In the months since the Harvey Weinstein scandal, there have been countless efforts to raise awareness of workplace sexual harassment.  Actresses donned black dresses at the Golden Globe Awards earlier this month to promote #MeToo and the related Time’s Up initiative.  Last weekend, the music industry’s elite carried white roses at the Grammy Awards to show solidarity for the movement.  These efforts, however, are not limited to celebrities.  Many other initiatives have sprung up in response to workplace sexual harassment issues – including those in our federal and state legislatures.

The most notable legislative development to date was tucked into the federal Tax Cuts and Jobs Act, which President Trump signed into law at the end of December.  The Act adds a provision to the Internal Revenue Code prohibiting tax deductions for payments or settlements “related to sexual harassment or sexual abuse”, and for attorneys’ fees related to such payments or settlements, if the payment is subject to a non-disclosure agreement.  Essentially, it is intended to discourage the use of non-disclosure provisions in settlements of sexual harassment or abuse claims by forcing employers to choose between the tax deduction and confidentiality.  It applies to amounts paid or incurred after December 22, 2017.

The good news is that the provision appears to be limited to settlements involving actual allegations of sexual harassment or abuse, rather than to every settlement involving a general release of claims.  The bad news is that the provision leaves many questions unanswered, including the key question: What constitutes a payment “related to sexual harassment or abuse”?  We anticipate that regulations implementing the Act will address this and other ambiguities in the provision.  Until then, however, employers are well-advised to consult with their financial and legal advisors regarding the applicability of this provision to their individual circumstances.

Employers also should be aware of other legislative initiatives targeting the use of non-disclosure agreements.  An increasing number of states have introduced legislation to prohibit the use of non-disclosure agreements in sexual harassment claims entirely.  In November 2017, Pennsylvania Senator Judy Schwank (D) introduced Senate Bill 999 that would ban non-disclosure provisions in any contract or settlement relating to “sexual misconduct”.  Among other things, the bill would prohibit an agreement not to disclose the name of a person suspected of sexual harassment.  It remains to be seen whether, or in what form, Senate Bill 999 may be passed into law.

In the meantime, beyond staying abreast of the latest legal developments, you might be asking yourself, What can my company do to raise awareness of – and effectively address – issues of sexual harassment (and other types of discriminatory harassment) in the workplace?  Click here to learn more about how you can educate your workforce, update and strengthen your policies and procedures, and effectively investigate reported concerns of harassment in your workplace.  We also will cover lingering questions about sexual harassment issues in the workplace and conducting workplace investigations at McNees’ 28th Annual Labor & Employment Law Seminar on May 11, 2018.  Stay tuned to our blog for details, or contact any member of McNees’ Labor & Employment practice group for more information.

Employers are faced with an ever-increasing body of state and federal law governing a variety of labor and employment issues – from anti-discrimination laws, to medical leave and accommodation laws, to wage and hour laws, and much more. Do your supervisors and managers understand your organization’s legal obligations?  Do they understand that their actions may result in liability for not only the organization, but potentially themselves?  Do supervisors and managers understand how they can help minimize your organization’s risk of exposure to legal claims?

Periodic, targeted training can give your supervisors and managers the tools they need to understand the organization’s legal obligations and their obligations to the organization.  This will, in turn, help minimize your Company’s exposure to legal claims in the labor and employment arena.  Learn more about the benefits that proactive training programs can have for employers by viewing our brief podcast by clicking here.

On July 1, 2015, Governor Tom Wolf signed into law Act 15 (House Bill 1276), which amends Pennsylvania’s Child Protective Services Law (CPSL) to clarify the requirements of employers and volunteer-based organizations to provide for criminal background checks and child abuse clearances of their employees and volunteers who work directly with children.  Act 15 provides much-needed, and desired, clarification to a well-intentioned statute that had a very broad effect.

Prior to the passage of Act 15, the CPSL, among other things, required employees and volunteers who are responsible for a child’s welfare or “having direct contact with children” to complete three background checks:  (1) a state criminal history check; (2) a state child abuse clearance; and, (3) an FBI criminal background check.  For purposes of the CPSL, a “child” is an individual under age 18.  Individuals “having direct contact with children” were defined broadly and included those with “the care, supervision, guidance or control of children or routine interaction with children.”  The ambiguity of this definition, as well as other provisions of the statute, generated confusion for employers and volunteer-based organizations, which struggled to identify which employees and volunteers were be subject to the background check requirements.  There was also significant concern about the cost of complying with the requirements for employees and, especially, volunteers.

While the CPSL background check requirements were part of many measures passed in 2013 to help protect children and were well-intentioned, the ambiguity of the statute caused confusion and raised significant concerns for employers and volunteer-dependent organizations.  Recent amendments to the CPSL included numerous revisions that were designed to provide much-needed clarification and address many of the concerns raised by employers and volunteer-based organizations as well as entities that often, but not regularly, use volunteers in day-to-day operations such as school districts.  Most notably for employers, the amendments have clarified and narrowed the pool of employees and volunteers that will be considered to have “direct contact with children.”  As amended, the CPSL now clarifies that “routine interaction” with children is “regular and repeated contact that is integral to a person’s employment or volunteer responsibilities.”  The amendments also streamline definitions so the statute is written in furtherance of the intent of the bill.  Additionally, the amendments extended the obligation to renew the background checks from every three years to every five years.

Also significant is a welcome exemption for colleges and universities.  These institutions of higher education are now exempted from obtaining clearances for employees whose contact with children involves matriculated students who are enrolled with the institution or prospective students visiting the institution.  Additional exemptions include but are not limited to administrative employees who have no direct contact with children, minor employees between the ages of 14 through 17 with other qualifying conditions, as well as employees or volunteers with a J-1 visa and certain qualifying conditions.

In addition to narrowing the breadth of the background check requirements, Act 15 also includes provisions easing the financial burden related to these requirements.  Specifically, the amendments codified a waiver of certain background check fees announced by Governor Wolf in mid-June 2015.  Effective July 25, 2015, the fees for the state police criminal history and child abuse clearance checks will be waived for volunteers and reduced for all other applicants from $10 to $8 each.  Those needing background checks for employment-related reasons remain responsible for the cost. The fee waiver does not apply to the FBI background check, which is the most expensive of the three required checks.

While the requirement to complete these checks for new employees “having direct contact with children” has been in effect since January 1, 2015, the deadline for compliance with respect to new volunteer background checks is extended under these recent amendments to August 25, 2015.  Employees who were existing employees as of January 1, 2015, but who had not completed the required background checks within the past five years, must complete the checks by December 31, 2015.

Although Act 15 provides welcome clarification of who must comply with background check requirements, those employers, volunteer-based organizations,  and school districts affected by the law must take prompt and significant steps in order to meet their obligations under the law.  If you have questions about your obligations under the Child Protective Services Act and the effect of these recent amendments on your obligations, please contact any member of our Labor & Employment Practice Group or Kathleen Duffy Bruder in our Government Relations Group.

The United States Department of Labor (DOL) recently released new forms for employers to use when their employees are in need of leave under the Family and Medical Leave Act (FMLA).  These new forms can be viewed here.  So… what’s changed (besides the form expiration date), and why should your company use these forms? Read on to find out.

The FMLA requires covered employers (i.e., those with 50 or more employees) to provide eligible employees with family and medical leave under certain circumstances, including when leave is needed due to the employee’s or a child, spouse or parent’s serious health condition.  The FMLA also requires covered employers to provide certain notices and information to employees as part of the FMLA process.  To comply with these obligations, many employers take advantage of the DOL’s FMLA forms, such as the Notice of Rights and Responsibilities, the Designation Notice, and the Certification of Health Care Provider notices.

The DOL has updated all of these forms.  Frankly, however, they have not changed much.  The primary revision appears to be to the Health Care Provider Certification forms, which request specific information from the employee’s (or his or her family member’s) treating healthcare provider.  Those forms now contain language that is designed to protect employers from inadvertent disclosure of genetic information within the meaning of the Genetic Information Nondiscrimination Act of 2008.  (For more information on GINA, read our Employer Alert here.)

Should your company use these forms?  Certainly, employers are not required to use the DOL’s forms.  Keep in mind, however, that these forms are “blessed” by the DOL – meaning that DOL considers these forms to be compliant with the FMLA’s requirements.  For this reason, we recommend that all FMLA-covered employers have an up-to-date FMLA policy and, unless there is a strong reason to use your own forms, make use of the DOL’s forms.

As a final practical matter, FMLA and non-FMLA covered employers alike should have leave of absence and reasonable accommodation procedures in place.  Periodic review of your leave of absence and accommodation procedures and managerial training on the proper handling of those issues is key to minimizing your Company’s exposure under the FMLA and under the Americans with Disabilities Act. The old saying is trite, but true (and seems fitting for today’s topic):  an ounce of prevention is worth a pound of cure.

This post was contributed by Eric N. Athey, Esq., a Member in McNees Wallace & Nurick LLC’s Labor and Employment Practice Group.

As previously reported on this blog, employers are required to provide a notice to employees regarding coverage options under the new Health Insurance Marketplaces created by the Affordable Care Act that are scheduled to be up and running on October 1. The notice must be provided by October 1 to all employees, part-time and full-time, regardless of whether they have health coverage through their employer. New hires must receive the notice within 14 days of hire. 

Employers were understandably confused when, on September 11, the DOL posted an FAQ on its website advising that employers would not be fined under the Fair Labor Standards Act for failing to distribute the notice, yet some DOL officials were quick to point out that penalties and other adverse consequences for non-compliance could follow under ERISA and other statutes. In light of this uncertainty, employers are wise to comply and provide the notice by October 1.

The U.S. Department of Labor ("DOL") has published sample notices at http://www.dol.gov/ebsa/healthreform/. The specific language in the DOL notices need not be used, however, so long as certain key points are included. Given the complexity of the topic, the DOL sample notices are likely to raise more questions than they answer. Many employers are tailoring the notice in a manner that they feel will be more understandable to their employees. Other employers are preparing supplemental handouts and scheduling employee group meetings to address the many questions that will likely arise. Much is uncertain about how the roll out of the Health Insurance Marketplaces will go on October 1; however, one thing is for certain: employees are likely to have many questions and misunderstandings regarding their options under the Affordable Care Act. 

Based on questions and feedback we’ve been hearing from clients, here is our list of the "top five" questions you may hear from employees once the required notices are distributed (and suggested responses):

  1. "Why am I receiving this notice?" You have probably heard news reports about "Obamacare" (aka "Healthcare Reform" or the "Affordable Care Act"). Under the law, employers must notify all employees of their ability to purchase their own coverage under new "Health Insurance Marketplaces" that will be open on October 1, 2013. The new Marketplaces do not impact your eligibility for coverage under the Company’s health plan.
     
  2. "Can I get coverage on the Health Insurance Marketplace if I find a plan there that’s cheaper than my employer’s plan?" Nearly anyone will be able to purchase coverage on the Marketplace; however, employees who are likely to find this advantageous are those who either do not have employer-provided coverage available to them or who pay a lot (more than 9.5% of income) for their coverage.
     
  3. "Will I qualify for a tax subsidy if I purchase coverage on the Health Insurance Marketplace?" Employees who have affordable, minimum value coverage available to them through their employer will not qualify for a tax subsidy. If you are not eligible for coverage from an employer (or you pay more than 9.5% of your income to purchase coverage through your employer) you may qualify for a subsidy and you should explore your coverage options on the Marketplace.
     
  4. "Is the health coverage I have through my employer ‘affordable’ and of ‘minimum value’?" There are no short answers to these questions. However, as a rule of thumb, coverage through an employer is "affordable" if an employee does not pay more than 9.5% of his or her income for self-only coverage, and the coverage is "minimum value" if the plan’s share of the total allowed benefit costs covered by the plan is no less than 60% of those costs.
     
  5. "Haven’t the individual mandate penalties been delayed until 2015?" No. Certain "shared responsibility" penalties that apply to large employers have been delayed until 2015; however, the individual mandate is scheduled to take effect on January 1, 2014. Individuals who do not obtain coverage may be subject to an annual penalty equivalent to the greater of $95 or 1% of their household income. The penalty amount will increase in subsequent years.

Employers are likely to receive more questions from employees regarding health coverage than ever before in the months following October 1, 2013. Of course, employees can always be referred to the feds for additional information (www.HealthCare.gov or 1-800-318-2596).  If we can assist you with any questions you may have regarding compliance with the Affordable Care Act, please contact any member of our Labor and Employment Practice Group.

This post was contributed by Tony D. Dick, Esq., an attorney in McNees Wallace & Nurick LLC’s Labor and Employment Practice Group in Columbus, Ohio.

In light of the Supreme Court’s recent decision in United States v. Windsor, the U.S. Department of Labor (DOL) has just issued updated guidance for employers concerning the rights of same-sex spouses under the Family and Medical Leave Act (FMLA). As you may recall from our earlier blog post on the legal implications of the Windsor case, in a 5-4 ruling, the Supreme Court struck down a key provision of the Defense of Marriage Act, which defined marriage under federal law as “a legal union only between one man and one woman as husband and wife.” 

The updated Fact Sheet #28F issued by the DOL Wage and Hour Division entitled “Qualifying Reasons for Leave under the Family and Medical Leave Act” now defines a “spouse” under the FMLA as “a husband or wife as defined or recognized under state law for purposes of marriage in the state where the employee resides, including ‘common law’ marriage and same-sex marriage.” As a result, an eligible employee in a same-sex marriage who was married and resides in a state that recognizes same-sex marriages is entitled to up to 12 weeks of leave in a 12-month period to care for a seriously ill spouse or for activities associated with a military spouse’s deployment, and up to 26 weeks of caregiver leave for military spouse who is seriously injured or ill. 

Conversely, there is no obligation to make FMLA spousal leave available to a same-sex spouse who resides in any state that has banned or otherwise does not recognize same-sex marriage, including both Pennsylvania and Ohio. Of course, private employers in states that do not recognize same-sex marriage are free to extend equivalent FMLA spousal leave benefits to same-sex spouses on their own if they wish.

DOL Secretary Thomas Perez has suggested further guidance in this area will be released in the coming months. We will certainly keep you updated on any new developments. In the meantime, if you are a covered employer operating in one of the 13 states that permits same-sex marriage, or the District of Columbia where same-sex marriage is recognized, now is the time to revise your policies, procedures and forms to conform with the DOL’s updated guidance.

As we discussed with attendees at our most recent health care reform compliance seminar in June, we wanted to make the presentation available to the readers of our blog.  You can access the PowerPoint, “Countdown to 2014: PPACA Compliance Priorities for Employers,” by clicking here

Readers of this blog will note that we recently reported on a one-year delay in the effective date for PPACA’s employer shared responsibility requirements.  Please keep in mind that the PowerPoint presentation was created prior to the announcement of the change in effective date for the shared responsibility provisions; however, other information and other effective dates referenced in the presentation remain accurate.  For future PPACA developments, stay tuned to this blog at https://www.palaborandemploymentblog.com/tags/ppaca/.

Questions regarding specific PPACA compliance issues and our upcoming PPACA presentations may be addressed to any member of McNees Wallace & Nurick’s Labor and Employment Law and Employee Benefits Practice Groups

Many employers received a welcome, though temporary, reprieve yesterday, when the U.S. Department of the Treasury (“Department”) announced a one-year delay in the effective date of one of the key requirements of the Patient Protection and Affordable Care Act (“PPACA”) – the employer “shared responsibility” requirements (a.k.a. “pay or play”).  PPACA’s shared responsibility requirements were scheduled to become effective January 1, 2014, which has left countless employers scrambling to navigate complex regulations to determine what steps are necessary to comply with the mandate and avoid penalties.  (Click here to read our previously-published Employer Alert detailing the shared responsibility provisions and regulations issued to date.) 

The announced delay was prompted by the Department’s recognition that new employer and insurer coverage reporting requirements under PPACA are complex and that businesses need additional time to implement these requirements effectively.  Specifically, PPACA will require information reporting by insurers, self-insuring employers, and other parties that provide health coverage, as well as by certain employers with respect to the health coverage offered to their full-time employees.  The delayed implementation of these requirements is intended to allow the Department time to review and (hopefully) simplify the new reporting requirements and to allow additional time to adapt health coverage and reporting systems while employers move towards compliance with the shared responsibility requirements.

 

The Department’s announcement effectively pushes the deadline for compliance with the shared responsibility rules to January 1, 2015 – including the assessment of shared responsibility payments or penalties.  Importantly, other key 2014 requirements under PPACA, including the implementation of Health Care Exchanges and the so-called individual mandate, as well as the Patient Centered Outcomes Research Institute (PCORI) and transitional reinsurance program fees, remain unchanged.  

 

The Department is expected to issue formal guidance within the next week regarding transitional matters relating to its announcement, as well as proposed rules later this summer implementing the reporting provisions under PPACA.  We will provide additional updates on our blog as they become available.  

 

For more information on the most recent developments under PPACA, click here to view McNees’ recent Healthcare Reform White Paper: Countdown to 2014.  Questions regarding this white paper and specific PPACA compliance issues may be addressed to any member of McNees Wallace & Nurick’s Labor and Employment Law and Employee Benefits Practice Groups.

 This post was contributed by Joseph S. Sileo, Esq., a new addition to McNees Wallace & Nurick LLC’s Labor and Employment Law Practice Group.  McNees recently welcomed Joe, Jennifer LaPorta Baker and Jennifer J. Walsh in Scranton, Pennsylvania.

As employers know all too well, an employee who is injured in connection with work can receive workers’ compensation benefits simply by establishing that the injury occurred in the course of employment and resulted in a loss of wages. Proof of employer negligence or fault is not required. In exchange for this benefit, workers’ compensation is generally the "exclusive remedy" for employees who sustain work-related injuries.   In other words, injured employees are not permitted to sue their employers for negligence in connection with their injuries. This exclusive remedy reflects the public policy bargain between employers and employees underlying Pennsylvania’s workers’ compensation system, by which workers give up the right to bring personal injury suits against their employers in court in exchange for the guaranty of workers’ compensation benefits for work-related injuries. 

Pennsylvania’s Workers’ Compensation Act does not, however, prevent injured employees from taking legal action against third parties, such as an employer’s clients, customers or vendors. For example, an employee who is injured while working on the property of an employer’s client may, in some circumstances, file a workers’ compensation claim against his or her employer and file a lawsuit against the client for negligence. 

A recent decision by Pennsylvania’s Supreme Court confirms that employers can take steps to prevent such employee-initiated third party lawsuits relating to injuries covered by workers’ compensation. In Bowman v. Sunoco, a security guard employee was injured during work when she fell on an icy sidewalk at a facility owned by her employer’s client. In addition to filing a claim with her employer for workers’ compensation benefits, the employee also sued the client for negligence. The Court held that a disclaimer signed by the employee when she was hired – stating that she waived her rights to sue the employer’s clients for injuries covered by workers’ compensation – was valid and precluded the employee’s lawsuit against the employer’s client.   

For obvious reasons, employers have an interest in protecting their clients, customers and vendors from embarrassing, costly and time-consuming employee lawsuits. In light of the Bowman decision, employers should consider using disclaimers to prevent employee lawsuits against third parties relating to work injuries covered by workers’ compensation. Such disclaimers may be particularly useful in the case of employees who routinely have direct interaction with an employer’s customers and vendors, or who perform work at client facilities or other remote locations.

Feel free to contact any member of the McNees Wallace & Nurick Labor and Employment Practice Group for assistance with labor and employment law issues and/or if you have any questions regarding this article.    

This post was contributed by Stephen R. Kern, Esq., a Member in the Employee Benefits Practice Group.

The U.S. Department of Labor (the "DOL") has recently enhanced its enforcement activities with respect to group health plans by significantly increasing the number of audits it is conducting. In addition, the DOL’s audit letters contain significant document requests that are directed specifically at compliance with the Patient Protection and Affordable Care Act ("PPACA" or "healthcare reform") compliance obligations. For example, the DOL’s audit letters now include the following:

  • Age 26 mandate – Plans must provide a sample of the written notice describing the enrollment rights for dependent children up to the age of 26 that has been used by the plan since September 23, 2010. 
     
  • Prohibition on rescissions of coverage – If the plan has rescinded coverage, it must supply a list of all affected individuals and a copy of the written notice provided 30 days in advance of each rescission. The DOL will analyze whether the reason for the rescission complies with the healthcare reform standard of fraud or intentional misrepresentation of a material fact.
     
  • Monetary limits on essential health benefits – Plans that have imposed dollar limits since September 23, 2010 must provide documentation showing the limits that are applicable for each year. A plan must also provide a sample of the notice that it sent to participants stating that the plan’s lifetime limits had been eliminated. 
     
  • Grandfathered plan status – Employers that are retaining grandfathered plan status must provide documentation to substantiate that status, as well as a copy of the notice that is part of the plan’s documents and has been provided to participants and beneficiaries.
     
  • Choice of Provider Notice – Nongrandfathered plans must provide a copy of the notice informing participants of the right to designate their choice of certain providers as well as a list of participants who received the notice. 
     
  • Claims and external review – Nongrandfathered plans must provide samples of the claims and appeals forms that have been used since September 23, 2010 plus the contracts with any independent review organizations or third party administrators that are providing the required external reviews. 

In light of this recent DOL audit activity, employers should carefully document their files regarding these healthcare reform compliance issues. To assist employers in this regard, the DOL recently published a very useful checklist entitled "Self-Compliance Tool for Part 7 of ERISA: Affordable Care Act Provisions" on its website. The DOL compliance tool allows employers to engage in a step-by-step analysis of their level of compliance with the healthcare reform requirements that are currently effective. In addition to the compliance issues referenced above, the compliance tool also deals with summary of benefits and coverage, emergency care, and preventive services. 

The increased scope of the DOL’s group health plan audits echoes the recent expansion of other DOL investigations and audits of employers (e.g., wage and hour audits, and other areas of labor and employment law compliance – see our recent blog article for more information).  If you have any questions regarding DOL audits or PPACA, please do not hesitate to contact any member of our Labor & Employment and Employee Benefits Practice Groups.