LEGISLATIVE DEVELOPMENTS

ISSUES WE ARE TRACKING

Who says legislators don't work hard? Both federal and state legislators have been busy crafting bills that would affect businesses. Here are some hot topics:

  • Immigration Reform - As Arizona goes, there goes the nation? Under intense political pressure, the Senate Democrats officially unveiled a proposal to reform America's immigration system last week. The 26-page framework, which has not yet been written into a formal bill, defines steps to limit illegal immigration before offering new rights for those currently in the U.S. illegally. Under the proposal, illegal immigrants currently in the United States would be eligible for legal status in eight years as long as they learned English, had not committed a crime and paid their taxes.

    One proposal is titled "Achieving Operational Control of America's Borders to Prevent Future Illegal Immigration." This proposed reform would require employers to use Biometric Enrollment, Locally-stored Information, and Electronic Verification of Employment System (BELIEVE) as a means of verifying employee work authorization. The proposed law calls for the Social Security Administration to implement biometric security cards, which would be the only acceptable document employers could use for employment verification purposes. The proposed law also calls for dramatically increased monetary fines against employers who knowingly hire illegal workers, as well as stiffer penalties against employers for labor violations involving unauthorized workers.

  • Mandatory Paid Sick Days - A long stalled effort to guarantee American workers paid sick days will likely be revisited by both state and federal legislators. The federal bill is known as "The Healthy Families Act" (you read that right) and as drafted would mandate employers with 15 or more workers grant one paid hour off for each 30 hours worked, enabling all workers to earn up to seven paid days a year. This legislation was supported by Senator Kennedy and President Obama. Last year business groups blocked the legislation arguing that the recession made this initiative an inopportune time to create a new mandate.

    The AFL-CIO has pledged continued support to enact comprehensive paid sick days legislation in Massachusetts. Last year, this proposed legislation was defeated but will likely be revisited in the Commonwealth.

  • Health Care Reform - In an effort to keep children living in their parents basement for as long as possible, the national health care reform legislation (the "Affordable Care Act") contains a provision that defines health care coverage provided for an employee's child under age 27 years old as tax free to employees. Employers who provide Section 125 plans to their employees may permit their employees to immediately make pre-tax contributions to provide coverage for children under age 27. These issues are explained in IRS Notice 2010-38, which is available at www.irs.gov.

    The national and the Commonwealth's health care reform laws share the goal of increasing access to medical care coverage for citizens/residents. The guiding principle behind both laws is one of shared responsibility: Individuals, employers, health plans and governmental agencies all have new responsibilities. Once these laws are coordinated and take root, the cost of providing insurance benefits for your employees and/or retirees will be determined. For now, it looks like employers are still doing most of the sharing.

  • Workplace Bullying - On May 3, Governor Patrick signed new anti-bullying legislation in an effort to deter school bullies and place greater responsibility on teachers and school administrators. The bill signed by the Governor gained momentum after the recent public suicides of two Massachusetts students who were victims of harassment. Will that momentum go beyond the school yard?

    Last May, Massachusetts attempted to become the first state to enact a healthy workplace law targeting severe workplace bullying. That bill was titled "An Act Addressing Workplace Bullying, Mobbing, and Harassment without Regard to Protected Class Status." The law did not pass but continues to have significant support. Did you know that there is a Workplace Bullying Institute? According to the Bullying Institute, 54 million Americans have experienced bullying in the workplace, directly. Yet bullying is legal in 80% of the known incidents because discrimination laws do not apply. Clients have addressed this dilemma by adopting policies that prohibit all forms of abusive behavior, harassment and discrimination. Those policies typically contain a process for a victim to file a complaint and procedures for investigations to inform decisions about the allegation. More to follow.

  • Non-Competition Agreements - The unique aspect of non-compete covenants is that they restrict activities of an employee after the employee stops working for the employer. Because non-compete covenants are post-employment restrictions on an employee's ability to earn a living, they are viewed in most states with disfavor and narrowly construed. To be enforceable, covenants not to compete must be narrowly tailored as to the time, geographic scope and prohibited activity necessary to protect a legitimate employer interest.
The Massachusetts legislature may take the limitations on non-competes even further. A bill pending in the Massachusetts House of Representatives would:
  • Limit the duration of non-competes to a period of between six months and one year;Create a $75,000 income minimum so workers earning less would be exempt from the agreements;Require companies to create a distinct agreement that both parties sign instead of burying it in other employment documents; and
  • Force employers to pay attorney's fees if the Court modifies an otherwise enforceable agreement.
This bill is an alternative to the previously proposed bill that would have banned non-competes entirely. More to follow...

Final Thought
The regulations that govern today's workplace are dynamic. We created an employment practices audit, our monthly electronic newsletter, our workplace law Guide and our legal triage concierge program to help our clients and friends decipher the extensive regulations that govern today's workplace. More information about our new legal triage program can be found on our website under News. Questions? We can help.





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