Intermittent FMLA – You Are Not Alone

We work with HR departments all over the country, answering compliance questions everyday. Over time, we have come to recognize patterns and issues that seem to plague HR universally.  One frequently raised issue: The incredibly painful intermittent FMLA. The DOL defines intermittent FMLA as leave taken in separate blocks of time for a single qualifying reason – or on a reduced leave schedule – reducing the employee’s usual weekly or daily work schedule.

Unfortunately, for many employers, intermittent leave can become a nightmare – often abused and difficult to manage. Fortunately, the FMLA regulations offer some tools for employers to discourage abuse and better monitor leave. Here are our top 5 strategies for curbing the misuse of intermittent FMLA.

1. Question the Original Certification.

If the employee’s use of intermittent FMLA is inconsistent with the certification, this gives you a good starting point for curbing the abuse, or stopping misuse of FMLA before it starts.

It is always worth double-checking that the employee was actually eligible for FMLA in the first place.  Did he or she actually work 1250 hours in the last 12 months?  Was the original certification sufficient to establish a serious health condition?  Intermittent FMLA is often needed for chronic conditions that cause episodic rather than continuing incapacity.  Check the certification: if the employee (or the employee’s spouse or child) was not seen or was not scheduled to be seen by a healthcare provider at least twice within 12 months, the leave may not qualify as FMLA.

2. Monitor Compliance with the Certification

The certification will set forth the frequency and expected duration of the “flare-ups” and you have a right to track intermittent leave to ensure that the employee’s use is consistent with the certification.  If the employee’s use of leave exceeds what is outlined in the certification, let the employee know.  If the employee feels that he or she needs additional leave, you can provide him/her with a new certification for the healthcare provider to complete.  If the employee was using intermittent FMLA to fix his or her car, this will set the record straight.

The FMLA allows employers to insure that a certification calling for intermittent health-related absences is sufficient, valid and supports the need for intermittent leave. If you notice a pattern of absences that seem to occur at suspicious times like weekends and holidays, you should document it. Because evidence of a pattern of abuse is circumstantial, don’t jump the gun – document absences over a long enough period to be able to show a definite pattern.

3. Request Recertification.

The FMLA regulations offer a number of opportunities to seek recertification of the need for FMLA leave, including intermittent leave.  Employees may be asked for recertification:

  • Any time they seek to extend an existing FMLA leave;
  • For long-term conditions or conditions that may require sporadic absences, an employer may request recertification every 30 days in connection with an absence;
  • If the employee is taking a solid block of leave for more than 30 days, the employer may ask for recertification if the leave extends beyond the requested leave;
  • If the employee is out on a leave that has been certified to extend for more than six months, the employer may seek recertification every six months; and finally,
  • Employers may ask for a new certification at the beginning of each leave year.

If you are looking to request a recertification at the start of a new FMLA year, check first to make sure the employee actually worked 1250 hours in the previous year.

4. Follow up on changed or suspicious circumstances.

The FMLA regulations also allow employers to seek recertification more frequently than 30 days if:

  • The circumstances described by the existing certification have changed; or
  • The employer receives information that casts doubt on the employee’s stated reason for the absence or on the continuing validity of the certification.

“Changed circumstances” include a different frequency of duration of absences, increased severity, or complications from the illness. The regulations allow employers to provide information to the health care provider about the employee’s absence pattern and ask the provider if the absences are consistent with the health condition. Changed circumstances are the scenarios where you’ve noticed the employee’s FMLA call-ins are exceeding the absences noticed in the certification, and the employee indicates a need for additional leave.  To mitigate risk, send the employee an email or letter first notifying him/her that the use of FMLA is exceeding the certification and that if more time is needed a new certification should be executed.

Information you receive about activities the employee is engaging in while on FMLA leave that are inconsistent with the employee’s health condition may cast doubt on absences. An example provided in the regulations is an employee playing in the company softball game while on leave for knee surgery.  Again, it is important to look at the certification.  It may be that the employee has a job that is precluded due to something like epilepsy, but other activities are allowed.

5. Make Sure the Employee Provides Appropriate Notice

The DOL regulations spell out that an employee is supposed to give the employer at least 30 days advance notice before using FMLA leave if the need for leave is foreseeable. If that is not practical because of a lack of knowledge or uncertainty about when the leave will need to begin or due to a change in circumstances or a medical emergency, notice is supposed to be given “as soon as practicable.” That means both as soon as possible and practical, taking into account all of the facts and circumstances in the individual case.  At the very least, the employee is expected to comply with the employer’s call out procedure absent extenuating circumstances.

That’s our top 5.  So, the next time you receive a request for intermittent FMLA leave, or have intermittent leave questions, ask yourself the following before you start banging your head on the wall repeatedly:

√    Is the certification complete and valid? When a certification has entries missing or is vague or ambiguous, you may ask the employee to provide complete and sufficient information. The request must be in writing and must specify the reason the certification was considered incomplete or insufficient. The employee then must provide the additional information within seven days. If the employee fails to provide the information, leave may be delayed or denied.

Even if the certification was initially complete, has the time period it covered expired?  If you have concerns that the certification is not legitimate, HR may contact the health care provider to insure that he or she actually prepared the certification, and to clarify handwriting or the meaning of a response, but the employee’s direct supervisor may not be the one to make that contact. During this process be careful not to request more information than what is required to authenticate or clarify the form.  This process can also be used at the recertification stage as well as with an initial certification.

√    Is the employee’s use of FMLA consistent with the certification?  If not, address it immediately with the employee reminding the employee of the certification, and letting the employee know that if something about the health condition has changed and additional leave is needed, you will want to go ahead and obtain a new certification from the doctor.

√    Do you suspect abuse?  If so – document and watch for patterns.

√    Are you enforcing your absence notification policy consistently?  When an employee on intermittent FMLA is absent, don’t assume it is for an FMLA qualifying reason.  Make sure they are following your call-in procedures and are not just leaving work whenever they feel like it.  On the other hand, if no one else is expected to call-in, don’t just enforce these policies for those on FMLA.

√   Have you considered the American’s with Disabilities Act (ADA)?  Any time an employee seeks FMLA leave for his or her serious health condition and indicates a need for ongoing treatment, it is important to consider whether the employee also qualifies as disabled under the American’s with Disabilities Act (ADA), and whether you may have an obligation to engage in the interactive dialogue and grant ongoing accommodations.  As a reminder, the ADA requires employers to provide qualified disabled employees with accommodation absent undue hardship.

√   Do you need a gut-check? Call us. We can save you headaches and time, cutting through the confusion quickly.  508-548-4888 or questions@foleylawpractice.com

 

 

 

Is Your Organization Prepared for the New Pay Equity Law?

Pay equity laws are not new. Federal law has prohibited pay discrimination for decades. However, current media attention to sex-based discrimination, including sexual harassment and pay inequities, has placed these issues in the spotlight. This focus creates new challenges—and opportunities—for compliance-minded employers to face this issue head-on, rather than waiting to defend a claim. Pay equity claims can cause an expensive distraction, but it doesn’t have to be that way. By understanding the law, and your obligations, you can rest assured you are protecting your organization, and your employees.

Understand The Law.

As we mentioned here, one of the strongest state laws in the country addressing equal pay for comparable work will take effect in Massachusetts on July 1, 2018. The sweeping Act makes many changes to existing law, including definitions of how to determine comparable work, and prohibiting organizations from requesting salary history before hire, to name a few. Additionally, employees will not be required to file a claim with the MCAD prior to filing a lawsuit, making this an expensive proposition for unprepared employers. The silver lining in these new obligations is the Act provides an affirmative defense to employers who perform a good-faith evaluation of pay practices, and create a plan for addressing identified disparities. Below is an overview of how that process can work to your organization’s advantage. And, if you are interested in getting in on that attorney client privilege, we’ve got you covered.

Perform a Pay Equity Evaluation.

In addition to the affirmative defense the Massachusetts Act provides employers, a pay equity assessment or audit is arguably the most efficient way to address the risk of a pay equity claim. The focus and depth of the analysis can vary depending on the size and needs of your organization, but there are three common goals:

  • Determine whether pay disparities exist that cannot be explained by other factors (remember, these are not factors that could explain the disparity, but factors that actually influenced the pay decision);
  • Identify weaknesses or gaps in compensation policies and practices that contribute to such disparities; and
  • Create a plan for addressing the disparities.

Exercise Attorney-Client Privilege. 

Any time you internally audit or review your internal policies and procedures that review may be subject to disclosure, either during a government agency investigation or during discovery in litigation. By using an attorney, that same audit or review becomes protected by the attorney client privilege. When we are talking about an audit that may reveal evidence of pay inequity, using an attorney becomes a key risk management tool. You won’t know beforehand what the audit will reveal, so the conservative approach is to take appropriate steps to protect the audit and its results to the greatest extent possible.

Make Appropriate Comparisons.

At its core, a pay equity assessment analyzes your organization’s pay data to determine whether there are disparities. A typical analysis compares the average pay of men to the average pay of women (or other protected groups) within relevant job classifications to determine whether disparities exist. Under the federal Equal Pay Act, for example, this means comparing employees who perform jobs that require equal skill, effort and responsibility and are performed within the same establishment under similar working conditions.

Under the new Massachusetts law, this comparison is extended to include “comparable work,” defined as “work that is substantially similar in that it requires substantially similar skill, effort and responsibility and is performed under similar working conditions.” In other words, employers need to use more than job titles to make an appropriate comparison.

Disparities Require a Deeper Dive.

If your pay equity analysis reveals pay disparities within certain jobs, it will be necessary to more closely examine the affected groups to identify whether other relevant factors explain the pay differences. These factors can be objective or subjective and are usually unique to the particular job or industry. For instance, compensation for some jobs is based on the quantity or quality of achievements, such as sales revenues, patents filed, degrees achieved or publications made. Differences may also be attributed to market data or difficulties in filling the position that required paying a higher salary.

Review Compensation Practices.

Often, pay disparities are not the result of intentional discrimination, but a variety of factors ranging from salary history to lack of clarity in the organization’s pay policies and practices. Even after the pay analysis is complete, it is important to consider whether modifications must be made to existing compensation policies, procedures and practices in order to help prevent unexplained disparities from continuing to occur. Failure to take this step could create an ongoing risk of future pay disparities. The following questions will help identify whether policies and practices should be examined:

 

  • Are there written guidelines that define the factors to be considered when making pay decisions?
  • Are decision makers held accountable for complying with compensation related policies and guidelines?
  • Do different departments or teams within the organization operate independently and without oversight when making compensation related decisions, rather than a cohesive approach within the organization?
  • Do the organization’s pay practices require evidence to support the factors that are used to make pay decisions, such as written performance evaluations or objective market data?
  • Is there documentation recording the reasons for pay decisions, particularly where those decisions deviate from expectations?

Update Job Descriptions and Performance Evaluations.

Job descriptions alone are not sufficient to show that jobs are equal. However, they can provide the foundation for demonstrating that certain jobs are either comparable or should be differentiated for purposes of salary comparison. Conversely, poorly drafted job descriptions can adversely impact an organization’s ability to defend themselves when confronted with pay equity claims. Additionally, because performance reviews generally impact salary directly, a flaw in the performance evaluation process may affect the legitimacy of pay decisions (and other employment decisions) that are tied to those results. For this reason, it is important that managers and any personnel responsible for setting salary levels are trained and understand the importance of accurately documenting performance issues and achievements.

Create a Plan.

The final step in any pay equity assessment is to make a plan for addressing pay disparities that are identified. Employers cannot lower the pay for some employees in order to equalize pay, so the righting of identified inequities can take time.

Don’t Wait.

With the renewed focus on pay equity—whether across gender, race or other protected lines—employers can expect increased scrutiny of their pay decisions. Conducting an effective pay analysis will help ensure legal compliance and provide useful insight into the effectiveness of existing compensation practices. In Massachusetts, it will also provide an affirmative defense in the event of a pay equity complaint. And finally, to protect the process and your findings, strongly consider the use of an outside attorney. This will give you the benefit of the affirmative defense coupled with the protection of the attorney-client privilege.  We are here to help.

 

Time to Think About Interns

As second semester begins, many undergraduates are considering their summer employment options, and many are looking for internships.  In the past, this has been an area fraught with risk for unwary employers, particularly in labor friendly states like California and Massachusetts.  The DOL is making a new push for the use of unpaid interns in the private sector, which is a major departure from its position during the Obama administration.  Below is an overview of the DOL’s new intern guidance (located here), as well as ongoing risks for employers to consider.

When determining whether an intern is properly classified under the Fair Labor Standards Act (FLSA), courts have identified the following seven factor test:

  1. The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee—and vice versa.
  2. The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions.
  3. The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.
  4. The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar.
  5. The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.
  6. The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.
  7. The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.

The test is a flexible one, and no single factor is determinative, which means a court will look at the unique circumstances of each case.

Think you may be ready to take the plunge?  Before you do, consider the risks inherent in using unpaid interns.

  1. Employers must also comply with state law.  
Under Massachusetts law, most for-profit companies must pay interns at least minimum wage.  The Massachusetts Minimum Fair Wage Law and Regulations (the “Wage Act”) specifically states that the following five types of work are the only occupations permitted to be performed by unpaid interns):
  1. Professional service;
  2. Agricultural and farm work;
  3. Work by persons being rehabilitated or trained under rehabilitation or training programs in charitable, educational or religious institutions;
  4. Work by members of religious orders; or
  5. Outside sales work regularly performed by outside salesmen who regularly sell a product or products away from their employer’s place of business and who do not make daily reports or visits to the office or plant of their employer.  (M.G.L. c. 151, § 2).
Unlike the FLSA, as outlined above, the training exception to the Wage Act is limited to only charitable, educational or religious institutions, removing the possibility that a for-profit company could utilize the exception for an unpaid internship program structure.   Additionally, “professional service” is a restricted group, limited to such professions as a doctor, lawyer or engineer and not the more commonly sought undergraduate internships.
In short, in Massachusetts, unless the organization is charitable, educational or religious, or the internship is for a professional service (as defined above), interns must be paid at least minimum wage.
2.  The DOL does not determine whether your interns should be paid, the courts do.
Over the past several years, a number of high profile cases involving interns have made their way through the courts.  Companies like Fox Searchlight and GM have been sued for failing to pay interns.  While the specific factors a court will examine will vary depending on jurisdiction, there are a few major factors the courts will be looking at.
Is the training similar to that the intern would receive at a vocation school?
In other words, is the intern learning the skills of the trade for which he or she is interning?  If your accounting intern is running errands, buying coffee, and answering phones, you may face an issue.

Is the training for the benefits of the intern, or does the employer derive an immediate advantage from the activities of the interns?

In addition to the intern benefiting from the internship, the company must also show that it received no immediate advantage from the intern’s work.  While it is acceptable for the performance of tasks by interns to have some benefit, this limited benefit should be counter-balanced by impediments to the employer’s operations in both time and economic costs in teaching the intern the activities, reviewing any work performed as well as economic costs to the business of participating in the program.

Do the interns displace regular employees?

If the intern is filling a position that would otherwise be filled by a paid employee, the intern should be paid at least minimum wage.
Unsure about interns?  We can help.

New Year, New Laws, New Website

   

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Hope your 2018 is off to a great start! We have a robust new website which we updated to change those awful pictures make it easier to use our resources. Please take a minute and check it out? http://www.foleylawpractice.com

Remember those laws we wrote about months ago — Pay Equity Act and the Pregnant Workers Fairness Act? They’re finally here. We break it down with action steps below, including, of course,  sexual harassment:

Massachusetts Pregnant Workers Fairness Act (MPWFA): This law will require all Massachusetts employers to update handbooks and policies; provide reasonable accommodation to pregnant and breastfeeding employees; and provide written notice to all employees about their right to be free from discrimination under this Act no later than April 1, 2018.

The law amends Massachusetts anti-discrimination laws to specifically prohibit retaliation and discrimination against pregnant employees, creating a new protected class to include:  “pregnancy or a condition related to pregnancy, including, but not limited to, lactation, or the need to express breast milk for a nursing child.” While Massachusetts and Federal laws already prohibit pregnancy discrimination, the new law creates an obligation for employers to engage in an interactive dialogue,  provide accommodations to pregnant and breastfeeding employees and provide new, existing and newly pregnant employees with notice of these new rights.  With the creation of a new  protected class comes familiar language and obligations: reasonable accommodation, interactive process and undue hardship.

Reasonable accommodation might include more frequent rest breaks; seating or modified equipment; paid or unpaid time off to recover from childbirth; a private space to express breast milk that is not a bathroom; job restructuring; or a modified work schedule. The interactive process mandate requires employers and employees (or prospective employees) to engage in a timely and good faith interactive process to determine a reasonable accommodation to perform the essential functions of the job. An employer is not required to provide and accommodation that would cause an undue hardship, defined as an accommodation “requiring significant difficulty or expense.” Finally, an employee may not be forced to take a leave of absence if a reasonable accommodation could be made to stay on the job.

Next Steps

  • Update handbooks and personnel policies to reflect the increased obligations under the new law, including the adoption of a specific policy outlining and documenting the interactive process;
  • Train human resources personnel and managers regarding the requirements of the Act;
  • Ensure proper measures are in place to provide written notice in all instances required under the Act; and

Contact us with any questions and assistance in compliance. This law is a big deal.

 

Pay Equity–It really is on the horizon.

One of the strongest state laws in the country addressing equal pay for comparable work will take effect in Massachusetts on July 1, 2018.

The sweeping Act makes many changes including how to determine comparable work, and prohibiting salary and benefit inquiries before hire, to name a few. Employees will not be required to file a claim with MCAD as before but can go directly to court.

The silver lining of these new obligations is the Act provides an affirmative defense to employers who perform a good faith evaluation of pay practices. Over the past several months many of our clients have utilized out Pay Equity Audit  which creates a rolling affirmative defense for your company. We strongly advise employers to take advantage of this comprehensive and valuable service before July 1, 2018.

 

Sexual Harassment

The standard sexual harassment compliance advice has been to implement a well-written sexual harassment policy and invest in sexual harassment training. Yet many of the workplaces rocked by recent claims—including the Weinstein Company in California, home to the country’s strictest anti-harassment laws—had a policy and training in place. What can be done?

In response to the changes in climate and the new EEOC guidelines, we have developed a Sexual Harassment Tool Kit. For a flat fee we will provide:

  1.    A digital copy of Attorney Angela Snyder’s No More #MeToos webinar that can be shared with your entire leadership team, serving as the first level of effective sexual harassment training for leadership and HR;
  2.   A comprehensive outline for creating a sexual harassment strategy for your organization;
  3.   A model sexual harassment policy and/or review of your existing sexual harassment policy;
  4.   Sample Letter from Leadership in Word that sets forth your organization and leadership’s commitment to addressing sexual harassment in the workplace that can be modified to meet your specific needs;
  5.    A sample “pulse” survey to send to employees that will help uncover underlying cultural erosions; and
  6.   One hour of attorney time to uncover your unique risks based on demographics and culture. During that discussion we will provide a punch list of action items that will help you finalize a customized sexual harassment strategy.

 

We believe strongly in proactive advice and want to make this service as accessible as possible. We are offering the Tool Kit for a very reasonable flat fee. Please contact us.

 

 We can help! Reach out to us at questions@foleylawpractice.com or (508) 548-4888.

 

 

A Massachusetts Employer’s Obligations Related to the Employer Medical Assistance Contribution (“EMAC”)

A few months ago, “An Act Further Regulating Employer Contributions to Health Care,” was signed into law without associated regulations, leaving employers in the difficult spot of trying to interpret the vague and confusing language. Recently, the Massachusetts Department of Unemployment Assistance published draft regulations that help to clarify the law. Because the effective date is looming (1/1/18), it is important to examine the draft regulations for guidance and assume these regulations will be finalized as currently written. We will, of course, update you if there are any changes.

In 2018, employers will be responsible for two types of contributions related to healthcare:

  1. The Employer Medical Assistance Contribution (“EMAC”) – requires that an employer with 6 or more employees provide a contribution, per employee, to support the Commonwealth Care Trust Fund.
  2. The EMAC supplement, sometimes referred to as the penalty portion of the law, requires that an employer with 6 or more employees pay a contribution for each employee who receives health insurance coverage through the MassHealth Agency or ConnectorCare.

Which Employees are Covered?

The EMAC relies on the definition of “employee” set out in Massachusetts’ unemployment insurance laws. This means that any regular employee, regardless of full or part-time status, contributes to an employer’s count. Depending on the length of employment, temporary/seasonal workers may also need to be included. To be clear, an employee should be included in an employer’s count, and may subject the employer to an EMAC penalty, even where the employee is not qualified for employer-provided benefits under the Affordable Care Act.

An employee is considered to work in Massachusetts if he/she: a) performs work entirely in Massachusetts; b) performs work in and out of Massachusetts, but the work out of state is incidental to the work within the state.

Which Employers are Covered?

Any Massachusetts employer, including a not-for-profit employer, with 6 or more employees working in Massachusetts, is subject to the EMAC and the EMAC supplement.

The employee count is determined each quarter by calculating the average number of employees who worked during or received wages for the pay period that includes the twelfth day of each month of the applicable quarter. For smaller employers, this means that you may be subject to the law in some quarters and exempt in other quarters. 

The EMAC Contribution Increase

The EMAC contribution itself is not new. Beginning 1/1/18 however, the amount employers must contribute will change:

  • For an established business, the contribution will increase from .34% of wages to .51% of wages.
  • For a new business:
    • Not required to provide EMAC contributions until 12 months after they have been provided an unemployment insurance contribution rate.  This means that an employer will generally not have to pay an EMAC contribution for years 1, 2, or 3 of business operations.
    • Responsible for .18% of wages the first year of contribution (4th year of business)
    • Responsible for .36% of wages the second year of contribution (5th year of business)
    • By the third year of contribution (6th year of business), the business follows the rules for established businesses.
  • “Wages” for the purposes of EMAC means the unemployment insurance taxable wage base.
  • Wages are capped at $15,000.  So, if an employee’s wages exceed $15,000, you multiply the contribution rate times $15,000, rather than the actual wages.  This means that, in 2018, an established business will pay a maximum of $77/employee/year (.0051 x 15000)

The EMAC Supplement/Penalty

A covered employer will pay a 5% penalty for each employee who receives health insurance through either the MassHealth agency (the Office of Medicaid) or ConnectorCare (available where the household income is less than 300% of the FPL) for fourteen or more consecutive days in the quarter.  Here, too, wages are capped at $15,000. This means that a business will pay a maximum of $750/employee/year (.05 x 15000).

However, the penalty does not apply for any employee who receives coverage through the MassHealth agency either: a) on the basis of permanent and total disability, or b) as a secondary payer where the employee is enrolled in the company-sponsored insurance. Premium assistance does not trigger the penalty.

Note, too, that most individuals who are otherwise eligible for MassHealth will be required to take their employer’s plan if the plan meets the basic coverage criteria and the employer pays at least 50% of the premium. Therefore, if your company pays at least 50% of premiums, you will generally not be subject to the fines.

How Does an Employer Calculate the EMAC and the EMAC Supplement?

The employer is not responsible for calculating either amount. All employers, including new businesses in the first three years, must submit a quarterly “Employment and Wage Detail Report” to the Department of Unemployment Assistance (DUA), which will be used as the basis for the DUA’s calculation.  The form can be submitted online.  Once submitted, the required EMAC and EMAC supplement payments will be automatically calculated. The DUA will also receive information from the MassHealth Agency and the Connector to aid in its determination of liability related to the EMAC supplement.

The quarterly employer reports are due at the end of April (Q1), July (Q2), October (Q3), and January (Q4). Payments are due by the end of the first month following the end of each quarter.

The report must include:

  • For each employee: name, social security number, wages paid, hours worked, total amount of taxes withheld, amount of wages upon which the withholding was based, the identification number assigned the employer by the DUI, the corresponding federal employer identification number, and the identification number the employer is required to include on a withholding tax return.
  • The report also should include the count of all employees who worked during or received wages for the pay period that includes the twelfth day of each month of the applicable quarter. Because the state can estimate your employee count if the number is not provided, we suggest that all employers provide this data, even if they have fewer than six employees.

We hope this has answered some of the lingering questions since this bill passed.   Please reach out with any questions or for further information on the law.

We can help! Reach out to us at questions@foleylawpractice.com or (508) 548-4888.

Year End Federal Employment Law Changes: 2017 Summary

2017, 2018

Stressed? We can help. Below is a Federal Year End Update that will walk you through important changes in Federal law and enforcement practices.

Join us on December 14, 2017 at 12:00 pm EST for a virtual lunch time (or breakfast depending on your time zone) roundup of changes in Federal and State laws that took place in 2017. It will be quick but informative. From 12:00-12:30 pm, we will cover changes at the Federal level, from 12:30-1:00 pm we will cover notable changes on the East Coast, and from 1:00 pm-1:30 pm we will cover the West Coast. To RSVP, please send an email to nicole@foleylawpractice.com.

2017 YEAR END ROUNDUP: FEDERAL EDITION

What a long, strange trip it’s been. The Affordable Care Act (ACA) did not go away but the overtime rule did-for now (see below). The constant tweets and the initial flurry of Executive Orders gave way to little action by Congress. Yet, there are many changes that will impact employers in 2018. Federal agencies and the courts hammered away on workplace issues. Additionally, sex-based and sexual harassment is being litigated and receiving unprecedented attention, putting unprepared employers at tremendous risk. And states are legislating where Congress has not (more on that soon). Let’s take a quick tour of what is in store for 2018:

Sexual Harassment, Time to Take Action

You can call it the Harvey Weinstein effect, but sexual harassment is not just a Hollywood problem. It exists in all industries and has for years. However, it is now getting some serious press, which means sexual harassment is on employees’ minds, and all employers are at an increased risk of a sexual harassment claim.

Before now, the standard sexual harassment compliance advice has been to implement a sexual harassment policy, and invest in sexual harassment training. Yet, many of the workplaces publicly rocked by recent claims-including the Weinstein Company-are headquartered in California, where the law mandates that employers have strict policies and training in place. What can be done?

First, it is time for all employers to revisit and revise their existing policies and practices. The U.S. Equal Employment Opportunity Commission (EEOC) has released a new document identifying five core principles for addressing and preventing sexual harassment in the workplace. According to the EEOC, the principles are “promising practices,” rather than official guidance or legal requirements; but they are a great place for all employers to start. They include:

  1. Committed and engaged leadership;
  2. Consistent accountability;
  3. Strong harassment policies;
  4. Trusted, accessible complaint procedures; and
  5. Regular, interactive and tailored training.

Next Steps:

  • Update Harassment Policies. Our firm is available to help draft a policy that includes an open door element, multiple avenues for complaints, and a process that will allow employees to file complaints with your organization-rather than going to an attorney or the MCAD or EEOC.
  • Utilize Targeted Training. Our firm offers a unique form of sexual harassment training targeted to your organization’s culture and needs.
  • Create a Communication Strategy. Messages from leadership will set the tone for the entire organization.
  • Join Us for a Sexual Harassment Webinar. Many employers are feeling overwhelmed and concerned about their exposure regarding sexual harassment. Join our attorneys from the comfort of your desk for a webinar on January 17, 2017, at 12:00p.m. We will provide an overview of the state of the laws as well as strategies for addressing harassment in the workplace. To RSVP, please send an email to nicole@foleylawpractice.com.

I-9 Audits and ICE Investigations

Although USCIS does not require employers to submit Form I-9 audits, the U.S. Immigration and Customs Enforcement (ICE) does audit I-9’s, and the agency just recorded its largest I-9 settlement ever, to the tune of $95 million. When viewed alongside recent Executive Orders changing ICE’s immigration priorities and promoting Buy American, Hire American policies, there seems to be a clear pattern of change in enforcement strategies emerging.

Recently, the acting Director of ICE announced that he has instructed the investigative unit of ICE, to increase worksite enforcement audits and inspections by four to five times. ICE has already increased the number of inspections in worksite operations, and these inspections will significantly increase this next fiscal year. In addition, ICE is changing its approach to more aggressively go after employers that hire illegal workers.

1095-B or 1095-C Flags
At the same time, we have noted a marked increase in the number of employer questions related to employees who either present a new social security number or whose 1095’s are rejected by the IRS. The 1095 requirements arose out of the reporting required by the Affordable Care Act. The system verifies whether the name and social security number on the 1095C actually match Social Security Administration records. If they do not match, the system is returning an error message. There are a number of reasons the name and social security numbers on a 1095C might not match, including typos, marriage, divorce, or a “borrowed” social.

Unfortunately, even when the employer is able to fix the 1095C errors, I-9’s and W-2’s will need to be updated as well. The I-9 rules do not require employers to terminate employees for submitting false identity documents, and later requesting to change them. However, they do require employers to complete a new I-9 and attach it to the old I-9 form making note of the reason for the change.

But, Please Don’t Forget About Discrimination Laws

The current administration’s push for “Hire American” cannot be interpreted as “hire only Americans” or even “hire Americans first” without exposing your company to legal liability. First, workplace laws limit what employers can ask in the application and interview process, particularly when it comes to immigration status. Furthermore, once a new hire comes on board, an employer cannot require proof of U.S. citizenship when filling out the Form I-9. The law is clear that employers must accept valid documents and cannot insist on additional documentation because of a suspicion that an applicant is not a U.S. citizen. Federal law also prohibits employers from conducting E-Verify or requesting a form I-9 before the employee has accepted an employment offer, and employment applications must state that.

Next Steps:
The tension between discrimination laws and the actions of the current administration are creating risk for employers. However, there are steps employers can take to mitigate these risks:

  • Review and update applications. Ensure they do not ask unlawful questions related to citizenship. Our firm is available to review and update or draft applications for a flat fee.
  • Training. Any employee who will be conducting interviews or collecting I-9 forms and all HR employees must understand the potential pitfalls outlined above.
  • Forward facing employees should be prepared for ICE inspections.They should know who to contact, and how to reach them immediately. They should know what to say and what not to say. There are specific regulations regarding I-9 production, and California has its own I-9 steps vis a vis ICE.
  • Perform an I-9 audit. If you self-audit, the first step is to ensure that you are using the newest Form I-9. The form was updated twice this year, and a third update may be on the way. We can also assist.
  • We Can Help. Our firm offers training on discrimination as well as I-9 compliance. We draft action plans for I-9 audits and/or ICE inspections, and we have also developed a flat fee I-9 audit intended to help our clients address this thorny issue.

It Is Not Dead Yet: New Overtime Rule Rears its Head

Although the current administration has remained publicly silent on the so called white collar overtime rule, the Department of Labor (DOL) has taken a series of steps that indicate new overtime rules may be coming. First, the DOL issued a news release in July announcing that the DOL would publish a Request for Information (RFI) for the overtime rule. Then this fall the DOL appealed the initial injunction stopping the overtime rule in order to affirm its authority to set a salary threshold for the white collar exemptions. At that time Secretary of Labor Acosta stated: “The particular question on the table is how should the overtime rule be updated…it hasn’t been updated since 2004, and it really is in need of updating.” While the timing of the proposed overtime rule remains up in the air, it is clear that employers should be ready to take another look at their overtime classifications.

Next Steps
For clients we worked with already, you updated your job descriptions, reviewed your exempt and non-exempt classifications, focusing on the employees’ duties in addition to the minimum salary level, and you are now in good shape. Up to date and accurate job descriptions are vital in the defense against various claims and to proper classification of employees.

Employers who hedged and thought they would wait-now it is your turn.Our office performed a number of Position Classification Audits in 2017, and our clients found them to be an extremely effective risk management tool, even without the new overtime rules. Most employee misclassification occurs because the employee is incorrectly classified as exempt in the first place, not because of the salary. We continue to offer this audit under a flat fee arrangement.

Affordable Care Act (ACA)

While the ACA was not been repealed there have been many changes over time. Here are some areas for employers to review in preparation of 2018:

  • For plan years beginning in 2018, employer-sponsored coverage will be considered affordable if the employee’s required contribution for self-only coverage for the least-expensive plan option the employer offers does not exceed 9.56 percent of the employee’s household income for the year (down from 9.69 percent in 2017). The ACA has created a safe harbor for employers to use in lieu of actually knowing an employee’s household income:
    • The employee’s wages, as reported in Box 1 of the W-2, generally as of the first day of the plan year.
    • The employee’s rate of pay, which is determined by the employee’s hourly wage rate multiplied by 130 hours (the monthly equivalent of at least 30 hours per week) as of the first day of the plan year.
    • The individual Federal Poverty Level (FPL). The FPL isn’t officially published until January, until then, employers can use the FPL in effect six months prior to the start of the plan year. For 2018, the maximum monthly premium contribution that meets the FPL safe harbor will be 9.56 percent of the prior year’s federal poverty level ($12,060 in most states for 2017) divided by 12, or $96.08.
  • Out-of-Pocket Maximums: An annual limit on cost-sharing, known as an out-of-pocket (OOP) maximum is set by the department of Health and Human Services (HHS) and applies to all non-grandfathered plans. The ACA’s self-only annual limit on OOP costs applies to each covered individual, regardless of whether the individual is enrolled in self-only coverage or family coverage.
    • In 2017, the OOP maximum is $7,150 for an individual and $14,300 for a family plan. For 2018, the OOP maximum will be $7,350 for self-only coverage and $14,700 for family coverage.
    • The IRS annually sets a separate, lower OOP maximum for high-deductible health plans (HDHPs) that can be linked with health savings accounts (HSAs), known as HSA-qualified HDHPs. For these plans, the OOP maximum for 2017 is $6,550 for an individual and $13,100 for family coverage. For 2018, the OOP maximum will be $6,650 for self-only coverage and $13,300 for family coverage.

Next Steps
The 2018 affordability rate is lower than the 2017 affordability rate, meaning applicable large employers may need to reduce their employees’ share of premium contributions in order to maintain affordable coverage as required by the ACA. We recommend developing a compliance strategy now to avoid ACA assessments under 4980H. Because applicable large employers (50 or more full-time equivalent employees during the previous calendar year) are assessed a penalty of $3,000 per year for each full-time employee who receives a premium tax credit through the ACA exchange, it is important to ensure that plans meet the affordability requirement. The IRS has published a Q&A located here: https://www.irs.gov/affordable-care-act/individuals-and-families/questions-and-answers-on-the-individual-shared-responsibility-provision

As a reminder, large employers-those with 50 or more full-time employees in the previous year-must use IRS Forms to report healthcare coverage offered to full-time employees in the previous calendar year. This year’s deadlines for filing are as follows:

  • Forms 1095-B and 1095-C: January 31, 2018
  • Forms 1094-B and 1094-C with copies of1095-B and 1095-C (paper submission): February 28, 2018
  • Forms 1094-B and 1094-C with copies of1095-B and 1095-C (electronic submission): March 31, 2018

Tip: Employers can receive an automatic 30-day extension by filing Form 8809 with the IRS.

WE CAN HELP, REACH OUT TO US AT QUESTIONS@FOLEYLAWPRACTICE.COM OR (508) 548-4888.


© 2017 FOLEY & FOLEY, PC, ALL RIGHTS RESERVED

 

Foley & Foley, PC, 495 Palmer Avenue, Falmouth, MA 02540

 

The Kids Are Alright

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Millennials love information. Information means transparency. And that means pay equity cannot hide. A case in point: The EEOC prevailed where two high school friends, Jensen Walcott and Jake Reed, applied to work at Pizza Studio as “pizza artists” in 2016. After both were interviewed and offered jobs, Walcott and Reed discussed their starting wages. Upon learning that Reed–the male– was offered 25¢ more per hour, Walcott called the restaurant to complain about the unequal pay. When she did so, the company immediately withdrew its offers of employment from both Walcott and Reed. Not the best practice, maybe the worst.

The Kansas federal court ordered that compensatory, liquidated and punitive damages be paid by the store’s holding company (the store had closed). A very expensive lesson learned:

  • Rectify don’t retaliate when mistakes are discovered;
  • REVIEW PAY PRACTICES–we can help.  We have a comprehensive pay equity service that has already helped many clients;
  • Workers, particularly millennials, will talk about pay and will publish information found online.  Keep ahead of trouble with fair pay policies.

We can help.  Check out our Pay Equity Service http://www.foleyworkplacelaw.com/pay-equity-audit-service.htm

Sexual Harassment at my Company? …Never!

Don’t be so certain that your business is immune to inappropriate behaviors. Just a quick read of the news lately reveals that sexual harassment remains a significant issue in our society.

For a business, the mere threat of a harassment complaint should be scary. A main reason is that a sexual harassment lawsuit of any kind can bring large financial liability. Another, and perhaps more important, reason for concern is the tremendous embarrassment that such claims bring upon a business. The harm to a company’s good will may be permanent. Attracting and keeping good employees becomes harder.

As a result, an employer must regularly inform its staff that sexual harassment will not be tolerated in its workplace. It must have a strong written policy prohibiting such conduct, and it must enforce that policy with zero tolerance.

The employer should conduct annual harassment prevention training for its staff, particularly its managers who are the first line of defense. The managers, who can be personally exposed to liability under certain circumstances, will benefit from an understanding of the law, the risks, the warning signs and their obligations.  Employers and their managers need to be able to recognize behaviors that may be considered offensive and hostile in the workplace, and they must know how to quickly and properly respond. All employees should know and understand their rights and their responsibilities relative to sexual harassment . Good communication about these issues is the best way to prevent harassment and related claims.

A well-crafted training course is therefore a vital risk management tool for all employers. It demonstrates an employer’s commitment to a workplace that is free from sexual harassment and intimidation, and thereby sends a strong and necessary message to the staff about the type of professional workplace you maintain.

Foley & Foley, PC provides sexual harassment prevent training for our clients. If you have a need, you can get more information at 508-548-4888 or via email at tim@foleylawpractice.com.

The Case for Ditching the Salary History Question

This month, California Governor Jerry Brown signed into law AB 168, which prohibits employers from requesting salary history from applicants.  The bill also requires employers, upon reasonable request, to provide the pay scale for a position to an applicant applying for employment.

According to the National Women’s Law Center, in 2017 nearly half of states considered legislation that would ban the salary history question in hiring. Massachusetts adopted a salary history ban in 2016. In 2017, California, Oregon, Delaware, Puerto Rico, San Francisco, New York City, Pittsburgh (Philadelphia’s ban is on hold pending a legal challenge), and New Orleans also passed salary history bans.  Add to this the fact that 42 states offered Equal Pay legislation in 2017, and what do you get?  Serious risk for employers – everywhere.

Much of the legislation regarding salary history is predicated on the theory that asking women about salary history perpetuates disparity in pay because women have historically earned less than men for performing the same work.  However, a recent survey released by PayScale suggests that the salary history question can also hurt female job candidates in another way.  According to PayScale’s survey, a woman who is asked about her salary history and declines to disclose that information earns 1.8 percent less than a woman who discloses her salary history. If a man declines to disclose, he gets paid 1.2 percent more on average.

While we can debate about the reasons for this disparity, the results highlight a significant risk to employers: The salary history question results in lower starting salaries for women; and if women are starting out at a lower salary than their male counterparts, there is a heightened risk of a pay equity claim later regardless of whether the employer actually has discriminatory pay practices. 

Still not convinced?

That’s okay.  Many of our clients have serious concerns that these new salary history prohibitions will limit employers’ ability to attract talent and negotiate competitive salaries.  However, where you see limitations, I see risk management opportunity.

Built in to California’s AB 168, is an obligation that creates an opportunity for all employers to reduce their overall risk for a pay equity claim.  Set clear salary ranges based on labor market data, and share that information with applicants.  It will set expectations at the outset, and if it is based on market data, it will attract talent.  Then, use the candidate’s job experience, skills, education, and performance in the interview process to set the salary.  This will ensure that the employer has a justifiable position with regard to each employee’s pay at the outset, and will be less likely to have a pay equity problem later.

By avoiding the salary history question altogether, employers don’t have to worry about the extensive risks these bans create.  Salary history questions in online applications are problematic because employers in a state without a salary history ban have to worry about out of state job applicants filing a complaint based on a salary history ban the employer was unaware of.  There is further risk due to the variances in the different state laws.  Some salary history bans allow employers to rely on salary history that has been volunteered by applicants, while other pay equity laws prohibit employers from relying on salary history alone regardless of the source.  Multi-state employers in particular will find it increasingly difficult to comply with pay equity laws while relying on salary history when setting pay.

By ditching the salary history question, employers can comply with salary history bans now, and limit their risk for pay equity problems later.

What the devil is Massachusetts doing to employer health care contributions?

devil

Last week, Governor Baker signed the awkwardly named, “An act further regulating employer contributions to health care,” which has raised many excellent questions. Once again we think about Bismarck’s quote: laws are like sausages, it is better not to see them being made. Except when laws are passed without regulation or key details, you have to dive into the sausage factory… .

Where did this bill come from?
Short answer: Governor Baker wanted spending cuts to MassHeath along with an increase in the employer contribution. The House and Senate decided to just implement the increased employer contribution without reforms or regulations. The Governor signed that bill. Surprise!

On July 19, Governor Baker issued recommendations for amendments to the State’s Fiscal 2018 budget. A short attachment suggested an increase in the employer medical assistance contribution (EMAC) and introduced the 5% employer fine. Governor Baker indicated that these two changes “must not be considered in isolation of other measures needed to manage spending in the MassHealth program. Absent other reforms, this proposal imposes an unfair burden on Massachusetts’ employers without making the structural reforms essential to MassHealth’s long-term sustainability.”

On July 26, the Massachusetts House and Senate both rejected the Governor’s amendments, reenacted the bill, and added an “emergency preamble” that stated: “Whereas, The deferred operation of this act would tend to defeat its purpose, which is to establish forthwith certain employer healthcare contributions, therefore, it is hereby declared to be an emergency law, necessary for the immediate preservation of the public convenience.”

There was hopeful speculation from the business community that, given the rejection of his recommendations, the Governor would not sign the reenacted bill. Therefore, many were surprised that the Governor signed the bill after indicating that these changes, without other reforms, imposed an unfair burden on employers was unexpected.

The “emergency” adoption of this bill contributed to the lack of information employers are now facing.

Questions? You bet! Here are some questions we received last week. We hope this provides clarity, based on the limited information still available:

Q: In your email, you said “All Massachusetts employers who have more than five employees must pay a fine – 5% of the employee’s wages – for every employee who receives his or her insurance through MassHealth.” Does this mean that if an employee elects MassHealth instead of the employer-sponsored insurance, the employer has to pay a 5% fine?

A: Yes – the employer will pay a 5% fine for each employee who receives health care through MassHealth or subsidized coverage instead of through the employer-sponsored plan.

Q: How can the employer know if the employee receives his or her insurance through MassHealth?

A: The Governor’s recommendations included some details about employer reporting and tracking. Baker’s recommendations indicated that employers: 1) would need to respond to ad hoc requests from the state; and 2) would need to complete, annually, a “Health Insurance Responsibility Disclosure” form.” However, none of this detail was carried forward into the enacted bill.The bill does not specify what obligations the employer will have with regard to tracking and reporting employee coverage. According to the bill, the department of unemployment will create and publicize regulations that address details including how many days of non-employer coverage will trigger the fines and how the fines will be paid.

It is possible that the regulations will also clarify any employer obligations with regard to tracking and reporting employee coverage. We will monitor the developments of the regulations and communicate details as they become available.

The fines will be implemented January 1, 2018 – that’s less than five months away. Therefore, employers may not have much time between the publication of the regulations and the effective date of the new law. Employers may wish to start gathering data now to get a sense as to the size of the fines they may face. They may wish to poll employees who are not enrolled in the company-sponsored plan to understand the outside coverage the employee has elected.

Q: Does the employer still pay a fine if the individual is covered under MassHealth for free?

A: Very few individuals are eligible to receive MassHealth at no cost. We have included a chart that reviews eligibility and premiums. Note, too, that most individuals who are otherwise eligible for MassHealth will be required to take their employer’s plan if the plan meets the basic coverage criteria and the employer pays at least 50% of the premium. Therefore, if your company pays at least 50% of premiums, you will generally not be subject to the fines.The bill does not currently address whether employers would be subject to fines for individuals who receive MassHealth at no cost. We do know that the fines are paid for non-disabled workers. If an employee receives MassHealth due to his/her disability, the employer would not be subjected to the fine for that employee.

Q: I read there is a $750 cap on the fine per employee. Is this true?

A: Yes, this is true. The bill indicates that the fine is 5% of an employee’s wages. However, it defines wages in this context as the “unemployment insurance taxable wage base,” which is $15,000. $15,000 * .05 = $750

Q: I understand that the fines are effective January 1, 2018. Will Massachusetts employers be subject to them year after year?

A: The bill contains “sunset” language, which indicates these fines will be repealed as of 12/31/19. It’s quite possible that, between now and 12/31/19, the sunset language will be removed or modified to push the date further out. However, as of now, these fines are effective for a two-year period only.

Q: Can I question any fines? Is there an offset?

A: Yes, The Department of Unemployment Insurance (DUI) will levy the fines and there is procedure to request a hearing. The bill also calls for DUI rates to remain the same to offset the increases in employer contributions for the 2 years the bill is in effect.

Q: What makes an individual eligible for MassHealth?

A: First, the applicant or member must be a resident of Massachusetts. Second, all those applying in the household must have a social security number or be applying for an SSN. After those basic requirements are met, eligibility is then assessed using a number of factors including citizenship, age, disability, income level, and the availability of other health coverage. We have included a chart that reviews eligibility for the different types of MassHealth coverage.

We will continue to communicate with you as we learn more about this bill. In the meantime, please reach out to us with any of your questions!


© 2017 FOLEY & FOLEY, PC, ALL RIGHTS RESERVED