top 5 issues employment law breakfast (k0227996-2)

8/9/2019 Top 5 Issues Employment Law Breakfast (K0227996-2)

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To p Five Issu e s C o n fro n tin gYo u r B u sin e ss s H u m a n

R e la tio n s Pra ctice sMay 12, 2010


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& :W a g e H o u r E m p lo ye eC la ssifica tio n s


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W h y th is M a tte rs

:Department of Labor adding 250 new investigators

Internet educationinitiatives will be requiring compliance

audits

prioritizingmisclassifications

Mistakes cost big money


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Three Issues to Think About

.Employee vs Contractor .Employee vs Intern

- .Non Exempt Employee vs ExemptEmployee


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.Employee vs Contractor

The Benefits of UsingIndependent Contractors

Reduced Cost Employer taxes

No benefits

Flexibility in staffing


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Employee vs. Contractor (cont.)

When Will Workers Be Considered Employees ( )Common Law Test Right To Control

., .Nationwide Mutual Insurance Co v DardenInsurance Agent US Supreme Court

factors consider all aspects of

employment relationship no singlefactor controls

The IRS 20 Factor Test !It is not about the numbers

You do not need to meet all 20 tests

All of the relevant facts andcircumstances are considered

,Ultimately it is about CONTROL


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.Employee vs Contractor( .)cont

( .) When Will Workers Be Considered Employees cont Economic Realities Test

,As an economic reality is the worker dependenton the company

,Considered a broader more liberal test

Often used in FLSA cases Relevant factors

Level of skill required Degree of worker s financial investment in

equipment and facilities Degree of control by Company Duration of the relationship Worker s opportunity for profit and loss


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Effects of Misclassification Payroll Tax Liability

Safe harbor protections company had areasonable basis for not treating workers as

.employees

past audit court case letter ruling advice of attorney

FLSA FLSA does not cover independent contractors Economic realities test If misclassified

Overtime

minimum wage


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Effects of Misclassification (cont.)

Employment Discrimination Laws and NLRA ,If considered an employee must count towards

jurisdictional minimum number of employees( , .)Title VII requires 15 employees etc

,If considered an employee entitled toprotections of the laws

Workers Compensation ,If independent contractor then exempt from

,workers compensation and can sue in courtfor work related injuries

Employee Benefits May sue the plan for benefits denied Risk of plan disqualification Plan language is key the definition of who

is eligible for benefits .Vizcaino v Microsoft


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Precautions to Reduce Risk of Liability Draft Independent Contractor Agreement Key Terms

The definition of work performed

, ,Payment flat rate or per hour charge withsubmission of reports Payment of Expenses Responsibility for Taxes , ,Equipment materials supplies No Benefits Insurance contractor to carry Indemnification contractor to indemnify

company for losses if reclassified asemployee

, In practice adhere to the agreement s terms


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.Employee vs Intern

DOL is cracking down on companies.that fail to properly pay interns

# :Fact Sheet 71 Internship Programs

Under The Fair Labor Standards Act - Internships in the for profit

private sector will most often be,viewed as employment which must be

.paid


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.Employee vs Intern

- :Six Factor Test Is the training similar to what would be given

in a vocational school or academic educationalinstruction?

Is the training for the benefit of the trainees

or students? Do the trainees or students work under their

close observation of regular employees withoutdisplacing them?

Does the employer derive no immediate advantagefrom the activities of the trainees or

, students and on occasion are the employer soperations actually impeded? Are the trainees or students not necessarily

entitled to a job at the conclusion of thetraining period?

Do the employer and the trainees or students

understand that the trainees or students arenot entitled to wages for the time spent in


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:Exemptions AdministrativeEmployees

- - :Employee by employee analysis based on Is the employee paid a salary of at least $455 per week? Is the employee s primary duty the performance of office

-or non manual work directly related to the managementor general business operations of the employer or the

employer s customers?

Does the employee s primary duty include the exercise ofdiscretion and independent judgment with respect to

matters of significance?

The Case of Mortgage Loan Officers .Traditionally considered exempt

. -DOL Administrator s Interpretation No 2010 1 Employees who perform the typical job duties of amortgage loan officer do not qualify as exempt

.administrative employees A careful examination of the law as applied to the

mortgage loan officers duties demonstrates that their, ,primary duty is making sales and therefore mortgage

[loan officers perform the production work as opposed

] .to administrative work of their employers


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Patient Protection and( )Affordable Care Act PPACA andHealthcare and Education

( )Reconciliation Act HCERA What You Need To Known Now and In theFuture


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Main Elements

Individual Mandate Employer Mandate

Health Insurance Market Reform

Creation of exchanges Insurance mandates Required coverage elements

Tax Changes


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Impact on Businesses

What Your Insurance Must Have No lifetime amount restrictions Cover up to 26 Preexisting condition coverage No rescissions Preventative health services without cost

( )sharing with grandfather clause Early retiree reimbursement

Community Living Assistance Services andSupport Act Prohibition on salary discrimination


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Employer Coverage Issues

( )NOW 2010 and 2011 Tax credits for small businesses Coverage requirements Tax changes HSA changes -CLASS Act Long term benefit enrollment

2013 Medicare payroll tax increase

-Cap on salary reductions for health FSAs Change Medicare Part D retiree drug subsidy

( )RDS


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Employee Coverage Issues (cont.)

2014 ( )Small Business Exchanges SHOPs Penalty for No Coverage ( )Automatic Enrollment maybe 2014 Tax on Cadillac Plans

2016 Healthcare across state lines

2018 -High value Excise Tax


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Healthcare Related TaxChanges

- W 2 Reporting Tax on subsidies for retiree

prescription drug programs

Medicare payroll taxes increased-for high wage employees Tax for not providing health

insurance

Excise tax on Cadillac plans Tax credits for small businesses Comparative effectiveness fee


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What Your Plan Has to Cover

. % -72 5 employee plan % -65 family Kids up to 26

No lifetime limits No recissions Limits on waiting periods No preexisting condition restrictions

for kids under 19 Automatically enroll employees opt

out


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Grandfather Clauses

What will cause loss of grandfatheredin status is as yet undetermined

Group health plans in existence whenPPACA was enacted are not required to

adhere to some of the plan coveragerequirements -No cost sharing for preventive health

services

Prohibition on salary discrimination

Grievance and appeals procedures Certain patient protection provisions : ,Remember enacted March 23 2010


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HSAs

Limiting its uses ,Only for prescriptions no

- -longer for over the counterdrugs Stiffer penalties


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Retiree Only Plans

Tax subsidies on retireebenefits starting in 2013

Companies that provides

retirees with prescriptiondrugs received a subsidy to doso

This will now be taxed

- -Caterpillar write down $14Billion , ,Boeing Verizon Conway also

claim will suffer losses


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CBAs

Similar coverage requirements Amendments to CBA solely to

comply with new rules is not

considered termination of theagreement Certain coverage and reporting

mandates not to apply untildate last CBA relating tocoverage terminates


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Additional Surprises

Nursing Rooms Whistleblower Protection

1099 Requirement Changes


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Predicted Impacts

Higher Insurance Premiums forBusinesses on Current Plans

Potential decrease for small

businesses if SHOPs work aspromised by Congress

Penalty for Not ProvidingInsurance

Loss of Certain Tax Breaks


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Technology in the Workplace

What You Can and Cannot Do


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Privacy and Privilege

. , . ( . . )Stengart v Loving Care Agency Inc N J 2009 ,Employee s emails to her attorney sent through

,Employee s web based email account consideredprivileged

Court concluded that Company s electronic

,communications policy which requiredconversion of emails into company business, -records must give way to attorney client

privilege

. ,Alamar Ranch LLC v County of Boise 2009 WL( . )3669741 D Idaho 2009

Privilege waived for emails sent using companycomputers Attorney should have been aware that client s

employer would access email sent via companysystem


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Text Messages

. ( . )Quon v Arch Wireless 9th Cir 2008 Police officers used department provided cell

phones for work and personal use Department had policy of monitoring email and

,other communications but policy did notspecifically include text messages

Service provider disclosed the text messages to,the Department as the subscriber under the SCA

Court concludes that service provider could notdisclose contents to Department

Employee had reasonable expectation of privacythat messages would not be reviewed withoutconsent

. . ,U S heard oral arguments on April 19 2010


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Personal Email Accounts

-Employee s access of personal web based( , ,email accounts Gmail Yahoo and the

)like on company computer Can Employer log in to the personal

account?

Stored Communications Act Violation of SCA to access without

authorization and obtain electroniccommunications

. .,Van Alstyne v Electronic Scriptorium Ltd. ( . )560F 3d 199 4th Cir 2009(Company found to violate SCA and

,punitive damages upheld where former )boss logged into employee s AOL account


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:The ADA Amendments Act

Disability Discrimination Redux


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ADA Amendments Act

Express purpose is to make iteasier to meet the

.definition of disability Response to court rulings that

rejected claims ofdisability discrimination

because the party wasn t.sufficiently disabled


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: ADAAA What s New

New definitions of major lifeactivity

- Re imagines substantially

limits New provision relating to

regarded as

Refocuses the test ofdiscrimination away fromwhether a disability exists to

.whether discrimination exists


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:ADAAA Major Life Activities

- :Non exclusive statutory list , , , ,eating sleeping walking standing

, , ,lifting bending speaking, , ,breathing learning reading

, ,concentrating thinking ;communicating and working or ,Major bodily functions such as

,functions of the immune system, ,normal cell growth digestive

, , ,bowel bladder neurological, , ,brain respiratory circulatoryendocrine and reproductive.functions


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:ADAAA Major Life Activities

Impairments affecting onlyinternal bodily functions

without affecting externalactivities are to be

.considered disabilities Impairment of one from either

.list is enough


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:ADAAA Substantially Limits

.Not an exacting test ,Does not mean prevent or

significantly or severely

.restrict , -Does not cover temporary non

chronic impairments of short

duration with little or no

.residual effects


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:ADAAA Substantially Limits

Must also consider limiting nature .of impairment when it is active

An impairment that is episodic orin remission is a disability ifit would substantially limit a .major life activity when active

Must ignore mitigating measures . ., , ,E g medications medical devices

,assistive technologies learned,behaviors and surgical.interventions


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:ADA Substantially Limits

Examples :es , , ,deafness blindness intellectual disability

,partially or completely missing limbs mobility,impairments requiring use of a wheelchair

, , , ,autism cancer cerebral palsy diabetes, / , ,epilepsy HIV AIDS multiple sclerosis muscular

, , ,dystrophy major depression bipolar disorder- , -post traumatic stress disorder obsessive, .compulsive disorder and schizophrenia

:o ,the common cold seasonal or common, , -influenza a sprained joint minor and non

,chronic gastrointestinal disorders or a broken.bone that is expected to heal completely

:aybe , ,asthma back and leg impairments carpal, .tunnel syndrome and learning disabilities


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:ADAAA Regarded As

:Covers ,actual or perceived disability

whether or not it actually limitsor is believed to limit a major

life activity actions taken on basis of

mitigating measures used for an,impairment or symptoms of an

impairment

:Does not cover apply to transitory and minor

impairments

.require reasonable accommodations


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:ADAAA What Does It All Mean?

More ADA claims in federalcourt

Summary judgment more

difficult

Higher settlement values of

cases .Disability vs Accommodation


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:Objective

Locate and Hire the BestAvailable Candidate
http://www.fotosearch.com/CSP161/k1610349/


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- .Re hire vs New Hire

Look at the Pros and Cons

Wh d L k f
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Where do you Look forPeople?

H B d i Y A li t
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How Broad is Your ApplicantPool?

Wh Did L R d Y


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When Did you Last Read YourApplication Form?

Sh ld Y C d R f
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Should You Conduct Reference/and or Background Checks?
http://www.clipartof.com/details/clipart/87190.html


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Do You Use

Social Networking Tools? Online Sources of

Information?


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:Interviews

Are you asking the RightQuestions?


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Do You Do

Applicant Testing
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Do You Require

Physical Examinations? Drug and Alcohol Testing?

D Y G Th h th S
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Do You Go Through the SameSteps

.Rehire vs New Applicant?

T d C diti f


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Terms and Conditions ofEmployment

Confidentiality Agreement? -Non Compete? Employment Agreement? Review Employee Handbook?


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:Result

!A Productive Workforce


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Presenter Information

top 5 issues employment law breakfast (k0227996-2)

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