New Year Ushers in Minimum Wage Hikes

Two cities and 11 states are raising their minimum wage laws on Jan. 1, 2009, with Washington topping the state list at $8.55 per hour, and the City of Santa Fe besting everyone at $9.92 an hour (San Francisco just behind that at $9.79).

The federal rate will go to $7.25 on July 24, raising many other states' rates in the process (including both Florida and Arizona, which are raising their hourly wage requirement on Jan. 1 but no to that level).

Here's a complete rundown on the Jan. 1 wage increases.

Employers, check your requirements and get the posters you need with this state-by-state labor law posting checklist.

Song Parody: 'This Is Why You Are Fired'

A little gallows humor when times are tough never hurts, I guess, especially when it comes in the form of lyrics rewritten for Billy Joel's "We Didn't Start the Fire," which was then retitled "This Is Why You Are Fired."

VIEW THE LYRICS

If You Like EFCA, You'll Love Its Siblings

The Employee Free Choice Act (EFCA), which would allow union organization merely by the collection of enough signatures--called card check--instead of secret ballots, has been stirring up a hornet's nest of business opposition.

Now, a University of Chicago Law School professor named Richard Epstein has even come out in print blasting the EFCA as unconstitutional on both First and Fifth Amendment grounds. I think he's stretching the First Amendment gambit a bit, but the argument based on the "takings" clause of the Fifth may carry more legal weight.

The takings argument involves the EPCA's provision calling for binding arbitration in case the employer and new union can't agree on a contract. Epstein argues that an arbitrator could mandate provisions that would put the company out of business (setting wages and benefits too high, etc.), and this would invoke the takings-clause protection of the Fifth Amendment.

Anyway, unless the law passes, we'll never get a review of its constitutionality, but in the meantime employers and business owners have a whole panolpy of other liberal-leaning legislation to fear and oppose.

Let's look at some of them:

RESPECT Act: Redefines how much time a person must spend supervising to be categorized a supervisor to make more employees eligible for unionization while shrinking the ranks of potential opponents.

Lilly Ledbetter Fair Pay Act: Gets a tad technical but basically stretches the time frame for filing discrimination claims almost into infinity.

Employment Non-Discrimination Act: Adds sexual orientation and gender identity as protected classes.

Civil Rights Act of 2008: A grab bag of statutory changes that prohibits mandatory arbitration agreements between employees and employers and removes caps on monetary claims in lawsuits, among other far-ranging goodies.

Working Families Flexibility Act: Reguires good faith negotiations with any employee who desires a different work schedule--days of work, hours of work and location of work. (Makes it hard for the employer to say no as well.)

FOREWARN Act: Takes the WARN Act (see recent Republic Windows and Doors incident) and lowers coverage to companies with 50 or more employees (down from 100), raises advance-notice of layoffs/closing bar to 90 days, and doubles the amount of pay for employees if proper advanced notice isn't given.

Like I said, if you like EPCA, you'll love the whole mix of legislative goodies coming down the pike.

A New Protected Class: Ugliness?

Over at the Ohio Employer's Law Blog, Jon Hyman has an interesting discussion on the proposal to add ugly to the protected classes under labor law and employment laws.

To wit, Hyman writes:

"Under the current state of the law, it is illegal to discharge, to refuse to hire, or otherwise to discriminate with respect to hire, tenure, terms, conditions, or privileges of employment, or any matter directly or indirectly related to employment because of: race, color, sex, religion, national origin, ancestry, age, disability, genetic information, military status, and veteran status. I am fairly confident that 2009 will add sexual orientation, and possibly gender identity, to this list."

Now, the argument for adding ugly to the protected classes is to prevent discrimination based on looks, of course. Some, maybe most, employers prefer hiring good-looking people as they are perceived to be sharper, sexier and better, more trustworthy workers.

However, since beauty is in the eye of the beholder, how could the courts or regulatory agencies ever agree on how to define ugly so as to have a workable law?

Minimum Wage Laws: Helpful or Hurtful?

It's hard to argue that any law that can potentially elevate people from poverty or substandard living conditions is bad. Such, however, is the case with the minimum wage laws of our nation, which began in 1938 with the Fair Labor Standards Act (FLSA) and have now taken root not only in state legislatures but in city halls as well.

The effectiveness of these laws is--seven decades later--fair game for debate. Some argue that minimum wage laws have no adverse effect on employment of certain groups of people (such as the unskilled and the young), while others maintain that minimum wages reduce employment at the fringes.

A lot of it depends on one's political perspective and/or business involvement (owner, manager, et al.).

Now comes a book by a professor of economics at UC Irvine and an associate director of research for the Federal Reserve, which argues that minimum wage laws indeed lower employment and reduce (not raise) wages overall.

In Minimum Wages, David Neumark and William Wascher argue that their two decades of research reveal that these laws do not achieve their goals. Instead, they reduce employment opportunities for less-skilled workers and tend to reduce their earnings; they are not an effective means of reducing poverty; and they appear to have adverse longer-term effects on wages and earnings, in part by reducing the acquisition of human capital.

Still, there's no stopping the political will power to raise the minimum wage. The federal rate will go up to $7.25 next July 24, while states and even municipalities are beating that figure and that onset date with minimum wage laws' taking effect on New Year's Day. Washington is the highest of the states at $8.55 an hour, while San Francisco--at $9.79--and Santa Fe--at $9.92--are highest overall.

I've certainly seen many anecdotal news videos in which business owners say they've already laid someone (or someones) off in anticipation of the new minimum wages, spreading their work around or doing it themselves, to lead me to believe that minimum wage laws can indeed backfire.

However, politics is politics, and the minimum wage phenomenon is here to stay.

Up next--the minimum wage as living wage?

ADA Amendments Act Will Greet the New Year

The Americans With Disabilities Act (ADA), originally passed in 1990, sought to open up employment in the private sector to persons with physical or mental disabilities who were otherwise perfectly capable of performing the required duties. The ADA brought to private enterprise what the 1973 Rehabilitation Act did for federal agencies and firms carrying out federal contracts.

Through the years, though, the Supreme Court kept nibbling away at the definition of disability to the point that the ADA lost almost all its teeth.

Voila--the Americans With Disabilities Amendment Act (ADAAA), signed into law this year by President Bush. The ADAAA clarifies exactly the intended definition of disability and throws in another category, "regarded as disabled." Taken together, the two categories--disability and "regarded as disabled"--pretty much cover every human being alive.

In fact, the ADAAA basically states that employers should accept at face value an employee's announcement of an impairment or disability that requires a reasonable accommodation. (There's one out clause--if the accommodation involves "undue hardship" for the company and its operations, then it might not be considered "reasonable.")

If you don't believe me, read this definition of "regarded as disabled": "[A]ctual or perceived physical or mental impairment whether or not the impairment limits or is perceived to limit a major life activity."

(Major life activities include, but are not limited to, caring for oneself, performing manual tasks, seeing, hearing, eating, sleeping, walking, standing, lifting, bending, speaking, breathing, learning, reading, concentrating, thinking, communicating, and working.)

My question is this: If an employee, for instance, has sleep apnea and thus is tired in the daytime, would a "reasonable accommodation" include a sleep break or two or three? A specially cushioned chair so as to be able to drift off into slumber when necessary?

I'm only half joking, but I think you get the idea that the ADAAA has significantly broadened the scope of what constitutes a disability.

Meanwhile, I'm relying on my old friends at Personnel Concepts to keep me updated on all this. In fact, the company has already issued its ADAAA Compliance Kit.

Straight Out of Dickens: Labor Strife in China

You might think it was the early phase of the Industrial Revolution in Great Britain if you visited South China these days.

Guangdong Province is the manufacturing heartland of China, and its factories supply a lot of what we Americans find at Wal-Mart and many other retail stores, especially toys.

But things are getting tough in China, by many standards tougher than we have it here in the U.S.

First, under pressure from Wal-Mart and other large-scale buyers, China officially raised the minimum wage, but that didn't stop Wal-Mart from simultaneously demanding lower costs. Profits, at least for the toymakers, sank immediately.

Then came higher fuel costs and now the recession in the U.S., and factory after factory in Guangdong began shutting down; factory hands were let go en masse, many of them migrant workers whose families back home in distant provinces depend on them for monthly cash infusions--and bare survival.

Since the beginning of 2008, some 3,600 toy factories have gone under, leaving hundreds of thousands without work, yet China still publishes an official unemployment rate of 4 percent.

Now, the workers are fighting back--literally. Dongguan, the city where the toy manufacturers are concentrated, has witnessed several episodes of laid-off workers' occupying and trashing the factories after they're closed. Riot police have been called in. Scenes have gotten ugly. Tensions are understandably high, as is anxiety for the future.

But since the owners of the factories often disappear into the hinterlands after closing shop, local authorities are usually powerless to collect back wages, let alone enforce severance packages. In some cases, the government--hoping to keep face--has itself coughed up the workers' earnings.

As it stands, Chinese factory workers toil up to 80 or more hours a week (when times are good) for the princely sum of 770 yuan a month, about $118. Overtime is almost never paid.

In the States, we just witnessed the employee occupation in Chicago of Republic Windows and Doors, which was abruptly shuttered after Bank of America closed its line of credit to the firm.

The laid-off workers demanded 60 days' wages and benefits under the WARN (Worker Adjustment and Retraining Notification) Act since that law requires firms to give 60 days' advance warning of mass layouts (unless there is an unforeseen emergency, a gray area).

Just last night I heard that BofA was going to advance Republic a $1.2-million loan to remunerate the fired employees.

So, the employees won, evidently, but I have one question:

How is Republic going to repay BofA if it's no longer operating the factory?

(I just learned, but I don't know if it's accurate, that the sum is actually $1.75 million and that it will go into a fund with money from both JPMorgan Chase and Bank of America. This would seem to indicate that it's not a loan, but a publilc relations tactic to counter consumer and public ill will toward the banks.)

New Regulations Flying Right and Left

Mostly right, I guess, given the composition of the current administration.

Much indeed has been made of Bush's so-called "midnight regulations," which no doubt face reversal under Obama and the Democratic Congress, but one set of regulations looks to be ensconced for a while. That would be the Final Rule issued Nov. 17, and taking effect next Jan. 16, to expand and clarify the Family and Medical Leave Act (FMLA).

Since 1993, FMLA has afforded workers with health care and family needs the option to take up to 12 weeks of unpaid leave, either consecutively or intermittently. The Final Rule keeps this option intact but shifts more of the notification and certification responsibility to the employees themselves. For the first time, it even gives employers the right to verify the health provider's certification of the employee's condition and treatment, but only to the extent of verifying the provider's signature and whether he or she actually issued the certification.

Too much on that already, but the main idea is that employers, after two years of input to the Department of Labor, got what they wanted in terms of ending employee (alleged or perceived) abuse of FMLA.

The other big part of the Final Rule is that it adds two categories of leave for relatives of service members. One category affords 26 weeks of unpaid leave to tend to an injured service member (certain conditions apply, of course), and the other category provides up to 12 weeks for certain "exigencies," for instance, to join a service member when he or she is home on leave or when he or she is preparing to be deployed.

Unions and employee advocates are naturally cheering the military component but deriding the new employee notification and certification policies.

At any rate, it will take a long time to go about changing or reversing these new regulations and clarifications, though President-elect Obama has already announced he wants to expand FMLA to employers with just 25 or more employees in a 75-mile radius (down from the current 50). He also wants to pass legislation mandating that all employers allow paid leave.

We'll just have to wait and see as a more employee- and union-friendly administration takes over, so we can then "fly left."

More Pain on the Labor Front

When I left home a little after 5 a.m. today, the panel on CNBC was predicting a job loss total for November of 350,000. By the time I got to my office, the actual figure of 533,000 newly unemployed had been announced by the DOL. Stocks, natch, immediately began plunging.

Not since December 1974 has the nation witnessed such a dreadful month on the employment front. The total for the year now stands at 1.91 million jobs lost. It would take a record-breaking December to push us over the 2 million mark. Small comfort in that, though, as jobs will continue to be shed as the nation comes to grips with its new economic reality.

As much as I keep telling myself that recessions cure a lot of the economy's--and society's--ills, that doesn't reduce the anxiety or reality of what's going on very much, either for me personally or for anyone who reads this, and certainly not for anyone who loses his or her job.

What next?

The automaker swan song is already upon us, and there's no way Detroit 2009 will resemble anything in 2008. That transformation, as much needed as it is, will have ripple effects throughout many supporting and consuming sectors of the economy.

I don't want to predict the next crisis, but many commentators are already forecasting a credit card default wave rivaling the ongoing foreclosure crisis.

We are all now living through that ancient Chinese curse: "May you live in interesting times."

Hang on to your seats for a bumpy ride.

The Never-Ending Regulation Mill

Anyone out there ever try keeping up with all the workplace regulations foisted on us business owners by the federal and state (and sometimes local) governments?

Try reading through the latest iteration of the Family and Medical Leave Act (FMLA) that came out Nov. 17, 2008.

You need a guidebook to wade your way through it, so why bother? Don't we have better things to do, like surviving in a challenging economy?

Fortunately, we don't have to spend hours and days pouring through these gov regs, as I call them.. There are a bunch of Web sites, blogs and newsletters that can help yus cope with complying with workplace regulations.

I have several such sites bookmarked on my browser, but I also rely on Personnel Concepts to keep me informed, which they do quarterly, and daily on their site. They do the research and then keep me up to date.

There are other providers out there that I've checked into, but Personnel Concepts seems to have been around longer and honed their skills better.

More on keeping up in future posts.