Employment Law Update – Summer 2010
Employment Practices Affected by Federal Health Care Reform
Health care reform has occupied the front and center of the political stage for well over a year, and since the passage late in March of the two bills embodying federal reform, most commentary has focused on the enormous changes in employee benefits practices required by the legislation. The health care reform bills unquestionably implement the greatest change in employee benefits law since the passage of ERISA. Employers of every size should work closely with their insurers, health benefits providers, and employee benefits attorneys to ensure compliance with the new mandates, some of which are effective this year. A summary of the employee benefits provisions of the reform can be obtained by clicking here.
The healthcare reform bills will also affect the workplace in areas other than benefits. Three examples in this regard are of particular interest.
First, employers of any size should be aware that the reform legislation creates a new protected category of employees. In language very similar to existing prohibitions on discrimination or retaliation based on race or sex, the new laws provide that an employer may not refuse to hire, discharge, or otherwise discriminate in the terms and conditions of employment (language that includes ‘harassment’) on the basis of the employee’s receipt of a premium tax credit for health insurance, a federal cost-sharing subsidy, or on the basis of the employee’s providing information about a potential violation of the new law. Accordingly, the legislation creates a whistleblower protection provision that is applicable to most private-sector employees. This law will be enforced by the federal Department of Labor (DOL).
Another example of the new law’s impact on human resource professionals is it’s provision for employee wellness programs. The health care reform legislation increases the amount of financial incentive an employer can offer to an employee for participation in a wellness program to 30% of the premium costs. However, nothing in the new laws seems to modify (or even consider) the EEOC’s position that employer-provided wellness programs (and the associated medical monitoring) do not violate the Americans with Disabilities Act only if the program is voluntary – and that a penalty for employee non-participation renders the program non-voluntary. Unfortunately, the resolution of this particular issue likely will await some EEOC modification of its regulations or future litigation.
Third, ‘large employers’ (those with fifty or more employees) must provide breastfeeding break time for nursing mothers. Moreover, a convenient and sanitary location for expressing milk must be provided – the use of a public or employee restroom is not sufficient. The break time need not be paid time, but the breaks must be as frequent as the need to express breast milk and can continue throughout an entire year after the birth of the child. Employers who have fewer than fifty employees need not comply with the breastfeeding break requirement, but only if they can demonstrate ‘undue hardship’ in compliance due to ‘significant difficulty or expense.’ This provision will also be enforced by the DOL.
Questions about these and other provisions of health care reform and their impact on employers may be directed to any member of the Employee Benefits Practice Group, the Labor and Employment Law Practice Group, or the Health Care Practice Group at Kaufman & Canoles. Also, K&C’s 26th Annual Employment Law Update seminar on July 22, 2010, in Hampton will feature a special lunch session on health care reform.
Agency Reps Provide Tips to Attendees of 26th Annual Employment Law Update
A number of current and former representatives from relevant state and federal employment agencies provided valuable guidance to attendees of the April 22, 2010 showing of K&C’s 26th Annual Employment Law Update. For example, the Richmond Area Director of the Equal Employment Opportunity Commission (EEOC), Patricia Glisson, provided tips to attendees as part of a workshop on handling government investigations. She emphasized the need for consistent treatment of employees in all aspects of employment as perhaps the best defense to a charge of discrimination. She also stressed the need for effective communication to allow employees to work out problems with their employers without the need for access to an outside agency like the EEOC. Ms. Glisson noted the success of the EEOC mediation program and recommended that employers take advantage of this efficient and cost-effective method of resolving charges of discrimination.
The former Chief Deputy Commissioner of the Virginia Workers’ Compensation Commission, Mary Ann Link, participated in another workshop designed to help employers reduce liability for workers’ compensation. Ms. Link indicated that, with the prominence of national healthcare reform, employers might want to remind their employees that workers’ compensation coverage is a company expense that, if reduced, can provide more profits to help their company thrive. She also suggested that employers implement incentives to reduce workers’ comp and she observed that drug testing employees whenever there is an accident involving injury is becoming more and more common.
Attendees appreciated receiving the perspective of agencies charged with enforcing employment laws. This perspective is a mainstay of the Employment Law Update seminar and better equips employers to reduce potential employment liability.
SEX[T]UAL HARASSMENT – Do Employers Need a Text Messaging Policy?
Sex[t]ing: (a combination of sex and texting) is the act of sending sexually explicit messages or photos electronically, primarily between mobile phones. http://en.wikipedia.org/wiki/Sexting (last visited Mar. 18, 2010). Sex[t]ing seems to be an ever-increasing phenomenon. Whether it be between Tiger Woods and one of his mistresses or Bob and Mary in Accounting, these messages are the new frontier in both flirtation and sex[t]ual harassment.
As any texter knows, the beauty of the text message is that it is casual, abbreviated and immediate. Indeed, what is more informal than a message that reads ‘What r u wearing?’ It seems harmless enough – unless it is from a male supervisor to a female subordinate at 11:30 p.m.
Much like when e-mail was first introduced, people tend to be more willing to say things via text message than they would in person. They also appear more willing to exchange sexually suggestive or explicit images and initiate communications outside of business hours – after all, their phone is ‘private,’ isn’t it? If at this point, you are thinking to yourself that, as a human resource professional, text messaging might create some headaches for you, you are not alone.
The best defenses to claims of sex[t]ual harassment, as with other forms of harassment, are 1) an appropriate policy prohibiting the exchange of sexually suggestive and/or explicit texts or pictures amongst employees, and 2) immediate investigation and resolution of any complaints of sex[t]ual harassment. While an employer can certainly argue that its general policy against workplace harassment is sufficient to put employees on notice that sexually explicit text messages between supervisors and subordinates, or even co-workers, are inappropriate, given that much of such conduct can occur outside of both the workplace and normal business hours, it is prudent to include specific prohibitions on sexually suggestive and/or explicit text (or instant) messages between employees in your harassment policy.
Investigations of sex[t]ual harassment claims need to be particularly prompt. Unless either the complaining party or the alleged harasser has saved copies of the messages to his or her phone or printed out copies of such messages, the messages are only maintained, by at least one major wireless provider, for five (5) days after being sent. Without such messages, the employer is left to investigate and resolve a classic ‘she said, he said’ harassment complaint.
By being proactive in amending workplace harassment policies to specifically prohibit sex[t]ual harassment, as well as promptly investigating any such claims so as to preserve evidence, employers can successfully limit their exposure to this high tech liability trap.
HIRE Act Provides New Hiring Incentives
On March 18, 2010, President Obama signed into law the Hiring Incentives to Restore Employment Act (the ‘HIRE Act’). Among other provisions, the HIRE Act provides certain tax incentives to encourage qualified employers to hire previously unemployed individuals.
The HIRE Act provides employers with a tax credit of 6.2% of the newly hired employee’s wages through 2010. Essentially, the tax credit exempts the employer from paying its portion of the employee’s Social Security payroll tax for wages paid between March 19 and December 31, 2010. In addition, the employer may claim a tax credit of up to $1,000 in 2011 for each qualified employee who is retained for at least one year.
For an employer to be eligible for the incentives, the newly hired employee must be a non-family member who has not been employed for more than 40 hours during the 60-day period preceding his/her hire date. In addition, the newly hired employee must either fill a newly-created position or replace a prior employee who left the job voluntarily or was terminated for cause.
The HIRE Act applies to private-sector employers, as well as public higher education institutions. In order to qualify for the tax credits, the employer must obtain an affidavit from the employee certifying that the employee meets the stated requirements of the HIRE Act. To assist employers, the IRS has issued a form affidavit that is available at by clicking here.
26th Annual Employment Law Update Featuring an All-New Health Care Reform Presentation
On July 22nd, the K&C Employment Law Team will host the final showing of the 26th Annual Employment Law Update: Your Employment Law Survival Kit at the Hampton Roads Convention Center. Given recent concerns about the impact of health care reform on the workplace, we have created a special lunch presentation designed to give you the information you need to comply with these new laws. We encourage anyone involved in employment decisions and/or practices to attend. In addition to a general update, all attendees will be given the opportunity to have specific employment law questions answered by specialists in the field.
Attendees will select their choice of several of our educational workshops. Topics include Risks and Responsibilities with Social Networking, Handling a Government Investigation, Controlling Workers’ Compensation, Effective Performance Reviews, Drafting/Updating Employee Handbooks, and more.
For more information, contact Kerry Martinolich at (757) 624-3232.
This program has been approved for 5 credit hours toward PHR and SPHR recertification through the Human Resource Certification Institute (HRCI). For more information about certification or recertification, please visit the HRCI homepage at www.hrci.org.
The contents of this publication are intended for general information only and should not be construed as legal advice or a legal opinion on specific facts and circumstances. Copyright 2023.