Category Archives: Regulatory & Compliance

GOVERNOR WALKER PROPOSES TO ELIMINATE THE LABOR AND INDUSTRY REVIEW COMMISSION

By:  Jonathan T. Swain

February 13, 2017

In his recently published proposed biennial budget for fiscal years 2018 and 2019, Governor Walker has proposed to eliminate the Wisconsin Labor and Industry Review Commission (LIRC).  LIRC is an independent three member commission appointed by the Governor that currently handles all appeals of Administrative Law Judge (ALJ) decisions for unemployment compensation cases, worker compensation claims, as well as state fair labor standards cases and fair employment cases in the Equal Rights Division and public accommodation cases.  LIRC would be phased out over the next three fiscal years.

Presently, LIRC has the authority to affirm, overturn and remand ALJ decision in these areas.  LIRC decisions are appealable to the State’s circuit courts.

Under Governor Walker’s proposal, Worker Compensation ALJ decisions will be reviewable by the State Department of Administration, while jobless claims and Equal Right Division decisions will be Agency administrators.  In his budget statement, Governor Walker stated that the proposed elimination of LIRC will eliminate “an unnecessary layer of government” and will make this second layer of review decisions occur much more quickly.

Of course, this is a proposed budget and, as such, is subject to negotiation with the legislature and subsequent amendment.  Further, stakeholders in the business, labor and legal community have yet to weigh-in on the Governor’s proposal.  As this issue advances, we will keep you up to date and informed.

Employers Must Now Use New Form I-9

NEW I-9 FORM AVAILABLE: As of January 22, 2017, employers must use the NEW version of the Form I-9 — whether for new employees or for the reverification of expiring authorizations for existing employees. Prior versions of the Form I-9 should no longer be used. Employers who do not use the new Form I-9 are considered to be in technical violation of the law and can expose themselves to penalties for each occasion they have failed to use the new form.

If you have questions or concerns about I-9 compliance or need assistance in conducting an I-9 compliance audit, please contact Sally Piefer at spiefer@lindner-marsack.com or at 414.226.4818, or any other attorney you have been working with here at Lindner & Marsack, S.C.

Final Rule Implementing Executive Order Mandating Paid Sick Leave by Federal Contractors Published

By Jerilyn Jacobs

Last week, the Department of Labor published a Final Rule regarding implementation of Executive Order 13706, which requires certain federal contractors to provide paid sick leave to their employees.  The Final Rule applies to contracts where the solicitation was issued or the contract was awarded on or after January 1, 2017.

Under the Final Rule, applicable federal contractors will be required to provide employees with one hour of paid sick leave for every 30 hours worked on or in connection with a covered federal contract, up to 56 hours.  Employees may use paid sick leave for the following reasons:

  • To care for the employee’s own illness and other health care needs, including preventative health care;
  • To care for a family member who is ill or needs health care, including preventative health care (the Final Rule takes an expansive view of the types of family relationships that are covered, extending beyond individuals with biological or legal ties to the employee); and
  • For purposes related to being the victim of domestic violence, sexual assault or stalking, or assisting a family member or loved one who is such a victim.

The four major types of federal contracts that fall under the Final Rule are procurement contracts for construction covered by the Davis-Bacon Act (DBA), service contracts covered by the McNamara-O’Hara Service Contract Act (SCA), concessions contracts, including any concessions contracts excluded from the SCA by the Department of Labor’s regulations at 29 CFR 4.133(b), and contracts in connection with federal property or lands and related to offering services for federal employees, their dependents, or the general public.

The Executive Order and Final Rule do not apply to contracts for the manufacturing or furnishing of materials, supplies, articles, or equipment to the federal government that are subject to the Walsh-Healy Public Contracts Act (PCA).  However, where a PCA-covered contract involves a substantial and segregable amount of construction work that is subject to the DBA, employees whose wages are governed by the DBA or the Fair Labor Standards Act (FLSA), including those who qualify for an exemption from the FLSA’s minimum wage and overtime provisions, are covered for the hours spent performing work on or in connection with such DBA-covered construction work.

As to employees working on contracts covered by a collective bargaining agreement (CBA), if the CBA already provided the employee with at least 56 hours of paid sick time per year, then the other requirements of the Executive Order and the Final Rule do not apply to the employee until the date the CBA terminates or January 1, 2020, whichever is first.  If the CBA provides less than 56 hours or seven days, in cases where the CBA refers to days rather than hours, the contractor must provide covered employees with the difference between the amount provided under the CBA and 56 hours in a manner consistent with the Executive Order and Final Rule or the terms and conditions of the CBA.

The Final Rule also provides that employees can carry over up to 56 hours of unused paid sick leave from year to year while they work for the same contractor on covered contracts. Further, contractors are required to reinstate employees’ accrued, unused sick leave if the employee returns to work within 12 months after a job separation, unless the employee was paid for unused sick leave upon separation.

Employees can use as little as an hour of paid sick leave at a time.  An employee’s request to use paid sick leave may be made orally or in writing.  Advance notice can be required where the need for leave is foreseeable, and a contractor can require supporting documentation if the employee is absent three or more consecutive full days.

For further reference, the Final Rule may be found at https://www.federalregister.gov/documents/2016/09/30/2016-22964/establishing-paid-sick-leave-for-federal-contractors

 

NLRB Expands Appropriate Bargaining Unit to Include Temporary Workers

In a 3-1 decision issued this week, the National Labor Relations Board (“Board”) reversed current precedent that prohibited the inclusion of temporary employees along with permanent, or “solely employed,” employees in a bargaining unit absent employer consent, as it returned to the previous standard under M.B. Sturgis, Inc., 331 NLRB 1298 (2000), where no such consent was required.

In its July 11, 2016 decision, Miller & Anderson, Inc. and Tradesmen International and Sheet Metal Workers International Association, Local Union No. 19, AFL-CIO, the Board expressly overruled the 2004 decision of Oakwood Care Center, 343 NLRB 659 (2004), which had held that the National Labor Relations Act (“NLRA”) did not authorize the Board to direct elections in units encompassing employees of more than one employer, i.e. a company’s employees and other employees placed at the company via a staffing agency.  The Oakwood Board further held that combining such employees would lead to significant conflicts among the various employers and among groups of employees.

With the Miller & Anderson decision, the Board reversed course again, holding that the terms “employer” and “employer unit,” as used within Section 9(b) of the NLRA, were sufficiently broad to encompass temporary employees performing work for another employer.  The Board also reasoned that the Sturgis standard better effectuated the purposes of the NLRA.

Going forward, the Board will apply the traditional “community of interest” factors when determining if a bargaining unit is appropriate.  The Board will determine whether the temporary employees and solely employed employees have the same or substantially similar interests as to wages, hours or other working conditions.

While the Board described its decision as a return to Sturgis, the landscape has changed since 2004, when Sturgis was last the standard.  Last year, the Board issued the highly contentious Browning-Ferris decision, which overruled two other long-standing joint-employer decisions.

Under Browning-Ferris, the Board greatly expanded the joint-employment standard by abandoning the requirement that an employer exercise “direct and immediate” control over an employee’s terms and conditions of employment and instead including relationships where an employer merely exercised “indirect” control or even where an employer has simply reserved the authority to exercise control.   Thus, between 2000 and 2004, when Sturgis was the standard, the law was much clearer as to when a joint-employer relationship existed.  Now those waters are far murkier, and employers will have to navigate them to make best judgments as to whether a joint-employer relationship exists and, if so, whether a group of temporary employees and solely employed employees have sufficient interests in common in order to create an appropriate bargaining unit.

Employers and other amici cautioned that a return to Sturgis would create confusion and hinder meaningful bargaining.  We will see whether those concerns bear out.

SAVE THE DATE FOR OUR ANNUAL COMPLIANCE/BEST PRACTICES SEMINAR!

Please mark your calendar for Lindner & Marsack, S.C.’s Annual Compliance/Best Practices Seminar!

WHEN:         April 14, 2016

8:00 a.m. – 12:00 p.m.

WHERE:       Sheraton Milwaukee Brookfield Hotel

375 South Moorland Road

Brookfield, WI

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

SESSION TOPICS INCLUDE: 

  • Labor Law Update: Including Recent NLRB Decisions, Right to Work and Collective Bargaining Trends
  • 2016 Employment Law Update
  • FMLA Update – A Best Practices Review
  • The Use of Temporary Workers in 2016 – A Panel Discussion
  • Update on Proposed Wisconsin Worker Compensation Act Reform
  • Winning Strategies in Defending Worker Compensation Cases – How to Avoid Early Mistakes in Investigating Claims

Watch your inbox as well as our Facebook, LinkedIn and Twitter pages for more detailed information about session topics and a link to register for this free seminar.

NEW PAY TRANSPARENCY RULES ARE NOW IN EFFECT FOR FEDERAL CONTRACTORS

By: Laurie A. Petersen and Samantha J. Wood

On January 11, 2016, the final rule implementing Executive Order 13665 went into effect. This rule makes it unlawful for federal contractors to discharge or discriminate in any manner against any employee or job applicant because such employee or applicant has inquired about, discussed, or disclosed his or her compensation information or has inquired about, discussed, or disclosed another employee or applicant’s compensation information.

This rule applies to any business or organization that (1) holds a single federal contract, subcontract, or federally assisted construction contract in excess of $10,000; (2) has federal contracts or subcontracts that have a combined total in excess of $10,000 in any 12-month period; or (3) holds government bills of lading, serves as a depository of federal funds, or is an issuing and paying agency for U.S. savings bonds and notes in any amount. While in effect now, the rule will apply to these employers once they enter into a new covered federal contract or subcontract or modify an existing covered federal contract or subcontract on or after January 11, 2016.

In accordance with this rule, contractors are prohibited from having policies or practices that prohibit or tend to restrict employees or applicants from discussing topics such as: salary, wages, overtime pay, shift differentials, bonuses, commissions, vacation and holiday pay, allowances, insurance and other benefits, stock options and awards, profit sharing, and retirement. Contractors must revise handbooks, confidentiality agreements, employment agreements, or other work rules and policies that restrict discussing compensation information.

The rule also requires federal contractors to do the following:

  1. Post the Pay Transparency Nondiscrimination Provision either electronically or in a conspicuous location in the workplace where it can be seen by employees and applicants. This provision can be found at  http://www.dol.gov/ofccp/PayTransparencyNondiscrimination.html
  2. Incorporate the Pay Transparency Nondiscrimination Provision into existing manuals or .employee handbooks, and disseminate the updated manuals or handbooks.
  3. Post the updated “EEOC is the Law Poster” when it becomes available. In the interim, post the “EEOC is the Law Poster Supplement,” available at http://www.dol.gov/ofccp/regs/compliance/posters/ofccpost.htm
  4. Ensure that all contracts entered into or modified after January 11, 2016, contain a revised equal opportunity clause. If the contract incorporates 41 C.F.R. § 60-1.4, by reference, no changes are necessary.

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.

New Regulations Allow Orientation Period Prior To ACA’s Maximum Waiting Period Before Mandatory Health Plan Coverage

The Affordable Care Act (“ACA”) requires a “large employer” (50 or more full time equivalent employees) to provide health plan coverage to “full time” employees (30 or more hours per week) within 90 days of hire. On June 25, 2014, IRS, DOL, and HHS published final regulations which allow an employee orientation period of up to 30 days to precede that 90-day waiting period.

Specifically, the final regulations provide that being otherwise eligible to enroll in a plan means having met the plan’s substantive eligibility conditions (for example, being in an eligible job classification, achieving job-related licensure requirements specified in the plan’s terms, or satisfying a reasonable and bona fide employment-based orientation period). Under the final regulations, after an individual is determined to be otherwise eligible for coverage under the terms of the plan, any waiting period may not extend beyond 90 days, and all calendar days are counted beginning on the enrollment date, including weekends and holidays.

IRS, 26 CFR Part 54, Reg-122706-12, RIN 1545-BL97, p. 6; DOL EBSA, 29 CFR Part 2590, RIN 1210-AB61; HHS 45 CFR Part 147, RIN 0938-AR77.

Saying that, “the Departments do not intend to call into question the reasonableness of short, bona fide orientation periods,” the Regulation adds that, for fear of abuse, they will apply a “clear maximum” to prevent “mere subterfuge for the passage of time.” If an orientation period for training and evaluation is “longer than one month that precedes a waiting period, the Departments refer back to the general rule, which provides that the 90-day period begins after an individual is otherwise eligible to enroll under the terms of a group health plan.” Id., pp. 6-7.

Two definitional elements should be noted:

  1. “[O]ne month would be determined by adding one calendar month and subtracting one calendar day, measured from an employee’s start date in a position that is otherwise eligible for coverage.” Id.
  2. This rule applies to plan years beginning on or after January 1, 2015. Until then, the proposed regulations will be considered in effect. Under the proposed regulations, an orientation period would be allowed if it “did not exceed one month and the maximum 90-day waiting period would begin on the first day after the orientation period.” Id., p. 5. The final version is not considered to be a “substantive change.”

The concern with possible abuse or misuse of this new rule has led to a “bright line” test which simply counts the relevant days with no attention to the details of job requirements and how the employer determines within 30 days whether the new employee can satisfy them.

If you have any questions about this new regulation, please contact Alan Levy, the Lindner & Marsack attorney who focuses on employee benefits.

PROPOSED OSHA RULE IMPOSING ELECTRONIC SUBMISSIONS TO IMPROVE ILLNESS AND INJURY TRACKING

By: Laurie A. Petersen and Samantha J. Wood

On Thursday, November 7, 2013, OSHA issued a proposed rule amending 29 C.F.R. § 1904.41 to require certain employers to electronically submit injury and illness information that most employers are required to maintain under § 1904. The only employers unaffected by this rule are those that are exempted from maintaining injury and illness records, which includes companies that had ten or fewer employees at all times during the last calendar year, and companies that have been classified in a specific low-hazard retail, service, finance, insurance, or real estate industry.1

For those employers that are required to maintain injury and illness records under OSHA’s regulations, the rule imposes three new electronic reporting requirements:

(1) Establishments with 250 or more employees at any time during the prior calendar year (including full, temporary, and seasonal workers) will be required to electronically submit information from their injury and illness records (Form 300 and Form 301) to OSHA or OSHA’s designee on a quarterly basis.

(2) Establishments with 20 or more employees at any time during the prior calendar year, that are among certain designated industries, will be required to electronically submit information from the OSHA annual summary form (300A) to OSHA or OSHA’s designee on an annual basis. This submission will replace OSHA’s annual injury and illness survey that employers are required to complete and submit under 1904.41(a). The designated industries will be
those industries covered by Part 1904 with a 2009 Days Away From Work, Job Restrictions, or Job Transfer (DART) rate in the Bureau of Labor Statistics’ Survey of Occupational Injuries and Illnesses of 2.0 or greater. Among others, the designated industries will include: construction, manufacturing, wholesale trade, department and grocery stores, waste collection, nursing care facilities, gambling industries, and dry-cleaning and laundry services.

(3) All employers who receive notice (by mail, announcements on the OSHA website, the OSHA newsletter, and the Federal Register) will be required to electronically submit specified information from their injury and illness records to OSHA or OSHA’s designee.

To submit injury and illness records, employers will be required to register their establishments on OSHA’s data collection website. OSHA intends to scrub the data of personally identifiable information and make the data public. The purpose of publication is to allow employers to benchmark their performance against others in their industry, and encourage employers to improve safety. Information will also be available for researchers to understand and identify emerging health hazards. According to OSHA, this initiative will not result in more OSHA enforcement, but will target employers who are in need of free consultants, educational materials, and health and safety inspections.

The public comment period ends February 6, 2014. Comments can be submitted electronically at http://www.regulations.gov, by fax at (202) 693-1648, or by mail at OSHA Docket Office, Docket Number OSHA-2013-0023, U.S. Department of Labor, Room N-2625, 200 Constitution Avenue NW, Washington, DC 20210. A public meeting will be held Thursday, January 9, 2014 from 9 a.m. to 4:30 p.m. at the U.S. Department of Labor in Washington, D.C. Interested parties must request attendance by Friday, December 13, 2013.

1 To determine whether your business establishment is classified in a specific low-hazard retail, service, finance, insurance, or real estate industry, see 1904 Subpart B, Appendix A at https://www.osha.gov/pls/oshaweb/owadisp.show_document?p_table=STANDARDS&p_id=12791.

If you have questions about this material, contact Laurie A. Petersen at lpetersen@lindner-marsack.com, Samantha J. Wood at 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.

FINAL REGULATIONS ISSUED FOR WELLNESS PROGRAMS PERMITTED UNDER AFFORDABLE CARE ACT

By: Alan M. Levy

A major element of the Affordable Care Act (the “ACA,” a/k/a “Obamacare”) is the prohibition against denying coverage due to a pre- existing condition or otherwise discriminating in coverage, premium cost, or benefits because of an individual’s health condition. “Wellness programs” typically seek to incentivize a healthy lifestyle by rewarding organized efforts to exercise, diet, stop smoking, or take similar health measures. Because wellness programs might be perceived as discriminatory through higher premium costs due to health conditions of those who do not use them, the ACA provides an exception for those which offer “rewards,” but not for penalties. Effective for plan years beginning on or after January 1, 2014, final regulations issued by IRS, HHS, and DOL apply the exception to all group health plans (whether or not grandfathered, insured, or self-insured) and all group health insurance, but not to individual health insurance.

The final rules permit:

(1) “Participating wellness programs” which reimburse an employee for all or part of the cost of utilizing health programs such as membership in a fitness center, a diagnostic testing program, or health education. The payment toward the

employee’s cost for such participation is limited to an amount equal to 30% of premium cost.

(2) “Health–contingent wellness programs” which involve rewarding an employee for satisfying health-related standards such as diet, exercise, or smoking cessation.

  1. a)  “Activity–only wellness programs” reward the employee for simply participating in the program, such as adhering to a daily exercise regimen regardless of outcome.
  2. b)  “Outcome–related wellness programs” reward the employee for attaining or maintaining a standard, such as succeeding in cessation of smoking, losing weight, or maintaining a prescribed blood pressure level.

One issue with the health-contingent programs is the treatment of people whose personal health limitations prevent them from gaining the reward.

For example, a wheelchair bound person could not participate in a lunch hour walking program or satisfy a goal of walking ten miles per week. In cases where personal health conditions limit or prevent successful participation in, and obtaining a reward from, the wellness program, particularly if it is outcome–based, accommodations must be offered in the form of a “reasonable alternative standard” which must be made available to all participants, regardless of their health status, who cannot satisfy the initial standards. All health–contingent programs are subject to five criteria to come under the wellness program exception to the anti- discrimination rules; they must:

  1. (1)  Be reasonably designed to promote health or prevent disease.
  2. (2)  Provide the participant a reasonable chance of improvinghealth or preventing disease.
  3. (3)  Not be overly burdensome.
  4. (4)  Not be a subterfuge for discrimination based on personal healthfactors.
  5. (5)  Not use a highly suspect method to promote health or preventdisease.

The maximum reward a plan can provide for satisfactory participation in a wellness program is the equivalent of 30% of premium cost, except that a 50% reward can be given for satisfaction of programs to prevent or reduce tobacco use.

Because of the wide variety of potential wellness programs and the thus- far non-specific aspects of reasonable alternative standards, “the Departments [which issued these final regulations] anticipate issuing future sub-regulatory guidelines to provide additional clarity and potentially proposing modifications to this final rule as necessary.” A copy of these “final” regulations can be found in the Federal Register / Vol. 78, No. 106, 6/3/13; 26 CFR, TD 9620, RIN 1210-AB55, CMS-9979-F.

If you have questions about these rules, please contact Lindner & Marsack Attorney Alan Levy, who focuses on employee benefits.