Author: Site Staff

Employers would be prohibited from making hiring, firing and other personnel decisions on the basis of workers’ genetic predisposition to a disease under rules to be proposed this week by the Equal Employment Opportunity Commission.

The proposals, which are open for public comment over the next two months, also would bar employers from deliberately acquiring genetic information from employees and job applicants, according to testimony before commissioners by EEOC lawyer Christopher Kuczynski on Wednesday, February 25

In addition, employers would be restricted from disclosing genetic information about workers and applicants. Violators would be subject to compensatory and punitive damages under some circumstances.

The rules, which must be issued by May 21, would implement the Genetic Information Nondiscrimination Act of 2008, which was signed into law by President George W. Bush last May. It is the first legislative expansion of employment discrimination law since the 1990 Americans with Disabilities Act and extends the reach of the law beyond age, race, religion, sex and disability.

“Congress believed that individuals were not taking advantage of genetic tests that could inform them whether they are at risk of acquiring certain conditions, because of concerns about discrimination,” Kuczynski told commissioners in Washington on Wednesday. “Moreover, without this legislation, Congress believed individuals might be reluctant to participate in beneficial genetic research.”

The rules would apply to public and private employers with at least 15 employees, the EEOC said in a fact sheet.

The genetic information covered by the rules includes tests of an individual and his or her family, as well as family medical history.

The rules would not apply to information about an individual’s current disease or condition. The category of “genetic information” also excludes the sex or age of a person, or tests for drug or alcohol use, the fact sheet said.

Employers would be barred from intentionally acquiring this information, though there would be a so-called “water cooler” exception for supervisors who inadvertently learn of an employee’s condition.

Such instances might include a boss overhearing a conversation between co-workers or receiving genetic information in response to a question about the general health of an employee, according to the fact sheet.

Because of these exceptions, workers could not file claims under a so-called “disparate impact” theory, attorney Rae Vann said at the hearing.

“Disparate impact” claims have alleged, for example, that employer background or credit checks have inadvertently discriminated against minorities because of their disproportionate brushes with the criminal justice system and credit collection agencies, she said in an interview.

Employee advocates Wednesday hailed the implementation of the legislation. The law had been opposed by business groups.

“This is really the first time that the Congress has passed such legislation before the covered discrimination has become completely ingrained in the social fabric,” said Jeremy Gruber, president of the Council for Responsible Genetics.

The legislation, which unanimously passed the Senate and passed the House with only one opposing vote, is a response to developments in the field of genetics, the decoding of the human genome and advances in genomic medicine.

Genetic tests now can determine whether individuals may be at risk for a specific disease or disorder.

As of 2008, only one genetic discrimination suit had ever been filed, even though 41 states have laws prohibiting such discrimination on their books, according to Washington employment lawyer Burton Fishman.

“To the extent that employment discrimination on the basis of genetic discrimination has not been a pervasive problem, the EEOC should point out in its implementing regulations that the aim of the law is to prevent a discrimination problem from developing,” said Vann, a Washington lawyer with the Equal Employment Advisory Council, a nonprofit group that represents Fortune 500 companies.

The regulation should be “user-friendly,” with “clear and practical examples,” she told the EEOC panel.

Another employment lawyer recommended that the rules clarify a potential problem for small businesses.

These businesses often request physicians’ notes to excuse worker absences, said Karen Elliott, an attorney with the firm of Gregory Kaplan and a member of the Society for Human Resource Management.

Physicians’ notes sometimes volunteer medical information, she said.

“The regulations should clarify the breadth of exceptions permitting acquisition of all such information,” Elliott said.

The 2008 law also bars health insurance decisions based on genetic information. The Labor, Treasury and Health and Human Services departments are preparing rules to implement that portion of the legislation.

Filed by Neil Roland, a staff writer for the Crain Financial Group, which includes Workforce Management. To comment, e-mail editors@workforce.com.

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Capitol Hill Republicans threw the first legislative punch in the fight over union law on Wednesday, February 25. But Democrats could land a haymaker of their own later with a bill that is much more likely to obtain congressional approval.

Members of the House and Senate GOP introduced a bill that would mandate secret-ballot elections to form a union. The measure is meant to counter a bill Democrats could debut any day that would make it easier for employees to organize.

Called the Employee Free Choice Act, the Democratic bill would force companies to recognize unions when a majority of workers sign cards authorizing one. Under current law, corporations can require a secret-ballot election supervised by the National Labor Relations Board.

Proponents of the EFCA argue that it will protect workers from intimidation and delaying tactics that employers use to stymie unions. But Republicans who unveiled the Secret Ballot Protection Act on Wednesday assert that the EFCA would foster union coercion during organizing campaigns because the cards have to be signed publicly.

“With this bill, we’re sending the message that fundamental democratic rights should not be negotiable,” said Rep. Howard “Buck” McKeon, R-California and ranking Republican on the House Education and Labor Committee.

Whether the EFCA eliminates secret-ballot elections is a matter of debate. Advocates say the bill lets employees choose whether to use a so-called card-check process or secret ballots to organize.

Opponents say that by instituting a union when a majority of cards have been collected, the bill would obviate any other method. Rep. John Kline, R-Minnesota and a co-sponsor of the secret-ballot bill, said that in order for a secret ballot to be used, there would have to be a parallel organizing campaign.

“I cannot imagine a scenario where [card check] does not come about,” Kline said.

But the secret-ballot bill would not allow card-check elections under any circumstances. Many companies, including AT&T, have allowed them voluntarily.

The bill was launched with 101 House co-sponsors and 15 Senate co-sponsors, all Republicans.

Despite being the top priority of organized labor, the EFCA has not yet been introduced. Unions rallied for the bill at a February 4 event on Capitol Hill.

At a similar time during the previous Congress, the bill had been introduced with 233 co-sponsors and approved by the House. It was stopped by a Senate filibuster.

In the new Congress, Democrats have substantially increased their majorities in the House and Senate. In addition, President Barack Obama was a co-sponsor of the legislation when he was a senator and promoted it during his presidential campaign.

Democratic leaders will introduce the bill “soon,” said Aaron Albright, a spokesman for the House Education and Labor Committee. “We will have the overwhelming support of the [Democratic] caucus and a few Republicans.”

Business and labor groups are locked in a fierce and expensive battle over the bill. Corporate advocates say that it will raise the cost of doing business in the midst of a recession.

Backers of the choice measure say that it will be an economic boon for workers. As more of them organize, they will gain leverage to increase pay and benefits.

The Economic Policy Institute on Wednesday, February 25, released a statement by 25 economists in support of the bill.

Frank Levy, a professor of urban studies and planning at the Massachusetts Institute of Technology, said that although productivity has increased by 45 percent since 1990, an average 40-year-old man with a high school diploma has seen his wages stagnate. Someone with four years of college has earned an 18 percent wage increase.

“Even people with a bachelor’s degree are having trouble grabbing on to their fair share of labor productivity,” Levy said in a media conference sponsored by the Economic Policy Institute. “Unions are very weak, so that leaves the typical worker with weak bargaining power.”

But Sen. Jim DeMint, R-South Carolina and a co-sponsor of the secret-ballot bill, questions whether greater unionization ushered in by the choice measure would benefit workers.

“This is the American auto industry business model—to force people to join a union,” DeMint said. “We’ve seen how that worked.”

—Mark Schoeff Jr.

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A teacher hurt while accompanying students to an honor society conference is entitled to workers’ compensation benefits because her injury was work-related, Kentucky’s Supreme Court has ruled.

The teacher broke her shoulder in four places after slipping and falling on bleachers while attending the conference in 2003, according to court records in Clark County Board of Education v. Audeen Jacobs.

School administrators had given Jacobs permission to start a local honor society chapter and her school’s principal provided permission to attend the state convention.

An administrative law judge, a workers’ comp board and an appeals court all agreed she was entitled to benefits because she was providing her employer with a service by accompanying the students.

But the school board argued before the high court that her claim was not employment-related because she was not compelled to form the honor society chapter and she was not providing a specific benefit to her employer when she was injured. The board argued her service provided only a “vague and general benefit.”

The high court disagreed. It said in its February 19 ruling that her injury occurred within the scope of her employment because “the record permitted reasonable inferences the school board encouraged” her honor society activity. She was also allowed to accompany the students during normal working hours without deducting vacation or sick time.

Filed by Roberto Ceniceros of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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Congress must move to reform the nation’s retirement system, House Education and Labor Committee Chairman George Miller said Tuesday, February 24, and lawmakers are planning a series of hearings this year to figure out exactly how to do it.

“Clearly there’s corrective action that must be taken by the Congress,” said Miller, D-California, in an interview after a hearing on 401(k) reform. “We’re not meeting what I believe is a national mandate to encourage savings,” he added. “We’re not meeting the retirement objectives of the vast majority of American families.”

Miller said he hasn’t determined exactly what sort of reforms to pursue, but his committee had heard several good, different proposals aimed at promoting universal retirement coverage.

“People clearly believe you have to do this,” he said.

During the hearing, Miller also said he believed that in the short term, Congress had to address ways to improve 401(k) plans, making them more transparent, fair “and operated on behalf of the account holder, not Wall Street firms.”

“But we must also ask the difficult questions about the state of our nation’s retirement system as a whole and look to see whether we need to create a new leg of retirement security,” Miller said.

Filed by Doug Halonen of Pensions & Investments, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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President Barack Obama on Tuesday night, February 24, pledged to reform the faltering health care system by year’s end, calling its costs “crushing” and parlaying wholesale change on modernizing how care is delivered and by pushing Americans to live healthier lives.

“I suffer no illusions that this will be an easy process,” Obama told a joint session of Congress in a nationally televised address. “It will be hard.”

The president said that while difficult, reforming health care would be a necessary move to help salvage the sagging economy. He said rising health care costs contribute to a growing number of bankruptcies and foreclosures across the country and has all but stymied growth among small businesses.

“Given these facts, we can no longer afford to put health care reform on hold,” he said.

The speech, which mentioned “health care” 15 times and linked economic recovery, in part, to the use of electronic health records, served as preamble to Obama’s first federal budget, due Thursday, February 26. In it, the White House is expected to trim back spending in Medicare and Medicaid, though where and exactly by how much is still uncertain.

“This budget builds on these reforms,” Obama said. “It includes an historic commitment to comprehensive health care reform—a down payment on the principle that we must have quality, affordable health care for every American.”

Filed by Matthew DoBias of Modern Healthcare, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

Executive search firm Heidrick & Struggles International Inc. reported net fourth-quarter revenue fell 12.1 percent year-over-year to $134.9 million as the economic slowdown took hold. The number of executive searches decreased 16.9 percent year-over-year in the fourth quarter, the company said.

“Our fourth-quarter results reflect further deterioration in economies around the world, which resulted in slower hiring decisions in every region and in almost every industry practice,” CEO L. Kevin Kelly said. “We continued to benefit from expense reductions as a result of cost-cutting initiatives adopted earlier in the year, but they could not fully offset the decline in net revenue.”

Heidrick said fourth-quarter U.S. net revenue fell 14.7 percent to $68.2 million.

European fourth-quarter net revenue fell 16.1 percent to $45.3 million. Asia Pacific fourth-quarter net revenue, however, rose 9.2 percent to $21.4 million.

Full-year 2008 net revenue slipped 0.6 percent to $615.9 million compared with the previous year. Net income fell 30.8 percent to $39.1 million.

Heidrick estimated full-year 2009 net revenue of $450 million to $500 million, a decrease of 18.8 to 26.9 percent compared with 2008.

The company said it plans to cut real estate expenses and support costs in 2009 by 30 percent. It earlier announced in January plans to cuts its global workforce by 12 percent.

—Staffing Industry Analysts

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The American Society of Pension Professionals & Actuaries is asking the government to give employers a break from rules that require many companies to contribute 3 percent to their employees’ 401(k) plans.

Officials at the Arlington, Virginia-based society wrote a letter to the Department of the Treasury and the Internal Revenue Service asking that employers that are required to make a 3 percent contribution to their employees’ plans so they can get safe-harbor provisions be allowed to suspend the contribution because of economic hardship.

Under the Pension Protection Act of 2006, employers that contributed 3 percent annually to employees’ 401(k) plans didn’t have to meet “non-discrimination” or “top-heavy” rules meant to prevent plans from favoring their higher earners.

In the past, the IRS had limited the maximum deferral by highly compensated employees to make sure that lower-paid employees received at least a minimum benefit in plans in which most of the assets were owned by higher-paid key employees. If companies failed to pass certain tests, they were required to return money to highly compensated workers.

Now, employers that contribute the 3 percent to workers don’t have to take these tests. But the problem, according to officials of the American Society of Pension Professionals & Actuaries, is that many companies are struggling to contribute 3 percent to their 401(k) plans.

Under existing regulations, employers that can’t afford to contribute to their plans have no other recourse than to terminate the retirement plans.

The organization is asking the government to allow employers to suspend their contributions, though they would still have to show that the firm isn’t favoring highly compensated workers.

“It’s pretty bad, and a lot of employers are really considering it. Times are tough,” said Brian Graff, the group’s executive director and chief executive.

“You’re talking about a lot of employers who are freezing payroll, and 3 percent is a lot of money,” he said.

Filed by Lisa Shidler of Investment News, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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After nearly seven weeks of scrutinizing her background and policy positions, the Senate confirmed Rep. Hilda Solis, D-California, as secretary of labor on Tuesday, February 24.

The 80-17 vote came after Solis explained her role as an unpaid treasurer for American Rights at Work, a nonprofit organization, and her husband paid about $6,400 in tax liens against his auto repair business.

Republicans held up Solis’ confirmation process over concerns about a conflict of interest between Solis’ role with the advocacy group and her support of legislation that it sought to pass, including a bill that would make it easier for workers to organize. 

Sen. Mike Enzi of Wyoming, the top-ranking Republican on the Senate Health Education Labor and Pensions Committee, said Solis signed an affidavit indicating that she had “no check-writing or signing authority” with American Rights at Work and that she did not control its spending on campaign ads.

Enzi attributed the delay in Solis’ confirmation to “numerous errors and omissions” in the documents she submitted to the committee and in House financial disclosures over a number of years.

“Because of these errors, we had to reconstruct her application and her financial statements to remove the possibility of any conflict of interest,” Enzi said.

Enzi also said he had received confirmation from Los Angeles County and the state of California that her husband’s liens had been released. Tax problems have cropped up for several Obama administration appointees. Former Sen. Tom Daschle, D-South Dakota, withdrew from his nomination as secretary of health and human services over $128,000 in unpaid taxes.

Republicans also slowed Solis’ nomination to get answers to follow-up questions from her January 9 nomination hearing. At that meeting, she avoided stating a position on the unionization bill, the Employee Free Choice Act, and several other policies.

Even her written responses didn’t fully satisfy Republicans.

“The nominee dodged legitimate questions relating to the Employee Free Choice Act, right-to-work laws, employment standards and overtime regulations, to name just a few,” Enzi said. “This is a policy post, and policy questions deserve full answers from any nominee.”

While in the House, Solis was a co-sponsor of the Employee Free Choice Act, as President Barack Obama was while serving in the Senate. The AFL-CIO gave her voting record a 97 percent rating.

In the end, Enzi said that his committee had done its “due diligence” and he joined Democrats and most other Republicans in voting for Solis.

The daughter of immigrants who were also union leaders, Solis was praised by Sen. Patty Murray, D-Washington, as someone who understands the challenges that working families face in a recession.

Solis has represented a congressional district in the Los Angeles area since 2001. Prior to coming to Capitol Hill, she was the first Hispanic woman elected to the California state Senate.

Solis won a Profile in Courage Award from the John F. Kennedy Library in 2000 for her work on environmental justice and minority, worker and women’s rights. She earned her undergraduate degree from Cal Poly Pomona and a master’s degree from the University of Southern California.

“Her life is one that epitomizes the American Dream,” Enzi said.

—Mark Schoeff Jr.

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Labor groups are targeting industries they believe they have a good chance of organizing should a new law be enacted making it easier for workers to join unions.

And it appears that unions think employees in the financial sector are ripe for organizing, in light of the Wall Street crisis and the spotlight it has shone on executive compensation. The Service Employees International Union has already started talking with bank tellers, who earn a median salary of less than $25,000 a year in New York City.

The Employee Free Choice Act, which passed in the House of Representatives in 2007 but stalled in the Senate, is expected to be reintroduced in both houses within weeks. President Barack Obama has expressed his support for the measure.

The measure would require employers to recognize a union when a majority of workers sign authorization cards, and it would impose binding arbitration if an initial contract can’t be negotiated within 120 days. Under current law, an employer can call for an election, a process that gives companies the time to sway workers against the union.

“Lots of bank tellers and bank employees are really angry that they face mass layoffs while executives are getting huge bonuses,” said Stephen Lerner, assistant to SEIU president Andy Stern. “Bank employees are talking with co-workers and with us about how to fix the financial industry so it works for consumers, workers and the country, not just executives.”

Employers in the financial activities sector—which employs more than 450,000 people in the city, including many back-office workers—are not ready for changes in the law, employment lawyers say.

“Historically, they never thought they were at risk of unionization,” said Michael Lotito, a partner at Jackson Lewis. “They have managers who probably wouldn’t know a union card or what their company’s position is on unions from a man on the moon.”

Banking is not the only industry that will be targeted by labor. Any unorganized workplace, from major retailers to restaurants to hotels, will be fair game.

“Should EFCA become law, I don’t think any sector should think it’s not likely to be the subject of an organizing campaign,” said Maggie Moree, director of federal affairs for the Business Council of New York State.

Both labor and management experts expect unions to target a wide array of service industries.

Business advocates and labor lawyers say employers generally have been slow to grasp the potential impact of the measure.

“This will affect a lot of people who just have no idea of what they’re facing,” said Jeffrey Bernstein, chairman of the Manhattan Chamber of Commerce. “My fear is there’s going to be people who are totally unprepared and find themselves unionized without understanding how it happened.”

Some employers have taken steps to educate their workers and managers about the possible changes in the law. For example, Home Depot posted information about the proposal on an employee Web site and discussed it with managers during planning meetings. Burger King issued a memo to franchisees about the act.

Peter Conrad, a partner at law firm Proskauer Rose, said even banks are starting to mobilize.

“They’re bringing us in to do training and make sure supervisors know what they need to do before a union appears on the scene,” he said. “Believe me, if an employer is doing what it can do, it can make it as hard for the union to organize with EFCA [as without].”

Filed by Daniel Massey of Crain’s New York Business, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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President Barack Obama called rising health care costs “the single most pressing fiscal challenge we face by far” and said that work is already under way to go “line by line” through the federal budget to cut wasteful and inefficient programs to halve the federal deficit in four years.

Economists put the deficit at close to $1 trillion, and last year alone the U.S. spent $250 billion on interest payments for that debt—roughly seven times what it spent on veterans’ health programs, the president said. “We cannot and will not sustain deficits like these without end,” Obama said Monday, February 23, in opening a scheduled “fiscal summit” at the White House.

The discussion comes just days before the Obama administration is expected to release a 10-year budgetary blueprint that likely will include spending cuts in Medicare and Medicaid.

In opening remarks, White House budget director Peter Orszag said that the Obama administration is committed to health care reform this year. “The single most important thing we can do to put this nation back on a sustainable long-term fiscal course is slow the growth rate of health care costs,” he said. “Health care is the key to our fiscal future.”

Obama is slated to address a joint session of Congress on Tuesday, February 24. The speech is expected to further outline his plans for health care reform.

Filed by Matthew DoBias of Modern Healthcare, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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