Biden-Harris To Require many Employers To Mandate Employee Vaccinations

September 9, 2021

The Biden- Harris Administration today announced it will require a multitude of US employees to adopt and enforce workplace COVID-19 vaccination mandates for their workers.

The mandate requirement generally will apply to all federal workers, government contractors and subcontractors, health care workers of facilities participating in Medicare or Medicaid And any employer with more than 100 employees.All Medicare and Medicaid certified health care facilities, and a broad range of other employers must prepare to meet impending new federal COVID-19 vaccine mandates announced by the Biden-Harris Administration today.

According to today’s announcements all healthcare facilities participating in Medicare or Medicaid, Federal government employees, federal government contractors or subcontractors and any business employing 100 or more employees will be required to ensure all staff are vaccinated against COVID-19.

The Biden-Harris Administration says the new health industry COVID-19 vaccine will be implemented through emergency regulations to be issued in October.

According to today’s announcement, the Centers for Medicare & Medicaid Service (“CMS”) in collaboration with the Centers for Disease Control (“CDC”) will issue an Interim Final Rule with Comment Period for health care providers in October that will apply vaccine mandates hospitals, dialysis facilities, ambulatory surgical settings, nursing homes and home health agencies, among others, as a condition for participating in the Medicare and Medicaid programs. This announcement expends the healthcare industry mandate beyond it’s originally planned applicability to nursing homes when announced last month.

In addition to the health industry mandate, the Biden-Harris Administration also announcementI it would impose new vaccine mandates for all federal government workers, government contractors and subcontractors, and all employers employing more than 100 employees.

In it’s announcement of the impending vaccination requirements, CDC urged health care facilities to prepare now to meet the new mandate in October. CMS expects certified Medicare and Medicaid facilities to act in the best interest of patients and staff by complying with new COVID-19 vaccination requirements. 

The Administration is urging covered workers not currently vaccinated to begin the vaccination process immediately and facilities and employers to use all available resources to support employee vaccinations, including employee education and clinics, as they work to meet new federal requirements.

Beyond potential federal program participation losses, the new vaccine mandates likely adds vaccination to the list of safety safeguards that employers can expect to be required to enforce as part of the occupational safety rules of the Occupational Safety and Health Administration (“OSHA”).

While legal challenges to the mandate requirements are likely, most business andw that have not already adopted vaccine mandates are expected to adopt these mandates rather than face business losses and other sanctions.

Businesses that were supportive of mandates but fearful of the burdens of administering required accommodations under the Americans with Disabilities Act (”ADA”) or other civil rights laws are likely to welcome the Administration‘s new position. Unlike voluntary mandates, the ADA accommodation requirements do not apply to vaccination requirements required by law.

The new mandates also mean that businesses generally need to be concerned about potential OSHA exposure for failing to implement or enforce the mandates. OSHA already is sanctioning employers for violating COVID-19 related OSHA requirements. For instance, OSHA nailed Lakewood Resource and Referral Center Inc., dba Center for Education Medicine and Dentistry (CHEMED) with heavy fines for allegedly violating applicable COVID-19 safety guidelines in January, 2021.

In a July 23, 2021 citation letter, OSH proposes to fine CHEMED $273,064.00 for willfully violating OSHA by not providing a medical evaluation to determine each employee’s ability to use a N95 respirator, before the employee was fit tested or required to use the respirator in the workplace to protect against SARS-CoV-2 virus while testing suspected COVID-19 individuals.

In addition to the proposed fine, the citation also orders CHEMED to take a series of corrective actions and to post notices in the workplace informing workers of the violation. 

Along with the CHEMED citation, OSH also cited a staffing agency contracted to provide nursing staffing to CHEMED, Homecare Therapies for also failing to conduct medical evaluations and fit tests. It received two violations and a proposed fine of $13,653.

In the face of these potential consequences, most covered health care facilities and other employers impacted by the mandate are likely to implement mandates unless and until these requirements are struct down by the courts or withdrawn.

Assuming the Administration follows appropriate procedures to adopt the rules, most legal commentators do not expect the legal challenges opposing the mandate orders to be successful in the courts particularly after the Supreme Court refused to overturn or hear arguments for overturning a unanimous decision of a three-judge panel of the United States Court of Appeals for the Seventh Circuit in Klassen v. Trustees of Indiana University that refused to enjoin a vaccine mandate imposed by Indiana University as a condition of student or staff in person participation in classes or other activities.

While most healthcare and other covered businesses are not expected to challenge the rules, compliance us likely to trigger backlash from some unvaccinated workers strongly opposed to becoming vaccinated. Employers may find that some employees will resign their employment or take other tactics to avoid becoming vaccinated. Even those who elect to become vaccinated to retain their employment are likely to express opposition and dissatisfaction that could create liability exposures for the employers if it becomes a basis for retaliation claim.

Employers in Texas and certain other states that have adopted rules restricting or prohibiting vaccine, mask or other mandates also may face challenges based on the state rules. 

In light of these and other uncertainties and challenges, Healthcare and Other or Employers generally should seek legal advice and assistance from legal counsel experienced with the relevant health care, labor and employment, privacy and other concerns. 

More Information

This article is republished by permission of the author, Cynthia Marcotte Stamer.  To review the original work, see here.

Solutions Law Press, Inc. invites you to receive future updates by registering here and participating and contributing to the discussions in our Solutions Law Press, Inc. LinkedIn SLP Health Care Risk Management & Operations GroupHR & Benefits Update Compliance Group, and/or Coalition for Responsible Health Care Policy. 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. For specific information about the these or other legal, management or public policy developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.

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 working as an on demand, special project, consulting, general counsel or other basis with domestic and international business, charitable, community and government organizations of all types, sizes and industries and their leaders on labor and employment and other workforce compliance, performance management, internal controls and governance, compensation and benefits, regulatory compliance, investigations and audits, change management and restructuring, disaster preparedness and response and other operational, risk management and tactical concerns.

Most widely recognized for her work with health care, life sciences, insurance and data and technology organizations, she also has worked extensively with health plan and insurance, employee benefits, financial, transportation, manufacturing, energy, real estate, accounting and other services, public and private academic and other education, hospitality, charitable, civic and other business, government and community organizations. and their leaders.

Ms. Stamer has extensive experience advising, representing, defending, and training domestic and international public and private business, charitable, community and governmental organizations and their leaders, employers, employee benefit plans, their fiduciaries and service providers, insurers, and others has published and spoken extensively on these concerns. As part of these involvements, she has worked, published and spoken extensively on these and other human resources, employee benefits, compensation, worker classification and other workforce and other services; insurance; health care; workers’ compensation and occupational disease; business reengineering, disaster and distress; and many other performance, risk management, compliance, public policy and regulatory affairs, and other operational concerns. 

A former lead advisor to the Government of Bolivia on its pension  project, Ms. Stamer also has worked internationally and domestically as an advisor to business, community and government leaders on these and other legislative, regulatory and other legislative and regulatory design, drafting, interpretation and enforcement, as well as regularly advises and represents organizations on the design, administration and defense of workforce, employee benefit and compensation, safety, discipline, reengineering, regulatory and operational compliance and other management practices and actions.

Ms. Stamer also serves in leadership of a broad range of professional and civic organizations and provides insights and thought leadership through her extensive publications, public speaking and volunteer service with a diverse range of organizations including as Chair of the American Bar Association (“ABA”) Intellectual Property Section Law Practice Management Committee, Vice Chair of the International Section Life Sciences and Health Committee, Past ABA RPTE Employee Benefits & Other Compensation Group Chair and Council Representative and current Welfare Benefit Committee Co-Chair, Past Chair of the ABA Managed Care & Insurance Interest Group, past Region IV Chair and national Society of Human Resources Management Consultant Forum Board Member,  past Texas Association of Business BACPAC Chair, Regional Chair and Dallas Chapter Chair, former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation and many others.

For more information about these concerns or Ms. Stamer’s work, experience, involvements, other publications, or programs, see www.cynthiastamer.com,  on  Facebook, on LinkedIn or Twitter or 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.

©2021 Cynthia Marcotte Stamer. Non-exclusive right to republish granted to Solutions Law Press, Inc.™


Avoid Internship FLSA Minimum Wage & Overtime Traps

March 3, 2021

Is your organization considering offering or receiving requests from students or others seeking paid or unpaid internships?  Properly structured internships can prove highly beneficial for both the sponsoring employer and the intern. Before you jump in, make sure you’ve considered and covered the Fair Labor Standards Act (“FLSA”) traps.

The FLSA generally requires “for-profit” employers to pay interns in accordance with the minimum wage and overtime requirements of the FLSA if the internship results in the intern providing services as an “employee” within the meaning of the FLSA.  An employer fails to pay an intern who is an employee for FLSA purposes at least minimum wage for regular hours of work or  time and a half for any overtime worked risks being required to pay back pay, interest, and liquidated damages plus attorneys fees and costs of enforcement in the case of private enforcement or administrative penalties in the case of enforcement by the Department of Labor Wage and Hour Division.

As is generally the case under the FLSA, an employer that violates the FLSA by failing to pay an intern who is an employee at least minimum wage for regular hours of work or  time and a half for any overtime worked risks being required to pay back pay, interest, and liquidated damages plus attorneys fees and costs of enforcement in the case of private enforcement or administrative penalties in the case of enforcement by the Department of Labor Wage and Hour Division.

One clear way a business can sidestep these FLSA risks is to pay any intern at least minimum wage for regular hours of work and time and time and a half for any overtime hours of work.

Where an employer is unwilling to pay an intern at least the minimum amounts required by wage and hour law, the employer should confirm and preserve evidence to prove the intern and not the organization was the primary beneficiary of the relationship taking into account all of the economic realities of the relationship.

Employers should keep in mind that the FLSA places the burden upon the employer to prove the justification for not treating and paying an intern as an employee under the FLSA by showing that the intern and not the employer is the “primary beneficiary” of the internship. While no single factor is determinative, some of the factors identified by the courts as as relevant for purposes of determining the economic reality of the relationship include:

  • The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee—and vice versa.
  • The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions.
  • The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.
  • The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar.
  • The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.
  • The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.
  • The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.

Because of the potential risks of misclassification of the relationship, an employer contemplating involvement in an unpaid or below minimum wage internship arrangement should carefully document and preserve all evidence relevant to prove that the internship was not employment under the economic realities. Because of the heightened requirements and liability exposures, this is even more critical when providing internships to an individual who could be covered by child labor laws.

To reduce the risk of missteps or unexpected consequences, employers also may wish to ask legal counsel experienced in the FLSA and other workforce laws to provide guidance about the proposed relationship under the FLSA and other laws.  Employers should keep in mind that state minimum wage and other pay laws, OSHA and other safety, tax and other law may apply different definitions for purposes of deciding their treatment of an internship relationship.  The business will want to understand and preserve analysis and relevant evidence to help support its characterization under the FLSA and other laws.

Additionally, whether paid or unpaid, employers also should carefully document the understanding between the parties about the relationship and its terms.  Employers also keep careful time and other records needed to show or defend compliance and other elements of the relationship.  Even where the relationship is not characterized as an employment one, employers also will want to use care not to skip or cut corners on background checks, privacy, security, intellectual property, safety, or other requirements.  If the relationship is not one of employment, the employer also should consult with its insurance broker about the availability of or advisability of securing coverage for injuries or other actions or events involving the intern.

More Information

This article is republished by permission of the author, Cynthia Marcotte Stamer.  To review the original work, see here.

Solutions Law Press, Inc. invites you to receive future updates by registering here and participating and contributing to the discussions in our Solutions Law Press, Inc. LinkedIn SLP Health Care Risk Management & Operations GroupHR & Benefits Update Compliance Group, and/or Coalition for Responsible Health Care Policy. 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. For specific information about the these or other legal, management or public policy developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.

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 working as an on demand, special project, consulting, general counsel or other basis with domestic and international business, charitable, community and government organizations of all types, sizes and industries and their leaders on labor and employment and other workforce compliance, performance management, internal controls and governance, compensation and benefits, regulatory compliance, investigations and audits, change management and restructuring, disaster preparedness and response and other operational, risk management and tactical concerns.

Most widely recognized for her work with health care, life sciences, insurance and data and technology organizations, she also has worked extensively with health plan and insurance, employee benefits, financial, transportation, manufacturing, energy, real estate, accounting and other services, public and private academic and other education, hospitality, charitable, civic and other business, government and community organizations. and their leaders.

Ms. Stamer has extensive experience advising, representing, defending, and training domestic and international public and private business, charitable, community and governmental organizations and their leaders, employee benefit plans, their fiduciaries and service providers, insurers, and others has published and spoken extensively on these concerns. As part of these involvements, she has worked, published and spoken extensively on these and other human resources, employee benefits, compensation, worker classification and other workforce and other services; insurance; health care; workers’ compensation and occupational disease; business reengineering, disaster and distress;  and many other performance, risk management, compliance, public policy and regulatory affairs, and other operational concerns.

A former lead advisor to the Government of Bolivia on its pension  project, Ms. Stamer also has worked internationally and domestically as an advisor to business, community and government leaders on these and other legislative, regulatory and other legislative and regulatory design, drafting, interpretation and enforcement, as well as regularly advises and represents organizations on the design, administration and defense of workforce, employee benefit and compensation, safety, discipline, reengineering, regulatory and operational compliance and other management practices and actions.

Ms. Stamer also serves in leadership of a broad range of professional and civic organizations and provides insights and thought leadership through her extensive publications, public speaking and volunteer service with a diverse range of organizations including as Chair of the American Bar Association (“ABA”) Intellectual Property Section Law Practice Management Committee, Vice Chair of the International Section Life Sciences and Health Committee, Past ABA RPTE Employee Benefits & Other Compensation Group Chair and Council Representative and current Welfare Benefit Committee Co-Chair, Past Chair of the ABA Managed Care & Insurance Interest Group, past Region IV Chair and national Society of Human Resources Management Consultant Forum Board Member,  past Texas Association of Business BACPAC Chair, Regional Chair and Dallas Chapter Chair, former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation and many others.

For more information about these concerns or Ms. Stamer’s work, experience, involvements, other publications, or programs, see www.cynthiastamer.com,  on  Facebook, on LinkedIn or Twitter or 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.

©2021 Cynthia Marcotte Stamer. Non-exclusive right to republish granted to Solutions Law Press, Inc.™


Employer Option To Defer Paying Some Employee Payroll Taxes Until 2021

September 3, 2020

Employers now have the option temporarily to defer paying the employee portion (but not employer’s portion) of certain payroll taxes due between September 1, 2020 to December 31, 2020 for employees earning less than $4000 on a bi-weekly basis.

U.S. Department of the Treasury Notice 2020-65, Relief with Respect to Employment Tax Deadlines Applicable to Employers Affected by the Ongoing Coronavirus (COVID-19) Disease 2019 Pandemic (the “Notice”) issued on August 28, 2020 implements President Trump’s directive in his August 8, 2020 Memorandum on Deferring Payroll Tax Obligations in Light of the Ongoing COVID-19 Disaster (the “Memorandum”) that the Treasury Department allow the deferral of the employee portion of federal payroll taxes (6.2% for Social Security and 1.45% for Medicare) (“Employee Payroll Taxes”) from September 1, 2020 until December 31, 2020 for workers earning less than $4,000 on a biweekly basis (roughly $104,000 annually).

The Notice implements the Memorandum by confirming that employers may (but are not required to) elect to defer the payment of the Employee Payroll Taxes otherwise due on “applicable wages” until next year, after which payment of the deferred Employee Payroll Taxes will be required in  installments between January 1, 2021 and April 30, 2021. The option to defer does not, however, extend to the payment of the employer’s portion of payroll taxes.  An employer remains obligated timely to pay its employer payroll taxes whether or not the employer elects to take advantage of the Notice’s option to defer paying its employees’ portion of the taxes until 2021.

Employers contemplating this option must keep in mind that the Notice only delays the deadline for the employer to pay the employee portion of the payroll taxes.  Employers deferring payment of Employee Payroll Taxes under the Notice remain obligated to pay these taxes to the federal government by the end of April 2021.  Employers also will need to consider what arrangements, if any, the employer will make to collect deferred employee payroll taxes from the employee.

More Information

We hope this update is helpful. For more information about this or other health care, human resources, employee benefits, or other legal, operational or risk management developments and strategies, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.

Solutions Law Press, Inc. provides a broad range of publications and other information, education and other resources and tools to assist management leaders to manage people, process, risk and operations. 

Solutions Law Press, Inc. invites you receive future updates by registering on our Solutions Law Press, Inc. Website  and participating and contributing to the discussions in our Solutions Law Press, Inc. LinkedIn SLP Health Care Risk Management & Operations Group, HR & Benefits Update Compliance Group, and/or Coalition for Responsible Health Care Policy.

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 Law and Labor and Employment Law and Health Care; 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, and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, 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 human resources, employee benefits, compensation and other management work, public policy leadership and advocacy, coaching, teachings, and publications.

Ms. Stamer’s work throughout her 30 plus year career has focused heavily on working with health care and managed care, health and other employee benefit plan, insurance and financial services, construction, manufacturing, staffing and workforce and other public and private organizations and their technology, data, and other service providers and advisors domestically and internationally with legal and operational compliance and risk management, performance and workforce management, regulatory and public policy and other legal and operational concerns. As a part of this work, she has continuously and extensively worked with domestic and international employer and other management, employee benefit and other clients on payroll, income and other related tax, workers classification, wage and hour, compensation, benefits, performance, discipline, change and crisis management, internal and agency investigations and defense and a wide range of other workforce matters.

Author of hundreds of highly regarded books, articles and other publications, Ms. Stamer also is widely recognized for her scholarship, coaching, legislative and regulatory advocacy, leadership and mentorship on wage and hour, worker classification and a diverse range of other labor and employment, employee benefits, health and safety, education, performance management, privacy and data security, leadership and governance, and other management concerns within the American Bar Association (ABA), the International Information Security Association, the Southwest Benefits Association, and a variety of other international, national and local professional, business and civic organizations including highly regarded works on worker reclassification and joint employment liability under the FLSA and other laws published by the Bureau of National Affairs and others. Examples of these involvements include her service as the ABA Intellectual Property Law Section Law Practice Management Committee; the ABA International Section Life Sciences and Health Committee Vice Chair-Policy; a Scribe for the ABA Joint Committee on Employee Benefits (JCEB) Annual OCR Agency Meeting and a former JCEB Council Representative and Marketing Chair; Past Chair of the ABA RPTE Employee Benefits and Other Compensation Group and Vice Chair of its Law Practice Management Committee; Past Chair of the ABA Managed Care & Insurance Interest Group; former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Southwest Benefits Association Board member; past Texas Association of Business State Board Member, BACPAC Committee Meeting, Regional and Dallas Chapter Chair; past Dallas Bar Association Employee Benefits Committee Executive Committee; former SHRM Region IV Chair and National Consultants Forum Board Member; for WEB Network of Benefit Professionals National Board Member and Dallas Chapter Chair; former Dallas World Affairs Council Board Member; founding Board Member, past President and Patient Empowerment and Health Care Heroes founder for the Alliance for Health Care Excellence; former Gulf States TEGE Council Exempt Organizations Coordinator and Board member; past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, and involvement in a broad range of other professional and civic organizations. For more information about Ms. Stamer or her health industry and other experience and involvements, see http://www.cynthiastamer.com 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 available 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.

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. 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 author and Solutions Law Press, Inc. disclaim, and have no responsibility to provide any update or otherwise notify anyone 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.

©2020 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.


Congress Expected To Pass COVID-19 Relief Bill With Paid Leave Mandates & Expanded Unemployment Funding This Week

March 15, 2020

U.S. employers need to prepare for their likely need to deal with paid family medical leave, paid sick leave, unemployment insurance and other employer impacting provisions of the “Families First Coronavirus Response Act,” (H.R. 6201) passed by the House of Representatives last week and expected to pass the Senate in some form this week as part of Congressional efforts to mitigate impacts of disruptions of the COVID-19 containment disruptions. Since the paid leave mandates would take effect 15 days from enactment, employers will want to prepare to comply and take into account the likely mandates when planning and communicating with workers and dealing with other financial and operational disruptions from the crisis.Solutions Law Press, INC. is planning to host a briefing for employers on the requirements after passed by Congress. For an invitation, register at http://www.solutiinslawpress.com or email here.

Paid Family Medical Leave

As passed by the House, the paid leave requirements currently only apply to employers with fewer than 500 employees and are accompanied by tax credit provisions intended to help covered businesses pay the cost of compliance. The bill’s paid leave requirements add special job-protected paid leave to the Family and Medical Leave Act (FMLA) for employees who have been working for at least 30 calendar days. In particular, covered employees would be entitled to 12 weeks of paid family leave, of which the first 14 days may be unpaid, to respond to quarantine requirements or recommendations, to care for family members who are responding to quarantine requirements or recommendations, and to care for a child whose school has been closed as a result of the COVID-19 pandemic (“COVID Leave”). The bill also provides employees may. but employers can’t require employees to use accrued personal or sick leave during the first 14 days. After the initial 14 days, covered employers must compensate employees in an amount that is not less than two-thirds of the employee’s regular rate of pay. Because the leave is FMLA covered, employers should expect to be required to continue health coverage during the leave at usual employee contribution rates and to reinstate the employee to their position with all benefits and employment rights and seniority upon timely return. The provisions will take effect 15 days after the date of enactment and expire on December 31, 2020.

Paid Sick Leave

Employers with fewer than 500 employees will be required to provide full-time employees 2 weeks (80 hours) of paid sick leave for COVID-19 specific circumstances related to COVID-19 such as self-isolating, doctors’ visits or the like. Part-time employees would be entitled to the number of hours of paid sick time equal to the average number of hours worked over a 2-week period.

Employers must pay employees for any paid sick time taken at their regular rates of pay and will be required to post a notice informing employees of their rights to leave.

Since the bill expressly does not, as currently drafted, the bill expressly provides that it does not preempt existing state or local paid sick leave entitlements, employers also could face additional requirements under state or local law.

Like the COVID leave, these provisions also will go into effect 15 days after the date of enactment and expire on December 31, 2020.

Unemployment Insurance

The bill also includes $1 billion in emergency unemployment insurance (UI) relief to the states: $500 million for costs associated with increased administration of each state’s unemployment insurance (“UI”) program and places $500 million in reserve to help states with a 10 percent increase in unemployment. To receive a portion of this grant money, states mustveclerience the required increase in unemployment and temporarily ease certain UI eligibility requirements, such as waiting periods and work search requirements.

Prospects For Enactment

Although some Senators raised questions about certain provisions of the bill, it is expected to pass in some form this week as Congress and the Administration rush to provide relief for workers and business impacted by the economic effects of the COVID-18 pandemic containment efforts. Accordingly, covered employers should expect Congress to pass and President Trump to sign the bill this week. Meanwhile all employers also should brace for added legislation and regulation as well as continued operational and financial disruption as the COVID-19 virus impacts continue to roll out across the U.S. and around the World.

More Information

We hope this update is helpful. For more information about the these or other health or other legal, management or public policy 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 by registering on our Solutions Law Press, Inc. Website and participating and contributing to the discussions in our Solutions Law Press, Inc. LinkedIn SLP Health Care Risk Management & Operations Group, HR & Benefits Update Compliance Group, and/or Coalition for Responsible Health Care Policy.

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 health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications. As a significant part of her work, Ms. Stamer has worked extensively domestically and internationally with business, government and community leaders to prepare for and deal with pandemic and other health and safety, financial, workforce and other organizational crisis, change and workforce, employee benefit, health care and other operations planning, preparedness and response for more than 30 years. As a part of this work, she regularly advises businesses and government leaders on an an demand and ongoing basis about preparation of workforce, health care and other business and government policies and practices to deal with management in a wide range of contexts ranging from day to day operations, through times of change and in response to operational, health care, natural disaster, economic and other crisis and change.

Author of “Privacy and the Pandemic Workshop” for the Association of State and Territorial Health Plans, “How to Conduct A Reduction In Force,” and a multitude of other highly regarded publications and presentations on workforce, compliance, health care and health benefits, pandemic and other health crisis, workers’ compensation and occupational disease, business disaster and distress and many other topics, Ms. Stamer has worked with employers, insurers, health industry organizations and providers and domestic and international community and government leaders on pandemic and other health and safety, workforce and performance preparedness, risks and change management, disaster preparedness and response and other operational and tactical concerns throughout her adult life. A former lead advisor to the Government of Bolivia on its pension privaitization project, Ms. Stamer also has worked internationally as an advisor to business, community and government leaders on crisis preparedness and response, workforce, health care and other reform, as well as regularly advises and defends organizations about the design, administration and defense of their organizations workforce, employee benefit and compensation, safety, discipline and other management practices and actions.

Board Certified in Labor and Employment Law By the Texas Board of Legal Specialization, Scribe for the ABA JCEB Annual Agency Meeting with OCR, Vice Chair of the ABA International Section Life Sciences Committee, and the ABA RPTE Employee Benefits & Other Compensation Group and and a former Council Representative, Past Chair of the ABA Managed Care & Insurance Interest Group, former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, 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 extensive publications and thought leadership as well as leadership involvement in a broad range of other professional and civic organizations. For more information about Ms. Stamer or her health industry and other experience and involvements, see http://www.cynthiastamer.com 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 available 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.

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 considering the specific facts and circumstances presented in their unique circumstance at the particular time. No comment or statement in this publication is to be construed as legal advice or 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 constantly and often rapidly evolves, subsequent developments that could impact the currency and completeness of this discussion are likely. The author and Solutions Law Press, Inc. disclaim, and have no responsibility to provide any update or otherwise notify anyone of any fact or law specific nuance, 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.

©2020 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.


Don’t Get Stuck Paying Another Employer’s Overtime Or Other Backpay

January 13, 2020

No business wants to get hit with a bill or judgement for unpaid overtime or other wages and penalties under the Fair Labor Standards Act (“FLSA”). It’s even worse when the order to pay is for back pay another business owed but didn’t pay. New FLSA joint employer regulations released today update the rules about when your business could get stuck paying another business’ backpay. That’s why all U.S. employers should re-evaluate their potential minimum wage, overtime, recordkeeping and other Fair Labor Standards Acts (“FLSA”) liability exposure from work performed by workers employed by subcontractors or contractors, staffing, leasing, manpower and workforce and other separate business entities in light of the new Final Rule: Joint Employer Status under the Fair Labor Standards Act (“Final Rule”) on determining joint employer status under the FLSA released by the Department of Labor Wage and Hour Division (“Labor Department”).  The Labor Department released a copy of the Final Rule to the public today today (January 13, 2020) in anticipation of its scheduled official publication in the Federal Register on January 16, 2019.

Joint Employer Liability Long Standing FLSA Risk

Many businesses and their management are unaware that if their business meets the definition of a “joint employer” for purposes of the FLSA, their businesses could be required to pay unpaid wages and penalties another business owes for failing to pay minimum wage or overtime or other FLSA violations. even though their business never directly employed those workers.  This is because the FLSA also makes business that are “joint employers” as defined for purposes of the FLSA  jointly and severally liable with the direct employer for proper payment of wages and other compliance with the FLSA.  The FLSA requires covered employers to pay their employees at least the federal minimum wage for every hour worked and overtime for every hour worked over 40 in a workweek. To be liable for paying minimum wage or overtime, an individual or entity must be an “employer,” which the FLSA defines in Section 3(d) to include “any person acting directly or indirectly in the interest of an employer in relation to an employee[.]” Under the FLSA, an employee may have—in addition to his or her employer—one or more joint employers. A joint employer is any additional “person” (i.e., an individual or entity) who is jointly and severally liable with the employer for the employee’s wages under the applicable Labor Department regulations.

While both the Labor Department and private litigants have used the joint employer rules and precedent to nail businesses for other employer’s wage and hour liability frequently for the past sixty plus years, Obama Administration changes in the Labor Department’s interpretation and enforcement of the joint employer rule have significantly broadened the scope of relationships found to constitute joint employment to include a broad range of subcontractor and other business relationships not historically recognized as triggering joint employer liability.  Historically, joint employer determinations were reached by applying highly subjective, fact specific analysis heavily reliant upon decades of court decisions which required some evidence that the alleged joint employer possessed or exercised some control over the employees to support the finding of joint employment.   Under these historical tests, mere benefit from work performed by individuals employed by another employer did not establish a presumption, much less proof of joint employment.

During the Obama Administration, however, the Department of Labor both stepped up its efforts to identify and enforce these joint employer provisions and concurrently without formally issuing new regulations adopted interpretive and enforcement guidelines for finding joint employer status that that significantly broadened the employment relationships that the Labor Department treated as joint employers in a manner that presumed the existence of a joint employment relationship whenever the alleged joint employer benefitted from the performance of work even when the facts showed little or any evidence that the alleged joint employer possessed or exercised any control over the employee or the details of his work.  As a consequences, construction and other businesses uses contractors, health care organizations, and a host of other entities were surprised to be nailed with wage and hour liabilities arising from work performed by subcontractors, contractors, and other businesses including overtime liability attributable to work performed for the benefit of other customers of the employer.

Final Joint Employer Rule Changes Rules Effective March 16, 2020

Prompted by the Trump Administration’s broader effort to roll back these and other Obama Era pro-labor rulemaking and enforcement, the new Final Rule seeks to restore and reaffirm the requirement of evidence of the possession of authority or exercise of some traditional employer control by the alleged joint employer.  Scheduled to take effect on March 16, 2020, the new Final Rule will continue to recognize two potential scenarios where an employee may have one or more joint employers based on a highly subjective analysis of the factual realities of an alleged joint employer with another business or businesses under two scenarios:

  • The employee has an employer who suffers, permits, or otherwise employs the employee to work, but another individual or entity simultaneously benefits from that work (“Scenario One”); versus
  • One employer employs an employee for one set of hours in a workweek, and another employer employs the same employee for a separate set of hours in the same workweek (“Scenario Two”).

The Final Rule modifies and clarifies the Labor Department’s historical joint employer rule as it relates to the determination of joint employment status in Scenario One situations but leaves substantially unchanged its existing rules on joint employer determinations in Scenario Two situations.

Finally, the Final Rule provides several examples of how the Department’s joint employer guidance should be applied in various factual circumstances

Final Rule Modifications To Existing Rules On Joint Employment in Scenario One Situations

Under the Final Rule in a Scenario One situation under which an employee performs work for the employer that simultaneously benefits another individual or entity, the Final Rule adopts a four-factor balancing test to determine whether the potential joint employer is directly or indirectly controlling the employee, assessing whether the potential joint employer:

  • hires or fires the employee;
  • supervises and controls the employee’s work schedule or conditions of employment to a substantial degree;
  • determines the employee’s rate and method of payment; and
  • maintains the employee’s employment records.

Businesses should keep in mind that proof of the exercise of exercise direct control over these details of employment of an employee is not required for a finding of joint employment. Indirect exercise of control is sufficient.  Examples of indirect exercise of control recognized in the Final Regulations as supporting joint employer liability include control over an employee through mandatory directions to another employer that directly control the employee. However, indirect control does not include the direct employer’s voluntary decision to accommodate the potential joint employer’s request, recommendation, or suggestion. Similarly, acts that incidentally impact the employee do not indicate joint employer status. For example, a restaurant could request lower fees from its cleaning contractor, which, if agreed to, could impact the wages of the cleaning contractor’s employees. However, this request would not constitute an exercise of indirect control over the employee’s rate of payment.

Like under the prior rules and standards, whether a person is a joint employer under the new standards established in the Final Rule will continue to depend upon all the facts in a particular case, and the appropriate weight to give each factor will vary depending on the circumstances. Moreover, all of these factors need not be present for joint employment to exist.  However, the Final Rule states the potential joint employer’s maintenance of the employee’s employment records alone will not lead to a finding of joint employer status.  For purposes of its provisions, the Final Rule defines the “employment records” referred to in the fourth factor to mean only those records, such as payroll records, that reflect, relate to, or otherwise record information pertaining to the hiring or firing, supervision and control of the work schedules or conditions of employment, or determining the rate and method of payment of the employee.

Additionally, the Final Rule also notes that additional factors may also be relevant in determining whether another person is a joint employer in this situation, but only when they show whether the potential joint employer is exercising significant control over the terms and conditions of the employee’s work.

The Final Rule also identifies factors that are not relevant to the determination of FLSA joint employer status. For example, the Final Rule specifies that whether the employee is economically dependent on the potential joint employer, including factors traditionally used to establish whether a particular worker is a bona fide independent contractor (e.g., the worker’s opportunity for profit or loss, their investment in equipment and materials, etc.), are not relevant to determine joint employer liability. Economic dependence was an evidentiary factor promoted as evidence of joint employment in several Obama Administration era enforcement actions.

The Final Rule also identifies certain other factors that do not make joint employer status more or less likely under the Act which had been relied upon by the Labor Department under the Obama Administration era interpretation of the FLSA, including:

  • operating as a franchisor or entering into a brand and supply agreement, or using a similar business model;
  • the potential joint employer’s contractual agreements with the employer requiring the employer to comply with its legal obligations or to meet certain standards to protect the health or safety of its employees or the public;
  • the potential joint employer’s contractual agreements with the employer requiring quality control standards to ensure the consistent quality of the work product, brand, or business reputation; and
  • the potential joint employer’s practice of providing the employer with a sample employee handbook, or other forms, allowing the employer to operate a business on its premises (including “store within a store” arrangements), offering an association health plan or association retirement plan to the employer or participating in such a plan with the employer, jointly participating in an apprenticeship program with the employer, or any other similar business practice.

Additionally, the Final Rule makes clear that a finding of joint employer status in Scenario One situations must be based on an actual exercise of control by the alleged joint employer.  In this respect, the Final Rule provides that although an individual or entity’s power, ability, or reserved contractual right to exercise control relating to one or more of the factors may be relevant in determining whether they are an FLSA joint employer, such power, ability, or reserved contractual rights are not in themselves sufficient to establish FLSA joint employer status without some actual exercise of control.

Final Rule Retains Existing Rules On Joint Employment In Scenario Two Situations

The Final Rule did not make any substantive changes to the standard for determining joint employer liability in Scenario Two situations. If the employers are acting independently of each other and are disassociated with respect to the employment of the employee, the Final Rule continues to provide that each employer may disregard all work performed by the employee for the other employer in determining its liability under the FLSA. However, if the factual realities show that the employers are sufficiently associated with respect to the employment of the employee, the Final Rule continues to state that the two businesses are joint employers and must aggregate the hours worked for each for purposes of determining if they are in compliance.

For purposes of the Scenario Two analysis, the Final Rule provides that employers generally will be sufficiently associated if there is an arrangement between them to share the employee’s services, the employer is acting directly or indirectly in the interest of the other employer in relation to the employee, or they share control of the employee, directly or indirectly, by reason of the fact that one employer controls, is controlled by, or is under common control with the other employer.  Employers using manpower, staffing, employee leasing or other shared or part time workforces should keep in mind that a finding that their business is a joint employer with the supplier of the workers can result in liability for their business associated both for hours of work performed for the benefit of their business as well as any work the employee worked for another client of the supplier business.  As these shared workforces often perform work for several competitors, ironically this often means that a joint employer often ends up payment overtime liability attributable to unpaid overtime or other wages performed for a competitor business or businesses that also are clients of the same partial workforce supplier.

Businesses Should Act To Assess & Mitigate Joint Employer & Other FLSA Liability

The Labor Departments that its adoption of the revisions to the joint employer rule made by the Final Rule will add greater certainty regarding what business practices may result in joint employer status: and promote greater uniformity among court decisions by providing a clearer interpretation of FLSA joint employer status.  While the clarifications may help businesses to better predict certain relationships and arrangements that carry a higher risk of joint employer liability exposure, businesses must keep in mind that joint employer determinations under the Final Rule will continue to turn on highly subjective analysis of facts and circumstances that existing precedent suggests often finds the requisite evidence to find a joint employer relationship in many circumstances surprising to many business owners even taking into account the modifications made by the Final Rule,  For this reason, virtually all businesses generally will want to critically evaluate their existing and prospective relationships for potential joint employer liability under the FLSA in light of the Final Regulations.

Businesses should look to the guidance in the new Final Rule initially to evaluate whether their existing or prospective relationships meet, or could be restructured to meet all of the requisites to avoid or reduce the risk of findings of joint employer status.  When possible, businesses should seek to structure their contractual relationships and business dealings with other businesses to fit as closely as possible with those arrangements that the new Final Regulations identify as not constituting joint employer relationships in form and operation.  When engaging in these efforts, businesses need to look beyond their contractual agreements to examine the factual realities of their relationships with other businesses realistically based upon a clear understanding of the historical precedent to avoid mischaracterizing their relationships and their associated risks.  For added protection, businesses also should consider seeking contractual representations of compliance, coupled with requirements that other businesses whose employment practices could create joint employment risk provide records and other documentation needed to verify compliance and defend against potential joint employer liability claims.

Concurrently, businesses looking at FLSA joint employer liability risk management also should keep in mind that the new Final Rule only addresses joint employer determinations under the FLSA.  This Final Rule does not address “joint employer” status or other characterizations of relationships under other federal employment laws, such as the National Labor Relations Act (NLRA), the Employee Retirement Income Security Act of 1974 (ERISA), the Migrant and Seasonal Agricultural Worker Protection Act, Title VII of the Civil Rights Act, state labor, tax, unemployment, workers’ compensation or other laws, which often apply different standards for finding joint employment or other imputed liability of businesses other than the direct or nominal employer.  While different rules apply for those laws, government agencies and private litigants also increasingly successfully assert joint employer or other theories to impute liability to businesses that are not the nominal employer of workers protected by these laws.  To effectively plan for a control their broader joint employer risk, most businesses benefit from looking at their exposure holistically taking into account the potential characterization and liabilities under all of these rules concurrently.

Before beginning these assessments, businesses and their leaders are encouraged to engage an attorney experienced in FLSA and other joint employer and other worker classification laws in light of the legally sensitive evidence and discussions inherently involved in this process.  Conducting this analysis within the scope of attorney-client privilege helps protector limit the discoverability of sensitive discussions and work product in the event of a Labor Department investigation or litigation.

For More Information

We hope this update is helpful. For more information about this or other labor and employment 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 by registering on our Solutions Law Press, Inc. Website and participating and contributing to the discussions in our Solutions Law Press, Inc. LinkedIn SLP Health Care Risk Management & Operations Group, HR & Benefits Update Compliance Group, and/or Coalition for Responsible Health Care Policy.

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 Law and Labor and Employment Law and Health Care; 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, and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, 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 health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications.

Ms. Stamer’s work throughout her 30 plus year career has focused heavily on working with health care and managed care, health and other employee benefit plan, insurance and financial services, construction, manufacturing, staffing and workforce and other public and private organizations and their technology, data, and other service providers and advisors domestically and internationally with legal and operational compliance and risk management, performance and workforce management, regulatory and public policy and other legal and operational concerns. As a part of this work, she has continuously and extensively worked with domestic and international employer and other management, employee benefit and other clients to assess, manage and defend joint employer and other worker classifications and practices under the FLSA and other federal and state laws including both advising and and assisting employers to minimize joint employer and other FLSA liability and defending a multitude of employers against joint employer and other FLSA and other worker classification liability. She also has been heavily involved in advocating for the Trump Administration’s restoration of more historical principles for determining and enforcing joint employer liability over the past several years.

Author of hundreds of highly regarded books, articles and other publications, Ms. Stamer also is widely recognized for her scholarship, coaching, legislative and regulatory advocacy, leadership and mentorship on wage and hour, worker classification and a diverse range of other labor and employment, employee benefits, health and safety, education, performance management, privacy and data security, leadership and governance, and other management concerns within the American Bar Association (ABA), the International Information Security Association, the Southwest Benefits Association, and a variety of other international, national and local professional, business and civic organizations including highly regarded works on worker reclassification and joint employment liability under the FLSA and other laws published by the Bureau of National Affairs and others.  Examples of these involvements include her service as the ABA Intellectual Property Law Section Law Practice Management Committee; the ABA International Section Life Sciences and Health Committee Vice Chair-Policy; a Scribe for the ABA Joint Committee on Employee Benefits (JCEB) Annual OCR Agency Meeting and a former JCEB Council Representative and Marketing Chair; Past Chair of the ABA RPTE Employee Benefits and Other Compensation Group and Vice Chair of its Law Practice Management Committee; Past Chair of the ABA Managed Care & Insurance Interest Group; former Vice President and Executive Director of the North Texas Health Care Compliance Professionals Association, past Southwest Benefits Association Board member; past Texas Association of Business State Board Member, BACPAC Committee Meeting, Regional and Dallas Chapter Chair; past Dallas Bar Association Employee Benefits Committee Executive Committee; former SHRM Region IV Chair and National Consultants Forum Board Member; for WEB Network of Benefit Professionals National Board Member and Dallas Chapter Chair; former Dallas World Affairs Council Board Member; founding Board Member, past President and Patient Empowerment and Health Care Heroes founder for the Alliance for Health Care Excellence; former Gulf States TEGE Council Exempt Organizations Coordinator and Board member; past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, and involvement in a broad range of other professional and civic organizations. For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com 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 available here 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 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 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. 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 author and Solutions Law Press, Inc. disclaim, and have no responsibility to provide any update or otherwise notify anyone 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.

©2020 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.


Congress Moves To Enact Federal Paid Leave Rules

May 8, 2019

U.S. employers should start giving clear feedback to Congress about proposals to impose new federal paid family leave requirements on U.S. employers likely to move quickly through Congress given strong bipartisan Congressional and Presidential support. The push for enactment of federal paid leave legislation comes amid the enactment of a patchwork of state and local state paid leave laws over the past decade.

Strong bi-partisan Congressional support for expanded federal support for paid family leave was evident from statements and testimony at the House Ways and Means Committee Full Committee Hearing on Paid Family and Medical Leave: Helping Workers and Employers Succeed this morning.

In fact, Republican Representative Tom Brady, the Ranking Minority Member of the Committee, stated in his opening statement at the start of the hearing, “Today the question isn’t whether to expand paid family leave, but how best to achieve it.”

With the majority of Congress supporting federal legislation to expand the availability of paid family leave, U.S. employers should make sure to communicate their preferences about the “how” to Congress whole time remains to influence those decisions.

While both parties and the President Trump support expanded federal support for paid leave, the two Parties differ widely about the how federal legislation should promote paid family leave.

  • Republicans generally are urging the extension and support the “carrot” incentive approach they began in the last Congress when they led the enactment of The Paid Family and Medical Leave Tax Credit, doubling of the Child Tax Credit to its largest amount in history, increase of the Child Tac Credit refundability, and expansion of its availability to 8 million more families as part of the Tax Cuts and Jobs Act. The new paid leave credit reimburses qualifying businesses up to 25 percent of the cost of providing paid leave to their workers.  In this first-ever pilot program, businesses can get help for offering up to 12 weeks of paid leave. Republicans now support continuation and possible expansion of these incentives.
  • In contrast, Democrats advocate Congress using a “stick” approach by mandating that employers provide paid family leave or government sponsored programs through a plethora of proposals including, for instance instance:

    • S. 840, the Healthy Families Act and H.R. 1784, the Healthy Families Act would require covered employees of 15 or more employees to provide 1 hour of paid sick leave for care of self or a family member for every 30 hours an employee works that employees could carryover to subsequent years if not used with substantial penalties imposed employers; and
    • H.R. 1185: FAMILY Act introduced by Democrat Representative Rosa DeLauro with 185 co-sponsors would establish government sponsored accounts to provide paid family leave.
  • In his comments this morning, Representative Brady noted the need to tailor paid mandates to account for differences in employer needs, stating: “As we work to expand access to paid medical leave, there are real concerns that a new one-size-fits-all Washington mandate limits family flexibility, could be extremely costly, and will lead to higher taxes on workers, reduced job benefits, or harmful cuts in education, Social Security, or Medicare to pay for the new mandate.
  • in addition, before the hearing the highest ranking Republicans on the Subcommittees for Select Revenue Measures, Worker and Family Support, and Social Security respectively, Representatives Kevin Brady, Adrian Smith, Jackie Walorski, and Tom Reed, sent a letter to Ways and Means Chairman Richard Neal (D-MA), urging the emphasis of incentives over “one size, fits all mandates.”

    With both parties pushing to enact their preferred paid family leave approach, employers concerned about the cost and other challenges of a federal paid family leave mandate should review and provide feedback to key Congressional committees and members as soon as possible.

    If you want addition information or assistance in reviewing or responding to these proposals, please contact the author directly.

    We also invite you to share your own best practices ideas and resources and join the 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 Group or COPE: Coalition On Patient Empowerment Groupon LinkedIn or Project COPE: Coalition on Patient Empowerment Facebook Page.

    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, employee benefit and insurance, workforce and other management work, public policy leadership and advocacy, coaching, teachings, and publications.

    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’s clients include employers and other workforce management 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.

    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; 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.

    Past Chair of the ABA Managed Care & Insurance Interest Group and, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, heavily involved in health benefit, health care, health, financial and other information technology, data and related process and systems development, policy and operations throughout her career, and scribe of the ABA JCEB annual Office of Civil Rights agency meeting, Ms. Stamer also is widely recognized for her extensive work and leadership on leading edge health care and benefit policy and operational issues. She regularly helps employer and other health benefit plan sponsors and vendors, health industry, insurers, health IT, life sciences and other health and insurance industry clients design, document and enforce plans, practices, policies, systems and solutions; manage regulatory, contractual and other legal and operational compliance; vendors and suppliers; deal with Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA, state insurance law and other private payer rules and requirements; contracting; licensing; terms of participation; medical billing, reimbursement, claims administration and coordination, and other provider-payer relations; reporting and disclosure, government investigations and enforcement, privacy and data security; and other compliance and enforcement; Form 990 and other nonprofit and tax-exemption; fundraising, investors, joint venture, and other business partners; quality and other performance measurement, management, discipline and reporting; physician and other workforce recruiting, performance management, peer review and other investigations and discipline, wage and hour, payroll, gain-sharing and other pay-for performance and other compensation, training, outsourcing and other human resources and workforce matters; board, medical staff and other governance; strategic planning, process and quality improvement; HIPAA administrative simplification, meaningful use, EMR, HIPAA and other technology, data security and breach and other health IT and data; STARK, antikickback, insurance, and other fraud prevention, investigation, defense and enforcement; audits, investigations, and enforcement actions; trade secrets and other intellectual property; crisis preparedness and response; internal, government and third-party licensure, credentialing, accreditation, HCQIA, HEDIS and other peer review and quality reporting, audits, investigations, enforcement and defense; patient relations and care; internal controls and regulatory compliance; payer-provider, provider-provider, vendor, patient, governmental and community relations; facilities, practice, products and other sales, mergers, acquisitions and other business and commercial transactions; government procurement and contracting; grants; tax-exemption and not-for-profit; 1557 and other Civil Rights; privacy and data security; training; risk and change management; regulatory affairs and public policy; process, product and service improvement, development and innovation, and other legal and operational compliance and risk management, government and regulatory affairs and operations 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 health industry and other 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 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 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 advise or 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.

    ©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.


    Proposed FLSA Base Pay Rule Clarifies Overtime Treatment Of Perks

    March 28, 2019

    Employers frustrated with the current Fair Labor Standards Act (“FLSA”) rules defining what forms of payment employers must count as part of an employee’s “regular rate” when calculating overtime should evaluate and consider expressing support for the Department of Labor’s proposal announced today (March 28, 2019) to update its more than 50-year old regulations implementing the regular rate requirements under section 7(e) of FLSA  in 29 C.F.R. Parts 548 and 778.  Officially scheduled for publication in the May 28, 2019 Federal Register, employers and other interested persons may review the unofficial text of the  Notice of Proposed Rulemaking (“Proposed Rule”) released with the Labor Department’s announcement of its proposal today.  The Proposed Rule also will make substantive changes to the Labor Department’s current FLSA regulations about the treatment of “call back pay” and its base pay rules.

    Regular Rate For Overtime

    The FLSA generally requires employers to pay non-exempt employees overtime pay of at least one and one-half times the “regular rate” of pay for all hours worked in excess of 40 hours per workweek. Regular rate requirements define what forms of payment employers include and exclude in the “time and one-half” calculation when determining workers’ overtime rates. The existing rules define the regular rate to include both the base hourly rate of pay and certain bonus and other compensation and perks.  As the Trump Administration supports these proposed changes, employers should start evaluating their implications in anticipation of the Labor Department’s adoption of a Final Rule.  At the same time, businesses supporting the rule or desiring refinements to its provisions also will want to submit comments to the Labor Department no later than the May 18 comment deadline.

    Ambiguities in the current more than 50-year-old Labor Department regulations implementing the regular rate requirement rules discourage employers from offering more perks to their employees because of uncertainty about whether the perks are required to be included in the regular rate of pay for purposes of calculating overtime pay.  In many other cases, employers that mistakenly fail to include bonuses, benefits and other perks often experience the unfortunate surprise of getting nailed with unexpected back pay and penalties obligations through Labor Department audits or private litigation.

    The Proposed Rule primarily focuses on defining when employers must count bonuses, benefits, and other perks in an employee’s regular rate of pay when calculating overtime.  As proposed, the Proposed Rule would confirm that employers may exclude the following from an employee’s regular rate of pay:

    • the cost of providing wellness programs, onsite specialist treatment, gym access and fitness classes, and employee discounts on retail goods and services;
    • payments for unused paid leave, including paid sick leave;
    • reimbursed expenses, even if not incurred “solely” for the employer’s benefit;
    • reimbursed travel expenses that do not exceed the maximum travel reimbursement under the Federal Travel Regulation System and that satisfy other regulatory requirements;
    • discretionary bonuses, by providing additional examples and clarifying that the label given a bonus does not determine whether it is discretionary;
    • benefit plans, including accident, unemployment, and legal services; and
    • tuition programs, such as reimbursement programs or repayment of educational debt.
    • that employers do not need a prior formal contract or agreement with the employee(s) to exclude certain overtime premiums described in sections 7(e)(5) and (6) of the FLSA; and
    • that employers may exclude pay for time that would not otherwise qualify as “hours worked,” including bona fide meal periods,from an employee’s regular rate unless an agreement or established practice indicates that the parties have treated the time as hours worked.

    In addition, the Proposed Rule also would make two substantive changes to the existing regulations on “call-back pay” and to its “basic rate” regulations.

    Call-Back Pay

    The Proposed Regulation would eliminate the current restriction in Labor Regulation §§ 778.221 and 778.222 that “call-back” pay and other payments similar to call-back pay must be “infrequent and sporadic” to be excludable from an employee’s regular rate, while maintaining that such payments must not be so regular that they are essentially prearranged.

    Basic Rate

    The Proposed Rule also  proposes an update the Labor Department’s “basic t rate” regulations.

    Under the current regulations, employers using an authorized basic rate may exclude from the overtime computation any additional payment that would not increase
    total overtime compensation by more than $0.50 a week on average for overtime work weeks in the period for which the employer makes the payment.

    The Proposed Regulation would  change the current $0.50 limit to 40 percent of the federal minimum wage (currently $2.90.”  The Labor Department is inviting comments on if 40 percent is an appropriate threshold in its request for comments on the Propsoed Regulations.

    Comment on the Proposed Rule & Other FLSA Rule Changes

    Employers commenting on the Proposed Rule also should keep in mind that its publication comes on the heals of the Labor Department’s proposal of a new Proposed Salary Threshold Rule  that if adopted will increase to $679 per week the minimum salary an employee must earn to qualify for coverage by the “white collar” overtime exemption.  This would effectively raise the amount an employer must pay any worker it wants to treat as exempt under the white collar overtime exemption  from $23,660 annually to $35,308 annually. The adoption of this proposed Salary Threshold Rule as proposed overnight will disqualify a million plus currently salaried workers to hourly employees entitled to overtime under the FLSA.

    Businesses concerned about the Proposed Rule or the Proposed Salary Threshold Rule should submit their feedback as comments to the applicable proposal during the applicable comment period.  May 28 is the deadline for employers and other interested persons to submit comments of support or other input on the Proposed Rule to change the regular rate determination rules.

    Other Defensive Actions To Minimize FLSA Exposures

    Whether or not the either of these proposed rule changes takes effect, U.S. businesses will want to strengthen their existing practices for classifying and compensating workers under existing Federal and state wage and hour laws, tighten contracting and other compliance oversight in relation to outsourced services, weigh options to clean up exposure areas, review insurance coverages and consider other options to minimize their potential liability under applicable wages and hour laws.  Conducting this analysis within the scope of attorney-client privilege is important because the analysis and discussions are highly sensitive both as potential evidence for wage and hour and other legal purposes.  Consequently, businesses and their leaders generally will want to arrange for this work to be protected to the extent by attorney-client privilege, work product and other evidentiary protections against discovery by Department, employees or others for FLSA or other workforce enforcement actions.

    As a part of this process, businesses and their leaders generally should plan to:

    • Review subcontractor, temporary, lease employee, independent contractor and other outsourced labor and services relationship for potential risk of worker reclassification and tighten contracting and other procedures;
    • Audit the position of each employee currently classified as exempt to assess its continued sustainability and to develop documentation justifying that characterization;
    • Audit characterization of workers obtained from staffing, employee leasing, independent contractor and other arrangements and implement contractual and other oversight arrangements to minimize risks that these relationships could create if workers are recharacterized as employed by the employer receiving these services;
    • Review the characterization of on-call and other time demands placed on employees to confirm that all compensable time is properly identified, tracked, documented, compensated and reported;
    • If the employer hires any individuals under age 18, audit and implement appropriate procedures to ensure its ability to demonstrate compliance with all applicable FLSA child labor rules;
    • If the employer is a government contractor or subcontractor or otherwise performs any services on projects funded with federal or state funds, evaluate the applicability and fulfillment of any special wage, fringe benefit, recordkeeping or other government contracting wage and hour requirements;
    • If the employer hires foreign agricultural or other workers subject to special conditions and requirements, to review compliance with those special requirements;
    • Review and tighten existing practices for tracking compensable hours and paying non-exempt employees for compliance with applicable regulations and to identify opportunities to minimize costs and liabilities arising out of the regulatory mandates;
    • If the employer uses leased, temporary, or other outsourced labor, evaluate contractual, process and other options to support the employer’s ability cost effectively to respond to an audit, investigation or enforcement action by the Labor Department or private litigants and if necessary, obtain indemnification or other recovery in the event the employer incurs liability due to the use or practices of the outsourced labor supplier;
    • If the audit raises questions about the appropriateness of the classification of an employee as exempt, self-initiation of proper corrective action after consultation with qualified legal counsel;
    • Review and document all workers classified as exempt;
    • Review of existing documentation and record keeping practices for hourly employees;
    • Evaluate potential exposures under other employment, labor, tax or related laws or contracts that might be impacted by the findings or actions taken in response to those findings;
    • Explore available options and alternatives for calculating required wage payments to non-exempt employees and assessing and resolving other concerns;
    • Identify and calculate other employee benefit, tax or other corrections and associated costs and procedures that may be required as a result of findings or corrective actions resulting from their redress;
    • Re-engineer work rules, policies, contracts and practices to minimize costs and liabilities as appropriate in light of the regulations and enforcement exposures;
    • Explore insurance, indemnification and other options for mitigating risks and associated investigation and defense costs; and
    • Consider self-correction within the new PAID Program or otherwise.

    If you need more information or have questions, contact the author, Cynthia Marcotte Stamer.  We also invite you to share your own best practices ideas and resources and join the discussions about these and other human resources, health and other employee benefit and patient empowerment concerns by participating and contributing to the discussions onLinkedIn.

    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 wage and hour and other employment, employee benefit and insurance, workforce and other management work, public policy leadership and advocacy, coaching, teachings, and publications.

    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’s clients include employers and other workforce management 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.

    Throughout her  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; 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.

    Past Chair of the ABA Managed Care & Insurance Interest Group and, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, heavily involved in health benefit, health care, health, financial and other information technology, data and related process and systems development, policy and operations throughout her career, and scribe of the ABA JCEB annual Office of Civil Rights agency meeting, Ms. Stamer also is widely recognized for her extensive work and leadership on leading edge health care and benefit policy and operational issues. She regularly helps employer and other health benefit plan sponsors and vendors, health industry, insurers, health IT, life sciences and other health and insurance industry clients design, document and enforce plans, practices, policies, systems and solutions; manage regulatory, contractual and other legal and operational compliance; transactional and other change management; regulatory affairs and public policy; process, product and service improvement, development and innovation; and other legal and operational compliance and risk management, government and regulatory affairs and operations 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 wage and hour and 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 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 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 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 Linkedin or Facebook

    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 advise or 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.

    ©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.


    Federal Veterans Hiring Benchmark Resets 3/31 To 5.9%; Prepare For Audits & Other Enforcement

    March 27, 2019

    The just announced March 31, 2019 update of the the Annual Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA) hiring benchmark for federal government contractors and subcontractors changes to 5.9% provides an important reminder to U.S. employers to review and tighten the compliance of their recruiting, hiring, employment, compensation and benefits, and other policies and practices to withstand growing scrutiny and enforcement risks under federal laws.

    Government contractors, subcontractors and other U.S businesses should reconfirm their compliance with the new benchmark and other VEVRAA requirements for dealing with veterans in light of the Trump Administration’s continuing emphasis on enforcing it and other federal laws protecting active duty military and veteran servicemen and women. As part of these enforcement efforts the Office of Federal Contract Compliance Programs (“OFCCP”) has announced it plans to incorporate VEVRAA Focused Reviews into the Corporate Scheduling Announcement List next fiscal year.

    The Department of Labor announced the new 5.9% 2019 benchmark today (March 27, 2019). At the same time, it also updated national and state information in the VEVRAA Benchmark Database for federal contractors and subcontractors who calculate an individualized hiring benchmark using the five-factor method.

    With already large active duty and veteran population set to grow as the withdrawal of troops from Afghanistan and other deployments continues, the need for employers to properly honor the rights of active duty and returning service members under VEVRAA, USERRA, the expanded military related medical leave rules of the Family & Medical Leave Act and other applicable laws is more important than ever.  For many businesses, active duty and veteran service members constitute valuable sources of qualified workers amid an increasingly competitive labor market.  On the other hands, the special legal obligations and protections afforded these workers requires that businesses use care to meet these obligations.   Failing to meet or exceed hiring benchmarks or other noncompliance with federal requirements and goals can cause federal contractors and subcontractors to incur liability for breaching federal contracts and laws.  In addition, employers generally face substantial employment liability for violating VEVRRA, the Uniformed Services Employment and Reemployment Act or other applicable federal or state laws.  See, e.g. Enforcement e.g.,  Michael Sipos and Gary Smith v. FlightSafety Services Corporation, Co. Consent Decree (April 4, 2013);  Mervin Jones v. Jerome County Sheriff’s Office, ID complaint (January 7, 2013); Service Members to Receive $39 Million for Violations of the Servicemembers Civil Relief Act; Justice Department Settles Disability Discrimination Case Involving Disabled Veteran in Utah; Justice Department Reaches $12 Million Settlement to Resolve Violations of the Servicemembers Civil Relief Act by Capital One; and Justice Department Files Complaint Against Forsyth County, North Carolina, Sheriff for Violating the Employment Rights of Army National Guard Soldier.

    VEVRRA & USERRA Protections For Active Duty Military & Veterans

    Affirmative action hiring by government contractors and subcontractors is one of the VEVRRA requirements for government contractors and subcontractors to provide assistance to and protect returning veterans from employment discrimination.

    One of two key federal laws specifically prohibiting discrimination against returning veterans, VEVRRA applies only to government contractors and subcontractors. The other law, the Uniformed Services Employment and Reemployment Rights Act (USERRA), applies to virtually all  U.S. employers.

    Among other things, VEVRAA and its implementing regulations impose affirmative action requirements that require federal contractors and subcontractors to monitor and improve efforts to recruit and hire “protected veterans.”  Protected veterans generally include veterans who are:

    • Disabled veterans: Those who are “entitled to compensation…under laws administered by the Secretary of Veterans Affairs” or “those who were released from active duty because of a service-connected disability;
    • Recently separated veterans;
    • Active duty wartime or campaign veterans;
    • Campaign badge veterans; and
    • Armed Forces service medal veterans.

    Among other things, VEVRAA and its implementing Final Regulations generally require government contractors and subcontractors:

    • To set a hiring benchmark by either: (1) adopting a benchmark based on the national percentage of veterans currently in the workforce (5.9% effective March 31, 2019); or (2) creating an individualized benchmark based on their own interpretation of the best available data nationally and within their state/region.
    • Invite voluntary self-identification  of applicants and employees as protected veterans.  Pre-offer invitation to self-identify will involve asking whether the applicant believes that s/he is a protected veteran under VEVRAA without asking about the particular category of protection. Post-offer self-identification will request information regarding the specific category of protected veteran status. For Sample self-identification forms for both pre- and post-offer forms, see Appendix B Part 60-300 of the Final Regulation.
    • Comply with OFCCP reviews including providing on-site and off-site access to documents needed for compliance and focused reviews.
    • Track and report the effectiveness of veteran recruiting and hiring efforts by collecting specified data, which also must be retained for three years.
    • Provide access to job listings that identify the employer as a federal contractor in a format that can be used by veterans’ Employment Service Delivery Systems (ESDS).
    • Use mandated language in federal contracts (including subcontracts) to communicate the contractor’s obligations to employ and advance protected veterans.
    • Find and use appropriate outreach and positive recruitment activities like the Department of Defense Transition Assistance Program; the National Resource Directory and other sources contractorsfeel will be helpful in identifying and attracting veterans.

    While VEVRRA only applies to government contractors and subcontractors, USERRA generally applies to all employers.

    USERRA generally provides that an individual who leaves a job to serve in the uniformed services is generally entitled to continue medical coverage for up to 26 months while absent for a qualifying military leave, reemployment by the previous employer upon timely return from military leave and, upon reemployment, to restoration of service, promotion, benefits and other rights of employment. 

    As part of these reemployment rights, qualifying service members timely returning from military leave are entitled to receive credit for benefits, including employee pension plan benefits, that would have accrued but for the employee’s absence due to the military service. USERRA’s pension-related provisions generally require that pension plans treat a service member who is called to active duty as if the service member had no break in service for purpose of the administration of pension benefits when the service member timely returns to employment at the end of a military leave.  In addition to these pension rights, USERRA also requires employers honor other rights to employment, promotion and other benefits and rights of employment.

    Beyond these VEVRRA and USERRA employment rights, service members taking or returning from active duty often enjoy various other employment and other protections under various other federal and state laws, many of which have been expanded in recent years.

    As many veterans suffer return with physical, cognitive or emotional injuries and conditions, veteran applicants and employees may qualify for the disability discrimination, accommodation, privacy and other protections of the Americans with Disabilities Act (ADA) and, in the case of government contractors and subcontractors, the Section 503 of the Rehabilitation Act.

    Under requirements of the Soldiers’ and Sailors’ Civil Relief Act (SSCRA), creditors including a pension plan, employer loan program or credit union generally are required to drop interest charges down to 6 percent on debt owed by those called to active duty for the period of such military service. Further, under the Employee Retirement Income Security Act (ERISA), the loan will not fail to be a qualified loan under ERISA solely because the interest rate is capped by SSCRA.  These and other provisions of federal law often require pension and profit-sharing plans that allow plan loans to change loan terms and tailor other special treatment of participants who are on military leave.

    In addition to the specific protection given to a service member, employers also need to be ready to honor certain family leave protections afforded to qualifying family members or caregivers of service members added to the Family & Medical Leave Act (FMLA) in recent years.  As amended to include these military leave related protections, the FMLA may require certain employees who are the spouse, son, daughter, or parent of a military member to take to 12 weeks of FMLA leave during any 12-month period to address the most common issues that arise when a military member is deployed to a foreign country, such as attending military sponsored functions, making appropriate financial and legal arrangements, and arranging for alternative childcare. This provision applies to the families of members of both the active duty and reserve components of the Armed Forces.  Meanwhile, the “Military Caregiver Leave” provisions added to the FMLA may entitle certain employees who are the spouse, son, daughter, parent or next of kin of a covered service member to up to 26 weeks of FMLA leave during a single 12-month period to care for the service member who is undergoing medical treatment, recuperation, or therapy, is otherwise in outpatient status, or is otherwise on the temporary disability retired list, for a serious injury or illness incurred or aggravated in the line of duty on active duty. These provisions apply to the families of members of both the active duty and reserve components of the Armed Forces.  The expansion of these requirements, updating of regulation, and rising enforcement by private plaintiffs and the government make it advisable that businesses take all necessary steps to ensure their employment practices, employee benefit plans, fringe benefit programs and other practices are updated and administered to comply with the current requirements of VEVRRA, USERAA,  SSCRA, the FMLA and other applicable federal and state laws.

    Special care also generally is needed when designing and administering employment based health benefit programs to avoid violating federal eligibility rules prohibiting discrimination against service members, to properly offer continuation coverage and reinstatement during and following periods of service by employees and family members, and to avoid  improper denial of coverage or coordination of benefit rules with military and veteran health benefits.

    Given the potential liabilities that can result from noncompliance with these and other federal employment rules and requirements protecting active military and veteran service men and women, U.S. employer generally should reconfirm and carefully monitor and document their compliance with these laws to minimize their liability exposure.  Where employers use subcontractors or otherwise outsource work, these businesses also should consider require their subcontractors and other service providers to contract to comply with these requirements, to supply data and other documentation that the employer might need to complete reports or otherwise defend its compliance, to cooperate in audits and other investigations, and  to participate and cooperate with employer initiated compliance audits as well as government audits and investigations.

    Need more information about veterans’ employment or other Human Resources, employee benefits, compensation or other performance and compliance management, check out the extensive training and other resources available on the author’s website or contact the author, Cynthia Marcotte Stamer.

    We also invite you to share your own best practices ideas and resources and join the 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 Health Plan Compliance Group or COPE: Coalition On Patient Empowerment Groupon LinkedIn or Project COPE: Coalition on Patient Empowerment Facebook Page.

    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, employee benefit and insurance, workforce and other management work, public policy leadership and advocacy, coaching, teachings, and publications.

    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 has advised, trained, coached and defended businesses, employee benefit plans and others, published, and problem solved on opportunities and challenges relating to employment, benefits consumer, health care, disability and other rights and needs of active duty and veteran service people and their families.

    Ms. Stamer’s clients include employers and other workforce management 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.

    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; 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.

    Past Chair of the ABA Managed Care & Insurance Interest Group and, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, heavily involved in health benefit, health care, health, financial and other information technology, data and related process and systems development, policy and operations throughout her career, and scribe of the ABA JCEB annual Office of Civil Rights agency meeting, Ms. Stamer also is widely recognized for her extensive work and leadership on leading edge health care and benefit policy and operational issues. She regularly helps employer and other health benefit plan sponsors and vendors, health industry, insurers, health IT, life sciences and other health and insurance industry clients design, document and enforce plans, practices, policies, systems and solutions; manage regulatory, contractual and other legal and operational compliance; vendors and suppliers; deal with Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA, state insurance law and other private payer rules and requirements; contracting; licensing; terms of participation; medical billing, reimbursement, claims administration and coordination, and other provider-payer relations; reporting and disclosure, government investigations and enforcement, privacy and data security; and other compliance and enforcement; Form 990 and other nonprofit and tax-exemption; fundraising, investors, joint venture, and other business partners; quality and other performance measurement, management, discipline and reporting; physician and other workforce recruiting, performance management, peer review and other investigations and discipline, wage and hour, payroll, gain-sharing and other pay-for performance and other compensation, training, outsourcing and other human resources and workforce matters; board, medical staff and other governance; strategic planning, process and quality improvement; HIPAA health care, financial, tax, HR and  technology, privacy, data security and breach; health care, insurance, and other fraud prevention, investigation, defense and enforcement; audits, investigations, and enforcement actions; trade secrets and other intellectual property; crisis preparedness and response; internal, government and third-party licensure, credentialing, accreditation, HCQIA, HEDIS and other peer review and quality reporting, audits, investigations, enforcement and defense; patient relations and care; internal controls and regulatory compliance; payer-provider, provider-provider, vendor, patient, governmental and community relations; facilities, practice, products and other sales, mergers, acquisitions and other business and commercial transactions; government procurement and contracting; grants; tax-exemption and not-for-profit; 1557 and other Civil Rights; privacy and data security; training; risk and change management; regulatory affairs and public policy; process, product and service improvement, development and innovation, and other legal and operational compliance and risk management, government and regulatory affairs and operations 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 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 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 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. 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.

    ©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.


    Use 3/26 Diabetes Alert Day Resources To Jumpstart Your Diabetes Management & Cost Containment Efforts

    March 26, 2019

    Employers, health plans and others concerned about managing the high medical, disability and other costs of Type 2 Diabetes should use today’s annual Diabetes Awareness Day observances and resources to beef up their efforts and tools.

    With 1 in 3 adult Americans at risk for Type 2 diabetes, the Centers for Disease Control (“CDC”) and other public and private organizations partnering in The National Diabetes Prevention Program are urging all Americans, their health plans, state and local agencies and communities to protect themselves and join their fight to prevent or delay Type 2 diabetes.

    Celebrated every year on the fourth Tuesday in March, Diabetes Alert Day promotes awareness of the prevalence and risks of undiagnosed or unmanaged Type 2 Diabetes to Americans, American taxpayers, health benefit programs and their communities.

    • More than 30 million people in the United States have diabetes and an additional 84 million adults—over a third—have prediabetes, and 90% of them don’t know they have it.
    • Diabetes is the 7th leading cause of death in the United States (and may be underreported).
    • Type 2 diabetes accounts for about 90% to 95% of all diagnosed cases of diabetes; type 1 diabetes accounts for about 5%.
    • In the last 20 years, the number of adults diagnosed with diabetes has more than tripled as the American population has aged and become more overweight or obese
    • Undiagnosed or unmanaged Type 2 diabetes threatens serious and disabling medical risks for afflicted individuals that also are financially costly for patients and their families, their health plans, taxpayers and communities.

    Type 2 diabetes usually starts during adulthood; however, children, teens, and young adults increasingly also are developing it. Since Type 2 diabetes symptoms often develop over several years and can go on for a long time without being noticed it’s important individuals know the factors for Type 2 Diabetes and that people with these symptoms visit their doctor promptly.

    Fortunately, Type 2 Diabetes and its costs often can be prevented or minimized through appropriate diagnosis and treatment. That’s why the CDC and its partners are urging all Americans, the employers, health plans, health care providers and communities to join the fight against Type 2 Diabetes.

    To start with, the CDC and its partners ask every American to learn their risk for diabetes by taking the online Type 2 Diabetes Risk and promote use of CDC-recognized lifestyle change programs to individuals suffering or at risk for Type 2 diabetes.

    The CDC and its partners also are asking American families, health care providers, employers and their health benefit programs, federal, local and state governments and communities to help identify and get people at risk or suffering from Type 2 diabetes involved in making appropriate lifestyle changes and other activities to help manage their Type 2 Diabetes and offers a multitude of free tools and resources to help promote Type 2 Diabetes Awareness and assist in its prevention and treatment.

    Employers and their health plans and insurers should consider participating in Diabetes Alert Day and using some of the resources provided by CDC and other partners to beef up their Type 2 and other Diabetes prevention, screening and management efforts.  Appropriate use of these resources could help mitigate exposure to the high medical, disability, productivity and other costs that employers and their health plans generally incur when employees or their family members suffer from undiagnosed or unmanaged diabetes.  When utilizing these resources, however, employers and their health plan fiduciaries, insurers and administrators are reminded to use care to implement and administer these wellness and other programs in a manner that complies with the Americans With Disabilities Act (“ADA”), Health Insurance Portability & Accountability Act, Internal Revenue Code and other federal and state requirements concerning the design and administration of wellness and disease management programs including recent updates in the Equal Employment Opportunity Commission’s regulations and enforcement positions under the ADA.

    Learn more about Type 2 Diabetes cost modeling, screening, prevention and other participant education resources in our companion article in the Project Cope: Coalition for Patient Empowerment Newsletter.  We also invite you to share your own best practices ideas and resources and join the 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 Health Plan Compliance Group or COPE: Coalition On Patient Empowerment Groupon LinkedIn or Project COPE: Coalition on Patient Empowerment Facebook Page.

    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, employee benefit and insurance, workforce and other management work, public policy leadership and advocacy, coaching, teachings, and publications.

    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’s clients include employers and other workforce management 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.

    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, FMLA and other leave, 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; 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.

    Past Chair of the ABA Managed Care & Insurance Interest Group and, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, heavily involved in health benefit, health care, health, financial and other information technology, data and related process and systems development, policy and operations throughout her career, and scribe of the ABA JCEB annual Office of Civil Rights agency meeting, Ms. Stamer also is widely recognized for her extensive work and leadership on leading edge health care and benefit policy and operational issues. She regularly helps employer and other health benefit plan sponsors and vendors, health industry, insurers, health IT, life sciences and other health and insurance industry clients design, document and enforce plans, practices, policies, systems and solutions; manage regulatory, contractual and other legal and operational compliance; vendors and suppliers; deal with Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA, state insurance law and other private payer rules and requirements; contracting; licensing; terms of participation; medical billing, reimbursement, claims administration and coordination, and other provider-payer relations; reporting and disclosure, government investigations and enforcement, privacy and data security; and other compliance and enforcement; Form 990 and other nonprofit and tax-exemption; fundraising, investors, joint venture, and other business partners; quality and other performance measurement, management, discipline and reporting; physician and other workforce recruiting, performance management, peer review and other investigations and discipline, wage and hour, payroll, gain-sharing and other pay-for performance and other compensation, training, outsourcing and other human resources and workforce matters; audits, investigations, enforcement and defense; Civil Rights; privacy and data security; training; risk and change management; regulatory affairs and public policy; process, product and service improvement, development and innovation, and other legal and operational compliance and risk management, government and regulatory affairs and operations 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 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 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 be sure that we have your current contact information including your preferred e-mail by creating 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 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 advise or 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.

    ©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.


    2019 Mileage Rates Adjusted; Employee Unreimbursed Mileage & Relocation Mileage Deductions Unavailable In 2018 and 2019

    March 20, 2019

    Employers, employees and other taxpayers should use care to properly take into account recent changes in Internal Revenue Code (“Code”) rates and deduction rules reporting or when projecting, reporting or claiming mileage reimbursements or deductions for 2018 and 2019.

    Employers, employees and other taxpayers should use care properly to take into account recent changes in the rates and rules for deducting mileage and business, charitable and medical mileage and other travel expenses under the Internal Revenue Code (“Code”).

    Historically, the Code has allowed individual taxpayers to claim deduct either actual expenses incurred or the applicable standard deduction for business, medical or charitable mileage and other travel expenses. While most employers, employees and other taxpayers understand the Internal Revenue Service (“IRS”) adjusts applicable standard mileage rates annually, many are unaware the recent tax law changes generally prohibit employees, but not certain other income earners, from claiming a mileage deduction for business mileage.  Many employees or other individual taxpayers also do not realize that different deduction rates apply to businesses versus charitable and medical mileage expenses.  Understanding these nuances is important to avoid making mistakes in projecting, reporting or deducting mileage expenses and reimbursements.

    2019 Standard Mileage Deduction Rates

    The Code generally allows a taxpayer to elect either to claim a deduction for substantiated actual mileage and other transportation expenses or or an amount computed using the applicable standard mileage rate declared by IRS for that taxable year under mileage reimbursement policy, whichever is greater from the gross total income.  However, different applicable standard mileage rates apply to mileage for business, charitable, medical or moving expenses and the IRS adjusts each of these standard mileage rates annually.

    Notice 2019-02 sets 2019 standard mileage rates for taxpayers to use in computing the deductible costs of operating an automobile for business, charitable, medical or moving expense purposes.  The notice also provides the amount taxpayers must use in calculating reductions to basis for depreciation taken under the business standard mileage rate, and the maximum standard automobile cost that a taxpayer may use in computing the allowance under a fixed and variable rate plan.  For 2019, the applicable standard mileage rates are as follows:

    • The standard mileage rate for transportation or travel expenses is 58 cents per mile for all miles of business use (business standard mileage rate);
    • The standard mileage rate is 14 cents per mile for use of an automobile in rendering gratuitous services to a charitable organization under § 170;
    • The standard mileage rate is 20 cents per mile for use of an automobile: (1) for medical care described in § 213; or (2) as part of a move for which the expenses are deductible under § 217(g).

    Unreimbursed Employee Travel Expense & Moving Expense Deduction Suspension

    Even though the IRS has published standard mileage rates for use of an automobile for medical care or as part of a deductible move, most taxpayers incurring these expenses will not be able to claim any deduction for these expenses.  While the Code historically allowed employees and other taxpayers to claim an itemized deduction for business, charitable or medical care related transportation expenses,  Section 11045 of the Tax Cuts and Jobs Act, Public Law 115-97, 131. Stat. 2054 (December 22, 2017) (the “Tax Act”) suspends the deductions of unreimbursed employee travel expenses and for relocation expenses for the 2018 through 2026 tax years.  Specifically, the Tax Act amended the Code to prohibit employees from claiming unreimbursed employee travel and relocation mileage deductions for the 2018 through 2026 tax years.  Historically, the Code allowed employees filing itemized tax returns to include unreimbursed employee transportation expenses among the itemized expenses deductible in excess of the two percent of their adjusted gross income.  In connection with its expansion of the standard individual deductions, however, the Tax Act  suspends all miscellaneous itemized deductions subject to the two-percent of adjusted gross income floor under Code § 67, including unreimbursed employee travel expenses, for taxable years beginning after December 31, 2017 and before January 1, 2026.  In contrast, however, the Tax Act does not suspend the deduction in determining adjusted gross income of travel expenses or other expenses incurred in the production of income by independent contractors or other non-employee taxpayers.  Since unreimbursed travel expenses of employees are subject to the adjusted gross income floor under Code § 67,  employees cannot claim an itemized deduction for unreimbursed employee travel expenses for 2018 or 2019.  In contrast,  the Tax Act did not suspend the deduction for expenses incurred in the production of income.  Consequently, independent contractors and other non-employees still can deduct  travel expenses as expenses incurred in connection with the production of income on line 24 of Schedule 1 of Form 1040 (2018), not as an itemized deduction on Schedule A of Form 1040 (2018), using either their actual expenses or the annually applicable business standard mileage rate.

    In addition, Section 11049 of the Tax Act also generally suspends the deduction for moving expenses for the 2018 through 2026 . However, this suspension does not apply to members of the Armed Forces on active duty who move pursuant to a military order and incident to a permanent change of station to whom § 217(g) applies. Thus, except for taxpayers to whom § 217(g) applies, the standard mileage rate for the use of an automobile as part of a move occurring during the suspension will not apply during the suspension period.

    Proper calculation of applicable mileage related tax deduction depends upon taxpayers properly taking into account the suspension of the deductions for unreimbursed employee travel and relocation expenses for the 2018 through 2026 tax years and using the correct standard mileage rate.  Employees impacted by these expenses should take into account these modifications when calculating and completing their tax withholding forms and projecting their tax liability.  Because many employees may not be aware of these changes, employees with employees likely to be impacted by these changes may wish to alerting their employees to these changes.   Employers that previously provided employee handbooks or other communications to employees containing explanations discussions of the implications of travel or relocation expenses inconsistent with the current tax rules also should take immediate steps to withdraw or correct those communications.

    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, employee benefit and insurance, workforce and other management work, public policy leadership and advocacy, coaching, teachings, and publications.

    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’s clients include employers and other workforce management 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.

    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, FMLA and other leave, 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; 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.

    Past Chair of the ABA Managed Care & Insurance Interest Group and, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, heavily involved in health benefit, health care, health, financial and other information technology, data and related process and systems development, policy and operations throughout her career, and scribe of the ABA JCEB annual Office of Civil Rights agency meeting, Ms. Stamer also is widely recognized for her extensive work and leadership on leading edge health care and benefit policy and operational issues. She regularly helps employer and other health benefit plan sponsors and vendors, health industry, insurers, health IT, life sciences and other health and insurance industry clients design, document and enforce plans, practices, policies, systems and solutions; manage regulatory, contractual and other legal and operational compliance; vendors and suppliers; deal with Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA, state insurance law and other private payer rules and requirements; contracting; licensing; terms of participation; medical billing, reimbursement, claims administration and coordination, and other provider-payer relations; reporting and disclosure, government investigations and enforcement, privacy and data security; and other compliance and enforcement; Form 990 and other nonprofit and tax-exemption; fundraising, investors, joint venture, and other business partners; quality and other performance measurement, management, discipline and reporting; physician and other workforce recruiting, performance management, peer review and other investigations and discipline, wage and hour, payroll, gain-sharing and other pay-for performance and other compensation, training, outsourcing and other human resources and workforce matters; audits, investigations, enforcement and defense; Civil Rights; privacy and data security; training; risk and change management; regulatory affairs and public policy; process, product and service improvement, development and innovation, and other legal and operational compliance and risk management, government and regulatory affairs and operations 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 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 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 be sure that we have your current contact information including your preferred e-mail by creating 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 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 advise or 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.

    ©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.


    Employers Risk FMLA Violation By Delaying FMLA Notification, Designation While Employees Use Other Leave

    March 19, 2019

    A new U.S. Department of Labor’s Wage and Hour Division (WHD) Family and Medical Leave Act (“FMLA”) opinion letter says warns employers not to delay providing FMLA notice or designating a leave as FMLA-covered when coordinating FMLA protected leave with otherwise available paid or unpaid leave.

    FMLA Opinion 2019-1-A states that a FMLA-covered employer must designate as FMLA protected and, absent extenuating circumstances, must provide notice of the designation of the leave as FMLA protected within five business days of the date the employer has enough information to determine an employee has experienced a FMLA qualifying event. The Opinion says this designation and notice must happen even if the employee would prefer that the employer delay the designation of the absence as a FMLA protected leave until the employee exhausts other available leave.

    According to WHD, its FMLA regulations require employers to provide a written “designation notice” to an employee within five business days—absent extenuating circumstances—after the employer “has enough information to determine whether the leave is being taken for a FMLA-qualifying reason.”  Failure to provide timely notice requirement may constitute an interference with, restraint on, or denial of the exercise of an employee’s FMLA rights. 29 C.F.R. §§ 825.300(e), 825.301(e).  Consequently, the Opinion concludes that the employer is responsible in all circumstances for designating leave as FMLA-qualifying and giving notice of the designation to the employee within five days of learning if events triggering the FMLA eligibility. 29 C.F.R. § 825.300(d).

    The Opinion also emphasizes that employers cannot delay the designation of a leave as FMLA protected and provision of notice while a FMLA-eligible employee uses otherwise available leave.  While acknowledging that the FMLA permits an employer to require, or to permit an employee to elect, to “substitute” accrued paid leave (e.g., paid vacation, paid sick leave, etc.) to cover any part of the unpaid FMLA entitlement period,the Opinion states that  “[t]he term substitute means that the paid leave provided by the employer … will run concurrently with the unpaid FMLA leave.” 29 C.F.R. § 825.207(a) (emphasis added).   While acknowledging that the FMLA allows employers to adopt leave policies more generous than those required by the FMLA. 29 U.S.C. § 2653; see 29 C.F.R. § 825.700, the Opinion also says an employer may not designate more than 12 weeks of leave—or more than 26 weeks of military caregiver leave—as FMLA-protected. See, e.g., Weidner v. Unity Health Plans Ins. Corp., 606 F. Supp. 2d 949, 956 (W.D. Wis. 2009) (citing cases for the principle that “a plaintiff cannot maintain a cause of action under the FMLA for an employer’s violation of its more-generous leave policy”).

    Furthermore, the Opinion also openly rejects and disagrees with the Ninth Circuit’s holding in Escriba v. Foster Poultry Farms, Inc., 743 F.3d 1236, 1244 (9th Cir. 2014) that an employee may use non-FMLA leave for an FMLA-qualifying reason and decline to use FMLA leave in order to preserve FMLA leave for future use. Instead, the Opinion adopts the position that once an eligible employee communicates a need to take leave for an FMLA-qualifying reason, neither the employee nor the employer may decline FMLA protection for that leave. See 29 C.F.R. § 825.220(d) (“Employees cannot waive, nor may employers induce employees to waive, their prospective rights under FMLA.”); Strickland v. Water Works and Sewer Bd. of City of Birmingham, 239 F.3d 1199, 1204 (11th Cir. 2001) (noting that the employer may not “choose whether an employee’s FMLA-qualifying absence” is protected or unprotected by the FMLA).  Accordingly, the Opinion concludes that when an employer determines that leave is for an FMLA-qualifying reason, the qualifying leave is FMLA-protected and counts toward the employee’s FMLA leave entitlement.  Once the employer has enough information to make this determination, the employer must, absent extenuating circumstances, provide notice of the designation within five business days.  Therefore, the employer may not delay designating leave as FMLA-qualifying or providing notification, even if the employee would prefer that the employer delay the designation.

    The Opinion also clarifies the WHD’s interpretation of the FMLA limits the protection of the FMLA to the statutory period set by the FMLA.   In this respect, the Opinion states, “An employer is also prohibited from designating more than 12 weeks of leave (or 26 weeks of military caregiver leave) as FMLA leave.”  Thus, while acknowledging that “[a]n employer must observe any employment benefit program or plan that provides greater family or medical leave rights to employees than the rights established by the FMLA.” under 29 C.F.R. § 825.700, the Opinion also states that “providing such additional leave outside of the FMLA cannot expand the employee’s 12-week (or 26-week) entitlement under the FMLA.” Therefore, the Opinion states that if an employee substitutes paid leave for unpaid FMLA leave, the employee’s paid leave counts toward his or her 12-week (or 26-week) FMLA entitlement and does not expand that entitlement.

    As many employers currently coordinate and administer their FMLA and other leaves inconsistently with the positions stated in the Opinion, employers generally should consult with experienced legal counsel within the scope of attorney client privilege about the implications of the guidance set forth in the Opinion on their existing practices and about whether any corrective action or modifications are advisable in light of the Opinion to minimize potential exposure to FMLA liability.   In connection with this review, employers also generally will want to evaluate their other paid and unpaid military, medical, maternity/paternity, adoption and other absence and leave policies and associated employee benefit plans to confirm that these designs continue to operate as intended and that current coordination practices comport with existing guidance.

    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, employee benefit and insurance, workforce and other management work, public policy leadership and advocacy, coaching, teachings, and publications.

    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’s clients include employers and other workforce management 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.

    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, FMLA and other leave, 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; 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.

    Past Chair of the ABA Managed Care & Insurance Interest Group and, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, heavily involved in health benefit, health care, health, financial and other information technology, data and related process and systems development, policy and operations throughout her career, and scribe of the ABA JCEB annual Office of Civil Rights agency meeting, Ms. Stamer also is widely recognized for her extensive work and leadership on leading edge health care and benefit policy and operational issues. She regularly helps employer and other health benefit plan sponsors and vendors, health industry, insurers, health IT, life sciences and other health and insurance industry clients design, document and enforce plans, practices, policies, systems and solutions; manage regulatory, contractual and other legal and operational compliance; vendors and suppliers; deal with Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA, state insurance law and other private payer rules and requirements; contracting; licensing; terms of participation; medical billing, reimbursement, claims administration and coordination, and other provider-payer relations; reporting and disclosure, government investigations and enforcement, privacy and data security; and other compliance and enforcement; Form 990 and other nonprofit and tax-exemption; fundraising, investors, joint venture, and other business partners; quality and other performance measurement, management, discipline and reporting; physician and other workforce recruiting, performance management, peer review and other investigations and discipline, wage and hour, payroll, gain-sharing and other pay-for performance and other compensation, training, outsourcing and other human resources and workforce matters; audits, investigations, enforcement and defense; Civil Rights; privacy and data security; training; risk and change management; regulatory affairs and public policy; process, product and service improvement, development and innovation, and other legal and operational compliance and risk management, government and regulatory affairs and operations 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 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 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 be sure that we have your current contact information including your preferred e-mail by creating 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 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 advise or 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.

    ©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.


    Give Labor Department Feedback On Proposed $124 Per Week Increase In FLSA Salary Threshold & Other Burdensome Rules

    March 19, 2019

    Employers concerned about minimum wage, overtime and other liability from the Proposed Salary Threshold Rule (“Proposal”) that if adopted will increase the minimum salary for the Fair Labor Standards Act (“FLSA”) “white collar” overtime exemption from $23,660 annually to $35,308 annually. If adopted as proposed, the Proposal overnight will disqualify a million plus currently salaried workers to hourly employees that their employers will be required to pay minimum wage and overtime under the FLSA.  Businesses concerned about the Proposal or other burdensome minimum wage or overtime requirements under the FLSA need to tell the Labor Department about these rules burdensome effects on business.

    Proposal To Raise Minimum Salary For Overtime Exemption

    The Labor Department Proposal if adopted will increase to $679 per week the minimum amount that an employer must pay an employee to treat that employee as exempt from the minimum wage or overtime rules of the FLSA regardless of the role or position of the employee.  This means that an additional million plus employees overnight no longer would qualify to be paid as salaried rather than hourly employees.  The Proposal

    Under currently enforced FLSA rules, employers generally must treat any employee earning less than $455 per week ($23,660 annually) as a non-exempt employee.  This generally means that the employer must pay the employee at least minimum wage for regular time and must pay overtime to the worker for any hours worked in excess of 40 hours per week.

    The Labor Department set the minimum weekly earnings level of $455 per week in 2004.  The Proposal if adopted will increase the minimum required earnings an employee must earn to qualify for exemption from minimum wage and overtime rules more than $124 per week to $679 per week (equivalent to $35,308 per year).

    The Department also is asking for public comment on the Proposal’s language for periodic review to update the salary threshold. An update would continue to require notice-and-comment rule making rather than calling for automatic adjustments to the salary threshold for inflation.

    Speak Up About Proposal & Other FLSA Burdens On Business

    Businesses concerned about Proposal to increase the salary threshold or other burdensome FLSA rules or enforcement policies should seize the opportunity to provide feedback.

    To start with, businesses should submit comments about the Proposed Rule electronically at www.regulations.gov as soon as possible before the 60-day comment period runs in mid-May.

    Additionally, concerned businesses also should consider participating in events like the Small Business Roundtables that the Small Business Administration (“SBA”) Office of Advocacy plans to host to discuss the Proposal to hear directly from small businesses about the impact of the proposed rule.  Currently SBA plans to host three roundtables:

    • Thursday April 4, 2019 –  2:00 pm – 4:00 pm (EDT) at the University of South Florida Port Tampa Bay, Building 1101 Channelside Dr., Suite 210, Tampa, FL 33602;
    • Thursday April 11, 2019 – 2:00 pm – 4:00 pm (EDT) at the SBA Headquarters, Eisenhower Room B 409 Third Street SW, Washington, DC 20416 (Call-in option available); and
    • Tuesday April 30, 2019 – 9:00 am – 11:00 am (CDT) at the Mobile Area Chamber of Commerce 451 Government St., Mobile, Alabama 36602

    Interested parties must RSVP to Janis.Reyes@sba.gov to participate.  Note that while SBA reports that SBA has invited Labor Department staff, the Labor Department has not confirmed its acceptance of these invitations yet.  Also, because comments expressed during these roundtables do not take the place of submitting written comments to the regulatory docket, concerned businesses should also still comment on the Proposal.  However adverse feedback from business expressed at this meeting could help to motivate SBA to express opposition or other negative feedback on the Proposal.

    Other Defensive Actions To Minimize FLSA Exposures

    Whether or not the Proposal takes effect, all U.S. businesses will want to strengthen their existing practices for classifying and compensating workers under existing Federal and state wage and hour laws, tighten contracting and other compliance oversight in relation to outsourced services, weigh options to clean up exposure areas, review insurance coverages and consider other options to minimize their potential liability under applicable wages and hour laws.  Conducting this analysis within the scope of attorney-client privilege is important because the analysis and discussions are highly sensitive both as potential evidence for wage and hour and other legal purposes.  Consequently, businesses and their leaders generally will want to arrange for this work to be protected to the extent by attorney-client privilege, work product and other evidentiary protections against discovery by Department, employees or others for FLSA or other workforce enforcement actions.

    As a part of this process, businesses and their leaders generally should plan to:

    • Review subcontractor, temporary, lease employee, independent contractor and other outsourced labor and services relationship for potential risk of worker reclassification and tighten contracting and other procedures;
    • Audit the position of each employee currently classified as exempt to assess its continued sustainability and to develop documentation justifying that characterization;
    • Audit characterization of workers obtained from staffing, employee leasing, independent contractor and other arrangements and implement contractual and other oversight arrangements to minimize risks that these relationships could create if workers are recharacterized as employed by the employer receiving these services;
    • Review the characterization of on-call and other time demands placed on employees to confirm that all compensable time is properly identified, tracked, documented, compensated and reported;
    • If the employer hires any individuals under age 18, audit and implement appropriate procedures to ensure its ability to demonstrate compliance with all applicable FLSA child labor rules;
    • If the employer is a government contractor or subcontractor or otherwise performs any services on projects funded with federal or state funds, evaluate the applicability and fulfillment of any special wage, fringe benefit, recordkeeping or other government contracting wage and hour requirements;
    • If the employer hires foreign agricultural or other workers subject to special conditions and requirements, to review compliance with those special requirements;
    • Review and tighten existing practices for tracking compensible hours and paying non-exempt employees for compliance with applicable regulations and to identify opportunities to minimize costs and liabilities arising out of the regulatory mandates;
    • If the employer uses leased, temporary, or other outsourced labor, evaluate contractual, process and other options to support the employer’s ability cost effectively to respond to an audit, investigation or enforcement action by the Labor Department or private litigants and if necessary, obtain indemnification or other recovery in the event the employer incurs liability due to the use or practices of the outsourced labor supplier;
    • If the audit raises questions about the appropriateness of the classification of an employee as exempt, self-initiation of proper corrective action after consultation with qualified legal counsel;
    • Review and document all workers classified as exempt;
    • Review of existing documentation and record keeping practices for hourly employees;
    • Evaluate potential exposures under other employment, labor, tax or related laws or contracts that might be impacted by the findings or actions taken in response to those findings;
    • Explore available options and alternatives for calculating required wage payments to non-exempt employees and assessing and resolving other concerns;
    • Identify and calculate other employee benefit, tax or other corrections and associated costs and procedures that may be required as a result of findings or corrective actions resulting from their redress;
    • Re-engineer work rules, policies, contracts and practices to minimize costs and liabilities as appropriate in light of the regulations and enforcement exposures;
    • Explore insurance, indemnification and other options for mitigating risks and associated investigation and defense costs; and
    • Consider self-correction within the new PAID Program or otherwise.

    If you need more information or have questions, contact the author, Cynthia Marcotte Stamer.

     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.

    The author of the “Texas Payday Act,” and numerous other highly regarded publications on wage and hour and other human resources, employee benefits and compensation publications, Ms. Stamer is well-known for her 30 years of extensive wage and hour, compensation and other management advice and representation of restaurant and other hospitality, health, insurance, financial services, technology, energy, manufacturing, retail, governmental and other 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 here 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 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 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. 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.

    ©2019 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.

     


    Labor Department Proposes Increasing FLSA Salary Threshold To $679 Per Week

    March 7, 2019

    Employers concerned about managing their overtime liability should review and provide prompt feedback to the U.S. Department of Labor (Department) on a Notice of Proposed Rulemaking (NPRM) that would make an additional million plus American workers eligible for overtime under the Fair Labor Standards Act (“FLSA”) by increasing the minimum amount an employee must earn to be eligible for treatment as FLSA exempt to $679 per week.

    Under currently enforced FLSA rules, employers generally must treat any employee earning less than $455 per week ($23,660 annually) as a non-exempt employee.  This generally means that the employer must pay the employee at least minimum wage for regular time and must pay overtime to the worker for any hours worked in excess of 40 hours per week.

    The minimum weekly earnings level of $455 per week was set in 2004.  The proposed regulation would increase the salary threshold using current wage data projected to January 1, 2020 from $455 to $679 per week (equivalent to $35,308 per year).

    The Department also is asking for public comment on the NPRM’s language for periodic review to update the salary threshold. An update would continue to require notice-and-comment rulemaking.

    The NPRM maintains overtime protections for police officers, fire fighters, paramedics, nurses, and laborers including: non-management production-line employees and non-management employees in maintenance, construction and similar occupations such as carpenters, electricians, mechanics, plumbers, iron workers, craftsmen, operating engineers, longshoremen, and construction workers. The proposal does not call for automatic adjustments to the salary threshold.

    The proposal to change the salary threshold in the NPRM follows a prior attempt by the Department of raise the threshold in 2016.  The U.S. District Court for the Eastern District of Texas enjoined a 2016 final regulation that would have raised the threshold on November 22, 2016.  Since November 6, 2017, the U.S. Court of Appeals for the Fifth Circuit has held in abeyance the Department’s appeal of the District Court’s ruling pending further rulemaking by the Department.  In the 15 years since the District Court enjoined its 2016 final rule, the Department consistently has enforced the 2004 salary threshold level.

    Employers concerned about the proposed increase in the salary threshold or other elements of the NPRM should submit comments about the proposed rule electronically at www.regulations.gov within the 60 day period following publication, in the rulemaking docket RIN 1235-AA20.

    The NPRM proposing to increase the salary threshold for qualification as a FLSA-exempt employee is only one of a number of proposed rule changes that could significantly impact employer liabilities and costs.

    Coupled with the Department’s continuing aggressive attacks against contract labor and other worker misclassification as well as other minimum wage, overtime and other FLSA rules, all employers should shore up the defensibility of their existing practices for classifying and compensating workers under existing Federal and state wage and hour laws, tighten contracting and other compliance oversight in relation to outsourced services, weigh options to clean up exposure areas, review insurance coverages and consider other options to minimize their potential liability under applicable wages and hour laws.  Conducting this analysis within the scope of attorney-client privilege is important because the analysis and discussions are highly sensitive both as potential evidence for wage and hour and other legal purposes.  Consequently, businesses and their leaders generally will want to arrange for this work to be protected to the extent by attorney-client privilege, work product and other evidentiary protections against discovery by Department, employees or others for FLSA or other workforce enforcement actions.

    As a part of this process, businesses and their leaders generally should plan to:

    • Review subcontractor, temporary, lease employee, independent contractor and other outsourced labor and services relationship for potential risk of worker reclassification and tighten contracting and other procedures;
    • Audit the position of each employee currently classified as exempt to assess its continued sustainability and to develop documentation justifying that characterization;
    • Audit characterization of workers obtained from staffing, employee leasing, independent contractor and other arrangements and implement contractual and other oversight arrangements to minimize risks that these relationships could create if workers are recharacterized as employed by the employer receiving these services;
    • Review the characterization of on-call and other time demands placed on employees to confirm that all compensable time is properly identified, tracked, documented, compensated and reported;
    • If the employer hires any individuals under age 18, audit and implement appropriate procedures to ensure its ability to demonstrate compliance with all applicable FLSA child labor rules;
    • If the employer is a government contractor or subcontractor or otherwise performs any services on projects funded with federal or state funds, evaluate the applicability and fulfillment of any special wage, fringe benefit, recordkeeping or other government contracting wage and hour requirements;
    • If the employer hires foreign agricultural or other workers subject to special conditions and requirements, to review compliance with those special requirements;
    • Review and tighten existing practices for tracking compensable hours and paying non-exempt employees for compliance with applicable regulations and to identify opportunities to minimize costs and liabilities arising out of the regulatory mandates;
    • If the employer uses leased, temporary, or other outsourced labor, evaluate contractual, process and other options to support the employer’s ability cost effectively to respond to an audit, investigation or enforcement action by WHD or private litigants and if necessary, obtain indemnification or other recovery in the event the employer incurs liability due to the use or practices of the outsourced labor supplier;
    • If the audit raises questions about the appropriateness of the classification of an employee as exempt, self-initiation of proper corrective action after consultation with qualified legal counsel;
    • Review and document all workers classified as exempt;
    • Review of existing documentation and record keeping practices for hourly employees;
    • Evaluate potential exposures under other employment, labor, tax or related laws or contracts that might be impacted by the findings or actions taken in response to those findings;
    • Explore available options and alternatives for calculating required wage payments to non-exempt employees and assessing and resolving other concerns;
    • Identify and calculate other employee benefit, tax or other corrections and associated costs and procedures that may be required as a result of findings or corrective actions resulting from their redress;
    • Re-engineer work rules, policies, contracts and practices to minimize costs and liabilities as appropriate in light of the regulations and enforcement exposures;
    • Explore insurance, indemnification and other options for mitigating risks and associated investigation and defense costs; and
    • Consider self-correction within the new PAID Program or otherwise.

    If you need more information or have questions, contact the author, Cynthia Marcotte Stamer.

     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.

    The author of the “Texas Payday Act,” and numerous other highly regarded publications on wage and hour and other human resources, employee benefits and compensation publications, Ms. Stamer is well-known for her 30 years of extensive wage and hour, compensation and other management advice and representation of restaurant and other hospitality, health, insurance, financial services, technology, energy, manufacturing, retail, governmental and other 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 here 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 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 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. 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.

    ©2019 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.

     


    Creative Pay & Time Keeping Requires FLSA Compliance & Risk Management

    December 27, 2018

    Today’s diverse business environment creates a demand for businesses to think creatively about their employment relationships, including creative scheduling and pay arrangements. While many of these arrangements produce win/win solutions for both the business and its employees, businesses need to use care properly to evaluate and manage minimum wage, overtime, and other wage and hour law responsibilities under the Fair Labor Standards Act (“FLSA”) and applicable state law.

    A new Department of Labor Wage and Hour Division (WHD) Fair Labor Standards Act (FLSA) opinion letter published December 21 illustrates this point. WHD Opinion Letter FLSA 2018-28 (Dec. 21, 2018) evaluates FLSA minimum wage and overtime compliance of one employer’s innovative strategy of paying certain hourly employees one hourly rate while the employee was working with clients and a second, lower hourly rate of pay for time that the employee spent traveling between client sites throughout the day.

    In WHD Opinion Letter FLSA 2018-28 (Dec. 21, 2018), the WHD expresses reservations about whether the specific practices of the requesting employer for calculating overtime for workers paid different hourly rates for different categories of work during the same work week fulfill the FLSA overtime requirements under certain circumstances, but blessed the compliance of the practice of the employer with the FLSA minimum wage rules.

    While only the employer that actually requested the ruling that resulted in the Opinion actually may rely upon the Opinion, the ruling highlights both the potential opportunity for businesses to structure innovative compensation and scheduling arrangements within the requirements of the FLSA and other laws, as well as the legal exposures that employers using innovative staffing and compensation arrangement risk by failing to appropriately manage these responsibilities.

    FLSA Minimum Wage & Overtime Requirements Generally

    The FLSA generally requires that employers pay covered, nonexempt employees receive at least the federal minimum wage (currently $7.25 per hour) for all hours worked. See 29 U.S.C. § 206(a)(1). According to previously published WHD guidance, WHD will consider an employer to have fulfilled this requirement “if the employee’s total wages for the workweek divided by compensable hours equal or exceed the applicable minimum wage.” See WHD Opinion Letter FLSA2004-8NA (Aug. 12, 2004)(different pay rates for trucking company workers); WHD Field Operations Handbook § 30b02.

    In addition to the requirement to pay at least the minimum wage, the FLSA also requires that covered, nonexempt employees receive overtime compensation of at least one and one-half times their regular rate of pay for time worked in excess of 40 hours per workweek. See 29 U.S.C. § 207(a)(1). To  determine the regular rate of pay for purposes of calculating the required overtime, an employer generally divides the employee’s “remuneration for employment” (subject to the exclusions in 29 U.S.C. § 207(e)) by the total hours worked for the workweek. See 29 C.F.R. § 778.109.

    WHD Opinion Letter FLSA 2018-28

    In WHD Opinion Letter FLSA 2018-28 (Dec. 21, 2018), WHD addressed its views regarding a home health provider’s practice for calculating the wages due to home health aide services that traveled to home health clients’ homes, who were required to travel to different client home locations during the workday. The employer establishes different rates of pay for time spent working with clients versus time spent traveling from location to location.  To calculate weekly pay, that employer multiplied an employee’s time with clients by his hourly pay rate established by the employer for time spent working with clients.  The employer then divides the product by the employee’s total hours worked, which includes both the client time and the travel time. The employer guarantees that the quotient meets both federal and state minimum wage rate requirements.

    According to the facts published in the WHD Opinion Letter, the home health provider represented that a typical standard rate of pay is $10.00 per hour with a client including travel time,” and that “[i]f any employee works over 40 hours (total paid hours and [travel] time) in any given workweek, the employer pays the employee time and a half for all time over 40 hours at a rate of $10.00.”

    Based upon the factual representations made by the home health agency, WHD ruled the employer’s compensation plan complies with the FLSA’s minimum wage requirements but expressed concern about whether the employer’s practices for calculating overtime complied with the FLSA.

    Concerning the FLSA minimum wage compliance, the WHD found that the employers practice fulfilled the FLSA minimum wage requirements because even though the employee’s average hourly pay rate varied from workweek to workweek, the employer always ensured that the average hourly pay rate exceeded the FLSA’s minimum wage requirement for all hours worked.

    In contrast, however, WHD expressed concern about the compliance of the employer’s compensation plan with the FLSA’s overtime requirements under certain circumstances. WHD states in the Opinion that the employer will not pay all overtime due to employees whose actual rate of pay exceeds $10 per hour if the employer always assumes a regular rate of pay of $10 per hour when calculating overtime due.  See  29 C.F.R. § 778.107.

    The Opinion notes that “neither an employer nor an employee may arbitrarily choose the regular rate of pay; it is an “actual fact” based on “mathematical computation.” Walling v. Youngerman-Reynolds Hardwood Co., Inc., 325 U.S. 419, 424–25 (1945); 29 C.F.R. § 778.108.

    On the other hand, the Opinion also states that the employer’s compensation plan would comply with the FLSA’s overtime requirements for all employees whose actual regular rates of pay are less than $10 per hour, as an employer may choose to pay an overtime premium in excess of the required amount. See, e.g., Molina v. First Line Solutions LLC, 566 F. Supp. 2d 770, 779 (N.D. Ill. 2007).

    The cautionary lessons from FLSA Opinion 2018-28 echo those WHD previously has issued alerting businesses to the need to use care to properly understand and meet FLSA requirements when structuring and administering two-tier hourly pay or other innovative pay and scheduling arrangements.

    The need to attend to the details of FLSA compliance when adopting and administering customized pay arrangements is further illustrated by WHD’s review of the FLSA compliance of a school district employer’s customized pay arrangement for its drivers in FLSA2004-8NA in 2004.  While the WHD found issues with the FLSA compliance of the special arrangement as administered by the school district, guidance provided by the Opinion also makes clear the type of adjustments to the arrangement the employer would need to adopt and apply to continue using the arrangement in its modified form. 

    Specifically, FLSA 2004-8NA considered a school district’s contractually negotiated arrangement to pay its drivers pursuant to a contractual arrangement under which the employer agreed to pay regular drivers a specified hourly rate with a minimum guarantee of two hours driving time pay per route/additional assignment. The contract also provided that for an assigned trip of less than two hours, a driver that wanted to receive pay for hte minimum guaranteed time had to perform regular maintenance in the bus garage or other work as assigned by the School District to complete the two hours.  Furthermore, the contract also specified that “Any regular driver may complete a voucher for payment for additional time if their morning or afternoon route exceeds his/her assigned time by one half hour or more” and that the employers only would pay additional wages for the actual added time worked to employees that worked at least 30 minutes or more without rounding to the next hour for calculating wages.  Thus,  an employee that worked an additional twenty-five minutes beyond his/her normal shiftwould not be compensated for the extra time worked.  Meanwhile, a bus driver that returned fifty minutes past the scheduled time received pay for an additional 50 minutes of work.

    WHD’s issue with the arrangement was that the rounding practices applied under the arrangement meant that the school district did not ensure that workers were paid at least the minimum wage per hour for all hours worked and might under some circumstances not properly pay overtime due to workers.

    While acknowledging that Labor Regulation Section 785.47 allows employers to disregard ‘insubstantial or insignificant periods of time outside the scheduled working hours that cannot practically be precisely recorded as de minimis,  WHD noted that the de minimis rule applies only where a few seconds or minutes of work are involved and where the failure to count such time is due to considerations justified by industrial realities.  It does not allow an employer by contract or otherwise to arbitrarily fail to count as hours worked any part, however small, of the employee’s fixed or regular working time. Where an employer fails to pay an employee for any part of the employee’s fixed or regular working time, however small, this would be considered a violation of the FLSA.

    Concerning the FLSA’s requirement that the employer pay hourly employees at least the minimum wage, WHD noted that in non-overtime workweeks or in workweeks in which the overtime provisions do not apply, WHD would consider the employer to have met the minimum wage requirement  if the employee’s total wages for the workweek divided by compensable hours equal or exceed the applicable minimum wage.  WHD added that this principle would apply even if the employer technically did not compensate the emploeye for time which is compensable under the FLSA.

    Concerning the overtime requirements of the FLSA, however, WHD had greater reservations.  As WHD noted in the 2004 Opinion, when a covered and non-exempt employee works overtime, a different rule applies. The FLSA overtime rule requires that an employer pay the employee for all hours worked at the agreed rate plus the overtime premium (one-half the regular rate) for all overtime hours.  Therefore, before an employee can be said to be paid statutory overtime compensation due, the employee must first be paid all straight time wages due for all hours worked under any express or implied contract or under any applicable statute (see 29 CFR Part 778.315).  As a result, WHD found that the FLSA overtime requirements would require the employer both to ensure that the employee actually was paid for each hour of straight time at the regular rate of pay plus time and a half of the regular rate of pay for each overtime hour worked.

    WHD additionally noted in the 2004 Opinion that the employer also risked violation of Labor Regulation 516.2(a)(7)’s requirement that the employer maintain accurate recordkeeping of hours worked each workday and total hours worked each workweek for covered, nonexempt employees if the payroll records do not accurately record the number of hours worked in one or more of the workdays.

    Takeaways For Other Employers About Using Variable Pay Rates & Other Innovative Scheduling & Pay Practices

    While other employers actually cannot rely upon  either WHD Opinion Letter FLSA 2018-28, FLSA 2004-8NA, or most other WHD Opinion Letters, WHD Opinion Letters and other publishe guidance, as well as judicial precedent and the enforcement conduct by WHD provide a wealth of valuable insights for other employers about the potential FLSA opportunities and pitfalls of using variable rates of pay or other innovative compensation, scheduling and timekeeping practices for compensating hourly employees.  Employers using or contemplating using innovative compensation, scheduling or recordkeeping practices should should seek assistance from experienced legal counsel with accessing and using this guidance to help reduce the risk that a proposed innovative compensation or other practice for scheduling or paying nonexempt hourly workers will trigger unanticipated FLSA or other liabilities..

    Make Wage & Hour Compliance & Risk Management Priority To Reduce Exposures

    Aside from using caution to properly calculate and pay overtime for workers paid different rates for different types of work, employers also need to use care to avoid other common FLSA and other wage and hour overtime violations.

    With the Trump Administration U.S. Department of Labor Wage and Hour Division (WHD) continuing its aggressive investigation and enforcement of minimum wage, overtime and other Fair Labor Standards Act (FLSA) and other wage and hour laws it used to recover more than $1.2 billion in back pay for workers over the past five years, Agriculture, Amusement, Apparel Manufacturing, Auto Repair, Child Care Services, Construction, Food Services, Guard Services, Hair, Nail & Skin Care Services, Health Care, Hotels and Motels, Janitorial Services, Landscaping Services, Retail, and Temporary Help and other U.S. employers should evaluate their current and past potential liability exposures and consider using the new pilot WHD self-audit Payroll Audit Independent Determination (PAID) program announced by WHD on March 6 or other options to mitigate their liability for their own or temporary or other contract labor’s existing or past minimum wage and hour law violations.

    U.S. employers and leaders with wage and hour management authority risk substantial liability from unresolved violations of the FLSA and other federal and state wage and hour laws.

    One of the most frequently violated and litigated federal employment laws, the FLSA generally requires that U.S. employers pay nonexempt employees at least $7.25 per hour for all regular compensable hours worked, plus time and one-half their regular rates, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. In general, FLSA “hours worked” includes all time an employee must be on duty, or on the employer’s premises or at any other prescribed place of work, from the beginning of the first principal work activity to the end of the last principal activity of the workday. Similar state or local laws often also impose higher minimum wage, compensable hour, break and other requirements than federal law requires.

    The FLSA and most applicable state and local wage and hour laws also mandate that employers maintain records of the hours worked by employees by non-exempt employees, documentation of the employer’s proper payment of its non-exempt employees in accordance with the minimum wage and overtime mandates of the FLSA, and certain other records and prohibit retaliation by an employer or other person again an employee or other person for asserting rights under the law or cooperating in a WHD investigation about FLSA compliance.

    Beyond these FLSA minimum wage and overtime requirements, WHD regulations and court decisions provide guidance on when an employer must treat “on-call” time, travel time, meal and break times, and certain other time periods as compensable hours worked by a non-exempt employee, when “comp time” in lieu of the payment of wages is permitted, various alternative methods for calculating overtime under certain special circumstances, and various other rules applicable to various special circumstances. Other special rules also can apply to businesses employing tipped employees, home workers, child labor, certain farm workers, workers working with special visas, and other special classes or workers.   Furthermore, collective bargaining agreements or other contracts or other federal, state or local laws also sometimes impose additional requirements for employers to pay higher “prevailing wages,” apply special rules for counting compensable work hours, and provide specified fringe benefits or other special compensation or protections or other wages, when the employer is a government contractor or subcontractor covered by the Service Contract Act, the Davis Bacon Act or other similar federal or state statutes.

    Over the past decade, WHD and private enforcement of the FLSA and other wage and hour laws generally has skyrocketed in part driven by the Obama Administration’s prioritization on raising the minimum wage, extending federal wage and hour protections, and expanding WHD and other enforcement.  WHD’s success in recovering more than $1.2 billion in back pay for workers over the past five years and other achievements in expanding its own and private oversight and enforcement and the continuation of these efforts under the Trump Administration means all employers need to view wage and hour law as a major liability risk requiring conscientious management.   However, the risk of enforcement is particularly acute for businesses in the following industries, designed for heightened enforcement and other attention as “Low Wage High Violation Industries” based on their particularly high record of noncompliance:  Agriculture, Amusement, Apparel Manufacturing, Auto Repair, Child Care Services, Construction, Food Services, Guard Services, Hair, Nail & Skin Care Services, Health Care, Hotels and Motels, Janitorial Services, Landscaping Services, Retail, and Temporary Help.

    Scrutiny & Challenges To Contract & Outsourced Labor Relationships Rising

    Beyond assessing their FLSA and other wage and hour compliance and associated exposures from the worker on their own payroll, U.S. employers and their leaders also should take care to carefully evaluate potential exposures from nontraditional services relationships and act to manage those risks.

    Misclassification of workers providing services as non-employees increasingly causes U.S. businesses to incur unanticipated FLSA and other wage and hour law liability for back pay, liquidated punitive damages, civil monetary penalties and other liability, in part because of WHD’s stepped up worker education, scrutiny, investigation, and enforcement challenging employers’ treatment of workers as non-employees.

    The FLSA and state and local rules generally apply to any workers that the employer who receives its services cannot prove is not its common law employee or an exempt employee within the meaning of the FLSA. The FLSA and most other wage and hour laws generally rules presume that workers rendering services are common law employees of the business in most circumstances. Businesses should evaluate their FLSA exposures from both workers they recognize as common law employees and those performing services in capacities that the business typically does not view as common law or otherwise covered by the FLSA when managing FLSA compliance and evaluating exposures, employers should exercise care not to overlook potential responsibilities and exposures associated with outsourced services provided through relationships characterized by the employer as subcontractors, independent contractors, lease employees, or other common outsourced relationships.

    Court decisions and regulations provide guidance for determining when leased, contract, jointly employed, independent contractor or other non-traditionally employed workers will be treated as employees of a business,  As in many other enforcement areas, The WHD and many other agencies increasingly view the misclassification of workers as something other than employees, such as independent contractors, leased employees and other common “outsourced” relationship as a serious problem for affected employees, employers and to the entire economy.

    According to the Labor Department, misclassified employees are often denied access to critical benefits and protections, such as family and medical leave, overtime, minimum wage and unemployment insurance and other rights.  The Labor Department also says employee misclassification also generates substantial losses to state and federal treasuries, and to the Social Security and Medicare funds, as well as to state unemployment insurance and workers compensation funds. To address these and other concerns, the Labor Department has joined other agencies like the Internal Revenue Service increasingly is challenging employers’ treatment of workers as exempt from FLSA and other legal obligations as independent contractors or otherwise.

    In response to these concerns, WHD published guidance warning employers about misclassification of workers about potential violation of the FLSA by improper misclassification of workers as independent contractors or non-employed. See Department of Labor Issues Guidance of Misclassification of Workers.  DOL’s key points in the guidance are that:

    • Most workers are employees under the broad definitions of the FLSA;
    • No single factor is determinative;
    • Employers should be wary of classifying workers as independent contractors merely because the workers control some aspects of their work; and
    • The ultimate question is whether a worker “is really in business for him or herself (and thus is an independent contractor) or is economically dependent on the employer (and thus is an employee).

    Other guidance makes clear that WHD and other agencies concerns about misclassification extend beyond workers labeled independent contractors to include scrutiny of subcontractor, day labor, temporary, leased employee and a broad range of other outsourced services relationships.  See here,

    Consistent with these principles, WHD and private litigants in recent years have increasingly scrutinized and successfully challenged employers’ failure to comply with the FLSA’s minimum wage, overtime, recordkeeping and other rules with respect to these outsourced workers.  See e.g., $1.4M FLSA Back Pay Award Demonstrates Worker Misclassification Risks; Employer Faces $2M FLSA Lawsuit For Alleged Worker Misclassification; $754,578 FLSA Settlement Shows Employer Risks From Worker Misclassification, Underpayment;   WHD now both conducts significant worker education outreach and regularly requests and scrutinizes the characterization of and FLSA compliance of outsourced workers in connection with its FLSA investigations and audits.  See e.g. Get the Facts on Misclassification Under the FLSA; Am I an Employee?: Employment Relationship Under the Fair Labor Standards Act (FLSA); Compliance Assistance Page – Fair Labor Standards Act; Elaws: Independent Contractors; Know Your Rights Video Series: Misclassification as an Independent Contractor; WHD Press Releases about employee Misclassification as Independent Contractors.  These and other developments are significantly increasing the likelihood that businesses will face WHD or private litigants challenges to its FLSA compliance relating to workers rendering services as independent contractors, subcontractors or other outsourced services providers.

    Employers often face substantial challenges responding to, much less, containing their FLSA exposures when a WHD or a private litigant successfully challenges the employer’s classification of the worker as a non-employee for a variety of reasons.  Beyond the likelihood of violations resulting from the employer’s failure to recognize it might owe minimum wage and overtime duties to the worker, an employer often lacks records and other data needed to fulfill recordkeeping and posting requirements and to accurately demonstrate hours worked and hourly rates to limit resulting back pay exposures because these workers are not treated as part of the employer’s workforce. Obtaining the necessary records to respond to a WHD or other investigation, lawsuit or other action often proves challenging because the independent contractor, leasing company, or other provider or of the services often becomes unavailable, is disincentivized by its own noncompliance or other interests, has failed to maintain necessary documentation or otherwise fails to cooperate in the delivery of these materials.  Furthermore, as leased employee, staffing, independent contractor and other outsourced arrangements invoice services at higher rates of compensation payment than the employer might otherwise have paid a traditionally employed worker, the lack of records and elevated compensation rates tend to push up the compensation used to calculate back pay and other awards. Accordingly, employers utilizing these arrangements should use care in structuring and administering these arrangements properly to evaluate their likely FLSA and other treatment and to manage these risks.

    FLSA Big Liability Risk

    Under the FSLA and applicable state wage and hour laws, violations of the FLSA and other federal or state wage and hour laws expose employers to substantial back pay, interest and punitive damages, civil monetary penalties for willful or and in the case of willful or repeated violations and in the case of willful violations, criminal prosecution.

    Because of the ability to recover liquidated damages and attorneys’ fees in addition to unpaid back pay, private enforcement of the FLSA is common.  The FLSA generally allows employees wrongfully denied wages in violation of the FLSA to bring lawsuits to enforce their rights provided that the WHD has not or does not intervene to enforce those rights on the worker’s behalf.  Workers successfully proving an employer violated their FLSA rights typically can recover back pay, plus liquidated damages, interest, attorneys’ fees and other costs of enforcement from the breaching employer.  In some cases, Corporate officers such as CEOs, CFOs or COOs and other management leaders with control over the breaching employer’s financial affairs also be held personally liable for the unpaid wages  See e.g., Lamonica v. Safe Hurricane Shutters+2013 U.S. App. LEXIS 4599 (11th Cir. 2013)(ruling personal liability for FLSA violations can attach to any individual with control over an employer’s financial affairs who could potentially cause an employer to violate FLSA).

    As an alternative to private litigation, the FLSA empowers the WHD to supervise or if necessary, enforce through litigation the rights of workers against a breaching employer to recover back pay plus  liquidated damages in an amount equal to the wrongfully denied wages. WHD also can pursue injunctive relief against noncompliant employers.

    When the employer is a repeat offender or willfully violated the FLSA, additional consequences attach.  A violation is “willful” for purposes of FLSA criminal prosecution if it is deliberate, voluntary, and intentional. A fine of up to $10,000 on the first conviction

    When an employer’s violation of the FLSA is repetitious or willful, the FLSA empowers WHD to impose civil money penalties (CMPs) against the noncompliant employer in addition to the recovery of back pay and liquidated damages. Intended to discourage future noncompliance by an employer guilty of violating the FLSA, CMPs for a “repeated” violation are assessable when the employer had previously violated the minimum wage or overtime requirements of the FLSA. CMPs for a “willful” violation may be assessed when it can be shown that the employer knew that its conduct was prohibited by the FLSA or showed reckless disregard for the requirements of the FLSA.  CMPs ordinarily are imposed based on violations occurring within the normal two-year investigation period. Where violations are determined to be willful, the investigation will cover a three-year period.

    The applicable 2018 CMP amounts, which are adjusted annually for inflation, are as follows:

     

    Type of Violation Statutory Citation CFR Citation Maximum Civil Monetary Penalty on or before 1/2/2018 Maximum Civil Monetary Penalty on or after 1/3/2018
    Homeworker:

    Violation of recordkeeping, monetary, certificate or other statutes, regulations or employer assurances.

    29 USC 211(d) 29 CFR 530.302 $1,005 $1,026
    Child labor:

    (1) Violation of child labor standards (sec 212 or 213(c));

    29 USC 216(e)(1)(A)(i) 29 CFR 570.140(b)(1) and 29 CFR 579.1(a)(1)(i)(A) $12,278 $12,529
    (2) Violation of child labor standards (sec 212 or 213(c)) that causes the serious injury or death of a minor; 29 USC 216(e)(1)(A)(ii) 29 CFR 570.140(b)(2) and 29 CFR 579.1(a)(1)(i)(B) $55,808 $56,947
    (3) Willful or repeated violation of child labor standards (sec 212 or 213(c)) that causes the serious injury or death of a minor 29 USC 216(e)(1)(A)(ii) 29 CFR 570.140(b)(2) and 29 CFR 579.1(a)(1)(i)(B) $111,616 $113,894
    (4) Repeated or willful violation of section 206 or 207. 29 USC 216(e) 29 CFR 579.1(a)(2) $1,925 $1,964
    Minimum Wage and Overtime:

    Repeated or willful violation of section 206 or 207.

    29 USC 216(e)(2) 29 CFR 578.3(a) $1,925 $1,964

    Although typically reserved for more egregious violations, “willful” violations of the FLSA can trigger criminal prosecution by the Department of Justice. A fine of up to $10,000, or a term of imprisonment of up to six months, or both, on all convictions after the first conviction

    In addition to or instead of lawsuits by the Secretary of Labor for back wages or injunctive relief, willful violation of the FLSA also can trigger criminal prosecutions against an employer by the Department of Justice.  Criminal penalties for willful FLSA violations include a fine of up to $10,000, or a term of imprisonment of up to six months, or both, on all convictions after the first conviction.  Since enforcement actions by the DOJ can be brought instead of or in addition to lawsuits by WHD for back wages or injunctive relief, an employer that willfully violates the FLSA can be ordered to pay liquidated damages and back-pay, as well as any court imposed criminal fine or penalty.

    Always popular, WHD and private enforcement of the FLSA initially spiked upward following the highly publicized George W. Bush Administration’s implementation of updated FLSA “white collar” regulations regarding the classification of workers as exempt.  The Obama Administration’s highly publicized, but unsuccessful, campaign to increase the minimum wage and aggressive FLSA educational outreach and enforcement further fueled this trend.  While President Trump has opposed proposals to increase the federal minimum wage, he has expressed his commitment to protect workers’ FLSA rights through continued vigorous enforcement of the FLSA minimum wage, overtime and other rules.

    As a result of its aggressive enforcement commitments, WHD takes credit for having recovered more than $1.2 billion in back wages on behalf of more than 1.3 million workers over the past five years. See here.  The following WHD enforcement statistics reflect that its commitment to FLSA enforcement has continued during President Trump’s tenure in office.

    Cases with Violations Back Wages Employees Receiving Back Wages(duplicated 1)
    FY 2011 Minimum Wage 12,450 $29,327,527 89,305
    Overtime 11,990 $140,328,012 204,243
    FY 2012 Minimum Wage 12,532 $35,270,524 107,005
    Overtime 12,462 $148,560,700 218,137
    FY 2013 Minimum Wage 12,403 $38,470,100 103,671
    Overtime 12,108 $130,703,222 174,197
    FY 2014 Minimum Wage 11,042 $36,732,407 106,184
    Overtime 11,238 $136,239,001 174,365
    FY 2015 Minimum Wage 10,642 $37,828,554 86,229
    Overtime 10,496 $137,701,703 173,330
    FY 2016 Minimum Wage 10,722 $34,964,350 81,870
    Overtime 10,884 $171,917,225 209,819
    FY 2017 Minimum Wage 10,687 $31,213,737 69,588
    Overtime 10,823 $157,592,682 183,272

    Pilot PAID Program May Offer New Option To Resolve WHD Exposures

    When an audit uncovers potential violations, some employers may want to explore options to voluntarily resolve their exposures.  To encourage voluntary compliance, the WHD on March 6, 2018 announced a new pilot self-audit Payroll Audit Independent Determination (PAID) program that offered employers accepted into the program after voluntarily disclosing violations to resolve their exposure WHD penalties and liquidated damages commonly assessed by WHD against employers for violating the FLSA minimum wage and overtime violations by:

    • Voluntarily disclosing the violations to WHD before becoming subject to investigation or enforcement and requesting admission to the program;
    • Paying affected workers 100 percent of the unpaid back pay due wrongfully denied by the end of the next full pay period after receiving the summary of unpaid wages from WHD confirming the back pay amount;
    • Working with WHD prospectively to correct noncompliant practices; and
    • Taking other actions to correct and prevent a recurrence of those violations.

    Originally slated as a pilot program set to expire after six months, the PAID program remains an opportunity offered by WHD on its website, which also shares “testimonials” from various employers that report having participated in the PAID program.

    While participation in the PAID program purpoerts to offer allows a participating employer to settle its exposure to prosecution for those violations by WHD without incurring some of themore extraordinary penalties that WHD is authorized to assess, many practitioners and employers report having achieved similar and in some cases even more favorable outcomes through negotiations conducted outside the PAID program.  Furthermore, many employers may face challenges in using the program as a result of the inability to marshal the required capital to pay 100 percent of the back pay due within the required time period.

    Beyond this challenge, employers evaluating whether to seek relief through the new PAID program also may need to weigh a variety of other concerns.

    For instance, employers considering participation need to understand that the settlement only addresses potential liability from WHD enforcement.  While WHD’s requirement that a participating employer pay affect 100 percent of any wrongfully denied back pay to the impacted employees generally would reduce the actual back pay damages recoverable by an employee in a private enforcement action, WHD says settlements reached with the WHD under the PAID program does not prevent employees wrongfully denied wages in violation of FSLA from bringing private lawsuits.  Rather, WHD states that it will be purely the employee’s choice whether to accept the payment of back wages the employer agrees to pay under the PAID program settlement. If the employee chooses to not accept the payment, the employee will not release any private right of action. Additionally, if the employee chooses to accept the payment, the employee will not grant a broad release of all potential claims under the FLSA. Rather, the releases are tailored to only the identified violations and time period for which the employer is paying the back wages. The WHD also cautions that regardless of whether the employee accepts or rejects the back pay specified in the PAID program, the FLSA will prohibit employers from retaliating against the employee for his or her choice. Furthermore, while the payment of previously unpaid amounts could reduce the amount of unpaid wages for purposes of determining liability for state wage and hour law violations, the WHD settlement does not directly impact or release liability for any state wage and hour violations.

    While any FLSA covered employer may use the program, interested employers should understand that acceptance into the program is not automatic and is not available for all FLSA violations.  Rather, the PAID program only covers potential violations of the FLSA’s overtime and minimum wage requirements that an employer self-identifies and voluntarily discloses and resolves in accordance with its PAID program settlement with WHD.  An employer cannot use the PAID program to resolve any issues for which WHD is already investigating the employer, or which the employer is already litigating in court, arbitration, or otherwise. An employer likewise may not initiate the process when an employee’s representative or counsel has already communicated an interest in litigating or settling the issue.   Employers using the Paid program also must be prepared to correct the noncompliant practices that resulted in the violations settled under the PAID program.  According to the WHD, WHD will not allow employers to use the program to repeatedly resolve the same violations, as this program is designed to identify and correct non-compliant practices. By allowing employers to participate in the PAID program, WHD also does not waive its right to conduct any future investigations of the employer.

    Employers contemplating participation in the PAID program generally should conduct a self-audit after updating their understanding of WHD program and compliance assistance materials and other WHD guidance.  Because the information, analysis and discussions conducted in this process may be legally sensitive, employers generally will want to engage qualified legal counsel before initiating these processes to advise and assist the employer about the adequacy and risks of its existing practices, recommendations for redressing known compliance issues and other risks as well as opportunities and procedures for qualifying certain of these actions and discussions for coverage under attorney-client privilege, attorney work product or other evidentiary protections.

    Whether or not an employer decides based on the audit to pursue compliance resolution through the PAID program, employers generally should work with their legal counsel within the scope of attorney client privilege to organize and retain documentation of their audit, its findings of compliance and, for any potential compliance issues, corrective actions taken to redress those issues retrospectively and prospectively, and other documentation that the employer might need to pursue resolution under the PAID program or otherwise respond to and defend against a WHD or private charges brought by an employee in the future.

    If the employer wishes to pursue resolution of potential violations under the PAID program based on review of the audit findings in conjunction with their legal counsel, the employer in coordination with the legal counsel within the scope of attorney client privilege should work together to prepare and assemble the records and information WHD will expect the employer to provide in the initial phases of the process including:

    • A list of the specific potential violations uncovered
    • The specific employees affected
    • The specific timeframes in which each employee was affected, and
    • The calculation of the amount of back wages the employer believes are owed to each employee.
    • Each of the calculations described above—accompanied by both evidence and explanation concerning how the calculations were made;
    • A concise explanation of the scope of the potential violations for possible inclusion in a release of liability;
    • A certification that the employer reviewed all of the information, terms, and compliance assistance materials;
    • A certification that the employer is not litigating the compensation practices at issue in court, arbitration, or otherwise, and likewise has not received any communications from an employee’s representative or counsel expressing interest in litigating or settling the same issues; and
    • A certification that the employer will adjust its practices to avoid the same potential violations in the future.

    After preparing this information, the employer generally will want to arrange for legal counsel to make the preliminary contact to the WHD to request that the WHD admit the employer to the PAID program.  During the preliminary contact, the WHD will require that a list of the specific potential violations, and the identity, specific time frame and back pay amount that employer believes it owes to each affected employee as a prerequisite to considering the request for admission to the program.  If the WHD approves the employer’s request, WHD will require that the employer or its legal counsel on its behalf provide the remaining information listed above.  After evaluating this information, WHD will provide notification of the next steps, including the collection of any other information necessary for WHD to assess and confirm the back wages due for the identified violations.

    Current published guidance states that after WHD assesses the back wages due, it will issue a summary of unpaid wages. WHD will also issue forms describing the settlement terms for each employee, which employees may sign to receive payment. The release of claims provided in the form will match the previously agreed-upon language and, again, must be limited to only the potential violations for which the employer had paid back wages. The PAID program settlement will require the employers to pay the back pay amounts confirmed in the summary of unpaid wages promptly and in full by the end of the next payroll period after receiving the WHD summary of wages confirming the back pay amounts required.

    Audit & Act To Mitigate FLSA & Other Wage & Hour Risks

    Regardless of whether an employer elects to pursue using the new PAID program, all FLSA covered employers generally should consult with legal counsel within the scope of attorney-client privilege to assess the defensibility of their existing practices for classifying and compensating workers under existing Federal and state wage and hour laws, tighten contracting and other compliance oversight in relation to outsourced services, and about using the PAID program and other options to minimize their potential liability under applicable wages and hour laws.  Conducting this analysis within the scope of attorney-client privilege is important because the analysis and discussions are highly sensitive both as potential evidence for wage and hour and other legal purposes.  Consequently, businesses and their leaders generally will want to arrange for this work to be protected to the extent by attorney-client privilege, work product and other evidentiary protections against discovery by WHD, employees or others for FLSA or other workforce enforcement actions.

    As a part of this process, businesses and their leaders generally should plan to:

    • Review subcontractor, temporary, lease employee, independent contractor and other outsourced labor and services relationship for potential risk of worker reclassification and tighten contracting and other procedures;
    • Audit the position of each employee currently classified as exempt to assess its continued sustainability and to develop documentation justifying that characterization;
    • Audit characterization of workers obtained from staffing, employee leasing, independent contractor and other arrangements and implement contractual and other oversight arrangements to minimize risks that these relationships could create if workers are recharacterized as employed by the employer receiving these services;
    • Review the characterization of on-call and other time demands placed on employees to confirm that all compensable time is properly identified, tracked, documented, compensated and reported;
    • If the employer hires any individuals under age 18, audit and implement appropriate procedures to ensure its ability to demonstrate compliance with all applicable FLSA child labor rules;
    • If the employer is a government contractor or subcontractor or otherwise performs any services on projects funded with federal or state funds, evaluate the applicability and fulfillment of any special wage, fringe benefit, recordkeeping or other government contracting wage and hour requirements;
    • If the employer hires foreign agricultural or other workers subject to special conditions and requirements, to review compliance with those special requirements;
    • Review and tighten existing practices for tracking compensable hours and paying non-exempt employees for compliance with applicable regulations and to identify opportunities to minimize costs and liabilities arising out of the regulatory mandates;
    • If the employer uses leased, temporary, or other outsourced labor, evaluate contractual, process and other options to support the employer’s ability cost effectively to respond to an audit, investigation or enforcement action by WHD or private litigants and if necessary, obtain indemnification or other recovery in the event the employer incurs liability due to the use or practices of the outsourced labor supplier;
    • If the audit raises questions about the appropriateness of the classification of an employee as exempt, self-initiation of proper corrective action after consultation with qualified legal counsel;
    • Review and document all workers classified as exempt;
    • Review of existing documentation and record keeping practices for hourly employees;
    • Evaluate potential exposures under other employment, labor, tax or related laws or contracts that might be impacted by the findings or actions taken in response to those findings;
    • Explore available options and alternatives for calculating required wage payments to non-exempt employees and assessing and resolving other concerns;
    • Identify and calculate other employee benefit, tax or other corrections and associated costs and procedures that may be required as a result of findings or corrective actions resulting from their redress;
    • Re-engineer work rules, policies, contracts and practices to minimize costs and liabilities as appropriate in light of the regulations and enforcement exposures;
    • Explore insurance, indemnification and other options for mitigating risks and associated investigation and defense costs .
    • Pursue self-correction within the new PAID Program or otherwise.

    Many employers also will want to consider adopting or strengthening their use of arbitration agreements, strengthening contract compliance, audit, indemnification and other contractual safeguards in staffing and other outsourcing contracts and broadening employment practices and other liability insurance coverage to mitigate and manage these exposures.

    For additional information, please contact the author or other qualified legal counsel with health industry wage and hour and other labor and employment experience.

     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 is nationally and internationally recognized for her work assisting businesses, governments, and other entities to develop, implement, administer and defend pragmatic strategies for dealing with employment and other workforce and related compensation, employee benefit,  performance management and internal controls, insurance, health care and finance concerns to manage risk, operations and other business objectives.

    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.

    The author of the “Texas Payday Act,” and numerous other highly regarded publications on wage and hour and other human resources, employee benefits and compensation publications, Ms. Stamer is well-known for her 30 years of extensive wage and hour, compensation and other management advice and representation of restaurant and other hospitality, health, insurance, financial services, technology, energy, manufacturing, retail, governmental and other 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.

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    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. 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.

     


    Reminder To Report Moving Expense Reimbursements As Taxable Income

    December 18, 2018

    Businesses that reimburse employee moving expenses should review their practices in response to changes to the Internal Revenue Code rules on qualified moving expenses. The requirement to treat moving expenses as taxable is just one of many changes to the treatment of fringe benefits and compensation under the Internal Revenue Code (“IRC”) as part of the tax reforms enacted last year.

    Under previous law, payment or reimbursement of an employee’s qualified moving expenses were not subject to income or employment taxes.

    Under last year’s tax reform legislation, however, employers generally must include all moving expenses, in employees’ wages, subject to income and employment taxes.

    Exception
    Generally, members of the U.S. Armed Forces can still exclude qualified moving expense reimbursements from their income if:

    • They are on active duty
    • They move pursuant to a military order and incident to a permanent change of station
    • The moving expenses would qualify as a deduction if the employee didn’t get a reimbursement

    Transition rule
    There is a transition rule under the new law. Under this rule, certain payments or reimbursements aren’t subject to federal income or employment taxes. This includes amounts that:

    • An employer pays a third party in 2018 for qualified moving services provided to an employee prior to 2018.
    • An employer reimburses an employee in 2018 for qualified moving expenses incurred prior to 2018.

    To qualify for the transition rule, the payments or reimbursements must be for qualified expenses which would have been deductible by the employee if the employee had directly paid them before Jan. 1, 2018. The employee must not have deducted them in 2017.

    Corrections
    Employers who have included amounts covered by the exception or the transition rule in individuals’ wages or compensation can take steps to correct taxable wages and employment taxes.

    More information:

  • The changes to the tax treatment of moving expense reimbursements is one of many changes passed last year. For more information or help with these or other workforce, compensation and benefits concerns, contact the author.
  • 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, employee benefit and insurance, workforce and other management work, public policy leadership and advocacy, coaching, teachings, and publications.

    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’s clients include employers and other workforce management 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.

    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; 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.

    Past Chair of the ABA Managed Care & Insurance Interest Group and, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, heavily involved in health benefit, health care, health, financial and other information technology, data and related process and systems development, policy and operations throughout her career, and scribe of the ABA JCEB annual Office of Civil Rights agency meeting, Ms. Stamer also is widely recognized for her extensive work and leadership on leading edge health care and benefit policy and operational issues. She regularly helps employer and other health benefit plan sponsors and vendors, health industry, insurers, health IT, life sciences and other health and insurance industry clients design, document and enforce plans, practices, policies, systems and solutions; manage regulatory, contractual and other legal and operational compliance; vendors and suppliers; deal with Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA, state insurance law and other private payer rules and requirements; contracting; licensing; terms of participation; medical billing, reimbursement, claims administration and coordination, and other provider-payer relations; reporting and disclosure, government investigations and enforcement, privacy and data security; and other compliance and enforcement; Form 990 and other nonprofit and tax-exemption; fundraising, investors, joint venture, and other business partners; quality and other performance measurement, management, discipline and reporting; physician and other workforce recruiting, performance management, peer review and other investigations and discipline, wage and hour, payroll, gain-sharing and other pay-for performance and other compensation, training, outsourcing and other human resources and workforce matters; board, medical staff and other governance; strategic planning, process and quality improvement; HIPAA administrative simplification, meaningful use, EMR, HIPAA and other technology, data security and breach and other health IT and data; STARK, antikickback, insurance, and other fraud prevention, investigation, defense and enforcement; audits, investigations, and enforcement actions; trade secrets and other intellectual property; crisis preparedness and response; internal, government and third-party licensure, credentialing, accreditation, HCQIA, HEDIS and other peer review and quality reporting, audits, investigations, enforcement and defense; patient relations and care; internal controls and regulatory compliance; payer-provider, provider-provider, vendor, patient, governmental and community relations; facilities, practice, products and other sales, mergers, acquisitions and other business and commercial transactions; government procurement and contracting; grants; tax-exemption and not-for-profit; 1557 and other Civil Rights; privacy and data security; training; risk and change management; regulatory affairs and public policy; process, product and service improvement, development and innovation, and other legal and operational compliance and risk management, government and regulatory affairs and operations 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 health industry and other 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 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 be sure that we have your current contact information including your preferred e-mail by creating 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 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 advise or 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 or the topic of this article, please contact the author directly. All other rights reserved.


    ADEA Age Discrimination Ban Applies To All State & Local Government Employers

    November 6, 2018

    State and local political subdivisions employing fewer than 20 employees should reconfirm the defensibility of their employment policies and practices under the Age Discrimination and Employment Act (ADEA) and the Fair Labor Standards Act (FLSA) and various other laws in light of the unanimous[1] ruling issued this morning by the United State Supreme Court holding that the ADEA applies to all state and local political subdivisions regardless of size.

    In its ruling in Mount Lemmon Fire District v. Guido, – U.S. -, 2018 WL 5794639 (November 6, 2018) released this morning, the United States Supreme Court unanimously ruled that the ADEA applies to all state and local subdivisions regardless of the number of employees the political subdivision employs.

    The Supreme Court’s ruling arose from an ADEA lawsuit brought by John Guido and Dennis Rankin against a small Arizona fire department, the Mount Lemmon Fire District (District) challenging their layoff by the District. Faced with a budget shortfall, the District laid off Guido and Rankin, who at the time were the District’s two oldest full-time firefighters. Guido and Rankin sued the Fire District, alleging that their termination violated the Age Discrimination in Employment Act of 1967 (ADEA), 81 Stat. 602, as amended, 29 U. S. C. §621 et seq. The Fire District sought dismissal of the suit on the ground that the District was too small to qualify as an “employer” within the ADEA’s compass.

    In response to Guido and Rankin’s lawsuit, the District asserted that was not covered by the ADEA  because its employment of fewer than 20 employees rendered it “too small” to qualify as an “employer” as defined by 29  U. S. C. §630(b).  In its ruling against the Fire District this morning, the Supreme Court rejected this numerosity defense, holding instead that the ADEA applies to all political subdivisions regardless of the size of their workforce.

    In the unanimous opinion authored by Justice Ginsburg, the Supreme Court pointed out that the ADEA definition of “employer” distinguishes between private sector employers and State and local political subdivisions.  The Supreme Court noted that before 1974, State and local political subdivisions were exempt from the ADEA.  In 1974, however, Congress added a special definition of “employer” for States and political subdivisions to the ADEA and FLSA when it amended the ADEA and FLSA to apply to all State and local government employers regardless of their size.    Thus, since 1974, the ADEA and FLSA definitions of “employer” have read as follows:

    “The term ‘employer’ means a person engaged in an industry affecting commerce who has twenty or more employees . . . . The term also means (1) any agent of such a person, and (2) a State or political subdivision of a State . . . .” 29 U. S. C. §630(b); 29 U. S. C. §203(d), (x).

    In construing this definition, the Supreme Court weighed whether the phrase “also means” added new categories to the definition of “employer” or merely clarified that States and their political subdivisions are a type of “person” included in §630(b)’s first sentence. While acknowledging that various Courts of Appeals previously have reached differing conclusions concerning the appropriate interpretation, the Supreme Court ruled that the phase “also means” added a new category to the definition of “employer” for purposes of the ADEA.  Accordingly, the Supreme Court rejected the District’s claim that the ADEA definition of “employer” includes the requirement of employment of at least 20 employees applicable to the ADEA’s private sector definition of “employer.  Accordingly, the Supreme Court unanimously ruled that the ADEA applies to all State and local political subdivisions.

    In light of the Supreme Court’s ruling, any State or local subdivision that has operated in reliance upon the now discredited interpretations of the ADEA or FLSA definitions of “employer” as applicable only to State or local governmental entities employing at least 20 employees immediately should take all necessary corrective action to bring their policies into compliance with the ADEA and FLSA.  These governmental entities also should seek the advice of qualified legal counsel about the advisability of taking any retrospective action to self-correct any potential past deficiencies in compliance, if any, for which the entity might bear potential liability to the extent that the applicable state of limitations has not run on those claims.

    [1] Justice Kavanaugh did not join in the opinion as he took no part in the consideration or decision of the case.

    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, employee benefit and insurance, workforce and other management work, public policy leadership and advocacy, coaching, teachings, and publications.

    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’s clients include employers and other workforce management 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.

    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; 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.

    Past Chair of the ABA Managed Care & Insurance Interest Group and, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, heavily involved in health benefit, health care, health, financial and other information technology, data and related process and systems development, policy and operations throughout her career, and scribe of the ABA JCEB annual Office of Civil Rights agency meeting, Ms. Stamer also is widely recognized for her extensive work and leadership on leading edge health care and benefit policy and operational issues. She regularly helps employer and other health benefit plan sponsors and vendors, health industry, insurers, health IT, life sciences and other health and insurance industry clients design, document and enforce plans, practices, policies, systems and solutions; manage regulatory, contractual and other legal and operational compliance; vendors and suppliers; deal with Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA, state insurance law and other private payer rules and requirements; contracting; licensing; terms of participation; medical billing, reimbursement, claims administration and coordination, and other provider-payer relations; reporting and disclosure, government investigations and enforcement, privacy and data security; and other compliance and enforcement; Form 990 and other nonprofit and tax-exemption; fundraising, investors, joint venture, and other business partners; quality and other performance measurement, management, discipline and reporting; physician and other workforce recruiting, performance management, peer review and other investigations and discipline, wage and hour, payroll, gain-sharing and other pay-for performance and other compensation, training, outsourcing and other human resources and workforce matters; board, medical staff and other governance; strategic planning, process and quality improvement; HIPAA administrative simplification, meaningful use, EMR, HIPAA and other technology, data security and breach and other health IT and data; STARK, antikickback, insurance, and other fraud prevention, investigation, defense and enforcement; audits, investigations, and enforcement actions; trade secrets and other intellectual property; crisis preparedness and response; internal, government and third-party licensure, credentialing, accreditation, HCQIA, HEDIS and other peer review and quality reporting, audits, investigations, enforcement and defense; patient relations and care; internal controls and regulatory compliance; payer-provider, provider-provider, vendor, patient, governmental and community relations; facilities, practice, products and other sales, mergers, acquisitions and other business and commercial transactions; government procurement and contracting; grants; tax-exemption and not-for-profit; 1557 and other Civil Rights; privacy and data security; training; risk and change management; regulatory affairs and public policy; process, product and service improvement, development and innovation, and other legal and operational compliance and risk management, government and regulatory affairs and operations 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 health industry and other 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 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 be sure that we have your current contact information including your preferred e-mail by creating 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 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 advise or 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 or the topic of this article, please contact the author directly. All other rights reserved.


    July 5, 2018

    Construction industry and other employers of employees working in summer heat impacted environments need to take appropriate steps to prevent heat related injuries and illnesses

    Every year, dozensof workers die and thousands more become ill while working in extreme heat or humid conditions. More than 40 percent of heat-related worker deaths occur in the construction industry, but workers in every field are susceptible.

    Working in extreme heat without appropriate precautions creates heightened risk of a range of heat illnesses. These risks can affect anyone, regardless of age or physical condition.

    Employer Responsibility to Protect Workers

    Protecting workers from extreme heat generally is part of the responsibility of an employer to provide a safe workplace under the Occupational Health & Safety Act (OSHA) and state occupational health and safety statutes.

    Aside from the worker’s compensation, medical and disability costs and workplace disruptions that heat related illness can create, heat related injuries or illnesses to workers also create risks of civil penalties and other liabilities under OSHA.

    To minimize risks of heat related OSHA violations and other exposures, an employer of workers exposed to high temperatures should establish and document their training and administration of a complete heat illness prevention program that meets or exceeds applicable OSHA standards.

    Resources

    OSHA’s Occupational Exposure to Heat page explains what employers can do to keep workers safe and what workers need to know – including factors for heat illness, adapting to working in indoor and outdoor heat, protecting workers, recognizing symptoms, and first aid training. The page also includes resources for specific industries and OSHA workplace standards.

    Employers can help promote compliance and reduce heat related injury risks by training and requiring workers and their management to use three common sense elements for preventing heat related injuries and deaths to workers – Water. Rest. Shade.

    OSHA guidance urges employers to prevent heat-related injuries by taking the following steps:

    • Provide workers with water, rest and shade.
    • Allow new or returning workers to gradually increase workloads and take more frequent breaks as they acclimatize, or build a tolerance for working in the heat.
    • Plan for emergencies and train workers on prevention.
    • Monitor workers for signs of illness.
    • Take prompt action to provide appropriate intervention and medical care in response to signs of potential heat related health issues.

    To ensure that they can prove these expectations are met, Most employers will want to adopt specific policies require in well-documented compliance with these requirements.

    About The Author

    If you need more information about or help with these or other workplace concerns, the author of this article may be able to help.

    Board Certified in Labor and Employment Law, 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 management attorney, consultant, coach, author, public policy advocate, author and lecturer repeatedly recognized for her 30 plus years’ of work and pragmatic thought leadership, publications and training on labor and employment, compensation, health, pension and other employee benefit, insurance, 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

    DOL Spending Reports Required As Taxpayer Tool Need Improvement

    Check & Protect Health & Other Electronic Systems & Data Against New Security Threat

    April 1 New Deadline To Update Benefit Plan Disability Determination Claims & Appeals Procesures; Hear More on 1/26

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

    $23M Penalty Small Part of 21st Century’s Data Breach Fallout; Offers Data Breach Lessons For Other Businesses

    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

    IRS Prepares To Nail Employers Under Obamacare Mandate While Giving Some Individual Mandate Relief

    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.


    2018 Family HSA Deductible Contribution Limit Restored To $6,900

    May 11, 2018

    The 2018 maximum deductible Health Savings Account (HSA) contribution for individuals with family coverage under a high deductible health plan (HDHP) is $6,900, rather than the lower $$6850 limitation that the Internal Revenue Service (IRS) and Department of Treasury originally identified as the 2018 maximum deduction amount last March.

    The mid-year change in the 2018 annual limit that Internal Revenue Code § 223(b)(2)(B) sets for the maximum deductible HSA contribution for individuals with family coverage under a HDHP announced in Revenue Procedure 2018-27 on April 26 corrects a mistake in the amount of the 2018 annual limit amount that the Treasury Department and the IRS previously announced in Rev. Proc. 2018-18 on March 2, 2018. Revenue Procedure does not change any other annual limitation or any other requirement under section 223 for calendar year 2018.

    Before Revenue Procedure 2018-27, the annual limitation on deductions under section 223(b)(2)(B) for an individual with family coverage under an HDHP at $6,850 for 2018 – a $50 reduction in the amount of the 2018 limit amount set in Revenue Procedure 2018-18, which reduced the originally announced 2018 limit amount of $6,900 that the Treasury Department and IRS previously had announced in May 4, 2017 in Revenue Procedure 2017-37. After publishing the original $6,900 limit in Revenue Procedure 2017-37, Congress changed the rules on inflation adjustments as part of “An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018” (the Act), Pub. L. 115–97, 131 Stat. 2504, enacted December 22, 2017. Consequently, on March 2, 2018, the Treasury Department and the IRS released Rev. Proc. 2018-18, announcing the reduction of the 2018 limit to $6,850 to reflect the statutory amendments to the inflation adjustments under the Act. However, IRS and Treasury say that the recently announced change in the 2018 annual limitation resulted after stakeholders informed the Treasury Department and the IRS that implementing the $50 reduction to the limitation on deductions for individuals with family coverage would impose numerous unanticipated administrative and financial burdens. Specifically, stakeholders informed the Treasury Department and the IRS that the costs of modifying the various systems to reflect the reduced maximum, as well as the costs associated with distributing a $50 excess contribution (and earnings), would be significantly greater than any tax benefit associated with an unreduced HSA contribution (and in some instances may exceed $50). Some stakeholders also pointed to section 223(g)(1), which requires annual inflation adjustments for HSAs to be published by June 1 of the preceding calendar year, as another indication that a current year change would be unduly burdensome.

    In response to these concerns, the Treasury Department and the IRS have determined that it is in the best interest of sound and efficient tax administration to allow taxpayers to treat the $6,900 annual limitation originally published in Rev. Proc. 2017-37 as the 2018 inflation adjusted limitation on HSA contributions for eligible individuals with family coverage under an HDHP. Accordingly, $6,900 now is the annual limitation on deductions under section 223(b)(2)(B) for an individual with family coverage under an HDHP for calendar year 2018.

    Before this announced change, some individuals may have received distributions of HSA contribution amounts that were treated as in excess of the annual contribution limit amount before publication of Revenue Procedure 2018-27. Revenue Procedure 2018-27 outlines two alternatives for dealing with these distributions.

    Under the first alternative, an individual who receives a distribution from an HSA of an excess contribution (with earnings) based on the $6,850 deduction limit published in Rev. Proc. 2018-18 may repay the distribution to the HSA and treat the distribution as the result of a mistake of fact due to reasonable cause under Q&A-37 of Notice 2004-50. The portion of a distribution (including earnings) that an individual repays to an HSA by April 15, 2019, is not included in the individual’s gross income under section 223(f)(2) or subject to the 20 percent additional tax under section 223(f)(4). The repayment is not subject to the excise tax on excess contributions under section 4973(a)(5). Also, mistaken distributions that are repaid to an HSA are not required to be reported on Form 1099-SA or Form 8889 and are not required to be reported as additional HSA contributions. However, in accordance with Q&A-76 of Notice 2004-50, a trustee or custodian is not required to allow individuals to repay mistaken distributions.

    Alternatively, Revenue Procedure 2018-27 states that an individual who receives a distribution from an HSA of an excess contribution (with earnings) based on the $6,850 deduction limit published in Rev. Proc. 2018-18 and does not repay the distribution to the HSA may treat the distribution in accordance with section 223(f)(3), which describes the treatment of excess contributions returned before the due date of return. Thus, the excess contribution generally would not be included in gross income under section 223(f)(2) or subject to the 20 percent additional tax under section 223(f)(4), provided the distribution is received on or before the last day prescribed by law (including extensions of time) for filing the individual’s 2018 tax return. However, Revenue Procedure 2018-27 adds that the tax treatment under this alternative does not apply to distributions from an HSA that are attributable to employer contributions (pursuant to a cafeteria plan election or otherwise) if the employer does not include any portion of the contributions in the employee’s wages because the employer treats $6,900 as the annual limitation on deductions under section 223(b)(2)(B). In that case, unless the distribution from the HSA is used to pay qualified medical expenses, the distribution is includible in the employee’s gross income under section 223(f)(2) and subject to the 20 percent additional tax under section 223(f)(4).

    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.

    The author of the “Texas Payday Act,” and numerous other highly regarded publications on wage and hour and other human resources, employee benefits and compensation publications, Ms. Stamer is well-known for her 30 years of extensive wage and hour, compensation and other management advice and representation of restaurant and other hospitality, health, insurance, financial services, technology, energy, manufacturing, retail, governmental and other 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 here 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 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 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. 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.


    Remind Employees To Update Withholding

    April 18, 2018

    Employers should consider inviting their workers to conduct a Paycheck Checkup to review their withholding elections to confirm they have the right amount of tax deducted from their paychecks in response to tax law changes enacted by the Tax Cuts and Jobs Act (Trump Tax) and other recent legislation.  Helping workers properly to take into account tax relief or other changes reducing their income tax liability can help boost workers’ take home pay, helping them to see more benefit from the wages paid by the employer at payday.

    The amount of withholding that an employer withholds from an employee’s pay generally depends upon two factors:

    • The amount the employee can earn; and
    • The accuracy of the personal information the employee uses to complete the Form W-4 to notify the employer of his withholding elections; and
    • The tax rules that decide how much tax the employee ultimately will owe when their personal income tax returns become due on April 15, 2018.

    Although most employees don’t think about the potential need to re-evaluate the withholding elections on their current Form W-4 unless reminded by an employer or professional advisor, it’s generally a good idea for workers to periodically review and update their withholding elections since these often change from time to time.  Encouraging workers to periodically review and update their W-4 elections can help workers maximize their take home pay while minimizing the risk of being surprised with an unexpected income tax or even under withholding penalty when they file their annual income tax return.

    A number of recent events make it particularly likely that employees will benefit from re-evaluating their W-4 withholding now.  For one thing, the Tax Cuts and Jobs Act recently changed the way income tax is calculated for most individual taxpayers.   As many of these changes were enacted to provide individual tax relief for many taxpayers, workers qualifying for this relief that do not review and update their withholding elections likely are having the employer withhold more tax than necessary from their paychecks.  Beyond these tax rule changes, many workers also may need to update their withholding elections in response to changes in their income, marital or other family status or other changes in their personal situation that also can affect the income tax withholding of the individual worker.

    The Internal Revenue Service recently updated the Withholding Calculator  the IRS provides on its website to help individuals estimate their annual income tax for purposes of deciding the withholding they should enter on their Form W-4 in light of the Tax Cuts and Jobs Act changes.  Individuals can use the Withholding Calculator to estimate their 2018 and to compare their current tax withholding to help the individual decide if the individual needs to change his withholding with an employer.

    More details about the Withholding Calculator and the new 2018 withholding tables can be found using the following internet links on the IRS’ Frequently Asked Question pages:

    Employers should consider sending a reminder to workers to review their Form W-4 using these tools to determine if they can increase their take home pay by changing their withholding to take into account any potential income tax and withholding reductions they qualify for, if any, as a result of the Tax Cuts and Jobs Act or other changes in factors that impact their withholding and income tax liability or if other changes are warranted.  Because most employees just completed their annual tax returns and likely have not considered the potential need to change their elections for tax reform or other changes, employees are likely to be particularly receptive and responsive to these reminders now.  Employers and benefit plan administrators also may wish to consider helping employees remember to review and update their Form W-4 withholding when sending benefit enrollment packages, processing benefit enrollment elections when announcing pay increases or bonuses, in employee handbooks or payroll stuffers, at annual enrollment times or in response to mid-year election or beneficiary change notifications and at other times when the employer or their benefit plans deal with life event or benefit election events that could impact an employee’s withholding.

    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.

    The author of the “Texas Payday Act,” and numerous other highly regarded publications on wage and hour and other human resources, employee benefits and compensation publications, Ms. Stamer is well-known for her 30 years of extensive wage and hour, compensation and other management advice and representation of restaurant and other hospitality, health, insurance, financial services, technology, energy, manufacturing, retail, governmental and other 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 here 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 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 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. 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.


    Employers Should Weigh New DOL PAID Program, Other Options To Manage Rising FLSA Minimum Wage & Overtime Risks

    April 12, 2018

    With the Trump Administration U.S. Department of Labor Wage and Hour Division (WHD) continuing its aggressive investigation and enforcement of minimum wage, overtime and other Fair Labor Standards Act (FLSA) and other wage and hour laws it used to recover more than $1.2 billion in back pay for workers over the past five years, Agriculture, Amusement, Apparel Manufacturing, Auto Repair, Child Care Services, Construction, Food Services, Guard Services, Hair, Nail & Skin Care Services, Health Care, Hotels and Motels, Janitorial Services, Landscaping Services, Retail, and Temporary Help and other U.S. employers should evaluate their current and past potential liability exposures and consider using the new pilot WHD self-audit Payroll Audit Independent Determination (PAID) program announced by WHD on March 6 or other options to mitigate their liability for their own or temporary or other contract labor’s existing or past minimum wage and hour law violations.

    FLSA & Other Wage & Hour Law Exposures & Enforcement Mounting Legal & Business Risk

    U.S. employers and leaders with wage and hour management authority risk substantial liability from unresolved violations of the FLSA and other federal and state wage and hour laws.

    One of the most frequently violated and litigated federal employment laws, the FLSA generally requires that U.S. employers pay nonexempt employees at least $7.25 per hour for all regular compensable hours worked, plus time and one-half their regular rates, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. In general, FLSA “hours worked” includes all time an employee must be on duty, or on the employer’s premises or at any other prescribed place of work, from the beginning of the first principal work activity to the end of the last principal activity of the workday. Similar state or local laws often also impose higher minimum wage, compensable hour, break and other requirements than federal law requires.

    The FLSA and most applicable state and local wage and hour laws also mandate that employers maintain records of the hours worked by employees by non-exempt employees, documentation of the employer’s proper payment of its non-exempt employees in accordance with the minimum wage and overtime mandates of the FLSA, and certain other records and prohibit retaliation by an employer or other person again an employee or other person for asserting rights under the law or cooperating in a WHD investigation about FLSA compliance.

    Beyond these FLSA minimum wage and overtime requirements, WHD regulations and court decisions provide guidance on when an employer must treat “on-call” time, travel time, meal and break times, and certain other time periods as compensable hours worked by a non-exempt employee, when “comp time” in lieu of the payment of wages is permitted, various alternative methods for calculating overtime under certain special circumstances, and various other rules applicable to various special circumstances. Other special rules also can apply to businesses employing tipped employees, home workers, child labor, certain farm workers, workers working with special visas, and other special classes or workers.   Furthermore, collective bargaining agreements or other contracts or other federal, state or local laws also sometimes impose additional requirements for employers to pay higher “prevailing wages,” apply special rules for counting compensable work hours, and provide specified fringe benefits or other special compensation or protections or other wages, when the employer is a government contractor or subcontractor covered by the Service Contract Act, the Davis Bacon Act or other similar federal or state statutes.

    Over the past decade, WHD and private enforcement of the FLSA and other wage and hour laws generally has skyrocketed in part driven by the Obama Administration’s prioritization on raising the minimum wage, extending federal wage and hour protections, and expanding WHD and other enforcement.  WHD’s success in recovering more than $1.2 billion in back pay for workers over the past five years and other achievements in expanding its own and private oversight and enforcement and the continuation of these efforts under the Trump Administration means all employers need to view wage and hour law as a major liability risk requiring conscientious management.   However, the risk of enforcement is particularly acute for businesses in the following industries, designed for heightened enforcement and other attention as “Low Wage High Violation Industries” based on their particularly high record of noncompliance:  Agriculture, Amusement, Apparel Manufacturing, Auto Repair, Child Care Services, Construction, Food Services, Guard Services, Hair, Nail & Skin Care Services, Health Care, Hotels and Motels, Janitorial Services, Landscaping Services, Retail, and Temporary Help.

    Scrutiny & Challenges To Contract & Outsourced Labor Relationships Rising

    Beyond assessing their FLSA and other wage and hour compliance and associated exposures from the worker on their own payroll, U.S. employers and their leaders also should take care to carefully evaluate potential exposures from nontraditional services relationships and act to manage those risks.

    Misclassification of workers providing services as non-employees increasingly causes U.S. businesses to incur unanticipated FLSA and other wage and hour law liability for back pay, liquidated punitive damages, civil monetary penalties and other liability, in part because of WHD’s stepped up worker education, scrutiny, investigation, and enforcement challenging employers’ treatment of workers as non-employees.

    The FLSA and state and local rules generally apply to any workers that the employer who receives its services cannot prove is not its common law employee or an exempt employee within the meaning of the FLSA. The FLSA and most other wage and hour laws generally rules presume that workers rendering services are common law employees of the business in most circumstances. Businesses should evaluate their FLSA exposures from both workers they recognize as common law employees and those performing services in capacities that the business typically does not view as common law or otherwise covered by the FLSA when managing FLSA compliance and evaluating exposures, employers should exercise care not to overlook potential responsibilities and exposures associated with outsourced services provided through relationships characterized by the employer as subcontractors, independent contractors, lease employees, or other common outsourced relationships.

    Court decisions and regulations provide guidance for determining when leased, contract, jointly employed, independent contractor or other non-traditionally employed workers will be treated as employees of a business,  As in many other enforcement areas, The WHD and many other agencies increasingly view the misclassification of workers as something other than employees, such as independent contractors, leased employees and other common “outsourced” relationship as a serious problem for affected employees, employers and to the entire economy.

    According to the Labor Department, misclassified employees are often denied access to critical benefits and protections, such as family and medical leave, overtime, minimum wage and unemployment insurance and other rights.  The Labor Department also says employee misclassification also generates substantial losses to state and federal treasuries, and to the Social Security and Medicare funds, as well as to state unemployment insurance and workers compensation funds. To address these and other concerns, the Labor Department has joined other agencies like the Internal Revenue Service increasingly is challenging employers’ treatment of workers as exempt from FLSA and other legal obligations as independent contractors or otherwise.

    In response to these concerns, WHD published guidance warning employers about misclassification of workers about potential violation of the FLSA by improper misclassification of workers as independent contractors or non-employed. See Department of Labor Issues Guidance of Misclassification of Workers.  DOL’s key points in the guidance are that:

    • Most workers are employees under the broad definitions of the FLSA;
    • No single factor is determinative;
    • Employers should be wary of classifying workers as independent contractors merely because the workers control some aspects of their work; and
    • The ultimate question is whether a worker “is really in business for him or herself (and thus is an independent contractor) or is economically dependent on the employer (and thus is an employee).

    Other guidance makes clear that WHD and other agencies concerns about misclassification extend beyond workers labeled independent contractors to include scrutiny of subcontractor, day labor, temporary, leased employee and a broad range of other outsourced services relationships.  See here,

    Consistent with these principles, WHD and private litigants in recent years have increasingly scrutinized and successfully challenged employers’ failure to comply with the FLSA’s minimum wage, overtime, recordkeeping and other rules with respect to these outsourced workers.  See e.g., $1.4M FLSA Back Pay Award Demonstrates Worker Misclassification Risks; Employer Faces $2M FLSA Lawsuit For Alleged Worker Misclassification; $754,578 FLSA Settlement Shows Employer Risks From Worker Misclassification, Underpayment;   WHD now both conducts significant worker education outreach and regularly requests and scrutinizes the characterization of and FLSA compliance of outsourced workers in connection with its FLSA investigations and audits.  See e.g. Get the Facts on Misclassification Under the FLSA; Am I an Employee?: Employment Relationship Under the Fair Labor Standards Act (FLSA); Compliance Assistance Page – Fair Labor Standards Act; Elaws: Independent Contractors; Know Your Rights Video Series: Misclassification as an Independent Contractor; WHD Press Releases about employee Misclassification as Independent Contractors.  These and other developments are significantly increasing the likelihood that businesses will face WHD or private litigants challenges to its FLSA compliance relating to workers rendering services as independent contractors, subcontractors or other outsourced services providers.

    Employers often face substantial challenges responding to, much less, containing their FLSA exposures when a WHD or a private litigant successfully challenges the employer’s classification of the worker as a non-employee for a variety of reasons.  Beyond the likelihood of violations resulting from the employer’s failure to recognize it might owe minimum wage and overtime duties to the worker, an employer often lacks records and other data needed to fulfill recordkeeping and posting requirements and to accurately demonstrate hours worked and hourly rates to limit resulting back pay exposures because these workers are not treated as part of the employer’s workforce. Obtaining the necessary records to respond to a WHD or other investigation, lawsuit or other action often proves challenging because the independent contractor, leasing company, or other provider or of the services often becomes unavailable, is disincentivized by its own noncompliance or other interests, has failed to maintain necessary documentation or otherwise fails to cooperate in the delivery of these materials.  Furthermore, as leased employee, staffing, independent contractor and other outsourced arrangements invoice services at higher rates of compensation payment than the employer might otherwise have paid a traditionally employed worker, the lack of records and elevated compensation rates tend to push up the compensation used to calculate back pay and other awards. Accordingly, employers utilizing these arrangements should use care in structuring and administering these arrangements properly to evaluate their likely FLSA and other treatment and to manage these risks.

    FLSA Big Liability Risk

    Under the FSLA and applicable state wage and hour laws, violations of the FLSA and other federal or state wage and hour laws expose employers to substantial back pay, interest and punitive damages, civil monetary penalties for willful or and in the case of willful or repeated violations and in the case of willful violations, criminal prosecution.

    Because of the ability to recover liquidated damages and attorneys’ fees in addition to unpaid back pay, private enforcement of the FLSA is common.  The FLSA generally allows employees wrongfully denied wages in violation of the FLSA to bring lawsuits to enforce their rights provided that the WHD has not or does not intervene to enforce those rights on the worker’s behalf.  Workers successfully proving an employer violated their FLSA rights typically can recover back pay, plus liquidated damages, interest, attorneys’ fees and other costs of enforcement from the breaching employer.  In some cases, Corporate officers such as CEOs, CFOs or COOs and other management leaders with control over the breaching employer’s financial affairs also be held personally liable for the unpaid wages  See e.g., Lamonica v. Safe Hurricane Shutters+2013 U.S. App. LEXIS 4599 (11th Cir. 2013)(ruling personal liability for FLSA violations can attach to any individual with control over an employer’s financial affairs who could potentially cause an employer to violate FLSA).

    As an alternative to private litigation, the FLSA empowers the WHD to supervise or if necessary, enforce through litigation the rights of workers against a breaching employer to recover back pay plus  liquidated damages in an amount equal to the wrongfully denied wages. WHD also can pursue injunctive relief against noncompliant employers.

    When the employer is a repeat offender or willfully violated the FLSA, additional consequences attach.  A violation is “willful” for purposes of FLSA criminal prosecution if it is deliberate, voluntary, and intentional. A fine of up to $10,000 on the first conviction

    When an employer’s violation of the FLSA is repetitious or willful, the FLSA empowers WHD to impose civil money penalties (CMPs) against the noncompliant employer in addition to the recovery of back pay and liquidated damages. Intended to discourage future noncompliance by an employer guilty of violating the FLSA, CMPs for a “repeated” violation are assessable when the employer had previously violated the minimum wage or overtime requirements of the FLSA. CMPs for a “willful” violation may be assessed when it can be shown that the employer knew that its conduct was prohibited by the FLSA or showed reckless disregard for the requirements of the FLSA.  CMPs ordinarily are imposed based on violations occurring within the normal two-year investigation period. Where violations are determined to be willful, the investigation will cover a three-year period.

    The applicable 2018 CMP amounts, which are adjusted annually for inflation, are as follows:

     

    Type of Violation Statutory Citation CFR Citation Maximum Civil Monetary Penalty on or before 1/2/2018 Maximum Civil Monetary Penalty on or after 1/3/2018
    Homeworker:

    Violation of recordkeeping, monetary, certificate or other statutes, regulations or employer assurances.

    29 USC 211(d) 29 CFR 530.302 $1,005 $1,026
    Child labor:

    (1) Violation of child labor standards (sec 212 or 213(c));

    29 USC 216(e)(1)(A)(i) 29 CFR 570.140(b)(1) and 29 CFR 579.1(a)(1)(i)(A) $12,278 $12,529
    (2) Violation of child labor standards (sec 212 or 213(c)) that causes the serious injury or death of a minor; 29 USC 216(e)(1)(A)(ii) 29 CFR 570.140(b)(2) and 29 CFR 579.1(a)(1)(i)(B) $55,808 $56,947
    (3) Willful or repeated violation of child labor standards (sec 212 or 213(c)) that causes the serious injury or death of a minor 29 USC 216(e)(1)(A)(ii) 29 CFR 570.140(b)(2) and 29 CFR 579.1(a)(1)(i)(B) $111,616 $113,894
    (4) Repeated or willful violation of section 206 or 207. 29 USC 216(e) 29 CFR 579.1(a)(2) $1,925 $1,964
    Minimum Wage and Overtime:

    Repeated or willful violation of section 206 or 207.

    29 USC 216(e)(2) 29 CFR 578.3(a) $1,925 $1,964

    Although typically reserved for more egregious violations, “willful” violations of the FLSA can trigger criminal prosecution by the Department of Justice. A fine of up to $10,000, or a term of imprisonment of up to six months, or both, on all convictions after the first conviction

    In addition to or instead of lawsuits by the Secretary of Labor for back wages or injunctive relief, willful violation of the FLSA also can trigger criminal prosecutions against an employer by the Department of Justice.  Criminal penalties for willful FLSA violations include a fine of up to $10,000, or a term of imprisonment of up to six months, or both, on all convictions after the first conviction.  Since enforcement actions by the DOJ can be brought instead of or in addition to lawsuits by WHD for back wages or injunctive relief, an employer that willfully violates the FLSA can be ordered to pay liquidated damages and back-pay, as well as any court imposed criminal fine or penalty.

    Always popular, WHD and private enforcement of the FLSA initially spiked upward following the highly publicized George W. Bush Administration’s implementation of updated FLSA “white collar” regulations regarding the classification of workers as exempt.  The Obama Administration’s highly publicized, but unsuccessful, campaign to increase the minimum wage and aggressive FLSA educational outreach and enforcement further fueled this trend.  While President Trump has opposed proposals to increase the federal minimum wage, he has expressed his commitment to protect workers’ FLSA rights through continued vigorous enforcement of the FLSA minimum wage, overtime and other rules.

    As a result of its aggressive enforcement commitments, WHD takes credit for having recovered more than $1.2 billion in back wages on behalf of more than 1.3 million workers over the past five years. See here.  The following WHD enforcement statistics reflect that its commitment to FLSA enforcement has continued during President Trump’s tenure in office.

    Cases with Violations Back Wages Employees Receiving Back Wages(duplicated 1)
    FY 2011 Minimum Wage 12,450 $29,327,527 89,305
    Overtime 11,990 $140,328,012 204,243
    FY 2012 Minimum Wage 12,532 $35,270,524 107,005
    Overtime 12,462 $148,560,700 218,137
    FY 2013 Minimum Wage 12,403 $38,470,100 103,671
    Overtime 12,108 $130,703,222 174,197
    FY 2014 Minimum Wage 11,042 $36,732,407 106,184
    Overtime 11,238 $136,239,001 174,365
    FY 2015 Minimum Wage 10,642 $37,828,554 86,229
    Overtime 10,496 $137,701,703 173,330
    FY 2016 Minimum Wage 10,722 $34,964,350 81,870
    Overtime 10,884 $171,917,225 209,819
    FY 2017 Minimum Wage 10,687 $31,213,737 69,588
    Overtime 10,823 $157,592,682 183,272

    New Pilot PAID Program May Offer New Option To Resolve WHD Exposures

    On March 6, 2018, the WHD division announced a new pilot self-audit Payroll Audit Independent Determination (PAID) program that for the next six months will allow employers accepted into the program after voluntarily disclosing violations to resolve their exposure WHD penalties and liquidated damages commonly assessed by WHD against employers for violating the FLSA minimum wage and overtime violations by:

    • Voluntarily disclosing the violations to WHD before becoming subject to investigation or enforcement and requesting admission to the program;
    • Paying affected workers 100 percent of the unpaid back pay due wrongfully denied by the end of the next full pay period after receiving the summary of unpaid wages from WHD confirming the back pay amount;
    • Working with WHD prospectively to correct noncompliant practices; and
    • Taking other actions to correct and prevent a recurrence of those violations.

    While participation in the PAID program allows a participating employer to settle its exposure to prosecution for those violations by WHD, many employers may face challenges in using the program as a result of the inability to marshal the required capital to pay 100 percent of the back pay due within the required time period.

    Beyond this challenge, employers evaluating whether to seek relief through the new PAID program also may need to weigh a variety of other concerns.

    For instance, employers considering participation need to understand that the settlement only addresses potential liability from WHD enforcement.  While WHD’s requirement that a participating employer pay affect 100 percent of any wrongfully denied back pay to the impacted employees generally would reduce the actual back pay damages recoverable by an employee in a private enforcement action, WHD says settlements reached with the WHD under the PAID program does not prevent employees wrongfully denied wages in violation of FSLA from bringing private lawsuits.  Rather, WHD states that it will be purely the employee’s choice whether to accept the payment of back wages the employer agrees to pay under the PAID program settlement. If the employee chooses to not accept the payment, the employee will not release any private right of action. Additionally, if the employee chooses to accept the payment, the employee will not grant a broad release of all potential claims under the FLSA. Rather, the releases are tailored to only the identified violations and time period for which the employer is paying the back wages. The WHD also cautions that regardless of whether the employee accepts or rejects the back pay specified in the PAID program, the FLSA will prohibit employers from retaliating against the employee for his or her choice. Furthermore, while the payment of previously unpaid amounts could reduce the amount of unpaid wages for purposes of determining liability for state wage and hour law violations, the WHD settlement does not directly impact or release liability for any state wage and hour violations.

    While any FLSA covered employer may use the program, interested employers should understand that acceptance into the program is not automatic and is not available for all FLSA violations.  Rather, the PAID program only covers potential violations of the FLSA’s overtime and minimum wage requirements that an employer self-identifies and voluntarily discloses and resolves in accordance with its PAID program settlement with WHD.  An employer cannot use the PAID program to resolve any issues for which WHD is already investigating the employer, or which the employer is already litigating in court, arbitration, or otherwise. An employer likewise may not initiate the process when an employee’s representative or counsel has already communicated an interest in litigating or settling the issue.   Employers using the Paid program also must be prepared to correct the noncompliant practices that resulted in the violations settled under the PAID program.  According to the WHD, WHD will not allow employers to use the program to repeatedly resolve the same violations, as this program is designed to identify and correct non-compliant practices. By allowing employers to participate in the PAID program, WHD also does not waive its right to conduct any future investigations of the employer.

    Employers contemplating participation in the PAID program generally should conduct a self-audit after updating their understanding of WHD program and compliance assistance materials and other WHD guidance.  Because the information, analysis and discussions conducted in this process may be legally sensitive, employers generally will want to engage qualified legal counsel before initiating these processes to advise and assist the employer about the adequacy and risks of its existing practices, recommendations for redressing known compliance issues and other risks as well as opportunities and procedures for qualifying certain of these actions and discussions for coverage under attorney-client privilege, attorney work product or other evidentiary protections.

    Whether or not an employer decides based on the audit to pursue compliance resolution through the PAID program, employers generally should work with their legal counsel within the scope of attorney client privilege to organize and retain documentation of their audit, its findings of compliance and, for any potential compliance issues, corrective actions taken to redress those issues retrospectively and prospectively, and other documentation that the employer might need to pursue resolution under the PAID program or otherwise respond to and defend against a WHD or private charges brought by an employee in the future.

    If the employer wishes to pursue resolution of potential violations under the PAID program based on review of the audit findings in conjunction with their legal counsel, the employer in coordination with the legal counsel within the scope of attorney client privilege should work together to prepare and assemble the records and information WHD will expect the employer to provide in the initial phases of the process including:

    • A list of the specific potential violations uncovered
    • The specific employees affected
    • The specific timeframes in which each employee was affected, and
    • The calculation of the amount of back wages the employer believes are owed to each employee.
    • Each of the calculations described above—accompanied by both evidence and explanation concerning how the calculations were made;
    • A concise explanation of the scope of the potential violations for possible inclusion in a release of liability;
    • A certification that the employer reviewed all of the information, terms, and compliance assistance materials;
    • A certification that the employer is not litigating the compensation practices at issue in court, arbitration, or otherwise, and likewise has not received any communications from an employee’s representative or counsel expressing interest in litigating or settling the same issues; and
    • A certification that the employer will adjust its practices to avoid the same potential violations in the future.

    After preparing this information, the employer generally will want to arrange for legal counsel to make the preliminary contact to the WHD to request that the WHD admit the employer to the PAID program.  During the preliminary contact, the WHD will require that a list of the specific potential violations, and the identity, specific time frame and back pay amount that employer believes it owes to each affected employee as a prerequisite to considering the request for admission to the program.  If the WHD approves the employer’s request, WHD will require that the employer or its legal counsel on its behalf provide the remaining information listed above.  After evaluating this information, WHD will provide notification of the next steps, including the collection of any other information necessary for WHD to assess and confirm the back wages due for the identified violations.

    Current published guidance states that after WHD assesses the back wages due, it will issue a summary of unpaid wages. WHD will also issue forms describing the settlement terms for each employee, which employees may sign to receive payment. The release of claims provided in the form will match the previously agreed-upon language and, again, must be limited to only the potential violations for which the employer had paid back wages. The PAID program settlement will require the employers to pay the back pay amounts confirmed in the summary of unpaid wages promptly and in full by the end of the next payroll period after receiving the WHD summary of wages confirming the back pay amounts required.

    Audit & Act To Mitigate FLSA & Other Wage & Hour Risks

    Regardless of whether an employer elects to pursue using the new PAID program, all FLSA covered employers generally should consult with legal counsel within the scope of attorney-client privilege to assess the defensibility of their existing practices for classifying and compensating workers under existing Federal and state wage and hour laws, tighten contracting and other compliance oversight in relation to outsourced services, and about using the PAID program and other options to minimize their potential liability under applicable wages and hour laws.  Conducting this analysis within the scope of attorney-client privilege is important because the analysis and discussions are highly sensitive both as potential evidence for wage and hour and other legal purposes.  Consequently, businesses and their leaders generally will want to arrange for this work to be protected to the extent by attorney-client privilege, work product and other evidentiary protections against discovery by WHD, employees or others for FLSA or other workforce enforcement actions.

    As a part of this process, businesses and their leaders generally should plan to:

    • Review subcontractor, temporary, lease employee, independent contractor and other outsourced labor and services relationship for potential risk of worker reclassification and tighten contracting and other procedures;
    • Audit the position of each employee currently classified as exempt to assess its continued sustainability and to develop documentation justifying that characterization;
    • Audit characterization of workers obtained from staffing, employee leasing, independent contractor and other arrangements and implement contractual and other oversight arrangements to minimize risks that these relationships could create if workers are recharacterized as employed by the employer receiving these services;
    • Review the characterization of on-call and other time demands placed on employees to confirm that all compensable time is properly identified, tracked, documented, compensated and reported;
    • If the employer hires any individuals under age 18, audit and implement appropriate procedures to ensure its ability to demonstrate compliance with all applicable FLSA child labor rules;
    • If the employer is a government contractor or subcontractor or otherwise performs any services on projects funded with federal or state funds, evaluate the applicability and fulfillment of any special wage, fringe benefit, recordkeeping or other government contracting wage and hour requirements;
    • If the employer hires foreign agricultural or other workers subject to special conditions and requirements, to review compliance with those special requirements;
    • Review and tighten existing practices for tracking compensable hours and paying non-exempt employees for compliance with applicable regulations and to identify opportunities to minimize costs and liabilities arising out of the regulatory mandates;
    • If the employer uses leased, temporary, or other outsourced labor, evaluate contractual, process and other options to support the employer’s ability cost effectively to respond to an audit, investigation or enforcement action by WHD or private litigants and if necessary, obtain indemnification or other recovery in the event the employer incurs liability due to the use or practices of the outsourced labor supplier;
    • If the audit raises questions about the appropriateness of the classification of an employee as exempt, self-initiation of proper corrective action after consultation with qualified legal counsel;
    • Review and document all workers classified as exempt;
    • Review of existing documentation and record keeping practices for hourly employees;
    • Evaluate potential exposures under other employment, labor, tax or related laws or contracts that might be impacted by the findings or actions taken in response to those findings;
    • Explore available options and alternatives for calculating required wage payments to non-exempt employees and assessing and resolving other concerns;
    • Identify and calculate other employee benefit, tax or other corrections and associated costs and procedures that may be required as a result of findings or corrective actions resulting from their redress;
    • Re-engineer work rules, policies, contracts and practices to minimize costs and liabilities as appropriate in light of the regulations and enforcement exposures;
    • Explore insurance, indemnification and other options for mitigating risks and associated investigation and defense costs .
    • Pursue self-correction within the new PAID Program or otherwise.

    Cynthia Marcotte Stamer, is nationally and internationally recognized for her work assisting businesses, governments, and other entities to develop creative strategies for dealing with employee benefit and related human resources, insurance, health care and finance concerns. Ms. Stamer helps businesses design, administer and defend cost-effective employee benefit other human resources programs, policies and procedures to meet their budgetary and other business objectives.

     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.

    The author of the “Texas Payday Act,” and numerous other highly regarded publications on wage and hour and other human resources, employee benefits and compensation publications, Ms. Stamer is well-known for her 30 years of extensive wage and hour, compensation and other management advice and representation of restaurant and other hospitality, health, insurance, financial services, technology, energy, manufacturing, retail, governmental and other 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 here including:

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    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. 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


    Confirm Your Benefit Plans Ready For New Disability Determination Rules on 1/1/18

    December 14, 2017

    Employer and other sponsors, fiduciaries, administrators and insurers of the Employee Retirement Income Security Act (ERISA)-covered employee benefit plans making disability-based benefit determinations should confirm that their plan documents, summary plan descriptions, procedures and claims and appeals notices are updated and ready to meet tightened new federal rules on disability-based benefit determinations applicable to all post December 31, 2017 claims under the restated Final Rule on Claims Procedure for Plans Providing Disability Benefits (“Disability Claims Rule”).  Given the nature and scope of these new requirements, most covered plans will require specific action be taken before the new rules take effect to update plan documents, summary plan descriptions, notices, contracts, processes and procedures to meet the January 1, 2018 deadline.

    The Disability Claims Rule published by the Department of Labor Employee Benefit Security Administration (“EBSA”) on December 19, 2016 generally require all ERISA-covered employee benefit plans making any disability benefit or other determination conditioned upon a finding of disability to comply with the new Disability Claims Rule for any claim received after December 31, 2017.

    The new Final Disability Claims Rule will apply to all disability determinations made under any ERISA-covered plan after December 31, 2017, regardless of how the plan characterizes the benefit or whether the plan is a health or other welfare, pension, 401(k) plan or other savings plan.

    Significant affirmative action is likely required to prepare covered plans to meet these requirements since most plans historically have not followed the detailed claims and appeals notification, independent and impartial decision-making, rescission, deemed exhaustion, “culturally and linguistically appropriate” and other procedural protections and safeguards based on EBSA’s previously adopted Patient Protection and Affordable Care Act (“ACA”) group health plan claims and appeals rules, which the Disability Claims Rules extend and make applicable to all ERISA-covered plans making benefit determinations based on disability.   Covered plans making disability-based benefit or other covered determinations are likely to require updates to plan documents, insurance or administrative services contracts, summary plan descriptions and other plan communications, claims and appeals notices, and other related processes, procedures and documentation to meet these new requirements. Since certain requirements of the Disability Claims Rules like the summary plan description advance disclosure requirements are required to be provided before the claim is received, plans and their sponsors risk being accused of violating these requirements by waiting to update plans, their processes and materials until after claim involving a disability based determination arises.

    Ensuring that impacted plans are updated before the January 1, 2018 deadline is important because the Disability Claims Rule, like the group health plan claims and appeals rules upon which it is based, also states that noncompliance with any of its requirements empowers a participant to immediately sue the plan for enforcement if his rights without further complying the the plan’s administrative procedures. Moreover, failing to comply with summary plan disclosure or claims or appeal adverse benefit determination notification requirements also may subject the plan administrator to administrative penalties under ERISA section 514(c).  Consequently, employers and other plan sponsors, fiduciaries, administrators and insurers will want to act quickly to ensure that their plans, their summary plan descriptions and other communications, notices, processes, contracts and procedures are updated appropriately before January 1, 2018.

    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, immediatepast 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, BenefitsMagazine, 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.

    ©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.


    Individual Accountability For Performance Matters

    December 13, 2017

    Teamwork is a valuable and necessary to organizational performance in most workplaces. However management undermines team performance and effectiveness by giving participation trophies to team members that don’t give their best when working on teams.

    Managements goal at all-time should be to maximize the effectiveness of the team by encouraging and require each individual team member to contribute their best on the team.

    Overemphasizing team work at the expense of individual performance accountability, however, undermines team performance by disincentivizing optimal performance by every team member. Optimal management and performance rewards ensure that each individual member of the team remains accountable for optimizing his or her individual performance while encouraging effective participation on the team. To maintain individual performance within the team, ensure your expectations and performance measures track not only team performance but also individual performance on the team. Measure and award teamwork by individual members of the team as one of the performance measures rather than making teamwork itself at the expense of the performance goals the basis of the reward.

    Check out this coach’s perspective for more food for thought.

    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:

    DOL Proposes Changing FLSA Tipped Employee Pay Rules

    Consider Internal Investigation & Defense Costs When Administering Compliance Programs

    Recruiting Qualified Workers Biggest Challenge US Manufacturers See In Otherwise Optimistic 3rd Quarter 2017

    Government Retirees Get New Thrift Plan Distributing Choices

    Jennifer A. Abruzzo Named NLRB Acting General Counsel

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

    Address Workplace Harassment During October Stop Bullying Month

    NIOSH Proposed Updated Occupational Safety Chemical Monitoring Rules

    2018 Social Security COLAs Set

    IRS Updates Defined Benefit Plan Guidance

    Read Trump Health Care Executive Order

    Dealing With HR, Benefits & Other Headaches From Equifax and Other Data Breach

    Employers Should Manage Potential Unfair Labor Practice Risks From Recording, Acceptable Use, Fighting, Integrity & Other Employment Policies

    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


    Jennifer A. Abruzzo Named NLRB Acting General Counsel

    November 1, 2017

    The National Labor Relations Board (NLRB) announced today the appointment of Jennifer A. Abruzzo to serve as NLRB’s Acting General Counsel.

    Although Ms. Abruzzo original began her legal career as a civil litigation attorney in the medical malpractice division of a South Florida firm, she has spent almost twenty-three years working for the NLRB in various capacities, including as Field Attorney, Supervisory Field Attorney and Deputy Regional Attorney in the Miami, Florida office, as well as Deputy Assistant General Counsel in the Division of Operations-Management in Washington, DC, where she oversaw Regional operations in the Northeast and Midwest.

    Prior to becoming Deputy General Counsel, Ms. Abruzzo served as the Executive Assistant to Acting General Counsel Lafe E. Solomon, and detailed in that role for General Counsel Ronald E. Meisburg.   In 2011 her involvement at the NLRB drew public attention when an e-mail sent to her by then NLRB Deputy Assistant General Counsel Joseph Baniszewski forwarding a political cartoon mocking the state of South Carolina with regard to Boeing Corporation’s decision to locate its manufacturing facility to South Carolina was made public.

    During her career with NLRB, she has participated in the litigation of numerous high profile cases.

    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:

    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.


    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.


    Address Workplace Harassment During October Stop Bullying Month

    October 21, 2017

    This month’s annual October Stop Bullying Month observances are a great time for employers to deter sexual, racial, religious, national Origin, disability discrimination and harassment, retaliation and other illegal or otherwise counterproductive bullying in their workplaces.

    Aside from obvious legal exposures that often attend from many versions of workplaces bullying, unfair or heavy handed tactics of workplace bullies often pervasively disrupt workplace productivity and operations by undermining performance, feedback, initiative, employee retention and a host of other ways.

    Seize the opportunity to boost your organization’s legal and operational exposures non discrimination, anti-harassment, and other workplace bullying policies by leveraging the visibility and resources of this month’s anti-bullying activities.

    Checkout StopBullying.gov for more information and free resources.

    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”

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    DB Plan Sponsors Check Out New Bifurcated Distribution Model Amendmentsy

    U.S. News Names 2017-2018 “Best” Hospitals; Patient Usefulness Starts With Metholodogy Understanding

    Use Lessons Of Past Mistakes or Injustice To Build Better Future

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    SCOTUS Ruling Bars Many State Arbitration Agreement Restrictions

    $2.4M HIPAA Settlement Message Warns Health Plans & Providers Against Sharing Medical Info With Media, Others

    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.


    Employers Should Manage Potential Unfair Labor Practice Risks From Recording, Acceptable Use, Fighting, Integrity & Other Employment Policies

    September 13, 2017

    Employers beware of potential National Labor Relations Act unfair labor practices risks that may arise from their adoption or enforcement of overly broad or restrictive workplace recording, acceptable use, workplace conduct, commitment-to-integrity or other policies that might be construed to prohibit or deter employees from exercising protected organization or other collective bargaining rights under the National Labor Relations Act (NLRA) in light of the Fifth Circuit’s July 25, 2017  T-Mobile United States, Inc. v. Nat’l Labor Relations Bd. decision.

    In T-Mobile v. NLRB, the Fifth Circuit upheld and ordered the enforcement of a National Labor Relations Board (NLRB) ruling that telecommunications industry employers T-Mobile and MetroPCS (T-Mobile) engaged in unfair labor practices in violation of Section 8 of the NLRA by maintaining a policy that prohibited all photography and audio or video recording in its workplace without the employer’s prior permission (“Recording Policy”).

    The Fifth Circuit’s ruling arose from an appeal filed by T-Mobile with the Fifth Circuit, challenging a NLRB ruling that the Recording Policy, a workplace conduct policy, a commitment-to-integrity policy and an Acceptable Use Policy included in the T-Mobile employee handbook violated the NLRA because “employees would reasonably construe the language to prohibit Section 7 activity and therefore constituted unfair labor practices prohibited under Section 8 of the NLRA. (Note:  T-Mobile did not appeal the NLRB’s findings that 7 other policies also violated the NLRA).

    While the Fifth Circuit’s decision only upheld the unfair labor practice determination based on the Recording policy, the decision makes clear that its findings concerning each of the four employment policies subject to the appeal as well as other employment policies could come out differently in other cases based on the contextual evidence reflected in the factual record concerning the particular employment policy and the context in which it is implemented and enforced. Employers maintaining or administering similar workplace rules will want to scrutinize carefully their own policies to assess their potential for exposing the employer to unfair labor practice charges and take appropriate action to minimize these risks.

    Policies Chilling Organizational Rights Protected By NLRA  § 7 Create Unfair Labor Practice Exposures

    Section 7 of the NLRA  protects workers’ right “to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.” 29 U.S.C. § 157.  NLRA § 8(a)(1) makes it an “unfair labor practice” for an employer to “interfere with, restrain, or coerce employees in the exercise of the rights” protected by NLRA § 7.

    According to existing Fifth Circuit precedent, a workplace rule violates Section 8(a)(1) of the NLRA if the rule either:

    • “Explicitly restricts activities protected by Section 7″ or
    • Employees would reasonably construe the language to prohibit Section 7 activity even if the rule does not explicitly prohibit or has not been enforced to prohibit or restrict Section 7 protected activity.

    A careful analysis of the Fifth Circuit’s decision makes clear that its decision about each of the four challenged policies covered by T-Mobile’s appeal turned upon the Court’s careful analysis of the surrounding context under which the applicable policy was implemented and administered reflected in the factual record.  While the Fifth Circuit overruled as erroneous the NLRB’s findings that three other challenged policies violated the NLRA under this analysis, it agreed with and ordered enforced the NLRB’s ruling that T-Mobile’s Recording Policy violated the NLRA by impermissibly chilling worker’s exercise of their Section 7 rights.  Construing the Acceptable Use Policy as prohibiting all recording in the workplace without the employer’s consent, the Fifth Circuit concluded that the policy would “discourage” a reasonable employee from engaging in protected activity” because a reasonable employee would construe the Policy as prohibiting employee unionizing or other concerted activity protected by the NLRA.

    Context Protected Workplace Conduct, Commitment-To-Integrity, No Arguing or Fighting & Acceptable Use Policy

    Based upon its review of the contextual facts shown in the record, the Fifth Circuit overruled the NLRB’s unfair labor practice orders with respect to T-Mobile’s workplace conduct, commitment-to- integrity, no argument or fighting and Acceptable Use policies.  Employers should note, however, that the Fifth Circuit’s ruling does not give blanket enforcement to the defensibility of these policies in all circumstances.   Rather, noting that “context matters” when determining whether a work rule violates the NLRA, the court found  the policies read in the context of the workplace established common sense civility guidelines that a reasonable employee would not read as chilling or discouraging organization activities protected under Section 7.  Accordingly, the Fifth Circuit declined to enforce the NLRB’s unfair labor practice orders against T-Mobile with respect to those policies in this instance.  Employers considering the implications on this decision on their own policies should keep in mind, however, that the Fifth Circuit based its decision on the context reflected by the facts in the record.  Accordingly, there remains a risk that these or other policies could be found to violate the NLRB if adopted or administered under circumstances that could chill reasonable workers from exercising their Section 7 organizational rights.

    Context Invalidated Recording Policy

    The critical significance of the factual context in determining the defensibility of each of these policies under Sections 7 and 8(a) of the NLRA is driven home by the Fifth Circuit’s explanation in the opinion of its decision to enforce the NLRB’s order with respect to the following Recording Policy as well as its explanation of its distinguishability from the Acceptable Use Policy that the Fifth Court found permitted.:

    To prevent harassment, maintain individual privacy, encourage open communication, and protect confidential information employees are prohibited from recording people or confidential information using cameras, camera phones/devices, or recording devices (audio or video) in the workplace. Apart from customer calls that are recorded for quality purposes, employees may not tape or otherwise make sound recordings of work-related or workplace discussions. Exceptions may be granted when participating in an authorized [T-Mobile] activity or with permission from an employee’s Manager, HR Business Partner, or the Legal Department. If an exception is granted, employees may not take a picture, audiotape, or videotape others in the workplace without the prior notification of all participants.

    In determining this Recording Policy impermissibly deterred employees from exercising their Section 7 rights in violation of the NLRA, the Fifth Circuit’s opinion makes clear that “the broad reach of the recording ban” strongly influenced this determination, stating:

    The ban, by its plain language, encompasses any and all photography or recording on corporate premises at any time without permission from a supervisor. This ban is, by its own terms alone, stated so broadly that a reasonable employee, generally aware of employee rights, would interpret it to discourage protected concerted activity, such as even an off-duty employee  photographing a wage schedule posted on a corporate bulletin board. …

    Unlike the “workplace conduct” policy and the “commitment-to-integrity” policy, the recording policy forbids certain forms of clearly protected activity. We have earlier held that held those two policies would not be interpreted by a reasonable T-Mobile employee as forbidding protected activity. By contrast, a reasonable T-Mobile employee, aware of his legal rights, would read the language of the recording policy as plainly forbidding a means of engaging in protected activity.

    In the face of this possibility, the Court similarly considered the factual record before rejecting T-Mobile’s argument that the Policy was defensible to promote its legitimate business interests “[t]o prevent harassment, maintain individual privacy, encourage open communication, and protect confidential information” on the grounds that “merely reciting such justifications does not alter the fact that the operative language of the rule on its face prohibits protected Section 7 activity, including Section 7 activity wholly unrelated to those stated interests.”

    In reaching this determination, the Fifth Circuit distinguished these findings from its findings with regard to the Acceptable Use policy.  In explaining its finding the Acceptable Use Policy valid, the Fifth Circuit’s opinion explains that the NLRB’s decision concerning the Acceptable Use Policy disregarded the context in which the acceptable use policy is to be read and understood, stating:

    The “Scope” section of the acceptable use policy explicitly states that the policy “applies to all non-public T-Mobile information.” Thus the policy only prohibits employees from sharing non-public information. 

    Where a company policy prohibits the disclosure of non-public information, courts presume that a reasonable employee would not construe the policy to prohibit the disclosure of information that may be properly used in protected activity, such as wage and benefit information, so long as the policy does not explicitly state that it encompasses such information.  … Here… the policy does not define “non-public T-Mobile information” in a way that would lead a reasonable worker to believe that it includes protected wage and benefit information.  Instead, the policy only applies to the sort of proprietary business information that an employer may properly restrict its employees from sharing outside of the company. …

    Thus the NLRB’s finding that a reasonable worker would construe the acceptable use policy to discourage protected activity is unreasonable, and we deny enforcement as to that part of its order.

    Accordingly, the Fifth Circuit upheld enforcement of the NLRB’s order striking down the Recording Policy but denied enforcement and overruled the NLRB’s unfair labor practice finding with regard to the other three policies.

    Contextual Basis of Decision Requires Employer Tread Carefully, Manage Risks

    While the Fifth Circuit only enforced the NLRB’s unfair labor practice finding with respect to T-Mobile’s Recording Policy in T-Mobile,  the opinion makes clear that similar or identical policies could be treated differently depending upon whether the contextual evidence reflects that the policy could be reasonably construed by employees as prohibiting or restricting conduct protected by Section 7 of the NLRA.  Employers maintaining or administering similar workplace rules will want to scrutinize carefully their own policies to assess their potential for exposing the employer to unfair labor practice charges and take appropriate action to minimize these 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.

    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:

    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.