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Legislative Update

Legislative Update Contact:
Jeff Jackson, SPHR, SHRM-SCP
HR Director
Stephenson Wholesale Co.

SHRM - Public Policy State Reports

The purpose of the Legislative Update is to provide you, the member, with a snapshot of what is happening on the legislative front.  Understanding legislative issues have become more and more critical to the HR profession and this page is dedicated to introducing you to some of the legislation being considered at both the state and federal level as well as keeping you updated on practices or changes coming from the regulatory agencies.  This is not intended to be an all encompassing list, but to provide you with highlights. 

 State Legislation

Latest Update . . . 9/27/2013

DOMA Found Unconstitutional….Now What!

If you are a business owner or human resource executive you may be scratching your head.  In June, the U.S. Supreme Court found the Defense of Marriage Act, (DOMA), unconstitutional in the U.S. vs Windsor case by striking down section three in violation of equal protection.  DOMA previously defined “marriage” for purposes of federal rules and regulations as ‘a legal union between one man and one women as husband and wife’.  This definition disallowed states who recognized same-sex marriage from being treated as married for purposes of federal law.

Since the Supreme Court’s decision, federal agencies have been scrambling to clarify guidelines that will be used for tax consequences for same-sex marriages.  As a result, in August the IRS issued a ruling to detail their position on the treatment of same-sex spouses including impact on employee benefit plans.

You can see, this is the point in which employers are involved in the conversation.  There is still much confusion and many questions being asked to grasp the full scope of this law.  Some of these questions were answered in the IRS Frequently Asked Questions document released September 6, 2013.  Some areas addressed in this document focused on Qualified Retirement Plans by recognizing same-sex spouses who were married in a jurisdiction that recognizes same-sex marriages as married, and same-sex spouses, for purposes of the Code even if the same-sex couple lives in a jurisdiction that does not recognize same-sex marriages, such as Oklahoma.

Plan sponsors should carefully review their benefit plans as to how this ruling will impact their plan or necessitate any document changes.  Plan sponsors may want to develop a guideline to identify same-sex spouses, whether it be through the presentation of specific documentation or affidavit, or acceptance from an employee declaration.  As a guideline, plan sponsors should prepare to treat same-sex spouses for purposes of spousal consent rules, minimum required distributions (MRD), rollovers, qualified domestic relations orders (QDRO), maximum benefit limits, death benefits and hardship distributions. This ruling will also affect other benefits such as cafeteria plans, HRA’s, HSA’s, and medical plans. 

This ruling will certainly be felt throughout business and will be managed through the human resource departments.  Whether this ruling affects diversity areas or cultural changes within organizations is an area to be addressed by each organization but could have a far reaching effect going forward.

There is no question there is much more to come both from the regulatory agencies as a result of the ruling as well as for potential far reaching effects on the horizon.  We will continue to monitor aspects and report back with information.



Historic Work Comp Reform Passed — The House of Representatives overwhelmingly voted Wednesday (74-24) to replace Oklahoma’s broken, court-based workers’ compensation system with an administrative system. The bill now goes back to the Senate for acceptance of amendments (expected) and then on to the governor for her signature (also expected). Click here to see a list of the house amendments.  An overview of SB1062 is below.

Unemployment Compensation “Misconduct” Bill Signed — HB 1911 (Shannon/Newberry) is a bill aimed at reducing frivolous unemployment benefit claims. Governor Mary Fallin signed this important piece of legislation on April 24th. This legislation gives clear definitions of employee misconduct that would disqualify a terminated individual from receiving unemployment benefits. The elements of misconduct laid out below will become law when the bill goes into effect on November 1, 2013:

  • “Misconduct shall include, but not be limited to, the following:
    • Unexplained absenteeism or tardiness;
    • Willful or wanton indifference to or neglect of the duties required;
    • Willful or wanton breach of any duty required by the employer;
    • The mismanagement of a position of employment by action or inaction;
    • Actions or omissions that place in jeopardy the health, life, or property of self or others;
    • Dishonesty;
    • Wrongdoing;
    • Violation of a law; or,
    • A violation of a policy or rule adopted to ensure orderly work or the safety of self or others;”



Worker Compensation Reform
The most talked about state issue regarding employment today is worker compensation reform/restructure.  There are currently eight House bills and four Senate bills under review; one has passed the Senate and moved on to the house (SB1062). 

Effectively, all of these bills focus on taking workers’ compensation claims from a court system to an administrative system.  This change would dramatically alter the process in which a claim flows, the intent is to change the system from an adversarial system, with attorneys representing both parties, to a procedural system with defined policies.  The burden of proof of injury falling on the employee and requiring  determination that the injury occurred on the job, specifically a time and location of the accident.  An injury is only considered compensable if qualified by objective medical evidence.  Also any injury occurring where the employee willfully violates policies, including the use of safety protection or violation of safety policies is not covered; including the presence of illegal drugs or alcohol while on the job.  In lieu of the court system, mediation services will be available to those employees who feel their claims have been unfairly assessed at the employee request.  This does not however invoke the jurisdiction of the court.  Mediation is available to any party involved in the claim.  It is expected that worker compensation job classification rates would reduce with the introduction of these changes.

This issue will affect every business in Oklahoma and could affect growth in the state and will be one to watch.  Click here to review a copy and details of the proposed bill.

 Unemployment Compensation Reform
The administration of unemployment benefits have been a topic of debate in Oklahoma for many years, in particular due to the placement of the “burden of proof” which currently resides with the employer.  Below you will find an opinion brief from the Oklahoma State Chamber on this issue.

State Chamber Applauds House Passage of Common Sense Reform of Unemployment Compensation

 With strong, bi-partisan support, HB 1911 was approved by the Oklahoma House of Representatives this week.  The State Chamber of Oklahoma has been working on clarifying Oklahoma’s definition of “misconduct” as it relates to unemployment compensation and HB 1911 achieves that goal.

 “Oklahoma’s definition of misconduct is not as open as many other states,” said Fred Morgan, president and CEO of the State Chamber.  “This is why we support HB 1911 and its effort to expand that definition.”  The elements of misconduct laid out below (and in HB 1911) come from other states and have been approved for use by the U.S. Department of Labor:

  • “Misconduct shall include, but not be limited to, the following:
  • Unexplained absenteeism or tardiness;
  • Willful or wanton indifference to or neglect of the duties required;
  • Willful or wanton breach of any duty required by the employer;
  • The mismanagement of a position of employment by action or inaction;
  • Actions or omissions that place in jeopardy the health, life, or property of self or others;
  • Dishonesty;
  • Wrongdoing;
  • Violation of a law; or,
  • A violation of a policy or rule adopted to ensure orderly work or the safety of self or others;

 Oklahoma employers pay two types of taxes when it comes to Unemployment Insurance (UI).  The first, and largest amount, is paid directly to the Employment Security Commission for payment of benefits to unemployed workers.  The second, and smaller, is paid to the federal government and is designed to allow the U.S. Department of Labor to send money to the states for the administration of their UI and Employment Services (ES) programs.  Oklahoma has historically had a financially sound UI system and we are one of the few states in the nation that has never had to borrow from the U.S. Department of Labor to fund our UI system. 

 “Oklahoma employers pay the entire cost of the system,” said Morgan.  “Our rates have been going up drastically over the past few years.  For some employers, that rate is 9.2% on the taxable wage base of $20,100…or almost $1,850 on the first $20,100 paid to every worker.”

 Generally, an employee is eligible for UI if they are terminated from employment (and have worked long enough to gain eligibility) for any reason other than “voluntary quit” or “misconduct”. 

These are obviously not the only two issues coming in from of the State Legislature this year and it is our intention to provide you updates on other items throughout the year. 


Notes from the 2012 OKHR and SHRM National Legislative Conferences

Stephanie McCarty, SPHR, MHR

The DOL has an increased budget and FTEs for the wage and hour division.  They have more FTEs than ever before; 500 more than 2008.  In 2011, the DOL collected almost as much in back wages as the size of their budget.

 Misclassification of employees as contractors is a huge audit effort.  DOL would like to train other agency reps and provide state grants to spot violations of the wage and hour rules.  Today’s DOL is becoming much more penalty oriented and less assistance focused. 

 In the regulatory agenda, child labor guidelines are expanding the definition of hazardous occupation to prohibit more hazardous occupations such as running some farm equipment etc.

The NAICS code of “companionship services” provided an overtime exemption for companions.  DOL wants to eliminate the exemption for anyone doing it as a third party. Not family or household who can stay exempt.  Result would be a loss of employee benefits, background screening, insurance or bonding.  You can make an impact if you file a comment.

 Recommendations:  Plan. Prevent. Protect.   Ensure employers create a plan to identify and correct any problems and verify it is working.  Notify employees of their status.  If you don't have a plan you are assumed to be out of compliance.  The requirement will not be dated until after the elections.  DOL has been asking employers to provide a list of exempt employees and under what exempt definitions.  If asked for it, you can tell them you don’t keep that info cause they have no right to that info.  If you decide that you are going to provide a list, list every possible exempt rule that employee would qualify.  Better yet, say “under any exemption that would apply”.   Still better not to do so.

 FMLA published on February 15th, in proposed form, guidelines for  Exigency Military Leave.  It provides for an expanded duration of leave for rest and relaxation for five to fifteen days.  It also provides for extended caregiver leave to veterans with serious injury or illness but is not effective until final rule is published.

 Implemented changes to Airline flight crew.  The way their work was scheduled, they might not meet the standard of hours worked.

 The big deal in new regs was in intermittent leave taking away the employers right to charge it by the hour.  Now will have to charge it at the shortest leave period used for other benefits.  Cannot require employee to take more leave than necessary.  If your payroll system uses minutes, then leave will be calculated by minutes.  If it was impossible to return employee to their job mid shift, we now can require them to stay on leave but under the new regs employers cannot do that.  How to file comments. Www.regulations.gov to make a comment at regulations with ninety days comment and do it soon.  Don't need to ID your employer.

 Finding issues.  DC Update blog. By Elise at SHRM or Regulations.gov can help you stay current.  If Republicans get in charge they can use your comments to appeal the rules.

 Enforcement initiatives.  There are more directed investigations - ones that had no employee complain which make up 35% of future investigations.  Top investigative topics:  Misclassifications in construction, janitorial, home health, and child care, transportation, poultry, landscaping, personnel agencies.  They are asking for every independent contractor you have in place.  Coordinating with IRS, state regulators, worker advocates, community organizations and unions to recover lost state revenues and fed revenues.

 If you have a subcontractor who violates classification, you will become responsible for that misclassification under joint employer definitions.  What DOL wants you to do, is to make sure you are using reputable subs.  Figure out how to enforce compliance by subs or don't hire them.  Must be a part of the contract with the subs.

 If you get a letter or call from DOL that you have a subcontractor in violation, challenge it.  Happening frequently for construction, janitorial, hospitality, health care.

 Small employers in low wage industries are getting a special look by DOL

 DOL has increased enforcement, debarment, draconian remedies, and withholding of contracting payments to the employer in order to pay the employee back wages.  DOL feels like without penalties in addition to back wages you are getting away with something..

 Special programs. 

  • The DOL is spending money on their “We can help” campaign.  Employees in target industries being sought out.
  • Free DOL Smartphone apps.  Timesheet app to track your work and then you can email discrepancies to your attorney.
  • “Eat, shop, sleep”  A list of the DOL violations is listed along with menus, etc.
  • “Bridge to justice” campaign - DOL will provide employees with contact info to attorneys when they don't have time to investigate and the claimant attorneys will be sent the DOL files.

 Civil money penalties are being assessed against any employer who has a prior violation.  Penalty monies collected go back into the DOL budget.

 What to do?

  • Asses your compliance
  • Write compliant policies and procedures,
  • Have a complaint and investigation process.
  • Conduct training of managers.
  • Ask legislators to deny funding DOL for expanding misclassification initiative,
  • Ask legislators to encourage the DOL to issue more opinion letters and answer employer questions.

 Session by Patrick Content:  Sturm and Content, Spartanburg, SC

 I-9s. Use of an old form is a violation.  Must have a current date regardless of whether the form is identical or not.

 Because of the incidences of fraud where tourists or students overstayed their visa term, it can be very difficult to get a visa today from certain countries such as Mexico.

 The more you do to help an illegal alien – just trying to be nice or help out a great employee,  the greater potential for  you to be in jeopardy of committing a felony.  As soon as you know they are illegal, you have to fire them.  ICE doesn't have the resources to hunt down illegals, even if you call them to tell them.  Their focus is to go after businesses.  They have been known to send or hand deliver a letter asking to see the I-9s.  You have the right to ask for a little time to organize the paper work.

 Due to ID theft, your I9s may be perfect yet you have illegals working. Same for e-verify.  Employer only is in trouble if ICE can prove the employer knew the papers were false.  Just because you participate in e verify does not mean a lessor chance of having a paper raid.

 Must always have I-9 for every active employee and keep it for one year past termination.  Can keep them electronically but would need to comply with the standards for electronic records.

 ICE can and will look at your prior I-9s for the last six months at least.

 ICE may investigate by industry such as Ag and food processing.

 ICE has determined that some countries have oversubscribed to VISAs and so there is a backlog.  Mexico has an eleven year backlog for unskilled workers.  One cause is the fact that if approved, the immigrant can bring their family and the family members will count against the allowed visa numbers.

 Most illegals will have children who are US citizens.  Parents can still be deported.  If the illegal entered the country legally and overstayed, then got married they might be able to stay.

 Be sure there is always someone on site who knows what to do if ICE shows at your door.  You have three days to comply, so ask for that time to ensure your files are in order.  Have a plan in case the regular contact is on vacation or off site.

 There has been a 500% increase in fines and double the number of audits.  And they are trying to first make it a criminal offense with fines secondary.  Using employers to show they are doing something to enforce the law.

 If you use a subcontractor, you have the right to ask to see their i9s if you can be construed as a joint employer such as with Express Personnel.  Employer can be held responsible if they act with reckless abandon or disregard of the status of the contractors’ employees.  It's constructive knowledge.  Penalties range from $375-$16,000.  The larger fines are for repeat offenders.

 Don't over document by asking for more than the I-9 called for.

 You have 10 days to correct technical violations.  Can't fix mistakes such as being timely which is a substantive violation.

 Examples of technical violations such as signing above the line instead of in the box or using a PO box for the address.  Don't use abbreviations since some auditors will mark it as a violation.

 If you aren’t using the dated version of I-9 that was in force at time of hire, it is a violation.  The attorney suggested that you correct technical violations but don't white out or erase or do a new one and throw out the old one.  Can get the correct form, staple it to the old one and fill it out correctly.

 If you have a good system in place and can show you've trained your people on it you may get the benefit of the doubt from ICE.

 Limit the number of people who have responsibility for filling out the I-9.  Make sure they are familiar with the ICE Employer Handbook.

 Put them in alphabetical order, in a three ring binder, separated active and inactive employees

  Next Speaker served at the EEOC and the OFCCP.

 Corporate scheduling letter notifying of an audit.   ACE.

 good news...in 2010 the OFCCP was told not to do the audits of I-9s.  ICE is handling these very rigorously.

 Return of the functional affirmative action plan which allows contractors to do their affirmative action plans FAAP on function rather than the facility.  Requires approval from OFCCP to do so.  The process is different with more info required from employers with intense review of the proposed FAAP and increased audits.

 Doing reviews under the new administration changed in response to employers cooking the books to avoid red flags and on-site visits.  ACE stands for Active Case Enforcement.  Broader audit focus that is focused on technical aspects, more thorough, more in depth.  Will investigate systemic violations where there are two cases or more which can establish a pattern of discrimination.

 OFCCP hired an additional 200 investigators, an additional 30% workforce.

 All audits will be full desk audits with greater focus on technical compliance.  Will schedule on site visits for statistical violations, if they see red flags, anecdotal indicators (employee complaints), poorly designed online applications.  Audits can last for days requiring lots of preparation.   They give points for good faith efforts. 

 Looking at compensation differences for pay discrimination as discovered by a regression analysis.  Will have to explain any disparity no matter how small.

 Requesting records on policies, job postings, employment applications, performance reviews, sub-contractor and vendor notifications and purchase-order language.

 Intense focus on veteran and disabled outreach programs and proof of such for you AND your subs and how you are soliciting such.  VEVRA.  Actually calling the agencies or individuals to whom you've outreached and confirming that you are doing what you said.  You will need to start collecting and analyzing this data quantitatively. 

 Problems:  Can create huge problems when employers start to ask for employees to self identify and volunteer whether they are disabled to ensure the data is reliable and accurate.  And avoid ADAAA complications and perceived disabilities.  And military service fraudulent claims.

 OFCCP is reviewing leave policies for discrimination against women and whether you have a maternity policy and a reasonable accommodation policies and USERRA.

 Confirming that postings are delivered to OESC.  If you haven't been doing this, it is automatically a conciliation agreement!  Keep track of referrals from OESC, who was hired, who wasn't and why.

 Doing focused reviews for postings, accessibility, by doing a tour and interviewing your employees. 

 CSAL letters were sent out as a notice of possible audit.  Proposed revisions include more up front data to OFCCP when selected for audit.

 Scheduling letters sent with an itemized listing of what they want.  Proposed changes mean more info being requested.  You have 30 days to submit.  Once submitted the OFCCP can start asking for more data.  Attorneys are  seeing them do so in advance when the OFCCP isn’t supposed to do so.  They are asking for a copy of the P AND P handbooks or table of contents for it and will share that info with other concerned agencies.  Asking for three years of EEO1 , two years of vet data, etc.  You can be asked for data for both “job group” and “job title” and sub minorities, terminations both voluntary and involuntary, and pool data for individuals who were considered for promotions and terminations.

 Asking for compensation data, detailed regression like data such as date of hire, date in the position, salary grade BY EMPLOYEE.  Separate base pay from other types of earnings as of February 1 regardless of plan year, and compensation policies.  Wanting a very detailed breakdown of sources of compensation and tools used to determine what employees were paid and how they were grouped into SSEGs..similarly situation group employees.

 If not using an HRIS system, you should consider doing so in order to produce the data in a timely fashion before the deadline runs out.

 Recommendations:  Start collecting the data, learn how to do the analyses, beef up the recruitment of vets and disabled.  The new rules may be finalized by November.

 Comments from Congressman Scott

93% of union contributions go to democrats but 42% are Republicans.  He is not anti-union but pro-parity and employees should have the right to make their own decisions about belonging to a union and how their dues are spent.

 The NLRB of today is very pro-union.  His proposed legislation is pro everyday worker.  70,000 pages of new legislation on compliance has come out in the last 14 months. 

 Comments from Congressman Charlie Gonzales

There will be no meaningful pieces of legislation come out of this congress since it is an election yr.

 Americans have a lot of stuff, but it's all made overseas.

 We've been investing money in making money rather than goods and so have not been creating jobs.  These banks have 62% of our GNP

 Closing the gap created by the recession in employment would take till 2040 even if hiring was double that of pre- recession.  Between 2000 and 2008 there wasn't a single net job created.

 Everyone wants to go to heaven, but no one wants to die. 

 Congressman Platt:  Resolution of disapproval about quickie elections.  This is anti worker because it does not allow workers to make informed decisions.  Our troops don't go to war as republicans or democrats but as Americans.


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