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Employment Law News from Vigilant: 07/1/2010
07-01-2010 |
 New FMLA interpretation broadens definition of child
Employers may be surprised to hear that an employee could take leave under the federal Family and Medical Leave Act (FMLA) to care for their domestic partner’s child, but that’s exactly what the Department of Labor (DOL) said in a recent interpretation letter. Employees may take leave to care for a child if they stand “in loco parentis,” meaning “in the place of” of a parent, even if no biological or legal relationship to the child exists. Under FMLA regulations, an individual who provides a child with day-to-day care and financial support stands in loco parentis. The DOL’s new interpretation letter says providing either day-to-day care or financial support is sufficient.
Tips: This interpretation letter could have broad implications, particularly for employees living with a domestic partner. If an employee is providing day-to-day care of a domestic partner’s child (e.g. cooking dinner, driving to school, etc.), the employee will be eligible to take FMLA leave to care for that child. Remember, it’s irrelevant whether the child’s biological parents could provide care; if the employee stands in loco parentis, he or she is eligible to take FMLA leave if that child has a serious health condition.
Additional health care reform details revealed
More guidance on federal health care reform mandates has been issued by the Departments of Health and Human Services (HHS), Labor and the Treasury. This latest round of interim final rules, which will go into effect on August 27, 2010, discuss the ban on pre-existing condition exclusions (PCEs), restrictions on annual and lifetime limits, the prohibition on rescinding an individual’s coverage and certain patient protections (75 Fed Reg 37188, June 28, 2010). Except as noted below, all of these provisions apply to grandfathered plans. Among the key points:
PCEs: A PCE is a limitation or exclusion of benefits based on the fact that the condition was present before the effective date of coverage. Beginning with the first plan year starting on or after September 23, 2010, PCEs may not be applied to any enrollee under age 19. Effective January 1, 2014, PCEs may not be applied to any enrollee.
Annual limits: Annual limits on “essential health benefits” may only be applied as follows:
• For a plan year beginning on or after September 23, 2010, but before September 23, 2011: $750,000
• For a plan year beginning on or after September 23, 2011, but before September 23, 2012: $1,250,000
• For a plan year beginning on or after September 23, 2012, but before September 23, 2013: $2,000,000
The term “essential health benefits” will be defined in future guidance, but in the meantime, for enforcement purposes, the regulators will take into account good faith efforts to comply with a reasonable interpretation of the term. Additionally, the guidance indicates that health reimbursement arrangements (HRAs) that are linked to other coverage need not separately meet these limitation requirements and retiree-only HRAs and flexible spending arrangements (FSAs) are likewise not subject to this guidance. The regulators are seeking comments on how a standalone HRA should be handled for purposes of annual limits.
Lifetime limits: Lifetime limits are not permitted for plan years beginning on or after September 23, 2010. If an individual has already exceeded his or her lifetime limit, but otherwise remains eligible under the plan, you must give them notice of their right to reenroll and allow them a 30-day period in which to reenroll. A model notice is available.
Rescissions of coverage: Plans may only rescind coverage of an individual if they can show the individual committed fraud or an intentional misrepresentation to gain coverage. The guidance clarifies that rescinding coverage refers only to a cancellation that has a retroactive effect. This interpretation means that employers who discover ineligible individuals on their plans are not barred from removing them from coverage, but may only do so on a prospective basis, unless they can show fraud or intentional misrepresentation.
Patient protections: For plans that have a network of providers, an individual must be able to choose any participating provider as their primary care provider or any participating pediatrician for a child’s care. Also, women cannot be required to obtain preauthorization or referral for OB-GYN care. Participants must receive notice of these rights—a model notice is available. In addition, emergency room care must be paid on an in-network basis and without any preauthorization. These patient protections do not apply to grandfathered plans.
Have questions? Contact Vigilant!
No privacy in text messages sent from employer-owned pager
Reversing a Ninth Circuit U.S. Court of Appeals decision that Vigilant reported on nearly two years ago, the Supreme Court recently ruled that a city employer didn’t violate the rights of several California police officers when it searched text messages sent from city-owned pagers (City of Ontario v. Quon, US, June 2010).
Officers could use the pagers for personal use, but excessive overage charges triggered a city-conducted search that turned up sexually explicit messages. While the Ninth Circuit ruled that the search violated the officers’ privacy rights, the Supreme Court said the city’s search was okay because it was work-related and not excessive in scope. Interestingly, the high court also noted that the search would be “regarded as reasonable and normal in the private-employer context.”
Tips: Although public employees have different privacy rights, the court’s decision certainly strengthens a private employer’s right to conduct electronic monitoring of employee conduct. If you conduct electronic searches, be sure they’re narrowly focused on a business-related purpose and inform employees that they shouldn’t expect privacy with regard to any activity conducted on company-owned equipment. State laws vary in this regard, so check out our Legal Guide, “Electronic Communications in the Workplace” (1337) for more information.
SAFETY: Dog days of summer bring threat of heat illness
Hot sun and no shade? Check. Long hours of physical labor? Check. Non-breathable clothing and no water? Check. Sounds like you’ve got everything you need for a heat illness!
As summer approaches, employees who work outdoors in direct sunlight or in hot environments are increasingly susceptible to heat-induced illnesses such as heat stress, heat exhaustion or the more serious heat stroke. Symptoms of heat exhaustion or heat stroke include confusion, irrational behavior, loss of consciousness, abnormally high body temperature and hot, dry skin.
Employers in California and Washington are required to protect workers by following their state’s heat illness prevention rule, but all employers should help employees stay healthy by providing plenty of water and frequent rest periods in a cool recovery area. Check out OSHA’s fact sheets, “Protecting Workers from Effects of Heat” and “Working Outdoors in Warm Climates,” and call your Vigilant safety professional for more heat illness prevention information and recommendations.
FMCSA updates guidance on electronic tracking devices and driver hours
The Federal Motor Carrier Safety Administration (FMCSA) has issued two new guidance policies, aimed at modernizing records of hours of service by drivers of interstate commercial motor vehicles. The FMCSA is an agency within the U.S. Department of Transportation (DOT).
Because electronic mobile communication/tracking systems have become commonplace in the trucking industry, inspectors may now review the data in such systems and issue citations if the driver exceeded the maximum hours of service for the day or week. You may dispense with certain paper records if your electronic system meets specific requirements, including the transmission of position location for each vehicle at least once per hour while in motion, and the ability to produce records on demand. You must retain any position history report for at least six months (75 Fed Reg 32984, June 10, 2010).
The agency also issued guidance allowing interstate commercial motor vehicle drivers to electronically scan and send their “record of duty status” reports to their employers, thus eliminating the need to forward the paper originals and keep duplicates in the vehicle. If the driver uses this scanning procedure, the originals must stay with the driver and be available for inspection (75 Fed Reg 32860, June 10, 2010). For more information on FMCSA recordkeeping requirements, see our Legal Guide, “Motor Carrier Safety Requirements” (3146).
Whistleblower poster required for ARRA contractors
The federal government recently updated and finalized an interim rule that had been in place since March 31, 2009, requiring employers who receive stimulus funds under the American Recovery and Reinvestment Act of 2009 (ARRA) to display a whistleblower rights poster. The employer must also inform subcontractors whose work is funded in whole or in part by ARRA funds that they must display the poster too. Employees of companies that receive ARRA funds are protected from discipline or discharge for reporting gross mismanagement, gross waste, danger to public health or safety, abuse of authority, or violations of laws or regulations related to covered funds. These protections apply regardless of the size of the federal contract or subcontract (75 Fed Reg 34258, June 16, 2010 and 74 Fed Reg 14633, March 31, 2009).
Changing into PPE may be compensable and changing clothes may start the workday
In a new opinion letter, the U.S. Department of Labor (DOL) has reversed course on pay for union-represented workers who change clothes at the beginning or end of the workday. The letter focuses on a special exception in the federal Fair Labor Standards Act that allows a collective bargaining agreement to exclude pay for changing clothes or washing up at the beginning or end of the workday.
First, the agency decided that the special exception doesn’t extend to personal protective equipment (PPE) “that is required by law, by the employer, or due to the nature of the job.” Translation: even if a collective bargaining agreement says you don’t have to pay for changing clothes, you may have to pay for the time it takes to put on required PPE.
Second, the agency decided that even if a collective bargaining agreement says you don’t have to pay for the time it takes to actually change clothes, the changing may itself be a “principal activity” that signals the beginning or end of the workday. Translation: If it takes 15 minutes after changing clothes for the employee to walk to the work station, you may have to pay for those 15 minutes of walking time (Administrator’s Interpretation No. 2010-2, June 16, 2010).
Tips: If the time it takes to put on or remove PPE is minimal (e.g., such as for a hard hat and hearing protection), then you generally don’t have to pay for that time. The DOL is more concerned with lengthy donning and doffing of PPE, such as at a meat-packing plant. For more information, see our Legal Guide, “Compensation for Pre-Shift and Post-Shift Activities” (1179).
Senate confirmations bring NLRB back to five-member strength
Two members of the National Labor Relations Board (NLRB), Mark Gaston Pearce and Brian Hayes, were confirmed by unanimous consent in the Senate recently, bringing the Board back to its full five-member strength for the first time since 2007 (NLRB Press Release, June 22, 2010). The Board is composed of five members, split 2-3 between Republicans and Democrats depending on which administration is in the White House. Currently the split is in favor of the Democrats, which means employers can expect predominantly pro-labor rulings from the Board. The Supreme Court ruled last month that the decisions issued by a two-member Board, while awaiting appointment of its remaining three members, were not valid (see our Vigilant Counsel article on June 17, 2010), but these confirmations make for a full Board that can now issue binding decisions. Prepare for more turnover on the Board, however, as one member’s term expires in August and two others expire in 2011.
Applications, FAQs on retiree reinsurance program available
Thinking of applying for reimbursements under the new Early Retiree Reinsurance Program? Check out new FAQs on the program, posted by the Department of Health and Human Services (HHS), and begin the application process now. HHS has also posted instructions for the program application. Applications are taken on a first come, first served basis and a study by the Employee Benefits Research Institute predicts that the $5 billion appropriation for the program will run out in two years.
Tips:
Interested in health care reform? Keep up to date on all the latest developments with Vigilant’s new Health Care Reform Blog.
Pension funding relief becomes law
Good news for defined benefit pension plan sponsors! President Obama recently signed into law a bill containing pension funding relief (HR 3962). Under the new law, temporary funding relief is available to both single and multiemployer pension plans that suffered major losses in asset value due to market conditions in 2008. Employers who choose to take advantage of the relief provisions will be subject to additional contribution requirements if they pay any employee compensation in excess of $1 million, or engage in certain other transactions involving stock and dividends. For more information, contact your pension plan advisor.
DOL toughens penalties for child labor violations
New tougher monetary penalties apply for employers who illegally employ 12 or 13-year olds. According to a U.S. Department of Labor (DOL) news release, an employer who illegally employs a child aged 12 or 13 will face a penalty of at least $6,000 per violation. Illegal employment of a child under 12 will result in a penalty of at least $8,000 per violation and any of these penalties can be raised to $11,000 per violation under certain circumstances. Generally, the minimum age at which a child may be employed is 14. For more information, see Vigilant’s Legal Guide, “Child Labor Laws” (1019).
Supreme Court and NLRB clarify arbitration rules
Disputes over arbitration agreements recently resulted in three new decisions that may affect you. The first two apply to employers who ask non-union workers to sign agreements to arbitrate employment disputes (instead of suing you in court). The third applies to employers with a collective bargaining agreement that includes arbitration as the final step of a grievance procedure.
1. The U.S. Supreme Court said that if an arbitration agreement with a non-union employee includes a clause delegating authority to an arbitrator to determine whether the agreement is valid, the employee can challenge that clause in court. However, if the employee wants to challenge the overall agreement (e.g., because the terms are coercive), then the employee must present the case to an arbitrator (Rent-A-Center, West, Inc. v. Jackson, US, June 2010).
2. The top attorney who advises the National Labor Relations Board issued an enforcement memo stating that non-union workers who band together to file a class action lawsuit or arbitration case are protected under the National Labor Relations Act from retaliation. You may require employees to sign arbitration agreements that waive the right to file such class actions, but the agreement must explain that no retaliation will occur if the employees choose to join together to challenge the validity of the agreement (NLRB General Counsel Memorandum 10-06, June 16, 2010).
3. When the parties to a collective bargaining agreement (CBA) are fighting over whether the CBA was properly ratified, the U.S. Supreme Court said a federal judge, not an arbitrator, normally should make the decision. Just because the CBA contains arbitration as the final step in the grievance process doesn’t mean that the parties intended to let an arbitrator decide whether the contract was actually formed (Granite Rock Co. v. Int’l. Brotherhood of Teamsters, US, June 2010).
MONTANA: Employee can sue employer for personal injuries
Workers’ compensation is not the sole remedy for an employee who was injured by a leaking propane stove, says the Montana Supreme Court. Michael Alexander was hired to work in a small building, where the only source of heat was a propane stove. Unbeknownst to Alexander, he was replacing an employee who had passed out due to inhaling toxic fumes and who claimed the leaking propane stove was to blame. After starting work, Alexander’s health significantly deteriorated from toxic fume inhalation.
Although his employer tried to claim that workers’ compensation should be his sole remedy, the Montana Supreme Court allowed Alexander to directly sue for several personal injury claims. The court’s rationale: Since the employer knew about the health concerns from the previous employee and failed to properly inspect or take other action to protect Alexander, his injuries may have been the result of an intentional action. A jury will now decide whether Alexander should collect any money for his injuries (Alexander v. Bozeman Motors, Inc., Mont, June 2010).
Tips: Ignoring an employee’s complaint about a safety issue will get you in hot water in more ways than one. Contact your Vigilant safety professional to discuss how to properly investigate an employee’s complaint about a health or safety issue.
OREGON: No prorated commissions owed to terminated salesman
A terminated salesman was not owed prorated commissions under his employer’s sales incentive program, according to a recent case from the Oregon Court of Appeals. The incentive program specified that employees must be employed on the final business day of the quarter in order to qualify for bonus commissions. When the salesman was terminated prior to the end of the qualifying date, he claimed he should have been paid prorated commissions. The court sided with the company, stating that the company could make employment through the end of the incentive period a qualification of receiving a bonus commission. For salespeople who didn’t meet the qualifications, including being employed on the final day of the incentive period, the court said no prorated payments were owed (Martin v. DHL Express, Inc., Or App, June 2010).
Tips: The employer won this case because it had a clearly written policy that defined how an employee qualified for bonus commissions. If you’re offering bonuses or commissions to employees, and you don’t want to be on the hook for prorated payments, be sure you’ve squarely addressed this issue. For assistance, contact your Vigilant staff representative.
OREGON: Oregon OSHA adopts hexavalent chromium changes
The Oregon Occupational Safety and Health Division has updated its rule regarding hexavalant chromium to align with federal regulations. Employers conducting hexavalent chromium exposure monitoring will now have to share all results with affected workers. Previously, the rules only required notice to employees when their exposure to hexavalent chromium climbed above the federal permissible exposure limit of five micrograms per cubic meter of air. The new rule went into effect on June 15, 2010.
WASHINGTON: Initiative 1082 makes it on the November ballot
Vigilant and other supporters of Initiative 1082, a measure to allow private insurers to compete with the Department of Labor & Industries (L&I) in the workers’ comp market, have successfully gathered 340,000 signatures, making it highly likely I-1082 will appear on the ballot in November for voter approval. Currently, L&I is the sole provider of workers’ compensation coverage in Washington State. For more information about Initiative 1082 or how you can support it, contact Nancy Dicus in Vigilant’s Everett Regional office at 1-800-733-8620.
Can you believe it!
When handing out company credit cards, it’s best to give only one per employee. An insurance company gave four gasoline credit cards to a company VP. With so many cards, he decided to spread the wealth, so he gave one to his wife, and one to his mistress. The mistress racked up $2500 in unauthorized charges, and the VP used his own card for personal trips to visit her. Eventually he was fired, and although he claimed age discrimination, the court didn’t “buy” it and threw out his case (McLain v. Liberty Nat’l Ins., 11th Cir, April 2010).
Vigilant warmly welcomes our newest members:
DLF International Seeds, based in Halsey, Oregon, is one of the five largest forage and turf seed companies in the U.S. The primary contacts are Alan Muhl and Donna Stephens.
Truck Vault is the world’s leading manufacturer of secure vehicle storage solutions in the sports, law enforcement and public safety markets. The manufacturing facility is located in Sedro Woolley, Washington. The primary contacts are Patricia Pienta and Crystal Birkett.
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UPCOMING EVENTS, TRAINING CLASSES AND WEBINARS:
Is training too expensive? Do you wish we had training in other subjects? Or, do you have difficulty getting the training you need because you’re located in a remote area? We’re excited to announce that we have NEW online classes for our members—over 3,000 titles to choose from! Our new online classes provide you with a more affordable way to get training for you and your employees—no matter where you’re located!
Topics such as: Marketing, Sales, Accounting, Operations, Diversity, Interviewing Skills, Microsoft Excel, Microsoft Word and more are now all available to you at reduced member rates. To see a complete list, check out the catalog of online classes. If you already have an email and password to get into the member side of our current website, or the old TOC website, you may use that same email and password to login. However, if your name or email address has changed since you initially registered for access to our site, you may have to create a new registration with your current information. You can register under “Vigilant members registration” at: www.companycollege.com/vigilant.
We’re thrilled to be able to bring you more affordable options for training. Please feel free to give us your feedback, concerns, or requests at: training@vigilantcounsel.org.
Training:
Don't see classes in your area? Contact Nicole Forward at n.forward@vigilantcounsel.org to request classes in your community. To learn how to register for open training classes, see our webinar for registering yourself (approximately ten minutes) or registering others (approximately seven minutes).
By attending 10 half-day classes in 5 months, employees can earn a “Fundamentals of Leadership” certificate in Everett, Washington, beginning this August. Or, participants can sign up for individual sessions using the links below. To register for the “Fundamentals of Leadership” certificate series, contact Nicole Forward (n.forward@vigilantcounsel.org or 800-733-8620).
Coming soon: Open classes in Tigard, Oregon
Frontline Leadership
August 17, Everett, WA
September 23, Spokane, WA
Communications Skills 101: Interpersonal Communications
August 18, Everett, WA
Hiring the Best (for Supervisors)
August 26, Spokane, WA
Legal Issues for Supervisors
September 14, Everett, WA
Preventing Discrimination and Harassment
September 15, Everett, WA
Safety Inspections
October 12, Everett, WA
Investigating Accidents
October 13, Everett, WA
Training Employees
October 21, Spokane, WA
December 15, Everett, WA
Proactive Supervision: Sowing Seeds for Success
November 9, Everett, WA
November 18, Spokane, WA
Effective Discipline: When Coaching Doesn’t Work
November 10, Everett, WA
Conflict Resolution
December 14, Everett, WA
Team Building
December 16, Spokane, WA
On-demand webinars:
Recent webinars are available as on-demand recordings that you can watch and listen to on your computer. Available titles range from $99 to $159.
Online courses:
Over 3,000 online courses are available on a variety of topics through a partnership with the Business Training Library (BTL). Employees’ completion of each course can be verified by HR. For more information, see our four-minute webinar on how to access free online demos or our ten-minute webinar on how to take the online courses.
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Vigilant Counsel is a publication of Vigilant, 6825 S.W. Sandburg St., Tigard, OR 97223, telephone 503-620-1710. © 2010 Vigilant. This publication presents general information in nontechnical language. Before applying this information to specific management decisions, consult legal counsel, or consult Vigilant staff in the following offices:
Everett, WA—425-349-4477
Spokane, WA—509-276-2277
Tigard, OR—503-620-1710
Eugene, OR—541-485-7296
Redding, CA—530-222-3500
Writers This Issue: Kristine Cienfuegos, Karen Davis, Diane Weisheit
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