2014 Legal Update – Part 2

At the Federal level there are two big items related to labor law.

The first is in regards to a Supreme Court ruling on the Defense of Marriage Act (DOMA).  The court ruled that benefits must be extended to same sex couples if the state they reside in recognizes same sex marriages.  What is unclear is how that applies in states that do not recognize same sex marriages.  Even more unclear is if a same sex couple gets married in a state that recognizes same sex marriages but lives and works in a state that does not.  Since the ruling on DOMA focuses on benefits, like health insurance or 401(k) plans, you should contact the administrator of those benefits and ask about the criteria they have set.  Then update your employee handbook to match their advice.

The second item at the Federal level is the Affordable Care Act (ACA).  The implementation of various pieces of the ACA has been changing since its inception.  2014 was no exception.  There is a provision of the ACA known as the employer mandate.  The employer mandate applies to employers that have 50 or more full time employees.  If you are a large employer and do not provide health insurance you will be taxed $2000 per full time employee per year (the first 30 are tax exempt). This tax was due to take place in 2014 but enforcement was delayed until 2015.  The recent change is that during 2015 the IRS is not going to enforce the employer mandate against employers with less than 100 employees. This is just a temporary reprieve as the IRS is supposed to begin enforcing the law as written in 2016.

At the state level there were bills in the Oregon Legislature focusing on the ACA.  One bill, HB 4072, would give a $500 tax credit per employee for businesses that spend at least that amount per employee on wellness programs. Another bill, SB 1543, proposed to fine large employers that avoid the employer mandate by exploiting a loophole in the definition of a full time employee.  If an employee works less than 32 hours per week then they do not qualify as a full time employee under the ACA and thus are not subject to the $2000 tax.  If an employer reduces hours to avoid the tax the employer would be guilty of an unlawful employment practice and the bill specifies penalties. Both bills appear to be stuck in committee and the 2014 session ends on March 9th.

There are several trends worth highlighting.  Two are related to felonies.  One is from the Equal Employment Opportunity Commission (EEOC) which came out with guidelines that employers could not automatically exclude applicants if they had a felony conviction.  The EEOC wants employers to exclude applicants based on relevant felonies.  An example would be barring an applicant convicted of theft from being a bank teller.  The State of Texas objected and took the issue to court as they did not want to open up positions like a corrections officer to felons- essentially allowing former inmates to supervise current inmates. Other states have also objected but the EEOC has fired back with a letter defending its stance.  This is an issue to keep an eye on in the coming year.  The second trend is a push in some states or municipalities to bar employers from asking about criminal convictions up front. This effort is often referred to “Ban the Box” in reference to the yes or no question about past criminal convictions on most applications.

Another trend worth noting is workplace bullying.  This issue has been getting greater recognition and OSHA Enforcement can investigate if physical contact takes place.

A possible new trend is could be an increase in requests for accommodation under the Americans with Disabilities Act (ADA).   The American Psychiatric Association released an updated edition of Diagnostic and Statistical Manual of Mental Disorders.  An increase in the number of disorders could lead to an increase in ADA requests.

Arin J. Carmack