Though the United States is one of just a handful of countries around the world that does not require organizations to grant their employees paid parental leave by law, recent years have seen more US states pursue mandates of their own, while a growing number of large, nationwide employers have voluntarily adopted more robust policies for working mothers and, increasingly, fathers and caregivers as well.
These trends have been driven by the public conversation and advocacy around parental leave, by a growing body of research showing the various benefits of parental leave to working families, and also by business considerations, as organizations struggle to attract and retain workers (particularly women) in a tight and competitive labor market. The latest research into what employees and candidates value, including Gartner’s Global Talent Monitor, shows that flexibility and work-life balance are becoming more and more important to the workforce. As millennials grow up and start families, this massive generational cohort is voicing a clear expectation that employers will support them—both moms and dads—in balancing career and family obligations.
Several developments have taken place in this area over the past month that employers should be aware of, as they illustrate the accelerating pace at which paid leave benefits are transforming from nice-to-have features to essential—and in a growing number of jurisdictions, mandatory—components of the employee value proposition.
The US Department of Labor announced last week that it was making available $100 million in “Trade and Economic Transition National Dislocated Worker Grants,” which will fund training and career services programs for workers affected by “major economic dislocations.” These grants will be disbursed to states, outlying areas, local workforce development boards, and other entities, by the department’s Employment and Training Administration, and are meant to address a variety of workforce challenges, including:
- The economic and workforce impacts associated with job loss or employer/industrial reorganization due to trade or automation;
- The loss, significant decline, or major structural change/reorganization of a primary or legacy industry, such as a manufacturing downturn due to technological advances, including impacts on the agricultural industry due to trade or other economic trends;
- Other economic transition or stagnation that may disproportionately impact mature workers, putting them at risk for extended unemployment, lower wages, and underemployment.
Applications for grants are due by September 7, and the administration plans to begin awarding funds by September 30. It will continue to fund qualifying applications in the order they are received until all of the allocated funds are spent.
This is the first major initiative from the Trump administration focused on protecting the workforce from automation-related displacement. Treasury Secretary Steven Mnuchin took criticism last year when he downplayed the potential impact of automation on job loss, arguing that technological displacement would not be an issue for another 50 years or more.
In its latest regulatory agenda, the US Department of Labor announced its intent to issue a Notice of Proposed Rulemaking for a new overtime salary threshold sometime next January. The Trump administration had first signaled its interest in rewriting the overtime rule last July, when the Justice Department expressed that intent in a court filing and the Labor Department issued a request for comments from the public—the first step in the federal government’s rulemaking process.
A new overtime rule issued by the Obama administration in 2016 raised the salary threshold at which employees are exempt from overtime pay from $23,660 to $47,476, but was blocked from going into effect by the courts and ultimately overturned by a federal judge in Texas last September, who found that the department had erred in setting the new rules for overtime eligibility based on salaries alone and not job descriptions.
The Labor Department appealed that judgment, not because it intends to maintain the previous administration’s rule, but rather out of concern that the ruling would hinder its ability to rewrite it. Current Labor Secretary Alexander Acosta had been critical of his predecessor’s decision to raise the threshold dramatically, indicating in his confirmation hearing last year that he thought an increase was needed but that doubling it all at once would put undue stress on the economy.
Employers may have hoped for a slightly speedier regulatory process, SHRM’s Lisa Nagele-Piazza reports, but now can likely expect a final new rule within two years, giving them plenty of time to prepare for what will probably be a less onerous new standard than the Obama administration’s:
The US Department of Labor under President Donald Trump and Secretary Alexander Acosta has been working over the past year to undo the regulations implemented by the Obama administration regarding the definition of “joint employers.” Acosta, like many employers and business associations, considers the previous administration’s standard too broad.
Now, the National Labor Relations Board is weighing a rulemaking process to update the standard, the board announced on Wednesday:
“Whether one business is the joint employer of another business’s employees is one of the most critical issues in labor law today,” says NLRB Chairman John F. Ring. “The current uncertainty over the standard to be applied in determining joint-employer status under the Act undermines employers’ willingness to create jobs and expand business opportunities. In my view, notice-and-comment rulemaking offers the best vehicle to fully consider all views on what the standard ought to be.”
Acosta’s Labor Department rescinded Obama-era guidelines on the joint employer standard last June, while the National Labor Relations Board’s regional directors were instructed in December to slow enforcement of the Obama administration’s standard. Shortly thereafter, the NLRB overturned its ruling in the landmark Browning-Ferris case, in which it had considered a company to be a joint employer with a subcontractor if it exercised “indirect” control over the terms and conditions of employment or had the “reserved authority to do so.”
Senate Republicans including Mike Lee (Utah), Marco Rubio (Florida), and Joni Ernst (Iowa) are talking up a new proposal from the Independent Women’s Forum, a conservative economic policy shop, to establish a mechanism for US parents to access paid leave without creating additional costs for their employers by deferring their Social Security benefits in retirement, the Hill reports:
According to IWF’s six-page proposal, parents could take up to 12 weeks and receive on average 45 percent of their pay in a Social Security parental benefit that’s calculated using the same formula as Social Security disability benefits. The IWF estimates the average wage worker would receive $1,175 per month.
Lee said lawmakers are trying to figure out how to structure benefits so they are delivered to families when they need them, how the federal law should interact with state paid leave laws and how to keep the law from hastening the Social Security Trust Fund’s 2034 insolvency date.
Several House Democrats released statements criticizing the proposal, calling it “woefully insufficient” and arguing that working Americans should not have to forgo Social Security benefits to spend time with their newborn children. Democratic Rep. Rosa DeLauro also insisted that “any paid leave plan that reflects the needs of working people and families must address the need to deal with a personal or family member’s serious illness.”
The US is the only industrialized nation and one of only three countries in the world not to mandate paid time off for new parents, though the Family and Medical Leave Act guarantees mothers the right to unpaid leave during pregnancy and after childbirth. Many US employers, including the 20 largest private employers, offer some amount of paid parental leave, but millions of Americans lack access to this benefit.
One of the most widely disliked provisions of the 2010 Affordable Care Act is the 40 percent excise tax it imposed on health insurance plans costing more than $10,200 for individuals or $27,500 for families. The so-called “Cadillac tax” was originally set to become effective this year, but its implementation date was later pushed back to 2020. A Republican plan to repeal and replace the ACA, which ultimately failed in Congress last year, had proposed to delay the tax until 2025, although employers have been pushing for its total repeal.
The major tax reform bill passed by Congress last month did not touch the Cadillac tax, but a resolution to restore funding to the federal government this week after legislative gridlock led to a government shutdown included a further delay in its implementation, SHRM reports:
Both political parties supported the provision to postpone the so-called Cadillac tax from taking effect until 2022, instead of in 2020—as did the Society for Human Resource Management (SHRM). The stopgap funding bill also amends other tax provisions that were part of the Affordable Care Act, such delaying the medical device tax—a 2.3 percent tax on the sale of certain devices—until 2020. …
Earlier this month the US Department of Labor announced that it was revising its test for determining whether interns count as employees entitled to protections under the Fair Labor Standards Act, citing recent federal court rulings that rejected the previous test:
The Department of Labor today clarified that going forward, the Department will conform to these appellate court rulings by using the same “primary beneficiary” test that these courts use to determine whether interns are employees under the FLSA. The Wage and Hour Division will update its enforcement policies to align with recent case law, eliminate unnecessary confusion among the regulated community, and provide the Division’s investigators with increased flexibility to holistically analyze internships on a case-by-case basis.
The department has issued a fact sheet explaining the standard it will enforce going forward, which is more flexible than the previous test and is based on the rubric the courts have used to judge who is the “primary beneficiary” of the internship and the “economic reality” on which it is based: