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

thewho

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.

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

Don’t Jump Into an Imprecise Contract…It Will Co$t You

 

Cliff-Jumping-into-the-Ocean-at-Sunset-Outdoor-Adventure-Lifestyle-Stock-Photo Take the case of “The Jumping Toy” a/k/a the “SkyDriver”.  The inventor, Will Isaksson, entered into an oral royalty sharing agreement with marketer, Craig Nadel and his company, Design O Matic, to market a toy known as “the Modified Kenner Car”.  The parties to the oral contract agreed to evenly split any royalties.   However, because they failed to commit their agreement to writing, the parties soon crashed into a costly and protracted lawsuit concerning several important contract terms.

As luck would have it, Isaksson altered the design of the Modified Kenner Car by adding a fin.  This fin made the toy jump.  Isaksson naturally called the toy “the Jumping Toy”, and he presented it to Nadel for possible marketing.  Isaksson wanted the toy marketed to Hasbro, but Nadel suggested a smaller company.  This disagreement drove Isaksson to go direct to Hasbro with the toy.  Hasbro agreed to sell the toy under the name “SkyDriver”, and the toy generated approximately $535,000.00 in royalties.

As you might expect, Nadel demanded 50% of the royalties from the SkyDriver and Isaksson refused.  For his part, Isaksson alleged that the oral agreement with Nadel was limited to the Modified Kenner Car and any royalties generated by it.  Nadel meanwhile alleged that the oral agreement covered any toy that arose out of the design underlying the Modified Kenner Car.

In April 1998, the parties wheeled their dispute into the United States District Court for resolution.  In December 1999, nearly 20 months later, the case was tried to a jury and Nadel won.  The jury decided that the SkyDriver was not a new toy but merely a modification of the Modified Kenner Car, and therefore covered by the oral royalty sharing contract. The jury awarded Nadel his share of the royalties. But this toy story did not end there…

The case was appealed by Isaksson.  And, in February 2003 nearly five years after the lawsuit was filed, the Appellate Court decided the appeal.  The Appeals Court accepted the jury’s determination that the SkyDriver was not a new toy.  However, the Appeals Court also ruled that there was another critical question that the jury needed to answer before deciding the case. The Appeals Court sent the case back to the trial court and the jury to decide whether or not Nadel earned his share of the royalties under the oral contract.  The specific questions that the Appeals Court required the jury to answer – (1) what performance the Modified Kenner Car agreement required of Nadel for him to earn a share of the royalties, and (2) whether Nadel fulfilled those performance obligations?

The parties ended up resolving this dispute in a confidential settlement before returning to the jury for answers to these additional questions.  However, neither party could take a victory lap in this case, having spent too many years fighting and thousands upon thousands of dollars on lawyers.  This dispute could have been avoided with a well-crafted contract.

Do you want to lower your risk of a contract dispute and avoid Court?  We can help!

You can reach us at 508.548.4888 or info@foleylawpractice.com

© Foley & Foley, PC 2017

Two government agencies are fighting: Grill, chill and get your law fill

fighting

THE DOJ AND THE EEOC CANNOT AGREE WHETHER TITLE VII PROTECTS SEXUAL ORIENTATION DISCRIMINATION

In a case that takes parents fighting in front of the kids to new heights, the Department of Justice claims that Title VII does not cover discrimination on the basis of sexual orientation, the opposite position taken by the Equal Employment Opportunity Commission. In fact, the EEOC had filed an amicus brief on the same Second Circuit case last month (Melissa Zarda et al. v. Altitude Express dba Skydive Long Island et al) which stated that sexual orientation discrimination is inextricably linked to gender, involves gender-based discrimination regarding whom a person associates with, and is linked to gender stereotypes and non-conformity.

Huh? The EEOC has been out in front on this issue for some time. Sexual orientation discrimination claims are working their way through several appeals courts and may soon be at the U.S. Supreme Court. As we reported in April, https://workplacelawhelp.com/2017/04/ the Eleventh Circuit in mid-March issued a decision counter to the Seventh Circuit’s Hively ruling, affirming dismissal of a lesbian hospital security guard’s claim she was fired because of her sexual orientation while letting her replead a gender nonconformity claim. Her lawyers have said they would take the case to the high court.

Treating sexual orientation like gender under discrimination laws is the best course unless and until the DOJ can persuade the US Supremes otherwise.  We will keep you posted.

 

grill

GRILLING AND CHILLING

Spice-rubbed carrots: Roll peeled carrots in cumin, salt, pepper and brown sugar. Char, then move them away from direct heat and cover the grill until carrots are tender.

Grilled Chicken Parm: Pound breast thin (key), top one side with sliced tomato, mozzarella and Parmesan; fold in half, seal with a toothpick or skewer and grill for a few minutes on each side.

Bon apetit! (recipes by Mark Bittman, tested by Foley & Foley)

 

Workplace Posters are Free. Really.

theoffice

Clients often receive pressing, official-looking notices urging the purchase of mandatory employment law postings. While you do have to post, you do not have to buy. Although some states also try to sell posters which is really cheap, all required postings are available free of charge (keep scrolling).  Please see the links below, from the federal government and states where we practice:

Federal: United States Department of Labor – Wage and Hour Division

Massachusetts: Labor and Workforce Development – Massachusetts Workplace Poster Requirements

California: http://www.taxes.ca.gov/payroll_tax/postingreqbus.shtml

Connecticut: https://www.ctdol.state.ct.us/gendocs/Labor_Posters.htm

Georgia: https://dhs.georgia.gov/department-labor-required-workplace-posters

Illinois: https://www.illinois.gov/idol/Employers/Pages/posters.aspx

Kansas:  http://www.dol.ks.gov/Laws/Posters.aspx

Maine: http://www.maine.gov/labor/posters/

Maryland: https://www.dllr.state.md.us/oeope/poster.shtml

Minnesota:  http://www.dli.mn.gov/ls/posters.asp

Missouri: https://labor.mo.gov/posters

New Hampshire: https://www.nh.gov/labor/forms/mandatory-posters.htm

New York: https://labor.ny.gov/workerprotection/laborstandards/employer/posters.shtm

North Carolina:  http://www.nclabor.com/posters/posters.htm

Oregon:  http://staging.apps.oregon.gov/boli/TA/Pages/Req_Post.aspx

Pennsylvania: http://www.hrm.oa.pa.gov/workplace-support/required-postings/Pages/default.aspx

Texas: http://www.twc.state.tx.us/businesses/posters-workplace

Utah: https://laborcommission.utah.gov/divisions/UOSH/RequiredPosters.html

Vermont: http://labor.vermont.gov/

Wisconsin:  https://dwd.wisconsin.gov/dwd/posters.htm

As always, should you have any questions including information for additional state postings, please contact us. We can help. Mike@foleylawpractice.com or 508-548-4888

Happy Memorial Day

When-is-Memorial-Day-2017

Happy Memorial Day! For many, this is a day to honor fallen soldiers and also a time to get ready for summer.

Have you done the following?

  • Sunscreen?
  • Summer reading list?
  • Pay Equity Audit?
  • Midyear handbook and diagnostic workplace audit?

If you answered “No” to any one of these questions, we can help!  Read on.

SUNSCREEN

It is outside our wheelhouse but we do like to be helpful.  See the latest list from Consumer Reports. http://www.consumerreports.org/sun-protection/get-the-best-sun-protection/

PAY EQUITY

In 2016 alone, California, New York, Nebraska, Maryland and Massachusetts passed aggressive equal pay legislation. If you are not in this group, the EEOC’s proposed expansion to the EEO-1 reports means more pay data will be required from federal contractors and employers with more than 100 employees.

Do I Need to Buy More Software?

Absolutely not.  By now you may have seen software solicitations touting the importance of statistical analysis to comply with pay equity. Beware.  Sizes matters: unless an employer has a significant number of employees performing the same role and a statistically significant amount are women, a statistical analysis will not produce reliable results. Most of our clients should perform a cohort analysis, which better compares the factors affecting pay.

Why Should I Use Your Pay Equity Audit?  

By partnering with an attorney, the process is protected by the attorney-client privilege. Any pay equity found will be kept strictly confidential.  Moreover, in Massachusetts you create a rolling affirmative defense by conducting an evaluation of pay practices if it is completed within three years prior to the commencement of a wage discrimination claim. We have developed an effective and painless Pay Equity Audit to achieve compliance and create an affirmative defense.

Why Now? 

The effective date of the MA Pay Equity Law is July 1, 2018.  Many of you are planning for 2018 in your budgets and hiring. Include Pay Equity in that list to be compliant and create the rolling affirmative defense against any future claims.

SUMMER READING

Software slamming aside, Bill Gates is a pretty smart guy.  His summer reading list looks terrific.  Check it out!  https://www.gatesnotes.com/About-Bill-Gates/Summer-Books-2017?WT.mc_id=05_22_2017_10_SummerBooks2017_BG-media_&WT.tsrc=BGmedia

 

MIDYEAR HANDBOOK AND DIAGNOSTIC AUDIT

Probably not high on your reading list but terribly important is your employee handbook.  When is the last time you read it? We recommend that you review and update your handbook on an annual basis. Now is a particularly good time given the many local and state law updates.  Marijuana, equal pay, paid family leave, sick leave—many changes have taken place that are probably not properly addressed in your handbook.

Why Worry about the Handbook?

A well-crafted handbook serves many valuable purposes:

  • Define the culture of your business
  • Set expectations
  • Inform employees of compensation, benefits and rules
  • Provide a clear avenue for dispute resolution, a critical road map for staff

Your Handbook are a valuable tool for you and an important resource for employees.

 

What is the Diagnostic Audit?

The Risk Management Diagnostic Audit is a tool we have developed to allow you to identify and respond to the compliance risks at your workplace. This audit targets your organization’s unique vulnerability and provides action items to put you on the path to compliance.  Please check out our website or call 508-548-4888 for the steps and timelines for this popular service. http://www.foleylawpractice.com/diagnostic-compliance-audit.html

Enjoy the long weekend!

Contact us at 508-548-4888 or info@foleylawpractice.com

 

 

 

Why Many Executive Orders are Hot Air

hot-air-balloons-439331_960_720.jpgOn May 4, 2017, President Trump signed an Executive Order Promoting Free Speech and Religious Liberty.  Could this order allow discrimination against LGBTQ individuals and women, as feared?   Will this impact the workplace? No. Here is the line to remember: Existing laws cannot be overturned by Executive Orders.

Let’s take a look at this Order as a good example. The portion of the Order that pertains to Federal law is:

_Sec_. _4_. _Religious Liberty Guidance_. In order to guide all agencies in complying with relevant Federal law, the Attorney General shall, as appropriate, issue guidance interpreting religious liberty protections in Federal law.

Attorney General Jeff Sessions can issue guidance until the cows come home: The US Equal Employment Opportunity Commission (EEOC) does not answer to him.  The EEOC is an independent federal agency charged with enforcing federal laws against illegal discrimination in the workplace. Laws like the ADA, ADEA, FLSA, FMLA and Title VII are under the purview of the EEOC for enforcement and guidance. Congress may make changes to the laws and the courts can overrule, clarify or uphold the laws.

Executive Orders might be good optics but cannot impact the rule of federal. state or local law in the workplace.