Cook County Record

Tuesday, January 28, 2020

Illinois employers to face shifting regulatory burdens in 2018

By David Hutton | Dec 11, 2017

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SPRINGFIELD — As 2018 looms, employers in Illinois are bracing for another wave of employment and labor regulations on the local, state and federal levels.

According to Darren Mungerson, an attorney at Littler Mendelson’s Chicago office, there are a number of new rules and regulations for employers to take stock off before the calendar turns over to a new year.

On the national level, Mungerson told the Cook County Record that some of the biggest changes employers can expect to see aren’t necessarily a result of changes in specific laws or regulations, but rather “how federal agencies under the new administration will be enforcing and interpreting existing laws and regulations.”

This is particularly true as it relates to the three biggest federal agencies governing labor and employment issues—the National Labor Relations Board, the Department of Labor and the Equal Employment Opportunity Commission (EEOC).

“With regard to the NLRB, with the approval of Marvin Kaplan and William Emanuel, Republicans now hold a majority at the NLRB and [we] could potentially see some pro-labor decisions and stances being reversed as President Trump’s tenure continues,” he said. “Although the Republican chairman's terms end on Dec. 16, 2017, his replacement will also be Republican, so the board is expected to return to a 3-2 Republican majority in 2018.”

Moreover, the confirmation of Alexander Acosta as secretary of the Department of Labor could lead to a pro-employer shift when it comes to policies and procedures.

“We have already seen the Trump administration pull back on the overtime regulations pushed by the Obama administration,” Mungerson said.

As the Department of Labor appeals the court’s ruling regarding the limits of its authority to make changes to the salary threshold, it remains to be seen what types of changes the Department of Labor will want regarding overtime reform.

“While we expect less significant changes with regard to the EEOC, there may be some more flexibility towards employers in this avenue as well once new Republican commissioners are seated and a new general counsel is named and confirmed,” Mungerson said.

On the legislative front, there already have been several proposals that would benefit employers. Mungerson noted that these include revisions towards the definition of “joint employer” that would result in decreased potential liability towards employers, and potential revisions in tip-pooling regulations that would allow greater flexibility in managing tip pools where employees (primarily in the Ninth Circuit) are already receiving minimum wage.

When considering new rules, regulations and laws taking effect in 2018 will have the biggest effect nationally, Mungerson said the greatest impact could come from legislation that has not yet been approved.

“The Save Local Business Act, which would clarify that two or more employers must have direct control over employees to be considered joint employers, has passed the House and is now in front of the Senate,” he said. “This would have a significant impact on both labor and employment laws. If the [Department of Labor] amends or revises the overtime rules, and these amendments are passed, that would also have a substantial change nationally.”

Another bill under consideration would establish standards for employers providing paid sick leave to its employees.

Mungerson noted the bill would allow employers that provide a certain level of paid leave and flexible work benefits to its employees to be exempt from local and state paid sick leave requirements.

“This would clearly benefit employers with a nationwide footprint, as they could avoid having to comply with each and every paid sick leave law that could cover their employees,” he said. 

Mungerson said such rule changes would mark a “significant step," as existing federal rules and laws impacting unpaid leave, such as the Family and Medical Leave Act and the accommodation provisions under the Americans with Disabilities Act don't directly address employers' obligations to provide vacation, short- or long-term disability benefits or paid sick leave.

"This would be one of the first times that the federal government has sought to address paid time off," Mungerson said.

For employers, there may not be that rule or regulation that changes the game when it comes to the legal landscape, but many are casting a curious eye on every move the Trump administration makes.

“Management-side counsel are eagerly awaiting to see what the Trump administration is going to be doing with regard to healthcare and immigration reform,” Mungerson explained. “Currently, there are no concrete plans to address these issues, but reforms and revisions to these two areas may have substantial changes to how employers hire employees.”

From an employer perspective, the greatest change isn’t likely to come in the form of new laws and regulations taking effect, but rather in the laws and regulations that won’t be taking effect.

Mungerson noted that once the Senate confirms the two Republican nominees to the EEOC, it will have enough votes to overturn recent changes to the EEO-1 form now on hold.

“The DOL is also expected to put additional portions of the fiduciary rule on hold," he said. "Nothing is certain, but a lot of Obama administration rules are being re-evaluated, particularly in light of the executive order requiring as much.”

And the current atmosphere in Washington isn’t likely to lead to changes that could expose employers to increased litigation. Mungerson noted that, if anything, the pro-business stance of the Trump administration would likely decrease litigation risks for employers.

Nationwide, another looming change is a decrease in the restrictions regarding the use of marijuana, particularly medical marijuana.

“Employers that have ‘zero tolerance’ drug use policies may face additional litigation risks if they discipline or terminate employees who violate anti-drug policies because of the use of medical marijuana,” Mungerson explained. “We have already seen that this year in a Massachusetts case involving an employee’s termination because of the use of medical marijuana.”

Going forward, Illinois employers may face calm seas in 2018. Having already seen changes taking place in 2018 and others proposed for 2018, the state finds itself in a unique position.

“For example, Chicago and Cook County implemented new paid sick laws, but have not begun enforcement proceedings to date,” Mungerson explained. “It remains to be seen how harshly those laws will be enforced, and whether Cook County will recognize opt-outs by non-home rule municipalities.”

On a state level, legislation has been proposed that could increase the minimum wage, which has already happened in Chicago and Cook County and provide a minimum number of paid sick days.

“If those laws are passed, then they may make the Cook County and Chicago Ordinances obsolete,” Mungerson noted.

Two laws passed by Illinois lawmakers that were vetoed by Gov. Bruce Rauner, a Republican, would have prohibited salary history inquiries and local governing bodies from implementing “right-to-work” rules, which would limit union activity and/or influence.

“The Illinois legislature sought to override those vetoes, but were unsuccessful,” Mungerson added.

In 2017, Illinois also increased the expansion of certain leave laws, adding in paid child bereavement leave and allowing employees to use a portion of their accrued sick time for family members.

“There has also been some expansion of employee protections in privacy, use of biometrics and discrimination,” Mungerson concluded. “None of these are particularly onerous changes individually, but taken as a whole, do require employers to be more aware of the various laws protecting employees and to ensure compliance with these laws.”

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Organizations in this Story

State of IllinoisCook CountyU.S. Department of LaborWhite HouseIllinois Governor Bruce RaunerU.S. Equal Employment Opportunity Commission