New Compliance Laws Challenge RMs

Risk managers and human resource professionals have difficultjobs, and their work is compounded by the multitude of lawsimpacting their companies in the states where they dobusiness–witness that no fewer than 25 major pieces of legislationbecame effective as of Jan. 1, 2005.

While the 50 state legislatures passed fewer pieces ofemployment legislation in 2004 than in recent years, a significantnumber of employment issues were impacted by legislativeenactments.

This legislation covered issues such as worker privacy,prohibited bases of discrimination, new employment law proceduralrequirements, drug and alcohol testing, leave of absenceentitlements, and plant closings or layoff laws.

Privacy Legislation

Laws regarding worker privacy were enacted in Kentucky, Oklahomaand Washington.

Kentucky now provides immunity from civil liability to employersthat provide references regarding job performance, conduct, orevaluations of former or current employees. This is the case exceptwhen a plaintiff can prove the employer knowingly provided falseinformation or if the disclosure constitutes an independent,unlawful discriminatory practice such as retaliation.

Oklahoma enacted legislation prohibiting employers from postingor displaying Social Security numbers of an employee (unless thenumber is required by a personnel document mandated by federal lawor state law). The law restricts requirements that employerstransmit Social Security numbers over the Internet unless theconnection is secure or the number is encrypted.

Washington also enacted a genetic testing protection law. Thisnew law prohibits employers from requiring applicants or employeesto disclose genetic information, or to submit to screening forgenetic information, as a condition of employment or continuedemployment.

Protected Category Group Expansion

Eight states enacted legislation which creates or enlargesprotected group category status. Four new laws added protection forNational Guard membership, protecting individuals serving in andreturning from the Iraq conflict.

The eight states and the new protected categories include:

o California–the status of being a domestic partner.

o Hawaii–due to arrest or court records.

o Illinois–sexual orientation, membership in the National Guardand volunteer firefighter status.

o Massachusetts–veteran status and membership in the NationalGuard.

o Minnesota–membership in the National Guard.

o North Carolina–victims of domestic violence and membership inthe National Guard.

o Oklahoma–serving on a jury.

o Rhode Island–crime victims.

New Employment Discrimination ProcedureRequirements

Four states enacted legislation or amended existing laws thatchange or enlarge procedures for litigation of employmentdiscrimination claims.

In California, the Labor Code Attorney General's Act was amendedby softening penalty provisions. California's existinganti-discrimination law also was amended to provide registereddomestic partners with the same rights, protections and benefitsunder law as married spouses. It also expanded employers' exposureto liability attributable to third-party harassment ofemployees.

In Delaware, new legislation eliminated the state's EqualEmployment Review Board and now allows claimants to pursue judicialremedies in state court. The statute of limitations also waschanged to 120 days from the date of the alleged discriminatoryact.

In Illinois, legislation was enacted to authorize the state'sattorney general to bring “pattern or practice” lawsuits againstemployers. This was modeled, to an extent, on the procedures for“pattern or practice” lawsuits brought by the U.S. Equal EmploymentOpportunity Commission.

In Tennessee, the state's Equal Pay Law was amended to providerecovery of compensatory and punitive damages against employers whoknowingly violate the statute.

Drug & Alcohol Testing

Three states enacted or amended laws controlling procedures fordrug and alcohol testing by private employers.

Louisiana's existing law was amended to specify that samplesother than urine–including blood, saliva and hair–may be used forworkplace drug testing. It also requires thatspecified, certifiedlaboratories must be used if the testing is for drugs, includingmarijuana, cocaine and amphetamines. These labs also must be usedif an individual could be terminated as a result of the alcohol ordrug testing.

In Maine, new legislation was enacted that is applicable toemployers of 50 or more workers. This allows random or arbitrarydrug testing, as long as the employer is not covered by acollective bargaining agreement and has instituted or appointed anemployee committee responsible for developing a written policyregarding substance abuse testing programs. The committee testingpolicy also must be approved by the state's Department ofLabor.

In Mississippi, legislation was enacted to require employers toprovide employees with a written policy statement regarding theexistence of any drug testing program at least 30 days prior toimplementation of the program. The notice must include informationregarding confidentiality protections, procedures for testing, theconsequences of refusing to submit to a test, and opportunities forrehabilitation if the employee has a confirmed positive result.

Miscellaneous Employment & LaborLegislation

Several states passed miscellaneous labor and employment laws.These include job bias protection for employees who use lawfulproducts off-duty. In Rhode Island this included a tobacco use law,while banning smoking in the workplace.

Others include an expansion of whistleblower protections inDelaware, new leave of absence entitlements (in Rhode Island forvictims of criminal violence, and in North Carolina for victims ofdomestic violence participating in court proceedings), andregulating plant closings and mass layoffs in Illinois.

California also enacted a mandatory training law, requiringprivate employers of 50 or more to provide at least two hours oftraining to supervisory personnel on prevention of sexualharassment. By Jan. 1, 2006, all supervisory personnel employed asof July 1, 2005 must have undergone the training. Supervisors hiredafter July 1, 2005 must be trained within six months of theirassumption of duties.

In conclusion, risk managers and human resource professionalsshould examine the personnel policies of their companies to insurethey comply with the spate of new legislation which becameeffective in 2005. Proper planning and implementation of personnelpolicies can help reduce the risk of legal claims and mitigateexposures to employment problems.

Gerald L. Maatman Jr. is a partner with Seyfarth Shaw LLP inChicago.