Obama Administration Proposal Would Extend FLSA Minimum Wage & Overtime Requirements To 5 Million+ Workers

June 30, 2015

U.S. should brace for potentially huge increases in their federal minimum wage overtime costs and liabilities if the U.S. Department of Labor Wage and Hour Division (WHD) implements a Proposed Fair Labor Standards Act Rule Change (Proposed Rule) that would extend overtime pay rights to nearly 5 million additional workers by guaranteeing overtime pay to most salaried workers earning less than an estimated $50,440 next year.  While the Proposed Rule has not yet been published in the Federal Register, the WHD released a prepublication copy for public review in connection with President Obama’s announcement of plans to implement the change yesterday.

The FLSA currently requires that covered employees be paid at least the federal minimum wage of $7.25 for all hours worked, plus time and one-half their regular rates, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. Employers also must maintain accurate time and payroll records. The FLSA provides that employers who violate the law are liable to employees for their back wages and an equal amount in liquidated damages. Liquidated damages are paid directly to the affected employees.

These FLSA rules generally apply to all common law employees other than those that the employer can prove meet the requirements of one of a limited number of exemptions to these rules.  The Proposed Rule would change the requirements for one of the exemptions most commonly relied upon by employers for not paying overtime to salaried workers – the “White Collar Exemption.”

Since 1940 and last updated by the WHD while President George W. Bush was President, generally have required an employer prove that an employee meets each of three tests for one of the FLSA’s White Collar Exemptions to apply:

  • The employee must be paid a predetermined and fixed salary that is not subject to reduction because of variations in the quality or quantity of work performed;
  • The amount of salary paid must meet a minimum specified amount; and
  • The employee’s job duties must primarily involve executive, administrative, or professional duties as defined by the regulations.

Among other things, the Proposed Rule if adopted as presently proposed would update current WHD regulations governing which executive, administrative, and professional employees (white collar workers) qualify as exempt from the FLSA minimum wage and overtime requirements often referred to as the “White Collar Exemption”:

  • Immediately raise the threshold under which most salaried workers are guaranteed overtime to equal the 40th percentile of weekly earnings for full-time salaried workers. As proposed, this would raise the salary threshold from $455 a week ($23,660 a year) to a projected level of $970 a week ($50,440 a year) in 2016.  WHD says nearly doubling the minimum salary threshold for a worker to qualify as exempt “minimizes the risk that employees legally entitled to overtime will be subject to misclassification based solely on the salaries they receive, without excluding from exemption an unacceptably high number of employees who meet the duties test.”;
  • Increase the total annual compensation requirement needed to exempt highly compensated employees (HCEs) to the annualized value of the 90th percentile of weekly earnings of full-time salaried workers ($122,148 annually); and
  • Establish a mechanism for automatically updating these qualifying standard salary and HCE total annual compensation requirements.

Beyond these changes, the WHD also is considering various changes to the duties test and invites suggestions for additional occupational examples in the current White Collar Exemption as well as comments on whether its regulations should require employers to take into account nondiscretionary bonuses when determining whether an employee meets the standard salary requirement.

The Administration claims that the Proposed Rule is needed to workers and their employers with greater “clarity” about when workers qualify for overtime.  Employers concerned about minimum wage, overtime and other wage and hour costs should recognize that the Proposed Rule would accomplish this clarification by substantially expanding the income and number of white collar workers that entitled to be paid in accordance with the FLSA’s minimum wage and overtime rules.

Even without the adoption of the Proposed Rule, U.S. businesses already face huge and ever-growing FLSA minimum wage, overtime and recordkeeping exposures.  The availability of substantial actual and punitive damages plus attorneys fees and difficulties that unprepared employers frequently encounter meeting their burdens of proof make wage and hour and overtime claims attractive lawsuits for disgruntled employees and their plaintiff’s counsel.  Meanwhile, the pro-worker’s rights Obama Administration has made enforcement of these rules a high priority.  Increasingly, the reach of these exposures has expanded further as plaintiffs and the WHD have challenges effectively many employers’ classification of workers as independent contractors.  See  $1.4M FLSA Back Pay Award Demonstrates Worker Misclassification Risks.  Amid these already substantial exposures, most employers will view proposals to expand the scope of workers eligible for FLSA rights and protections as extremely concerning.

Employers concerned about the potential implications of this rule should begin reviewing the Proposed Rule in preparation of providing comments and feedback to members of Congress, the WHD through its rulemaking comment process, and the public.  The deadline for commenting to the WHD will be 60 days from the date of publication of the Proposed Rule in the Federal Register.

For Legal or Consulting Advice, Legal Representation, Training Or More Information

If you need help responding to these new or other workforce, benefits and compensation, performance and risk management, compliance, enforcement or management concerns, help updating or defending your workforce or employee benefit policies or practices, or other related assistance, the author of this update, attorney Cynthia Marcotte Stamer may be able to help.

Recognized as a “Top” attorney in employee benefits, labor and employment and health care law extensively involved in health and other employee benefit and human resources policy and program design and administration representation and advocacy throughout her career, Cynthia Marcotte Stamer is a practicing attorney and Managing Shareholder of Cynthia Marcotte Stamer, P.C., a member of Stamer│Chadwick │Soefje PLLC, author, pubic speaker, management policy advocate and industry thought leader with more than 27 years’ experience practicing at the forefront of employee benefits and human resources law.

A Fellow in the American College of Employee Benefit Counsel, past Chair and current Welfare Benefit Committee Co-Chair of the American Bar Association (ABA) RPTE Section Employee Benefits Group, Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, former Chair of the ABA Health Law Section Managed Care & Insurance Interest Group,  an ABA Joint Committee on Employee Benefits Council Representative and Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, Ms.Stamer is recognized nationally and internationally for her practical and creative insights and leadership on health and other employee benefit, human resources and insurance matters and policy.

Ms. Stamer helps management manage. Ms. Stamer’s legal and management consulting work throughout her 27 plus year career has focused on helping organizations and their management use the law and process to manage people, process, compliance, operations and risk. Highly valued for her rare ability to find pragmatic client-centric solutions by combining her detailed legal and operational knowledge and experience with her talent for creative problem-solving, Ms. Stamer helps public and private, domestic and international businesses, governments, and other organizations and their leaders manage their employees, vendors and suppliers, and other workforce members, customers and other’ performance, compliance, compensation and benefits, operations, risks and liabilities, as well as to prevent, stabilize and cleanup workforce and other legal and operational crises large and small that arise in the course of operations.

Ms. Stamer works with businesses and their management, employee benefit plans, governments and other organizations deal with all aspects of human resources and workforce management operations and compliance.  She supports her clients both on a real time, “on demand” basis and with longer term basis to deal with daily performance management and operations, emerging crises, strategic planning, process improvement and change management, investigations, defending litigation, audits, investigations or other enforcement challenges, government affairs and public policy.  Well known for her extensive work with health care, insurance and other highly regulated entities on corporate compliance, internal controls and risk management, her clients range from highly regulated entities like employers, contractors and their employee benefit plans, their sponsors, management, administrators, insurers, fiduciaries and advisors, technology and data service providers, health care, managed care and insurance, financial services, government contractors and government entities, as well as retail, manufacturing, construction, consulting and a host of other domestic and international businesses of all types and sizes.  Common engagements include internal and external workforce hiring, management, training, performance management, compliance and administration, discipline and termination, and other aspects of workforce management including employment and outsourced services contracting and enforcement, sentencing guidelines and other compliance plan, policy and program development, administration, and defense, performance management, wage and hour and other compensation and benefits, reengineering and other change management, internal controls, compliance and risk management, communications and training, worker classification, tax and payroll, investigations, crisis preparedness and response, government relations, safety, government contracting and audits, litigation and other enforcement, and other concerns.

Ms. Stamer uses her deep and highly specialized health, insurance, labor and employment and other knowledge and experience to help employers and other employee benefit plan sponsors; health, pension and other employee benefit plans, their fiduciaries, administrators and service providers, insurers, and others design legally compliant, effective compensation, health and other welfare benefit and insurance, severance, pension and deferred compensation, private exchanges, cafeteria plan and other employee benefit, fringe benefit, salary and hourly compensation, bonus and other incentive compensation and related programs, products and arrangements. She is particularly recognized for her leading edge work, thought leadership and knowledgeable advice and representation on the design, documentation, administration, regulation and defense of a diverse range of self-insured and insured health and welfare benefit plans including private exchange and other health benefit choices, health care reimbursement and other “defined contribution” limited benefit, 24-hour and other occupational and non-occupational injury and accident, ex-patriate and medical tourism, onsite medical, wellness and other medical plans and insurance benefit programs as well as a diverse range of other qualified and nonqualified retirement and deferred compensation, severance and other employee benefits and compensation, insurance and savings plans, programs, products, services and activities.  As a key element of this work, Ms. Stamer works closely with employer and other plan sponsors, insurance and financial services companies, plan fiduciaries, administrators, and vendors and others to design, administer and defend effective legally defensible employee benefits and compensation practices, programs, products and technology. She also continuously helps employers, insurers, administrative and other service providers, their officers, directors and others to manage fiduciary and other risks of sponsorship or involvement with these and other benefit and compensation arrangements and to defend and mitigate liability and other risks from benefit and liability claims including fiduciary, benefit and other claims, audits, and litigation brought by the Labor Department, IRS, HHS, participants and beneficiaries, service providers, and others.  She also assists debtors, creditors, bankruptcy trustees and others assess, manage and resolve labor and employment, employee benefits and insurance, payroll and other compensation related concerns arising from reductions in force or other terminations, mergers, acquisitions, bankruptcies and other business transactions including extensive experience with multiple, high-profile large scale bankruptcies resulting in ERISA, tax, corporate and securities and other litigation or enforcement actions.

Ms. Stamer also is deeply involved in helping to influence the Affordable Care Act and other health care, pension, social security, workforce, insurance and other policies critical to the workforce, benefits, and compensation practices and other key aspects of a broad range of businesses and their operations.  She both helps her clients respond to and resolve emerging regulations and laws, government investigations and enforcement actions and helps them shape the rules through dealings with Congress and other legislatures, regulators and government officials domestically and internationally.  A former lead consultant to the Government of Bolivia on its Social Security reform law and most recognized for her leadership on U.S. health and pension, wage and hour, tax, education and immigration policy reform, Ms. Stamer works with U.S. and foreign businesses, governments, trade associations, and others on workforce, social security and severance, health care, immigration, privacy and data security, tax, ethics and other laws and regulations. Founder and Executive Director of the Coalition for Responsible Healthcare Policy and its PROJECT COPE: the Coalition on Patient Empowerment and a Fellow in the American Bar Foundation and State Bar of Texas, Ms. Stamer annually leads the Joint Committee on Employee Benefits (JCEB) HHS Office of Civil Rights agency meeting and other JCEB agency meetings.  She also works as a policy advisor and advocate to many business, professional and civic organizations.

Author of the thousands of publications and workshops these and other employment, employee benefits, health care, insurance, workforce and other management matters, Ms. Stamer also is a highly sought out speaker and industry thought leader known for empowering audiences and readers. Ms. Stamer’s insights on employee benefits, insurance, health care and workforce matters in Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, HealthLeaders, Modern Healthcare, Business Insurance, Employee Benefits News, World At Work, Benefits Magazine, the Wall Street Journal, the Dallas Morning News, the Dallas Business Journal, the Houston Business Journal, and many other publications. She also has served as an Editorial Advisory Board Member for human resources, employee benefit and other management focused publications of BNA, HR.com, Employee Benefit News, InsuranceThoughtLeadership.com and many other prominent publications. Ms. Stamer also regularly serves on the faculty and planning committees for symposia of LexisNexis, the American Bar Association, ALIABA, the Society of Employee Benefits Administrators, the American Law Institute, ISSA, HIMMs, and many other prominent educational and training organizations and conducts training and speaks on these and other management, compliance and public policy concerns.

Ms. Stamer also is active in the leadership of a broad range of other professional and civic organizations. For instance, Ms. Stamer presently serves on an American Bar Association (ABA) Joint Committee on Employee Benefits Council representative; Vice President of the North Texas Healthcare Compliance Professionals Association; Immediate Past Chair of the ABA RPTE Employee Benefits & Other Compensation Committee, its current Welfare Benefit Plans Committee Co-Chair, on its Substantive Groups & Committee and its incoming Defined Contribution Plan Committee Chair and Practice Management Vice Chair; Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group and a current member of its Healthcare Coordinating Council; current Vice Chair of the ABA TIPS Employee Benefit Committee; the former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division; on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications.  She also previously served as a founding Board Member and President of the Alliance for Healthcare Excellence, as a Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; the Board President of the early childhood development intervention agency, The Richardson Development Center for Children; Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee; a member of the Board of Directors of the Southwest Benefits Association. For additional information about Ms. Stamer, see www.cynthiastamer.com, or www.stamerchadwicksoefje.com   the member of contact Ms. Stamer via email here or via telephone to (469) 767-8872.

About Solutions Law Press, Inc.™

Solutions Law Press, Inc.™  provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources at www.solutionslawpress.com including:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating or updating your profile at here.

©2015 Cynthia Marcotte Stamer. Non-exclusive right to republish granted to Solutions Law Press. All other rights reserved.


Prompt Business Action Needed To Mitigate Post-King Employer Health Benefit Costs & Liabilities

June 30, 2015

With the Obama Administration construing the United States Supreme Court’s King v. Burwell decision as a green light for its full implementation and enforcement of the Patient Protection & Affordable Care Act (ACA), U.S. businesses should brace for both increases in health benefit costs and liabilities over the next year as well as take prompt action to identify and mitigate potential excise tax and other exposures from any unaddressed compliance deficiencies in their 2014 or 2015 health plans as soon as possible and no later than the due date for filing their 2014 business tax return.

As health benefit costs continue their upward trend, many businesses and their leaders plan to look for new options to manage costs and liabilities following the King decision.  In most cases, businesses assume they can delay these actions until the beginning of their upcoming health plan year, not realizing their company’s potential liability exposures from existing and past defects.  Businesses and their leaders who have held off updating their health plan compliance and expect to delay completion of these activities until the beginning of their upcoming health plan year are likely to be in for a rude awakening, however, particularly since a much underappreciated Sarbanes-Oxley style provision of the Internal Revenue Code will require employer or other group health plan sponsors to self-report, self-assess and pay stiff excise tax penalties when filing their company’s 2014 business tax return unless their group health plan complied with a long list of ACA and other federal health plan rules in 2014.

Employer Health Benefit & Other Compensation Up, Costs Exposures Projected To Continue To Rise

While many businesses delayed making tough choices  about their health plan design and compliance over the past several years in hopes of some judicial or Congressional relief from the mandates and costs of ACA, businesses generally have continued to struggle with ever-rising compensation and benefit costs, with health benefit costs the biggest challenge.  Recent U.S. Bureau of Labor Statistics (BLS) data confirms what business leaders already know.  Compensation and benefit costs rose over the past year, with health benefit costs remaining a big factor in these increased costs.  According to BLS, employer compensation costs rose slightly and health benefit costs remained the largest individual benefit cost for employers during the 12-month period ending March 31, 2015, according to the U.S. Bureau of Labor Statistics (BLS). See BLS Employment Cost Index News Release (April 30, 2015).

The BLS Employer Costs For Employee Compensation Report, March 2015 released June 10, 2015 Report) shows private employers spent an average of $31.65 per hour worked for compensation in March 2015 with health benefits accounting averaging 7.7 percent of this average employer total compensation cost per employee.  This compares to BLS showing that in March 2014, In March 2014, total employer compensation costs for private industry workers averaged $29.99 per hour worked, with wages and salaries averaging $20.96 per hour (69.9 percent) and benefits averaging $9.03 per hour (30.1 percent). See BLS Employer Costs For Employee Compensation, March 2014 (June 12, 2014)(2014 Report).

BLS data on health benefit and other compensation and benefit costs and trends provides many interesting insights for business as well as government leaders and the role health benefit cost increases play in these increased expenditures.  For instance, BLS statistics show for private employers on average during the 12-month period ending March 31, 2015:

  • Compensation costs for private industry workers increased 2.8 percent over the year, higher than the March 2014 increase of 1.7 percent;
  • Wages and salaries increased 2.8 percent, also higher than the March 2014 increase of 1.7 percent;
  • Benefits costs rose 2.6 percent, which was higher than March 2014, when the increase was 1.8 percent; and
  • Health benefits on average increased 2.5 percent over during the 12-month period that ended on March 31, 2015, rising from the March 2014 increase in compensation costs of 1.8 percent.

Businesses Must Prepare For Impending ACA Enforcement While Dealing With Upsurge In Health Benefit Costs

While the continued rise in the average hourly cost of health benefits for employers is significant in its own right, the reported health benefit cost and employer health cost data in the Report does not include additional reporting and other compliance and risk management costs, which in light of the explosion in employer group health plan mandates since the passage of the Patient Protection and Affordable Care Act (ACA). Research indicates that the employer plan design changes slowed the upward trend in employer health benefit expenditures that otherwise would have occurred in 2015.  This upward trend is projected to continue if not accelerate in 2016, however.

The 2015 Report shows these upward increases in employer costs for health benefits and other compensation continued in the first quarter of 2015.  Concerning health benefits, for instance, the 2015 Report shows health benefit costs paid by employers averaged $2.43 per hour worked (7.7 percent of total compensation)in private industry in March 2015, compared to the average health benefit costs BLS reported.  In comparison, the 2014 Report indicated in March, 2014, the average cost for health insurance benefits in private industry was $2.36 per hour worked in March 2014 (7.9 percent of total compensation).

Overall health benefit costs and associated compliance expenses of employers that elect to continue to offer health benefits for employees are projected to rise throughout 2015 and 2016 as ACA driven mandates and market changes drive up employer’s direct health benefit costs.  See, e.g. Employers’ Health Costs Projected to Rise 6.5% for 2016.

The trend data and judicial and political developments indicate that business leaders can look for these trends not only to continue, but accelerate. With an impending responsibility to self-report violations of ACA and various of federal health plan mandates imminent, business leaders should brace to deal with any deficiencies in compliance in their 2014 and 2015 health plans much sooner than they might have expected following the Supreme Court’s King v. Burwell decision last week.  President Obama made clear last week he views the King ruling as giving the Internal Revenue Service, Department of Labor and Department of Health & Human Services the all clear for full implementation and enforcement of ACA and other federal health plan rules.  While these overall enforcement exposures will play out over the next several years, many employers are poised to experience the first bite of these new enforcement exposures over the next few months, when the Internal Revenue Code will require that employers that offered health coverage for employees in 2014 self-assess, report and pay stiff new excise tax penalties of $100 per day per violation when filing their 2014 tax return unless their program complied with all of a long list of ACA or other federal law mandates in addition to otherwise applicable exposures under the Employee Retirement Income Security Act (ERISA) and other laws. See, Businesses Must Confirm & Clean Up Health Plan ACA & Other Compliance Following Supreme Court’s King v. Burwell Decision.  Since prompt self-audit and correction can help mitigate these liabilities, business leaders should act quickly to engage experienced legal counsel for their companies for help in evaluating, within the scope of attorney client privilege, the adequacy of their 2014 and 2015 health plan compliance, options for addressing potential exposures from any compliance deficiencies, and for advice and assistance to decide whether to offer health benefits going forward and if so, aid in designing and implementing their future health benefit program to enhance its defensibility.  While businesses inevitably will need to involve or coordinate with their accounting, broker, and other vendors involved with the plans, businesses generally will want to get legal advice in a manner that preserves their potential to claim attorney-client privilege to protect against discovery in the event of future enforcement or litigation actions sensitive discussions and analysis about compliance audits, plan design choices, and other risk management and liability planning as well as to get help evaluating potential future plan design changes or proposed solutions to known or suspected liability exposures, particularly in light of complexity of the exposures and risks.

For Legal or Consulting Advice, Legal Representation, Training Or More Information

If you need help responding to these new or other workforce, benefits and compensation, performance and risk management, compliance, enforcement or management concerns, help updating or defending your workforce or employee benefit policies or practices, or other related assistance, the author of this update, attorney Cynthia Marcotte Stamer may be able to help.

Recognized as a “Top” attorney in employee benefits, labor and employment and health care law extensively involved in health and other employee benefit and human resources policy and program design and administration representation and advocacy throughout her career, Cynthia Marcotte Stamer is a practicing attorney and Managing Shareholder of Cynthia Marcotte Stamer, P.C., a member of Stamer│Chadwick │Soefje PLLC, author, pubic speaker, management policy advocate and industry thought leader with more than 27 years’ experience practicing at the forefront of employee benefits and human resources law.

A Fellow in the American College of Employee Benefit Counsel, past Chair and current Welfare Benefit Committee Co-Chair of the American Bar Association (ABA) RPTE Section Employee Benefits Group, Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, former Chair of the ABA Health Law Section Managed Care & Insurance Interest Group,  an ABA Joint Committee on Employee Benefits Council Representative and Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, Ms.Stamer is recognized nationally and internationally for her practical and creative insights and leadership on health and other employee benefit, human resources and insurance matters and policy.

Ms. Stamer helps management manage. Ms. Stamer’s legal and management consulting work throughout her 27 plus year career has focused on helping organizations and their management use the law and process to manage people, process, compliance, operations and risk. Highly valued for her rare ability to find pragmatic client-centric solutions by combining her detailed legal and operational knowledge and experience with her talent for creative problem-solving, Ms. Stamer helps public and private, domestic and international businesses, governments, and other organizations and their leaders manage their employees, vendors and suppliers, and other workforce members, customers and other’ performance, compliance, compensation and benefits, operations, risks and liabilities, as well as to prevent, stabilize and cleanup workforce and other legal and operational crises large and small that arise in the course of operations.

Ms. Stamer works with businesses and their management, employee benefit plans, governments and other organizations deal with all aspects of human resources and workforce management operations and compliance.  She supports her clients both on a real time, “on demand” basis and with longer term basis to deal with daily performance management and operations, emerging crises, strategic planning, process improvement and change management, investigations, defending litigation, audits, investigations or other enforcement challenges, government affairs and public policy.  Well known for her extensive work with health care, insurance and other highly regulated entities on corporate compliance, internal controls and risk management, her clients range from highly regulated entities like employers, contractors and their employee benefit plans, their sponsors, management, administrators, insurers, fiduciaries and advisors, technology and data service providers, health care, managed care and insurance, financial services, government contractors and government entities, as well as retail, manufacturing, construction, consulting and a host of other domestic and international businesses of all types and sizes.  Common engagements include internal and external workforce hiring, management, training, performance management, compliance and administration, discipline and termination, and other aspects of workforce management including employment and outsourced services contracting and enforcement, sentencing guidelines and other compliance plan, policy and program development, administration, and defense, performance management, wage and hour and other compensation and benefits, reengineering and other change management, internal controls, compliance and risk management, communications and training, worker classification, tax and payroll, investigations, crisis preparedness and response, government relations, safety, government contracting and audits, litigation and other enforcement, and other concerns.

Ms. Stamer uses her deep and highly specialized health, insurance, labor and employment and other knowledge and experience to help employers and other employee benefit plan sponsors; health, pension and other employee benefit plans, their fiduciaries, administrators and service providers, insurers, and others design legally compliant, effective compensation, health and other welfare benefit and insurance, severance, pension and deferred compensation, private exchanges, cafeteria plan and other employee benefit, fringe benefit, salary and hourly compensation, bonus and other incentive compensation and related programs, products and arrangements. She is particularly recognized for her leading edge work, thought leadership and knowledgeable advice and representation on the design, documentation, administration, regulation and defense of a diverse range of self-insured and insured health and welfare benefit plans including private exchange and other health benefit choices, health care reimbursement and other “defined contribution” limited benefit, 24-hour and other occupational and non-occupational injury and accident, ex-patriate and medical tourism, onsite medical, wellness and other medical plans and insurance benefit programs as well as a diverse range of other qualified and nonqualified retirement and deferred compensation, severance and other employee benefits and compensation, insurance and savings plans, programs, products, services and activities.  As a key element of this work, Ms. Stamer works closely with employer and other plan sponsors, insurance and financial services companies, plan fiduciaries, administrators, and vendors and others to design, administer and defend effective legally defensible employee benefits and compensation practices, programs, products and technology. She also continuously helps employers, insurers, administrative and other service providers, their officers, directors and others to manage fiduciary and other risks of sponsorship or involvement with these and other benefit and compensation arrangements and to defend and mitigate liability and other risks from benefit and liability claims including fiduciary, benefit and other claims, audits, and litigation brought by the Labor Department, IRS, HHS, participants and beneficiaries, service providers, and others.  She also assists debtors, creditors, bankruptcy trustees and others assess, manage and resolve labor and employment, employee benefits and insurance, payroll and other compensation related concerns arising from reductions in force or other terminations, mergers, acquisitions, bankruptcies and other business transactions including extensive experience with multiple, high-profile large scale bankruptcies resulting in ERISA, tax, corporate and securities and other litigation or enforcement actions.

Ms. Stamer also is deeply involved in helping to influence the Affordable Care Act and other health care, pension, social security, workforce, insurance and other policies critical to the workforce, benefits, and compensation practices and other key aspects of a broad range of businesses and their operations.  She both helps her clients respond to and resolve emerging regulations and laws, government investigations and enforcement actions and helps them shape the rules through dealings with Congress and other legislatures, regulators and government officials domestically and internationally.  A former lead consultant to the Government of Bolivia on its Social Security reform law and most recognized for her leadership on U.S. health and pension, wage and hour, tax, education and immigration policy reform, Ms. Stamer works with U.S. and foreign businesses, governments, trade associations, and others on workforce, social security and severance, health care, immigration, privacy and data security, tax, ethics and other laws and regulations. Founder and Executive Director of the Coalition for Responsible Healthcare Policy and its PROJECT COPE: the Coalition on Patient Empowerment and a Fellow in the American Bar Foundation and State Bar of Texas, Ms. Stamer annually leads the Joint Committee on Employee Benefits (JCEB) HHS Office of Civil Rights agency meeting and other JCEB agency meetings.  She also works as a policy advisor and advocate to many business, professional and civic organizations.

Author of the thousands of publications and workshops these and other employment, employee benefits, health care, insurance, workforce and other management matters, Ms. Stamer also is a highly sought out speaker and industry thought leader known for empowering audiences and readers. Ms. Stamer’s insights on employee benefits, insurance, health care and workforce matters in Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, HealthLeaders, Modern Healthcare, Business Insurance, Employee Benefits News, World At Work, Benefits Magazine, the Wall Street Journal, the Dallas Morning News, the Dallas Business Journal, the Houston Business Journal, and many other publications. She also has served as an Editorial Advisory Board Member for human resources, employee benefit and other management focused publications of BNA, HR.com, Employee Benefit News, InsuranceThoughtLeadership.com and many other prominent publications. Ms. Stamer also regularly serves on the faculty and planning committees for symposia of LexisNexis, the American Bar Association, ALIABA, the Society of Employee Benefits Administrators, the American Law Institute, ISSA, HIMMs, and many other prominent educational and training organizations and conducts training and speaks on these and other management, compliance and public policy concerns.

Ms. Stamer also is active in the leadership of a broad range of other professional and civic organizations. For instance, Ms. Stamer presently serves on an American Bar Association (ABA) Joint Committee on Employee Benefits Council representative; Vice President of the North Texas Healthcare Compliance Professionals Association; Immediate Past Chair of the ABA RPTE Employee Benefits & Other Compensation Committee, its current Welfare Benefit Plans Committee Co-Chair, on its Substantive Groups & Committee and its incoming Defined Contribution Plan Committee Chair and Practice Management Vice Chair; Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group and a current member of its Healthcare Coordinating Council; current Vice Chair of the ABA TIPS Employee Benefit Committee; the former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division; on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications.  She also previously served as a founding Board Member and President of the Alliance for Healthcare Excellence, as a Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; the Board President of the early childhood development intervention agency, The Richardson Development Center for Children; Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee; a member of the Board of Directors of the Southwest Benefits Association. For additional information about Ms. Stamer, see www.cynthiastamer.com, or www.stamerchadwicksoefje.com   the member of contact Ms. Stamer via email here or via telephone to (469) 767-8872.

About Solutions Law Press, Inc.™

Solutions Law Press, Inc.™  provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources at www.solutionslawpress.com including:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating or updating your profile at here.

©2015 Cynthia Marcotte Stamer. Non-exclusive right to republish granted to Solutions Law Press. All other rights reserved.


IRS FAQ Addresses Determination Letter Program As Applied To Multiple Employer Plans

May 6, 2015

Multiple employer plans, -i.e., a plan maintained by two or more employers that don’t have sufficient overlapping ownership to be considered a single employer for purposes of the Internal Revenue Code (Code) or other laws-can be attractive options for some plan sponsors to minimize their individual costs for offering qualified deferred compensation or other employee benefit plans. Sponsors, fiduciaries and participating employers involved with these arrangements need to keep in mind, however, that these arrangements also often trigger special legal rules, exposures and operational challenges under the Internal Revenue Code (Code), the Employee Retirement Income Security Act (ERISA) and other laws.

One of these issues can be the scope of protection that a determination letter issued to a plan sponsor of a multiple employer plan. To help clarify some common questions about the treatment of multiple employer plans in its determination letter program, the Internal Revenue Service (IRS) on March 30, 2015 published a new set of “Frequently Asked Questions” (FAQs) that provide some insights about the IRS’ current position on some of these issues, subject to the understanding that IRS does not consider its answers to frequently asked questions as appropriate for citation as legal authority. Subject to this disclaimer, the new FAQ states:

Does each adopting employer have to come in for an individual determination letter?

No, it’s not necessary for all adopting employers to apply for a determination letter on Form 5300, Application for Determination for Employee Benefit Plan. The sponsors of the plan have two choices:

  1. Submit just for a determination letter on the plan; or
  2. Submit for letter on the plan and a letter for each employer maintaining the plan who wants an individual letter. See Revenue Procedure 2015-6, section 10.

Are the adopting employers required to give Notice to Interested Parties if they are not coming in for individual letters?

Yes, each employer must provide notice to interested parties. The rule permitting one consolidated determination letter for a multiple employer plan does not change the “Notice to Interested Parties” requirement.

Do the employers maintaining the plan have reliance on the determination letter issued to the plan?

Yes. Revenue Procedure 2015-6, section 10, states: “An employer maintaining a multiple employer plan can rely on a favorable determination letter issued for the plan except with respect to the requirements of §§ 401(a)(4), 401(a)(26), 401(l), 410(b) and 414(s), and, if the employer maintains or has ever maintained another plan, §§ 415 and 416.”

Is a volume submitter plan’s submission cycle affected if it changes to a multiple-employer plan?

No, conversion of a volume submitter (VS) plan to a multiple-employer plan does not take the plan off of the 6-year remedial amendment cycle. A VS plan may be designed to be used as either a single-employer or as a multiple-employer plan. Conversion occurs when the adopting employer decides to allow an unrelated employer to also adopt its VS plan. Even if the employer had to modify the VS plan to allow it to be used as a multiple-employer plan, this would not remove the employer from the 6-year cycle because a multiple employer plan is not an impermissible plan type for a VS plan.

What form is used to request a determination letter for a VS plan that was modified to be a multiple-employer plan?

An employer requesting a determination letter for a VS plan that was modified for use as a multiple-employer plan should file Form 5300 (not Form 5307). The Form 5300 has to be used because the Form 5307 does not accommodate filings by multiple- employer plans. If the employer has not modified the VS plan at all, for example, because the VS plan allows for use as either a single-employer or as a multiple-employer plan, the employer has reliance on the VS advisory letter issued to the document provider and should not file for its own determination letter.

 For  Advice, Representation, Training & Other Resources

If you need help responding to these new or other workforce, benefits and compensation, performance and risk management, compliance, enforcement or management concerns, help updating or defending your workforce or employee benefit policies or practices, or other related assistance, the author of this update, attorney Cynthia Marcotte Stamer may be able to help.

Recognized as a “Top” attorney in employee benefits, labor and employment and health care law, Ms. Stamer is a practicing attorney Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, author, pubic speaker,management policy advocate and thought leader with more than 25 years’ experience advising government contractors and other employers, their management, benefit plans and plan fiduciaries, vendors and service providers and others about OFCCP, EEOC, and other employment discrimination, government contracting compliance, and other workforce and operational performance, compliance, risk management, compensation, and benefits matters. As a part of this involvement, Ms. Stamer throughout her career specifically has advised and represented a broad range of employers across the U.S., their employee benefit plans and plan fiduciaries, insurers, health care providers and others about the implications of DOMA and other rules relating to rights and expectations of LBGT community members and others in federally protected classes under Federal and state employment, tax, discrimination, employee benefits, health care and other laws.

In addition to her extensive client work Ms. Stamer also is a widely published author, management policy advocate and thought leader, and management policy advocate on these and other workforce and related matters who shares her experience and leadership in a wide range of contexts.  A current or former author and advisory board member of HR.com, Insurance Thought Leadership, SHRM, BNA and several other the prominent publications, Past Chair of the ABA RPTE Employee Benefit & Other Compensation Arrangements Group, Co-Chair and Past Chair of the ABA RPTE Welfare Plan Committee, Vice Chair of the ABA TIPS Employee Benefit Plans Committee, Vice President of the North Texas Health Care Compliance Professionals Association, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, former President of the Richardson Development Center Board of Directors, and the former Board Compliance Chair of the National Kidney Foundation of North Texas, An American College of Employee Benefit Counsel, American Bar Association (ABA) and State Bar of Texas Fellow, Martindale Hubble Premier AV Rated (the highest), Ms. Stamer publishes and speaks extensively on these and other staffing and human resources, compensation and benefits, technology, health care, privacy, public policy, and other operations and risk management concerns.  Her publications and insights appear in the ABA and other professional publications, HR.com, SHRM, Insurance Thought Leadership, Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, World At Work, The Wall Street Journal, Business Insurance, the Dallas Morning News, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications.

You can review other recent human resources, employee benefits and internal controls publications and resources and additional information about the employment, employee benefits and other experience of the Cynthia Marcotte Stamer, PC here. If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile www.cynthiastamer.com or by registering to participate in the distribution of these and other updates on our HR & Employee Benefits Update here including:

About Solutions Law Press

Solutions Law Press, Inc. provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources at www.solutionslawpress.com.

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile at here or e-mailing this information here.

©2015 Cynthia Marcotte Stamer. Non-exclusive right to republish granted to Solutions Law Press. All other rights reserved.


OSHA Rules Requires New Construction Industry Close Space Safeguards 

May 1, 2015

The Occupational Safety and Health Administration today issued a final rule to increase protections for construction workers in confined spaces. Compliance assistance material and additional information is available on OSHA’s Confined Spaces in Construction Web page.  The new Rule imposes new safety standards for construction work in small spaces.

OSHA says manholes, crawl spaces, tanks and other confined spaces are not intended for continuous occupancy. They are also difficult to exit in an emergency. People working in confined spaces face life-threatening hazards including toxic substances, electrocutions, explosions and asphyxiation. For instance, last year two workers were asphyxiated while repairing leaks in a manhole, the second when he went down to save the first — which is not uncommon in cases of asphyxiation in confined spaces.

“In the construction industry, entering confined spaces is often necessary, but fatalities like these don’t have to happen,” said Secretary of Labor Thomas E. Perez. “This new rule will significantly improve the safety of construction workers who enter confined spaces. In fact, we estimate that it will prevent about 780 serious injuries every year.”

The rule will provide construction workers with protections similar to those manufacturing and general industry workers have had for more than two decades, with some differences tailored to the construction industry. These include requirements to ensure that multiple employers share vital safety information and to continuously monitor hazards — a safety option made possible by technological advances after the manufacturing and general industry standards were created. 

“This rule will save lives of construction workers,” said Assistant Secretary of Labor for Occupational Safety and Health Dr. David Michaels. “Unlike most general industry worksites, construction sites are continually evolving, with the number and characteristics of confined spaces changing as work progresses. This rule emphasizes training, continuous worksite evaluation and communication requirements to further protect workers’ safety and health.”

The guidance reflects the growing emphasis of OSHA on construction safety.  Construction employers should take steps to immediately comply with these new requirements as well as review the adequacy of their other safeguards for compliance with the ever-tightening mandates of OSHA for construction industry employers.

For  Advice, Representation, Training & Other Resources

If you need help responding to these new or other workforce, benefits and compensation, performance and risk management, compliance, enforcement or management concerns, help updating or defending your workforce or employee benefit policies or practices, or other related assistance, the author of this update, attorney Cynthia Marcotte Stamer may be able to help.

Recognized as a “Top” attorney in employee benefits, labor and employment and health care law, Ms. Stamer is a practicing attorney Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, author, pubic speaker,management policy advocate and thought leader with more than 25 years’ experience advising government contractors and other employers, their management, benefit plans and plan fiduciaries, vendors and service providers and others about OFCCP, EEOC, and other employment discrimination, government contracting compliance, and other workforce and operational performance, compliance, risk management, compensation, and benefits matters. As a part of this involvement, Ms. Stamer throughout her career specifically has advised and represented a broad range of employers across the U.S., their employee benefit plans and plan fiduciaries, insurers, health care providers and others about the implications of DOMA and other rules relating to rights and expectations of LBGT community members and others in federally protected classes under Federal and state employment, tax, discrimination, employee benefits, health care and other laws.

In addition to her extensive client work Ms. Stamer also is a widely published author, management policy advocate and thought leader, and management policy advocate on these and other workforce and related matters who shares her experience and leadership in a wide range of contexts.  A current or former author and advisory board member of HR.com, Insurance Thought Leadership, SHRM, BNA and several other the prominent publications, Past Chair of the ABA RPTE Employee Benefit & Other Compensation Arrangements Group, Co-Chair and Past Chair of the ABA RPTE Welfare Plan Committee, Vice Chair of the ABA TIPS Employee Benefit Plans Committee, Vice President of the North Texas Health Care Compliance Professionals Association, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, former President of the Richardson Development Center Board of Directors, and the former Board Compliance Chair of the National Kidney Foundation of North Texas, An American College of Employee Benefit Counsel, American Bar Association (ABA) and State Bar of Texas Fellow, Martindale Hubble Premier AV Rated (the highest), Ms. Stamer publishes and speaks extensively on these and other staffing and human resources, compensation and benefits, technology, health care, privacy, public policy, and other operations and risk management concerns. Her publications and insights appear in the ABA and other professional publications, HR.com, SHRM, Insurance Thought Leadership, Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, World At Work, The Wall Street Journal, Business Insurance, the Dallas Morning News, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications.

You can review other recent human resources, employee benefits and internal controls publications and resources and additional information about the employment, employee benefits and other experience of the Cynthia Marcotte Stamer, PC here. If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile www.cynthiastamer.com or by registering to participate in the distribution of these and other updates on our HR & Employee Benefits Update here including:

About Solutions Law Press, Inc.™

Solutions Law Press, Inc.™  provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources at www.solutionslawpress.com.

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating or updating your profile at here.

©2015 Cynthia Marcotte Stamer. Non-exclusive right to republish granted to Solutions Law Press. All other rights reserved.


2016 & 2017 Health Plan Budgets, Workplans Should Anticipate Expected Changes To SBCs

April 28, 2015

Employer and union group health plans and health insurers should plan for the need to update their processes for preparing and distributing the Summary of Benefits & Coverage (SBC) that  Patient Protection & Affordable Care Act (ACA) requires them to distribute to covered persons as part of their preparations for their 2016 plan year enrollment periods later this year and to prepare to respond to changes to the required SBC templates used to prepare their SBCs in 2017, according a recent update on proposed changes to existing SBC guidance recently released by the Departments of Labor, Health and Human Services, and the Treasury (collectively, the Departments).

The duty to provide SBCs imposed by Public Health Service (PHS) Act section 2715, as added by ACA and incorporated by reference into the Employee Retirement Income Security Act (ERISA) and the Internal Revenue Code (Code), generally requires group health plans and group and individual insurers to prepare and provide a current SBC using template forms completed and provided in accordance with regulations jointly issued by the Departments..

Currently, the content, form, timing of distribution and other conditions that group health plans and health insurers currently must meet to fulfill § 2715’s SBC mandate are governed by the SBC final regulations jointly published February 14, 2012 and an accompanying document announcing the availability of templates, instructions, and related materials, as supplemented in six sets of FAQs regarding implementation of the SBC requirements. See final regulations, published at 77 FR 8668 (February 14, 2012) and guidance document published at 77 FR 8706 (February 14, 2012); Affordable Care Act Implementation FAQs Part VII available here and here; Part VIII available here  and here;  Part IX available here  and here;  Part X available here and here;  Part XIV available here and here and Part XIX available here and here.  

While group health plans, health insurers, their sponsors and administrators have continued to rely on this existing guidance when preparing and providing currently required SBCs, concern about the lead time required to conduct the analysis and other preparations needed to prepare the SBCs, has lead most health plans, health insurers, and their sponsors or administrators to monitor the proposals to modify current SBC guidance published by the Departments on December 30, 2014, which if adopted as originally published would require updates to the SBCs effective September 1, 2015.  See here.

According to their latest update on plans to finalize these proposed changes, the Departments announced on March 30, 2015 in FAQs about Affordable Care Act Implementation (Part XXIV) that the Departments now plan to finalize changes to the regulations in the near future and for these changes to take effect for coverage that would renew or begin on the first day of the first plan year (or, in the individual market, policy year) that begins on or after January 1, 2016 (including open season periods that occur in the Fall of 2015 for coverage beginning on or after January 1, 2016).  

FAQ Part XXIV also states that the Departments intend to finalizing revisions to the SBC template and associated documents. The Departments anticipate the new template and associated documents will be finalized by January 2016 and will apply to coverage that would renew or begin on the first day of the first plan year (or, in the individual market, policy year) that begins on or after January 1, 2017 (including open season periods that occur in the Fall of 2016 for coverage beginning on or after January 1, 2017).

Employer and other group health plan sponsors, individual and group health insurers and their administrators should include the expected need to respond to these anticipated updates to the SBC requirements in their planning and budgets for the 2016 and 2017 plan years and stay tuned for the Departments publication of the final rules expected later this year and updated templates thereafter.

For Help With Risk Management, Compliance & Other Management Concerns

If you need help to assess, update or defend your organization’s health or other employee benefit, human resources or other compliance and risk management processes, policies, practices or actions, please contact the author of this update, management attorney and consultant Cynthia Marcotte Stamer here or at (469) 767-8872.

Recognized as a “Top” Lawyer in Labor & Employment, Employee Benefits and Health Care law, Board Certified in Labor & Employment Law, Past Chair of the ABA RPTE Employee Benefit & Other Compensation Arrangements Group, Co-Chair and Past Chair of the ABA RPTE Welfare Plan Committee, Vice Chair of the ABA TIPS Employee Benefit Plans Committee, an ABA Joint Committee On Employee Benefits Council representative, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, Ms. Stamer is widely recognized for her extensive, leading edge work helping employer and other plan sponsors, fiduciaries, insurers and administrators design, document, communicate, administer and defend health and other employee benefit plan designs,management manage, promote and defend health and other employee benefit plans and related human resources, insurance and other practices, policies, systems and processes.

A management attorney who helps management to promote their organizational goals by using the law and process to manage internal and external people, their performance, compensation and benefits and other operational resources and risks, Ms. Stamer has worked with a broad range of other public and private organizations with human resources, labor and employment, employee benefits, insurance and risk management, vendor and services procurement and management, contracting and policy and procedures drafting and enforcement, investigations, defense and remediation throughout her more than 27 year career.

Ms. Stamer works, publishes and speaks extensively on health and other employee benefit plan, human resources and other workforce management, reengineering, audits and investigations, internal controls and risk management, federal sentencing guideline and other enforcement resolution actions, and related matters.  She also is recognized for her publications, industry leadership, workshops and presentations on these and other  concerns and regularly speaks and conducts training on these matters.Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the ABA, Insurance Thought Leadership, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, and many other national and local publications.

For additional information about Ms. Stamer and her experience or to access other publications by Ms. Stamer see here or contact Ms. Stamer directly.

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources at www.solutionslawpress.com.

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile at here or e-mailing this information here.

©2015 Cynthia Marcotte Stamer.  Non-exclusive right to republish granted to Solutions Law Press.  All other rights reserved.


Discrimination Rules Create Risks For Employer Reliance On Injunction Of FMLA Rule On Same-Sex Partners’ Marital Status

April 9, 2015

Employers covered by the Family & Medical Leave Act (FMLA) have a temporary reprieve from the obligation to comply with a change to the FMLA regulations’ definition of “spouse” that requires FMLA-covered employers to recognize certain same-sex relationships as marriages for purposes of the FMLA that had been slated to take effect on March 27, 2015 under a preliminary injunction order granted by the District Court for the Northern District of Texas in Texas v. U.S, No. 7:15-cv-00056-O, 2015 BL 84253 (N.D. Tex. Mar. 26, 2015).   However the delay in the implementation of the regulation as a practical matter may present traps for unwary employers in light of federal employment discrimination law rules that prohibit employers from discriminating against employees based on sexual orientation or gender identity. 

The preliminary injunction issued by Judge Reed O’Connor of the U.S. District Court for the Northern District of Texas on March 26 rule enjoins the Labor Department from enforcing a final regulation that would require employers covered by the FMLA to grant workers in legal same-sex marriages to take job-protected leave under the FMLA to care for a seriously ill spouse even if the state where the employee lives or works doesn’t recognize same-sex marriages.

The preliminary injunction resulted from a lawsuit brought by the attorney generals of Texas, Arkansas, Louisiana and Nebraska questioning the validity of change to the definition of “spouse” in DOL Regulation § 825.102 and § 825.122 to expand the definition of the term “spouse” for purposes of the FMLA to include same-sex relationships recognized as marriage under the state law of the location of the marriage celebration.

The Final Regulation redefining the term “spouse” for purposes of the FMLA is one of a host of changes to federal employment, tax, immigration and other regulations and enforcement policies announced by the Obama Administration in response to the Supreme Court’s decision in United States v. Windsor, 133 S. Ct. 2675, 118 FEP Cases 1417 (2013).

In Windsor, the Supreme Court ruled unconstitutional and struck down Section 3 of the Defense of Marriage Act (DOMA), which sought to preclude same-sex couples from being treated as married for purposes of federal law including the FMLA by restricting the definition of marriage for federal law only to relationships between persons of the opposite sex.

If and when implemented, the FMLA Final Regulation will revise the DOL’s FMLA regulations to provide that “Spouse” means

a husband or wife. For purposes of this definition, husband or wife refers to the other person with whom an individual entered into marriage as defined or recognized under state law for purposes of marriage in the State in which the marriage was entered into or, in the case of a marriage entered into outside of any State, if the marriage is valid in the place where entered into and could have been entered into in at least one State. This definition includes an individual in a same-sex or common law marriage that either:

  1. Was entered into in a State that recognizes such marriages; or
  2. If entered into outside of any State, is valid in the place where entered into and could have been entered into in at least one State.

According the DOL, the adoption of a place of celebration standard for determining marital status in the Final Rule ensures that all legally married employees have consistent FMLA leave rights regardless of where they live. The Department believes that this place of celebration rule will give fullest effect to the purpose of the FMLA to let employees to take unpaid, job-protected leave to care for a spouse for an FMLA-qualifying reason.  Thus, whether a same-sex or other couple qualifies as married for purposes of the FMLA turns upon whether the couple is in a relationship legally recognized as a married in the state in which the ceremony was performed.  However, the Final Regulation does not require employers to treat same-sex civil unions, as well as opposite-sex civil unions, as marriages and as such are not guaranteed the right to take FMLA spousal leave nor do have other protections of the Act, including from retaliation. As noted above, an employer may offer an employment benefit program or plan that provides greater family or medical leave rights to employees than the rights established by the FMLA, including voluntarily offering other types of leave for couples in civil unions. In addition, eligible employees in civil unions can take FMLA leave for their own serious health condition, for the birth of a child or the placement of a child for adoption or foster care and for bonding, to care for their child or parent with a serious health condition, and for qualifying military family leave reasons.

In Texas v. U.S., the states jointly argued that the Final Rule unlawfully interferes with state laws that prohibit same-sex marriage and bar recognition of out-of-state same-sex marriages.  Explaining his finding that the states had demonstrated a substantial likelihood of prevailing on the merits on their claim that the Final Regulation violates the Full Faith & Credit Clause of the U.S. Constitution, Judge O’Conner wrote, “Congress has not delegated to the Department the power to force states defining marriages traditionally to afford benefits in accordance with the marriage laws of states defining marriage to include same-sex marriages.”  Accordingly, Justice O’Conner ordered the Labor Department to stay implementation of the Final Regulation pending a decision on the merits of the states’ claims.

Even as Judge O’Connor issued his preliminary injunction, the Obama Administration was moving ahead to implement new mandates extending sweeping new protections prohibiting government contractors and subcontractors from discriminating against workers based on sexual orientation or gender identity under an Executive Order issued by President Obama that took effect April 8, 2015.  See Obama Executive Order’s Prohibition Of Government Contractor Sexual Orientation & Gender Identity Discrimination Creates Challenges For All US EmployersSince the preliminary injunction issued by Judge O’Connor does not apply to that Executive Order, employers contemplating holding off granting FMLA rights to employees involved in same-sex relationships should consult with legal counsel about the potential that such delay, despite Judge O’Connor’s order, might form the basis of employment discrimination, government contracting regulation violations or both.

 For  Advice, Representation, Training & Other Resources

If you need help responding to these new or other workforce, benefits and compensation, performance and risk management, compliance, enforcement or management concerns, help updating or defending your workforce or employee benefit policies or practices, or other related assistance, the author of this update, attorney Cynthia Marcotte Stamer may be able to help.

Recognized as a “Top” attorney in employee benefits, labor and employment and health care law, Ms. Stamer is a practicing attorney Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, author, pubic speaker,management policy advocate and thought leader with more than 25 years’ experience advising government contractors and other employers, their management, benefit plans and plan fiduciaries, vendors and service providers and others about OFCCP, EEOC, and other employment discrimination, government contracting compliance, and other workforce and operational performance, compliance, risk management, compensation, and benefits matters. As a part of this involvement, Ms. Stamer throughout her career specifically has advised and represented a broad range of employers across the U.S., their employee benefit plans and plan fiduciaries, insurers, health care providers and others about the implications of DOMA and other rules relating to rights and expectations of LBGT community members and others in federally protected classes under Federal and state employment, tax, discrimination, employee benefits, health care and other laws.

In addition to her extensive client work Ms. Stamer also is a widely published author, management policy advocate and thought leader, and management policy advocate on these and other workforce and related matters who shares her experience and leadership in a wide range of contexts.  A current or former author and advisory board member of HR.com, Insurance Thought Leadership, SHRM, BNA and several other the prominent publications, Past Chair of the ABA RPTE Employee Benefit & Other Compensation Arrangements Group, Co-Chair and Past Chair of the ABA RPTE Welfare Plan Committee, Vice Chair of the ABA TIPS Employee Benefit Plans Committee, Vice President of the North Texas Health Care Compliance Professionals Association, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, former President of the Richardson Development Center Board of Directors, and the former Board Compliance Chair of the National Kidney Foundation of North Texas, An American College of Employee Benefit Counsel, American Bar Association (ABA) and State Bar of Texas Fellow, Martindale Hubble Premier AV Rated (the highest), Ms. Stamer publishes and speaks extensively on these and other staffing and human resources, compensation and benefits, technology, health care, privacy, public policy, and other operations and risk management concerns. As a part of these activities, Ms. Stamer is scheduled to speak about Same-Sex Marriages and Domestic Partnerships: Lessons Learned, Unanswered Questions and Best Practices on May 1, 2015 for the ABA RPTE Section 2015 Spring Symposium in Washington D.C.  See also Stamer Talks About “Handling Health Plan Spouse, Dependent & Other “Family” Matters in Post-DOMA World” at SPBA 2014 Spring Meeting  Her publications and insights appear in the ABA and other professional publications, HR.com, SHRM, Insurance Thought Leadership, Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, World At Work, The Wall Street Journal, Business Insurance, the Dallas Morning News, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications.

You can review other recent human resources, employee benefits and internal controls publications and resources and additional information about the employment, employee benefits and other experience of the Cynthia Marcotte Stamer, PC here. If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile www.cynthiastamer.com or by registering to participate in the distribution of these and other updates on our HR & Employee Benefits Update here including:

About Solutions Law Press

Solutions Law Pressâ„¢ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources at www.solutionslawpress.com.

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile at here or e-mailing this information here.

©2015 Cynthia Marcotte Stamer. Non-exclusive right to republish granted to Solutions Law Press. All other rights reserved.


Obama Executive Order’s Prohibition Of Government Contractor Sexual Orientation & Gender Identity Discrimination Creates Challenges For All US Employers

April 8, 2015

Effective today (April 8, 2015), all U.S. businesses working as government contractors or subcontractors are prohibited from discriminating in employment against lesbian, gay, bisexual and transgender (LGBT) applicants and employees on the basis of sexual orientation or gender identity. While the new LGBT nondiscrimination rules for government contractors and subcontractors imposed by are the latest in a series of changes imposing new obligations for U.S. government contractors and other U.S. employers in their dealings with LGBT workers, all employers of 15 or more employees, not just government contractors, increasingly face employment discrimination risks and other expanding obligations to LGBT workers as a result of evolving judicial precedent and the pro-LGBT rights regulatory agenda of the Obama Administration. As publicity and the Obama Administration’s outreach about the implementation of the new nondiscrimination rules for government contractors and other announcements about these other new federal LGBT employment protections are likely to fuel new claims and demands by workers asserting these new rights, government contractors and all other employers should act quickly to ensure that their policies and benefit programs, as well as compliance and risk management procedures are properly updated to meet these changing federal rules regarding the employment rights of LGBT workers.

The new federal government contracting prohibition against sexual orientation and gender identity discrimination by federal government contractors is imposed by President Obama’s Executive Order on LGBT Workplace Discrimination, which takes effect today and applies to all federal government contractors and subcontractors regardless of the type of government contract, number of employees or project revenue. The Executive Order’s requirement that government contractors and subcontractors not discriminate based on sexual orientation or gender identity covers every type of new and modified federal contract and every establishment of those contractors and subcontractors – not just the ones directly involved in performing the contract. As a result of the Executive Order, all federal government contractors and subcontractors are prohibited from discriminating against lesbian, gay, bisexual or transgender people in hiring, firing, pay, promotion and other employment practices based on their sexual orientation or gender identity.

The Executive Order’s prohibition against federal contractors and subcontractors discriminating on the basis of sexual orientation and gender identity expressly elevates sexual orientation and gender identity to the same protected status as race, color, religion, national origin, disability and veteran status for purposes of the employment discrimination rules applicable to federal government contractors. While at this point, the Obama Administration rules do not also require federal government contractors and subcontractors to undertake any specific new record keeping, data analysis, goal setting or other similar affirmative action, government contractors and subcontractors of all types and sizes will want to take care to update their nondiscrimination policies and practices to reflect their policy against discrimination based on sexual orientation or gender identity, as well as ensure that their hiring, promotion, compensation and other employment practices and associated documentation are administered and documented to defend against potential discrimination charges based on gender identity or sexual orientation.

While the Executive Order expressly applies only to government contractors and subcontractors, in fact all employers of 15 or more employees increasingly need to be concerned about employment discrimination exposures brought by employees who are, or are perceived to be LGBT individuals, as well as keeping their employment and employee benefit practices compliant with a host of recent federal rule changes on the treatment of LGBT individuals.

On the employment discrimination front, most employers, not just government contractors, need to use care to meet their duty to protect LGBT and others from “gender stereotyping” and same-sex sexual harassment or other sex discrimination in their workplaces recognized by the courts as encompassed in Title VII’s sex discrimination protections.

Under the gender stereotyping theory recognized by the Supreme Court in Price Waterhouse v. Hopkins (1989), for instance, an employer violates Title VII if “X discriminates against Y because X believes that Y does not dress, walk, talk, etc. as members of Y’s gender typically do.”  In EEOC v. Boh Bros. Const. Co., LLC , 731 F. 3d 444 (5th Cir. 2013) for instance, the Fifth Circuit upheld Title VII gender stereotying based sex discrimination claims of an iron worker  who claimed his supervisor in the all-male work environment  accused him of being gay subjected him to highly offensive, often sexually explicit verbal and physical harassment for months because the supervisor perceived his behavior was effeminate and did not conform to the supervisor’s  idea of how a man should act.

Likewise, the EEOC and courts also have continued to recognize sexual harassment claims based on harassing conduct inflicted by a party of the same sex as the victim plaintiff.   For instance, last year the EEOC announced  that Wells Fargo Bank, N.A. agreed to pay $290,000 to four female bank tellers and take other corrective action to settle an EEOC sexual harassment lawsuit where the EEOC charged that a female manager and another female bank teller at a Wells Fargo branch in Reno, Nevada sexually harassed the women by making graphic sexual comments, gestures and images; inappropriate touching, and making suggestions to wear sexually provocative clothing to attract customers and to advance in the workplace, which the Wells Fargo allegedly failed to act quickly to stop despite complaints about the conduct from the victims.

In addition, government contractors and other U.S. employers also generally need to review and update heir employment, employee benefit plans, leave policies and other practices to ensure that they are up to date and defensible in light of the ongoing series of new rules affording new protections for LGBT workers issued by the Obama Administration in the aftermath of the Supreme Court’s ruling of the Defense of Marriage Act unconstitutional in Windsor. In the aftermath of Windsor, the Departments of Labor, Veterans Affairs, Treasury, Justice, Homeland Security and other federal agencies modified immigration, family and military leave, employee benefits, and a host of other rules to require both public and private employers and their employee benefit plans afford marriage-equivalent treatment workers involved in certain same-sex relationships as well as to extend other LGBT employment and other protections. As a result of these and other expansions in the legal protections of LGBT individuals by the Obama Administration like the Executive Order and these other regulatory and enforcement changes, as well as evolving precedent in the wake of the Windsor decision, all U.S. employers should prepare to meet new legal requirements, as well as rising expectations by members of the LGBT community about their workplace, employee benefits and other rights.

In anticipation of these rising requirements and expectations all employers including government contractors should engage legal counsel for assistance in reviewing and updating their policies and practices to comply with the evolving federal and state rules on workplace and other rights of LGBT individuals and strategies for appropriately managing the legal risks and other concerns associated with these emerging entitlements and expectations. For government contractors and other employers concerns about discrimination exposures, this discussion generally should include consideration about whether in addition updating written policies and procedures, the employer should consider workforce training, communications or other actions to promote workforce compliance with the new policies, minimize the risk that the failure to retrain the workforce might make it easier for potential plaintiffs to use events or policies occurring before the new rules became effective to help bolster post-effective date discrimination claims, and other risk management and compliance procedures.

 For  Advice, Representation, Training & Other Resources

If you need help responding to these new or other workforce, benefits and compensation, performance and risk management, compliance, enforcement or management concerns, help updating or defending your workforce or employee benefit policies or practices, or other related assistance, the author of this update, attorney Cynthia Marcotte Stamer may be able to help.

Recognized as a “Top” attorney in employee benefits, labor and employment and health care law, Ms. Stamer is a practicing attorney Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, author, pubic speaker,management policy advocate and thought leader with more than 25 years’ experience advising government contractors and other employers, their management, benefit plans and plan fiduciaries, vendors and service providers and others about OFCCP, EEOC, and other employment discrimination, government contracting compliance, and other workforce and operational performance, compliance, risk management, compensation, and benefits matters. As a part of this involvement, Ms. Stamer throughout her career specifically has advised and represented a broad range of employers across the U.S., their employee benefit plans and plan fiduciaries, insurers, health care providers and others about the implications of DOMA and other rules relating to rights and expectations of LBGT community members and others in federally protected classes under Federal and state employment, tax, discrimination, employee benefits, health care and other laws.

In addition to her extensive client work Ms. Stamer also is a widely published author, management policy advocate and thought leader, and management policy advocate on these and other workforce and related matters who shares her experience and leadership in a wide range of contexts.  A current or former author and advisory board member of HR.com, Insurance Thought Leadership, SHRM, BNA and several other the prominent publications, Past Chair of the ABA RPTE Employee Benefit & Other Compensation Arrangements Group, Co-Chair and Past Chair of the ABA RPTE Welfare Plan Committee, Vice Chair of the ABA TIPS Employee Benefit Plans Committee, Vice President of the North Texas Health Care Compliance Professionals Association, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, former President of the Richardson Development Center Board of Directors, and the former Board Compliance Chair of the National Kidney Foundation of North Texas, An American College of Employee Benefit Counsel, American Bar Association (ABA) and State Bar of Texas Fellow, Martindale Hubble Premier AV Rated (the highest), Ms. Stamer publishes and speaks extensively on these and other staffing and human resources, compensation and benefits, technology, health care, privacy, public policy, and other operations and risk management concerns. As a part of these activities, Ms. Stamer is scheduled to speak about Same-Sex Marriages and Domestic Partnerships: Lessons Learned, Unanswered Questions and Best Practices on May 1, 2015 for the ABA RPTE Section 2015 Spring Symposium in Washington D.C.  See also Stamer Talks About “Handling Health Plan Spouse, Dependent & Other “Family” Matters in Post-DOMA World” at SPBA 2014 Spring Meeting  Her publications and insights appear in the ABA and other professional publications, HR.com, SHRM, Insurance Thought Leadership, Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, World At Work, The Wall Street Journal, Business Insurance, the Dallas Morning News, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications.

You can review other recent human resources, employee benefits and internal controls publications and resources and additional information about the employment, employee benefits and other experience of the Cynthia Marcotte Stamer, PC here. If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile www.cynthiastamer.com or by registering to participate in the distribution of these and other updates on our HR & Employee Benefits Update here including:

About Solutions Law Press

Solutions Law Pressâ„¢ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources at www.solutionslawpress.com.

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile at here or e-mailing this information here.

©2015 Cynthia Marcotte Stamer. Non-exclusive right to republish granted to Solutions Law Press. All other rights reserved.


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