On December 12, 2014 the National Labor Relations Board (NLRB) adopted a final rule regarding what has come to be known as the "quickie election" rule, saying it will "modernize" the representation process.  This rule goes into effect on April 14, 2015.

This new rule will minimize an employer's opportunity to wage a campaign by reducing the existing union election process down to a few short weeks.  Additionally it will require employers to provide employee contact information (e.g. personal phone numbers and emails) to the unions sooner than it had to before (within 2 business days of the approval of the election agreement).

Other key changes include:

• All petitions, filings and notices can now be processed electronically
• Pre-election hearings will be set for 8 days after the petition is filed.  Post-election hearings will be 14 days after the filing of objections.
• No automatic stay of an election due to filing of a request to review decisions (made in pre-election hearing).

In addition to providing employee lists, employers must also post a Notice of Petition for Election within 2 business days of being served the petition.

To avoid delay tactics, the NLRB will also require:

• All petitions must be accompanied by a "Statement of Position" by noon on the day before a hearing begins and include with it a list of prospective voters including their job classifications, shifts and work locations to all parties and the NLRB regional office 1 day prior to the pre-election hearing
• Pre-election hearing issues will be limited to only those considered necessary to determine if an election should be held

West Michigan does not have a history of a concentration of unions, and we would expect that to continue.  In order to retain our workplace flexibility, however, employers should take positive steps on their own behalf BUT should act quickly by pulling your executive team together and developing an action plan and carry it out consistently.  The initial steps of the plan should include the following:

• Conduct an environmental scan to assess your vulnerability.  This should include reviewing all your policies, specifically non-solicitation/non-distribution and problem solving policies, and ensure they are being enforced in a consistent manner.
• Training your supervisors on common union tactics like how to recognize and respond to union organizing activities.  Reinforce your support of them in fostering positive employee relations and what that mean within your culture.
• Strengthen your employee communications - all mediums - to inform employees about Management's position on unions and to learn their thoughts and opinions on working conditions, wages and benefits.  Part of this communication process should include education on what a union authorization card is, what it looks like and the consequences of signing one.

These new rulings are the result of three years of efforts by the NLRB and were not passed unanimously by the Board.  The dissenting NLRB members refer to this ruling as the "Mount Everest of regulations - massive in scale and unforgiving in its effect."  Other recent changes allow Unions to utilize a company's electronic communications system for organizing activity and "short cuts" in the petition process.

Though Michigan recently became a "right to work" state, changes such as these continue to erode good employee/employer relationships.  Concerned about how to put together an effective communications plan?  Contact TEA for assistance and training about these issues.

References: 

Varnum Law Publications, December 12, 2014

Barnes & Thornburg Law, Employment Law Alert, December 15, 2014

National Law Review, December 12, 2014

Forbes Magazine, December 15, 2014

A recent "Helpline" call from a TEA member brought to light an issue many employers are dealing with in regard to the Affordable Care Act ("ACA").  As most everyone is aware, the ACA requires employers with 50 or more full time employees (referred to as "large employers") to offer affordable health insurance to employees or be faced with significant penalties.  Much has been written about the practice by many employers of hiring temporary and part time employees in an effort to remain below the 50 employee threshold, and therefore not be required to offer health insurance at all. The Help Line call focuses attention on another less publicized practice that is aimed at lowering the full time employee headcount - the hiring of independent contractors.

The ACA states that an employer will not be penalized for failing to offer coverage to its independent contractors, a provision that our member's client (whose identity was not revealed) seemed to be taking advantage of when determining whether they meet the minimum threshold as a large employer.  Unfortunately, it was apparent that the client had no understanding of the requirements for workers to be classified as independent contractors nor of the significant penalties that can be handed down by the IRS and Department of Labor should the company be guilty of misclassification.

The IRS recently issued a final audit report on the topic of independent contractors, and although the exact numbers won't be published until early 2015, preliminary estimates show approximately 15% of employers misclassified many millions of employees last year.  To help determine whether a worker is an employee, the IRS has identified 20 factors that courts have used to assess whether an individual is an employee or an independent contractor.  Specifically, an employer must weigh the following:

• Is the worker required to comply with instructions on where, how and when the work is to be done?
•  Is the worker provided training to perform the job in a particular manner?
•  Are the services performed an integral part of the organization's operations?
•  Must the services be rendered personally?
•  Does the business hire, supervise and pay assistants to help the worker on the job?
•  Is there a continuing relationship between the worker and the business?
•  Does the organization set the work schedule?
•  Is the worker required to devote his/her full time to the organization?
•  Is the work performed at the company's place of business or at specific places designated by the company?
•  Does the organization direct the sequence in which work is performed?
•  Are oral or written reports required to be submitted?
•  Are payments to the worker made by the hour, week or month?
•  Are travel and lodging expenses reimbursed?
•  Does the organization furnish tools and materials?
•  Does the worker have an investment in the equipment or facilities?
•  Does the worker stand to realize a profit or loss as a result of the work?
•  Does the worker work exclusively for the organization?
•  Does the worker work predominantly for the organization or are services available to the general public?
•  Can the worker be discharged for reason other than nonperformance of contract provision?
•  Can the worker terminate the relationship without liability?

The benefits for employers who correctly classify workers as independent contractors are considerable, since health insurance is not required and paying Social Security, Medicare and unemployment insurance taxes can be avoided.  Other costs that would be required for full time employees but can be avoided for independent contractors include minimum wages, overtime, and workers compensation premiums.

However, any of these financial advantages gained can be erased when an employer fails to properly classify workers. That's why it is so important to take preventative steps and thereby avoid hefty fines, penalties, and even potential business reputation issues related to noncompliance.  TEA members who have concerns or questions about how they are classifying their workers, whether it be exempt, non-exempt, part time or independent contractors, are always encouraged to contact our Helpline by phone (616.698.1167) or by email (tea@teagr.org).

As a footnote to this article, an interview with David Weil, who runs the Labor Department's Wage and Hour Division, appeared in the 12/31/2014 edition of the Wall Street Journal.  In the interview, Mr. Weil stated: "There still are violations of our standard labor laws that are almost jaw-dropping.  Sometimes employers violate the law because they don't understand it.  But there are companies out there that aren't complying because they don't want to or don't feel they need to.  We see a lot of it in the area of misclassification of independent contractors."  Mr. Weil went on to say that the division continues to hire more investigators and that a top priority for the coming year will be to aggressively monitor independent contractor compliance by employers.  To view the entire article that appeared in the WSJ, click here.