Leave Under the ADA Not a Guarantee

The Americans with Disabilities Act (ADA) Is Not a Leave Act, Or Is It?

 

This week the US Supreme Court let stand a decision from America’s heartland that has been closely watched. The Severson case arose from an employee with a back issue who had surgery at the end of his FMLA leave and was unable to return to work for another three months.  He was terminated. Severson sued, claiming his rights under the ADA were violated when he was not allowed extra leave.  The Seventh Circuit US Court of Appeals which covers Illinois, Indiana and Wisconsin disagreed. The Court found that ADA is an anti-discrimination statute, not a medical leave law.

 

What does this mean for employers? The Circuit Courts are split and a ruling from the Supreme Court would have been helpful. Unless and until that occurs, we recommend employers continue to utilize a case by case analysis in determining if leave is a reasonable accommodation under the ADA.  The interactive process with the employee and analysis of undue burden is the best practice for each instance. The trend favoring employees in these cases may be waning, but the risks in denying accommodation across the board are tremendous. Stay the course: treat the ADA as proscribed by law.

 

If you have any questions on ADA and FMLA leaves, please contact us.  It can be tricky business. questions@foleylawpractice.com

 

 

Another Noteworthy Wage and Hour Law Development

By Timothy G. Kenneally, Esquire

A business owner from Texas, we’ll call him George, posed this question, “Why is a Texas-based business required to provide a 30-minute meal break to certain company employees working shifts of more than 6 hours in Massachusetts, when no such breaks are required in the company’s home state of Texas?” The response to this inquiry seemed clear – Massachusetts wage and hour laws apply to employees working in Massachusetts. However, George pressed on, “I looked at the Fair Labor Standards Act (FLSA), he said, and it does not require a meal break.  Why doesn’t the federal law trump Massachusetts?”   The answer – many states throughout the country have state specific wage and hour laws in place. When state and federal laws address the same topic, the law that provides the greater benefit to the employee prevails.

Just this week, we saw an example of an important United States Supreme Court (Supreme Court) decision that will impact thousands of automobile dealerships in states across the country, and yet that decision will not change anything in Massachusetts.

The Supreme Court’s April 2, 2018 decision in Encino Motorcars, LLC v Navarro, et al. was heard loud and clear over the din of service departments in automobile dealerships throughout the United States.  The issue: whether Encino Motorcars violated the FLSA by failing to pay overtime wages to service advisors who regularly worked more than forty (40) hours in a week.  The answer: NO.

Encino Motorcars claimed that its service advisors were exempt from the FLSA’s overtime-pay requirement under 29 U. S. C. §213(b)(10)(A), which states : “[A]ny salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles, trucks, or farm implements, if he is employed by a nonmanufacturing establishment primarily engaged in the business of selling such vehicles or implements to ultimate purchasers” is exempt from the overtime wages requirement of the law (the 10A exemption).  The Court of Appeals for the Ninth Circuit had ruled that the 10A exemption did not apply to service advisors who did not perform any work on the vehicles for the dealership, and that the service advisors were entitled to overtime.  Following a close vote (5-4), the Supreme Court overruled that decision reasoning:

[S]ervice advisors are ‘salesm[e]n . . . primarily engaged in . . . servicing automobiles,’ [and are therefore] exempt from the FLSA’s overtime-pay requirement…Service advisors are also ‘primarily engaged in . . . servicing automobiles.’ ‘Servicing’ can mean either ‘the action of maintaining or repairing a motor vehicle’ or ‘[t]he action of providing a service.’ Service advisors satisfy both definitions because they are integral to the servicing process.

Of import, the impact of the Supreme Court’s decision is limited to the FLSA, which is the federal wage and hour law.  For those jurisdictions with state overtime laws that do not adopt or mirror the FLSA, employees may remain eligible for overtime even where they are exempt under the FLSA.  In jurisdictions that do not include the 10A exemption (or similar language) within their overtime law, for example Massachusetts, service advisors remain eligible for overtime compensation under state wage and hour laws.

State wage and hour laws and exempt classification do not always follow federal law, and can result in costly damages in the event of an audit or lawsuit.  We recommend that employers review their employee job descriptions and applicable law to determine whether their employees are properly classified.

Our recent blog entry regarding the new PAID law (https://conta.cc/2GO4VPN) presents another example of a federal regulation that employers would be wise to know and understand, while also comparing that law to the laws of their state.  Please also check out www.foleylawpractice.com for more information on the services we provide. We are here to help.

Un-“PAID” Is a Better Option

Last week the U.S. Department of Labor’s Wage and Hour Division (WHD) unveiled its new Payroll Audit Independent Determination (PAID) program to facilitate resolution of potential overtime and minimum wage violations under the Fair Labor Standard Act (FLSA). Below you will find the highlights of the program and our advice and recommendations on compliance.

WHD will implement this “self-audit pilot program nationwide for approximately six months” to begin in April. At the end of the six month pilot period, WHD will determine whether to make the program permanent. In the meantime, as your team contemplates this opportunity, we recommend you keep WHD’s stated goal in mind: “To ensure that more employees receive the back wages they are owed – faster.”

All FLSA-covered employers are eligible to participate in the program on a voluntary basis. The program covers potential violations of the FLSA’s overtime and minimum wage requirements including, for example, violations based on alleged “off-the-clock” work; failures to pay overtime at one-and-one-half times the regular rate of pay;  misclassification of employees as exempt from the FLSA’s minimum wage; and overtime requirements.

There are some attractive elements to the program. It enables employers to expeditiously resolve inadvertent minimum wage and overtime violations without litigation (perhaps—see below), without the payment of liquidated damages, and without civil monetary penalties. That certainly sounds attractive but there is a catch or two or three… .

For many employers, the downside of this program will outweigh the upside. For example:

• This program does not require employees to surrender any rights.
• If an employee chooses not to accept back payment, the employee will not release any private right of action.
• If the employee chooses to accept the back payment, the employee will not grant a broad release of potential claims under the FLSA.
• By allowing employers to participate in the program, WHD does not waive its right to conduct any future investigations of the employer.
• The participating employer must pay 100% of the calculated back wages immediately, no exceptions.
• An employer’s DOL-supervised settlement under this program does not necessarily prevent state law wage claims.

All FLSA-covered employers nationwide confront the same critical question: Does the PAID program reduce risk or increase exposure for your company? Our experience tells us that many employers will be better off conducting their own Audit outside the PAID program and under the attorney/client protection. Certainly, it would be prudent for all employers to conduct an Audit of pay practices to assess compliance under the FLSA and state wage and hour laws. Our employment law crystal ball identified these issues a few years back and led us to develop our very popular FLSA Wage and Hour and Timekeeping Audit Service and our Exempt or Non-Exempt Positions Classification Service. You can achieve compliance without the PAID program pitfalls. Please let us know how we can help. www.foleylawpractice.com or call 508.548.4888

 

In some jurisdictions this blog post is regarded as Attorney advertisement.

Equal Pay Is Coming Your Way

Less than a handful of states do not have laws that prohibit gender-based compensation discrimination, and the federal pay equity laws have been on the books for years. California, New York and Massachusetts seem to be competing to have the most aggressive pay equity laws, with other states in the race. While this alert focuses on Massachusetts, we are happy to answer questions about your state’s equal pay laws or the federal law.

Is your company covered by the new Massachusetts pay equity law? Yes, all employers in Massachusetts with the noted exception of the federal government are covered by the new law: for-profit; not-for-profit; large and small; in all industry sectors. Unlike most employment laws, the number of individuals employed is not relevant – your company is covered.

The assessment of gender-based pay inequity in Massachusetts has changed significantly. The standard is different. The definitions are different. Exposure is different. Potential corrective measures are different. Defenses are different. The conversation about salary history and employee wages will be significantly different.

Many find that the guidance recently issued by the Massachusetts Attorney General raised as many questions as it answered. The good news is that the Attorney General’s guidance includes a basic self-evaluation tool for employers. We recommend using outside counsel as part of this process to protect your findings under the attorney-client privilege. Think of our Pay Equity Audit as a protective cloak: it shields any pay inequities you may discover, and will allow your team to make reasonable progress eliminating pay disparities without creating other distractions.

In less than four months, the Massachusetts law goes into effect and your company must be in compliance. We have been advising our clients for over a year to conduct gender-based pay equity audits to protect their organization against the new exposure and litigation from this law: Several have used our innovative Pay Equity Audit already. The Attorney General’s guidance has made it very clear that there are very few clear answers implementing this law– and that all employers should make compliance a top priority.

Our Pay Equity Audit is designed to help your Massachusetts team achieve compliance with the new law and create a rolling affirmative defense to a gender-based pay equity claim. No worries, if you are not located in Massachusetts, we have other state specific Pay Equity Audits. We stand ready to help and can be reached at questions@foleylawpractice.com or 508-548-4888.

What International Women’s Day Means for Your Business

March 8, 2018, is International Women’s Day and this year it is getting a lot of attention. Does anyone remember what went on last year? Or the prior 109 years it was celebrated? Thought not.

McDonalds is turning its Golden Arches upside down. Google is trading its logo to one highlighting 12 women artists and their stories, while also encouraging stories from other women–quite a platform. 

Your employees are watching, listening and reading. It is time to be proactive. We have found that a combination of the traditional and non traditional approaches work best. Two examples are our firm’s Equal Pay Audit Service and our Sexual Harassment Prevention Toolkit.

International Women’s Day is a good time to examine workplace issues affecting women. We stand ready to help.

We are proud of the fact our law firm is over 50% women. Call 508-548-4888 or email us at questions@foleylawpractice.com

www.foleylawpractice.com

 

 

 

Has your Massachusetts business misclassified employees as independent contractors? It could be a costly error…

Courts in Massachusetts continue to strictly interpret and apply the state’s independent contractor law: the state favors employment status.  On February 27, 2018, the Appeals Court of Massachusetts (AC) ruled that GateHouse Media Massachusetts I, the publisher of the Patriot Ledger, misclassified David King, a newspaper delivery driver, as an independent contractor (2018 WL 1058352). The AC ruled that King was an employee and thereby affirmed a Norfolk Superior Court judgment against GateHouse.
As with most Court decisions in this area of Massachusetts law, the Appeals Court cited to the second prong of the independent contractor test – GateHouse was required to prove that the service furnished by King was “performed outside the usual course of the business of the employer” (M.G.L.A. 149, § 148B). GateHouse failed in that regard, as is often the case. The Court assessed Gatehouse’s evidence by looking at: (1) its own previous description of its business; and also (2) evidence of whether or not the service was necessary (not just incidental) to GateHouse’s business. As GateHouse had previously held itself out as a distributor of the newspaper, and given that the delivery drivers play a big role in distribution, the AC concluded that King was an employee.
Mr. King is one of many who have delivered the Patriot Ledger by automobile to some of the paper’s subscribers. GateHouse now faces the possibility of paying damages to other similarly situated drivers through a related class action. The newspaper is in the unfortunate spot of being the story–do not let it happen to your business.
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Foley & Foley, PC offers an Positions Classification Audit service to identify potential pitfalls of independent contractors and wage and hour issues. It is an efficient and easy way to protect your business. If you would like more information about this service or any other questions, please contact (508) 548-4888 or info@foleylawpractice.com

New Year, New Laws, New Website

   

Hope your 2018 is off to a great start! We have a robust new website which we updated to change those awful pictures make it easier to use our resources. Please take a minute and check it out? http://www.foleylawpractice.com

Remember those laws we wrote about months ago — Pay Equity Act and the Pregnant Workers Fairness Act? They’re finally here. We break it down with action steps below, including, of course,  sexual harassment:

Massachusetts Pregnant Workers Fairness Act (MPWFA): This law will require all Massachusetts employers to update handbooks and policies; provide reasonable accommodation to pregnant and breastfeeding employees; and provide written notice to all employees about their right to be free from discrimination under this Act no later than April 1, 2018.

The law amends Massachusetts anti-discrimination laws to specifically prohibit retaliation and discrimination against pregnant employees, creating a new protected class to include:  “pregnancy or a condition related to pregnancy, including, but not limited to, lactation, or the need to express breast milk for a nursing child.” While Massachusetts and Federal laws already prohibit pregnancy discrimination, the new law creates an obligation for employers to engage in an interactive dialogue,  provide accommodations to pregnant and breastfeeding employees and provide new, existing and newly pregnant employees with notice of these new rights.  With the creation of a new  protected class comes familiar language and obligations: reasonable accommodation, interactive process and undue hardship.

Reasonable accommodation might include more frequent rest breaks; seating or modified equipment; paid or unpaid time off to recover from childbirth; a private space to express breast milk that is not a bathroom; job restructuring; or a modified work schedule. The interactive process mandate requires employers and employees (or prospective employees) to engage in a timely and good faith interactive process to determine a reasonable accommodation to perform the essential functions of the job. An employer is not required to provide and accommodation that would cause an undue hardship, defined as an accommodation “requiring significant difficulty or expense.” Finally, an employee may not be forced to take a leave of absence if a reasonable accommodation could be made to stay on the job.

Next Steps

• Update handbooks and personnel policies to reflect the increased obligations under the new law, including the adoption of a specific policy outlining and documenting the interactive process;
• Train human resources personnel and managers regarding the requirements of the Act;
• Ensure proper measures are in place to provide written notice in all instances required under the Act; and

Contact us with any questions and assistance in compliance. This law is a big deal.

 

Pay Equity–It really is on the horizon.

One of the strongest state laws in the country addressing equal pay for comparable work will take effect in Massachusetts on July 1, 2018.

The sweeping Act makes many changes including how to determine comparable work, and prohibiting salary and benefit inquiries before hire, to name a few. Employees will not be required to file a claim with MCAD as before but can go directly to court.

The silver lining of these new obligations is the Act provides an affirmative defense to employers who perform a good faith evaluation of pay practices. Over the past several months many of our clients have utilized out Pay Equity Audit  which creates a rolling affirmative defense for your company. We strongly advise employers to take advantage of this comprehensive and valuable service before July 1, 2018.

 

Sexual Harassment

The standard sexual harassment compliance advice has been to implement a well-written sexual harassment policy and invest in sexual harassment training. Yet many of the workplaces rocked by recent claims—including the Weinstein Company in California, home to the country’s strictest anti-harassment laws—had a policy and training in place. What can be done?

In response to the changes in climate and the new EEOC guidelines, we have developed a Sexual Harassment Tool Kit. For a flat fee we will provide:

1.    A digital copy of Attorney Angela Snyder’s No More #MeToos webinar that can be shared with your entire leadership team, serving as the first level of effective sexual harassment training for leadership and HR;
2.   A comprehensive outline for creating a sexual harassment strategy for your organization;
3.   A model sexual harassment policy and/or review of your existing sexual harassment policy;
4.   Sample Letter from Leadership in Word that sets forth your organization and leadership’s commitment to addressing sexual harassment in the workplace that can be modified to meet your specific needs;
5.    A sample “pulse” survey to send to employees that will help uncover underlying cultural erosions; and
6.   One hour of attorney time to uncover your unique risks based on demographics and culture. During that discussion we will provide a punch list of action items that will help you finalize a customized sexual harassment strategy.

 

We believe strongly in proactive advice and want to make this service as accessible as possible. We are offering the Tool Kit for a very reasonable flat fee. Please contact us.

 

 We can help! Reach out to us at questions@foleylawpractice.com or (508) 548-4888.

 

 

A Massachusetts Employer’s Obligations Related to the Employer Medical Assistance Contribution (“EMAC”)

A few months ago, “An Act Further Regulating Employer Contributions to Health Care,” was signed into law without associated regulations, leaving employers in the difficult spot of trying to interpret the vague and confusing language. Recently, the Massachusetts Department of Unemployment Assistance published draft regulations that help to clarify the law. Because the effective date is looming (1/1/18), it is important to examine the draft regulations for guidance and assume these regulations will be finalized as currently written. We will, of course, update you if there are any changes.

In 2018, employers will be responsible for two types of contributions related to healthcare:

1. The Employer Medical Assistance Contribution (“EMAC”) – requires that an employer with 6 or more employees provide a contribution, per employee, to support the Commonwealth Care Trust Fund.
2. The EMAC supplement, sometimes referred to as the penalty portion of the law, requires that an employer with 6 or more employees pay a contribution for each employee who receives health insurance coverage through the MassHealth Agency or ConnectorCare.

Which Employees are Covered?

The EMAC relies on the definition of “employee” set out in Massachusetts’ unemployment insurance laws. This means that any regular employee, regardless of full or part-time status, contributes to an employer’s count. Depending on the length of employment, temporary/seasonal workers may also need to be included. To be clear, an employee should be included in an employer’s count, and may subject the employer to an EMAC penalty, even where the employee is not qualified for employer-provided benefits under the Affordable Care Act.

An employee is considered to work in Massachusetts if he/she: a) performs work entirely in Massachusetts; b) performs work in and out of Massachusetts, but the work out of state is incidental to the work within the state.

Which Employers are Covered?

Any Massachusetts employer, including a not-for-profit employer, with 6 or more employees working in Massachusetts, is subject to the EMAC and the EMAC supplement.

The employee count is determined each quarter by calculating the average number of employees who worked during or received wages for the pay period that includes the twelfth day of each month of the applicable quarter. For smaller employers, this means that you may be subject to the law in some quarters and exempt in other quarters. 

The EMAC Contribution Increase

The EMAC contribution itself is not new. Beginning 1/1/18 however, the amount employers must contribute will change:

• For an established business, the contribution will increase from .34% of wages to .51% of wages.
• For a new business:
  • Not required to provide EMAC contributions until 12 months after they have been provided an unemployment insurance contribution rate.  This means that an employer will generally not have to pay an EMAC contribution for years 1, 2, or 3 of business operations.
  • Responsible for .18% of wages the first year of contribution (4th year of business)
  • Responsible for .36% of wages the second year of contribution (5th year of business)
  • By the third year of contribution (6th year of business), the business follows the rules for established businesses.
• “Wages” for the purposes of EMAC means the unemployment insurance taxable wage base.
• Wages are capped at $15,000.  So, if an employee’s wages exceed $15,000, you multiply the contribution rate times $15,000, rather than the actual wages.  This means that, in 2018, an established business will pay a maximum of $77/employee/year (.0051 x 15000)

The EMAC Supplement/Penalty

A covered employer will pay a 5% penalty for each employee who receives health insurance through either the MassHealth agency (the Office of Medicaid) or ConnectorCare (available where the household income is less than 300% of the FPL) for fourteen or more consecutive days in the quarter.  Here, too, wages are capped at $15,000. This means that a business will pay a maximum of $750/employee/year (.05 x 15000).

However, the penalty does not apply for any employee who receives coverage through the MassHealth agency either: a) on the basis of permanent and total disability, or b) as a secondary payer where the employee is enrolled in the company-sponsored insurance. Premium assistance does not trigger the penalty.

Note, too, that most individuals who are otherwise eligible for MassHealth will be required to take their employer’s plan if the plan meets the basic coverage criteria and the employer pays at least 50% of the premium. Therefore, if your company pays at least 50% of premiums, you will generally not be subject to the fines.

How Does an Employer Calculate the EMAC and the EMAC Supplement?

The employer is not responsible for calculating either amount. All employers, including new businesses in the first three years, must submit a quarterly “Employment and Wage Detail Report” to the Department of Unemployment Assistance (DUA), which will be used as the basis for the DUA’s calculation.  The form can be submitted online.  Once submitted, the required EMAC and EMAC supplement payments will be automatically calculated. The DUA will also receive information from the MassHealth Agency and the Connector to aid in its determination of liability related to the EMAC supplement.

The quarterly employer reports are due at the end of April (Q1), July (Q2), October (Q3), and January (Q4). Payments are due by the end of the first month following the end of each quarter.

The report must include:

• For each employee: name, social security number, wages paid, hours worked, total amount of taxes withheld, amount of wages upon which the withholding was based, the identification number assigned the employer by the DUI, the corresponding federal employer identification number, and the identification number the employer is required to include on a withholding tax return.
• The report also should include the count of all employees who worked during or received wages for the pay period that includes the twelfth day of each month of the applicable quarter. Because the state can estimate your employee count if the number is not provided, we suggest that all employers provide this data, even if they have fewer than six employees.

We hope this has answered some of the lingering questions since this bill passed.   Please reach out with any questions or for further information on the law.

We can help! Reach out to us at questions@foleylawpractice.com or (508) 548-4888.

Year End Federal Employment Law Changes: 2017 Summary

Stressed? We can help. Below is a Federal Year End Update that will walk you through important changes in Federal law and enforcement practices. Join us on December 14, 2017 at 12:00 pm EST for a virtual lunch time (or breakfast depending on your time zone) roundup of changes in Federal and State laws that took place in 2017. It will be quick but informative. From 12:00-12:30 pm, we will cover changes at the Federal level, from 12:30-1:00 pm we will cover notable changes on the East Coast, and from 1:00 pm-1:30 pm we will cover the West Coast. To RSVP, please send an email to nicole@foleylawpractice.com. 2017 YEAR END ROUNDUP: FEDERAL EDITION What a long, strange trip it’s been. The Affordable Care Act (ACA) did not go away but the overtime rule did-for now (see below). The constant tweets and the initial flurry of Executive Orders gave way to little action by Congress. Yet, there are many changes that will impact employers in 2018. Federal agencies and the courts hammered away on workplace issues. Additionally, sex-based and sexual harassment is being litigated and receiving unprecedented attention, putting unprepared employers at tremendous risk. And states are legislating where Congress has not (more on that soon). Let’s take a quick tour of what is in store for 2018: Sexual Harassment, Time to Take Action You can call it the Harvey Weinstein effect, but sexual harassment is not just a Hollywood problem. It exists in all industries and has for years. However, it is now getting some serious press, which means sexual harassment is on employees’ minds, and all employers are at an increased risk of a sexual harassment claim. Before now, the standard sexual harassment compliance advice has been to implement a sexual harassment policy, and invest in sexual harassment training. Yet, many of the workplaces publicly rocked by recent claims-including the Weinstein Company-are headquartered in California, where the law mandates that employers have strict policies and training in place. What can be done? First, it is time for all employers to revisit and revise their existing policies and practices. The U.S. Equal Employment Opportunity Commission (EEOC) has released a new document identifying five core principles for addressing and preventing sexual harassment in the workplace. According to the EEOC, the principles are “promising practices,” rather than official guidance or legal requirements; but they are a great place for all employers to start. They include: Committed and engaged leadership; Consistent accountability; Strong harassment policies; Trusted, accessible complaint procedures; and Regular, interactive and tailored training. Next Steps: Update Harassment Policies. Our firm is available to help draft a policy that includes an open door element, multiple avenues for complaints, and a process that will allow employees to file complaints with your organization-rather than going to an attorney or the MCAD or EEOC. Utilize Targeted Training. Our firm offers a unique form of sexual harassment training targeted to your organization’s culture and needs. Create a Communication Strategy. Messages from leadership will set the tone for the entire organization. Join Us for a Sexual Harassment Webinar. Many employers are feeling overwhelmed and concerned about their exposure regarding sexual harassment. Join our attorneys from the comfort of your desk for a webinar on January 17, 2017, at 12:00p.m. We will provide an overview of the state of the laws as well as strategies for addressing harassment in the workplace. To RSVP, please send an email to nicole@foleylawpractice.com. I-9 Audits and ICE Investigations Although USCIS does not require employers to submit Form I-9 audits, the U.S. Immigration and Customs Enforcement (ICE) does audit I-9’s, and the agency just recorded its largest I-9 settlement ever, to the tune of $95 million. When viewed alongside recent Executive Orders changing ICE’s immigration priorities and promoting Buy American, Hire American policies, there seems to be a clear pattern of change in enforcement strategies emerging. Recently, the acting Director of ICE announced that he has instructed the investigative unit of ICE, to increase worksite enforcement audits and inspections by four to five times. ICE has already increased the number of inspections in worksite operations, and these inspections will significantly increase this next fiscal year. In addition, ICE is changing its approach to more aggressively go after employers that hire illegal workers. 1095-B or 1095-C Flags At the same time, we have noted a marked increase in the number of employer questions related to employees who either present a new social security number or whose 1095’s are rejected by the IRS. The 1095 requirements arose out of the reporting required by the Affordable Care Act. The system verifies whether the name and social security number on the 1095C actually match Social Security Administration records. If they do not match, the system is returning an error message. There are a number of reasons the name and social security numbers on a 1095C might not match, including typos, marriage, divorce, or a “borrowed” social. Unfortunately, even when the employer is able to fix the 1095C errors, I-9’s and W-2’s will need to be updated as well. The I-9 rules do not require employers to terminate employees for submitting false identity documents, and later requesting to change them. However, they do require employers to complete a new I-9 and attach it to the old I-9 form making note of the reason for the change. But, Please Don’t Forget About Discrimination Laws The current administration’s push for “Hire American” cannot be interpreted as “hire only Americans” or even “hire Americans first” without exposing your company to legal liability. First, workplace laws limit what employers can ask in the application and interview process, particularly when it comes to immigration status. Furthermore, once a new hire comes on board, an employer cannot require proof of U.S. citizenship when filling out the Form I-9. The law is clear that employers must accept valid documents and cannot insist on additional documentation because of a suspicion that an applicant is not a U.S. citizen. Federal law also prohibits employers from conducting E-Verify or requesting a form I-9 before the employee has accepted an employment offer, and employment applications must state that. Next Steps: The tension between discrimination laws and the actions of the current administration are creating risk for employers. However, there are steps employers can take to mitigate these risks: Review and update applications. Ensure they do not ask unlawful questions related to citizenship. Our firm is available to review and update or draft applications for a flat fee. Training. Any employee who will be conducting interviews or collecting I-9 forms and all HR employees must understand the potential pitfalls outlined above. Forward facing employees should be prepared for ICE inspections.They should know who to contact, and how to reach them immediately. They should know what to say and what not to say. There are specific regulations regarding I-9 production, and California has its own I-9 steps vis a vis ICE. Perform an I-9 audit. If you self-audit, the first step is to ensure that you are using the newest Form I-9. The form was updated twice this year, and a third update may be on the way. We can also assist. We Can Help. Our firm offers training on discrimination as well as I-9 compliance. We draft action plans for I-9 audits and/or ICE inspections, and we have also developed a flat fee I-9 audit intended to help our clients address this thorny issue. It Is Not Dead Yet: New Overtime Rule Rears its Head Although the current administration has remained publicly silent on the so called white collar overtime rule, the Department of Labor (DOL) has taken a series of steps that indicate new overtime rules may be coming. First, the DOL issued a news release in July announcing that the DOL would publish a Request for Information (RFI) for the overtime rule. Then this fall the DOL appealed the initial injunction stopping the overtime rule in order to affirm its authority to set a salary threshold for the white collar exemptions. At that time Secretary of Labor Acosta stated: “The particular question on the table is how should the overtime rule be updated…it hasn’t been updated since 2004, and it really is in need of updating.” While the timing of the proposed overtime rule remains up in the air, it is clear that employers should be ready to take another look at their overtime classifications. Next Steps For clients we worked with already, you updated your job descriptions, reviewed your exempt and non-exempt classifications, focusing on the employees’ duties in addition to the minimum salary level, and you are now in good shape. Up to date and accurate job descriptions are vital in the defense against various claims and to proper classification of employees. Employers who hedged and thought they would wait-now it is your turn.Our office performed a number of Position Classification Audits in 2017, and our clients found them to be an extremely effective risk management tool, even without the new overtime rules. Most employee misclassification occurs because the employee is incorrectly classified as exempt in the first place, not because of the salary. We continue to offer this audit under a flat fee arrangement. Affordable Care Act (ACA) While the ACA was not been repealed there have been many changes over time. Here are some areas for employers to review in preparation of 2018: For plan years beginning in 2018, employer-sponsored coverage will be considered affordable if the employee’s required contribution for self-only coverage for the least-expensive plan option the employer offers does not exceed 9.56 percent of the employee’s household income for the year (down from 9.69 percent in 2017). The ACA has created a safe harbor for employers to use in lieu of actually knowing an employee’s household income: The employee’s wages, as reported in Box 1 of the W-2, generally as of the first day of the plan year. The employee’s rate of pay, which is determined by the employee’s hourly wage rate multiplied by 130 hours (the monthly equivalent of at least 30 hours per week) as of the first day of the plan year. The individual Federal Poverty Level (FPL). The FPL isn’t officially published until January, until then, employers can use the FPL in effect six months prior to the start of the plan year. For 2018, the maximum monthly premium contribution that meets the FPL safe harbor will be 9.56 percent of the prior year’s federal poverty level ($12,060 in most states for 2017) divided by 12, or $96.08. Out-of-Pocket Maximums: An annual limit on cost-sharing, known as an out-of-pocket (OOP) maximum is set by the department of Health and Human Services (HHS) and applies to all non-grandfathered plans. The ACA’s self-only annual limit on OOP costs applies to each covered individual, regardless of whether the individual is enrolled in self-only coverage or family coverage. In 2017, the OOP maximum is $7,150 for an individual and $14,300 for a family plan. For 2018, the OOP maximum will be $7,350 for self-only coverage and $14,700 for family coverage. The IRS annually sets a separate, lower OOP maximum for high-deductible health plans (HDHPs) that can be linked with health savings accounts (HSAs), known as HSA-qualified HDHPs. For these plans, the OOP maximum for 2017 is $6,550 for an individual and $13,100 for family coverage. For 2018, the OOP maximum will be $6,650 for self-only coverage and $13,300 for family coverage. Next Steps The 2018 affordability rate is lower than the 2017 affordability rate, meaning applicable large employers may need to reduce their employees’ share of premium contributions in order to maintain affordable coverage as required by the ACA. We recommend developing a compliance strategy now to avoid ACA assessments under 4980H. Because applicable large employers (50 or more full-time equivalent employees during the previous calendar year) are assessed a penalty of $3,000 per year for each full-time employee who receives a premium tax credit through the ACA exchange, it is important to ensure that plans meet the affordability requirement. The IRS has published a Q&A located here: https://www.irs.gov/affordable-care-act/individuals-and-families/questions-and-answers-on-the-individual-shared-responsibility-provision As a reminder, large employers-those with 50 or more full-time employees in the previous year-must use IRS Forms to report healthcare coverage offered to full-time employees in the previous calendar year. This year’s deadlines for filing are as follows: Forms 1095-B and 1095-C: January 31, 2018 Forms 1094-B and 1094-C with copies of1095-B and 1095-C (paper submission): February 28, 2018 Forms 1094-B and 1094-C with copies of1095-B and 1095-C (electronic submission): March 31, 2018 Tip: Employers can receive an automatic 30-day extension by filing Form 8809 with the IRS. WE CAN HELP, REACH OUT TO US AT QUESTIONS@FOLEYLAWPRACTICE.COM OR (508) 548-4888. © 2017 FOLEY & FOLEY, PC, ALL RIGHTS RESERVED

 

Foley & Foley, PC, 495 Palmer Avenue, Falmouth, MA 02540

 

The Kids Are Alright

Millennials love information. Information means transparency. And that means pay equity cannot hide. A case in point: The EEOC prevailed where two high school friends, Jensen Walcott and Jake Reed, applied to work at Pizza Studio as “pizza artists” in 2016. After both were interviewed and offered jobs, Walcott and Reed discussed their starting wages. Upon learning that Reed–the male– was offered 25¢ more per hour, Walcott called the restaurant to complain about the unequal pay. When she did so, the company immediately withdrew its offers of employment from both Walcott and Reed. Not the best practice, maybe the worst.

The Kansas federal court ordered that compensatory, liquidated and punitive damages be paid by the store’s holding company (the store had closed). A very expensive lesson learned:

• Rectify don’t retaliate when mistakes are discovered;
• REVIEW PAY PRACTICES–we can help.  We have a comprehensive pay equity service that has already helped many clients;
• Workers, particularly millennials, will talk about pay and will publish information found online.  Keep ahead of trouble with fair pay policies.

We can help.  Check out our Pay Equity Service http://www.foleyworkplacelaw.com/pay-equity-audit-service.htm