It’s all too easy to think that labor laws only affect other people. Common employment law issues include considerations of the minimum wage, leave time when employees become parents, and retirement plans for those who save a portion of their income. Millennials are delaying getting married and having children, and young, salaried employees may not feel concerned with the minimum wage or saving for their far-off golden years.
In reality, of course, laws concerning work affect everyone who hires or is hired, and often, those employees’ dependents. The three employment law issues explored in this post have been in the news this year, and they carry long-term impact for companies, employees and their families.
Independent Contractor Status
In the U.S. general election on November 3, 2020, a majority of voters in California approved Proposition 22. This ballot initiative permits companies to continue treating “app-based ride-share and delivery drivers” as independent contractors rather than employees, who are entitled to critical wage and labor protections under state law. Five large gig companies spent over $200 million—the largest amount ever spent on a ballot initiative campaign in California—to pass Prop 22.
In a joint statement issued on November 9, Human Rights Watch and Amnesty International said that the passage of Prop 22 in California is a blow to the rights of gig workers, effectively stripping them of the state’s minimum wage guarantee, paid sick leave and other protections.
“Prop 22 threatens to create a permanent underclass of workers in California forced to endure poverty wages and substandard working conditions with little recourse,” said Amos Toh, senior artificial intelligence and human rights researcher at Human Rights Watch. “The fight now is to stop this dangerous effort to normalize worker exploitation from spreading across the United States and around the world.”
Legal questions surrounding independent contractor status affect industries across the economy, and the gig economy’s rise has complicated the issue. Employers want a rule that would shield them from lawsuits and federal investigations that allege they are on the hook for significant back wages because their workers are improperly classified as independent contractors.
The U.S. Department of Labor has been working to fast-track the rule nationally and complete it by year’s end. Writing for Bloomberg Law, Senior Labor Reporter Ben Penn notes, “A proposed rule was completed in May, but has been in a holding pattern because of discord among DOL officials and attorneys about the legal standing of what would be a significant change to the Fair Labor Standards Act.”
President-elect Biden has voiced his support for the union-backed, expansive definition of employee that California adopted last year. That law, known as Assembly Bill 5, designates workers as employees if their work is controlled by the company and isn’t outside the usual course of its business, and if they don’t independently run a similar business.
The Equal Employment Opportunity Commission (EEOC) enforces federal laws prohibiting employment discrimination. These laws protect employees and job applicants against:
- Discrimination, harassment and unfair treatment in the workplace by anyone because of race, color, religion, sex (including gender identity, transgender status and sexual orientation), pregnancy, national origin, age (40 or older), disability and genetic information
- Being denied reasonable workplace accommodations for disability or religious beliefs
- Retaliation because they complained about job discrimination and/or helped with an investigation or lawsuit
This year, after a long wait, the Illinois Department of Human Rights (IDHR) published its model sexual harassment prevention training. It relates to the recent amendments and expansions of the state’s anti-discrimination and anti-harassment statute, known as the Illinois Human Rights Act (IHRA). These amendments put into place strict anti-harassment policy and training requirements for employers.
At a minimum, training must address:
- An IHRA-consistent explanation of sexual harassment
- Examples of conduct that constitutes unlawful sexual harassment
- A summary of relevant federal and state statutory provisions concerning sexual harassment, including remedies available to victims of sexual harassment
- A summary of employers’ responsibilities in preventing, investigating, and correcting alleged sexual harassment
Bars and restaurants in Illinois are subject to additional anti-harassment training requirements. Employees in the bar and restaurant industries must receive supplemental, industry-specific training and policies that are available in English and Spanish. These include, but are not limited to, an explicit prohibition on sexual harassment, an explanation of manager liability and responsibility, and contact information for the IDHR and EEOC.7
Healthcare costs in this country have been rising for decades. The healthcare law known as the Affordable Care Act (ACA) helps reduce them for many people by:
- Providing preventive care, such as screening mammograms and colonoscopies, at no cost to patients
- Not allowing yearly and lifetime dollar limits on the amount of coverage a health plan will pay for
- Encouraging more competition among health plans and empowering consumers to choose the best one for them
- Helping low- and middle-income people afford health coverage in the health insurance marketplaces
- Helping to make sure health plans don't charge more just because a patient has a pre-existing condition (except for grandfathered plans)
- Not allowing plans to charge women more than men
The law includes an employer mandate requiring organizations with 50 or more full-time or equivalent employees to provide ACA-compliant health insurance to at least 95 percent of their full-time workforce and those workers’ dependents.
To be ACA-compliant, health insurance must provide minimum essential coverage, minimum value (the plan must pay at least 60% of the benefits cost) and affordability. A plan is considered affordable if the employee’s required contribution does not exceed 9.86% of that person’s household income. This amount is adjusted annually based on the federal poverty line.
Employers are required to document their insurance offerings to the Internal Revenue Service (IRS) each year, and those who fail to meet ACA standards are subject to penalties. Though it has become increasingly stringent in its enforcement, the IRS does offer good-faith transition relief, waiving those penalties for employers who can provide legitimate reasons for missing a reporting requirement by the mandated deadlines. Employers with ACA noncompliance issues need significant, substantive evidence to claim good-faith transition relief, as it does not apply to organizations that are ignoring or not trying to comply with ACA regulations.
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