The National Safety Council has published an Employer Toolkit for drug policies and issues, which is very informative and comprehensive.  The Toolkit furnishes an employer an excellent "checklist" of various items to consider, including such things as how opioids affect tolerance and ultimately lead to addiction, how to confront an employee, sample employee buy-in approaches, sample policies, and the like.  The policies recommend balancing the safety needs of the employer and workers' health, and suggest the following components:

• Statement of the purpose and scope of the program.

• Definition of what constitutes misuse, including alcohol and all forms of impairing drugs, prescribed, over-the-counter, legal, illegal, synthetic or otherwise.
• Statement of who is covered by the policy and/or program.
• Statement describing under what circumstances drug or alcohol testing will be conducted, including confidentiality of test results.
• Procedures to ensure fair testing process (confirmation testing, use of medical review officers, worker protections against retaliatory testing).
• Training for employees, supervisors, and others in identifying impaired behavior and substance use.
• Employee education (e.g., a substance-free awareness program).
• Procedures for dealing with impaired workers.

• Assistance for those who voluntarily seek help for impairment issues.

• For further information, go to org/opioidsatwork.

As reported in this newsletter last month, a federal judge in the District of Columbia ruled that the EEOC had to implement its requirement that employers file certain pay equity data as part of their EEO-1 Component 2 filing due on September 30 of this year.  The EEOC has already announced that the pay equity data component will not be required after this year, but there is still ongoing litigation as to the completion of the requirement for this year.  The EEOC has reported that approximately 81% of employers met the filing requirement of the pay equity data as of October 28, 2019.  Plaintiffs in the ongoing litigation have contended that the pay data requirement should remain open until over 98% of businesses with 100 or more workers have submitted their pay equity data.  The EEOC contends that sufficient filings have been made to close the first-time requirement.  On October 29, the same federal judge ruled that the EEOC must continue to collect the pay data from employers with 100 or more workers.  The rationale was that the agency had previously left the collection period open past the deadline, so now the judge wants the EEOC to at least collect the average response rate it calculates for those who submit data within the grace period rather than the normal deadline. 

The ruling directs the EEOC to keep the filing period open similar to the manner it has in the past, so that the federal judge can determine when the EEOC's responsibility to collect the pay equity data ceases.  The court order said the EEOC "must continue to take all steps necessary" to complete the data collection by January 31, 2020.  This suggests the possibility that there may be follow-up with those employers with 100 or more employees that have not yet filed the pay equity Component 2 Report.  However, there are no automatic fines or penalties for not filing. 

Last month, this newsletter reported that President Trump, on October 9, signed two executive orders to reduce the impact of agency guidance that had become a back door means of regulation.  Agencies are supposed to review all their federal guidance documents and rescind those no longer in effect.  The Office of Management and Budget has given agencies until February 28, 2020 to list all their operative industry guidance documents and post them to a single departmental website. 

In a related development, the National Labor Relations Board (NLRB) and the Equal Employment Opportunity Commission (EEOC) announced that they, too, will meet these requirements, even though as independent agencies, they are outside the normal requirements. 

Guidance from federal agencies is a double-edged sword to industry.  On the one hand, many administrations have used such guidance to change the law without going through the normal notice and comment period, but on the other hand, some in industry like whatever advice they can get on compliance requirements of complicated legal issues.  The new executive order will definitely promote transparency and consistency by requiring such postings to a central website.

It is not uncommon for many employers and their attorneys to complain that they are harassed by overly aggressive federal investigators, some of whom appear to be following prior administration policies that are no longer applicable.  In October, Cheryl Stanton, Administrator of the Department of Labor's Wage and Hour Division, addressed just this issue.  She acknowledged there was a common complaint that some field investigators are ignoring the Trump Administration policies and instead advancing Obama-era strategies that are now outdated.  In such situations, Stanton advised employers or their representatives to contact their district office director or to "flag it for the national office, and we can take a look and make sure that things are being applied correctly."  Stanton also emphasized that employers are free to "run it up the chain," and stated that: "We are trying to look at the best way to become one Wage and Hour Division instead of 54 district offices."  She noted that the division is in the process of retraining some investigators and reviewing the field operation handbook.

In a related development, many expect the new Secretary of Labor, Eugene Scalia, to direct new policy changes under a unifying but different interpretation of what constitutes fair Labor Department enforcement.  The result may be memos to regional staffs requiring more national office oversight of major cases to guarantee the agency's litigation resources are properly engaged.

The California legislature has passed a bill that has been signed by its governor designed to reclassify many or most contract workers as employees.  The bill goes into effect January 1 of next year, and applies what is known as the "ABC Test" to employment status.  It requires companies that want to treat a worker as a contractor to prove that the worker is independent and free to perform the services provided without company control, that those services are outside the company's usual course of business, and that the contractor works independently in the same type of business as the contracted work.  The bill, known as Assembly Bill 5, directly threatens the business model of gig-economy companies like Uber, as would the legislation promoted by various Democratic Presidential candidates in Congress.  Further, the so-called "red" states across the country are looking at this bill and considering similar legislation.                     

The situation in California leaves many with the question as to what to do after the law goes into effect.  Federal Express reacted to similar issues by abandoning any issues of independent contractor drivers in favor of smaller independent motor carriers, and contracting with corporate entities rather than individuals seems to promote the contractor classification.  Although a company might also consider outsourcing employment to a staffing agency, issues still arise concerning potential joint employment liability.

On August 1, 2019, the Senate approved Sharon Gustafson as the EEOC's new General Counsel and Charlotte Burroughs (D) for a second term as a member of the EEOC Commission.  Gustafson had been awaiting Senate approval for almost 15 months, giving the Administration its first Senate-confirmed General Counsel.  The authority of the EEOC General Counsel is quite significant as the Commission has delegated the authority to the General Counsel to determine which cases to litigate, and some consideration is being given to return that authority to the Commission rather than the General Counsel.

Since the Commission now has a quorum to transact business, it will undoubtedly be addressing some of the controversial issues over which consideration has been postponed due to the lack of a quorum.  Those issues include new policies on sexual harassment and the controversial issues associated with sexual orientation and gender identity.  The Justice Department and the EEOC currently have conflicting opinions as to whether the discrimination laws protect LGBT workers, and a case dealing with that issue is now before the U.S. Supreme Court.  Another controversial issue pending at the EEOC is the Obama-era initiative to require employers to submit pay equity data with their EEO-1 Reports.  There is another nominee for the remaining open Commission position, and the Administration has nominated Keith Sonderling for this position, but as of yet there have been no Senate confirmation hearings. 

On September 24, 2019, the U.S. Department of Labor announced its long-anticipated Final Rule on exemptions and overtime under the Fair Labor Standards Act (FLSA).  The new rule takes effect January 1, 2020.  It increases the salary thresholds necessary to exempt executive, administrative, or professional employees from the FLSA’s minimum wage and overtime pay requirements from $455 to $684 per week (equivalent to $35,568 per year for a full-year worker).  It also allows employers to count a portion of certain nondiscretionary bonuses and commissions towards meeting that salary level:  this will allow an employer to “catch up” an employee’s earnings at year end so the employee qualifies for the exemption. The total annual compensation level for highly compensated employees (HCE) is increased from the currently-enforced level of $100,000 to $107,432 per year.

The variable pay component cannot exceed more than 10% of each employee's total pay.  In addition, if an employee does not earn enough in non-discretionary bonuses and incentive payments (including commissions) in a given 52-week period to retain his or her exempt status, DOL permits a "catch-up" payment at the end of the 52-week period.  This gives an employer one pay period to make up for a shortfall of up to 10% of the standard salary level for the preceding 52-week period.  DOL did not make any revision to the separate duties test, which exempts workers from overtime if their primary duties involve supervisory functions or require advanced knowledge, provided they also earn more than the minimum salary level. 

The new rule is expected to draw a legal challenge from worker advocates, as an earlier Obama-era proposed regulation would have doubled the salary threshold to $47,500 and automatically updated it every three years. 

Employers will need to weigh the cost of raising employee salaries above the new threshold against the cost of reclassifying them as non-exempt and paying overtime.  Such changes will necessitate a communication strategy as employees tend to like salaried status, including the benefit levels that often come with salaried employees.  The changes could be explained as based on the new government rules.  If employees are reclassified as hourly, employers will need to track work time and pay appropriate overtime premiums.  Another potential solution is to keep employees on salary and pay one-half time overtime on a fixed pay for fluctuating hours arrangement.  The latter arrangement should only be used with legal advice. 

At least five Democratic presidential candidates have recognized labor unions as representatives of their campaign staffs, including Bernie Sanders, Elizabeth Warren, Cory Booker, Julian Castro, and Eric Swalwell.  Democratic candidates are catering to labor union votes, likely because of President Trump's strong support from union households in the last election.  Surprisingly, results have not always gone the way the presidential candidates would have preferred.

The Bernie Sanders campaign is facing unfair labor practice charges alleging illegal employee interrogation and retaliation.  Apparently, negotiations between the Sanders' campaign and the union representing staffers has not gone over well, although the NLRB has yet to determine whether the charges against the Sanders' campaign have merit.  Charges to the NLRB can be filed by "any person," and they do not have to come from someone directly affected by the alleged violations.

A representative of the UFCW, the union representing the Sanders' campaign staffers, declined to comment, as did the Sanders campaign officials.

More recent information indicated that the charge against the Sanders' campaign was filed by a staffer alleging that the campaign "failed to notify us upon hire that we had a collective bargaining agreement and maintained that we were at-will."  Other allegations include that the campaign broke the terms of its collective bargaining agreement by making staff work additional days and failing to provide days off.

Elizabeth Warren's campaign is also facing an unfair labor practice charge alleging its confidentiality agreement unlawfully prevents them from speaking out on workplace issues.  The charge against Warren was filed by a non-employee who supports another presidential candidate and is targeting the campaign's reported use of unpaid fellowships as well as non-disparagement agreements.  The Warren campaign reportedly requires its employees to not "make any statement that may impair or adversely affect the good will or reputation of the organization."  Other reports indicate neither the Warren nor the Sanders campaign are willing to pay the $15.00 per hour wages that they had campaigned for.

A related development concerning the Bernie Sanders' campaign is that numerous reports indicate that union members are upset with Sanders for his idea of eliminating the current health coverage of union members in favor of a Medicare for all system.  The unions oppose this idea on the grounds that negotiated health care benefits are a key perk of being in a union. 

According to a Gallup Poll on August 28 of this year, the approval rating for labor unions among the American public reached 64%.  This 64% approval rating is up 16 points from the all-time low just ten years ago.  The poll indicated that about 14% of Americans live in a union household.  The survey found an 86% approval rating among those living in a union household, but only a 60% approval rating in non-union households. 

The situation between General Motors (GM) and the United Auto Workers (UAW) seemed a "perfect storm" for a labor dispute.  GM's profits have reached high levels in 2016 and 2017, before falling last year, with expectations for further downturns in U.S. auto sales.  The investment community had the opinion that GM coddled the UAW, and thus avoided necessary cost cutting measures.  The UAW, on the other hand, is experiencing a major membership decline from 1.5 million in the 1970s to around 400,000, partially resulting from lay-offs in Detroit and moving more work to Mexico.  The UAW has been notoriously unsuccessful in attempting to organize foreign-owned car plants in the U.S., such as Nissan, Toyota, and Volkswagen.  The UAW's newly-elected President was inexperienced in labor negotiations, and is himself the subject of a Justice Department investigation into corruption, along with many other UAW officials, some of which have already been convicted of various forms of embezzlement.  The union president is under investigation for a "lavish lifestyle" that includes long stays in luxury lodgings, golf outings and state dinners with champagne and cigars.  In the government raid of his suburban Detroit home, federal investigators seized golf clubs and $30,000 in cash.  Even President Trump played a role by publicly criticizing GM for not building more in the U.S.  It didn't help that the industry was shifting toward electric vehicles and self-driving cars.  The union also resented concessions during the previous GM bankruptcy and wanted pay-backs.

GM was trying to require union members to pay some portion of the healthcare costs, which is currently a ridiculously low 4%, well less than something like the 25%-30% industry average.  The UAW was trying to reduce the current eight-year progression to reach the pay level of $30, as new hires start around $15 and go through a progression.  The UAW also wanted to reduce the number of temporary workers and contractors. 

The situation resulted in a strike of almost 50,000 workers, and occurred at a time when public approval of unions is the highest in 50 years.  The strike is one of the biggest ones in many years.  Over 30 factories in the U.S. were directly affected, resulting in problems for many suppliers as well.

The union seemed begging for a fight and increased its strike pay from $200 to $250 a week, and seemed desperate to show toughness to its membership.  GM, in its effort to hold the line on costs, aggressively publicized its proposals to the entire workforce, a tactic designed to appeal directly to workers. 

Finally, after over a month of striking, a tentative deal has been reached.  GM has apparently promised to invest more monies in the U.S. factories and to keep some of them open that would otherwise have closed or been reduced.  The agreement reportedly includes wage increases of 3% for two years of the contract and a 4% bonus payment in the other two years, and further provides a path to full-time employment for temporary workers.  The healthcare cost issue remains unchanged, and new hires will get improved pay and faster progression to the top rate. 

As usual, everybody lost in the strike.  Some estimate GM's losses as much as $1.5 billion, and the union strikers lost wages that they will never regain.