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Washington Labor & Employment Wire » The Potential Impact of the Obama Administration on the Labor and Employment Legal Landscape

The Potential Impact of the Obama Administration on the Labor and Employment Legal Landscape

Part II - Workplace Leave Policies and Regulation

This is the second installment in our series on potential changes ahead in labor and employment law with the Obama administration and the 111th Congress.  Today, we examine the issue of workplace leave policies and regulation.

In February 1993, the Family and Medical Leave Act (FMLA) became one of the first bills signed into law by President Clinton.  Under the FMLA, eligible employees may take up to 12 weeks of unpaid leave in a 12-month period as a result of their own serious health condition; to care for a parent, spouse or child with a serious health condition; or for the birth or adoption of a child.  Since its enactment, the FMLA has become a popular source of employee benefits in the workplace, but one that imposes significant administrative burden and cost on employers.  The strengthened Democratic majorities in the House and Senate, with the support of the Obama administration, will likely expand further the scope and cost of various family leave policies.

The various bills introduced in the recent Democratic Congress provide a guide for likely legislative activity in the 111th Congress.  These bills generally increase the pool of employees eligible for employee leave and the types and duration of leave.  Additionally, on his Web site, President-elect Obama expressed support for mandating paid sick days, as well as support for efforts to encourage states to adopt paid leave programs, both of which would increase labor costs to employers.  President-elect Obama also supports legislation providing tax breaks to companies that implement flextime arrangements for their employees.

Military Leave Legislation

The Obama administration will likely support extensions of the FMLA in ways that would benefit military personnel and their families.  Such legislation, although politically popular, would nonetheless impose new administrative and labor costs on employers.

In July 2007, President-elect Obama introduced the Military Family Job Protection Act in the Senate (S. 1885, H.R. 3993), a bill that amends the FMLA to provide up to a full year of job protection, including protection from denial of any employment benefit or promotion, for any family member caring for a recovering service member at a military medical facility.

A variety of other bills (S. 1898, H.R. 3391, S. 1894, S. 1975, H.R. 3481, H.R. 5090) were also introduced in this Congress to extend FMLA benefits to the families of military personnel who care for wounded veterans.  For example, S. 1898 and S. 1975 would extend the FMLA’s provision of 12 weeks of unpaid leave to up to six months of unpaid leave for spouses, children and parents of soldiers injured in combat.  H.R. 3481 would include primary caregivers as well.  S. 1894 would extend the FMLA to up to 26 work weeks for primary caregivers of service members with combat-related injuries, and H.R. 3391 would extend the FMLA to up to 26 work weeks for spouses, children and parents.  H.R. 5090 provides FMLA coverage to qualifying part-time workers, lowering the qualifying 12-month work requirement  for veterans’ spouses, parents or children from 1,250 hours to 625 hours when that individual takes leave to care for the covered service member employees.

Expansion of the FMLA

The Obama administration will likely seek to expand the reach of the FMLA to cover employers with as few as 25 employees (down from the current 50-employee threshold).  On his campaign Web site, President-elect Obama also supported expanding the FMLA to cover additional care situations, including elder care, parental participation in school activities and leave for victims of domestic violence and sexual assault.

Additionally, the Obama administration may pursue additional Democratic initiatives concerning expanded paid FMLA benefits.  One such bill, the Family Leave Insurance Act (S. 1681, H.R. 5873), would create a federal insurance fund, similar to the federal unemployment insurance scheme, to provide eight weeks of pay for employees taking FMLA leave.  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 paid leave that equals or exceeds the government plan to opt out of participating in the insurance fund.  If enacted with employer matching requirements, the 0.2 percent matching requirement could be costly to employers of qualifying employees.

Mandatory Paid Sick Leave

President-elect Obama cosponsored the Healthy Families Act (H.R. 1542, S. 910), which requires employers with at least 15 employees who work at least 30 hours a week to provide seven days of paid sick leave, with pro-rated leave for part-time employees.  The leave could be used to care for an illness, injury or medical condition, or to obtain medical diagnosis or preventative care for “a child, a parent, a spouse, or any other individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship.”

Flexible Work Schedules

In late 2007, President-elect Obama cosponsored the Working Families Flexibility Act (H.R. 4301, S. 2419), a broad-based proposal to reform working conditions and employee rights that would have a dramatic impact on the workplace.  With the support of the Obama administration, the 111th Congress may take up this legislation, which provides employees with the statutory right to request flexible work terms and conditions.  The Working Families Flexibility Act provides for a detailed interactive process with employees on flexible scheduling and requires employers to meet with a requesting employee and a designated representative of his or her choosing, justify any denial in writing and then meet again with any dissatisfied employee.  Employees, in turn, would be given the right to make a complaint to the Department of Labor (DOL), seek an administrative hearing and appeal the administrative hearing result to a federal court of appeals.  In addition, the Secretary of Labor may file a civil action for injunctive relief in District Court.

The bill, which exempts small businesses, would transfer significant authority over working conditions away from employers by giving employees a larger say in determining their schedules and locations of work.  While some employers may benefit from this approach to working conditions through increased worker satisfaction and productivity, some employers may bristle at these changes, which would likely place additional strain on human resources departments tasked with complying with DOL regulations, evaluating employee requests, documenting their decisions and engaging in the interactive process prescribed by the bill.  Additionally, employers will be burdened by the administrative and legal processes available to dissatisfied employees.