Final Regulations Published for Federal Contractor Paid Sick Leave

On the eve of the end of its fiscal year, the U.S. Department of Labor has announced final rules implementing Executive Order 13706 requiring that covered federal contractors provide paid sick leave for covered employees.

Scheduled for official publication tomorrow in the federal register, the rules require federal contractors to provide at least 1 hour of paid sick leave for every 30 hours of work on, or in connection with, certain federal contracts, for a total of 56 hours per year.

Not unexpectedly, the rule does nothing to try to synchronize the expanding patchwork of paid sick leave laws sprouting across the country.  Instead, it reminds employers that, to the extent they differ, the more generous provisions apply.

To read more about this latest development click here.

Federal Court Simultaneously Rejects and Upholds EEOC’s Positions on Wellness Programs – Rejects Employer’s ADA “Safe Harbor” Defense

In a much anticipated decision, a Wisconsin federal district court has granted Orion Energy Systems, Inc.’s summary judgment on the EEOC’s challenge to its wellness program design. See Sept 19, 2016 Decision and Order. While largely good news for Orion, the ruling creates even more confusion for employers seeking clarity on wellness program design principles.  In short, the Court: 1) rejected the EEOC’s claim that the wellness program violated the ADA because it was “involuntary;” 2) upheld the EEOC’s position that the ADA’s “safe harbor” for insurance could not be used to defend the wellness program design; and 3) held there was a triable issue on whether the employer’s termination of an employee who refused to participate in the wellness program was unlawful retaliation under the ADA. The case lives on due to the retaliation claim but many employers are scratching their heads on what the ADA requires for wellness programs going forward.

The EEOC’s complaint alleged that Orion required employees to complete a health risk assessment, as part of the wellness program, or pay 100 percent of their health insurance premiums and retaliated against an employee who declined to participate in the screenings. Orion claimed its wellness program was protected by the ADA’s “safe harbor” provision satisfied the ADA requirements of “voluntariness” under 42 U.S.C. §12112(d)(4)(B).

In analyzing whether the ADA’s “safe harbor” provision applies to Orion’s wellness program, the Court applied retroactively the EEOC’s new ADA wellness regulation, which specifically states that the “safe harbor” provision does not apply to wellness programs. This ruling should concern employers who have relied on the ADA’s “safe harbor” provision in designing wellness programs.

However, in a surprising move, the Court concluded, contrary to the EEOC’s position, that the medical inquiries that triggered potential ADA’s protection – the requirement that employees complete a health risk appraisal – were voluntary. Although the Court briefly mentions the 30 percent cap on financial incentives found in the EEOC’s new ADA wellness regulations, because the EEOC did not argue that the cap applied retroactively, the Court did not consider its effect on Orion’s wellness program.  Instead, the Court focused on a question the EEOC likely thought was a “slam dunk” – whether requiring employees who chose not to answer the HRA to pay 100 percent of their health premiums rendered the medical inquiries “involuntary.”  The Court found that the wellness design was “voluntary” because, while the options of either participating in the screening or pay 100 percent of premiums could be considered a hard choice, it was still a choice and the employee had the option of deciding whether or not to participate in the wellness program without the risk of losing participation in the group health insurance plan.  As a result of the determination that participation was optional, the Court held that Orion conducted voluntary medical examinations as part of its wellness program pursuant to 42 U.S.C. § 12112(d)(4)(B).

This ruling renders a completely different result than the decision of the Western District of Wisconsin in EEOC v. Flambeau, Inc. Only time will tell whether the Court’s ruling is followed by other federal courts. Stay tuned!

St. Paul, Minnesota Joins the Paid Sick Leave Patchwork Quilt and Continues Its Spread Into the Interior States

We have been reporting on the growing patchwork of paid sick leave laws now for over 3 years.  The patchwork continues to fill in heavily on the west coast with state laws in both California and Oregon and 10 city ordinances scattered across California, Oregon and Washington.  This summer Los Angeles and San Diego added their own patches to the quilt.  To read more about these new laws, click here  and here

The east coast also contributes heavily to the patchwork, with state laws in Massachusetts, Connecticut, and Vermont,  a plethora of city laws scattered throughout New Jersey, and a handful of other city or county laws in New York, D.C., Maryland, and Pennsylvania.  Puerto Rico rounds out the east coast.    This summer, Minneapolis, Minnesota became the first to stretch the thread away from the coastal states.  To read more about Minneapolis’ law, click here.  It’s law, which takes effect July 1, 2017 opened the door for other interior states and locations to add their own patches.  Chicago quickly joined.  To read more about Chicago’s law, click here.  And this week the city council for St. Paul, Minnesota  unanimously passed its own sick leave ordinance.  Like Minneapolis, it goes into effect on July 1, 2017.  The St. Paul ordinance requires employers to allot employees an hour of earned sick leave for every 30 hours worked.   Unlike the Minneapolis law, St. Paul’s ordinance does not exempt companies with fewer than six employees.

It would be nice if the patches all matched, but each local law has its own definition of who is covered, what it can be used for, and how much must be provided, leaving a mis-matched (and sometimes clashing) pattern of stripes, solids and checks across the nation.    New Jersey is a shining example of this where there are at least 12 city ordinances, but the state legislature has stalled passing a consistent state law.

While employers may cringe at the idea of having to pay employees not to work, the administrative cost of adjusting to each local ordinance and tracking the various accrual rates is often times outweighing the cost of the leave itself.  Indeed, the objection to many of these laws is not so much the paid time off (as many employers already provide some form of paid time off), but the administrative cost associated with complying and the lack of any meaningful control on employee abuse.  As the patchwork continues (and appears to be picking up momentum), employers should make their voices heard at the local, state and national level. A number of states have passed kibosh laws that prohibit municipalities from passing these laws.  Stay tuned, if it is not already on the ballot, it is likely coming to a ballot near you soon.

California Court of Appeal Finds Employer’s Denial of Accommodation to a Nondisabled Employee May Be Evidence of an Associational Disability Discrimination Claim

On August 29, 2016, the California Court of Appeal for the Second Appellate District reversed summary judgment earlier awarded to the employer in Castro-Ramirez v. Dependable Highway Express, Inc. In its reversal, the court found that an employer’s denial of accommodation to a nondisabled employee may be evidence of associational disability discrimination under the Fair Employment and Housing Act (“FEHA”).

The Facts

Plaintiff Luis Castro-Ramirez (“Plaintiff”) began working for Dependable Highway Express (“DHE”) in 2010. At that time, Plaintiff notified DHE that he had a disabled son who required dialysis on a daily basis.  He requested work schedule accommodations that allowed him to administer dialysis to his son in the evenings and was given such a schedule.  Plaintiff’s typical schedule was from 9:00 or 10:00 a.m. until 7:00 or 8:00 p.m.

In March 2013, Plaintiff’s supervisor was promoted to operations manager, and his new supervisor, Boldomero Munoz-Guillen (“Junior”) changed Plaintiff’s work schedule. That same month, Plaintiff complained to the operations manager that Junior had changed his hours, such that he was unable to attend to his son’s daily dialysis needs.

Plaintiff told Junior, “Please, I need to have my job like always. I’ve always had help from everyone except you.”  The next day, Junior assigned Plaintiff to a shift starting at 12:00 p.m., and due to the route Plaintiff’s supervisor assigned to him, he could not get back in time to administer dialysis by 8:00 p.m.  Plaintiff requested the day off or an alternative shift, and reminded Junior that the operations manager had told Junior about Plaintiff’s needs.  Junior laughed, “[Plaintiff’s former supervisor] doesn’t work here anymore.  Now it’s me.” Junior told Plaintiff that if Plaintiff did not handle the route, he would be terminated.  Plaintiff refused, and DHE terminated Plaintiff’s employment.

The Decision

The Court of Appeal noted that Plaintiff had abandoned his claim for failure to provide reasonable accommodation, and thus, declined to decide whether FEHA provided a duty to accommodate associational disability. However, the Court of Appeal explained that the FEHA creates an associational disability discrimination claim.  The Court of Appeal opined that FEHA makes it unlawful to discharge a person from employment based on physical disabilities or other characteristics, which include “a perception that the person. . .is associated with a person who has, or is perceived to have, any of those characteristics.”  Cal. Gov. Code § 12940(a), § 12940(o).

Based on that framework, the Court of Appeal opined that a jury could reasonably find that Plaintiff’s association with his disabled son was a substantial motivating factor in Junior’s decision both to deny an alternative work schedule and to terminate Plaintiff. “[T]hese facts may give rise to the inference that Junior acted proactively to avoid the nuisance plaintiff’s association with his disabled son would cause Junior in the future.”

The Court of Appeal also held that reasonable juror could find Plaintiff’s repeated complaints about the sudden changes to his schedule represented a protected activity, especially given the proximity of time between Plaintiff’s complaints and the termination. The Court of Appeal found Plaintiff did more than simply request an accommodation; he expressed a degree of opposition to the DHE’s failure to provide the altered schedule and thus there is a triable issue of fact as to retaliation.

The Dissent

The Court of Appeal’s dissenting opinion disagreed with the majority’s statement that it declined to decide whether FEHA establishes a separate duty to reasonably accommodate associational disabilities. Rather, the dissent believes the majority did just that.  Effectively, the employer either must provide accommodations to employees associated with disabled persons, or face liability for associational discrimination for failure to provide such accommodations.

***

The Castro-Ramirez v. Dependable Highway Express ruling finds that an employer could be liable for discrimination and retaliation for adverse employment actions substantially based on associational disabilities.  The decision also asserts that employer denial of accommodation requests by employees associated with disabled persons may be evidence of an associational disability claim.  Accordingly, employers should review their policies and practices regarding responding to disability accommodation requests in light of this decision.  Please contact Jackson Lewis with any legal questions about disability accommodation related issues.

Disability and leave management mistakes just got more costly!

With today’s publication of the final guidance and regulations implementing the “Fair Pay and Safe Workplaces” Executive Order (also known as the “Blacklisting” or “Bad Actors” Executive Order), mistakes that violate the FMLA or ADA (along with many other employment laws) could block an employer from lucrative federal contracts or subcontracts.  Federal contractors and those hoping to become federal contractors or subcontractors will soon have to publicly disclose administrative agency decisions, arbitral awards and civil judgments against them.  Violations will now cost more than just the original judgment – they could prevent the employer from obtaining or retaining  a federal contract or subcontract.

As with most things, an ounce of prevention is worth a pound of cure.  Employers are wise to develop practical and effective accommodation and leave management programs to help avoid the issues lurking under every medical restriction or leave request.  Even more important is to develop well-trained managers and HR professionals who are adept at handling the many intricacies of these laws and know when to get outside help before a little issue turns into a reportable violation.

The effective date of the regulations is just two months away, October 25, 2016.  To read more about the regulations, click here.

Illinois Employers Must Provide Child Bereavement Leave

The loss of a child is never easy.  Effective July 29, 2016, Illinois employers with 50 or more employees must provide eligible employees with up to 10 days of unpaid child bereavement leave following the death of a child.  The Illinois Child Bereavement Leave Act supplements the leave options available under the federal Family and Medical Leave Act of 1993 (“FMLA”).  However, employees who have exhausted all available leave under the FMLA may not be entitled to additional leave under the Child Bereavement Leave Act.  Further details regarding the Act can be found at the link below.

http://www.jacksonlewis.com/publication/illinois-law-mandates-unpaid-child-bereavement-leave

What is a Disability? The DOJ’s Final ADAAA Rule is Here.

Today, after a two year wait, the Department of Justice will publish its final rule amending the ADA regulations to incorporate the 2008 statutory changes set forth in the ADAAA, which took effect on January 1, 2009.

The ADAAA, signed into law by President George W. Bush, was Congress’s response to multiple Supreme Court decisions they believed ran afoul of the intent and purpose of the ADA by significantly narrowing the application of the definition of “disability”.  While courts have, since the enactment of the ADAAA, assigned a broad interpretation to the meaning of the term “disability,” the final rule not only clarifies that the term should be interpreted broadly, it also explains that the primary focus in cases brought under the ADA should be whether covered entities have complied with their obligations not to discriminate based on disability versus addressing the question and engaging in extensive analysis of whether an individual’s impairment meets the definition of the disability.

In addition to clarifying and expanding the term “disability,” the final rule provides a non-exhaustive list in defining “major life activities,”and adds rules of construction to be applied when determining whether an impairment substantially limits a major life activity.  The goal again to ensure the ADA is construed broadly in favor of expansive coverage, thereby meeting the original intent of Congress.

The final rule applies to Titles II (nondiscrimination in state and local government services) and III (nondiscrimination by public accommodations and commercial facilities) and becomes effective October 11, 2016.

The language of the final rule can be found here.

Unlike Godot, ADA Leave Guidance Arrives

Since June 2011, when the EEOC suggested it might issue guidance on leave as a reasonable accommodation under the ADA, we have likened the wait to waiting for Godot. See here and here.  After nearly five years of reciting that “it didn’t come today, it might come tomorrow,” on May 9, 2016, the EEOC issued a “resource document” on leave and the ADA. Unlike in Beckett’s play, Godot arrived.

The thirteen page document, in easy-to-read format and sprinkled with twenty examples, collects some of the basic principles governing leave as an accommodation under the ADA.  To that extent, it is a useful resource for new and veteran leave administrators alike.

But some insight one would expect to find in this document is not there. For example, it notes the familiar refrain that an employer may need to provide leave to an employee with a disability even if the employer does not offer leave as a benefit; or the employee is not eligible for leave under the employer’s policy; or the employee has exhausted the leave available under the employer’s policy and the law, e.g. FMLA.  The document stops short of addressing the next obvious next, the most vexing question for employers: how much additional leave does an employer need to provide?  The rote response–unless it is an undue hardship—is unsatisfying.

The maximum leave discussion misses an opportunity as well. The EEOC recites its long held position—an employer must consider modifying its maximum leave policy as an accommodation under the ADA. The Tenth Circuit and a recent Florida district court case have rejected the EEOC’s position. See here. Some discussion of this opposing view would have been valuable.

Finally, in U.S. Airways v. Barnett, the Supreme Court set out the analytical framework for use in every accommodation case. The first step requires the plaintiff to establish that the requested accommodation is reasonable “in the run of cases” before even getting to the undue hardship analysis.  The resource document glosses over this important first step by referencing it in a footnote (5) and stating that all requested accommodations noted in the document are assumed to be reasonable, as that term is defined in U.S. Airways. This is the equivalent of a baserunner starting on second base. Some discussion of requests for additional leave that were not reasonable in the run of cases would have been helpful. Not all requests for additional leave are reasonable in the run of cases, are they?

 

PSL: How Does the Patchwork Grow?

However many patches it takes to make a paid sick leave patchwork, we are there…and adding more. Here are the patches added in 2016, thus far:

Alabama is now a kibosh state, joining about a dozen others that prohibit municipalities from passing a law requiring employers to provide employees with paid or unpaid leave. The Alabama law, HB 174, also bars municipalities from requiring employers to pay employees for any leave required by federal law, e.g., the Family and Medical Leave Act.

Vermont becomes the fifth state to pass a PSL law, joining Connecticut, California, Massachusetts and Oregon. For more information on the Vermont law, click here.

Although California already has a PSL law, Santa Monica patches in with its own. Watch for San Diego to join the list of California PSL cities after its June referendum on PSL. For more information on the Santa Monica law, click here.

Finally, the federal government is working on its first PSL patch. On Labor Day last year, President Obama signed Executive Order 13706, which requires federal contractors to allow their employees to accrue paid sick days. The Department of Labor recently published proposed rules to implement that executive order. For more information on the proposed rules, click here.

There was a time I could recite the list of PSL jurisdictions without any hesitancy. Wth more than 30 PSL jurisdictions now, there is a hesitancy or two to make sure I have them all. National and multi-jurisdiction employers continue to struggle to comply with the varied and sometimes inconsistent provisions of these laws. The struggle is going to continue and, like the patchwork, will grow!

New New York City PSL FAQs; Pittsburgh PSL Law Not Dead Yet

The New York City Department of Consumer Affairs, the agency that enforces New York City’s Earned Sick Time Law, has issued new and updated FAQs concerning that law. For additional information on the Department’s FAQ action, click here.

Meanwhile, Pittsburgh’s Paid Sick Days Act is not dead yet. A Court of Common Pleas struck down the law in December 2015.  Local 32BJ of the Service Employees International Union has appealed the court’s order. The ordinance is not in effect during the union’s challenge, pending the outcome of the appeal. For additional information on the appeal, click here.

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