west branch 2017 (a5737475).pptx [read-only] · customized labor & employment law training for...

© McNees Wallace & Nurick llc

ACA Affordable Care Act (see also PPACA)ADA Americans with Disabilities Act of 1990ADAAA ADA Amendments Act of 2008ADEA Age Discrimination in Employment Act of 1967ALJ Administrative Law Judge

CBA Collective Bargaining Agreement CFPB Consumer Financial Protection BureauCOBRA Consolidated Omnibus Budget Reconciliation Act of 1985

DOL Department of LaborDOT Department of Transportation

EAP Employee Assistance ProgramEBSA Dept. of Labor’s Employee Benefits Security AdministrationEEOC Equal Employment Opportunity CommissionEPA Equal Pay ActERISA Employee Retirement Income Security ActESI Electronically Stored Information

FCRA Fair Credit Reporting ActFLSA Fair Labor Standards Act of 1938FMCS Federal Mediation and Conciliation ServiceFMLA Family and Medical Leave Act of 1993FTC Federal Trade Commission

GINA Genetic Information Nondiscrimination Act of 2008

HIPAA Health Insurance Portability and Accountability Act

I-9 Employment Eligibility and Verification FormICE Immigration and Customs Enforcement

LTD Long Term Disability

MWA Pennsylvania’s Minimum Wage Act

NLRA National Labor Relations Act of 1935NLRB National Labor Relations Board

OCRC Ohio Civil Rights CommissionOFCCP Office of Federal Contract Compliance ProgramsOSHA Occupational Safety and Health AdministrationOWBPA Older Workers Benefit Protection Act

PDA Pregnancy Discrimination ActPHRA Pennsylvania Human Relations ActPHRC Pennsylvania Human Relations CommissionPPACA Patient Protection and Affordable Care Act

SOX Sarbanes-Oxley Act of 2002STD Short Term Disability

Title VII Title VII of the Civil Rights Act of 1964

UC Unemployment CompensationULP Unfair Labor PracticeUSCIS U.S. Citizenship and Immigration ServicesUSERRA Uniformed Services Employment and Reemployment Rights Act of 1994

WARN Worker Adjustment and Retraining Notification ActWC Workers’ CompensationWHD Department of Labor’s Wage and Hour DivisionWPCL Pennsylvania’s Wage Payment and Collection Law

LABOR & EMPLOYMENT LAW ACRONYMS AND ABBREVIATIONSNavigating the Alphabet Soup

© McNees Wallace & Nurick llc

HEALTHCARE-RELATED ACRONYMS AND ABBREVIATIONS Navigating the Alphabet Soup

ACA Affordable Care Act (see also PPACA)

FPL Federal Poverty LevelFSA Flexible Spending AccountFT Full-TimeFTE Full-Time Equivalent

HCE Health Care ExchangeHHS U.S. Department of Health and Human ServicesHIPAA Health Insurance Portability and Accountability ActHRA Health Reimbursement AccountHSA Health Savings Account

IMP Initial Measurement Period

MEC Minimum Essential Coverage

OOP Out-Of-Pocket

PPACA Patient Protection and Affordable Care Act

QHP Qualified Health Plan

SMP Standard Measurement Period

Customized Labor & Employment Law Training for Your Workforce The McNees Labor and Employment Law Practice Group wants to help you build an efficient, effective training curriculum that is customized to suit the needs of your workforce. Let us work with you to craft a training program that will help ensure that your HR and management teams have the training they need to conduct business with the confidence that they are on solid legal footing.

You identify your priority training needs and your target audience, and we will tailor a training program just for you. Training topics cover the gamut from basic HR skill-building and general labor and employment law compliance, to narrowly focused, industry-specific topics. The length of your training program will vary based on your needs – from a 30-minute executive briefing to a full-day intensive workshop. Audiences may range fromsmall groups to your entire salaried or hourly workforce, Board members, supervisorystaff, and more. We can also design your training program to help you “train the trainer”– coaching your HR and management teams on how to effectively train hourly employeeson selected legal issues – and extend the value of your tailor-made training program. Allof our training programs are available on a fixed fee basis.

The training topics listed below provide just a sampling of the training programs that we can tailor to suit your Company’s needs.

HUMAN RESOURCES BUILDING BLOCKS• Identifying and Preventing Harassment and Discrimination in the Workplace

(module for hourly employees also available)• Employment Law 101• Hiring 101: Interviews, I-9s and Background Checks• Hiring 202: Offer Letters, Non-Competes and Employment Contracts• Introduction to Wage and Hour Law• FMLA/ADA 101: Employee Rights and their Limits• FMLA/ADA 202: Effective Administration of Leave and Accommodation Programs• Fundamentals of Effective Workplace Investigations• OSHA Compliance for HR Managers

LABOR RELATIONS• What Non-Union Employers Need to Know About the NLRA• What Union Employers Need to Know About the NLRA• Union Awareness: Best Practices and Policies• The Nuts and Bolts of Union Representation Elections• Managing a Unionized Workforce• Best Practices for Grievance Administration and Labor Arbitration• A Guide to Effective Labor Negotiations• Work Stoppage Contingency Planning

EMPLOYEE BENEFITS• What HR Needs to Know About Employee Benefits Law• Complying with the Affordable Care Act (Health Care Reform)• HIPAA Compliance for HR and Benefits Professionals• Understanding Your Section 125 Plan• Understanding Fiduciary Responsibility• Employee Benefits Law Update

HUMAN RESOURCES MANAGEMENT AND LEGAL COMPLIANCE• Wage and Hour Compliance Pitfalls• Advanced FMLA/ADA: Effectively Addressing the Toughest Challenges• Understanding Military Leave Laws and Other Leave Mandates• Your HR Audit: Identifying and Addressing Common Compliance Issues• A Roadmap for Use of Independent Contractors and Temporary Employees• The Ten Most Important Policies in Your Handbook (and How to Enforce Them)• How to Manage Toxic Employees• I-9 (Employment Eligibility) Compliance• Best Practices for Employee Discipline and Discharge• Effective Management of Unemployment Compensation Claims• Social Media and Electronic Resources in the Workplace• Administering Your Affirmative Action Plan• Administering Your Substance Abuse Testing Program• Avoiding Whistleblower and Retaliation Claims• Understanding Severance Agreements• Non-Competes and Confidentiality Agreements: Their Value and Their Limitations

MANAGEMENT TRAINING ESSENTIALS• Labor and Employment Law for Managers/Supervisors• Labor and Employment Law Essentials for In-House Counsel• Managing the Problem Employee: Documentation, Discipline and Discharge• FMLA/ADA for Managers: Your Rights and Obligations as an Employer• Your Role in a Government Inspection or Audit: Do’s, Don’ts and What to Expect• Anatomy of a Lawsuit: How Good Management Practices Make a Difference• Industry-Specific Wage and Hour Compliance Issues• Industry-Specific Labor and Employment Compliance Issues

SPECIALIZED TRAINING• Employment Law Update (topics tailored to your needs)• Understanding the Law and Limits of Employee Privacy• Reductions in Force and Early Retirement Programs• Tackling Equal Pay and Glass Ceiling Concerns• Designing Your HR Record Retention Program• Diversity in the Workplace• Litigation Basics: Privilege, E-Discovery and Case Management• Understanding DOT Testing and Fitness Regulations• Construction Industry: Complying With Prevailing Wage Laws• Construction Industry: Picketing, Reserve Gates and Protecting Your Machinery• An Introduction to Employment Practices Liability Insurance• Board Governance• Design Your Own Session

HARRISBURG, PATel: 717.232.8000 LANCASTER, PATel: 717.291.1177

SCRANTON, PATel: 570.209.7220

STATE COLLEGE, PATel: 814.867.8500

COLUMBUS, OHTel: 614.469.8000

www.McNeesLaw.com

How Can We Help You?As you develop your training plan for the coming year, consider the McNees Training Academy as your partner. For more information please contact any of our Labor & Employment attorneys in the offices below.

Mark A. Hipple 717.237.5367 [email protected]

Sarah K. Ivy 717.581.3725 [email protected]

Kelley E. Kaufman 717.237.5248 [email protected]

Donald R. Keller 614.719.5955 [email protected]

Stephen R. Kern 717.237.5350 [email protected]

Andrew L. Levy 717.237.5252 [email protected]

Adam R. Long 717.237.5209 [email protected]

Langdon T. Ramsburg717.237.5402 [email protected]

Adam L. Santucci 717.237.5388 [email protected]

Micah T. Saul717.237.5402 [email protected]

Joseph S. Sileo 570.209.7224 [email protected]

Jennifer E. Will 717.237.5418 [email protected]

Alice Ober Paralegal 717.581.3738 [email protected]

Charmaine Y. O’HaraParalegal 717.237.5272 [email protected]

Brian F. Jackson, Co-Chair717.237.5467 [email protected]

Eric N. Athey, Co-Chair 717.581.3708 [email protected]

John U. Baker 814.867.8500 [email protected]

Kathleen D. Bruder 717.237.5318 [email protected]

Crystal Clark 717.581.2313 [email protected]

Paul D. Clouser 717.581.2310 [email protected]

Denise E. Elliott 717.581.3713 [email protected]

Schaun D. Henry 717.237.5346 [email protected]

PaLaborAndEmploymentBlog.com

www.McNeesLaw.com

The McNees Labor & Employment Group

Harrisburg, PA Lancaster, PA Scranton, PA State College, PA Frederick, MD Columbus, OH Washington, DC

To help us understand the desired scope of your upcoming Human Resources Audit, please check the topics that you would like the audit to cover – or that you would like to discuss as a potential audit topic.


GENERAL POLICIES AND PROCEDURES:____ Review of Employee Handbook and Related HR Policies/Procedures ____ Review of Employee Benefit Plans and Related Documents (ERISA, COBRA, HIPAA, PPACA, Section

125, beneficiary designations, IRS determination letters, etc.)

HIRING:____ Review of Hiring Process (e.g. Application for Employment, Interview Questions, Job Advertisements, Job

Postings, On-line Inquiries and Processes, Offer Letters, Reference Checking, Selection/Non-Selection Memos, Employment Agreements)

____ Review of Supervisory and Employee Orientation and Training Programs ____ Review of I-9 Compliance____ Review of E-Verify Compliance____ Review of Compliance with Fair Credit Reporting Act, Criminal History Information Act and Related

Background Check Issues____ Review of Orientation Processes for Hourly and Salaried Employees (key policy discussion, sign-off,

recertification)____ Review of Protections for Proprietary Information (use of and clearance from non-competes, non-disclosure/

trade secret agreements)

HUMAN RESOURCES MANAGEMENT:____ Review of Corrective Action Procedures and Documents (corrective action procedures, action plans,

documentation, follow-up, attorney-client privilege issues, record retention)____ Review of Performance Evaluation and Performance Management Processes (evaluation forms, disciplinary

record forms)____ Internal Investigations (protocol, documentation, attorney-client privilege issues, record retention)____ Review of Internal/External Job Posting Processes (protocol, documentation, attorney-client privilege issues,

record retention)____ Review of Job Descriptions (e.g. ADA essential function designations, support of exempt designations, format)____ Review of Human Resources Training Program (for HR Professionals)____ Review of HR Vendor Agreements

TERMINATION AND POST-EMPLOYMENT:____ Review of Reduction in Force Procedures and Related Documents____ Review of Termination Procedures and Documents (termination letter, disciplinary procedures, severance

agreements, reference policy, attorney-client privilege issues, record retention)____ Review of Unemployment Compensation Control Procedures____ Review of post-termination communications protocol (internal/external communications,

references, employee inquiries)____ Review of Protocol for Enforcing Post-Employment Covenants (enforcement of non-competes, non-

disclosure/trade secret agreements)

McNees Wallace & Nurick LLC

Defining the Scope of Your HR Auditwww.McNeesLaw.com

FAIR EMPLOYMENT PRACTICES AND FMLA COMPLIANCE:____ Review of EEO and harassment policies and prevention efforts (policy review, employee education,

investigation, documentation, follow-up, attorney-client privilege issues, record retention)____ Review of ADA Compliance Procedures and Practices (e.g. interactive process for accommodation,

confidentiality, return from leave issues, ergonomics, etc.)____ Review of EEO-1 Reporting Compliance ____ Review of Employee Demographics and Turnover for Potential EEO Compliance Concerns____ Review of OFCCP/Affirmative Action Plan Compliance____ Review of Equal Pay and Discriminatory Pay Practices Concerns____ FMLA Compliance (e.g. procedure for designation, policy, recordkeeping, reinstatement)

COMPENSATION:____ Review of Wage and Hour Practices

____ Exempt/Non-Exempt Determinations____ Minimum Wage____ Overtime Payment (e.g. bonus credit, multiple rate, comp time, carryover, etc.)____ Hours Worked (start/stop, meals/breaks, on-duty vs. off-duty)____ Child Labor____ Authorization of Deductions____ Final Pay Issues____ Recordkeeping

____ Review of Compensation Program (hourly, salaried, executive, job valuation, grades and steps)____ Review of Use of Independent Contractors, Temporary Employees and other Contingent Workers (e.g.

independent contractor agreements, staffing services agreements, IRS/DOL compliance)____ Review of Employment Tax and Withholding Practices

POSTING AND RECORDKEEPING:____ Review of Required Employee Posting s____ Review of Personnel File Record Retention Practices (e.g. Wage/Hour Records, ADA compliance, Retention/

Destruction practices, HIPAA compliance, Personnel Files Act)____ Review of HR Records Retention Schedule____ Review of e-Discovery Protocol____ Review of Confidentiality Practices Relating to HR Records

SAFETY AND MEDICAL ISSUES:____ Review of OSHA Compliance

____ Recordkeeping____ MSDS Program____ Lockout/Tagout Program____ Workplace Violence Prevention____ First Responder Program____ Bloodborne Pathogens Program____ General Duty Clause Issues (Ergonomics and other known hazards)

____ Review of Medical Emergency Protocol____ Review of Workers’ Compensation Protocol (physician panel, notification process, documentation)____ Review of Drug Testing Policies and Related Documents and Protocol____ Review of Medical Privacy Practices (HIPAA, ADA, GINA, FMLA, HIV-related information)


LABOR RELATIONS:____ Review of Union Avoidance Plan ____ Review of Collective Bargaining Agreements (issue spotting, suggestions for future negotiation)____ Review of Supervisory Status Among Current Employees

MANAGEMENT/SUPERVISORY TRAINING SESSIONS:____ Performance Management and Discipline____ Drug and Alcohol Testing Issues____ FMLA / ADA / Work-Related Injuries____ Discriminatory Harassment ____ Diversity in the Workplace____ Workplace Violence____ Electronic Resources and Social Media Policies____ Interviewing / Hiring____ Confidentiality and Medical Records____ Litigation Basics: e-Discovery, Privilege, Litigation Holds and More____ Wage and Hour Issues for Supervisors and Managers____ Employment Law for Managers____ Employee Benefits Law for Managers____ Preventing Harassment in the Workplace____ Understanding Your Role in ADA/FMLA Compliance____ A Manager’s Guide to Wage and Hour Compliance____ Conducting Effective Workplace Investigations____ A Manager’s Survival Guide to Employment Laws____ Do’s and Don’ts in Interviewing and Hiring____ Performance and Disciplinary Documentation____ HR’s Guide to I-9 Compliance____ Managing a Unionized Workforce____ Avoiding Union Activity____ Protecting Your Company’s Confidential Information____ Handling Employee Medical Records (HIPAA, ADA, FMLA)____ Do’s and Don’ts for Administering Your Drug and Alcohol Testing Program____ Preventing and Responding to Violence in the Workplace____ Litigation Basics: Privilege, Litigation Holds and E-Discovery____ Employment Law Refresher____ Workplace Privacy____ Independent Contractor Designation____ Avoiding Retaliation and Whistleblower Claims____ Employee Benefits Law Update____ Managing in the Electronic Age____ Other (Please explain):_____________________________________________________________


With the many interesting ways employees find to get into trouble at work and the ever-changing maze of statutes and regulations, sometimes it may seem like human resource and labor compliance is nearly impossible. With the right plan and the right team, it is possible.

The McNees Labor and Employment Group helps employers solve the seemingly endless array of issues that arise in the workplace by doing exactly that: we partner with employers to address the complex web of federal and state employment statutes and regulations. We assist in developing a proactive, comprehensive approach to compliance. We help you craft the policies, procedures, handbooks, and training programs that will help avoid workplace issues. But when issues do arise, we will provide advice and counsel in real time to help put out the fire.

We pride ourselves on our long-term, trusting relationships with our clients. Our goal is to allow you and your organization to focus on your goals – growth and success – as much as you can. We understand that sometimes all of best intended efforts cannot prevent a government investigation or discourage an employee or former employee from filing a claim. And when that happens, we are ready to roll out an aggressive and efficient strategy to defend you and your organization. We frequently defend our employer clients before state and federal administrative agencies and in the state and federal courts.

The Labor and Employment Group provides detailed, effective legal representation and counseling to employers on a broad range of matters, including: Human Resource auditing; supervisor/manager/employee training; internal and external investigations; affirmative action compliance; Family and Medical Leave Act compliance and litigation; labor negotiations, labor arbitration, and other disputes with unions (private and public); employment discrimination and harassment litigation; non-compete and other restrictive covenant litigation; occupational safety and health; wage and hour compliance and litigation; unemployment compensation; workers’ compensation; wrongful discharge; statutory and regulatory compliance; and ERISA compliance and litigation.

The Labor and Employment Group includes Employee Benefits and Workers’ Compensation attorneys and professionals. Our Benefits professionals provide end-to-end services for savings, retirement, pension and welfare plans, as well as multiemployer pension plans, and our Benefits attorneys regularly assist with executive compensation plans and ERISA compliance and litigation. Our Workers’ Compensation attorneys assist employers to develop effective injury prevention strategies, and when necessary, by defending employers when facing claims.

We all pride ourselves on putting Clients First, which means that we focus on our clients’ goals and interests above all else. When we are considering fee structures, developing a solution to a legal problem, reviewing a new legal development, we are guided by asking and answering the very basic question: How can we help our client?

We strive to see the world through our clients’ eyes. We learn your business. We understand your challenges and your goals and this helps us to develop the best legal strategies. We take ownership of our relationship with you.

The McNees Labor and Employment Group

Brian F. Jackson, Co-Chair 717.237.5467 [email protected] Eric N. Athey, Co-Chair 717.581.3708 [email protected] John U. Baker 814.867.8500 [email protected] Kathleen D. Bruder 717.237.5318 [email protected]

Crystal Clark 717.581.2313 [email protected]

Paul D. Clouser 717.581.2310 [email protected]

Joshua Cohen 717.581.3719 [email protected]

Denise E. Elliott 717.581.3713 [email protected]

Schaun D. Henry 717.237.5346 [email protected] Mark A. Hipple 717.237.5367 [email protected]

Sarah K. Ivy 717.581.3725 [email protected]

Kelley E. Kaufman 717.237.5248 [email protected]

Donald R. Keller 614.719.5955 [email protected] Stephen R. Kern 717.237.5350 [email protected] Andrew L. Levy 717.237.5252 [email protected]

Adam R. Long 717.237.5209 [email protected]

Langdon Ramsburg 717.237.5402 [email protected]

Adam L. Santucci 717.237.5388 [email protected] Micah T. Saul 717.237.5402 [email protected]

Joseph S. Sileo 570.209.7224 [email protected]

Jennifer E. Will 717.237.5418 [email protected] Lori A. Ham, Litigation Support Manager 717.237.5371 [email protected] Charmaine Y. O’Hara, Paralegal 717.237.5272 [email protected]

www.McNeesLaw.com

LABOR & EMPLOYMENT

5/10/2017

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© 2017 McNees Wallace & Nurick LLC www.mcneeslaw.com

May 17, 2017John Baker Eric Athey814.867.8500 [email protected] [email protected]

YEAR IN REVIEW:

LABOR AND EMPLOYMENT LAW

West Branch Human Resource Society


EEO CASE LAW UPDATE: FEE AWARDS

CRST Van Expedited v. EEOC (S. Ct. 2016)

Background

o EEOC filed suit alleging that 250 female employees had been subjected to sexual harassment

o All claims were dismissed; employer awarded $4M in attorneys’ fees

o On appeal – claims of lead plaintiff and one other employee reinstated; fee award vacated; remanded back to trial court

o On remand – lead plaintiff settled; other claim dismissed; fee award reinstated

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EEO CASE LAW UPDATE: FEE AWARDS

CRST Van Expedited v. EEOC (S. Ct. 2016)

Supreme Court held unanimously that the employer does not have to “win” the case to be a “prevailing party” entitled to attorneys’ fees.

Issue with EEOC’s investigation and/or failure to resolve the case before filing suit could be sufficient to find that employer prevailed

Supreme Court remanded to trail court for a determination of whether the employer qualified as a “prevailing party”

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EEO CASE LAW UPDATE: VACCINATIONS AND RELIGIOUS ACCOMMODATIONS

Fallon v. Mercy Fitzgerald Hospital (E.D. Pa. 2016)

Facts:

o Hospital required flu vaccines for all employees unless granted an exception for medical or religious reasons

o Fallon’s request for “religious exception” denied in 2014

o He failed to provide a letter from clergy; wrote a 22 page essay instead (did not belong to an organized religion; objections based on his moral belief system)

Holding:

o Suit dismissed

o Fallon’s beliefs were personal and social – not spiritual

o Failed to contend that others shared his belief system

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REGULATORY UPDATE: THE NEW PROTECTED CLASSES

Oncale v. Sundowner Offshore Svcs., (S. Ct. 1998): recognition that same sex sexual harassment is unlawful under Title VII

Post Oncale EEOC Litigation Position:

Law prohibits discrimination based on “failure to confirm to gender stereotype” but not discrimination based on sexual orientation

2014-2015: EEOC receives over 1000 sexual orientation discrimination charges each year

7/16/15: EEOC issues internal opinion that denial of promotion based on sexual orientation is equivalent to sex discrimination under Title VII

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EEO CASE LAW UPDATE: LGBT – THE NEW PROTECTED CLASS

3/1/2016: EEOC files two federal lawsuits alleging unlawful sexual orientation discrimination on the part of Scott Medical Center (PA) and Pallet Cos. (MD)

Pallet Cos. settled for $202,200 in June 2016

EEOC v. Scott Medical Health Center (W.D.Pa. 11/7/2016): Court refuses to dismiss EEOC complaint; says: “discrimination on the basis of sexual orientation is, at its very core, sex stereotyping plain and simple.”

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Macy v. Holder (7th Cir. 7/28/2016): holds Title VII does not cover sexual orientation – applies in Illinois, Indiana and Wisconsin – but Court reverses itself on 4/4/17 in Hively v. Ivy Tech

Similar decisions to Macy have been issued by nearly all other federal appellate courts –including the 3rd Circuit (Bibby v. Philadelphia Coca-Cola Bottling Co.)

A “split among the circuits” on such an important issue means the Supreme Court will likely step in

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Pennsylvania weighs in: Governor Wolf signed two executive orders in 2016 protecting the rights of LGBT individuals

Prohibits discrimination by state agencies and by state contractors and companies who receive state grants

Requires that state agencies and contractors have a written sexual harassment policy and employee awareness as a condition of payment and/or funding

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TAKEAWAYS

Gender identity and orientation issues are not new

Supreme Court decision in Obergefell (upholding right of same sex marriage) is causing some courts to re-evaluate whether Title VII prohibits discrimination on the basis of sexual orientation

Title VII link is gender stereotyping

28 states have employment laws relating to gender ID or sexual orientation

Federal contractors may not discriminate based on gender ID or sexual orientation

ACA prohibits “covered entities” from discriminating on the basis of “sex” – which is defined in the regulations to include gender identity

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CASE LAW UPDATE: ADEA – DISPARATE IMPACT

Karlo v. Pittsburgh Glass Works (3rd Cir. 2017)

Employees 50 years old and over claim disparate impact as part of a reduction in force

The ADEA protected class is 40 years and older

The employer argues that disparate impact analysis should be based on impact to employees under and over 40

The plaintiff employees argue for analysis of disparate impact on sub-group 50 and older

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CASE LAW UPDATE: ADEA – DISPARATE IMPACT

The Federal 3rd Circuit becomes first appellate court to recognize "subgroup" disparate impact claim

What is an employer to do?

Disparate impact analysis should include subgroup comparisons within the protected class

Employers should have criteria for a RIF set in advance of the final decision and involve counsel

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CASE LAW UPDATE: FMLA

Capps v. Mondelez Global, LLC (3rd Cir. 2017)

An employee on intermittent FMLA goes to a bar, gets drunk (4 times the legal limit) and gets arrested for a DUI

His employer finds out later through the local paper and determines that the offense and court dates occurred while using intermittent FMLA

The employer terminates the employee for misuse of FMLA leave

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CASE LAW UPDATE: FMLA

The employee sues for retaliation under the FMLA and ADA violations related to his use of intermittent leave.

The Good: The employer's objective and good faith belief sufficient to defeat intent needed to support a claim for retaliation

The Bad: The court suggests that a request for intermittent FMLA could also be a request for accommodation under the ADA requiring the employer to go further than just providing FMLA

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REGULATORY UPDATE: ADA LEAVE AS AN ACCOMMODATION

May 9, 2016: EEOC Issues First Guidance on Extended Leave As An Accommodation Under the ADA

Key Points:

o Employees with disabilities must be provided access to leave on the same basis as other similarly situated employees

o An Employer must consider offering unpaid leave even if employer doesn't offer it, the employee isn't eligible, or employee has exhausted all leave

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More Highlights…

FMLA compliance does not equate to ADA compliance

FMLA leave can be considered as part of whether overall leave request is undue hardship

Maximum leave and 100% healed policies are problematic

Reassignment: No competition with other applicants

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Undue Hardship Analysis:

Amount/length/frequency of leave request

Predictability of leave

Impact on co-workers and overall productivity

o Morale of co-workers may not be relevant

Size and resources of employer

Indefinite leave requests are an undue burden

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REGULATORY UPDATE: EEOC RETALIATION GUIDANCE – 8/29/16

EEOC finalized retaliation enforcement guidance have a clearly worded anti-retaliation policy including:

Examples of retaliation

Suggestions for avoiding retaliation

Instructions on reporting

A disciplinary prong

All employees must be trained on policies

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REGULATORY UPDATE: EEOC RETALIATION GUIDANCE

Guidelines Expand Protections

Participation includes internal complaints

Managers should be able to raise claims when they have supported employees against management

Allows employees to talk dollars

Broad view of adverse action

Mosaic approach to "but for" cause

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REGULATORY UPDATE: EEOC GUIDANCE/MENTAL HEALTH

December 2016, EEOC Issues "Resource Document" regarding mental health and ADA

Mental health conditions must be accommodated like any other qualifying disability

The employer must have "objective evidence" of a direct threat to safety or inability to perform job

Employees maintain right to privacy and not to disclose mental illness with limited exceptions

o Special privacy concerns under PA law

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REGULATORY UPDATE: WEBSITE ACCESSIBILITY

US DOJ: ADA requires public and private entities to make their websites accessible to disabled individuals

Currently no specific accessibility standard

Web Content Accessibility Guidelines Version 2.0 levels A and AA (WCAG 2.0 AA) is accepted by DOJ

Web accessibility has resulted in government enforcement actions and a cottage industry of private actions

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WHAT’S AHEAD?MEDICAL MARIJUANA IN PENNSYLVANIA

Medical marijuana law effective May 17, 2016

Legalizes the use of marijuana for certain enumerated medical conditions

Requires medical certification

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Employment Provisions

Anti-discrimination and retaliation provisions for certified users

Does not require accommodation for use on the premises or property of the employer

Permits discipline for those "under the influence" in the workplace

Permits discipline where use causes employee's performance to "fall below the standard of care normally accepted" for the position

Prohibits employees from performing safety sensitive jobs

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Law was effective May 17, 2016 but . . .

Unclear when dispensaries will be up and running

Unclear when certifications will be issued

Regulations with additional guidance to be issued

What constitutes under the influence? Who decides?

What about medical marijuana use prescribed out of state?

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Looking ahead, policies may need to be updated

Anti-discrimination and retaliation policies?

Americans with Disabilities Act policy?

Drug and Alcohol testing policies?

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WRONGFUL DISCHARGE UPDATE

Wakely v. M.J. Brunner, Inc. (Pa. Super. 2016)

Recruiter contacts Ms. Wakely about digital recruiter position in Pittsburgh

Ms. Wakely accepts job and 5 days later offer rescinded due to “change in business”

Next month, recruiter contacts Ms. Wakely about another job at same employer

Vacancy due to maternity leave – but assurance of permanent position

June 2012: Relocates from Dallas, TX to Pittsburgh, PA ($9000 relocation benefit paid)

No training provided

Performance Problems: 1) conference call goes awry; 2) unsatisfactory email exchange

September 2012: Terminated 4 days before incumbent returns from maternity leave

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WRONGFUL DISCHARGE UPATE (cont.)

Wakely v. M.J. Brunner, Inc.

Legal Claims:

o Breach of implied contract

o Breach of express contract

o Fraudulent inducement

Job Application and Offer Letter both confirm At-Will Employment (but application was for prior vacancy)

Confirmation letter: “This is not a contractual agreement…and we want to point out your employment…is on an at-will basis.”

Presumption of at-will can be overcome if employee gives consideration beyond services she was hired for

Court: Leaving other job and relocating does not overcome at-will status in light of confirmation letter language

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NLRB UPDATE

Class Action Waivers

NLRB position continues to be that class action waivers violate NLRA

Ralph’s Grocery, 363 NLRB No. 128 (2016)

Federal courts split on subject (3 uphold/2 invalidate)

3rd Circuit has not ruled

Supreme Court to decide issue

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NLRB UPDATE (cont.)

Joint Employer Status

Browning-Ferris (2015): Temp employee jointly employed by agency and host employer

Impact: Both employers may be required to negotiate; both may be liable for ULPs

Miller & Anderson, Inc. (2016): Temps may be combined with regular employees into single unit without consent of agency and host

“…each employer is obligated to bargain only over those employees with whom it has an employment relationship.”

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NLRB UDPATE (cont.)

Unionizing for College Credit?

Columbia University teaching and research assistants seek to unionize

Issue: Are they primarily students or employees?

NLRA does not specifically exempt students

NLRB reverses 2004 Brown University decision

Graduate assistants now permitted to organize unions and bargain with their universities

Impact on tuition and assistantships?

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NLRB UDPATE (cont.)

The Attack on Innocuous Policies Continues

Minteq Int’l: Non-compete Agreement: “Employee may not interfere with customer relationships”

Component Bar Products: Handbook rule prohibiting “insubordination or other disrespectful conduct.”

Valley Health Systems: Handbook rule prohibiting “offensive” conduct

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OSHA UPDATE

Injury Reporting Rule

29 C.F.R. Section 1904.35(b)

Reasonable procedures for employee prompt reporting of illnesses/injuries required

Deterrents are not reasonable

Retaliation for reporting prohibited

Blanket post-accident drug/alcohol testing policies may be retaliatory

Incident-based safety incentive programs may be deterrents

Lawsuits challenging rule continue31


OSHA UPDATE (cont.)

Penalties Sharply Increase

First increase in 25 years

Inflation-based adjustment to 1990 penalty levels

Eff. 8/1/2016

Max penalty for Serious/Other/Failure to Abate/Posting Violations: $12,675

Max penalty Willful/Repeat: $126,749

Adjustments due to employer size and other factors remain applicable

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OSHA UPDATE (cont.)

New Reporting Rules Take Effect

Effective 1/1/2017 (phase in over 2 years)

First reports due 7/1/2017

Supplement Reporting on OSHA 300, 301 and 300A

Covers non-exempt establishments with at least 250 employees

Electronic submission of data from OSHA reports

Smaller employers in high risk industries submit Form 300A data

Some data posted on OSHA website

Lawsuit pending in U.S. District Court W.D. Okla.

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OSHA UPDATE (cont.)

Workplace Violence

No rule or regulation in effect

General duty clause

Guidance issued over years for select industries (health care, night retail)

Home health care company operating in York, PA

o Report of sexual assaults by client in home

o Repeat occurrence with other employee

Ignoring warning signs = “willful” citation under General Duty clause

$70,000 penalty (plus additional $28,000 for recordkeeping violations)

Abatement:

o Workplace violence prevention program

o Hazard assessment/procedures for each new client

o Training

o Post-incident reporting

34


OSHA UPDATE (cont.)

OSHA and Severance Agreements (Huh?!?)

OSHA Guidelines issued 9/9/2016

Severance agreement verbiage may restrict OSHA-protected activity

o Restricting employee ability to provide information, complain, testify or participate in government investigation

o Requiring employee to notify employer before filing any complaint

o Requiring employee to disclaim any knowledge that employer has violated law

o Requiring employee to waive right to monetary award from government whistleblowing program

Guidance provides suggested language

35


I-9 UPDATE: NEW FORM AND HIGHER PENALTIES

New I-9 Form Effective 1/22/2017 (Rev. Date 11/14/2016 N)

Unlawful hiring: Max Penalty $4313 first offense /$21,563 third offense

Paperwork violations: Minimum Penalty $216/ Max Penalty $2,156

Unfair employment practices: Max Penalty $3,563 first offense/$17,816 third offense

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WHAT'S NEXT: NEW WAYS A MOBILE PHONE WILL GET EMPLOYEES IN TROUBLE

Commonwealth v. Smith (Pa.Super. 2/19/16)

An employee is called into the office to talk to his boss about an ethics complaint that he made

He sees the complaint on the desk and activates the "Voice Notes" app on his smart phone



The boss finds out and the employee is charged with violating the Pennsylvania Wiretap Act

The employee files a motion to have charges dismissed

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The trial court held that the recording is lawful because the recording fell within the telephoneexemption to the Wiretap Law

Distinguishes Comm. v. Spence, (Pa. 2014)(policeman listening to drug sale via speaker on buyer’s smart phone is not wiretapping)

On appeal, the Superior Court held that the recording was unlawful, because the result (a surreptitious recording) was the same as a wiretap no matter the type of recording device utilized

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RESTRICTIVE COVENANT UPDATE

B.G. Balmer & Co. v. Frank Crystal & Co.

EVP and others collaborate with competing insurance brokerage to solicit employees to join competitor

Employees encouraged to bring clients with them

Confidential information and trade secrets used to solicit more than 25 large clients

Prior to departure, new employer notified of non-solicitation restrictions

New employer makes offers to all employees except owner

All employees leave – some with client lists and policy details

PA Superior Court awards $4.5M in punitive damages

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UNEMPLOYMENT COMPENSATION UPDATE:YOU BE THE JUDGE!

Willful Misconduct or Eligible for UC?:

Ritter v. UCBR (2016)(Onsite recruiter a no-call/no-show for 2 months due to incarceration – but cleared of all charges)

Reading Area Water Auth. v. UCBR (2016)(maintenance worker removes parts from scrap pile; claims business reason. Employer relies on evidence of criminal charge and ARD)

Ratkovich v. UCBR (2017)(USPS driver loses license for 3 years for DUI. Policy allows driver to secure friend to drive for 1 year. Driver terminated after 1 year)

41


WHAT’S AHEAD?

Trump’s Predicted Labor & Employment Law Agenda

Replace/Repair Parts of ACA

Simplify Wellness Plan restrictions

Install NLRB that reverts case law to pre-Obama Board precedent

Cancel EEO-1 expansion

Undo multiple Obama era executive orders

Withdraw FLSA overtime regulations

Limit H-1B visa program or increase employer costs; broaden E-Verify

Paid maternity leave?

National Right to Work Law?

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5/10/2017

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ACA “REPEAL AND REPLACE” STALLED “American Health Care Act” introduced(3/6/2017)

Cadillac Tax for 2018 out – but reappears in 2025

Employer mandate out – but Employer Reporting remains?

Premium subsidies out and age-adjusted tax credits in (2020)

HSA/FSA tax favored status for OTC medications

Lift caps on FSAs/Increase limit on HSA contributions

Per capita state funding of Medicaid (effective 2020)

Employer and Individual Mandates Out – but individuals may be charged higher premium without continuous coverage (2019)

Limit on Employer Health Coverage Exclusion (amounts over 90th

percentile taxes as wages)

Repeals Revenue Provisions: Tanning tax, brand drug tax, high income Medicare tax, health insurance tax

Surviving: pre-existing condition exclusions prohibited, dependent coverage to 26, non-discrimination, no annual/lifetime limits, no health status underwriting, capped OOP costs

43


WHAT’S AHEAD?

State/Local Law Trends (Across the Nation)

Paid Sick Leave (Six states; Federal Contractors; Philadelphia Ordinance)

Paid Family Leave (Five states; Three additional states pending; Trump campaign plank)

Salary History (MA passes law in 2016; Philadelphia Ordinance) – goal is to combat gender-based pay disparity

Other issues continue to percolate: Ban the Box, Pay Equity, LGBT protections, etc.

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4545

Questions?

Visit us:

www.palaborandemploymentblog.com

5/10/2017

1


West Branch Human Resources Seminar

WAGE AND HOUR UPDATE

Joseph Sileo

125 N. Washington Avenue, Suite 220

Scranton, PA 18503

(570) 209-7220


RECENT WAGE AND HOUR CASES

Payroll Debit Cards

Issue: May an employer require payment of wages via payroll debit card?

PA Wage Payment and Collection Law (WPCL): Payment of wages must be “in lawful money of the U.S. or check”

Siciliano v. Mueller (10/21/16): PA Superior Court holds mandatory use of payroll debit cards that may subject users to fees violates WPCL

Open questions: What if users were not subject to potential fees? Same result for direct deposit?

2


RECENT WAGE AND HOUR CASES

Payroll Debit Cards (cont.)

11/4/2016: Two weeks after Siciliano decision, Act 161 signed into Law – amending PA Banking Code

Payroll debit cards may be used for wage payment if:

o Use is optional for employee;

o Notice and authorization requirements;

o One free withdrawal of wage per pay and one in-network ATM withdrawal per week;

o Employee enabled to check card balance without charge electronically or by phone; and

o No fees associated with certain card uses (e.g. issuance, one replacement/year, non-use)

Effective May 20173

5/10/2017

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RECENT WAGE AND HOUR CASES: CAN PAID MEAL AND REST PERIODS BE USED AS OFFSET UNDER THE FLSA?

Smiley v. E.I. Dupont (3rd Cir. October 2016)

Facts:

o DuPont pays employees for meal breaks;

o DuPont used the benefit of paid meal breaks to offset unpaid donning and doffing time before and after shifts;

o Does a paid lunch break make an employee whole for unpaid hours worked before and after a shift?

4


RECENT WAGE AND HOUR CASES: CAN MEAL AND REST PERIODS BE USED AS OFFSET UNDER THE FLSA? (cont.)

The Federal Third Circuit Court of Appeals says NO!

The employer's choice to offer paid lunch breaks is not a permissible offset to paying for hours worked

Paid lunch breaks are counted toward hours worked even if an employee is completely relieved of duty

5


PENDING WAGE AND HOUR CASES: ARE CLASS ACTION WAIVERS IN ARBITRATION AGREEMENTS ENFORCEABLE?

Ernst & Yound v. Morris

Epic Systems Corp. v. Lewis

NLRB v. Murphy Oil USA, INC.

Consolidated cases pending before U.S. Supreme Court (certiorari granted Jan. 13, 2017)

Issue - Whether the National Labor Relations Act prohibits the enforcement of an agreement requiring an employee to arbitrate claims against an employer on an individual basis rather than by a class or collective action

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ARE CLASS ACTION WAIVERS IN ARBITRATION AGREEMENTS ENFORCEABLE? (Cont.)

Conflicting Decisions by Circuit Courts of Appeals

9th and 7th Circuits – and NLRB – say no

2nd, 5th and 8th Circuits say yes

National Labor Relations Act vs. Federal Arbitration Act

NLRB – affords employees substantive right to engage in concerted activity (act collectively) with respect to wages and other terms and conditions of employment

FAA – promotes/protects enforceability of arbitration agreements and generally requires courts to enforce arbitration agreements 7


ARE CLASS ACTION WAIVERS IN ARBITRATION AGREEMENTS ENFORCEABLE? (Cont.)

Employers fare better with individual claims and arbitration

Supreme Court will decide the issue and resolve split among the circuit courts

The Supreme Court has generally favored enforcement of arbitration agreements

o AT&T Mobility LLC v. Concepcion (2011) – Supreme Court held FAA preempted state laws conditioning arbitration agreement on the availability of class action arbitration procedures

Stay Tuned!!

8


FLSA REGULATORY UPDATE

New Overtime Regulations Derailed in 11th Hour and Still on Hold

Regulations would have increased minimum weekly salary for exempt white collar employees from $455 to $913

Intended Effective Date: 12/1/2016

Employers everywhere were dreading the change and taking steps to comply (scrambling? panicking?)

THEN……..

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STATUS OF NEW OT REGS (cont.)

11/22/2016 – a Texas federal court issued a nationwide Preliminary Injunction blocking implementation of the new regulations

The DOL (under the Obama administration) appealed the ruling to 5th Circuit Court of Appeals

o Request to fast track the case was granted

Current Status – Trump's DOL has been granted at least three extensions (most recently a 60-day extension to June 30, 2017) to file a reply brief in connection with the appeal

o Extensions were requested for the stated purpose "to allow the incoming leadership adequate time to consider the issues."

10


STATUS OF NEW OT REGS (cont.)

What will happen on appeal?

It's anybody's guess, but it is a very real possibility that Trump's DOL will withdraw the appeal and abandon the new salary rule

Reasons why Trump's DOL may walk away –

o It's Obama's rule

o Push to reduce new regulations

o Advance pro-business agenda

11


FMLA REGULATORY UPDATE

Joint Employer Liability – New FMLA Guidance

WHD Fact Sheet #28N (January 2016)

Primary and Secondary Employer Responsibilities Under FMLA (e.g. staffing companies and host employers)

Each company's workers may count toward FMLA jurisdiction for the other company

Primary Employer: hire/fire, pay, administer leave and benefit policies, FMLA notices, etc.

Secondary Employer: may be required to reinstate after leave; cannot interfere with FMLA rights

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5/10/2017

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REGULATORY UPDATE: MANDATORY PAID SICK LEAVE RULES

OFCCP final rules issued September 2016; effective June 2017

Seven days of paid leave for own illness, doctor's appointments, sick family absences, absences related to domestic violence

Narrower than expected; impacts only:

Procurement construction contracts under Davis Bacon;

Service contracts covered by Service Contract Act;

Concessions contracts on federal property; and

Contracts in connection with land or property leases

Medical certification – can be required only for absences of three days or more

13


REGULATORY UPDATE: FAIR PAY

Executive Order re: Paycheck Transparency; applies to Federal Contracts on or after 1/1/2017 and exceed $500,000

Wage statement must be provided to all individuals performing work on the contract; statement must include hours and overtime hours worked each pay period and broken down by:

Week;

Rate of pay;

Gross pay; and

Itemization of deductions from gross pay

Independent contractors must be informed of their status as an independent contractor

14


REGULATORY UPDATE: MINIMUM WAGE FOR CONTRACTORS

Executive Order 13658 established $10.20/hour as the minimum wage for federal contractors (effective 1/1/2017)

Tipped employees minimum wage = $6.80/hour

Applies to new contracts and replacements for expiring contracts resulting from solicitations issued on or after 1/1/2015 or to contracts awarded outside the solicitation process on or after 1/1/2015

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MINIMUM WAGE UPDATE BT (Before Trump)

o Minimum Wage Increases were Trending

o In 2016 alone, seven states and 18 localities passed new laws/ordinances establishing or increasing minimum wage rates

o Although still a popular political agenda item, there are signs of restraint

o More states are considering municipal preemption laws that will prohibit localities from adopting minimum wage rates

o Some minimum wage proposals have failed and existing minimum wage rates are under reconsideration

Montgomery County, Maryland – veto of $15 minimum wage rate

Flagstaff Arizona – Considering roll back of/alternatives to scheduled minimum wage rate increase to $15

o No legislation pending right now to raise federal minimum wage

o At least for now, a new minimum wage is unlikely under this administration/legislature

o But, minimum wage rate has been increased for certain federal contractors

16


MINIMUM WAGE UPDATE (Cont.) In Pennsylvania:

o Governor Wolf has been strong proponent of increasing the state minimum wage

o His 2017-2018 executive budget proposal calls for a minimum wage rate increase from the current rate – $7.25/hr. to $12/hr.

o Good or Bad?

o Supporters say the two-thirds increase will benefit working families and allow them to earn a fair and life-sustaining wages

o Critics say it will hurt businesses, local economies, consumers and workers because it will result in reductions in staff/layoffs, price increases and other unintended consequences

o Not likely to succeed

o Opposition is strong in the House and Senate (both Republican majorities)

o If passed, $12 minimum would make minimum wage rate in PA highest compared to all neighboring states

NY/$9.70 hr.

Ohio/$8.15 hr.

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The Trump Administration

What Lies Ahead?

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The Last Eight Years

Employees Rejoice!!!

Affordable Care Act (Obamacare)

Quickie union elections

NLRB General Counsel attacking Employee Handbooks

o Extensive social media protections

Wage and Hour Regulation overhaul

EEOC efforts

o Expansion of gender identity and sexual orientation protections

o Pay equity

o And on and on and on!19


So….will the pendulum swing back to the Employer side?

20


Competing Interests?

Easing regulatory burden on businesses/employers

Creating/retaining higher paying jobs in U.S.

Recognizing the Trump Base: Disaffected Middle Class

21

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So….not as simple as prior pendulum swings?

22


New DOL Secretary

Alexander Acosta

Former U.S. Attorney

Former NLRB Board Member

Led Department of Justice Civil Rights Division

On April 27, 2017, the Senate confirmed Acosta (by 60-38 vote) as the 27th U.S. Secretary of Labor

23


New DOL Secretary

Acosta is a more traditional choice than Trump's initial nominee (Andrew Puzder – who withdrew from consideration)

Viewed as staunchly conservative

Unions are combing through his NLRB opinions

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5/10/2017

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WHAT TO EXPECT/WATCH FOR FLSA exempt salary rule – Will the Trump Administration

abandon it?

Investigation and Enforcement Efforts in General – Will the DOL/WHD remain as aggressive or scale back?

Will investigations and enforcement efforts increase, level off or be reduced?

Will industry targets change?

o Gas and Oil Industry

Will liquidated damages be pursued in connection with administrative wage and hour/OT investigations?

o Yes under Obama/Perez

o Under Trump/Acosta – who knows?

25


WHAT TO EXPECT/WATCH FOR

Paid Maternity Leave?

An Ivanka agenda item – six weeks of paid maternity leave

Trump referenced it in his first address to Congress (February 28, 2017): “My administration wants to work with members in both parties to make child care accessible and affordable, to help ensure new parents have paid family leave, to invest in women's health.”

His existing maternity leave proposals would be paid through unemployment benefits to parents by those companies that don’t offer it

Will fathers be included?

26


WHAT TO EXPECT/WATCH FOR

Investigation and Enforcement Efforts in General –Will the DOL/WHD remain as aggressive or scale back?

Will investigations and enforcement efforts increase, level off or be reduced?

Will industry targets change? (Gas and Oil Industry)

Will liquidated damages be pursued in connection with administrative wage and hour/OT investigations?

o Yes under Obama/Perez

o Under Trump/Acosta – who knows?

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5/10/2017

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Yes, There is Uncertainty and Expect Change

But, Employers Must Continue to Focus on Addressing Certain Common FLSA Compliance Issues

The DOL and litigation-happy employees will not forget these issues

Employers remain vulnerable to the risk of potential exposure to significant liability

o Including the nightmare of class/collective actions

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SOME THINGS WILL NEVER CHANGE


Misclassification Exempt vs. non-exempt

Independent contractor vs. employee

Recording Work Time Form (time sheet, time clock, computer, handheld, etc.)

Accuracy (more important than form)

Rounding (be careful, must be fair and balanced)

29

CRITICAL COMPLIANCE ISSUES


Off-the-Clock Work

Work from home or at other remote locations

Use of computers/electronic devices (BYOD)

o Off-hours calls (cell phones), emails, texts, etc.

Arriving early/ leaving late

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Salary Basis (Exempt Employees)

Permissible deductions from salary

Unpaid suspensions

Initial and terminable weeks

Regular Rate Issues (Non-exempt Employees)

Blended rate

Commissions, bonuses, other payments

31



Overtime Calculation Issues Are you using the correct calculation method?

o Is all work time accounted for?

o Is the overtime premium calculated correctly?

Private employers – Don't use "comp time" (even if employee wants it)

o Public/state and local government employers can use comp time subject to certain conditions

32



Conduct periodic audits

Review exemption and IC classifications

Review payroll practices

o Is OT calculated correctly?

o Check on salary basis/deductions

o Are payroll records in order?

33

RECOMMENDATIONS FOR THE PROACTIVE EMPLOYER

5/10/2017

12


Use an accurate and reliable time keeping system

Focus on accuracy and functionality, not form

Don't use schedule-based time keeping

Have policy stressing importance of keeping accurate time records and recording all hours worked and consequences of failing to do so

o Make it part of your culture

34



Use an accurate and reliable time keeping system

Whatever system is used, employees should be involved with recording or verifying their time

o Employees should verify all time recorded as accurate and complete

o Employees should understand that false or incomplete information will result in discipline

35



Keep a close eye on off-the-clock work

Work from home, other remote locations

Use of cell phones, email, mobile devices, other electronics

"Working" lunches

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Keep a close eye on off-the-clock work

Address by policy and culture of enforcement

o Working from home is permitted only with advance approval

o Off schedule/overtime work is allowed only with approval

o Disciplinary consequences for violations

Pay for all time worked and address with counseling or discipline

37



CLASS/COLLECTIVE ACTIONS

These multiple employee lawsuits remain a significant concern for employers

Many downsides for employers include:

o Multiple employees = High value settlements/damage awards

o Complicated, costly to defend

o Easier standards of proof for plaintiff-employees

o Ex. – In Tyson Foods vs. Bouaphakeo, (2016), the U.S. Supreme Court held that an expert could properly use a statistical sampling of damages claimed to have been sustained by workers in litigation brought under the Fair Labor Standards Act (FLSA). More specifically, statistical evidence was determined to be relevant and admissible to prove class-wide liability where the employer had no records of employee time incurred in changing to and from work clothing

38


CLASS/COLLECTIVE ACTIONS

Proactive management of wage and hour/FLSAcompliance is the key to minimizing the risk of liability and the class/collective action nightmare

Some Key Recommendations –

o Conduct regular, periodical auditing of payroll and time-keeping practices, exemption classifications, and FLSA/wage and hour compliance in general

o Promptly address any wage and hour issues that are brought to your attention

o Keep current with wage and hour law development

o www.palaborandemploymentblog.com

o Consult legal counsel when necessary

39

5/10/2017

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QUESTIONS?

www.McNeesLaw.comwww.PaLaborAndEmploymentBlog.com

5/11/2017

1

2017 Labor & Employment Law Seminar

www.McNeesLaw.comwww.PaLaborAndEmploymentBlog.com

2017 Labor & Employment Law Seminar

CLICK TO ADD PRESENTERS

EMPLOYEE BENEFITS UPDATE: CHANGE IS THE ONLY CONSTANT

ERIC N. ATHEY

717.581.3708

[email protected]

www.McNeesLaw.com


WELLNESS PROGRAMS - REPRISE

• ADA• “Voluntary” disclosure of information or participation in an examination• Awards for participation• Safe harbor for “bona fide benefit plans”

• GINA• Generally prohibits employers from requesting such information• Prohibits offering financial inducements for such information• Genetic questions must be specifically identified and financial incentives

provided whether or not these questions are answered

www.McNeesLaw.com


WELLNESS PROGRAMS – REPRISE (CONT.)

• HIPAA Nondiscrimination• Generally prohibits discrimination based upon “health factors”• Wellness program exception• Participation vs. health contingent• Activity only vs. outcome-based• Health contingent requirements• Frequency of opportunity• Size of the award• Reasonable design• Reasonable alternative standards

Don’t forget HIPAA Privacy and Security, ADEA and Title VII

5/11/2017

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WELLNESS PROGRAMS – FINAL REGULATIONS

• EEOC issued proposed regulations in April of 2015

• Extensive comments were received

• Final regulations were issued on May 17, 2016

• Generally applicable to plan years beginning on and after January 1, 2017

www.McNeesLaw.com


WELLNESS PROGRAMS – FINAL REGULATIONS (CONT.)

• As was the case with the proposed regulations, the final regulations specifically reject the statutory safe harbor exemption for bona fide benefit plans from the ADA restrictions.

• A significant portion of the regulations is dedicated to the calculation of the limit on maximum incentives involving medical examinations and/or disability-related inquiries.• It is not always a straightforward calculation.• HIPAA is different than ADA.• The regulations did not adequately address multiple coverage options.

• EEOC issued two information letters on July 1, 2016 and August 31, 2016 interpreting how the regulations apply to certain plan designs.

www.McNeesLaw.com


WELLNESS PROGRAMS – FINAL REGULATIONS (CONT.)

• NEW NOTICE REQUIREMENT• Effective date• Contents• Employers may already be compliant• Sample notice and Q & A’s• Electronic distribution – Not as stringent as the DOL rules for

summary plan descriptions

5/11/2017

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WELLNESS PROGRAMS – LITIGATION UPDATE

• EEOC vs. Orion Energy• The first decision following the issuance of the final regulations• The facts• The holding• The safe harbor did not apply• The program satisfies the “voluntary” exception.• An appeal to the 7th Circuit may result in a Circuit Court split

(with the 11th) and a Supreme Court review.

www.McNeesLaw.com


WELLNESS PROGRAMS – LITIGATION UPDATE (CONT.)

• AARP vs. EEOC• AARP challenged the use of penalties/incentives in a

“voluntary” plan.• AARP asserted that the regulations were arbitrary and

capricious under the Administrative Procedures Act.• The court ruled in favor of the EEOC and refused to grant

injunctive relief.

www.McNeesLaw.com


WELLNESS PROGRAMS – LITIGATION UPDATE (CONT.)

• EEOC vs. Flambeau, Inc.• Decided by the 7th Circuit on January 25, 2017.• The first appellate decision since the issuance of the final regulations.• Holding by the Western District of Wisconsin on December 31, 2015.• 7th Circuit upheld the District Court’s dismissal but never reached the merits

of the case.• Seff remains the only appellate decision and it is contrary to the final

regulations and to the Orion decision.

5/11/2017

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WELLNESS PROGRAMS – STATUS UNDER THE TRUMP ADMINISTRATION

• Final regulations are now outside the 60-day “pullback”

• H.R. 1313

• Is there congressional momentum in this area?

• This is definitely a “stay tuned” situation

www.McNeesLaw.com


WELLNESS PROGRAMS – IRS MEMORANDUM

• The IRS released guidance as an Office of the Chief Counsel Memorandum on May 27, 2016.

• The memorandum addresses the tax treatment of certain wellness programs that include cash rewards and the reimbursement of premiums.

• The “too good to be true” plan design

• The IRS response

www.McNeesLaw.com


21ST CENTURY CURES ACT – QUALIFIED SMALL EMPLOYER HEALTH REIMBURSEMENT ARRANGEMENT (QSEHRA)

• Lifts the prohibition on stand-alone HRAs for certain small employers• Eligible employer

• Not an Applicable Large Employer• Determined on a controlled group basis

• No group health plans (controlled group)

• Eligible employees

• Five permissible exclusions• Generally offered on the same terms – two exceptions

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CURES ACT – QSEHRA (CONT.)

• Funded solely by the employer

• Reimbursements for eligible medical expenses as defined in IRC Section 213(d)

• Employee must prove that he has insurance that provides Minimum Essential Coverage, otherwise, the reimbursements are taxable

• Limitations for 2017

• $4,950.00 employee only• $10,000.00 family• Prorated for partial year coverage

www.McNeesLaw.com



• Application of ERISA – It is a welfare plan

• Plan document• SPD• Fiduciary standards• Reporting (Form 5500)

• It is an excepted benefit and not a group health plan – COBRA does not apply• Impact on other coverage

• HSA• Premium subsidy or tax credit

• W-2 reporting

www.McNeesLaw.com



• Notice Requirement

• 90 days prior to the beginning of the year• 2017 transition rule• Contents

• Amount of benefit• Impact on tax credit• Minimum Essential Coverage requirement and the implications of failure

• Penalty - $50.00 per employee up to $2,500.00 per year

• Pre-2017 penalty relief for stand-alone HRAs

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CURSES ACT – OTHER PROVISIONS

• HIPAA – Privacy changes relating to communications with caregivers of adults with serious mental illness

• Mental Health Parity and Addiction Equity Act (MHPAEA)

• Clarification on eating disorder coverage• MHPAEA enforcement

www.McNeesLaw.com


MENTAL HEALTH PARITY AND ADDICTION EQUITY ACT (MHPAEA) -ENFORCEMENT

• Both the DOL and HHS oversee the enforcement of MHPAEA

• Both have enhanced their enforcement efforts

• There is also an IRS excise tax

• Private litigation and actions by various psychiatric associations targeting health plans and insurance carriers have also served as enforcement vehicles

www.McNeesLaw.com


MENTAL HEALTH PARITY AND ADDICTION EQUITY ACT (MHPAEA) – ENFORCEMENT (CONT.)

• What does MHPAEA require?• Parity in each of six classifications

• Inpatient, in-network• Inpatient, out-of-network• Outpatient, in-network• Outpatient, out-of-network• Emergency care • Prescription drugs

• Financial requirements and quantitative treatment limitations• Nonquantitative treatment limitations

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MENTAL HEALTH PARITY AND ADDICTION EQUITY ACT (MHPAEA) – what is the government looking for?

• Nonquantitative treatment limitations have been the focus• In June of 2016, DOL and HHS released a compliance publication entitled

“Warning Signs”• Potential plan design problems

• Chronic disorder exclusions• Preauthorizations• Written treatment plan• Fail-first protocol• Residential treatment exclusions• The “exclusion applies to medical/surgical as well” argument fails

• Action steps

www.McNeesLaw.com


DISABILITY BENEFIT PLAN CLAIMS AND APPEALS REGULATIONS

• DOL issued final regulations in December of 2016 that for the most part adopted the proposed regulations that were issued in November of 2015

• The final regulations align the adjudication of disability benefit claims with the claims and appeals procedures under ACA

• The regulations apply where a plan fiduciary has discretionary authority to determine whether a participant is “disabled” under the terms of the plan

• The regulations are generally effective for claims filed on or after January 1, 2018 but there is a 2017 “transition period”

www.McNeesLaw.com


FINAL DISABILITY BENEFIT CLAIMS REGULATIONS

• Independence and impartiality• Improved disclosure• New information or rationale• Notice of any contractual limitations• Deemed exhaustion• Retroactive rescissions• “Culturally and linguistically appropriate” notices

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FINAL DISABILITY BENEFIT CLAIMS REGULATIONS – NEXT STEPS

• Determine whether the plan is subject to the regulations

• Review notices, processes, plan and SPD language

• Comply with the 2017 transition period

• These regulations seem to have slipped under the radar for delay by the Trump administration

www.McNeesLaw.com


LITIGATION – RELATED PLAN DESIGN PROVISIONS

• Forum selection clauses• Limits plan-related claims to a specific federal district court• Can result in significant cost savings and enhance uniformity, efficiency and predictability for

the plan

• ERISA Section 502(e)(2)• Where the plan is administered• Where the breach took place• Where the participant resides or may be found

• With the exception of a few district courts, such clauses have been uniformly approved by the courts including two Circuit Courts

• The Supreme Court has denied two petitions for certiorari within one year

www.McNeesLaw.com


LITIGATION – RELATED PLAN DESIGN PROVISIONS (CONT.)

• Contractual limitation on the statute of limitations• Must be reasonable • Must be disclosed

• Arbitration Clauses• Pension – Courts clearly permit arbitration (2nd, 3rd, 5th, 8th and 10th Circuits)• Health and Disability Plans – ERISA regulations permit arbitration after two voluntary

appeals

• Attorneys Fees• Section 502 of ERISA provides that a court may award attorneys fees to the prevailing party• The door may be opening for plans to seek attorneys fees from unsuccessful

participant/beneficiary litigants

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THE EXECUTIVE ORDER

• Literally hours after being sworn into office on January 20, 2017, President Trump signed an executive order officially setting out the policy of his administration to seek the repeal of the ACA.

• A president cannot, by unilateral action, repeal final or interim final regulations.• The executive order directs the Executive Branch (i.e., the regulatory agencies)

to “operate within the boundaries of the existing law” to:• Alleviate “unwarranted economic and regulatory burdens of the ACA”• Prepare to “afford the states more flexibility and control to create a more free and open healthcare market”• Encourage a “free and open market in interstate commerce” for healthcare services and health insurance• Grant waivers, deferrals, or exemptions from ACA provisions that impose fiscal burdens on certain individuals,

plans and entities• Revise ACA regulations as necessary to achieve these goals through the normal regulatory process outlined in the

ACA

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THE EXECUTIVE ORDER (CONT.)

• The executive order challenges the new agency Secretaries of HHS, Labor (???), CMS and Treasury to look for ways to “ease the burdens” of the ACA.

• Repeal and “replace” or repeal and “repair” will require congressional action.• Reconciliation – Limitations

• Only revenue items• Employee mandate, employer mandate, Cadillac tax and tax credits• The “insurance death spiral”

• Regular Order – Will require cooperation from the Democrats

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ACA: REPEAL, REPLACE, REPAIR, ETC.

• The Legislative Path• Change to the text of ACA requires legislative action

• In Senate, this will likely require “filibuster proof” majority of 60 votes• GOP controls 52 Senate votes• Complete repeal unlikely

• Reconciliation process requires only 51 Senate votes• Regulatory action or inaction• Court challenges

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ACA: REPEAL, REPLACE, REPAIR, ETC. (CONT.)

• Leading Proposals• American Health Care Act (introduced 3/6/17)• Also:

• President Trump’s Campaign Rhetoric• 2015 Budget Reconciliation Bill• Paul Ryan Proposal (“A Better Way”)• Tom Price Proposal (“Empowering Patients First”)• Cassidy/Collins Proposal (“Patient Freedom Act”)• Rand Paul Proposal (“Obamacare Replacement Act”)

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• American Health Care Act• Cadillac Tax for 2018 out – but reappears in 2025• Employer mandate out – but Employer Reporting remains?• Premium subsidies out and age-adjusted tax credits in (2020)• HSA/FSA tax favored status for OTC medications• Lift caps on FSAs / Increase limit on HSA contributions• Per capita state funding of Medicaid (effective 2020)• Employer and Individual Mandates Out – but individuals may be charged higher premium without

continuous coverage (2019)• Limit on Employer Health Coverage Exclusion (amounts over 90th percentile taxes as wages)• Repeals Revenue Provisions: Tanning tax, brand drug tax, high income Medicare tax, health insurance

tax• Surviving: pre-existing condition exclusions prohibited, dependent coverage to 26, non-discrimination,

no annual/lifetime limits, no health status underwriting, capped OOP costs

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• Trump Campaign Rhetoric• Repeal ACA and individual mandate• Retain prohibition of pre-existing condition exclusion• Expand access to and flexibility of HSAs • Permit interstate sale of health insurance• Cost transparency in healthcare• Reduce market entry barriers to drug companies• Issue block grants to states for Medicaid

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• 2015 Budget Reconciliation Bill• ACA tax credit/subsidies gone after 2 years• No penalties under individual or employee mandate• Repeals Medicaid expansion• Repeals Cadillac Tax• HSA distribution excise tax reduced from 20% to 10%• No FSA salary reduction limitation

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• Ryan Proposal• Tax credit for all Americans with excess to be contributed to HSA• Expand HSAs / HRAs• Cap on tax-free health benefits• Interstate purchase of individual market coverage• Loose wellness plan rules• Expand association plans • Government “high risk pools”• Medical malpractice reform• Pre-existing condition exclusions permitted if no continuous coverage• Keep dependent coverage until 26

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• Price Proposal• Repeal ACA (similar to Ryan Proposal, but…)• Cost sharing subsidies for certain individuals

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• Cassidy/Collins Proposal• States may choose between

• Obamacare system• Market-based system using federally funder Roth HSAs• Self-guided system (no federal funding)

• Price transparency• Retains most ACA consumer protections

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• Real World Concerns• Removing Medicaid Expansion = 10 million lose coverage /

Impacts 31 states• House Republicans want to address Medicare = AARP backlash• ACA Exchange enrollees actually surged for 2017• In PA, nearly 1 million residents lose coverage if ACA is repealed

without a replacement• Impact of pre-ex exclusion, dollar benefit limits, etc.• How to pay for expansions without mandates/Cadillac Tax

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PREDICT WHERE THE ACA WILL BE ONE YEAR FROM NOW

Code

1 = Remains In Effect Substantially Unchanged (May be Included as Part of New Law)

2 = Substantially Changed or Replaced with Different Concept (May be Included as Part of New Law)

3 = Remains in Effect But Enforcement Suspended (Perhaps Pending Replacement in Future)

4 = Repealed with No Replacement

Athey Kern Ivy Contestant

Individual Mandate (Penalty for not having coverage)

3 2 4

Employer Mandate (Penalty for not offering coverage)

3 2 2

Minimum Value Requirements 3 2 2

Limits on Out-of-Pocket Expenses 3 2 2

90-Day Maximum Waiting Period 1 1 2

Elimination of Pre-Existing Condition Exclusions 1 1 1

No Annual/Lifetime Dollar Benefit Limits 1 2 2

Dependent Coverage Until Age 26 1 1 1

No-Charge Preventive Care Benefits 1 1 1

Summary of Benefits and Coverage 1 1 1

60-Day Notice of Material Change 1 1 1

Wellness Incentives Capped at 30-50% 1 2 1

Employer Reporting (1095 Forms) 3 3 3

Non-Discrimination (Section 1557) 3 3 3

Cadillac Tax 3 4 4

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ACA SECTION 1557: HEALTHCARE MEETS DISCRIMINATION LAW

• Covered entities may not administer health programs and activities in a manner that discriminates on the basis of:• Race, Color, National Origin, Sex, Age, Disability

• Posting of notices required (key publications, website, public areas)• Certain entities must implement grievance procedures

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ACA SECTION 1557: HEALTHCARE MEETS DISCRIMINATION LAW (CONT.)

• “Covered entity”: an entity that operate a health program or activity, any part of which receives Federal financial assistance

• Examples: hospital, health clinic, group health plan, health insurance issuer, physician’s practice, community health center, residential treatment facility

• Provisions Affecting Health Plans Effective January 1, 2017

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• HHS defines “sex discrimination” to include discrimination on basis of “sexual orientation”

• Example: Covered plans that exclude all coverage regarding gender transition may be discriminatory

• Is Plan covered?• OCR enforcement efforts• TPAs seek indemnification for non-compliance

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• Franciscan Alliance v. Burwell (N.D.Tex 2017)• Catholic hospital system challenges Section 1557 regulations objecting

to whether hospital must:• Provide abortion services• Provide gender transition services

• 12/31/16: Court issues preliminary injunction on basis of Religious Freedom Restoration Act

• Pregnancy termination and gender identity provisions blocked (for now)

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THE NEW EEO “PROTECTED CLASS”

• 3/1/2016: EEOC files two federal lawsuits alleging unlawful sexual orientation discrimination on the part of Scott Medical Center (PA) and Pallet Cos. (MD)

• Pallet Cos. settled for $202,200 in June 2016• EEOC v. Scott Medical Health Center (W.D.Pa. 11/7/2016): Court

refuses to dismiss EEOC complaint; says: “discrimination on the basis of sexual orientation is, at its very core, sex stereotyping plain and simple.”

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THE NEW EEO “PROTECTED CLASS” (CONT.)

• Macy v. Holder (7th Cir. 7/28/2016): holds Title VII does not cover sexual orientation – applies in Illinois, Indiana and Wisconsin – but Court reverses itself on 4/4/17 in Hively v. Ivy Tech

• Decisions refusing to recognize sexual orientation as protected have been issued by nearly all other federal appellate courts – including the 3rd Circuit (Bibby v. Philadelphia Coca-Cola Bottling Co.)

• A “split among the circuits” on such an important issue means the Supreme Court will likely step in.

• Further impact on benefits for same-sex couples?

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HIPAA: “SMALL BREACH” NOTIFICATIONS

• HIPAA requires covered entities to notify affected individuals of PHI breaches “without unreasonable delay” and no later than 60 days

• “Small breaches” (those affecting fewer than 500 individuals) must be reported to HHS/OCR within 60 days after end of each calendar year

• Reporting deadline for 2017: March 1, 2017• Reporting may be delegated to business associate• Notification is provided via OCR online portal• Be sure to print report and confirmation of receipt for records

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HIPAA: IMPLICATIONS OF CLOUD COMPUTING

• October 2016: HHS updated guidance on HIPAA and cloud computing• July 2016: Oregon Health & Science University tagged for $2.7M for sharing ePHI

with Google-cloud platform without business associate agreement• Cloud Computing: Use of remote servers maintained by vendor to store, manage

and process data• If cloud service provider is creating, receiving, maintaining or transmitting your

plan’s PHI it is a HIPAA business associate• Subcontractors of cloud service providers may also be business associates• Encryption does not eliminate status as business associate (even if they can’t non-

encrypt)• Risk assessment / Internal controls / Business associate agreement

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THE IMPACT OF THE OPIOID ADDICTION EPIDEMIC ON EMPLOYERS

• In 2014:• 4.1% of adult population used prescription pain relievers• 21.5M Americans struggle with prescription pain reliever addiction• Nearly 600,000 are heroin addicts• 94% heroin users previously abused prescribed pain relievers• One study predicted that 64.5% of absenteeism can be tied to misused

opioids

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THE IMPACT OF THE OPIOID ADDICTION EPIDEMIC ON EMPLOYERS (CONT.)

• Comprehensive Addiction and Recovery Act (CARA)• Passed July 2016• Expands access to addiction treatment• Allows nurse practitioners and physician’s assistants to prescribe

buprenorphine• Refines treatment of overdoses by first responders• Authorizes law enforcement to divert low-level drug offenders to treatment

instead of criminal justice system

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THE IMPACT OF THE OPIOID ADDICTION EPIDEMIC ON EMPLOYERS (CONT.)

• The Employer Role?• Public health messaging• Rehabilitate vs. Terminate• Collaborating with community resources (e.g. take back initiatives)• Identify signs of addiction• EAPs that can effectively treat or refer• Plan design (are effective providers in panel)

QUESTIONS?

2017 Labor & Employment Law Seminarwww.McNeesLaw.com

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