College Pays $54,000 To Settle DOJ ADA Lawsuit For Paramedic Program’s Termination of TA With MS

November 7, 2019

Lanier Technical College, a unit of the Technical College System of Georgia, will pay $53,000 in back pay and compensatory damages and revise its policies and procedures to settle a Justice Department lawsuit alleging the College violated the Americans with Disabilities Act (ADA) by terminating along-time College employee based on her multiple sclerosis filed in the Northern District Of Georgia on November 4, 2019.  In addition to this disability discrimination allegation, the Justice Department complaint also alleges the removed the employee from the teaching schedule for an entire school semester, thus reducing her hours and pay to zero, due to her multiple sclerosis after the employee took three days of sick leave one summer.  The lawsuit and its settlement reminds academic health care and other public and private employers about the need to use appropriate care to avoid inappropriate discrimination against individuals  with disabilities in employment and other operations.

The College had employed the terminated employee as a part-time emergency medical technician (EMT) lab assistant for over three years before the events prompting the lawsuit took place.  The essential functions of her job involved assisting instructors in the classroom and in the lab, and perform “check offs” to authorize and certify that the students mastered particular technical competencies (e.g., properly taking blood pressure, starting a patient’s I.V., assessing a patient’s vital signs).  In addition to her employment with the College, the former employee also worked as a paramedic for an unrelated employer.  She continued to work as a full-time paramedic for nearly three years after the College terminated her employment as a part-time lab assistant.

Less than a year into her employment at the College, the former employee was diagnosed with multiple sclerosis (MS) in 2010.   Shortly after her diagnosis the former employee notified among others, notified the Director of the Lanier Paramedicine Technology (PMT) Department, Sam Stone, of her condition and Mr. Stone subsequently discussed her MS and treatment with her over the course of her employment with the College.  According to the Justice Department complaint, the former employee did not require any reasonable accommodations for her disability, remained qualified to perform the essential functions of the part-time lab assistant job, and did so successfully until College discharged her or otherwise altered her compensation, terms, conditions, or privileges of employment.

In 2012, the former employee assisted with classes and labs taught by Instructor Andy Booth.  Instructor Booth managed the work schedule for all the part-time EMT lab assistants who assisted with his classes, including that of the former employee.  This included the ability to remove lab assistants from any shifts they requested.  Director Stone then completed a final review of the semester and approved the schedule and any changes to it.

During the summer of 2012, the former employee had to miss her assigned workdays on two or three occasions due to her MS and its treatment.  She also was on disability leave from her paramedic job for a period during that summer, returning to work full-time in early August.  Following these absences, Instructor Booth on August 30, 2012 sent an email to lab assistants, including the former employee requesting that lab assistants sign up for open shifts on the work schedule, as he was “still short on help.”  The schedule with available shifts was posted for September through December 2012.  The former employee signed up for seven or eight four-hour shifts over the course of the fall semester that same day and emailed Instructor Booth the evening of August 30 to inform him of this.  In her email, she indicated that she was no longer on disability leave from her other job.

Two weeks later, on September 12, 2012, the College removed the former employee from the work schedule for the entire fall semester schedule on the written instructions of Instructor Booth with the approval of Director Stone.   Instructor Booth’s September 12 email instructions to his assistant provided a link to the online work schedule for the lab assistants and stated:  “Any day you see [the former employee], just take her off.”  Director Stone was copied on this email.  That same day, Director Stone replied to Instructor Booth’s email, stating that he had reviewed all of the dates up to December and approved the schedule.  The College knew that, by removing the former employee from the schedule, it was terminating her employment with Lanier.

When the former employee realized that someone removed her from the schedule for the entire semester, she contacted Instructor Booth.  He told the former employee, by text message, that it was Director Stone’s decision and that Director Stone wanted to give the former employee “some time to heal.”  Instructor Booth also stated that Director Stone seemed upset about the former employee missing a few days in the summer due to her MS.  Instructor Booth then directed the former employee to speak to Director Stone.  He did not offer to reinstate her for any of the days she signed up for or for any future dates.

Thereafter, on September 26, 2012, the former employee contacted Director Stone by email.  After telling Director Stone i her email that Instructor Booth said Director Stone was managing the schedule and had wanted to give her “some time to heal,” she reassured him that she appreciated his concern but that she felt she was “OK.”  When Director Stone responded on September 23, he confirmed the correctness of Director Stone’s email and also confirmed that he was concerned with the former employee’s health. He offered to discuss these concerns further with her in private.  He did not offer to reinstate her for any of the days she signed up for or for any future dates.

Later that day, the former employee called Director Stone.  On the call, Director Stone expressed concern about legal and liability issues and whether the former employee was fit to work because of her MS.  He said that he, as the Department Director, had to be concerned about her health and medical issues, because a student could challenge a grade on the basis that her MS made her unfit to evaluate students.   Director Stone also referenced a couple days that the former employee missed work due to her MS during the summer, and stated that she was less reliable than other lab assistants were at that point.  He did not offer to reinstate her for any of the days she signed up for or for any future dates.

Approximately six months later, College removed the former employee from the payroll and changed her payroll status to “terminated.”

On September 26, 2012, the former employee filed a timely charge of discrimination with the United States Equal Employment Opportunity Commission (EEOC), alleging that College terminated her because of her disability in violation of the ADA.  The Justice Department filed the lawsuit after the EEOC referred the former employee’s complaint to it.

Title I of the ADA prohibits covered entities including the College from discriminating against a qualified individual on the basis of disability in regard to job application procedures, the hiring, advancement, or discharge of employees, employee compensation, job training, and other terms, conditions, and privileges of employment.  42 U.S.C. § 12112(a); 29 C.F.R. § 1630.4.

The Justice Department complaint against the College charged that the College violated the ADA by discriminating against her on the basis of her disability by:

  • Removing her from the lab assistant work schedule for a semester and reducing her work hours and compensation to zero; and
  • Terminating her on the basis of her disability

As a consequence of these discriminatory actions, the complaint charged the former employee suffered lost earnings, benefits and job advancement opportunities, as well as substantial emotional distress, pain and suffering and other nonpecuniary losses.  The complaint asked the District Court to redress these injuries by:

  • Declaring the College in violation of the Title I of the ADA and its accompanying regulation;
  • Enjoining the College and its agents, employees, successors, and all persons in active concert or participation with it, from engaging in discriminatory employment policies and practices that violate Title I of the ADA;
  • Requiring the College to modify its policies, practices, and procedures as necessary to bring its employment practices into compliance with Title I of the ADA and its implementing   regulation;
  • Ordering the College to train its supervisors and human resource staff regarding the requirements of Title I of the ADA; and
  • Awarding the former employee back pay with interest; the value of any lost benefits with interest; and compensatory damages, including damages for emotional distress, for injuries suffered as a result of Defendant’s failure to comply with the requirements of the ADA;

Under the settlement agreement announced November 7, 2019 by the Justice Department, the College must pay the former employee $53,000 in back pay and compensatory damages, revise its policies and training staff on the ADA to ensure compliance with the ADA, train staff on the ADA, and report to the Justice Department on implementation of the settlement agreement.

Reaching this settlement allowed the College to eliminate its exposure to potentially much greater liability.  In addition to actual lost compensation and benefit damages, a loss at trial could have resulted in a jury award that also ordered the College to pay attorneys’ fees and other costs, interest and exemplary damages of up to $300,000.

For More Information

We hope this update is helpful. For more information about employment discrimination or other labor and employment, compensation, benefits or other related management and compliance concerns or developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.

Solutions Law Press, Inc. invites you receive future updates and join discussions about these and other human resources, health and other employee benefit and patient empowerment concerns by participating and contributing to the discussions in our Solutions Law Press HR & Benefits Update Compliance Update Group and registering for updates on our Solutions Law Press Website..

About the Author

Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of management focused employment, health care, employee benefit and insurance, workforce and other management work, public policy leadership and advocacy, coaching, teachings, and publications including extensive work with businesses on compliance, risk management and defense.

Author of numerous highly regarding publications on disability and other discrimination and other employment, employee benefit, compensation, regulatory compliance and internal controls and other management concerns affecting health care, education, insurance, housing and other operations, Ms. Stamer’s clients include health care, insurance and financial services, educational and other employer and services organizations; employer, union, association, government and other insured and self-insured health and other employee benefit plan sponsors, benefit plans, fiduciaries, administrators, and other plan vendors;   domestic and international public and private health care, education and other community service and care organizations; managed care organizations; insurers, third-party administrative services organizations and other payer organizations; and other private and government organizations and their management leaders.  In addition to her legal and management operations work. Ms. Stamer’s experience includes 30 plus years’ of  legislative and regulatory policy advocacy and drafting, design, compliance and enforcement including testifying to the EBSA Advisory Council on Employee Welfare and Pension Benefit Plans in  on the effectiveness of employee benefit plan disclosures during 2017 hearings on on reducing the burdens and increasing the effectiveness of ERISA mandated disclosures  as well as advice, representation, advocacy and testimony to and before and other work with various foreign governments, Congress, state legislatures, and a multitude of federal, state and local agencies.

Throughout her 30 plus year career, Ms. Stamer has continuously worked with these and other management clients to design, implement, document, administer and defend hiring, performance management, compensation, promotion, demotion, discipline, reduction in force and other workforce, employee benefit, insurance and risk management, health and safety, and other programs, products and solutions, and practices; establish and administer compliance and risk management policies; manage labor-management relations, comply with requirements, investigate and respond to government, accreditation and quality organizations, regulatory and contractual audits, private litigation and other federal and state reviews, investigations and enforcement actions; evaluate and influence legislative and regulatory reforms and other regulatory and public policy advocacy; prepare and present training and discipline;  handle workforce and related change management associated with mergers, acquisitions, reductions in force, re-engineering, and other change management; and a host of other workforce related concerns. Ms. Stamer’s experience in these matters includes supporting these organizations and their leaders on both a real-time, “on demand” basis with crisis preparedness, intervention and response as well as consulting and representing clients on ongoing compliance and risk management; plan and program design; vendor and employee credentialing, selection, contracting, performance management and other dealings; strategic planning; policy, program, product and services development and innovation; mergers, acquisitions, bankruptcy and other crisis and change management; management, and other opportunities and challenges arising in the course of workforce and other operations management to improve performance while managing workforce, compensation and benefits and other legal and operational liability and performance.

A Fellow in the American College of Employee Benefit Counsel and Past Chair of both the ABA Managed Care & Insurance Interest Group and it’s RPTE Employee Benefits and Other  Compensation Group, Ms. Stamer also has leading edge experience in health benefit, health care, health, financial and other plan, program and process design, administration, documentation, contracting, risk management, compliance and related process and systems development, policy and operations; training; legislative and regulatory affairs, and other legal and operational concerns.

A former lead consultant to the Government of Bolivia on its Pension Privatization Project with extensive domestic and international public policy concerns in pensions, healthcare, workforce, immigration, tax, education and other areas, Ms. Stamer has been extensively involved in U.S. federal, state and local health care and other legislative and regulatory reform impacting these concerns throughout her career. Her public policy and regulatory affairs experience encompasses advising and representing domestic and multinational private sector health, insurance, employee benefit, employer, staffing and other outsourced service providers, and other clients in dealings with Congress, state legislatures, and federal, state and local regulators and government entities, as well as providing advice and input to U.S. and foreign government leaders on these and other policy concerns.

Author of leading works on a multitude of labor and employment, compensation and benefits, internal controls and compliance, and risk management matters and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other related concerns by her service in the leadership of the Solutions Law Press, Inc. Coalition for Responsible Health Policy, its PROJECT COPE: Coalition on Patient Empowerment, and a broad range of other professional and civic organizations including North Texas Healthcare Compliance Association, a founding Board Member and past President of the Alliance for Healthcare Excellence, past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children (now Warren Center For Children); current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a current Defined Contribution Plan Committee Co-Chair, former Group Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group, past Representative and chair of various committees of ABA Joint Committee on Employee Benefits; an ABA Health Law Coordinating Council representative, former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, a former member of the Board of Directors of the Southwest Benefits Association and others.

For more information about Ms. Stamer or her work, services, experience and involvements, see here or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.

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 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 your profile here.  We also invite you to join the discussion of these and other human resources, health and other employee benefit and patient empowerment concerns by participating and contributing to the discussions in our Health Plan Compliance Group or COPE: Coalition On Patient Empowerment Groupon LinkedIn or Project COPE: Coalition on Patient Empowerment Facebook Page.

NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission and its content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion.otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.

Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.

©2019 Cynthia Marcotte Stamer. Non-exclusive right to republish granted to Solutions Law Press, Inc.™ For information about republication or the topic of this article, please contact the author directly. All other rights reserved.


OFCCP Extends TRICARE Affirmative Action Morotorium

May 18, 2018

Today the U.S. Department of Labor issued a press release about the publication of a new OFCCP Directive extending the enforcement moratorium relating to the affirmative obligations of TRICARE providers for two years. This moratorium has been in effect for four years, and will now expire on May 7, 2021; it will also now apply to Veterans Affairs Health Benefits Program providers.

This extension will provide OFCCP time to receive feedback from stakeholders, relieve uncertainty, and give OFCCP an opportunity to evaluate and address legislation that may be enacted on this issue.

About The Author

A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation; Former Chair of the RPTE Employee Benefits and Compensation Committee, a current Co-Chair of the Committee, and the former Chair of its Welfare Benefit and its Defined Compensation Plan Committees and former RPTE Joint Committee on Employee Benefits Council (JCEB) Representative, Cynthia Marcotte Stamer is a Martindale-Hubble “AV-Preeminent” practicing attorney and management consultant, author, public policy advocate, author and lecturer repeatedly recognized for her 30 plus years’ of work and pragmatic thought leadership, publications and training on health, pension and other employee benefit,  insurance, labor and employment, and health care  fiduciary responsibility, payment, investment, contracting  and other design, administration and compliance concerns as among the “Top Rated Labor & Employment Lawyers in Texas,” a “Legal Leader,” a “Top Woman Lawyer” and with other awards by LexisNexis® Martindale-Hubbell®; as among the “Best Lawyers In Dallas” for her work in the field of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, in International Who’s Who of Professionals and with numerous other awards and distinctions.

Highly valued for her ability to meld her extensive legal and industry knowledge and experience with her talents as an insightful innovator and pragmatic problem solver, Ms. Stamer advises, represents and defends employer, union, multi-employer, association and other employee benefit plan sponsors, insurers and managed care organizations, fiduciaries, plan administrators, technology and other service providers, government and community leaders and others about health and other employee benefit and insurance program and policy design and innovation, funding, documentation, administration, communication, data security and use, contracting, plan, public and regulatory reforms and enforcement, and other risk management, compliance and operations matters. Her experience encompasses leading and supporting the development and defense of innovative new policies, programs, practices and solutions; advising and representing clients on routine plan establishment, plan documentation and contract drafting and review, administration, change and other compliance and operations; crisis prevention and response, compliance and risk management audits and investigations, enforcement actions and other dealings with the US Congress, Departments of Labor, Treasury, Health & Human Services, Federal Trade Commission, Justice, Securities and Exchange Commission, Education and other federal agencies, state legislatures, attorneys general, insurance, labor, worker’s compensation, and other agencies and regulators, and various other foreign and domestic governmental bodies and agencies. She also provides strategic and other supports clients in defending litigation as lead strategy counsel, special counsel and as an expert witness. Alongside her extensive legal and operational experience, Ms. Stamer also is recognized for her work as a public and regulatory policy advocate and community leader with a gift for finding pragmatic solutions and helping to forge the common ground necessary to build consensus. Best known for her domestic public policy and community leadership on health care and insurance reform, Ms. Stamer’s lifelong public policy and community service involvement includes service as a lead consultant to the Government of Bolivia on its pension privatization project, as well as extensive legislative and regulatory reform, advocacy and input workforce, worker classification, employee benefit, public health and healthcare, social security and other disability and aging in place, education, migration reforms domestically and internationally throughout her adult life. In addition to her public and regulatory policy involvement, Ms. Stamer also contributes her service and leadership to a professional and civic organizations and efforts including her involvement as the Founder and Executive Director of the Coalition on Responsible Health Policy and its PROJECT COPE; Coalition on Patient Empowerment, a founding Board Member and past President of the Alliance for Healthcare Excellence; Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee; Vice Chair, Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group; current Fiduciary Responsibility Committee Co-Chair and Membership Committee member of the ABA RPTE Section; former RPTE Employee Benefits and Other Compensation Group Chair, former Chair and Co-Chair of its Welfare Plans Committee, and Defined Contribution Plans Committee; former RPTE Representative to ABA Joint Committee on Employee Benefits Council; former RPTE Representative to the ABA Health Law Coordinating Counsel; former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, former Board Member, Continuing Education Chair and Treasurer of the Southwest Benefits Association; Vice President of the North Texas Healthcare Compliance Professionals Association; past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children; past Dallas World Affairs Council Board Member, and in leadership of many other professional, civic and community organizations. Ms. Stamer also is a highly popular lecturer, symposia chair and author, who publishes and speaks extensively on health and managed care industry, human resources, employment and other privacy, data security and other technology, regulatory and operational risk management for the American Bar Association, ALI-ABA, American Health Lawyers, Society of Human Resources Professionals, the Southwest Benefits Association, the Society of Employee Benefits Administrators, the American Law Institute, Lexis-Nexis, Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, the Society of Professional Benefits Administrators, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, HealthLeaders, the HCCA, ISSA, HIMSS, Modern Healthcare, Managed Healthcare, Institute of Internal Auditors, Society of CPAs, 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 symposia and 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 and speaks and conducts training for a broad range of professional organizations and for clients, serves on the faculty and planning committee of many workshops, seminars, and symposia, and on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications.

Beyond these involvements, Ms. Stamer also is active in the leadership of a broad range of other public policy advocacy and other professional and civic organizations and involvements. Through these and other involvements, she helps develop and build solutions, build consensus, garner funding and other resources, manage compliance and other operations, and take other actions to identify promote tangible improvements in health care and other policy and operational areas.

Before founding her current law firm, Cynthia Marcotte Stamer, P.C., Ms. Stamer practiced law as a partner with several prominent national and international law firms for more than 10 years before founding Cynthia Marcotte Stamer, P.C. to practice her unique brand of “Solutions law™” and to devote more time to the pragmatic policy and system reform, community education and innovation, and other health system improvement efforts of her PROJECT COPE: the Coalition on Patient Empowerment initiative.

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 SolutionsLawPress.com such as the following

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Take Care of Your Good People

Read Tax Cuts and Jobs Act Conference Report For Tax Reform From Source

Check How IRS 2018 Retirement & Saving Plan Limits and Amounts Cost Of Living Adjustments Impact Your HR & Retirement Plan Administration & Planning

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Hiring & Retaining Workers Growing Business Challenge

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

NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.

Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.

©2018 Cynthia Marcotte Stamer. Non-exclusive right to republish granted to Solutions  Law Press, Inc.™   For information about republication, please contact the author directly.  All other rights reserved.


Time To Tighten Business Travel Policies

January 30, 2018

Businesses with employees that travel regularly or for the occasional training or other isolated business trip should review and update their travel related policies, practices, and procedures for evolving laws, risks and management needs.

To start with, 2017 tax reforms impact the tax treatment of various employee relocation and travel related expense. Businesses should review these changes and make appropriate updates now to avoid headaches for the business and its employees later.

While many employers mostly focus upon travel expense management, reporting and reimbursement, smart employers also understand there’s much more to consider.

First and foremost, since employees often forget that the purpose of business travel is carrying out the business of the company and not a boondoggle, business travel policies and communications should make clear to employees that their trip is about work. Policies should make clear to employees their tesponsibility for attending meetings and performing other business-related responsibilities as well as for conducting themselves at all times consistent with company policy and to promote a positive impression of the employer and the company.

Naturally all travel policies also should require compliance with all applicable laws and customs. For international travel, this includes compliance with the Foreign Corrupt Practices Act, the Patriot Act, U.S. and foreign immigration and customs, and other relevant laws, rules and customs. However, domestic travelers also should be reminded if their duty to comply with local laws as well.

Amid the current “Me Too” frenzy, however, companies also should consider addressing other potentially risky behavior that tends to arise when employees travel on business. Unfortunately history proves that many employees actually do need to be told and reminded to abstain from inappropriate alcohol, sexual harassment or other behavior that could create liability or embarrassment for the company when traveling for business or engaging in other activities. Because business travel tends to blur distinctions between business and personal time, most businesses will want to establish and communicate high expectations concerning on and off-duty conduct when traveling on business to head off potential problems. Updated direction about hosting or participating in entertainment and other social activities with co-workers, customers, vendors, prospects and others also often are warranted.

Beyond communicating expectations of employees while on business travel, businesses also should confirm their company’s compensation, expense reimbursement, timekeeping and reporting, hours of work, and other policies comply with current laws and capture and retain appropriate documentation.

Businesses must recognize, for instance, that training and other work related travel typically is considered hours of work for wage an hour, safety and various other purposes. Employers should confirm their policies and practices properly capture and count all required hours of compensable work and pay hourly workers for time on the road properly in accordance with Labor Department requirements. Many employers unfortunately get nailed for overtime violations because of assumptions or misunderstandings of rules. For instance, many employers improperly fail to count air travel and certain other travel time as compensable when required to do so under Labor Department Fair Labor Standards Act (FLSA) rules. Likewise, improperly structured expense reimbursement policies or practices can bump up overtime pay liability by requiring the employer to include otherwise excludable expense reimbursements payments in the hourly rate of pay when calculating regular and overtime pay. Employers must ensure they understand these rules and take appropriate steps to capture, track, report and pay for time and expenses upfront to defend an audit or other challenge effectively and efficiently.

Reviewing and tightening workforce travel related policies, practices and procedures to meet current laws, business and social expectations and management needs can boost the bang businesses realize for their business travel buck while mitigating a host of legal and business risks.

About The Author

A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation; Former Chair of the RPTE Employee Benefits and Compensation Committee, a current Co-Chair of the Committee, and the former Chair of its Welfare Benefit and its Defined Compensation Plan Committees and former RPTE Joint Committee on Employee Benefits Council (JCEB) Representative, Cynthia Marcotte Stamer is a Martindale-Hubble “AV-Preeminent” practicing attorney and management consultant, author, public policy advocate, author and lecturer repeatedly recognized for her 30 plus years’ of work and pragmatic thought leadership, publications and training on health, pension and other employee benefit,  insurance, labor and employment, and health care  fiduciary responsibility, payment, investment, contracting  and other design, administration and compliance concerns as among the “Top Rated Labor & Employment Lawyers in Texas,” a “Legal Leader,” a “Top Woman Lawyer” and with other awards by LexisNexis® Martindale-Hubbell®; as among the “Best Lawyers In Dallas” for her work in the field of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, in International Who’s Who of Professionals and with numerous other awards and distinctions.

Highly valued for her ability to meld her extensive legal and industry knowledge and experience with her talents as an insightful innovator and pragmatic problem solver, Ms. Stamer advises, represents and defends employer, union, multi-employer, association and other employee benefit plan sponsors, insurers and managed care organizations, fiduciaries, plan administrators, technology and other service providers, government and community leaders and others about health and other employee benefit and insurance program and policy design and innovation, funding, documentation, administration, communication, data security and use, contracting, plan, public and regulatory reforms and enforcement, and other risk management, compliance and operations matters. Her experience encompasses leading and supporting the development and defense of innovative new policies, programs, practices and solutions; advising and representing clients on routine plan establishment, plan documentation and contract drafting and review, administration, change and other compliance and operations; crisis prevention and response, compliance and risk management audits and investigations, enforcement actions and other dealings with the US Congress, Departments of Labor, Treasury, Health & Human Services, Federal Trade Commission, Justice, Securities and Exchange Commission, Education and other federal agencies, state legislatures, attorneys general, insurance, labor, worker’s compensation, and other agencies and regulators, and various other foreign and domestic governmental bodies and agencies. She also provides strategic and other supports clients in defending litigation as lead strategy counsel, special counsel and as an expert witness. Alongside her extensive legal and operational experience, Ms. Stamer also is recognized for her work as a public and regulatory policy advocate and community leader with a gift for finding pragmatic solutions and helping to forge the common ground necessary to build consensus. Best known for her domestic public policy and community leadership on health care and insurance reform, Ms. Stamer’s lifelong public policy and community service involvement includes service as a lead consultant to the Government of Bolivia on its pension privatization project, as well as extensive legislative and regulatory reform, advocacy and input workforce, worker classification, employee benefit, public health and healthcare, social security and other disability and aging in place, education, migration reforms domestically and internationally throughout her adult life. In addition to her public and regulatory policy involvement, Ms. Stamer also contributes her service and leadership to a professional and civic organizations and efforts including her involvement as the Founder and Executive Director of the Coalition on Responsible Health Policy and its PROJECT COPE; Coalition on Patient Empowerment, a founding Board Member and past President of the Alliance for Healthcare Excellence; Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee; Vice Chair, Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group; current Fiduciary Responsibility Committee Co-Chair and Membership Committee member of the ABA RPTE Section; former RPTE Employee Benefits and Other Compensation Group Chair, former Chair and Co-Chair of its Welfare Plans Committee, and Defined Contribution Plans Committee; former RPTE Representative to ABA Joint Committee on Employee Benefits Council; former RPTE Representative to the ABA Health Law Coordinating Counsel; former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, former Board Member, Continuing Education Chair and Treasurer of the Southwest Benefits Association; Vice President of the North Texas Healthcare Compliance Professionals Association; past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children; past Dallas World Affairs Council Board Member, and in leadership of many other professional, civic and community organizations. Ms. Stamer also is a highly popular lecturer, symposia chair and author, who publishes and speaks extensively on health and managed care industry, human resources, employment and other privacy, data security and other technology, regulatory and operational risk management for the American Bar Association, ALI-ABA, American Health Lawyers, Society of Human Resources Professionals, the Southwest Benefits Association, the Society of Employee Benefits Administrators, the American Law Institute, Lexis-Nexis, Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, the Society of Professional Benefits Administrators, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, HealthLeaders, the HCCA, ISSA, HIMSS, Modern Healthcare, Managed Healthcare, Institute of Internal Auditors, Society of CPAs, 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 symposia and 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 and speaks and conducts training for a broad range of professional organizations and for clients, serves on the faculty and planning committee of many workshops, seminars, and symposia, and on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications.

Beyond these involvements, Ms. Stamer also is active in the leadership of a broad range of other public policy advocacy and other professional and civic organizations and involvements. Through these and other involvements, she helps develop and build solutions, build consensus, garner funding and other resources, manage compliance and other operations, and take other actions to identify promote tangible improvements in health care and other policy and operational areas.

Before founding her current law firm, Cynthia Marcotte Stamer, P.C., Ms. Stamer practiced law as a partner with several prominent national and international law firms for more than 10 years before founding Cynthia Marcotte Stamer, P.C. to practice her unique brand of “Solutions law™” and to devote more time to the pragmatic policy and system reform, community education and innovation, and other health system improvement efforts of her PROJECT COPE: the Coalition on Patient Empowerment initiative.

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 SolutionsLawPress.com such as the following

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

NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.

Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.

©2018 Cynthia Marcotte Stamer. Non-exclusive right to republish granted to Solutions  Law Press, Inc.™   For information about republication, please contact the author directly.  All other rights reserved


Arizona Proposal To Ban Sexual Harassment Confidentiality Agreements Sign Of Growing Employer Risks

January 7, 2018

Arizona legislators are considering adopting legislation banning and rendering unenforceable agreements by employers or others to keep confidential or otherwise restrict the disclosure of allegations or other information about sexual harassment or sexual assault. If enacted as proposed, the proposed legislation could significantly impact employers, sexual harassment and sexual assault victims and witnesses,  persons accused of sexual assault or harassment and others’ ability to negotiate, enforce or comply with provisions in new or preexisting employment policies, and settlement, severance and other agreements requiring confidentiality of or restricting disclosure of information about findings or allegations of sexual harassment or assault and related factual information.

As currently proposed,  Arizona House Bill 2020 (HB 2020) would amend Section 1.  Title 12, chapter 6, article 12, Arizona Revised Statutes, to include add a new section 12-720 that would read as follows

12-720.  Confidentiality agreements; disclosure of information relating to sexual assault or sexual harassment; applicability

A.  A CONFIDENTIALITY AGREEMENT THAT RESTRICTS THE DISCLOSURE OF FACTUAL INFORMATION THAT IS RELATED TO A SEXUAL ASSAULT OR SEXUAL HARASSMENT, INCLUDING FACTUAL INFORMATION THAT IS RELATED TO AN ALLEGATION OF OR ATTEMPTED SEXUAL ASSAULT OR SEXUAL HARASSMENT, IS AGAINST THIS STATE’S PUBLIC SAFETY AND POLICY AND IS VOID AND UNENFORCEABLE.

B.  A PERSON MAY NOT ENTER INTO A CONFIDENTIALITY AGREEMENT THAT RESTRICTS THE DISCLOSURE OF FACTUAL INFORMATION THAT IS RELATED TO AN ALLEGATION OF OR ATTEMPTED SEXUAL ASSAULT OR SEXUAL HARASSMENT BY AN ELECTED OFFICIAL.

C.  THIS SECTION DOES NOT APPLY TO THE DISCLOSURE OF A MINOR CRIME VICTIM’S MEDICAL OR PERSONAL IDENTIFYING INFORMATION OR TO OTHER INFORMATION THAT IS SPECIFICALLY PROTECTED FROM DISCLOSURE BY LAW.

Based on this currently proposed language,  enactment of HB 2020’s sexual harassment and assault confidentiality restrictions almost certainly will dramatically impact both the financial, reputation and legal liability exposures of  individuals accused of sexual harassment or assault and their employers or others potentially responsible for the investigation, management or liability for the alleged harasser’s behavior,  behavior, as well as the privacy, retaliation and other concerns of sexual harassment or assault victims and witnesses.  Certainly,  HB 2020 would preclude or limit the ability of executives or other individuals accused of sexual harassment or assault from hiding their isolated or recurrent actual or alleged misconduct behind confidentiality or nondisclosure provisions in settlement or other contracts, handbooks, investigation, compliance or other policies. Likewise, HB 2020’s prohibitions against agreements requiring the maintenance of confidentiality of information about alleged or actual sexual harassment or assaults also can be expected to make it more difficult for  employers to defend or mitigate their exposure to liability for alleged sexual harassment or assaults by making it much easier for alleged victims, their attorneys and the Equal Employment Opportunity Commission and other government agencies to investigate and obtain evidence about the conduct of the accused and the actions of his or her employer to other events or charges of sexual harassment or assault.  Among other things, more free availability of this information is likely to make it easier for sexual harassment or assault victims, their plaintiff’s lawyers and the EEOC or other agencies and advocates to uncover, pursue enforcement and recover damages from employers  through individual, class action or serial sexual harassment investigations and lawsuits as well as to rebut efforts of employers and those accused to mitigate damages and other liability.

While many might celebrate these expected effects of HB 2020 in helping to hold harassers and their employers more accountable for misconduct and to safeguard others from becoming future victims, HB 2020 also carries the risk of a number of potentially undesirable side effects for sexual harassment and assault victims and witnesses, employer and other investigators and those wrongfully accused. Because victims and witnesses to sexual harassment often fear embarrassment, retaliation or other adverse consequences from their report or involvement in a charge or investigation, sexual harassment and other policies and the employers and others responsible for administering and enforcing sexual harassment policies typically offer assurances of confidentiality and  other nondisclosure to encourage and reassure victims and witnesses to report concerning behavior and to help prevent retaliation against victims and witnesses reporting or cooperating in sexual harassment and assault investigations.  While HB 2020 includes a provision that appears intended to preserve the confidentiality of the identity and medical information of victims, the technical concealment of names and medical information as a practical matter generally provides an inadequate shield for victims or witnesses when other information otherwise remains discoverable.  Consequently, confidentiality restrictions like those proposed in HB 2020 could backfire against these victims and witnesses and employers legitimately working to protect them by enhancing victim and witness reluctance to report or cooperate in sexual harassment investigations as well as inflict substantial and irreversible injury upon the personal and professional reputations of individuals wrongfully accused.   The confidentiality prohibitions of HB 2020 are likely to undermine the ability of employers, victims and witnesses to use confidentiality requirements legitimately to prevent unjustified retaliation, loss of privacy and other adverse consequences to victims, witnesses and those wrongfully accused.  Likewise, restrictions on confidentiality also can be expected to undermine the ability of victims to secure compensation from guilty parties and their employers without litigation as accused parties and their employer as the inability to enforce confidentiality will undermine the settlement value of questionable charges by enhancing the potential need to dispute and defend such charges to avoid becoming targeted by other accusations concurrently or in the future.

Obviously, these and other potential implications of HB 2020 make it highly advisable that businesses, management, individuals, insurers and others potentially subject to HB 2020  will want to carefully assess the implications of HB 2020 and provide input to the Arizona legislature.  Given the wave of recent publicity triggered over the past year from widespread reporting of sexual harassment and related charges and resulting resignations and lawsuits and settlements involving sexual harassment charges levied against high profile entertainers, business leaders and others, employers, management and business leaders, victims, witnesses, insurers and other operating outside the jurisdiction of Arizona law can anticipate that they also may face similar legislative, regulatory or other challenges to confidentiality and nondisclosure policies and agreements concerning sexual harassment and assault allegations, investigations and settlements.  Because of these and other concerns, employers, victims, witnesses, investigators, insurers and others with responsibility for or involvement with sexual harassment and assault concerns across the nation should both carefully monitor these developments as well as the reliability and effectiveness of their past and existing sexual harassment, investigations, anti-retaliation, confidentiality and other related policies, confidentiality and nondisclosure provisions in settlement agreements, and other  potentially impacted agreements, policies and practices. Employers and other individuals or organizations in the scope of potential liability for sexual harassment or assault charges also may wish to consider strengthening existing anti-harassment policies, investigation practices, insurance coverage and other prevention and risk management arrangements to mitigate their sexual harassment risks.

About The Author

Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: Erisa & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for management work, coaching, teachings, and publications.

Ms. Stamer works with businesses and their management, employee benefit plans, governments and other organizations deal with all aspects of human resources and workforce, internal controls and regulatory compliance, change management and other performance and operations management and compliance. Her day-to-day work encompasses both labor and employment issues, as well as independent contractor, outsourcing, employee leasing, management services and other nontraditional service relationships. She supports her clients both on a real-time, “on demand” basis and with longer term basis to deal with all aspects for workforce and human resources management, including, recruitment, hiring, firing, compensation and benefits, promotion, discipline, compliance, trade secret and confidentiality, noncompetition, privacy and data security, safety, daily performance and operations management, 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, insurance, financial services, technology, energy, manufacturing, retail, hospitality, governmental and other highly regulated employers, her nearly 30 years’ of experience encompasses domestic and international businesses of all types and sizes including extensive involvement for more than providing training for management and others and helping management, liability insurers and others to develop, administer, enforce, defend and mitigate sexual harassment and other related employment risks.

A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other concerns by her service as a management consultant,  business coach and consultant and policy strategist as well through her leadership participation in professional and civic organizations such her involvement as the Vice Chair of the North Texas Healthcare Compliance Association; Executive Director of the Coalition on Responsible Health Policy and its PROJECT COPE: Coalition on Patient Empowerment; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children; former Gulf Coast TEGE Council Exempt Organization Coordinator; a founding Board Member and past President of the Alliance for Healthcare Excellence; former board member and Vice President of the Managed Care Association; past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; a member and policy adviser to the National Physicians’ Council for Healthcare Policy; current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee; current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section; Past Chair of the ABA Health Law Section Managed Care & Insurance Section; ABA Real Property Probate and Trust (RPTE) Section former Employee Benefits Group Chair, immediate past RPTE Representative to ABA Joint Committee on Employee Benefits Council Representative, and Defined Contribution Committee Co-Chair, past Welfare Benefit Committee Chair and current Employee Benefits Group Fiduciary Responsibility Committee Co-Chair, Substantive and Group Committee member, Membership Committee member and RPTE Representative to the ABA Health Law Coordinating Council; past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee; a former member of the Board of Directors, Treasurer, Member and Continuing Education Chair of the Southwest Benefits Association and others.

Ms. Stamer also is a widely published author, highly popular lecturer, and serial symposia chair, who publishes and speaks extensively on sexual harassment and other human resources, labor and employment, employee benefits, compensation, occupational safety and health, and other leadership, performance, regulatory and operational risk management, public policy and community service concerns, who has received high praise for workshops and training programs she conducts on “What To Do When Your Employee’s Personal Life Becomes Your Business,” “Sex, Drugs & Rock ‘N Role in the Workplace,” and other sexual harassment, investigations, privacy and related programs for SHRM,  the American Bar Association, ALI-ABA, American Health Lawyers, Society of Human Resources Professionals, the Southwest Benefits Association, the Society of Employee Benefits Administrators, the American Law Institute, Lexis-Nexis, Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, HealthLeaders, the HCCA, ISSA, HIMSS, Modern Healthcare, Managed Healthcare, Institute of Internal Auditors, Society of CPAs, 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 symposia and 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 and speaks and conducts training for a broad range of professional organizations and for clients on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications.

Want to know more? See here for details about the author of this update, attorney Cynthia Marcotte Stamer, e-mail her here or telephone Ms. Stamer at (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 SolutionsLawPress.com such as the following:

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

NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.

Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.

©2018 Cynthia Marcotte Stamer. Non-exclusive right to republish granted to Solutions  Law Press, Inc.™   For information about republication, please contact the author. directly.  All other rights reserved


Bill Mandating E-Verify, Raising Employer I-9 Penalties Approved By House Judiciary Committee

October 28, 2017

Employers will face heightened employment-related immigration responsibilities and fines for hiring undocumented aliens if Congress passes a bill that would mandate that all employers use the E-Verify process to check the Work eligibility of all new hires approved October 25 by the House Judiciary Committee.

One of two Immigration bills that passed the Committee on October 25, the Legal Workforce Act (LWA), H.R. 3711 Introduced by Representatives Lamar Smith (R-TX) and Ken Calvert (R-CA), along with House Judiciary Committee Chairman Bob Goodlatte (R-VA), among other things, would:

  • Replace the current paper-based I-9 system with a completely electronic work-eligibility check under which employers would attest through the electronic verification system that they had examined the new hire’s employment and identification documents to ensure authenticity. Under the bill, employers have the choice to continue do the attestation on paper as well.
  • Phase-in mandatory E-Verify participation for new hires for employers with more than 10,000 employees, within 6 months of enactment and remaining employers over stage periods of not longer than 24 months.
  • Allow employers to seek a one-time six-month extension of the initial phase-in from the Department of Homeland Security (DHS).
  • Require employers to perform an E-Verify check on employees who perform “agricultural labor or services within 18 months after enactment.”
  • Grant employers a safe harbor from prosecution if they use the E-Verify program in good faith and, through no fault of their own, receive an incorrect eligibility confirmation.
  • Raise penalties on employers that knowingly hire illegal immigrants and create a penalty for individuals (employees or employers) who knowingly submit false information to the E-Verify system.
  • Require DHS to implement pilot programs to help prevent against identity theft within the system.
  • Pre-empt state law on employer fines for immigration-related issues or require employers to verify work status or identity for work authorization purposes but continue to allow States to award business licenses on the basis of compliance with the federal system.

One of two Immigration Reform bills the Committee passed October 25, the legislation is one of many immigration reform proposals Congress is considering. Employers should read the bill, provide feedback and watch for developments.

About The Author

Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: Erisa & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for management work, coaching, teachings, and publications.

Ms. Stamer works with businesses and their management, employee benefit plans, governments and other organizations deal with all aspects of human resources and workforce, internal controls and regulatory compliance, change management and other performance and operations management and compliance. Her day-to-day work encompasses both labor and employment issues, as well as independent contractor, outsourcing, employee leasing, management services and other nontraditional service relationships. She supports her clients both on a real-time, “on demand” basis and with longer term basis to deal with all aspects for workforce and human resources management, including, recruitment, hiring, firing, compensation and benefits, promotion, discipline, compliance, trade secret and confidentiality, noncompetition, privacy and data security, safety, daily performance and operations management, 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, insurance, financial services, technology, energy, manufacturing, retail, hospitality, governmental and other highly regulated employers, her nearly 30 years’ of experience encompasses domestic and international businesses of all types and sizes.

A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other concerns by her service as a management consultant,  business coach and consultant and policy strategist as well through her leadership participation in professional and civic organizations such her involvement as the Vice Chair of the North Texas Healthcare Compliance Association; Executive Director of the Coalition on Responsible Health Policy and its PROJECT COPE: Coalition on Patient Empowerment; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children; former Gulf Coast TEGE Council Exempt Organization Coordinator; a founding Board Member and past President of the Alliance for Healthcare Excellence; former board member and Vice President of the Managed Care Association; past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; a member and policy adviser to the National Physicians’ Council for Healthcare Policy; current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee; current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section; Past Chair of the ABA Health Law Section Managed Care & Insurance Section; ABA Real Property Probate and Trust (RPTE) Section former Employee Benefits Group Chair, immediate past RPTE Representative to ABA Joint Committee on Employee Benefits Council Representative, and Defined Contribution Committee Co-Chair, past Welfare Benefit Committee Chair and current Employee Benefits Group Fiduciary Responsibility Committee Co-Chair, Substantive and Group Committee member, Membership Committee member and RPTE Representative to the ABA Health Law Coordinating Council; past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee; a former member of the Board of Directors, Treasurer, Member and Continuing Education Chair of the Southwest Benefits Association and others.

Ms. Stamer also is a widely published author, highly popular lecturer, and serial symposia chair, who publishes and speaks extensively on human resources, labor and employment, employee benefits, compensation, occupational safety and health, and other leadership, performance, regulatory and operational risk management, public policy and community service concerns for the American Bar Association, ALI-ABA, American Health Lawyers, Society of Human Resources Professionals, the Southwest Benefits Association, the Society of Employee Benefits Administrators, the American Law Institute, Lexis-Nexis, Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, HealthLeaders, the HCCA, ISSA, HIMSS, Modern Healthcare, Managed Healthcare, Institute of Internal Auditors, Society of CPAs, 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 symposia and 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 and speaks and conducts training for a broad range of professional organizations and for clients on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications.

Want to know more? See here for details about the author of this update, attorney Cynthia Marcotte Stamer, e-mail her here or telephone Ms. Stamer at (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 SolutionsLawPress.com such as the following:

RAISE Act Immigration Reforms Touted As “Giving Americans A Raise” to Congress about the legislation as well as monitor developments..To read further about the proposal, check out the House Judiciary Committee’s summary of the bill.


RAISE Act Immigration Reforms Touted As “Giving Americans A Raise”

August 2, 2017

Employers operating in the United States (U.S.) should evaluate potential workforce and implications of immigration law reforms proposed in the revised The Reforming American Immigration for a Strong Economy Act (RAISE Act) reintroduced in the Senate by co-sponsors Senators Tom Cotton and David Perdue with the announced backing of President Donald Trump earlier today (August 2, 2017).

Applauding the RAISE ACT as his preferred vehicle for implementing the “merit based” Green Card system he promised would be implemented during his Presidential campaign, President Trump said the RAISE Act reforms will “give Americans a raise” by creating a “skills-based immigration system that seeks to make America more competitive, raise wages for American workers, and create jobs” while also ensuring that “newcomers to our wonderful country will be assimilated, will succeed, and will achieve the American Dream.”

In pursuit of these goals, the RAISE Act would radically restructure U.S. rules to radically change the foreign workers and others eligible to qualify for work or other visas to enter the U.S., the procedures for their selection and other visa rules.

The centerpiece of these reforms are the RAISE Act’s proposal to replace the current permanent employment visa and lottery visa programs used to determine what foreign workers receive Green Cards to work in the U.S. with a “merit based system” under which a newly created “skills-based point system” would determine the workers eligible for selection to receive a work visa to work in the U.S. based upon listed “predictors of immigrant success and economic contribution.”  Under the skills-based point system created by the RAISE Act, selection for inclusion in the pool of workers eligible to work in the U.S. would rank foreign workers seeking visas based on a merit-based point system created under the legislation.

Beyond these specific reforms to the worker visa programs, other proposed reforms that tighten the eligibility rules and requirements for granting visas to noncitizen family members of U.S. citizens and foreign workers also can be expected to impact the recruitment and employment of foreign workers.  For this reason, employers and workers concerned with the recruitment of foreign labor to work in the United States generally will want to carefully evaluate all of these proposed reforms.

Proposed Direct Reforms To Work Visa Programs

The RAISE Act’s strategy for reforming the worker visa program focuses on the replacement of the current permanent employment visa and lottery programs with a newly created “skills-based points system” for granting work-eligible visas similar to systems used by Canada and Australia.  Concurrent with the deployment of the new skills-based point system, the RAISE Act provides for the elimination of the existing diversity visa lottery program, pursuant to which the U.S. currently grants via lottery selection 50,000 visas annually in a lottery to applicants from countries with low rates of immigration to the United States, with no regard to the applicants’ skills.

As proposed under RAISE Act §5, the U.S. would issue up to 140,000 employment-based visas annually to applicants selected by the U.S. Citizenship and Immigration Services twice a year to receive an invitation to file full applications and undergo security vetting from the pool of applicants scoring the highest points the new skills-based points system created under the RAISE Act.

Under the RAISE Act reforms, a new skills-based points system would be used to prioritize applicants for visa eligibility based on the following “predictors of immigrant success and economic contribution:”

  • Education,
  • English-language ability,
  • High-paying job offers,
  • Age,
  • Record of extraordinary achievement, and
  • Entrepreneurial initiative.

The RAISE Act would require that an applicant score at least 30-points to eligible to qualify for inclusion in the pool of applicants eligible to be considered for possible selection to receive an employment-based visa or “Green Card.”  Subject to this floor, applicants would be selected for invitation to complete the application process and undergo a security check based on their score relative to other applicants.

Immigrant households arriving through the points system are not eligible for federal means tested benefits for a period of 5 years.

Section 5(e) of the RAISE Act requires an annual statistical report on the skills-based points system while Section 5(f) requires a quadrennial report to Congress recommending updates to the points system with the aim of improving the economy and enhancing working Americans’ wages.

Section 6 conditions naturalization on the sponsors of an immigrant fulfilling their obligation to reimburse the federal government for benefits used by the immigrant, as required under current law.

Proposed Changes To Immigration Preferences for Family Members of U.S. Citizens & Residents

Beyond the direct reforms to the worker visa systems, the RAISE Act’s proposed changes to the preferences for granting visas to family members of U.S. citizens and residents also are likely to impact the recruitment and retention of foreign workers to fill positions in the United States by both narrowing to spouses and children the list of family members eligible to qualify as “family-sponsored immigrants” and tightening the requirements for parents of citizens and residents to qualify for visitors visa.

As proposed, the RAISE Act would keep, but narrow the availability of visas for “family-sponsored immigrants.”  RAISE Act §4 would continue to allow preferences for spouses and minor children of U.S. residents but eliminate visa preferences for extended family and grown adult family members of U.S. residents.  Along with narrowing the individuals that can qualify for visa preferences as family-sponsored immigrants, the RAISE Act also caps the allowable number of “family-sponsored immigrants” eligible for admission per fiscal year to 88,000 reduced by the number of certain previously admitted family-sponsored immigrants not obtaining alien lawfully admitted to the United States for permanent residence status within a specified period remaining in the United States.

Along with this narrowing of the applicability of preferences for family-sponsored immigrants, the RAISE Act also proposes to create a temporary visa under which elderly parents of U.S. residents could come to the United States for a limited period of time conditional upon the fulfillment by the resident of certain conditions.  This newly created nonimmigrant classification for alien parents of adult United States Citizens would be conditional upon the sponsoring nonimmigrant child being at least 21 years old, legally resident in the U.S., responsible for the nonimmigrant parent’s support and for providing satisfactory proof that the sponsoring child maintains health insurance coverage for the parent at no cost to the parent. Furthermore, the parent receiving the visitor’s visa would not be authorized to be employed in the United States or eligible for any Federal, State, or local public benefit.

Proposed Cap on Offers Of Permanent Residency To Refugees

RAISE Act § 3 would caps the number of refugees granted permanent visas to the United States at 50,000 per year, in line with a 13-year average. It also requires the President to report the annual number of refugees admitted to the United States.

President, Sponsors Say Reforms Give U.S. Citizens “A Raise”

Joined by RAISE Act co-sponsors Senator Cotton and Senator Perdue for his Rose Garden announcement of support for enactment of the RAISE Act this morning, President Trump reaffirmed his campaign commitment to create “a merit-based immigration system that protects U.S. workers and taxpayers” that “demonstrates our compassion for struggling American families who deserve an immigration system that puts their needs first and that puts America first” while helping “ensure that newcomers to our wonderful country will be assimilated, will succeed, and will achieve the American Dream.

According to President Trump, “The RAISE Act — R-A-I-S-E — the RAISE Act will reduce poverty, increase wages, and save taxpayers billions and billions of dollars … by changing the way the United States issues Green Cards to nationals from other countries” to protect low skilled U.S. workers from unfair foreign immigrant competition by replacing a “low-skilled system” with a new points-based system for receiving a Green Card “that favors applicants who can speak English, financially support themselves and their families, and demonstrate skills that will contribute to our economy.”

President Trump also touted provisions of the RAISE Act for preventing new migrants and new immigrants from collecting welfare and other benefits upon entry to the country as protecting U.S. taxpayers.

Implications For Employers

The reforms proposed by the RAISE Act, if enacted as proposed are likely to impact U.S. based employers in a multitude of ways including, but not limited to the obvious changes in the selection and availability of foreign workers for employment in the United States.

Obviously, the proposed changes to the processes for selection and qualification of non-citizens will impact both the nature of the workers eligible for employment, and the procedures and timing of their availability.   The emphasis on granting visas to higher skilled workers over those with lower skills likely will raise concerns for employers reliant upon lower skilled foreign labor.  While the new point system is touted as preferring the recruitment of higher skilled workers, it remains to be seen whether the system actually will meet the workforce needs already expressed by a host of hi-tech and other U.S. businesses concerned about immigration reform.  Meanwhile, employers recruiting foreign workers with family members also should anticipate that foreign workers may request or require assistance from their U.S. employer to fulfill newly imposed requirements that the worker provide health care coverage as a condition to his sponsorship of a parental visa or to address new government benefit eligibility exclusions included in the RAISE Act.

Beyond impacting the actual availability of foreign workers and their skill sets, it also is likely that the English-speaking and other preferences incorporated into the skills based point system proposed by the REACH Act also inevitably will necessitate some reconsideration if not actual reform of federal or state laws or regulations concerning nondiscrimination based on national origin, race or other civil rights laws that have been the basis of challenges to English language only workforce or other business rules. It remains to be seen how Congress and the Administration contemplates the new priority system will integrate with the employment and other federal and state laws that commonly are relied upon to protect foreign and English as a Second Language individuals against employment and other discrimination.

About The Author

Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: Erisa & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for management work, coaching, teachings, and publications.

Ms. Stamer works with businesses and their management, employee benefit plans, governments and other organizations deal with all aspects of human resources and workforce, internal controls and regulatory compliance, change management and other performance and operations management and compliance. Her day-to-day work encompasses both labor and employment issues, as well as independent contractor, outsourcing, employee leasing, management services and other nontraditional service relationships. She supports her clients both on a real-time, “on demand” basis and with longer term basis to deal with all aspects for workforce and human resources management, including, recruitment, hiring, firing, compensation and benefits, promotion, discipline, compliance, trade secret and confidentiality, noncompetition, privacy and data security, safety, daily performance and operations management, 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, insurance, financial services, technology, energy, manufacturing, retail, hospitality, governmental and other highly regulated employers, her nearly 30 years’ of experience encompasses domestic and international businesses of all types and sizes.  A former lead consultant to the Government of Bolivia on its Pension Reform project, Vice Chair of Policy of the American Bar Association International Section Life Sciences Committee and an active in a host of migration reform and other cross-border workforce, pandemic and other healthcare, education, ethics, cyber crime policy reforms within and outside the United States throughout her career, Ms. Stamer also has extensive experience working with domestic and foreign businesses on a host of immigration, workforce, compensation, benefits, privacy, and other compliance and management challenges arising in connection with the management and use of ex-pat and other global workforces by U.S. and foreign businesses.

A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other concerns by her service as a management consultant,  business coach and consultant and policy strategist as well through her leadership participation in professional and civic organizations such her involvement as the Vice Chair of the North Texas Healthcare Compliance Association; Executive Director of the Coalition on Responsible Health Policy and its PROJECT COPE: Coalition on Patient Empowerment; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children; former Gulf Coast TEGE Council Exempt Organization Coordinator; a founding Board Member and past President of the Alliance for Healthcare Excellence; former board member and Vice President of the Managed Care Association; past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; a member and policy adviser to the National Physicians’ Council for Healthcare Policy; current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee; current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section; Past Chair of the ABA Health Law Section Managed Care & Insurance Section; ABA Real Property Probate and Trust (RPTE) Section former Employee Benefits Group Chair, immediate past RPTE Representative to ABA Joint Committee on Employee Benefits Council Representative, and Defined Contribution Committee Co-Chair, past Welfare Benefit Committee Chair and current Employee Benefits Group Fiduciary Responsibility Committee Co-Chair, Substantive and Group Committee member, Membership Committee member and RPTE Representative to the ABA Health Law Coordinating Council; past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee; a former member of the Board of Directors, Treasurer, Member and Continuing Education Chair of the Southwest Benefits Association, the US-Mexico Chamber of Commerce and others.

Ms. Stamer also is a widely published author, highly popular lecturer, and serial symposia chair, who publishes and speaks extensively on human resources, labor and employment, employee benefits, compensation, occupational safety and health, and other leadership, performance, regulatory and operational risk management, public policy and community service concerns for the American Bar Association, ALI-ABA, American Health Lawyers, Society of Human Resources Professionals, the Southwest Benefits Association, the Society of Employee Benefits Administrators, the American Law Institute, Lexis-Nexis, Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, HealthLeaders, the HCCA, ISSA, HIMSS, Modern Healthcare, Managed Healthcare, Institute of Internal Auditors, Society of CPAs, 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 symposia and 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 and speaks and conducts training for a broad range of professional organizations and for clients on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications.

Want to know more? See here for details about the author of this update, attorney Cynthia Marcotte Stamer, e-mail her here or telephone Ms. Stamer at (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 SolutionsLawPress.com.

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

NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.

Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.

©2017 Cynthia Marcotte Stamer. Non-exclusive right to republish granted to Solutions  Law Press, Inc.™   For information about republication, please contact the author directly.  All other rights reserved.


Federal Veteran Hiring Benchmarks Increased

March 31, 2017

Government contractors should review and update their veteran recruitment and hiring practices in light of an increase in the 2017 Annual Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA) hiring benchmark on the VEVRAA Benchmark Database.  The new benchmark – 6.7 percent – is effective March 31, 2017.  National and state information has also been updated in the VEVRAA Benchmark Database for federal contractors and subcontractors who calculate an individualized hiring benchmark using the five-factor method.

The target adjustments are part of heightened requirements, audits and scrutiny of their compliance with federal contracting requirements imposed under the Obama Administration, upon federal government contractors and their subcontractors.

Audit and enforcement of discrimination and a host of other government contractor requirements was a key enforcement and audit priority of the Obama Administration. Additionally, the Obama Administration expanded and tightened a wide range of OFCCP and other government contracting standards, reporting, notice and other requirements as part of its efforts to promote affirmative action, prounion and other regulatory agendas, It remains unclear if the new Trump Administration plans to modify these these requirements.

Pending further published guidance to the contrary, contractors should continue to assume the rules remain in effect.  Those who adopted the previous year’s national benchmark of 6.9 percent after March 4, 2016, but prior to the adjustment announcement, may keep their benchmark at 6.9 percent.

About The Author

Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: Erisa & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney and management consultant, author, public policy advocate and lecturer widely known for work, teachings and publications.

Ms. Stamer works with businesses and their management, employee benefit plans, governments and other organizations deal with all aspects of human resources and workforce, internal controls and regulatory compliance, change management and other performance and operations management 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.

A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other concerns by her service in the leadership of a broad range of other professional and civic organization including her involvement as the Vice Chair of the North Texas Healthcare Compliance Association; Executive Director of the Coalition on Responsible Health Policy and its PROJECT COPE: Coalition on Patient Empowerment; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children; former Gulf Coast TEGE Council Exempt Organization Coordinator; a founding Board Member and past President of the Alliance for Healthcare Excellence; former board member and Vice President of the Managed Care Association; past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; a member and advisor to the National Physicians’ Council for Healthcare Policy; current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee; current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section; Past Chair of the ABA Health Law Section Managed Care & Insurance Section; a current Defined Contribution Plan Committee Co-Chair, former Group Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group; immediate past RPTE Representative to ABA Joint Committee on Employee Benefits Council Representative and current RPTE Representative to the ABA Health Law Coordinating Council; past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee; a former member of the Board of Directors, Treasurer, Member and Continuing Education Chair of the Southwest Benefits Association and others.

Ms. Stamer also is a highly popular lecturer, symposia chair and author, who publishes and speaks extensively on health and managed care industry, human resources, employment, employee benefits, compensation, and other regulatory and operational risk management. Examples of her many highly regarded publications on these matters include the “Texas Payday Law” Chapter of Texas Employment Law, as well as thousands of other publications, programs and workshops these and other concerns for the American Bar Association, ALI-ABA, American Health Lawyers, Society of Human Resources Professionals, the Southwest Benefits Association, the Society of Employee Benefits Administrators, the American Law Institute, Lexis-Nexis, Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, HealthLeaders, the HCCA, ISSA, HIMSS, Modern Healthcare, Managed Healthcare, Institute of Internal Auditors, Society of CPAs, 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 symposia and 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 and speaks and conducts training for a broad range of professional organizations and for clients on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications. For additional information about Ms. Stamer, see CynthiaStamer.com or 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 SolutionsLawPress.com

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

NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.

Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.

©2017 Cynthia Marcotte Stamer. Non-exclusive right to republish granted to Solutions Law Press, Inc.™ All other rights reserved.

 

 


Employers Must Tread Carefully To Manage Foreign Worker Employment & Employment Discrimination Explosures

June 23, 2016

A $180,000 wrongful termination settlement that Foothill Packing, Inc. just paid to settle Department of Labor charges illustrates the potential Catch-22 tightrope that employers must walk when choosing between citizens and resident aliens with visas for hiring and firing decisions.

The Foothill wrongful termination settlement resolving H-2A visa rule violation charges illustrates an often overlooked side of the potential Catch-22 that U.S. employers can face when making hiring and other employment choices between work-eligible foreign and U.S. citizen employees or candidates.

Usually, we hear about employers nailed for employment discrimination against noncitizens.  This time, firing U.S. citizens and keeping foreign workers was the problem.

Employers Must Juggle Many Duties When Dealing With Foreign Applicants & Workers

The H-2A visa program requirements established by the labor provisions of the of the Immigration and Nationality Act and provisions of the Migrant and Seasonal Agricultural Worker Protection Act (H-2A visa program) allows companies and farm labor contractors to bring in foreign agricultural workers on a temporary basis when an adequate amount of qualified U.S. workers cannot be found to perform the work. As a condition to qualifying to hire foreign workers under the program, the H-2A program explicitly requires all jobs in this country must be offered to U.S. citizens before an employer may receive authorization to hire foreign workers.  To fulfill this requirement, an employer must demonstrate that it made required efforts to hire U.S. workers prior to having their visas approved.  Employers also must not give H-2A workers preferential treatment or wrongfully discharge U.S. workers.

The H-2A visa program requirement that employers offer work to available U.S. workers before seeking to employ foreign workers under a H-2A visa exists concurrent with the national origin and race discrimination prohibitions of Title VII of the Civil Rights Act.  Title VII, among other things, generally prohibits U.S. employers from discriminating in hiring or other terms and conditions of employment based on a worker’s national origin, ancestry or race. The national origin discrimination prohibitions of Title VII of the Civil Rights Act generally extend to any discriminatory employment decision by an is covered by Title VII, including recruitment, hiring, promotion, transfer, wages and benefits, work assignments, leave, training and apprenticeship programs, discipline and layoff and termination.

Beyond the national origin, race and other nondiscrimination requirements of Title VII, employers dealing with workers who are not U.S. citizens also generally are accountable for complying with various other nondiscrimination and other employment laws including but not limited to the following:

  • The Immigration Reform and Control Act of 1986 (IRCA), which prohibits employers with four or more employees from discriminating because of citizenship status against U.S. citizens and certain classes of foreign nationals authorized to work in the United States with respect to hiring, referral, or discharge. IRCA also prohibits national origin discrimination by employers with between four and fourteen employees.
  • The Fair Labor Standards Act (FLSA): The FLSA requires, among other things, that covered workers, including those who are not U.S. citizens, be paid no less than the federally designated minimum wage.
  • Employment of foreign nationals under special visa programs, such as H-1B and H-2A visas, also may be subject to certain requirements related to wages, working conditions, or other aspects of employment.
  • When making employment decisions and taking hiring or other employment actions involving foreign workers on H-2A visas or otherwise, employers must understand and tread carefully to comply with all of these requirements.

DOL Chared Foothill Violated H-2A Visa Program By Retaining Foreign Workers While Terminating U.S. Citizens

According to the June 13, 2016 U.S. Department of Labor Wage and Hour Division (DOL) announcement of the Foothill settlement, DOL investigators determined that Foothill, a packing and labeling company, violated the H-2 visa program by terminating 18 workers, who were U.S. citizens, that Foothill claimed failed to meet production standards when the investigation found that many of the terminated workers consistently exceeded the production of many of the foreign workers Foothill continued to employ to the same jobs.  In reaching this finding, the DOL interpreted the H-2A visa program requirement that H-2A program’s prohibition against providing preferential treatment to foreign worker as extending to layoffs.

To resolve the charges, Foothill Packing paid $180,000 in back wages to the 18 terminated workers and also paid $55,000 in penalties for the violations of H-2A provisions of the Immigration and Nationality Act, and provisions of the Migrant and Seasonal Agricultural Worker Protection Act. The settlement agreement also requires Foothill to:

  • Designate a staff member whose primary job duties consist of monitoring and reporting the firm’s compliance with all H-2A regulatory requirements;
  • Provide annual training to all frontline supervisors involved with the H-2A program;
  • Provide detailed reasons for any future terminations to the U.S. Department of Labor; and
  • Otherwise comply with the labor provisions of the requirements of the H-2A Visa Program.

Reconciliation Of H-2A Visa Rules With Civil Rights Act Nondiscrimination Rules

The key to reconciling the H-2A visa program requirement that employers show preference to U.S. workers over H-2A visa workers in hiring and retaining workers and the race and national origin employment discrimination prohibitions of Title VII is understanding that Title VII’s protections are construed and enforced as extending to all work-eligible workers in the United States, whether born in the United States or abroad and regardless of citizenship status.

While Title VII does not prohibit citizenship discrimination per se, citizenship discrimination does violate Title VII where it has the “purpose or effect” of discriminating on the basis of national origin.  For example, a citizenship requirement would be unlawful if it is a “pretext” for national origin discrimination, or if it is part of a wider scheme of national origin discrimination.

The H-2A visa program’s requirement that an employer show preference for U.S. workers over workers whose eligibility for employment is based on a H-2A visa is based on the eligibility of the employer to work in the United States under United States immigration laws. As such, when the adverse action is taken against a worker using a H-2A visa for eligibility to work, the action is based on eligibility to work required by the I-9 verification rules, and not based on the ancestry, place or origin, race or other elements of national origin.

Whether or not dealing with a H-2A visa worker, however, employers still must tread carefully to conduct and document their employment actions with respect to workers to withstand scrutiny under both requirements in the event of a challenge on either or both fronts.  Both doing the right thing and documenting throughout the process is critical as the “after acquired evidence” rules of evidence applicable to employment discrimination claims under the Civil Rights Act could prevent an employer from presenting documentation or other evidence to support an employer’s defense of a valid, nondiscriminatory business purpose to rebut discrimination claims in the event of litigation or a government investigation or charge.

About The Author

Cynthia Marcotte Stamer is a noted Texas-based management lawyer and consultant, author, lecturer and policy advocate, recognized for her nearly 30-years of cutting edge management work as among the “Top Rated Labor & Employment Lawyers in Texas” by LexisNexis® Martindale-Hubbell® and as among the “Best Lawyers In Dallas” for her work in the field of “Tax: Erisa & Employee Benefits” and “Health Care” by D Magazine.

Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, a Fellow in the American College of Employee Benefit Counsel, past Chair and current 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, a former  ABA Joint Committee on Employee Benefits Council Representative and , Ms. Stamer helps management manage.

Ms. Stamer’s legal and management consulting work throughout her nearly 30-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, internal controls and regulatory compliance, change management and other performance and operations management 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, expat 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 serves on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and as an editorial advisor and contributing author of many other publications. Her leadership involvements with the American Bar Association (ABA) include year’s serving many years as a Joint Committee on Employee Benefits Council representative; ABA RPTE Section current Practice Management Vice Chair and Substantive Groups & Committees Committee Member,  RPTE Employee Benefits & Other Compensation Committee Past Group Chair and Diversity Award Recipient,  current Defined Contribution Plans Committee Co-Chair, and  past Welfare Benefit Plans Committee Chair Co-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; International Section Life Sciences Committee Policy Vice Chair; and a speaker, contributing author, comment chair and contributor to numerous Labor, Tax, RPTE, Health Law, TIPS, International and other Section publications, programs and task forces.  Other selected service involvements of note include Vice President of the North Texas Healthcare Compliance Professionals Association; past EO Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division; 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 former Southwest Benefits Association Board of Directors member, Continuing Education Chair and Treasurer; former Texas Association of Business BACPAC Committee Member, Executive Committee member, Regional Chair and Dallas Chapter Chair; former Society of Human Resources Region 4 Chair and Consultants Forum Board Member and Dallas HR Public Policy Committee Chair; former National Board Member and Dallas Chapter President of Web Network of Benefit Professionals; former Dallas Business League President and others. For additional information about Ms. Stamer, see CynthiaStamer.com or 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 control and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources at Solutionslawpress.com such as:

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 here.  ©2016 Cynthia Marcotte Stamer. Non-exclusive right to republish granted to Solutions Law Press, Inc. ™. All other rights reserved.

 


Obama Administration Proposes Rules Giving Jobseeker Equal Opportunity Protections

January 26, 2016

In keeping with President Obama’s administration long agenda of expanding equal employment and discrimination protections and enforcement, the Obama Administration now is proposing new regulations that if adopted as proposed, would expand the equal employment and nondiscrimination protections applicable for individuals receiving services through federal apprenticeships and other programs or activities provided by partners at American Job Centers and other key workforce programs that aid jobseekers administered by the U.S. Department of Labor’s Civil Rights Center (CRC).

In a Notice of Proposed Rulemaking released by CRC on January 25, 2016, CRC proposed to revise its current regulations, which were originally adopted in 1999 both:

  • To implement the expanded nondiscrimination and equal opportunity obligations made under Section 188 of the Workforce Innovation and Opportunity Act (WIOA) signed into law in July 2014; and
  • To reflect the Obama Administration’s expansive interpretation, enforcement and other practices of protections for transgender, gender identity, pregnancy, limited English proficiency (LEP) and other individuals against discrimination implemented by the Obama Administration in its enforcement of other federal equal employment and other nondiscrimination laws.

WIOA Implementation Identified As Reason For Proposed Regulations

In the cases of the CRC’s proposed regulations, the CRC identifies its need to adopt regulations to implement the WIOA as the reason for its restatement of its equal opportunity regulations at this time.

The Obama Administration is using its adoption of implementing regulations for WIOA Section 188 to revise and update the CRC’s equal opportunity rules generally to reflect changes in the interpretation of federal employment and other nondiscrimination rules already adopted during Mr. Obama’s presidency in other federal equal rights and nondiscrimination laws and regulations.

WIOA Section 188 prohibits discrimination against individuals participating in any job training for adults and youth, apprenticeships, and programs or activities provided by partners at American Job Centers or other covered program or activity that receives financial assistance under Title I of WIOA because of the race, color, religion, sex, national origin, age, disability, or political affiliation or belief of the individual participating in the program and, for beneficiaries only, because of their citizenship status. The WIOA discrimination and equal opportunity rules apply to recipients of financial assistance under Title I of WIOA and to program partners at American Job Centers that offer programs or activities through the workforce development system including partners that conduct related programs or activities through the One-Stop delivery system such as Unemployment Insurance, Temporary Assistance for Needy Families, adult education, Trade Adjustment Assistance, and others.  The CRC’s proposed regulations are the latest of the growing responsibilities and risks that private businesses and state and local government agencies increasingly face to lawsuits, agency audits and sanctions, program disqualification, and other enforcement actions under federal equal employment opportunity and nondiscrimination requirements, particularly in light of the expanded scope and applicability of disability and various other federal nondiscrimination laws implemented during the Obama Administration by statutory, regulatory, executive order or other federal action. The extension of these changes into the CRC regulations reflects the continuing commitment of the Obama Administration to implement and enforce these expansions as fully as possible before Mr. Obama leaves office.

Highlights of Proposed CRC Regulations

If adopted as proposed by the CRC, the proposed rule would update the equal opportunity and nondiscrimination requirements applicable to American Job Centers and other WIOA partners working within the workforce development system to:

  • Align the equal opportunity and nondiscrimination protections for individuals in WIOA programs with current regulations and guidance issued by the Departments of Justice and Education, the Equal Employment Opportunity Commission and other federal agencies regarding the following equal opportunity and discrimination laws:
    • Title VI and Title VII of the Civil Rights Act of 1964;
    • Title IX of the Education Amendments of 1972;
    • The Americans with Disabilities Act of 1990 and the ADA Amendments Act of 2008; and
    • Section 504 of the Rehabilitation Act of 1973.
  • Clarify that sex discrimination under the WIOA, as under the Pregnancy Discrimination Act of 1978, which amended Title VII of the Civil Rights Act of 1964, and Title IX of the Education Amendments of 1972, includes discrimination based on transgender status, gender identity, or sex-stereotyping as well as pregnancy, childbirth, and related medical conditions.
  • Clarify that discrimination based on national origin may include discrimination because someone has limited English proficiency (LEP) and strengthen the ability of the Labor Department and private plaintiffs to enforce this expectation by requiring recipients and partners to:
    • Record the primary language of applicants, participants and beneficiaries in their programs;
    • Take “reasonable steps” to ensure that LEP individuals have meaningful access to aid, benefits, services, and training;
    • Notify participants about these rights, including offering oral interpretation and written translation of both hard-copy and electronic materials in non-English languages.
    • The Proposed Rule also would clarify which CRC views as “vital” documents required to be translated and include an appendix describing promising practices to help recipients comply with their legal obligations and includes the components of a plan to facilitate meaningful access for individuals with limited English proficiency.
  • Change the equal opportunity notice or poster that the Labor Department requires recipients and partners to post to inform individuals participating in their programs and activities about their equal employment opportunity protections and rights to reflect these expanded rights and responsibilities by among other things, clearly state that “sex,” as a prohibited basis for discrimination, includes pregnancy, childbirth, and related medical conditions, transgender status, gender identity, and sex stereotyping and that discrimination against LEP persons may be a form of national origin discrimination.
  • Promote the ability of the Labor Department and private plaintiffs to enforce compliance by among other things:
    • Implementing clearer and broader descriptions of recipient and partner responsibilities, more effective Equal Opportunity Officers, and enhanced data collection;
    • Expanding recipient and partner recordkeeping and requiring other actions that will make proof of violations easier;
    • Requiring annual monitoring, instead of the current “periodic” monitoring and other increased enforcement in accord with the Pregnancy Discrimination Act of 1978, which amended Title VII of the Civil Rights Act of 1964, and in accord with Title IX of the Education Amendments of 1972.

CRC Proposal Reflects Broader Agency Regulatory & Enforcement Agenda For All U.S. Businesses & State & Local Agencies

While the CRC’s proposed regulations most directly impact those providing services or programs to jobseekers and other assistance under CRC administered programs, the proposed regulations also are yet another strong sign for private businesses and state and local government agencies alike of the need to step up their compliance and risk management in light of expanded responsibilities and enforcement of federal equal employment opportunity laws under the Obama Administration. As a result, all U.S. businesses as well as state and local government agencies should exercise special care to prepare to defend their actions against potential disability or other Civil Rights discrimination challenges.  All organizations, whether public or private need to make sure both that their organizations, their policies, and people in form and in action understand and comply with current disability and other nondiscrimination laws.  When reviewing these responsibilities, many state and local governments and private businesses may need to update their understanding of current requirements as well as strengthen oversight and investigation practices, tighten vendor contracts, explore insurance or other options for planning for funding costs of defending investigations, litigation or other enforcement actions, and other heightened compliance and risk management strategies and practices.

About The Author

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 nearly 30- 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, expat 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 CynthiaStamer.com or StamerChadwickSoefje.com or 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 SolutuonsLawPress.com such as:

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 here.

©2016 Cynthia Marcotte Stamer. Non-exclusive right to republish granted to Solutions Law Press, Inc. ™. All other rights reserved.

 


More Work For Employers, Benefit Plans Following SCOTUS Same-Sex Marriage Ruling

June 26, 2015

While politicos and pundits nitpick and debate about the underlying arguments of today’s Supreme Court ruling that all states must permit same sex couples to marry, businesses need to prepare for the employment, employee benefit and other operational challenges of the fallout.

With same sex couples lining up to apply for licenses in the 34 states that prohibited or refused to recognize same sex marriages before the Supreme Court announced its landmark June 26, 2015 Obergefell v. Hodges ruling that all states must allow same sex marriages, businesses need to anticipate and prepare to cope with the legal and operational demands their business likely will face as same sex couples move to claim the new rights recognized by the Supreme Court.  While these demands may vary depending on the nature of the business and its workforce and client base, most businesses should move quickly to review and update as necessary their human resources and employee benefit policies and practices concerning when same-sex partners of employees are treated as the spouses of the employees in light of the United States Supreme Court’s .  When moving forward on these actions and addressing spousal rights and compliance concerns in the workplace, employer and employee benefit plan leaders and their consultants are cautioned that the decision requiring states to allow same-sex couples to marry under their marriage law does not eliminate ambiguities or differences in state laws and documentation of marriage.  Consequently, policies, practices and programs for administering the employment and employee benefit rights of married employees need to be carefully tailored to identify and require proof of marriage evenhandedly taking into account variances and potential biases in state documentation and practices that could create complications or even liabilities for employers and plans if not appropriately considered.

Since the Supreme Court ruled that the Equal Protection Clause of the United States Constitution entitled same-sex couples to equal treatment with married heterosexual couples under federal law in United States v. Windsor, 133 S.Ct. 2675 (2013), employers have faced several challenges understanding and updating their policies and practices with respect to employees involved in same sex relationships.

The Obama Administration’s aggressive reinterpretation of federal employment, employee benefit, tax and other laws and regulations to require same sex partners married or in legal relationships that applicable state law afforded treatment equivalent to marriage placed pressure upon employers to update their policies and practices concerning when to recognize employees in same sex relationships as marriages for employment, employee benefits and other purposes.  See, e.g., See Obama Executive Order’s Prohibition Of Government Contractor Sexual Orientation & Gender Identity Discrimination Creates Challenges For All US Employers; Discrimination Rules Create Risks For Employer Reliance On Injunction Of FMLA Rule On Same-Sex Partners’ Marital Status; Review Benefit Plan, FLMA & Other Family-Related Policies In Light Of Labor Department Same-Sex Marriage Guidance; Post-Windsor Same-Sex Participant Guidance May Require Mid-Year Plan Amendments; DOMA: Health & Cafeteria Plan Design & Administration In A Post-Windsor World; Review & Update HR & Benefit Practices For DOL Proposed Change In FMLA Regs, Other Rules Treating Some Same-Sex Couples As SpousesAs the Windsor decision did not address whether the United States Constitution also guaranteed same sex couples a right to marry under state law, disparities in the treatment of same sex marriages between the states and rapid changes in the state statutory and judicial rules governing these determinations created significant challenges to employer efforts to determine if and when a same sex couple could marry in a particular state and the right and duty of the employer in response to such an arrangement.  Today’s Obergefell ruling will help to resolve some, but not all of this uncertainty by answering the question whether states may refuse to allow same sex partners to marry or refuse to recognize marriages of same sex partners.  The Obergefell decision settles this debate by holding that the United States Constitution requires all States to allow same-sex couples to marry on the same terms as apply to heterosexual couples.

While the Obergefell decision answers the question about whether states must allow same-sex couples to marry, employers still face many challenges. First, employers, employee benefit plan fiduciaries and service providers, their advisors and consultants must reevaluate and update their policies and practices in response to Winsor and Obergefell.   Employers, employee benefit plans and their leaders need to think and act broadly and systematically when conducting this analysis to help ensure that their efforts cover all policies, practices and procedures where the rights of an employee or his spouse may be implicated.  While some of these concerns and requirements will be clear, others may not necessarily be obvious at first blush. Businesses and benefit plans definitely need to make a priority updating their existing employment and employee benefit policies and practices to deal with the new rights and expectations of potential employees or applicants in same sex marriages.  Naturally employers and plan fiduciaries and administrators will need to take steps to identify and specifically respond to any new rules or updated guidance concerning the employment, employee benefits or other rights of employees in same sex relationships.  Employers also need to anticipate and address the foreseeable impacts of the ruling on practices not covered by specific judicial precedence or regulatory guidance where newly recognized marital status of an employee to his or her same sex partner could create rights or expectations not previously enjoyed for the employee, his or her spouse or their family members.  For instance, employers can expect and will need to plan to handle potential requests to add a same sex spouse to benefit plans, change cafeteria plan elections to change the employee’s benefit or beneficiary elections in response to his or her newly recognized marital status, add dependent children of a same sex partner as dependents under health or other benefit plans, and have the employer or benefit plan grant access to events or information to a same sex spouse normally enjoyed by spouses of heterosexual married employees.

Beyond handling these common employment and employee benefit transactions and dealings, businesses also generally will want to consider revising their workplace conduct, discrimination, harassment and other policies and retrain members of their workforce to conduct themselves appropriately concerning conduct and communications impacting the legal obligations of the employer toward employees or customers in or perceived to be involved in marriages or other relationships with same sex spouses or partners.

When conducting this analysis, business and benefit plan leaders should keep in mind that while the Supreme Court’s Obergefell requires States to treat same sex and opposite sex couples equally under the law for purposes of determining which couples are married, determining consistently whether two individuals are legally married in any particular state remains anything but simple.  Variations in the marriage laws of the states mean the requirements for and proof of marriage can vary significantly. When working to adopt updated policies and practices for deciding whether to treat two individuals, regardless of their sex, as married for employment or employee benefit purposes, employers, employee benefit plans, and their management, fiduciaries, service providers and advisors also need to use care to manage potential discrimination risks that might arise from the adoption of policies that by the terms or in operation treat same sex versus opposite sex partners disparately. Beyond the specific administrative complications and compliance risks that ignoring these differences could create, policies or practices that by their terms or in operation treat same sex and opposite sex couples differently for purposes of recognition of marriage rights also may create sex discrimination liability exposures under the Civil Rights Act and other laws.  Accordingly, parties responsible for these activities should act promptly and carefully with the advice of counsel to evaluate and update their employment and employee benefit policies to respond to the new decisions and these other challenges and duties.

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 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 uses her deep and highly specialized 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.

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.

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 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.

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.


State Exchange Problems Present ACA Concerns That Exist Beyond King v. Burwell

March 3, 2015

While most Americans are familiar with the well-publicized issues and higher than projected premium costs of coverage offered to Americans enrolling in health care coverage through the federal healthcare marketplace Healthcare.gov created under the health care reforms of the Patient Protection & Affordable Care Act (ACA), many Americans are just beginning to recognize the growing problems and concerns emerging with state exchanges in those states that elected to enact their own exchange.  As the Supreme Court prepares to hear arguments in the challenge to the payment of ACA subsidies to individuals in states that elected not to adopt a state-run health care exchange to pay for coverage purchased through the federal healthcare.gov marketplace in King v. Burwell on Wednesday, March 4, 2015, the growing evidence of rapidly emerging funding and other challenges affecting state-run exchanges raise concerns about the solvency and reliability of coverage promised and purchased through those state-run exchanges.

During the Congressional debates leading up to the enactment of ACA, for instance, ACA advocates touted the Massachusetts health care mandates and reform law of Massachusetts as part of the model for ACA and evidence of the potential benefits offered by enactment of ACA.  Now Massachusetts officials are blaming ACA for serious underfunding and other problems in their state’s health care connector.

Massachusetts Governor Charlie Baker recently cited the Health Connector and its challenges in enrolling Massachusetts residents in health insurance plans as part of the Affordable Care Act that forced the state to temporarily transition hundreds of thousands of state residents into the commonwealth’s Medicaid program as a primary reason for the state’s projected $1.5 billion budget deficit.  He now has asked for the resignations of four Massachusetts Health Connector board members:  MIT professor Jonathan Gruber,  Covered California actuarial consultant John Bertko; Massachusetts Nonprofit Network CEO Rick Jakious and Spring Insurance Group CEO George Conser.

The Massachusetts experience is not unique.  Other states also are experiencing significant funding and other problems dealing with the ACA mandates and implementation.  See, e.g.,  Funding Woes Imperil Future of State Run Exchanges;  State Insurance Exchanges Face Challenges In Offering Standardized Choices Alongside Innovative Value-Based Insurance.

This mounting evidence of serious cost, financing and other concerns in state-run exchanges creates new reason for concern about the future of ACA’s health care reforms even for those citizens of states whose eligibility for subsidies is not challenged by the King v. Burwell Supreme Court challenge.  These and other budget overruns and operational challenges raise serious questions about the ability of the federal government or the states to fund the promises currently made by ACA in its present form.  Congress and state governments almost certainly will be forced to deal with these broader challenges regardless of the outcome of King v. Burwell.   As American leaders continue to struggle to deal with these and other mounting problems impacting the U.S. health care system, the input of individual Americans and businesses and community leaders is more critical than ever.  Get involved in helping to shape improvements and solutions to the U.S. health care system and the Americans it cares for by sharing your ideas and input through the Coalition For Responsible Health Care Policy  and exchanging information and ideas for helping American families deal with their family member’s illnesses, disabilities and other healthcare challenges through Project COPE: Coalition for Patient Empowerment here.

About Project COPE: The Coalition On Patient Empowerment &  Coalition on Responsible Health Policy

Do you have ideas or experiences to share about medical debit, ACA or other health care challenges?  Have ideas for helping improve ACA and other health care policies impacting the US health care system, helping Americans cope with these and other health care challenges or other health care matters? Know other helpful resources or experiences that you are willing to share?  Are you concerned about health care coverage or other health care and disability issues or policy concerns?  Join the discussion and share your input by joining Project COPE: Coalition for Patient Empowerment here.

Sharing and promoting the use of practical practices, tools, information and ideas that patients and their families, health care providers, employers, health plans, communities and policymakers can share and offer to help patients, their families and others in their care communities to understand and work together to better help the patients, their family and their professional and private care community plan for and manage these  needs is the purpose of

The Coalition and its Project COPE arise and operate on the belief that health care reform and policy must be patient focused, patient centric and patient empowering.  The best opportunity to improve access to quality, affordable health care for all Americans is for every American, and every employer, insurer, and community organization to seize the opportunity to be good Samaritans.  The government, health care providers, insurers and community organizations can help by providing education and resources to make understanding and dealing with the realities of illness, disability or aging easier for a patient and their family, the affected employers and others. At the end of the day, however, caring for people requires the human touch.  Americans can best improve health care by not waiting for someone else to step up:  Step up and help bridge the gap when you or your organization can. Speak up to help communicate and facilitate when you can.  Building health care neighborhoods filled with good neighbors throughout the community is the key.

The outcome of this latest health care reform push is only a small part of a continuing process.  Whether or not the Affordable Care Act makes financing care better or worse, the same challenges exist.  The real meaning of the enacted reforms will be determined largely by the shaping and implementation of regulations and enforcement actions which generally are conducted outside the public eye.  Americans individually and collectively clearly should monitor and continue to provide input through this critical time to help shape constructive rather than obstructive policy. Regardless of how the policy ultimately evolves, however, Americans, American businesses, and American communities still will need to roll up their sleeves and work to deal with the realities of dealing with ill, aging and disabled people and their families.  While the reimbursement and coverage map will change and new government mandates will confine providers, payers and patients, the practical needs and challenges of patients and families will be the same and confusion about the new configuration will create new challenges as patients, providers and payers work through the changes.

We also encourage you and others to help develop real meaningful improvements by joining Project COPE: Coalition for Patient Empowerment here by sharing ideas, tools and other solutions and other resources. The Coalition For Responsible Health Care Policy provides a resource that concerned Americans can use to share, monitor and discuss the Health Care Reform law and other health care, insurance and related laws, regulations, policies and practices and options for promoting access to quality, affordable healthcare through the design, administration and enforcement of these regulations.

You also may be interested in one or more of the following other recent articles published on the Coalition for Responsible Health Care Reform electronic publication available here, our electronic Solutions Law Press Health Care Update publication available here, or our HR & Benefits Update electronic publication available here such as:

 You also can find out about how you can arrange for training for you, your employees or other communities to participate in training on “Building Your Family’s Health Care Toolkit,”  using the “PlayForLife” resources to organize low-cost wellness programs in your workplace, school, church or other communities, and other process improvement, compliance and other training and other resources for health care providers, employers, health plans, community leaders and others here.

For Advice, Training & Other Resources

Should your business need legal advice about the taxability of or other requirements on tips, gratuities or other compensation,  assistance assessing or resolving potential past or existing compliance exposures, or monitoring and responding to these or other workforce, benefits and compensation, performance and risk management, compliance, enforcement or management concerns, the author of this update, attorney Cynthia Marcotte Stamer may be able to help.

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, a Fellow in the American College of Employee Benefit Counsel, ABA, and State Bar of Texas, Ms. Stamer has more than 25 years’ experience advising health plan and employee benefit, insurance, financial services, employer and health industry clients about these and other matters. Ms. Stamer has extensive experience advising and assisting health plans and insurers about ACA, and a wide range of other plan design, administration, data security and privacy and other compliance risk management policies.  Ms. Stamer also regularly represents clients and works with Congress and state legislatures, EBSA, IRS, EEOC, OCR and other HHS agencies, state insurance and other regulators, and others.   She also publishes and speaks extensively on health and other employee benefit plan and insurance, staffing and human resources, compensation and benefits, technology, public policy, privacy, regulatory and public policy and other operations and risk management concerns. Her publications and insights appear in the 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 receive these and other updates here.  Recent examples of these updates include:

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 here. For important information about this communication click here

NOTE:  This article is provided for educational purposes.  It is does not establish any attorney-client relationship nor provide or serve as a substitute for legal advice to any individual or organization.  Readers must engage properly qualified legal counsel to secure legal advice about the rules discussed in light of specific circumstances.

The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations.  The Regulations now require that either we (1) include the following disclaimer in most written Federal tax correspondence or (2) undertake significant due diligence that we have not performed (but can perform on request).

ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, or (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

©2015 Cynthia Marcotte Stamer, P.C. Non-exclusive license to republish granted to Solutions Law Press.  All other rights reserved.

 

EEOC Charges Employer Violated ADA By Terminating Employment At FMLA Leave End

March 2, 2015

Employers considering terminating the employment of employees not ready to resume their usual duties when their eligibility for medical leave ends under the Family & Medical Leave Act (FMLA) or other leave policies should first consider whether the employee qualifies for accommodation under the Americans With Disabilities Act.  That’s the message transmitted by a new Employment Opportunity Commission (EEOC) Americans With Disabilities Act (ADA) lawsuit against ValleyLife of Phoenix, Arizona.

In EEOC v. ValleyLife, the EEOC charges that ValleyLife engaged in illegal disability discrimination in violation of the ADA when it allegedly fired employees with disabilities instead of providing them with reasonable accommodations when their eligibility for family leave ended under the FMLA and allegedly failed to keep employees’ medical records confidential.  See EEOC v. ValleyLife, Civil Action No. 2:15-cv-00340-GMS (N.Az).

According to the lawsuit, ValleyLife fired employees with disabilities rather than provide them with reasonable accommodations due to its inflexible leave policy.  The policy compelled the termination of employees who had exhausted their paid time off and/or any unpaid leave to which they were eligible under the FMLA.   In its complaint, for instance, the EEOC alleges that ValleyLife fired supervisor, Glenn Stephens, due to his need for further surgery when his FMLA leave was exhausted.  EEOC claims this termination violated the ADA because ValleyLife did not engage in any interactive process to determine whether any accommodations (including additional leave) were possible.  Stephens had worked for ValleyLife for over ten years at the time of his termination.  The EEOC contends that ValleyLife’s failure to offer extended leave or other accommodation to Stephens when his leave eligibility ended violated the ADA, which protects workers from discrimination based upon disability and requires employers to provide reasonable accommodations to the known physical or mental impairments of disabled employees unless doing so would cause an undue hardship.

The suit also alleges that ValleyLife commingled medical records in employee personnel files and failed to maintain these medical records confidential in violation of the medical record confidentiality requirements of the ADA, which requires employees’ to keep medical documents confidential and separate from other personnel records.

The lawsuit seeks lost wages and compensa­tory and punitive damages for the alleged victims, as well as appropriate injunctive relief to prevent discriminatory practices in the future.

Prepare Employment Discrimination Defenses

The EEOC suit against ValleyLife sends a message to employers of the need to use care to monitor and manage ADA and other disability discrimination risks at the end of a FMLA or other medical leave.  Employers assume at their own peril that their responsibility to an employee ends when an employee is unable to or fails to return to work following a FMLA or other medical leave.  Instead, the employer should evaluate whether the affected employee qualifies as disabled under the ADA and if so, whether the employer has any responsibility to offer the employee an extended leave or other accommodations before terminating the employee.

Employers also should consider reviewing and updating their current FMLA and other leave policies and communications to incorporate appropriate accommodation offer and administration procedures and notices, as well as other processes to ensure that these practices are operationalized in a manner to create and keep appropriate documentation to defend staffing decisions against potential claims of illegal discrimination under the ADA, Civil Rights, or other laws that could trigger ADA or other discrimination charges.  Employers should keep in mind that an evidentiary doctrine known as the “after acquired evidence rule” makes it important to properly document analysis and decision-making before an employment action is taken to help ensure that critical evidence of employer intention necessary to defend discrimination claims will not be excluded or compromised in the event of litigation.

For Advice, Training & Other Resources

Should your business need legal advice about the taxability of or other requirements on tips, gratuities or other compensation,  assistance assessing or resolving potential past or existing compliance exposures, or monitoring and responding to these or other workforce, benefits and compensation, performance and risk management, compliance, enforcement or management concerns, the author of this update, attorney Cynthia Marcotte Stamer may be able to help.

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, a Fellow in the American College of Employee Benefit Counsel, ABA, and State Bar of Texas, Ms. Stamer has more than 25 years’ experience advising health plan and employee benefit, insurance, financial services, employer and health industry clients about these and other matters. Ms. Stamer has extensive experience advising and assisting health plans and insurers about ACA, and a wide range of other plan design, administration, data security and privacy and other compliance risk management policies.  Ms. Stamer also regularly represents clients and works with Congress and state legislatures, EBSA, IRS, EEOC, OCR and other HHS agencies, state insurance and other regulators, and others.   She also publishes and speaks extensively on health and other employee benefit plan and insurance, staffing and human resources, compensation and benefits, technology, public policy, privacy, regulatory and public policy and other operations and risk management concerns. Her publications and insights appear in the 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 receive these and other updates here.  Recent examples of these updates include:

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 here. For important information about this communication click here

NOTE:  This article is provided for educational purposes.  It is does not establish any attorney-client relationship nor provide or serve as a substitute for legal advice to any individual or organization.  Readers must engage properly qualified legal counsel to secure legal advice about the rules discussed in light of specific circumstances.

The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations.  The Regulations now require that either we (1) include the following disclaimer in most written Federal tax correspondence or (2) undertake significant due diligence that we have not performed (but can perform on request).

ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, or (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

©2015 Cynthia Marcotte Stamer, P.C. Non-exclusive license to republish granted to Solutions Law Press.  All other rights reserved.

 

Tell Congress to protect wellness programs against EEOC attacks

January 28, 2015

The EEOC has declared war on many employer sponsored wellness programs. The Senate Health, Education, Labor, and Pensions Committee will hold a hearing about how to improve employer wellness programs on Thursday, January 29. Employers and others should urge the Committee and other Congressional leaders to overrule the EEOC’s attacks on wellness programs as illegal disability discrimination under the Americans with Disabilities Act.


Stamer Kicks Off Dallas HR 2015 Monthly Lunch Series With 2015 Federal Legislative, Regulatory & Enforcement Update

November 10, 2014

Human resources and other management leaders are watching Washington to see if the change in Congressional control resulting from the November 4, 2014 mid-term election ushers in a more management friendly federal legal environment. Since President Obama took office, the Democrats aggressive pursuit of health care, minimum wage and other federal pro-labor legislation, regulations and enforcement has increased management responsibilities, costs and liabilities.

Nationally recognized management attorney, public policy advisor and advocate, author and lecturer Cynthia Marcotte Stamer will help human resources and other management leaders prepare for 2015 when she speaks on “2015 Federal Legislative, Regulatory & Enforcement Update: What HR & Benefit Leaders Should Expect & Do Now” at the 2015 Dallas HR monthly luncheon series kickoff meeting on January 13, 2014.

About The Program

While November 4, 2014 Republican election victories gave Republicans a narrow majority in both the House and Senate when the new Congress takes office January 3, 2015, the new Republican Majority may face significant challenges delivering on their promises to move quickly to enact more business-friendly health care, guest worker, tax and other key reforms Republicans say will boost the employment and the economy.

While President Obama and Democrat Congressional leaders say they plan to work with the new majority, President Obama already is threatening to use vetoes, regulations and executive orders to block Republicans from obstructing or rolling back his pro-labor policy and enforcement agenda.   When the new Congress takes office, the narrowness of the Republican Majority in the Senate means Republicans can’t block a Democratic filibuster or override a Presidential veto without recruiting some Democratic support.

As the Democrats and Republicans head into battle again, Board Certified Labor & Employment attorney and public policy advocate Cynthia Marcotte Stamer will help human resources and other management leaders get oriented for the year ahead by sharing her insights and predictions on the legislative, regulatory and enforcement agendas that HR, benefit and other business leaders need to plan for and watch in 2015.  Among other things, Ms. Stamer will:

  • Discuss how management can benefit from monitoring and working to influence potential legislative, regulatory and enforcement developments when planning and administering HR and related workforce policies;
  • Discuss the key workforce and other legislative, regulatory and enforcement priorities and proposals Democrats and Republicans plan to pursue during 2015;
  • Share her insights and predictions about how the narrow Republican majority, Mr. Obama’s lame duck presidency and other factors could impact each Party’s ability to pursue its agenda
  • Share tips management leaders can use to help monitor developments and to help shape legislation, regulation and enforcement through Dallas HR, SHRM and other organizations as well as individually;
  • Learn tips for anticipating and maintaining flexibility to respond to legislative, regulatory and enforcement developments; and
  • More

To register or get more details about the program, DallasHR, or both, see http://www.dallashr.org.

About Ms. Stamer

Board certified labor and employment attorney, public policy leader, author, speaker Cynthia Marcotte Stamer is nationally and internationally recognized and valued for her more than 25 years of work advising and representing employers, insurers, employee benefit plans, their fiduciaries and advisors, business and community leaders and governments about workforce, employee benefits, social security and pension, health and insurance, immigration and other performance and risk management, public policy and related regulatory and public policy, management and other operational concerns.

Throughout her career, Ms. Stamer continuously both has helped businesses and their management to monitor and respond to federal and state legislative, regulatory and enforcement concerns and to anticipate and shape federal, state and other laws, regulations, and enforcement in the United States and internationally.

Well known for her leadership on workforce, health and pension policy through her extensive work with clients as well as through her high profile involvements as the Founder and Executive Director of the Coalition for Responsible Healthcare Policy and its PROJECT COPE: the Coalition on Patient Empowerment, a founding Board member of the Alliance for Health Care Excellence, a Fellow in the American College of Employee Benefit Counsel, the American Bar Association (ABA), and the State Bar of Texas leadership and other involvements with the ABA including her annual service leading the annual agency meeting of Joint Committee on Employee Benefits (JCEB) representatives with the HHS Office of Civil Rights and participation in other JCEB agency meetings, past involvements with legislative affairs for the Texas Association of Business and Dallas HR and others, and many speeches, publications, and other educational outreach efforts, Ms. Stamer has worked closely with Congress and federal and state regulators on the Patient Protection & Affordable Care Act and other health care, pension, immigration, tax and other workforce-related legislative and regulatory reforms for more than 30 years. One of the primary drafters of the Bolivian Social Security reform law and a highly involved leader on U.S. workforce, benefits, immigration and health care policy reform, Ms. Stamer’s experience also includes working with U.S. and foreign government, trade association, private business and other organizations to help reform other countries’ and U.S. workforce, social security and severance, health care, immigration, privacy and data security, tax, ethics and other laws and regulations. Ms. Stamer also contributes her policy, regulatory and other leadership to many professional and civic organizations including as Vice President of the North Texas Healthcare Compliance Professionals Association; Immediate Past Chair of the American Bar Association RPTE Employee Benefits & Other Compensation Committee and its current Welfare Benefit Plans Committee Co-Chair, a Substantive Groups & Committee Member; a member of the leadership council of the ABA Joint Committee on Employee Benefits; Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group and a current member of its Healthcare Coordinating Council; the current Vice Chair of the ABA TIPS Employee Benefit Committee, and the past Coordinator of the Gulf Coast TEGE Council TE Division.

The publisher and editor of Solutions Law Press, Inc. who serves on the Editorial Advisory Boards of Employee Benefit News, HR.com, InsuranceThoughtLeadership.com and many other publications, Ms. Stamer also is a prolific and highly respected author and speaker,  National Public Radio, CBS, NBC, and other national and regional news organization, Atlantic Information Services, The Bureau of National Affairs, HealthLeaders, Telemundo, Modern Healthcare, Business Insurance, Employee Benefit News, the Employee Benefits News, World At Work, Benefits Magazine, InsuranceThoughtLeadership.com, the Wall Street Journal, the Dallas Morning News, the Dallas Business Journal, CEO Magazine, CFO Magazine, CIO Magazine, the Houston Business Journal, and many other prominent news and publications.  She also serves as a planning faculty member and regularly conducts training and speaks on these and other management, compliance and public policy concerns for these and a diverse range of other organizations. For additional information about Ms. Stamer, see www.cynthiastamer.com.

For Added Information and Other Resources

If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:

For Help Or More Information

If you need assistance in auditing or assessing, updating or defending your organization’s compliance, risk manage or other  internal controls practices or actions, please contact the author of this update, attorney Cynthia Marcotte Stamer here or at (469)767-8872.

Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, management attorney and consultant Ms. Stamer is nationally and internationally recognized for more than 24 years of work helping employers and other management; employee benefit plans and their sponsors, administrators, fiduciaries; employee leasing, recruiting, staffing and other professional employment organizations; and others design, administer and defend innovative workforce, compensation, employee benefit  and management policies and practices. Her experience includes extensive work helping employers implement, audit, manage and defend union-management relations, wage and hour, discrimination and other labor and employment laws, privacy and data security, internal investigation and discipline and other workforce and internal controls policies, procedures and actions.  The Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Committee, a Council Representative on the ABA Joint Committee on Employee Benefits, Government Affairs Committee Legislative Chair for the Dallas Human Resources Management Association, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer works, publishes and speaks extensively on management, reengineering, investigations, human resources and workforce, employee benefits, compensation, 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 human resources 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 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 hereor 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.

©2014 Cynthia Marcotte Stamer.  Non-exclusive right to republish granted to Solutions Law Press.  All other rights reserved.


IRS Guidance Raises Concerns For Many Employers Offering “Skinny” & Other Limited Coverage Health Plans

November 4, 2014

Learn More Details By Participating In November 13, 2014 WebEx Briefing

Employers of 100 or more full-time employees that plan currently offering or planning to offer after November 4, 2014 health plans with mandate only or other “skinny” plan designs which do not provide “substantial coverage” for both in-patient hospitalization and physician services should re-evaluate the implications of their proposed plan design as well as existing and planned employee enrollment or other communications about those plans, in light of the new guidance provided by Notice 2014-69 released by the Internal Revenue Service (IRS) today.  Learn all the details about this new guidance and its implication by participating in our November 13 , 2014 briefing.

Plans Must Provide “Substantial Coverage” for Both In-Patient Hospitalization & Physician Services To Provide Minimum Value

Notice 2014-69 makes it official that the Department of Treasury (including the IRS) and Department of Health and Human Services (collectively the Departments)  believe that group health plans that fail to provide substantial coverage for in-patient hospitalization services or for physician services (or for both) (referred to in the Notice as Non-Hospital/Non-Physician Services Plans) do not provide the “minimum value” necessary to fulfill the minimum value requirements of Code §36B and 4080H(b).

The Notice also notifies sponsoring employers about the Departments expectations about notifications and other communications to employees about Non-Hospital/Non-Physician Services Plans) as well as shares details about the Departments plans for implementing their interpretation in planned final regulations by March, 2015.

Standards On Employer Communications About Non-Hospital/Non-Physician Services Plans

The Notice cautions employers about the need to use care in communicating with employees about Non-Hospital/Non-Physician Services Plan.  Among other things, the Notice states that an employer that offers a Non-Hospital/Non-Physician Services Plan (including a Pre-November 4, 2014 Non-Hospital/Non-Physician Services Plan) to an employee must:

  • Not state or imply in any disclosure that the offer of coverage under the Non-Hospital/Non-Physician Services Plan precludes an employee from obtaining a premium tax credit, if otherwise eligible, and
  • Timely correct any prior disclosures that stated or implied that the offer of the Non-Hospital/Non-Physician Services Plan would preclude an otherwise tax-credit-eligible employee from obtaining a premium tax credit.
  • Without such a corrective disclosure, the Notice warns that a statement (for example, in a summary of benefits and coverage) that a Non-Hospital/Non-Physician Services Plan provides minimum value will be considered to imply that the offer of such a plan precludes employees from obtaining a premium tax credit. However, an employer that also offers an employee another plan that is not a Non-Hospital/Non/-Physician Services Plan and that is affordable and provides minimum value (MV) is permitted to advise the employee that the offer of this other plan will or may preclude the employee from obtaining a premium tax credit.

Anticipated Approach In Planned Regulations

Regarding the Departments plans to adopt regulations implementing the interpretation of Code § 36B announced in the Notice, the Notice indicates:

  • HHS intends to promptly propose amending 45 CFR 156.145 to provide that a health plan will not provide minimum value if it excludes substantial coverage for in-patient hospitalization services or physician services (or both).
  • Treasury and the IRS intend to issue proposed regulations that apply these proposed HHS regulations under Code section 36B. Accordingly, under the HHS and Treasury regulations, an employer will not be permitted to use the MV Calculator (or any actuarial certification or valuation) to demonstrate that a Non-Hospital/Non-Physician Services Plan provides minimum value.
  • Treasury and IRS anticipate that the proposed changes to regulations will be finalized in 2015 and will apply to plans other than Pre-November 4, 2014 Non-Hospital/Non-Physician Services Plans on the date they become final rather than being delayed to the end of 2015 or the end of the 2015 plan year. As a result, a Non-Hospital/Non-Physician Services Plan (other than a Pre-November 4, 2014 Non-Hospital/Non-Physician Services Plan) should not be adopted for the 2015 plan year.
  • Solely in the case of an employer that has entered into a binding written commitment to adopt, or has begun enrolling employees in, a Non-Hospital/Non-Physician Services Plan prior to November 4, 2014 based on the employer’s reliance on the results of use of the MV Calculator (a Pre-November 4, 2014 Non-Hospital/Non-Physician Services Plan), however, Notice 2014-69 states the Departments anticipate that final regulations, when issued, will not be applicable for purposes of Code section 4980H with respect to the plan before the end of the plan year (as in effect under the terms of the plan on November 3, 2014) if that plan year begins no later than March 1, 2015.
  • Employers offering Non-Hospital/Non-Physician Services Plans should “exercise caution in relying on the Minimum Value Calculator to demonstrate that these plans provide minimum value for any portion of a taxable year after publication of the planned final regulations.
  • The IRS will not require an employee to treat a Non-Hospital/Non-Physician Services Plan as providing minimum value for purposes of an employee’s eligibility for a premium tax credit under Code section 36B, regardless of whether the plan is a Pre-November 4, 2014 Non-Hospital/Non-Physician Services Plan before final regulations take effect.

Employers & Plans Most Likely To Be Affected

The interpretation of minimum value and planned future regulatory changes announced in Notice 2014-69 primarily will impact large employers subject to the “pay or play” shared responsibility rules of Code § 4980H that offer a health plan providing coverage that meets the “minimum essential coverage” standards of Code § 4980H.

Under Code § 4980H(a),  large employers that fail to offer employee and dependent coverage under a health plan providing “minimum essential coverage” to each full-time employee generally become liable to pay an employer shared responsibility payment of  $165 per month ($2000 per year) (commonly referred to as the “A Penalty”)  for each full-time employee.

In contrast, the penalties (commonly referred to as the “B Penalty”) created under Code § 4980H(b) generally comes into play when a covered large employer offers health plan coverage under a health plan providing minimum essential coverage but the plan either:

  • Does not provide minimum value; or
  • The cost to the employee for coverage exceeds 9.5% of the employee’s family adjusted gross income or an otherwise applicable safe harbor amount allowed under IRS regulations.Register For Briefing To Learn More
  • To learn more about Notice 2014-69 and its implications on employer health plan obligations and Code § 4980H shared responsibility exposures, register to participate in a special Solutions Law WebEx Briefing on the new guidance conducted by Attorney Cynthia Marcotte Stamer on Thursday, November 13, 2014 from Noon to 1:00 p.m. Central Time here.
  • Assuming at least one full-time employee of a covered large employer receives a subsidy for enrolling in health coverage through a health care exchange or “Marketplace” established under ACA, the B Penalty generally is equal to $250 per month ($3000 per year) multiplied by the number of such subsidized employees of the employer.

Learn More By Joining November 13, 2014 Solutions Law Press, Inc. Virtual Briefing Register Now!

To learn more about Notice 2014-69 and its implications on employer health plan obligations and Code § 4980H shared responsibility exposures, register to participate in a special Solutions Law WebEx Briefing on the new guidance conducted by Attorney Cynthia Marcotte Stamer on Thursday, November 13, 2014 from Noon to 1:00 p.m. Central Time here.

During the briefing, Ms. Stamer will:

  • Explain what health benefits, if any, employers must offer employees under current ACA guidance
  • Brief participants on this new guidance and other related guidance
  • Discuss potential implications for employers and their health plans
  • Discuss potential options for employers dealing with these plans and
  • Take questions from virtual audience participants as time permits.

Registration Fee is $35.00 per person   Registration required for each virtual participant. Payment required via website registration in advance of the program.. Payment only accepted via website PayPal. No checks or cash accepted. Participation is limited and available on a first come, first serve basis. Persons not registered at least 24 hours in advance not guaranteed to receive access information or materials prior to commencement of the briefing.

This briefing will be conducted via WebEx over the internet. Participants may have the opportunity to participate via telephone, provided that participants electing to participate may incur added charges for telephone connectivity. Solutions Law Press, Inc. is not responsible for any power or system failures. Solutions Law Press, Inc. also expects to offer the opportunity for individuals unable to participate in the live briefing to listen to a recording of the briefing beginning approximately one week after the program via the Internet by registering, paying the required registration fee and following listening instructions received in response to such registration.

Interested persons can register here now!

About The Speaker

A Fellow in the American College of Employee Benefits Counsel, recognized in International Who’s Who, and Board Certified in Labor & Employment Law, attorney and health benefit consultant Cynthia Marcotte Stamer has  25 years experience advising and representing private and public employers, employer and union plan sponsors, employee benefit plans, associations, their fiduciaries, administrators, and vendors, group health, Medicare and Medicaid Advantage, and other insurers, governmental leaders and others on health and other employee benefit. employment, insurance and related matters. A well-known and prolific author and popular speaker Board Certified in Labor & Employment Law, Ms. Stamer presently serves as Co-Chair of the ABA RPTE Section Welfare Plan Committee, Vice Chair of the ABA TIPS Employee Benefit Committee, an ABA Joint Committee on Employee Benefits Representative, an Editorial Advisory Board Member of the Institute of Human Resources (IHR/HR.com), Insurance Thought Leadership,com and Employee Benefit News, and various other publications.  With extensive domestic and international regulatory and public policy experience, Ms. Stamer also has worked extensively domestically and internationally on public policy and regulatory advocacy on health and other employee benefits, human resources, insurance, tax, compliance and other matters and representing clients in dealings with the US Congress, Departments of Labor, Treasury, Health & Human Services, as well as state legislatures, attorneys general, insurance and labor departments, and other agencies and regulators. A prolific author and popular speaker, Ms. Stamer regularly authors materials and conducts workshops and professional, management and other training and serves on the faculty and planning committees of a multitude of symposium and other educational programs.  See http://www.CynthiaStamer.com  for more details.

 

A Fellow in the American College of Employee Benefits Counsel, recognized in International Who’s Who, and Board Certified in Labor & Employment Law, attorney and health benefit consultant Cynthia Marcotte Stamer has 25 plus years’ experience advising and representing private and public employers, employer and union plan sponsors, employee benefit plans, associations, their fiduciaries, administrators, and vendors, group health, Medicare and Medicaid Advantage, and other insurers, governmental leaders and others on health and other employee benefit. employment, insurance and related matters. A well-known and prolific author and popular speaker Board Certified in Labor & Employment Law, Ms. Stamer presently serves as Co-Chair of the ABA RPTE Section Welfare Plan Committee, Vice Chair of the ABA TIPS Employee Benefit Committee, an ABA Joint Committee on Employee Benefits Representative, an Editorial Advisory Board Member of the Institute of Human Resources (IHR/HR.com), Insurance Thought Leadership,com and Employee Benefit News, and various other publications. With extensive domestic and international regulatory and public policy experience, Ms. Stamer also has worked extensively domestically and internationally on public policy and regulatory advocacy on health and other employee benefits, human resources, insurance, tax, compliance and other matters and representing clients in dealings with the US Congress, Departments of Labor, Treasury, Health & Human Services, as well as state legislatures, attorneys general, insurance and labor departments, and other agencies and regulators. A prolific author and popular speaker, Ms. Stamer regularly authors materials and conducts workshops and professional, management and other training and serves on the faculty and planning committees of a multitude of symposium and other educational programs. See http://www.CynthiaStamer.com. for more details.

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For Added Information and Other Resources

If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:

For additional information about upcoming programs, to inquire about becoming a presenting sponsor for an upcoming event, e-mail your request to info@Solutionslawpress.com   These programs, publications and other resources are provided only for general informational and educational purposes. Neither the distribution or presentation of these programs and materials to any party nor any statement or information provided in or in connection with this communication, the program or associated materials are intended to or shall be construed as establishing an attorney-client relationship,  to constitute legal advice or provide any assurance or expectation from Solutions Law Press, Inc., the presenter or any related parties. If you or someone else you know would like to receive future Alerts or other information about developments, publications or programs or other updates, send your request to info@solutionslawpress.com.  If you would prefer not to receive communications from Solutions Law Press, Inc. send an e-mail with “Solutions Law Press Unsubscribe” in the Subject to support@solutionslawyer.net.  CIRCULAR 230 NOTICE: The following disclaimer is included to comply with and in response to U.S. Treasury Department Circular 230 Regulations.  ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN. If you are an individual with a disability who requires accommodation to participate, please let us know when you register so that we may consider your request.   ©2014 Solutions Law Press, Inc.  All rights reserved.

 


Hospital To Pay $75K For Refusing To Hire Disabled Child Care Worker

March 10, 2014

Osceola Community Hospital Refused To Hire Child Care Worker With Cerebral Palsy Who Had Worked As Volunteer

Osceola Community Hospital in Sibley, Iowa will pay $75,000 and furnish other relief to settle an Americans With Disabilities Act (ADA) disability discrimination lawsuit filed by the U.S. Equal Employment Opportunity Commission (EEOC) for its refusal to hire a child care worker with cerebral palsy.  The case shows both the need for health care and other employers to have sufficient evidence to support decisions not to hire disabled workers for safety reasons as well as the potential risks that hospitals or other face when refusing to hire disabled individuals who have been allowed to work as volunteers in their organizations.

The EEOC charged a day care center operated by the hospital, Bright Beginnings of Osceola County, unlawfully failed to hire a volunteer employee into a paid position for which she was qualified because of her cerebral palsy.  Although the woman who brought the charge of discrimination against the hospital already volunteered in the day care center and held a job driving a school bus, the EEOC’s investigation revealed the county refused to hire her into a paying job in the center out of an unfounded fear that her disability meant that she could not safely care for the children.

Judge Mark Bennett entered a consent decree on February, 28, 2014, resolving the brought by the EEOC in EEOC v. Osceola Community Hospital d/b/a Bright Beginnings of Osceola County, Civil Action No. 5:12-cv-4087 (N.D. Iowa, Sept. 26, 2012 that orders Osceola Community Hospital to pay $75,000 to the discrimination victim.  The decree also requires the hospital to institute a policy prohibiting discrimination on the basis of disability and to distribute the policy to all of its employees.  The hospital also must train its employees and report regularly to the EEOC on its compliance with the ADA.

The lawsuit provides another example to health care and other employers of their growing exposure to disability discrimination claims under the ADA.  The EEOC action and lawsuit highlights the importance of employers ensuring that decisions to refuse to hire disabled workers for safety reasons are based upon appropriate evidence of actual safety concerns that prevent the worker from safely performing the assigned duties with or without reasonable accommodation.

The fact that the worker in this case had in fact worked as a volunteer likely created additional challenges in defending the decision.  The use of volunteer workers in health industry businesses is a common practice that may justify special care before those organizations deny employment to a former volunteer on the basis of safety concerns associated with the disabilities of the applicant or worker both to document the reasonable basis of the safety concern and that the concern could not be adequately resolved through reasonable accommodation.

Eenforcing federal discrimination laws is a high priority of the Obama Administration. The Departments of Labor, Health & Human Services, Education, Justice, Housing & Urban Development, and others all have both increased enforcement, audits and public outreach, as well as have sought or are proposing tighter regulations.

The expanding applicability of nondiscrimination rules coupled with the wave of new policies and regulatory and enforcement actions should alert private businesses and state and local government agencies of the need to exercise special care to prepare to defend their actions against potential disability or other Civil Rights discrimination challenges under employment and a broad range of other laws.

Health care and organizations, public or private, government contractor or not, should act to ensure both that their organizations, their policies, and people in form and in action understand and comply with current disability discrimination laws and that these compliance activities are well-documented to help defend against potential charges or other challenges.  Because of changing regulatory and enforcement trends, organizations and their leaders should avoid assuming the adequacy of current compliance and risk management. Most organization should reevaluate their assessments concerning whether their organization is a federal government contractor or subcontractor to minimize the risk of overlooking critical obligations.

Many organizations need to update their understanding, policies and practices in light of tightening rules and enforcement. The scope and applicability of federal nondiscrimination and other laws have been expanded or modified in recent years by the differences in perspectives of the Obama Administration from the Bush Administration, as well as statutory, regulatory, judicial precedent and enforcement changes.  In addition, all organization should conduct well-documented periodic training and take other actions to monitor and enforce compliance by staff, contractors and others with whom they do business.

For Help With Compliance & Risk Management and Defense

If you need help in auditing or assessing, updating or defending your organization’s compliance, risk manage or other  internal controls practices or actions, please contact the author of this update, attorney Cynthia Marcotte Stamer here or at (469)767-8872.

Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, management attorney and consultant Ms. Stamer is nationally and internationally recognized for more than 24 years of work helping private and governmental organizations and their management; employee benefit plans and their sponsors, administrators, fiduciaries; employee leasing, recruiting, staffing and other professional employment organizations; schools and other governmental agencies and others design, administer and defend innovative compliance, risk management, workforce, compensation, employee benefit, privacy, procurement and other management policies and practices. Her experience includes extensive work helping employers implement, audit, manage and defend union-management relations, wage and hour, discrimination and other labor and employment laws, procurement, conflict of interest, discrimination management, privacy and data security, internal investigation and discipline and other workforce and internal controls policies, procedures and actions.  The Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Committee, a Council Representative on the ABA Joint Committee on Employee Benefits, Government Affairs Committee Legislative Chair for the Dallas Human Resources Management Association, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer works, publishes and speaks extensively on management, reengineering, investigations, human resources and workforce, employee benefits, compensation, 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 human resources 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 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.

Other Resources

If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:

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, compensation, data security and privacy, health care, insurance, and other key compliance, risk management, internal controls and other key operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources available at ww.solutionslawpress.com.

THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS.  ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

©2014 Cynthia Marcotte Stamer.  Non-exclusive license to republish granted to Solutions Law Press.  All other rights reserved.


Statistics, OSHA Lawsuit Against AT&T Operator & Other DOL Action Highlights Rising Retaliation Exposures

February 10, 2014

A new Department of Labor (DOL) lawsuit filed in Cleveland against The Ohio Bell Telephone Company and other DOL enforcement news released today remind U.S. businesses again of the growing need to recognize and manage exposure to retaliation claims when dealing with workers who have reported injuries or other Occupational Health & Safety Act of 1974 (OSHA Laws), discrimination, wage and hour or other federal laws that include anti-retaliation or whistleblower protections.

AT&T Operator Sued Under OSHA

Filed in the U.S. District Court for the Northern District of Ohio, Eastern Division, the In the Matter of: Perez v. The Ohio Bell Telephone Company, Civil Action No. 1:14-cv-269 lawsuit charges The Ohio Bell Telephone Company, which operates as AT&T, violated the whistleblower provisions of the OSHA Laws. The complaint alleges that in 13 separate incidents, 13 employees of AT&T were disciplined and given one- to three-day unpaid suspensions for reporting injuries that occurred on the job.

OSHA enforces the whistleblower provisions of 22 statutes protecting employees who report violations of various airline, commercial motor carrier, consumer product, environmental, financial reform, food safety, motor vehicle safety, health care reform, nuclear, pipeline, public transportation agency, railroad, maritime and securities laws.  These whistleblower provisions generally prohibit employers from retaliating against employees who raise concerns or provide information to their employer or the government under any of these laws.

The lawsuit illustrates the difficulty that U.S. employers increasingly face when dealing with workers who have filed complaints or participated in other protected activity under the OSHA Laws or other laws with whistleblower or anti-retaliation provisions.  OSHA claims that the employer wrongfully retaliated against 13 Ohio employees who received unpaid suspensions after reporting work place injuries from 2011 to 2013.  However, the company claims that the suspensions were appropriate disciple against the impacted employees for his or her violation of a workplace safety standard.

Assuming that the lawsuit proceeds without settlement, the company can expect to face expensive and lengthy litigation to determine whose perspective wins.  Even if the company succeeds in winning the lawsuit, the expenses and other costs of the litigation will render any victory a financial loss.

Wage & Hour Retaliation

Along with the AT&T Operator OSHA action, DOL also is acting to enforce retaliation claims under the Fair Labor Standards Act (FLSA) and other laws enforced by its Wage and Hour Division as well as its other agencies.  The Wage and Hour Division makes investigation and enforcement against employers that retaliate against workers for exercising rights protected under the FLSA or other wage and hour laws a priority.    One example of this commitment to this priority is the brief the Labor Department filed in Lockheed Martin Corp. v. Administrative Review Board, where a key issue is whether substantial evidence supports the determination of the Administrative Law Judge, as as affirmed by the Administrative Review Board, that protected activity was a contributing factor in Lockheed’s constructive discharge of an employee.

Retaliation Exposure Wide-Reaching and Growing

While OSHA and the Wage and Hour Division zealously enforce the anti-retaliation provisions of the laws subject to their jurisdiction, these laws and agencies are only the tip of the iceberg.  Most federal and many state labor and employment as well as a broad range of other laws include anti-relation provisions that protect workers who report potential misconduct, participate in investigaitons or engagement in other protected activity.

U.S. Government statistics show that U.S. business risk from retaliation or other whistleblower claims is significant and rising.  Official statistics reported by the Equal Employment Opportunity Commission (EEOC) here show a steady rise in retaliation based charges.

Businesses or their leaders found guilty of retaliation often face significant liability.  When anti-retaliation laws are enforced by the Department of Labor or other agencies, businesses generally can expect to incur both restitution and correction costs as well as administrative or civil penalties.  Increasingly, employees or others reporting the claims to the agencies may receive a portion of the recovered amounts under qui tam or other similar statutes.

Damages awarded to private plaintiffs who win retaliation lawsuits also tend to be quite costly.  They typically include actual damages, attorneys’ fees and other costs of enforcement as well as punitive damages. In addition to the exposures that businesses face when found guilty of illegal retaliation, many of these statutes also may impose personal liability against management or others who engage in or condone this activity. Defending these claims often proves particularly challenging because of the heavy burdens of proof that a business ormanagement official often faces when an employee or other protected party shows detriment after engaging in protected actions.

Risk Management Needed

In the face of this growing risks, businesses should recognize and take steps to monitor and manage their exposure to retaliation or other whistleblower claims.  While an imperfect panacea to the rising risks of retaliation claims and liabilities, examples of some of the steps businesses generally will want to use to prevent and mitigate etaliation exposures include:

  • Establish and clearly communicate by word and deed that the Company prohibits retaliation.  The policy should make clear retaliation is against company policy and communicate the steps that employees concerned that they are being retaliated against should take to report suspected retailiation.
  • Train management and other workers on the retaliation policy and hold employees that engage in illegal retailiation or other prohibited conduct through appropriate discipline.
  • Communicate promptly with persons reporting suspected retaliation, acknowledging the receipt of the report and that the company takes the report seriously and will investigate.  At the same time, tell the whistleblower that the company does not tolerate retaliation and what to do if the whistleblower suspects retaliation.
  • Keep complaints confidential to reduce the risk of retaliation.
  • Document the report and the investigation.  When possible, ask the whistleblower and other witnesses provide written statements.
  • Avoid forming, and teach management and others conducting or participating in the investigation to avoid forming any conclusions or making statements or other actions that could indicate that conclusions have been reached before all the facts are completed.
  • Use exit interviews, whistleblower hotlines and other processes to help identify and manage concerns before they turn into litigation or complaints.
  • Ensure that your employee hiring, promotion, compensation, demotion, termination and other practices and policies are well designed, documented and administered.  Document personnel decisions consistently and fairly on an ongoing basis.
  • Be aware of and monitor potential retaliation exposures when conducting ongoing promotion, discharge, bonus and compensation and other day-to-day workforce actions.  When an individual who has engaged in protected activity is terminated, denied a promotion or wage or experiences an event that the worker could perceive as adverse, take steps to review the action before it is finalized to identify and correct potential retaliation.
  • Consider getting employment practices liability coverage or other protection to provide a fund to defend claims.
  • Don’t overlook exposures arising from staffing or leasing arrangements, customer or vendor relationships or other third party relationships.
  • Seek competent legal advice and assistance with using attorney-client privilege and other rules of evidence, designing policies and practices, investigating and responding to complaints or enforcement actions and other activities.

When planning for and administering these and other compliance and risk management processes and procedures, keep in mind that the intent to retaliate generally is not required to create liability.   Likewise, a business’ policy prohibiting retaliation is not an adequate shield against liability in most cases if in fact retaliation in violation of the policy occurs.  Nevertheless, the efforts to prevent and mitigate retaliation are worthwhile.  Not only can they prevent claims by deterring improper conduct or providing opportunities for correction and mitigation they also can help mitigate judgments and other liability in most instances.

For Assistance or More Information

If you have questions or need help with these or employee benefit, human resources, insurance, health care matters or related documents or practices, please contact the author of this update, Cynthia Marcotte Stamer.

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 25 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters.

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with these and other employment, employee benefit and compensation matters, Ms. Stamer continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, insurers and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals. A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials about regulatory, investigatory or enforcement concerns.

Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the Editorial Advisory Board of Employee Benefits News, HR.com, Insurance Thought Leadership, Solutions Law Press, Inc. and other publications, and active in a multitude of other employee benefits, human resources and other professional and civic organizations. She also is a widely published author and highly regarded speaker on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, Modern and many other national and local publications. Her widely respected publications and programs include more than 25 years of publications on health plan contracting, design, administration and risk management including a “Managed Care Contracting Guide” published by the American Health Lawyers Association and numerous other works on vendor contracting.  You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and register to receive future updates about developments on these and other concerns from Ms. Stamer here.

Other Helpful Resources & Other Information

We hope that this information is useful to you.   If you found these updates of interest, you also be interested in one or more of the following other recent articles published on the Coalition for Responsible Health Care Reform electronic publication available here, our electronic Solutions Law Press Health Care Update publication available here, or our HR & Benefits Update electronic publication available here .  You also can get access to information about how you can arrange for training on “Building Your Family’s Health Care Toolkit,”  using the “PlayForLife” resources to organize low-cost wellness programs in your workplace, school, church or other communities, and other process improvement, compliance and other training and other resources for health care providers, employers, health plans, community leaders and others 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 here. You can reach other recent updates and other informative publications and resources.

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©2013 Cynthia Marcotte Stamer.  Nonexclusive right to republish granted to Solutions Law Press, Inc. All other rights reserved.

Other Information & Resources

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 Ms. Stamer here /the Curran Tomko Tarski LLP attorneys 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 here or e-mailing this information to Cstamer@CTTLegal.com or registering to participate in the distribution of these and other updates on our Solutions Law Press HR & Benefits Update distributions here. For important information concerning this communication click here.    If you do not wish to receive these updates in the future, send an e-mail with the word “Remove” in the Subject to support@SolutionsLawyer.net.

©2009 Cynthia Marcotte Stamer. All rights reserved.


Government Contractor SCA Violation Costs It $2M & 3 Year Government Contracts Disbarrment

January 20, 2014

A nearly $2 million settlement agreement with a California-based government contractor announced January 15, 2014 by the U.S. Department of Labor Wage and Hour Division (DOL) illustrates why U.S. businesses providing goods and services directly or as subcontractors to the federal government should use care to properly compensate workers and comply with other requirements applicable to government contractors.

Lesson From Lange Trucking Inc.

According to the DOL, Lange Trucking Inc. will pay $1,979,779 in 401(k) pension benefits to 515 drivers working on U.S. Postal Service contracts to resolve DOL charges that the company violated the McNamara-O’Hara Service Contract Act by not paying drivers required fringe benefits. The settlement also debars from eligibility for any further service contracts from any U.S. government agency for three years the company, along with its President, William A. Langenhuizen; Vice President, William H. Langenhuizen; Secretary Treasurer, Antoinette Langenhuizen; Vice President, Robert Langehuizen; and Vice President of Finance, Lisa Kulak.  The Wage and Hour Division reported the settlement January 15, 2013 here.

The SCA applies to every contract entered into by the United States or the District of Columbia, the principal purpose of which is to furnish services in the United States through the use of service employees. The SCA requires that contractors and subcontractors performing services on covered federal contracts in excess of $2,500 must pay their service workers no less than the wages and fringe benefits prevailing in the locality.

DOL reports that Wage and Hour investigators found that Lange Trucking failed to fully fund the drivers’ 401(k) plan, resulting in a violation of the SCA. Wage and Hour has investigated the company several times in the past. Lange Trucking paid $500,000 of the unpaid benefits while Hoovestol Inc., which is based in Eagan, Minn., acquired the company subsequent to the violations and voluntarily agreed to fund the remaining $1.48 million in benefits. Hoovestol, which cooperated fully with the Wage and Hour Division during its investigation, has also: corrected record-keeping procedures, overhauled the plan to ensure timely payments into the plan going forward, posted wage determinations at the work site and made information about the contracts accessible to employees.

Audits and Enforcement Rising

Government contractors face rising risks of audit and enforcement of their compliance with federal contracting requirements.  The Obama Administration has made audit and enforcement of compliance a lead priority.

The risk of audit generally affects all federal government contractors and subcontractors.  However, contractors providing services on projects funded from the $787 billion of stimulus funding provided under the American Recovery and Reinvestment Act of 2009 (“ARRA”) signed into law by President Barack Obama in February, 2009 are even more at risk.  ARRA-funded contracts are subject to special procedures under the Office of Federal Contract Compliance Programs (“OFCCP”) “Procedures for Scheduling and Conducting Compliance Evaluations of American Recovery and Reinvestment Act of 2009 (ARRA) Funded Contractors” issued July 7, 2009.  See OFCCP Order No. ADM 0901/SEL the “ARRA Procedures”).

Businesses providing services or supplies on ARRA funded projects directly or as subcontractors be considered government contractors, required to comply with the equal employment opportunity requirements of  Executive Order 11246, as amended (EO 11246); Section 503 of the Rehabilitation Act of 1973,as amended (Section 503); and the Vietnam Veterans’ Readjustment Assistance Act of 1974, as amended, 38 U.S.C. 4212 (VEVRAA).   OFCCP has made clear that it will conduct compliance evaluations and host compliance assistance events to ensure that federal contractors comply and are aware of their responsibilities under EO 11246, Section 503 and VEVRAA.

Beyond the heightened risks of enforcement due to the Obama Administration’s emphasis, government contractors and subcontractors also need to use care to monitor and maintain compliance with evolving requirements.  In some cases, such as in the case of ARRA-funded projects, the applicability and requirements have been expended to extend to businesses or projects that historically might have qualified as exempt from government contractor rules.

In addition, the rules themselves are evolving in response to the regulatory and enforcement activism of the Obama Administration.  In recent years, for instance, the Obama Administration has made audit and enforcement of federal disability, veterans and other nondiscrimination, affirmative action and other laws and rules for government contractors and other employers.  An example of these evolving rules is reflected in the recent posting by the OFCCP of a third round of Frequently Asked Questions (FAQs) answering questions from contractors and the general public about provisions in the recently published Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA) and Section 503 of the Rehabilitation Act (Section 503) Final Rules.  These FAQs address implementation issues, such as the schedule for contractors to come into compliance with the affirmative action requirements of Subpart C of the new regulations.

In light of these developments, government contractors and subcontractors will want to review and verify their compliance with requirements as well as the adequacy of their recordkeeping and other documentation, as well as take other appropriate steps to manage their risks.

For Assistance or More Information

If you have questions or need help with these or employee benefit, human resources, insurance, health care matters or related documents or practices, please contact the author of this update, Cynthia Marcotte Stamer.

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 25 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters.

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with these and other employment, employee benefit and compensation matters, Ms. Stamer continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, insurers and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals. A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials about regulatory, investigatory or enforcement concerns.

Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the Editorial Advisory Board of Employee Benefits News, HR.com, Insurance Thought Leadership, Solutions Law Press, Inc. and other publications, and active in a multitude of other employee benefits, human resources and other professional and civic organizations. She also is a widely published author and highly regarded speaker on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, Modern and many other national and local publications. Her widely respected publications and programs include more than 25 years of publications on health plan contracting, design, administration and risk management including a “Managed Care Contracting Guide” published by the American Health Lawyers Association and numerous other works on vendor contracting.  You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and register to receive future updates about developments on these and other concerns from Ms. Stamer here.

Other Helpful Resources & Other Information

We hope that this information is useful to you.   If you found these updates of interest, you also be interested in one or more of the following other recent articles published on the Coalition for Responsible Health Care Reform electronic publication available here, our electronic Solutions Law Press Health Care Update publication available here, or our HR & Benefits Update electronic publication available here .  You also can get access to information about how you can arrange for training on “Building Your Family’s Health Care Toolkit,”  using the “PlayForLife” resources to organize low-cost wellness programs in your workplace, school, church or other communities, and other process improvement, compliance and other training and other resources for health care providers, employers, health plans, community leaders and others 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 here. You can reach other recent updates and other informative publications and resources.

Recent examples of these publications include:

For important information about this communication click here.

©2013 Cynthia Marcotte Stamer.  Nonexclusive right to republish granted to Solutions Law Press, Inc. All other rights reserved.

Other Information & Resources

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 Ms. Stamer here /the Curran Tomko Tarski LLP attorneys 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 here or e-mailing this information to Cstamer@CTTLegal.com or registering to participate in the distribution of these and other updates on our Solutions Law Press HR & Benefits Update distributions here. For important information concerning this communication click here.    If you do not wish to receive these updates in the future, send an e-mail with the word “Remove” in the Subject to support@SolutionsLawyer.net.

©2009 Cynthia Marcotte Stamer. All rights reserved.


OFCCP Posts Additional FAQs on the Implementation of the VEVRAA and Section 503 Final Rules

December 26, 2013

The Office of FCCP posted a third round of Frequently Asked Questions (FAQs) answering questions from contractors and the general public about provisions in the recently published Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA) and Section 503 of the Rehabilitation Act (Section 503) Final Rules.  These FAQs address implementation issues, such as the schedule for contractors to come into compliance with the affirmative action requirements of Subpart C of the new regulations.  These latest FAQs, published on the OFCCP Web site and marked with a “NEW” banner, are part of a series of FAQs, guidance materials, and resources that OFCCP is providing to contractors and the public between now and the March 24, 2014, effective date of the new rules.

The VEVRAA FAQs are available here. The Section 503 FAQs are available here.

For Assistance or More Information

If you have questions or need help with these or employee benefit, human resources, insurance, health care matters or related documents or practices, please contact the author of this update, Cynthia Marcotte Stamer.

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 25 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters.

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with these and other employment, employee benefit and compensation matters, Ms. Stamer continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, insurers and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals. A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials about regulatory, investigatory or enforcement concerns.

Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the Editorial Advisory Board of Employee Benefits News, HR.com, Insurance Thought Leadership, Solutions Law Press, Inc. and other publications, and active in a multitude of other employee benefits, human resources and other professional and civic organizations. She also is a widely published author and highly regarded speaker on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, Modern and many other national and local publications. Her widely respected publications and programs include more than 25 years of publications on health plan contracting, design, administration and risk management including a “Managed Care Contracting Guide” published by the American Health Lawyers Association and numerous other works on vendor contracting.  You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and register to receive future updates about developments on these and other concerns from Ms. Stamer here.

Other Helpful Resources & Other Information

We hope that this information is useful to you.   If you found these updates of interest, you also be interested in one or more of the following other recent articles published on the Coalition for Responsible Health Care Reform electronic publication available here, our electronic Solutions Law Press Health Care Update publication available here, or our HR & Benefits Update electronic publication available here .  You also can get access to information about how you can arrange for training on “Building Your Family’s Health Care Toolkit,”  using the “PlayForLife” resources to organize low-cost wellness programs in your workplace, school, church or other communities, and other process improvement, compliance and other training and other resources for health care providers, employers, health plans, community leaders and others 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 here. You can reach other recent updates and other informative publications and resources.

Recent examples of these publications include:

For important information about this communication click here.

©2013 Cynthia Marcotte Stamer.  Nonexclusive right to republish granted to Solutions Law Press, Inc. All other rights reserved.


OFCCP Posts Additional FAQs on the Implementation of the VEVRAA and Section 503 Final Rules

December 26, 2013

The Office of Federal Contract Compliance Programs (OFCCP) posted a third round of Frequently Asked Questions (FAQs) answering questions from contractors and the general public about provisions in the recently published Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA) and Section 503 of the Rehabilitation Act (Section 503) Final Rules.  These FAQs address implementation issues, such as the schedule for contractors to come into compliance with the affirmative action requirements of Subpart C of the new regulations.  These latest FAQs, published on the OFCCP Web site and marked with a “NEW” banner, are part of a series of FAQs, guidance materials, and resources that OFCCP is providing to contractors and the public between now and the March 24, 2014, effective date of the new rules.

The VEVRAA FAQs are available at here. The Section 503 FAQs are available at here

For Assistance or More Information

If you have questions or need help with these or employee benefit, human resources, insurance, health care matters or related documents or practices, please contact the author of this update, Cynthia Marcotte Stamer.

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 25 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters.

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with these and other employment, employee benefit and compensation matters, Ms. Stamer continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, insurers and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals. A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials about regulatory, investigatory or enforcement concerns.

Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the Editorial Advisory Board of Employee Benefits News, HR.com, Insurance Thought Leadership, Solutions Law Press, Inc. and other publications, and active in a multitude of other employee benefits, human resources and other professional and civic organizations. She also is a widely published author and highly regarded speaker on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, Modern and many other national and local publications. Her widely respected publications and programs include more than 25 years of publications on health plan contracting, design, administration and risk management including a “Managed Care Contracting Guide” published by the American Health Lawyers Association and numerous other works on vendor contracting.  You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and register to receive future updates about developments on these and other concerns from Ms. Stamer here.

Other Helpful Resources & Other Information

We hope that this information is useful to you.   If you found these updates of interest, you also be interested in one or more of the following other recent articles published on the Coalition for Responsible Health Care Reform electronic publication available here, our electronic Solutions Law Press Health Care Update publication available here, or our HR & Benefits Update electronic publication available here .  You also can get access to information about how you can arrange for training on “Building Your Family’s Health Care Toolkit,”  using the “PlayForLife” resources to organize low-cost wellness programs in your workplace, school, church or other communities, and other process improvement, compliance and other training and other resources for health care providers, employers, health plans, community leaders and others 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 here. You can reach other recent updates and other informative publications and resources.

Recent examples of these publications include:

For important information about this communication click here.

©2013 Cynthia Marcotte Stamer.  Nonexclusive right to republish granted to Solutions Law Press, Inc. All other rights reserved.


OIG 2013 Top Management Challenges List Signals Tightening of Labor Department Enforcement

December 26, 2013

Employers should expect heighten scrutiny and enforcement in the labor law areas identified in the “2013 Top Management Challenges Facing the Department List” recently published by the U.S. Department of Labor Office of Inspector General.  Employers can expect to see the Labor Department and its component agencies acting to tighten oversight and enforcement in these areas in response to the OIG list.

For 2013, the OIG identified the following as the most serious management and performance challenges facing the Department:

  • Protecting the Safety and Health of Workers
  • Protecting the Safety and Health of Miners
  • Improving Performance Accountability of Workforce Investment Act Grants
  • Ensuring the Effectiveness of the Job Corps Program
  • Reducing Improper Payments
  • Ensuring the Security of Employee Benefit Plan Assets
  • Securing and Protecting Information Management Systems
  • Ensuring the Effectiveness of Veterans’ Employment and Training Service Programs

In the report accompanying the OIG list, the OIG presents the challenge, the OIG’s assessment of the Department’s progress in addressing the challenge, and what remains to be done. These top management challenges are intended to identify and help resolve serious weaknesses in areas that involve substantial resources and provide critical services to the public. Typically, the identification of an area of concern by the OIG prompts tightening of processes and enforcement.

For Assistance or More Information

If you have questions or need help with these or employee benefit, human resources, insurance, health care matters or related documents or practices, please contact the author of this update, Cynthia Marcotte Stamer.

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 25 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters.

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with these and other employment, employee benefit and compensation matters, Ms. Stamer continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, insurers and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals. A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials about regulatory, investigatory or enforcement concerns.

Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the Editorial Advisory Board of Employee Benefits News, HR.com, Insurance Thought Leadership, Solutions Law Press, Inc. and other publications, and active in a multitude of other employee benefits, human resources and other professional and civic organizations. She also is a widely published author and highly regarded speaker on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, Modern and many other national and local publications. Her widely respected publications and programs include more than 25 years of publications on health plan contracting, design, administration and risk management including a “Managed Care Contracting Guide” published by the American Health Lawyers Association and numerous other works on vendor contracting.  You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and register to receive future updates about developments on these and other concerns from Ms. Stamer here.

Other Helpful Resources & Other Information

We hope that this information is useful to you.   If you found these updates of interest, you also be interested in one or more of the following other recent articles published on the Coalition for Responsible Health Care Reform electronic publication available here, our electronic Solutions Law Press Health Care Update publication available here, or our HR & Benefits Update electronic publication available here .  You also can get access to information about how you can arrange for training on “Building Your Family’s Health Care Toolkit,”  using the “PlayForLife” resources to organize low-cost wellness programs in your workplace, school, church or other communities, and other process improvement, compliance and other training and other resources for health care providers, employers, health plans, community leaders and others 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 here. You can reach other recent updates and other informative publications and resources.

Recent examples of these publications include:

For important information about this communication click here.

©2013 Cynthia Marcotte Stamer.  Nonexclusive right to republish granted to Solutions Law Press, Inc. All other rights reserved.


Register For 6/4 Virtual Briefing On DOL/IRS/HHS Final Group Health Plan Wellness Program Regulations

May 30, 2013

Solutions Law Press, Inc. Invites Employer & Other Group Health Plan Sponsors, Insurers, Administrators, Brokers, Advisors & Consultants to A Virtual Briefing On

Making Wellness Programs Work Under New Tri-Agency Final Wellness Regulations

Tuesday, June 4, 2013

1:00 P.M.-2:00 P.M. Eastern | 12:00 P.M.-1:00 P.M. Central | 11:00 A.M-12:00 P.M. Mountain | 10 A.M-11:00 A.M. Pacific

Register Now!

Solutions Law Press, Inc. invites employer and other employment-based group health plan sponsors, fiduciaries insurers, administrators, brokers, consultants and others to learn the key details of new Final Wellness Program regulations jointly published May 29, 2013 by the Departments of Health and Human Services, Labor and Treasury (collectively the “Agencies”) by participating in an informative and timely virtual briefing on “Making Wellness Programs Work Under New Final Tri-Agency Regulations” on June 4, 2013.

New final wellness program regulations jointly published May 29, 2013 by the Departments of Labor, Health & Human Services and Labor tell employers and insurers how to design health risk assessment and other wellness and disease management tools in their group health plans and policies to incentivize and reward employees and other plan members to better manage their health and help manage health plan costs without violating the HIPAA Portability Rules against group health plan discrimination in premiums or eligibility based on health status.

Participants in this briefing will learn key information about:

  • The final wellness program regulation’s requirements for designing HRA and other group health plan wellness and disease management programs that avoid violating HIPAA’s prohibition against discrimination based on health factors as “bona fide wellness programs;”
  • How group health plans can take advantage of the option allowed beginning in 2014 to offer greater incentives to plan members to participate in group health plan wellness programs by amendments made under the Patient Protection and Affordable Care Act;
  • How new Omnibus HIPAA Privacy Rules may require group health plans and insurers to update their marketing and other privacy policies, procedures, documentation, vendor agreements and other practices for collecting, using, disclosing and safeguarding “personal health information” and “genetic health information” when administering wellness programs and other group health plan provisions;
  • When the EEOC views wellness programs incentives as potentially violating the Americans With Disabilities Act discrimination exposures under the Equal Employment Opportunity Commission’s (EEOC’s) current interpretation of the employment discrimination rules of Americans With Disabilities Act (ADA) and GINA; and
  • Other tips for designing legally compliant, effective group health plan disease management and wellness programs.

Ms. Stamer also will take questions from virtual audience participants as time permits.

About The Speaker

A Fellow in the American College of Employee Benefits Counsel, recognized in International Who’s Who, and Board Certified in Labor & Employment Law, attorney and health benefit consultant Cynthia Marcotte Stamer has  25 years experience advising and representing private and public employers, employer and union plan sponsors, employee benefit plans, associations, their fiduciaries, administrators, and vendors, group health, Medicare and Medicaid Advantage, and other insurers, governmental leaders and others on health and other employee benefit. employment, insurance and related matters. A well-known and prolific author and popular speaker Board Certified in Labor & Employment Law, Ms. Stamer presently serves as Co-Chair of the ABA RPTE Section Welfare Plan Committee, Vice Chair of the ABA TIPS Employee Benefit Committee, an ABA Joint Committee on Employee Benefits Representative, an Editorial Advisory Board Member of the Institute of Human Resources (IHR/HR.com), Insurance Thought Leadership,com and Employee Benefit News, and various other publications.  With extensive domestic and international regulatory and public policy experience, Ms. Stamer also has worked extensively domestically and internationally on public policy and regulatory advocacy on health and other employee benefits, human resources, insurance, tax, compliance and other matters and representing clients in dealings with the US Congress, Departments of Labor, Treasury, Health & Human Services, as well as state legislatures, attorneys general, insurance and labor departments, and other agencies and regulators. A prolific author and popular speaker, Ms. Stamer regularly authors materials and conducts workshops and professional, management and other training and serves on the faculty and planning committees of a multitude of symposium and other educational programs.  See http://www.CynthiaStamer.com. for more details.

Registration

Registration Fee is $95.00 per person   Registration required for each virtual participant. Payment required via website registration in advance of the program..  Payment only accepted via website PayPal.  No checks or cash accepted.  Participation is limited and available on a first come, first serve basis.  Persons not registered at least 24 hours in advance not guaranteed to receive access information or materials prior to commencement of the briefing.

Equipment Requirements For Virtual Briefing Participation

This briefing will be conducted via WebEx over the internet.  Participants may have the opportunity to participate via telephone, provided that participants electing to participate may incur added charges for telephone connectivity.  Solutions Law Press, Inc. is not responsible for any power or system failures.  Solutions Law Press, Inc. also expects to offer the opportunity for individuals unable to participate in the live briefing to listen to a recording of the briefing beginning approximately one week after the program via the Internet by registering, paying the required registration fee and following listening instructions received in response to such registration.

About Solutions Law Press, Inc.™

Solutions Law Press, Inc.™ provides business and management information, tools and solutions, training and education, services and support to help organizations and their leaders promote effective management of legal and operational performance, regulatory compliance and risk management, data and information protection and risk management and other key management objectives.  Solutions Law Press, Inc.™ also conducts and assist businesses and associations to design, present and conduct customized programs and training targeted to their specific audiences and needs.  For additional information about upcoming programs, to inquire about becoming a presenting sponsor for an upcoming event, e-mail your request to info@Solutionslawpress.com   These programs, publications and other resources are provided only for general informational and educational purposes. Neither the distribution or presentation of these programs and materials to any party nor any statement or information provided in or in connection with this communication, the program or associated materials are intended to or shall be construed as establishing an attorney-client relationship,  to constitute legal advice or provide any assurance or expectation from Solutions Law Press, Inc., the presenter or any related parties. If you or someone else you know would like to receive future Alerts or other information about developments, publications or programs or other updates, send your request to info@solutionslawpress.com.  If you would prefer not to receive communications from Solutions Law Press, Inc. send an e-mail with “Solutions Law Press Unsubscribe” in the Subject to support@solutionslawyer.net.  CIRCULAR 230 NOTICE: The following disclaimer is included to comply with and in response to U.S. Treasury Department Circular 230 Regulations.  ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN. If you are an individual with a disability who requires accommodation to participate, please let us know at the time of your registration so that we may consider your request.   ©2013 Solutions Law Press, Inc.  All rights reserved.


Wal-Mart Settlement Shows ADA Risks When Considering Employee Return To Work Accommodation Requests & Inquiries

February 25, 2013

From handling requests for light duty or other modifications follow a leave to investigating the medical justification for leaves or the fitness of an employee to return to work following a medical absence, employers need to use care to manage disability discrimination exposures.

Today’s announcement by the  Equal Employment Opportunity Commission (EEOC) that Wal-Mart Stores, Inc. and Wal-Mart Stores East, L.P.  (Wal-Mart) will pay $50,000 in back pay and damages to settle an EEOC disability discrimination lawsuit highlights the potential disability discrimination risks that employers can face when deciding not to provide a requested accommodation to a worker returning from medical leave while other recent enforcement actions show ADA risks from simply making medical inquiries to a worker on or returning from medical leave.

In its lawsuit against Wal-Mart, Case No. 2:11-CV-00834, filed in the U.S. District Court for the District of New Mexico, the EEOC charged that a Carlsbad, N.M Wal-Mart store violated the Americans With Disabilities Act (ADA) by firing a part-time sales clerk, Marcia Arney because the store refused to provide temporary accommodations ordered by her physician following a period of medical leave.

According to the EEOC lawsuit, when Arney, a 22-year Wal-Mart employee, showed the store manager a note from her doctor requesting an accommodation involving periodic breaks off her feet, the manager refused to return her to her job unless she obtained a medical release with no restrictions. The EEOC claims that had Wal-Mart inquired further, it would have known the accommodation need was temporary and in any case, that Wal-Mart easily could have accommodated the restriction. 

Under the consent decree settling the suit, Wal-Mart will conduct annual live ADA training of management  officials at its Carlsbad store and post a notice on its agreement with the EEOC so that employees are aware  of procedures for reporting disability discrimination. Wal-Mart also committed to not require  disabled workers to produce a full release from their doctor upon returning  from a medical leave. Further, Wal-Mart agreed to engage in an interactive process with disabled employees to find a  reasonable accommodation to assist them in performing their jobs and to report future requests for accommodation, as well as charges and lawsuits alleging disability discrimination to the EEOC for the duration of the decree.

Title I of the ADA prohibits employers from discriminating against individuals on the basis of disability in various aspects of employment.  The ADA’s provisions on disability-related inquiries and medical examinations reflect Congress’s intent to protect the rights of applicants and employees to be assessed on merit alone, while protecting the rights of employers to make sure that individuals in the workplace can efficiently perform the essential functions of their jobs.   An employer generally violates the ADA if it requires its employees to undergo medical examinations or submit to disability-related inquiries that are not related to how the employee performs his or her job duties, or if it requires its employees to disclose overbroad medical history or medical records.  Title I of the ADA also generally requires employers to make  reasonable accommodations to employees’ and applicants’ disabilities as long as  this does not pose an undue hardship or the employer the employer otherwise proves employing a disabled person with reasonable accommodation could not eliminate significant safety concerns.  Employers generally bear the burden of proving these or other defenses.  Employers are also prohibited from excluding individuals with disabilities unless they show that the exclusion is consistent with business necessity and they are prohibited from retaliating against employees for opposing practices contrary to the ADA.  Violations of the ADA can expose businesses to substantial liability.

As reflected by the Wal-Mart, violations of the employment provisions of the ADA may be prosecuted by the EEOC or by private lawsuits and can result in significant judgments.  Disabled employees or applicants that can prove they fully were denied reasonable accommodations or otherwise subjected to prohibited disability discrimination under the ADA generally can recover actual damages, attorneys’ fees, and up to $300,000 of exemplary damages (depending on the size of the employer).   

The lawsuit against Wal-Mart is part of a wave of lawsuits in which the EEOC or other agencies under the Obama Administration are aggressively challenging medical examination and other medical screenings by private and public employers.  In the Wal-Mart case, the suit challenged an employer’s refusal to provide requested accommodations.  In other cases, however, the EEOC or other agencies under the Obama Administration also have challenged medical inquiries made by an employer to employees during or returning from leave.  Both types of suits send clear signals that employers should use care in making medical inquiries and responding to requests for accommodation from employees taking or returning from medical leaves.  See, e.g., Employer Pays $475,000 To Settle ADA Discrimination Lawsuit Challenging Medical Fitness Testing For EMTs, Firefighters & Other Public Safety Worker’s.

To help mitigate the expanded employment liability risks , businesses generally should act to manage their exposures.  Management needs to recognize the likely need to defend medical inquiries, decisions to refuse accommodation requests or other similar actions that arise when dealing with employees taking or returning from medical leave due to a disability, illness or injury.  Employers need to critically check and document the legitimate business justification for making a medical inquiry or refusing a requested accommodation based on a well-documented investigation and analysis tailored to the specific situation of each requesting employee.

Businesses also should consider tightening their documentation regarding their procedures and processes governing the  collection and handling records and communications that may contain information that could be helpful or hurtful in the event of a discrimination charge.  Businesses need to ensure that all required records and statistics are collected.  In addition, businesses also should consider strengthening record creation and retention efforts to help preserve other evidence that could be invaluable to defending charges and change the way that decisions are made and documented to position their organizations to more effectively demonstrate the defensibility of their employment and other business activities against potential nondiscrimination charges.

As part of this process, businesses also should carefully review their employment records, group health plan, family leave, disability accommodation, and other existing policies and practices to comply with, and manage exposure under the new genetic information nondiscrimination and privacy rules enacted as part of the Genetic Information and Nondiscrimination Act (GINA) signed into law by President Bush on May 21, 2008.  Effective November 21, 2009, Title VII of GINA amends the Civil Rights Act to prohibit employment discrimination based on genetic information and restricts the ability of employers and their health plans to require, collect or retain certain genetic information. Under GINA, employers, employment agencies, labor organizations and joint labor-management committees face significant liability for violating the sweeping nondiscrimination and confidentiality requirements of GINA concerning their use, maintenance and disclosure of genetic information. Employees can sue for damages and other relief like currently available under Title VII of the Civil Rights Act of 1964 and other nondiscrimination laws.  For instance, GINA’s employment related provisions include rules that will:

  • Prohibit employers and employment agencies from discriminating based on genetic information in hiring, termination or referral decisions or in other decisions regarding compensation, terms, conditions or privileges of employment;
  • Prohibit employers and employment agencies from limiting, segregating or classifying employees so as to deny employment opportunities to an employee based on genetic information;
  • Bar labor organizations from excluding, expelling or otherwise discriminating against individuals based on genetic information;
  • Prohibit employers, employment agencies and labor organizations from requesting, requiring or purchasing genetic information of an employee or an employee’s family member except as allowed by GINA to satisfy certification requirements of family and medical leave laws, to monitor the biological effects of toxic substances in the workplace or other conditions specifically allowed by GINA;
  • Prohibit employers, labor organizations and joint labor-management committees from discriminating in any decisions related to admission or employment in training or retraining programs, including apprenticeships based on genetic information;
  • Mandate that in the narrow situations where limited cases where genetic information is obtained by a covered entity, it maintain the information on separate forms in separate medical files, treat the information as a confidential medical record, and not disclosure the genetic information except in those situations specifically allowed by GINA;
  • Prohibit any person from retaliating against an individual for opposing an act or practice made unlawful by GINA; and
  • Regulate the collection, use, access and disclosure of genetic information by employer sponsored and certain other health plans.

These employment provisions of GINA are in addition to amendments to the Health Insurance Portability and Accountability Act of 1996 (HIPAA), the Employee Retirement Income Security Act of 1974 (ERISA), the Public Health Service Act, the Internal Revenue Code of 1986, and Title XVIII (Medicare) of the Social Security Act that are effective for group health plan for plan years beginning after May 20, 2009.

If you have any questions or need help reviewing and updating your organization’s employment and/or employee practices in response to the ADAAA, GINA or other applicable laws, or if we may be of assistance with regard to any other workforce management, employee benefits or compensation matters, please do not hesitate to contact the author of this update, Cynthia Marcotte Stamer.

About The Author

Management attorney and consultant Cynthia Marcotte Stamer helps businesses, governments and associations solve problems, develop and implement strategies to manage people, processes, and regulatory exposures to achieve their business and operational objectives and manage legal, operational and other risks. Board certified in labor and employment law by the Texas Board of Legal Specialization, with more than 20 years human resource and employee benefits experience, Ms. Stamer helps businesses manage their people-related risks and the performance of their internal and external workforce though appropriate human resources, employee benefit, worker’s compensation, insurance, outsourcing and risk management strategies domestically and internationally. Recognized in the International Who’s Who of Professionals and bearing the Martindale Hubble AV-Rating, Ms. Stamer also is a highly regarded author and speaker, who regularly conducts management and other training on a wide range of labor and employment, employee benefit, human resources, internal controls and other related risk management matters.  Her writings frequently are published by the American Bar Association (ABA), Aspen Publishers, Bureau of National Affairs, the American Health Lawyers Association, SHRM, World At Work, Government Institutes, Inc., Atlantic Information Services, Employee Benefit News, and many others. For a listing of some of these publications and programs, see here. Her insights on human resources risk management matters also have been quoted in The Wall Street Journal, various publications of The Bureau of National Affairs and Aspen Publishing, the Dallas Morning News, Spencer Publications, Health Leaders, Business Insurance, the Dallas and Houston Business Journals and a host of other publications. Chair of the ABA RPTE Employee Benefit and Other Compensation Committee, a council member of the ABA Joint Committee on Employee Benefits, and the Legislative Chair of the Dallas Human Resources Management Association Government Affairs Committee, she also serves in leadership positions in many human resources, corporate compliance, and other professional and civic organizations. For more details about Ms. Stamer’s experience and other credentials, contact Ms. Stamer, information about workshops and other training, selected publications and other human resources related information, see here or contact Ms. Stamer via telephone at 469.767.8872 or via e-mailto  cstamer@solutionslawyer.net

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 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 or e-mailing this information here.   

©2012 Cynthia Marcotte Stamer.  Non-exclusive right to republish granted to Solutions Law Press.  All other rights reserved.

 


ADA May Require Food Allergy Accommodation By Employers, Schools & Businesses

January 25, 2013

The Justice Department’s recently Lesley  University Settlement (Settlement)  announced by the Justice Department on December, 21, 2012 should be a reminder to employers and others covered by the Americans With Disabilities Act (ADA) of the potential advisability of establishing policies or taking other steps to position their practices for providing food in the workplace or at workplace events or to the public to withstand challenge under the ADA.

 While technically referring to only schools, its recognition of some food allergies as disabilities under the ADA makes the Settlement likely to have significant implications for other businesses and organizations regulated by the employment, public accommodation, education or other disability discrimination rules of the ADA under certain circumstances.  Consequently, schools, as well as employers and businesses covered by the ADA should evaluate their practices for offering and providing accommodations for food allergies to minimize their exposure to disability discrimination charges under the ADA in light of the settlement.

Background of Lesley University Settlement

The charges of discrimination against Lesley University resulting in the Settlement challenged a university meal plan that Lesley University required all students living on campus to take part in, and pay for the meal plan.  Lesley University mandated that each student buy the meal service plan – even if some students with severe allergies could not eat the food available through the plan without risk of illness.   The Justice Department charged that Leslie University violated the ADA by failing to appropriate accommodate the special food needs for these students.  The Settlement Agreement resolves Justice Department that Lesley University with illegally discriminating in violation of the ADA by failing to adequately accommodate the special food needs with severe food allergies that constituted a disability under the ADA. 

While the Lesley University Settlement specifically concerned a school meal plan, the Justice Department’s treatment of persons with severe food allergies as disabled within the meaning of the ADA has potential implications for all types of entities regulated by the ADA.  Meanwhile, schools in particular should carefully review the Settlement as the Justice Department says it expects some but all aspects of the Settlement “will serve as a model for other schools – particularly those that require students to participate in a meal plan.” 

Under the Settlement, Lesley University agreed to act to change its food plan to ensure that its students with celiac disease and other food allergies to take advantage of and fully and equally enjoy the university’s food services in compliance with the ADA as well as requires Lesley to consider exempting from its mandatory plan students who cannot, because of disability, take full advantage of the University’s meal service plan.   

Among other things, Lesley University agreed to:

  • Provide gluten-free and allergen-free food options in its dining hall food lines in addition to its standard meal options;
  • Allow students with known allergies to pre-order allergen-free meals;
  • Display notices about food allergies and identify foods containing specific allergens;
  • Train food service and university staff about food allergy-related issues;
  • Provide a dedicated space in its main dining hall to store and prepare gluten-free and allergen-free foods; and
  • Work to retain vendors that accept students’ prepaid meal cards that also offer food without allergens.

Food Allergies as Disability Under ADA

According to the Justice Department, a disability as defined by the ADA is a mental or physical impairment that substantially limits a major life activity, such as eating. Major life activities also include major bodily functions, such as the functions of the gastrointestinal system. Some individuals with food allergies have a disability as defined by the ADA – particularly those with more significant or severe responses to certain foods. This would include individuals with celiac disease and others who have autoimmune responses to certain foods, the symptoms of which may include difficulty swallowing and breathing, asthma, or anaphylactic shock.

Settlement Implications For Employers, Schools & Other Businesses

Since the ADA has a common disability definition, this means that the recognition of food allergies as a disability likely will be used in other situations involving employers under the ADA’s employment provisions, businesses under the public accommodation provisions or others. 

While the Settlement reflects that food allergies may be disabilities, the Justice Department says the Settlement does not mean that the ADA requires that every place of public accommodation that serves food to the public under all circumstances provide gluten-free or allergen-free food. Accordingly to the Justice Department, the Lesley Agreement involved a mandatory meal program for a defined group of students. Because its meal plan was mandatory for all students living on campus, the Justice Department says the ADA required that the University make reasonable changes to the plan to accommodate students with celiac disease and other food allergies.

The Justice Department has pointed out that the rules governing when accommodation is required are different for schools versus restaurants or others that serve food to the general public.  According to the Justice Department, the public accommodation provisions of the ADA may require a restaurant or other business to take some reasonable steps to accommodate individuals with disabilities where it does not result in “fundamental alteration” of that restaurant’s operations.  Examples of such accommodations might include answering questions from diners about menu item ingredients, where the ingredients are known, or omitting or substituting certain ingredients upon request if the restaurant normally does this for other customers. 

However, the Justice Department has indicated that for purposes of the ADA’s public accommodation provisions, organizations are not required to accommodations that would require that the business to make a “fundamental alteration” to its operations.  For this purpose, the Justice Department has indicated that fundamental alteration is “a modification that is so significant that it alters the essential nature of the good or services that a business offers.” For example, the Justice Department says a restaurant is not required to alter its menu or provide different foods to meet particular dietary needs.  

While the Equal Employment Opportunity Commission (EEOC) and not the Justice Department has authority for the interpretation and enforcement of the ADA’s employment provisions, employers also can expect that the EEOC and/or private plaintiff’s will follow the lead in arguing that food allergies may qualify as disabilities for purposes of determining when employers serving or offering food in workplaces or at work-related events also may be required to make or offer accommodations to address the special needs of individuals with disabilities.

Although many employers may be tempted to discount the relevance of the Justice Department’s recognition of food allergies as a disability based on pre Americans With Disabilities Act Amendment Act (ADAAA) cases that viewed food allergies as not rising to the level of a disability under the ADA.  Since the ADAAA has greatly expanded the definition of a disability and made it easier for an employee to show that a condition is disabling within the meaning of the ADA, employers are cautioned against assuming that food allergies or other disabilities don’t qualify as disabilities based on pre-ADAAA precedent.

The ADAAA makes it more difficult for employers to establish that food allergies or other medical conditions are not disabilities.  As amended by the ADAAA, the ADA presently extends covers individuals as disabled when they have conditions that are “episodic or in remission,” as long as the condition causes symptoms which affect a “major life activity” when active.

Also, the ADAAA now provides that employers can no longer consider whether an individual could ameliorate the effects of the condition through medication or whether other actions.

In reliance upon these changes, the EEOC now takes the position that allergies producing life-threatening reactions are per se substantially limiting under the ADAAA.

Given the likelihood that the EEOC and private plaintiffs now are likely to assert that individuals affected by food allergies rights to accommodation or other ADA based claims in reliance upon the ADAAA, the settlement is likely to fuel added claims against employers, as well as schools and businesses under the ADA’s public accommodations provisions.  In response to these exposures, schools, businesses and employers should consider whether their existing practices and training of workers about ordering, offering or providing food should be tightened to reduce potential exposures under the ADA.

If you have any questions or need help reviewing and updating your organization’s employment and/or employee practices in response to the ADAAA, GINA or other applicable laws, or if we may be of assistance with regard to any other workforce management, employee benefits or compensation matters, please do not hesitate to contact the author of this update, Cynthia Marcotte Stamer.

About The Author

Management attorney and consultant Cynthia Marcotte Stamer helps businesses, governments and associations solve problems, develop and implement strategies to manage people, processes, and regulatory exposures to achieve their business and operational objectives and manage legal, operational and other risks. Board certified in labor and employment law by the Texas Board of Legal Specialization, with more than 20 years human resource and employee benefits experience, Ms. Stamer helps businesses manage their people-related risks and the performance of their internal and external workforce though appropriate human resources, employee benefit, worker’s compensation, insurance, outsourcing and risk management strategies domestically and internationally. Recognized in the International Who’s Who of Professionals and bearing the Martindale Hubble AV-Rating, Ms. Stamer also is a highly regarded author and speaker, who regularly conducts management and other training on a wide range of labor and employment, employee benefit, human resources, internal controls and other related risk management matters.  Her writings frequently are published by the American Bar Association (ABA), Aspen Publishers, Bureau of National Affairs, the American Health Lawyers Association, SHRM, World At Work, Government Institutes, Inc., Atlantic Information Services, Employee Benefit News, and many others. For a listing of some of these publications and programs, see here. Her insights on human resources risk management matters also have been quoted in The Wall Street Journal, various publications of The Bureau of National Affairs and Aspen Publishing, the Dallas Morning News, Spencer Publications, Health Leaders, Business Insurance, the Dallas and Houston Business Journals and a host of other publications. Chair of the ABA RPTE Employee Benefit and Other Compensation Committee, a council member of the ABA Joint Committee on Employee Benefits, and the Legislative Chair of the Dallas Human Resources Management Association Government Affairs Committee, she also serves in leadership positions in many human resources, corporate compliance, and other professional and civic organizations. For more details about Ms. Stamer’s experience and other credentials, contact Ms. Stamer, information about workshops and other training, selected publications and other human resources related information, see here or contact Ms. Stamer via telephone at 469.767.8872 or via e-mailto  cstamer@solutionslawyer.net

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 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 or e-mailing this information here.   

©2013 Cynthia Marcotte Stamer.  Non-exclusive right to republish granted to Solutions Law Press.  All other rights reserved.

©2013 Cynthia Marcotte Stamer.  Non-exclusive right to republish granted to Solutions Law Press.  All other rights reserved.


Peter Madoff 10 Sentence For Defrauding ERISA Plans Reminder Manage Plan Investment Responsibilities

December 27, 2012

Peter Madoff (Madoff), the former Chief Compliance Officer and Senior Managing Director of Bernard L. Madoff Investment Securities LLC (BLMI), was sentenced on December 20, 2012 to 10 years in prison after he pled guilty among other things, to conspiracy to commit securities fraud, tax fraud, mail fraud, ERISA fraud and falsifying records of an investment adviser.

In addition to the prison term, Madoff also was sentenced to one year of supervised release, ordered to pay a $200 special assessment, and ordered to forfeit $143.1 billion, including all of his real and personal property. This amount represents all of the investor funds paid into BLMIS from 1996 – the start of Madoff’s involvement in the conspiracy – through December 2008.

As part of the defendant’s forfeiture, the Government previously entered into a settlement with Madoff’s family that requires the forfeiture of all of his wife Marion’s and daughter Shana’s assets, and assets belonging to other family members. The surrendered assets include, among other things, several homes, a Ferrari and more than $10 million in cash and securities. Marion Madoff was left with approximately $771,733 to live on for the rest of her life.

Madoff’s Sentence Part of Continuing Actions Seeking To Rectify BLMIS Fraud

Among other things, the Superseding Information against Madoff charged that the overt acts in the conspiracy count also included, among other things, making false statements to investors about BLMIS’s compliance program and the nature and scope of its Investment Advisory business. Madoff pled guilty in June 2012. He was sentenced in Manhattan federal court by U.S. District Judge Laura Taylor Swain.

Manhattan U.S. Attorney Preet Bharara said: “Peter Madoff was a gatekeeper, who was supposed to guard against fraud, but instead enabled it – facilitating his brother Bernie’s breathtaking scheme by falsifying compliance records and lying to both regulators and clients of BLMIS. The decade he will spend in prison and the disgorgement of his assets are a just result. Our efforts to hold to account anyone and everyone who played a role in this unprecedented Ponzi scheme continue.”

According to the Superseding Information to which Madoff pled guilty and other court filings:

  • Madoff was employed at BLMIS from 1965 through December 2008. Beginning in 1969, he became the Chief Compliance Officer (“CCO”) and Senior Managing Director of BLMIS. In his role as CCO, Madoff created false and misleading BLMIS compliance documents, as well as false reports that were filed with the U.S. Securities and Exchange Commission (“SEC”) that materially misstated the nature and scope of BLMIS’s Investment Advisory (“IA”) business.
  • As CCO, Madoff created numerous false compliance documents in which he stated that he had performed compliance reviews of the trading in the BLMIS IA business on a regular basis, when in reality, the reviews were never performed. The false statements were designed to mislead regulators, auditors, and IA clients.
  • In August 2006, BLMIS registered as an investment adviser with the SEC. As a registered investment adviser, on at least an annual basis, BLMIS was required to file forms with the SEC that are used as part of the oversight process of investment advisers. Madoff was integrally involved with both the SEC registration process and in the creation of the forms, known as “Forms ADV,” which were materially false and misleading. The numerous false statements in the Forms ADV created the false appearance that BLMIS’s IA business had a small number of highly sophisticated clients and far fewer assets under management than was actually the case. Madoff also misrepresented that he, as CCO, ensured that reviews of the IA trading were being performed.
  • From 1998 through 2008, Madoff engaged in a tax fraud scheme involving the transfer of wealth within the Madoff family in ways that allowed him to avoid paying millions of dollars in required taxes to the IRS. Most, if not all of the “wealth,” came directly or indirectly from IA client funds held at BLMIS. The schemes in which he engaged also allowed Bernard L. Madoff to evade his tax obligations.
  • The methods by which Madoff engaged in tax fraud included the following:
  • Madoff also arranged for his wife to have a “no-show” job at BLMIS from which she received between approximately $100,000 to $160,000 per year in salary, a 401(k), and health benefits to which she was not entitled.
  • In December 2008, when the collapse of BLMIS was virtually certain, Madoff agreed with others to send the $300 million that remained in the IA accounts to preferred employees, family members and friends. BLMIS collapsed before the funds were ever disbursed. On December 10, 2008, one day prior to BLMIS’s collapse, Madoff also withdrew $200,000 from BLMIS for his personal use.
  • Madoff received approximately $15,700,000 from Bernard L. Madoff and his wife, and executed sham promissory notes to make it appear that the transfers were loans, in order to avoid paying taxes;
  • Madoff gave approximately $9,900,000 to family members, and in order to avoid paying taxes, executed sham promissory notes to make it appear that the transfers of these funds were loans;
  • Madoff did not pay taxes on approximately $7,750,000 that he received from BLMIS;
  • Madoff received approximately $16,800,000 from Bernard L. Madoff from two sham trades, and disguised the proceeds of the trades as long-term stock transactions in order to take advantage of the lower tax rate for long-term capital gains;
  • Madoff charged approximately $175,000 in personal expenses to a corporate American Express card and did not report those expenses as income.

Madoff  Victim Compensation Process Continues

In addition to the sentencing of Madoff, the Government has taken steps to clear the way to begin distributing assets forfeited by Peter Madoff in connection with the victim compensation process by filing a motion requesting that the Court find restitution to be impracticable, A similar motion was granted by United States Circuit Judge Denny Chin, who as a United States District Judge sentenced Bernard L. Madoff in 2009. The Department of Justice intends to return the assets forfeited as a result of the Madoff fraud to victims through the remission process.

Richard C. Breeden was retained to serve as Special Master on behalf of the Department of Justice to administer the process of compensating the victims of the Madoff fraud with the forfeited funds. A former chairman of the SEC, Mr. Breeden is Chairman of Richard C. Breeden & Co., which has been involved in (among other things) the administration and distribution of securities fraud claims since 1996. Among other things, Mr. Breeden has served as Corporate Monitor of WorldCom, Inc. and KPMG under its deferred prosecution agreement with the U.S. Attorney’s Office. Mr. Breeden also served as remission special master in connection with the fraud committed through Adelphia Communications Corporation. In April 2012, more than $728 million forfeited in connection with this Office’s investigation and prosecution of the Adelphia fraud was distributed to approximately 8,500 victims, the largest single distribution of forfeited assets to victims in Department of Justice history.

Now that a new Special Master has been retained, and given the pledge of SIPC Trustee Irving Picard and his counsel to lend their support and resources to the new Special Master for the benefit of the fraud victims, we expect the victim claims process to begin shortly. It is anticipated that victims who filed claims in the SIPA proceeding will not have to refile their claims to be eligible for remission. New information about the remission Special Master, and information about the victim claims process, will be posted on the Office’s Madoff website at http://www.justice.gov/usao/nys/vw_cases/madoff.html as soon as it becomes available, along with a link to a dedicated website Mr. Breeden’s firm will establish in connection with the remission proceedings.

Investment Advisors and Others With Discretion Over Funds Should Exercise Fiduciary Care

While the Madorf scandle represents an exceptionally large and long-standing stream of mishandling of employee benefit funds, the investigations and prosecutions also serve as a reminder of the need to carefully comply with the fiduciary responsibility and other requirements of ERISA and other laws to investment advisors and other employee benefit plan asset service providers, plan committees and fiduciaries and the plan sponsors, boards and other individuals responsible for investing or handling employee benefit monies or choosing the parties that possess and exercise that discretion. 

ERISA generally requires that plan asset investments be made prudently and for the exclusive benefit of participants and beneficiaries.  Service providers or others with discretionary responsibiliity or that are investment managers of plan assets must be prudently selected based on careful credentialing and other procedures.  e No prohibited transactions should be permitted.  Fees and other compensation must be set appropriately and properly reported in accordance with ERISA’s fee disclosure rules.  The actions and performance of parties investing in plan assets and their investment performance must be reviewed and monitored prudently.  Proper bonding must be maintained.  Concerns and questions about these activities must be timely investigated in a prudent manner.  Failure to properly conduct these and other ERISA fiduciary responsibilities can expose responsible parties to personal liability for losses, profits improperly realized, a fiduciary administrative penalties, disqualification to serve in plan fiduciary or other positions, and attorneys fees and other costs of recovery, as well as in certain cases like the Madorff fraud, criminal prosecution.

For Help or More Information

If you need help reviewing and updating, administering or defending your employee benefit, human resources, insurance, health care matters or related documents or practices to monitor or respond to evolving laws and regulations,  drafting or administering programs,  resolving or defending audits, investigations or disputes or other  employee benefit, human resources, safety, compliance  or risk management concerns, please contact the author of this update, Cynthia Marcotte Stamer.

About Ms. Stamer

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 24 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters.

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with these and other employment, employee benefit and compensation matters, Ms. Stamer continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, insurers and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals.  A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials concerning regulatory, investigatory or enforcement concerns.

Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the Editorial Advisory Board of Employee Benefits News, the editor and publisher of Solutions Law Press HR & Benefits Update and other Solutions Law Press Publications, and active in a multitude of other employee benefits, human resources and other professional and civic organizations.   She also is a widely published author and highly regarded speaker on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, Modern and many other national and local publications.   You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and register to receive future updates about developments on these and other concerns  see here or contact Ms. Stamer via telephone at 469.767.8872 or via e-mail to  cstamer@solutionslawyer.net.

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 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 or e-mailing this information here.

©2012 Cynthia Marcotte Stamer.  Non-exclusive right to republish granted to Solutions Law Press.  All other rights reserved.


IRS Plans To Issue 2013 Withholding Guidance By 12/31

December 26, 2012

With employers facing continuing uncertainty about how Congress will address expiring payroll and other tax provisions, the Internal Revenue Service (IRS) plans to issue guidance before December  31 on employer withholding responsibilities in 2013.

In a statement issued this week, the IRS said, “We are aware that employers have questions about 2013 withholding. Since Congress is still considering changes to the tax law, we continue to closely monitor the situation. We intend to issue guidance by the end of the year on appropriate withholding for 2013.”

For Help or More Information

If you need help reviewing and updating, administering or defending your group health or other employee benefit, human resources, insurance, health care matters or related documents or practices to respond to emerging health plan regulations, monitoring or commenting on these rules, defending your health plan or its administration, or other health or employee benefit, human resources or risk management concerns, please contact the author of this update, Cynthia Marcotte Stamer.

About Ms. Stamer

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 24 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters.

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with these and other employment, employee benefit and compensation matters, Ms. Stamer continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, insurers and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals.  A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials on regulatory, investigatory or enforcement concerns.

Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the Editorial Advisory Board of Employee Benefits News, the editor and publisher of Solutions Law Press HR & Benefits Update and other Solutions Law Press Publications, and active in a multitude of other employee benefits, human resources and other professional and civic organizations.   She also is a widely published author and highly regarded speaker on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, Modern and many other national and local publications.   You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and register to receive future updates about developments on these and other concerns  see here or contact Ms. Stamer via telephone at 469.767.8872 or via e-mail to  cstamer@solutionslawyer.net.

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 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 or e-mailing this information here.

©2012 Cynthia Marcotte Stamer.  Non-exclusive right to republish granted to Solutions Law Press.  All other rights reserved.


ESOP, Other Employee Plan Investments In Company Stock Land Plans, Fiduciaries, Sponsors & Others In Hot Water

December 10, 2012

 Companies that sponsor employee benefit plans that have purchased or own stock in their sponsor beware.  Declines in the stock value of company stock purchased by employee stock ownership plans (ESOP) or other employee benefit plans in their plan sponsor have a growing number of plans and the plan sponsors, sponsoring company owners and management, plan trustees and other plan fiduciaries in hot water with the Department of Labor.  ESOP or other employee plans that have purchased or allow investments in company stock and their sponsors, fiduciaries and advisors should carefully review for defensibility the current stock value, the purchase price and analysis supporting that purchase and other aspects of these investments of plan assets and take carefully documented action to prove the prudence and other appropriateness of the investment and continued retention of the investment in these assets.

Company Stock Investments Carry Special ERISA Risks

Purchases of company stock by an ESOP or other employee benefit plan can create a wide range of risks under the fiduciary responsibility rules of the Employee Retirement Income Security Act (ERISA).  When making investment or other decisions under an employee benefit plan, the general fiduciary duty standards of ERISA § 404 generally require plan fiduciaries to act prudently and solely in the interest of participants and beneficiaries. Meanwhile, except in certain narrow circumstances and subject to fulfillment of ERISA § 404,  the prohibited transaction rules of ERISA § 406 among other things prohibits plan fiduciaries from causing the plan to engage in a transaction, if he knows or should know that such transaction is a direct or indirect:

  • Sale or exchange, or leasing, of any property between the plan and a party in interest;
  • Furnishing of goods, services, or facilities between the plan and a party in interest;  
  • Transfer to, or use by or for the benefit of a party in interest, of any assets of the plan; or
  • Acquisition, on behalf of the plan, of any employer security or employer real property in violation of section 1107 (a) of this title.

Stock Drops Create Rising Exposures For Plans Invested In Company Stock

Amid economic downturns or other situations where the stock value of company held by plans significantly lower than the price the plan paid for the stock, the Labor Department, plaintiffs in private lawsuits or both may bring “stock drop” or other lawsuits against the plan, its sponsor and its officers and board members, its fiduciaries and others for breach of fiduciary duties under these rules. See e.g., Enron v. Tittle, 463 F.3d 410 (5th Cir. 2006); In Re: BP p.l.c. ERISA Litig., No. 4:10-cv-4214 (S.D. Texas); Vivian v. Worldcom (N.D. Cal. 2002).  Since the sponsoring company is a party-in-interest of the plan, using plan assets to purchase company stock or other activities resulting in the inclusion of company stock among the plan assets held by the plan creates presumptions of impropriety that impose higher than usual burdens upon the plan, its sponsor and fiduciaries to prove the appropriateness of the transaction.  See e.g., Pfeil v. State Street Bank & Trust Co., 671 F.3d 585 (6th Cir. 2012).

The filing of stock drop cases tends to rise and fall in reflection to the economic times. Following the economic downturn in 2002, federal courts saw a surge in stop drop case challenges as well as Labor Department enforcement actions.  The number of these cases dropped as the economy improved later in the decade only to rise again between 2010 and the present in response to the current economic crisis.  

Tough Economic Times Fueled Stock Drops Creating Rising Risks & Enforcement

The latest economic downturn is fueling resurgence in these “stock drop” challenges.  Fifteen stop drop lawsuits were filed during 2010 and 2011.  Additional suits and Labor Department stop drop challenges have emerged this year.

In Griffin v. Flagstar Bancorp, Inc., No. 11-1497 (6th Cir. 2012), for instance, plaintiffs alleged various fiduciaries allegedly breached their duties under ERISA by allowing employer stock to be offered as a 401(k) plan investment option while the company was facing a precarious financial situation.  The Griffin court overruled the lower court’s dismissal of the plaintiff’s lawsuit.  The Court of Appeals held that the defendants offering of company stock to plan participants made ERISA’s “safe harbor” (Section 404(c)) provision for participant self-directed investments inapplicable.  The Sixth Circuit ruled “[a]fter reviewing the factual allegations in the complaint – which go far beyond documenting a simple drop in stock price to recite announcements from Flagstar itself, statements by analysts and financial media publications, and actions taken by Flagstar suggesting a precarious financial situation– we must conclude that the complaint raises a plausible claim for breach of fiduciary duty.”

In addition to private class action lawsuits like Griffin, plans holding company stock, their sponsors, owners, management and fiduciaries also need to be ready to defend against investigations and enforcement by the Labor Department, which often zealously investigates and takes enforcement action against plans, their fiduciaries, sponsors, company boards and management and others for losses to plan asset values resulting due to the investment or retention of investments by their plans in company stock. See also Labor Department Backs M&I Employees In Stock-Plan Suit.

Labor Department Suits Show Particular Risks For ESOPs

Over the past year, the Labor Department has been particularly aggressive in taking action when the value of company stock purchased or held by employee stock purchase plans or “ESOPS” drops significantly.  

  • Rembar

For instance, the purchase by the Rembar Inc. Employee Stock Ownership Plan (“Rembar Plan”) of all the stock of its sponsor, Rembar Inc. has landed the trust company that served as the Plan’s independent fiduciary and Rembar Inc.’s owner and Chief Executive Officer in hot water.

The Labor Department is suing Rembar Inc.’s Chief Executive Officer and owner, Frank Firor, First Bankers Trust Services Inc. and the Rembar Plan to recover losses that the Labor Department charges Rembar Plan participants suffered because the Rembar Plan paid too much when it purchased all of the stock of Rembar Inc.

Rembar Inc. manufactures and distributes precision parts made from refractory metals. The Labor Department lawsuit alleges that, in June 2005, First Bankers Trust Services allowed the Rembar Plan to purchase 100 percent of the company’s stock from Firor and Firor’s relatives for $15.5 million. A Labor Department investigation found that First Bankers Trust Services failed to comply with its duty to understand the valuation report that set the purchase price, identify and question assumptions in the report, and verify that the conclusions in the report were consistent with the company’s financial data. As a result of First Bankers Trust Services’ failure to comply with its fiduciary duties, the Labor Department claims the Rembar Plan overpaid for the stock and suffered losses.  The suit seeks, among other things, to recover jointly from First Bankers Trust Services and Firor all losses suffered by the Rembar Plan.

  • Maran

Similarly, the Labor Department also has filed an ERISA stock drop lawsuit against the Maran Inc. Employee Stock Ownership Plan (Maran Plan), First Bankers Trust Services Inc. and others to recover losses suffered by participants. 

According to the pleadings, First Bankers Trust Services was hired as an independent fiduciary and trustee in connection with the company’s ESOP to decide whether, and at what price, to purchase shares of Maran Inc. from majority shareholders.  The suit charges First Bankers Trust Services violated ERISA in 2006 when it approved the ESOP’s purchase of 49 percent of the outstanding stock of Maran Inc. for about $71 million, which was more than the fair market value. The Labor Department claims that as a result of the purchase of overvalued stock, the Maran Plan participants suffered significant losses.  The suit seeks to recover all losses and have First Bankers Trust Services enjoined from serving as a fiduciary to ESOP plans.  

  • Parrot

Likewise, the Labor Department in April sued in the U.S. District Court for the Northern District of California seeking to recover losses suffered by participants in the Parrot Cellular Employee Stock Ownership Plan (Parrot Plan).

The suit names as a defendant Dennis Webb, the principal owner of Entrepreneurial Ventures Inc. (EVI), which operates Parrot Cellular telephone retail stores in northern and central California, and is the sponsor of the Parrot Plan; EVI executives Matthew Fidiam and J. Robert Gallucci; Consulting Fiduciaries Inc., an Illinois company that served as the independent fiduciary and investment manager for the Parrot Plan in 2002 when the Parrot Plan bought 90 percent of EVI stock. 

According to the pleadings, the Parrot Plan paid for more than $28 million to buy approximately 90 percent of EVI’s stock in 2002. Around the same time as the stock purchase, EVI also set aside $4 million pursuant to a deferred compensation agreement with Webb and entered into a second executive compensation agreement with Webb for $12 million.

The Labor Department charges defendants allegedly violated ERISA by rejecting their fiduciary duties of loyalty and prudence to the plan, engaging in self-dealing, permitting or engaging in prohibited transactions, and failing to monitor the performance of the plan’s appraiser when they caused or permitted the Parrot Plan to purchase EVI stock for more than fair market value.  The suit also charges that Webb enriched himself by millions of dollars at the expense of the plan and its participants because a reasonable value for the company as of November 2002 was far less than the amounts the Parrot Plan paid for the stock and the total deferred compensation agreements entered into with Webb.

In addition to seeking the recovery of all losses to the Parrot Plan resulting from the above violations, the Labor Department’s suit seeks the disgorgement of unjust profits from Webb that he received from the two deferred compensation agreements and from his sale of EVI stock to the Parrot Plan.

Plans, Sponsors and Fiduciaries Must Act Continously To Manage Risks

These and other actions send a stong message for ESOP and other employee benefit plans, their fiduciaries and sponsors about the need to continuously and prudently evaluate and monitor the investment of plan assets in company stock,the analysis and decisions about whether to continue to keep and offer this stock under the plan, as well as the qualifications, credentials and conduct of the fiduciaries and others empowered to influence these decisions. The Labor Department’s statement in announcing the Parrot litigation sums up the messages from these cases. “Plan officials are required by law to manage the ESOP in a careful, prudent manner and to act solely to benefit the plan’s participants,” said Jean Ackerman, director of EBSA’s San Francisco Regional Office, which conducted the investigation. “This action underscores the department’s commitment to protect the benefits that employers promise to their employees.”  Plan fiduciaries, sponsors and their management, service providers and consultants participating in these activities need to both act with care and carefully document their actions to position to defend potential challenges.

Plans, their sponsors and fiduciaries also should ensure that appropriate steps are taken in selecting the fiduciaries, management and service providers responsible for administering or overseeing the administration of their plans, the selection of vendors, and other critical details.  Appropriate background checks and other credentialing should be done both at commencement and periodically.  Bonding and fiduciary liability insurance should be arranged and reviewed periodically along with their activities.  Documentation of these and other steps should be carefully created and preserved.

When and if a change in stock value or other event that could compromise the investment occurs, consideration should be given as to the responsibilities that such events create under ERISA.  As company leaders often have dual responsibilities to both the company and the plan, it is important that the company sponsoring the plan, its management and owners learn in advance how these responsibilities impact each other so that they are aware of the issues and have a good understanding of responsibilities and options as situations evolve.

 For Help or More Information

If you need help reviewing and updating, administering or defending your employee benefit, human resources, insurance, health care matters or related documents or practices to monitor or respond to evolving laws and regulations,  drafting or administering programs,  resolving or defending audits, investigations or disputes or other  employee benefit, human resources, safety, compliance  or risk management concerns, please contact the author of this update, Cynthia Marcotte Stamer.

About Ms. Stamer

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 24 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters.

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with these and other employment, employee benefit and compensation matters, Ms. Stamer continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, insurers and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals.  A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials about regulatory, investigatory or enforcement concerns.

Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the Editorial Advisory Board of Employee Benefits News, the editor and publisher of Solutions Law Press HR & Benefits Update and other Solutions Law Press Publications, and active in a multitude of other employee benefits, human resources and other professional and civic organizations.   She also is a widely published author and highly regarded speaker on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, Modern and many other national and local publications.   You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and register to receive future updates about developments on these and other concerns  see here or contact Ms. Stamer via telephone at 469.767.8872 or via e-mail to  cstamer@solutionslawyer.net.

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 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 or e-mailing this information here.

©2012 Cynthia Marcotte Stamer.  Non-exclusive right to republish granted to Solutions Law Press.  All other rights reserved.


Confirm Qualified Plans Updated By Reviewing Against 2012 Required Plan Qualification Requirements Change List

December 9, 2012

Qualified plan sponsors, fiduciaries, administrators and advisors and other service providers should review the 2012 Cumulative List of Changes in Plan Qualification Requirements (2012 Cumulative List) in Notice 2012-76 to identify any required or recommended changes to promote continued fulfillment of applicable qualification requirements.

The Internal Revenue Service (IRS) publishes a cumulative list annually to guide plan sponsors and practitioners submitting qualifed plan determination letter applications for plans during the upcoming year.  The 2012 Cumulative Listinforms plan sponsors of issues the Service has specifically identified for review in determining whether a plan filing in Cycle C has been properly updated.  Specifically, the 2012 Cumulative List reflects law changes under the Pension Protection Act of 2006 (PPA ’06), Pub. L. 109-280; the U.S. Troop Readiness, Veterans’ Care, Katrina Recovery and Iraq Accountability Appropriations Act, 2007, Pub. L. 110-28; the Heroes Earnings Assistance and Relief Tax Act of 2008 (HEART Act), Pub. L. 110-245; the Worker, Retiree, and Employer Recovery Act of 2008 (WRERA), Pub. L. 110-458; the Small Business Jobs Act of 2010 (SBJA), Pub. L. 111-240; the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 (PRA 2010), Pub. L. No. 111-192; and the Moving Ahead for Progress in the 21st Century Act (MAP-21), Pub. L. 112-141. 

The 2012 Cumulative List sets forth guidance and regulations implementing these requirements and provides certain model amendment language. 2012 Retirement Plan Notices are published here.

The IRS intends that the 2012 Cumulative List will be used by plan sponsors and practitioners submitting determination letter applications for plans during the period beginning February 1, 2013 and ending January 31, 2014.  In order to be qualified, a plan must comply with all relevant qualification requirements, not just those on the 2012 Cumulative List including those enacted or effective after publication of the 2012 Cumulative List.  The list of changes in the Cumulative List does not extend the deadline for amending a qualified plan to comply with any statutory, regulatory, or guidance changes. 

Plans using 2012 Cumulative List will primarily be single employer individually designed defined contribution plans and single employer individually designed defined benefit plans that are in Cycle C, and § 414(d) governmental plans (including governmental multiemployer or governmental multiple employer plans) that choose to file during Cycle C.  Generally an individually designed plan is in Cycle C if the last digit of the employer identification number of the plan sponsor is 3 or 8.  In addition, the 2012 Cumulative List will be used by sponsors of defined benefit pre-approved plans (that is, defined benefit plans that are master and prototype (M&P) or volume submitter (VS) plans) for the second submission under the remedial amendment cycle described in Rev. Proc. 2007-44.

The IRS issued Notice 2012-76 in conjunction with the determination letter program for individually designed plans eligible for Cycle C.  The IRS is scheduled to accept determination letter applications for Cycle C individually designed plans from February 1, 2013 to January 31, 2014. In addition, the Service will start accepting opinion and advisory letter applications for defined benefit pre-approved plans beginning on February 1, 2013. The 12-month submission period for non-mass submitter sponsors and practitioners, word-for-word identical adopters, and M&P minor modifier placeholder applications will end on January 31, 2014. The 9-month submission period for mass submitters will end on October 31, 2013.

For Help or More Information

If you need help reviewing and updating, administering or defending your employee benefit, human resources, insurance, health care matters or related documents or practices to monitor or respond to evolving laws and regulations,  drafting or administering programs,  resolving or defending audits, investigations or disputes or other  employee benefit, human resources, safety, compliance  or risk management concerns, please contact the author of this update, Cynthia Marcotte Stamer.

About Ms. Stamer

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 24 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters.

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with these and other employment, employee benefit and compensation matters, Ms. Stamer continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, insurers and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals.  A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials concerning regulatory, investigatory or enforcement concerns.

Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the Editorial Advisory Board of Employee Benefits News, the editor and publisher of Solutions Law Press HR & Benefits Update and other Solutions Law Press Publications, and active in a multitude of other employee benefits, human resources and other professional and civic organizations.   She also is a widely published author and highly regarded speaker on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, Modern and many other national and local publications.   You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and registerto receive future updates about developments on these and other concerns  see here or contact Ms. Stamer via telephone at 469.767.8872 or via e-mail to  cstamer@solutionslawyer.net.

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 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 or e-mailing this information here.

©2012 Cynthia Marcotte Stamer.  Non-exclusive right to republish granted to Solutions Law Press.  All other rights reserved.


Reminder To Amend Health FSA Plan Terms To Include ACA $2500 Contribution Before 2013 Plan Year Begins

December 4, 2012

Employers and other health plan sponsors, insurers, and their administrators and service providers are reminded that the $2500 limit on pre-tax contributions to health flexible spending account plans under Internal Revenue Code section 125(i) takes effect on the first day of the 2013 plan year.   Notice 2012-40 makes clear that the IRS requires that this limitation be included in the plan document before the first day of the plan year for the plan to remain qualified under Code section 125.  Employers making this amendment likely wll want to draft this provision to preserve the option to adjust the limit as adjusted in the Code for post-2013 plan years.  Code section 125(i) provides for inflation adjustments the $2500.00 limit after 2013.

Most health flexible spending account plans already cap the annual contribution that employees can contribute to limit exposure to the “at-risk” requirements of current IRS regulations.   The at risk rule is a requirement imposed by IRS regulations that mandates that a health flexble spending account plan must make the full amount of the annual contribution of an employee available to the employee beginning with the first day of the plan year.  This provision has been highly contested as there is no express Code language authorizing or mandating this at risk requirement.  Along with providing guidance about the Code section 125(i) limit Notice 2012-40 also indicates that the IRS is reconsidering the need for and future of the at-risk requirement.

Health FSA Limit Change Just Tip of Iceberg

The new Code section 125(i) limit is only one of a plethora of statutory and regulatory changes impacting health benefit arrangements enacted by health care reform.  The effective date of these requirements spans from 2009 to 2017.  As implementation of these changes moves forward health plan design and administration requirements are changing rapidly as the Departments of Health and Human Services IRS, Department of Labor and state insurance agencies finalize arrangements and guidance governing the implementation and enforcement of the ACA health care reforms scheduled to take effect and to tweek guidance on provisions already effective under the law.  Employers and insurers now must get cracking to update their programs and cost estimates to comply with both existing and new guidance while keeping a close eye out for potential changes to ACA or other federal or state health coverage laws as the new Congress is expected to continue to discuss refinements or other changes when the new Congress begins work in January 2013.

What Should Employers Do To Cope With These & Other Health Plan Mandates?

Facing the operational and financial challenges of meeting these mandates, many business leaders continue report significant concern about what they should do to respond to these requirements.  For some practical steps that businesses confronting these issues should take to cope with ACA and other health plan responsibilities, check out the “12 Steps Every Employer With A Health Plan Should Do Now” article by Cynthia Marcotte Stamer in the October 26, 2012 online edition of Texas CEO Magazine. To read the full article, see here.

Clearly in light of the new guidance, employers, insurers, health plan fiduciaries and their service providers need to act quickly to familiarize themselves with the guidance and make any need adjustments to their plans, communications, practices and budgets warranted by the new guidance and remain vigilent for and prepared to do the same with other guidance and reform proposals as it is released.

Beyond responding to the new guidance and other future developments, most health plan sponsors, insurers, administrators and other fiduciaries, and their vendors also should consider conducting this specific analysis and update of their health benefit programs in the context of a broader strategy.

In her 12-Steps Article, Ms. Stamer writes, “While most employers and insurers of employment-based group health plans view with great concern radically expanded health plan responsibilities taking effect in 2014, many are failing to take steps critical to manage exposures and costs already arising from the Affordable Care Act (ACA) and other federal health plan regulations.”

In the article, Ms Stamer discusses the following 12 steps that she suggests most businesses consider to help catch up with current responsibilities and to help their business manage future costs and responsibilities:

  1. Know The Cast Of Characters & What Hat(s) They Wear
  2. Know What Rules Apply, and How They Affect a Group Health Plan
  3. Review and Update Health Plan Documents to Meet Requirements and Manage Exposure
  4. Update the Plan For Changing Compliance Requirements and Enhanced Defensibility
  5. Consistency Matters: Build Good Plan Design, Documentation and Processes, and Follow Them
  6. Ensure the Correct Party Carefully Communicates About Coverage and Claims in a Compliant, Timely, Prudent, Provable Manner
  7. Prepare For ACA’s Expanded Data Gathering and Reporting Requirements
  8. Select, Contract and Manage Vendors With Care
  9. Help Plan Members Build Their Health Care Coping Skills With Training and Supportive Tools
  10. Pack The Parachute and Locate The Nearest Exit Doors
  11. Get Moving On Compliance and Risk Management Issues
  12. Provide Input On Affordable Care Act Rules

For Help or More Information

If you need help reviewing and updating, administering or defending your group health or other employee benefit, human resources, insurance, health care matters or related documents or practices to respond to emerging health plan regulations, monitoring or commenting on these rules, defending your health plan or its administration, or other health or employee benefit, human resources or risk management concerns, please contact the author of this update, Cynthia Marcotte Stamer.

About Ms. Stamer

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 24 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters.

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with these and other employment, employee benefit and compensation matters, Ms. Stamer continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, insurers and others to watch and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals.  A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials about regulatory, investigatory or enforcement concerns.

Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the Editorial Advisory Board of Employee Benefits News, the editor and publisher of Solutions Law Press HR & Benefits Update and other Solutions Law Press Publications, and active in a multitude of other employee benefits, human resources and other professional and civic organizations.   She also is a widely published author and highly regarded speaker on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, Modern and many other national and local publications.   You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and register to receive future updates about developments on these and other concerns  see here or contact Ms. Stamer via telephone at 469.767.8872 or via e-mail to  cstamer@solutionslawyer.net.

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 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 or e-mailing this information here.

©2012 Cynthia Marcotte Stamer.  Non-exclusive right to republish granted to Solutions Law Press.  All other rights reserved.


2013 Maximum Yearly PBGC Guaranteed Pension Benefit Amount To Increase Slightly In 2013

November 28, 2012

The yearly maximum guaranteed benefit for a 65-year-old retiree under the Pension Benefit Guaranty Corporation (PBGC) insurance program will increase to almost $57,500 in 2013, up from $56,000 in 2012.  Beginning in 2013, the PBGC announced November 27, 2012 that the maximum yearly guarantee for a 65-year-old retiree is $57,477.24. The increase is not retroactive.

The slight increase in the  guaranteed benefit is likely to be meaningful for the many pensioners receiving benefits under pension plans covered by the PBGC insurance program. This program insures guaranteed benefits amounts for pensioners of defined benefit plans covered by the PBGC insurance programs that are underfunded under the PBGC rules when terminated and otherwise meet program requirements.  Most retirees who get their pension from PBGC — almost 85 percent — receive the full amount of their promised benefit. In some cases, retirees can receive more than the PBGC maximum guarantee.

The PBGC maximum guarantee is based on a formula prescribed by federal law. Yearly amounts are higher for people older than age 65, and lower for those who retire earlier or choose survivor benefits (see chart).  If a pension plan ends in 2013, but a retiree does not begin collecting benefits until a future year, the 2013 rates still apply. For plans that terminate as a result of bankruptcy, the maximum yearly rates are guided by the limits in effect on the day the bankruptcy started, not the day the plan ended.

The following chart shows the 2013 annual and monthly maximum benefit guarantees for retirees from ages 45 to 75. The maximum amount is lower for retirees who begin getting benefits at ages below 65, reflecting the fact that younger retirees receive more monthly pension checks over a longer lifetime. The maximum amount is higher for benefits starting at ages above 65, because older retirees receive fewer monthly pension checks over their expected lifetimes.

PBGC Maximum Monthly Guarantees for 2013
Age Annual Maximum Monthly Maximum Monthly Joint and 50% Survivor Maximum*
75 174,730.80 14,560.90 13,104.81
74 158,867.04 13,238.92 11,915.03
73 143,003.40 11,916.95 10,725.26
72 127,139.64 10,594.97 9,535.47
71 111,275.88 9,272.99 8,345.69
70 95,412.24 7,951.02 7,155.92
69 85,641.12 7,136.76 6,423.08
68 77,019.48 6,418.29 5,776.46
67 69,547.44 5,795.62 5,216.06
66 63,225.00 5,268.75 4,741.88
65 57,477.24 4,789.77 4,310.79
64 53,453.88 4,454.49 4,009.04
63 49,430.40 4,119.20 3,707.28
62 45,407.04 3,783.92 3,405.53
61 41,383.56 3,448.63 3,103.77
60 37,360.20 3,113.35 2,802.02
59 35,061.12 2,921.76 2,629.58
58 32,762.04 2,730.17 2,457.15
57 30,462.96 2,538.58 2,284.72
56 28,163.88 2,346.99 2,112.29
55 25,864.80 2,155.40 1,939.86
54 24,715.20 2,059.60 1,853.64
53 23,565.72 1,963.81 1,767.43
52 22,416.12 1,868.01 1,681.21
51 21,266.52 1,772.21 1,594.99
50 20,117.04 1,676.42 1,508.78
49 18,967.44 1,580.62 1,422.56
48 17,817.96 1,484.83 1,336.35
47 16,668.36 1,389.03 1,250.13
46 15,518.88 1,293.24 1,163.92
45 14,369.28 1,197.44 1,077.70
* Both spouses the same age

The PBGC insurance program is funded through insurance premiums paid by covered plans.  In recent years, the number of underfunded plans has increased due to a lagging economy, declines in market performance and other factors.  The demands on the PBGC insurance program prompted Congress to increase premiums, modify pension funding rules and enact various other reforms in an effort to shore up the PBGC insurance program.  The PBGC also has undertaken a number of regulatory and operational reforms.  Companies sponsoring plans covered by the PBGC insurance program should review their existing funding and insurance requirements to ensure that they are in compliance with existing rules and taking advantage of  the most favorable opportunities under these rules.  In addition, companies sponsoring defined benefit plans govered by the PBGC insurance program and/or the Internal Revenue Code and Employee Retirement Income Security Act’s minimum funding rules or entities that are  part of commonly controlled or affiliated groups of companies, purchasing stock or assets from such company groups or lending to or investing in such entities should evaluate the funding status of these programs and the responsibilities and liability exposures that might impact their interests.

For additional information, see PBGC’s fact sheet “Pension Gurantees” and for information about the benefits guaranteed by the PBGC, see “Making Sense of the Maximum Insurance Benefit.”

For Help or More Information

If you need help reviewing and updating, administering or defending your employee benefit, human resources, insurance, health care matters or related documents or practices to respond to emerging health plan regulations, monitoring or commenting on these rules, defending your health plan or its administration, or other health or employee benefit, human resources or risk management concerns, please contact the author of this update, Cynthia Marcotte Stamer.

About Ms. Stamer

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 24 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters. 

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with these and other employment, employee benefit and compensation matters, Ms. Stamer continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, insurers and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals.  A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials concerning regulatory, investigatory or enforcement concerns. 

Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the Editorial Advisory Board of Employee Benefits News, the editor and publisher of Solutions Law Press HR & Benefits Update and other Solutions Law Press Publications, and active in a multitude of other employee benefits, human resources and other professional and civic organizations.   She also is a widely published author and highly regarded speaker on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, Modern and many other national and local publications.   You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and registerto receive future updates about developments on these and other concerns  see here or contact Ms. Stamer via telephone at 469.767.8872 or via e-mail to  cstamer@solutionslawyer.net.

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 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 or e-mailing this information here.   

©2012 Cynthia Marcotte Stamer.  Non-exclusive right to republish granted to Solutions Law Press.  All other rights reserved.


Rare Court Order Telling Union To Stop Filing Grievances Example Of Employer Risks When Caught Between Competiting Unions

November 23, 2012

A district court judge in Washington has ordered the International Longshore and Warehouse Union (ILWU) to stop processing grievances and filing lawsuits against a competitive union, the International Brotherhood of Electrical Workers (IBEW), and, pending the outcome of further litigation, employers assigning work of plugging in, unplugging and monitoring refrigerated shipping containers at the Port of Portland to IBEW.  The litigation between the two competing unions shows how employers can get caught in risky, no-win liability exposures as a result of power battles between competing unions over the right to represent workers performing services for the employers.

The injunctive order steps from a dispute between both unions over which union is entitled to represent a group of workers. Both unions claim the work, citing various contracts and collective bargaining agreements. In August 2012, the National Labor Relations Board issued a decision concluding that the employees represented by the IBEW are entitled to the work. Despite that ruling, the ILWU and two of its locals have continued to file and process grievances against employers serving as carriers at the port, seeking lost wages for work assigned to the IBEW. The ILWU also filed a claim against the IBEW in federal court under the Labor-Management Relations Act.

In granting the petition for injunctive relief from the NLRB’s Regional Office in Seattle late Wednesday, November 22, 2012, U.S. District Judge Michael H. Simon found that, by filing grievances and seeking enforcement of subsequent awards despite the Board’s decision, the ILWU had the unlawful secondary object of pressuring shipping carriers to stop doing business with the Port of Portland. He enjoined the union from filing, processing, maintaining, prosecuting, or threatening grievances or new lawsuits in the matter against the union as well as the carrier employers. With respect to the dispute with IBEW, the court ruled that the continued filing of the grievances against the IBEW constituted an unfair labor practice because the NLRB ruling already had recognized the IBEW as the authorized representative of the covered employees performing the work.

Concerning his decisions to also bar the ILWU from suing and filing charges against the employing carriers that have been caught in the war between the two unions, the Court issued a temporary injunction pending the outcome of the litigation. The court noted that the question of whether the NLRB ruling prohibited the carrier employers from subcontracting work covered by the NLRB order could not be permanently resolved based in the facts on the record, but that the IBEW had produced sufficient evidence of likely success on merits and irreparable harm to justify the court’s issuance of a temporary injunction.

While federal courts rarely enjoin unions under the National Labor Relations Act, the federal court in this matter found in light of the NLRB ruling in favor of the other union, the court’s decision in favor of the IBEW allows the IBEW to move forward for the time being as the  representative of the workers.  Concurrently, the court’s decision allows the employers caught between the two unions to continue operations for the time being by assigning work to the IBEW workers unless and until the ILWU proves its entitlement to that work.

For Help or More Information

If you need help reviewing and updating, administering or defending your employee benefit, human resources, insurance, health care matters or related documents or practices to respond to emerging health plan regulations, monitoring or commenting on these rules, defending your health plan or its administration, or other health or employee benefit, human resources or risk management concerns, please contact the author of this update, Cynthia Marcotte Stamer.

About Ms. Stamer

A Board Certified Labor & Employment attorney and Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 24 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters. 

Ms. Stamer is widely known for her extensive and creative knowledge and experienced with these and other labor and employment, employee benefit and compensation matters, Ms. Stamer continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, insurers and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals.  A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials concerning regulatory, investigatory or enforcement concerns. 

Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the Editorial Advisory Board of Employee Benefits News, the editor and publisher of Solutions Law Press HR & Benefits Update and other Solutions Law Press Publications, and active in a multitude of other employee benefits, human resources and other professional and civic organizations.   She also is a widely published author and highly regarded speaker on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, Modern and many other national and local publications.   You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and registerto receive future updates about developments on these and other concerns  see here or contact Ms. Stamer via telephone at 469.767.8872 or via e-mail to  cstamer@solutionslawyer.net.

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 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 or e-mailing this information here.   

©2012 Cynthia Marcotte Stamer.  Non-exclusive right to republish granted to Solutions Law Press.  All other rights reserved.


IRS OKs Retirement Plans Allowing Plan Loans & Hardship Withdrawals To Hurricane Sandy Victims

November 23, 2012

Retirement plan fiduciaries of plans covering participants impacted by Hurricane Sandy seeking loans or hardship withdrawals received some welcome guidance from the Internal Revenue Service (IRS). 

The IRS announced November 16 that 401(k)s and similar employer-sponsored retirement plans can make loans and hardship distributions to victims of Hurricane Sandy and members of their families. Read News Release IR-2012-93. For more information, read Announcement 2012-44.

Plan fiduciaries dealing with requests or  wishing to offer this option to participants affected by Hurricane Sandy should check this guidance along with existing plan terms and associated loan and hardship withdrawal rules to confirm that  their plan terms contain  all necessary provisions to use this guidance and their plan’s loan or  hardship withdrawal provisions before moving forward.  Assuming that the plan contains appropriate provisions and the necessary requirements are met,the guidance says plan fiduciaries can  authorize these requests.

For Help or More Information

If you need help reviewing and updating, administering or defending your employee benefit, human resources, insurance, health care matters or related documents or practices to respond to emerging health plan regulations, monitoring or commenting on these rules, defending your health plan or its administration, or other health or employee benefit, human resources or risk management concerns, please contact the author of this update, Cynthia Marcotte Stamer.

About Ms. Stamer

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 24 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters. 

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with these and other employment, employee benefit and compensation matters, Ms. Stamer continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, insurers and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals.  A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials concerning regulatory, investigatory or enforcement concerns. 

Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the Editorial Advisory Board of Employee Benefits News, the editor and publisher of Solutions Law Press HR & Benefits Update and other Solutions Law Press Publications, and active in a multitude of other employee benefits, human resources and other professional and civic organizations.   She also is a widely published author and highly regarded speaker on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, Modern and many other national and local publications.   You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and registerto receive future updates about developments on these and other concerns  see here or contact Ms. Stamer via telephone at 469.767.8872 or via e-mail to  cstamer@solutionslawyer.net.

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 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 or e-mailing this information here.   

©2012 Cynthia Marcotte Stamer.  Non-exclusive right to republish granted to Solutions Law Press.  All other rights reserved.


Agencies Release ACA Wellness, Adult Pre-Existing Condition, Essential Health Benefits Guidance; Briefing Planned

November 20, 2012

Employers and other health plan sponsors, insurers, and their administrators and service providers should consider the advisability of updating health plan cost projections, plan documents and procedures, communications and other practices in response to new and proposed guidance interpreting federal health plan rules under the Patient Protection and Affordable Care Act (ACA) released today (November 20, 2012).

Solutions Law Press, Inc. plans will host a webex executive study group briefing to update its members and other interested persons on this new and proposed guidance on Tuesday, November 27, 2012 at Noon Central Time.  Interested persons wishing details about registration for this briefing should send an e-mail here.

Guidance Released Today

Earlier today, the Departments of Labor and Health & Human Services issued guidance implementing ACA provisions that make it illegal for insurance companies to discriminate against people with pre-existing conditions, as well as guidance impacting wellness and disease management programs and the “essential health benefits” definition that plays  a key role in defining the benefits package mandates applicable to exchange and other health plans and policies required to comply with ACA’s mandates.  This guidance includes:

  • A proposed rule that, beginning in 2014, prohibits health insurance companies from discriminating against individuals because of a pre-existing or chronic condition. Under the rule, insurance companies would be allowed to vary premiums within limits, only based on age, tobacco use, family size and geography. Health insurance companies would be prohibited from denying coverage to any American because of a pre-existing condition or from charging higher premiums to certain enrollees because of their current or past health problems, gender, occupation, and small employer size or industry that the agencies intend to ensure that people for whom coverage would otherwise be unaffordable and young adults have access to a catastrophic coverage plan in the individual market. See HHS Proposed Regulation – Health Insurance Market Rules available here;
  • A proposed rule outlining policies and standards for coverage of essential health benefits, while giving states more flexibility to implement the Affordable Care Act. Essential health benefits are a core set of benefits that would give consumers a consistent way to compare health plans in the individual and small group markets. A companion letter on the flexibility in implementing the essential health benefits in Medicaid was also sent to states. Related to Essential Health Benefits, Actuarial Value, and Accreditation available here; and
  • A proposed rule implementing and expanding employment-based wellness programs that the agencies intend to promote health and help control health care spending, while prohibiting what the agencies consider unfair underwriting practices that impermissibly discriminate based on health status.  See Proposed regulations here; Study available here; Fact Sheet available here.

With this guidance impacting key plan design and cost concerns, employers and other health plan sponsors, plan fiduciaries and administrators, insurers and their vendors will need to act quickly to evaluate the potential implications of this guidance in light of already existing rules and enforcement positions, their plan design and costs, and market and other factors.

Today’s Guidance Just Tip of Iceberg

The guidance published today is the first in an expected deluge of regulatory pronouncements that HHS, DOL, the Internal Revenue Service and state insurance agencies are expected to issue as the rush to finalize arrangements and guidance governing the implementation and enforcement of the ACA health care reforms scheduled to take effect and to tweek guidance on provisions already effective under the law.  This guidance adds to the extensive list of previously issued guidance previously published by the Agencies since Congress passed ACA.  With the election behind the US and the Supreme Court having rejected initial challenges by businesses and individuals to the employer and individual mandates last Summer, employers and insurers now must get cracking to update their programs and cost estimates to comply with both existing and new guidance while keeping a close eye out for potential changes to ACA or other federal or state health coverage laws as the new Congress is expected to continue to discuss refinements or other changes when the new Congress begins work in January 2013. 

What Should Employers Do To Cope With These & Other Health Plan Mandates?

Facing the operational and financial challenges of meeting these mandates, many business leaders continue report significant concern about what they should do to respond to these requirements.  For some practical steps that businesses confronting these issues should take to cope with ACA and other health plan responsibilities, check out the “12 Steps Every Employer With A Health Plan Should Do Now” article by Cynthia Marcotte Stamer in the October 26, 2012 online edition of Texas CEO Magazine. To read the full article, see here.

Clearly in light of the new guidance, employers, insurers, health plan fiduciaries and their service providers need to act quickly to familiarize themselves with the guidance and make any need adjustments to their plans, communications, practices and budgets warranted by the new guidance and remain vigilent for and prepared to do the same with other guidance and reform proposals as it is released. 

Beyond responding to the new guidance and other future developments, most health plan sponsors, insurers, administrators and other fiduciaries, and their vendors also should consider conducting this specific analysis and update of their health benefit programs in the context of a broader strategy. 

In her 12-Steps Article, Ms. Stamer writes, “While most employers and insurers of employment-based group health plans view with great concern radically expanded health plan responsibilities taking effect in 2014, many are failing to take steps critical to manage exposures and costs already arising from the Affordable Care Act (ACA) and other federal health plan regulations.” 

In the article, Ms Stamer discusses the following 12 steps that she suggests most businesses consider to help catch up with current responsibilities and to help their business manage future costs and responsibilities:

  1. Know The Cast Of Characters & What Hat(s) They Wear
  2. Know What Rules Apply, and How They Affect a Group Health Plan
  3. Review and Update Health Plan Documents to Meet Requirements and Manage Exposure
  4. Update the Plan For Changing Compliance Requirements and Enhanced Defensibility
  5. Consistency Matters: Build Good Plan Design, Documentation and Processes, and Follow Them
  6. Ensure the Correct Party Carefully Communicates About Coverage and Claims in a Compliant, Timely, Prudent, Provable Manner
  7. Prepare For ACA’s Expanded Data Gathering and Reporting Requirements
  8. Select, Contract and Manage Vendors With Care
  9. Help Plan Members Build Their Health Care Coping Skills With Training and Supportive Tools
  10. Pack The Parachute and Locate The Nearest Exit Doors
  11. Get Moving On Compliance and Risk Management Issues
  12. Provide Input On Affordable Care Act Rules

For Help or More Information

If you need help reviewing and updating, administering or defending your group health or other employee benefit, human resources, insurance, health care matters or related documents or practices to respond to emerging health plan regulations, monitoring or commenting on these rules, defending your health plan or its administration, or other health or employee benefit, human resources or risk management concerns, please contact the author of this update, Cynthia Marcotte Stamer.

About Ms. Stamer

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 24 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters. 

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with these and other employment, employee benefit and compensation matters, Ms. Stamer continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, insurers and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals.  A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials concerning regulatory, investigatory or enforcement concerns. 

Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the Editorial Advisory Board of Employee Benefits News, the editor and publisher of Solutions Law Press HR & Benefits Update and other Solutions Law Press Publications, and active in a multitude of other employee benefits, human resources and other professional and civic organizations.   She also is a widely published author and highly regarded speaker on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, Modern and many other national and local publications.   You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and registerto receive future updates about developments on these and other concerns  see here or contact Ms. Stamer via telephone at 469.767.8872 or via e-mail to  cstamer@solutionslawyer.net.

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 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 or e-mailing this information here.   

©2012 Cynthia Marcotte Stamer.  Non-exclusive right to republish granted to Solutions Law Press.  All other rights reserved.


12 Steps Every Employer With A Health Plan Should Do Now No Matter Who Wins the Election

October 29, 2012

Business leaders concerned about what to do to manage health benefit costs, responsibilities and liabilities over the next year and to position to cope with impending shifts in the health plan regulatory landscape ahead should check out the “12 Steps Every Employer With A Health Plan Should Do Now” article by Cynthia Marcotte Stamer in the October 26, 2012 online edition of Texas CEO Magazine.

Nationally recognized for quarter century of work advising businesses and governments about health benefit and other employee benefits and human resources matters, Ms. Stamer says regardless of who wins the Presidential election next week, employers need to get moving to deal with current health plan obligations and exposures and brace for new future challenges.

Ms. Stamer writes, “While most employers and insurers of employment-based group health plans view with great concern radically expanded health plan responsibilities taking effect in 2014, many are failing to take steps critical to manage exposures and costs already arising from the Affordable Care Act (ACA) and other federal health plan regulations.” 

In the article, Ms Stamer discusses the following 12 steps that she suggests most businesses consider to help catch up with current responsibilities and to help position their business to anticipate and manage future costs and responsibilities:

  1. Know The Cast Of Characters & What Hat(s) They Wear
  2. Know What Rules Apply, and How They Affect a Group Health Plan
  3. Review and Update Health Plan Documents to Meet Requirements and Manage Exposure
  4. Update the Plan For Changing Compliance Requirements and Enhanced Defensibility
  5. Consistency Matters: Build Good Plan Design, Documentation and Processes, and Follow Them
  6. Ensure the Correct Party Carefully Communicates About Coverage and Claims in a Compliant, Timely, Prudent, Provable Manner
  7. Prepare For ACA’s Expanded Data Gathering and Reporting Requirements
  8. Select, Contract and Manage Vendors With Care
  9. Help Plan Members Build Their Health Care Coping Skills With Training and Supportive Tools
  10. Pack The Parachute and Locate The Nearest Exit Doors
  11. Get Moving On Compliance and Risk Management Issues
  12. Provide Input On Affordable Care Act Rules

For Help or More Information

If you need help reviewing and updating, administering or defending your group health or other employee benefit, human resources, insurance, health care matters or related documents or practices to respond to emerging health plan regulations, monitoring or commenting on these rules, defending your health plan or its administration, or other health or employee benefit, human resources or risk management concerns, please contact the author of this update, Cynthia Marcotte Stamer. To read the full article, see here. To learn more, check out some of Ms. Stamer’s upcoming speaking engagements, her many publications or contact Ms. Stamer directly at (469) 767-8872.

About Ms. Stamer

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 24 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters. 

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with these and other employment, employee benefit and compensation matters, Ms. Stamer continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, insurers and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals.  A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials concerning regulatory, investigatory or enforcement concerns. 

Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the Editorial Advisory Board of Employee Benefits News, the editor and publisher of Solutions Law Press HR & Benefits Update and other Solutions Law Press Publications, and active in a multitude of other employee benefits, human resources and other professional and civic organizations.   She also is a widely published author and highly regarded speaker on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, Modern and many other national and local publications.   You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and registerto receive future updates about developments on these and other concerns  see here or contact Ms. Stamer via telephone at 469.767.8872 or via e-mail to  cstamer@solutionslawyer.net.

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 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 or e-mailing this information here.   

©2012 Cynthia Marcotte Stamer.  Non-exclusive right to republish granted to Solutions Law Press.  All other rights reserved.


NLRB’s Nailing of Bel Air Hotel Reminder RIFs, Other Reengineering & Transactions Impacting Workforce Requirement Proper Risk Management

October 5, 2012

Severance Deals Get Hotel Bel-Air Nailed By NLRB For Labor Law Violations

A National Labor Relations Board (NLRB) decision that nails Hotel Bel-Air (Hotel) for offering severance packages to unionized workers highlights one of a range of potentially costly missteps that businesses conducting reductions in force or other re-engineering risk if they fail to properly understand and manage legal requirements when designing and implementing the change.

Since labor and other workforce-related risks are long-standing, some businesses, their leaders and consultants may be tempted to assume that prior experience means these are handled. The fact specific nature of the risks and changing rules and enforcement, however, makes it critical not to be over-confident. Legal and operational mismanagement of these risks can disrupt achievement of the purpose of the change and add significant added cost and exposure for the business and its management. Proper use of qualified legal counsel as part of the process is important both to help identify and properly manage risk and to leverage attorney-client privilege to help shield sensitive communications in the planning and implementation of these activities from discovery.

Employer’s Obligations To Negotiate & Deal With Union

Once a union is recognized as the certified representative of employees in a workplace, the National Labor Relations Act (NLRA) generally prohibits the employer from unilaterally changing term and conditions of employment or from going around the union to bargain directly with employees over layoffs, the effects of layoffs and other material terms and conditions of employment. As part of this responsibility, the NLRA and other federal and state laws generally require that employers provide notification to the union of planned reductions in force, plant closings or other operational changes that might impact the workforce and bargain in good faith with the union before conducting layoffs, or offering or making in work rules, compensation, severance or other benefits or other terms or conditions of employment.

In general, an employer’s duty to bargain with a union generally also continues to apply when the collective bargaining agreement between the union and the employer expires unless and until the parties reach agreement or impasse.  While negotiations continue, the employer’s obligation to refrain from making unilateral changes generally encompasses a duty to refrain from implementation unless and until an overall impasse has been reached on bargaining for the agreement as a whole. See Pleasantview Nursing Home, 335 NLRB 96 (2001) citing Bottom Line Enterprises, 302 NLRB 373 (1991). The NLRB considers negotiations to be in progress, and will not find a genuine impasse to exist, until the parties are warranted in assuming that further bargaining would be “futile” or that there is “no realistic possibility that continuation of discussion .  . . would be fruitful.” Saint-Gobain Abrasives, Inc., 343 NLRB 542 556 (2004).

Because the existence of impasse is a factual determination that depends on a variety of factors, including the contemporaneous understanding of the parties as to the state of negotiations, the good faith of the parties, the importance of the disputed issues, the parties’ bargaining history, and the length of their negotiations, Taft Broadcasting Co., 163 NLRB 475, 478 (1967), parties to the negotiation often do not necessarily agree when they have reached impasse.  As the September 28 decision by the NLRB against the Hotel shows, employers that act unilaterally based on an overly optimistic determination of impasse suffer significant financial and other operational and legal risks for engaging in unfair labor practices in violation of Section 8 of the NLRA. 

NLRB Nails Hotel Bel-Air For Failing To Bargain, Offering Severance Around Union

In its September 28, 2012 Bel-Air Hotel Decision, the NLRB ruled the Hotel engaged in unfair labor practices in violation of the NLRA when it offered severance packages to laid off workers in return for the workers’ waiver of recall rights without bargaining to impasse with the union representing its workers, UNITE HERE Local 11 (Union), about the effects of the temporary shutdown.  

The NLRB also ruled the Hotel engaged in unlawful direct dealing by contacting the employees about severance packages without going through the Union even though the Hotel’s contract with the union had expired when the Hotel contacted the laid off union employees to offer severance in return for waivers.  As a result, the NLRB ordered the Hotel to rescind the waiver and release forms signed by the Union members and to meet and bargain with the Union on these terms.

Bel-Air Hotel Decision Background

The NLRB order against the Hotel resulted from unfair labor practice charges that the Union filed against the Hotel after the Hotel offered severance packages directly to workers in exchange for the workers’ waiver of their recall rights while the workers were laid off during the Hotel’s temporary closure for renovations in 2009. 

Before the Hotel offered the severance package directly to the laid off workers, the Hotel and the Union bargained for nine months about the terms of a separation agreement and recall rights for employees who would lose their jobs during a planned 2-year shutdown of the facility for renovation.  In April, 2010, the Hotel gave the Union what it said was the “last, best, and final offer” on severance pay for unit employees laid off during the temporary renovation closure.  While the Union and the Hotel did talk after the Hotel made this final offer. Unfortunately, the parties did not reach an agreement before their existing collective bargaining agreement expired or before the Hotel shut down the facility for renovation.  After the shutdown, the Union and the Hotel stopped formal negotiations but had some “off the record” informal communications until June.  With no resolution by the end of June, the Hotel moved forward unilaterally to offer severance directly to the laid off employees as outlined in its final offer. 

Although the facility was closed and the employees already laid off when the Hotel’s contract with the Union expired, the Union claimed the Hotel remained obligated to negotiate with the Union.  The Union said a flurry of “off-the-record” discussions between the Hotel and the Union leading up to and after the termination showed the parties had not reached impasse. The Union also separately charged that the Hotel violated the NLRA by going around the Union to directly contact employees to offer severance payments in exchange for waiving their right to return to their jobs when the Hotel reopened after renovation.

In response to unfair labor practices charges filed by the Union, Hotel management among other things argued that the Union no longer represented the employees when it offered severance and because the parties’ contract had expired and the parties were at impasse when the Hotel made the offer.

  • Union Remained Representative Despite Layoff & Temporary Facilities Shutdown

The NLRB found “meritless” the Hotel’s effort to rely upon the NLRB’s decision in  Sterling Processing Corp., 291 NLRB 208 (1988) to support the Hotel’s claim that it had no duty to bargain or extend the severance offers through the Union because it made the unilateral severance offer when the facility was closed and the employees were already laid off.

In Sterling, the NLRB found the employer’s unilateral modification of preclosure wages and working conditions did not violate Section 8(a)(5) of the NLRA because when the employer acted unilaterally, there were no employees for the union to represent because when the employer took its unilateral action, the employer already had permanently closed the facility and terminated all employees with no reasonable expectation of reemployment.   

The NLRB ruled that the circumstances when the Hotel acted were distinguishable from Sterling because the unit employees on layoff from the Hotel retained a reasonable expectation of recall from layoff since the Hotel’s closure was only temporary and the Hotel had only laid off, and not yet discharged the employees when it made the unilateral severance offers.  According to the NLRB, the terms of the severance offer evidenced the existence of an expectation of recall because under the terms of that offer, employees who accepted a severance payment waived their recall rights.  See, Rockwood Energy & Mineral Corp., 299 NLRB 1136, 1139 fn. 11 (1990), enfd. 942 F.2d 169 (3d Cir. 1991)(finding that lengthy suspension of production did not relieve employer of its bargaining obligation where laid off employees had “some expectation of recall,” and distinguishing Sterling).

  • No Impasse Because Of Informal “Off The Record” Communications

The Hotel also separately and unsuccessfully argued that its direct offer of severance benefits to laid off employees was not an unfair labor practice because the parties had bargained to impasse before the offer was made. In response to the Union’s claim that a series of “off-the-record” exchanges between the Union and Hotel after the contract expired reflected a continuation of bargaining, the Hotel argued that an impasse existed because the Union was not engaged in good faith negotiations and there was not any possibility that the informal discussions between the Union and the Hotel would result in any fruitful change in the parties positions. 

In an effort to support its position, the Hotel management argued that the Union’s negotiation behavior with other Los Angeles hotels showed the Union had a practice of “artificially extend[ing] negotiations in bad faith” that supported the Hotel’s claim that continued negotiation would be futile. The NLRB rejected this argument too.  It said evidence that the Union did not bargain in good faith to string out negotiations when negotiating with other businesses as part of a campaign to coerce all hotels city wide to agree to a standard contract had no probative relevance for purposes of determining if the Hotel and the Union had bargained to impasse in their negotiations and did not prove bad faith by the Union for purposes of its negotiation with the Hotel.

Having rejected these and other Hotel arguments and evidence of impasse, the NLRB ruled that the evidence indicated that the parties continued communications had narrowed their differences before and after the Hotel made its last final offer on April 9.  Given this progress, the NLRB ruled that parties’ participation in informal off the record discussions well into June were sufficient to show the existence of some possibility that continued negotiations might result in a fruitful change in the parties position sufficient to obligate the Hotel to continue to bargain with the Union.

NLRB Order Carries Heavy Cost for Bel-Air Hotel

Complying the NLRB’s orders to remedy the breach will be painful and expensive for the Hotel, particularly since by the time the order was issued, the renovation was substantially completed. 

To fulfill the requirements of the Order, the Hotel must, among other things:

  • Bargain with the Union as the recognized and exclusive collective-bargaining representative of the employees about the effects on bargaining unit employees of the temporary shutdown of the hotel for renovation and, if an understanding is reached, embody the understanding in a signed collective bargaining agreement;
  • Not deal directly with bargaining unit employees about severance, waiver and release or other terms or arrangements relating to the impact of the temporary shutdown on the bargaining unit employees
  • Rescind the waiver and release agreements signed by individual bargaining unit employees which included the waiver of rehire rights; and
  • Post a NLRB-mandated written notice in the workplace for 60 consecutive days in conspicuous places.

This means that the Hotel will have to work through issues about how to find positions for employees, if any, who originally agreed to waive their rehire rights who now wish to be rehired, as well as engage in expensive bargaining and the implementation of the terms of any resulting collective bargaining agreement.

Union Duties One of Many Potential HR RIF & Deal Traps

The NLRB’s prounion ruling is unsurprising. Since the Obama Administration took office, its NLRB appointments, rule changes and other activism are intended to and are promoting the strength and efforts of labor.  See e.g. Labor Risks Rising For Employers Despite NLRB Loss Of Arizona Secret Ballot Challenge : HR Article by Ms. Cynthia Marcotte Stamer .

Collective bargaining responsibilities like those that resulted in the NLRB order against the Hotel are only one of many potential labor, human resources and benefits-related traps that businesses need to negotiate carefully when planning and executing layoffs or other workforce restructurings in connection with cost or other restructurings, business transactions or other activities impacting the workforce. 

Some examples of other issues and risks that businesses involved in changes impacting their workforce also may need to manage include but are not limited to the need to manage discrimination, federal and state leave, whistleblower and retaliation, and other general employment-related legal risks and responsibilities; to give Worker Adjustment and Retraining Act (WARN) or state law required plant closing or other notifications to workers, unions, government officials, vendors, customers, lenders or other creditors, insurers or others; to disclose, review,  modify or terminate contracts, employee benefit plan documents, communications and other materials; to modify fiduciary, officer, board or other assignments and other related insurance, indemnification, bonding and related arrangements; to comply with employee benefit and compensation related plan document, fiduciary responsibility, discrimination, communication, benefit funding or distribution, reporting and disclosure and other Employee Retirement Income Security Act, Internal Revenue Code, securities and other laws and regulations; privacy, trade secret, and other data integration, confidentiality, and information security and management concerns; Sarbanes-Oxley  and other securities, accounting or related requirements; system and data integration; and many others.

Because improper handling of these or other responsibilities in connection with these responsibilities can significantly undermine the businesses’ ability to realize the financial and operational goals behind the action, as well as expose the business to potentially costly liability, businesses anticipating or conducting reductions in the force or other activities that will impact their workforce should seek advice and help from qualified legal counsel experienced with these concerns early to mitigate these concerns.

If you have any questions or need help with these or other workforce management, employee benefits or compensation matters, please do not hesitate to contact the author of this update, Cynthia Marcotte Stamer.

About The Author

Management attorney and consultant Cynthia Marcotte Stamer helps businesses, governments and associations solve problems, develop and implement strategies to manage people, processes, and regulatory exposures to achieve their business and operational objectives and manage legal, operational and other risks. Board certified in labor and employment law by the Texas Board of Legal Specialization, with more than 25 years human resource and employee benefits experience, Ms. Stamer helps businesses manage their people-related risks and the performance of their internal and external workforce though appropriate human resources, employee benefit, worker’s compensation, insurance, outsourcing and risk management strategies domestically and internationally. Recognized in the International Who’s Who of Professionals and bearing the Martindale Hubble AV-Rating, Ms. Stamer also is a highly regarded author and speaker, who regularly conducts management and other training on a wide range of labor and employment, employee benefit, human resources, internal controls and other related risk management matters.  Her writings frequently are published by the American Bar Association (ABA), Aspen Publishers, Bureau of National Affairs, the American Health Lawyers Association, SHRM, World At Work, Government Institutes, Inc., Atlantic Information Services, Employee Benefit News, and many others. For a listing of some of these publications and programs, see here. Her insights on human resources risk management matters also have been quoted in The Wall Street Journal, various publications of The Bureau of National Affairs and Aspen Publishing, the Dallas Morning News, Spencer Publications, Health Leaders, Business Insurance, the Dallas and Houston Business Journals and a host of other publications. Chair of the ABA RPTE Employee Benefit and Other Compensation Committee, a council member of the ABA Joint Committee on Employee Benefits, and the Legislative Chair of the Dallas Human Resources Management Association Government Affairs Committee, she also serves in leadership positions in many human resources, corporate compliance, and other professional and civic organizations. For more details about Ms. Stamer’s experience and other credentials, contact Ms. Stamer, information about workshops and other training, selected publications and other human resources related information, see here or contact Ms. Stamer via telephone at 469.767.8872 or via e-mail to  cstamer@solutionslawyer.net.

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 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 or e-mailing this information here.   

©2012 Cynthia Marcotte Stamer.  Non-exclusive right to republish granted to Solutions Law Press.  All other rights reserved.


Tighten Employment Disability Risk Management As Obama Declares 12/10 National Disability Employment Awareness Month

October 1, 2012

President Obama’s declaration today (October 1, 2012) of October as National Disability Employment Awareness Month reminds business that U.S. businesses and their leaders need to tighten their disability discrimination risk management and compliance in light of the Obama Administration’s emphasis on aggressively interpreting and enforcing disability discrimination laws, rising private plaintiff lawsuits and other recent regulatory and judicial changes.

In his proclaimation today, President Obama reaffirmed his often stated commitment to the aggressive enforcement of disability laws and other efforts to promote opportunities for disabled individuals, stating:

“[My Administration remains committed to helping our businesses, schools, and communities support our entire workforce. To meet this challenge,… we are striving to make it easier to get and keep those jobs by improving compliance with Section 508 of the Rehabilitation Act.

As the administration marks the month, U.S. employers and other business leaders can expect the Obama Administration will be stepping up its already aggressive outreach to disabled Americans to promote awareness of their disability law rights and tools for asserting and enforcing these rights.

Business Faces Growing Employment Disability Exposures

As part of his administration’s commitment, the Obama Administration has moved to aggressively enforce the disability and accommodations of teh Americans With Disabilities Act, Section 508 of the Rehabilitation Act, and other federal disability discrimination laws.  The reach and effectiveness of these efforts has been enhanced by statutory and regulatory changes that require employers to exercise greater efforts to meet their compliance obligations and manage their disability and other discrimination risks.

ADA Exposures Heightened

The ADA, for instance, generally prohibits disability discrimination and requires employers to make reasonable accommodations to employees’ and applicants’ disabilities as long as this does not pose an undue hardship.  Violations of the ADA can expose businesses to substantial liability. Violations of the ADA may be prosecuted by the EEOC or by private lawsuits.  Employees or applicants that can prove they were subjected to prohibited disability discrimination under the ADA generally can recover actual damages, attorneys’ fees, and up to $300,000 of exemplary damages (depending on the size of the employer).   

In recent years, amendments to the original provisions of the ADA have made it easier for plaintiffs and the EEOC to establish disabled status of an individual.  Businesses should exercise caution to carefully document legitimate business justification for their hiring, promotion and other employment related decisions about these and other individuals who might qualify as disabled.  Provisions of the ADA Amendments Act (ADAAA) that expand the definition of “disability” under the ADA,  As signed into law on September 25, 2008, the ADAAA amended the definition of “disability” for purposes of the disability discrimination prohibitions of the ADA to make it easier for an individual seeking protection under the ADA to establish that that has a disability within the meaning of the ADA.  The ADAAA retains the ADA’s basic definition of “disability” as an impairment that substantially limits one or more major life activities, a record of such an impairment, or being regarded as having such an impairment. However, provisions of the ADAAA that took effect January 1, 2009 change the way that these statutory terms should be interpreted in several ways. Most significantly, the Act:

  • Directs EEOC to revise that portion of its regulations defining the term “substantially limits;”
  • Expands the definition of “major life activities” by including two non-exhaustive lists: (1) The first list includes many activities that the EEOC has recognized (e.g., walking) as well as activities that EEOC has not specifically recognized (e.g., reading, bending, and communicating); and (2) The second list includes major bodily functions (e.g., “functions of the immune system, normal cell growth, digestive, bowel, bladder, neurological, brain, respiratory, circulatory, endocrine, and reproductive functions”);
  • States that mitigating measures other than “ordinary eyeglasses or contact lenses” shall not be considered in assessing whether an individual has a disability;
  • Clarifies that an impairment that is episodic or in remission is a disability if it would substantially limit a major life activity when active;
  • Changes the definition of “regarded as” so that it no longer requires a showing that the employer perceived the individual to be substantially limited in a major life activity, and instead says that an applicant or employee is “regarded as” disabled if he or she is subject to an action prohibited by the ADA (e.g., failure to hire or termination) based on an impairment that is not transitory and minor; and
  • Provides that individuals covered only under the “regarded as” prong are not entitled to reasonable accommodation.

The ADAAA also emphasizes that the definition of disability should be construed in favor of broad coverage of individuals to the maximum extent permitted by the terms of the ADA and generally shall not require extensive analysis.In adopting these changes, Congress expressly sought to overrule existing employer-friendly judicial precedent construing the current provisions of the ADA and to require the EEOC to update its existing guidance to confirm with the ADAAA Amendments.  Under the leadership of the Obama Administration, the EEOC and other federal agencies have embraced this charge and have sigificantly stepped up enforcement of the ADA and other federal discrimination laws.

Recent enforcement, regulatory and other activities by the EEOC demonstrate that the EEOC is enthusiastically moving forward to exercise its regulatory and enforcement powers under these enhanced ADA provisions to tighten requirements for employers and to enforce its rules. See e.g.,  Leprino Foods To Pay $550K To Settle OFCCP Charge Pre-Hire Screening Test Illegally Discriminated « As EEOC Steps Up ADA Accommodation Enforcement, New DOD Apple App, Other Resources Released; Wal-Mart Settlement Shows ADA Risks When Considering Employee Return To Work Accommodation Requests & Inquiries; Employer Pays $475,000 To Settle ADA Discrimination Lawsuit Challenging Medical Fitness Testing For EMTs, Firefighters & Other Public Safety Worker’s.

Rehabilitation Act Risks For Government Contractors

Beyond the generally applicable risks applicable to all employers of more than 15 employees under the ADA, federal and state government contractors face additional responsibilities and risks. 

Subject to limited exceptions, government contractors providing services or supplies on ARRA or other government funded contracts or projects must comply both with generally applicable employment discrimination requirements and special statutory and contractual nondiscrimination, affirmative action, and recordkeeping requirements applicable government contractors. For instance, federal law generally requires government contractors to comply with the special equal employment opportunity requirements of  Executive Order 11246 (EO 11246); Section 503 of the Rehabilitation Act of 1973 (Section 503); and the Vietnam Veterans’ Readjustment Assistance Act of 1974 (VEVRAA).   Pursuant to these laws, business with the federal government, both contractors and subcontractors, generally must follow a number of statutory and contractual requirements to follow the fair and reasonable standard that they not discriminate in employment on the basis of sex, race, color, religion, national origin, disability or status as a protected veteran. OFCCP generally audits and enforces these requirements. Memo to Funding Recipients: Compliance with Applicable Nondiscrimination and Equal Opportunity Statutes, Regulations, and Executive Orders.  

OFCCP has made clear that it will conduct compliance evaluations and host compliance assistance events to ensure that federal contractors comply and are aware of their responsibilities under EO 11246, Section 503 and VEVRAA. 

While many government contractors may be tempted to become complacent about OFCCP exposures based on reports of the OFCCP’s relatively low enforcement in the past, see Report Says OFCCP Enforcement Data Show Infrequent Veteran, Disability Bias Findings | Bloomberg BNA recent enforcement data documents OFCCP is getting much more serious and aggressive about auditing and enforcing compliance with its affirmative action and other requirements against government contractors under the Obama Administration.  See, OFCCP Enforcement Data is Available on a New DOL Website. See also, Affirmative Action Update: OFCCP Enforcement Statistics Show Increase in Violations.  The readiness of OFCCP to enforce its rules is illustrated by the settlement of an OFCCP action filed against federal contractor Nash Finch Co. (Nash Finch) announceed last week.  Under the settlement, Nash Finch to pay $188,500 in back wages and interest and offer jobs to certain women applicants who OFCCP charged Nash rejected for the entry-level position of order selector at the company’s distribution facility in Lumberton, Minnesota.  See Settlement of OFCCP Employment Discrimination Charge Reminder To ARRA, Other Government Contractors Of Heightened Enforcement Risks.

These government contractor disability discrimination risks are particularly acute where the government contractor works on or provides supplies on contacts or projects funded in whole or in part by monies provided under the American Recovery and Reinvestment Act of 2009 (“ARRA”).    When the contract or project in question receives any funding out of the $787 billion of stimulus funding provided by ARRA, special OFCCP rules applicable to ARRA funded projects necessitates that federal contractors exercise special care to understand and meet their responsibilities and manage associated exposures.   See, e.g. Settlement of OFCCP Employment Discrimination Charge Reminder To ARRA, Other Government Contractors Of Heightened Enforcement Risks

Businesses Should Act To Manage Risks

The ADAAA amendments, the Rehabilitation Act’s expanded reach, and the Obama Administration’s emphasis on enforcement make it likely that businesses generally will face more disability claims from a broader range of employees and will possess fewer legal shields to defend themselves against these claims. These changes will make it easier for certain employees to qualify and claim protection as disabled under the ADA, the Rehabilitation Act, and other disability discrimination laws. 

In light of these and other developments and risks, businesses generally should act cautiously when dealing with applicants or employees with actual, perceived, or claimed physical or mental impairments to minimize exposures under the ADA, the Rehabilitation Act and other laws.  Management should exercise caution to carefully and appropriate the potential legal significance of physical or mental impairments or conditions that might be less significant in severity or scope, correctable through the use of eyeglasses, hearing aids, daily medications or other adaptive devices, or that otherwise have been assumed by management to fall outside the ADA’s scope.  

Likewise, businesses should be prepared for the EEOC, OFCCP and the courts to treat a broader range of disabilities, including those much more limited in severity and life activity restriction, to qualify as disabling for purposes of the Act. Businesses should assume that a greater number of employees with such conditions are likely to seek to use the ADA as a basis for challenging hiring, promotion and other employment decisions.  For this reason, businesses generally should tighten job performance and other employment recordkeeping to enhance their ability to demonstrate nondiscriminatory business justifications for the employment decisions made by the businesses.

Businesses also should consider tightening their documentation regarding their procedures and processes governing the  collection and handling records and communications that may contain information regarding an applicant’s physical or mental impairment, such as medical absences, worker’s compensation claims, emergency information, or other records containing health status or condition related information.  The ADA generally requires that these records be maintained in separate confidential files and disclosed only to individuals with a need to know under circumstances allowed by the ADA. 

As part of this process, businesses also should carefully review their employment records, group health plan, family leave, disability accommodation, and other existing policies and practices to comply with, and manage exposure under the new genetic information nondiscrimination and privacy rules enacted as part of the Genetic Information and Nondiscrimination Act (GINA) signed into law by President Bush on May 21, 2008.  Effective November 21, 2009, Title VII of GINA amends the Civil Rights Act to prohibit employment discrimination based on genetic information and restricts the ability of employers and their health plans to require, collect or retain certain genetic information. Under GINA, employers, employment agencies, labor organizations and joint labor-management committees face significant liability for violating the sweeping nondiscrimination and confidentiality requirements of GINA concerning their use, maintenance and disclosure of genetic information. Employees can sue for damages and other relief like currently available under Title VII of the Civil Rights Act of 1964 and other nondiscrimination laws.  For instance, GINA’s employment related provisions include rules that will:

  • Prohibit employers and employment agencies from discriminating based on genetic information in hiring, termination or referral decisions or in other decisions regarding compensation, terms, conditions or privileges of employment;
  • Prohibit employers and employment agencies from limiting, segregating or classifying employees so as to deny employment opportunities to an employee based on genetic information;
  • Bar labor organizations from excluding, expelling or otherwise discriminating against individuals based on genetic information;
  • Prohibit employers, employment agencies and labor organizations from requesting, requiring or purchasing genetic information of an employee or an employee’s family member except as allowed by GINA to satisfy certification requirements of family and medical leave laws, to monitor the biological effects of toxic substances in the workplace or other conditions specifically allowed by GINA;
  • Prohibit employers, labor organizations and joint labor-management committees from discriminating in any decisions related to admission or employment in training or retraining programs, including apprenticeships based on genetic information;
  • Mandate that in the narrow situations where limited cases where genetic information is obtained by a covered entity, it maintain the information on separate forms in separate medical files, treat the information as a confidential medical record, and not disclosure the genetic information except in those situations specifically allowed by GINA;
  • Prohibit any person from retaliating against an individual for opposing an act or practice made unlawful by GINA; and
  • Regulate the collection, use, access and disclosure of genetic information by employer sponsored and certain other health plans.

These employment provisions of GINA are in addition to amendments to the Health Insurance Portability and Accountability Act of 1996 (HIPAA), the Employee Retirement Income Security Act of 1974 (ERISA), the Public Health Service Act, the Internal Revenue Code of 1986, and Title XVIII (Medicare) of the Social Security Act that are effective for group health plan for plan years beginning after May 20, 2009.

If you have any questions or need help reviewing and updating your organization’s employment and/or employee practices in response to the Rehabilitation Act, ADA, GINA or other applicable laws, or if we may be of assistance with regard to any other workforce management, employee benefits or compensation matters, please do not hesitate to contact the author of this update, Board Certified Labor and Employment Attorney and Management Consultant Cynthia Marcotte Stamer at 469..

About The Author

Management attorney and consultant Cynthia Marcotte Stamer helps businesses, governments and associations solve problems, develop and implement strategies to manage people, processes, and regulatory exposures to achieve their business and operational objectives and manage legal, operational and other risks. Board certified in labor and employment law by the Texas Board of Legal Specialization, with more than 25 years human resource, employee benefits and management experience, Ms. Stamer helps businesses manage their people-related risks and the performance of their internal and external workforce though appropriate human resources, employee benefit, worker’s compensation, insurance, outsourcing and risk management strategies domestically and internationally. Recognized in the International Who’s Who of Professionals and bearing the Martindale Hubble AV-Rating, Ms. Stamer also is a highly regarded author and speaker, who regularly conducts management and other training on a wide range of labor and employment, employee benefit, human resources, internal controls and other related risk management matters.  Her writings frequently are published by the American Bar Association (ABA), Aspen Publishers, Bureau of National Affairs, the American Health Lawyers Association, SHRM, World At Work, Government Institutes, Inc., Atlantic Information Services, Employee Benefit News, and many others. For a listing of some of these publications and programs, see here. Her insights on human resources risk management matters also have been quoted in The Wall Street Journal, various publications of The Bureau of National Affairs and Aspen Publishing, the Dallas Morning News, Spencer Publications, Health Leaders, Business Insurance, the Dallas and Houston Business Journals and a host of other publications. Chair of the ABA RPTE Employee Benefit and Other Compensation Committee, a council member of the ABA Joint Committee on Employee Benefits, and the Legislative Chair of the Dallas Human Resources Management Association Government Affairs Committee, she also serves in leadership positions in numerous human resources, corporate compliance, and other professional and civic organizations. For more details about Ms. Stamer’s experience and other credentials, contact Ms. Stamer, information about workshops and other training, selected publications and other human resources related information, see here or contact Ms. Stamer via telephone at 214.270.2402 or via e-mail here.

Other Helpful Resources & Other Information

If you found these updates of interest, you also be interested in one or more of the following other recent articles published in this electronic Solutions Law publication available for review here including:

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©2012 Cynthia Marcotte Stamer.  Non-exclusive right to republish granted to Solutions Law Press, Inc.  All other  rights reserved. 


Settlement of OFCCP Employment Discrimination Charge Reminder To ARRA, Other Government Contractors Of Heightened Enforcement Risks

September 29, 2012

Federal contractor Nash Finch Co. (Nash Finch) will pay $188,500 in back wages and interest and offer jobs to certain women applicants who the U.S Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) charged Nash rejected for the entry-level position of order selector at the company’s distribution facility in Lumberton, Minnesota under a consent decree approved by an OFCCP administrative law judge this week.

Nash Finch Settlement Highlights

Minneapolis-based and the second-largest wholesale food distributor in the U.S., Nash Finch distributes food products to military commissaries around the world. Since the start of the OFCCP review period on May 1, 2005, Nash Finch has received payments of more than $14 million from the U.S. Department of Defense.

The consent decree resolves an OFCCP administrative action commenced after OFCCP investigators conducted a review of Nash Finch’s employment practices at the Lumberton facility from May 1, 2005, to Dec. 31, 2006. OFCCP asserted that Nash Finch had failed to ensure qualified female job applicants received equal consideration for employment without regard to sex as required by Executive Order 11246. OFCCP filed a complaint with the Labor Department’s Office of Administrative Law Judges on Nov. 30, 2010, alleging that Nash Finch systematically had discriminated against women who applied for jobs as order selectors during a nine-month period in 2006. See Solis v. Nash Finch Co., OFCCP Case Number: 2011-OFC-00004.  Under the consent decree, Nash Finch will pay $188,500 in back pay and interest to the 84 women.  In addition to the financial remedies, the settlement requires Nash Finch to extend job offers to up to 12 women in the original class as order selector positions become available. The company must also submit progress reports to OFCCP for the next two years.

Reflective of the growing emphasis of OFCCP and other federal agencies on audit and enforcement of compliance with federal employment discrimination and affirmative action laws, the Nash Finch charges and resultant settlement highlight that the Obama Administration’s emphasis on employment discrimination and other civil rights laws expansion and enforcement is resulting in increased liability for employers that fail to take appropriate steps to manage compliance related risks.

Settlements Remind ARRA & Other Federal Government Contractors To Act To Defend Against Heightened Requirements & Enforcement

The OFCCP action and settlement against Nash Finch and other recent OFCCP and other employment discrimination law enforcement actions and settlements against government contractors and other U.S. employers remind U.S. businesses that provide services or supplies directly or as subcontractors on federally funded projects or contracts to review and tighten their employment discrimination, affirmative action and other employment practices in light of the Obama Administration’s heightened emphasis on auditing and enforcing OFCCP and other nondiscrimination and affirmative action rules.

While all U.S businesses face heightened exposures to discrimination-related enforcement risks and liability under the Obama Administration’s enforcement policies, businesses providing services or supplies directly or as subcontractors on projects funded in whole or in part by monies provided under the American Recovery and Reinvestment Act of 2009 (“ARRA”) or other federally funded projects or contracts are particularly at risk.  See e.g.,  Leprino Foods To Pay $550K To Settle OFCCP Charge Pre-Hire Screening Test Illegally Discriminated « As EEOC Steps Up ADA Accommodation Enforcement, New DOD Apple App, Other Resources Released; Wal-Mart Settlement Shows ADA Risks When Considering Employee Return To Work Accommodation Requests & Inquiries; Employer Pays $475,000 To Settle ADA Discrimination Lawsuit Challenging Medical Fitness Testing For EMTs, Firefighters & Other Public Safety Worker’s.

Subject to limited exceptions, government contractors providing services or supplies on ARRA or other government funded contracts or projects must comply both with generally applicable employment discrimination requirements and special statutory and contractual nondiscrimination, affirmative action, and recordkeeping requirements applicable government contractors. For instance, federal law generally requires government contractors to comply with the special equal employment opportunity requirements of  Executive Order 11246 (EO 11246); Section 503 of the Rehabilitation Act of 1973 (Section 503); and the Vietnam Veterans’ Readjustment Assistance Act of 1974 (VEVRAA).   Pursuant to these laws, business with the federal government, both contractors and subcontractors, generally must follow a number of statutory and contractual requirements to follow the fair and reasonable standard that they not discriminate in employment on the basis of sex, race, color, religion, national origin, disability or status as a protected veteran. OFCCP generally audits and enforces these requirements. Memo to Funding Recipients: Compliance with Applicable Nondiscrimination and Equal Opportunity Statutes, Regulations, and Executive Orders.  OFCCP has made clear that it will conduct compliance evaluations and host compliance assistance events to ensure that federal contractors comply and are aware of their responsibilities under EO 11246, Section 503 and VEVRAA.  While many government contractors may be tempted to become complacent about OFCCP exposures based on reports of the OFCCP’s relatively low enforcement in the past, see Report Says OFCCP Enforcement Data Show Infrequent Veteran, Disability Bias Findings | Bloomberg BNA recent enforcement data documents OFCCP is getting much more serious and aggressive about auditing and enforcing compliance with its affirmative action and other requirements against government contractors under the Obama Administration.  See, OFCCP Enforcement Data is Available on a New DOL Website. See also, Affirmative Action Update: OFCCP Enforcement Statistics Show Increase in Violations

  • Government Contractors On ARRA Funded Projects Particularly Exposed

When the contract or project in question receives any funding out of the $787 billion of stimulus funding provided by ARRA, special OFCCP rules applicable to ARRA funded projects necessitates that federal contractors exercise special care to understand and meet their responsibilities and manage associated exposures. 

For one thing, the range of businesses required to comply with OFCCP’s equal employment opportunity requirements for government contractors is broader.  Government contractors who sometimes qualify as exempt from certain OFCCP rules may not qualify as exempt when working on ARRA funded projects.  Government contractors that on other types of federally-funded projects might qualify as exempt from certain OFCCP requirements often are unaware that the range of federal contractors required to comply with the OFCCP equal employment opportunity and related rules of ARRA is much broader than often applies for federal projects funded from other sources. Smaller government contractors run the risk of unknowingly incurring liability by mistakenly assuming that the small size of their contract exempts them from otherwise applicable OFCCP requirements. Consequently, before relying on any assumed exemption, a government contractor providing goods or services for ARRA-funded project directly or as a subcontractor should specifically verify the applicability of those exemptions and document that analysis.  

Furthermore, all government contractors on ARRA-funded projects need to understand that they operate subject to heightened compliance and enforcement scrutiny.  The OFCCP particularly scrutinizes government contractor equal employment opportunity and other civil rights requirements on ARRA funded projects.  The “Procedures for Scheduling and Conducting Compliance Evaluations of American Recovery and Reinvestment Act of 2009 (ARRA) Funded Contractors” issued July 7, 2009.  See OFCCP Order No. ADM 0901/SEL the “ARRA Procedures”) subject government contractors on ARRA funded projects to special rules and heightened OFCCP oversight.  OFCCP has established separate scheduling procedures to provide for compliance evaluations of ARRA funded contractors separate from those usually applicable to government contractors because ARRA also obligates OFCCP separately to track its ARRA-related and non-ARRA-related enforcement activities. 

The ARRA Procedures require that Regional, District and Area offices conduct a full compliance evaluation, including a full desk audit and onsite review, of every ARRA funded contractor establishment scheduled, even in the absence of systemic discrimination indicators. Normally applied by OFCCP to non-ARRA government contract reviews, Active Case Management (ACM) procedures normally allow OFCCP to conduct only an abbreviated desk audit in the absence of systematic discrimination indicators in non-ARRA compliance evaluations.  These ACM procedures will not be used in ARRA compliance evaluations. 

Due to the special nature of ARRA, OFCCP also has indicated that the ARRA compliance evaluations will not apply the following scheduling exceptions typically applicable in non-ARRA contract compliance reviews.  For instance, OFCCP ARRA procedures state:

  • No more than 25 establishments per contractor exception: Presently, for contractors with multiple establishments, the Federal Contractor Scheduling System (FCSS) limits the number of compliance evaluations scheduled to 25 new evaluations during a scheduling cycle. The 25-establishment limit does not apply to ARRA compliance evaluations.
  • Two year exception: Traditionally, contractor establishments that have been reviewed by OFCCP are excepted from further review for a 24-month period. Under ARRA scheduling procedures, ARRA funded contractor establishments may be eligible for an ARRA compliance evaluation even if they have been reviewed within the previous 24 months. However, pre-award clearance is not required for contractor establishments reviewed by OFCCP within the past 24 months.

However, ARRA scheduling procedures will apply the following scheduling exceptions:

  • ARRA funded contractor establishments that have undergone an FCSS compliance evaluation will be excepted from scheduling and review under ARRA procedures for six months from the date of the FCSS case closure.
  • ARRA funded contractor establishments that have undergone an ARRA compliance evaluation will not be subject to another ARRA evaluation.
  • ARRA funded contractor establishments that have undergone an ARRA evaluation will also be excepted from scheduling for a standard OFCCP compliance evaluation, pursuant to FCSS, for 24 months from the date of closure of the ARRA compliance evaluation.

ARRA funded contractors also are subject to other special pre-award clearance, pre-award intake, pre-award classification and other special procedures.  The ARRA Procedures also set for special requirements particularly applicable to construction contracts funded by ARRA.

The special procedures and heightened compliance review procedures provided for under the ARRA Procedures indicate that government contractors or subcontractors providing services or supplies on projects funded with ARRA funds will want to place special attention on compliance with OFCCP and other federal equal employment opportunity and other employment regulation compliance.

Government Contractors, Other US Employers Urged To Act To Manage Exposures

In the face of the rising emphasis of OFCCP, the EEOC and other federal and state agencies on these audit and enforcement activities, government contractors and other U.S. businesses should act to position themselves to defend against likely challenges and scrutiny.  All government contractors and other businesses should review and tighten the adequacy of their existing compliance and risk management practices to promote and document compliance.  These efforts should focus on all relevant hiring, recruitment, promotion, compensation, recordkeeping and reporting policies and practices internally, as well as those of any recruiting agencies, subcontractors or other business partners whose actions might impact on compliance. Among other things, these steps should include the following:

  • Government contractors and subcontractors should specifically review their existing or proposed contracts and involvements to identify projects or contracts which may involve federal or state contracts or funding that could trigger responsibility.  In this respect, businesses should conduct well-documented inquiries when proposing and accepting contracts to ensure that potential obligations as a government contractor are not overlooked because of inadequate intake procedures. Businesses also should keep in mind that ARRA and other federal program funds often may be filtered through a complex maze of federal grants or program funding to states or other organizations, which may pass along government contractor status and liability when subcontracting for services as part of the implementation of broader programs.  Since the existence of these obligations often is signaled by contractual representations in the contracts with these parties, careful review of contractual or bid specifications and commitments is essential.  However, it also generally is advisable also to inquire about whether the requested products or services are provided pursuant to programs or contracts subject to these requirements early in the process. 
  • In addition to working to identify contracts and arrangements that are covered by OFCCP or other requirements, government contractors and other businesses also should reconfirm and continuously monitor the specific reporting, affirmative action, and other requirements that apply to any programs that may be subject to OFCCP requirements to ensure that they fully understand and implement appropriate procedures to comply with these conditions as well as pass along  the obligation to make similarly necessary arrangements to any subcontractors or suppliers that the government contractor involves as a subcontractor. 
  • Throughout the course of the contract, the government contractor also should take steps to maintain and file all required reports and monitor and audit operational compliance with these and other requirements.  
  • The organization should develop and administer appropriate procedures for monitoring and investigating potential compliance concerns and maintaining documentation of that activity.  Any known potential deficiencies or complaints should be promptly investigated and redressed with the assistance of qualified counsel in a prompt manner to mitigate potential risks.
  • Documentation should be carefully retained and organized on a real time and continuous basis to faciliate efficiency and effectiveness in completing required reports, monitoring compliance indicators and responding to OFCCP, EEOC or private plaintiff charges as well as other compliance inquiries.
  • Any audit inquiries or charges should be promptly referred to qualified legal counsel for timely evaluation and response.
  • When available and affordable, management should consider securing appropriate employment practices liability coverage, indemnification from business partners and other liability protection and assurance to help mitigate investigagtion and defense costs.
  • Board members or other senior management should include periodic review of compliance in their agenda.

If you have any questions or need help reviewing and updating your organization’s employment, employee benefits, contracting or other risk management or internal controls compliance practices, responding to an OFCCP, EEOC or other government or private plaintiff charge or investigation, or if we may be of assistance with regard to any other workforce or compliance management, employee benefits, compensation matters, please do not hesitate to contact the author of this update, Cynthia Marcotte Stamer.

About The Author

Management attorney and consultant Cynthia Marcotte Stamer helps businesses, governments and associations solve problems, develop and implement strategies to manage people, processes, and regulatory exposures to achieve their business and operational objectives and manage legal, operational and other risks. Board certified in labor and employment law by the Texas Board of Legal Specialization, with more than 20 years human resource and employee benefits experience, Ms. Stamer helps businesses manage their people-related risks and the performance of their internal and external workforce though appropriate human resources, employee benefit, worker’s compensation, insurance, outsourcing and risk management strategies domestically and internationally. Recognized in the International Who’s Who of Professionals and bearing the Martindale Hubble AV-Rating, Ms. Stamer also is a highly regarded author and speaker, who regularly conducts management and other training on a wide range of labor and employment, employee benefit, human resources, internal controls and other related risk management matters.  Her writings frequently are published by the American Bar Association (ABA), Aspen Publishers, Bureau of National Affairs, the American Health Lawyers Association, SHRM, World At Work, Government Institutes, Inc., Atlantic Information Services, Employee Benefit News, and many others. For a listing of some of these publications and programs, see here. Her insights on human resources risk management matters also have been quoted in The Wall Street Journal, various publications of The Bureau of National Affairs and Aspen Publishing, the Dallas Morning News, Spencer Publications, Health Leaders, Business Insurance, the Dallas and Houston Business Journals and a host of other publications. Chair of the ABA RPTE Employee Benefit and Other Compensation Committee, a council member of the ABA Joint Committee on Employee Benefits, and the Legislative Chair of the Dallas Human Resources Management Association Government Affairs Committee, she also serves in leadership positions in many human resources, corporate compliance, and other professional and civic organizations. For more details about Ms. Stamer’s experience and other credentials, contact Ms. Stamer, information about workshops and other training, selected publications and other human resources related information, see here or contact Ms. Stamer via telephone at 469.767.8872 or via e-mail to cstamer@solutionslawyer.net.

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 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 or e-mailing this information here.   

©2012 Cynthia Marcotte Stamer.  Non-exclusive right to republish granted to Solutions Law Press.  All other rights reserved.

 


$1.25M NLRB Backpay Order Highlights Risks of Mismanaging Union Risks In Health Care & Others M&A Deals

September 23, 2012

California nursing home buyer must pay estimated $1.25 million in backpay and interest, recognize union & hire 50 employees of seller following purchase

Last week’s National Labor Relations Board (NLRB) order requiring the buyer of a California nursing home to pay approximately $1.25 million in backpay and interest, rehire 50 employees and recognize the seller’s union reminders buyers of union-organized businesses of some of the significant risks of mishandling union-related obligations in merger and acquisition, bankruptcy and other corporate transactions under the National Labor Relations Act (NLRA) and other federal labor laws.  

Buyer’s Obligations To Honor Seller’s Collective Bargaining Obligations

Under the NLRA, new owners of a union facility that are “successors” of the seller generally must recognize and bargain with the existing union if “the bargaining unit remains unchanged and a majority of employees hired by the new employer were represented by a recently certified bargaining agent.”  See NLRB v. Burns Sec. Servs., 406 U.S. 272, 281 (1972).   

In assembling its workforce, a successor employer also generally “may not refuse to hire the predecessor’s employees solely because they were represented by a union or to avoid having to recognize a union.” U.S. Marine Corp., 293 NLRB 669, 670 (1989), enfd., 944 F.2d 1305 (7th Cir. 1991).   

Nasaky, Inc. NLRB Order

Last week’s  NLRB Order requires Nasaky, Inc., the buyer of the Yuba Skilled Nursing Center in Yuba City, California, to recognize and honor collective bargaining obligations that the seller Nazareth Enterprises owed the before the sale and rehire and pay backpay and interest to make whole 50 of the seller’s former employees who the NLRB determined Nasaky, Inc. wrongfully refused to hire when it took over the facility from the prior owner, Nazareth Enterprises. 

Before Nasaky, Inc. bought the nursing home, many of the employees at the nursing home were represented by the Service Employees International Union, United Healthcare Workers West (Union).    After Nasaky, Inc. agreed to buy the facility but before it took control of its operations, Nasaky, Inc. advertised in the media for new workers to staff the facility and told existing employees at the facility that they must reapply to have a chance of keeping their jobs under the new ownership.  

When Nasaky, Inc. took operating control of the Facility, facility operations continued as before with the same patients receiving the same services.  The main difference was the workforce.  The new staff included 90 employees in erstwhile bargaining unit positions, of which forty were former employees of the predecessor employer and fifty were newcomers.  Nasaky, Inc. then took the position that the change in the workforce excused it from responsibility for recognizing or bargaining with the Union or honoring the collective bargaining agreement between the Union and seller Nazareth Enterprises.

When the union demanded that Nasaky, Inc. recognize the Union and honor the Union’s collective bargaining agreement with Nazareth Enterprises, Nasaky, Inc. refused.  Instead, Nasaky, Inc. notified the union that it would not allow the Union on its premises, would not honor the Union’s collective bargaining agreement with the seller, and did not accept any of the predecessor’s terms and conditions of employment.  The Union then filed charges with the NLRB, charging that Nazareth Enterprises had breached its obligations as a successor under the NLRA.  

After NLRB Regional Director Joseph F. Frankl agreed and issued a complaint, California Administrative Law Judge Gerald Etchingham found all the allegations true based on a two-day hearing.  He rejected all of Nasaky’s explanations for why it declined to hire most of those who had worked for the previous employer.  See ALJ Decision.  Since Nasaky, Inc did not file exceptions, the NLRB ordered Nasaky, Inc. immediately to recognize and bargain with the Union, hire the former employees and make them whole.  The amount of backpay and interest is expected to approximate $1.25 million.  

Managing Labor Exposures In Business Transactions

The NLRB’s order against Nasaky, Inc. highlights some of the business and operational risks that buyers and sellers can face if labor-management relations are misperceived or mismanaged in connection with business transactions.  Because the existence of collective bargaining agreements or other labor obligations can substantially affect the operational flexibility of a buyer, buyers need to investigate and carefully evaluate the potential existence and nature of their obligations as part of their due diligence strategy before the transaction.  A well-considered understanding of whether the structure of the transaction is likely to result in the buyer being considered a successor for purposes of union organizing and collective bargaining obligations also is very important so that the buyer and seller can properly appreciate and deal with any resulting responsibilities.

Beyond the potential duty to recognize a seller’s collective bargaining obligations, buyers and sellers also should consider the potential consequences of the proposed transaction on severance, pension, health, layoff and recall and other rights and obligations that may arise.  At minimum, the existence of these responsibilities and their attendant costs are likely to impact the course of the negotiations.

When a worksite is union organized, for instance, additional obligations may arise in the handling of reductions in force or other transactions as a result of the union presence.  For example, in addition to otherwise applicable responsibilities applicable to non-union affected transaction, the Worker Adjustment Retraining Act (WARN) and other plant closing laws and/or collective bargaining agreements may impose special notification or other requirements before a reduction in force or other transaction related activities. 

Similarly, the existence of collective bargaining agreements also may trigger obligations for one or both parties to engage in collective bargaining over contemplated changes in terms and conditions of employment, to provide severance, to accellerate or fund severance, benefits or other obligations, to provide continued health or other coverage, to honor seniority, recall or other rights or deal with a host of other special contractual obligations.

Where the collective bargaining arrangements of the seller currently or in the past have included obligations to contribute to a multiemployer, collectively bargained pension or welfare plan, the buyer and seller also need to consider both the potential for withdrawal liability or other obligations and any opportunities to minimize these exposures in structuring the allocation of the arrangement. In this case, both parties need to recognize that differences exist between the federals for determining when successor liability results under the withdrawal liability rules than typically apply other labor and employment law purposes.  While buyers and sellers often presume that the stock versus assess sale distinction that typically applies for many other legal purposes will apply, this can be an expensive mistake in the case of determining a buyer’s obligation to honor the seller’s collective bargaining obligations post deal.  Likewise, buyers can be exposed to multiemployer successor liability from asset transactions, although it may be possible to mitigate or avoid such liabilities by incorporating appropriate representations in the sale documents or through other steps.  Since these multiemployer withdrawal and contribution liabilities generally attach on a controlled group basis, both parties need to properly appreciate and address these concerns early in the transaction to mitigate their risks and properly value the transaction.

In light of these and other potential labor-related risks that may affect corporate and other business transactions, parties contemplating or participating in these transactions are urged to engage and consult with competent legal counsel with specific experience in such labor management relations and multiemployer benefit plan matters early in the process.

About The Author

Management attorney and consultant Cynthia Marcotte Stamer helps businesses, governments and associations solve problems, develop and implement strategies to manage people, processes, and regulatory exposures to achieve their business and operational objectives and manage legal, operational and other risks. Board certified in labor and employment law by the Texas Board of Legal Specialization, with more than 25 years human resource and employee benefits experience, Ms. Stamer helps businesses manage their people-related risks and the performance of their internal and external workforce though appropriate labor and employment, human resources, employee benefit, worker’s compensation, insurance, outsourcing and risk management strategies domestically and internationally. Recognized in the International Who’s Who of Professionals and bearing the Martindale Hubble AV-Rating, Ms. Stamer’s experience includes significant experience  advising and representing buyers, sellers, their commonly controlled and affiliated entities, lenders, bankruptcy trustees and committees and others regarding labor-management relations, employment, compensation, employee benefits and other human resources related exposures, strategies and negotiations.  She also has served as counsel to multiemployer and single employer pension, profit-sharing and other retirement, health and welfare, severance and other plans and their fiduciaries and sponsors in relation to these and other transactions.

Ms. Stamer also is a highly regarded author and speaker, who regularly conducts management and other training on a wide range of labor and employment, employee benefit, human resources, internal controls and other related risk management matters.  Her writings frequently are published by the American Bar Association (ABA), Aspen Publishers, Bureau of National Affairs, the American Health Lawyers Association, SHRM, World At Work, Government Institutes, Inc., Atlantic Information Services, Employee Benefit News, and many others. For a listing of some of these publications and programs, see here. Her insights on human resources risk management matters also have been quoted in The Wall Street Journal, various publications of The Bureau of National Affairs and Aspen Publishing, the Dallas Morning News, Spencer Publications, Health Leaders, Business Insurance, the Dallas and Houston Business Journals and a host of other publications. Chair of the ABA RPTE Employee Benefit and Other Compensation Committee, a council member of the ABA Joint Committee on Employee Benefits, and the Legislative Chair of the Dallas Human Resources Management Association Government Affairs Committee, she also serves in leadership positions in many human resources, corporate compliance, and other professional and civic organizations. For more details about Ms. Stamer’s experience and other credentials, contact Ms. Stamer, information about workshops and other training, selected publications and other human resources related information, see here or contact Ms. Stamer via telephone at 469.767.8872 or via e-mail to cstamer@solutionslawyer.net.

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 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 or e-mailing this information here.   

©2012 Cynthia Marcotte Stamer.  Non-exclusive right to republish granted to Solutions Law Press.  All other rights reserved.

 


As EEOC Steps Up ADA Accommodation Enforcement, New DOD Apple App, Other Resources Released

September 18, 2012

With the Equal Employment Opportunity Commission (EEOC) and other federal agencies prioritizing disability discrimination law enforcement, businesses and individuals looking to find solutions to help accommodate persons with disabilities may find a new free app for Apple Devices from the Department of Defense (DOD) Computer/Electronic Accommodations Program helpful. 

New DOD Accommodation Apple App & Other Accommodation Aids

The DOD Apple application is an example of the many new resources that the federal government is providing to promote compliance with disability discrimination laws and to help people with disabilities under the Obama Administration. 

The DOD Apple application now available in the iTunes App Store lets users browse the latest news and tips on assistive technology, scan CAP’s calendar of events and stay connected to the disability community. DOD says an Android version is coming soon. 

CAP works to make the Federal Government a model employer of people with disabilities by providing job accommodations and equal access to electronic and information technology.  With disabilities and other discrimination law compliance audit and enforcement rising, this new application provides another timely resource for government contractors and agencies, and other businesses looking to provide accommodations and manage disability risks.

The DOD application is just one of many emerging training and other tools that the agencies are rolling out to promote employment and other opportunities for people with disabilities.  The Federal Government is devoting increasing resources to educating the disabled about resources including employment discrimination protections and other aids.  The October 10  Work Incentive Seminar Event webinar is another example.  To be held on October 10, 2012 from 3 – 4:30 p.m. Eastern Time, the webinar is for people who receive Social Security disability benefits and want to learn how the Ticket to Work program can help them earn money and become financially independent. It also will discuss  writing a resume, job interview tips, whether or not to discuss your disability with a potential employer and tips for on the job success. Officials invites interested parties to register online or call 1-866-968-7842 (V) or 1-866-833-2967 (TTY/TDD).

Rising Liability & Enforcement Make Accommodation & Other Disability Law Risk Management Critical

Managing disability risks and meeting accommodation obligations is increasingly important as US government agencies place growing emphasis on enforcing disability discrimination laws and regulations that increasingly result in significant liability for U.S. businesses.

For instance, in June, 2012, the U.S. Justice Department announced a $10,250,000  settlement with JPI Construction L.P. (JPI) and six other JPI firms is the largest-ever disability-based housing discrimination settlement.  The settlement resolves Justice Department charges the JPI and its affiliates illegally discriminated on the basis of disability in the design and construction of multifamily housing complexes.

Under the settlement of disability charges initiated against JPI a few years ago, JPI will pay $10,250,000 into an accessibility fund to update properties so they comply with the Americans with Disabilities Act and the Fair Housing Act (FHA), and to increase the availability of housing that is accessible to people with disabilities.

The record settlement follows the reaffirmation of the Obama Administration’s continuing committment to find and punish companies that illegally discriminate or fail to provide required accommodations in violation of Federal disability discrimination laws made by President Obama and others to mark the 13th Anniversary of the June 22, 1999 Supreme Court decision in Olmstead v. L.C

As part of that anniversary celebration of Olmstead, the Obama Administration reaffirmed its continuing commitment to fight disability discriminated and touted the success of its “significant progress continuing to enforce Olmstead as well as more broadly helping to level the playing field for people with disabilities.”

In Olmstead, the Supreme Court ruled in that the unjustified institutional isolation of people with disabilities is a form of unlawful discrimination under the ADA. 

In marking the 13th anniversary of this decision, President Obama said, “As we mark the anniversary of this historic civil rights decision, we reaffirm our commitment to fighting discrimination, and to addressing the needs and concerns of those living with disabilities.”

In reaffirming this commitment, the Administration highlighted its past and continuing efforts to enforce disability discrimination laws, as well as other activities to support individuals with disability. 

As part of its significant commitment to disability discrimination enforcement, the Civil Rights Division at the Department has been involved in more than 40 Olmstead matters in 25 states.   Recently, in Virginia, the Department entered into a landmark settlement agreement with the Commonwealth, which will shift Virginia’s developmental disabilities system from one heavily reliant on large, state-run institutions to one focused on safe, individualized, and community-based services that promote integration, independence and full participation by people with disabilities in community life. The agreement expands and strengthens every aspect of the Commonwealth’s system of serving people with intellectual and developmental disabilities in integrated settings, and it does so through a number of services and supports.  The Department has a website dedicated to Olmstead enforcement, which includes links to settlements, briefs, findings letters, and other materials. The settlement agreements are a reminder that private businesses and state and local government agencies alike should exercise special care to prepare to defend their actions against potential disability or other Civil Rights discrimination challenges.  All organizations, whether public or private need to make sure both that their organizations, their policies, and people in form and in action understand and comply with current disability and other nondiscrimination laws.  When reviewing these responsibilities, many state and local governments and private businesses may need to update their understanding of current requirements.  The scope and applicability of disability and various other federal nondiscrimination and other laws have been expanded or modified in recent years by statutory, regulatory or enforcement changes. 

These Justice Department efforts also are reflected in the companion enforcement efforts to investigate and prosecute disability discrimination by the Labor Department Equal Employment Opportunity Commission in employment, the HUD and related areas, the Department of Education in education and related fields and a host of other agencies.

The enforcement of disability discrimination and accommodation requirements in the employment space is even more zealous making big dollar EEOC and private plaintiff judgements and settlements increasingly common.  See, e.g. Employer Pays $475,000 To Settle ADA Discrimination Lawsuit Challenging Medical Fitness Testing For EMTs, Firefighters & Other Public Safety Worker’s.

 Where the entity is a private or government agency that is a government contractor or receiving other federal funds or grants, compliance with the ADA and other nondiscrimination and civil rights laws is particularly important as the contracts or regulations pursuant to which these funds are granted typically require compliance with these and other special nondiscrimination rules.  In the case of funds provided under the 2009 Stimulus Bill, the scope of businesses subject to these requirements and the likelihood of audits was specifically increased in many ways, making recipients of these funds at particular risk for failing to fulfill requirements.

These Federal enforcement activities are further heightened by rising private litigation of disability claims.  These public and private actions are encouraged by changes made by Congress to the ADA, which make it easier for plaintiff’s bringing disabilities claims to win, as well as the proactive agenda of the Obama Administration in enforcing disability discrimination laws.

In light of these continuing enforcement efforts, businesses should continue and heighten their diligence against possible disability discrimination exposures by strengthening policies, practices, training and documentation to keep up compliance and to position to defend against possible charges.

About The Author

Management attorney and consultant Cynthia Marcotte Stamer helps businesses, governments and associations solve problems, develop and implement strategies to manage people, processes, and regulatory exposures to achieve their business and operational objectives and manage legal, operational and other risks. Board certified in labor and employment law by the Texas Board of Legal Specialization, with more than 20 years human resource and employee benefits experience, Ms. Stamer helps businesses manage their people-related risks and the performance of their internal and external workforce though appropriate human resources, employee benefit, worker’s compensation, insurance, outsourcing and risk management strategies domestically and internationally. Recognized in the International Who’s Who of Professionals and bearing the Martindale Hubble AV-Rating, Ms. Stamer also is a highly regarded author and speaker, who regularly conducts management and other training on a wide range of labor and employment, employee benefit, human resources, internal controls and other related risk management matters.  Her writings frequently are published by the American Bar Association (ABA), Aspen Publishers, Bureau of National Affairs, the American Health Lawyers Association, SHRM, World At Work, Government Institutes, Inc., Atlantic Information Services, Employee Benefit News, and many others. For a listing of some of these publications and programs, see here. Her insights on human resources risk management matters also have been quoted in The Wall Street Journal, various publications of The Bureau of National Affairs and Aspen Publishing, the Dallas Morning News, Spencer Publications, Health Leaders, Business Insurance, the Dallas and Houston Business Journals and a host of other publications. Chair of the ABA RPTE Employee Benefit and Other Compensation Committee, a council member of the ABA Joint Committee on Employee Benefits, and the Legislative Chair of the Dallas Human Resources Management Association Government Affairs Committee, she also serves in leadership positions in many human resources, corporate compliance, and other professional and civic organizations. For more details about Ms. Stamer’s experience and other credentials, contact Ms. Stamer, information about workshops and other training, selected publications and other human resources related information, see here or contact Ms. Stamer via telephone at 469.767.8872 or via e-mail to  cstamer@solutionslawyer.net.

About Solutions Law Press

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