House Passes HR Policy-Supported Pregnant Workers Fairness Act

With strong business community support, including HR Policy, the House of Representatives passed the Pregnant Workers Fairness Act (PWFA) (H.R. 1065), which would provide needed accommodations and protections for pregnant workers along the lines of the Americans with Disabilities Act.  The bipartisan support for the bill, with strong business backing, proves that bipartisan approaches to workplace policy issues are possible.

The PWFA would require employers to provide "reasonable accommodations" for pregnant employees and job applicants.  Specifically, employers would have to provide reasonable accommodations to employees and job applicants for pregnancy, childbirth, and related medical conditions, unless such accommodations create an undue hardship for employers.  The reasonable accommodation standard and associated protections contemplated by the PWFA largely resemble what employers are currently required to do for employees with disabilities under the Americans with Disabilities Act (ADA).  The ADA does not consider pregnancy a disability.

“The Pregnant Workers Fairness Act…is a balanced approach that clarifies an employer’s obligation to accommodate the known limitations of employees and job applicants that accompany pregnancy,” our letter noted.  “This bipartisan bill is a strong reminder that through good faith negotiations, legislative solutions to important workplace questions and problems can be found.”

Outlook:  The PWFA passed on a 315-101 bipartisan vote, and its passage in the House comes as no surprise.  However, its chances of passing the Senate are less clear at the moment.  The Association has been a vocal supporter of the bill as a much-needed update to employment discrimination law that effectively clarifies an employer’s accommodation obligations in accordance with already existing law.

Contact Greg Hoff

Vaccine Webinar: How Vaccines and Federal Guidelines Impact Return to Office Plans

HR Policy’s latest vaccine webinar explored what employers are thinking on COVID-19 vaccine mandates and the guidance employers should consider when making decisions about reopening their workplaces.

Updated CDC guidance relaxes mask and social distancing mandates for vaccinated individuals.  The guidance states: 

  • Fully vaccinated people no longer need to wear a mask or physically distance in any setting, except where required by federal, state, local, tribal, or territorial laws, rules, and regulations, including local business and workplace guidance.

  • Fully vaccinated people can refrain from testing following a known exposure unless they are residents or employees of a correctional or detention facility or a homeless shelter.

Over 70% of HR Policy members are not mandating vaccination, although some have decided, or are considering, to only allow vaccinated employees back onsite.  Members are continuing to follow CDC and local guidance on masking and social distancing and are maintaining the same policies for vaccinated and unvaccinated employees. 

This guidance may complicate plans for reopening office locations as fully vaccinated employees may not want to adhere to masking policies any longer.  The Association met with OSHA this week to urge flexibility for employers ahead of the release of an updated Emergency Temporary Standard (ETS). We are also waiting for updated EEOC guidance on vaccine incentives. 

Continue to educate on the effectiveness of vaccines:  A recent Cleveland Clinic study found that of the COVID-19 patients they saw from January to April 2021, 99.7% of the infections occurred in those who are unvaccinated.  Karl Niemann, VP HR Organizational Health, The Kroger Company, stated the company is focused on stressing the efficacy of the vaccines to its employees along with providing a financial incentive.  Leadership is also continuing to engage with employees through internal communications as well as through social media campaigns focused on promoting vaccination.  

Create return to work plans that are flexible and prioritize employee safety:  Dave Pendleton, SVP Global Total Rewards & Performance, Mondelez International, Inc., described their return to office strategy which includes evaluating community case rates to determine when certain locations can return.  Doing so allows them to focus on the safety of employees and allows for additional flexibility in case certain locations need to close again.  Randy Patterson, Chief Human Resources Officer, Wilsonart, said they have determined that their "in-office" days for teams will be based on the days when the teams require more collaboration.

Outlook:  Employers should continue to weigh federal and local guidance when developing and implementing return to office protocols.  While the recent CDC guidance is a welcome step towards returning to worksites, the lack of updated OSHA and EEOC guidance continues to complicate the process.  The American Health Policy Institute and the Association continue to urge Congress and federal agencies to provide this needed guidance.

Contact Margaret Faso

2021 Say-On-Pay Votes Show Significant Downturn in Shareholder Support

Several themes have begun to emerge as proxy season hits its peak period for 2021, including higher levels of shareholder criticism of executive pay plans.

Average support for executive compensation proposals declines to below 90% across the market.  Shareholders have expressed a broad range of concerns, not solely focusing on a specific practice (such as COVID-19 adjustments or discretionary actions) in expressing their concern.  Semler Brossy has tracked vote results for both the S&P 500 and the Russell 3000—each show significant declines in shareholder approval.  Historically, S&P 500 companies have received approximately 91% shareholder support.  So far in 2021, that level has declined to 87%.  The Russell 3000 is averaging 89% support, down from 91% historically.  Additionally, ISS recommendations against SOP proposals are near their highest level since 2011 (13.6% against in the Russell 3000). 

Voting trends for the S&P 500 through May 8th break down as follows:

  • 95 received more than 80% say-on-pay support,
  • 12 received between 50-80% support, and
  • 7 failed to receive 50% support.

Several prominent companies have received media attention on close voting results.  Meanwhile, BlackRock indicated it doubled votes against management on compensation related proposals versus Q1 2020, from 7% against to 15% (including votes on frequency of SOP votes).  The Financial Times noted that more than 100 companies in the S&P 500 modified incentives in response to the pandemic, but relatively poor performance leading up to the pandemic, changes to equity awards, and poor proxy disclosure seems to push shareholders to vote against.

Outlook:  Shareholder support for say-on-pay proposals is likely to remain depressed for 2021 meetings.  Rightly or wrongly, pay adjustments in response to COVID-19 are exposing simmering concerns about pay for performance.  Critics have highlighted concerns that pay for performance only seems to apply when things are going well.  Pay equality advocates have been quick to highlight that companies moved to protect executives’ pay on the downside while employees suffered.  Broadly, it is reasonable to estimate that shareholder support for say-on-pay proposals will modestly decline in the near future.  Further, companies should anticipate increased engagement on executive compensation and direct questions about metric selection and performance determinations, as well as talent management practices that might exacerbate pay equity concerns.

Contact Andrew Maletz

HR Policy Urges Guidance Rather Than Prescription in Forthcoming OSHA COVID-19 Standard

The Association met with Department of Labor and Office of Management and Budget officials regarding a potential COVID-19 workplace safety standard.  We emphasized the need for flexibility as well as the enormous strides the employer community has already taken to ensure the safety of their workplaces and employees.

For several months, OSHA has been considering promulgating an Emergency Temporary Standard (ETS) that would create workplace safety standards related to COVID-19, in response to a directive from President Biden.  Although a decision was expected by March 15, a potential ETS is still under review.

In the meeting, the Association highlighted the lengths to which employers have already gone to ensure their workplaces are safe.  These include shifts to remote work arrangements, substantial investments in safety infrastructure such as upgraded ventilation systems and rapid testing materials, infection control protocols such as social distancing and facial coverings, and generous paid time off policies for those employees who may have been exposed to the virus.  Additionally, the Association emphasized that employers have been extremely supportive of President Biden’s vaccination campaign and have provided numerous incentives for employee vaccination, including paid time off.

The Association strongly recommended that flexibility should be the emphasis of any ETS.  A flexible approach to workplace safety standards that takes into account changing CDC guidance, increased vaccination rates, differences in employer size and industry, and the associated differing risk of exposures for each employer is the most practicable course of action.  The Association highlighted California’s state-level ETS as an example of an approach that is far too rigid, overly burdensome for employers, and largely unworkable in practice.

Outlook:  It is likely that an ETS—or new guidance in lieu of an ETS—will be issued sometime this month, although the timeline is still unclear given the already lengthy delay.  HR Policy will continue to engage with the DOL, OSHA, and OMB to ensure the employer perspective is properly heard, and will provide members with compliance assistance should an ETS be issued.

Contact Greg Hoff

Complaints Filed Over Alleged Labor Violations in Mexico, Testing the USMCA

Two landmark complaints were filed under USMCA scheme by U.S. unions and lawmakers as U.S. Trade Representative Katherine Tai vowed to use the USMCA's "rapid response" labor mechanism to address Mexico’s labor issues.

The AFL-CIO filed a complaint with the Biden administration over claims of labor violations at an auto part factory in Mexico.  The U.S. union alleged an independent Mexican union’s members, led by Susan Prieto, were harassed and dismissed by the company.  

In the same week, U.S. lawmakers filed another complaint alleging a powerful local union disrupted a contract voting process at an auto factory.  In response, the Mexican Labor Ministry ordered that a re-vote would take place within 30 days.  If the U.S. and Mexico don't subsequently agree that the problem has been solved, the U.S. can request a panel be established to make a decision.  Importantly, labor remedies under the USMCA include revoking tariff-free access for a violating factory's goods.

HR Policy Global members discuss Mexico’s outsourcing ban bill:  The USMCA actions come in the wake of a new Mexican law broadly banning outsourcing, which has yet to be fully clarified by the government.  Participants on an HR Policy Global call this week pointed out that employers should prepare to comply with the new amendment despite a short timeline and certain ambiguities as noncompliance could result in monetary penalties, legal liability, and tax implications.  The speakers encouraged employers to review their current talent and compliance structure to distinguish their “core business” from “specialized services.”

Contact Henry Eickelberg

Democrats’ Paid Leave Bill Guarantees Child Care Access, Expands Child Tax Credits

House Ways and Means Chairman Richard Neal’s (D-MA) Building an Economy for Families Act has emerged as a competitor to the FAMILY Act in establishing paid leave for workers.  The Neal bill, however, has a larger scope—vaguely promising “guaranteed child care” and permanently extending the American Rescue Plan’s child and dependent care tax credits.

This comprehensive approach has proven attractive to some Democratic lawmakers, many of whom see historically low birthrates, longstanding workplace inequities, and the impact of women dropping out of the workforce due to COVID-19 as evidence for the need for reform.  

“Our failure to recognize basic caregiving obligations in the U.S. has driven millions of women out of the workforce since last March, with a majority of those being women of color,” Neal said in a hearing last month.  He called the lack of universal paid leave and limited access to child care “unacceptable.”

Child care funding:  The bill would increase funding for the Child Care Entitlement to States program to $10 billion for FY2022 and index the funds to grow with inflation and child population.  It would also establish a refundable payroll tax credit for child care providers and allocate $15 billion toward the physical infrastructure of child care facilities.  Finally, it would create a “Child Care Information Network” for parents and caregivers.  It is not clear how the bill would actually “guarantee” child care for parents nor does it impose any new requirements on employers along those lines.

The measure would permanently extend the American Rescue Plan’s expansions of:

  • The Child Tax Credit ($3,000 per child over six and $3,600 for children under six), 
  • Child and Dependent Care Credit ($8,000 for qualifying child care expenses of up to $16,000), and 
  • Nearly triple the maximum credit for workers without dependents under the Earned Income Tax Credit.

Previously, we discussed the paid leave provisions of Chairman Neal’s bill and questions concerning funding the ambitious universal paid leave benefits.  Under the legislation, benefits and administrative costs would be paid out of general revenue.  In other words, the bill would rely on potential increased corporate taxes, but would itself not impose any new taxes on employers. 

Outlook:  Like Chairman Neal's proposal, President Biden’s American Families Plan takes a broader approach, promising that low- and middle-income families will spend no more than seven percent of their income on childcare.  Both the Neal proposal and the President's paid leave proposal under the American Families Plan will likely attempt to avoid a filibuster by relying on budget reconciliation to pass, which would require the support of all 50 members of the Democratic caucus in the Senate.  Whether that is feasible remains to be seen. 

Contact Daniel Chasen

HR Policy Backs Traditional Joint Employer Liability Standard

The Association joined several other business groups in a letter to Congress that voiced strong support for the “Save Local Business Act,” which would limit joint employer liability based on traditional labor and employment law standards. 

The bill would amend the National Labor Relations Act and the Fair Labor Standards Act to limit joint employer liability to situations in which an employer exercises direct, actual, and immediate control over employees’ essential terms and conditions of employment. 

The letter notes that “this legislation comes at a critical time in the economic recovery when so many small businesses are emerging from the COVID-19 pandemic and are seeking legal clarity to help them grow their businesses, create jobs, serve their communities, and meet local, state, and federal obligations to their employees, customers, and the general public.” 

Outlook:  The same version of the bill passed the Republican House in 2017—largely along party lines—but did not receive a floor vote in the Senate.  Consideration by the current Democratic Congress is highly unlikely. The reintroduction of the bill comes as the Department of Labor has withdrawn a Trump-era joint employer rule that created a standard largely similar to that of the bill.  It is likely that the Department of Labor will issue its own regulation expanding joint employer liability sometime in the future.

Contact Greg Hoff

Association Supports Motion to Rehear Case Protecting ERISA Preemption

HR Policy Association joined an amicus brief urging the Ninth Circuit Court of Appeals to rehear a case in which the court decided the Employee Retirement Income Security Act (ERISA) does not preempt a Seattle ordinance imposing health care requirements on certain employers.

Under the Seattle ordinance, hotels with 100 or more rooms and ancillary hotel businesses must provide full-time workers with health benefits equal to a gold-level policy on the Washington state health exchange or pay the equivalent directly to the employee.

While local in nature, the ruling has national implications.  “The repercussions of the Court permitting a single locality to exercise this type of power over ERISA-covered plans reach much further and threaten to alter the regulatory landscape materially and irreparably for employee benefit plans—not solely health plans—across the United States, to the detriment of employers, plans, participants, and beneficiaries.” 

The court’s decision clashes with the Supreme Court’s interpretation of the expansive preemption provision in ERISA, and conflicts with several subsequent Circuit Court rulings on the matter, our brief backing the ERISA Industry Committee’s (ERIC) petition to rehear the case argues. 

The brief “is a clear sign that employers across multiple industries support a strong federal standard governing employer-sponsored health care, over disparate state and local mandates,” ERIC President and CEO Annette Guarisco Fildes said in a statement. 

Contact Daniel Chasen

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