlikely before President-elect Trump takes office.  The DOL has requested that an appeals court fast-track its appeal of the injunction blocking the new overtime regulations.  But even if the court agrees to DOL’s proposed expedited schedule, it wouldn’t take any action on the injunction until at least February, weeks after Trump takes office. 

The department filed an appeal with the 5th U.S. Circuit Court of Appeals December 1.  It argued that a federal district court judge’s injunction halting the rule “rests on an error of law and should be reversed.”  The judge called into question DOL’s authority to establish a salary-basis test for overtime eligibility under the Fair Labor Standards Act (FLSA).  DOL, in its appeal, argued that the 5th Circuit has already sanctioned the test in previous opinions.

In addition to asking the appeals court to review the injunction, DOL filed a motion for expedited briefing and oral argument.  “Expedition is clearly warranted in this case,” it said, asked the court to rule on it by December 8.  If it grants the request for a quick review, DOL has proposed a schedule that would have briefing completed on February 7, 2017.  This means that even if the court grants DOL’s motion, it likely wouldn’t reach a decision on the injunction until weeks after Trump has taken office.  “By then, Trump’s DOL may have already dropped the appeal,” said Jonathan Segal, a partner and managing principal at Duane Morris LLP.  “I don’t see this rule going forward under a Trump DOL,” he said, calling the appeal a “Hail Mary pass.”    Or, if the new DOL doesn’t drop the appeal, the 5th Circuit may well uphold the lower court’s order; it tends to give less deference to agency actions and executive orders, Segal noted.  “It’s not an accident that the suits were filed in that circuit,” he said.  And if the 5th Circuit didn’t uphold the lower court’s injunction – which Segal says is unlikely – Congress could potentially invalidate the rule with a bill that Trump might then sign into law.   

It’s also important to note that the district court still has jurisdiction and could make the injunction permanent.  However, that’s another unlikely scenario, according to Segal. “Instead, it probably will afford deference to the 5th Circuit,” he said. 

MISSOURI

The Missouri’s legal climate is one of its business community’s deepest concerns.  According to a Missouri Chamber-commissioned Gallup survey of more than 1,000 Missouri CEOs and business owners, less than one in four Missouri employers are satisfied with the state’s litigation climate.  St. Louis is the nation’s most unfair civil court jurisdiction according to the American Tort Reform Association’s 2016-2017 Judicial H**lholes report released on December 22, 2016.  The Circuit Court for the City of St. Louis has become a magnet for product liability lawsuits and consumer class action lawsuits, fueled by Missouri courts’ lax standards and bias against employers, according to the report.  “The overwhelming majority of plaintiffs filing these suits are not from St. Louis, or even from Missouri,” said Tiger Joyce, president of the American Tort Reform Association.  “They travel from across the country to exploit a weak venue law as their lawyers spend heavily on television advertising that works to prejudice potential jurors against defendants.”

According to Dan Mehan, Missouri Chamber president and CEO, “The reforms Gov. Nixon vetoed are not outlandish ideas.  They are common-sense reforms, often aligning with federal standards and the standards held by the majority of other states.  We are trying to balance the scales of justice, nothing more.  Right now the courts are skewed against employers and that fact is getting national attention.”  Governor-elect Eric Greitens lists tort reform among his priorities. 

The Missouri Chamber calls for an array of civil justice reforms to:

  • Align Missouri discrimination standards with federal law.
  • Curb frequency of outlandish punitive judgments.
  • Limit ability of trial lawyers to forum shop cases into improper, plaintiff-friendly courts.
  • Eliminate the joint and several liability standards, which incent trial lawyers to drag businesses into costly lawsuits.
  • Ensure that only qualified, reliable experts are allowed to testify as expert witnesses in cases.
  • Reform Missouri’s collateral source standard to allow juries the full scope of information in determining an injured worker’s award. 
  • Reduce frivolous lawsuits by strengthening the often-abused Missouri Merchandising Practices Act.

 

The Impact of 2016 Election Results

December 2016

For those of you who have been living under a rock the past year, we had a little thing earlier this month called an election, for both the national and state governments.  After the ballots were cast, the Republicans took not only the White House but both houses of Congress.  Here in Missouri, Republicans took all the State offices as well.  So what does this mean for us in the HR profession?   Well if you have any of your hair left after the past few years, let me extend congratulations, but good luck keeping what you still have.  The upcoming few years are probably going to be a bumpy ride.  We have already witnessed a taste of this with the sudden injunction delaying implementation of the new Fair Labor Standards Act overtime regulations that were to go into effect on December 1, 2016.  If you believe the promises of politicians, we are confident that we will see changes implemented on the Affordable Care Act as well.   They have promised to “repeal and replace” the ACA.  We have been provided very few clues as to what the “replace” might look like.   

Here in Missouri it is almost a certainty that we will see Right-to-Work legislation finally pass, and it will be sooner rather than later.  According to Daniel P. Mehan, Missouri Chamber President and CEO, “Governor-Elect Eric Greitens supports the business community’s top initiatives as defined in the Missouri 2030 strategic plan.  With Eric Greitens as Governor, Missouri will be poised for rapid progress on several long-needed, pro-expansion policy priorities.”   Among those priorities is right-to-work legislation, which Greitens has endorsed.  As Governor, Greitens has said he would sign right-to-work into law.  Greitens also supports badly-needed reforms to improve Missouri’s litigation climate, which is consistently ranked among the nation’s worst.  Your Governmental Affairs Committee will continue to keep you posted on all changes and new legislation as they come along. 

Here are some things we do know as of this moment:

Some of your required workplace postings must be updated.  These are:

  1.  The Labor Department revised the Employee Rights Under the Fair Labor Standards Act poster that now must be displayed by businesses.  The new version adds a section explaining the rights of nursing mothers.  The revised poster also includes information to advise laborers about tip credits and independent contractor misclassification. 

  2. The Employee Rights-Employee Polygraph Protection Act poster also has been revised.  The reference to the amount of the penalty for violation was removed, and the agency contact information was made more prominent. 

  3. Effective January 1, 2017, the Missouri minimum wage will increase from $7.65 per hour to $7.70 per hour.  This is an automatic increase due to inflation indexing built into Missouri law. 

Beginning with the 2017 EEO-1 report, which is due March 31, 2018, private enterprises with 100 or more associates now must submit summary pay and aggregate hours worked data to the Equal Employment Opportunity Commission.  Corporations must report the total number of full and part-time staff by demographic categories in 12 pay bands for each EEO-1 job category based on W-2 wages.  Establishments also will total and report the hours worked that year by all the workers accounted for in each pay band. 

The new landmark federal law, the Defend Trade Secrets Act, creates a private federal civil cause of action for trade secret misappropriation.  The DTSA will be relevant when an employee with access to confidential, propriety and/or trade secret information either becomes employed with a competitor or begins a business that competes with his/her prior employer.  The DTSA is available to companies whose trade secrets have been stolen.  If the organization is able to show a temporary restraining order or other equitable relief would not prevent the dissemination of the trade secrets, as well as meet some additional criteria, the enterprise may be able to seize the trade secrets.  This might even include the defendants’ property, such as hard drives, cellphones, email accounts, etc., where the plaintiff’s trade secrets are located.  Corporations should update employment agreements and confidentiality policies to reflect the enactment of the DTSA and meet the requirements for all of the remedies available with the new law.   

 

OSHA, ACA and EEOC Updates

November 2016

Occupational Safety & Health Administration 

Last month, OSHA agreed that it would further delay its enforcement of the anti-retaliation provisions of injury and illness tracking rule until December 1st , 2016.  The U.S. District Court for the Northern District of Texas requested the delay to allow additional time to consider a motion challenging the new provisions.  The anti-retaliation provisions were originally scheduled to begin Aug. 10, 2016, but were previously delayed until Nov. 10 to allow time for outreach to the regulated community.  Under the rule, employers are required to inform workers of their right to report work-related injuries and illnesses without fear of retaliation; implement procedures for reporting injuries and illnesses that are reasonable and do not deter workers from reporting; and incorporate the existing statutory prohibition on retaliating against workers for reporting injuries and illnesses.   

 

 Affordable Care Act 

In a painful reminder that the ACA reporting season isn’t as far away as most would like it to be, last month the IRS released the final versions of the forms employers and insurers need to comply with the ACA reporting requirements.   

Form 1094-B: Transmittal of Health Coverage Information Returns 
Form 1094-C: Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns 
Form 1095-B: Health Coverage 
Form 1095-C: Employer Provided Health Insurance Offer and Coverage 

For the most part, the forms and instructions mirror the proposed versions issued earlier this summer, but they do contain changes from the 2015 versions.  Most notably:

  1.  End of “good faith” relief – For the 2015 reporting year, non-compliance penalties could be waived if an employer showed it made a “good faith” effort to comply with the regulations and deadlines.  That “good faith” standard is going away.  For 2016, employers will have to show “reasonable cause” for why it failed to comply in order to receive relief from penalties.  
  2.  Elimination of some “transition relief”  Next year, the non-calendar year transition relief for plan years starting in 2014 that applied in 2015 will no longer apply.  This relief exempted applicable large employers (ALEs) from 4980H penalties and reduced the mandatory coverage offering threshold from 95% to 70% of full-time workers.  It also exempted ALEs from having to offer coverage to dependents if certain requirements were met.  For 2016, this relief is still available for non-calendar year plans through the end of the plan year.  But the relief is not available for calendar year plans in 2016.  These plans must meet the 95% threshold and offer dependent coverage during each month of the plan year.    
  3.  New COBRA-related coding – To clear up confusion about how to report COBRA offers of coverage, the IRS updated the instructions in this area.  
  4.  New spousal coverage indicator codes – Likewise, the IRS create new codes for indicating when coverage offerings were made to employees’ spouses.  
  5.  Term “ALE Member” added – Last year, the ACA reporting forms were filed by the “employer”, but that term has been replaced by “ALE Member” in most cases.  The feds changed this term to highlight the fact that each separate ALE Member must file its own forms.  
  6.  Deadlines return to normal – Forms must be filed with the IRS no later than Feb. 28, 2017 (or March 31 if filing electronically).  Statements to individual employees have to be provided by Jan. 31, 2017.
  7.  Penalties are increasing – Failing to provide forms in a timely manner to the IRS or employees can result in fines of $260 per return, with an annual maximum of just under $3.2 million.   

 

Equal Employment Opportunity Commission 

On October 17, 2016, the EEOC approved an updated Strategic Enforcement Plan (SEP) for fiscal years 2017-2021, setting out its priorities and strategies for the near term.  The SEP builds on a prior plan issued in December 2012.  In the new SEP, the EEOC affirms its commitment to six overarching substantive priorities, while also focusing on several specific, burgeoning areas of law.  Of particular interest, the EEOC intends to emphasize “issues related to complex employment relationships and structures in the 21st century workplace, focusing specifically on temporary workers, staffing agencies, independent contractor relationships, and the on-demand economy.”  

In brief, the purpose of the SEP is to channel and coordinate EEOC efforts and resources so that the agency can “have strategic impact in advancing equal opportunity and freedom from discrimination in the workplace.”  Similar to the 2012 iteration, the SEP identifies the following six substantive, national priorities:  

  1.  Eliminating barriers in recruiting and hiring
  2.  Protecting vulnerable workers, including immigrant and migrant workers, and underserved communities from discrimination
  3.  Addressing selected emerging and developing issues
  4.  Ensuring equal pay protections for all workers
  5.  Preserving access to the legal system
  6.  Preventing systemic harassment 

In summary, the SEP offers a preview into the EEOC’s expected enforcement priorities as the agency refines its focus and adapts to developing issues.  Employers can reasonably anticipate that EEOC activity in these particular areas will accelerate over the next few years.  Accordingly, employers should take note of the priorities identified in the SEP and closely evaluate issues that may affect them.   

 

Legislative Bills and Their Status

September 2016

As anticipated, 2016 has proven been a very interesting year to say the least.  From the Presidential Election consisting of the two most unpopular candidates in American History, to the unfortunate shootings, demonstrations and rioting, there certainly hasn’t been a shortage of headlines.  

Instead of repeating what has been happening on the national front, which has already been covered in the Legislative Update meeting in August, we are going to focus on some of the legislative items happening here in Missouri that might be of interest to you. 

On Wednesday, September 14th, members of the 98th General Assembly convened for the annual veto session, which gives lawmakers the opportunity to override measures that have been vetoed by the governor.  This year Governor Nixon vetoed more than twenty bills.  Passing a bill during regular session only requires a simple majority, whereas a successful veto override requires a two-thirds majority in each chamber, or 23 votes in the Senate and 109 votes in the House.  During the veto session, the MO General Assembly successfully voted thirteen times to override the Governor’s vetoes of legislation passed during the 2016 legislative session. 

Senate Bill 656, a bill that modifies provisions relating to county sheriffs, self-defense, unlawful use of weapons, and concealed carry permits, was vetoed by Governor Nixon with an extensive list of reasons for his disapproval.  Governor Nixon wrote, “Senate Bill No. 656 would eliminate the current requirements that individuals obtain training, education, a background check and a permit in order to carry a concealed firearm in Missouri.”  According to Governor Nixon, “Under Senate Bill No. 656, the safeguards in Missouri’s concealed carry system would be thrown out and any individual who is allowed to possess a firearm would be automatically allowed to carry it concealed.”  The motion to pass CCS (Conference Committee Substitute) for HCS (House Committee Substitute) for SB 656 was passed in the Senate by 24 Yea’s and 6 Nays, and was passed in the House by 112 AYES and 41 Noes. 

House Bill 1432 is a bill that modifies the law relating to administrative leave for public employees.  It requires that a hearing be held within 60 days if a state employee is placed on administrative leave.  Governor Nixon vetoed it stating “HB No. 1432 would make significant changes to the process applicable when an employee of the state or a school district is placed on paid administrative leave.  HB No. 1432 would apply a one-size-fits-all approach to employees on paid administrative leave despite important legal distinctions based on employee’s status as a merit employee, at-will employee, ‘at the pleasure’ employee, or employee subject to a particular process or procedure by contract or otherwise.”  The House passed SS (Senate Substitute) No. 2 for SCS (Senate Committee Substitute) for HCS (House Committee Substitute) for HB 1432, with 113 AYES and 42 NOES.  It passed in the Senate with 23 YEAS and 7 NAYS. 

House Bill 1763 changes the laws regarding workers’ compensation large deductible policies issued by an insurer.  It amends chapter 375, RSMo, with an emergency clause.   It stated, “Because of the immediate need for the state to ensure that insurance guaranty associations have adequate resources to pay the covered claims of insolvent insurance carriers, the enactment of section 375.1605 of this act is deemed necessary for the immediate preservation of the public health, welfare, peace, and safety, and the enactment of section 375.1605 of this act is hereby declared to be an emergency act within the meaning of the constitution, and the enactment of section 375.1605 of this act shall be in full force and effect upon its passage and approval. “  Governor Nixon vetoed the bill stating “House Bill No. 1763 contains drafting errors that would make an exemption in the bill ineffectual and create ambiguity regarding the rules applicable to the orderly distribution of assets in insurance delinquency proceedings.  House Bill No. 1763 contains errors that would create ambiguity within an already complex area of law dealing with insurance delinquency proceedings.”  HB 1763 was passed in the House with 121 AYES and 34 NOES, and in the Senate with 25 YEAS and 5 NAYS. 

House Bill 2030 creates a tax deduction for employee stock ownership plans.  It authorizes a tax deduction equal to fifty percent of the capital gain resulting from the sale of employer securities to a certain Missouri stock ownership plans.  This creates new incentives that would make transitioning into an employee-ownership model more attractive to business owners in the state.  It was vetoed by Governor Nixon, but passed in the House by 119 AYES and 38 NOES.  It passed in the Senate by 26 YEAS and 4 NAYS. 

Unfortunately, two important bills that failed to pass are Senate Bill 591 and Senate Bill 847.  Both addressed Missouri’s legal climate problem.  As a result, the state’s business community can expect Missouri to remain near the bottom of national legal climate rankings.  The U.S. Chamber’s Institute for Legal Reform ranks’ our legal climate at 42 in the nation.  “These rankings instantly jump out to any company considering investing or expanding in Missouri.  Top job creators are well aware of the risks of operating in a state where the courtrooms are so strongly tilted against employers,” said Daniel P. Mehan, Missouri Chamber president and CEO. 

Members of the 99th MO General Assembly are scheduled to convene on January 4th at noon.  We will continue to keep you informed as things move forward. 

 

FLSA Overtime Rule Resources

June 2016

The U.S. Department of Labor (DOL) published monumental changes to the overtime rule that will make approximately 4.2 million currently exempt employees eligible for overtime pay later this year.

All employers will have to comply with the changes made to the overtime regulations of the Fair Labor Standards Act (FLSA) by December 1, 2016.

You can learn more about the overtime rule changes and how to implement them within your organization using the content and tools located at the SHRM website:  SHRM FLSA Overtime Rule Resources

 

Governmental Affairs Update

June 2015

By Julie Norris - SAHRA Governmental Affairs Committee

The 2015 Legislative Session came to an end at 6 P.M. on May 15, 2015.  This session was unique and interesting but extremely disappointing and unproductive. 

 

Major Bills That Passed:

Temporary Assistance to Needy Families (TANF) (SB24) – Reduces the length of time a family can draw welfare benefits and increases requirements for low-income parents to get job training, complete high school or vocational education or do volunteer work.  This bill was originally vetoed by Gov. Nixon, but the veto was overridden by the General  Assembly.  This bill will become effective 8/28/15.

 

Personal Injury Caps (SB239) – This bill places caps of $400,000 on damages for personal injury and $700,000 for a catastrophic injury (death, paralysis or loss of vision) in a medical malpractice lawsuit.  It also includes a clause to increase the limits by 1.7 percent each year.  This bill was passed and signed by the Governor and will become effective 8/28/15.

 

Other Bills of Interest:

Right-To-Work – Prohibits an employer from requiring a person to become a member of a labor organization as a condition or continuation of employment.  This bill resulted in a filibuster which completely shut down the Senate the last week of Session and will most certainly be vetoed by Gov. Nixon.  There is little chance his veto will be overridden because the bill did not pass either the House or Senate with enough votes to be considered “veto-proof”.

 

Unemployment Benefits (HB150) -  Cuts the maximum number of weeks of unemployment benefits that people can receive from 20 to as low as 13, depending on the unemployment rate in the state.  Already vetoed by Gov. Nixon.

 

Other Matters of Interest:

The NLRB issued employee handbook guidance being that could very helpful in avoiding liability (though no guarantee).  See the full report here. 

 

ACA Reporting – Everyone probably is well aware by now the ACA reporting requirements are effective January 1, 2016 for most employers.  Several webinars are popping up related to that subject.  Our best resource is to contact your payroll software provider or payroll company to see what assistance they will be offering and maybe try to educate yourself with a webinar or seminar on the subject.

 


 

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