2010 First Quarter Newsletter

Kelly | Newsletters | Wednesday, June 2nd, 2010

2010 To Do Checklist:

 Post new version of EEOC poster http://www1.eeoc.gov/employers/poster.cfm
 Review GINA checklist (below)
 Review and make changes to group health plans to make sure they comply with changes to the Mental Health Parity Act
 Develop plan for implications of Health Reform Law including new reporting and notification requirements
 Review FLSA requirement for providing nursing mothers a break to express milk for their infant
 Post OSHA 300 form effective Feb. 1. 2010
 Review any administrative or outside sales exemptions under FLSA
 Distribute CHIPRA notices

Employment Law—Federal

Genetic Information Nondiscrimination Act of 2008 (GINA)

So you were planning on getting around to auditing your policies and procedures to be compliant with the new GINA law, but you just haven’t gotten around to it, here is a reminder:

 Post “EEOC is the Law” poster
 Review your company policies and employee handbook relating to equal opportunity. Make sure to include the company does not tolerate discrimination based on one’s genetic information.
 Make sure all genetic or medical information is maintained in a confidential medical file that is separate from the employee file and is properly secured preferably under lock and key.
 Review employment-related documents to ensure they do not request genetic information and limits the chances employees have to self-disclose.
 If your company requires applicants or employees to submit to medical/physical examinations, that they refrain from inquiring about one’s family medical history or undergo genetic testing.
 Review Wellness programs to make sure they comply with requirements.
 Provide training to managers and employees about GINA provisions and any changes that the company made to relevant policies and procedures.

Mental Health Parity Act (MHPAEA) of 2008 – Effective January 1, 2010 New Rules

MHPAEA prohibits group health insurance plans from limiting benefits and requiring higher patient costs than those that apply to general medical or surgical benefits. Specifically, mental health and substance use disorder benefits must be treated equally in terms of out-of-pocket costs, benefits limits and practices such as prior authorization and utilization review. This law applies to employers with more than 50 employees. The rules apply to plan years starting after June 30, 2010.

Plan sponsors should review plan documents to ensure they company with the new final rules. If plan sponsors decide to drop their mental healthy or substance use or disorder coverage they should distribute summaries of material reduction and revise summary plan descriptions, benefit booklets and other benefit communications.

Children’s Health Insurance Program Reauthorization Act (CHIPRA) of 2009

CHIPRA requires employers offering fully or self insured group health plans to notify employee of their potential rights to receive premium assistance under a state’s Medicaid or SHIP program.

Department of Labor has issued a model notice to meet the requirement to inform employee of opportunities for group health plan premium assistance under CHIPRA. http://www.dol.gov/ebsa/pdf/chipmodelnotice.pdf

Companies will need to decide how to distribute the notices every year – through personalized notices, or simply as an addition to their annual benefits enrollment guide, which could be more cost effective.

Patient Protection and Affordable Care Act aka Health Reform Law of 2010

Even though most of the reforms in the health reform law won’t go into effect until 2014, there are some provisions that begin immediately.

• Effective immediately and until 2014, until SHOP exchanges can be set up, businesses with 10 or fewer full-time equivalent employees earning less than $25000 a year on average will be eligible for a tax credit of 35 percent of health insurance costs. Companies with 11 to 25 workers and an average wage of up to $50,000 are eligible for partial credits.
o Tax credits increase to 50 percent of costs for the first two years a company buys insurance through its state exchange.
• Employers covered by FLSA are now required to provide 1) “reasonable” breaks to nursing mothers to express milk for their infants; and 2) a place other than a bathroom that is shielded from view and free from intrusion from co-workers and the public. The breaks are not required to be paid and employers with less than 50 employees are exempt if the requirements impose an undue hardship based on difficulty or expense as compared to employer’s size and business structure.

• Effective September 23, 2010:
o health plans will be prohibited from setting lifetime or annual caps on benefits, and health insurance plans, with some exceptions, will no longer be able to cancel coverage for plan participants who become ill;
o Health care plans cannot deny coverage to dependent children of plan participants because of pre-existing health conditions;
o Children who are not eligible for coverage under another employer’s health plan to remain on their parents’ insurance plans until they reach the age of 26;

Employers should take initial steps to address the short-term and long-term implications of health care reform, including new reporting and notification requirements:
o Perform a detailed financial impact analysis;
o Communicate the immediate and long-term impact to employees;
o Develop an administration and compliance strategy, along with a transition plan to meet the varying effective dates;
o Adjust income statements, and the reporting of liability for retiree benefit obligations under FAS 109 and 106 to reflect changes in retiree health care obligations

EEOC Settlements

EEOC v. Sears Roebuck & Co., N.D. Ill., No. 04 C 7282

$6.2 million settlement for inflexible workers’ compensation leave exhaustion policy and termination of employees unlawfully instead of providing them with reasonable accommodations for their disabilities.

EEOC v. Outback Steakhouse of Florida Inc., No 06-cv-01935

$19 million to settle sex discrimination against thousands of women. EEOC alleged Outback discriminated against its female employees in the terms and conditions of employment and denied women equal opportunities for advancement. Female employees could not get promoted to the restaurant’s profit-sharing management positions. EEOC also alleged that women were denied favorable job assignments, particularly kitchen management experience which was required for employees to be considered for the top management job in the restaurants.

The settlement included employing a human resource executive in the newly created position of vice president of people.

EEOC v. Wal-Mart

$11.7 million settlement for sex discrimination. EEOC alleged that Wal-Mart’s London, KY distribution center denied jobs to female applicants for more than seven years to its entry level order-filler positions. Hiring officials told applicants that order-filling jobs were not suitable for women and hired mainly 18- to 25-year-old males.

Employment Law—9th Circuit

Tip Pooling Does Not Violate FLSA (Cumbie v. Woody Woo Inc., 9th Cir., No 08-35718 (Feb 23, 2010)

Restaurant employers that pay employees above the federal minimum wage, do not take a tip credit may require servers to contribute to a tip pooling arrangement that distributes a portion of the tips to employees who are not customarily tipped in the restaurant industry without violating the Fair Labor Standards Act.

Rehabilitation Act Covers ADA Claim by Independent Contractor (Fleming v. Yuma Regional Medical Center, 9th Cir., No 07-16427 (Nov 19 2009)

In direct conflict with 6th and 8th circuit courts, the 9th Circuit ruled consistently with prior 10th Circuit decision that Section 504 incorporates only the ADA’s standards for what conduct violates that act and not the definition of who is covered by the protections of the act. The decision was based on the fact that the Rehabilitation Act covers any otherwise qualified individual who has been excluded from a program receiving federal funds and not just employees.

Compensatory and Punitive Damages Unavailable for ADA Retaliation (Alvarado v. Cajun Operating Co., 9th Cir., No. 08-155949 (Dec. 11, 2009)

The retaliation section of the ADA does not specify the remedies available for a violation of that section. Federal courts have varied decisions on the matter. The 9th Circuit based its decision on a long held rule of statutory construction that courts must presume that the legislature says in a statute what it means and the statute means what it says. The circuit court determined that the statutes text is clear that compensatory and punitive damages are available for discrimination and failure to make a reasonable accommodation but not for claims of retaliation.

Fair Labor Standards Act Administrative and Outside Sales Exemptions

Employers should expect the DOL to take a narrower interpretation of the Administrative and Outside Sales exemptions under FLSA. DOL has already opined on one case that pharmaceutical sales representatives in this particular case do not fit under either exemption and therefore are non-exempt.

DOL has increased its budget and staff and have shifted from compliance assistance to enforcement and compensation discrimination.

Allied Human Resource Consulting News

Kelly will be presenting to the Washington State CUPA Conference on July 14, 2010 in Tacoma, Washington. The topic will be “Analyze What? Data that Matters – a Look At Metrics”.

If you are interested in presentations that can serve your needs, please contact me at Kelly@alliedhrconsulting.com.

Referral Program

We are continuing our referral program.
If you refer a client to Allied Human Resource Consulting by June 30, 2010, and services are purchased, you and your referral will each receive a $50.00 gift certificate to a local business. Next time a colleague has a need you think Allied Human Resource Consulting could assist with, have them give me a call for a new client consultation. Remind them to tell me you referred them!

Allied Human Resource Consulting is interested in your comments and feedback. Email Kelly@alliedhrconsulting.com and let me know if this information is useful or what additional information you would like to see in future newsletters. Also, feel free to forward this newsletter to others you think might benefit from this kind of information.

This newsletter should not be construed as legal advice.

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