Speaking at a Labor Day event in Boston, President Obama announced a new executive order that will provide up to seven days of paid sick time to employees of federal contractors.  The measure, which does not go into effect until 2017, is the latest in a string of executive orders affecting working conditions for people employed under federal contracts.

Under the executive order, employees working under qualifying federal contracts will be entitled to earn up to seven days of paid time off to deal with health and domestic violence issues affecting themselves or their family members.

Many of the details of how the earned sick time will actually be administered and tracked have been left to regulations to be drafted by the Secretary of Labor over the next year.  However, the main provisions of the executive order are as follows:

  • Employees will earn one hour of paid sick time for every thirty hours worked.
  • Employers cannot cap accrual of earned sick time until an employee amasses fifty-six hours of earned sick time—the equivalent of seven eight-hour days.
  • Earned sick time can be used for absences resulting from:
    • physical or mental illness, injury, or medical condition;
    • obtaining diagnosis, care, or preventive care from a health care provider;
    • caring for a child, a parent, a spouse, a domestic partner, or any other individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship who has any of the conditions or needs for diagnosis, care or preventive care described above, or is otherwise in need of care;
    • domestic violence, sexual assault or stalking, including absences resulting from the need for medical care related to domestic violence, or resulting from seeking counseling, participating in legal proceedings or other related absences.
  • In the case of foreseeable absences, employees must request paid time off, orally or in writing, seven days in advance. In the case of unforeseeable absences, employees must request time off as soon as is practicable.
  • Employees cannot be forced to find a replacement worker as a condition of using paid sick time.
  • Employers may not request certification (i.e., a “doctor’s note”) until an employee has had absences of three consecutive workdays.
  • Employees may carry over earned sick time from year to year.
  • Employees will not be entitled to payment for unused earned sick time upon termination, but workers re-employed within twelve months of termination will have their unused earned sick time reinstated.
  • Employers’ pre-existing paid time off policies can satisfy the provisions of the executive order if such policies provide at least the same amount of paid time off, and if that time off can be used for the same purposes provided for in the executive order.
  • The Executive Order includes anti-retaliation and anti-discrimination provisions.

In many respects, the provisions of the executive order resemble the recently-enacted Massachusetts Earned Sick Time Law, which President Obama praised during his Labor Day speech.  The Obama administration estimates that the executive order will provide paid time off to about 300,000 workers, but it is no secret that the President wants paid sick time to be expanded to all U.S. workers.  In his 2015 State of the Union address, the President asked Congress to “[s]end me a bill that gives every worker in America the opportunity to earn seven days of paid sick leave.  It’s the right thing to do.”  It’s unclear whether Congress will give the President the legislation that he is looking for, but in the meantime, federal contractors will anxiously await the Secretary of Labor’s proposed regulations for implementing the executive order, which are due by September 2016, in advance of the executive order’s January 1, 2017 effective date.

On June 25, 2015, the Equal Employment Opportunity Commission (“EEOC”) updated its Enforcement Guidance: Pregnancy Discrimination and Related Issues to make it consistent with the decision in Young v.United Parcel Service, Inc. (UPS), the most recent U.S. Supreme Court case on pregnancy discrimination.

The Young court analyzed under what circumstances the Pregnancy Discrimination Act (“PDA”) requires an employer to provide work accommodations it provides to non-pregnant employees to pregnant employees who are “similar in their ability or inability to work.”

Before Young v. UPS, the EEOC’s interpretation of the PDA was that it  required employers to treat pregnant workers with work limitations more favorably compared to non-pregnant employees  with work limitations  due to reasons other than pregnancy. Based on this interpretation, the EEOC previously advised in its guidance:

[A]n employer is obligated to treat a pregnant employee temporarily unable to perform the functions of her job the same as it treats other employees similarly unable to perform their jobs, whether by providing modified tasks, alternative assignments, leave, or fringe benefits.

An employer may not refuse to treat a pregnant worker the same as other employees who are similar in their ability or inability to work by relying on a policy that makes distinctions based on the source of an employee’s limitations (e.g., a policy of providing light duty only to workers injured on the job).

In Young , the U.S. Supreme Court rejected the EEOC’s guidance  and held that the PDA does not grant pregnant workers a “most-favored-nation” status. You can read more about the case in a summary of Young v. UPS written by Attorney Stevens.

The majority of the guidance remains unchanged, and only the portion that was criticized by the Young court was amended. While the changes  should come as no surprise to those  who followed Young , below are the sections that were rewritten:

  • Section I.A.5. Persons Similar in Their Ability or Inability to Work
    • This section was deleted in its entirety
  • Section I.B.1. Disparate Treatment
    • The guideline regarding how to prove a violation of the Pregnancy Discrimination Act was revised consistent with Young.
    • A new example of evidence indicating disparate treatment based on Young was added.
  • Section I.C.1. a. Disparate Treatment (Formerly “a. Disparate Treatment: Pregnancy-Related Comments as Direct Evidence of Discrimination”)
    • This section, which pertains to disparate treatment involving light duty, was significantly rewritten to reflect the holding of Young and is worth taking the time to read.

Although the Court in Young  rejected the EEOC’s literal interpretation of the PDA,  an employer may still be found to have violated the PDA if its seemingly nondiscriminatory, harmless work accommodation policy poses a significant burden on pregnant workers. Therefore, employers  should review their workplace accommodation policies to  assess  whether the administration of such policies may result in unfair treatment of pregnant workers.

You have probably heard that effective July 1, 2015, Massachusetts enacted a new sick time law. There has been much discussion about its impact on companies located in Massachusetts. However, one aspect that has been overlooked is its impact on out-of-state businesses which have employees in Massachusetts. Any company with employees performing work in Massachusetts must consider this issue or face the consequences of non-compliance with the law.

The new law applies to businesses with employees whose “primary place of work” is Massachusetts. The final regulations of the Earned Sick Time Law, M.G.L. c. 149, § 148C, specify that an employee does not have to spend 50% of his/her work time in Massachusetts for it to be considered his/her primary place of work. Click here to read the final rule.

The regulations give the following example: A painter with a single employer works 40% of her hours in Massachusetts, 30% in New Hampshire and 30% in other states. Massachusetts is her primary place of work. In this example, all the hours the painter worked would be applied toward accrual of earned sick time, regardless of the location of the work or of the employer.

The first step in determining whether a company not located in Massachusetts is covered by the law is to review its total number of employees.  Unpaid sick leave must be provided to employers with 11 or fewer employees, and paid sick leave must be provided to employers with more than 11 employees.  The regulations state that in determining the number of employees for purposes of the sick leave law, “All of an employer’s employees, including full-time, part-time, seasonal, and temporary employees, whether working in or outside Massachusetts and regardless of their eligibility to accrue and use earned sick time, shall be counted for the purpose of determining employer size.”

Therefore, a New Hampshire (or any out-of-state) business that has employees who work primarily in Massachusetts must count all of its employees to determine whether it must offer paid or unpaid sick time to its Massachusetts employees.

For example, ACME manufacturing has its head office in New Hampshire where 20 people work, 5 employees in Connecticut and 2 salespeople in Massachusetts. The 2 salespeople in Massachusetts report to the New Hampshire head office, but primarily work in Massachusetts. What is ACME’s obligation under the Massachusetts sick leave law? Answer: ACME must count all employees to determine whether it must offer the 2 salespeople unpaid or paid leave. In this case, ACME has 27 employees and must offer paid sick leave to its 2 salespeople in Massachusetts and otherwise comply with that law as to those 2 employees.

My colleague Adam Hamel has written several blog posts (link #1, link #2) about compliance with the new law.  However, businesses with questions about the new law are strongly encouraged to consult with legal counsel to determine what, if any changes, must be made to their existing sick leave or paid time off (PTO) policies and whether the safe harbor applies.

The wait is over; well sort of.  In March 2014 President Obama directed the US Department of Labor (“DOL”) to review the so-called “White Collar” exemptions under the Fair Labor Standards Act (“FLSA”) to determine whether they were in need of revision having last been updated in 2004.  Today the DOL announced a new proposed rule regarding the salary basis which applies to the executive, administrative and professional tests which employees must meet in order to be exempt from the minimum wage and overtime requirements of the FLSA.   This exception to overtime eligibility was originally meant for certain highly-compensated or white collar workers.

An employee’s salary level was typically viewed as the best test of exempt status.  However, the current minimum salary level required for the exemption is $455 per week or $23,660.00 per year.  If an employee meets that test, then his or her duties are evaluated to determine whether the job itself is of the type which should be considered exempt.  Also, under the current rule, certain highly compensated employees, those making a salary of $100,000.00 per year or more, are automatically exempt.

The proposed revision would increase the salary threshhold to $921 per week or $47,892.00 per year.  The DOL also proposes to raise the threshhold for a highly compensated employee to $122,148.00 per year.  The department estimates that these changes would extend overtime protections to nearly 5 million white collar workers within the first year of its implementation. Finally, the proposed rule would automatically update the standard salary and compensation levels annually “to make sure that they maintain their effectiveness,” either by maintaining levels at a fixed percentile of earnings or by updating amounts based on changes to the CPI-U.

What the DOL did NOT do is make specific proposals to modify the standard duties tests, something which was expected.  Rather, the department is seeking comments on whether the tests are  working as intended to screen out individuals who are not appropriately classified as executive, administrative or professional employees.

So what happens next?  As soon as the proposed rules are published in the Federal Register, a comment period of sixty days begins.  Interested parties may submit comments electronically through the Federal eRulemaking Portal at http://www.regulations.gov. Comments by mail should be addressed to Mary Ziegler, Director of the Division of Regulations, Legislation, and Interpretation, Wage and Hour Division, U.S. Department of Labor, Room S-3502, 200 Constitution Avenue, N.W., Washington, D.C. 20210.  It is expected that the DOL will receive comments from organized labor as well as any number of business and trade associations.  Industries expected to be most affected by the proposed changes include retail and hospitality where managers often work long hours for low pay with many non-management responsibilities.  Also likely to be impacted are businesses which employ individuals who might otherwise qualify as executive, administrative or professional based on their education and duties on a part time basis for reduced pay.  In the rare week that such an employee works more than 40 hours, he or she could receive overtime pay at a rich hourly rate.

 

 

RSA 265-79-c takes effect on July 1, 2015.  The new law prohibits New Hampshire drivers from using “any hand-held mobile electronic device capable of providing voice or data communication” while driving or while temporarily halted in traffic, at a stop sign or red light, or any other momentary delay.  “Use” is defined broadly, and includes calls, reading or composing text messages or emails, accessing the internet on a device, and inputting information into a GPS. Drivers will still be permitted to use their devices in emergencies or to call 911 and may use a Bluetooth or other hands-free function to send or receive information while driving, provided that the driver does not have to divert their attention from the road ahead.  The exception for hands-free devices only applies to adult drivers, as teens under the age of 18 are not permitted to use electronic devices while driving except to report emergencies.  The statute carries fines for violations of the law, which increase in amount for each offense.

Cell Phone - MIke Kline via Flickr - CC by 2.0
Cell Phone – MIke Kline via Flickr – CC by 2.0

Although many employers have already implemented policies barring use of devices on the road, it is important to review and update cell phone or electronic device policies to confirm compliance with this change in the law.  An employer’s restriction on employees’ use of electronic devices while driving should be consistent with safety and require compliance with the law in the state of use.  Employers that do not currently have cell phone or electronic device use policies should implement such policies now.  Given the trend across the country to adopt similar legislation, those companies which have drivers engaged in interstate travel should confirm that the employees are also aware of the laws which govern driving in other states.

In addition to the fines which may be imposed upon employees who violate the law, businesses may be subject to liability for accidents or injuries which occur as a result of unsafe driving practices.

In the latest case to challenge elements of the Affordable Care Act (“Act”), the United States Supreme Court in a six-to-three vote, ruled on June 25, 2015 in King v. Burwell that premium subsidies will remain available in 36 states in which the federal government has primary responsibility for running health insurance exchanges.

The legal issue before the Court was the validity of Internal Revenue Service regulations that allow premium subsidies to individuals enrolled in a health plan through exchanges operated by a State or by the federal government.  The regulation interprets Section 36B(b)(2) of the Internal Revenue Code added by the Act which provides that the IRS is to calculate tax credits for premiums for qualified health plans “which were enrolled in through an Exchange established by the State.”

The Court was not persuaded by the petitioners’ argument that the plain, unambiguous language of the statutory provision prevented the IRS from establishing the regulation and there was no basis for the Court rejecting the plain text of Section 36B that only tax credits were available on state exchanges.  Rather, the Court viewed Section 36B as ambigu­ous in that the phrase could be limited in its reach to State exchanges but it could also refer to all exchanges—both State and Federal—for purposes of the tax credits.  Given that it determined that the text was ambiguous, the Court looked to the broader structure of the Act to determine whether one of Section 36B’s permissible meanings produced a substantive effect that was compatible with the rest of the Act, the core purpose of which is to provide quality, affordable health care.

Chief Justice Roberts concluded his lengthy majority opinion with the following statement that summarized the majority’s rational for the decision “[a] fair reading of legislation demands a fair understanding of the legislative plan.  Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them. If at all possible, we must interpret the Act in a way that is consistent with the former, and avoids the latter. Section 36B can fairly be read consistent with what we see as Congress’s plan, and that is the reading we adopt.”

Late last week, Massachusetts Attorney General, Maura Healey, issued the long-awaited final regulations for the implementation of the Commonwealth’s Earned Sick Time Law.  The issuance of the final regulations follows a series of public hearings and information sessions, and comes just in advance of the law’s July 1 effective date.

In addition to providing general guidance for employers as to the application of the Sick Time Law, the final regulations include some important clarifications about accrual, breaks in service, and the conditions under which documentation can be required from employees.

The Sick Time Law provides that all employees—regardless of whether they are full-time, part-time, exempt, not-exempt, permanent or temporary—earn sick time at a rate of one hour for every thirty hours worked up to a maximum of forty hours.  In recognition of the administrative burden tracking this accrual may impose on some employers, the final regulations give employers the option of providing employees with a lump sum allocation of forty hours of sick time at the beginning of the year.  Employers choosing this option will not be required to keep track of employees’ accrual of sick time.

The final regulations also explain how sick time benefits are handled for employees with breaks in service, an issue that is of great importance to employers with temporary workers who may come on and off the employers’ payroll as business needs change.  Employees who have a break in service of up to four months will retain their rights to all unused sick time earned prior to the break in service.  Employees who have a break in service of more than four months, but less than a year, will retain their rights to unused sick time earned prior to the break, but only if their unused sick time bank exceeds ten hours.  Employees returning to work after a break in service of less than one year are not subject to the ninety-day vesting period, and may begin using earned sick time right away.  Employees with a break in service of more than twelve months do not retain any of their rights to unused sick time earned before the break in service.

The Sick Time Law provides that employers may only request documentation from an employee justifying the need for sick time when the employee has used sick time for twenty-four consecutively scheduled work hours.  In response to employers’ concerns about potential misuse of sick time, the final regulations also allow employers to request documentation under certain other circumstances: for an absence that exceeds three consecutive days; when an employee has four unforeseeable absences in a three-month period (for employees seventeen years old or younger, documentation can be requested after three unforeseeable absences in a three-month period); or for absences that occur within two weeks of a non-temporary employee’s final scheduled workday before termination.  The final regulations also make clear that earned sick time may not be used as an excuse for being late to work for a reason other than those for which sick time may be used.

All employers with workers in Massachusetts must bring their policies in compliance with the law by the July 1 effective date, unless they qualify for the “safe harbor” announced by Attorney General Healey earlier this spring, in which case, they will have until January 1, 2016 to modify their existing policies.

Photo: mkhmarketing via Flickr (CC by 2.0)
Photo: mkhmarketing via Flickr (CC by 2.0)

People often think of the Americans with Disabilities Act as a law that protects individuals with physical and mental disabilities from discrimination or other unfair treatment. What is seldom mentioned is that the ADA also protects the confidentiality of employee medical information, and requires that employers keep all such information confidential.

There are some exceptions that allow limited disclosure of protected medical information by employers, including when the employee voluntarily discloses his or her own medical information to co-workers. In that instance, the employee cannot claim a breach of confidentiality if their information is released to other co-workers.

This exception was recently tested in a case out of the Federal district court in Indiana called Shoun v. Best Formed Plastics, 28 F. Supp. 3d 768 (N.D. Ind. 2014). There, the employee – Shoun – alleged that his former employer violated the ADA by divulging confidential medical information to others via a posting on Facebook. Shoun was injured at work, spent months on leave recovering, and sought to collect workers’ compensation benefits as a result of the injury. While out on leave and seeking these benefits, a co-worker of Shoun’s responsible for processing his workers’ compensation claim learned of the nature and extent of his injuries.

Shoun then filed a lawsuit in federal court alleging different violations of the ADA. During the course of this lawsuit, the co-worker posted the following message on her personal Facebook page: “Isn’t [it] amazing that how Jimmy experienced a 5 way heart bypass just one month ago and is back to work, especially when you consider George Shoun’s shoulder injury kept him away from work for 11 months and now he’s trying to sue us.” Based on this posting, he alleged a new claim against the employer for violating the ADA’s confidentiality and disclosure provisions.

The employer moved to dismiss this ADA claim, arguing that Shoun voluntarily disclosed his medical condition through the original filing of his ADA lawsuit, prior to the Facebook post. The court disagreed and allowed the claim to go forward, concluding that disclosure via a court filing was not a “voluntary” disclosure that met the exception under the statute.

This decision teaches us that employers must use great caution when discussing a co-worker’s health condition on social media, or anywhere else for that matter. Training on the ADA’s confidentiality and medical information disclosure rules is especially important, given that this is an oft-overlooked part of the law. Employers need to understand that the concept of confidential medical information is broad-ranging, and includes workers’ compensation claim files, FMLA claims, reasonable accommodation requests, and other medical information related to the performance of one’s job. Such information should always be off-limits for discussion.

Last month, the United States Supreme Court ruled unanimously in Tibble v. Edison International that retirement plan fiduciaries have an ongoing duty to monitor plan investments.  The ruling came in a case involving challenges to plan investment decisions made more than six years before suit was filed. The lower courts had ruled some claims were barred by the statute of limitations.

In a 2007 lawsuit, participants in the Edison 401(k) Savings Plan sued various Edison International entities and the plan fiduciaries alleging numerous claims under ERISA.  The claims included that the plan fiduciaries should have offered identical lower-cost institutional shares instead of the more expensive investment options selected in 1999 and 2002.

The Supreme Court reversed the lower courts’ ruling that ERISA’s six-year limitations period barred plaintiff’s claims that the 1999 mutual fund investments were imprudent.  Although the Supreme Court stated that the lower court correctly asked whether the last action which constituted a part of the breach or violation of the duty of prudence occurred within the rele­vant 6-year period, the lower court was incorrect to focus on the act of designating an investment for plan inclusion to start the six ­year period. Instead, the lower courts should have recognized that a fiduciary is required to conduct a regular review of its investments with the nature and timing of the review contingent on the circumstances.  The case highlights the need for retirement plan fiduciaries to monitor plan investments pursuant to written procedures.

Recently, the U.S. Department of Labor published new FMLA forms with the new expiration date of May 31, 2018. The new forms remain essentially the same as the previous forms. The only notable change is that a reference to the Genetic Information Nondiscrimination Act (“GINA”) was included in all certification forms except the certification form for qualifying exigency for military family leave.

Title II of GINA prohibits discrimination against employees, applicants, and former employees on the basis of their genetic information in all aspects of employment. That means that it is unlawful for an employer to consider an employee, applicant, or former employee’s genetic information when making employment decisions. GINA also makes it unlawful for employers to acquire genetic information of an individual or family member of the individual with certain exceptions. EEOC’s guidance explains the exceptions to this prohibition as follows:

  • Inadvertent acquisitions of genetic information do not violate GINA, such as in situations where a manager or supervisor overhears someone talking about a family member’s illness.
  • Genetic information (such as family medical history) may be obtained as part of health or genetic services, including wellness programs, offered by the employer on a voluntary basis, if certain specific requirements are met.
  • Family medical history may be acquired as part of the certification process for FMLA leave (or leave under similar state or local laws or pursuant to an employer policy), where an employee is asking for leave to care for a family member with a serious health condition.
  • Genetic information may be acquired through commercially and publicly available documents like newspapers, as long as the employer is not searching those sources with the intent of finding genetic information or accessing sources from which they are likely to acquire genetic information (such as websites and on-line discussion groups that focus on issues such as genetic testing of individuals and genetic discrimination).
  • Genetic information may be acquired through a genetic monitoring program that monitors the biological effects of toxic substances in the workplace where the monitoring is required by law or, under carefully defined conditions, where the program is voluntary.
  • Acquisition of genetic information of employees by employers who engage in DNA testing for law enforcement purposes such as a forensic lab or for purposes of human remains identification is permitted, but the genetic information may only be used for analysis of DNA markers for quality control to detect sample contamination.

The term “genetic information” means information about:

  1. An individual’s genetic tests;
  2. The genetic tests of that individual’s family members;
  3. The manifestation of disease or disorder in family members of the individual (family medical history);
  4. An individual’s request for, or receipt of, genetic services, or the participation in clinical research that includes genetic services by the individual or a family member of the individual; or
  5. The genetic information of a fetus carried by an individual or by a pregnant woman who is a family member of the individual and the genetic information of any embryo legally held by the individual or family member using an assisted reproductive technology.

Among others, an employer with 15 or more employees is covered by GINA. Employers must treat genetic information as a confidential medical record and keep genetic information in a separate medical file. Lastly, employers are required to display a notice regarding GINA in a conspicuous location in the workplace where notices to applicants and employees are customarily posted.