Legislative Alert:
Ledbetter Fair Pay Act Signed
     
A new federal law, known as the "Ledbetter Fair Pay Act" was signed by President Obama.  The bill is named after Lily Ledbetter, a former employee of Goodyear Tire Company, who sued the company for discrimination due to years of receiving less pay than other workers doing similar tasks.  Her claim was thrown out by the Supreme Court on grounds that it was untimely.  In response, Congress presented a bill, which was supported by then Senator Obama, which creates an exception to statute of limitations in such cases.
 
As a result of the new law, employers are encouraged to audit their current pay levels for employees in similar job categories.  Such an audit will become even more important if another piece of pending legislation, known as the Paycheck Fairness Act, is also passed.  This law would greatly enhance penalties and reduce burdens of proof for plaintiffs in unequal pay cases.
 
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Liebmann, Conway, Olejniczak & Jerry S.C.
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Short Term Solutions to Economic Crisis Carry Potential Risk  
The current economic malaise is creating pressure on both legislators, who are being pressed to pass new laws to stem the devasting impact of the national crisis on the average family, and on businesses, who are trying to remain afloat while the nation struggles to find a solution.

Temporary layoffs and work "furloughs" have seen increasing use as tools for short term cost savings.  Human Resource professionals need to implement such measures carefully to avoid legal exposures.  Some of the issues that need to be addressed as part of contingency planning include the following:
 
FLSA Rules May Impact Layoffs of Less Than One Work Week.  Although layoffs of less than one week can save payroll costs when customer demands fall for short periods, HR professionals need to be very careful to follow state and federal wage and hour laws in relation to such layoffs.  For example, exempt employees must receive their whole weekly salary, even if there is a plant shutdown for part of the week.  Failing to do so may destroy the "salary basis" test for those and other exempt employees.
 
COBRA Rules Relating to Reduction of Hours. Depending on the length of the layoff, a "reduction of hours" may occur which could trigger COBRA rules and benefit plan language.  The failure to issue a COBRA notice in such cases could result in the employer being in breach of their contract with their insurer and result in the loss of insurance for the employee (even if the employer has maintained insurance premiums) as well as COBRA penalties.  If your layoffs exceeds the plan language regarding "reduction of hours", it may be possible to secure an amendment of your plan document to enable the furloughed employees to stay on the medical plan.
 
Warn Notices (State and Federal).   HR professionals need to evaluate whether the layoff will require a 60 day "Warn" notice under either the state or federal plant closure laws.  Under Wisconsin law, if a company with at least 50 employees engages in a mass layoff of 1) at least 25% of the company's employees or 25 employees, whichever is greater, or 2) at 500 employees, the notice requirement may be triggered.  Some exceptions apply, including layoffs less than 60 days in duration, but the rules should be reviewed to ensure that the notice is not required.  The Federal WARN rules apply to employers with more than 100 employees.  Under those rules, an "employment loss" of more than six months (or reduction of more than 50% of work hours over 6 months) which affect 1) at least 33% of employees and at least 50 employees, or 2) at least 500 employees can trigger a notice requirement.  The rules for both state and federal laws are very complex and should be carefully considered prior to any action that might potential fall within the laws.
 
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