vol.2 U.S. HRM in 2009- “The Best of Times, The Worst of Times”
An Update （April, 2009）
It's spring of 2009 and looking back over the past few months, it's clear to see that the year has produced some very worrisome and challenging developments - from the reemergence of pirates threathening world commerce, to the provocative launching of a missile by North Korea, to the continuing saga of the world economic crisis.
It's difficult to look at these crises and still have time to worry
about the new legislation affecting HRM in the U.S. Fortunately the U.S.
economy and these world events have taken President Obama's attention away
from some of the major labor law changes he supports. But analysts still
say that when the economy shows signs of genuine recovery, the Democrats in
Congress and the White House will once again push for massive changes in
labor law favoring organized labor or employees as a whole.
I'd like to provide a brief summary of what's been happening with the
5 large pieces of legislation supported by President Obama during his
1) The Employee Free Choice Act
This bill, strongly supported by labor unions, would be the biggest change in the National Labor Relations Act since the Act was created in the 1940’s. It would eliminate secret ballots during union organization elections and impose mandatory arbitration when a union wins an election.
The bill was formally proposed in March/09. Fortunately American business is mounting a very effective educational campaign to inform the public on the provisions and dangers of this legislation. Surveys are now showing that the public is against the elimination of a cherished American democratic ideal - the secret ballot.
Organized labor is still putting massive pressure on Congressmen and
Senators to support this bill in an overwhelming way to resist any blockage
by Republicans and Independents. Despite this pressure, a very influential
pro-labor senator from the state of Pennsylvania, Arlen Specter, announced
we would NOT support this bill in its current form.
It's difficult to predict what negotiations will take place and their
final result, but the 2 most significant aspects of this bill are very
emotional issues for each side - 1) the elimination of the secret ballot and
2) the stipulation that when a union is recognized by a company that a
2-year labor agreement must be completed within 120 days or the proposals
would be submitted to an arbitrator.
Unions represent 7.5% of the private workforce in the U.S. with their
numbers falling daily, especially with the massive layoffs occurring in the
auto industry. It is certain that organized labor is desperate and will
fight fiercely to retain the original spirit of this legislation, making it
far easier for them to organize employees and obtain lucrative labor
2) Ledbetter Fair Pay Act
The Ledbetter Fair Pay Act was approved by Congress and signed by President Obama January 29, 2009 retroactive to May 27, 2007.
It allows plaintiffs, predominantly women, to recover wage disparities up to two years preceding the filing of a charge of discrimination. It also permits new litigation over decades-old compensation disparities based on decisions made long ago.
Companies must re-evaluate what documentation should be created and
retained, and for how long, concerning compensation studies and pay
adjustments. For example, if a male employee and female employee have the
same job title, but the female employee is paid less, the burden is with the
company to explain the difference by experience level, educational level or
other business-related explanations.
3) Healthy Families Act
No formal action has been taken to introduce this legislation as yet. The bill would require companies to provide 7 additional sick days for full-time and pro-rated for part-time employees IN ADDITION to current sick leave and paid time-off (PTO). This would apply to the illness of the employee OR a family member.. An employee may be allowed up to 3 days to report an illness! This presents obvious challenges in scheduling and preventing abuse by employees.
4) Expansion of the Family and Medical Leave Act
New provisions became effective January 16, 2009.
Some of the major points of these changes are:
1) changes in the notice and certification requirements for FMLA leave;
2) employers must revise Employee Handbook FMLA policies;
3) new military leave provisions (for example, emergency leave of up to 12 weeks for an employee when a family member is called to active military duty,
or leave of up to 26 weeks if a family member becomes ill or injured because of active military service);
4) no clarification of "serious health condition" or "intermittent leave" issues, some of
the most challenging problems for employers when deciding whether
to grant FMLA leave.
5) New Mandated Benefits under ERISA and 401k:
No formal changes have been proposed as yet. I've attached a summary
of possible changes from the January/09 article:
a) Possible ERISA changes include changing health insurance plans to
provide mental health coverage similar to physical health coverage (most
companies have very limited mental health coverage). This could add substantial costs
to health insurance plans trying to cope with medical inflation.
Companies might also be required to treat all disabilities in the
same way. This could lead to substantial costs in providing these modified
benefits to employees and their families. For example, prescription drug coverage
typically requires employees to pay a small co-pay for each prescription. A person
with high blood pressure (hypertension) or diabetes might pay $15 for each
prescription. Changes to ERISA would require companies to charge the same co-pay for
much more expensive drugs. For example, a person with multiple sclerosis
(MS) might need a drug that costs $10,000/month. This person would be given the same
co-pay as a person requiring a much less expensive drug. This could drive up
health insurance expenses considerably.
As for 401k plans, stricter standards on fiduciary fees and
responsibilities are expected. Many companies are adopting ‘automatic enrollment’ and/or
automatic employee contribution increases in their 401k plans to
encourage more employees to join and save more money for retirement.
As employees divert more of their money into 401k’s, the government
will be more concerned that companies are providing enough investment
information for employees to make educated financial decisions. Employee complaints or lawsuits relating to poor investment results could be costly and damaging unless
companies can prove they’ve provided sufficient notice and education on the risks
Source of information: Morgan Lewis & Brockius/Wharton School of
Research Advisory Group
「Reports from New York」はニューヨークでHRMに関する活動をしているPhilip S. Kozlowskiからのレポートです。
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