New Perspectives on the Unemployed

I ran across a blog posting today by someone named Chef Sheila, but it appears as if the article itself was done by someone else judging by the first paragraph that praises “this journalist’s informative piece” (unless she’s vainly referring to and complimenting herself).

Be that as it may, the piece is called “Meltdown 101: Unemployment by the numbers,” and it starts off by factoring in categories of unemployed and underemployed that the “official” figures excludes and comes up with a total unemployment rate for December 2008 of 21 million people, or 13.5 percent unemployed. That’s compared to the official rate of 7.2 percent, or 11.1 million.

If you want more details on how that figure was pieced together, just hit the hot link above, but what I personally found most interesting was a breakdown of unemployment by category, to wit:

DECEMBER UNEMPLOYMENT RATE BY GROUP:

7.2 percent: Adult men
5.9 percent: Adult women
9.5 percent: Female heads of households
5.1 percent: Asians
6.6 percent: Whites
9.2 percent: Hispanics
11.9 percent: Blacks
20.8 percent: Teenagers
15.3 percent: Construction workers
17 percent: Agriculture workers
2.3 percent: Government workers

There is a wealth of other statistics and information available, so hit the ol’ hot link above. When I finally read to the end of the article, I realized that it had been taken from AP (without permission?) and was written by AP Business Writer Ellen Simon.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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Republic Windows and Doors Offers WARN Test Case

The WARN Act (Worker Adjustment and Retraining Notification Act) specifies that 60 days’ notice must be given in firms with more than 100 full-time employees when large-scale layoffs are going to take place. The act kicks in when 50 employees at one location are laid off within a 30-day period, or when 33 percent of the workfoce is laid off, or when 500 employees are laid off (regardless of the percentage of the workforce).

However–and there are a lot of howevers in WARN–the window extends to 90 days when the layoffs are staggered but reach those same thresholds in combination. (“Caught you trying to cheat!” is the emphasis here.)

Here’s another however: WARN defines full-time employees as those who have averaged at least 20 hours per week in six of the past 12 months, or another definition–if the entire workforce averages 4,000 hours per week excluding overtime.

I bring this up for a couple of reasons. One is that the incoming Obama administration has been loud about extending the 60-day notification to 90 days. The other is that just this week one union at Republic Windows and Doors in Chicago (remember the showdown over WARN during that factory shutdown?) filed suit to force the owners to return equipment to the Chicago site that was reportedly relocated before closing.

Now, here’s the interesting part: The union alleges that Republic’s owners ferreted away the machinery in the middle of the night to a location in Indiana, where they intended to set up new, non-union operations, and then told the workers that the Chicago firm was shutting down because Bank of America wouldn’t extend them a line of credit.

If this is true, it brings to light a fascinating new wrinkle and shows that Republic did indeed scheme to avoid WARN.

In the end, to avoid a public relations nightmare, BofA forked over about $1.5 million to Republic, and the workers received 60 days of pay and benefits.

Which brings up the final point: There’s no way an employer would want dozens of laid-off workers sitting around the workplace for 60 days while knowing they’re getting the axe. It’s doubtful they’d do much constructive work, and it’s likely that pilferage and sabotage would take place. Pay them 60 days’ worth and see them off.

So, if the Obama team manages to up the WARN stakes, many companies will face paying three months of wages and benefits just to downsize in an effort to survive in tough economic times.

Better to gid rid of them now! LOL Just kidding, of course.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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Dems Launch Effort Toward Pay Parity

House Speaker Nancy Pelosi, D.-Calif., indicated today that two labor bills are being put on the fast track for passage. Both deal with ensuring women are paid the same as men for doing the same jobs, all other factors being equal.

The Lilly Ledbetter Fair Pay Act is named for a litigant who lost her case for fair pay in 2007. The Supreme Court, though agreeing Ms. Ledbetter was probably discriminated against, offered what labor advocates called a too-narrow definition of the statute of limitations for filing a discrimination charge. The court determined that the statute began ticking once the decision had been made to pay her less than her male counterparts, while her lawyers argued that the statute remained open so long as the discriminatory wages were being paid.

So, the eponymous Lilly Ledbetter Fair Pay Act simply proclaims that the statue of limitations begins anew on each payday so long as the unequal pay is still taking place. This, of course, could open up employers to many new EEOC filings and legal actions.

The conjoining Paycheck Fairness Act, co-sponsored by Hillary Clinton when it was introduced, also redefines provisions of the Equal Pay Act of 1963. Under the earlier act, employers could avoid liability if they could show that the uneqal pay was based on factors other than sex.

The Paycheck Fairness Act raises the bar on that other-than-sex defense by demanding the mitigating factors be shown to be job-related or serving a legitimate business interest.

Needless to say, but the upshot of these two measures would be to open up the administrative and legal process in fair pay claims and make it easier for filers to prevail over employers.

I personally doubt that the Republicans can muster a filibuster on either of these bills, first because they have no margin for error and second because they’re no doubt saving their ammunition for the Employee Free Choice Act (EFCA), which they call the card-check bill.

More on EFCA as it moves along the legislative process.

Meanwhile, if you’re an employer, you may want to delve into both the Employee Communication and Compliance Handbook and the Employee Handbook and Personnel Policies Manual from Personnel Concepts to avoid unwanted legal hassles.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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Recession, or Return to Normalcy?

This morning I was poring over a press release from a law firm advising employers to use caution and follow labor law mandates in laying people off in hard times. The release began by lamenting a 40-percent rise in business bankruptcies in the 12-month period ending in June 2008, which saw a total of 33,822 firms seek protection, up from 23,889 in 2007.

The release listed the Administrative Office of the U.S. Courts as its source, so I began doing some digging around the Web. What I discovered was actually pretty startling.

First, as for the release, the authors didn’t even use the latest data, which was for the 12-month period ending September 2008, which saw business filings rise 49 percent from September 2007–38,651 now and 25,925 then.

Now for the somewhat startling part: As bad as the current figures are, for the most part things were much worse in 2004 and 2005, and nobody is calling those recessionary years.

Over the past five years (September to September), business bankruptcies have stayed nearly steady except for two fairly “good years” in 2006 and 2007. In 2004, 34,817 businesses filed; in 2005, 34,222; in 2006, 27,333; in 2007, 25,925; and in 2008, 38,651.

Overall, there are four types or chapters of bankruptcy–chapters 7, 11, 12 and 13. Let’s look at the trends for all chapters and all filers over the past five years: In 2004, there were 1,168,987 filings; in 2005, 1,782,643; in 2006, 1,112,542; in 2007, 801,269; and in 2008, 1,042,993. So, in point of fact, bankruptcy filings have a ways to go to catch up to the good ‘ol “boom days” of the housing bubble in 2004-2005.

If I were to offer my interpretation to all of this, I would say that the twin good years of 2006 and 2007 saw people exhausting and living high off the hog from the salad days of the real estate bubble. Then in 2008, as it always does, reality caught up to everyone from Wall Street to Main Street.

(Of course, there’s another side to this, and that is that the Bush Boys tightened bankruptcy rules around 2005, so there may have been a rush to file before the new, more restrictive law kicked in.)

Today, Mr. and Mrs. Small Business can no longer tap into their HELOCs, which they’ve depleted, and for everyone on Main Street and Wall Street, the banks and lenders have adopted a policy of “just say no.”

That leaves the federal government, whose largess has gotten so ridiculous that porn magnates Larry Flynt and Joe Francis yesterday asked for a $5-billion federal bailout of the adult industry.

“People are too depressed to be sexually active,” Flynt said in a statement. “This is very unhealthy as a nation. Americans can do without cars and such, but they cannot do without sex.”

Can’t argue with that logic, I guess.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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Construction Industry Draws Most OSHA Fire

The Occupational Health and Safety Administration (OSHA), which has drawn a lot of fire from labor rights groups–as has the whole Department of Labor–for lax workplace regulation under the Republicans, recently posted its 2008 Top Ten List of most commonly cited standards (in other words, standards that resulted in the most citations for violations).

Construction came out in the top two spots, the first relating to scaffolding and the second to fall prevention. (Somehow, these two seem intertwined, don’t they?)

For the full list, plus another list on violations that resulted in the most fines, go to this OSHA page.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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Come Morn and Minimum Wage Rates Will Rise

Some eleven states and two municipalities are raising their minimum wage hourly rates on New Year’s Day 2009, topped by the City of Santa Fe with its $9.92 rate (closely followed by San Francisco at $9.79).

Heading the states is Washington at $8.55 an hour. For a full list, check out this site.

The federal rate goes to $7.25 on July 24, 2009, but most of the January 1 state increases already match or top that except for Florida ($7.21) and Arizona ($6.90).

Employers, if you want to keep compliant with federal and state labor law posting requirements, check your requirements on this site.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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Meanwhile, Back in the U.S. of A.: Severance Pay Woes

Turns out that a survey of severance pay around the world reveals that the U.S. pays the least of all monitored countries.

READ THE SURVEY RESULTS


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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Employees in China Get Unheard-of Job Protections

With tens of thousands of us Americans losing our jobs every week, I found it interesting to discover that China just in the past year implemented what’s called the Labor Contract Law, which basically gives every employee a nearly unbreakable contract with their employer. Plus, many of these contracts are open-ended, meaning they go on forever.

What this dictates is that a company has to go through almost-impossible-to-conquer hoops to lay off or fire workers before their contracts are up. Even if the company plans to reorganize and/or eliminate a factory or division, it still has to agree to rehire the affected employees, or if that proves impossible, to give them 30 days’ notice and ample severance pay.

Of course, if the company just shuts down and the owners disappear, these policies can’t be enforced very easily, and that appears to be the route that many toy manufacturers have taken this year as demand for their products dried up in the West.

So, these days employees in China have the upper hand when it comes to job security, which is a sharp break from just a year ago before the LCL (Labor Contract Law) was passed. (However, if you read the story linked below about “shedding workers,” you’ll find an interesting quote from a Chinese official who tells an employer that, so long as he doesn’t lay anyone off, the official will overlook other labor law violations.)

On the organized labor front, things might favor the employers a bit more. While most employees are organized into unions, it is illegal for them to strike, but work slowdowns and stoppages have proven to be ready substitutes.

Overall, however, I wouldn’t be surprised if the LCL hasn’t actually contributed to some–or many–of the factory closings, as owners found it easier just to cease operations than navigate the shoals of the LCL and reduce their workforces to stay in business.

For more information, read “The Impact of China’s Labor Contract Law” and “Employers in China Have Issues Shedding Workers.”

So, if you’ve been eying China for a low-cost start-up, be forewarned that the country is not the cheap source of labor that it’s been perceived to be.

(China is also moving, Obama-like, toward a national health care and “social insurance” system, which is recounted here.)


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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Nice Gig if You Can Get It

Here’s something I just learned. I generally don’t pay much attention to unemployment insurance law since I don’t qualify for it, but some people have been pretty smart at gaming the system.

To wit:

Under federal unemployment rules that are being changed Jan. 6, 2009, a worker who drew wages from jobs in two or more states could choose ANY STATE from which to claim the benefits. The smart ones all opted, evidently, for Massachusetts, which pays the highest unemployment sum in the nation at $628 a week plus $25 for each dependent.

Come the New Year plus a few days, however, and new rules will force the unemployed to seek unemployment checks only from states in which they’ve actually worked.

Massachusetts officials must be breathing easier.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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What Is the Cost of Government Regulations?

Two George Mason University researchers looking into the cost of government regulations on American business conclude that the total burden amounts to a 1.6 percent excise tax on the “typical manufacturer.” Another way of framing the cost is in terms of dollars, which they say amounts to $1,700 per employee.

The researchers, W. Mark Crain and Joseph M. Johnson, concentrated their study solely on American manufaturing and used data from the year 2000, so we’re almost ten years removed from their benchmark. Still, it’s interesting to see that government regulations do carry a price tag, though many would argue that most regulations are virtually cost neutral and, if not, result in an overall gain for the company, the employees and the American workplace in general.

I’m not here to argue for or against government regulations in general, but I’m not of the mindset of “the more, the merrier.” I think there comes a point for each business when it says, “Enough is enough,” and decides to do things differently. You know, outsource, ship manufacturing overseas, lay people off to save costs, and all those nasty little things that somehow get blamed on NAFTA by certain sectors of the body politic.

Keep this in mind as the new administration and heavily Democratic Congress contemplate a wide expansion of labor law rights and protections.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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