On June 30, 2014 the United States Supreme Court ruled in favor of Hobby Lobby in a controversial 5-4 decision regarding the Affordable Care Act provision mandating that insurance policies cover contraceptives without charge to the insured.  The Court ruled that Hobby Lobby, Inc. a corporation which owns a number of arts and crafts stores can refuse to provide health insurance coverage to employees for some forms of birth control.  The company, deemed to be a “closely held” corporation, is owned by a family of devout evangelical Christians who objected on religious grounds to providing health insurance which would pay for certain types of birth control, specifically intrauterine devices and morning-after pills.

The Supreme Court’s decision is limited to the requirement under the Affordable Care Act to provide contraceptives at no cost as one of a list of women’s preventative health services.

Justice Alito, writing for the majority,  stated that it is not necessarily the case that an insurance coverage mandate will be struck down if it conflicts with an employer’s religious beliefs.  This is a narrow decision which applies to companies which are “closely held” or “family-owned” and where the religious identity of the company is  strongly tied to the owner’s religious beliefs.   The court cautioned against concern that this decision would allow employers to opt out of covering other medical procedures like blood transfusions.

In addition to the controversial religious aspects of the decision its real significance may lie in the fact that this is the first time the Court has ruled that a for-profit business can hold religious beliefs.  The real struggle in the future is likely to be in determining what it takes to be a “closely held” business with sincerely held religious belief.  What determines a company’s status as closely held is a creature of state law, and some states do not define or even use that term.  What is clear is that this decision has moved the discussion from family owned businesses and the proverbial “Mom and Pop” operation to a large, profitable company.  The Court’s majority was convinced that the management of Hobby Lobby was concentrated in a small enough group of people with the same religious beliefs to support their refusal to provide the mandated coverage on religious grounds.  The question now is what the future implications of this decision might be, not only with respect to the ACA but in connection with other laws against which a religious objection might be lodged.

 

It has been a long, cold winter this year with the Polar Vortex and record snowfall in many parts of the country.  And while spring will arrive eventually, winter’s not over yet.  (Remember what they say about March coming in like a lion….)

Sometimes, severe weather conditions lead employers to make the decision to shut down their business operations for all or part of a day.  What are employers’ obligations with regard to payment of wages when employees are sent home early, or told to stay home all day, because of inclement weather?  This question raises issues under both federal and state law, and the answer is not always easy.

When it comes to non-exempt employees, the Federal Fair Labor Standards Act (“FLSA”) only requires that these employees be paid for hours actually worked.  State statutes that provide for “report-in” pay, may come into play in cases where an employer decides to shut down its operations for part of a day and send employees home.  For example, Massachusetts regulations (455 C.M.R. § 2.03(1)) provide that when an employee who is scheduled to work three or more hours reports for duty at the time set by the employer, and that employee is not provided with the expected hours of work, the employee shall be paid for at least three hours on such day at no less than the basic minimum wage.  New Hampshire’s “report-in” law, RSA 275:43-a, requires that employees who report to work at the employer’s request be paid no less than two-hours pay at the regular rate of pay.

For exempt employees, the FLSA does not permit employers to make deductions from employees’ pay for partial day, or even whole day closures.  The only exception is when the employer’s facility is shut down for an entire week, and exempt employees do not perform any work at all during the shutdown.  But, if exempt employees are still checking emails and making phone calls from home while the office is closed, they would still be entitled to be paid.  For most employers, there will be a duty to pay exempt employees as usual during a weather-related shutdown.

Employers may permit, or even require, employees to use accrued paid time off in connection with inclement-weather closings.  However, if employees don’t have enough accrued paid time off, employers cannot make up the difference by charging against future unearned vacation time unless this is specifically provided for in the company’s vacation policy.

It always makes sense to prepare for a storm, whether that means checking to make sure that you have enough milk in the refrigerator, or reviewing your payroll and personnel policies for compliance with applicable federal and state laws.

Have you ever gotten lost on the way to work and found yourself in another state or had your car swarmed by bees so that you just couldn’t get to work?  Some employees have had those days and called in sick from work.

CareerBuilder’s annual survey on absenteeism in the workplace reveals some of the most creative excuses employees used this year when calling in sick.  The online survey included 2,099 hiring managers and human resource professionals and 3,484 full time employees.

Up two percent from last year, 2013’s survey shows that 32% of workers called in sick when they were not actually ill.   The majority of employees, however, use sick days to recover from being ill.  After that, the most common reasons employees do not come into work in statistical order include:   just don’t feel like going; felt like they needed to relax; doctor’s appointment; wanted to catch up on sleep; or errands to do.

What are some of the more interesting excuses employers reported hearing this year?

  • Employee’s false teeth flew out the window while driving down the highway
  • Employee’s favorite football team lost on Sunday so needed Monday to recover
  • Employee said that someone glued her doors and windows shut so she couldn’t leave the house to come to work
  • Employee bit her tongue and couldn’t talk
  • Employee claimed a swarm of bees surrounded his vehicle and he couldn’t make it in
  • Employee said the chemical in turkey made him fall asleep and he missed his shift
  • Employee got lost and ended up in another state
  • Employee couldn’t decide what to wear

See the full list of excuses reported by CareerBuilder.com.

So what are employers to do?  The best practice is to have clear policies on paid or unpaid time off from work.  Policies may specify different types of time off (for example, sick, personal, or vacation) while others may allow a general amount of time off.  There may also be limitations or conditions to taking such time (for example, a notice requirement or a doctor’s note).  Employees need to know what is allowed and not allowed.  Employers need to confirm they are complying with any federal or state law as to requested time off and that they are applying their policies consistently.

This year’s survey further revealed that some employers follow up on employees who call in sick.  Of those responding, 64% had required a doctor’s note, 48% had called the employee at home some time during the day, 19% had checked the employee’s social media posts, 17% had another employee call the employee, and 15% had driven past the employee’s house.  Employers also reported that while they allow flexibility for reasons to take the day off from work under their policies, no fewer than 16% had terminated employees who used false reasons for being out.

On September 23, 2013, the IRS released Notice 2013-61 which provides special rules for employers making claims for refunds or adjustments of Federal Insurance Contributions Act (FICA) and federal employment taxes resulting from the United States Supreme Court’s decision in Windsor.  In Windsor, the Court found that Section 3 of the Defense of Marriage Act (DOMA), which defined marriage as only between a man and a woman, was unconstitutional.

In the wake of Windsor, the IRS first released Revenue Ruling 2013-17 and adopted a “place of celebration” test for determining whether same-sex couples are considered legally married for federal tax purposes (which is more fully discussed here).  Under the “place of celebration” test, once a couple is married in a state that recognizes same-sex marriage, the IRS considers them married for all purposes going forward, even if they move to a state where same-sex marriage is not recognized.

Prior to Windsor and Revenue Ruling 2013-17, an employer who made benefits available to a same-sex partner of an employee was required to impute the value of those benefit as income to the employee, and then withhold and pay FICA and employment taxes based on that imputed income amount.  As a result of Windsor and Revenue Ruling 2013-17, however, employers no longer need to impute income to employees with same-sex partners who are validly married.

Revenue Ruling 2013-17, which took effect on September 16, 2013, is retroactive to all open tax years (2010, 2011, 2012).  Individual taxpayers may amend their previously filed tax returns back to 2010 to change their filing status and recalculate their federal income tax to exclude imputed income based on benefits provided to a same-sex spouse.  Like individual taxpayers, employers may also claim a refund or make an adjustment for any excess FICA and employment taxes paid.  With Notice 2013-61, the IRS eased the process for employers seeking such an adjustment.  Rather than filing a Form 941-X for each calendar quarter for which a refund or adjustment is needed (including 2013), an employer may file a single Form 941-X for each calendar year for which a refund or adjustment is desired.  Notice 2013-61 also provides employers with two optional methods for correcting 2013 overpayments.  The first correction method allows an employer to use its 2013 fourth quarter quarterly tax return (IRS Form 941) to correct any overpayments made during the first three quarters of 2013. The second correction method allows an employer to file one amended employer’s quarterly tax return (IRS Form 941-X) for the fourth quarter of 2013 to correct overpayments of FICA taxes for all four quarters of 2013.

Employers should be aware that these special rules are optional.  If an employer desires to use regular procedures for correcting employment tax payments instead of the special administrative procedures (e.g., submitting amended returns for each quarter), it may still do so.

While uncertainty still lingers in some areas of federal law regarding how the recent overturning of DOMA will affect same-sex couples’ abilities to obtain federal benefits, on August 29, 2013, the IRS clarified this ambiguity with regard to federal tax law.  The IRS published Revenue Ruling 2013-17 and a news release, IR-2013-72, announcing that it will recognize “all legal same-sex marriages … for federal tax purposes.”  This means that all same-sex couples legally married in any state are married, so far as the IRS is concerned, no matter where they now live.

The IRS ruling marks the first big first step toward a general federal recognition of same-sex marriages.  The IRS could have decided that married same-sex couples file their taxes on a “place of residence” basis, that is, if their state recognizes same-sex marriage, they can file as a married couple; if not, they must file individual returns.  Instead, the IRS opted for a “place of celebration” rule, which means that once a couple is married in one of the 13 states that recognize same-sex marriage (14, including Washington D.C.), the IRS considers them married for all purposes going forward, even if they move to a state where same-sex marriage is not recognized.

In doing so, the IRS concluded that gender-specific terms in the tax code such as “husband” and “wife” must be construed in a gender-neutral way.  The IRS also concluded, however, that other types of formal relationships, such as civil unions and registered domestic partnerships, are not equivalent to marriage, and persons in such relationships are not married for federal tax purposes.

The IRS ruling takes effect on September 16, 2013, though taxpayers may rely upon the ruling retroactively.  Taxpayers may amend their previously filed tax returns back to 2010 to change their filing status and recalculate their federal income tax.  Employers too are permitted to rely upon the ruling retroactively claim a refund of, or make an adjustment for, any excess Social Security and Medicare taxes paid.  The IRS will issue a special administrative procedure for employers on this point in the future.  Employers, however, cannot make claims for refunds of overwithheld income tax for prior years, but may make adjustments for income tax withholdings that were overwithheld in the current year, provided the employer has repaid and reimbursed the employee for the overwithheld income tax before the end of the calendar year.

 

 

 

 

Many dog lovers think their job, and their job performance, would be better if they could bring their pet to work. And there are studies that show that allowing dogs in the workplace reduces stress – resulting in happier and even more productiveDogs at Work and efficient employees – and even increased teamwork.

So every office should open its doors to Fido, right? Well, don’t throw open the doggie-door quite yet. While it might be tempting, employers have a few issues to consider from a legal, business and office culture perspective before offering a blanket policy allowing dogs.

There are certainly reasons to allow pooches in the workplace, and as a dog lover, I often wonder what my day would look like if I could bring my dog with me to the office. Then I realize that my wonderful, loving, but rambunctious dog is probably not office appropriate.

Canine Culture

Dog-friendly workplaces indicate that the employer is relaxed and forward thinking about office culture generally, and that type of environment is appealing to employees.

Even so, employers have to weight the positives with the potential negatives. For example, what do you do about aggressive dogs? While dog owners will tell you, “Don’t worry my dog wont bite,” it’s not always true. Even the most mild-mannered pup may get aggressive when put into an uncomfortable situation, perhaps including eight to 10 hours in an office building with many new faces and possible several unfamiliar dogs.

Employers should decide whether they are willing to face the possibility that an employee-owned dog becomes aggressive with an employee, customer or visitor. If so, employers should be sure that they have appropriate insurance for that possibility. And while you’re at it, check your building’s lease to ensure dogs are allowed.

Petaphobes

Employers also have to take into consideration the reaction of non-dog lovers before implementing a dog-friendly policy, and even further how to address employees with allergies. As hard as it is for dog lovers to understand, some people just do not like dogs and do not want to spend 40 (or more) hours each week with “those animals.”

How do you justify to an employee with a serious dog allergy that he or she might have to buy stock in Zyrtec in order to continue working? And might you be required to accommodate and employee’s allergies under the Americans with Disabilities Act? While the specific facts and circumstances would dictate whether an allergy would be a disability under the ADA, the possibility may be enough for some employers to choose not to implement a pet-friendly policy.

For those who still feel strongly about dogs in the workplace, they should remember they may be required to provide ADA separate pet-friendly and no-pet areas, requiring dogs on leashes, and making sure pet owners focus on pet hygiene.

Are You Really Dog-Friendly?

Finally, is being a dog-friendly workplace representative of the employer’s actual office culture? Take a close look at whether your workplace is appropriate for animals. If an employer is going to feel uncomfortable with the idea of customers and clients coming into the office where they will be greeted by a four-legged friend, then there is no reason for the employer to try to force a culture that does not fit with his or her business needs.

In a manufacturing business, it would be unsafe for animals to be allowed in the workplace. No matter how badly a company’s employees love the idea of having Rex sit at their feet during the workday, and employer should not acquiesce to their desire if it is directly opposed to the culture the employer wants to instill or the business in which it is engaged.

Pooch Policy

If you decide your office culture can include dogs, managing such issues can be (and should be) addressed by implementing a detailed policy. The policy should include, among others, an animal background check (assuring the dog has not been aggressive previously), allowing only housebroken and vaccinated dogs, requiring certain cleaning and hygiene requirements, requiring the use of a leash in certain parts of the office (if not all), creating a no-dog area for those who are not themselves dog-friendly or allergic, and implementing a zero-tolerance policy.

While dogs in the workplace may fit into the business and office culture of certain workplaces, employers should be cautious of the potential pitfalls and make sure they have a policy that addresses these possibilities.