Newsletters

Labor & Employment Newsletter - Summer 2013

Date: August 30, 2013

Affordable Care Act Requirements for Employers: Although Mandate Delayed, Action Still Required
By: Theodore P. Stein, Esq.

The impending need for compliance with the Patient Protection and Affordable Care Act of 2010 has been a source of great concern for employers. Recently, the U.S. government announced a one-year delay in the implementation of one of the statute’s central provisions, the employer mandate. Despite that extension, the law still requires that employers take action this year in order to remain compliant. This article examines one of the critical provisions of the law which remains in place notwithstanding the delay of the employer mandate.

On July 2, 2013, the U.S. Department of the Treasury announced that it was postponing the effective date of the employer mandate under the Patient Protection and Affordable Care Act of 2010 (“ACA”) from January 1, 2014 to January 1, 2015. The ACA requires annual information reporting by applicable employers (those with 50 or more full-time employees or equivalents) and imposes penalties on employers who fail to provide full-time employees with minimum essential coverage or if an employer’s plan is not affordable and fails to provide minimum value. When the Obama Administration announced last month that it would postpone the effective date of the employer mandate and its reporting and penalty provisions, businesses and nonprofits gave a sigh of relief.

But virtually all businesses and nonprofits (including small businesses) still have to provide a notice to employees advising them of the existence of a statewide health insurance marketplace. Beginning January 1, 2014, individuals and employees of small businesses will have access to health insurance coverage through a new state-by-state private health insurance market, now known as the Health Insurance Marketplace. Open enrollment via the Marketplace begins October 1 with new enrollees to be covered on January 1, 2014.

The ACA requires employers to send a notice to current employees by October 1 and to employees employed on or after October 1 within 14 days of hire. The Department of Labor has released model notices that can be used to satisfy this requirement. These model notices, one for employers who offer a health insurance plan and another for employers who do not, are available on the U.S. Department of Labor website. 

Employers also should focus now on developing an optimal strategy for what health insurance benefits to offer in light of the ACA and related interpretive guidance, the health insurance marketplace, and the employer mandate.

Takeaway for employers: Even though employers can avoid the bulk of Obamacare requirements because they have been postponed a year, there is one important task that affected employers still must comply with this fall.

For further information, contact Theodore P. Stein, Esquire, in the Bethesda office, tstein@wtplaw.com, (301) 804-3617, or Steven E. Bers, Esquire, in the Baltimore office, sbers@wtplaw.com, (410) 347-8724.


Maryland Legislature Creates New Procedure for Employees Pursuing Wage Claims
By: David M. Stevens, Esq.

During the most recent legislative session, the Maryland General Assembly enacted legislation that creates an entirely new procedure by which employees who believe they are due unpaid wages can seek to obtain a lien against their employer for the wage amount. Most significantly, the procedure allows for the entry of a lien prior to a full adjudication in which the employee is obligated to demonstrate the merits of the wage claim. This article examines the new statute, which takes effect October 1, 2013.

Maryland has long had in place statutes pursuant to which employees may pursue a legal claim for unpaid wages. Such claims are generally filed pursuant to the Maryland Wage Payment and Collection Law (MWPCL) or the Maryland Wage-Hour Law (MWHL). Lawsuits filed under either the MWPCL or the MWHL proceed in the same procedural manner as any other civil claim, with the plaintiff having the burden to prove his or her claim at trial before the entry of any court order compelling payment by the employer.

In the 2013 legislative session, the Maryland General Assembly enacted a law which may dramatically affect the manner in which claims for unpaid wages are pursued. House Bill 1130, which was signed by Governor O’Malley on May 16, 2013, adds a “Lien for Unpaid Wages” subtitle to Maryland’s Labor and Employment Article. The statute creates a detailed procedure pursuant to which an employee wishing to pursue a claim for unpaid wages may obtain a lien for the amounts claimed prior to initiating any civil action, such as a claim under the MWPCL or the MWHL.

The first stage of the process requires the employee to serve the employer with written notice identifying the amount of the wage claim and the property over which a lien is sought. The statute calls for the form of the notice to be specified by regulations issued by the Department of Labor, Licensing & Regulation. As of the publication of this newsletter, no regulations have been issued. The level of detail that will be required as part of a notice under the statute therefore remains unknown.

Once notice is served, the statute shifts the burden to the employer to initiate judicial action contesting the claim. The statute specifies that the employer’s filing must contain a statement of defenses concerning the wage amount claimed, accompanied by an affidavit supporting the employer’s position. If the employer fails to file a complaint in court within 30 days after receiving the notice, a lien automatically arises in accordance with the terms set forth in the notice prepared by the employee.

If the employer does file the necessary pleadings to dispute the lien, the statute directs the court to decide within forty-five days whether the employee is entitled to the lien. If the court does find that a lien is appropriate under the statute, the employee is to automatically receive an award of the attorney’s fees he or she incurred in obtaining the lien.

In the event a lien is entered, it can be recorded against the real or personal property of the employer consistent with the terms specified in the lien. The lien would thereafter generally have the same effect as other liens entered in the commercial context.

Takeaway for employers: The lien statute enacted by the General Assembly represents a marked departure from prior Maryland law concerning wage claims. The law creates an attractive opportunity for plaintiffs and their attorneys, in that the lien procedure promises the opportunity of relief within 45 days, as opposed to the much lengthier litigation process that accompanies actions under the MWPCL and the MWHL.

Of greatest concern, the law fundamentally shifts the onus of initiating court action from the employee to the employer, and creates a significant risk that inaction by the employer may waive valid defenses to a potential lien. Specifically, the law provides that the initial notice is to be served in the same manner as a summons issued in a civil proceeding. Where the employer is a corporation or other entity, the possibility exists that the officer or resident agent served may not appreciate the importance of the notice, in which case the employer may waive its right to contest the lien by failing to timely respond. It is therefore critical that employers ensure that the people authorized to accept service on their behalf understand the new law and that the employer be prepared to make an immediate response in the event a notice is received. Immediate action is essential, as once service occurs the clock begins ticking for the employer to initiate court proceedings or be faced with a fiat accompli in which its critical real or personal property is suddenly encumbered with a lien.


Senate Breaks NLRB Logjam
By: Kevin C. McCormick, Esq.

For the past several years, the political stalemate in Washington, D.C. has resulted in the National Labor Relations Board operating with fewer than its standard complement of five members. Earlier this month, an agreement between Senate Republicans and the Obama administration resulted in the confirmation of new NLRB members, breaking an impasse that has resulted in numerous legal challenges to decisions made while the NLRB was operating with members who had not been confirmed by the Senate. This article examines the backgrounds of the new Board members, and offers insights as to what the new membership composition will mean for employers in the coming years.

As part of a political compromise to maintain the current filibuster rules, senators from both parties agreed to proceed with votes on President Obama’s NLRB nominees. The Senate confirmed four new NLRB members, who were sworn in on August 12, 2013. NLRB Chairman Mark Gaston Pearce was also confirmed for an additional five-year term on the Board. Here are the current Board members:

  • Mark Gaston Pearce is currently Chairman of the National Labor Relations Board, a position he has held since August 2011. He served as a member of the NLRB since March 2010. Mr. Pearce was the founding partner at Creighton, Pearce & Johnsen & Jiroux, a highly regarded union-side law firm. His term expires August 27, 2018.
  • Nancy Schiffer was Associate General Counsel to the American Federation of Labor and Congress of Industrial Organization (AFL-CIO) from 2000 to 2012. Previously, she was Deputy Counsel to the United Auto Workers (UAW) from 1998 to 2000. She also worked as Associate General Counsel for the UAW from 1982 to 1998. Schiffer’s term expires December 16, 2014.
  • Harry I. Johnson III is a partner with Arent Fox, LLP, a position he has held since 2010. Previously, Johnson worked at Jones Day as a partner and as an associate. Johnson’s term expires August 27, 2015.
  • Kent Hirozawa was Chief Counsel to National Labor Relations Board (NLRB) Chairman Mark Pearce. Before joining the NLRB in 2010, Hirozawa was a partner in Gladstein, Reif & Meginniss, LLP, a well-known union-side law firm. There, he advised clients on a variety of legal and strategic issues concerning federal and state labor and employment law matters. Mr. Hirozawa’s term expires on August 27, 2016.
  • Philip Miscimarra was a partner in the labor and employment group at Morgan Lewis & Bockius, LLP, a position he held since 2005. Since 1997, Miscimarra has been a Senior Fellow with the University of Pennsylvania’s Wharton Business School. Miscimarra previously worked at Seyfarth Shaw, LLP, as a partner from 1990 to 2005. Miscimarra’s term expires December 16, 2017.

Takeaway for Employers: Because decisions of the NLRB require the support of only three out of five members, the current Board is certain to continue the recent trend of pro-union and pro-employee decisions on a host of workplace issues. The confirmation of a full set of Board members also signals the end of an extended period of uncertainty relating to the effect of those Board decisions made during the recent period when multiple members were recess appointees. Although those decisions will remain the subject of legal challenges, the presence of a full Board – with all members confirmed by the Senate – will remove that concern as to future cases. While this eliminates a certain amount of uncertainty for employers, it also eliminates an issue that was providing some degree of restraint on the Board’s agenda.