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Employment Law Monitor

Insights on Recent Developments in Federal and State Labor & Employment Matters

EEOC Endorses Incentives To Employees For Participation In Qualified Wellness Programs

Posted in Employment Policies and Practices, Harassment, Discrimination and Retaliation

On April 20, 2015, the United States Equal Employment Opportunity Commission (“EEOC”) issued proposed guidance concerning employer wellness programs. The proposed rule would amend the EEOC’s regulations and interpretive guidance implementing Title I of the Americans with Disabilities Act (“ADA”). Prior to the proposed rule, the EEOC was silent as to whether employers may offer financial incentives to encourage employees to participate in wellness programs. The proposed rule clarifies that the ADA permits employers to offer incentives to employees who participate in wellness programs and/or for achieving health outcomes. Under the proposed rule, employers will be permitted to offer participating employees a maximum incentive of 30% of the total cost of the employee-only coverage.

The proposed rule applies only to employee health programs that include disability-related inquiries or medical examinations. These programs must be “voluntary” and must be reasonably designed to promote health or prevent disease. In order for an employee’s participation to be deemed “voluntary,” the employer may not require employees to participate, may not deny health coverage to those who do not participate, and may not take adverse action against employees who do not participate. In addition, the employer must clearly explain:

  1. What medical information will be obtained;
  2. Who will receive the medical information;
  3. The restrictions on disclosure; and
  4. The methods the covered entity uses to prevent improper disclosure of employee’s medical information.

The proposed rule provides that an employer’s act of providing incentives to employees to participate in wellness programs will not render the program “involuntary.”

Members of the public have 60 days, or until June 19, 2015, to comment on the proposed regulations. At the end of the comment period, the EEOC will evaluate the comments and make revisions, if necessary. Assuming the proposed rules are adopted, employers can now provide financial incentives to increase employee health through qualified wellness programs. Stay tuned to see whether these proposed rules are in fact adopted.

NLRB Issues Guidance on Employee Handbooks

Posted in Employment Policies and Practices

The National Labor Relations Board (“NLRB”) has recently been aggressive in its enforcement of the National Labor Relations Act (“NLRA”) and, in particular, Section 7 of the NLRA, which protects employees’ rights to form or join a union and engage in “protected, concerted activity” regarding wages, hours and other working conditions for their “mutual aid or protection.” The NLRB has also been diligent in trying to protect employees’ rights under Section 8(a)(1) of the NLRA, which prohibits employers from interfering with employees’ Section 7 rights. The NLRA applies to both union and nonunion workplaces. For the past several years, the NLRB has closely examined employee handbook policies to ensure that they do not inadvertently prohibit or “chill” protected Section 7 activity.

On March 18, 2015, the NLRB’s General Counsel, Richard F. Griffin, Jr. issued an extensive memo entitled “Report of the General Counsel Concerning Employer Rules,” which addresses recent handbook policy cases and provides examples of workplace policies that the NLRB believes will “chill” employee activity, as well as examples of those that will pass NLRB muster. The report also addresses handbook rules gleaned from a recently settled NLRB charge against Wendy’s International LLC.

The General Counsel’s memo includes a discussion of policies in the areas of confidentiality, conduct toward co-workers and management, communications with the media, conflicts of interest, photography and recording in the workplace, and the use of intellectual property. Although the NLRB has been scrutinizing handbook policies for some time, this memo provides concrete examples of the NLRB’s views in this area. As reflected in the memo, the difference between a lawful and unlawful policy is often quite a close call.

In light of this guidance, employers should examine their handbooks and employment policies to ensure that they will withstand NLRB scrutiny.

The Affordable Care Act Part Three – Upcoming Requirements & the Impact Recent Judicial Decisions Have on the ACA

Posted in Employment Policies and Practices

This is the last of our three part series on the Affordable Care Act (“ACA” or “Act”), commonly known as “ObamaCare.” This post discusses upcoming requirements under the ACA and judicial decisions that have impacted or may impact future requirements of the Act.

Employer Mandate

As we previously reported, the Employer Mandate for employers with 100 or more full-time employees became effective on January 1, 2015. The Employer Mandate will also go into effect for employers with 50 to 99 full-time employees as of January 1, 2016.

Judicial Challenges to the ACA

To date, opponents of the ACA have made a number of legal challenges to the Act, which have made their way to the United States Supreme Court.  Those cases are discussed below.

NIFIB v. Seleblius

The first significant challenge to the ACA was National Federation of Independent Business v. Seleblius, in which the NIFIB challenged the constitutionality of the individual mandate under the ACA (which requires most Americans obtain health insurance or pay a tax penalty) and the expansion of Medicaid programs (which required State Medicaid programs cover most individuals below 133% of the federal poverty level or lose their federal funding).

On June 28, 2012, the Court upheld the majority of the ACA in a 5-4 decision. Specifically, the Court affirmed Congress’ power to enact the individual mandate, finding that although the individual mandate was not authorized under the Commerce Clause (which grants Congress the power to regulate interstate commerce), was a proper exercise of Congress’ power under the Taxing and Spending Clause (which grants Congress the power to levy taxes and spend federal funds). On the challenge to the Medicaid programs, the Court found that the Medicaid expansion violated the Constitution by threatening States with the loss of their existing Medicaid funding if they did not comply with the expansion. A copy of the full opinion can be found here.

Burwell v. Hobby Lobby

In June 2014, the Supreme Court tackled another major issue arising from the ACA – whether closely-held corporations with religious owners could be required to pay for insurance coverage of contraception under the Act, when contraception conflicted with the owners genuinely held religious beliefs. In a closely divided opinion, the Court ruled that in such circumstances, closely-held corporations could not be required to pay for contraception under the ACA. The “Hobby Lobby” decision, named for the chain of stores that initiated the action, has been said to constrict the ACA and expand the right of some corporations to be treated more like people with a wide range of constitutional protections.

King v. Burwell

Currently, the greatest challenge to the ACA comes in King v. Burwell, otherwise known as the Obamacare subsidy lawsuit, where the plaintiffs challenge the ACA subsidies issued by the IRS in States that use the federal exchange (www.HealthCare.gov) to offer health insurance rather than their own State-run exchanges.

The challenge in King v. Burwell is based on 3 specific sections of the ACA – Section 1311, Section 1321, and Section 1401 – none of which expressly provide that individuals using the federal exchange, as opposed to a State exchange, are entitled to the federal tax subsidy. As a result, the IRS issued a clarification and confirmed that the ACA provides tax credits to taxpayers who obtain coverage through a State exchange, regional exchange, subsidiary exchange, and the federally-facilitated exchange. The King Plaintiffs, therefore, essentially argue that the subsidy provision of the ACA was intended to pressure the States into setting up exchanges, but when it became clear that the States would reject exchanges, the IRS and federal government claimed the intention always was for the IRS to issue subsidies to those using federal exchanges even though such subsidies are allegedly not authorized by the ACA.

The Supreme Court heard oral argument in this case on March 4, 2015 and is expected to issue its decision by mid-June. The challengers reportedly hope that a ruling in the favor would dismantle the ACA by causing its financial collapse. Because only 13 States have created exchanges, the majority of individuals that obtain health insurance through an exchange do so through the federal exchange. Without subsidies, individuals obtaining insurance through the federal exchange might be unable to purchase insurance, resulting in lower enrollment, and thus, less healthy people paying insurance premiums that offset the increased insurance coverage required under the ACA.

The Court’s decision could also open the door for regulatory agencies, Congress, and future lawsuits to have more freedom in interpreting laws with vague wording. Look for our next blog post on the Court’s decision in King v. Burwell sometime this summer.

Third Circuit Court of Appeals Applies an Exception to the Motor Carrier Exemption

Posted in Employment Policies and Practices, Wage and Hour and Executive Compensation

On March 11, 2015, the Third Circuit Court of Appeals became the first Circuit Court to apply the “covered employee” provision of the SAFETEA-LU Technical Corrections Act of 2008 (the “Corrections Act”) to the Motor Carrier Act exemption of the Fair Labor Standards Act (“FLSA”). In McMaster v. Eastern Armored Services, Inc., No. 14-1010 (Precedential), the Court held that an employee of a motor carrier whose job “in whole or in part” affects the safe operation of vehicles lighter than 10,000 pounds is a “covered employee” entitled to overtime for weeks in which such employee works more than 40 hours.

The FLSA generally provides that employers must pay hourly employees 150% of their regularly hourly rate for hours worked in a workweek over 40. 29 U.S.C. § 207. The “motor carrier exemption” provides that overtime pay is not required for any employee for whom the Secretary of Transportation has the power to establish qualifications and maximum hours of service. See 29 U.S.C. § 213(b)(1). In McMaster, the Third Circuit affirmed the decision of the United States District Court for the District of New Jersey that Ashley McMaster, an employee of an armored courier company, fell squarely within the exception to the Motor Carrier exemption created by Congress’s June 6, 2008 passage of the Corrections Act. As such, the Court determined McMaster to be entitled to overtime.

McMaster was employed by Eastern Armored Services (“Eastern”) from March 2010 through June 2011, and her employment included driving an armored vehicle as well as riding as a passenger in an armored vehicle to ensure safety and security. Eastern paid her hourly, and she spent 51% of her total days working on vehicles rated heavier than 10,000 pounds and 49% of her total days working on vehicles rates lighter than 10,000 pounds. She often worked more than 40 hours in a workweek but was never paid overtime because, according to Eastern, McMaster fell within the Motor Carrier exemption to the FLSA. The District Court disagreed and granted summary judgment in favor of McMaster, entering an order that McMaster was eligible to be paid overtime wages for all hours she worked over 40 in a particular workweek. The Third Circuit affirmed the District Court’s decision. Simply put, “covered employees” are subject to the FLSA’s overtime rules, despite the Motor Carrier Act’s provisions. The Court declined to define the term “in part” and determined that “[w]hatever ‘in part’ means, it is certainly satisfied by McMaster, who spent 49% of her days on vehicles less than 10,000 pounds.”

This case demonstrates that compensating employees properly within the statutory framework of the FLSA and its myriad exemptions and “exceptions to exemptions” is a complicated task. Employers should regularly review their compensation practices with counsel to ensure compliance with the changing statutory landscape and judicial interpretation and application of new statutes.

The DOL Adopts New FMLA Protections for Same-Sex Couples

Posted in Employment Policies and Practices

On Wednesday, February 25, 2015, the United States Department of Labor (“DOL”) finalized a rule expanding the scope of protections afforded under the Family and Medical Leave Act (“FMLA”) to married same-sex couples. The rule follows on the heels of the 2013 United States Supreme Court decision in United States v. Windsor, which struck down the federal Defense of Marriage Act’s definition of “marriage” as consisting only of a union between a man and a woman. The new DOL rule, which will take effect on March 27, 2015, will provide same-sex and opposite-sex couples with equal protections for federal leave under the FMLA.

The FMLA permits eligible workers up to 12 weeks of unpaid, job-protected leave for certain enumerated family and medical reasons, including, by way of example, caring for spouses or children with serious health conditions. Under the old FMLA framework, if an employee in a same-sex union resides in a state that does not recognize same-sex unions, he/she was precluded from FMLA coverage. The DOL’s revised rule replaces this former residence-based test in favor of the “place of celebration” rule. FMLA eligibility will now be dependent on where a couple is married and whether the marriage (same-sex or opposite-sex) is recognized in the state in which it was entered. This new standard will allow for a more uniform, consistent application of the FMLA’s protections across the country, regardless of the state in which a married employee currently resides.


New Jersey Supreme Court Erects New Hurdle for Harassment Plaintiffs To Overcome

Posted in Employment Policies and Practices, Harassment, Discrimination and Retaliation

Last week, the New Jersey Supreme Court analyzed the impact of an employer’s anti-harassment policy on an employee’s claims of negligence, recklessness and vicarious liability against employers under the New Jersey Law Against Discrimination (“LAD”), N.J.S.A. 10:5-1 to -49. In addition, the Court was called upon to determine who is a “supervisor” for purposes of claims based on sexual harassment giving rise to a hostile work environment. See Aguas v. State of New Jersey, A-35-13 (February 11, 2015) (Slip Op.).

In analyzing the first issue, the Court recognized two primary categories of claims against employers for sexual harassment committed by their employees under Restatement § 219. The first is a direct cause of action against the employer for negligence or recklessness under Restatement § 219(2)(b). The second is a claim for vicarious liability under Restatement § 219(2)(d). The Court analyzed the impact of an employer’s anti-harassment policy under both claims.

With regard to the first type of claim (direct negligence or recklessness), the Court held that an employer’s anti-harassment policy “is relevant to the elements” of the claim and, therefore, “should be considered in accordance with the factors identified in Gaines v. Bellino, 173 N.J. 301 (2002). With regard to the second type of claim (vicarious liability), the Court adopted the two-pronged affirmative defense to vicarious liability claims set forth in the United States Supreme Court’s decisions in Burlington Indus. v. Ellerth, 524 U.S. 742 (1998) and Faragher v. City of Boca Raton, 524 U.S. 775 (1998).

Specifically, the New Jersey Supreme Court held that an employer in a hostile work environment sexual harassment case may assert as an affirmative defense that it exercised reasonable care to prevent and correct promptly any sexually harassing behavior and the plaintiff employee unreasonably failed to take advantage of preventive or corrective opportunities provided by the employer or to avoid harm otherwise. The defendant employer has the burden to prove both prongs of the affirmative defense by a preponderance of the evidence. This defense, however, “provides no benefit to employers who empower sexually harassing employees who take tangible employment actions against their victims, employers who fail to implement effective anti-harassment policies, and employers whose policies exist in name only.”

Turning to the second issue, the Court found that the definition of a “supervisor” for purposes of claims based on sexual harassment giving rise to a hostile work environment claim should be read expansively to promote the paramount goal of the LAD. Specifically, the Court held that a “supervisor” is defined as: (1) an employee granted the authority to make tangible employment decisions; or (2) an employee placed in charge of the complainant’s daily work activities.

Writing for the dissent, Justice Albin, joined by Chief Justice Rabner, expressed the view that the LAD provides greater protection to employees than federal law and, as such, it was inappropriate for the majority to adopt a standard established in cases interpreting federal law. The dissent further asserted that if the New Jersey Legislature wanted to include an affirmative defense for supervisory liability it could have amended the LAD, but it did not.

While the Aguas decision is a welcome sight for New Jersey employers, the decision underscores the necessity of a strong anti-harassment policy. In order to avoid potential liability for an employee’s unilateral discriminatory acts, employers must formulate and implement meaningful and effective policies and procedures for employees to utilize in response to harassment. As such, employers should re-examine their current anti-harassment policies and procedures with legal counsel to ensure their policies and procedures effectively prevent and/or correct (to the extent possible) sexual and other unlawful harassment in the workplace.

NJ Supreme Court Embraces Employee-Friendly Test for Determining Independent Contractor Status

Posted in Employment Policies and Practices, Wage and Hour and Executive Compensation

In a unanimous opinion issued on January 14, 2015, the New Jersey Supreme Court determined that the “ABC test” governs whether an individual is an “employee” or an “independent contractor” entitled to the protections of New Jersey’s Wage Payment Law and Wage and Hour Law.  See Hargrove v. Sleep’s, LLC, A-70-12 (Jan. 14, 2015) (Slip Op.).  The Supreme Court issued this ruling in response to a question from the Third Circuit Court of Appeals in connection with litigation over whether Sleepy’s, LLC misclassified delivery drivers as independent contractors to avoid providing benefits, such as overtime pay, to those workers.  A copy of the New Jersey Supreme Court’s decision is available here.

New Jersey’s Wage Payment Law governs the timing and mode for the payment of an employee’s wages, while New Jersey’s Wage and Hour Law mandates the minimum wage and overtime benefits that employers must pay to their employees.  The so-called “ABC test” is one of many different tests utilized to determine whether a particular individual qualifies as an “employee” or an “independent contractor”.  N.J.S.A. 43:21-19(i)(6).  Under the ABC test, the court presumes an individual bringing a claim qualifies as an “employee”.  The burden then shifts to the employer to demonstrate that the individual should instead be classified as an “independent contractor”.  The ABC test includes the following three factors:

(a)    Whether the employee has been and will continue to be free from control or direction over the performance of his or her services, both under a contract of service and in fact;

(b)   Whether the services provided are either outside the usual course of the business for which the service is performed, or that service is performed outside of all the places of business for the enterprise for which the service is performed; and

(c)    Whether the individual is customarily engaged in an independently established trade, occupation, profession, or business.

In holding the ABC test applies to both statutes, Judge Mary Catherine Cuff explained it provides predictability.  She also noted that the New Jersey Department of Labor had been utilizing the ABC test in determining whether an individual qualified as an “employee” under both statutes since 1995, without challenge.

For employers, the Hargrove decision underscores the importance of properly classifying workers as employees or independent contractors, both through contractual relationships and in practice.  Employers should examine their policies and procedures with legal counsel to determine compliance with the distinction between employees and independent contractors in order to avoid costly litigation and penalties for any violations.

The Affordable Care Act Part Two – Preparing for 2015

Posted in Employment Policies and Practices

This is the second of a three part series on the Affordable Care Act (“ACA” or “Act”), commonly known as “ObamaCare.”  This post discusses the Employer Mandate, which takes effect January 1, 2015, and certain reporting requirements that will also take effect beginning in 2015.

The Employer Mandate

On January 1, 2015, the so-called “Employer Mandate” goes into effect, requiring large employers to offer health coverage to full-time employees and their dependents (children up to age 26, but not spouses) or risk paying a penalty. As a result, large employers will be forced to make a choice — to either “play” by offering health coverage, or potentially “pay” a penalty to the IRS for failing to offer such coverage. This “play or pay” scheme, called “shared responsibility” in the statute, has become known as the Employer Mandate.

Although the Act defines a large employer as an employer with 50 or more full-time employees, implementation of the Employer Mandate is being phased in.  The Employer Mandate takes effect for employer with 100 or more full-time employees on January 1, 2015 and will apply to employers with 50-99 full-time employees beginning January 1, 2016.

To determine whether a business is  a “large employer” under the Act, the employer must determine whether it employs an average of at least 100 full-time employees on business days during the preceding calendar year.   As previously mentioned, beginning in 2016, the threshold drops to the equivalent of 50 full-time employees during the preceding calendar year.  A full-time employee is any employee who is employed, on average, 30 hours or more  a week or 130 or more hours each month.  Employers with part-time workers must also count “full-time equivalencies” in determining large employer status. “Full-time equivalent employees” are the number of full-time employees an employer would have, based on the hours worked by all employees who are not full-time.  To determine the number of full-time equivalent employees for a calendar month, an employer must calculate the aggregate hours of service (including fractional hours, but not including more than 120 for any one employee) for all employees who are not full-time employees for that month. The employer must then divide the total number of hours worked by its non-full-time employees by 120.  The number of full-time equivalent employees is then added to the number of full-time employees to determine applicable large employer status.  Hours of service include paid time for services performed as well as time for which the employee is paid but does not perform any services due to vacation, holiday, illness, disability, layoff, jury duty, military duty or paid leave of absence.

In addition to counting full-time employees and hours worked by employees who are not full-time, in certain circumstances, the number of employees of “controlled groups” and “affiliated service groups,” as defined by the Internal Revenue Code and applicable Internal Revenue Service (IRS) regulations, will be aggregated toward the full-time employee threshold.  Seasonal employees must also be considered in determining large-employer status.

A large employer under the Act is subject to the Employer Mandate, which requires that the employer offer health coverage to its full-time employees and certain of their dependents.  The coverage must: (1) provide “minimum essential coverage;” (2) be “affordable;” and (3) satisfy a minimum value requirement.  “Minimum essential coverage” typically includes most private health insurance plans and includes coverage under an employer-sponsored group health plan.  Coverage is considered “affordable” if the employee’s contribution or premium for self-only coverage is less than 9.5 percent of the employee’s household income.  Because most employers do not know their employee’s household income, the act provides a safe-harbor for the employer which requires that the cost of the employee-only coverage does not exceed 9.5 percent of the wages reported in Box 1 on the employee’s W-2.  The offered coverage must also meet a minimum value requirement. This generally means that the plan must pay at least 60 percent of the expected health care costs, and the employee is responsible for the remaining 40 percent through copayments, deductibles and coinsurance. While the terms of the specific benefits will vary, essential health benefits (such as annual physicals) must be provided without any annual limits.

If a large employer does not provide benefits for some or all of its full-time employees, the employer will have to pay a penalty in two scenarios. The first scenario occurs when an employer does not offer health coverage to “substantially all” of its full-time employees, and any one of its full-time employees both enrolls in health coverage offered through a State Insurance Exchange and receives a premium tax credit or a cost-sharing subsidy.  In order to be eligible for a subsidy, an employee must have an income between 100 and 400 percent of the federal poverty line and not be offered affordable, minimum value coverage.  In the second scenario, an employer will have to pay a penalty when it provides health care to its employees, but such coverage is deemed inadequate because: (1) it is not “affordable;” (2) does not provide at least “minimum value;” or (3) the employer offers coverage to substantially (but not) all of its full-time employees, and one or more of its full-time employees enrolls in exchange coverage and receives a tax subsidy.  In this second scenario, the employer will owe an “inadequate coverage penalty.”  The inadequate coverage penalty is $3,000 per person and is calculated based on each full-time employee who receives an exchange subsidy. This penalty amount is only for 2015 and will increase based on premium inflation.

Reporting Requirements Pursuant to Sections 6055 and 6056 of the ACA

On March 5, 2014, the U.S. Department of the Treasury and the IRS released final rules to implement the information reporting provisions for certain employers under the ACA.  These rules are available here. Beginning in 2015, all employers affected by the Employer Mandate are subject to yearly reporting requirements. On August 28, 2014, the IRS released draft instructions for Forms 1094-C and 1095-C, and other forms required by the ACA. Employers that are subject to the Employer Mandate will use the new forms to report health insurance coverage offered under employer-sponsored plans in accordance with the Act.

Under the ACA, employers subjected to the Employer Mandate must report certain information including: (1) information about the entity providing coverage, including contact information; and (2) which individuals are enrolled in coverage, with identifying information, and the months for which they were covered (Section 6055).  Employers will also have to report: (1) information about the employer offering coverage (including contact information and the number of full-time employees; and (2) information about the coverage (if any) offered to each full-time employee (by month) including the lowest employee cost of self-only coverage offered.

Final versions of the forms are not yet available.  Drafts of the forms (as of October 5, 2014) are available at the following links:  1094-C and 1095.


Paid Sick Leave Continues to Gain Traction in New Jersey

Posted in Employment Policies and Practices, Wage and Hour and Executive Compensation

Last week, Trenton and Montclair became the latest in a series of New Jersey municipalities to pass paid sick leave ordinances, joining East Orange, Irvington, Jersey City, Newark, Passaic and Paterson.  Under both the Trenton and Montclair legislation, which are largely modeled after the measures previously adopted by Newark in January, employers with 10 or more workers must provide their employees with up to 40 hours of paid sick time accrued on an annual basis, with smaller employers only being required to offer up to 24 hours of paid sick time per year.  Employees earn one hour of paid sick leave for every 30 hours worked.  However, irrespective of the employer’s size, child care, home health care and food service workers are entitled to the full 40 hours of paid benefits per year.

At the same time, the New Jersey Legislature continues to review proposed State-wide legislation designed to provide paid sick leave in a more uniform fashion.  Under the current proposals (Assembly Bill A2354 and Senate Bill S785), New Jersey employees would accrue one hour of paid sick leave for every 30 hours worked, up to a total of 40 hours of earned paid sick time annually for employers with less than 10 workers, and up to 72 hours per year for employers meeting or exceeding the 10 employee threshold.  If employees do not use all of their accrued hours in a year, they would be permitted to carry them forward for an additional year.  Employers would also be required to maintain detailed records concerning employees’ accrued paid sick time hours, and the legislation would clearly define when employees could be required to provide advance notice of sick time and/or documentation to their employers.  Employers would further be prohibited from retaliating against any employees using their paid sick time.

Given the current trend of state and local governments enacting paid sick leave laws, now is the time for employers to consult with counsel to ensure that their handbooks, policies and practices comply with the recent, and anticipated, changes in the law.

The Affordable Care Act – Where Are We Now?

Posted in Employment Policies and Practices

This is the first of a three part series on the Affordable Care Act (“ACA” or “Act”), commonly known  as “ObamaCare.”

The ACA was signed into law in March of 2010 with the goals of increasing the quality and affordability of health insurance, lowering the uninsured rate by expanding public and private insurance coverage, and reducing the costs of healthcare for individuals and the government.  Since that time, the ACA has been the subject of much debate.  Having survived a challenge to the United States Supreme Court, the ACA is officially the “law of the land” albeit with some changes.  One of the most anticipated and debated provisions of the ACA is the “employer mandate,” which will be phased in starting January 1, 2015.  With the public discussions and news reports focusing on the employer mandate and, earlier in the year, the health insurance exchanges, there was very little reported on the fact that most of the provisions of the ACA have already gone into effect. This post summarizes the employment related provisions of ACA that are currently in effect.


Earlier this year the Department of Labor, Treasury, and Health and Human Services adopted final regulations regarding minimum essential health insurance coverage.  In February, these agencies jointly announced the publication of final regulations implementing a 90-day limit on waiting periods for health coverage.  Described as a “common sense measure that helps workers access employer-sponsored health insurance,” the final regulations require that no group health plan or group health insurance issuer may impose a waiting period that exceeds 90 days after an employee is otherwise eligible for coverage.  Employers, however, can generally impose other conditions for eligibility such as meeting certain sales goals or successfully completing an orientation program.   In addition, employers can generally require employees to complete a certain number of hours before becoming eligible for coverage, as long as the requirement is capped at 1200 hours.  The rules do not require coverage be offered to any particular individual or class of individuals.

Breaks for Nursing Mothers

The ACA also amended the Fair Labor Standards Act (“FLSA”) to include mandatory break time for nursing mothers.  Employers are required to provide “reasonable break time for an employee to express breast milk for her nursing child for 1 year after the child’s birth each time such employee has need to express the milk.”  Employers are also required to provide a place other than a bathroom that is “shielded from view and free from intrusion” which may be used by the employee to express milk.  Employers with less than 50 employees are not subject to the break time requirement if compliance with the provision would impose an undue hardship.  Whether compliance would be an undue hardship is determined by looking at the difficulty or expense of compliance for a specific employer in comparison to the size, financial resources, nature, and structure of the employer’s business.  All employees who work for the covered employer are counted when determining whether this exemption may apply.

Whistleblower Protections

Notably, in addition to health insurance reforms including the aforementioned requirements under the ACA, Section 1558 of Title I of the ACA protects employees from retaliation for reporting violations of the various reforms found in Title I and receiving a premium tax credit or a cost sharing reduction for enrolling in a qualified health plan. Employees who believe they have been retaliated against in violation of Title I of the Act may file a complaint with OSHA.

Our next post will discuss the Employer Mandate, which will require that as of January 1, 2015, all employers with the equivalent of 100 or over full-time equivalent employees to purchase health insurance for their workers or pay a penalty will take effect (also known as the Employer Mandate).  Employers with 50 or more full-time equivalent employees will be subject to the Employer Mandate starting January 1, 2016.  We will also discuss certain reporting requirements that will also take effect beginning in 2015.