Monday, April 16, 2012

Latest Version of Jobs Bill Contains Numerous Employment Law-Related Provisions

The Rebuild America Act (S. 2252) incorporates a whole host of employment-related provisions into a single piece of legislation that would substantially change the landscape of employment law and provide a lot more benefits for employees.  Specifically, the Act seeks to:



  • The bill would initially increase the federal minimum wage to $8.10 an hour, then to $8.95 and $9.80 an hour one and two years after the bill’s enactment, respectively. The minimum wage for tipped employees would also increase initially to $3 an hour, then by an additional 85 cents per year until the hourly rate is equal to 70 percent of the federal minimum wage.
  • The bill incorporates the Healthy Families Act, a measure last introduced in May 2011 that would require employers to provide employees with paid sick leave. Specifically, employees would earn one hour of paid sick time for every 30 hours worked, up to a maximum of 56 hours (seven days) annually.
  • To combat worker misclassification, the bill includes components of the Fair Playing Field Act, which was most recently introduced in March as a standalone bill. This bill that would limit the use of a federal “safe harbor” that allows businesses to treat workers as independent contractors for federal employment tax purposes, regardless of the employee’s actual status under the common law test. In addition, the bill would direct the Secretary of the IRS to issue regulations and guidance clarifying who constitutes an independent contractor.
  • The bill would amend the National Labor Relations Act (NLRA) to narrow the exemption for supervisors and clarify that workers misclassified as independent contractors are entitled to NLRA protections. The legislation would impose civil penalties of up to $20,000 on employers the commit unfair labor practices.
  • The measure would amend the Fair Labor Standards Act (FLSA) to make it more difficult for employees to qualify for the executive, administrative, and professional exemption. Specifically, the bill would increase certain salary thresholds to potentially enable more “white collar” workers to qualify for overtime. This threshold is currently $455 a week, or $23,660 annually. This threshold would be raised incrementally to $54,340 after three years and indexed to inflation.

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