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Legislative Impact on the Workplace

Posted by Jeff Pelliccio on May 12, 2017 9:00:00 AM

In ICS insights

You may not want to talk politics, but the government is certainly having a discussion about your company. While there is much uncertainty ahead, there are some glimpses into the future of your company based on proposed legislature.Employment attorneys predict this year to be full of state regulations in your workplace. Possible changes at the state level include pay equity, parental leave, and predictable scheduling. On a federal level, you may see changes in the fiduciary rule, CEO pay ratios, the Affordable Care Act, and overtime pay. Nothing is safe from change this year, or certain, but here are the top seven changes you might see this year

1. Fiduciary Rule

In April of this year, the Department of Labor's rule was taken in effect. It essentially stated that fiduciary standard be applied to those who provide investment advice to people who are sponsoring or participating in retirement plans like the 401(k). If you're a financial adviser, this rule certainly applies, but even those who sponsor plans may need to change the way they draft contracts and compensation agreements. More steps could also be needed to be compliant.

Even past this latest installment from the DOL, there are still questions of whether the rule will change into something else or be done away with by the new administration. There are some who aren't even sure about the future of the department itself. Right now, the best way this rule is enforced is through private terms like class-action lawsuits.

Bottom of the line: Prepare for the rule to stay, but be nimble enough to adapt to any wild cards coming from the White House.

2. CEO Pay Ratio

Next year, it's projected that Public Companies are going to have to repor their CEO pay ratio for the fiscal year of 2017. This will detail how the CEO's compensation compares to workers' median pay. As this requirement implements part of the Dodd-Frank Act, it's unclear which direction this will be taking under new administration changes and you can expect the same for newly introduced regulations like pay-for-performance disclosures. Only time will tell what the White House agenda will be when it comes to these new workplace rules, but with a mostly conservative legislature, conservative business practices are bound to prevail.

Getting ahead of the required disclosures and financial reporting would be wise. You don't want to be caught without the proper data for compliance.

3. Affordable Care Act

This one is very tricky for a multitude of reasons. No one quite knows what the future holds for a new healthcare act, especially after the failure of the first one that was purposed. It's a delicate transfer of protocol even if a law is passed. The only way to be prepared is to keep your eyes and ears open to the latest updates in Congress and the White House. Any plan wouldn't even be in effect until 2019 with the insurance market's pricing projections.

Prepare for the repeal and any other scenario you think will impact the way you do business. You're going to want to have a plan for implementation in process for any new act to ensure a better experience for all and an easier time with compliance.

4. Overtime Rule

The overtime rule isn't really a certain thing right now. While it was preliminarily blocked in 2016, the appeal is still fild in the 5th U.S. Circuit Court of Appeals. Though, don't count on the Trump administration to let the appeal go through.

Even Congress could roll back the overtime regulations and have the DOL start the process all over again and change the exempt salary level. It should be noted that attorneys don't even think the appellate judges will overturn the ruling. The last time it was raised was in 2004.

5. Pay Equity

If pay equity laws haven't hit your state yet, they just might this year. In fact, Massachusetts' pay equity statute will be in effect in 2018. While the laws may be similar, they also have unique provisions. For example, salary history questions are being prohibited in the state of Massachusetts. Market surveys will have to make due at that time for existing positions, but new positions will be hard to gauge.

Even in Maryland, laws now require employers to inform employees about promotions in possible career tracks. It's best practices to post all open positions now, even if they are typically not disclosed. New York also joins Maryland as comparing pay between similar positions in the same county, yet Massachusetts and California have no geographical limitations on this practice. Many look towards these location differences when taking jobs or assessing salaries. The need for a salary guide with deviations per region is going to be rather high over the next few years as this law may be adopted in additional states.

6. Parental Leave

All of the laws addressing paid-sick-leave that were passed in 2016 are now taking effect in 2017. States are expected to pass further legislation for paid parental leave. Right now, under the Family and Medical Leave Act, businesses with 50 or more employees are require to provide up to 12 weeks of unpaid leave to employees with qualifying events, including baby bonding. The catch is in the wording. No paid leave is provided at the federal level at this time.

Setting the bar are states like California, New Jersey, and Rhode Island. They offer paid family leave and are creating a trend that is expected to grow.

At the state level, only California, New Jersey and Rhode Island offer paid family leave, but the number of states offering such benefits is expected to grow. Many activists will remain active in the fight for paid leave across state governments, but don't expect the new administration to push on this issue. If the White House did decide to budge, it would be a more restricted offering and may not include fathers or adoptive/foster parents. Expect that to create legal issues for the future.

7. Predictable Scheduling

Predictable scheduling laws are also making their way onto the state level agenda. They limit "just-in-time" or "on-call" scheduling practices, mainly in retail and restaurant industries. Employers, under these laws, will be required to provide work schedules ahead of time and to compensate the employee for any deviations from the aforementioned schedule.

Ever since San Francisco enacted the first law in 2014, this issue has been picking up speed. Just this past year in September, Seattle passed a similar law. This is only the beginning of the trend and several states already have legislation pending. While the laws have general support from workers to attorney generals, it doesn't necessarily leave the employer in a good place. Difficulties in attendance and replacing last minute call-outs could cause trouble for managers. Keep your eye out for your state to introduce this law, but also prepare for the troubles that come with it.

With all of these potential changes at the state and federal level, you may find the need to pivot rapidly to accomodate new regulations. When time is of the essence, we can help you find the talent you need.

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