Dealing With the Downturn — Wage and Benefit Freezes and Takeaways
As the U.S. economy continues to struggle, employers are exploring ways to control expenses. Labor costs, which often represent a significant portion of an employer’s operating expenses, continue to receive much attention from business owners and operators.
While employee layoffs have dominated the news for much of the current downturn, employers have been forced to implement other measures in order to remain viable, including wage and benefit freezes and/or takeaways. It goes without saying that wage and benefit freezes or takeaways pose significant employee relations problems. As such, they need to be carefully planned, communicated, and implemented. Employers should consider the following if they choose to undertake freezes or takeaways, or if they have already done so:
- Every effort should be made to be as transparent as possible concerning the organizational financial pressures leading to a decision to implement freezes or takeaways. It is vitally important that employees understand why these actions have become necessary. All relevant financial information that can be shared should be shared in a direct, easy-to-understand format.
- Employees may question whether other measures are being implemented to save costs in addition to freezes or takeaways that directly affect them. Employers should proactively describe other efforts being made so that employees can see how the actions negatively affecting them are part of a bigger picture of financial restraint.
- Employees may be concerned if organizational projects — such as building construction and equipment purchases — continue while they are forced to submit to freezes or takeaways. Care should be taken to anticipate such questions and to have answers ready.
- Employees should be advised of the freeze or takeaway “end game.” Employers should consider when and under what conditions freezes or takeaways can be lifted or modified, and should share that information as soon as possible with affected employees.
- Employees should be invited to participate in company cost-saving measures. A “suggestion box” should be implemented for company employees to provide ideas and input into cost-saving measures. Such an approach gives employees a sense of participation in the overall cost-saving process and may well lead to effective ideas otherwise not considered.
Implementing a wage and benefit freeze or takeaway can be much more complicated when some or all of the employer’s workforce is unionized. In most cases, these issues would need to be bargained with the union(s) involved; in other cases, contractual commitments would prevent an employer from implementing such measures for its unionized workers without union approval. Before taking any action, employers should anticipate what they can expect to accomplish with the union(s) involved, and decide how best to deal with these issues with both their union and non-union employees. It can be a complicated analysis, but one that employers are well advised to thoroughly examine before embarking on a course of action that may impact non-union employees more negatively than their union co-workers.
DOL Offers Guidance Regarding Break Time for Nursing Mothers
As the April 12, 2010 ELU described, the health care reform bill contains a provision amending the FLSA to require employers to provide break time for nursing mothers to express milk. In July, the DOL issued a fact sheet offering further detail about this nursing break time requirement (http://www.dol.gov/whd/regs/compliance/ whdfs73.pdf). While the guidance with respect to how compliance with this break time requirement will work on a day-to-day basis is still limited, the fact sheet does offer some insight for employers.
As an initial matter, the amendment requires employers with more than 50 employees to provide “reasonable break time for an employee to express breast milk for her nursing child for 1 year after the child’s birth each time such employee has need to express the milk.” The DOL indicated that the frequency and duration of these breaks would vary from mother to mother. Some women will need to express milk more often and/or take a longer period of time to do so than others. Therefore, employers should not attempt to create a “one-size-fits-all” policy.
Employers with fewer than 50 employees also are subject to the break-time requirement unless compliance would pose an undue hardship. The fact sheet explains that whether an undue hardship is imposed is fact-specific and depends on the difficulty or expense of compliance when compared to the employers’ size, financial resources, and nature and structure of business. Proving this undue hardship will likely be the employer’s responsibility and a difficult burden.
While the amendment does not require that breaks be paid, the fact sheet points out that if an employer already provides compensated breaks, an employee who uses those breaks to express breast milk must be paid similarly to the other employees taking the compensated break time. In other words, an employer is not relieved of its commitment to pay for a break just because an employee chooses to use the previously provided-for, compensated break to express breast milk.
Not only must employers provide for time to express milk, but employers must provide an appropriate location. A bathroom is NOT a permissible location even if it is private. In addition, the location must be functional as a space for expressing breast milk. This may mean having an electrical outlet if the method of expressing milk is a pump requiring power. The fact sheet clarifies that if the space is not solely dedicated to expressing breast milk, it must be available when needed to satisfy the law. Temporary space is sufficient if it is “shielded from view and free from any intrusion from co-workers and the public.”
We will continue to monitor this issue, and will provide additional communication when the DOL releases its anticipated rules of enforcement for this amendment. In addition, be careful to consider all laws applicable to the expressing of breast milk. Some states may have laws in place that provide for more protections than this amendment. For example, the fact sheet notes that the amendment only applies to non-exempt employees, but some states may have laws that require breaks for exempt employees.
Legal News is part of our ongoing commitment to providing legal insight to our clients and colleagues. If you have any questions about or would like to discuss these topics further, please contact your Foley attorney or any of the following individuals:
Authors
Richard Albert
Los Angeles, California
213.972.4644
[email protected]
Jennifer L. Neumann
Detroit, Michigan
313.234.7142
[email protected]
