The Challenge of Change: The Obama Administration's Impact on HR

March 2009
Change is coming fast and furiously. As predicted, from the minute President Obama took office his Administration unleashed a number of new initiatives as well as reforms of old policies that impact human resources and businesses in this country. While this administration’s focus is varied, there is no question that labor and business is under the microscope. The alterations made in the human resources field, not to mention those on the horizon, make immediate and long range adjustments to how HR practitioners conduct their day-to-day business. This article offers a summary of the major accomplishments in early 2009 as well as a peek forward as to the biggest concerns for HR that lie ahead.

Not wasting any time: First 10 Days in Office

DAY 1

President Obama named Wilma B. Liebman chairman of the National Labor Relations Board (NLRB) on Jan. 20, 2009. Liebman, first appointed to the Board in 1997 by former president Clinton, is an unabashed supporter of organized labor. Further, “in 2009, it is expected that the board will regain its full quota of five members which typically includes three members linked to the party of the sitting president.”1 Many pundits believe that Liebman’s appointment signals an effort to roll back the pro-employer NLRB decisions of the 2004-2007 board and that the remaining positions on the NLRB will similarly be filled with labor lawyers.

RealSolutions® for Your Business

If yours is a union shop, keep a close eye to upcoming NLRB rulings. It is likely that they will change the way you have done business for the past 10 years. If you are not currently operating under a collective bargaining agreement, be aware that a number of administration initiatives, including rulings from the NLRB, could make it vastly easier for your employees to organize. (See further discussion, below.) Staying in-tune with upcoming NLRB rulings will help your organization avoid inadvertent violations.

DAY 2

On Jan. 22, 2009, the White House website discussed a plan to enhance the cybersecurity of the nation. In conjunction with National Data Privacy Day, the White House unleashed a policy to “[e]nsure the full and free exchange of ideas through an open Internet,” focusing on the nation’s need to “strengthen privacy protections for the digital age and harness the power of technology to hold government and business accountable for violations of personal privacy.”2 The administration plans to “mandate standards for securing personal data and require companies to disclose personal information data breaches.”3 President Obama and Vice President Biden state that they will “partner with industry and our citizens to secure personal data stored on government and private systems.”4 Without question, the Administration’s agenda item on technology is a warning of pending legislation that would affect private as well as public sector employers.

RealSolutions® for Your Business

The cybersecurity agenda will likely place additional security obligations on employee related information, including computerized information containing social security and payroll data. Further, communications regarding notification to the public or those directly affected of security breaches will be mandated. Audit your current security and privacy policies and practices to ensure you are aware of current data privacy practices.

  • Are your privacy policies in writing and communicated to all supervisors and managers?
  • Is employee information kept confidential and secure, accessible only to those with a “need to know”?
  • How is this information accessed via off-site computers? Is that access secure?
  • Does your organization have a communication policy in the event the security of this data is breached?

DAY 9

The Lilly Ledbetter Fair Pay Act of 20095 was signed into law by President Obama on Jan. 29, 2009, reversing the U.S. Supreme Court decision in Ledbetter v. Goodyear Tire and Rubber Co., No. 05-1074. In that case, the Supreme Court held that the deadline for filing a charge of discrimination with the EEOC based on pay began to run when an employer makes an illegal compensation decision, not, as Ledbetter argued, every time the employee received a paycheck. In the Ledbetter Act, Congress stated the Supreme Court decision “significantly impairs statutory protections against discrimination in compensation that Congress established and that have been bedrock principles of American law for decades. The Ledbetter decision undermines those statutory protections by unduly restricting the time period in which victims of discrimination can challenge and recover for discriminatory compensation decisions or other practices, contrary to the intent of Congress.”6 The Ledbetter Act was thus passed “to amend Title VII of the Civil Rights Act of 1964 and the Age Discrimination in Employment Act of 1967, and to modify the operation of the Americans with Disabilities Act of 1990 and the Rehabilitation Act of 1973, to clarify that a discriminatory compensation decision or other practice that is unlawful under such Acts occurs each time compensation is paid pursuant to the discriminatory compensation decision or other practice, and for other purposes.”7 Under the Ledbetter Act, aggrieved employees may now seek back pay for a period of two years prior to their charges under certain circumstances.

RealSolutions® for Your Business

Law firms across the nation, both representing employees and employers, predict a plethora of new compensation-related lawsuits following this Act. Audit your compensation practices, including giving very careful consideration to the following:

  • Does your organization have written, objective compensation guidelines in place to guide supervisors, managers and HR in making these decisions?
  • Do your supervisors, managers and HR understand these policies and contribute to their efficacy?
  • Does your organization have and retain appropriate documentation supporting your compensation decisions?

DAY 10

Employment Eligibility

On Jan. 30, 2009, the U.S. Citizenship and Immigration Services (USCIS) announced that the implementation of the rules to streamline the Employment Eligibility Verification (Form I-9) process would be delayed until April 3, 2009.8 Form I-9 is required for all newly hired employees and verifies their identity and authorization to work in the U.S. The delay affords the public additional time to submit comments; the comment period will now close March 4, 2009. Under the interim rule, employers will no longer be able to accept expired documents to verify employment and identifies acceptable identity and employment authorization documents employees may present. The interim final rule and an informational copy of the revised Form I-9 will continue to be available for public comment at www.regulations.gov.

Further, the effective date of the final rule requiring certain federal contractors and subcontractors to use E-Verify has similarly been delayed until May 21, 2009.9 E-Verify is a free Internet based system operated by the Department of Homeland Security in partnership with the Social Security Administration that allows participating employers to electronically verify the employment eligibility of their newly hired employees. While E-Verify is open for use by private employers, federal contractors may not use E-Verify to verify current employees until the rule becomes effective and they are awarded a contract that includes the FAR E-Verify Clause.

RealSolutions® for Your Business

Calendar another look at the Form I-9 requirements on April 3, 2009 when the final rule goes into place. If there are no further delays, the old Form I-9 will no longer be valid after that date; rather, the revised Form will be required for all new hires and to re-verify any employee with expiring employment authorization.10 Only those documents listed on the new Form I-9 are permitted. Using the old form, or relying on expired documents to verify employment, could result in civil money penalties for each I-9 improperly used.

Economy in Government Contracting

On Jan. 30, 2009, three Executive Orders were signed by President Obama, reversing the previous administration’s Orders concerning organized labor. The Order entitled, “Economy in Government Contracting,”11 prohibits reimbursement by federal agencies for employer expenses intended to persuade employees to exercise or not to exercise their rights to organize as a union and bargain collectively. The Executive Order entitled “Notification of Employee Rights Under Fair Labor Laws,”12 requires unionized companies to post signs informing employees of their rights under the NLRA and rescinds the previous Executive Order (13201) requiring a “Beck Poster.” The DOL has been instructed to develop and publish the new poster by May 2009. The third Executive Order signed Jan. 30, “Nondisplacement of Qualified Workers Under Service Contracts,” seeks to ensure the consistency of employment in a follow-on service contract won by a new service provider.13 The Order requires that when a successor contractor wins a contract for a service renewal for the same service and at the same location, that contractor will give its predecessor’s employees the right of first refusal to stay instead of hiring a wholly new workforce.

DAY 28

On Feb. 17, 2009, President Obama signed the economic stimulus package, the American Recovery and Reinvestment Act of 2009. The stimulus package extends the period that workers can collect unemployment benefits and offers a subsidy to help unemployed workers pay for health care coverage under COBRA. Individuals who have been involuntarily terminated between Sept. 1, 2008 and Dec. 31, 2009, within certain income restrictions, are eligible for COBRA premium assistance of 65 percent subsidy toward their health care coverage premium for up to nine months. Further, U.S. companies that receive assistance under the Troubled Asset Relief Program (TARP) will be restricted in executive compensation options and prohibited from obtaining H-1B immigration visas for two years absent a showing of good faith steps to recruit U.S. workers for jobs in which the H-1B is sought.

RealSolutions® for Your Business

COBRA notices must be amended to include information on the availability of the premium assistance. Implement changes in your HR practices and policies to ensure compliance with ARRA.

What’s To Come?

The Employment Non-Discrimination Act (ENDA) passed in the House in October, 2008 but died in the Senate. The ENDA, as written in 2008, prohibits discrimination against an employee with respect to his or her terms or conditions of employment based on actual or perceived sexual orientation, defined as homosexuality, heterosexuality, or bisexuality. The White House website states that President Obama and Vice President Biden will pass this legislation.

President Obama has expressed his intention to sign into law the Employee Free Choice Act (EFCA) and the Re-Empowerment of Skilled and Professional Employees and Construction Tradeworkers Act (RESPECT ACT) if they land on his desk. Both Acts were introduced in Congress in 2007 and would vastly change the environment for unions in this country if passed into law. The EFCA would “amend the National Labor Relations Act to establish an efficient system to enable employees to form, join, or assist labor organizations and “provide for mandatory injunctions for unfair labor practices during organizing efforts” among other goals.14 The EFCA would attempt to facilitate union organizing by doing away with secret ballot votes.”15 The RESPECT ACT would redefine the term “supervisor” in the NLRA, thus increasing the number of those eligible to unionize.16

In January 2008, Senator Edward Kennedy and Congressman John Lewis, joined by numerous other legislators including then-Senator Obama, introduced the Civil Rights Act of 2008. According to Senator Kennedy, “This legislation will ensure accountability for violations of our civil rights and fair labor laws and give individuals the right to challenge practices that have unjustified discriminatory effect based on race, color, national origin, disability, age or gender. It also gives students the same protection from harassment in school that workers have on the job, and holds employers fully accountable for age discrimination and discrimination against our men and women in the armed services.”17 Among other changes, this legislation expands definitions in favor of employees, broadens the damages a plaintiff may recover, including eliminating the caps on compensatory damages, and allows for the recovery of punitive damages, attorney and expert fees.18

RealSolutions® for Your Business

Employers must be prepared for future legislative initiatives and the impact on business operations. Employers can speak out regarding proposed legislation through contact with federal and state representatives or providing testimony during congressional hearings. Stay abreast of pending legislation through EPS news briefs and Legislative updates posted monthly at www.EPSpros.com.

Change can be daunting and, indeed, often challenging. As we well know, in the field of human resources change is constant but does not need to be overwhelming. Staying informed and aware of the impact on your business of this new presidential administration will allow you to make the necessary strategic alterations in your day-to-day business, avoiding inadvertent violations. Bookmark helpful pages on the internet, including www.shrm.org, www.dol.gov, www.whitehouse.gov and www.epspros.com for the most up to date employment relations changes and check them regularly.


  1. “Top NLRB Precedents in Jeopardy Under an Obama Labor Board,” by Paul Galligan, New York Law Journal, January 15, 2009. http://www.law.com/jsp/ihc/PubArticleIHC.jsp?id=1202427454956
  2. http://www.whitehouse.gov/agenda/technology/
  3. Id.
  4. http://www.whitehouse.gov/agenda/homeland_security/
  5. http://www.whitehouse.gov/briefing_room/LillyLedbetterFairPayActPublicReview/
  6. Id.
  7. Id.
  8. http://www.uscis.gov/portal/site/uscis/menuitem.eb1d4c2a3e5b9ac89243c6a7543f6d1a/?vgnextoid=75bce2e261405110VgnVCM1000004718190aRCRD&vgnextchannel=75bce2e261405110VgnVCM1000004718190aRCRD
  9. Id.
  10. http://www.uscis.gov/files/article/I9_qa_12dec08.pdf
  11. http://www.whitehouse.gov/the_press_office/economy_in_government_contracting/
  12. www.whitehouse.gov/the_press_office/notificiation_of_employee_rights_under_federal_labor_laws/
  13. http://www.whitehouse.gov/the_press_office/nondisplacement_of_qualified_workers_under_service_contracts/
  14. Library of Congress, H.R. 800, 110th Congress, 1st Session. http://www.loc.gov/index.html
  15. “Will Obama Deliver for Organized Labor?” by Jay Newton-Small, December 22, 2008, Time Magazine, http://www.time.com/time/politics/article/0,8599,1868355,00.html
  16. http://www.opencongress.org/bill/110-h1644/show
  17. http://kennedy.senate.gov/newsroom/press_release.cfm?id=f4228cad-a004-4561-acdd-282aa1b3f4ec 
  18. http://www.govtrack.us/congress/bill.xpd?bill=h110-5129

Author / Presenter

EPS in a Nutshell
Our mission is to assist organizations in preventing and correcting employment claims while enhancing employee relations. Our strength is in our team of experienced, employment law attorney-consultants. Our goal is your peace of mind.

EPS - Enhancing Employee Relations
Follow EPS
Contact Us
Required
Required
Please Wait