On April 25, 2008, the comment period for the Department of Homeland Security’s supplemental proposed rule on “no-match” letters closed. Published on March 26, 2008, the proposed “supplemental rule” amends the original rule published on August 15, 2007 to address three concerns raised by Judge Charles Breyer (Northern District of California) when he preliminarily enjoined implementation of the original rule in October 2007.

The proposed supplemental rule does not change the original rule’s safe harbor provisions that provide employers a 30-day period to determine whether no-match results were caused by errors on their part. If the no-match results were not due to employer error, employees would have 60 days to resolve the discrepancy with the SSA.  Rather, the supplemental rule focused on procedural considerations connected with implementation of the original rule.

The supplemental rule contains a clarification that DHS does not believe the no-match rule changed its policy on the use of no-match letters and, if it did, the change was reasonable. DHS explains that the rule was written to eliminate ambiguity regarding an employer’s responsibilities upon receipt of a no-match letter, since “existing law clearly establishes that employers may be charged with constructive knowledge when they fail to conduct further inquiries in the face of information that would lead a person exercising reasonable care to learn of an employee’s unauthorized status.”

The supplemental rule also rescinds the anti-discrimination provisions included in the original rule and refers employers to the Justice Department for further guidance. The district court was concerned that the anti-discrimination provisions created a serious question of whether DHS had exceeded its authority by interpreting anti-discrimination provisions of the INA (which are enforced by the Justice Department’s Office of Special Counsel and not DHS) to preclude enforcement where employers follow the safe-harbor framework.

Finally, although DHS continues to maintain that the no-match rule “would not have a significant economic impact on a substantial number of small entities” and that the Regulatory Flexibility Act does not mandate it, DHS published an initial regulatory flexibility analysis (IRFA).  Published in response to the preliminary injunction, the IFRA allowed public review and comment on the costs that may be incurred by employers who choose to adopt safe harbor procedures.

According to a study submitted with the U.S. Chamber of Commerce comment to the supplemental rule, the no-match rule would cost employers between $1 billion to $1.6 billion per year to implement. Accordingly, the U.S. Chamber of Commerce requested the no-match rule be withdrawn until a proper Regulatory Flexibility Analysis is conducted. 

Immigrant advocacy groups also submitted comments voicing their concerns that the new rule would cause employers to incorrectly assume that workers listed in no-match letters are not authorized to work and fire them without giving them a chance to correct their records. These groups also expressed concern that the rule may result in increased discrimination based on race and national origin. 

DHS has not announced a timetable for its next action or the promulgation of a final rule. A DHS spokeswoman explained that the department wants to ensure a “quality review” of the hundreds of comments submitted.

The public comments received by the department may be reviewed on the government’s regulations website. 

On April 23, 2008, OSHA announced that it will hold an informal public hearing on the proposed rule for Confined Spaces in Construction. Published on November 28, 2007, the proposed rule increases the protection provided to construction employees working in confined spaces. The comment period for this proposed rule closed on February 28, 2008. For further details regarding the proposed rulemaking and specific requests for comment, please consult our December 17, 2007 post.

The OSHA hearing is scheduled for 10:00 am on July 22, 2008 at the Department of Labor’s Frances Perkins Building in Washington, D.C. Anyone who intends to present testimony at the hearing must notify OSHA in writing by May 21, 2008. In addition, if the testimony will be more than ten minutes, the presenter must provide OSHA with copies of the full testimony by June 20, 2008. 

On April 24, 2008, by a unanimous 95-0 vote, the Senate passed the Genetic Information Nondiscrimination Act (H.R. 493). The act amends Title VII to prohibit employers from discriminating against employees on the basis of genetic information in hiring, firing, and other activities. The act also prohibits employers from collecting genetic information from their employees, except for rare circumstances such as testing for adverse effects to hazardous workplace exposures, and requires strict confidentiality over genetic information possessed by employers. The act also amends ERISA and the Public Health Service Act to prohibit health insurers from discriminating against individuals on the basis of genetic information, prohibiting insurers from requiring genetic testing, tying premiums to genetic information, or considering family history of genetic disorders in making underwriting and premium determinations.

Individuals at risk for genetic diseases or disorders due to risk-profiles or family history, previously might have been “chilled” from seeking beneficial diagnostic genetic testing for fear that a diagnosis could imperil their jobs or insurance. According to its proponents, the bill removes this danger, allowing at-risk individuals to seek testing without adverse insurance or employment consequences. 

For the last several months, H.R. 493 had been subject to a hold placed by Sen. Coburn (R-OK), who sought a “business necessity” exemption for certain employers seeking genetic information from their employees. Sen. Coburn was persuaded to drop his hold on the bill following a compromise which strengthened the separation between the insurance and employment protections. Sen. Coburn and other proponents of the new language believe it will limit frivolous lawsuits. 

An earlier version of the bill introduced by Rep. Slaughter (D-NY) passed the House in April 2007.  The Senate version of the bill will now move to the House, where it is expected to pass next week. The Bush Administration has previously announced its support of H.R. 493 and is expected to sign the bill.

On April 23, 2008, by a vote of 56-42, Senate Democrats failed to garner the necessary 60 votes to invoke cloture and end debate on the Lilly Ledbetter Fair Pay Act of 2007 (H.R. 2831, S. 1843), which would overturn the U.S. Supreme Court’s decision in Ledbetter v. Goodyear Tire & Rubber Co., No. 05-1074 (May 29, 2007). In Ledbetter, the Supreme Court rejected a continuing violation theory that would restart Title VII’s 180-day time limit every time an employee receives a discriminatorily-disparate paycheck. S. 1843 would have reversed this decision by amending Title VII to allow claims brought within 180 days of receiving any paycheck affected by a discriminatory decision involving pay, no matter how far in the past the underlying act of discrimination allegedly occurred.

Senate Democrats fell only three votes short of invoking cloture, gaining the support of six Republicans:  Sen. Coleman (R-MN), Sen. Collins (R-ME), Sen. Smith (R-OR), Sen. Snowe (R-ME), Sen. Specter (R-PA), and Sen. Sununu (R-NH).  Majority Leader Sen. Reid (D-NV) supported cloture, but voted with Republicans as a procedural maneuver that allows him to bring the bill back to the floor at a later time.

The Bush Administration has threatened to veto the legislation in the event of passage. The bill previously passed the House on July 31, 2007.

Core Provisions: This untitled bill seeks to recapture approximately 210,000 employment-based immigrant visas (H-1B visas) that went unused between fiscal year 1992 and fiscal year 2007 due to bureaucratic delays and to prevent losses of family and employment-based immigrant visas in the future by allowing unused visas to roll over to the following fiscal year.

Status: On April 23, 2008, Rep. Zoe Lofgren (D-Calif.) introduced H.R. 5882. The bill was referred to the House Committee on the Judiciary.

Core Provisions:  This act would create a federal insurance fund similar to the unemployment benefits scheme to provide twelve weeks of pay for employees taking leave (1) because of a serious health condition, (2) upon the birth or adoption of a child, (3) in order to care for a family member, (4) due to any qualifying emergency arising from the fact that a spouse, child, or parent of the employee is on active military duty, or (5) in order to care for a family member who is a covered service member.Employees would contribute 0.2 percent of their annual earnings, and employers would match employee payments. Benefit amounts would be tiered progressively according to income level, and indexed for inflation under the Social Security wage index. The bill would allow employers with an equivalent or better paid-leave plan to opt out of participating in the insurance fund.

The legislation explicitly includes caring for a sick or injured “domestic partner” and, for those states that do not acknowledge same-sex domestic partnerships, defines domestic partner to include “a single, unmarried adult person of the same sex as the employee who is in a committed, intimate relationship with the employee, . . . and who is designated to the employer by such employee as that employee’s domestic partner.” The bill also prohibits an employer from interference, discrimination, or retaliation concerning an employee’s exercise of rights under the benefit scheme, and would give employees a corresponding private right of action. 

The bill grants the Secretary of Labor investigative authority, as well as authority to bring an administrative or civil action. The bill also provides criminal penalties for knowingly submitting or helping another to submit a false certification in order to fraudulently collect benefits. 

Status: H.R. 5873 was introduced by Rep. Stark (D-CA) on April 22, 2008, and referred to the House Committees on Education and Labor, Oversight and Government Reform, and Ways and Means.

The EEOC has requested comments on its suggested changes to the regulations governing disparate impact claims under the ADEA. Disparate impact claims are those that involve a facially neutral practice that has an adverse impact on persons who are age 40 and older. As discussed below, the proposed regulations are consistent with the agency’s position in Meacham v. Knolls Atomic Power Laboratory, 461 F.3d 134 (2d Cir. 2006), petition for cert. granted, 128 S.Ct. 1118 (2008), a case that will be argued before the Supreme Court on April 23, 2008.The EEOC’s changes would replace its current disparate impact age discrimination regulation with a regulation that conforms to the Supreme Court’s decision in Smith v. City of Jackson, 544 U.S. 228 (2005). Specifically, the EEOC would change 29 C.F.R. § 1625.7(d) to require plaintiffs who assert disparate impact age discrimination claims to “isolate[] and identify[] the specific employment practice that is allegedly responsible for any observed statistical disparities.” Additionally, the proposed regulation interprets the ADEA to require that when an employer asserts that some challenged practice is lawful because the practice is attributable to a “reasonable factor other than age” (”RFOA”), “the employer bears the burden of proving that the ‘reasonable factor other than age’ exists.”

In Smith, the Court determined that the ADEA permits disparate impact age claims. Unlike Title VII, which permits disparate impact race, color, sex, religion, and national origin claims, employers may defend ADEA disparate impact claims if the alleged discriminatory practice is justified by a RFOA.  Title VII provides a defense to disparate impact discrimination only when the practice is job related and consistent with business necessity. 

The question of whether a plaintiff or a defendant bears the burden of proving a RFOA in a disparate impact age discrimination case is currently pending before the Supreme Court of the United States in the Meacham case. The EEOC’s regulation seeks to settle the issue in Meacham, apparently before the Court issues its decision. Any comments about the EEOC’s proposed regulation must be received by May 30, 2008, and the EEOC may issue a final regulation anytime thereafter. The Supreme Court’s Meacham decision will likely issue by the end of June. 

The EEOC’s proposed treatment of the RFOA as an affirmative defense is inconsistent with decisions by the Second and Tenth Circuits, both of which have held that an employer only has a burden of production, not a burden of persuasion with respect to the RFOA. The Second and Tenth Circuits liken the ADEA to the pre-1991 Title VII disparate impact claims and place the ultimate burden of proof with the plaintiff. Meacham will decide this issue.

The EEOC’s proposed regulation is consistent with briefs the Commission filed in the Meacham case. Whether the Supreme Court will agree with the Commission remains to be seen, but even if the Court does agree, the Court already decided in the Smith case that the scope of disparate impact age discrimination is quite narrow. Nothing about the EEOC’s proposed regulation changes the Court’s decision in Smith.

The EEOC has asked interested parties to comment on whether the regulations should provide suggestions on the meaning of “reasonable factors other than age” standard. EEOC also asked whether explanations should refer to tort law standards such as negligence and reasonable standard of care when defining “reasonable.” Finally, the EEOC asked whether the regulations should offer factors relevant to whether an employment practice is based on reasonable factors other than age. 

On April 10, 2008, the House Subcommittee on Workforce Protections held a hearing on the FMLA that focused on proposed changes and potential areas of improvement. Chairwoman Woolsey (D-CA) expressed concerns about the Department of Labor’s proposed FMLA regulations, and endorsed two pending pieces of legislation: The Balancing Act of 2007 (H.R. 2392) and The Healthy Families Act of 2007 (H.R. 1542, S. 910).  The Balancing Act of 2007 would provide paid family medical leave, benefits for part-time workers, and additional leave for parental involvement activities. The Healthy Families Act of 2007 would require employers to provide workers with at least seven days of paid sick leave and pro-rated leave for part-time employees. 

Chante Lasco, a recent new mother, testified about the difficulty employees face when attempting to take advantage of the FMLA’s twelve weeks of guaranteed leave because the leave may be unpaid. Lasoc also shared the difficulties of returning to work only twelve weeks after giving birth, including the difficulty in finding and paying for child care for a twelve-week-old infant.

Victoria Lipnic, Assistant Secretary of the Employment Standards Administration division of the Department of Labor, spoke primarily about the Department’s proposed FMLA regulations.  Lipnic asserted that the Department currently has four main rulemaking goals: (1) to address the recently enacted military family leave provisions; (2) to update the regulations to comport with current case law; (3) to foster smoother communications among employees, employers, and health care professionals; and (4) to update and clarify specific problematic areas of the current FMLA regulations without limiting employee access to FMLA leave.

Among other revisions, the proposed rule:

• requires employees to give more advance notice of the intention to take FMLA leave;
• attempts to clarify the medical certification requirements;
• permits an employer to contact an employee’s health care provider directly for purposes of clarification and authentication of the serious health condition;
• imposes increased notice requirements on employers;
• changes the standard for determining the relevant “worksite” for coverage determination purposes in a joint employment situation;
• changes requirements regulating the interaction between FMLA leave and light duty work;
• clarifies that an employee cannot waive prospective rights but may settle claims based on past employer conduct; and
• removes categorical penalty provisions while retaining an employee’s entitlement to remedy for individualized harm.

For more complete coverage of the proposed rulemaking, please see Akin Gump’s recent Employment Alert.

Debra Ness, President of the National Partnership for Women and Families, criticized the proposed regulations. Ness claimed that the proposed changes would make it more difficult for employees to use FMLA leave because of increased notification and certification requirements.  In addition, the new rule would increase direct contact between employers and employees’ health care providers, a matter of concern for employees with serious health conditions that carry social stigma. Ness’s proposals for expanding FMLA included reducing the employer-size threshold, removing job tenure requirements for leave eligibility, extending coverage to include leave to care for all domestic partners and extended family members, and implementing a federal minimum standard of paid sick days for all employees.

Brenda Cossette testified on behalf of the Society for Human Resource Management, a professional association representing more than 225,000 HR professionals who administer FMLA leave on a daily basis. Cosette praised the FMLA generally, but warned that unintended consequences require regulatory clarification in areas not addressed by the proposed rule.  Cossette recounted common challenges HR professionals encounter, including administering unscheduled intermittent leave and interpreting the definition of a “serious health condition.”  Cossette reported that employers are facing habitual employee absenteeism or tardiness with limited tools for determining when the leave is legitimate. Furthermore, the availability of intermittent leave for chronic conditions, which allows leave to be taken in unpredictable, unscheduled, and small increments of time, poses significant challenges in the reallocation of absent employees’ work. Cossette also warned that proposals to expand FMLA without first addressing its flawed framework, including paid leave mandates, would be ill-advised.

Core Provisions: This act would expand the FMLA by permitting employees to use FMLA leave “to attend court proceedings relating to the prosecution of a person for a violent crime (including domestic violence) committed against the employee, a spouse, parent, son, or daughter of the employee, or other next of kin of the employee.” Whenever possible, the employee would be required to give the employer at least two weeks notice of the intention to take the leave. The employer would be able to require the employee to supply certification issued by a court or prosecutor relating to the court proceeding for which leave is taken.

Status: H.R.5845 was introduced by Rep. Emanuel (D-IL) on April 17, 2008, and referred to the House Committees on Education and Labor, Oversight and Government Reform, and House Administration.

Core Provisions: This bill would recapture 150,000 unused H-1B visas from prior years and distribute them over a three-year period. As a result, H1-B visa caps for fiscal years 2009 through 2011 would be increased from 65,000 to 115,000. The bill would also increase H-1B petition fees for employers and impose a recapture fee. The bill requires all employers to agree not to advertise jobs solely to H-1B workers and prohibits employers from outsourcing the labor of an H-1B worker by requiring that the alien work only at the worksite of the employer. Additionally, among other provisions, the H-2B Returning Worker provisions would be extended for 3 years.

Status: On April 10, 2008, Sen. Cornyn (R- TX) introduced S. 2839. The bill was read twice and referred to the Senate Committee on the Judiciary.