Employers Must Report 2017 and 2018 EEO-1 Pay Data

The Equal Employment Opportunity Commission (EEOC) is requiring that all employers report their pay data, broken down by race, sex and ethnicity, from 2017 and 2018 by September 30. Continue reading this post from the SHRM to learn more.

The Equal Employment Opportunity Commission (EEOC) has announced that employers must report pay data, broken down by race, sex and ethnicity, from 2017 and 2018 payrolls. The pay data reports are due Sept. 30.

Employers had been waiting to learn what pay data they would need to file—if any at all—as litigation on the matter ensued. A federal judge initially ordered the EEOC to collect employee pay data for 2018. The National Women's Law Center (NWLC) and other plaintiffs wanted the EEOC to collect two years of data, as the agency was supposed to under a new regulation before the government halted the collection in 2017.

Judge Tanya Chutkan of the U.S. District Court for the District of Columbia sided with the plaintiffs and gave the EEOC the option of collecting 2017 pay data along with the 2018 information by the Sept. 30 deadline or collecting 2019 pay data during the 2020 reporting period. The EEOC opted to collect the 2017 data.

The agency said it could make the collection portal available to employers by mid-July and would provide information and training to employers prior to that date.

Immediate Steps

"We are awaiting confirmation from the EEOC or the contractor it is hiring to facilitate the pay-data collection on how to lay out the data file for a batch upload," said Alissa Horvitz, an attorney with Roffman Horvitz in McLean, Va.

But employers should take some steps immediately. They should reach out to their subject-matter and technical experts and pull together resources to ensure that the required data components can be captured, analyzed and reported by Sept. 30, said Annette Tyman, an attorney with Seyfarth Shaw in Chicago.

Filing the additional reports will impose unanticipated burdens for HR, IT and legal departments, as well as third-party consultants, she noted. "It is unclear whether any further litigation options will impact the Sept. 30 deadline, and we are instructing employers to assume they must comply."

Employers should keep in mind that they still must submit their 2018 data for Component 1 of the EEO-1 form by May 31, unless they request an extension. Note that the EEOC recently shortened the extension period for employers to report Component 1 data from 30 days to two weeks. So the extension deadline is now June 14.

Component 1 asks for the number of employees who work for the business by job category, race, ethnicity and sex. Component 2 data—which includes hours worked and pay information from employees' W-2 forms by race, ethnicity and sex—is the subject of the legal dispute.

Data Collection

Businesses with at least 100 employees and federal contractors with at least 50 employees and a contract with the federal government of $50,000 or more must file the EEO-1 form. The EEOC uses information about the number of women and minorities companies employ to support civil rights enforcement and analyze employment patterns, according to the agency.

The revised EEO-1 form will require employers to report wage information from Box 1 of the W-2 form and total hours worked for all employees by race, ethnicity and sex within 12 proposed pay bands.

The reported hours worked should show actual hours worked by nonexempt employees and an estimated 20 hours per week for part-time exempt employees and 40 hours per week for full-time exempt employees.

"Filling out the added data in the EEO-1 form will present a large amount of work, especially as there's great potential for human error when populating the significantly expanded form," said Arthur Tacchino, J.D., chief innovation officer at SyncStream Solutions, which provides workplace compliance solutions.

Employers should start looking at their data now and conduct an initial assessment of their systems, said Camille Olson, an attorney with Seyfarth Shaw in Chicago. Identify the systems that house the relevant demographic, pay and hours-worked data and determine how to pull the information together, she said.

Pulling EEO-1 data is much simpler for Component 1, she noted, because it only involves reporting the employer's headcount by race, ethnicity and sex—whereas collecting pay information involves more data points. Additionally, employers may use different vendor systems at different locations, some employees may have only worked for part of the year, and other employees may have been reclassified to exempt or nonexempt.

"Employers may want to inquire with their current vendors—payroll or otherwise—or look for outside vendors that may be able to assist them with this reporting requirement," Tacchino said.

Under some circumstances, employers may be able to seek an exemption (at the EEOC's discretion) if filing the information would cause an undue burden. "Mega employers" may not be able to show an undue burden, but this could be an option for smaller businesses, said Jim Paretti, an attorney with Littler in Washington, D.C. But that will depend on how the parties decide to move forward.

The Court Battle

The EEO-1 form was revised during President Barack Obama's administration to add the Component 2 data, but the pay-data provisions were suspended in 2017 by President Donald Trump's administration. The NWLC challenged the Trump administration's hold on the pay-data collection provisions, and on March 4, Chutkan lifted the stay—meaning the federal government needed to start collecting the information.

On March 18, however, the EEOC opened the portal for employers to submit EEO-1 reports without including the pay-data questions. Chutkan subsequently told the government to come up with a plan.

The EEOC proposed the Sept. 30 deadline for employers to submit Component 2 data, claiming that the agency needed more time to address the associated collection challenges. Furthermore, the EEOC's chief data officer warned that rushing the data collection may yield poor quality data. Even with the additional time, the agency said it would need to spend more than $3 million to hire a contractor to provide the appropriate procedures and systems.

Robin Thurston, an attorney with Democracy Forward and counsel for the plaintiffs, said at an April 16 hearing that the plaintiffs don't want the agency to compromise quality. But they also wanted "sufficient assurances" that the EEOC will collect the data by Sept. 30.

On April 25, Chutkan ordered the government to provide the court and the plaintiffs with periodic updates on the EEOC's progress and to continue collection efforts until a certain threshold of employer responses has been received.

SOURCE: Nagele-Piazza, L. (2 May 2019) "Employers Must Report 2017 and 2018 EEO-1 Pay Data" (Web Blog Post). Retrieved from https://www.shrm.org/resourcesandtools/legal-and-compliance/employment-law/pages/eeo-1-pay-data-report-2017-2018.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/

Employers Assess Risk Tolerance with Wellness Program Incentives

Do you offer wellness programs to your employees? Employers are now uncertain to what extent they can use incentives as part of a wellness program. Continue reading to learn more.

Employers designing 2019 wellness programs must decide what approach to take on program incentives without Equal Employment Opportunity Commission (EEOC) guidance on the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA).

The commission has a Notice of Proposed Rulemaking tentatively slated for January 2019. Last year, the U.S. District Court for the District of Columbia decided the commission's 2016 ADA and GINA wellness regulations were arbitrary and vacated them, effective Jan. 1, 2019.

Employers again are "in the uncomfortable position of not knowing with certainty whether and to what extent they can use incentives as part of a wellness program that involves medical examinations, disability-related inquiries and/or genetic information," wrote Lynne Wakefield and Emily Zimmer, attorneys with K&L Gates in Charlotte, N.C., in a joint statement.

The Society for Human Resource Management (SHRM) "has long advocated for proposals that will ensure consistency between the wellness rules that the EEOC has jurisdiction over, the ADA and GINA, with those provided under the ACA [Affordable Care Act]," said Nancy Hammer, SHRM vice president, regulatory affairs and judicial counsel. "While EEOC's 2016 rulemaking effort adopted the ACA's 30 percent incentive, it added new requirements that would have discouraged employers from providing wellness options for employees. We are hopeful that the EEOC is able to revisit the rules to ensure both consistency with existing rules and flexibility to encourage employers to adopt innovative programs to improve employee health and reduce costs."

ADA and GINA Requirements

Employers have long sought guidance over whether and when wellness program incentives—rewards or penalties for participating in biometric screenings and health risk assessments connected with the programs—comply with the ADA and GINA.

The ADA prohibits employers from conducting medical examinations and collecting employee medical history as part of an employee health program unless the employee's participation is voluntary, noted Ann Caresani, an attorney with Tucker Ellis in Cleveland and Columbus, Ohio.

GINA prohibits employers from requesting, requiring or purchasing genetic information from employees or their family members, unless the information is provided voluntarily.

The EEOC in 2000 asserted that for a wellness program to be voluntary, employers could not condition the receipt of incentives on the employee's disclosure of ADA- or GINA-protected information.

However, in 2016, the commission issued regulations providing that the use of a penalty or incentive of up to 30 percent of the cost of self-only coverage would not render involuntary a wellness program that seeks the disclosure of ADA-protected information. The regulations also permitted employers to offer incentives of up to 30 percent of the cost of self-only coverage for disclosure of information, in accordance with a wellness program, about the manifestation of a spouse's diseases or disorder, Caresani said.

Wakefield and Zimmer noted that the EEOC's 2016 wellness regulations applied to wellness programs that provided incentives tied to:

  • Biometric screenings for employees and spouses.
  • Disability-related inquiries directed at employees, which might include some questions on health risk assessments.
  • Family medical history questions, such as risk-assessment questions that ask about the manifestation of disease or disorder in an employee's family member and/or such questions about the disease or disorder of an employee's spouse.
  • Any other factors that involve genetic information.

Court Actions

The AARP challenged the 2016 rule, arguing that the 30 percent incentives were inconsistent with the voluntary requirements of the ADA and GINA. Employees who cannot afford to pay a 30 percent increase in premiums would be forced to disclose their protected information when they otherwise would choose not to do so, Caresani explained.

While the 30 percent cap was consistent with the Health Insurance Portability and Accountability Act (HIPAA) as amended by the ACA, the AARP said this was inappropriate, as HIPAA and the ADA have different purposes, noted Erin Sweeney, an attorney with Miller & Chevalier in Washington, D.C..

In addition, the change from prohibiting any penalty to permitting one of 30 percent was not supported by any data, according to the AARP.

In the summer of 2017, the U.S. District Court for the District of Columbia held that the EEOC's rule was arbitrary. The court sent the regulations back to the EEOC for further revisions.

In December 2017, the court vacated the 2016 rule after the EEOC initially said that the new rule would not be ready until 2021.

Conservative to Aggressive Approaches

Wakefield and Zimmer observed that employers may take several different approaches as they design wellness programs for next year:

  • No incentives (most conservative approach). These types of wellness programs can still include biometric screening and health risk assessments that employees and spouses are encouraged to complete, but no rewards or penalties would be provided in connection with their completion.
  • Modest incentives (middle-ground approach). A modest incentive is likely significantly less than 30 percent of the cost of self-only coverage, given the court's finding that the EEOC did not provide adequate justification for an incentive level-up to 30 percent.
  • Up to 30 percent incentives (more aggressive approach). Although the court did not rule that a 30 percent incentive level would definitely cause a wellness program to be considered involuntary, incentives at this level after 2018 likely will expose employers to lawsuits, they wrote.

Multiple-Point Program

One good way to demonstrate compliance, they noted, is a multiple-point program in which participants engage in different activities and earn an incentive by participating in enough activities apart from biometric screenings, risk assessments or providing their spouse's health information.

For example, an employer could let employees take health care literacy quizzes or offer a program that measures a worker's activity as opposed to fitness, Caresani noted. She said, "Programs that are participatory are probably less effective than outcome-based programs, but they are more popular with employees and are less likely to pose litigation risks."

SOURCE: Smith, A. (1 August 2018) "Employers Assess Risk Tolerance with Wellness Program Incentives" (Web Blog Post). Retrieved from https://www.shrm.org/resourcesandtools/legal-and-compliance/employment-law/pages/risk-tolerance-wellness-program-incentives.aspx

New EEOC pay reporting rule issued: 3 things you need to know

Check out some new EEOC rules from HR Morning, by Christian Schappel

It’s official: Employers will have more reporting duties moving forward. Here’s everything you need to know about the EEOC’s new final rule. 

As expected, the agency just released its final rule updating the EEO-1 reporting requirements employers have to abide by.

For the most part, the final rule mirrors the proposed rule we got our hands on earlier this summer.

The rule requires certain employers to submit a summary of employees’ pay to the EEOC in addition to the gender, race and ethnicity reporting many employers are already accustomed to.

Beginning in 2018, employers will be required to report aggregate W-2 wages and hours worked in 12 pay bands for each of the 10 EEO-1 job categories and 14 gender, race and ethnicity categories. The EEOC issued a new sample EEO-1 form to help employers prepare for the new rule.

Three key components of the rule employers need to know:

Who will (and won’t) report pay data?

  • Private employers and federal contractors with 100 or more employees will have to report the summary pay data on the new EEO-1 form.
  • Federal contractors and subcontractors with between 50 and 99 employees will not report summary pay data, but they will tally employees by job category and then by sex and ethnicity or race, as they did before and report that information.
  • Federal contractors and subcontractors with fewer than 50 employees will not file EEO-1 reports.
  • Private employers with 99 or fewer employees will not file EEO-1 reports.

When is the first pay data due?

  • The new EEO-1 report will be due for the first time on March 31, 2018, and it’ll be due every March 31 thereafter.
  • This year’s reporting requirements have not changed, however. Those required to submit an EEO-1 report must still submit their 2016 reports by Sept. 30, 2016.
  • Employers will then have 18 months between the 2016 and 2017 EEO-1 deadlines — from September 30, 2016 until March 31, 2018 — to comply with the new reporting requirements.

How will the new pay data be reported?

  • Employers with 100 or more employees must first categorize employees by EEO-1 job category. The 10 categories are:
    • (1) Executive/Senior Level Officials and Managers;
      (2) First/Mid Level Officials and Managers;
      (3) Professionals;
      (4) Technicians;
      (5) Sales Workers;
      (6) Administrative Support Workers;
      (7) Craft Workers;
      (8) Operatives;
      (9) Laborers and Helpers; and
      (10) Service Workers.
  • Then, they will categorize employees by sex, and ethnicity or race. These first two steps mirror the current EEO-1 reporting procedures.
  • Next, employers will categorize employees by pay bands. The 12 pay bands added to the EEO-1 form are:
    • (1) $19,239 and under;
      (2) $19,240 – $24,439;
      (3) $24,440 – $30,679;
      (4) $30,680 – $38,999;
      (5) $39,000 – $49,919;
      (6) $49,920 – $62,919;
      (7) $62,920 – $80,079;
      (8) $80,080 – $101,919;
      (9) $101,920 – $128,959;
      (10) $128,960 – $163,799;
      (11) $163,800 – $207,999; and
      (12) $208,000 and over.
  • Employers will tally the number of employees in each pay band by sex, and ethnicity or race. For example, an employer might report 23 Sales Workers who are non-Hispanic, white women in pay band (4) $30,680 – $38,999.
  • The rule changes the “workforce snapshot” to a pay period between Oct. 1 and Dec. 31. The current snapshot period is July 1 through Sept. 30. The EEO-1 report due March 31, 2018 will be the first to use the Oct. 1 through Dec. 31 snapshot period.
  • Report income provided in Box 1 of Form W-2.
  • Employers will report the total number of hours worked that year by the employees in each pay band. For example, an employer reports the total number of hours worked by 23 Sales Workers who are non-Hispanic white women in pay band (4). (Note: The new EEO-1 gives employers a choice for how to count hours worked for employees who are exempt employees under the FLSA. An employer may either use 40 hours per week for full-time employees and 20 hours per week for part-time employees or, if it chooses, report the number of hours the employees actually worked.)
  • Under no circumstances should employers report individual pay or salaries or any personally identifiable information.

The EEOC says the new data will help it improve investigations into pay discrimination. The goal is to close the wage gap and better equalize pay among different age, gender and ethnic/racial groups.

See the original article Here.


Schappel, C. (2016 September 30). New EEOC pay reporting rule issued: 3 things you need to know. [Web blog post]. Retrieved from address https://www.hrmorning.com/eeoc-new-pay-reporting-rule-need-to-know/

What You Need To Know About The EEOC’s Updated Guidelines For Retaliation

Interesting article on EEOC guideline updates from, Employee Benefit Adviser by Bobbi Kloss

Did you know that under the U. S. Equal Employment Opportunity Commission, an employee who believes that they have been retaliated against by an employer for complaining against unlawful discrimination in the workplace can file a complaint with the EEOC under Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act (ADEA), Title V of the Americans with Disabilities Act, Section 501 of the Rehabilitation Act, the Equal Pay Act (EPA), and/or Title II of the Genetic Information Nondiscrimination Act. It is worth noting, this is not an either or situation, meaning, an employee’s claim can cross over the various discrimination laws.

Employers with at least 15 employees — or 20 employees in age discrimination cases, including labor unions and employment agencies — are covered by EEOC laws. The EEOC is responsible for enforcing federal laws that make it illegal to discriminate against a job applicant or an employee because of the person's race, color, religion, sex (including pregnancy, gender identity, and sexual orientation), national origin, age (40 or older), disability, or genetic information. A very important point to keep in mind: it’s illegal to discriminate against a person because the person complained about discrimination, filed a charge of discrimination, or participated in an employment discrimination investigation or lawsuit.

The EEOC laws apply to all types of work-related actions, including hiring, firing, promotions, harassment, training, wages and benefits. To put it all in perspective — and show just how large and widespread this issue is — here are some sobering statistics: charges of retaliation filed with the EEOC accounted for 44.5% of alleged basis of discrimination in FY2015 with more than 39,700 allegations filed and with monetary benefits awarded in the amount of $173.5 million (not including those paid through litigation), according to an EEOC report on litigation statistics: Retaliation-Based Charges FY 1997 - FY 2015. Compare today’s numbers to 1997, when 18,198 allegations were filed and $41.7 million in benefits were awarded. Retaliation complaints continue to be the most frequent form of alleged discrimination filed with the EEOC since 2009.

Final enforcement guidance
It is no wonder then that at the end of August the EEOC issued its final enforcement guidance on retaliation and related issues replacing its 1998 Compliance manual section on retaliation. The update also provides guidance for the “interference” (prohibiting coercion, threats or other acts that interference with exercise of rights) provision under the ADA.

The various topics explained in the new guidance include:

  • The scope of employee activity protected by the law;
  • Legal analysis to be used to determine if evidence supports a claim of retaliation;
  • Remedies available for retaliation;
  • Rules against interference with the exercise of rights under the ADA;
  • Detailed examples of employer actions that may constitute retaliation.

The EEOC also released The Small Business Fact Sheet: Retaliation and Related Issues and a set of FAQs, Questions and Answers: Enforcement Guidance on Retaliation and Related Issues for clarification on main topic points for employers.

As a trusted benefit adviser, why should you be concerned about this update in the EEOC Compliance Manual? This is another opportunity to be in front of your clients and help guide them with their employment practices. Good business practices help attract and retain employees during these competitive times. Creating a culture free from employment discrimination can also create a motivated, stress free workforce leading to reduced benefit claims, reduced absenteeism, and turnover, which can allow for business growth.

What can your employers do now to ensure that their organization is proactively compliant with EEOC laws?

1) Make sure the Employee Handbook contains their EEOC policy statement and includes a process for an employee to file allegations of a complaint of workplace discrimination.

2) Train employees and supervisors on lawful and unlawful employment practices, including retaliatory behavior.

3) Take all complaints of discrimination seriously and ensure that a prompt and thorough investigation is conducted.

Employers should also make sure that their performance management process is documented and non-discriminately administered. If an employer needs to take corrective performance action — up to and including termination of employment — against any employee who has filed a complaint of discrimination, it is advised that they seek guidance from their Employment Law attorney before taking any action.

Lastly, discrimination in the workplace can be avoided by having a culture that promotes diversity, making employment decisions based upon performance, and maintains professionalism in all forms of communication.

See the original article Here.


Kloss, B. (2016 September 22). What you need to know about the EEOC's updated guidelines for retaliation. [Web blog post]. Retrieved from address: https://www.employeebenefitadviser.com/opinion/what-you-need-to-know-about-the-eeocs-updated-guidelines-for-retaliation

EEOC Issues Final Rules on Employee Wellness Programs

From the U.S. Equal Employment Opportunity Commission.

WASHINGTON, DC--The U.S. Equal Employment Opportunity Commission (EEOC) today issued final rules that describe how Title I of the Americans with Disabilities Act (ADA) and Title II of the Genetic Information Nondiscrimination Act (GINA) apply to wellness programs offered by employers that request health information from employees and their spouses. The two rules provide guidance to both employers and employees about how workplace wellness programs can comply with the ADA and GINA consistent with provisions governing wellness programs in the Health Insurance Portability and Accountability Act, as amended by the Affordable Care Act (Affordable Care Act).

The rules permit wellness programs to operate consistent with their stated purpose of improving employee health, while including protections for employees against discrimination. The rules are available in the Federal Register at Regulations Under the Americans with Disabilities Act and Genetic Information Nondiscrimination Act (GINA). EEOC also published question-and-answer documents on both rules today, available at Q&A ADA Wellness Final Rule and Q&A GINA Final Rule, and two documents for small businesses Facts on ADA and Wellness and Facts on GINA and Wellness.

Many employers offer workplace wellness programs intended to encourage healthier lifestyles or prevent disease. These programs sometimes use medical questionnaires or health risk assessments and biometric screenings to determine an employee's health risk factors, such as body weight and cholesterol, blood glucose, and blood pressure levels. Some of these programs offer financial and other incentives for employees to participate or to achieve certain health outcomes.

The ADA and GINA generally prohibit employers from obtaining and using information about employees’ own health conditions or about the health conditions of their family members, including spouses. Both laws, however, allow employers to ask health-related questions and conduct medical examinations, such as biometric screenings to determine risk factors, if the employer is providing health or genetic services as part of a voluntary wellness program. Last year, EEOC issued proposed rules that addressed whether offering an incentive for employees or their family members to provide health information as part of a wellness program would render the program involuntary.

The final ADA rule provides that wellness programs that are part of a group health plan and that ask questions about employees’ health or include medical examinations may offer incentives of up to 30 percent of the total cost of self-only coverage. The final GINA rule provides that the value of the maximum incentive attributable to a spouse’s participation may not exceed 30 percent of the total cost of self-only coverage, the same incentive allowed for the employee. No incentives are allowed in exchange for the current or past health status information of employees’ children or in exchange for specified genetic information (such as family medical history or the results of genetic tests) of an employee, an employee’s spouse, and an employee’s children.

The final rules, which will go into effect in 2017, apply to all workplace wellness programs, including those in which employees or their family members may participate without also enrolling in a particular health plan.

“The EEOC received comments on both rules from a broad array of stakeholders and considered them carefully in developing this final rule,” said EEOC Chair Jenny R. Yang. “The Commission worked to harmonize HIPAA’s goal of allowing incentives to encourage participation in wellness programs with ADA and GINA provisions that require that participation in certain types of wellness programs is voluntary. These rules make clear that the ADA and GINA provide important safeguards to employees to protect against discrimination.”



Program Design

Both rules also seek to ensure that wellness programs actually promote good health and are not just used to collect or sell sensitive medical information about employees and family members or to impermissibly shift health insurance costs to them. The ADA and GINA rules require wellness programs to be reasonably designed to promote health and prevent disease.



Protecting Confidentiality

The two rules also make clear that the ADA and GINA provide important protections for safeguarding health information. The ADA and GINA rules state that information from wellness programs may be disclosed to employers only in aggregate terms.

The ADA rule requires that employers give participating employees a notice that tells them what information will be collected as part of the wellness program, with whom it will be shared and for what purpose, the limits on disclosure and the way information will be kept confidential. GINA includes statutory notice and consent provisions for health and genetic services provided to employees and their family members.

Both rules prohibit employers from requiring employees or their family members to agree to the sale, exchange, transfer, or other disclosure of their health information to participate in a wellness program or to receive an incentive.

The interpretive guidance published along with the final ADA rule and the preamble to the GINA final rule identify some best practices for ensuring confidentiality, such as adopting and communicating clear policies, training employees who handle confidential information, encrypting health information, and providing prompt notification of employees and their family members if breaches occur.



EEOC enforces federal laws prohibiting employment discrimination. Further information about the EEOC is available on its web site at EEOC.gov.

EEOC proposes amendment related to Genetic Information and Wellness Programs

The Equal Employment Opportunity Commision (EEOC) issued a proposed rule amending Genetic Information Nondiscrimination Act (GINA) to allow employers to offer financial incentives and inducements to spouses as part of a wellness program. The rule proposed on Oct. 30, 2015 is currently open for public comment.

The proposed regulations would clarify that GINA does not prohibit employers from offering limited inducements for the provision by spouses of information about their current or past health status as part of an HRA. This may include a medical questionnaire, a medical examination (e.g. to detect high blood pressure or high cholesteral) or both. However, the provision of genetic information must be voluntary with written authorization.

The EEOC further proposes to add a requirement that any health or genetic services in connection with which an employer requests genetic information be reasonably designed to promote health or prevent disease. This addition will make the revised GINA regulations consistent with the proposed rule amending the ADA's regulations as they relate to wellness programs, which permits employers to collect medical information as part of a wellness program only if the program are reasonably designed to promote health or prevent disease.

This proposal would not alter the absolute prohibition against the use of genetic information in making employment decisions.

There are 6 substantive changes to the GINA regulations. Click here to read through those changes.

The EEOC invites the public to comment on the proposed regulation amendment.

EEOC Proposed Rule on Wellness and the Americans with Disabilities Act – What Employers Need to Know

Originally posted by M. Brian Magargle and Robin E. Shea on April 30, 2015 on www.thinkhr.com.

The employer community has been waiting for years to receive guidance from the Equal Employment Opportunity Commission on wellness programs and how an employer’s obligations under the Americans with Disabilities Act intersect with its rights and obligations under the Health Insurance Portability and Accountability Act (as amended by the Affordable Care Act).

The EEOC finally issued a proposed rule on April 20. The following is what employers need to know in a “Q&A” format.

What problem is the EEOC trying to resolve?

The quick answer is an apparent conflict between the ADA rules on employer “medical inquiries,” on the one hand, and the “wellness program” provisions of the HIPAA/ACA, on the other.

Title I of the ADA (the part of the ADA that applies to private sector employers) generally prohibits employers from making “medical inquiries” of current employees unless the inquiries are “job-related and consistent with business necessity” (for example, to verify the need for a reasonable accommodation). The general rule is that employers are not supposed to be asking for medical information from current employees.

There are some limited exceptions to this rule, including an exception for medical inquiries made in connection with a “voluntary wellness program.”

As employer wellness programs have become more popular, many employers began offering specific rewards or penalties to employees based on whether they participated in the programs and even on whether they achieved certain “results.” As will be discussed in more detail below, the HIPAA and the ACA specifically authorize wellness programs to offer incentives for “participation” and “outcomes” under certain circumstances. However, the question arose whether the use of such incentives would render the wellness program not “voluntary” for ADA purposes. If the wellness program was not voluntary because of the incentives, then any requests for employee medical information made in connection with the wellness program would violate the ADA.

(Title I of the ADA would not have an impact on medical inquiries made, say, to the family member of an employee who might also be eligible to participate in the employer’s wellness program.)

Thus, it was possible that an employer could offer a wellness program that was authorized and lawful under the HIPAA/ACA but still be vulnerable to charges and lawsuits under the ADA. The EEOC’s proposed rule seeks to address this problem, and for the most part, it should be welcomed by employers who offer wellness programs.

What does the proposed rule say, in a nutshell?

The proposed rule says that a wellness program can still be “voluntary” for ADA purposes if the program provides “incentives” for employees (both rewards and penalties), as long as the employer complies with the wellness incentive requirements of the HIPAA/Affordable Care Act.

There are two caveats: The wellness program would have to be associated with a group health plan (either insured or self-insured), and the EEOC proposals do not exactly match the HIPAA/ACA rules, although they are reasonably close.

Can you give us a recap of the HIPAA/ACA requirements?

Under the HIPAA/ACA scheme, there are two types of wellness programs. A “participatory” program is one that rewards employees just for participating and does not require a specific goal to be met. (An example would be an employer who reimburses employees for fitness club memberships.) Under the HIPAA/ACA, participatory programs can be offered without limitation, as long as they’re available to all similarly situated individuals.

The other type of wellness program is a “health-contingent” program. There are two types of “health-contingent” programs: (1) activity-only programs, in which the employee is rewarded for completing an activity but doesn’t have to achieve or maintain an outcome (for example, “we’ll pay you $100 if you walk a mile three days a week for a year”); and (2) outcome-based programs, in which employees are rewarded for achieving or maintaining results (for example, “we’ll pay you $100 if you keep your BMI at or below 25 for a year, or if you quit smoking”).

If the program is health-contingent, employers are allowed to offer incentives (carrots or sticks) if –

  • Employees are allowed to try to qualify at least once a year,
  • The total reward offered doesn’t exceed 30 percent of the total cost of employee-only coverage under the plan or the total cost of family coverage if dependents are also allowed to participate in the program (“total” means the employee’s and the employer’s share). The percentage is up to 50 percent for tobacco prevention or cessation,
  • The program is reasonably designed to promote health or prevent disease,
  • The full reward must be available for all similarly situated individuals, and reasonable alternatives must be offered to those who can’t qualify, and
  • The availability of reasonable alternatives must be disclosed in plan materials and in any disclosure telling an individual that he or she did not meet an initial outcome-based standard.

Under the HIPAA/ACA, the 30 percent/50 percent incentive limit applies only to “health-contingent” programs. HIPAA and the ACA have no limit on rewards that apply to “participatory” programs (if the programs are available to all similarly situated individuals).

The EEOC’s proposed rule is slightly different.

How does the EEOC proposed rule contrast with the HIPAA/ACA rule?

The EEOC would allow employers to offer incentives for employee participation in wellness programs associated with group health plans if the total reward does not exceed 30 percent of the total cost of employee-only coverage under the plan for both participatory and health-contingent wellness programs. The EEOC proposed rule does not allow a 50 percent reward level for tobacco cessation programs (unless there are no associated disability-related questions or medical exams), and the total cost used in the reward calculations does not take into account family-level coverage, even where dependents can participate in the program.

In addition, the wellness program must be completely voluntary. The EEOC would define “voluntary” as follows:

  • Employees aren’t required to participate in the wellness program,
  • Health insurance coverage is not denied or made more difficult to get if the employee chooses not to participate (with the exception of the permitted “incentives”), and
  • The employer does not take adverse action against an employee for refusing to participate . . .as this employer allegedly did.

The EEOC invites the public to comment on the proposed rule through June 19. The agency is particularly interested in comments pertaining to how much medical information an employee should be required to disclose to be eligible for an incentive, whether the rule should require that the incentives not render health insurance “unaffordable” within the meaning of the ACA, issues related to the “notice” requirement, how to treat wellness programs that are not associated with group health insurance, as well as other topics.

The employer would also be required to provide a notice “that clearly explains what medical information will be obtained, who will receive the medical information, how the medical information will be used, the restrictions on its disclosure, and the methods the covered entity will employ to prevent improper disclosure of the medical information.”

The wellness program would be required to disclose medical information to the employer only in aggregated, non-individually-identifiable form, “except as needed to administer the health plan.”

Are there any other issues to consider under the HIPAA/ACA?

Although the EEOC rule is currently in proposed form, we expect any final version to still be somewhat different from the HIPAA/ACA requirements for wellness programs. For example, one of the primary requirements of a outcome-based program under HIPAA is the ability of an employee to meet a “reasonable alternative standard” to receive the reward. Participants in the program must be clearly informed of that option, and it remains to be seen how that notification will be coordinated with the notice proposed by the EEOC. A related issue is the intersection of the “reasonable alternative standard” under HIPAA with the reasonable accommodation and interactive process obligations under the ADA. The EEOC’s Interpretive Guidance to the proposed rule says that provision of a “reasonable alternative standard” along with the required notification will generally satisfy the employer’s reasonable accommodation obligations under the ADA, but no specifics are given. Moreover, the Interpretive Guidance notes that under the ADA an employer would have to make reasonable accommodations for an employee who could not be in a “participatory” program because of a disability, even though the HIPAA/ACA rules do not require a “reasonable alternative standard” for participatory programs.

Also, details about wellness programs commonly appear in ERISA-governed summary plan descriptions, so will the EEOC rules also have to appear there as well?

There are similarities between the employee benefits issues affecting wellness programs, on the one hand, and the ADA and employee-relations issues, on the other, but the differences are equally important and will hopefully be addressed by the EEOC in the final rules expected to be issued later this year.

What should employers do?

The proposed rule describes certain employer “best practices,” as follows:

  • Employers should ensure that employees who handle medical information know their obligations under the laws.
  • Employers should adopt privacy policies for collection and handling of employee medical information, assuming that they have not already done so.
  • If medical information is stored electronically, it should be encrypted and other security measures implemented such as password protection and firewalls.
  • If possible, employees who handle medical information should not be “making decisions related to employment, such as hiring, termination, or discipline.” If this is not possible, then the employer should ensure that there is no discrimination based on an employee’s disability.
  • Breaches of confidentiality should be promptly and effectively addressed, and the affected employees should be informed immediately.
  • Employers should take appropriate action against an employee who breaches confidentiality, and should “consider discontinuing” their relationships with vendors who breach confidentiality.

Why doesn’t the EEOC proposed rule have a 50-percent incentive for tobacco-related programs, since the HIPAA/ACA does?

The EEOC explained that it did not include the 50 percent incentive for tobacco programs because, it said, most of those programs do not seek employee medical information at all. If not, there would be no ADA issue. But if a tobacco program does seek such information (for example, through testing for nicotine, or monitoring blood pressure), then the tobacco program would have to be included in computing the 30-percent limit for incentives.

Did the proposed rule address the employer’s right to get medical information from an employee’s family members, who may be covered under the employee’s health insurance and might be eligible for participation in the wellness program?

No, because Title I of the ADA applies only to employers and employees. Medical inquiries about an employee’s family member would, of course, be covered under the Genetic Information Nondiscrimination Act, which is also enforced by the EEOC. The EEOC says it will issue guidance on wellness and the GINA “in future EEOC rulemaking.”

Did the proposed rule contain anything else of interest?

Yes. The EEOC has explicitly disagreed with a wellness/ADA decision from the U.S. Court of Appeals for the Eleventh Circuit, Seff v. Broward County. At issue in the Seff case was a $20-per-paycheck penalty that employees had to pay if they chose not to participate in the county’s wellness program. The court found that the county’s program fell within a “safe harbor” in the ADA, which provides that a covered entity is not prohibited “from establishing, sponsoring, observing or administering the terms of a bona fide benefit plan that are based on underwriting risks, classifying risks, or administering such risks that are based on or not inconsistent with State law.” Because the program fell within the safe harbor, the court said, it was irrelevant whether the program was “voluntary” or whether medical inquiries made in connection with the program violated the ADA.

The EEOC’s position is that this “safe harbor” provision in the ADA does not apply to wellness programs.

Employers who operate in the Eleventh Circuit states of Alabama, Florida, or Georgia can continue to follow Seff for the time being. However, employers who operate in other states may choose to follow the EEOC’s position once its proposal becomes final. The conflict between the EEOC and the Eleventh Circuit will probably be resolved eventually by the courts.

EEOC Issues Proposed Rule on Employer Wellness Programs

Originally posted by Rick Montgomery, JD on April 20, 2015 on thinkhr.com.

On April 20, 2015, the U.S. Equal Employment Opportunity Commission (EEOC) issued a proposed rule that would amend the regulations and interpretive guidance implementing Title I of the Americans with Disabilities Act (ADA) as they relate to employer wellness programs. The proposed rule amends the ADA regulations to provide guidance on the extent to which employers may use incentives to encourage employees to participate in wellness programs that include disability-related inquiries and/or medical examinations. The EEOC will accept public comments on the proposed rule until June 19, 2015, following which final regulations will be issued.

The EEOC has released a series of 10 questions and answers which outline the issues at hand, define terms involved in the proposed rule, and explain how wellness programs interact with regulations such as the ADA, the Health Insurance Portability and Accountability Act (HIPAA), and other federal nondiscrimination laws.

Employers do not have to comply with the proposed rule at this time; however, until final regulations are formulated, employers should take a careful look at their wellness programs to ensure compliance with the ADA, as many of the requirements set forth in the proposed rule are already requirements under the law.

At this time, employers should not:

  • Require employees to participate in a wellness program.
  • Deny health insurance to employees who do not participate in a wellness program.
  • Take any adverse employment action or retaliate against, interfere with, coerce, or intimidate employees who do not participate in wellness programs or who do not achieve certain health outcomes.

Further, employers should ensure that all employees are equally able to participate in any wellness programs or incentives offered, and that those employees needing reasonable accommodations to participate are offered those accommodations.

More on the EEOC and Wellness Programs

Source: ThinkHR.com

The U.S. Equal Employment Opportunity Commission’s (EEOC) recent litigation against employers over incentives granted to employees participating in wellness programs may be a concern for other employers. Specifically, the EEOC has asserted that the size of the incentive that is lost by employees that refuse to participate could render an employer’s wellness program “involuntary” and in conflict with the Americans with Disabilities Act (ADA). Our recent blog post on this issue highlights the concern.

The EEOC’s action raises issues that have confused employers and benefit advisors for many years: What types of wellness program rewards or penalties are acceptable under the ADA? Will programs that comply with other federal laws for employer-sponsored health plans avoid claims of discrimination under the ADA?

The ADA generally prohibits employers from requiring employees to answer disability-related questions or to undergo medical exams (except certain health/safety exams in specific professions or industries). The EEOC, which regulates various ADA provisions, has confirmed that employers may conduct health assessments or exams as part of a voluntary wellness program without violating the ADA. Medical records must be kept confidential and separate from personnel records.

While the EEOC has not published clear guidance as to the meaning of “voluntary” participation, the need for clarification is apparent. The Health Insurance Portability and Accountability Act (HIPAA), has long permitted health plans to make wellness rewards (incentives or penalties) up to certain limits — those limits were increased under the Affordable Care Act (ACA) starting in 2014. These ACA limits may inform strategy on employer implementation of incentives to promote participation in wellness programs.

Penalties and Rewards

The ADA speaks of penalties, but in the vernacular of the ACA, the term “reward” refers both to an incentive payment or a penalty surcharge. Further, the ACA categorizes wellness programs as either “participatory” or “health-contingent” and applies different rules for each category.

Participatory programs do not depend on health status and no specific health outcome is required. For example, a program that rewards all employees that complete a health risk assessment, without regard to the results, is a participatory program. A health-contingent program is one that offers the reward only to employees that either meet an initial health standard (such as satisfactory biometric screenings) or do not meet the initial standard but meet a reasonable alternative standard (such as attending an educational program).

Starting with 2014 plan years, the maximum allowable reward (incentive or penalty) in a health-contingent wellness program under the ACA is 30 percent of the health plan cost, or 50 percent if the program is designed to prevent or reduce tobacco use. (Health plan cost generally is the COBRA rate minus the 2 percent administrative fee.) If the program is merely participatory, however, there is no limit under the ACA for the amount of reward an employer can give an employee.

Regardless of the ACA provisions for wellness programs, the EEOC presently believes that compliance with the ADA prevents employers from offering rewards amounting to steep or enormous penalties — even in a participatory-only program. In its recent case, the EEOC cites the difference between employees paying 25 percent versus 100 percent of the cost for health insurance based on whether they participated in a wellness program as an “enormous penalty.”

Considering the EEOC’s public comments endorsing voluntary wellness programs, and that their enforcement activity is focused on programs imposing penalties that they describe as enormous or steep, it appears likely the use of wellness program incentives will continue to be permitted. However, compliance with the reward limits and reasonable alternatives required under the ACA needs to be complimented with awareness of the EEOC’s concern over excessive penalties. Formal guidance from the EEOC is still pending.

For more information about wellness programs under the ACA, read the Final Rule.