New I-9 Form For Employers

POSTED BY SCOTT T. SILVERMAN MARCH 12, 2013

The U.S. Citizenship and Immigration Services (USCIS) has published Introduction of the Revised Employment Eligibility Verification Form in the March 8, 2013, Federal Register. The new Form I-9 is available here. Employers should use the new form as soon as possible but have until May 7, 2013 before they will be penalized for not doing so. In addition, employers do not need to complete the new Form I-9 (Rev. 03/08/13) for current employees for whom there is already a properly completed Form I-9 on file unless reverification applies. The new form must be completed for reverification when the employee's employment authorization or documentation of employment authorization has expired. If the employer rehires an employee within three years of the date that a previous I-9 was completed, the employer may complete the new Form I-9 or complete Section 3 of the previously completed Form I-9. As always, specific questions concerning I-9 compliance should be referred to legal counsel. 

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OSHA Announces Whistleblower Protections under the Affordable Care Act

POSTED BY ELINA BASHAM ON MARCH 6, 2013

The Affordable Care Act (ACA)'s whistleblower provisions may present a hazard for unsuspecting employers. On February 27, 2013, the Department of Labor's Occupational Safety and Health Administration (OSHA) released an interim final rule prescribing the procedures and time frames for handling whistleblower complaints filed under ACA, which prohibits retaliation against workers who report violations of the law's consumer protections. 

ACA contains various provisions to make health insurance more affordable and health insurance companies more accountable to consumers. Section 1558 of ACA amended the Fair Labor Standards Act adding Section 18C, which provides protections to employees against retaliation by an employer for reporting alleged violations of Title I of the Act or for receiving tax credits that could translate to a tax penalty for certain large employers. Title I encompasses a range of accountability requirements for insurers, such as the prohibition against lifetime limits on coverage, exclusions due to pre-existing conditions or using factors like medical history to set premium rates. It also includes expanded benefits such as the requirement for most plans to cover recommended preventative services with no cost sharing. Workers who give their employer, the federal government or a state attorney general information about acts or omissions that they reasonably believe violate Title I of ACA will be protected from retaliation. 

ACA authorizes the Secretary of Labor to conduct investigations into complaints and issue determinations which are functions delegated to OSHA. OSHA's interim final rule establishes procedures and time frames for the filing and handling of such complaints. 

Retaliation complaints under 18C have to be filed within 180 days of when the alleged violation occurs. The violation is said to occur when the retaliatory decision has been made and communicated to the worker. Therefore, the limitations clock starts ticking when the employee is aware or reasonably should be aware of that decision, though the time for filing of a complaint can be tolled. 

Upon receipt of the complaint, OSHA must provide written notice to the persons named in the complaint alleged to have violated the Act of the filing of the complaint, the allegations contained in the complaint, the substance of the evidence supporting the complaint, and the rights afforded the respondent throughout the investigation. 

If the complainant makes the required prima facie showing and the respondent employer does not offer clear and convincing evidence that it would have handled the employee the same way absent the worker's alleged protected activity, OSHA will investigate whether there is reasonable cause to believe that retaliation has occurred. 

The assistant secretary for OSHA will issue written findings within 60 days of the filing of a complaint on whether there is reasonable cause to believe that complaint has merit. Complainants can file suit in a district court seeking de novo review within 90 days of getting that written determination or if more than 210 days pass without a final decision.

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IRS Expands VCSP Program

POSTED BY SCOTT T. SILVERMAN MARCH 5, 2013

On February 27, 2013, the Internal Revenue Service (IRS) announced its expansion of the Voluntary Classification Settlement Program (VCSP) to allow more employers to achieve certainty under the law by reclassifying their workers as employees for future tax periods.

The VCSP is beneficial for some employers because it allows employers to voluntarily reclassify their workers as employees for future tax periods, while only paying 10 percent of the amount of employment taxes that would have been due on compensation paid to the workers being reclassified for the most recent tax year, calculated under reduced rates. In addition, the employer will not be liable for any interest and penalties on the payment under the VCSP, and will not be audited for employment tax purposes for prior years with respect to the employee classification of the workers.

Employers who want to take advantage of these benefits must generally meet certain requirements to be eligible for the VCSP.  Specifically, an employer must be treating the workers to be reclassified as independent contractors or other nonemployees; additionally, the employer must have consistently treated the workers as nonemployees, including having filed any required Forms 1099, consistent with the nonemployee treatment, for the previous three years with respect to the workers to be reclassified. The employer cannot be currently under employment tax/payroll tax audit by the IRS. In addition, the employer cannot currently be under audit by the Department of Labor or a state agency concerning the classification of the workers or contesting the classification of the workers in court.

Under the revamped program, as stated above, employers under IRS audit, other than an employment tax audit, can qualify for the VCSP. Furthermore, employers accepted into the program will no longer be subject to a special six-year statute of limitations, rather than the usual three years that normally applies to payroll taxes. Please see the IRS's announcement and questions and answers document for more information.

Normally, employers are barred from the VCSP if they failed to file required Forms 1099 with respect to workers they are seeking to reclassify for the past three years. However, for the next few months, until June 30, 2013, the IRS is waiving this eligibility requirement. Details on this temporary change are in this announcement

Employers accepted into the program will generally pay an amount effectively equaling just over one percent of the wages paid to the reclassified workers for the past year. No interest or penalties will be due, and the employers will not be audited on payroll taxes related to these workers for prior years. Employers applying for the temporary relief program available for those who failed to file Forms 1099 will pay a slightly higher amount, plus some penalties, and will need to file any unfiled Forms 1099 for the workers they are seeking to reclassify. In determining whether to participate, an employer must also consider labor and employment law and affordable care act law implications.  Other laws may also impacted.  Accordingly, obtaining advice from counsel before participating in the VCSP is essential.

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Employers Should Ask their Insurance Agents Whether Early Renewal of Health Insurance Coverage is Appropriate

POSTED BY SCOTT T. SILVERMAN AND BRUCE PLATT ON FEBRUARY 28, 2013

While one of the greatest benefits of the federal Affordable Care Act ("ACA") is better access for all to quality healthcare, theoretically resulting in lower health care expenditures, there also are costs associated with the ACA. Many of these costs take the form of additional fees on participating insurers and health maintenance organizations in our nation's healthcare system.  The federal government will impose many of those fees beginning in calendar year 2014.  In general, these fees will only apply to the months of coverage that occur in calendar year 2014, but the cost to the employer will be spread out over the entire policy/contract year.  These fees will be passed along to employers in the form of premium increases.

There also will be additional operational cost impacts that only apply to health insurance policies or health maintenance organization contracts that become effective (or are renewed) on or after January 1, 2014. It is expected that changes such as these will result in very large premium increases for many employers, especially some small employers.   These premium increases will be especially large for employer groups that have younger and healthier employees.  All of these factors will lead to greater costs to provide insurance to employees, and will increase the cost of the insurance premium paid for the coverage.

To help mitigate the ACA's impact on their health insurance premium, employers, including small employers, should contact their health insurance agents or brokers to determine whether the employers should renew their coverage early, in late 2013, as opposed to waiting until their 2014 policy anniversary dates.  Employers renewing in late 2013 probably will pay a premium that is higher than they currently are paying, in part because of increasing medical costs, and in part because of the fees discussed above.  However, renewing early may allow employers to temporarily avoid some of the increased costs.

Early renewal will not be appropriate for every employer group.  For example, employers with a significant number of older employees, or with less-healthy employees, may not see as large of an impact.  Therefore, employers should contact their health insurance agent or broker to see if this is a solution that fits their particular needs.  Because this is such a complicated and evolving area, employers should carefully, and independently, review the advice given to make sure that it is consistent with their specific circumstances.

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No, Pregnancy Discrimination is Not Legal in Florida (Despite What You May Have Read)

POSTED BY RICHARD D. TUSCHMAN ON FEBRUARY 26, 2013

I just read an article entitled "Florida lawmakers look to end discrimination against expecting mothers."  Posted on the website of a Fox News affiliate, the article begins by stating:  

Pregnant women throughout the United States are protected from employment discrimination under federal law, but that's not necessarily the case in Florida. Two state lawmakers are now trying to change that fact.

The article goes on to quote one of the legislators who want to amend the Florida Civil Rights Act (FCRA) to prohibit pregnancy discrimination:

"Some (of the pregnant women) are terminated from their jobs or they go into a hostile work environment because of their pregnancy so we want to make sure we eliminate those kinds of things," said State Sen. Geraldine Thompson, D-Orlando.

Don't be misled by Senator Thompson or the Fox News article.  Pregnancy discrimination is illegal in Florida, as it is in every other state.   

It is true that courts disagree as to whether the FCRA prohibits pregnancy discrimination.  I wrote about this issue on this blog last year.  The proposed legislation attempts to end that debate. 

But make no mistake, federal law, specifically Title VII of the Civil Rights Act of 1964, has prohibited pregnancy discrimination since 1978, when the Pregnancy Discrimination Act amended Title VII.  

Employers with 15 or more employees are covered by Title VII.  Employees of such employers – including employees in Florida – are therefore protected from pregnancy discrimination.  That's because under the Supremacy Clause of the U.S. Constitution, federal law takes precedence over conflicting state laws.  

The FCRA also covers employers with 15 or more employees.  And the proposed amendments to the FCRA would not change that. So really, the issue of whether the FCRA prohibits pregnancy discrimination does not make a substantive difference.  

So why is this an issue? Well, a cynic might argue that it’s about political grandstanding.  Most voters don't understand the nuances of state versus federal law.  And most, I suspect, would be glad to hear that their representative voted for a law that prohibits pregnancy discrimination in employment.  For a legislator, supporting such a law would seem to be a no-brainer.  

There would be a practical effect to the legislation, though.  Many plaintiff-side lawyers prefer to litigate discrimination cases in state court, which is generally seen as more plaintiff-friendly.  If the proposed legislation is enacted into law, we will see more pregnancy discrimination cases filed in state court (under the FCRA) rather than in federal court (under Title VII).  That’s not an insignificant fact.  But it’s hardly a major civil rights issue, despite what the press and some legislators would like you to believe.

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Employers Need To Evaluate Coverage Under The Affordable Care Act Now

POSTED BY SCOTT T. SILVERMAN ON FEBRUARY 21, 2013

Beginning in 2014, "large employers" may be assessed a penalty for not providing required coverage under the employer shared responsibility mandate of the Affordable Care Act.  This does not mean that employers need not worry about whether they qualify for the mandate until 2014.  Why you may ask?

Because an applicable large employer is defined by the regulations as one that has employed an average of at least 50 full-time employees (including both full-time and full-time equivalent employees or FTEs) during the preceding calendar year.  Thus, employers should start determining whether they will qualify for the mandate in 2014. Indeed, the look back period started on January 1, 2013. 

Leased employees, sole proprietors, partners in a partnership, members (owners) of an LLC taxed as a partnership, and 2% S-corporation shareholders are not employees. A full-time employee is an employee who was employed on average at least 30 hours of service per week. Hours of service include not only hours worked, but also all hours for which employees are paid or entitled to payment even when no work is performed due to vacation, holiday, illness, incapacity (including disability), layoff, jury duty, military duty or leave of absence. 

All employees of a controlled group or affiliated service group are taken into account in determining whether the group together constitutes an applicable large employer. If a parent owns 80% or more of the equity in a subsidiary, or if the same 5 or fewer persons own 80% or more of the equity in another company and collectively own more than 50% of both companies, the companies will be considered a controlled group, and all employees of the controlled group must be combined together for purposes of calculating the 50 full-time employee threshold.

To determine if you are an applicable large employer, calculate:

1. The number of full-time employees, including seasonal workers, working an average of 30 hours of service per week for each month.

2. The number of FTEs, which is determined by taking the total number of hours of service of other employees, including seasonal workers, and dividing it by 120 for each month.  

3. Add 1 and 2 to determine your total full-time employees (including FTEs) for each month.

4. After performing the calculation for each month, add all of the numbers determined in step 3 for the entire year and divide by 12, dropping any fraction to the lower whole number. If this number is 50 or more, you are an applicable large employer and will be responsible for complying with the employer shared responsibility mandate during 2014.

An exception exists, however.  If your workforce exceeds 50 full-time employees for 120 days or less during the preceding calendar year, and the employees in excess of 50 who were employed during that period of no more than 120 days were seasonal workers, you are not an applicable large employer. The regulations state that for purposes of this particular exception, four calendar months may be treated as the equivalent of 120 days, and that the four calendar months and 120 days are not required to be consecutive.

In summary, employers who wish to avoid being subjected to the mandate in 2014 must be diligent in the hiring of full-time employees and the hours of non-full time employees.

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New Fair Credit Reporting Act Form For Employers

POSTED BY SCOTT T. SILVERMAN ON FEBRUARY 19, 2013

Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) established the Consumer Financial Protection Bureau (CFPB), and the responsibility for interpreting and enforcing the Fair Credit Reporting Act (FCRA) was transferred to the CFPB.  Although the CFPB began most activities on July 21, 2011, the CFPB just recently issued a new form for users of consumer reports to reflect the change in authority. Employers must now provide this new form when considering consumer reports in employment decisions (available here).

Although the form does not reflect a substantive change, employers should use this opportunity to review their compliance obligations under the FCRA. The FCRA applies to "consumer reports," which are defined as any communication from a consumer reporting agency about an individual which is used in whole or in part as a factor in establishing eligibility for employment.  A good summary of employer obligations under the FCRA is here (Appendix N).

In summary, before an employer requests a consumer report, it must:

1. Notify the applicant or employee that it may use the information in his/her consumer report for decisions related to employment. This notice must be in a stand-alone written document. The notice cannot be included in an employment application.

2. Obtain written permission from the applicant or employee to obtain the consumer report. This permission may be contained in the same document that is used to notify the applicant or employee that the employer will get a consumer report. If an employer wants the authorization to allow it to receive consumer reports throughout an employee’s employment, the written authorization must state this clearly and conspicuously.

3. Give the company that will provide the consumer report a written certification that the employer: (1) notified the applicant or employee and obtained their permission to get a consumer report, as required by §604(b) (2) of the FCRA; (2) will give the applicant or employee a copy of the consumer report and a summary of his/her rights under the FCRA before taking adverse action based on the contents of the consumer report, as required by §604(b)(3) of the FCRA; and (3) will not discriminate against the applicant or employee or otherwise misuse the information in the consumer report, as provided by any applicable federal or state equal opportunity laws or regulations.

After receiving the consumer report, if the employer may take adverse action based on the contents of the report, before actually taking the adverse action, the employer must: 

1. Give the applicant or employee notice that includes a copy of the consumer report; and

2. Give the applicant or employee a copy of the summary of rights under the Fair Credit Reporting Agency.

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Liquidated Damages Are Not Mandatory For FLSA Retaliation Claims In Eleventh Circuit

POSTED BY SCOTT T. SILVERMAN ON FEBRUARY 14, 2013

Deciding an issue of first impression, in Moore v. Appliance Direct, Inc., the Eleventh Circuit has held that courts have the discretion to award liquidated damages in FLSA retaliation suits.  Unlike suits for minimum wage or overtime wages, where such damages are mandatory, absent a showing of reasonable good faith by the employer, plaintiffs in a retaliation case under the FLSA must show that the circumstances justify such an award.

In Moore, delivery truck drivers brought an overtime wage lawsuit.  During the pendency of that litigation, they were terminated.  Thereupon, they brought a second suit, alleging that their terminations were in retaliation for their overtime claims.

The truck drivers prevailed at trial on their retaliation actions, but the court declined to award liquidated damages (which are an equal amount of  proven damages as a measure to punish the defendant for violation of the law).  The drivers appealed this aspect of the lower court's ruling, asserting that the award of such damages is mandatory in retaliation cases, absent a showing of reasonable good faith action by the employer, just as it is in overtime and minimum wage actions.

The Eleventh Circuit observed that the plain language of the retaliation statute directed that courts shall impose such relief as may be appropriate to effectuate the purposes of the law; while, in contrast, the overtime and minimum wage statute stated that courts shall impose an additional amount as liquidated damages.  Thus, the imposition of liquidated damages was clearly meant by Congress to be discretionary.

Therefore, the Eleventh Circuit concluded that the award of liquidated damages, as well as any other damages for retaliation is discretionary upon a determination of whether doing so would be appropriate under the facts of the case.

The important point for employers is to establish facts that would make an award of damages inappropriate. Employers must be ready to defend any actions taken against employees who have made FLSA complaints.  If an employer can show that it had reasonable grounds for the action, apart from asserted retaliation for protected activity, the employer may be able to avoid damages.  Documentation of the legitimate, non-retaliatory reasons for the adverse employment action is, of course, critical.

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DOL Expands FMLA Eligibility to Families of Eligible Veterans and Military Families

POSTED BY ELINA BASHAM ON FEBRUARY 8, 2013

Military family leave, enacted in 2009, provides for two forms of Family Medical Leave Act (FMLA) leave benefits related to military service: Qualifying Exigency and Military Caregiver Leave.  On February 5, 2013, on the twentieth anniversary of the FMLA, the U.S. Department of Labor (DOL) issued a Final Rule expanding FMLA protections. One of the expansions provides families of eligible veterans with the same job-protected FMLA leave currently available to families of military service members. The expansion also enables more military families to take leave for activities that arise when a service member is deployed.  The expansions will go into effect March 8, 2013.

Current FMLA Military Family Leave Benefits:

FMLA Qualifying Exigency Leave:

  • A non-medical activity that is directly related to the covered military member's active duty or call to active duty
  • Seven categories of qualifying exigencies include:
    • Short notice deployment
    • Military events and related activities
    • Childcare and school activities
    • Financial and legal arrangements 
    • Counseling
    • Rest and recuperation
    • Post-deployment activities

FMLA Military Caregiver Leave:

  • Twenty-six workweeks of leave during a single 12-month period to care for a covered service member with a serious injury or illness.
  • Employee must be the son, daughter, spouse, parent or the "next of kin" of the covered service member

The 2013 Final Rule highlights include: 

  • Expansion of the definition of a covered service member: Includes veterans who are undergoing medical treatment, recuperation, or therapy for a serious injury or illness incurred or aggravated in the line of duty on active duty and that manifested before or after the veteran left active duty.
  • Definition of a covered veteran: The Final Rule defines a covered veteran as a veteran who has been discharged or released under conditions other than dishonorable within the five-year period preceding the date the employee first takes military caregiver leave to care for the veteran.
  • Inclusion of Pre-Existing Injuries:  Expands the military caregiver leave provision to provide leave to eligible family members if the veteran was a member of the Armed Forces at any time during the period of five years preceding the date of the medical treatment, recuperation, or therapy.
  • Expansion of qualifying exigency leave for employees with family members in the Regular Armed Forces: The Final Rule expands the qualifying exigency leave entitlement to employees whose spouse, son, daughter, or parent serve in the Regular Armed Forces, and incorporates the statutory requirement that the military member, whether in the Regular Armed Forces or the Reserve components, must be deployed to a foreign country.
  • Certain changes to the categories of qualifying exigency leave, including:
    • Increasing the amount of time an eligible employee may take qualifying exigency leave related to the military member's Rest and Recuperation to a maximum of 15 calendar days. This leave may only be used while the military member is on Rest and Recuperation leave.
    • Creating a new qualifying exigency category that allows an eligible employee to take FMLA leave for certain activities related to the care of the military member's parent who is incapable of self-care where those activities arise from the military member's deployment or impending deployment, such as arranging for alternate care for the parent; providing care for the parent on an urgent, immediate need basis; admitting or transferring the parent to a care facility; and attending certain meetings with staff at a care facility.
  • Expansion of health care providers authorized to certify a current service member's or veteran's serious injury or illness: The Final Rule expands the list of health care providers who can provide a medical certification to support FMLA military caregiver leave to include health care providers who are not affiliated with the military. 
  • If a medical certification is obtained from a non-military affiliated health care provider, the employer may request a second (or third) opinion from the employee. The Final Rule retains the provisions that healthcare certifications obtained from healthcare providers associated with the military may not be subject to second and third opinions.

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Employers Must Examine Their Employee Agreements for Compliance With the National Labor Relations Act

POSTED BY SCOTT T. SILVERMAN ON FEBRUARY 5, 2013

Recently, an Administrative Law Judge (ALJ) for the National Labor Relations Board (NLRB) issued a decision in Quicken Loans, Inc., which found confidentiality and non-disparagement provisions to be unlawful under the National Labor Relations Act (NLRA). The decision is not surprising, and is in accord with the trend of the NLRB to find common employer conditions to violate the NLRA.  

When Quicken Loans sued former employees for asserted violations of a "Mortgage Banker Employment Agreement," which all mortgage bankers had signed during their employment, one of the defendants filed an unfair labor practice charge, alleging that certain provisions of the Agreement violated the NLRA. Specifically, the former employee challenged a provision that required employees to "hold and maintain all Proprietary/Confidential Information in the strictest of confidence" and stated that employees could not "disclose, reveal or expose any Proprietary/Confidential Information to any person, business or entity." The agreement broadly defined "Proprietary/Confidential Information" to include "any non-public information relating to or regarding the Company's . . . personnel," including "personal information of co-workers . . . such as home phone numbers, cell phone numbers, addresses, and email addresses" as well as "personal financial information, . . . background information, personal activities, information pertaining to work and non-work schedules, contacts, meetings, meeting attendees, [and] travel[.]" In addition, the former employee asserted that a provision, which prohibited employees from "publicly criticiz[ing], ridicul[ing], disparag[ing], or defam[ing]" Quicken or its "products, services, policies, directors, officers, shareholders, or employees, with or through any written or oral statement or image (including . . . any statements made via websites, blogs, postings to the internet, or emails . . . )" was also  overbroad in violation of the NLRA

The ALJ concluded that the two provisions at issue violated the NLRA because they "would reasonably tend to chill employees in the exercise of their Section 7 rights." The first provision would have unlawfully prevented employees from discussing with others, including fellow employees or union representatives, the wages and other benefits that they receive and the names, wages, benefits, addresses or phone number of fellow employees.  As these types of communications are protected by the NLRA, the provision was unlawful.  Further, the provision that prohibited public criticism of the employer violated the employees' protected concerted rights under the NLRA to make public statements against the employer and its products in order to appeal to the public, or their fellow employees, to gain support. 

But, what was the impact of this decision?  The ALJ ordered Quicken to cease and desist from maintaining these provisions and to notify its mortgage bankers that the provisions would not be enforced.  Further, Quicken was required to notify employees that it would not prohibit discussions of terms and conditions of employment, as protected by the NLRA.  Effectively then, Quicken' s lawsuit, at least as to these two provisions, was terminated, because Quicken would be in violation of the Order if it were to continue to pursue the asserted violations.

The case demonstrates that it is not enough for employers to simply examine their social media and other policies for compliance with the NLRA.  Rather, employers must re-examine all of their employee agreements to identify any that may be overbroad.  Employers may then need to have employees sign revised agreements in accordance with the applicable state law or be subject to having enforcement barred. As I will discuss at the Akerman Annual Labor & Employment Law Seminar, the NLRA has definitely invaded the non-union workspace.

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Health Care Reform - Should Employers Reduce Expected Health Costs in 2014 by Transitioning Some Full Time Employees to Part Time Status Now?

POSTED BY BETH ALCALDE ON FEBRUARY 1, 2013

2013 is shaping up to be a very busy year for employers in all industries, with the continued implementation of the Patient Protection and Affordable Care Act ("ACA"). Recognizing that in 2014, applicable large employers will avoid ACA-related penalty taxes by offering required affordable group health plan coverage just to full-time employees (i.e., those working an average of 30 hours or more per week, as calculated in a number of permitted ways), some applicable large employers have already begun examining whether to cut their employees' hours.  

Considerations in the reduction of hours decision will vary by industry and by employer, and there is no one-size-fits-all approach.  Some of the factors to weigh should include the following:

  • How much will the costs of health coverage continue to rise for this employer? What portion of those costs are expected to be specifically attributable to these employees?
  • What tax savings are currently available for the employer-sponsored coverage for these employees?
  • Are there employee morale, recruitment, productivity, and/or retention issues to consider?
  • Are there public relations or government relations issues to consider?
  • How many part-time employees does the company currently have?  Does the company's business model permit a shift away from full time employment?
  • Will salary increases be needed if no insurance is offered to these employees?
  • How many of these employees are expected to be eligible for subsidized health insurance coverage in a state or federal exchange?  (Note that employers are not advised to solicit pledges from employees to not seek a subsidy in exchange for continued full time employment.)

Members of Akerman's Employee Benefits, Labor and Employment, and Healthcare Practice Groups are constantly monitoring ACA regulations and other guidance as it is issued.  More detailed descriptions of various ACA issues impacting employer sponsored group health plans are available.  For example, please see our Practice Update entitled "Health Care Reform: Recent Guidance on 'Play or Pay' Rules for Applicable Large Employers in 2014".  

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Recess Appointments To Board Invalid - Summary Of Affected Decisions

POSTED BY SCOTT T. SILVERMAN ON JANUARY 29, 2013

The United States Court of Appeals for the District of Columbia Circuit issued an order on January 25, 2013, which struck, as unconstitutional, President Obama's recess appointments to the National Labor Relations Board ("NLRB"). Noel Canning v. NLRB (Case No. 12-1115) Typically, recess appointments to the NLRB,  pursuant to the Recess Appointments Clause of the Constitution, are made during Senate recess.  In its Opinion, the D.C. Circuit Court held that because the appointments at issue were not made during the intersession recess (the President made his three appointments to the Board on January 4, 2012, after Congress began a new session on January 3 and while that new session continued), these appointments were invalid from their inception. Therefore, because the Board lacked a quorum of three members when it issued its decision in Noel Canning, the D.C. Circuit Court vacated the holding.

In response, Chairman Mark Gaston Pearce issued the following statement: "The Board respectfully disagrees with today's decision and believes that the President's position in the matter will ultimately be upheld. It should be noted that this order applies to only one specific case, Noel Canning, and that similar questions have been raised in more than a dozen cases pending in other courts of appeals. In the meantime, the Board has important work to do. The parties who come to us seek and expect careful consideration and resolution of their cases, and for that reason, we will continue to perform our statutory duties and issue decisions."  

Regardless, this is a major development that could invalidate all NLRB decisions during the time in which President Obama's appointees were on the NLRB.  Below are summaries of the major decisions in 2012 that may be impacted by this ruling:

  • In Hispanics United of Buffalo, the NLRB held that the discharges of five employees regarding posts made on Facebook violated the NLRA. The NLRB indicated that the Facebook posts and comments were protected under the NLRA because they concerned job performance, and because they involved the preparation of co-workers to defend against allegations of poor work performance.  
  • In Costco Wholesale Corp. and United Food and Commercial Workers Union, Local 371, the NLRB held that Costco's policy prohibiting employees from making statements that "damage the Company, defame any individual or damage any person's reputation" violated the NLRA.  The NLRB reasoned that the policy was broad enough to chill employee rights under the NLRA.
  • In WKYC-TV, Inc., the NLRB overruled fifty years of its own precedent holding that a union dues check-off provision in a collective bargaining agreement, which provides for the automatic deduction of union dues from unionized employees' paychecks, survives the expiration of a collective bargaining agreement.  
  • In D.R.Horton, Inc., the NLRB held that it is a violation of federal labor law to require employees to sign arbitration agreements that prevent them from joining together to pursue employment-related legal claims in any forum, whether in arbitration or in court. Employees cannot be asked to waive a judicial form and to not bring class or collective claims in arbitration. Arbitration may be individual, as long as judicial forum is open to class or collective actions, or judicial may be prohibited as long as class and collective arbitration is open.  
  • In Latino Express, the Board decided to require respondents to compensate employees for any extra taxes they have to pay as a result of receiving the backpay in a lump sum. The Board will also require an employer ordered to pay back wages to file with the Social Security Administration a report allocating the back wages to the years in which they were or would have been earned.
  • Finally, in Banner Health System, the Board held that an employer's policy of asking its employees involved in an investigation into an internal complaint to its human resources division to refrain from discussing that ongoing investigation with co-workers, violated the NLRA.  The NLRB held that this policy was overbroad and violated employees' rights under Section 7 of the NLRA because it prevented employees from discussing discipline and investigations of discipline.

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ADA Pool and Spa Accessibility Compliance Deadline is Rapidly Approaching

POSTED BY ARLENE KLINE ON JANUARY 24, 2013

The current compliance date for making swimming pools and spas ADA accessible is January 31, 2013, although the deadline could be further extended by the U.S. Department of Justice.  (DOJ has extended the compliance deadline on two occasions, but not for pools and spas constructed or altered on or after March 15, 2012). The requirements may include installing an independently usable pool lift in some circumstances.  Public accommodations should be aware of any state and local government codes requiring greater access than the federal requirements.  The risks of noncompliance include possible private lawsuits and DOJ investigations.

As background, DOJ published revised Regulations for Titles II and III of the ADA in the Federal Register on September 15, 2010.  The 2010 standards revised the ADA's rules for accessible design in places of public accommodation to assist in meeting the practical needs of persons with disabilities and to better align with other existing building and accessibility codes. Compliance with the 2010 standards was generally required by March 15, 2012 (except for auxiliary aides which had a stricter deadline for compliance). The 2010 Standards set minimum requirements – both scoping and technical -- for newly designed and constructed or altered state and local government facilities, public accommodations, and commercial facilities to be readily accessible to and usable by individuals with disabilities.  The regulation includes Appendix A to Part 36 - Standards for Accessible Design establishing minimum standards for ensuring accessibility when designing and constructing a new facility or altering an existing facility. 

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OSHA Releases Regulatory Agenda and Projects that Final Action Will Be Taken on 10 Regulations in 2013

POSTED BY HEATHER MACDOUGALL ON JANUARY 10, 2013

The federal government, including agencies such as OSHA, are required to give notice of significant regulatory activity by publishing a "semi-annual" regulatory agenda that outlines the status of on-going and planned regulatory activity.  Apparently, OSHA doesn't understand the meaning of "semi-annual" because it long delayed the publication of a regulatory agenda for 2012, waiting to the final days of the year, and just in time for 2013.  Congressional Republicans had been pressing the Administration for a regulatory agenda since late summer, believing the delay was because the President didn't want to stir up controversy in an election year.

However, the wait is finally over, and OSHA projects that during 2013, final agency action will be taken on 10 regulations, including:

  • A new Confined Spaces in Construction standard (by July 2013);
  • An updated Electric Power Transmission and Distribution standard (by March 2013);
  • Eliminating many of the incentives of the Cooperative Programs (by April 2013);
  • Consensus Standard Update – Signage (April 2013);
  • Vertical Tandem Lifts (May 2013);
  • Updating the Walking Working Surfaces standard, i.e., Fall Protection (by August 2013);
  • Changes to the Injury & Illness Recording/Reporting requirements (by May 2013), including moving from the SIC system to the NAICS and revising the criteria to increase the incidents that are required to be reported directly to OSHA;
  • Three new standards for whistleblower enforcement.

Additionally, OSHA has proposed regulations in the pipeline that will require more time to be completed:

  • Review/look back of OSHA Chemical standards;
  • New Beryllium standard;
  • New Bloodborne Pathogen standard;
  • New comprehensive Combustible Dust standard;
  • New Injury & Illness Prevention Program rule (I2P2), which has been a top priority for OSHA (targeted for SBREFA by end of this month and NPRM to be published by end of 2013 – both which are nearly impossible to meet since SBREFA has not started yet).

Although the timelines laid out in the regulatory agenda often are delayed, the list does provide the public some insight into what priorities OSHA has set for itself.  If you have any questions regarding any specific proposal, please contact your legal counsel.

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Yes, Dear, I Will Fire My Employee Because She is "Hot"

POSTED BY RICHARD D. TUSCHMAN ON DECEMBER 31, 2012

Can a boss fire an employee simply because he finds her attractive?  Yes, according to the Iowa Supreme Court in a recent decision, Nelson v. James H. Knight, DDS (Iowa, December 21, 2012).  And, lest you conclude that the case is an anomaly, the decision relies heavily on a 1990 decision by the Eleventh Circuit Court of Appeals (which covers Florida, Georgia and Alabama), Platner v. Cash & Thomas Contractors, Inc., 908 F.2d 902, 903–05 (11th Cir. 1990)).

Melissa Nelson was a dental assistant for Dr. Knight’s practice for ten years.  On several occasions Dr. Knight complained to Nelson that her clothing was too tight and revealing and "distracting."  Dr. Knight and Nelson also began texting each other on both work and personal matters. The texts typically involved updates on their kids’ activities and other innocuous matters; neither objected to the other’s texting. While Dr. Knight made a couple of inappropriate comments to Nelson (such as saying that she would know her clothing was too revealing if she saw his pants bulging), Nelson did not complain of sexual harassment.  However, Dr. Knight’s wife complained about their relationship when she discovered they were texting each other, and she demanded that he fire Nelson.  Dr. Knight and his wife consulted with the senior pastor of their church, who agreed that Nelson should be fired.  Dr. Knight fired Nelson, gave her a month’s severance pay, and replaced her with another female assistant.  Nelson sued, claiming that she was the victim of gender discrimination.

The Iowa Supreme Court disagreed. The court cited several cases in which courts have held that that an employer does not engage in unlawful gender discrimination by discharging a female employee who is involved in a consensual relationship that has triggered personal jealousy, absent allegations that the relationship stemmed from unwelcome sexual advances or a hostile work environment.  The court also cited the Eleventh Circuit’s decision in Platner, where the court upheld the termination of a female employee who worked on the same crew as the business owner’s son, after the wife of the business owner’s son became jealous of her.  The logic of all these decisions, the Iowa Supreme Court observed, is that it is not unlawful to make a decision "driven entirely by individual feelings and emotions regarding a specific person. Such a decision is not gender-based, nor is it based on factors that might be a proxy for gender." 

But isn’t it illegal sexual harassment for a boss to terminate an employee for refusing his sexual advances, even if the employee is the only target of his affections? Yes, but the Iowa Supreme Court rejected this analogy by noting that "sexual harassment violates our civil rights laws because of the 'hostile work environment' or 'abusive atmosphere' that it has created for persons of the victim's sex.  On the other hand," the court observed, "an isolated decision to terminate an employee before such an environment arises, even if the reasons for termination are unjust, by definition does not bring about that atmosphere." 

As the Nelson case illustrates, the line between illicit gender discrimination and lawful favoritism (or, in this case "un-favoritism") is not always clear.  Dr. Knight won his case and may have saved his marriage in the process, though it was probably a costly victory.  Employers with a similar issue should consult with an employment lawyer, not just a pastor. 

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