Everything employers need to know about employee job classifications
FLSA job classifications can confuse even the most experienced HR managers. Continue reading this blog post for everything employers should know about employee job classifications.
Chief among the issues that keep employers up at night is staying compliant with federal and state employment laws.
Arguably, wage and hour rules are the most complex and cause the most issues for companies. Job classifications under the FLSA can confuse even the most experienced HR managers.
In fact, some of the costliest wage and hour lawsuits and penalties on record could have been avoided if only the employer properly classified an employee as either exempt or nonexempt. It’s critically important to understand the law — and the devil is in the details.
Exempt or nonexempt?
Most employers understand that an exempt employee is not entitled to receive overtime pay for hours worked in excess of forty hours per week, according to the provisions of the FLSA. Conversely, nonexempt employees are required to receive overtime pay and should be classified as nonexempt from these same overtime provisions.
While it may sound straightforward, figuring out an employee’s exempt status is not that simple. Different types of exemptions exist and each has its own unique set of requirements that are outlined in the FLSA. Most of these exemptions are specific to certain jobs or industries, for example, some exemptions only apply to specific types of agricultural workers, or to truck drivers who transport goods in interstate commerce. But for most businesses, exempt employees will usually fall into one of the following three exemption categories: executive, administrative and professional. Collectively, these are referred to as the white collar exemptions.
A common error that employers make is to classify all their salaried employees, or all employees with the word manager in their title, as exempt. Neither of these factors alone is enough to make the exempt designation. Each of the white-collar exemptions has two components: a salary requirement and a duties requirement. The salary requirement is the same for each of the three exemptions, but the duties requirements are different.
The salary basis test
For any employee to be considered exempt under any of the white-collar exemptions, they must be paid on a salary basis. This means that any employee who is paid by the hour, per day, or is commission-only, regardless of their title or position, will not meet the criteria for any of the white-collar exemptions. How the salary is paid as well as the amount are also subject to certain restrictions. The salary basis test determines the minimum amount, which is subject to change from time to time. The minimum salary is currently $455.00 per week (or $23,660 per year). This test also provides restrictions on when and how an employer can make deductions from an exempt employee’s salary.
An increase to the minimum salary per week from $455 to $913 (or $47,476 per year) was originally scheduled to go into effect back in December 2016, but industry groups against the measure successfully lobbied to block it. The U.S. Department of Labor is exploring alternatives that could appease these industry groups while keeping the regulations in line with the times. The DOL is scheduled to re-start the rulemaking process in March 2019, and prior statements of the current DOL Secretary, Alexander Acosta, suggest that the new rule may propose a more modest salary increase to around $634 per week (or around $33,000 per year).
Job duties
In addition to the salary, each white-collar exemption has its own unique set of duties requirements. Employers must look at the actual duties that each employee performs to determine whether they meet the criteria and their title or position does little to influence the outcome. So, simply naming an employee a manager does not automatically qualify the worker as an exempt employee. To be considered exempt under the executive exemption, which is the most common exemption for managers, this employee would need to supervise two or more full-time employees (or the equivalent) and have the authority to hire and fire employees. Otherwise, they would need to meet the requirements for one of the other exemptions to be paid in this manner.
Knowing that these regulations exist and being well-informed of the framework is the first step in understanding overtime obligations – and reducing wage and hour worries. Employers should seek a qualified employment law attorney for additional guidance on the specifics of each requirement to ensure compliance with applicable overtime laws.
SOURCE: Starkman, J.; Nadal, A. (15 February 2019) "Everything employers need to know about employee job classifications" (Web Blog Post). Retrieved from https://www.benefitnews.com/opinion/what-employers-need-to-know-about-job-classifications?brief=00000152-14a5-d1cc-a5fa-7cff48fe0001
Employee wellness programs and compliance: What to know right now
How do you decipher any given wellness program's compliance under the law? Under the Health Insurance Portability & Accountability Act (HIPAA) current guidance, employers need to assess whether the plan is “purely participatory” or “health-contingent.” Read this blog post to learn more about wellness program regulations.
Defining “wellness” for any one person is no simple task, and neither is deciphering a given wellness program’s compliance under the law.
In 2016, when the Equal Employment Opportunity Commission (EEOC) released its final regulations defining a “voluntary” program under the Americans with Disabilities Act (ADA), the entire landscape — at least what can be seen on a hazy day — appeared defined. But thanks to AARP’s successful challenge to these regulations and the EEOC’s recent acknowledgment of the demise of its incentive limitations, employers find themselves back in the “Wild West” of sorts for wellness compliance.
That being said, the uncertainty is not new for employers with wellness programs, and there is now more guidance than before, so let’s take a moment to take in the current view.
The current guidance under the Health Insurance Portability & Accountability Act (HIPAA) remains unchanged, so any wellness program integrated with a health plan or otherwise constituting a health plan itself, employers need to assess whether the plan is “purely participatory” or “health-contingent.” The health-contingent plans (which condition the award of incentives on accomplishing a health goal) will require additional compliance considerations, including—but not limited to—incentive limitations, reasonable alternative standards (RAS), and notice requirements.
The RAS should be of particular importance because they can be missed most out of the compliance parameters. Often there is an “accidental” program such as a tobacco surcharge, and the employer does not even realize the wellness rules are implicated, or the employer’s RAS is another health-contingent parameter that actually necessitates another RAS.
The Department of Labor is actively enforcing compliance in this area, so employers will want to take care.
Additionally, the EEOC’s ADA (and Genetic Information Nondiscrimination Act) regulations are still largely in force. This seems to be a common misconception—ranging from a celebration of no rules to a lament for the end of incentivized wellness programs that include disability-related questionnaires (like an average health risk assessment) or medical examinations (including biometric screenings).
The truth is somewhere in the middle.
The ADA’s own RAS and notice concepts still apply, along with confidentiality requirements. All that has changed is that the EEOC has declined (again) to tell us at what point an incentive turns a program compulsory. So employers sponsoring wellness programs subject to the ADA have three choices, based on risk tolerance (In truth, there are four options, but charging above the ADA’s previous incentive limitations would be excessively risky):
- Run incentives for ADA plans up to the 30 percent cap that existed before. This is the riskiest approach. To take this route, an employer must rely upon HIPAA’s similar (though not exactly the same) incentive limitations as indicative of non-compulsory levels. The fact that Judge Bates did not accept this argument in the AARP case advises against this approach, but this case does not have global application. If this path is chosen, it will be imperative to document analysis as to why this incentive preserves voluntariness for your participants.
- Keep the incentives below the previous 30 percent cap but incentivize the program. This approach does have risk because no one knows at what point an incentive takes choice away from participants. However, the incentive is a useful tool to motivate and reward health-conscientious behavior. The wellness incentive limitations stood at 20 percent under the HIPAA regulations for quite some time without much concern, so this could be a relatively safe target. But the most important thing is to carefully assess the overall structure of the program(s) offered, consider the culture and demographics of the employees who may participate, and balance the desire to motivate against the particular tensions of the program to decide on a reasonable incentive. Make sure to document this analysis and reconsider it every time a program changes.
- Not incentivize the program at all. This is the most conservative approach from a compliance perspective but ultimately not required. Before the EEOC’s 2016 regulations, employers were incentivizing programs subject to the ADA, and nothing about the AARP case or the EEOC’s response to it prohibits incentives.
There’s no doubt the wellness compliance landscape has changed a little over this last year, but this is also just the tip of the iceberg. With enforcement heating up, it is imperative for employers to carefully consider compliance, document the reasonableness of incentive choices and lean on trusted counsel when necessary to avoid potentially costly and time-consuming issues.
SOURCE: Davenport, B. (13 February 2019) "Employee wellness programs and compliance: What to know right now" (Web Blog Post). Retrieved from https://www.benefitspro.com/2019/02/13/employee-wellness-programs-and-compliance-what-to-know-right-now/
Don’t Forget to Post OSHA Injury and Illness Data at Your Worksite
Employers who are covered by the Occupational Safety and Health Administration's (OSHA's) record-keeping rule must post a summary of 2018 work-related injury and illnesses in a noticeable place from Feb. 1 to April 30. Read this blog post from SHRM to learn more.
Employers that are covered by the Occupational Safety and Health Administration's (OSHA's) record-keeping rule must post a summary of 2018 work-related injury and illnesses in a noticeable place from Feb. 1 to April 30. Here are some compliance tips for employers to review.
Required Posting
Many employers with more than 10 employees—except for those in certain low-risk industries—must keep a record of serious work-related injuries and illnesses. But minor injuries that are treated only by first aid do not need to be recorded.
Employers must complete an incident report (Form 301) for each injury or illness and log work-related incidents on OSHA Form 300. Form 300A is a summary of the information in the log that must be posted in the worksite from Feb. 1 to April 30 each year.
"This information helps employers, workers and OSHA evaluate the safety of a workplace, understand industry hazards, and implement worker protections to reduce and eliminate hazards," according to OSHA's website.
Employers should note that they are required to keep a separate 300 log for each "establishment," which is defined as "a single physical location where business is conducted or where services or industrial operations are performed."
If employees don't work at a single physical location, then the establishment is the location from which the employees are supervised or that serves as their base.
Employers frequently ask if they need to complete and post Form 300A if there were no injuries at the relevant establishment. "The short answer is yes, " said Tressi Cordaro, an attorney with Jackson Lewis in Washington, D.C. "If an employer recorded no injuries or illnesses in 2018 for that establishment, then the employer must enter 'zero' on the total line."
Correct Signature
Before the OSHA Form 300A is posted in the worksite, a company executive must review it and certify that "he or she has examined the OSHA 300 Log and that he or she reasonably believes, based on his or her knowledge of the process by which the information was recorded, that the annual summary is correct and complete," according to OSHA.
A common mistake seen on 300A forms is that companies forget to have them signed, noted John Martin, an attorney with Ogletree Deakins in Washington, D.C.
There are only four company representatives who may certify the summary:
- An owner of the company.
- An officer of the corporation.
- The highest-ranking company official working at the site.
- The immediate supervisor of the highest-ranking company official working at the site.
Businesses commonly make the mistake of having an HR or safety supervisor sign the form, said Edwin Foulke Jr., an attorney with Fisher Phillips in Atlanta and Washington, D.C., and the former head of OSHA under President George W. Bush.
They need to get at least the plant manager to sign it, he said, noting that the representative who signs Form 300A must know how numbers in the summary were obtained.
Once the 300A form is completed, it should be posted in a conspicuous place where other employment notices are usually posted.
Electronic Filing
The Improve Tracking of Workplace Injuries and Illnesses rule requires covered establishments with at least 20 employees to also electronically submit Form 300A to OSHA.
Large establishments with 250 or more employees were also supposed to begin electronically submitting data from the 300 and 301 forms in 2018, but the federal government recently eliminated that requirement. However, those establishments still must electronically submit their 300A summaries.
The deadline to electronically submit 2018 information is March 2.
SOURCE: Nagele-Piazza, L. (1 February 2019) "Don’t Forget to Post OSHA Injury and Illness Data at Your Worksite" (Web Blog Post). Retrieved from https://www.shrm.org/resourcesandtools/legal-and-compliance/employment-law/pages/don%E2%80%99t-forget-to-post-osha-injury-and-illness-data-at-your-worksite.aspx/
U.S. Department of Labor's New Compliance Assistance Tool
On February 6, 2019, the U.S. Department of Labor announced the launch of the electronic version of their Compliance Assistance Tool (Handy Reference Guide to the Fair Labor Standards Act (FLSA)). This new version will assist employers by providing them with basic Wage and Hour Division (WHD) information, as well as links to other resources.
This electronic resource was created as a part of the WHD's efforts to modernize compliance assistance tools, as well as provide easy-to-use, accessible compliance information. In coexistence with worker.gov, employer.gov, and other online tools, this tool will help improve employer understanding of federal labor laws and regulations.
View the digital Compliance Assistance Tool here.
Read the DOL's full press release here.
SOURCE: U.S. Department of Labor (6 February 2019) "U.S. Department of Labor Announces New Compliance Assistance Tool" (Web Press Release). Retrieved from https://www.dol.gov/newsroom/releases/whd/whd20190206-0
Compliance: Yearly Deadlines for Health Plans
Do you offer group health plans coverage to your employees? Employers that provide coverage are subject to multiple compliance requirements throughout the year. Certain requirements have been around for many years, while others have been recently added by the Affordable Care Act (ACA).
Continue reading for a summary of the many compliance requirements and their associated deadlines that health plan providers should be aware of throughout the year. Certain deadlines for non-calendar year plans may vary from what is outlined in this summary. This summary only covers recurring calendar year compliance deadlines. Other requirements that are not based on the calendar year are not included below.
January
| Deadline | Requirement | Description |
|
January 31 |
Form W-2 | Deadline for providing Forms W-2 to employees. The ACA requires employers to report the aggregate cost of employer-sponsored group health plan coverage on their employees’ Forms W-2. The purpose is to provide employees with information on how much their health coverage costs. Certain types of coverage are not required to be reported on Form W-2.
This Form W-2 reporting requirement is currently optional for small employers (those who file fewer than 250 Forms W-2). Employers that file 250 or more Forms W-2 are required to comply with the ACA’s reporting requirement. |
| January 31 | Form 1095-C or Form 1095-B—Annual Statement to Individuals | Applicable large employers (ALEs) subject to the ACA’s employer shared responsibility rules must furnish Form 1095-C (Section 6056 statements) annually to their full-time employees. Employers with self-insured health plans that are not ALEs must furnish Form 1095-B (Section 6055 statements) annually to covered employees.
The Forms 1095-B and 1095-C are due on or before Jan. 31 of the year immediately following the calendar year to which the statements relate. Extensions may be available in certain limited circumstances. However, an alternate deadline generally is not available for ALEs that sponsor non-calendar year plans.
Update: The IRS extended the deadline for furnishing the 2018 employee statements, from Jan. 31, 2019, to March 4, 2019. |
February
| Deadline | Requirement | Description |
|
February 28 (March 31, if filing electronically) |
Section 6055 and 6056 Reporting | Under Section 6056, ALEs subject to the ACA’s employer shared responsibility rules are required to report information to the IRS about the health coverage they offer (or do not offer) to their full-time employees. ALEs must file Form 1094-C and Form 1095-C with the IRS annually.
Under Section 6055, self-insured plan sponsors are required to report information about the health coverage they provided during the year. Self-insured plan sponsors must generally file Form 1094-B and Form 1095-B with the IRS annually. ALEs that sponsor self-insured plans are required to report information to the IRS under Section 6055 about health coverage provided, as well as information under Section 6056 about offers of health coverage. ALEs that sponsor self-insured plans will generally use a combined reporting method on Form 1094-C and Form 1095-C to report information under both Sections 6055 and 6056. All forms must be filed with the IRS annually, no later than Feb. 28 (March 31, if filed electronically) of the year following the calendar year to which the return relates. Reporting entities that are filing 250 or more returns must file electronically. There is no alternate filing date for employers with non-calendar year plans. |
March
| Deadline | Requirement | Description |
|
March 1 (calendar year plans) |
Medicare Part D Disclosure to CMS | Group health plan sponsors that provide prescription drug coverage to Medicare Part D eligible individuals must disclose to the Centers for Medicare & Medicaid Services (CMS) whether prescription drug coverage is creditable or not. In general, a plan’s prescription drug coverage is considered creditable if its actuarial value equals or exceeds the actuarial value of the Medicare Part D prescription drug coverage. Disclosure is due:
Plan sponsors must use the online disclosure form on the CMS Creditable Coverage webpage. |
July
| Deadline | Requirement | Description |
|
July 31 |
PCORI Fee | Deadline for filing IRS Form 720 and paying Patient-Centered Outcomes Research Institute (PCORI) fees for the previous year. For insured health plans, the issuer of the health insurance policy is responsible for the PCORI fee payment. For self-insured plans, the PCORI fee is paid by the plan sponsor.
The PCORI fees are temporary—the fees do not apply to plan years ending on or after Oct. 1, 2019. This means that, for calendar year plans, the PCORI fees do not apply for the 2019 plan year. |
|
July 31 |
Form 5500 | Plan administrators of ERISA employee benefit plans must file Form 5500 by the last day of the seventh month following the end of the plan year, unless an extension has been granted. Form 5500 reports information on a plan’s financial condition, investments and operations. Form 5558 is used to apply for an extension of two and one-half months to file Form 5500.
Small health plans (fewer than 100 participants) that are fully insured, unfunded or a combination of insured/unfunded, are generally exempt from the Form 5500 filing requirement. The Department of Labor’s (DOL) website and the latest Form 5500 instructions provide information on who is required to file and detailed information on filing. |
September
| Deadline | Requirement | Description |
|
September 30 |
Medical Loss Ratio (MLR) Rebates | The deadline for issuers to pay medical loss ratio (MLR) rebates for the 2014 reporting year and beyond is Sept. 30. The ACA requires health insurance issuers to spend at least 80 to 85 percent of their premiums on health care claims and health care quality improvement activities. Issuers that do not meet the applicable MLR percentage must pay rebates to consumers.
Also, if the rebate is a “plan asset” under ERISA, the rebate should, as a general rule, be used within three months of when it is received by the plan sponsor. Thus, employers who decide to distribute the rebate to participants should make the distributions within this three-month time limit. |
|
September 30 |
Summary Annual Report | Plan administrators must automatically provide participants with the summary annual report (SAR) within nine months after the end of the plan year, or two months after the due date for filing Form 5500 (with approved extension).
Plans that are exempt from the annual 5500 filing requirement are not required to provide an SAR. Large, completely unfunded health plans are also generally exempt from the SAR requirement. |
October
| Deadline | Requirement | Description |
|
October 15 |
Medicare Part D – Creditable Coverage Notices | Group health plan sponsors that provide prescription drug coverage to Medicare Part D eligible individuals must disclose whether the prescription drug coverage is creditable or not. Medicare Part D creditable coverage disclosure notices must be provided to participants before the start of the annual coordinated election period, which runs from Oct. 15-Dec. 7 of each year. Coverage is creditable if the actuarial value of the coverage equals or exceeds the actuarial value of coverage under Medicare Part D. This disclosure notice helps participants make informed and timely enrollment decisions.
Disclosure notices must be provided to all Part D eligible individuals who are covered under, or apply for, the plan’s prescription drug coverage, regardless of whether the prescription drug coverage is primary or secondary to Medicare Part D. Model disclosure notices are available on CMS’ website. |
Annual Notices
| Type of Notice | Description |
| WHCRA Notice | The Women’s Health and Cancer Rights Act (WHCRA) requires group health plans that provide medical and surgical benefits for mastectomies to also provide benefits for reconstructive surgery. Group health plans must provide a notice about the WHCRA’s coverage requirements at the time of enrollment and on an annual basis after enrollment. The initial enrollment notice requirement can be satisfied by including the information on WHCRA’s coverage requirements in the plan’s summary plan description (SPD). The annual WHCRA notice can be provided at any time during the year. Employers with open enrollment periods often include the annual notice with their open enrollment materials. Employers that redistribute their SPDs each year can satisfy the annual notice requirement by including the WHCRA notice in their SPDs.
Model language is available in the DOL’s compliance assistance guide. |
| CHIP Notice | If an employer’s group health plan covers residents in a state that provides a premium subsidy under a Medicaid plan or CHIP, the employer must send an annual notice about the available assistance to all employees residing in that state. the annual CHIP notice can be provided at any time during the year. Employers with annual enrollment periods often provide CHIP notice with their open enrollment materials.
The DOL has a model notice that employers may use. |
| Group health plans and health insurance issuers are required to provide an SBC to applicants and enrollees each year at open enrollment or renewal time. The purpose of the SBC is to allow individuals to easily compare their options when they are shopping for or enrolling in health plan coverage. Federal agencies have provided a template for the SBC, which health plans and issuers are required to use.
The issuer for fully insured plans usually prepares the SBC. If the issuer prepares the SBC, an employer is not also required to prepare an SBC for the health plan, although the employer may need to distribute the SBC prepared by the issuer. The SBC must be included in open enrollment materials. If renewal is automatic, the SBC must be provided no later than 30 days prior to the first day of the new plan year. However, for insured plans, if the new policy has not yet been issued 30 days prior to the beginning of the plan year, the SBC must be provided as soon as practicable, but no later than seven business days after the issuance of the policy. |
|
| Grandfathered Plan Notice | To maintain a plan’s grandfathered status, the plan sponsor or must include a statement of the plan’s grandfathered status in plan materials provided to participants describing the plan’s benefits (such as the summary plan description, insurance certificate and open enrollment materials). The DOL has provided a model notice for grandfathered plans. This notice only applies to plans that have grandfathered status under the ACA. |
| Notice of Patient Protections | If a non-grandfathered plan requires participants to designate a participating primary care provider, the plan or issuer must provide a notice of patient protections whenever the SPD or similar description of benefits is provided to a participant. This notice is often included in the SPD or insurance certificate provided by the issuer (or otherwise provided with enrollment materials).
The DOL provided a model notice of patient protections for plans and issuers to use. |
| HIPAA Privacy Notice | The HIPAA Privacy Rule requires self-insured health plans to maintain and provide their own privacy notices. Special rules, however, apply for fully insured plans. Under these rules, the health insurance issuer, and not the health plan itself, is primarily responsible for the privacy notice.
Self-insured health plans are required to send the privacy notice at certain times, including to new enrollees at the time of enrollment. Thus, the privacy notice should be provided with the plan’s open enrollment materials. Also, at least once every three years, health plans must either redistribute the privacy notice or notify participants that the privacy notice is available and explain how to obtain a copy. The Department of Health and Human Services (HHS) has model Privacy Notices for health plans to choose from. |
| HIPAA Special Enrollment Notice | At or prior to the time of enrollment, a group health plan must provide each eligible employee with a notice of his or her special enrollment rights under HIPAA. This notice should be included with the plan’s enrollment materials. It is often included in the health plan’s SPD or insurance booklet. Model language is available in the DOL’s compliance assistance guide. |
| Wellness Notice HIPAA | Employers with health-contingent wellness programs must provide a notice that informs employees that there is an alternative way to qualify for the program’s reward. This notice must be included in all plan materials that describe the terms of the wellness program. If wellness program materials are being distributed at open enrollment (or renewal time), this notice should be included with those materials. Sample language is available in the DOL’s compliance assistance guide. |
| Wellness Notice ADA | To comply with the Americans with Disabilities Act (ADA), wellness plans that collect health information or involve medical exams must provide a notice to employees that explains how the information will be used, collected and kept confidential. Employees must receive this notice before providing any health information and with enough time to decide whether to participate in the program. Employers that are implementing a wellness program for the upcoming plan year should include this notice in their open enrollment materials. The Equal Employment Opportunity Commission has provided a sample notice for employers to use. |
Resources: https://www.ada.gov/; https://www.dol.gov/; https://www.hhs.gov/hipaa/for-professionals/privacy/guidance/model-notices-privacy-practices/index.html; https://www.cms.gov/Medicare/Prescription-Drug-Coverage/CreditableCoverage/Model-Notice-Letters.html; https://www.irs.gov/retirement-plans/retirement-plan-participant-notices-when-the-end-of-the-plan-year-has-passed; https://www.cms.gov/cciio/programs-and-initiatives/health-insurance-market-reforms/medical-loss-ratio.html; https://www.dol.gov/sites/default/files/ebsa/about-ebsa/our-activities/resource-center/publications/compliance-assistance-guide.pdf; https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/affordable-care-act/for-employers-and-advisers/preexisting-condition-exclusions; https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/affordable-care-act/for-employers-and-advisers/summary-of-benefits; https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/chipra/working-group; https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/whcra; https://www.dol.gov/agencies/ebsa/employers-and-advisers/plan-administration-and-compliance/reporting-and-filing/forms; https://www.irs.gov/newsroom/patient-centered-outcomes-research-institute-fee; https://www.irs.gov/affordable-care-act/individuals-and-families/form-1095-b-what-you-need-to-do-with-this-form; https://www.irs.gov/affordable-care-act/individuals-and-families/form-1095-c-what-you-need-to-do-with-this-form; https://www.cms.gov/Medicare/Prescription-Drug-Coverage/CreditableCoverage/index.html?redirect=/CreditableCoverage/; https://www.irs.gov/affordable-care-act/questions-and-answers-on-information-reporting-by-health-coverage-providers-section-6055; https://www.irs.gov/affordable-care-act/employers/questions-and-answers-on-reporting-of-offers-of-health-insurance-coverage-by-employers-section-6056; https://www.irs.gov/forms-pubs/about-form-w-2;
E-Verify Is Down. What Do Employers Do Now?
Are you questioning what you should do now that E-Verify, the federal government's electronic employment verification system, has expired? Read this blog post from SHRM to learn more.
What are employers supposed to do now that E-Verify—the federal government's electronic employment verification system—has expired?
Funding and congressional authorization for the program ran out Dec. 22, 2018, as the government went into a partial shutdown after Congress and the White House could not agree on how to fund some agencies, including the U.S. Department of Homeland Security (DHS), which administers the system, for fiscal year 2019.
E-Verify compares information from an employee's Form I-9 to DHS and Social Security Administration (SSA) records to confirm employment eligibility. Employers enrolled in the program are required to use the system to run checks on new workers within three days of hiring them.
During the government shutdown, employers will not be able to enroll in E-Verify, initiate queries, access cases or resolve tentative non-confirmations (TNCs) with affected workers.
All employers remain subject to Form I-9 obligations, however. "Remember that the government shutdown has nothing to do with an employer's responsibilities to complete the Form I-9 [in a timely manner]," said Dawn Lurie, senior counsel in the Washington, D.C., office of Seyfarth Shaw. "Specifically, employees are required to complete Section 1 of the I-9 on or before the first day of employment, and employers must complete Section 2 of the I-9 no later than the third business day after an employee begins work for pay."
No Cause for Alarm
Lurie advised employers not to panic while E-Verify is down. "Employers will not be penalized as a result of the E-Verify operations shutdown," she said. "Employers will not be penalized for any delays in creating E-Verify cases. However, employers are reminded that they must continue to complete I-9s in compliance with the law, and when E-Verify becomes available, create cases in the system."
To minimize the burden on both employers and employees, DHS announced that:
- The three-day rule for creating E-Verify cases is suspended for cases affected by the unavailability of the service. "Normally, the employer enters information from the I-9 into E-Verify within three days of hire, but that won't be possible while the system is unavailable," said Montserrat Miller, a partner in the Atlanta office of Arnall Golden Gregory. "DHS will provide a window of time to submit those held cases once service resumes."
- The time period during which employees may resolve TNCs will be extended. The number of days E-Verify is unavailable will not count toward the days the employee has to begin the process of resolving a TNC. "Employers can't take any adverse action against a worker with a pending TNC regardless, shutdown or not," Miller said. Currently, an employee who chooses to contest a TNC must visit an SSA field office or call DHS within eight federal government working days to begin resolving it. This period will have to be extended because of the shutdown, she added.
- Additional guidance regarding the three-day rule and time period to resolve TNC deadlines will be provided once operations resume.
Amy Peck, an immigration attorney with Jackson Lewis in Omaha, Neb., advised employers to keep track of all new hires with completed I-9s for whom there are no E-Verify queries due to the shutdown. She also recommended attaching a memo in a master E-Verify file tracking the days that the program was unavailable. "I've seen the discrepancy come up years later during an audit," she said.
"Once the system is back up, work with counsel on how much time employees have to resolve their TNCs," Peck said. "Someone receiving a TNC the day before the shutdown is a different case than somebody who had 10 days to resolve their TNC when the shutdown occurred. Those circumstances should be considered on a case-by-case basis."
Federal contractors with a federal acquisition regulation E-Verify clause should contact their government contracting officers to extend deadlines. "Federal contractors have a particular concern because nobody is supposed to be working who has not been verified through the system," Peck said. "People can be hired, but whether they are allowed to work on the contract before being run through E-Verify is a critical consideration that should be discussed with counsel."
Prepare for the Resumption of Service
Miller said employers should monitor the shutdown. "When it is over, log in to the system and see what instructions there are for creating and submitting queries," she advised. "There is an obligation to create those queries if you are enrolled in the program, even if enrolled voluntarily."
The backlog created as a result of the shutdown might have a significant impact on employers that process many E-Verify cases and specifically on the HR staff and other team members in charge of the process.
"Not all employers will be able to push all their cases through at once when the shutdown ends," Miller said. "If everyone did that, the system would crash. DHS will provide instructions on how to submit queries. Employers will be asked why the query is being submitted after the required three days. In the past, 'Government Shutdown' was one of the options in the drop-down menu."
Peck reminded employers that the loss of E-Verify does not mean there is a prohibition against hiring. "Companies should continue to hire as they need," she said.
SOURCE: Maurer, R. (3 January 2019) "E-Verify Is Down. What Do Employers Do Now?" (Web Blog Post). Retrieved from https://www.shrm.org/ResourcesAndTools/hr-topics/talent-acquisition/Pages/EVerify-Outage-What-Do-Employers-HR-Do.aspx
The do’s and don’ts of ADA accommodations: 3 new rulings
More than 25,000 ADA charges were filed by the EEOC in the past year, despite employers best compliance efforts. Continue reading this blog post to learn more.
Employers are facing more disability discrimination lawsuits than ever – despite their best compliance efforts.
In the past year alone, over 25,000 ADA charges were filed by the EEOC.
The right way to accommodate
One area that’s often a point of contention? The accommodation process. Workers and employers can have a very different idea of how a disability should be accommodated.
And while each disability needs to be evaluated on a case by case basis, several recent court rulings shed further light on employers’ ADA accommodation responsibilities.
1. In Brumley v. United Parcel Service, a court ruled that ADA accommodations don’t necessarily have to be given to employees immediately.
Melissa Brumley delivered packages for UPS when she hurt her back lifting a heavy box from her truck.
She took leave to heal, and her doctor said when she returned to work she could no longer lift packages or drive. Since these were two essential functions of her job, Brumley’s manager put her on leave while waiting on more information from her doctor.
After beginning the interactive process and considering a reassignment, Brumley’s doctor cleared her to go back to her old job, and UPS ended the process.
But Brumley sued the company for failing to accommodate her during those weeks she was on leave, which resulted in loss of pay.
A district court ruled in favor of UPS, and on appeal, the 6th Circuit agreed. It said just because the company didn’t accommodate the employee immediately didn’t mean it violated the ADA.
UPS began the interactive process and only stopped once Brumley was cleared to go back to her old job without an accommodation.
The key things the company did? Beginning the process and requesting additional info from Brumley’s doctor – this showed the court a good faith effort to comply with the ADA.
2. In Sharbono v. Northern States Power, a court ruled a company that failed to find an accommodation didn’t fail to fulfill its ADA duties.
After a foot injury, James Sharbono wasn’t able to wear the steel-toed boots required by his company’s safety procedures.
HR worked with Sharbono and suggested several accommodations, such as altering his boots and getting a custom pair made, but none worked out. Sharbono was forced to retire, and he sued for ADA violation.
But the 8th Circuit ruled the company acted in good faith. It worked with Sharbono and suggested several accommodations. It was only after exhausting all options that Sharbono was forced to retire. The court said the company fulfilled its ADA responsibilities, despite finding no accommodation for Sharbono.
3. In Stokes v. Nielsen, a court decided companies can be required to make accommodations that cover more than just essential job functions.
Jacqueline Stokes had impaired vision and received multiple accommodations that allowed her to do her job. Stokes then requested special meeting handouts, printed in large letters, that she could read beforehand.
Despite many promises from HR, Stokes never received her requested handouts. She sued, claiming to be denied a reasonable accommodation under the ADA.
While the company argued it gave Stokes everything she needed to do her job, therefore fulfilling its ADA responsibilities, the Fifth Circuit disagreed.
“Our circuit has explicitly rejected the requirement that requested modifications must be necessary to perform essential job functions to constitute a reasonable accommodation,” it said. And Stokes’ request was deemed reasonable.
This case shows if an employee makes a reasonable request for their job, it’s easier to just grant it.
SOURCE: Mucha, R. (4 January 2019) "The do’s and don’ts of ADA accommodations: 3 new rulings" (Web Blog Post). Retrieved from https://www.hrmorning.com/the-dos-and-donts-of-ada-accommodations-3-new-rulings/
Strategies to help employers minimize ADA missteps
Having a good ADA policy and making sure employees acknowledge that they've reviewed it are essential tools in helping prevent unforeseen disability discrimination claims. Continue reading to learn more.
Handling ADA accommodation requests is tricky. But having a good ADA policy, making sure employees acknowledge receipt of the policy, and properly instructing managers how to deal with requests are essential tools to help prevent unforeseen disability discrimination claims.
Take this scenario.
In a conversation about his tardy attendance, an employee tells his manager he is having difficulty arriving to work because his sleep apnea interferes with his rest and prevents him from waking up on time. He adds that he is being evaluated for drugs that could potentially help him. Is this a request for an accommodation under the ADA?
In general, the answer is probably yes, and the employer could face a potential disability discrimination claim if the request is ignored.
Title I of the ADA requires employers to provide reasonable accommodations to qualified individuals with disabilities. Failure to provide an accommodation is a form of disability discrimination. The employee’s request for an accommodation triggers an “interactive process” to determine what accommodation might be reasonable.
To trigger the interactive process, the employee does not even have to specifically mention the ADA or state that he is requesting a “reasonable accommodation.” Thus, if such a statement made to a manager could be considered a request for an ADA accommodation, how can an employer possibly monitor these types of employee requests and comply with the ADA?
Realistically, there are two ways an employer can minimize ADA missteps in this scenario.
First, the employer should review and make sure that its ADA policy includes a definitive procedure for how an employee should request an ADA accommodation. An increasing number of courts are holding that even though an accommodation request may be informal, it does not necessarily excuse an employee’s failure to use the correct procedure, provided the procedure is clear and disseminated in advance. So once an employer has established a fixed set of procedures to request accommodations, an employee’s failure to follow this procedure could preclude a claim for failure to accommodate.
In one recent case, for example, an employer required employees to make all accommodation requests though it’s leave of absence administrator, a position it created specifically to deal with employee leave requests. The court held that the employee’s failure to use that specific procedure precluded her failure-to-accommodate claim. Thus, having a clear procedure that tells employees how, and to whom, they should direct their accommodation requests is essential to mitigating risk for failure to accommodate claims.
Second, even if an employer has a policy limiting the methods for accommodation requests, it also should inform managers and supervisors that when an employee who is trying to justify performance issues makes comments about his or her medical condition, such comments are potentially an accommodation request. The employer should direct supervisors and managers to immediately refer any such circumstance to human resources, in order to handle the interactive process.
This article originally appeared on the Foley & Lardner website. The information in this legal alert is for educational purposes only and should not be taken as specific legal advice.
SOURCE: Kopp, J. (13 December 2018) "Strategies to help employers minimize ADA missteps" (Web Blog Post). Retrieved from https://www.employeebenefitadviser.com/opinion/strategies-to-help-employers-minimize-ada-missteps
4 mistakes to avoid at the intersection of FMLA and PTO
Administration of the Family and Medical Leave Act (FMLA) can become extremely complex, especially when other leave entitlements are added. Read this blog post to learn about the four mistakes employers should avoid when it comes to FMLA and PTO.
By now, many employers can recite the basic requirements of the federal Family and Medical Leave Act (FMLA) in their sleep. The law provides eligible employees (those who have at least one year of service and 1,250 hours under their belt) with up to 12 weeks of unpaid, job-protected leave over a 12-month period for qualifying family-related or medical reasons. FMLA covers companies with 50 or more employees located within 75 miles of each other.
While the law itself is conceptually straightforward, administration can become incredibly complex — especially when you throw other types of leave entitlements into the mix such as workers' comp, disability leave, and paid time off (PTO).
HR Dive recently spoke with three employment law attorneys about the most common — and costly — leave administration errors employers make when it comes to the intersection of FMLA and paid leave.
Mistake #1: Not running leaves concurrently
"I would say that the biggest issue that we see is a lot of employers do not have policies that provide for the use of paid time off concurrently with the FMLA," said attorney Molly Batsch, an officer at the St. Louis office of Greensfelder, Hemker & Gale, P.C. "[Because] the FMLA regulations allow employers to require employees to use any paid time off concurrently with unpaid FMLA leave, we really encourage employers to put that specifically in their policies."
Attorney Jeff Nowak, a partner at the Chicago office of Franczek Radelet P.C., concurred via email: "A decent number of employers don't realize that they can run FMLA leave concurrently with paid leave benefits such as worker's compensation benefits — or they forget to run both at the same time."
Failing to run leaves concurrently, when permitted, can be costly for employers. A series of consecutive leaves strung together can mean longer absences and increased workplace disruption.
Mistake #2: Policy confusion
A similar mistake employers make is that they don't explicitly outline the concurrent rule to employees. Your FMLA policy should make clear that any paid time off will run concurrently with unpaid FMLA time, advised Batsch: "I think that employers have a few misconceptions about that.
"The first misconception would be that the employee gets to pick," she said. "If the employee doesn't want to run the two concurrently, then they can go ahead and take 12 weeks of unpaid FMLA and then they can take their five weeks of vacation after that, and that is not the case. It is permissible for an employer to require that time to run concurrently. So that's the first mistake I see."
Make sure your policy is abundantly obvious about that so employees don't get upset about that requirement when it's being administered.
Mistake #3: Missing an important caveat about FMLA and paid leave
There is an important exception to the general rule that employers may require an employee to use paid leave during unpaid FMLA leave, one that many employers miss, according to all three attorneys HR Dive spoke with.
"If an employee is on FMLA leave and simultaneously in receipt of a paid benefit, in any amount, FMLA leave is considered paid. When it's paid FMLA, an employer may not require that the employee substitute PTO — but it can permit that," said attorney David Mohl, a principal at the Atlanta office of Jackson Lewis PC.
For example, he said, if short-term disability provides 70% income replacement, an employer cannot require that the employee use PTO (or other paid leave) to make up the difference. If, however, there is a waiting period before that paid benefit kicks in — say, seven days — an employer may require the use of paid leave during that seven days.
Batsch noted that even if the employee is receiving paid time off via a third-party disability plan rather than an employer disability plan, "that's still a situation where you can't require an employee to run their paid time off concurrently with their FMLA time." This was clarified by the Seventh Circuit in a 2007 case (Repa v. Roadway Express, Inc., 477 F.3d 938).
Mistake #4: Forgetting to consider the patchwork of local laws
"The growing number of state and local laws heap a load of additional compliance concerns onto employers," said Nowak. "Not only are there additional considerations for accrual, carryover, and reasons for leave, but these new leave laws tend to provide job-protected leave in situations where the medical condition is not covered by the FMLA. As a result, employers cannot discipline an employee for an absence when he or she is utilizing leave covered by one of these leave laws."
Of course, those laws only make the interactions with FMLA management more complex.
"Paid parental leave policies interact with FMLA and gender discrimination laws," said Mohl. "PPL policies are, of course, a type of paid leave; some operate as a disability benefit."
Paid leave will likely continue to expand in scope in the coming months as more states and cities consider mandating it. Currently, 10 states and about 30 localities guarantee some type of paid sick leave. A number of federal policies have also been proposed, but no movement has been seen at that level yet.
SOURCE: Carsen, J. (27 November 2018) "4 mistakes to avoid at the intersection of FMLA and PTO" (Web Blog Post). Retrieved from https://www.hrdive.com/news/4-mistakes-to-avoid-at-the-intersection-of-fmla-and-pto/542962/
Association Health Plans Meet the 2018 Form M-1
The Employee Benefits Security Administration (EBSA) recently released the 2018 version of the Form M-1. Read this blog post for more information about the new Form M-1.
The Employee Benefits Security Administration (EBSA) is continuing to do what it can to help bring the new class of association health plans (AHPs) to life.
EBSA, an arm of the U.S. Department of Labor, unveiled the 2018 version of the Form M-1 Monday.
Administrators of multiple employer welfare arrangements (MEWAs) that provide medical benefits use Form M-1 to report on the MEWAs’ operations to the DOL.
The administration of President Donald Trump completed work on major new AHP regulations in June. The administration is hoping small employers will use the new AHPs to shield themselves from some state and federal mandates and to get a chance to benefit from being part of a large coverage buyer.
Any AHPs out there, including any AHPs formed under the new regulations, will need to file the 2018 Form M-1 with the Labor Department, EBSA said Monday.
An AHP, or other MEWA, can use Form M-1 both to register a new plan and to file the annual report for an in-force plan.
The 2018 annual report for an AHP or other MEWA in operation now will be due March 1, 2019.
If agents, brokers, benefit plan administrators or other financial professionals are trying to start AHPs, they are supposed to use Form M-1 to register the AHPs at least 30 days before engaging in any AHP activity.
“Such activities include, but are not limited to, marketing, soliciting, providing, or offering to provide medical care benefits to employers or employees who may participate in the AHP,” EBSA officials said in the form release announcement.
Resources
Links to AHP information, including information about the 2018 Form M-1, are available here.
SOURCE: Bell, A. (4 December 2018) "Association Health Plans Meet the 2018 Form M-1" (Web Blog Post). Retrieved from https://www.thinkadvisor.com/2018/12/04/association-health-plans-meet-the-2018-form-m-1/