6th Circuit Upholds Local Right-To-Work Ordinance
On November 18, 2016, the 6th Circuit Court of Appeals overturned a lower court ruling that had invalidated a county right-to-work ordinance. The Hardin County ordinance, like many others enacted in Kentucky, prohibits employers from requiring membership in a labor organization as a condition of employment.
The lower court had ruled that the ordinance was preempted by the National Labor Relations Act (NLRA), which broadly preempts right-to-work laws except for those specifically authorized in Section 14(b) of the Act. The lower court had held that Section 14(b), which allows states to enact right-to-work laws, was not intended to include the local laws of political subdivisions. The 6th Circuit disagreed, holding that because Congress in Section 14(b) “expressly excepted a particular type of state law from preemption, it can hardly be deemed to have intended to nonetheless preempt such laws of the state’s political subdivisions absent a clear statement to that effect.” In other words, to overcome the traditional rights of states to delegate authority to their political subdivisions, the federal law must state a clear purpose to preempt local authority. Otherwise, a local right-to-work ordinance is “state law” under the NLRA and is not preempted. The 6th Circuit did, however, agree with the lower court that the Hardin County ordinance’s prohibitions of hiring-hall agreements (clearing prospective employees through a labor organization) and dues-checkoff provisions (deductions of union charges from compensation unless the employee has authorized the deductions in writing) are not included in the Section 14(b) exception, and are therefore preempted by the NLRA.
Both federal and state interpretations of the NLRA indicate cities, like counties, are considered “political subdivisions.” In light of the 6th Circuit ruling, local governments can now legally enact right-to-work ordinances that comply with Section 14(b) of the NLRA.
For more information, contact the KLC Member Legal Services Department.
IMPORTANT HR NEWS! Increase In Salary Level for Exempt Employees Will Affect 2016-2017 City Budgets
Weekly HR News – Budgets
Increase In Salary Level for Exempt Employees Will Affect 2016-2017 City Budgets
By now, most of you have heard about the Department of Labor’s (DOL) changes to the regulations that mandate which executive, administrative, and professional employees are entitled to the Fair Labor Standards Act’s (FLSA) minimum wage and overtime pay protections. The current regulations were last updated in 2004, and stated that an employee must make at least $455 per week ($23,660 per year) to be exempt from overtime. With the new change, which is effective December 1, 2016, the DOL has updated the salary level required for exemption to $913 per week ($47,746 annually), with automatic increases every three years to maintain the level at the 40th percentile of full-time salaried workers in the lowest-wage census region.
Both KLC and the National League of Cities (NLC) are very aware of the impact that these changes have on cities and as such, submitted comments last August in response to the Notice of Proposed Rulemaking. The two primary recommendations were (1) to use a regional approach (due to variations in pay based on location) and (2) to implement the change over the course of three years. Here is an excerpt from the Final Rule discussing the concerns:
“After considering the comments, the Department has made several changes from the proposed rule to the Final Rule. In particular, the Department has modified the standard salary level to more fully account for the lower salaries paid in certain regions. In this Final Rule, the Department sets the standard salary level equal to the 40th percentile of earnings of full-time salaried workers in the lowest-wage Census Region (currently the South).”
What does this mean for city budgets right now? Any of your employees that are currently making less than $913 per week would be entitled to overtime for any hours worked over 40. As cities begin budget preparations for the coming fiscal year they should include the increased overtime costs based on the passage of this rule or consider an increase in wages for employees that may be close to the threshold. If there is any increase in compensation, keep in mind any possible pension spiking issues that may result.
The Department of Labor is offering several free webinars to review these changes. More information on the webinars can be found on the DOL website. In addition, KLC is offering an all-day training June 1 that will offer in-depth discussions on this topic as well as many others. Information and registration for Part I of this training can be found on the KLC website.
If you have any questions about this or need any additional information contact Andrea Shindlebower Main, KLC personnel services specialist.