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Jun 8, 2021 | Neil Reichenberg, HRCI Contributing Writer

Pregnant Workers Fairness Act Advances in Congress

On May 14, the House of Representatives passed the Pregnant Workers Fairness Act (H.R. 1065) by a vote of 315 – 101. The bill would require both public sector employers and private sector employers with at least 15 employees to provide reasonable accommodations for pregnancy, childbirth, or related medical conditions unless the accommodation would impose an undue hardship on the employer. Reasonable accommodations would need to be arrived at through an interactive process between employees and employers. If another accommodation could be provided, employers could not require employees to take leave. President Biden called the bill “a long overdue bipartisan effort to ensure equal protection in the workforce for women who are pregnant.”

The Pregnancy Discrimination Act of 1978 (PDA), which is an amendment to Title VII, prohibits treating an applicant or employee unfavorably in any aspect of employment because of pregnancy, childbirth, or a medical condition related to pregnancy or childbirth. According to the Equal Employment Opportunity Commission (EEOC), if a woman is temporarily unable to perform her job due to a medical condition related to pregnancy or childbirth, the employer must treat her in the same way as it treats any other temporarily disabled employee. 

Despite the PDA, sponsors of the Pregnant Workers Fairness Act believe that federal law still does not guarantee that all pregnant workers will be given reasonable workplace accommodations. In 2015, the United States Supreme Court in the case of Young v. UPS ruled that pregnant workers who bring a failure to accommodate claim under the Pregnancy Discrimination Act can demonstrate that the policy of the employer imposes a significant burden by showing that the employer accommodates a large percentage of nonpregnant workers while failing to accommodate a large percentage of pregnant workers. The Supreme Court did not define what constitutes a large percentage or which non-pregnant workers constitute a relevant comparator group. Of the cases brought under the Pregnancy Discrimination Act since the Young decision, “over two-thirds of workers lost their pregnancy accommodation cases,” according to the Education and Labor Committee report accompanying the legislation. 

The Pregnant Workers Fairness Act would amend Title VII of the Civil Rights Act of 1964 to establish that the prohibition against sex discrimination would include employment-related discrimination due to pregnancy, childbirth, or related medical conditions. The bill would apply to all aspects of employment – hiring, reinstatement, termination, disability benefits, sick leave, medical benefits, seniority, and other conditions of employment covered by Title VII. 

The EEOC would have two years to issue regulations implementing the law. The regulations would include examples of reasonable accommodations addressing known limitations related to pregnancy, childbirth, or related medical conditions.

Currently, 30 states, the District of Columbia, and 4 cities have enacted pregnancy accommodation laws. The bill will be considered next in the Senate, where a companion bill (S. 1486) has been introduced by Senator Robert Casey (D – PA) with bipartisan cosponsors. Given its bipartisan support, Senate passage is likely. 

Worker Organizing and Empowerment Executive Order Issued

President Biden has issued an executive order establishing a task force on worker organizing and empowerment. The executive order sets forth the Biden Administration’s policy of encouraging worker organizing and collective bargaining. The taskforce is chaired by Vice President Harris and its members include the heads of several federal departments and agencies, including the Department of Labor, whose secretary is the vice chair of the taskforce. The Task Force has 180 days to submit recommendations to the President to promote worker organizing and collective bargaining in the public and private sectors, and to increase union density in the country.

At the inaugural task force meeting, Vice President Harris stated that the taskforce would focus on “looking at what we can do to take on and address the work the federal government already has the capacity to do around protecting collective bargaining, protecting workers rights, protecting the quality of life of working people in the federal government, and doing it in a way that we also look at what we must do to ensure that working people can organize — that they can negotiate.”

Tip Credit Regulations Partially Finalized

A portion of the revised tip credit regulations under the Fair Labor Standards Act (FLSA) went into effect on April 30, 2021. According to the Department of Labor, Section 3(m) of the FLSA permits an employer to take a tip credit toward its minimum wage obligation for tipped employees equal to the difference between the required cash wage (which must be at least $2.13 per hour) and the federal minimum wage, which is $7.25 per hour. Thus, the maximum tip credit that an employer can currently claim under FLSA section 3(m) is $5.12 per hour (the minimum wage of $7.25 minus the minimum required cash wage of $2.13).

The final revised regulations were initially published on December 30, 2020, with an effective date of March 1, 2021. On February 26, 2021, the effective date of the revised regulations was delayed until April 30, 2021 to give the new administration an opportunity to review them. On April 28, 2021, the Department of Labor announced that three portions of the revised regulations were further delayed until December 31, 2021. These portions concerned the assessment of civil money penalties and the application of the tip credit to tipped employees who perform tipped and non-tipped duties. The Department of Labor issued a notice of proposed rulemaking on the delayed portion of the regulations and public comments had to be submitted by May 24, 2021.

The revised regulations were designed to address amendments made to section 3(m) of the FLSA by the Consolidated Appropriations Act of 2018 that prohibited employers from keeping tips received by their employees regardless of whether the employer takes a tip credit. Highlights of the revised final regulations include:

  • Removal of the regulatory restrictions on the ability of employers to require tip pooling when they do not take a tip credit and they can implement nontraditional tip pools that can include employees such as cooks and dishwashers.

  • Managers or supervisors are prohibited from keeping any portion of the tips of employees. 

  • Employers who collect tips to facilitate a mandatory tip pool must fully redistribute the tips no less often than when it pays wages. 

  • Employers may take a tip credit for time that an employee in a tipped occupation performs related non-tipped duties either at the same time with or for a reasonable time immediately before or after performing tipped duties.    

Neil Reichenberg is the former executive director of the International Public Management Association for Human Resources. He is an attorney, a frequent writer and speaker on public policy and human resource issues, and an adjunct faculty member at George Mason University. For questions or additional information, contact Reichenberg at neilreichenberg@yahoo.com.