Time after time, your success in court depends on your policies. Either an employee claims you violated your policy, or you claim the employee did. In either case, the policy is exhibit A, and it's likely to be dissected line by line. Are your policies ready?
How do you best ensure that your HR policies will hold up in court? Below are five bulletproof suggestions:
Tip 1: Be Aware (and Beware) of State Laws
Many employers are caught in lawsuits where the employer's policy complied with federal laws, but neglected to consider the impact of relevant state laws.
There are countless ways in which state and federal law overlap and diverge. Here are several of the most common:
Antidiscrimination
The federal antidiscrimination laws protect employees in organizations with 15 or more employees (Title VII and ADA), 20 or more employees (ADEA), or regardless of employer size (USERRA).
In comparison, most states have established antidiscrimination laws that cover employers with anywhere from one employee (e.g., Alaska, Colorado, and Michigan) to 12 employees (e.g., West Virginia).
Protected Classes
Under federal antidiscrimination law, employees are protected because of sex, race, ethnicity, age, national origin, disability, and service in the armed services.
A majority of states have moved to expand the protected classes of employees, adding sexual orientation and gender identity (e.g., Illinois, Maine, and Washington); use of lawful products (smoking) (e.g., California, Colorado, and Connecticut); genetic discrimination, HIV/AIDs, and/or sickle-cell trait (e.g., Arizona, Iowa, Kentucky, Maine, and North Carolina); arrest, conviction, and military records (e.g., North Carolina, California, Maryland, and Michigan); and marital status (e.g., Alaska, Illinois, Montana, and Nebraska) to name just a few. (The above list is not all inclusive).
Leaves of Absence
A number of states have adopted state-specific FMLA-type laws that generally follow the federal FMLA, with a few exceptions critical to employers in those states. For example, Connecticut allows for 16 weeks of protected family leave in a 24-month period (versus 12 weeks in a 12-month period under federal FMLA).
In addition, many states have adopted medical leave provisions for organ and bone marrow donation and blood donation (e.g., Arkansas, Connecticut, Illinois, Minnesota, and New York); leave for crime victims (e.g., California, Colorado, and Oregon); and leave for school visitation or other family obligations (e.g., California, Illinois, North Carolina, and Vermont).
Wage and Hour Provisions
The federal Fair Labor Standards Act (FLSA) is often supplemented by state laws regarding minimum wage, overtime, and meal or break periods. For example:
Overtime. Many states have chosen to diverge from the federal minimum overtime requirements for all hours worked in excess of 40 hours per week. For example, Alaska state law requires overtime for hours worked in excess of 8 hours per day.
Some states have legislated overtime requirements for specific industries in which overtime is frequent. For example, in New York, all hours worked by “resort employees” on the seventh consecutive workday are paid at an overtime rate.
Meal or break periods. The federal FLSA does not regulate meal or break periods. As a result, many states have stepped in and created their own rules. State provisions usually specify the number of hours that an employee must work to qualify for a break. North Carolina does not have a supplemental law at this time.
Tip 2: Make a Policy, Not a Contract
Depending on the specific facts of a case, state courts throughout the country have ruled that policy wording in employee handbooks may, in some circumstances, create a contract between employer and employee.
In this climate, you must treat your handbook that explains your policies as a quasi-legal document; and for this reason, it is best to seek an attorney’s advice in drafting the language.
Get Signatures
All workers should be asked to sign an acknowledgment that they have received and understand the policies in the handbook.
Tip 3: Train Supervisors and Employees
Of course, perfect policies are only half the battle—supervisors and employees must not only know what the company’s policies are, but they must also understand the reasons behind them. Without this understanding, they cannot effectively enforce and follow the policies.
Simply passing out policy manuals and suggesting that supervisors and employees read them isn't going to get the job done. Training is necessary, particularly if you have added new staff, changed any policies, or modified policies or procedures.
Tip 4: Coordinate Your Policy Manual with Other Manuals
Most companies have at least two types of policy manuals: one aimed at supervisors and managers and the other aimed at employees, usually called the “employee handbook.”
In addition, there may be a number of supplementary publications in the form of booklets or brochures describing the company’s programs in such areas as employee benefits, tuition aid, health and medical services, etc.
The important thing is to keep all policy-related publications current and in conformance with each other. A policy in one publication that is contradicted by a policy in another publication won't count for much in court.
There must be a single, up-to-date, authoritative source of guidance and information to which managers and supervisors can turn.
Tip 5: Keep Your Manual Up to Date
The work of policy management never really ends. In most companies a group of employees meets regularly to review changes in the law, government regulations, management philosophy, and employee benefits.
Remember that while an organization can change its policies at any time, those changes should be announced before—and not after—the fact and introduced to all employees, supervisors, and managers.
Also, keep in mind that some states require employers to provide employees with consideration (something of value beyond continued employment) if they reduce or eliminate a promised benefit (e.g., vacation).
How about your policies? Ready to be "Exhibit A" in court? Our editors estimate that there are 50 or so policies that need regular updating (or may need to be written.) It's easy to let this slide, but you can't afford to back-burner work on your policies—they're your only hope for consistent and compliant management that avoids lawsuits.
Many of you have heard me speak of "exhibit A" regarding not only your policies, but your job descriptions, disciplinary write-ups or any document related to requirements or conduct of employees. I always remind you to think about what you write, if you wouldn't want to see it as "exhibit A" in a court of law or on the front page of the Charlotte Observer, DON'T WRITE IT!
Contact The Whitford Group for assistance at TheWhitfordGroup@aol.com
by Steve Bruce - Summarized
Monday, May 31, 2010
Job Descriptions—The First Place the Feds Look
When "they" come to check up on you, whether they're agency investigators or class-action-minded attorneys, the first stop is the job description. Today we'll begin our look at three of the fed's favorite job description checkpoints: ADA, FLSA, and discrimination.
From the ADA standpoint, the most important thing the job description does is to delineate the essential functions. This is because in accommodating employees with disabilities, they must be able to accomplish the essential functions of the job with or without reasonable accommodation. Inability to perform nonessential functions does not disqualify the individual.
Here are a few pointers:
A function may be essential in one setting, but nonessential in another. For example, if a worker spends 90 percent of his time operating a particular piece of machinery, that's an essential function of his job. But how about for the person who operates that machine during the regular operator's lunch hour? That might be essential if:
1. The machine has to keep running (say it's filled with molten plastic that would congeal if it stops running), and
2. There's no one else who can be trained to run the machine.
However, if the plant has 30 people who are trained to operate that piece of machinery, the task of running it over the lunch hour wouldn't be essential.
The point? It's not necessarily the percentage of time a person spends on the task that makes it essential. The setting and situation have to be taken into account as well.
Describe an essential function more as an outcome than a method. For example:
Not "uses hand truck to move heavy boxes,” but "moves heavy boxes."
Not "walks from station to station," but "moves from station to station."
Do it now, not after the fact. If you try to craft your essential functions list after someone raises a complaint, it won't be credible.
How to Determine 'Essential'
Here are some questions you can use to determine whether a job function is essential:
•Does the position exist to perform this job function? (That would make it essential.)
•What is the employer's judgment regarding which functions or job requirements are essential? (The employer's view will be given due weight, but won't be determinative on its own.)
•Would the position be fundamentally altered if this function or job responsibility were altered? (That suggests that it's essential.)
•Is the number of employees to whom this function or job requirement could be given limited? (If yes, that makes it harder to pass off this function.)
•Is this a highly specialized function or job requirement? (Again, that makes it harder to cross-train someone else to do it.)
•What would be the consequences if this function or job requirement were not included? (If there are no consequences, it's likely not essential.)
•Does the current or past incumbent perform this function or job requirement? (If not, it's probably not essential.)
•Are the essential functions of this job linked to a specific location? (This could make it more difficult for others to take on this responsibility.)
In addition to making your essential/nonessential determination, it's helpful to pin duties down with a clear description of requirements and conditions. You might mention:
•Supervision (how much, how often)
•Physical requirements (e.g., sitting, standing, grasping). For lifting or carrying, also specify pounds (e.g., able to lift 50 pound several times each day).
•Mental requirements (e.g., thinking analytically), discriminating colors, making decisions, remembering names)
•Performance requirements (e.g., staying organized, meeting deadlines, attending meetings)
•Environmental factors (e.g., inside/outside, hot/cold, dusty, odors, fumes)
•Tools and equipment (e.g., computer, forklift, respirator)
•Other requirements (e.g., certificate, license, education)
While it is important to be detailed and precise, be sure that all the elements you list are true. If several of the things listed are not true, that inaccuracy will color everything you claim. (For example, if you say "lifts 50 pounds daily" but the person in the job never actually does that, your essential functions won't mean much.)
Today's HR Daily Advisor Tip: May 19, 2010
From the ADA standpoint, the most important thing the job description does is to delineate the essential functions. This is because in accommodating employees with disabilities, they must be able to accomplish the essential functions of the job with or without reasonable accommodation. Inability to perform nonessential functions does not disqualify the individual.
Here are a few pointers:
A function may be essential in one setting, but nonessential in another. For example, if a worker spends 90 percent of his time operating a particular piece of machinery, that's an essential function of his job. But how about for the person who operates that machine during the regular operator's lunch hour? That might be essential if:
1. The machine has to keep running (say it's filled with molten plastic that would congeal if it stops running), and
2. There's no one else who can be trained to run the machine.
However, if the plant has 30 people who are trained to operate that piece of machinery, the task of running it over the lunch hour wouldn't be essential.
The point? It's not necessarily the percentage of time a person spends on the task that makes it essential. The setting and situation have to be taken into account as well.
Describe an essential function more as an outcome than a method. For example:
Not "uses hand truck to move heavy boxes,” but "moves heavy boxes."
Not "walks from station to station," but "moves from station to station."
Do it now, not after the fact. If you try to craft your essential functions list after someone raises a complaint, it won't be credible.
How to Determine 'Essential'
Here are some questions you can use to determine whether a job function is essential:
•Does the position exist to perform this job function? (That would make it essential.)
•What is the employer's judgment regarding which functions or job requirements are essential? (The employer's view will be given due weight, but won't be determinative on its own.)
•Would the position be fundamentally altered if this function or job responsibility were altered? (That suggests that it's essential.)
•Is the number of employees to whom this function or job requirement could be given limited? (If yes, that makes it harder to pass off this function.)
•Is this a highly specialized function or job requirement? (Again, that makes it harder to cross-train someone else to do it.)
•What would be the consequences if this function or job requirement were not included? (If there are no consequences, it's likely not essential.)
•Does the current or past incumbent perform this function or job requirement? (If not, it's probably not essential.)
•Are the essential functions of this job linked to a specific location? (This could make it more difficult for others to take on this responsibility.)
In addition to making your essential/nonessential determination, it's helpful to pin duties down with a clear description of requirements and conditions. You might mention:
•Supervision (how much, how often)
•Physical requirements (e.g., sitting, standing, grasping). For lifting or carrying, also specify pounds (e.g., able to lift 50 pound several times each day).
•Mental requirements (e.g., thinking analytically), discriminating colors, making decisions, remembering names)
•Performance requirements (e.g., staying organized, meeting deadlines, attending meetings)
•Environmental factors (e.g., inside/outside, hot/cold, dusty, odors, fumes)
•Tools and equipment (e.g., computer, forklift, respirator)
•Other requirements (e.g., certificate, license, education)
While it is important to be detailed and precise, be sure that all the elements you list are true. If several of the things listed are not true, that inaccuracy will color everything you claim. (For example, if you say "lifts 50 pounds daily" but the person in the job never actually does that, your essential functions won't mean much.)
Today's HR Daily Advisor Tip: May 19, 2010
DOL Issues New Poster Advising Employees of Labor Rights
Last Thursday, the Department of Labor's Office of Labor-Management Standards issued final rules requiring federal contractors and subcontractors to post notice to employees of their rights under federal labor laws.
The new poster follows President Obama's January 30, 2009 Executive Order requiring contractors to advise employees of their rights to organize and collectively bargain with their employers under the National Labor Relations Act.
In another Executive Order, President Obama ended requirements that contractors post notices advising employees of their so-called Beck rights to avoid having union dues used for certain political purposes. The new posting requirement must be included in any subcontracts prepared by federal contractors. Failure to adhere to these requirements can result in the suspension or cancellation of the contract, and possible debarment of the federal contractor.
The new posters must be in place by June 21, 2010. If the employer has a significant percentage of its workforce that does not speak English, the posters must be translated into those primary languages (translated posters can be obtained from DOL). The new posters can be obtained at http://www.dol.gov/olms/regs/compliance/EmployeeRightsPoster11x17_Final.pdf.
ParkerPoe EmployNews
Issue 571, May 28, 2010
The new poster follows President Obama's January 30, 2009 Executive Order requiring contractors to advise employees of their rights to organize and collectively bargain with their employers under the National Labor Relations Act.
In another Executive Order, President Obama ended requirements that contractors post notices advising employees of their so-called Beck rights to avoid having union dues used for certain political purposes. The new posting requirement must be included in any subcontracts prepared by federal contractors. Failure to adhere to these requirements can result in the suspension or cancellation of the contract, and possible debarment of the federal contractor.
The new posters must be in place by June 21, 2010. If the employer has a significant percentage of its workforce that does not speak English, the posters must be translated into those primary languages (translated posters can be obtained from DOL). The new posters can be obtained at http://www.dol.gov/olms/regs/compliance/EmployeeRightsPoster11x17_Final.pdf.
ParkerPoe EmployNews
Issue 571, May 28, 2010
Wage & Hour Facts
Wage and hour should be the easiest job in HR, but there are a surprising number of misconceptions, and there is a surprising amount of misinformation being disseminated by savvy-sounding "experts" wandering the Internet chat sites.
Cruise HR on the Internet, and you'll be stunned. Mixed in with accurate answers are other answers—all delivered with total confidence—that are wildly inaccurate. Today Advisor takes some of these wage and hour myths—and busts them. (Note that state law may differ from federal law.)
Myth #1—Employees are entitled to breaks and a meal period if they work a full day.
Fact. The federal Fair Labor Standards Act (FLSA) does not require breaks or meal periods be given to workers. However, if you do give breaks or meal periods, there are rules concerning payment.
Beware that some states do have meal and rest-break requirements. If you work in a state that does not require breaks or meal periods, these benefits are a matter of agreement between the employer and the employee or the employee's representative.
Myth #2—Employees must be given 2 weeks' notice before being terminated or laid off.
Fact. The FLSA has no requirements for notice to an employee before termination or lay-off. However, the federal Worker Adjustment and Retraining Notification (WARN) Act requires employers, in certain cases, to give workers advanced notice of mass layoffs or plant closures.
Some states may have requirements for employee notification before termination or lay-off.
Myth #3—You can't work employees more than 60 hours a week.
Fact. The FLSA does not limit the number of hours per day or per week that employees aged 16 years and older can be required to work.
Myth #4—Employers are required to pay employees for federal holidays, sick days, and vacations.
Fact. The FLSA does not require payment for time not worked, such as vacations, sick leave, or holidays (federal or otherwise). These benefits are a matter of agreement between an employer and an employee or the employee's representative.
Myth #5—Terminated employees must be given their final check on their last day of work.
Fact. Employers are not required by federal law to give former employees their final paycheck immediately. Some states, however, do require immediate payment.
Myth #6—To be considered full-time, an employee must work a minimum of 24 hours per week.
Fact. The FLSA does not define full-time employment or part-time employment. Generally, this is a matter to be determined by the employer. Whether an employee is considered full-time or part-time does not change the application of the FLSA.
Myth #7—Employees are owed pay raises.
Fact. Pay raises are generally a matter of agreement between an employer and employee or the employee's representative. Pay raises for employees who are already making the federal minimum wage are not required by FLSA.
Myth #8—Employers are required to offer extra pay for weekend or night work.
Fact. The FLSA does not require extra pay for weekend or night work. This is a matter of agreement between the employer and the employee or the employee's representative. However, the FLSA does require that covered, nonexempt workers be paid not less than time and one-half the employee's regular rate for time worked over 40 hours in a workweek.
Myth #9—Employees must be paid double time for work on holidays and weekends.
Fact. The FLSA does not require double time. This is a matter of agreement between the employer and the employee or the employee's representative.
Myth #10—Employees may not be required to perform work that is not on their job descriptions.
Fact. The FLSA does not limit the types of work employees aged 18 and older may be required to perform. However, there are restrictions on what work employees under the age of 18 can do. This is true whether or not the work asked of the employee is listed in the employee's job description.
Myth #11—If workers receive tips greater than the minimum wage, they don't have to get additional wages.
Fact. The FLSA sets a federal minimum wage of $7.25 per hour effective July 24, 2009 for covered, nonexempt employees. An employer of a tipped employee is required to pay only $2.13 an hour in direct wages if that amount plus the tips received equals at least the federal minimum wage, the employee retains all tips, and the employee customarily and regularly receives more than $30 a month in tips. If an employee's tips combined with the employer's direct wages of at least $2.13 an hour do not equal the federal minimum hourly wage, the employer must make up the difference.
Some states have their own minimum wage laws. When an employee is subject to both the federal and state wage laws, the employee is entitled to the provisions that provide the greater benefits.
Summarized from Today's HR Daily Advisor Tip
Cruise HR on the Internet, and you'll be stunned. Mixed in with accurate answers are other answers—all delivered with total confidence—that are wildly inaccurate. Today Advisor takes some of these wage and hour myths—and busts them. (Note that state law may differ from federal law.)
Myth #1—Employees are entitled to breaks and a meal period if they work a full day.
Fact. The federal Fair Labor Standards Act (FLSA) does not require breaks or meal periods be given to workers. However, if you do give breaks or meal periods, there are rules concerning payment.
Beware that some states do have meal and rest-break requirements. If you work in a state that does not require breaks or meal periods, these benefits are a matter of agreement between the employer and the employee or the employee's representative.
Myth #2—Employees must be given 2 weeks' notice before being terminated or laid off.
Fact. The FLSA has no requirements for notice to an employee before termination or lay-off. However, the federal Worker Adjustment and Retraining Notification (WARN) Act requires employers, in certain cases, to give workers advanced notice of mass layoffs or plant closures.
Some states may have requirements for employee notification before termination or lay-off.
Myth #3—You can't work employees more than 60 hours a week.
Fact. The FLSA does not limit the number of hours per day or per week that employees aged 16 years and older can be required to work.
Myth #4—Employers are required to pay employees for federal holidays, sick days, and vacations.
Fact. The FLSA does not require payment for time not worked, such as vacations, sick leave, or holidays (federal or otherwise). These benefits are a matter of agreement between an employer and an employee or the employee's representative.
Myth #5—Terminated employees must be given their final check on their last day of work.
Fact. Employers are not required by federal law to give former employees their final paycheck immediately. Some states, however, do require immediate payment.
Myth #6—To be considered full-time, an employee must work a minimum of 24 hours per week.
Fact. The FLSA does not define full-time employment or part-time employment. Generally, this is a matter to be determined by the employer. Whether an employee is considered full-time or part-time does not change the application of the FLSA.
Myth #7—Employees are owed pay raises.
Fact. Pay raises are generally a matter of agreement between an employer and employee or the employee's representative. Pay raises for employees who are already making the federal minimum wage are not required by FLSA.
Myth #8—Employers are required to offer extra pay for weekend or night work.
Fact. The FLSA does not require extra pay for weekend or night work. This is a matter of agreement between the employer and the employee or the employee's representative. However, the FLSA does require that covered, nonexempt workers be paid not less than time and one-half the employee's regular rate for time worked over 40 hours in a workweek.
Myth #9—Employees must be paid double time for work on holidays and weekends.
Fact. The FLSA does not require double time. This is a matter of agreement between the employer and the employee or the employee's representative.
Myth #10—Employees may not be required to perform work that is not on their job descriptions.
Fact. The FLSA does not limit the types of work employees aged 18 and older may be required to perform. However, there are restrictions on what work employees under the age of 18 can do. This is true whether or not the work asked of the employee is listed in the employee's job description.
Myth #11—If workers receive tips greater than the minimum wage, they don't have to get additional wages.
Fact. The FLSA sets a federal minimum wage of $7.25 per hour effective July 24, 2009 for covered, nonexempt employees. An employer of a tipped employee is required to pay only $2.13 an hour in direct wages if that amount plus the tips received equals at least the federal minimum wage, the employee retains all tips, and the employee customarily and regularly receives more than $30 a month in tips. If an employee's tips combined with the employer's direct wages of at least $2.13 an hour do not equal the federal minimum hourly wage, the employer must make up the difference.
Some states have their own minimum wage laws. When an employee is subject to both the federal and state wage laws, the employee is entitled to the provisions that provide the greater benefits.
Summarized from Today's HR Daily Advisor Tip
Saturday, May 15, 2010
IRS - Health Care Reform Guidance
IRS Releases Guidance on Health Care Reform Small Employer Tax Credit
In March the Patient Protection and Affordable Care Act and the Health Care & Education Reconciliation Act of 2010 (together, "PPACA") were signed into law by President Obama. Among other sweeping changes to health care, PPACA contains a small business Federal income tax credit (the "Tax Credit") for certain small employers that provide health care coverage to their employees, effective for tax years beginning in 2010.
The IRS recently released guidance on the Tax Credit in a question and answer format. The guidance discusses which employers are eligible for the Tax Credit, how to calculate the Tax Credit, how to claim the Tax Credit, as well as provides information on transition relief for employers claiming the Tax Credit in 2010.
Small employers that provide health care coverage to their employees and that meet certain requirements ("Qualified Employers") generally are eligible for a Federal income tax credit for health insurance premiums they pay for certain employees.
In order to be a Qualified Employer:
(1) the employer must have fewer than 25 full-time equivalent employees ("FTEs") for the tax year,
(2) the average annual wages of its employees for the year must be less than $50,000 per FTE, and
(3) the employer must pay the premiums under a qualifying arrangement ("Qualifying Arrangement"). Additionally, tax-exempt employers may qualify as Qualified Employers for purposes of the Tax Credit; however, different rules for calculating the Tax Credit apply to tax-exempt employers, as discussed below.
Counting FTEs . The number of an employer's FTEs is determined by dividing the total hours for which the employer pays wages to employees during the year (but not more than 2,080 hours for any employee) by the number 2,080 (i.e., total hours paid to employees/2,080). The result, if not a whole number, is then rounded to the next lowest whole number. The final number is the employer's FTEs. This use of the formula, instead of just counting the number of employees an employer has on its payroll means that employers with more than 25 employees may qualify for the Tax Credit if some of the employees are part-time employees.
Determining Average Annual Wages . The amount of average annual wages is determined by first dividing the total wages paid by the employer to employees during the employer's tax year by the number of the employer's FTEs for the year (i.e., total amount of wages paid/total number of employer's FTEs). The result is then rounded down to the nearest $1,000 (if not otherwise a multiple of $1,000) and the resulting number is the amount of average annual wages. For purposes of this calculation, wages means wages as defined for FICA purposes (without regard to the wage base limitation).
What Constitutes a Qualifying Arrangement . The IRS defines a Qualifying Arrangement as a situation where the employer pays premiums for each employee enrolled in health care coverage offered by the employer in an amount equal to a uniform percentage (not less than 50%) of the premium cost of the coverage.
The IRS guidance makes clear that only premiums paid by the employer under Qualifying Arrangement are counted in calculating the Tax Credit. If an employer pays only a portion of the premiums for the coverage provided to employees under Qualifying Arrangement (with employees paying the rest), the amount of premiums counted in calculating the Tax Credit is only the portion paid by the employer. For example, if an employer pays 60% of the premiums for employees' coverage (with its employees paying the other 40%), only the 60% premium amount paid by the employer counts in calculating the Tax Credit. For purposes of the Tax Credit (including the requirement that at least 50% of the premium is paid by the employer), any premium paid pursuant to a salary reduction arrangement under a section 125 cafeteria plan is not treated as paid by the employer.
In addition, the amount of an employer's premium payments that counts for purposes of the Tax Credit is capped by the premium payments the employer would have made under the same arrangement if the average premium for the small group market in the state (or an area within the state) in which the employer offers coverage were substituted for the actual premium. The IRS has stated that the average premium for the small group market in a state (or an area within the state) will be determined by the Department of Health and Human Services and is expected to be posted on the IRS website by the end of April.
For tax years beginning in 2010 through 2013, the maximum Tax Credit is 35% of a Qualified Employer's premium expenses that count towards the Tax Credit. For tax years beginning in 2010 through 2013, the maximum Tax Credit for a tax-exempt Qualified Employer is 25% of the employer's premium expenses that count towards the Tax Credit. However, for tax-exempt Qualified Employers, the amount of the Tax Credit cannot exceed the total amount of income and Medicare (i.e., hospital insurance) tax the employer is required to withhold from employees' wages for the year and the employer share of Medicare tax on employees' wages.
Finally, the IRS stated that it intends to provide transition relief for Qualified Employers claiming the Tax Credit in 2010. This relief is intended to help those Qualified Employers who pay at least 50% of the premium for each of its employees, but not at uniform amounts and to help those Qualified Employers claiming the Tax Credit who pay an amount equal to 50% of the employee premium for individual coverage.
This new IRS guidance on the Tax Credit may provide small employers who provide their employees with health coverage an income tax credit for the 2010 tax year.
Since this portion of PPACA is effective for this tax year, small employers should begin to review their cost-sharing policies and other relevant records to determine if they may qualify for and take advantage of the Tax Credit this year. The IRS guidance may be found here: http://www.irs.gov/newsroom/article/0,,id=220839,00.html.
ParkerPoe, EmployNews, Issue 565
In March the Patient Protection and Affordable Care Act and the Health Care & Education Reconciliation Act of 2010 (together, "PPACA") were signed into law by President Obama. Among other sweeping changes to health care, PPACA contains a small business Federal income tax credit (the "Tax Credit") for certain small employers that provide health care coverage to their employees, effective for tax years beginning in 2010.
The IRS recently released guidance on the Tax Credit in a question and answer format. The guidance discusses which employers are eligible for the Tax Credit, how to calculate the Tax Credit, how to claim the Tax Credit, as well as provides information on transition relief for employers claiming the Tax Credit in 2010.
Small employers that provide health care coverage to their employees and that meet certain requirements ("Qualified Employers") generally are eligible for a Federal income tax credit for health insurance premiums they pay for certain employees.
In order to be a Qualified Employer:
(1) the employer must have fewer than 25 full-time equivalent employees ("FTEs") for the tax year,
(2) the average annual wages of its employees for the year must be less than $50,000 per FTE, and
(3) the employer must pay the premiums under a qualifying arrangement ("Qualifying Arrangement"). Additionally, tax-exempt employers may qualify as Qualified Employers for purposes of the Tax Credit; however, different rules for calculating the Tax Credit apply to tax-exempt employers, as discussed below.
Counting FTEs . The number of an employer's FTEs is determined by dividing the total hours for which the employer pays wages to employees during the year (but not more than 2,080 hours for any employee) by the number 2,080 (i.e., total hours paid to employees/2,080). The result, if not a whole number, is then rounded to the next lowest whole number. The final number is the employer's FTEs. This use of the formula, instead of just counting the number of employees an employer has on its payroll means that employers with more than 25 employees may qualify for the Tax Credit if some of the employees are part-time employees.
Determining Average Annual Wages . The amount of average annual wages is determined by first dividing the total wages paid by the employer to employees during the employer's tax year by the number of the employer's FTEs for the year (i.e., total amount of wages paid/total number of employer's FTEs). The result is then rounded down to the nearest $1,000 (if not otherwise a multiple of $1,000) and the resulting number is the amount of average annual wages. For purposes of this calculation, wages means wages as defined for FICA purposes (without regard to the wage base limitation).
What Constitutes a Qualifying Arrangement . The IRS defines a Qualifying Arrangement as a situation where the employer pays premiums for each employee enrolled in health care coverage offered by the employer in an amount equal to a uniform percentage (not less than 50%) of the premium cost of the coverage.
The IRS guidance makes clear that only premiums paid by the employer under Qualifying Arrangement are counted in calculating the Tax Credit. If an employer pays only a portion of the premiums for the coverage provided to employees under Qualifying Arrangement (with employees paying the rest), the amount of premiums counted in calculating the Tax Credit is only the portion paid by the employer. For example, if an employer pays 60% of the premiums for employees' coverage (with its employees paying the other 40%), only the 60% premium amount paid by the employer counts in calculating the Tax Credit. For purposes of the Tax Credit (including the requirement that at least 50% of the premium is paid by the employer), any premium paid pursuant to a salary reduction arrangement under a section 125 cafeteria plan is not treated as paid by the employer.
In addition, the amount of an employer's premium payments that counts for purposes of the Tax Credit is capped by the premium payments the employer would have made under the same arrangement if the average premium for the small group market in the state (or an area within the state) in which the employer offers coverage were substituted for the actual premium. The IRS has stated that the average premium for the small group market in a state (or an area within the state) will be determined by the Department of Health and Human Services and is expected to be posted on the IRS website by the end of April.
For tax years beginning in 2010 through 2013, the maximum Tax Credit is 35% of a Qualified Employer's premium expenses that count towards the Tax Credit. For tax years beginning in 2010 through 2013, the maximum Tax Credit for a tax-exempt Qualified Employer is 25% of the employer's premium expenses that count towards the Tax Credit. However, for tax-exempt Qualified Employers, the amount of the Tax Credit cannot exceed the total amount of income and Medicare (i.e., hospital insurance) tax the employer is required to withhold from employees' wages for the year and the employer share of Medicare tax on employees' wages.
Finally, the IRS stated that it intends to provide transition relief for Qualified Employers claiming the Tax Credit in 2010. This relief is intended to help those Qualified Employers who pay at least 50% of the premium for each of its employees, but not at uniform amounts and to help those Qualified Employers claiming the Tax Credit who pay an amount equal to 50% of the employee premium for individual coverage.
This new IRS guidance on the Tax Credit may provide small employers who provide their employees with health coverage an income tax credit for the 2010 tax year.
Since this portion of PPACA is effective for this tax year, small employers should begin to review their cost-sharing policies and other relevant records to determine if they may qualify for and take advantage of the Tax Credit this year. The IRS guidance may be found here: http://www.irs.gov/newsroom/article/0,,id=220839,00.html.
ParkerPoe, EmployNews, Issue 565
Health Care Reform Update - Grandfathered Plans
Health Care Reform Update: Clarification on "Grandfathered" Plans
As discussed in last week's issue of EmployNews , President Obama recently signed into law the Patient Protection and Affordable Care Act and the Health Care & Education Reconciliation Act of 2010 (together, the "Acts"). Last week's article had a brief discussion regarding "grandfathered" health plans and the applicability of the Acts to such plans. After receiving additional guidance on "grandfathered" health plans, the following provides clarification and additional information on such plans and answers some questions regarding this exception from certain provisions of the Acts.
What is a "grandfathered" health plan?
A "grandfathered" health plan is any group health plan or individual coverage that was in effect on the date of the Acts' enactment on March 23, 2010. "Grandfathered" status is important under the Acts as certain provisions of the Acts do not apply to grandfathered plans (or at least to many participants under "grandfathered" plans), or apply to such plans at a later date. There remain many questions regarding "grandfathered" plans and the extent to which "grandfathered" status will apply. It is hoped that future guidance will provide clarification of these issues.
What provisions of the Acts apply to "grandfathered" health plans in the short-term?
The following lists some of the key provisions of the Acts that apply to "grandfathered" health plans with plan years beginning on or after September 23, 2010:
•Dependent Coverage Until Age 26 - The Acts require group health plans (including "grandfathered" health plans) that cover dependents to provide coverage for dependent children until they reach age 26, regardless of student status or marital status. However, for plan years beginning before January 1, 2014, coverage need not be offered by a "grandfathered" plan if a dependent is eligible to enroll for coverage under another employer-sponsored group health plan.
•Restrictions on Annual and Lifetime Limits - Group health plans (including "grandfathered" health plans) may not impose lifetime limits or "unreasonable" annual limits on the value of "essential benefits" for any plan participant or beneficiary. For plan years beginning on or after January 1, 2014, group health plans (including "grandfathered" health plans) may not impose any annual limit on such essential benefits. The definition of "essential benefits" will be determined by Department of Health and Human Services regulations.
•Prohibition on Retroactive Cancellation of Coverage - Group health plans (including "grandfathered" health plans) may not retroactively cancel a participant's coverage once the participant is enrolled in the plan unless the individual has engaged in fraud or made an intentional misrepresentation of a material fact. Prior notice requirements also apply.
•Restrictions on Preexisting Conditions - The Acts mandate that group health plans (including "grandfathered" health plans) may not impose any preexisting condition exclusions for eligible children under age 19. In the future, this mandate will be expanded, and for plan years beginning on or after January 1, 2014, group health plans may not impose any preexisting condition exclusions for any individual.
The following key provisions of the Acts apply to "grandfathered" health plans beginning on January 1, 2011:
•W-2 Reporting of Health Benefits - Employers will be required to report the value of health benefits on an employee's IRS Form W-2.
•No Reimbursement of Over-the-Counter Medicine or Drug Purchases - Health flexible spending accounts, health reimbursement arrangements, and health savings accounts may no longer reimburse purchases of over-the-counter medicines or drugs (except insulin) without a prescription from a doctor.
What provisions of the Acts do not apply to "grandfathered" health plans?
"Grandfathered" health plans are excluded from the following provisions of the Acts so long as the plan maintains its "grandfathered" status:
•Preventative Care Benefits - For plan years beginning on or after September 23, 2010the Acts require that group health plans (other than "grandfathered" health plans) offer certain preventative care benefits, such as immunizations and breast cancer screening, on a first-dollar basis, without cost to participants.
•Nondiscrimination Testing - Currently, the existing Internal Revenue Code rules for nondiscrimination testing apply only to self-insured plans. For plan years beginning on or after September 23, 2010, the Acts require that fully-insured health plans (other than "grandfathered" health plans) apply the same nondiscrimination tests in an effort to discourage plans that cover only high-ranking employees.
•External Review of Claim Denials and Appeals - For plan years beginning on or after September 23, 2010, group health plans (other than "grandfathered" health plans) must provide a mechanism in their claims procedures for an external review process, among other things.
How can a plan lose "grandfathered" status?
It currently appears that a plan will not lose its "grandfathered" status if new employees (and their dependents) are enrolled in the plan after March 23, 2010. A plan also will not lose its "grandfathered" status even if an individual, who was enrolled in the plan on March 23, 2010, chooses to add their dependents to the plan after March 23, 2010, so long as the plan offered dependent coverage prior to March 23, 2010. However, at this point, it is not clear whether a plan would lose its "grandfathered" status under the Acts if design or benefit changes are made to the plan. We anticipate more guidance on this aspect of "grandfathered" plan status.
Plan sponsors whose plans were in effect on March 23, 2010, and fall under the "grandfathered" plan exception should review the terms of their plans and become acquainted with the provisions of the Acts that will apply in the near future. Additionally, plan sponsors should continue to review future guidance as it is released and ensure that their plans continue to remain in compliance with the terms of the Act. As future guidance is released, we will be providing additional alerts on this landmark legislation.
Note: In some cases, the effective date for the provisions of the Acts described above may differ for collectively bargained plans.
ParkerPoe, EmployNews, Issue 564
As discussed in last week's issue of EmployNews , President Obama recently signed into law the Patient Protection and Affordable Care Act and the Health Care & Education Reconciliation Act of 2010 (together, the "Acts"). Last week's article had a brief discussion regarding "grandfathered" health plans and the applicability of the Acts to such plans. After receiving additional guidance on "grandfathered" health plans, the following provides clarification and additional information on such plans and answers some questions regarding this exception from certain provisions of the Acts.
What is a "grandfathered" health plan?
A "grandfathered" health plan is any group health plan or individual coverage that was in effect on the date of the Acts' enactment on March 23, 2010. "Grandfathered" status is important under the Acts as certain provisions of the Acts do not apply to grandfathered plans (or at least to many participants under "grandfathered" plans), or apply to such plans at a later date. There remain many questions regarding "grandfathered" plans and the extent to which "grandfathered" status will apply. It is hoped that future guidance will provide clarification of these issues.
What provisions of the Acts apply to "grandfathered" health plans in the short-term?
The following lists some of the key provisions of the Acts that apply to "grandfathered" health plans with plan years beginning on or after September 23, 2010:
•Dependent Coverage Until Age 26 - The Acts require group health plans (including "grandfathered" health plans) that cover dependents to provide coverage for dependent children until they reach age 26, regardless of student status or marital status. However, for plan years beginning before January 1, 2014, coverage need not be offered by a "grandfathered" plan if a dependent is eligible to enroll for coverage under another employer-sponsored group health plan.
•Restrictions on Annual and Lifetime Limits - Group health plans (including "grandfathered" health plans) may not impose lifetime limits or "unreasonable" annual limits on the value of "essential benefits" for any plan participant or beneficiary. For plan years beginning on or after January 1, 2014, group health plans (including "grandfathered" health plans) may not impose any annual limit on such essential benefits. The definition of "essential benefits" will be determined by Department of Health and Human Services regulations.
•Prohibition on Retroactive Cancellation of Coverage - Group health plans (including "grandfathered" health plans) may not retroactively cancel a participant's coverage once the participant is enrolled in the plan unless the individual has engaged in fraud or made an intentional misrepresentation of a material fact. Prior notice requirements also apply.
•Restrictions on Preexisting Conditions - The Acts mandate that group health plans (including "grandfathered" health plans) may not impose any preexisting condition exclusions for eligible children under age 19. In the future, this mandate will be expanded, and for plan years beginning on or after January 1, 2014, group health plans may not impose any preexisting condition exclusions for any individual.
The following key provisions of the Acts apply to "grandfathered" health plans beginning on January 1, 2011:
•W-2 Reporting of Health Benefits - Employers will be required to report the value of health benefits on an employee's IRS Form W-2.
•No Reimbursement of Over-the-Counter Medicine or Drug Purchases - Health flexible spending accounts, health reimbursement arrangements, and health savings accounts may no longer reimburse purchases of over-the-counter medicines or drugs (except insulin) without a prescription from a doctor.
What provisions of the Acts do not apply to "grandfathered" health plans?
"Grandfathered" health plans are excluded from the following provisions of the Acts so long as the plan maintains its "grandfathered" status:
•Preventative Care Benefits - For plan years beginning on or after September 23, 2010the Acts require that group health plans (other than "grandfathered" health plans) offer certain preventative care benefits, such as immunizations and breast cancer screening, on a first-dollar basis, without cost to participants.
•Nondiscrimination Testing - Currently, the existing Internal Revenue Code rules for nondiscrimination testing apply only to self-insured plans. For plan years beginning on or after September 23, 2010, the Acts require that fully-insured health plans (other than "grandfathered" health plans) apply the same nondiscrimination tests in an effort to discourage plans that cover only high-ranking employees.
•External Review of Claim Denials and Appeals - For plan years beginning on or after September 23, 2010, group health plans (other than "grandfathered" health plans) must provide a mechanism in their claims procedures for an external review process, among other things.
How can a plan lose "grandfathered" status?
It currently appears that a plan will not lose its "grandfathered" status if new employees (and their dependents) are enrolled in the plan after March 23, 2010. A plan also will not lose its "grandfathered" status even if an individual, who was enrolled in the plan on March 23, 2010, chooses to add their dependents to the plan after March 23, 2010, so long as the plan offered dependent coverage prior to March 23, 2010. However, at this point, it is not clear whether a plan would lose its "grandfathered" status under the Acts if design or benefit changes are made to the plan. We anticipate more guidance on this aspect of "grandfathered" plan status.
Plan sponsors whose plans were in effect on March 23, 2010, and fall under the "grandfathered" plan exception should review the terms of their plans and become acquainted with the provisions of the Acts that will apply in the near future. Additionally, plan sponsors should continue to review future guidance as it is released and ensure that their plans continue to remain in compliance with the terms of the Act. As future guidance is released, we will be providing additional alerts on this landmark legislation.
Note: In some cases, the effective date for the provisions of the Acts described above may differ for collectively bargained plans.
ParkerPoe, EmployNews, Issue 564
Sexual Harassment - Fourth Circuit Ruling
Fourth Circuit Revives Sexual Harassment Claim Where Manager Told Employee That She Was "Overreacting" by Reporting Alleged Misconduct
Last week's EmployNews discussed a new Fourth Circuit Court of Appeals sexual harassment case from South Carolina that included important guidance on limitations periods for filing claims under South Carolina law. That case also contains a discussion of the legal rights of an employee who quit after being told that she was overreacting to alleged sexual harassment.
In Whitten v. Fred's, Inc., the plaintiff was hired as assistant manager. During the first two days of her employment, the store manager allegedly twice pressed his groin against Whitten as he passed by her. According to Whitten, the manager also called her stupid, told her that he would make her life a living hell if she complained to management and assigned her additional shifts for no apparent reason. Before going to work the third day, which was a Sunday, Whitten called her district manager and told him about the manager's alleged misconduct. The district manager allegedly told her that she was overreacting, that she should go ahead to work and that they would sit down with the manager on Monday to discuss the situation. In response, Whitten resigned. She then sued Fred's for allowing a sexually hostile work environment in violation of the South Carolina Human Affairs Law.
The district court granted summary judgment in the employer's favor, holding that Fred's was not vicariously liable for the manager's behavior because he did not have the authority to hire, fire, demote or otherwise economically affect Whitten, and therefore did not qualify as her "supervisor." The court further held that Fred's was not negligent because Whitten told people that she intended to quit before she reported the alleged harassment to Fred's management.
On appeal, the Fourth Circuit vacated the district court's grant of summary judgment and remanded the case for trial. The Court held that a manager can qualify as a "supervisor" and thereby subject the employer to vicarious liability if he has sufficient power and authority to make the employee vulnerable to his misconduct. Here, the manager's authority to set Whitten's schedule and assign her tasks was considered sufficient to render him a "supervisor." In addition, the Court held that the district manager's response to Whitten's complaint was arguably unreasonable because he did not take Whitten seriously enough.
This case is an important reminder that managers must treat employees who report sexual harassment with utmost respect. On the surface, the district manager's alleged response to Whitten's claims-in particular, telling her that they would discuss her claims with Green on Monday-might seem reasonable. But because he arguably belittled Whitten by telling her that she was overreacting, he left room for a jury to find that he refused to take her claims seriously. As a result, the employer now faces an expensive jury trial and, potentially, substantial liability.
ParkerPoe, EmployNews, Issue 565
Note: The Fourth Circuit Court of Appeals covers NC and SC as well as several other southern states. The rulings of this Court effect the way we interpret federal, state and other laws.
Among the best ways to avoid costly mistakes is to have a legally reviewed employee handbook, ADA and EEOC compliant job descriptions, an effective hiring process and provide annual supervisory and management training.
If you need assistance with any of these employment issues, please contact me at TheWhitfordGroup@aol.com
Last week's EmployNews discussed a new Fourth Circuit Court of Appeals sexual harassment case from South Carolina that included important guidance on limitations periods for filing claims under South Carolina law. That case also contains a discussion of the legal rights of an employee who quit after being told that she was overreacting to alleged sexual harassment.
In Whitten v. Fred's, Inc., the plaintiff was hired as assistant manager. During the first two days of her employment, the store manager allegedly twice pressed his groin against Whitten as he passed by her. According to Whitten, the manager also called her stupid, told her that he would make her life a living hell if she complained to management and assigned her additional shifts for no apparent reason. Before going to work the third day, which was a Sunday, Whitten called her district manager and told him about the manager's alleged misconduct. The district manager allegedly told her that she was overreacting, that she should go ahead to work and that they would sit down with the manager on Monday to discuss the situation. In response, Whitten resigned. She then sued Fred's for allowing a sexually hostile work environment in violation of the South Carolina Human Affairs Law.
The district court granted summary judgment in the employer's favor, holding that Fred's was not vicariously liable for the manager's behavior because he did not have the authority to hire, fire, demote or otherwise economically affect Whitten, and therefore did not qualify as her "supervisor." The court further held that Fred's was not negligent because Whitten told people that she intended to quit before she reported the alleged harassment to Fred's management.
On appeal, the Fourth Circuit vacated the district court's grant of summary judgment and remanded the case for trial. The Court held that a manager can qualify as a "supervisor" and thereby subject the employer to vicarious liability if he has sufficient power and authority to make the employee vulnerable to his misconduct. Here, the manager's authority to set Whitten's schedule and assign her tasks was considered sufficient to render him a "supervisor." In addition, the Court held that the district manager's response to Whitten's complaint was arguably unreasonable because he did not take Whitten seriously enough.
This case is an important reminder that managers must treat employees who report sexual harassment with utmost respect. On the surface, the district manager's alleged response to Whitten's claims-in particular, telling her that they would discuss her claims with Green on Monday-might seem reasonable. But because he arguably belittled Whitten by telling her that she was overreacting, he left room for a jury to find that he refused to take her claims seriously. As a result, the employer now faces an expensive jury trial and, potentially, substantial liability.
ParkerPoe, EmployNews, Issue 565
Note: The Fourth Circuit Court of Appeals covers NC and SC as well as several other southern states. The rulings of this Court effect the way we interpret federal, state and other laws.
Among the best ways to avoid costly mistakes is to have a legally reviewed employee handbook, ADA and EEOC compliant job descriptions, an effective hiring process and provide annual supervisory and management training.
If you need assistance with any of these employment issues, please contact me at TheWhitfordGroup@aol.com
Fourth Circuit Ruling - Managers & Sexual Harassment
Fourth Circuit Revives Sexual Harassment Claim Where Manager Told Employee That She Was "Overreacting" by Reporting Alleged Misconduct
In Whitten v. Fred's, Inc. , the plaintiff was hired as assistant manager. During the first two days of her employment, the store manager allegedly twice pressed his groin against Whitten as he passed by her. According to Whitten, the manager also called her stupid, told her that he would make her life a living hell if she complained to management and assigned her additional shifts for no apparent reason. Before going to work the third day, which was a Sunday, Whitten called her district manager and told him about the manager's alleged misconduct. The district manager allegedly told her that she was overreacting, that she should go ahead to work and that they would sit down with the manager on Monday to discuss the situation. In response, Whitten resigned. She then sued Fred's for allowing a sexually hostile work environment in violation of the South Carolina Human Affairs Law.
The district court granted summary judgment in the employer's favor, holding that Fred's was not vicariously liable for the manager's behavior because he did not have the authority to hire, fire, demote or otherwise economically affect Whitten, and therefore did not qualify as her "supervisor." The court further held that Fred's was not negligent because Whitten told people that she intended to quit before she reported the alleged harassment to Fred's management.
On appeal, the Fourth Circuit vacated the district court's grant of summary judgment and remanded the case for trial. The Court held that a manager can qualify as a "supervisor" and thereby subject the employer to vicarious liability if he has sufficient power and authority to make the employee vulnerable to his misconduct. Here, the manager's authority to set Whitten's schedule and assign her tasks was considered sufficient to render him a "supervisor." In addition, the Court held that the district manager's response to Whitten's complaint was arguably unreasonable because he did not take Whitten seriously enough.
This case is an important reminder that managers must treat employees who report sexual harassment with utmost respect. On the surface, the district manager's alleged response to Whitten's claims-in particular, telling her that they would discuss her claims with Green on Monday-might seem reasonable. But because he arguably belittled Whitten by telling her that she was overreacting, he left room for a jury to find that he refused to take her claims seriously. As a result, the employer now faces an expensive jury trial and, potentially, substantial liability.
ParkerPoe, EmployNews,Issue 565
Note: Rulings by the Fourth Circuit apply to NC and SC as well as several other southern states. Rulings from this Court effect how we intrepret federal, state and other laws applicable to these states.
It is important to remember that supervisors and manager's are agents of your company and can result in EEO charges and lawsuits. Whether or not "we" as employers interpret the individual as a "supervisor" or not is irrelevant to what the EEOC and Court may decide.
Those of you who have had my Sexual Harassment Avoidance training will recognize some of the comments above. It was mandated by the U.S. Supreme Court in 1998 that all employers are obligated to train their employees, annually, regarding sexual harassment avoidance and anti-discrimination practices.
A legally reviewed employee handbook, ADA and EEO compliant job descriptions, an effective hiring process and supervisory and management training can help avoid some costly mistakes not only in hiring employees in general but in partidcular hiring and promoting supervisory personnel. I
If you need assistance in setting up these or any other employment related procedures, please contact me at TheWhitfordGroup@aol.com.
In Whitten v. Fred's, Inc. , the plaintiff was hired as assistant manager. During the first two days of her employment, the store manager allegedly twice pressed his groin against Whitten as he passed by her. According to Whitten, the manager also called her stupid, told her that he would make her life a living hell if she complained to management and assigned her additional shifts for no apparent reason. Before going to work the third day, which was a Sunday, Whitten called her district manager and told him about the manager's alleged misconduct. The district manager allegedly told her that she was overreacting, that she should go ahead to work and that they would sit down with the manager on Monday to discuss the situation. In response, Whitten resigned. She then sued Fred's for allowing a sexually hostile work environment in violation of the South Carolina Human Affairs Law.
The district court granted summary judgment in the employer's favor, holding that Fred's was not vicariously liable for the manager's behavior because he did not have the authority to hire, fire, demote or otherwise economically affect Whitten, and therefore did not qualify as her "supervisor." The court further held that Fred's was not negligent because Whitten told people that she intended to quit before she reported the alleged harassment to Fred's management.
On appeal, the Fourth Circuit vacated the district court's grant of summary judgment and remanded the case for trial. The Court held that a manager can qualify as a "supervisor" and thereby subject the employer to vicarious liability if he has sufficient power and authority to make the employee vulnerable to his misconduct. Here, the manager's authority to set Whitten's schedule and assign her tasks was considered sufficient to render him a "supervisor." In addition, the Court held that the district manager's response to Whitten's complaint was arguably unreasonable because he did not take Whitten seriously enough.
This case is an important reminder that managers must treat employees who report sexual harassment with utmost respect. On the surface, the district manager's alleged response to Whitten's claims-in particular, telling her that they would discuss her claims with Green on Monday-might seem reasonable. But because he arguably belittled Whitten by telling her that she was overreacting, he left room for a jury to find that he refused to take her claims seriously. As a result, the employer now faces an expensive jury trial and, potentially, substantial liability.
ParkerPoe, EmployNews,Issue 565
Note: Rulings by the Fourth Circuit apply to NC and SC as well as several other southern states. Rulings from this Court effect how we intrepret federal, state and other laws applicable to these states.
It is important to remember that supervisors and manager's are agents of your company and can result in EEO charges and lawsuits. Whether or not "we" as employers interpret the individual as a "supervisor" or not is irrelevant to what the EEOC and Court may decide.
Those of you who have had my Sexual Harassment Avoidance training will recognize some of the comments above. It was mandated by the U.S. Supreme Court in 1998 that all employers are obligated to train their employees, annually, regarding sexual harassment avoidance and anti-discrimination practices.
A legally reviewed employee handbook, ADA and EEO compliant job descriptions, an effective hiring process and supervisory and management training can help avoid some costly mistakes not only in hiring employees in general but in partidcular hiring and promoting supervisory personnel. I
If you need assistance in setting up these or any other employment related procedures, please contact me at TheWhitfordGroup@aol.com.
Wednesday, May 12, 2010
Employee Pregnancy - The ADA, PDA , Title VII & The FMLA
Employee Pregnancy
When employees become pregnant, everyone wants to be understanding and protective, but it's easy for "protective" and "caring" to turn into "discrimination" in court.
The general rule is, a woman affected by pregnancy must be treated the same as other applicants and employees on the basis of their ability or inability to work.
Employees with pregnancy-related disabilities must be treated the same as other temporarily disabled employees for accrual and crediting of seniority, vacation calculation, pay increases, and temporary disability benefits.
Let's look specifically at how the American with Disabilities Act (ADA), the Pregnancy Discrimination Act (PDA), Title VII of the Civil Rights Act (Title VII) and the Family and Medical Leave Act (FMLA) deal with pregnancy.
Pregnancy and the ADA
An Interpretive Guidance issued by the Equal Employment Opportunity Commission (EEOC) on the ADA states that pregnancy, in and of itself, is not an impairment covered by the ADA. According to EEOC, disability from a normal childbirth is “temporary” and not protected by the ADA. However, pregnant employees who suffer from severe pregnancy - or birth-related complications may be covered by the ADA if their medical complications substantially limit a major life activity.
Pregnancy and the PDA
Under the PDA, an amendment to Title VII of the Civil Rights Act of 1964, discrimination on the basis of pregnancy, childbirth, or related medical conditions constitutes unlawful sex discrimination.
The PDA states that women who are pregnant or affected by related conditions must be treated in the same manner as other applicants or employees with similar abilities or limitations.
Title VII
Pregnancy-related protections, employers are prohibited from discriminating as follows:
Hiring
An employer cannot refuse to hire a pregnant woman because of her pregnancy, because of a pregnancy-related condition, or because of the prejudices of co-workers, clients, or customers.
Approving/Requiring Leave
An employer may not single out pregnancy-related conditions for special procedures to determine an employee's ability to work.
If an employee is temporarily unable to perform her job due to pregnancy, the employer must treat her the same as any other temporarily disabled employee. For example, if the employer allows other temporarily disabled employees to modify tasks, perform alternative assignments, or take disability leave or leave without pay, the employer must also allow an employee who is temporarily disabled due to pregnancy to do the same.
Pregnant employees must be permitted to work as long as they are able to perform their jobs. If an employee has been absent from work as a result of a pregnancy-related condition and recovers, her employer may not require her to remain on leave until the baby's birth.
Return to Work
An employer may not have a rule that prohibits an employee from returning to work for a predetermined length of time after childbirth.
Employers must hold a job for a pregnancy-related absence open the same length of time jobs are held open for employees on sick or disability leave.
Health Insurance
Any health insurance provided by an employer must cover expenses for pregnancy-related conditions on the same basis as costs for other medical conditions. Health insurance for expenses arising from abortion is not required, except where the life of the mother is endangered.
The amounts payable by the insurance provider can be limited only to the same extent as amounts payable for other conditions. No additional, increased, or larger deductible can be imposed.
Fringe Benefits
Pregnancy-related benefits cannot be limited to married employees.
If an employer provides any benefits to workers on leave, the employer must provide the same benefits for those on leave for pregnancy-related conditions.
Employees with pregnancy-related disabilities must be treated the same as other temporarily disabled employees for accrual and crediting of seniority, vacation calculation, pay increases, and temporary disability benefits.
Retaliation Prohibited
Finally, it is unlawful to retaliate against an individual for opposing employment practices that discriminate based on pregnancy or for filing a discrimination charge, testifying, or participating in any way in an investigation, proceeding, or litigation under Title VII.
FMLA
Pregnant employees are entitled to 12 weeks of job protected leave if they meet the eligibility criteria to be protected under the Act. An employee must have worked at least 12 months (do not have to be consecutive) and worked at least 1250 hours in the last 12 months to be eligible.
An employee is entitled to the entire 12 weeks of job protected leave for delivery of the child and recovery. Even if the employee has been medically released to return to work, for example, at eight weeks she may elect to remain on leave to bond with the child up to the end of the 12 week period.
Father's of the child are also entitled to 12 weeks of job protected leave to care for the mother and new born and to bond with the child. If both mother and father are employed with the same company, they must split the 12 weeks, the Act does not provide for them to take 12 weeks each.
If a pregnant employee has missed time from work during the course of the pregnancy, this time is to be counted as "intermittent" leave and may be deducted from the 12 weeks.
These laws overlap and often contradict each other, please call for assistance if you have employees with pregnancy related issues.
Source: Today's HR Daily Advisor
Summarized and Edited
Please contact The Whitford Group at TheWhitfordGroup@aol.com for assistance with pregnant employees or any other employee related issue.
When employees become pregnant, everyone wants to be understanding and protective, but it's easy for "protective" and "caring" to turn into "discrimination" in court.
The general rule is, a woman affected by pregnancy must be treated the same as other applicants and employees on the basis of their ability or inability to work.
Employees with pregnancy-related disabilities must be treated the same as other temporarily disabled employees for accrual and crediting of seniority, vacation calculation, pay increases, and temporary disability benefits.
Let's look specifically at how the American with Disabilities Act (ADA), the Pregnancy Discrimination Act (PDA), Title VII of the Civil Rights Act (Title VII) and the Family and Medical Leave Act (FMLA) deal with pregnancy.
Pregnancy and the ADA
An Interpretive Guidance issued by the Equal Employment Opportunity Commission (EEOC) on the ADA states that pregnancy, in and of itself, is not an impairment covered by the ADA. According to EEOC, disability from a normal childbirth is “temporary” and not protected by the ADA. However, pregnant employees who suffer from severe pregnancy - or birth-related complications may be covered by the ADA if their medical complications substantially limit a major life activity.
Pregnancy and the PDA
Under the PDA, an amendment to Title VII of the Civil Rights Act of 1964, discrimination on the basis of pregnancy, childbirth, or related medical conditions constitutes unlawful sex discrimination.
The PDA states that women who are pregnant or affected by related conditions must be treated in the same manner as other applicants or employees with similar abilities or limitations.
Title VII
Pregnancy-related protections, employers are prohibited from discriminating as follows:
Hiring
An employer cannot refuse to hire a pregnant woman because of her pregnancy, because of a pregnancy-related condition, or because of the prejudices of co-workers, clients, or customers.
Approving/Requiring Leave
An employer may not single out pregnancy-related conditions for special procedures to determine an employee's ability to work.
If an employee is temporarily unable to perform her job due to pregnancy, the employer must treat her the same as any other temporarily disabled employee. For example, if the employer allows other temporarily disabled employees to modify tasks, perform alternative assignments, or take disability leave or leave without pay, the employer must also allow an employee who is temporarily disabled due to pregnancy to do the same.
Pregnant employees must be permitted to work as long as they are able to perform their jobs. If an employee has been absent from work as a result of a pregnancy-related condition and recovers, her employer may not require her to remain on leave until the baby's birth.
Return to Work
An employer may not have a rule that prohibits an employee from returning to work for a predetermined length of time after childbirth.
Employers must hold a job for a pregnancy-related absence open the same length of time jobs are held open for employees on sick or disability leave.
Health Insurance
Any health insurance provided by an employer must cover expenses for pregnancy-related conditions on the same basis as costs for other medical conditions. Health insurance for expenses arising from abortion is not required, except where the life of the mother is endangered.
The amounts payable by the insurance provider can be limited only to the same extent as amounts payable for other conditions. No additional, increased, or larger deductible can be imposed.
Fringe Benefits
Pregnancy-related benefits cannot be limited to married employees.
If an employer provides any benefits to workers on leave, the employer must provide the same benefits for those on leave for pregnancy-related conditions.
Employees with pregnancy-related disabilities must be treated the same as other temporarily disabled employees for accrual and crediting of seniority, vacation calculation, pay increases, and temporary disability benefits.
Retaliation Prohibited
Finally, it is unlawful to retaliate against an individual for opposing employment practices that discriminate based on pregnancy or for filing a discrimination charge, testifying, or participating in any way in an investigation, proceeding, or litigation under Title VII.
FMLA
Pregnant employees are entitled to 12 weeks of job protected leave if they meet the eligibility criteria to be protected under the Act. An employee must have worked at least 12 months (do not have to be consecutive) and worked at least 1250 hours in the last 12 months to be eligible.
An employee is entitled to the entire 12 weeks of job protected leave for delivery of the child and recovery. Even if the employee has been medically released to return to work, for example, at eight weeks she may elect to remain on leave to bond with the child up to the end of the 12 week period.
Father's of the child are also entitled to 12 weeks of job protected leave to care for the mother and new born and to bond with the child. If both mother and father are employed with the same company, they must split the 12 weeks, the Act does not provide for them to take 12 weeks each.
If a pregnant employee has missed time from work during the course of the pregnancy, this time is to be counted as "intermittent" leave and may be deducted from the 12 weeks.
These laws overlap and often contradict each other, please call for assistance if you have employees with pregnancy related issues.
Source: Today's HR Daily Advisor
Summarized and Edited
Please contact The Whitford Group at TheWhitfordGroup@aol.com for assistance with pregnant employees or any other employee related issue.
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