Legal, Labor Experts Weigh in as Joint-Employer Rule Commenting Nears Deadline

As labor law experts and commentators continue to debate the powers of the National Labor Relations Board to impose new regulations that effectively redefine the joint-employer standard under the Fair Labor Standards Act, the NLRB has extended the public comment period for its currently proposed rulemaking.

Interested parties may now submit comments until and including Dec. 13, 2018. This represents a 30-day extension of the comment window. Comments replying directly to comments previously submitted to the board will be accepted until and including Dec. 20, 2018.

Public comments are invited on all aspects of the proposed rule and should be submitted either electronically via this official federal website or in paper form to Roxanne Rothschild, acting executive secretary, NLRB, 1015 Half Street S.E., Washington, D.C. 20570-0001.

Jurist, a legal news and research website operated in collaboration with the University of Pittsburgh, reported that the comment period extension came after the NLRB received requests from U.S. Rep. Robert C. Scott of Virginia and U.S. Sen. Patty Murray of Washington to extend the comment period by 60 days and to hold a public hearing. Labor organizations such as the AFL-CIO also requested 60 more days. The NLRB denied the request for a public hearing.

The proposed rule would govern shared employer liability among franchisors and franchisees, companies and their contractors as well as other arrangements where multiple business entities may have influence over employee compensation or working conditions. A classic example is McDonald’s, where the rule would affect whether the corporation or its individual franchises (restaurants) would be liable for unfair labor practices such as minimum wage or overtime violations. The NLRB plans to update the current regulations by the end of 2018.

“Some lawyers say the (NLRB) doesn’t have the power under the language of the Fair Labor Standards Act to make a rule legally binding. Others insist it does,” Bloomberg Law reported.

“Liability questions have nagged major corporations like McDonald’s Corp. and Microsoft. Those companies have faced claims that they’re on the hook for labor violations against franchisee and staffing firm workers. … The business community and legislators have been banging on the DOL’s door in recent months to urge (Labor) Secretary Alexander Acosta to move on the policy. But if the department has its hands tied in terms of creating a rule, the new policy’s impact could be limited in court.”

Philly Council Bill Would Make Worker Shifts More Predictable

A Philadelphia City Council Committee has advanced legislation that would require larger businesses in the city to provide at least 10 days’ notice to employees of their upcoming work schedule, and to pay employees if subsequent changes are made to the schedule.

Following a three-hour hearing, the “Fair Workweek” bill passed Council’s Law and Government Committee, 6-2, according to Philly.com. Eight members of the 17-seat full Council are listed as co-sponsors.

The proposed law would largely impact workers in the retail, fast food and hotel sectors, and would directly apply to businesses with 250 or more employees and 30 or more locations.

“Championed by advocates, union leaders, and researchers as a way for workers to gain more control over their lives and break out of a cycle of poverty, ‘Fair Workweek’ laws have been implemented in such cities as San Francisco, New York, and Seattle,” Philly.com reported. “But Philadelphia, the poorest big city in the nation, has not seen job growth like other cities have, as deputy commerce director Sylvie Gallier Howard pointed out during the hearing, warning of laws that might hinder job creation.”

An estimated 130,000 Philadelphians work in retail and food service. In a poll of 700 of those workers earlier this year, University of California-Berkeley researchers found that 66 percent said they had unpredictable work schedules. One worker, a cook at the Philadelphia Marriott Downtown, testified that her work schedule has been so unpredictable that her hours fell in 2017 and she made $5,000 less than the previous year, although she held the same job.

The bill is scheduled for a vote of the full Council on Nov. 29.

NJ Paid Sick Leave Law Takes Effect, But PA Workers Still Do Without

A statewide law in New Jersey took effect on Oct. 29 requiring employers to grant workers one hour of paid sick leave for every 30 hours worked. The measure is expected to impact 1.2 million workers in the Garden State, largely in the food and personal-care service industries, according to 6ABC.

New Jersey becomes the 10th state, along with the District of Columbia, to adopt paid sick leave requirements. Pennsylvania is not one of those states, although one Senate bill and two House bills were introduced during the 2017-2018 legislative session seeking to enact mandatory paid sick leave. All three bills are in committee and would expire at the end of the session. The General Assembly is scheduled to adjourn on Nov. 30.

Philadelphia enacted a citywide paid sick leave law in 2015 that requires businesses with 10 or more employees to grant each worker one hour of leave for every 40 hours worked. The law was expected to benefit 200,000 workers.

New Jersey’s new law would apply to all employees regardless of the size of the employer. Individual workers may earn and carry forward up to 40 hours of paid sick leave per year. The N.J. Department of Labor and Workforce Development proposed new regulations for the law in September and will hold a public hearing about those rules on Nov. 13. A public comment period will continue through Dec. 14.

Small Philly Manufacturer Feeling Pinch of America’s Trade War

Though relatively small by manufacturing company standards, Philadelphia’s Howard-McCray has proven to be remarkably resilient to economic ebbs and flows over time.

The company traces its roots to the 1880s when Mr. Elmer E. McCray and his father designed and patented a wooden cold-storage room in a small northern Indiana town to help area residents prevent food spoilage. The company has evolved and endured through a merger, sale and relocation. Now, it builds refrigerated display cases and employs about 85 people in Philly’s Juniata Park neighborhood.

Yet, a recent article distributed by the Associated Press chronicles how the country’s newly adopted trade policies have already forced Howard-McCray to halt planned hiring and capital investment, and landed the company in the same uncertain straits as many of the nation’s small manufacturers.

“That's what the tariffs are doing to us,” Christopher Scott, 59, who co-owns the company with his wife Diane, told the news wire service. “We're just going to delay (investment) until (the tariffs) come off.”

New tariffs on imported steel and aluminum are driving up the prices that Howard-McCray must pay its suppliers.

“One supplier is charging more for shelving brackets, another for electrical switches, a third for wheeled casters. Howard-McCray needs those parts for the refrigerated display cases it produces for convenience stores and restaurants,” the AP reported.
Scott’s alternatives are to raise his own prices at the risk of losing his longtime customers or to absorb the price increases at the expense of his own bottom line. He must decide if he will accept short-term losses on certain contracts in hope of returning those business relationships to profitability sometime in the future. In any case, it’s all about belt tightening now.

“He had been optimistic about 2018, with plans for hiring and investment in new machinery. He had hoped, for example, to replace two 30-year-old machines that cut holes in stainless steel sheets with a newer version that uses lasers and works twice as fast. All that's now on hold,” the AP reported.

The owner laments that the administration’s trade wars have nullified any benefits he may have gotten last year from the controversial tax cuts passed by Congress on the premise that they would promote capital investment among businesses.

Scott further noted that it’s not like he can change his own suppliers to ensure they use American raw materials. Howard-McCray acquires its parts from distributors who obtain them from other manufacturers. For many components, buying American isn’t even an option.

Montana Lockout Prompts Legislation to Rein In Corporate Tax Benefits

In response to a lockout of unionized workers by the French owner of a western Montana talc plant, one of the state’s U.S. senators has introduced a bill that would eliminate tax breaks, deductions and credits for corporations that lock out their workers during a picket dispute.

Sen. Jon Tester’s legislation is known as the PICKET Act (Prohibiting Incentives for Corporations that Kickout Employees Tax Act). The bill is a direct response to the lockout of about 35 workers since Aug. 2 at the Imerys plant in Three Forks, a town of about 1,900 people at the head waters of the Missouri River.

“When corporations sell their workers downstream, they shouldn't be able to turn around and cash in on the backs of taxpayers,” Tester said in a press release. “Imerys is a multinational, billion-dollar foreign corporation that has shown no interest in our Montana values and this bill will hold them accountable for unnecessarily upending the lives of workers and their families.”

The bill would also force employers who lock out workers to pay the old 35 percent corporate tax rate, rather than the new 21 percent rate enacted last year as part of the controversial federal tax legislation. The bill would further prevent those corporations from deducting wages and benefits paid to any replacement workers during a lockout, or from receiving any tax benefits for hiring replacement workers. The bill would apply to all U.S.-based corporations and U.S.-based subsidiaries of foreign corporations.

Unionized Imerys workers have been locked out since Aug. 2, six days after the company announced $2.6 billion in earnings for the first half of 2018, an 11.9 percent increase. That day, union members rejected a contract offer they say would have reduced overtime pay, frozen pensions and eliminated health insurance for new retirees, according to a report in The Nation.

The workers are represented by the International Brotherhood of Boilermakers Local #D239. Their previous eight-year contract expired in May. It was negotiated under a prior owner. Imerys bought the operation in 2011.

PA Jobs Report for September 2018

On Oct. 19, the Pennsylvania Department of Labor & Industry (L&I) released its employment situation report for September 2018.

Pennsylvania’s unemployment rate of 4.1 percent was unchanged from August and remained the lowest rate since July 2000. The Pennsylvania unemployment rate declined by seven-tenths of a percentage point from September 2017.

The estimated number of Pennsylvania residents working or looking for work, known as the civilian labor force, was up 15,000 over the month. The number of employed Pennsylvanians rose by 15,000 in September to a record high of 6,134,000. The number of unemployed residents was unchanged from August.

The estimated number of jobs in Pennsylvania, referred to as total nonfarm jobs, also reached an all-time high of 6,035,600 in September, up 7,700. Highlights from this month’s jobs report include:

• Professional & business services and education & health services jobs rose to record highs.
• Jobs increased in five of the 11 industry supersectors over the month.
• Education & health services had the largest monthly gain of 6,600.

Over the past 12 months, jobs increased 1.3 percent in the commonwealth with gains in eight of the 11 supersectors. Education & health services had the largest volume 12-month gain. Nationally, jobs were up 1.7 percent during this timeframe.

Additional information is available on the L&I website.

Note: The above data are seasonally adjusted. Seasonally adjusted data provide the most valid month-to-month comparison.