By Laura Gerdes Long
Co-authored by Laura Gerdes Long and Katherine M. Flett
In 2016, after years of twists and turns, backs and forths, the Equal Employment Opportunity Commission (EEOC) issued final rules that went into effect in January 2017 and apply to all employer group health insurance plans that offer wellness programs.
The final rules follow the EEOC’s 2015 publication of two rules under the Americans with Disabilities Act (ADA) and Genetic Information Non-Discrimination Act (GINA) to address whether an employer offering an incentive to employees to provide health information would effectively render the program “involuntary” and consequently discriminating under the ADA.
In October 2016 AARP filed a challenge arguing that the requirements were arbitrary and capricious under the Administrative Procedures Act (APA) as having incentives that render the disclosure of GINA- and ADA-protected information involuntary and disclosure in violation of law. That challenge was rejected in the District Court of the District of Columbia, which ruled the information required by the regulations is not public disclosure and employers are statutorily forbidden from using it to discriminate against employees.
Categories of Employer Wellness Programs
Employer wellness programs generally fall into two categories: participatory programs and health-contingent programs. Participatory programs offer financial incentive for employee participation, but do not require the employee to satisfy any health-related condition to receive the incentive. Examples of this program include reimbursing for gym memberships and offering health education classes.
On the other hand, health-contingent programs generally require the employee to satisfy a health-related standard to obtain a reward. Within the category of health-contingent programs, there are two sub-groups: activity-only programs and outcome-based programs. Activity-only programs require the employee to participate, but not to attain or maintain a specific health outcome. Examples of activity-only programs include rewards for high step-counts and dieting. Outcome-based programs require the employee to attain a specific health goal, such as quitting smoking or lowering one’s body mass index (BMI).
Requirements for Health-Contingent Programs Under the ACA, GINA, and ADA Challenged by AARP
Prior to the new EEOC rules, employers sponsoring wellness programs were required to comply with the Affordable Care Act (ACA), ADA and GINA. Continue reading »
02/28/17 6:00 AM
Employment Law | Comment (0) |
New EEOC Rules Complicate Task of Designing a Compliant Employer Wellness Program
By Brian C. Zaldivar
A federal district court in Texas has delayed the enforcement of the Department of Labor’s changes in overtime regulations.
In May 2016, the Department of Labor published a final rule that has caused a fury of scrambling amongst employers, in both the public and private sectors, to review their employee’s salary levels and exempt statuses. This final rule relates back to the Fair Labor Standards Act (“FLSA” or the “Act”), enacted in 1938, which set minimum wages and provided for overtime pay for hours worked above 40 in a week. Section 213(a)(1) of the Act, however, exempted overtime provisions for any employee employed in a bona fide executive, administrative, or professional capacity. This is known today as the “EAP” or “white collar” exemption. The Act also gave the Department of Labor regulatory authority to “define and delimit” those exemptions.
The current regulations concerning the white collar exempt status, promulgated in 2004, required an employee to meet three criteria. First, an employee must be paid on a salary basis (the “salary-basis test”). Second, an employee must be paid at least the minimum salary level established by the regulations (the “salary-level test”). And third, an employee must perform executive, administrative, or professional duties (the “duties test”). See “It’s Almost Time: DOL Overtime Exemption Rules Effective Dec. 1, 2016” for more information on the current regulations.
The final rule, previously scheduled to be enforced December 1, 2016, revamped the white-collar exemption by increasing the salary-level test from $23,660 to $47,476. Any employee earning less than the new amount, but still paid on a salary basis and meeting the duties test, would be entitled to overtime pay at one and one-half times the employee’s regular rate of pay for all hours worked above 40 in a week.
Employers had a few options to become compliment with the final rule and avoid paying overtime, most popular were: Continue reading »
12/2/16 10:40 AM
Business Law, Employment Law | Comments Off on Uncertainty Regarding the Department of Labor’s Salary and Overtime Regulations |
Uncertainty Regarding the Department of Labor’s Salary and Overtime Regulations
By Katherine M. Flett
In Symphony Diagnostic No. 1, Inc. d/b/a/ MobilexUSA v. Greenbaum, the Eighth Circuit Court of Appeals recently addressed the question of whether a successor company in Missouri may enforce a predecessor company’s non-compete agreements in situations where the successor company purchases the predecessor company’s assets. Missouri law already provides that assignment is allowed in situations where there is an acquisition of stock. Alexander & Alexander, Inc. v. Koelz, 722 S.W. 2d 311, 312 (Mo. Ct. App. 1986).
In MobilexUSA v. Greenbaum, Kimberly Greenbaum and Josephine Tabanag worked for Ozark Mobile Imaging as X-ray technicians. Both employees signed non-compete agreements. The non-compete agreement prohibited the employees from “directly or indirectly engaging in the mobile diagnostic business in any manner” for two years after their employment terminated and within a specified 100-mile radius geographical area.
In December 2012, Mobilex acquired Ozark Mobile Imaging through an Asset Purchase Agreement. Mobilex offered Greenbaum and Tabanag employment, but they both refused. In January 2013, they each accepted new positions as mobile X-ray technicians at Biotech X-ray, Mobilex’s competitor. Continue reading »
08/31/16 2:47 PM
Employment Law | Comments Off on Eighth Circuit Interprets Missouri Law: Non-Compete Agreements May Be Transferred to Subsequent Employer |
Eighth Circuit Interprets Missouri Law: Non-Compete Agreements May Be Transferred to Subsequent Employer
By Ruth Binger
Changes are coming soon to overtime exemption rules. Issued in May 2016 by the United States Department of Labor (DOL), the updated final overtime rule (Final Rule) will be effective December 1, 2016.
Under the Fair Labor Standards Act, unless considered “Exempt,” an employee must be paid overtime pay of time and one half of regular hourly rate (150%) for all hours worked over 40 in a seven-day regular workweek. Currently, in order to be exempt, the employee must meet all parts of a three-part test:
- Salary level test (currently $455 per week or $23,660 per year),
- Salary Basis test (employees must be paid a pre-determined salary that is not subject to reductions based upon quality/quantity of work), and
- Duties Test for White Collar Employees. Employees engaged in bona fide executive, administrative, or professional capacities that meet a prescribed “duties test” (including any employee employed in the capacity of academic administrative, or teacher in elementary or secondary schools or in the capacity of an outside sales employee, computer systems analyst, computer programmer, software engineer and other similarly skilled computer engineer (“White Collar Exemptions”).
The Final Rule changes effective in December 2016 are only directed to the Salary Level Test; the remaining two parts remain the same. Those changes are as follows: Continue reading »
08/8/16 10:05 AM
Business Law, Employment Law | Comments Off on It’s Almost Time: DOL Overtime Exemption Rules Effective Dec. 1, 2016 |
It’s Almost Time: DOL Overtime Exemption Rules Effective Dec. 1, 2016
By Katherine M. Flett
The Americans with Disabilities Act Amendments Act of 2008 (ADAAA) was enacted for the purpose of broadening the scope of the American with Disabilities Act (ADA). The ADAAA expanded the definitions of “major life activities” and “substantially limits,” while also increasing protection for those who are “regarded as” having a disability. Over the years, the ADAAA has been criticized for being too broad. However, three circuits have now rejected the idea that obesity, without an underlying physiological disorder or condition, is a disability under the ADA.
In Morriss v. BNSF Ry. Co, Case No. 14-3858 (8th Cir. April 5, 2016), the Eighth Circuit Court of Appeals affirmed a Nebraska district court’s decision, ruling that for obesity to constitute an “impairment” under the ADA, one must prove that the obesity is the result of a physiological disorder or condition.
In March 2011, Melvin Morriss, applied for a machinist position with BNSF Railway Company (“BNSF”). Morriss was extended an offer of employment contingent on a satisfactory medical review. A subsequent physical examination indicated that Morriss was 5’10”, 285 pounds, with a BMI of 40.9. BNSF’s policy was to not hire obese (defined as having a BMI of 40 or higher) applicants for safety sensitive positions. Therefore, Morriss was notified that he would not qualify for the safety sensitive machinist position due to his obesity. Continue reading »
05/20/16 11:53 AM
Employment Law | Comments Off on Eighth Circuit Rejects Obesity as an Impairment Under the ADA: Morriss v. BNSF Railway Company |
Eighth Circuit Rejects Obesity as an Impairment Under the ADA: Morriss v. BNSF Railway Company
By Ruth Binger
The U.S. Supreme Court held in Obergefell v. Hodges that there is a constitutional right to marry and that the 14th Amendment’s Due Process and Equal Protection clauses require states to allow same-sex marriages and to recognize same-sex marriages lawfully performed in other states.
The Obergefell decision is not an employment decision. However, the Equal Protection language in the opinion will require companies to make some changes to their employment practices, training, manuals, forms, beneficiary designations, and other personnel policies going forward.
Obergefell followed the Supreme Court’s decision in United States v. Windsor which held that the federal government’s interpretation of “marriage” and “spouse” must apply to both opposite sex and same-sex unions. Windsor made employee benefits like the Family Medical and Leave Act (“FMLA”), COBRA, and the Employee Retirement Income Security Act (“ERISA”) available to all same-sex spouses of federal employees.
What Does Obergefell Mean To Employers? Continue reading »
07/16/15 8:50 AM
Business Law, Employment Law, Manufacturing and Distribution | Comments Off on Effect of 2015 SCOTUS Same-Sex Marriage Decision on Employment Practices |
Effect of 2015 SCOTUS Same-Sex Marriage Decision on Employment Practices
By Ruth Binger
The labor landscape has changed and it will continue to change. The average worker has become increasingly responsible for the more traditional aspects of the employment relationship including health insurance, pension, and job security. There also has been a substantial increase in the numbers of part-time workers, workers/employees classified as exempt from overtime premium pay, and workers misclassified as independent contractors. Commentary and theory abounds as to the reason for the loss of full-time jobs, much less middle class jobs, including outsourcing, computers/software, Affordable Care Act, robots, automation, high taxes, globalization, etc.
Suffice it to say, a legal backlash is building against this new terrain. Proposed restrictive legislation, administrative rule-making, and recent court cases show evidence of a concerted attempt to re-create or retrieve the job security and wages and benefits of days gone by.
Most recently, the U.S. Department of Labor (“DOL”), in a long-awaited announcement on June 30, 2015, proposed a new rule that will decrease the ability of companies to classify their employees as exempt from premium overtime wages under the Fair Labor Standards Act (“FLSA”).
Backdrop – Increase in Part-time Workers
This legal backlash is due, in part, to other recent and dramatic changes in the number of part-time workers:
- Since 2007, the number of “involuntary” part-time workers has doubled.
- Employers are increasingly using software tools such as the use of just-in-time scheduling software. Estimates are that 17 percent of the work force is now employed by companies that use just-in-time scheduling software. Employees accordingly work fluctuating work weeks with uncertain schedules.
- Another contributing factor is business practices, such as the use of “call in shifts” where the employer does not confirm need for services until two hours before start time.
In response, a host of bills are being introduced in many states and municipalities to legislate predictable scheduling.
Backdrop – Misclassification
Likewise, misclassification of workers has also increased. Companies are attempting to shift work from employees to independent contractors, especially in the construction, transportation, and cab industries using a variety of strategies. Continue reading »
07/15/15 3:43 PM
Business Law, Employment Law, Manufacturing and Distribution | Comments Off on Exempt Employees, Overtime, and the Proposed DOL Rule for 2016 |
Exempt Employees, Overtime, and the Proposed DOL Rule for 2016
By David W. Morin
The federal Occupational Safety and Health Administration (OSHA) implemented rules on January 1, 2015 which place additional requirements on employers under OSHA jurisdiction (and with greater than 10 employees) to report occupational injuries and illnesses. This new data is going to be made public, which would allow individuals, companies, or labor unions to view injury reports submitted by health care providers.
Currently, employers in Missouri are required to report work injuries to the state if an employee sustains an injury at work requiring medical treatment beyond immediate first aid. The information is not made public, but is rather provided only to the state as a reporting requirement. In fact, workers’ compensation trials or hearing are not generally open to the public. Express consent is usually required of the parties or their attorneys for a member of the general public to watch these court proceedings.
Under the current OSHA regulations, fatalities must be reported within eight hours. The regulations add additional requirements and require all employers to report work-related in-patient hospitalizations, as well as amputations or incidents where someone loses an eye, within 24 hours. Continue reading »
05/12/15 10:53 AM
Business Law, Employment Law, Workers' Compensation | Comments Off on OSHA Finalizes Rules Requiring Health Care Employers to Report Injuries |
OSHA Finalizes Rules Requiring Health Care Employers to Report Injuries
By Ruth Binger
New regulations require Missouri employers to respond timely to information requests regarding unemployment insurance compensation. The federal Trade Adjustment Assistance Extension Act (“TAAEA” or the “Act”) of 2011 requires, among other things, that states increase employers’ duties regarding unemployment compensation claims. Specifically, the Act provides that states must require employers to respond timely and adequately to Claim Notices, information requests from state agencies relating to unemployment benefit compensation claims. It also requires states to charge the unemployment accounts of employers that repeatedly fail to respond to Claim Notices for unemployment benefits paid to ineligible former employees.
In Missouri, an employee that satisfies all the unemployment insurance benefit eligibility requirements may still be disqualified from receiving benefits for voluntarily quitting without good cause or for being discharged for work misconduct. Once a terminated employee files a claim for unemployment benefits, the Missouri Division of Employment Security (“DES”) mails the former employer a Claim Notice, which requires a response within 10 days. The Claim Notice permits the employer to protest an unemployment benefits claim because the former employee quit voluntarily or was discharged for misconduct. If the claim is not in dispute, the employer must still respond to acknowledge the claim.
Some employers routinely fail to respond to Claim Notices. They may systematically choose not to respond to Claim Notices to avoid becoming involved in a former employee’s benefits appeal. Continue reading »
03/26/14 2:22 PM
Business Law, Employment Law | Comments Off on Unemployment Insurance in Missouri: Should Employers Respond to Claim Notices? |
Unemployment Insurance in Missouri: Should Employers Respond to Claim Notices?
By Ruth Binger
You are a business owner whose company is buying the assets of a Missouri business with locations in both Missouri and Illinois. Your company intends to hire the seller’s employees. It is your understanding that those employees have signed restrictive covenants/non-competes with the seller (“Seller Agreements”). You have instructed your attorney to advise you on how to protect your company against the seller’s current highly trained employees walking out the door with the customer relationships, trade secrets, and confidential information you are purchasing. For administrative purposes, to the extent possible, you would like to use one strategy with both the Missouri and Illinois employees.
Here’s a look at some of the complexities of personal service contracts and non-competes you will want to consider.
Restrictive Covenants and Non-compete Agreements
The phrases “restrictive covenants” and “non-compete agreements” are used interchangeably by the public. More confusingly, the term “non-compete” is often used to describe three different types of covenants or promises: time and space clause, non-solicitation clause and anti-raiding clause.
The most restrictive non-competition covenant is a promise by the employee not to engage in the same type of business for a stated time in the same geographical market as the employer (“time and space clause”).
More common is a non-solicitation clause, where the employee is allowed to engage in the same type of business in the same geographical area but is prohibited from soliciting the employer’s customers for a stated period of time. Continue reading »
09/4/13 11:17 AM
Business Law, Employment Law | Comments Off on Considerations for Buyer Enforcement of Non-competes in the Purchase of a Business |
Considerations for Buyer Enforcement of Non-competes in the Purchase of a Business