Unclear crystal ball: What might 2017 hold for employers?

Workplace Issues

January 2017
Ryan B. Frazier
Utah Employment Law Letter

In 2016, employers were confronted with many new laws, regulations, and issues. Companies geared up for a substantial change in the overtime rule, which ultimately didn’t take effect after a federal judge in Texas issued an injunction placing the rule on hold. The Utah Legislature enacted a statute that significantly changed the law applicable to noncompetition agreements. And Utah lawmakers also amended the Utah Antidiscrimination Act to require employers with 15 or more employees to provide reasonable accommodations in most instances when employees request them for pregnancy, birth, breastfeeding, and other related conditions.

Now, the ball has dropped, and 2016 has come to an end. With the beginning of a new year, employers are asking what 2017 will hold. Unfortunately, there’s no way of knowing. Nevertheless, some changes that are already in the works or that seem to be hot topics may become legal issues in Utah. As in past years, 2017 will most likely bring significant changes to Utah employment law.

ACA repeal and replacement

The most likely change that will have a significant impact on employers is the repeal of the Affordable Care Act (ACA) or at least substantial portions of the law. Re­publican lawmakers are already moving forward with a bill to remove the law from the books, and some have stated the repeal will happen within the first 100 days of a Trump presidency.

Although they indicate that they hope to enact some healthcare-related legislation soon, Republicans haven’t offered an immediate replacement for the ACA. Many observers believe that simply repealing the healthcare law without a substitute will leave a void and will have a significant impact on the many individuals who will lose their healthcare coverage. What the elimination of the ACA means for employers will depend on exactly what Congress repeals or changes and what, if any­thing, is enacted as a replacement.

In the short term, employers will probably want to continue offering health insurance plans. For example, companies employing more than 50 employees will likely still be responsible for the employer mandate/shared-responsibility penalties for noncompliance. The reporting requirements will also likely remain in place, and employers will still need to make the required re­ports for the 2016 plan year. As a result, large employers probably won’t want to immediately drop coverage—at least not until they have a sense of how a repeal will af­fect them.

Overtime rule

As we reported in our December 2016 issue, imple­mentation of the new overtime rule proposed by the U.S. Department of Labor (DOL) has been blocked by the U.S. District Court for the Eastern District of Texas (see “Court blocks DOL’s new overtime rule from taking ef­fect” on pg. 1). The order preventing the implementation of the rule applies nationwide. For now, employers aren’t required to comply with the new rule.

The district court’s ruling has been appealed to the U.S. 5th Circuit Court of Appeals, and the appeal may be heard and decided in 2017. At this point, it’s difficult to predict how the 5th Circuit will rule.

Further clouding a prognostication for the future of the overtime rule is the election of Donald Trump as president. It isn’t clear if a new DOL administration ap­pointed by Trump will decide not to pursue the appeal. Trump has nominated Andrew Puzder, who has been somewhat critical of the new rule. The new DOL lead­ership may decide to abandon the appeal or not move forward with the new rule altogether.

Transgender discrimination

Utah has already enacted legislation prohibiting discrimination against employees on the basis of their gender identity. However, federal law doesn’t explicitly prohibit such discrimination. The law in this area is currently in flux.

Grimm v. Gloucester County School Board, a case in­volving discrimination against a transgender high-school student under Title IX, will be heard in 2017 by the U.S. Supreme Court. At issue is whether discrimina­tion “because of sex” under Title IX includes discrimi­nation against transgender individuals. Although the case wasn’t filed under Title VII of the Civil Rights Act of 1964, which means it isn’t an employment discrimina­tion case, it is expected that the Court’s ruling in the case will have a direct bearing on whether the prohibition on discrimination “because of sex” under Title VII is inter­preted as applicable to transgender discrimination.

Medical marijuana

Medical marijuana was a hot topic during the 2016 legislative session in Utah. Ultimately, Utah lawmak­ers didn’t enact any medical marijuana legislation. The issue is expected to crop up again during this year’s leg­islative session, and passage of a medical marijuana law may get more traction in 2017.

The enactment of such legislation would create many issues for employers, including:

  • Must marijuana be included as part of a healthcare benefits package?
  • Should medical marijuana be covered by workers’ compensation?
  • May an employer discipline an employee for using marijuana without a prescription?
  • Can an employer terminate an employee for a posi­tive drug test if the employee has a prescription for marijuana?
  • How does an employer determine whether the em­ployee has a valid prescription?
  • How does the Americans with Disabilities Act (ADA) apply, and does it require an accommodation?
  • How does the Drug-Free Workplace Act, which re­quires federal contractors to maintain zero-tolerance policies for illegal drug use, apply to marijuana when it’s still considered an illegal drug under federal law?

Minimum wage

Raising the minimum wage has been a hot issue in recent years. Congress has declined to raise the federal hourly minimum wage that’s applicable for most em­ployees from its current rate of $7.25. Utah has followed suit. In fact, Utah lawmakers are not expected to con­sider any changes to the state minimum wage during the 2017 legislative session.

Nevertheless, many states have recently raised their minimum wages. Arizona, California, Colorado, and Montana have all recently increased the minimum hourly compensation that must be paid to most workers in those states. Although it’s doubtful that Utah will ad­dress this issue in 2017, state lawmakers may be forced to take a look at the minimum wage within the next couple of years in order for Utah to remain competitive.

Noncompetition agreements

In 2016, the Utah Legislature limited new noncom­petition covenants to a term of one year. Lawmakers also considered, but didn’t pass, bills aimed at an outright ban on the use of covenants not to compete. Some ob­servers have speculated that the issue will surface again in 2017. Although there aren’t any current bills aimed at prohibiting restrictive covenants, it’s still possible that such a bill may be introduced.

What the future holds

There’s no way to predict how all of these issues will play out in 2017 or whether they will even be addressed. Nevertheless, the issues highlighted in this article are expected to become hot topics in 2017 or at least in the near future. Employers need to stay abreast of what’s happening to ensure that they remain in compliance with the ever-changing employment law landscape.

You can contact the author at rfrazier@kmclaw.com or 801-323-5933. D