2009 Was Definitely a Murphy Year
All I can say about 2009 is thank goodness it is coming to an end. I will no longer use cute little sayings like "Make it Great in 2008" or "Have a Fine 2009". Neither of those wishes worked and being a bit superstitious, we are now just saying "Have a prosperous and successful New Year."
My apologies to anyone named Murphy, but it seems that 2009 definitely followed Murphy’s Law which states. "Anything that can go wrong will." Well, 2009 was a good example of Murphy which can also be called the perfect storm. From the economy to unemployment to the credit freeze to the new governmental regulations to the political turmoil to just about anything you can think of, 2009 was the worst year in my memory. It was worse than 1982 when mortgage rates topped off at over 18% with gas lines and unemployment rates of over 10%.
A few things that affected businesses in 2009
- The enactment of the Lilly Ledbetter Act which extends the time an individual can file a claim of pay discrimination;
- Three Executive Orders favoring unions in Federal Contracts were executed;
- The Equal Employment Opportunity Commission saw a 15% increase in charges of discrimination. This is the largest percentage increase since 1992. In addition, for the first time ever, charges of retaliation were higher than charges for gender discrimination and became the second highest reason for charges of discrimination behind racial discrimination charges;
- The American Recovery and Reinvestment Act included legislation that allowed employees who were involuntarily terminated to obtain a significant reduction in COBRA premiums they had to pay. This caught all of us by surprise and caused a lot of scrambling to ensure compliance;
- The Family and Medical Leave Act was updated which extended the leave entitlement of military families;
- The Department of Labor (DOL) hired thousands of people to check on the wage and hour compliance of employers. By the DOL’s estimate, 75% of employers are in violation of the Fair Labor Standards Act. So they are going after those 75%.
- The Immigration and Customs Enforcement have gone on an all out effort to audit the I-9 forms of thousands of companies throughout the country. According to John Morton, the Assistant Secretary for ICE in a statement released on November 19, 2009, "We are increasing criminal and civil enforcement of immigration-related employment laws and imposing smart, tough employer sanctions to even the playing field for employers who play by the rules."
- The Genetic Information Nondiscrimination Act (GINA) was passed prohibiting discrimination based on genetic information of employees;
- The Americans with Disabilities Act Amendment Act was passed which greatly increases the number of employees who can be deemed to have a disability.
- Federal Contractors must now use E-verify for all new hires;
- The Supreme Court ruled in favor of white firefighters in the City of New Haven, Connecticut in a reverse discrimination case in Ricci vs. DeStefano.
- The economy continued to tank through most of the year causing a record number of bankruptcies.
- From a business perspective, it became much more difficult to obtain funding.
- A reduction in revenue caused many companies to lay off employees causing the unemployment rate to eclipse the 10% mark for the first time in over 25 years.
As you can see, there was a lot to think about in 2009. Much of the activity in the last year will have more of an impact in 2010. Therefore, we have to also take a look at the potential activities in the future.
New developments and legislative items to watch in 2010 include:
- The Employee Free Choice Act also known as “Card Check” will be revisited in the upcoming legislative session. Thank goodness it was not passed in its original form as it called for the elimination of union elections. This provision will probably go away. However, the provisions that call for mediation and binding arbitration with stiff penalties for companies will probably remain in the bill.
- Mandatory paid sick leave is raising its ugly head again as there are three bills that have been introduced in Congress that will mandate up to 7 paid sick days per year for employers with 15 or more employees.
- Unemployment taxes will be raised significantly as the unemployment funds in most states have been totally depleted causing the states to raise the amounts employers pay for unemployment insurance. For example, in Florida, the minimum tax rate for employers was increased from 0.12% to 1.18%. In addition, the taxable earnings increased from $7,000 per employee in 2009 to $8,500 in 2010. With these increases employees who pay minimum tax will see their payments go from $8.40 per employee per year (0.12% X $7,000) to $100.30 per employee (1.18% X $8,500) or an increase of nearly 1200%.
- Obviously health care will remain on the top of the agenda. No one really knows what will be passed and the affects of the legislation will not be felt for a couple of years.
The Top 10 Things to do in 2010
- Update your employee handbook to ensure that all of the changes are incorporated in it. Once completed, review it with your employees so they no what is expected from you as an employer and them as employees.
- Aggressively pursue and challenge unemployment claims. Be sure that you know the reasons why employees will be disqualified for unemployment benefits.
- Protect your self from EEOC charges. One of the reasons EEOC complaints increased so much is because it is much easier for people to make a complaint as they are able to use the internet to file them. Therefore, it is imperative to ensure that your workplace is free of harassing and discriminating behavior and employers develop a culture of treating employees with respect and dignity at all times.
- Ensure compliance with the Fair Labor Standards Act. Make sure your pay practices are in compliance with wage and hours laws.
- Look for more efficiencies in your organization to keep costs down. Implement stretch goals and a high level of standards of performance.
- Communicate often with your employees informing them of the good, the bad and the ugly of your business.
- Take charge of your business as we have to work three times harder for the same level of revenue.
- Keep an eye on the legislative developments and have the e-mail address of your state, local and national representatives handy. Be ready to let then know how you feel about how pending legislation will affect you and your business.
- Conduct an I-9 audit to ensure that all employees hired since November of 1987 have a valid and compliant I-9 form on file. If you have Federal contracts, be sure to sign up for and use E-Verify.
- Make sure you understand the new FMLA, GINA and ADAAA requirements.