Category Archives: Discrimination/Equal Rights

Registration is now open for our Annual Compliance/Best Practices Seminar!

Registration and a continental breakfast will be served beginning at 7:30 a.m.  Click here to register.

April 28, 2015

8:00 a.m. – 12:00 p.m.

Sheraton Milwaukee Brookfield Hotel

375 South Moorland Road Brookfield, Wisconsin

This FREE half-day event will address current topics in labor, employment, benefits and worker’s compensation law and provide employers across industries with practical and creative solutions for addressing their toughest workplace legal challenges.

SESSION TOPICS INCLUDE:

  • Annual Labor & Employment Update (Plenary)
  • Wellness Plans – Ensure ADA Compliance & Avoid EEOC Litigation
  • Steps To Avoid The Retaliation Claim Trap
  • Worker’s Compensation Update
  • The National Labor Relations Board And Its Impact On Non-Union Employers

EEOC Challenges Employer Wellness Programs

November 13, 2014

By: Alan M. Levy and Samantha J. Wood

The Affordable Care Act (ACA) has recently popularized employer wellness programs. The Department of Labor and Health and Human Services are presenting the ACA as promoting such programs by encouraging employers to offer “rewards” for participation. According to the final regulations, such “rewards” can include obtaining a benefit (such as a discount or rebate of a premium or contribution, or any financial or other incentive) and/or avoiding a penalty (such as the absence of a surcharge or other financial or nonfinancial disincentive). But the Equal Employment Opportunity Commission (EEOC) is now acting to remind employers that their programs’ “rewards” must comply with other laws.

In the past few months, the EEOC has challenged three employer wellness programs alleging that the programs, which offer financial incentives to those who participate, violate the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA). The EEOC reasons that the programs’ financial incentives constitute unlawful penalties and inducements.

The ADA prohibits employers from requiring their employees to submit to medical examinations or answer medical inquiries, unless such exam or inquiry is shown to be job-related and consistent with business necessity. However, the ADA permits employers to conduct medical exams and activities without having to satisfy the job-related/business necessity components as long as participation is voluntary, the information is kept confidential, and the information is not used to discriminate against employees. The EEOC has taken the position that a wellness program is “voluntary” as long as an employer neither requires participation nor penalizes employees who do not participate. In the recent litigation, the EEOC has maintained that large financial incentives affect the voluntariness of the programs.

GINA prohibits plans and issuers from collecting genetic information (including family medical history) prior to or in connection with enrollment, or at any time for underwriting purposes. A plan cannot offer rewards or inducement in return for genetic information. Accordingly, in the recent litigation, the EEOC has maintained that programs which offer financial incentives in exchange for spousal health information are unlawful inducements for one’s family medical history.

The EEOC brought its first lawsuit in the Eastern District of Wisconsin, challenging Orion Energy Systems, Inc.’s wellness program. Orion’s program required employees to complete a health risk assessment, to self-disclose their medical histories, and to have blood work performed. If the employees participated in the program, Orion would cover the entire amount of the employee’s health care costs. However, if an employee declined participation, s/he would be required to pay the entire premium cost for coverage ($413.43/month for single coverage or $744.16/month for family coverage), as well as a $50 non-participation fee. The EEOC has alleged that such financial incentive/disincentive is so great that it constitutes a penalty in violation of the ADA.

On September 30, 2014, the EEOC challenged Flambeau Inc.’s wellness program in the Western District of Wisconsin. Flambeau’s wellness program required employees to complete biometric testing and a health risk assessment, which required the employees to self-disclose their medical histories and have blood work and measurements performed. Employees who completed the testing were only obligated to pay 25 percent of the premium cost of their health insurance. However, employees who did not complete the testing were subjected to termination of health insurance and were required to pay the entire premium cost for COBRA health insurance coverage. As in the Orion Energy Systems case, the EEOC has alleged that Flambeau’s program is not job-related or consistent with business necessity and is not voluntary due to the financial penalty.

The EEOC’s most recent attack was brought October 27, 2014, against Honeywell International Inc., in the District Court of Minnesota. Honeywell’s wellness program required its employees and their spouses to undergo biometric testing. If the employees and their spouses did not take the biometric test, the employees risked losing the employer’s contributions to their health savings accounts (which could be up to $1500); would be charged a $500 surcharge that would be applied to their 2015 medical plan costs; would be charged a $1000 tobacco surcharge even if the employee chose not to undergo the testing for reasons other than smoking; and would be charged another $1000 tobacco surcharge if his/her spouse did not participate. In total, an employee could suffer a penalty of up to $4000. Again the EEOC has alleged that the wellness program is not job-related or consistent with business necessity and is not voluntary due to the large financial penalties. In addition, the EEOC has alleged that the program violates GINA’s proscription against providing inducements to an employee to obtain that employee’s family medical history.

Honeywell disputes that its financial incentives are in violation of the law, as such incentives/disincentives are allowed under the ACA. Indeed, prior to the ACA, the maximum financial incentive that could be offered for health-contingent wellness programs could not exceed 20 percent of the health plan’s premiums. However, the ACA increased the financial incentive allowance, permitting financial incentives of up to 50 percent of the premium for health-contingent wellness programs designed to prevent or reduce tobacco use, and 30 percent of the premiums for all other health-contingent wellness programs. Accordingly, if the EEOC’s position is adopted, which states that such financial incentives are penalties under the ADA and unlawful inducements under GINA, it would diminish the DOL and HHS’s final regulations affecting the financial incentive allowance.

Accordingly, employers offering health-contingent wellness program incentives should watch for the resolution of this litigation while keeping in mind their obligations to comply with other laws. Employers should be aware that offering large wellness program incentives could not only violate the ADA and GINA, but could also make their health plans unaffordable or inadequate under the ACA, which requires large employers to offer coverage that provides minimum value and affordability. Coverage is affordable if the employee’s required contribution to the plan does not exceed 9.5 percent of the employee’s household income; and a plan provides minimum value if the plan’s actuarial value is at least 60 percent. If an employer offers a premium discount for participation in a wellness program (that is not connected to tobacco use), employers must remember that the determination as to whether the plan is affordable and offers the minimum value, will be based on the higher deductible that applies to non-participating individuals.

If you have questions about this material, please contact Alan M. Levy or Samantha J. Wood by email at alevy@lindner-marsack.com or swood@lindner-marsack.com, or any other attorney you have been working with here at Lindner & Marsack, S.C.


DOL ISSUES GUIDANCE ON RIGHTS OF SAME-SEX SPOUSES FOR ERISA PLANS

By: Alan M. Levy

On September 18, 2013 the U.S. Department of Labor (“DOL”) issued Technical Release 2013-04 to address ERISA rights for same-sex spouses after the Supreme Court’s decision in United States v. Windsor, 133 S. Ct. 2675 (2013), invalidated parts of the federal Defense of Marriage Act. Largely consistent with the equivalent discussion from the Internal Revenue Service, Rev. Rul. 2013-17, DOL has stated that it will require that legally married same-sex spouses be treated under ERISA benefit plans in the same manner it has always applied for those in opposite-sex marriages.

The test for being “legally married” is based on the law in the state where the marriage ceremony took place, so, for example, a same-sex couple married in Iowa, New York, or Minnesota is considered legally married for purposes of federal law even if they subsequently live in a state (like Wisconsin) which does not recognize that marriage. For this reason, Wisconsin employers must be alert to the federal rules if any of their employees seek these benefits.

The two same-sex spouses then have all the ERISA rights of an opposite-sex married couple. In ERISA-governed retirement plans, each can be the “surviving spouse” of the other, and ERISA “joint and survivor” spouse benefits must apply to both. When the retirement plan rules require notice to or consent from a spouse (as when a participant designates a beneficiary or selects a joint and survivor retirement benefit), the same-sex spouse has the same rights to be notified and the same power to consent (or not) as the spouse in an opposite-sex marriage. Similarly, a same-sex couple who obtain a legal divorce can utilize a Qualified Domestic Relation Order (“QDRO”) to require that the participant’s same-sex former spouse receives part of the participant’s benefit.

The rules for ERISA welfare plans – including employer-provided health insurance – are somewhat less certain because a welfare plan may exclude a spouse regardless of gender. However, a health plan which only provides employee benefits to a spouse of the opposite sex and excludes a same-sex spouse is an invitation to litigation.

Employers should review their ERISA plan documents and amend those references which would improperly deny spousal benefits to same-sex spouses. Currently, all such references must be updated by December 31, 2013; although there are indications that IRS will extend this deadline, no announcement of that relief has yet been issued.

Should you have any questions about these new requirements and how they are to be enforced, please contact Alan M. Levy, an attorney with Lindner & Marsack who focuses on employee benefits.

SUPREME COURT RULING FORCES EMPLOYERS TO RECONSIDER BENEFITS FOR SAME-SEX COUPLES

By: John E. Murray and Samantha J. Wood

In June 2013, the United States Supreme Court invalidated the federal law defining marriage as the union of one man and one woman. That decision complicates the administration of FMLA leave for multi-state employers and employers in states (like Wisconsin) which have not recognized same-sex marriages. For more information on the impact of this decision, please read the article by Attorneys John E. Murray and Samantha J Wood at: http://www.biztimes.com/article/20131014/MAGAZINE03/310109977/-1/MAGAZINE/Supreme-Court-ruling-forces-employers–to-reconsider-benefits-for-same-sex-couples

If you have questions about this material, please contact John E. Murray or Samantha J. Wood by email at jmurray@lindner-marsack.com or swood@lindner-marsack.com, or any other attorney you have been working with here at Lindner & Marsack, S.C.

NEW FEDERAL REQUIREMENTS IMPOSING HIRING GOALS FOR VETERANS AND PEOPLE WITH DISABILITIES TO AFFECT APPROXIMATELY 171,000 COMPANIES

By: Laurie A. Petersen and Samantha J. Wood

On August 27, the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) announced a Final Rule that makes changes to the regulations implementing the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA) and Section 503 of the Rehabilitation Act of 1973. These changes are intended to improve hiring of veterans and people with disabilities.

The Final Rule will make the following changes to the regulations affecting VEVRAA:

  1. It will completely rescind 41 C.F.R. 60-250 and replace it with the revised 41 C.F.R. 60-300. Veterans who were formerly protected only under 41 C.F.R. 60-250 will be protected from discrimination under 41 C.F.R. 60-300.
  2. It will require federal contractors and subcontractors to establish annual hiring benchmarks. It will require federal contractors to either:A. Adopt a hiring benchmark equal to the national percentage

of veterans in the civilian labor force (currently 8 percent); or

B. Establish their own benchmark by taking into account (i) the average percentage of veterans in the civilian labor force in the state where the contractor is located over the preceding three years; (ii) the number of veterans, over the previous four quarters, who participated in the employment service delivery system in the state where the contractor is located;

(iii) the applicant and hiring ratios for the previous year; (iv) the contractor’s recent assessments of the effectiveness of its outreach and recruitment efforts; and (v) any other factors, such as the nature of the job and its location, that would affect the availability of qualified protected veterans.

3. It will require federal contractors to annually document and update, and maintain for three years the following quantitative comparisons regarding applicants and employees:

A. The number of protected veteran applicants;

  1. The total number of job openings and number of jobs filled;
  2. The total number of applicants for all jobs;
  3. The total number of protected veterans applicants hired; and
  4. The total number of applicants hired.
  1. Beyond records comparing applicants, employees, and the hiring benchmark requirement, it will require records to contain an evaluation of outreach and recruitment efforts. Companies must be able to provide documentation to show that they have tried to meet the benchmark otherwise they risk having their federal contracts revoked.
  2. It will require federal contractors to make the following adjustments to its hiring process:
    1. Contractors must invite applicants to self-identify as protected veterans at both the pre-offer and post-offer phases of the application process.
    2. When listing a job opening, contractors must provide information in a manner and format permitted by the

appropriate State or local job service.

  1. It will require federal contractors to use specific language when incorporating the equal opportunity clause into a subcontract by reference to alert subcontractors to their responsibilities as Federal contractors.
  2. It will require contractors to provide OFCCP all records upon request and allow OFCCP to complete a compliance check either

on or off-site.

The Final Rule will make the following changes to the regulations implementing Section 503 of the Rehabilitation Act of 1973 at 41 C.F.R. 60- 741:

  1. It will implement changes necessitated by the passage of the ADA Amendments Act of 2008 by revising the definition of “disability” and certain nondiscrimination provisions.
  2. It will require federal contractors to adopt a hiring goal of 7 percent to each of their job groups or to their entire workforce if the

contractor has 100 or fewer employees.

3. It will require federal contractors to annually document and update, and maintain for three years the following quantitative comparisons regarding applicants and employees:

A. B. C. D. E.

The number of applicants disabilities;
The total number of job openings and number of jobs filled; The total number of applicants for all jobs;
The total number of applicants with disabilities hired; and The total number of applicants hired.

4. It will
problem areas and establish specific action-oriented programs to address the problems.

require federal contractors to conduct annual assessments of

5. It will require federal contractors to make the following adjustments to its hiring process:

A. Contractors must invite applicants to self-identify as individuals with disabilities at both the pre-offer and post-

offer phases of the application process.

B. When listing a job opening, contractors must provide information in a manner and format permitted by the appropriate State or local job service.

6. It will require federal contractors to invite employees to self- identify as individuals with disabilities every five years.

7. It will require federal contractors to use specific language when

incorporating the equal opportunity clause into a subcontract by reference to alert subcontractors to their responsibilities as Federal contractors.

8. It will require contractors to allow OFCCP to request and review documents related to a compliance check either on or off-site.

According to the director of OFCCP, such new rules are expected to affect approximately 171,000 companies doing business with the federal government. Although these rules will not become effective for 180 days after publication in the Federal Register, contractors are encouraged to

begin updating their employment practices as soon as possible.

If you have questions about this material, please contact Laurie A. Petersen or Samantha J. Wood by email at lpetersen@lindner-marsack.com or swood@lindner-marsack.com, or any other attorney you have been working with here at Lindner & Marsack, S.C.

SEVENTH CURCUIT INCREASES DTY OF EMPLOYERS TO REASSIGN DISABLED WORKERS

By: John E. Murray

Under the American’s with Disabilities Act, and most state discrimination laws, employers must make reasonable accommodations for qualified disabled workers. When no accommodation would allow the employee to remain in his or her current position, employers must consider reassignment to a vacant position for which the employee is qualified. In a decision it issued last week, the Seventh Circuit Court of Appeals (covering Illinois, Indiana and Wisconsin) clarified the obligation to reassign disabled workers.

On September 7, 2012, the Seventh Circuit issued its decision in EEOC v. United Airlines, Inc. For the first time, the court ruled that employers may be required to place a qualified disabled worker in a vacant position over a more qualified candidate. If a disabled employee is qualified for the position, and it would be reasonable to transfer her into it, the employer must give her that position unless that reassignment would create an undue hardship. A reassignment that would violate a collective bargaining agreement, or a seniority system, is likely to meet this standard. The court ruled that a policy of hiring the most qualified applicant is not enough.

The United Airlines decision overruled the Seventh Circuit’s prior decisions on this issue. In the past, the Seventh Circuit viewed policies favoring the most qualified applicant to be no different from collective bargaining agreements or seniority policies. An employer who consistently followed such a practice could refuse to reassign a qualified disabled employee if another candidate was more qualified. That is no longer the case.

If you have questions about your accommodation/reassignment practices, feel free to call John Murray at 414-226-4818, or any other Lindner & Marsack attorney at 414-273-3910.

OFCCP PROPOSED RULE SEEKS TO INCREASE DISABILITY HIRING

By: Laurie A. Petersen and Kristofor L. Hanson

On December 9, 2011, the Department of Labor’s Office of Federal Contract Compliance Programs (“OFCCP”), published a Notice of Proposed Rulemaking, which if implemented, would impose significant changes on companies doing business with the federal government with respect to their hiring of persons with disabilities. The rule looks to set a hiring goal
for workers with disabilities’ proposed at 7% of federal contractors’ workforces’ and would establish for the first time, a single, national utilization goal for individuals with disabilities.

The proposed rule does not set 7% as a quota or a restrictive hiring ceiling. Nor does failure to achieve 7% hiring of persons with disabilities necessarily constitute a violation of Section 503 of the Rehabilitation Act of 1973, which the proposed rule seeks to amend. The OFCCP director stated that the focus of the rule will be on determining whether covered contractors are following required steps related to recruitment, notification of job openings, and accessible hiring procedures.

Under the rule the definitions of “disability,” “major life activities,” “substantially limits,” and other statutory terms within the existing Section 503 regulations to conform with the ADA Amendments Act (“ADAAA”) and the Equal Employment Opportunity Commission’s final regulations implementing that new law, which amended the Rehabilitation Act as well as the ADA.

The proposed rule makes substantive changes to a federal contractor’s responsibilities and the manner in which applicants are invited to voluntarily self-identify as individuals with disabilities during the hiring process. Contractors also shall invite employees to self-identify as disabled post-offer. The pre-offer self-identification process is designed to assist contractors and OFCCP in determining the number of individuals with disabilities who apply for jobs with contractors.

In addition, the proposed rule adds a new requirement that contractors annually survey their employees, providing an opportunity for each employee who is, or subsequently becomes, an individual with a disability to voluntarily self-identify as such in an anonymous manner, thereby
allowing those who have subsequently become disabled or who did not wish to self-identify during the hiring process to be counted. The purpose of the annual survey is to provide contractors and the OFCCP with a data collection tool to establish a baseline percentage of disabled employees and to better identify and monitor the contractor’s hiring and selection
practices with respect to individuals with disabilities. The OFCCP believes that assuring anonymity of employee response to the annual survey will likely increase the response rate, thus providing that the most accurate data possible is available to assist contractors and OFCCP. This data is designed to assist contractors and OFCCP in evaluating and refining
contractors’ affirmative action efforts. Surveying of employees may be accomplished by the contractor using a paper and/or electronic format, using the method(s) generally used by the contractor to communicate with employees regarding work-related matters. The OFCCP will provide suggested language for the self-identification inquiries and is seeking comments on the language prior to implementation.

Contractors would also have to annually review their personnel policies to assure that their affirmative action plan obligations are being met. Likewise, contractors would be required to annually review their outreach and recruitment efforts to evaluate their effectiveness in identifying and recruiting qualified individuals with disabilities, and to document the review. In addition, contractors would have to establish “linkage agreements” and “ongoing relationships” with state vocational rehabilitation agencies or local organizations listed in the Social Security
Administration’s Ticket to Work employment network directory.

Federal contractors would also be required for the first time to develop and implement written procedures for processing requests for reasonable accommodation under the rule. The purpose of developing these written procedures, according to the OFCCP, would be to assure that applicants and employees have clear instructions on how to request accommodations
and know the reason an accommodation request has been denied. In addition, the rule would assist federal contractors in assuring they are satisfying their reasonable accommodation requirements.

The significant changes in the proposed rule should be reviewed closely by all employers doing business with the federal government. Contractors should also review their current disability hiring and retention policies, as well as their reasonable accommodation guidelines, to assure that they are making proper efforts to accommodate individuals with disabilities, both
at the hiring phase and during active employment.

No implementation date has been set, but OFCCP is accepting comments on this Notice of Proposed Rulemaking through February 7, 2012. Comments, identified by RIN number 1250-AA02, may be submitted online at http://www.regulations.gov; by fax (if six pages or less) to (202) 693-1304; or by mail to: Debra A. Carr, Director, Division of Policy, Planning, and Program Development, Office of Federal Contractor Compliance Programs, Room C-3325, 200 Constitution Ave. NW, Washington, DC 20210.

If you have any questions about this material, please contact Laurie Petersen or Kris Hanson or any other attorney you have been working with here at Lindner & Marsack, S.C.