Did you know that you do not need to mail Form 1095-Cs if a notice is posted by March 3, 2025?

At the end of last year, a new law was enacted that would allow employers to provide Form 1095-C only if requested, so long as the employer complied with the IRS guidance.  The IRS has issued guidance which requires that the employer provide a clear and conspicuous notice, in a location on its website that is reasonably accessible to all participants, stating that they may receive a copy of their statement upon request. The notice must include an email address, a physical address to which a request for a statement may be sent, and a telephone number that the participant may use to contact with any questions.

The notice must be posted by March 3^rd this year and must remain up until October 15^th. The form must be provided to the participant within 30 days of their request.

For more information regarding compliance for your benefit plans, contact any member of the McNees Labor and Employment Group.

Yesterday, the Trump Administration announced that it offered voluntary buyouts to over two million federal employees.  Employees who voluntarily resign their position will receive payments equal to approximately eight months of their salary.  Obviously, the goal is to reduce the size of the federal workforce and related expenses.

From time to time, our clients ask us about doing similar voluntary exit incentives to shrink their labor-related expenses.  Such voluntary programs often have pros and cons.  Some of those tradeoffs look like this:

Pros

• By allowing employees to volunteer to resign or retire, the company can accelerate the departure of employees who are planning to leave anyway or who are on the fence about whether to leave. The buyout may provide them the final nudge they need.
• Employees on the cusp of retirement often elect the voluntary buyouts.  Those same employees tend to be the highest compensated employees.   By capturing those employees in the voluntary buyout, a company can shed some of its most expensive labor.
• It avoids difficult decisions. If the employee volunteers to leave, the company does not need to make the hard decision about who to keep and who to let go.
• Voluntary buyouts often come with a severance agreement that includes a general release of all claims. The employees elect the voluntary buyout knowing that they will sign a general release to receive the incentive payments.  So, the risk of post-termination discrimination lawsuits is significantly diminished.

Cons

• A company-wide buyout offer can lead to critical employees leaving the company. The departure of those key employees can cause serious skill-drain and corresponding loss in productivity/revenue.  As a result, the buyout may be entirely counterproductive.
• The company may be left with the worst performing employees. A company’s highest performing (and most marketable) employees are typically confident that they can go back into the marketplace and find new employment.  So, they are more inclined to take the buyout.  Conversely, poor performing employees (particularly those who have become comfortable due to lack of supervisory oversight), tend not to elect.
• A voluntary buyout is not precise enough. It is rare that the effects of a voluntary buy-out are spread evenly across all departments.  A voluntary buy-out risks that the employees who elect to participate are concentrated in a limited number of departments, causing imbalance in the workforce.  For example, let’s say a company’s IT department is lean, and because of that leanness the employees are disgruntled.  In a buyout, all the IT employees elect, leaving no one in the IT department.  At the same time, the marketing department is bloated, and because of the excess headcount work demand is low.  In the buyout, none of the marketing employees elect.  The end result is that the company loses employees it needs and keeps employees it doesn’t.
• While financial payments are necessary to incentivize anyone to voluntarily resign, the uncertainty surrounding healthcare insurance and related costs often prevents employees from accepting the buyout. Unless there is some continuation of paid healthcare (often through COBRA) for a sufficient period of time to bridge the employee to their next job or to Medicare, the risk is often too great for employees to take the offer.  The cost of continued healthcare certainly impacts the cost-benefit analysis for the company.

Upon balancing these pros and cons, companies tend to either skip voluntary buyouts altogether or carefully determine which employees are eligible to participate.  It is not uncommon for companies to go through a two-step process: a narrowly defined voluntary buyout program followed by an involuntary reduction to surgically remove the remaining excess.

We will find out sooner rather than later whether some of these concepts will surface with the federal government voluntary buyout program.

Since 1965, federal contractors have been required to take affirmative action to ensure that they are not discriminating against employees.  The affirmative action requirement stemmed from an executive order (11246) issued during the Johnson Administration.  That executive order related specifically to taking affirmative action to avoid discrimination on the basis of sex, race, and ethnicity.  From Executive Order 11246, the Office of Federal Contract Compliance Programs (OFCCP) was born, and a body of regulation was developed.  Affirmative action was later expanded by legislative action of Congress to include disability and veteran status.  Our federal contractor clients are well aware of these affirmative action requirements, and many have endured audits by OFCCP evaluating their compliance.

Today, the pendulum swung.  As part of his executive order eliminating DEI initiatives, President Trump also gutted affirmative action.  President Trump’s executive order revokes the entirety of President Johnson’s Executive Order 11246, the origin of affirmative action.  As a result, the affirmative action requirements relative to sex and race/ethnicity no longer exist.  Federal contractors are only permitted to continue complying with the current regulatory scheme for 90 days.

President Trump’s executive order does not stop there.  It also orders OFCCP to stop: (1) promoting diversity; (2) “holding federal contractors and subcontractors responsible for taking ‘affirmative action’”; and (3) allowing or encouraging federal contractors to engage in workforce balancing based on race, color, sex, sexual preference, religion, or national origin.  In effect, OFCCP is severely hamstrung.

Instead of the affirmative action requirements, President Trump’s order simply requires that federal contractors agree that its compliance with existing anti-discrimination laws is material to the government’s issuance of payment on the contract.  The order also requires that a contractor affirmatively certify that it does not operate any DEI programs that violate federal anti-discrimination laws.

Notably, President Trump cannot eliminate by executive order the statutory affirmative action requirements created by Congress related to disability and veteran status.  Unless and until Congress revokes those statutes, federal contractors continue to have affirmative action obligations with respect to those traits.

So, where does that leave you if you are a federal contractor?  Well, if you are collecting data and performing data analyses related to sex and race affirmative action, you need not.  You should, however, continue to comply with disability and veteran affirmative action requirements (though these are somewhat easier than sex and race).

It is clear that the intent behind President Trump’s executive order is to rely on existing federal discrimination laws to address employment discrimination in America.  It will be interesting to see whether a spike in federal discrimination lawsuits, and related burden on the judiciary, is an unintended consequence of today’s executive order.

It’s the most wonderful time of the year! The season’s greetings provide us with time to gather and reflect on the accomplishments and triumphs of ourselves and our peers. With a season so festive and spirits so bright, let’s not have legal nightmares keeping you up at night. You gather as co-workers, friends, and colleagues, but this holiday season, take it easy on the eggnog, please. Make sure to enjoy your holiday season (responsibly), and in doing so, let’s help you stay on the “nice” list this year!

Too much ‘Holiday Spirit?’

It’s important to remember that employment laws don’t take a break for the holidays.  A holiday party can be a great way to celebrate another year gone by and build camaraderie, but employers should remember, and remind their employees, that company policies still apply.  This includes, of course, policies against discrimination and discriminatory harassment.  And, with many employers choosing to serve alcohol at holiday functions, as you may guess, this could increase the odds that things could go sideways.  If the party gets too rowdy, or if a flirtation progresses into an inappropriate sexual advance, you may soon have a whole host of issues on your hands, ranging from the obvious sexual harassment claim to other issues, like workers’ compensation claims, or liability to a third-party for damages caused by one of your merrymaking employees.

As the holiday festivities are shortly starting, it is imperative to provide a helpful reminder to employees (and supervisors) that the company’s policies against harassment and discrimination apply during company-sponsored events, just as they ordinarily apply during the workday.

Remember that Holidays Aren’t the Same for Everyone

It’s also worth remembering that not all employees celebrate the religious aspects of the season.  Diversity makes the workplace a better, more productive place, and a holiday party should reflect the diversity of the workplace.  Beyond the fact that laws like Title VII of the Civil Rights Act of 1964 protect against discrimination on the basis of religion, your holiday party should be a place of inclusion that makes all employees of any or no religious affiliation feel welcomed. Consider these steps:

• Hold holiday parties off-premises and during non-work hours if possible.
• Make attendance optional. If the party is held outside of work hours and optional, then employees who may not celebrate holidays for religious or ethnic reasons can miss the party without forfeiting pay or suffering discipline.
• Consider offering a “holiday party” or “end of year party” instead of a celebration linked to a particular religious observance. Although you may not get sued for simply having a “Christmas Party” or “Hanukkah Party,” adding religious overtones to your celebration may leave some workers feeling alienated or unwelcome.
• If an employee has a religious or cultural objection to participating in your company’s holiday celebration, explore whether there’s a reasonable accommodation that will alleviate that employee’s concerns.

Don’t Hog the Eggnog!

Many employers choose to serve alcohol to add to the cheer and festive atmosphere at their holiday parties.  There’s usually nothing wrong with this from a legal perspective, and employees often appreciate the ability to enjoy an adult beverage while having a good time with work colleagues.  Serving alcohol at a work function does have its risks, though.  Here are some considerations if you decide to include alcohol at your holiday festivities:

• Consider offering drinks with lower alcohol content, such as beer, wine, and hard seltzers, and serving food, too, to help slow the absorption of alcohol.

• Consider having alcohol served by a professional bartender who can better recognize a visibly intoxicated person and/or limit the number of beverages available for each guest.
• Make transportation available to and from the event.

The holidays are a time of celebration for everyone, and your holiday party should be, too. Remaining cognizant of the liability issues that may be associated with a holiday party can help keep things ‘merry and bright.’ As always, feel free to contact a member of the McNees’ Labor & Employment Group if you have any questions or concerns about your holiday party.  We wish you all a happy and healthy holiday season!

The National Labor Relations Board (“NLRB”) issued a decision finding that an employer violates the National Labor Relations Act (“NLRA”) by requiring employees to attend meetings in which the employer expresses its views on unionization. The decision, Amazon.com Services LLC, was issued on November 13, 2024 and overruled precedent dating back to 1948.

Under the ruling, these meetings—commonly known as “captive audience meetings”— violate the NLRA when the employer requires attendance under threat of discipline or discharge. The NLRB reasoned that these meetings interfere with an employee’s right to freely decide whether, when, and how to discuss unionization. Further, the NLRB stated these meetings can give a “coercive character” to the employer’s message.

Although this decision may take away a very powerful tool for employers facing a union campaign or election, employers can rest assured that the rule is not retroactive.  The ban will only be applied moving forward and will not be applied to meetings that occurred prior to the ruling.

While an employer may currently be prohibited from holding captive audience meetings, even under the Amazon decision, an employer can still meet with employees and discuss its views on unions.  The NLRB offered a safe harbor scenario to avoid violative captive audience meetings. An employer seeking to hold a meeting to express its views on unionization should provide advance notice regarding the following: (1) the subject matter of the meeting; (2) that attendance is voluntary with no adverse consequences for failure to attend; and (3) that the employer will not keep attendance records of the meeting.

In 2022, Jennifer Abruzzo, General Counsel of the NLRB, issued a memo stating her position that similar violations of the NLRA occur when a supervisor approaches an employee during work to discuss unionization and the employee perceives that they cannot walk away. Because that scenario was not at issue in the Amazon case, the NLRB did not take a stance on that argument. Therefore, employers should caution their supervisors not to approach employees to discuss unionization while the employee is working.

The ruling serves as a reminder for employers to consult with legal counsel when dealing with potential unionization efforts or a petition for election to ensure they are operating with the most up-to-date information on what is permissible under the ever-evolving NLRA legal landscape.

In Pennsylvania, fall is in full swing, football season is hitting its stride and Thanksgiving is just around the corner.  What is on the menu for employers as the fall turns to winter?  Maybe some more restrictions on marijuana testing in the workplace?  Medical Marijuana is legal in PA and if you listen to the rumors, recreational marijuana may soon be on the menu.  Before we can even get to that course, Pittsburgh joined the party with an amended ordinance that employers should be aware of.  Will this new Ordinance be a sign of things to come or a one and done?

The City of Pittsburgh amended its Anti-Discrimination Ordinance to include protections for medical marijuana cardholders who work in or are applying to work in the city. The amended Ordinance restricts drug testing for applicants and employees who meet the Ordinance’s definition of a “medical marijuana patient.”  Here are some of the specifics:

What Does the Ordinance Do?

The Ordinance provides enhanced workplace protections for medical marijuana patients. City employers with five or more employees (including employment agencies and labor organizations) may not condition employment upon the passage of a pre-employment drug test for marijuana. The Ordinance also imposes restrictions on drug tests performed during employment; testing is permitted only under reasonable suspicion and after a workplace accident. For those entitled to protection, the employer may continue testing for other illegal drugs and controlled substances, only marijuana must be excluded from the testing panel.

Who is Protected?

Only those who meet the definition of a “medical marijuana patient” are protected by the Ordinance. The Ordinance defines “medical marijuana patient,” as someone who is certified under the Pennsylvania Medical Marijuana Act to access medical marijuana. There are no protections for applicants or employees who may be protected under another state’s medical marijuana program. If an Ohio resident, for example, chooses to work in the City of Pittsburgh, he or she would not be protected by the Ordinance. Likewise, any applicant or employee who holds a card in another state – and who has not yet become certified under Pennsylvania law – is not protected.

Are There any Exceptions?

There are a few limited exceptions to the testing restrictions. The Ordinance does not preempt the drug testing requirements of the state or federal department of transportation. Testing is also permitted if specifically allowed by a collective bargaining agreement and where the employee is required to carry a firearm as part of the job. However, there is no broad exception that allows testing for applicants and employees in other safety sensitive jobs.

Does the Ordinance Enhance Any Other Protections for Medical Marijuana Patients?

No. Employers in Pittsburgh may still discipline employees for being under the influence while at work. Employers may still prohibit employees from using medical marijuana on employer property and during work hours.  Pittsburgh employers may still restrict medical marijuana patients from performing certain safety sensitive jobs if the individual would be under the influence of marijuana while performing the job.

What Should a Pittsburgh Employer Do Now?

• Update your drug testing policies to comply with the Ordinance.
• Work with your drug testing vendors/facilities to create a process for identifying medical marijuana patients and ensuring they receive the appropriate testing in accordance with the Ordinance. Keep in mind that no questions regarding medical marijuana patient status may be made until after a conditional offer of employment has been made; such question is considered a medical inquiry.
• Train your managers and hiring personnel. Anyone involved in the hiring process must be educated on the new ordinance and the enhanced protections for medical marijuana patients.
• Refresh your reasonable suspicion/workplace impairment recognition program. With broad prohibitions on drug testing, and the general inability of a test to detect impairment from marijuana, a strong reasonable suspicion/impairment recognition program is critical. Managers and supervisors should be trained on the signs of impairment and how to objectively recognize and clearly document when someone is impaired. This is the key to keeping workplaces safe in the age of medical marijuana.
• Consult your counsel with questions.