HR Roundtable

2016 heralds changes, new developments, and resolutions to uncertainty in employment law at the city, state, and federal levels. The National Labor Relations Board, the Supreme Court, and the New York City Commission on Human Rights have put forth policy on topic areas running the gamut from employee social media use to religious accommodations to background and credit checks. State and city initiatives also implemented and expanded policies aimed at promoting equality in relation to sex and gender identity.

The National Labor Relations Board took up conflicts related to concerted activity, which it protects. Several court cases clarified the relevance of this protection in relation to company handbooks, recording policies, and class action waivers. It also raised its standards for joint employers.

The Supreme Court ruled on religious dress accommodations in the case EEOC v. Abercrombie & Fitch Stores, Inc., in which a Muslim woman challenged the company’s decision not to hire her because it assumed that her hijab would prevent her from adhering to its dress code.

At the local level, New York City implemented comprehensive “ban-the-box” legislation with the Fair Chance Act, as well as the Stop Credit Discrimination in Employment Act to eliminate the use of consumer credit history for employment purposes. The city’s Human Rights Commission expanded its guidance on what constitutes discrimination based on gender identity and expression, and clarified the penalties for this type of discrimination. An ordinance to make transit benefits available to employees also went into effect at the beginning of 2016.

New York State implemented its Women’s Equality Agenda, which encompasses stricter equal pay standards, pregnancy accommodations, and more expansive protections against familial status discrimination and sexual harassment.

Member Richard Block and labor and benefits associate George Patterson of law firm Mintz Levin visited TemPositions’ HR Roundtable Series on Thursday, February 25, 2016 to give a presentation and answer questions on these developments.

National Labor Relations Board

Block began by asking how may Roundtable attendees came from organizations with employees covered by the National Labor Relations Act (NLRA). About a quarter of attendees raised their hands, but Block ventured that everyone in the room likely had NLRA-covered employees.

“The National Labor Relations Act [NLRA] covers unionized and non-unionized employees, so it basically covers everybody,” Block said.

He noted that 2016 will be an interesting year for the National Labor Relations Board (NLRB) because of the upcoming presidential election. Because NLRB members are appointed by the president in staggered five-year terms, the body’s activity is shaped by the White House.

“If the Republicans win the White House, everything we talk about now will be reversed,” said Block. “Likewise, there are things we talk about now that didn’t exist 10 years ago.”

Under Barack Obama’s administration, the NLRB has focused on employees traditionally not subject to the NLRA.

Concerted Activity

Block asked attendees to define the term “concerted activity.” After some discussion, he clarified that the term encompasses any activity related to discussing or advancing the general common interest of employees. Employees may partake in concerted activity without suffering retaliation from employers. Concerted activity is defined by the NLRB, and is protected under the freedom of association.

“The NLRB currently is expanding its scrutiny of handbooks, email policies, and discipline for use of social media,” Block said.

Social Media

Employees may not be fired for complaining on social media about their employers being unfair, cheap, etc. Policies prohibiting employees from sharing confidential information on social media are also largely invalid; such policies must be drafted with high levels of precision.

Almost half of attendees reported that their employers have policies that govern employees’ use of social media. Block urged them to reexamine these policies in light of recent NLRB activity.

He noted that labor protections specific to New York City are unlikely to be affected by NLRB actions. For example, if an employee posts on a social media platform that he has been discriminated against, and is then fired by his company for the post, the employee is not protected by the NLRA (unless he claims that there is a pattern of discrimination by the employer). However, the employee may sue the employer under city, state, and federal discrimination laws – regardless of whether discrimination actually occurred – for retaliation for making a discrimination claim.

Block discouraged attendees from devoting much time and effort to monitoring employees’ social media activities, as they are not permitted to act on many of the things they may discover. He also cautioned against doing much research into the social media and general online presence of potential hires due to the risk of violating New York City’s Fair Chance Act.

In the case Three D, LLC v. NLRB, the Second Circuit court ruled that workers who criticize their employers on social media are protected by the NLRA. This protection includes “liking” a post. In the case, a Connecticut sports bar had fired two employees after one had made a Facebook post criticizing the owner, and the other had “liked” it. The bar contended that the employees had violated the social media policy outlined in its handbook, but the court ruled that the employees had engaged in protected concerted activity.

Block advised attendees to consult with a labor lawyer before taking any disciplinary action regarding employee social media use.

Email

Cellco Partnership d/b/a Verizon Wireless’s “solicitation and fundraising” policy prohibited employees from using email to distribute organizing materials to one another, even outside of work hours. In response to a challenge, a judge ruled that the policy had a “chilling effect” on NLRA-protected concerted activities.

“Employees can use your email system to organize,” said Block. He highlighted an upside to this for employers.

“As an employer, when you’re faced with a union drive, you need to know what the issues are so you can go to an NLRB election with full communication to employees about the issues that are there,” he said. “The fact that they can use your email, so that way you can at least learn what’s going on, to me that’s a useful thing.”

Confidentiality and Privacy

Macy’s Inc.’s confidentiality policy restricted “confidential” information about employees to “only those who need to see it,” and contained other broadly restrictive provisions involving use of the company logo, as well as a general disclaimer that its policy was consistent with the law.

In a challenge, a judge ruled that employees would reasonably interpret Macy’s policies to bar protected concerted activities. Employees cannot be disciplined for discussing matters of pay with one another, and the nature of the disclaimer was not specific enough to pass muster. Block urged companies that opt to include a disclaimer among its policies to be specific.

“If you’re going to have any social networking policies, make sure you have a disclaimer that the policy is not meant to impact activity protected by law, and give examples of what you’re talking about,” he advised. Confidentiality and privacy are two areas where specific examples are useful.

Recording

Block polled attendees to see if any had policies that prohibited recording of performance reviews by employees. One attendee said her company had such a policy in the past, but no longer does. Block said such policies are not viable.

“Any time you’re disciplining, any time you’re talking about performance management with employees, you could be recorded,” he said.

Though employers may ask employees if they are recording, or to stop recording, they are unable to legally prohibit employees from recording. However, employers may opt to halt a conversation or meeting that they do not wish to subject to possible recording.

Block highlighted a difference between New York State law and NLRA regulations regarding recording. While state law does not protect employees who record, recordings to which only one party consents are admissible in court proceedings. The NLRA does protects employees who record from discipline for doing so.

Overall, Block advised attendees to be extremely specific in drafting their policies, and to include specific examples of what is permitted and what is prohibited under said policies.

Joint Employers

For NLRA purposes, any employer that potentially has influence over another can be considered a joint employer. For example, if McDonald’s corporation has any say over the wages or benefits of McDonald’s franchise employees, it is considered a joint employer. Staffing agencies are also considered joint employers. If a joint employer is violating the law, then the connected company can also be held liable.

“Make sure whatever outside agencies you use for permanent or temporary help are complying with these laws,” said Block.

An attendee asked if a staffing agency that complies with all employment laws and regulations could be held liable if a company for which it provided employees did not. Block answered that it would be unlikely, as the joint employer guidelines are intended to clarify under what circumstances staffing agencies are also employers (the companies that hire them are always employers).

Block recommended that attendees review any contracts with affiliates, and to clarify any indemnity provisions.

Arbitration Agreements and Class Action Waivers

Block also advocated using employee arbitration agreements as a means of preventing collective and class actions. Not only is arbitration faster and less expensive, it is more favorable to employers than courts. Though New York State’s employment-at-will provision makes it easy to get many employee lawsuits dismissed, lawsuits alleging discrimination can be more challenging for employers.

“Have arbitration agreements that prevent them [employees] from bringing discrimination cases in court,” Block advised. “Before a jury, you’re going to be behind even before you begin your opening arguments.”

When asked, just a few attendees reported their companies used arbitration agreements.

An attendee raised a question about implementing arbitration agreements for current employees. The counsel at her current company had told her that in order to do this, the company must offer the employees some kind of incentive, and she asked for Block’s take on this advice. Though he could not answer the question completely, Block advocated doing whatever was necessary to implement class action waivers as widely as possible. He mentioned a client facing a class action suit that includes employees from six years ago through the present. Had that client had even some of its employees sign class action waivers, the exposure would have been significantly less.

The NLRB has objected to arbitration agreements, and categorized class and collective action waivers as an attempt to prevent concerted activity, but has so far been overruled twice by the Fifth Circuit Court. Block predicted that disputes about such waivers would continue until the Supreme Court takes up the issue.

Religious Dress Accommodations

Patterson reviewed EEOC v. Abercrombie & Fitch, a case involving tension between company dress codes and religious dress. The retailer had rejected an otherwise-qualified job applicant because she was wearing a religious head covering, which conflicted with the company’s “look policy.” The look policy forbade employees from wearing hats or head coverings. The Supreme Court ruled that even if an employer is not completely certain that an employee’s attire is religious in nature, it must investigate whether it can accommodate the employee.

Fair Chance Act

Block reviewed New York City’s “ban-the-box” legislation, which forbids employers from inquiring about an applicant’s criminal history until after extending a conditional job offer. He emphasized that such an inquiry cannot be made in any form – not in writing, not on job applications, not during interviews, and not as a notification in a job ad. Before making a conditional offer, employers may not perform background checks or search other publicly available sources. This law applies to employers with four or more employees.

After a conditional offer is made, employers may inquire about a candidate’s convictions, but Block said that is often not worth doing so because it is easy to run afoul of the law if using a criminal background to reject a candidate. Because the New York City Commission on Human Rights is known for being strict, he advised following its guidelines concerning what an employer may ask “to the letter.”

The language reads: “Have you ever been convicted of a misdemeanor or felony? Answer ‘no’ if: a.) your conviction was sealed, expunged, or reversed on appeal; b.) was for a violation, infraction, or other petty offense such as disorderly conduct; c.) resulted in a youthful offender or juvenile delinquency finding; d.) if you withdrew your plea after completing a court program and were not convicted of a misdemeanor or felony.”

Block reminded attendees that they may not ask about arrests or non-convictions, nor use any such information in hiring decisions.

The law includes specific guidelines outlining valid reasons an employer may reject an applicant due to his/her criminal history. The employer must draw a direct relationship between the applicant’s criminal behavior and the prospective job, or show that employing the applicant would involve an unreasonable risk to the property or safety of others.

Factors to be considered in making these determinations include:

• the duties of the job, and if the applicant’s prior conviction affects his/her ability to carry out the job duties
• the amount of time elapsed since the events that lead to the conviction, and the applicant’s age at the time of said events
• the seriousness of the conviction history
• any information furnished concerning the applicant’s rehabilitation or good conduct
• the legitimate interest of the employer of protecting the property, safety, and welfare of other employees, clients, etc.

If an employer opts not to hire the applicant due to a criminal history after extending a conditional job offer, the employer must provide the rejected applicant with a written copy of the inquiry justifying the decision. After receiving a copy of the inquiry, the applicant has three business days to respond.

“For most occupations, you’re running the risk that if you don’t hire the person, you are going to face a serious violation under this law,” said Block.

He reminded attendees that violating the Fair Chance Act puts employers at risk for unlimited punitive damages, and unlimited aid and abetting regulations.

An attendee said that her employer is required by the Justice Department to do criminal background checks on potential hires, and wanted to know if it was okay to say in job postings that any conditional offer is based on a criminal background check. She said that the current procedure is to give applicants background check paperwork after they have been given an offer. Based on the text of the law, Block suspected that such a statement likely wouldn’t hold up to scrutiny, as it effectively communicates that background checks are required, which is unlawful. A major goal of the law is to encourage people with criminal backgrounds to apply for jobs, and such statements discourage convicted people from applying.

Staffing Agencies

The Act is applicable to staffing agencies, with the provision that a conditional offer from an agency amounts to an offer to place the applicant in the firm’s labor pool, from which the applicant may be sent job assignments to the firm’s clients. If a staffing agency wishes to reject an applicant based on his/her criminal history, the agency must follow the process outlined in the Act (just like any other employer). Staffing agencies may be held liable if they aid and abet an employer’s discriminatory hiring practices.

“It’s the equivalent of an agency complying with a client’s request that they don’t hire African-Americans, or Jews, or Muslims, or whatever,” Block stressed. “This has the same protection as any other category of discrimination under the Civil Rights Act.”

Weighing the Risks

Block discussed a recent case he had in which an HR applicant was given a conditional offer. Upon learning that the applicant had two recent DUI convictions, the hiring manager rescinded the offer, as he believed the convictions showed poor judgment and was not comfortable hiring the applicant. The applicant protested, citing the Fair Chance Act, and Block advised the client to reinstate the job offer. However, the hiring manager decided not to take this advice.

Block noted that even if the law is clear, it is useful to be aware of the potential business implications it presents. As in his recent case, some employers may chose to risk a lawsuit rather than risk hiring an applicant who they fear would damage the company’s business, especially if they think the applicant is unlikely to sue. In this case, he advised the hiring manager to inform the board of the situation so if the applicant sued, the company would not be caught off-guard. He mentioned that if sued, an employer may opt to settle a case.

“It’s a business decision to do what most likely would be deemed unlawful in this case,” he said. “My job as a lawyer is to say what the law is, and assess different risks.”

Questions

Another attendee mentioned that his company deals with several clients that have their own processes that require anyone dealing with their products to go through a series of background checks and drug tests. He asked how to handle this situation. Block said the law supersedes any company’s policies, and recommended talking to the clients in question about it, as their policies are likely out of date.

One attendee had trouble fathoming that applicants with convictions for crimes like burglary and theft must be considered for positions that involve going into people’s homes, such as home health care workers and house cleaners. Block clarified that these may be examples of valid instances for rejecting an applicant based on his/her criminal history, but that there is no blanket rule: each decision is reviewed on a case-by-case basis, taking into account the details of the individual case, and the factors outlined above.

Another attendee who works with a domestic violence shelter said that because it is a violence-free environment, her organization cannot hire anyone with a violent history and must conduct background checks. Block asked whether this practice was required by law, or merely by the organization, The attendee said that it was required by law, to which Block responded that the employer was then exempt from the Fair Chance Act.

Block noted that exemptions from the Fair Chance Act are consistent with the local Civil Rights Restoration Act of 2005. He added that guidelines specify that all exceptions to the law’s anti-discrimination provisions will be construed narrowly. The burden of evidence for exemptions rests with employers. The Human Rights Commission will not classify entire employers or industries as exempt, but rather will investigate any exemptions in the context of individual positions.

In the case that an employer is sued for negligent retention or hiring, the employer will not be held liable because it did not do a criminal background check that it was not legally allowed to do.

Stop Credit Discrimination in Employment Act

This law prohibits employers with four or more employees from requesting or using consumer credit history for employment purposes. Research found that using credit reports in hiring disadvantaged candidates with low incomes, those with significant medical bills, those who are members of racial minority groups, and those who are survivors of domestic violence.

This law permits a few exceptions. One is if state or federal law or regulations of a self-regulatory organization require the use of consumer credit history for employment purposes. Employers may also comply with subpoenas, court orders, or law enforcement investigations that require credit information.

“Sensitive” Positions

Credit history may also be considered for certain “sensitive” positions specified by the law. Such positions include law enforcement officers, department of investigation positions, positions that require employees to be personally bonded, positions that entail access to highly confidential trade secrets, positions that include signing authority over the funds of others in excess of $10,000, and positions with the ability to modify digital security systems.

Patterson stressed that the exception for “sensitive” positions may not be applied in a blanket-like fashion to anyone who works in the financial services industry.

Employers who violate this law are subject to the full range of penalties and damages specified by New York City human rights law, including back pay, punitive damages, and attorney fees.

An attendee asked if IT employees fell under these parameters. Patterson replied that there may be a few IT positions that could be considered sensitive, such as a position that controls a company’s entire information system, but most general IT positions would not be excepted from this law.

Another attendee asked about employees who have access to clients’ banking information. Patterson said that such positions would likely not be considered sensitive under this law. Block interjected that employers can always call the city Human Rights Commission for guidance.

Another attendee inquired whether a fiduciary over a 403(b) plan would be excepted from the law. Patterson said that if the fiduciary can sign for $10,000 or more worth of funds that are not in her own name, the position would qualify as sensitive.

Giving and Checking References

Questions arose about whether new laws like the Fair Chance Act and Stop Credit Discrimination in Employment Act could limit what could be disclosed about former employees in the context of reference checks. Block said that historically, employers are not subject to defamation claims for sharing negative but truthful information about former employees, but advised erring on the side of caution.

“You can always say, ‘I wouldn’t hire the person,” said Block. “You can’t be sued for saying that, and it’s enough for you to hear. Opinions are not defamatory.”

He gave an example from his own firm. After firing an attorney for regularly making inexplicable errors, he later found out the attorney had been using illegal drugs. Because he had fired the attorney for making mistakes, and not for the drug problem, there was no basis for any legal complaint under the ADA, or under any other provision.

One attendee asked if an employer may disclose during a reference check whether a former employee resigned, or was terminated. Block said that it depends: if there is a release or a settlement specifying that the terms of termination are kept confidential, or if the company handbook says the employer will only verify names and dates of employment, employers may not answer this question without breaching the contract. If there is no contract or handbook specification, employers are free to share. However, Block always advises keeping comments general.

“You have no legal obligation to get into the details,” he said.

New York City Transit Ordinance

This ordinance, which went into effect in January of 2016, requires employers with 20 or more full-time employees to offer their full-time employees the opportunity to use pre-tax earnings to purchase transportation benefits in accordance with federal tax law. Employees are entitled to take the maximum deduction permitted under federal law. Employers must maintain records for two years showing that employees were offered these benefits, and indicating whether they elected to use them.

As an alternative, employers may provide transit passes or other forms of transportation payment to their employees.

The transit ordinance considers any employee who has worked an average of 30 hours/week during the previous four weeks to be a full-time employee. When calculating the number of full-time employees, employers should take the average number of full-time employees for the most recent consecutive three-month period. This average should include all employees in any of an employer’s New York City locations.

Patterson mentioned that many employers already provide these benefits, and thus the ordinance will mainly prompt changes in record-keeping habits. Records of benefits and whether employees accepted them must be kept for two years.

When employees are provided by a staffing firm, the staffing firm is considered the employer, and is responsible for keeping track of all employees’ hours at various placements. The staffing firm determines whether its respective employees are eligible for the specified transit benefits by calculating each employee’s average hours during each four-week period.

Patterson reassured attendees that if their administrative departments aren’t equipped to handle the required calculations and record-keeping, outside payroll management companies can help.

“Many companies are already offering these benefits, but the main thing you want to take away is that it isn’t optional anymore, so you need to make sure you’re up to speed,” Patterson said.

One attendee mentioned that her company’s current policy is to grant transit benefits beginning 90 days after the date of hire, and wanted to know if it needed to update this policy in light of the ordinance. Patterson advised the attendee to revise the policy, as the ordinance entitles full-time employees to benefits after four weeks.

Another attendee asked if it was okay to grant transit benefits immediately to new employees. Patterson said yes.

After some chatter about the best way to keep records, one attendee pointed out that the city’s website has a form employers may download and use. She said that her company had employees fill out the form indicating whether or not they took the transit benefits offered, and keep all of the forms in a binder for easy reference in case of an audit.

Patterson praised this idea, saying that using the forms provided is a foolproof way to ensure compliance.

“It helps with compliance to show that you use the standard form that the city makes available, and it’s really not much trouble to do that,” he said.

New York State’s Women’s Equality Agenda

In early 2016, New York State passed a series of laws strengthening protections for women in the workplace, collectively called the Women’s Equality Agenda (WEA).

Bona Fide Equal Pay

Though equal pay for equal work has been on the books for some time, the WEA increases scrutiny and narrows the legally acceptable justifications for pay differences within organizations.

“The old standard basically said that you can have pay differences among employees, as long as they are based on factors other than sex,” explained Patterson.

Under the WEA, if factors in pay differences cause a disparate impact on the basis of sex, and there is an alternative employment practice available that would serve the same purpose, an employer must adopt the alternative practice. Otherwise, the reason for the pay differential – which may have been acceptable in the past – will be considered invalid under the law.

“If you have a male and a female in the same position and they are making different wages, you’re going to have to go back and revisit that,” said Patterson. “Under the new standard, you might not be in compliance anymore.”

The law also mandates equal pay among men and women working at the same establishment, which it defines as any geographic region no bigger than a county.

“If you have 10 different operations in Manhattan, you have to make sure men and women doing the same work are paid the same at all 10 of those,” said Patterson.

The law imposes stiff penalties for willful violations, including attorneys’ fees and liquidated damages up to 300% of total wages. These penalties, previously confined to New York City, now apply statewide.

Familial Status

The WEA also forbids familial status discrimination. In essence, employers may not discriminate against anyone who is pregnant, has a child/children, or is in the process of obtaining legal custody of a child/children.   Though discrimination on the basis of familial status had been illegal in housing and credit for some time, the WEA  has now made it illegal in employment.

Pregnancy Accommodations

Though pregnancy accommodations are mandated at the federal level by the Americans with Disabilities Act (ADA) and at the city level by the New York City Human Rights Commission, the WEA “fills in the gaps,” Patterson explained. It specifies accommodations to make it possible for pregnant people to continue doing their jobs, such as rest periods, break periods, and reassigning of physically strenuous duties.

Sexual Harassment: Size Doesn’t Matter

In the past, sexual harassment and discrimination laws applied to companies with four or more employees. The WEA makes these laws applicable to all employers, regardless of size.

An attendee asked if this meant that all organizations should be delivering harassment training. Though the law does not mandate it, Patterson and Block acknowledged that it is always a good idea.

“If you’re ever sued for harassment and you didn’t do any training, it looks terrible,” said Block. “You want to show that you pay attention to these things, that you’re sensitive to it.”

Patterson emphasized that the equal pay provision is the most significant part of the WEA, and expressed certainty that it would be tested in court. He advised attendees to scrutinize any pay discrepancies among men and women who hold the same positions within their organizations.

Gender Identity and Expression Discrimination

Though New York City has prohibited discrimination based on gender identity since 2002, a recent survey of transgender and gender-non-conforming residents revealed that as many as 75 percent have experienced harassment or mistreatment in the workplace. In light of this, the city Human Rights Commission has released detailed enforcement guidelines aimed at curbing this type of discrimination.

Patterson mentioned that discrimination based on gender identity and expression can often result from ignorance and uncertainty, and does not necessarily involve conscious intent. He advised attendees to read through the guidelines on the Commission’s website to ensure that they are not unintentionally discriminating.

“It does make a serious effort to clarify all of the gray areas under the law,” he said.

Failing to use person’s preferred name, title, or pronoun is an example of gender-based discrimination.

An attendee asked how to address and refer to an employee who identifies as a gender other than the one indicated on that employee’s legal forms. Patterson said to use the name, pronouns, and gender that the employee gives, regardless of the sex or gender recorded on legal documents. He mentioned that the city guidelines also include non-gender-specific pronouns – ze and hir – that can be used when a person’s gender and pronouns are unknown.

The attendee asked how to record an employee’s sex or gender for tasks like EEOC reporting in cases where the employee’s gender identify is different than the one on the employee’s legal documents. Patterson clarified that the Commission’s guidance applies to interactions related to the employee, and does not pertain to paperwork.

“If you are using the information you have in your database or in your files and reporting it to an agency, I don’t see any violation,” he said. Block predicted that the EEOC will eventually expand sex and gender categories beyond “male” and “female.”

Another attendee advised having a private conversation in an HR capacity with employees in such situations to find out how they would like to be identified on paperwork, as well as among fellow employees.

Patterson concurred, noting that it may be necessary to correct other employees who use the wrong name or pronouns. Failing to use or enforce the use of a person’s preferred name and pronouns can create a hostile work environment.

All employees must be permitted to use single-sex facilities consistent with their genders. For example, all employees who identify as female must be allowed to use the women’s restroom, regardless of the gender with which they were identified at birth. Under the law, an employee’s right to use gender-appropriate facilities takes precedence over any discomfort or objections raised by cisgender employees.

Block and Patterson suggested making all bathrooms unisex to avoid any potential for conflict.

Other things that constitute gender-based discrimination include imposing different uniforms or grooming standards based on sex or gender, providing employee benefits that discriminate based on gender, engaging in gender-based harassment, and engaging in retaliation.

Violations may result in civil penalties up to $125,000, and up to $250,000 in cases of “willful, wanton, or malicious conduct.” Other damages, including back and front pay, and compensatory and punitive damages, may also be incurred.

 

Andrea Burzynski is a freelance writer based in New York. Reach her at andrea.burzynski@yahoo.com.

The HR Roundtable is a breakfast forum for human resources professionals in New York City sponsored by The TemPositions Group of Companies. TemPositions, one of the largest staffing companies in the New York tri-state area with operations in California, has been helping businesses with their short- and long-term staffing needs since 1962. 

Since recent Supreme Court rulings made clear that the Affordable Healthcare Act is here to stay, employers are no longer holding their collective breath, and are more eager than ever to ensure that they are in full compliance with the employer shared responsibility rules that take effect this year.

A crucial component to success in this arena is following the corresponding reporting rules that kick in in 2016. As many chart their maiden voyages into seas of ACA paperwork and deadlines, HR professionals seek clear directions on navigating the complexities that can arise. Many matters that seem simple, such as counting a company’s number of full-time employees, can be deceptively complicated. Though the tasks overlap, rules for determining coverage eligibility for individual employees and tax liability for employers are not always congruent.|

Employers are also beginning to look ahead to avoid the so-called “Cadillac tax” on high-cost health plans that takes effect in 2018, or at least steel themselves for its impact. In addition to affecting employer taxes and finances, the tax outlined in Code 49801 will likely influence plan designs. As employers adapt to these changes, the ACA’s coming nondiscrimination rules lurk in the background.

Alden Bianchi presented to attendees at the TemPositions HR Roundtable Series on Thursday, October 1, 2015 to clarify the rules and tasks that are ahead for attendees. Bianchi is the Practice Group Leader of the Employee Benefits & Executive Compensation Practice at law firm Mintz Levin, and worked with the Romney governmental administration to help draft the 2006 Massachusetts healthcare law that served as a template for the ACA. Mintz Levin Member Richard Block also attended.

Bianchi began by asking Roundtable attendees about which areas of the ACA they had questions, were confused by, or needed more information. One attendee said that she wanted to get a better sense of the pros and cons of using different measurement periods. Another asked about the timing and design for the finalized version of some of the reporting forms. Someone else asked to discuss the tax of high-cost health plans and the limits, like those related to deductibles and co-pays.

Bianchi praised the third speaker for using the terminology used by the IRS in all of its official communications – “the tax on high-cost health plans” – as opposed to the colloquial “Cadillac tax.”
Another attendee wanted to be sure about the size of employers affected by different aspects of the regulations, as she has worked for several companies that toed the 50-employee border of applicability.

Bianchi pointed out that while the vast majority of companies knew without hesitation whether they have more or fewer than 50 employees, getting it right can be a tricky but important business for those near the line.

“There’s a lot at stake in counting to 50 right,” he said.

History

Bianchi traced the genesis of healthcare law changes back to the mid-2000s.

“There was broad agreement that something had to be done about three principal healthcare issues,” he said. “We had to expand coverage, we had to contain costs, and we had to increase the quality of outcomes.”

Though there was agreement on those three goals, there was not much agreement on how to achieve them. Without the political will to either institute a European-style publicly funded system, or to shift the burden of insurance costs entirely onto individuals, a “third way” incorporating existing public and private structures was devised.

Bianchi noted that both the Massachusetts healthcare reform law and the ACA are both based on five key features: an individual mandate, low-income subsidies, an employer mandate, insurance marketplaces, and tax reforms to help foot the bill.

The tax on high-cost health plans

Code 49801
Code 49801 imposes a non-deductible excise tax on certain forms of high-cost employer-sponsored health coverage. A 40% tax is imposed on the portion of the aggregate cost of “applicable coverage” in excess of a statutory dollar limit. The cost of applicable coverage is calculated using rules similar to COBRA, and the statutory dollar limit is determined from month to month. Applicable coverage is defined as coverage under a group health plan offered by an employer that can be excluded from an employee’s gross income (or would be excludable if it were employer-provided coverage).

Bianchi said that this tax, described in Code 49801, was initially well-liked by both healthcare economists and the government, but has earned the contempt of many as unanticipated consequences appear. There are some efforts in Congress to repeal it. Bianchi observed that Republicans seemed more willing to work across the aisle since the King v. Burwell Supreme Court decision, but see acquiescence to a repeal as a bargaining chip for other political goals that Democrats generally find repugnant, so was not optimistic that a repeal would actually happen.

Economists theorized that if employers provide benefits that are “too rich,” it would encourage employees to use the benefits to a wasteful extent, and that this tax would discourage such waste. Meanwhile, government projections estimated it would bring in $87 billion in tax revenue over the next 20 years.

Bianchi expressed skepticism about the $87 billion figure.

“It assumes that employers won’t just voluntarily keep their health plans the same and pay all of this money to the government, but instead of paying non-taxable health benefits, will give their employees more cash,” he said. “I’m not sure employers are gonna do that.”

In practice, if employers save money by trimming health benefits (which would increase co-pays and deductibles and limit networks for employees), they aren’t necessarily inclined to pass on these savings to employees in the form of raises. Without more money flowing to employees as taxable income, there is no new money for the government to tax.

Bianchi referenced surveys of two major trade organizations that revealed members were not planning to reduce benefits and pass on the money saved as additional income to employees.

Likely effects of the tax on high-cost health plans

“Medical flexible spending accounts are toast,” said Bianchi, noting that eliminating FSAs is likely one of the first and easiest ways employers will try to reduce exposure to the tax on high-cost health plans.

The law purports to include health savings accounts, but officially refers to HSAs as “group health plans.” However, this conflicts with the Department of Labor’s statement that a health savings account is NOT a group health plan. Bianchi said regulators will have to sort out this ambiguity.

So far, regulators have ruled that HSAs funded with employee after-tax dollars do not count as applicable coverage, but those funded with pre-tax dollars (i.e. employer contributions) do count.

This has set off a flurry of backlash from benefit organizations, as well as the Chamber of Commerce. Critics say that the only feasible way to have a high-deductible plan with an HSA without triggering the tax is to fund it with after-tax dollars. Bianchi said that he wouldn’t be surprised if the IRS backed off due to the weight of the opposition, but for now it remains.

An attendee asked if Bianchi would recommend getting rid of flexible spending accounts. He stopped short of saying that he would recommend that action given the current situation, but that many employers would do so to try to avoid the tax.

In response to another question, Bianchi said that even employee-funded FSAs count as applicable coverage.

Bianchi noted that the tax does not take geography into account, meaning that employers in higher-cost areas such as New York will encounter it sooner than those in other parts of the country.

Valuing coverage

The value of applicable coverage is calculated with rules similar to COBRA. While this is pretty straightforward for fully insured plans, how to make similar determinations for self-funded plans isn’t completely clear.

Typically, self-insured employers hire an actuary to determine costs based on a standard population that includes everyone at the company. In one of its two notices, the IRS objected to this method based on the complexity created by having multiple plans, and wants to determine it based on who selects each type of plan. Different employee groups tend to gravitate toward different types of plans; a middle-aged, higher-paid employee who is married with children is more likely to choose a high-level plan, while a young, unmarried employee is more likely to opt for a low-level plan. Given these demographics, this approach would greatly increase the cost of the high-level plan, triggering the tax.

There have been many critical comments in response to this idea put forth by the IRS from major employers and benefit associations, including Johnson & Johnson.

Liability

Another question raised is which party is liable for the tax. In the insured-claim context, the carrier is liable. However, the carrier will pass on the cost, and the money paid ends up being additional income for the carrier. The result necessitates a tax gross-up. When this occurs, usually the highest marginal tax rate is assumed, but the IRS proposal would not allow this, and instead demand a precise gross-up calculation.

Notices

The IRS has put forth two notices this year in an effort to clarify what counts as applicable coverage for the purposes of the high-cost health plan tax. The notices are open to comments.
In the notices, the IRS said that coverage provided to military members and their families can be excluded from “applicable coverage.”

It also exempted on-site medical clinics that provide minimal care. However, many companies’ on-site medical clinics have morphed into what Bianchi describes as “small hospitals,” providing services such as immunizations, allergy injections, nonprescription pain relievers, and treatment of workplace injuries. The notices are soliciting comments on whether larger on-site clinics should be included in the definition of applicable coverage; Bianchi anticipates that they will be.

He noted that depending on lobbying tactics and relationships, some industry groups are more likely to be heard than others. An attendee asked specifically about the Society for Human Resource Management, which Bianchi praised as a knowledgeable group with high levels of technical expertise.

“Because the law is clear about health FSAs, the battleground has shifted to health savings accounts,” said Bianchi. “You might see more of what looks like consumer-driven healthcare.”

Employer Shared Responsibility

Employer shared responsibility rules are outlined under Code 4980H.

For larger employers with relatively stable, well-compensated workforces and robust benefits, employer shared responsibility rules are merely a speed bump, Bianchi said.
“At the end of the day, it’s not really going to change the way you operate,” he said.

Businesses with higher turnover rates and more low-level staff who have traditionally not been offered benefits, such as restaurants, retailers, and even staffing firms, face different challenges. Bianchi gave the example of McDonald’s, a large company with a range of employee categories, from executives to corporate managers to store managers to a fleet of low-wage, high-turnover servers who have not been offered benefits in the past. For McDonald’s and similar companies, coverage is the biggest issue to tackle.

“For one group, the problem is the 4980H, the employer shared responsibility rules,” he said. “For the other group, it’s the tax.”

Counting to 50

The definition of an applicable large employer is a company that has 50 or more full-time AND/OR full-time-equivalent employees. This is determined by looking at the previous calendar year, and averaging out each employee’s hours for each month. Employees who average 130 hours/month or more are full-time-equivalent employees.

Things can get complicated when there are multiple companies under common ownership. If there is a parent company that owns at least 80 percent, all of the subsidiaries can be lumped together for employee-counting purposes. Brother-sister control groups (five or fewer owners who each own varying portions of each subsidiary) and family trust ownership structures vary, and cannot be dealt with according to a single overarching rule. Bianchi said that if companies are eligible to file a consolidated return, there is a good chance that they are in a subsidiary control group, but this is not always the case.

Seasonal workers vs. seasonal employees

Bianchi stressed that there is a difference between a seasonal worker when counting to 50, and a seasonal employee when figuring out penalties. Once an employer has taken into account seasonal workers in determining that it meets the threshold for being an applicable large employer, seasonal employees are taken into account when a large applicable employer is assessing its exposure using the look-back method.

Bianchi gave the example of holiday associates in retail as an example of seasonal workers. If a retail store hires holiday associates who are employed by the store for fewer than four months, they are considered seasonal workers, and are not included when counting to 50 to determine if the store is a large employer, even if they are working full-time during that period.

If said retail store does otherwise meet the threshold for a large employer and is using the look-back method, it does not need to count the holiday associates when assessing penalty risk; in this situation, they are classified as seasonal employees. Seasonal employees are employees who work for a large applicable employer for fewer than six months.

Another example Bianchi mentioned was summer associates and summer clerks at law firms. They may be treated as seasonal employees for penalty purposes because they are employed by the firm for fewer than six months. They may also be treated as seasonal workers if they meet the parameters for that category.

Mergers and acquisitions

Several issues unique to mergers and acquisitions emerge when it comes to figuring out exposure and the logistics of counting employees.

Reserve employees

A category that has yet to be specifically defined by regulators is that of reserve employees. This comes into play with mergers and acquisitions when determining how to count employees from another company that has been acquired.

Bianchi said that the answers are unknown at this point, but he suspects that the rules will be similar to those under COBRA.

“For now, we’ve had clients do mergers – particularly in the restaurant space – where they treat all the acquired workers as new employees, and I think that’s fine,” said Bianchi.

In cases where there is a stock deal that involves a small employer merging with a large employer, from the date of purview, employees will show up on 1095C forms, but will not be considered employed for the first three months.

“There will be no penalties for the pre-merger months, but there might be exposure,” said Bianchi.

The 50-employee threshold and reporting requirements

Bianchi clarified a question from an attendee about the relevance about the 50-employee threshold to recording procedures.

“Once you hit the 50 threshold, you are an applicable large employer, and therefore you are subject to reporting requirements,” Bianchi explained.

He elaborated that reporting requirements are twofold.

“One set of reporting requirements apply to those who issue coverage, whether it’s a carrier or an employer,” he continued.

This is so the IRS can verify which employees actually have coverage, as citizens without coverage are taxed for not having it. All employers – even small employers that fall below the 50 threshold – are responsible for the 1095B form, as this simply helps the government verify whether individual citizens have insurance (and is not used for employer assessment purposes).

Unless the employer is self-funded, carriers will issue this form. If an employer is self-funded, then the employer must issue the form.

In addition to this requirement, larger companies must also report how they are complying with the Employer Shared Responsibility part of the ACA.

Coverage options

Though conventional wisdom says that the two options are to either offer employees coverage, or to not offer converge and pay a penalty, Bianchi said that in his view, there are actually three options: offering no coverage, offering “crappy coverage,” or offering good coverage.

He defined “crappy coverage” as insurance that is either unaffordable to employees, or doesn’t cover very many services due to high deductibles, anemic networks, or because it is a preventative-services-only plan.

Preventative-services-only plans are an example of Minimal Essential Coverage (MEC), which only covers very basic services such as check-ups, but does not cover things like hospital care.

However, having a MEC plan gets employers off the hook for the worst penalty. Bianchi said that this may change in the future with the nondiscrimination part of the ACA, the implementation of which has been postponed. He anticipates that it will be another 2-3 years before employers must take this into account.

Affordability

An attendee asked how the 9.5 percent of household income threshold for affordability played into employers’ obligations.

Under the ACA, if the employee cost for self-only coverage does not exceed 9.5 percent of the employee’s household income, the coverage is considered affordable.

There are three safe harbors available to employers. The first is rate of pay, for which an employee’s hourly pay rate and hours worked per month are calculated to determine average monthly pay over a year. The affordability threshold is 9.5 percent of this figure. The second method is the W-2 method, which uses an employee’s W-2 to calculate affordability. The problem with this method is that a company does not get employee W-2 forms until the end of the year, so cannot calculate the threshold until then. The third method is to calculate based on the assumption that every employee’s income is 138 percent of the federal poverty rate, which is approximately $16,000. Of course, this method costs the employer more, as employees may be making more than this.

An attendee asked about what an employer’s responsibility would be in the case than a full-time employee with benefits resigned, and was hired back on a part-time basis with the company if part-time employees are not offered benefits. Would the employer be obligated by the ACA to offer benefits to this employee?

As he delved into the attendee’s question, Bianchi advised the room that two important questions to ask when trying to resolve such issues are: 1. Is the employer an applicable large employer? 2. What method is being used to establish full-time status?

The attendee said that her company is an applicable large employer, and uses the look-back method.

Determining full-time status

When an employee is hired, they must be classified one of four ways: full-time, part-time, seasonal, or variable. There are two methods that can be used to determine whether employees are classified as full-time and must be offered benefits.

Monthly Method

The method entails looking at how many hours an employee worked in real time in a particular month. If the employee worked 130 hours or more, he/she is considered full time for that month. This method is useful for monthly ESR reporting, but not as useful for determining which employees are eligible for benefits.

Look-Back Method

This method looks back at a specific period of time – usually 12 months – and divides the hours worked during that time by 12 (monthly) or 52 (weekly). If the employee averaged 30 hours/week or more during that period, he/she is counted as full-time for a subsequent “stability period,” even if the employee is not working full time during that period.

This method is useful for companies with employees who work variable hours, seasonal employees, or other employees who otherwise may not consistently work 130 hours or more from one month to the next. It offers some stability to employers in terms of having a better idea of to whom they will be offering coverage.

Bianchi mentioned that there are two sets of stability periods under the look-back method: one for new hires, and one for employees who have worked for the company for a while.

“There is a standard measurement period,” said Bianchi. “Once you have worked through that, you are no longer full-time, part-time, seasonal, or variable. You are only ongoing.”

The initial measurement period for new employees is tied to either the date of hire, or to the first day of the following month. This period cannot exceed one year.

“If you’re using the look-back method, you can hold that person out of coverage for a year and not be penalized,” he said.

Bianchi used the example of a bartender to further explain how the look-back method works for cases where employees work variable amounts of hours each week or month. The bartender’s employer could delay offering coverage for the first year of the bartender’s employment until the employer determines if the bartender is a full-time employee. If the bartender works full-time for the first year, he is classified as s full-time employee for the following stability period (the following year), and the employer must offer coverage. However, if the bartender drops down to part-time during the stability period, she still must be offered coverage coverage, but the employer is not obligated to pay for the coverage; it could put the bartender on COBRA. While this is allowed, doing so may affect the employer’s affordability calculus and expose it to affordability-related penalties.

Alternately, if an employee is designated as a full-time employee upon hire, he must be offered coverage within three months. This employee can then be tested month-to-month through a whole standard measurement period.

An attendee asked if time taken off for accrued sick time and vacation is counted for monthly hours. Bianchi said these hours are counted, as are any other paid hours such as jury duty, bereavement leave, and any other paid leave. Unpaid leave is not counted, but an employee on unpaid leave is still treated as an employee during a stability period.

Measurement and stability periods

Measurement periods can be as short as three months, or as long as 12 months.

“Stability periods have to be at least six months,” Bianchi said. “So if you have a three-month measurement period, you have to have a six-month stability period.”

He advises most employers to use a 12-month measurement period and 12-month stability period. An 11-month measurement period followed by a 12-month stability period is also a good option, as it gives HR a month to sort out any changes or confusion, and can make reporting and administration easier.

An attendee asked about the best course of action for her company, which has more than 50 full-time employees, and is safe from penalties. The company offers a rich benefit plan for its full-time employees, and has a bunch of seasonal employees who are not offered benefits. She worried that if some seasonal employees end up qualifying to be offered healthcare, the company could face liability for the tax on high-cost health plans. She wanted to know if it was best to continue using the look-back method, and then depending on how things developed, possibly eliminate the company’s FSA and/or downgrade the health coverage offered.

Bianchi clarified that the company must offer coverage to eligible seasonal employees, but is not obligated to offer it at the at the same cost as it is offered to full-time employees, as the nondiscrimination aspect of the ACA is not yet in effect. As long as coverage is offered at a rate deemed affordable by the 9.5 percent calculation, the company should be in the clear.

Bianchi did point out that if an employer offers affordable coverage to employees, it makes them ineligible for income-based subsidies should they opt instead for a marketplace plan. Because of this, some employers opt to make coverage unaffordable to lower-paid employees to allow these employees to be eligible for subsidies (those who receive subsidies pay less than 9.5 percent of household income in premiums). This does open the employer to unaffordability penalties. Despite penalties, Bianchi noted that accepting the penalties may make more business sense in the big picture, as employees with other options will often quit in favor of a job that either provides affordable coverage, or allows them to find affordable coverage through the marketplace with the help of subsidies.

He advised offering more than one tier of coverage, as not all employees will want or value a rich plan. This saves the company money, allows it to comply with ACA regulations, and gives employees a sense of choice.

An attendee asked about measurement and stability periods that overlap calendar years. Her company’s year begins on April 1, and she wanted to know if it is feasible to have a 10-month measurement period followed by a two-month administrative period for a 12-month stability period, as doing so would go into the next calendar year.

Bianchi advised the attendee to begin the measurement period on February 1, and consider everyone hired on or before February 1, 2014 an ongoing employee (these employees would be offered coverage starting on April, if they did not already have it). Anyone hired after that date would be considered to be in an initial measurement period.

Another attendee asked about how to handle per-diem employees, as her company employs many per-diem residential aides. At her company, per-diem employees generally work two or three days a week, but some end up reaching 35 hours a week as a result of filling in for other employees.

“I think per-diem employees are the single biggest challenge of the Affordable Care Act,” Bianchi said.

He said per-diem employees’ hours and schedules tend to vary considerably, and hours of service can also be difficult to tabulate accurately because they often are doing administrative work even when not officially scheduled or on site. Nurses, residential aides, and adjunct professors are examples where employers are wise to be mindful of this.

Of adjuncts, Bianchi said, “It’s not just the hours in the classroom. It’s prep time, faculty meetings, office hours.”

Reporting

Forms

The first set of reporting rules is for carriers and anyone who provides coverage, e.g. self-funded employers. This set of rules is relatively straightforward, and serves to inform the government that an individual has coverage and thus will not be changed a tax penalty.

The employer shared responsibility rules (ESR) are more slightly more particular.

“The simplest way to understand all of this is that the timing is just like W-2s,” said Bianchi. “You issue it in January, report it in February or March.”

He also drew a parallel between W-2 and W-3 forms and the Minimum Essential Coverage (MEC) reporting forms, explaining that Form 1094B was a statement like a W-2, and Form 1095B is a transmittal form like a W-3.

For ESR, the employee receives Form 1095C, and the transmittal form sent to the IRS is Form 1094C.

“The difference is that there is far more information packed into transmittal forms for these reporting purposes than there is for wage reporting on W-2s,” he said.

Bianchi reminded attendees that unless they are self-funded, companies with fewer than 50 employees do not need to file 1095B forms, as the carrier will be the one filing it.

For insured employers with more than 50 employees, the employers will give employees 1095C forms after filling out Parts 1 and 2. The insurer will supply the 1095B form to employees.

Self-insured large applicable employers will fill out all three parts of the 1095C forms. In this case, the employer will only file the 1095C form (this system was designed to to reduce the number of forms).

Reporting challenges

If an employer has a fully insured group health plan and also a health reimbursement account (HRA), draft rules initially mandated that even small employers separately file a 1095B form for the HRA. The IRS has changed this rule, and employers may now file a single form for both its HRA and group health plan.

An attendee asked how this would impact employers that offer coverage to retirees. Bianchi responded that if the retiree has been covered the entire year, the only information required will be the information on the B form, and employers may choose whether to include this on the B form or the C form (most opt for the B). If the company is insured, the retiree will receive a form from the carrier, instead of from the company.

If am employee retires during the year being reported, the retired months will be marked with the “not employed” code (1H), which means they cannot trigger a penalty.

An attendee asked when the 1095B will first be issued. Bianchi responded that they will be issued in January of 2016 for reporting on 2015.

Employers may use software through their payroll services or other third parties to work on compliance, but Bianchi expressed doubt about the efficacy of these programs.

“The good news is that the IRS has given us a good-faith compliance period,” he said.

Employers who make a concerted effort to comply and are generally on track will not be penalized. The good-faith compliance does not apply to late filing.

“If you’re going to file a complete mess, at least do it on time,” said Bianchi.

He stressed the importance of having warranties of representation in contracts with third-party vendors.

“They’re got to tell you in that contract that this thing will work for the purpose you intend it,” he said. “It’s called a warranty of merchant ability and fitness for a particular purpose.”

Bianchi also said contracts should also include a warranty that the third-party vendor will be on time in filing, given that employers send the necessary information on time. This ensures that they will be able to enjoy the benefit of the good-faith compliance rule.

An attendee asked if it is feasible for companies to do the reporting themselves, as many employees at her company are not in the current payroll system, and will not be put in because the company will soon have a new system. The company had an IT person design tools to track paid sick leave time, hours and more, and plans to do the reporting itself harnessing the information gathered with these tools.

Bianchi mentioned that many companies that do payroll in house use a Microsoft Office-backed solution that is being programmed for this purpose. From what he has heard, it seems to work pretty well so far, and he thinks it is likely a good alternative for companies that prefer to do payroll and reporting in house, or want to avoid the expense of third-party vendors.

He said that at this point, whether companies opt for in-house or third-party services, the most important part is that they are well into the process.

Andrea Burzynski is a freelance writer based in New York. Reach her at andrea.burzynski@yahoo.com.

The HR Roundtable is a breakfast forum for human resources professionals in New York City sponsored by The TemPositions Group of Companies. TemPositions, one of the largest staffing companies in the New York tri-state area with operations in California, has been helping businesses with their short- and long-term staffing needs since 1962.

The ever-changing legal landscape at the city, state, and federal levels keeps life interesting for lawyers and politicians, but can sometimes be overwhelming for employers. Between knowing what is legal to ask during the hiring process, keeping track of wage and hour regulations, administering various types of paid time off, and keeping proper documentation in case of any challenges, companies often find themselves with questions about murky aspects of the law, or delicate situations with employees.

Partner Andrew Singer and Associate Attorney Jason Klimpl from employment law firm Tannenbaum Halpern Syracuse & Hirschtritt visited TemPositions’ HR Roundtable Series on Thursday, June 25 to answer questions brought by attendees.

Singer and Klimpl briefed attendees on the implications of New York City Fair Chance Act, which is set to prohibit employers from asking potential hires about past felony convictions. They also discussed an upcoming initiative by the New York City Human Rights Commission to screen for discrimination in hiring using candidate “testers.” They advised attendees on best practices to comply with anti-discrimination laws in recruitment and hiring practices.

Singer and Klimpl also answered many questions from attendees about wage and hour regulations, and how to avoid class-action lawsuits related to these regulations. They discussed the logistics of using arbitration as a means of problem-solving, which is often advantageous for employers in this area. Attendees asked about how to manage and penalize chronically late employees, and how to make company policies fair, consistent, and legal across locations in different states.

Another area of discussion was paid time off. Attendees had questions about complying with New York City’s sick leave law at companies with blanket paid time off policies, and under circumstances involving probationary periods for new hires.

Unclear situations relevant to the Americans with Disabilities Act and Family and Medical Leave Act were also addressed. This included questions about the specifics of “reasonable accommodations,” and best practices for handling situations in which poor work performance and health issues may intersect.

Fair Chance Act

This new piece of legislation passed by the New York City Council was the first thing Singer and Klimpl introduced to the group. None of the attendees had heard of it.

“It’s basically New York’s City version of ‘ban the box’ legislation,” explained Singer, triggering instant recognition among attendees.

It was signed into law by Mayor Bill De Blasio several days after the Roundtable.

The Fair Chance Act prohibits companies from asking job applicants whether they have been convicted of a crime until after a conditional offer of employment has been made. After that point, companies must provide documentation of the inquiry, analysis, and relevant supporting documents to the candidate. The candidate may then use this report to challenge a hiring decision within three days.

Section 23-A specifies the factors an employer is allowed to consider when deciding whether or not to hire a candidate with a criminal record.

Klimpl said that the legislation is more onerous for companies than many ban-the-box measures in other states.

“If that person discloses that they have been convicted of a crime, you then have to go through the Article 23-A analysis, actually put pen to paper, and write up a whole analysis about which factors apply,” he said. “You have to hand the applicant the written analysis, and give that person three days in which you hold the job open so that they can challenge it and have a dialogue. This is unprecedented.”

An attendee asked about the appropriate course of action if a criminal conviction pops up during a background check.

Singer responded that in most cases, a background check must not be done until after an offer has been made since it usually reveals criminal records.

He said that while it was easy in the past to simply not disclose to a candidate with a criminal record why he/she did not get a job, the new law mandates much more transparency.

“From a practical landscape, it’s going to be very, very hard for a company to get out of hiring somebody who has convicted any crime,” Singer said.

The law does not apply to jobs that require fingerprinting.

New York City Human Rights Commission and use of “testers”

Beginning on October 1, 2015, the New York City Human Rights Commission will commence a new initiative to identify employment discrimination in hiring practices. The agency will send two “tester” candidates with similar credentials to apply for the same job. The tester candidates will differ in that one will be of a protected class (based on race, gender, etc.) while the other will not.

“If the employer does not treat them the same – let’s say the one who is not in a protected class gets a second interview or a job offer – that company is going to get audited, and there’s going to be lots of problems,” said Singer.

Testers will not reveal themselves as such at any point in the process.

Klimpl said that is good practice to diffuse hiring responsibilities among many people so a single person cannot be accused of bias.

“We always think it’s helpful to have more than one decision maker with respect to applicants,” he said. “A committee or a group of people who can discuss someone’s qualifications, that’s a better process. It’s a better process even without this new initiative.”

An attendee asked if committee members should all interview a candidate at the same time, or if it was okay to do separate interviews. Klimpl said that separate interviews are fine, but recommended having a discussion or multi-person process in place for making decisions.

“It is much easier to prove circumstantial evidence of discrimination if only one person is making the decision,” Singer added. “If it’s three people, you really have to show that all three people are discriminating, and that’s a lot more difficult to prove, and for a jury to believe.”

Another attendee chimed in that it is helpful to create a standard interview template so every candidate is asked the same questions. She also recommended documenting committee feedback as to why each candidate either did or did not make the cut. Singer praised these ideas.

Singer also advised training employees on interview techniques so they only ask legal questions, and can handle tough situations effectively, such as when candidates volunteer information about which they are forbidden to inquire. Tannenbaum Halpern Syracuse & Hirschtritt offers training sessions.

Klimpl pointed out that iffy situations come up frequently as a result of natural human interaction. For example, asking a candidate what he/she likes to do in his/her spare time may yield information that the interviewer should not have, e.g. “I volunteer at my synagogue.” He suggested a better way of phrasing the question: “What do you do outside work that you think may affect your qualifications or skills to perform in this position?”

Singer said that training is also important to teach employees how to interview in a legal but also natural way in order to suss out “fit.”

“If you have properly trained people doing the interviews, you have a much greater chance of hiring the right person for the job, and that’s more important than not getting sued,” he said, mentioning that this is especially important for higher-level managers and executives.

Singer noted that many HR departments have difficulty getting upper management to take their requests seriously and do training, because HR is not viewed as a business generator. He said he is generally happy to talk to executives on on the phone or give educational presentations, which can help bring attention to the importance of the issues.

Wages and Hours

Klimpl noted an increase in the number of wage and hour legal actions during the last 10 years. He mentioned that such cases have overtaken discrimination claims in his practice.
“It’s the most commonly-filed federal lawsuit,” he said, referring to overtime lawsuits.

Klimpl said that such lawsuits are notoriously difficult to defend because they are typically brought by way of class or collective action.

However, he suggested a strategy to minimize the risk of dealing with such actions based on the Federal Arbitration Act. While the Fair Labor Standards Act (FSLA) allows collective actions, The Federal Arbitration Act recognizes the purpose of arbitration and deems resolutions reached this way enforceable.

Klimpl discussed a recent Supreme Court case in which the Court held up a provision from an arbitration agreement in which the plaintiff waived the right to participate in class and collective actions, despite the FSLA. The Court ruled that waiving the right to participate in a class or collective action in an arbitration agreement is legal and enforceable. This is the only circumstance under which the right to participate in a class or collective action can be waived.

“I cannot begin to tell you how disarming that is,” said Klimpl, noting the lack of incentive for lawyers to spend years pursuing overtime for one individual. “I’ve seen nothing but great case law coming out on this recently.”

Klimpl acknowledged that arbitration is not without its caveats, but recommended it to mitigate the risk of collective actions. With this practice, employees sign arbitration agreements consisting of specific, enforceable language.

Singer recommends arbitration agreements for companies with a lot of employees, high turnover, and/or many seasonal or hourly workers.

Overtime Exemptions
It can be difficult for even seasoned HR professionals to get everything right 100 percent of the time when it comes to interpreting overtime exemptions. For example, Singer noted that unless an employee is a lawyer or a doctor, the overtime exemption for professionals is probably not applicable.

Despite this, it is crucial to scrutinize this area and demand the CEO’s attention to make sure the company is in compliance to avoid lawsuits.

“That’s something that’s going to cost a lot of money, and if that happens on your watch, that’s something you’re going to get blamed for,” Singer cautioned.

He said they often advise clients to settle such suits because it usually ends up costing significantly less than fighting them.

An attendee said that her company was switching to a computerized system for employees to clock in and out to solve the problem of employees inaccurately filling out manual time sheets. The plan is for all employees – exempt, non-exempt, executives – to use this system (in order to be fair). She wanted to know if there were any possible legal problems with this plan.

Singer said the plan itself did not present any red flags.

“It’s what you do with the information,” he said. “Are you docking someone’s pay?”

“There are plenty of business-related reasons to track your exempt and non-exempt employees’ hours,” Klimpl concurred. “You want to study the metrics, see how resources are allocated, those are all fine.”

The only caution Klimpl issued was accounting for “boot time,” i.e. time during which computers are booting up. Employees must be paid for this time.

“You can’t put up barriers to someone clocking in. They can’t have to wait 15, 20 minutes for technology to get up and running and say ‘okay, now I’m here,’” he added.

Lateness

Another attendee asked about how to deal with chronic employee lateness, saying that her organization docks 15 minutes’ worth of pay after eight minutes of the late employee’s scheduled start time. She wanted to ensure this practice was legal, and also wanted to know how to punish chronic offenders.

Singer said if there is a policy in place that employees violate, the organization is free to discipline offenders, and fire at-will employees for infractions. However, it is at the discretion of the organization where to draw the line. He suggested sitting down and having a discussion to formulate a policy that makes sense for the organization, and a clear outline of the consequences for violating the policy.

Klimpl advised the attendee to exercise caution with docking 15 minutes of pay for being eight minutes late, saying that it is important to be even-handed in the application of such a rule.
“If they ever work an extra eight minutes, do you pay them for 15 minutes more?,” he asked. “You have to be consistent.”

An attendee asked if the organization had any type of system where certain latenesses can be excused, such as information from the MTA if the tardiness results from the train. The original attendee said that no formal system was currently in place, though they sometimes make allowances. Singer again emphasized that each organization is unique and needs to formulate policies that will work with its specific needs.

A different attendee said that within her organization, there is inconsistency when it comes to determining how late is late among different supervisors; one supervisor may write up an employee for being three minutes late, while another may only do so if an employee is 10 minutes late. She said there are 1,000 people in the organization.

Singer advised coming up with a policy, and gathering all managers in the same room to talk about and communicate the policy. He reminded attendees that employee handbooks are “living, breathing documents” that are there to be enforced, and can be altered to fit changing circumstances or goals.

The attendee clarified that the company did have uniform policies, but different managers, at different levels, in different departments, at different sites, were not enforcing the rules evenly. She asked what could be done to change this.

Singer responded that the issue is one of workplace culture, and recommended gathering managers for an open discussion of the organization’s goals and values, and what it wants from its employees. In his experience, coming up with a core set of values tends to bring the interpretation of policies more in sync, because everyone is more conscious of and acting in accordance with the same set of values. He noted that this process also involves prioritizing what is most important in terms of values.

“The organizations you never hear about in the newspaper with lawsuits or anything like that are the ones that have great corporate culture, great core values that everyone shares,” he said. “That’s the key to running a great organization.”

Klimpl added that the keys to having such a culture are communication and training. He said that many types of lawsuits he has dealt with have resulted from inadequately trained supervisors who acted in ways contrary to what the company wanted.

Someone else asked if it is problematic to have different policies at different locations.

Singer said it both important and challenging to have policies that comply with each state’s respective regulations, which can vary. Also important is the type of location and work done there. For instance, it makes sense to have different policies for a location comprised mostly of office workers and one that primarily does manufacturing.

Paid Time Off

The discussion about lateness segued into a discussion about paid time off, including vacation and sick days. Singer observed that he sees more and more companies instituting policies of unlimited vacation and sick days.

An attendee said that her company has such a policy, and that it has presented problems.

“It’s great for the majority, but there are a few employees who continue to abuse it,” she said. Because of this, she said the company had begun asking for a doctor’s note after two days of sick time. She said that has helped somewhat, but that there are still issues.

Another attendee raised the question of how companies can ensure compliance with the New York City sick leave regulations with this type of policy.

A different attendee mentioned that all employees at her company are subject to a 90-day probationary period when they start at the company. She wanted to confirm that the company is not obligated to pay out sick leave time under New York City law if an employee leaves during that period.

Klimpl confirmed that the law does not require any sick leave to be paid out, unless the employee is rehired within six months for some reason. However, the city advises companies to state this policy explicitly in information distributed to employees. He speculated that it is possible for a case to arise if this was not explicitly stated in a company’s handbook or policies, though such a thing has not happened at this point.

Things can get a bit murkier for companies with general paid time off (PTO) policies that don’t differentiate between vacation time, sick time, etc. New York state mandates that employees be paid out for remaining vacation times unless explicitly written otherwise. Because of this, Klimpl advised companies with general PTO policies to include a written policy that unused PTO days are not paid out upon termination of employment.

In Illinois and California, unused vacation days must be paid out. Because of this, Klimpl advises companies to differentiate between vacation days and sick days in these states.

Roger Oliver, host of the Roundtable Series and director of strategic accounts at TemPositions, raised the point that many people do work activities off the clock, such as answering emails on their smartphones on weekends and evenings, and asked how this fit in with policies on lateness and paid time off.

Singer said that there have been lawsuits related to after hours work, and therefore it is very important for companies to have relevant policies in place and communicate them clearly to employees.

Probationary Periods

Singer then addressed the concept of probationary periods as a whole. Because most states are at-will states, companies may fire employees at any time for nearly any reason.

“There are cases where if you have a probationary period, that gives that new employee a right to meet your standards of employment during that period of time,” he said. “If you decide after three weeks that he’s not going to cut it, there’s at least an argument that ‘wait a minute, I have 90 days to get this right.’”

“What you’re doing is you’re eating away at the greatest right under the law that employers have, which is the at-will doctrine,” he added.

Based on this logic, Singer strongly advised against probationary periods, saying that companies only hurt themselves by having them.

“You can have a period of time before someone can get benefits, you can have certain days before you can start taking vacation, that’s all fine,” he continued. “But to just have ‘you’re a probationary employee until you complete 90 days of employment,’ there’s absolutely zero benefit to the employer, and it can only hurt you.”

Klimpl raised the point that the potential for problems does not vanish after the probationary period ends.

“What happens when an employee crosses the 90-day period?,” he asked. “What do they think? ‘You can’t fire me! I survived my 90 days! You have to fire me for cause now!’ What’s the point of that?”

Singer emphasized the importance of including “at-will language” everywhere possible in written communication.

“You’d be surprised at how often courts really examine the language in handbooks,” he said. “If you miss one word, they’ll drive a truck through there.”

ADA and FMLA

An attendee asked Singer and Klimpl to touch on the Americans with Disabilities Act (ADA) and Family and Medical Leave Act (FMLA).

Singer reminded attendees than in addition to these federal laws, they must also be aware of any state or city laws that apply to these topic areas.

In New York, companies are generally required to provide reasonable accommodations to employees with medical conditions to enable them to perform the essential functions of their jobs.

Singer highlighted that FMLA can be utilized in the form of intermittent leave. For example, if an employee needs to leave twice a week for three hours at a time to get treatment, it may be covered under FMLA.

“If you forget to put that employee on FMLA leave, you could end up giving that person a lot more time with job protection that you may otherwise want,” Singer said.

He also reminded attendees that under ADA, it is not required for an employee to tell the company unprompted that he/she has a medical condition that requires an accommodation. If an employee’s behavior has changed or something seems off, the employer may have to approach the employee and ask what is happening. Singer advised focusing the conversation on the behavior’s effect on the employee’s performance of his/her job functions.

Klimpl also brought up the issue of what to do if an employee who has exhausted his/her FMLA leave requests a reasonable accommodation, such additional unpaid leave or permission to work from home. At that point, Singer said the company must do an analysis of what the employee does for the company, what he/she is asking, and how it would impact the company.

“You are permitted to not provide a reasonable accommodation if it would be an undue hardship,” Singer said.

However, he and Klimpl warned that undue hardship is very difficult to prove, and advised against it.

Instead, Klimpl advised that the company consider whether the requested accommodation really enables the employee to do the essential functions of his/her job. For example, if an an employee requests to work from home, would this accommodation truly allow him/her to perform all essential job functions?

Klimpl pointed out that the ADA and other disability laws don’t require companies to shift employees from their current jobs, or to create a new jobs to accommodate disabled employees. However, if there is an open position within the organization, the employee must be considered.

An attendee asked if the essential functions of an employee’s may be modified to facilitate his/her return to work. Singer responded that doing so is allowed, but is not required of the company.

Health issues, performance problems, and firing

Sometimes, an employee is having performance issues at the same time a health issues arises. This can put companies in precarious situations, as terminating the employee for performance-related reasons may be construed as related to health issues.

Singer offered what he described as unpopular but good advice for dealing with subpar employees who also happen to have unrelated health problems.

“Fire them. Fire them immediately,” he said.

His rationale was that underperforming employees seldom improve dramatically, and that the longer a company keeps such an employee, the greater the likelihood that any future firing for underperformance will be conflated with firing for health problems.

“It sounds harsh, but it will save a lawsuit,” he said.

\
An attendee raised a relevant issue she is dealing with at her organization. An employee who is not performing well and has taken a lot of unspecified time off at her company murmured to a manager that he has a chronic health issue. Thus far, the manager has used progressive discipline. The attendee said she is planning to put the employee on a performance improvement plan (PIP), but the manager mentioned the health issue just yesterday, and now she is unsure of the best way to proceed in light of that.

“Once the manager is told about a health issue, the company is charged with that knowledge,” said Singer. “You certainly are at risk if you fire that person when you go back to the office now.”

Singer recommended reiterating the job performance issues to the employee, saying she heard he has a chronic health issue, and ask what is going on as it relates to his job performance.

The attendee said that they have an outside administrator that deals with leave, but the illness has been affecting the employee’s performance, and even his ability to call in when he can’t make it to work.

Though a health issue does not negate poor performance, if the poor performance is due to the health issue, the dynamics are much different.

Klimpl stressed that if poor performance is unrelated to the health issue, it is better to fire the employee as soon as possible. However, if there is a possibility that the poor performance is because of the health issue, it is better to try to deal with the health issue first.

Another attendee asked about a trainee who, according to the trainee’s supervisor, is spending large amounts of time in the bathroom because she is pregnant. The supervisor is concerned because the training is very hands-on and requires being in the space. Because the trainee has not officially started the job, the supervisor is unsure how she will perform, but is not optimistic because the job requires being in the space, and because she has missed out on a considerable amount of training due to the bathroom issue. The attendee wanted to know whether the trainee should be let go since she missed out on the training.

“I’m very hesitant to terminate anyone who is pregnant, because there’s someone who’s going to take the case,” Singer said. “That’s just a practical place that I’m at in advising clients.”

He advised delaying placement, and having the trainee complete her training in an extended timeframe.

Another attendee asked about an employee at her organization who frequently complains of illness, and insists on being allowed to work at his own pace on time-sensitive issues. The organization thought he may be eligible for disability because of this and broached the issue with him, but he adamantly denied having any disability-related issues. The attendee said that the employee otherwise does good work, but the pace is an issue.

Singer said that if the organization does not wish to fire the employee, it should be meticulous in documenting discipline and performance issues to avoid problems down the road. He noted that once HR has done all it can to educate the CEO about a potential issue, the onus is on the CEO to assess risk.

A different attendee asked if she should be documenting instances when she inquires of employees about possibly needing help in the form of disability-related accommodations. She often talks to employees face-to-face, but asked if she should use email instead for the sake of documentation.

Singer said that if there are no major performance issues and the employee denies having any health issues, documentation may not be necessary. However, if there are performance problems, and/or a health problem at play, documentation becomes necessary.

Another attendee asked about how much information is necessary and proper to request of employees (and their doctors) who are eligible for disability accommodations, as the company handles the process in house.

Klimpl said that contrary to popular belief, the more information the company can get, the better. He encouraged asking detailed questions of an employee’s doctors and other relevant sources.

“You need to understand the exact contours of what a person can or can’t physically and mentally achieve,” he said.

He added that though plentiful and detailed information is best, normal confidentiality practices are important.

In addition, it is the employee’s responsibility to ensure cooperation from doctors, not the company’s.

Andrea Burzynski is a freelance writer based in New York. Reach her at andrea.burzynski@yahoo.com.

The HR Roundtable is a breakfast forum for human resources professionals in New York City sponsored by The TemPositions Group of Companies. TemPositions, one of the largest staffing companies in the New York tri-state area with operations in California, has been helping businesses with their short- and long-term staffing needs since 1962.

According to the Centers for Disease Control, 1 in 7 children in the United States are diagnosed with a developmental disability, a category encompassing conditions such as Autism Spectrum Disorder and Down Syndrome. Once primarily an issue for parents and doctors, this is becoming a more prevalent issue for employers as the challenges facing employees with special-needs children seep into the workplace.

As developmental disabilities increase in prevalence, more parents must navigate the challenges of finding accurate and useful information, devising effective ways to manage their children’s conditions, and accessing appropriate treatment. As they do this, they face sparse and conflicting reports, a severe lack of resources and specialists, and high stress levels.

The difficult and time-consuming aspects of caring for special-needs children can make it hard for good employees to work at full capacity, and for companies to get the most benefit from their skills. Many employers find themselves at a loss for practical means of addressing these obstacles.

Though there is no one-size-fits-all formula, there are creative and cost-effective ways that employers can address these challenges. Mike Civello, Vice President of Employee Benefits at Rethink, visited TemPositions’ Roundtable series on Thursday, April 30, 2015, to share information and statistics about autism and developmental disabilities, the challenges they present for companies and their employees, and what can be done to address these challenges.

Areas of change

Civello outlined three major areas of benefits that are undergoing major changes.

1. Developmental disabilities: This category includes Autism Spectrum Disorder, as well as issues such as Down Syndrome and ADHD. Civello noted that autism is now classified as a medical issue, whereas it was previously classified as a mental and behavioral issue. Applied Behavioral Analysis (ABA) is the preferred treatment approach.“There’s some liability there in terms of getting it covered for employees,” said Civello.
2. Transgender reassignment surgery: Previously classified as a mental disorder, transgender is now categorized as a medical condition. Civello noted that some major self-insured companies such as Amazon are adding coverage for reassignment surgery.“You can now get your reassignment surgery covered by your medical plan, and a lot of companies are going in that direction,” said Civello.While self-insured plans are exempt from covering reassignment surgery, Civello said that once something is classified as a medical condition, there is “quite a bit of pressure” to add coverage.
3. Infertility: This is also now classified as a medical issue.

“There’s a huge focus on employee well-being these days in general, and I think every company is taking their own approach on it, and I think there is a real lack of standardization,” said Civello.

The main focus of the Roundtable was developmental disabilities, particularly Autism Spectrum Disorder. April is National Autism Awareness Month, and April 2 is World Autism Awareness Day.

“Awareness has come a long way,” enthused Civello.

He asked attendees if they were familiar or personally affected by developmental disabilities, and some attendees indicated that they were.

Buzzwords to know

ASD: Autism Spectrum Disorder. This includes Asperger’s syndrome, which is a form of autism. People with various forms of autism are sometimes described as being “on the spectrum.”

ABA: Applied Behavioral Analysis. This is the most highly recommended treatment approach for ASD. It is endorsed by the Surgeon General and National Institutes of Health.

BCBA: Board-Certified Behavioral Analyst. This is considered the gold standard for providers servicing those affected by autism. They must complete over 1500 hours of supervision to earn this certification. There is a massive shortage of BCBAs.

Scope and prevalence

According to the CDC, 1 in 7 children are diagnosed with a developmental disability.

“If you don’t think it affects your workforce, it does,” said Civello. “That’s 14 percent of the population.”

He said that many of the treatment principles, services, and things employers can do for parents of families with autistic children are also applicable to other developmental disabilities.

The CDC reports that 1 in 68 children are diagnosed with ASD nationally. New Jersey has the highest prevalence at 1 in 47. Civello notes that this may be somewhat skewed because New Jersey has some of the best ASD services, and people may move there to access these services. Technically, the state with the highest diagnosis rate is Utah, with 1 in 54.

ASD is a global issue. The UK reports a 1 in 50 diagnosis rate, and China 1 in 44.

The ASD diagnosis rate has increased twentyfold in the last 20 years. There is no known cause for the increase, or for the condition itself. Civello thinks the increase in diagnosis rates is likely a combination of increased prevalence, better diagnosis and understanding of developmental disabilities, and more awareness.

Most statistics Civello shared at the Roundtable were drawn from the CDC, from reports from the National Business Group on Health, and from reports from Rethink.

Access to treatment

A shortage of Board-Certified Behavioral Analysts (BCBAs) has resulted in difficulty accessing treatment for many families affected by ASD. There are about 6,000 BCBAs worldwide. In the U.S., there are approximately 2,800 BCBAs to serve a million people affected by ASD. Places with bigger populations like California, Texas, and the New York metro area have more providers. Some states have fewer than 10 providers. Even in areas with more providers, a 6-12 month wait for an appointment is not uncommon.

“There are a lot of stories we’ve heard of employees at companies trying to get a provider and traveling 200 miles to be seen,” recounted Civello. He added that others move to be closer to treatment providers.

Civello mentioned that the problem is even worse outside the U.S.: the whole of Saudi Arabia has only one provider.

Effects on employers

Cost
Self-insured plans are exempt from providing ABA treatment services, but the biggest issue for many employers attempting to address ASD is the cost. Civello said that ABA treatment averages $60,000-$75,000/year per child. Given that the diagnosis rate has increased twentyfold in the last 20 years, more and more employers find themselves struggling to cope with the associated costs.

The average cost added to a health plan that includes a developmental disabled child is $6,200. The cost of clinic visits and hospitalization is approximately double that of a traditional plan. Behavioral issues that stem from ASD, such as self-injuring behavior, drive up the cost. Also, routine care like dental appointments often requires additional measures such as sedation to get developmentally disabled children treated without incident. The average prescription drug cost is seven times higher than for plans that do not include a developmentally disabled child.

Loss of productivity and employees
Lost productivity is another issue and cost employers face. Civello said that on average, 250 hours per employee per year are lost in productivity as a result of what it is involved in caring for a child with a developmental disability. 24 hours of hands-on care per week is the average number of hours that a child with developmental disabilities is prescribed to have.

“Picture a parent trying to make 24 hours a week work with school and other activities. It becomes almost physically impossible,” said Civello. “In a two-parent household, often one parent is leaving the workforce, or cutting down on hours by maybe 50 percent, or going down to part-time.”

Civello discussed a recent Washington State University study about the impact of caring for a child with a developmental disability on full-time working mothers. 53 percent had cut their hours, and 58 percent had passed on a job altogether, and nearly a quarter passed on a promotion.

Employee experiences and challenges
“A lot of people don’t personally know what it’s like to have a child with a developmental disability in the home,” said Civello.

A lack of firsthand knowledge means that employers are often unaware of the issues that result, or what sort of changes will have meaningful impact.

Because the challenges of caring for children with developmental disabilities are usually unfamiliar to those who have not personally experienced them, many parents don’t feel comfortable asking for help from their employers.

“There’s unfortunately still a lot of stigma attached,” said Civello. “They’re concerned that identifying themselves – specifically with regard to the statistics about cutting hours – they are then going to be seen as not promotable. Or, they’re going to be seen as having constant conflict, and being unreliable.”

A window into life with ASD

Civello showed several clips from the NBC sitcom “Parenthood” to illustrate the “basic human side” and process parents go through in getting a diagnosis, and dealing with the aftermath. He mentioned that the show has garnered praise from autism awareness organizations for its authenticity and sympathetic, realistic portrayal of ASD.

The first clip showed a child initiating a physical altercation with another student that had teased him during class. The teacher has difficulty calming and restraining the child who lashed out after he bit the other boy who had teased him.

The second clip showed a discussion between a doctor and parents, in which the doctor diagnosed their son with Asperger’s. The doctor explains to the shocked and perturbed parents that it is a lifelong condition, and that parental involvement is the most crucial factor in helping their son achieve as much as possible.

The third clip showed a support group meeting for parents of children with Asperger’s. Mothers broke down when relating the difficulties of caring for their children with Asperger’s.

“This is what your employees in a greater or lesser sense are going through daily,” Civello told attendees.

Both before and after a diagnosis, many parents turn to the internet to find information. They are met with a deluge of overwhelming, conflicting, and sometimes outright inaccurate information. Civello mentioned the discredited study that associated autism with vaccines as an example of the types of things parents must navigate when looking for information to help their children, and the widespread effects wrought by incorrect information. When trying to find helpful information, parents are often scared and uncertain, as they don’t know what cased their children’s issues, or what will help.

Civello said that fewer than half of ASD cases are diagnosed before a child is four years old, but warning signs can present as early as nine months. The path from noticing that something is “off” to getting a diagnosis is often a rocky one.

“There can be years that are going by where parents are like, ‘there is something wrong,’ and yet no diagnosis comes,” said Civello. “I think parents are doing a lot on their own. They haven’t been directed to healthcare yet.”

Parents can be further discouraged when they find out that the best outcomes result when ABA treatment has been started early – even before an official diagnosis.

Most diagnoses are made after a pediatrician refers parents to a developmental pediatrician. After receiving the diagnosis, they are often sent away without a treatment plan or any training.
“A lot of ABA treatment plans are supposed to include parent training and coaching – how to effectively work with your child,” explained Civello. “Unfortunately because of the lack of providers and and the shortage of resources, there’s typically little to no time for that.”

What employers can do

“It’s critical to really understand what’s going on for these people, and not just think linear, i.e. medical coverage or not, or is medical coverage enough?” said Civello.

He encouraged a holistic approach, saying that the ultimate goal is to keep employees in the workforce. He noted that many conversations with employers center around waiting for medical coverage to step in, or waiting for carriers to take care of it, but encouraged attendees to expand beyond that, and create environments in which employees feel comfortable bringing up issues with their employers to find workable solutions.

Civello also reminded attendees that conditions like ASD are lifelong, and parents often support their developmentally disabled children into adulthood. Despite this, these children are often no longer eligible for coverage under their parents’ health insurance, and do not show up as dependents on paper.

Challenges and solutions

Civello encouraged HR departments to be innovative in creating solutions – “inventing a way when there seemingly is no way.”

“A lot of employers are pretty stuck,” he explained. “They don’t know how to size the population, there’s no claims data to support because there hasn’t been an existing benefit, there’s no ICD-9 codes to pull for the most part, and then when they do start to address it, the cost seems insurmountable.”

Civello defined “benefits” in a broader context, using the dictionary definition as “something that is advantageous or good.” He urged attendees to keep this definition in mind with regard to employee benefits, and to remember the human side of their work.

He stressed that the most important thing was to take care of basic employee needs.

“If you’re not even serving their most basic needs, you cannot expect them to be engaged in your workforce, or even come to work,” he said.

He advised attendees to leverage Autism Awareness Month in April to introduce and bring attention to the issue in their workplaces. Mother’s Day in May and Father’s Day in June could also be used for this purpose.

Civello cautioned that when trying to assess what needs to be done, claims usually don’t reveal the full picture. He recommended that attendees instead look at the full population, then look at the number of dependents and at tax forms. From there, he advised them to calculate 14 percent of that number to get a basic idea of how many employees are affected by developmental disabilities. He based this on the CDC statistic of 14 percent of children being diagnosed with a developmental disability.

Innovative options

Civello urged any employers who are able to add applied behavioral analysis (ABA) to their coverage, but acknowledged that this may not be possible for many companies due to the expense. For employers who cannot sponsor this benefit, he advised coming up with a task force on the issue to make employees feel heard.

One possibility he highlighted was providing resources to help parents plan in light of the obstacles they face. This could take the form of financial planning services, support for developmentally disabled dependents transitioning into adulthood, and assistance getting into the job market and living independently.

Civello also encouraged attendees to embrace technology, particularly telemedicine and tele-consulting. He mentioned that most BCBAs are women, and eventually leave the workforce due to both high burnout rates, and because they have their own children at home. However, many practice telemedicine as a means of continuing to work in the field while balancing their own needs. This is also helpful for families who are not located near providers, as it saves them travel time.

“They’re doing video calls with parents, coaching and training them in the home to work with their child, they can see them in the home,” he said. “Get comfortable with technology, because your employees are.”

Civello predicted that technology and telemedicine would come into play with more and more conditions. Microsoft is working on motion-detecting software that allows therapists to remotely attend to patients with physical disabilities and injuries.

A business case for benefits

In addition to new technologies, there are also traditional resources that can help. For companies eager to boil everything down to ROI, Civello posed the question: “what’s the cost of doing nothing?” He encouraged attendees to used the available statistics and research to show the numbers of employees who leave the workforce, pass up promotions, and cut hours.

“All of those things are your business case,” he said.

He also advised utilizing sales and marketing teams to help craft a compelling business case for addressing these issues. Focusing on the cost of doing nothing, featuring anecdotes, and even using video excerpts are some strategic approaches to get executives to pay attention to the need to address developmental disabilities. Given the national and multinational nature of many companies, executives may be out of touch with the everyday challenges facing employees dealing with developmental disabilities. For example, executives in California, where there are more BCBAs, may not be aware of the hardships in accessing similar care for their employees in Iowa.

“The purpose of all of this is to create new advantages,” Civello concluded. “I really believe that in employee benefits and HR, this is what are jobs are every day: to create new advantages for our companies for creating new advantages for our employees.”

Discussion
In discussion at the end of Civello’s presentation, an attendee mentioned that in her experience, HR often doesn’t find out that employees are having difficulties balancing care for special-needs children until after these employees quit. She asked how employers could be more proactive in identifying and addressing these issues.

Civello advised against asking employees to identify themselves due to sensitivity and stigma. He suggested advertising and offering support that employees can use passively. This can take the form of posters, handouts, web portals, and more.

“If they see a service advertised at work, they can take it home and use it at home,” he said.

Resources

Civello shared a list of resources that may be helpful for attendees.

• Autism Speaks (https://www.autismspeaks.org/) This organization funds medical research, increases awareness, and advocates for the needs of people with ASD and their families.
• My Autism Team (http://www.myautismteam.com/) This organization offers peer-to-peer support for families dealing with ASD. It helps parents connect with one another, which is a critical form of support.
• National Business Group on Health (https://www.businessgrouphealth.org/) This group had done many in-depth reports on the costs and impacts on employers and employees in relation to developmental disabilities and related topics.
• Rethink Autism (https://www.rethinkfirst.com/) This is Civello’s company, and works to connect parents, educators, and medical professionals working with special-needs children to evidence-based treatment solutions. Clients include Amazon and Starbucks. He encouraged attendees to reach out to him personally, and to reach him on Twitter at @MikeCivello.
• Washington State University (http://depts.washington.edu/uwautism/index.php) This university (specifically its Vancouver, WA campus) has produced trailblazing research on the impacts of caring for children with autism on working mothers.
• Centers for Disease Control and Prevention (http://www.cdc.gov/) This government agency provides the most up-to-date statistics and information on diagnosis rates for children with developmental disabilities.
• American Psychiatric Association (http://www.psychiatry.org/)
• American Academy of Pediatrics (https://www.aap.org/en-us/Pages/Default.aspx)These two organizations give different perspectives about what is going on in the industries around developmental disabilities.
• National Public Radio (http://www.npr.org/tags/136582388/autism) NPR has an abundance of postings and news about adults with autism and developmental disabilities.
• Steven Silberman (http://stevesilberman.com/) Silberman is an author and expert on neurodiversity. He wrote the forthcoming book “NeuroTribes: The Legacy of Autism and the Future of Neurodiversity,” and is at the forefront of the neurodiversity movement, which focuses on creating better work environments for adults with autism and other disabilities.
• Dame Stephanie “Steve” Shirley (http://www.steveshirley.com/home) After escaping Austria during World War II, Shirley built a billion-dollar business despite having a severely autistic child. She is leader in autism advocacy, and author of “Let It Go: The Story of the Entrepreneur Turned Ardent Philanthropist,” a memoir of her life experiences.
• Resource for Children with Special Needs (http://www.resourcesnyc.org/) This New-York-based organization mentioned by a Roundtable attendee has many resources and links to help parents of special-needs children navigate the transition out of high school and into adulthood for their children, which can be especially stressful and difficult for parents.Andrea Burzynski is a freelance writer based in New York. Reach her at andrea.burzynski@yahoo.com.The HR Roundtable is a breakfast forum for human resources professionals in New York City sponsored by The TemPositions Group of Companies. TemPositions, one of the largest staffing companies in the New York tri-state area with operations in California, has been helping businesses with their short- and long-term staffing needs since 1962. Visit them online at www.tempositions.com or email them at info@tempositions.com.

Every year, the landscape of employment law continues to evolve, along with the obligations of employers. Staying up to date on new statutes and new interpretations of existing laws isn’t always easy. But the C-suite depends on HR to take the lead and keep the company compliant, no matter how far-reaching or unexpected new employment law requirements may be.

Richard H. Block, Esq., David Katz, Esq. and George Patterson, Esq., of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. visited TemPositions’ HR Roundtable Series on Thursday, December 4, 2014 to help attendees evaluate potential compliance challenges in 2015. Together, they urged attendees to pay attention to specific areas of growing regulation—and risk.

2014 saw many clear employment law trends begin to form, Block noted in opening the session. But as always, the specific details of individual cases can make all the difference in court. If a company is ever in doubt on how these laws might apply to their situation, it’s always wise to consult a seasoned attorney.

National Labor Relations Board Developments

The National Labor Relations Board (NLRB) is the federal body that works to ensure compliance with the National Labor Relations Act (NLRA). The NLRB seeks to protect employees’ rights to communicate with one another collectively about workplace conditions and terms. This practice is commonly referred to as “protected concerted activity.”

In the past, the NLRB focused primarily on workers’ attempts to unionize and engage in collective bargaining. But the NLRA does not exclude non-unionized labor or limit its protections to unionized workforces. As Block explained it, all employees “engaging in collective activities for their self-interest” (i.e., discussing wages, working conditions, hours, conduct of supervisors, etc.) have always been protected under the act.

Over the past several years, the NLRB’s authority has broadened. It has stepped up enforcement significantly, impacting far more companies and extending its reach into uncharted territories.

Social Media
The NLRA was passed in 1935, long before Facebook, Twitter, and the countless other online communication platforms we now call “social media” existed. These platforms enable people—including employees—to communicate instantaneously, often in large groups.

As the popularity of social media grew, so did many employers’ restrictions on its use, Block noted. Companies did not want their employees to go online and make negative comments about them. So some employers created broad, sweeping policies that prohibited any potentially negative mention of the company on these sites.

The NLRB responded by more aggressively guarding protected concerted activities that take place on social media. In 2011 and 2012, the board issued statements warning employers that “policies should not be so sweeping that they prohibit the kinds of activity protected by federal labor law, such as the discussion of wages or working conditions among employees.”

In general, the NLRB has always ruled consistently against employers whose policies are overbroad, Block explained. The board is highly concerned with any policy that may have a “chilling effect” on employees and their confidence in being able to participate in protected concerted activities without fear of discipline or retribution.

For example, in 2014, the NRLB ruled against the Triple Play Sports Bar and Grille for overreaching in its social media restrictions. Triple Play’s policy prohibited employees from using social media to “engage in inappropriate discussions about the company, management or co-workers.” The bar used this policy to terminate workers who criticized Triple Play on Facebook for failing to withhold proper income tax on paychecks. While one of these workers used profanity to describe leadership in their comments, another merely “liked” the conversation.

In its decision, the NLRB argued that Triple Play’s workers could too easily interpret their social media policy as “proscribing any discussions about their terms and conditions of employment [that the employer] deemed inappropriate.” The original poster was found to be working for the betterment of more than one employee by posting, and the board specified that “liking” a conversation could be considered protected concerted activity.

Even the employee who had sworn when criticizing leadership was protected. The board reasoned that while the worker’s conduct was undesirable, it did not represent such gross misconduct that the worker should be stripped of NLRA protections.

Also in 2014, the NLRB ruled against both Hoot Winc, LLC (for a social media policy that prohibited “insubordination,” and “lack of respect” or “cooperation”) and against Professional Electrical Contractors of Connecticut (for a policy that prohibited using business or personal computers “in any manner that may adversely affect company business interests or reputation”). The board determined both these policies to be in violation of the NLRA, again, due to their broad chilling effect—indirectly discouraging employees from protected actions.

The NLRB does find some limits on social media use to be reasonable, Block stressed. Companies are expected to protect themselves from “sabotage.” So it’s permissible to prohibit employees from disclosing confidential company information or competitive trade secrets. And in one case (regarding a company called Landry’s Inc.), the board approved social media policy language that prohibited “postings…likely to create morale problems.” This language was permitted because the company did not discourage all postings about working conditions.

There is also room to discipline workers for gross misconduct on social media. The NLRB decided in favor of Richmond District Neighborhood Center, which withdrew two job offers after the new hires posted details of extreme insubordinate acts they intended to commit upon commencement of employment. The misconduct they threatened was so severe, and their threats appeared so credible, the board determined these workers had forfeited their NLRB protections.

The solution, Block counseled, is to carefully draft new social media policies, or revisit existing ones, to ensure their compliance. These policies should reflect the NLRB’s most recent decisions and priorities (avoiding any boilerplate versions available online, as they’re already likely to be outdated) while also protecting the company to the extent permissible by law.

The NLRB is sensitive to employer intent, so it may be helpful to introduce the company’s policy with a simple statement clarifying its purpose: to safeguard confidential company information/operations and to discourage online posts that are false, threatening or offensive. After listing any prohibited activities (whether performed using company equipment or personal technology), it may also be beneficial to conclude with a “savings” clause—a description of the protected concerted activities under the NLRA that the policy does not restrict.

To a certain degree, companies must develop thicker skins and disregard the online nature of social media, Block noted. Just as employees are protected when they meet in closed rooms to discuss low wages, poor/unsafe working conditions, and even complaints about management, they must be permitted to discuss these topics in the far more public venue of social media. Lawful restrictions must be few and specific, aimed only at minimizing legitimate business risks.

This balance can be hard to strike, and it’s important to “get it right” given the NLRB’s new vigilance. If in doubt, Block stressed, consult an experienced attorney with extensive knowledge of the NLRA and current, relevant case law.

Joint Employer Liability
The NLRB is also extending its authority into joint employer relationships, as evidenced by a 2014 ruling against fast food chain McDonald’s for (in part) unlawful actions taken by independent franchise locations. The case is notable, Block explained, because it marks a “clear departure from established law.”

Traditionally, a joint employer is defined as an entity that wields direct decision-making power over essential terms and conditions of employment: hiring/firing, working conditions and schedules, rates of pay and compensation methods, maintaining employment records, etc. In the past, privately-owned franchises were considered legally independent, on the basis that the company did not operate from their locations or manage day-to-day decision-making.

In the McDonald’s case—marking a significant new interpretation—the NLRB looked at what it called “the totality of the circumstances” and ruled there was a clear joint employer relationship between McDonald’s and its franchises. Employees across the brand’s network of restaurants—those owned by the corporation and independently-owned—claimed they suffered retaliation for attempting to unionize. The NLRB agreed and found McDonald’s liable.

McDonald’s objected to this decision, claiming its franchisees operate with such a degree of independence, it would only be appropriate to find them individually liable. But the NLRB found McDonald’s franchise regulations so detailed, specific and strict, that it ruled that franchise owners did not have the independent decision-making power over wages, working conditions and other factors that McDonald’s claimed.

“The implications of this case are potentially far-reaching,” Block stated. If courts adopt the NLRB’s new, broad, totality-of-circumstances standard, companies that work with vendors or independent contractors could be held responsible for the unlawful practices of these parties. Unions may become bolder as they seek inroads into new national companies or industries, as their path may now be far easier.

“As a takeaway, be careful how much control you exert over any other employer that you contract with,” Block counseled. “If you exercise a lot of control over them, you may end up with a finding that you are in a joint employer relationship.”

Bellwether Cases & New Legislation

Each year, there are important cases that indicate coming trends in the law, along with new statutes or first-time implementations. As both courts and legislatures consider the intent behind laws, they may prescribe updated practices.

Block introduced fellow presenter Patterson to share the details of two cases before the US Supreme Court. These cases are significant, Patterson explained, because they address an employer’s obligation to provide “reasonable accommodations” to two very large groups—pregnant women and workers who wear clothing that reflects their religious faith.

Cases Before the Supreme Court
In the first case, Young v. UPS, the plaintiff sued after being placed on an unpaid seven-month leave (including loss of wages, pension, health benefits, and disability payments) following the disclosure that she was pregnant. Young’s doctor instructed her to avoid any heavy lifting, and she asked her employer to accommodate her with “light duty.” UPS refused, and Young filed suit, claiming discrimination under the Pregnancy Discrimination Act (PDA).

As Patterson described it, UPS’s policy on accommodating lifting restrictions was “facially neutral,” revealing no clear intent to discriminate against pregnant women. Per this policy, UPS offered temporary light duty (such as desk work) to workers who injured themselves while working. UPS’s attorneys argued that Young was denied accommodation not because of her pregnancy, but because her lifting restriction did not derive from an on-the-job injury.

On March 25, 2015, the Supreme Court vacated a lower court’s ruling against Young, referencing the McDonnell-Douglas burden shifting framework typically applied in discrimination cases. The court put the onus back on UPS to establish that its legitimate business concerns for denying accommodation to Young were not a pretext for discrimination.

As Patterson had noted during his presentation, whatever decision the court made would be significant. Women make up 47% of the American workforce and many plan to work late into their pregnancies. By reviving Young’s case, the court may have just made it easier for pregnant workers to bring suits over an employer’s failure to provide workplace accommodations.

The second case, Equal Employment Opportunity Commission v. Abercrombie & Fitch Stores, concerns applicant Samantha Elauf. Elauf applied to work at Abercrombie & Fitch wearing a headscarf in observance of her Muslim faith. While her interviewer noted that her qualifications and demeanor were impressive, Elauf was not hired on the grounds that her scarf violated the store’s “Look” policy (dress code). The EEOC sued, alleging religious discrimination.

According to the EEOC, Abercrombie & Fitch should have accommodated Elauf’s religious beliefs by permitting an exception to their dress code policy. But the company insisted its “Look” policy was central to the company’s brand, to the point that sales associates are called “models.” Further, the brand’s attorneys argued that Elauf failed in her obligation to inform the company that she would need an accommodation in relation to the “Look” policy.|

In this case, the court’s ruling could set an interesting precedent, Patterson explained. Early signs are that the court will side with Elauf, and if it does, companies will need to be “more perceptive”—and better-educated—about employees’ needs for faith-driven dress/grooming accommodations. Potentially, such a decision could eventually affect how employers address a wide range of workplace accommodation needs.

Increasing Intern Protections Fellow presenter Katz stepped forward to discuss the lawful engagement of interns. In recent years, the courts have seen an influx of wage and hour class action suits filed on behalf of unpaid interns.

To avoid these wage and hour suits, employers should take great care whenever they engage interns that are unpaid, Katz explained. Many companies are tempted, especially in a poor job market, to welcome candidates who may agree to work without compensation to get a “foot in the door.” But unless very specific conditions are met, the courts are likely to reclassify many common internship arrangements as employment relationships, subject to all relevant regulation.

To be lawful, an internship must clearly benefit the intern—not the company—to the extent that the intern’s presence may even hinder the organization’s ability to go about its normal operations. Expecting the intern to contribute substantively to daily business, Katz warned, may lead to a finding that they should be classified as an employee.

The internship experience must provide education and training, similar to what the intern might receive at a school. The intern should not replace any worker, but instead perform distinct duties under the close supervision of company staff. Their classification quickly becomes muddied if they are asked to perform any “overflow” tasks typically performed by employees.

Finally, it’s important that both the intern and the employer maintain a clear understanding that there will be no wages paid for the internship period. It must be equally clear that once the internship concludes, the intern is not entitled to employment.

Wage and hour laws aren’t the only concern. In 2014, perhaps in response to internship-related cases rising in prominence, the New York City Council voted to extend the anti-discrimination protections of the New York City Human Rights Law to all interns, paid and unpaid.

Statute of Limitations Reductions
Statutes of limitations—the amount of time that plaintiffs have to file lawsuits after an alleged violation occurs—can vary state by state. Two recent and somewhat overlooked court decisions support an employer’s right to set their own statutes of limitations for suits against the company. While the cases may continue through the courts, these decisions stand until further notice.

Both cases involved furniture retailer Raymour & Flanigan, one location in New Jersey and the other in New York. Plaintiffs objected to a section on the company’s employment application that read, “I agree that any claim or lawsuit relating to my service with Raymour & Flanigan must be filed no longer than six (6) months after the date of employment action that is the subject of the claim or lawsuit. I waive any statute of limitations to the contrary.”

The company’s waiver sets a bold new limit. New Jersey’s statute of limitations for employment discrimination lawsuits is two years, Katz explained, and New York’s is three years. But both courts found the practice to be lawful and the term of six months to be reasonable.

To add a statute of limitations waiver to an application form, Katz counseled, be sure to use “clear and uncomplicated language.” The courts want employers to make best efforts to ensure applicants read that language—so place it prominently on the page and use eye-catching formatting of some kind (e.g., bold type, larger font size, etc.). Finally, allow the applicant sufficient time to review their form, ideally taking it home to complete. Companies should provide for a period of at least six months, as found acceptable by the court.

Consistency in employment documentation is also advised. The waiver, or very similar language, should appear in offer letters, employment agreements, employee handbooks, documents related to arbitration policies, and severance/separation agreements.

In December 2014, the New Jersey Supreme Court granted the plaintiff’s petition for certification, agreeing to review the June 2014 appellate court decision. So employers may want to consider tracking this case before revising their job applications to abridge limitations periods (at least in New Jersey).

New York Wage Theft Prevention Act
The New York Wage Theft Prevention Act requires employers to issue letters to new employees at the time of hire, as well as distribute annual notices to continuing employees, containing specific details of their compensation. Details include pay rate, schedule, regular payday, etc.

Since the law went into effect in 2011, issuing annual notices has created an “administrative headache” for HR departments, Katz noted. Many hoped that New York Governor Andrew Cuomo would sign a new law repealing parts of the act and relieving them of this burden.

That repeal has been enacted. Governor Cuomo signed a partial repeal bill on December 29, 2014, effective immediately. Employers are still required to share specific wage information at the time of hire, but the annual notice requirement has been eliminated.

New York City Earned Sick Time Act
Newly enacted in April 2014, the New York City Earned Sick Time Act is one of the most buzz-worthy new statutes among businesses that operate in the city. But in spite of the law’s seeming complexity, Katz noted, employers who already offer some form of paid time off should find it relatively easy to comply.

According to the act, employers with more than five workers (who work more than 80 hours per calendar year and were hired to work in New York City, specifically) are required to provide eligible employees with a maximum of 40 hours of paid sick leave per year. Employers with fewer than five workers are required to offer the same maximum in unpaid sick leave per year.

Employees are deemed eligible when they have worked in New York City for more than 80 hours in a given calendar year. The law protects nearly every category of employee (though notably, not correctly-classified independent contractors), from managers and supervisors to temporary employees to part-time and per diem workers. Even those who telecommute for companies based outside the city are covered for the hours they physically work in NYC.

Employees accrue one hour of sick leave for every 30 hours they work, and can earn up to the maximum of 40. Workers begin to accrue sick leave, paid or unpaid, upon commencement of employment, and they can begin using accrued leave after 120 days. Once they reach this 120-day mark, they can use additional sick time as it accrues.

Sick leave can be used for a variety of health-related reasons, not all of them limited to the employee. The time can of course be used to attend to personal injuries and physical/mental illness, see doctors (including for preventative care), etc. But workers can also use it to care for broadly-defined “family members,” which include everyone from parents, grandparents, siblings (including half, step or adopted), spouses and children of domestic partners, and their children.

Sick leave can also be used for basic child care in case of school closures (or childcare provider closures) related to any form of public health emergency. The same applies if the employer’s business closes for a public health emergency.

Employees can use their sick time against any hours they are required/scheduled to work, including overtime hours, Katz noted. But employers can formalize a “reasonable minimum increment” no greater than four hours/day to keep productivity on track. (A worker who comes and goes for shorter periods may be more disruptive to scheduling than one who leaves less frequently, but for longer stretches.)

Requiring notice and especially documentation for use of sick leave is permitted only within certain guidelines. A worker with a “foreseeable” reason to take leave (e.g., a scheduled annual check-up) can be required to provide advance notice of up to seven days. For sick leave needs that are unforeseeable, the employer can only require notice “as soon as practicable.” Documentation cannot be required until an employee has missed three consecutive days.

If employees do not use all of their sick leave by the end of a year, they can carry it over, though the total sick leave hours per year that an employer is required to provide will never exceed 40. Hours that carry over remain immediately available for use (there is no new 120-day waiting period). Employers are permitted to pay their workers for unused sick leave hours if they wish. Notably, they are not required to pay for unused sick time upon termination.

All that said, Katz stressed, a surprising number of companies may find it easier than expected to comply with this act. Many employers already offer some form of paid time off (PTO), from accrued vacation time to personal days. As long as the PTO offered either meets or exceeds the minimums prescribed by this law, and as long as the employer allows its workers to use that PTO for sick leave, the company will be in compliance.

The NYC Department of Consumer Affairs requires employers to distribute and post standard notices regarding sick leave. Templates and guidelines for employee communications can be found on the department’s website.

The Year in Wacky Employment Cases

To conclude the session, Patterson stepped forward to review some of the most unusual recent employment cases. No matter how unique the circumstances that brought each case to court, he explained, the decisions set precedents for all employers.

Barker v. The Boeing Company
When three Caucasian Boeing employees donned makeshift KKK costumes and posed for a photo in the workplace, the company promptly terminated their employment. But the three workers sued, claiming that because they were white, their supposed joke had been judged too harshly. They pointed out that an African-American employee had also “participated” in the activity and had not been terminated.

As it turns out, the participating African-American employee was the party who took their picture—then complained to the company about their conduct. The court determined swiftly that bias against Caucasians was not a factor in the employees’ firing, and that their termination on the grounds they had created a hostile work environment for other employees was lawful.

Lester v. NY Parks & Recreation
The NY Parks & Recreation Department requires all male lifeguards to wear Speedo-style bathing suits as their official uniform. But one employee, a 61-year-old former triathlete named Roy Lester, refused. Lester’s employment was then terminated, and he sued—claiming age discrimination. Lester’s attorney argued that older lifeguards would not be comfortable in such a bathing suit, and that the policy was therefore intended to eliminate older employees.

The case ended up in the New York Appellate Court, but the original New York court’s decision was upheld: the courts found no age discrimination in the uniform requirement, and Lester’s termination was found lawful. Disappointed, the plaintiff memorably said, “There should be a law prohibiting anyone over the age of 50 from wearing a Speedo.”

EEOC v. Dynamic Medical Services
According to employees at Dynamic Medical Services, their employer routinely forced them—as a condition of employment—to engage in religious activities related to the Church of Scientology. These practices included taking part in Scientology “audits,” staring at walls, screaming at ashtrays, or looking at one another without moving for hours on end.

Two employees refused to participate in these activities, and the company terminated them. Their case was taken up by the EEOC, which argued the company created a hostile work environment and failed to accommodate the workers’ religious beliefs (essentially by forcing them to join a different religion).

The company chose to settle out of court (while protesting the claims were false, and that they merely settled to avoid the cost of a trial). Dynamic Medical Services paid $170,000 in damages and pledged to put an end to all such practices.

Hudgens v. Prosper, Inc.
While working at Prosper, Inc., employee Chad Hudgens worked under a supervisor who engaged in extreme motivational practices. This manager intimidated his team by striking desks and worktables with a large wooden paddle. When they failed to meet sales targets, he drew on their faces with permanent marker. Once, he even approximated waterboarding on Hudgens, telling the team afterwards that they should fight to sell just as Hudgens had fought to breathe.

Hudgens was later terminated. He promptly sued the company for wrongful termination, while also claiming a series of what Patterson called “common law” offenses: intentional infliction of emotional distress and assault and battery.

Incredibly, a lower court dismissed the case, arguing that the company’s only goal was to motivate Hudgens, not actually harm him. But the Utah Supreme Court reversed that decision and permitted the case to move forward.

Several HR Roundtable attendees expressed shock that Hudgen’s action had met with any resistance at all. But as Patterson explained, it can be very difficult to win cases involving only non-statutory claims in the employment context. The bar for proving “intentional infliction of emotional distress” can be extremely high, as nearly all manager-subordinate relationships can lead to stress, and many include some level of intimidation intended to motivate better performance.

McMiller v. Metro
Eartha McMiller claims that while she was an employee at Metro, her supervisor developed a sexual interest in her and made ongoing advances, which she rejected. On one occasion, he reportedly called her into his office to request she use tweezers to remove an ingrown hair from his chin. She refused, and he responded that he could ensure she lost her job. Then he kissed her, assuring her he would keep her position secure. She rejected him once more before leaving.

The company eventually terminated McMiller for poor work performance. Interestingly, she did not dispute that her work had been unsatisfactory. But she chose to bring a claim against her former supervisor for “quid pro quo” sexual harassment. Representing herself (and having successfully navigated appeals up to the Eighth Circuit), she was permitted to present her case to a jury.

What’s interesting about this case, both Patterson and Block noted, is that McMiller’s termination is not at issue. The court is concerned with the supervisor’s attempts to establish a quid pro quo relationship with her (while he was tolerating her poor performance).

Caparanis v. Ford Motor Co.
Ford employee Robert Caparanis dressed differently than his co-workers at the assembly plant. He admitted to wearing “weird” clothing, and also liked to pretend that he was pregnant whenever he was wearing his work apron. Other employees, he claimed, played “obscene sexual pranks” on him and teased him about his gender identity. He maintained that he brought his grievance to management many times, but that they did not discipline the other workers.

Ford eventually terminated Caparanis for an unrelated incident: bringing a container of his own urine to work and placing it in a container of work gloves. Caparanis claimed the container of his urine was properly discarded in a trash can, not a container of work gloves. He also questioned the sincerity of the company’s concern over sanitary conditions, as another worker had once urinated in an inappropriate location and was not terminated for it.

Caparanis sued Ford, claiming that “retaliation” and “harassment based on gender stereotyping” had caused him “emotional distress” and were the true motivations behind his termination. An Ohio federal court denied Ford’s motion for summary judgment permitted Caparanis to proceed to trial.

As strange as Caparanis’s case may be, Patterson stressed, it’s telling how seriously the courts are taking his claims. Sexual pranks and any harassment that relates to gender or gender identity can lead to exposure, even if the circumstances are unusual.

2015 Sure to Bring New Changes

Block, Katz and Patterson closed their session by urging attendees to keep current with employment law updates, whether by attending events hosted by their firm, reading newsletters or signing up for email blasts. Like any other year, 2015 is sure to see trending litigations, new statutes, and new interpretations. It will certainly see important pending cases decided.

In response, attendees should expect to revise their companies’ policies and even recommend brand new practices. After all, compliance is an evolving challenge—one that companies will always rely on their HR departments to ensure.

Anne DeAcetis is a freelance writer based in New York. Reach her at anne.deacetis@gmail.com.

The HR Roundtable is a breakfast forum for human resources professionals in New York City sponsored by The TemPositions Group of Companies. TemPositions, one of the largest staffing companies in the New York tri-state area with operations in California, has been helping businesses with their short- and long-term staffing needs since 1962. Visit them online at www.tempositions.com or email them at info@tempositions.com.

The Affordable Care Act’s aim is to make it easier for Americans to obtain health insurance. This aim may be admirable, but for companies, complying with all facets of the new regulations can sometimes get complicated. Challenges include having a clear understanding of all applicable rules and regulations, identifying full-time employees, and determining the best plans based on affordability and value for both the company and for its employees. It is also important for companies to keep track of the data on the health insurance status of their workforces in order to furnish proof of compliance with ACA standards to the IRS via the necessary paperwork.

Equipped with the information on how comply with the ACA, companies must also look forward and consider the possible outcomes of King v. Burwell, a case in which the Supreme Court will rule on whether the text of the ACA allows citizens who obtain health insurance from federal exchanges to receive subsidies. Since there are federally run exchanges in 36 states, and subsidies influence if or how companies offer health insurance, the outcome of this case may have a significant impact on employers.

Other court cases that do not challenge the ACA but relate to other aspects of health insurance are also important for companies to keep on the radar. The Supreme Court will determine whether states must allow same-sex marriage and recognize such marriages performed in other states. This ruling may impact how domestic partners and domestic partner benefits are handled for health insurance purposes.

Another relevant case is EEOC v. Honeywell. In this case, the Equal Opportunity Employment Commission (EEOC) has challenged the legality of voluntary wellness programs that involve biometric screenings used to determine surcharges and employer HSA contributions on the grounds that such practices may violate the Americans with Disabilities Act (ADA). Many companies have similar programs in place.

It is not only important for employers to know regulations, but to document their own practices properly to prove that they are complying with said regulations. There are several forms employers, employees, and insurers must fill out and submit to the IRS to verify employer compliance with ACA regulations, and employee eligibility for subsidies. IN order to properly comply with regulations and fill out these forms, employers must determine which of their employees are full time, and can draw upon several different methods to figure this out.

Mercer partner Dorian Smith, J.D., visited TemPositions’ HR Roundtable Series on Thursday, January 29, 2015 to address the intricacies of these issues. About one-third of attendees said they worked for companies that employ more than 50 people, and are therefore subject to ACA regulations. Many admitted to being confused and overwhelmed by all of the changes and pending issues, and were eager to get answers to specific questions to ensure their companies were complying with the new regulations.

Employer Wellness Programs

A few attendees said that their companies sponsored wellness programs for employees.

“Wellness programs come in all shapes and sizes,” explained Smith. “They can come in the form of asking employees to fill out a health risk assessment, and in order to get them to do that, the employer will provide an incentive, such as a reduction in their medical premiums, or a gift card, or entry into a raffle.”

Smoker surcharges are another example of wellness programs, said Smith. Under such programs, employees who smoke are charged more for their insurance, which they can avoid by participating in smoking cessation programs.

Providing incentives or rewards to employees who meet certain biometric standards or merely getting biometrics checked is another example of a wellness program.

Laws and Regulations

Wellness programs are governed by the Health Insurance Portability and Accountability Act (HIPAA). Program based on a health status, such as smoking, are allowed, but subject to strict guidelines. HIPAA guidelines also limit the amount of rewards that can be provided under such programs.

The Americans with Disabilities ACT (ADA) also pertains to wellness programs, but its guidelines are less clear than those provided by HIPAA. The ADA is enforced by the Equal Opportunity Employment Commission (EEOC), and prohibits employers from making disability-related inquiries or requiring medical examinations.

“A lot of these wellness programs do just that,” said Smith. “They ask you to fill out a health risk assessment, and the assessment is asking questions about someone’s health information, so that’s technically a disability-related inquiry.”

The ADA allows such inquiries only if doing so is a business necessity, or if it they are part of a voluntary wellness program.

The Genetic Information Nondiscrimination Act (GINA) prohibits employers from requesting genetic information from employees. This includes information about an employee’s spouse.

Definition of “Voluntary”

“Unfortunately, the EEOC has provided very little guidance on what it means to be a voluntary wellness program,” said Smith.

“All they have said is that a voluntary wellness program is one that neither requires participation nor penalizes someone who doesn’t participate.”

Because of the lack of guidelines, there has been a flurry of confusion in the corporate world about what sorts of programs and practices are legal, and which may be questionable.

Giving a health risk assessment to employees’ spouses in exchange for incentives is not permitted under GINA, as providing an incentive is considered to compromise the voluntary nature of such a practice.

EEOC v. Honeywell

Honeywell was operating what Smith described as “a pretty standard vanilla wellness program” that included a smoker surcharge, a health risk assessment, biometric screenings, and potential rewards that amounted to approximately $2,500/year. No employees were known to have their jobs compromised in relation to the program.

The EEOC deemed the program involuntary, and tried unsuccessfully to get a temporary injunction to suspend the program. A group of senators told the EEOC that it needs to make clearer guidelines before taking action. At this time, the issue remains unresolved.

The EEOC’s action sent shockwaves through many Fortune 500 companies with similar programs. Smith advised attendees whose companies sponsor wellness programs to follow HIPAA rules, and to be aware of other rules such as those that are part of the ADA.

Smith noted that the ACA encourages wellness programs, particularly those that levy smoker surcharges.

Same-Sex Marriage

At this time, same-sex marriages are recognized and issued in 36 states and DC, with numbers increasing frequently. Almost all appeals courts have found same-sex marriage bans unconstitutional under federal law. The 6th Circuit Court of Appeals has disagreed, and ruled that states may have and enforce such bans.

The Questions

The Supreme Court has agreed to hear a group of cases to rule on the issue. The Court will answer two questions:

1. Does the U.S. Constitution require states to issues marriage licenses to same-sex partners?
2. Does the U.S. Constitution require states to recognize same-sex marriages that were lawfully licensed and performed in other states?

In 2013, the Supreme Court recognized the federal rights of married same-sex couples in their ruling in Windsor v. United States, which overturned the Defense of Marriage Act.

Given this precedent, many Court watchers are predicting a ruling in favor of requiring the recognition and issuing of same-sex marriages.

Impact on Companies

If the Court rules in favor of same-sex marriage, this will ease the administrative burden for companies when it comes to health insurance. Imputing income would become a thing of the past.

Smith posited that in the case of a favorable ruling, employers will also likely get rid of domestic partner benefits, as there would cease to be a legal distinction between same-sex and opposite-sex marriages.

ACA Challenge

Another case that the Supreme Court will rule on this year is King v. Burwell, which will affect who is eligible for federal subsidies when buying health insurance through the publicly run exchanges set up under the ACA. Though the case is most directly relevant to citizens who do not have health insurance coverage through their employers, the decision is important for companies because the subsidies can trigger “pay-or-play” assessments.

Federal Exchanges, State Exchanges and Subsidies
A provision of the ACA makes subsidies available to health insurance consumers who earn up to 400 percent of the federal poverty level. If full-time employees are not offered coverage through their companies and instead purchase their own insurance with the help of subsidies, a penalty can be triggered for the companies that have not offered coverage.

Some states (including New York) run their own exchanges, but 36 states’ exchanges are run by the federal government.

“The issue is the way that the statute is written,” explained Smith. “It says that individuals are eligible for subsidies in exchanges established by the state.”

“So the challenge is, should people really be entitled to those subsidies? Because they’re not in an exchange established by the state, they’re in an exchange established by the federal government.”

Some view the law as being written this way as a means to incentivize states to create their own exchanges. The IRS interpreted “state” as encompassing both state and federally run exchanges, which allows subsidies for consumers purchasing insurance in either type of exchange.

Why it Matters
Smith said that the outcome will be very important in determining the future of the ACA.

“It tears away the individual mandate, because coverage becomes unaffordable for tons of people in those other [federally run] states,” he said. (If the cost of insurance exceeds 8 percent of a person’s income, the person is exempt from purchasing it). He said that this could result in only those who are unhealthy and in dire need of insurance to purchase it, setting off a “death spiral” due to a lack of healthy people in the insurance pool to underwrite payouts.

“It would have a detrimental effect on the employer pay-or-play mandate,” Smith added. If employees can no longer get subsidies, there is no way to trigger penalties for employers that do not provide health benefits to their full-time employees.

A question was raised about family coverage. Companies are obligated to provide affordable coverage for full-time employees per the ACA’s guidelines, but have no obligation to provide affordable coverage (or any coverage) for employees’ families. If an employer covers an employee but coverage is not available or unaffordable to the employee’s spouse, the company will not suffer any penalties. However, it may cause the spouse to be ineligible for a subsidy when shopping for independent coverage in a marketplace exchange.

Possible Outcomes

A ruling will be issued in the summer of 2015. If the Supreme Court rules that “state” encompasses both state and federal exchanges, nothing will change, and the ACA will proceed as planned.

If the Court rules that “state” only encompassed state-run exchanges, some states may act immediately to make their exchanges state-run so that they do not lose access to subsidies, Smith said.

Other states will not. If this happens, it is unclear what will happen next, but Smith said that is is very unlikely that there will be a bifurcated system. A corrections bill may be introduced, which could be the center of political bargaining on healthcare and possibly other issues.

Employer Shared Responsibility

The ACA’s employer shared responsibility mandate applies to companies with 50 or more full-time employees. Companies with 50-99 full-time employees have until 2016 to get up to speed before this is enforced. Full-time employees are those who work an average of 30 hours a week, or 130 hours a month.

Pay or Play

In 2015, employers must offer minimum essential coverage (MEC) to at least 70 percent of their full-time employees and their children 26 years of age and younger. In 2016, this increases to 95 percent. If an employer does not meet what Smith calls “the 70 percent test” (and then “the 95 percent test”), the company will be fined a $2,000 penalty for each full-time employee.

“There’s nothing worse then offering coverage to 68 percent, or 93 percent, because you get no credit for that,” Smith cautioned. “So if you’re gonna play, play.”

The remaining 30 percent (2015) and 5 percent (2016) are intended to leave room for calculation errors, and certain full-time employees to whom companies may not want to offer benefits, such as interns or short-term employees.

Once this threshold is overcome, a company can still be fined $3,000 for any remaining full-time employee not offered coverage. This fine can also be levied on companies if the coverage they offer to employees is not affordable, or does not provide minimum value. If the latter occurs and a full-time employee goes to a government-run exchange and gets a subsidy, the company will be fined $3,000. If the employee is not eligible for a subsidy, no penalty will be triggered for the company.

“Of all the employers that I’ve dealt with, no one is paying,” said Smith, referring to the $2,000-per-employee penalty.

He noted that it’s cheaper in a vacuum to “pay” $2,000 per employee than it is to offer coverage, but that the associated factors and costs are generally not worthwhile for companies.

Smith advised an attendee whose company covers employees at no cost but does not subsidize higher-cost family coverage to consider dropping coverage for spouses altogether.

“By offering coverage to that spouse, what you’re doing is making that spouse ineligible for a subsidy,” Smith said. “Because your employee-only coverage is affordable, that disqualifies the spouse for being eligible for a subsidy merely because the spouse is offered coverage.”

Instead, he advised only offering coverage to employees and their children. This way, the spouse may be eligible for a subsidy, and there will still be no penalty triggered for the company.

ACA Reporting

To demonstrate compliance with ACA regulations, there are several key government forms that must be filled out by insurers, employers, and employees.

MEC Reporting

The insurer is responsible for a Minimum Essential Coverage (MEC) report, which tells the government which employees (and their family members) were covered under a company’s insurance plan, and for which months, of a given year.

The insurance company will send copies of Form 1095-B to individual employees by February 1, 2016 to be filled out for the 2015 plan year. It is not clear whether the forms will be sent directly to employees, or to employers to hand out. This form, along with a transmittal report sent directly from the insurer to the government (Form 1094-B) must be sent to the government by March 31.

Form 1095-B requires the social security numbers of employees and anyone else included in their coverage plan, such as spouses and children. If an employee refuses to give his/her social security number or does not have one, employers can substitute the employee’s date of birth.

ESR Reporting
The Employer Shared Responsibility (ESR) form is a form that employers need to send to the IRS and to individuals to show which of their employees are full-time, if said employees were offered insurance coverage, and if the coverage offered was affordable. If employees were not offered coverage, it indicates the reason.

ESR reporting serves three purposes, according to Smith. The government needs them to help enforce the individual mandate, as they can be used as proof of insurance in the event that an individual is audited. The forms also help the IRS enforce the employer mandate, as it shows whether affordable coverage with minimum value (or any coverage at all) was offered to full-time employees, and any reason that it was not offered. Finally, the forms help the IRS verify whether individuals receiving subsidies to purchase insurance from the government exchange are in fact eligible for the subsidies they are receiving.

Form 1095-C will be issued to all full-time employees who are employed for at least one month, beginning February 1, 2016 for the 2015 year. Smith emphasized the importance of knowing who counts as a full-time employee not only for meeting the 70/95 percent threshold, but for ESR reporting.

Most companies will have vendors to fill out the employer sections of this form. Many vendors who do payroll, such as ADP, offer this service. Smith encouraged attendees to inquire with their vendors if the vendors had not advertised this service. Vendors will need data from HR on their methods for measuring full-time employees, who is covered under the insurance plan, and other relevant information.

“If nothing else, start to engage your vendor,” Smith advised.

Part III of Form 1095-C is only relevant for employees who are self-insured. All attendees came from fully insured companies.

Part II is is broken down by month, and for each month requires employers to record:

1. Whether an employee was offered coverage
2. The employee share of the lowest cost plan
3. Applicable Section 4980H Safe Harbor. If an employee is not offered insurance, there are indicator codes to communicate the reason for that in the last portion. This part is also a place for employers to indicate whether coverage was affordable based on a safe harbor. For example, coverage would be classified as affordable if it met a federal poverty level safe harbor, or a rate-of-pay safe harbor.

If someone was a full-time employee for all 12 months of the year, there is a single column on the left part of Section II that can be filled out. If someone was not a full-time employee for all 12 months (e.g. a new hire, someone who was terminated, someone who fluctuates between full-time and part-time status), employers must fill out each of the 12 monthly columns.

“The 70 percent test, the 95 percent test, it’s all looked at monthly,” said Smith. “The way the penalties are calculated is monthly.”

In order to avoid penalties, it is important to choose the right method of counting full-time employees.

Smith clarified in response to attendee questions that the form was for all employees, whether or not they actually took the coverage offered, as it was to show that the company offered coverage in line with ACA requirements.

Identifying Full-Time Employees

Any paid hours when employees are at work, or not at work but getting paid (e.g. vacation) count as working hours. Depending on the type of calculation used, unpaid FMLA (Family and Medical Leave Act) and USERRA (Uniformed Services Employment and Reemployment Rights Acts) leave, and unpaid jury duty may also count. If employers use the look-back method to calculate hours, time on the aforementioned unpaid leaves does count.

Counting Hours

Counting hours varies depending on whether am employee is salaried, or paid on an hourly basis. For hourly employees, any hour paid goes into the calculation. For salaried employees, there are two equivalency methods: the days-worked equivalency, and the weeks-worked equivalency.

Days-Worked Equivalency
Under this method, an employee gets eight hours of credit for any day in which he/she works at least one hour.

Employers may NOT use this method if they know that an employee is working at least 30 hours/week, but the days-worked count would give them fewer hours. For example, if an employee works 10 hours/day for three days, using the days-worked equivalency would only give the employee credit for 24 hours.

Weeks-Worked Equivalency
Under this method, an employee gets 40 hours of credit for any week in which he/she works for at least one hour. Smith said that this method is generally simpler, as any employee who works 30 hours/week or more counts as full-time for ACA purposes, and the precise number over 30 is irrelevant.

“These are simplified ways of counting hours for employers that aren’t going to try to recreate how many actual hours that someone who is salaried worked, because you just don’t know that information,” explained Smith.

Methods to Identify Full-Time Employees

Once hours are counted, employers must then determine who is truly a full-time employee. To do this, companies can use the monthly method, or the look-back method.

Monthly Method

The method entails looking at how many hours an employee worked in real time in a particular month. If the employee worked 130 hours or more, he/she is considered full time for that month. This method is useful for monthly ESR reporting, but not as useful for determining which employees are eligible for benefits.

Look-Back Method

This method looks back at a specific period of time – usually 12 months – and divides the hours worked during that time by 12 (monthly) or 52 (weekly). If the employee averaged 30 hours/week or more during that period, he/she is counted as full-time for a subsequent “stability period,” even if the employee is not working full time during that period.

This method is useful for companies with employees who work variable hours, seasonal employees, or others who otherwise may not consistently work 130 hours or more from one month to the next. It offers some stability to employers in terms of having a better idea of to whom they will be offering coverage.

Questions and Clarifications

In response to a question from an attendee, Smith clarified that every salaried employee would be counted as full-time under the weeks-worked method. For salaried employees who do not actually work full-time, it is usually better to use the days-worked method.

“You can use different equivalencies for reasonable categories for employees,” Smith said. “You may say, ‘for part-time non-hourly, we’re going to use the days-worked. For full-time non-hourly, we’re going to use the weeks-worked.”

In response to another question, Smith stressed that employee scheduling does not matter when using the look-back method, as it uses past times employees actually worked, not projected future times.

If an employee works less than full-time during the stability period, the employer is not required to continue offering benefits. However, for reporting purposes, that employee is still treated as being full-time.

“If you take their benefits away at some point, that’s going to count against you in those months for the 70 percent, the 95 percent test,” said Smith. “You can take them off your plan, but it will count against you in the penalty calculation.”

He pointed out that if such an employee works fewer hours, this will be reflected in the next stability period calculation, even if the employee begins working more hours.

Smith emphasized the importance of properly recording the company’s practices. He concluded that even if an employer is fully compliant with ACA regulations, it needs to be able to prove this. He advised attendees to keep abreast of developments in the relevant cases discussed to stay on top of best practices.

Andrea Burzynski is a freelance writer based in New York. Reach her at andrea.burzynski@yahoo.com.

The HR Roundtable is a breakfast forum for human resources professionals in New York City sponsored by The TemPositions Group of Companies. TemPositions, one of the largest staffing companies in the New York tri-state area with operations in California, has been helping businesses with their short- and long-term staffing needs since 1962. Visit them online at www.tempositions.com or email them at info@tempositions.com.