The First 100 Days of Obama: Fistful of Talent Saved Me An Update

The folks over at Fistful of Talent saved me a legislative update. Follow this link to Tough Love: The First 100 Days of the Obama Administration. It is getting very hard to be an employer these days and it is not going to get any easier. So read and learn and prepare. Or be active and contact legislators to express your opinion on the pending legislation.

Change you can believe in.... well you can believe there will be change and more change. Hang on to your hat the rollercoaster is leaving the platform!

Ledbetter: The Perpetual Paperwork Act

On Thursday the 19th of March I attended a good seminar at at great venue. The seminar was hosted by the lawfirm of Drew Eckl & Farnham and was held at the Georgia Aquarium in Atlanta. One of the sessions was lead by a long time aquaintence, Joe Chancey. The format for this session was different any other session I have attended. Joe and his fellow attorneys used a scenario presentation that brought home the point they were trying to cover. The scenario that really caught my eye was the following:

• Ten years ago, my supervisor game me a bad review because I had complained about him sexually harassing me. I received no raise that year, as a result. He was fired shortly after that, and I've gotten good raises since then, but I don't think I've ever caught up. Can I do anything to recover the difference?

How do you answer this? What do you think? Well prior to the Lily Ledbetter Act the answer would have been "no." The statute of limitations for reporting the act of discrimination, 180 days, would have long been passed. But now, with the passage of the Ledbetter Fair Pay Act the answer would be different. As Joe and his collegues responded "Every new paycheck tainted by the discrimination is a new violation and restarts the statute of limitations clock." Thus our employee in the above scenario would now be able to go claim sex and pay discrimination and recover some of the money she feels she had missed out on. I say some, because the law only allows retroactive claims back to May 28, 2007.

To make a further point, if this woman had already retired, and was receiving a pension check based upon the amount of her income, then potentially she may still have a claim, since each pension check is a repeat of the act of discrimination and thus resets the statute of limitations clock.

What does this mean for HR? You:

• Must make sure that pay and promotional decisions are documented and are business related, including the business justification for having made that decision.


• May not be able to purge paperwork files for much longer periods of time. If you have someone receiving wage or pension payments in any way shape or form you must retain that paperwork in case someone decides to file a claim. Thus, my title of The Perpetual Paperwork Act


• You need to review any possible such situation you may currently have and see what paperwork or justification you have in the file.

So get to it. Get that work done now before someone files against you. Besides, we have more laws coming later in the year and if you don't do this now you may not have the time.

Merit Pay Going the Way of the Dinosaur: Fallout From Ledbetter

A SHRM alert I received today had this quote in it: "Camille Olson, an attorney at Seyfarth Shaw in Chicago, said that some HR executives have wanted to revisit their companies’ entire pay systems as a result of the new law. Here’s why: An annual pay increase based on merit has a life under the new law until the employee no longer receives a paycheck, she explained." The article went on to discuss alternative methods of paying people as a way to people because of the passage of the Ledbetter Fair Pay Act. Included in these was " Employers might instead adopt policies awarding pay based on objective factors such as job title and years of service, she noted. Employers would pay employees a certain amount, and everyone would get the same percentage increase. " This will certainly eliminate individual merit increases.

An alternative suggestion was “A lot of HR executives are asking me if they should move from performance-related increases to lump-sum payments” so that pay won’t have a continuing effect, she remarked. The merit portion of this compensation scheme would result in bonus payments but not increases in base salaries." This suggestion certainly keeps merit in the pay system, but will require a large attitude change in how compensation is seen, by both employers and employees. Who knows it may open the door to putting everyone on a system of having a significant percentage of compensation "at-risk."

Either way, it appears that merit increases of base wages will be going the way of the dinosaur. What do you think?

Senate Considers Pay Legislation That House Passed

The Paycheck Fairness Act and the Ledbetter Fair Pay Act, that were passed in the House of Representatives last week, are now being considered by the Senate. SHRM opposes these bills, which while well meaning are flawed in construction. Here is why SHRM opposes them.

SHRM opposes the following provisions of the Ledbetter Fair Pay Act:

Fundamentally changes statute of limitations—By making the time clock start over upon the issuance of each successive paycheck or retirement benefit, the Ledbetter bill would allow individuals to bring discrimination claims years or even decades after an alleged act of discrimination occurred. Employers would be liable for previous management decisions for which there may be no available witnesses or records.

Expands plaintiff field—The Ledbetter bill would allow not just an employee who was discriminated against, but other individuals who were “affected” by an act of pay discrimination to file claims. The legislation may allow family members, including spouses and children, and potentially others to become plaintiffs in suits over an employee’s pay—even after the employee was deceased.

SHRM opposes the following provisions of the Paycheck Fairness Act:

Ø Promotes class action lawsuits against employers—The Paycheck Fairness Act would require employees to “opt-out” of a gender discrimination class action, rather than the current law requirement that employees must give their written consent to join a class action. By automatically including all employees as part of a class, the bill would dramatically increase the number of plaintiffs in class actions.

Ø Exposes employers to unlimited damages—The Paycheck bill would create unlimited punitive damage awards for which employers would be liable, in addition to current liability for back pay. The potential for such penalties would likely compel employers to settle more wage discrimination claims, even in cases where no discrimination occurred.

Ø Restricts legitimate pay practices—The Paycheck bill would make it significantly more difficult for an HR professional to use legitimate factors, such as education, training, or experience, as a component of an organization’s pay system. Moreover, the legislation may altogether prohibit an employer’s use of local market rates and prior salary history in setting compensation.

So I hope this informs you as well. Inform your senators if you are so inclined. That is what SHRM is calling for in their letter campaign. I happen to know my two senators will be opposed, but yours may not. And if you don't know if yours will be then shame on you. And if you do not know who your senators are then hand in your voter registration card you don't deserve it. Also, don't call yourself an HR PRO, a PRO would know.

More On Paycheck Fairness: Still Beating 'Cause the Horse Isn't Dead

Here are two great links for people who are far more compentent to talk about the paycheck fairness legislation than am I. The first link is to Ann Bares, author of Compensation Force, who talks about Pay Legislation Leaps to Top of House Agenda: Interview with WorldatWork's Cara Welch. Ann Bares is a MUST read.

The second link is to Michael Moore's Pennsylvania Labor and Employment Blog where he writes about Record Retention Nightmare Created by Ledbetter Fair Pay Act . If you are a paper shuffler you will love this law. If not... whoa... what a potential nightmare! How about NEVER getting rid of ANY employee information? Eternal record retention.... do you have enough file cabinets?

So check out these two invaluable blog posts. Be informed.

HR Is Caught in a Whirlwind of Political Wrangling

The Democrat controlled 111th House of Representatives flexed it's muscles today. Nancy Pelosi et. al. changed the rules on how bills are dealt with in the House. As stated in this Washington Post article House rule changes squander good will "The spirit of bipartisan cooperation didn't survive the first day of the 111th Congress as House Democrats pushed through a package of rule changes Tuesday that the furious Republican minority said trampled their traditional rights to affect legislation." Well that is just politics you say, why should it matter to human resources? That reason is this change:"The most contentious rule change places new restrictions on motions to "recommit" a bill for new amendments to the committee that approved it. In practice, that motion often meant a lengthy or even permanent delay in passing the measure. Motions to recommit would still be possible, but the new rules allow the full House to reconsider the bill almost instantaneously." Ok, so what, how does that affect HR?

It affects HR in that it makes it almost impossible for Republican Representatives to have legislation they think is bad for the country reconsidered. And for many this includes the two pieces of legislation that are being acted on RIGHT NOW, AS IN JANUARY 7TH. These are the Lily Ledbetter Fair Pay Act and the Paycheck Fairness Act. Both of these may be noble in thought but are bad in execution. SHRM, The U.S. Chamber of Congress and other business associations are all lined up in opposition to these bills.

But this opposition, and the letter writing campaign SHRM called for may come too late. These bills are being pushed through the House as I write this and with the rules changes House opponents may have no opportunity to stop or have have the bills reconsidered. New Congressional Representatives are being asked to vote on something they have had no time to get educated on. (Of course, I believe most Representatives don't have a clue about how businesses operate anyway. Most have never had to make a payroll.)

The Ledbetter Fair Pay Act would effectively eliminate the uniform statue of limitations on pay discrimination claims and restart the time clock for filing such a charge with the EEOC upon the receipt of each successive paycheck. The bill would also re-start the time clock when a retiree receives an annuity check from an employer, and would thus keep employers liable to a discrimination claim potentially decades after an alleged act of misconduct. The legislation would amend the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Americans with Disabilities Act, and the Rehabilitation Act.

The Paycheck Fairness Act would limit an employer’s ability to justify paying different salaries to workers based in different locations with different costs of living. Second, the bill would lift the caps on compensatory or punitive damages for which employers would be liable, in addition to current liability for back pay. These damage penalties would apply to even unintentional pay disparities.

A third piece of legislation, the Employee Free Choice Act, may also soon be offered on the floor but opinions vary on its immediate chances of success. The other two are considered "low hanging fruit" (after all who is not for fairness?). Here are two articles that offer slightly different points of view on these issues. Workplace legislation coming to a head in Congress from the Kansas City Star and Labor Unions' Top Priority Faces Delay from the Wall Street Journal. Check them out. I would offer to send you to SHRM's website for information too... BUT THEY DON'T HAVE ANY VISIBLE! Yes they sent a letter to the membership but how about posting it for everyone to see?? I am gravely disappointed.

Don't be passive with this legislation. Inform you legislator of your opinion, either pro or con. I wrote about this, here, in reference to the election. The advice offered there still applies.