Employment Law and the President Obama’s State of the Union
The State of the Union is always one of the major Presidential events of the year. The President gets to set out his agenda for upcoming policy and legislation changes (and members of Congress get to sit down or stand up a lot, depending on the side of the aisle). The State of the Union often has some big ideas in the arena of employment law, and this year was no different. So what were some of the highlights discussed by President Obama?
– Minimum Wage. This topic set off the most fireworks before the President’s State of the Union. The President announced he will sign an executive order increasing the minimum wage for new federal contracts from $7.25 to $10.10 per hour. One estimate suggests that may affect around 560,000 employees of federal contractors. Another figure I heard over the air suggested it may be more like 200,000 employees.
He also expressed his support for raising the federal minimum wage for all employees in stages to $10.10 per hour and tying the rate to inflation thereafter. This change would come by proposed federal legislation from Sen. Tom Harkin of Iowa and Rep. George Miller of California. The federal minimum wage rate last increased on July 24, 2009.
Employers are also subject to any state minimum wage requirements. In Wisconsin, it’s no different and stands at $7.25 per hour. With Gov. Walker indicating his opposition to any such increase in the minimum wage, an increase would likely have to come at the federal level to occur any time soon. Wisconsin employers must follow the greater of the two rates, whatever they may be.
– Gender Equality. President Obama drew perhaps the biggest laughs of the night with a reference to “Mad Men” policies in the workplace. Calling for employers to address workplace issues before they require government regulation, President Obama highlighted the need for equal pay and maternity leave. The Equal Pay Act and the Family and Medical Leave Act provide existing employee protections on these topics. However, many argue the existing gender disparity of female employees being paid 77 cents for every dollar male employees earn as a need for additional reform. And while the FMLA provides leave for events such as childbirth, those leave rights are unpaid. Perhaps we will see the introduction of legislation to address these issues.
– Retirement. This one doesn’t exactly fall under employment law but nonetheless addresses an important aspect of the employment relationship. The President also discussed the creation of a “starter-IRA” program for those employees who work for employers that don’t offer a retirement plan such as a 401(k). Employees would actually be investing in Treasury bonds and could turn those accounts into an IRA once a sufficient investment is made. Recent reports have called attention to the issue of Americans failing to save enough for retirement. The starter-IRA program may at least eliminate the suggestion that this is due to the lack of vehicle for many employees to save.