New Overtime Rule May 25, 2016 New Overtime Rule Expected to Benefit Millions of Employees On May 23, 2016, the United States Department of Labor (DOL) issued a new overtime rule under the Fair Labor Standards Act (FLSA). The new overtime rule is expected to automatically extend overtime pay eligibility to 4.2 million salaried workers. It will entitle most salaried white collar workers earning less than $913 a week ($47,475 a year) (“salary threshold”) to overtime pay if they work more than 40 hours in a week. The increase will go into effect December 31, 2016. The new rule also requires that the salary threshold be automatically updated on January 1, 2020 in order to ensure that the benefits of the new rule are not lost by time and inflation. Under the new rule, an employer may use bonuses and incentive payments to satisfy part of the standard salary threshold if: the bonuses and incentives total no more than 10% of the employee’s regular compensation; the bonuses are non-discretionary (which means they are promised and must be paid at a fixed rate); and the payments must generally be made on a quarterly basis. The DOL published questions and answers about its new final overtime rule at: https://www.dol.gov/whd/overtime/final2016/faq.htm The new rule does not change the “duties” test used by employers to determine whether white collar salaried workers that earn more than the salary threshold are eligible for overtime pay. That exemption is available when a salaried employee holds a bona fide executive, administrative, professional, computer, or outside sales position. These exemptions are sometimes referred to as “white collar” exemptions. Information about white collar exemptions may be found in DOL Wage and Hour Division (WHD) Fact Sheets (published in 2009): Executive Exemption: https://www.dol.gov/whd/overtime/fs17b_executive.pdf Administrative Exemption: https://www.dol.gov/whd/overtime/fs17c_administrative.pdf Professional Exemption: https://www.dol.gov/whd/overtime/fs17d_professional.htm Computer-related Occupations Exemption: https://www.dol.gov/whd/overtime/fs17e_computer.pdf Outside Sales Exemption: https://www.dol.gov/whd/overtime/fs17f_outsidesales.pdf The information provided here is a brief summary of hundreds of pages of regulatory guidance. It is not intended to provide legal advice to a specific individual with an individual problem.
Employer Wellness Programs May 23, 2016 EEOC ISSUES FINAL RULES ON EMPLOYER WELLNESS PROGRAMS May 17, 2016. The EEOC issued final rules on the administration of employer wellness programs. The rules address the relationship between the Genetic Information Nondiscrimination Act (GINA) and the obtaining and use of genetic information in employer wellness programs. The final rules are effective July 18, 2016, but will only be applicable to employee benefits plans on January 1, 2017. Questions and Answers regarding the new final rules were published by the EEOC: Wellness ADA Rule GINA Rule Employer wellness programs are health promotion and disease prevention programs and activities offered to employees as an employment benefit — either as part of an employer health plan or as separate benefits. Wellness programs commonly ask employees to fill out questionnaires about their health and risk factors. These questionnaires are often called “health risk assessments” or “HRAs.” Wellness programs also often include biometric screening for health risk factors, including blood testing for diabetes or high cholesterol, and blood pressure tests for high blood pressure. Other employer wellness programs may be educational, such as to provide information about healthy nutrition and eating habits; or may be designed to change unhealthy behaviors such as tobacco use. They may also be inspirational to develop a healthier-at-work environment. Employee advocates were concerned that the proposed employer wellness program rules would allow employers to discriminate against disabled employees. The final rules answer a number of questions regarding the relationship between the Americans with Disabilities Act (ADA), the Health Insurance Portability and Accountability Act (HIPAA) and the Affordable Care Act (ACA): The ADA’s “safe harbor” provision, which allows health insurers and plan sponsors (including employers) to collect health information related to risk, does not apply to employer wellness programs. Employers may not seek information related to insurance premiums and insurance rate-making as part of their offering of wellness programs. Employers and those administering a wellness program may ask employees about their disabilities and ask other medical questions as long as the programs are “reasonably designed to promote health or prevent disease.” This means that wellness programs may use HRAs and biometric screenings as long as the results of the information gathered is only used to help design programs to promote health or to prevent disease. The information collected may not be used against individuals. The good news is that an employee’s participation in a wellness program must be “voluntary.” This means the employer may not require any employee to participate in the program. An employer may also not deny health coverage to an employee who refuses to participate in a wellness program. The employer also may not take any other adverse action against the employee for not participating, however, that does not mean that there cannot be significant financial consequences to employees who refuse to participate in wellness programs. The bad news is that the EEOC’s final rule allows employers to use “incentives” of up to 30% of the total premium related to an employee’s individual health coverage without the premium assessment being considered as making participation in the wellness program not voluntary. The “incentives” for tobacco cessation programs may be as high as 50%. This means that an employee who refuses to participate in a wellness program may end up paying as much as 30% of the total premium charged for the employee’s health coverage and an employee using tobacco may end up paying as much as 50% of the total premium. These “incentives” may be used not only for employer sponsored coverage but also for coverage under the ACA (“Obamacare”). The Wellness ADA Rule adds two new requirements designed to protect employee privacy. First, the employer or wellness program may receive information collected by a wellness program, but only in a combined form. This means that this information may be considered for the group without giving the identity of specific individuals “except as is necessary to administer a health plan.” Second, an employer may not require an employee to waive confidentiality or agree that the employee’s information may be used or shared as a condition of participating in the wellness program. This second requirement addresses any concern that wellness programs may collect data about individual employees and then sell this private health information without the employee’s consent. The Wellness/GINA rule uses the same definition of a wellness program, and the same requirements for a wellness program to be “reasonably designed to promote health or prevent disease.” This final rule allows an employer to ask for current or past health status information about an employee’s spouse as long as there is an inducement to participate. Inducements to spouses may be offered in all welfare plans. The inducements may be up to 30% of the cost of the plan. Refusal to participate in a wellness program by a spouse may not be used to deny access to health insurance or benefits if the spouse refused to provide health status information. The new rules should reduce concerns employees may have had regarding wellness programs. They will still have a significant effect on employees’ and spouses’ participation in wellness programs. If the result of not participating is that the employee or the spouse has to pay up to 30% of the costs of health coverage, many employees and their spouses will not be able to afford to not participate in the programs.
Scams Targeting Seniors May 16, 2016 Elderly citizens lose billions a year to scams targeting seniors. Seniors are victims more often than other age groups. Seniors are victims more often than persons from other age groups. This is because they may have accumulated more savings over time, and are experiencing increased dependency on others because of diminishing physical and mental capacity. Financial scams targeting seniors are common. One survey found that almost 20 percent of those 65 and older have been the victim of a financial swindle. And that is only of those who know they were victimized. Many seniors never realize – or at least never admit – that they were scammed. Fortunately, seniors and their children can take steps to reduce the likelihood of being victimized. The first step is to recognize the signs that someone may be a target of financial abuse by a stranger, a family member, or a caregiver. Those signs include: They get mail, email or phone calls announcing that they have won a sweepstakes or a “prize.” They are suddenly “befriended” by a new person who wants to spend a lot of time with them. They are paying large sums for minor repairs or improvements. They are asked to take their retirement savings and “invest” in or lend to a new business that established investors or lenders have declined to support. At the advice of their financial advisor, they are frequently selling and buying stocks and bonds (“churning”). They have left their long-time investment advisor and are excited about the big returns promised by a new advisor. They are investing in “alternative investments” that they don’t really understand. They are considering buying or have bought a deferred, variable annuity or an exotic insurance product. They talk about the need to get a better rate of return on their investments and look online for high-paying investment opportunities. They are spending less money, don’t want to take their traditional winter getaway, and are reluctant to discuss finances. This could indicate that they may have lost a lot of money. What should you do if you think you or a loved one has been the victim of a financial scam? Seek out a person or institution that you trust – such as your accountant, attorney, or trusted financial advisor – about who to contact to investigate what happened to the senior’s funds and assets. Don’t delay, the longer you wait to do something the less likely you will be able to recover your money. The office of the Pennsylvania Attorney General operates a free Elder Abuse Helpline at 1-866-623-2137. It can also be reached by email to [email protected]. If you think your parents are at risk of being financially victimized, talk to them. Ask to see paperwork associated with the possible scam or abuse. Look over their mail for “prize alerts” or questionable charitable requests for money. Review their documents, receipts and financial statements to determine whether they are receiving the services and returns that they paid for. Be alert for possible signs of dementia – even a modest decline in memory and judgment can make an individual susceptible to being victimized. Financial abusers target persons with diminished capacity. Don’t be put off if your parents seem reluctant to discuss your concerns. Victims of financial abuse are often embarrassed to talk about it, or they may be unaware that they have been victimized. Get their permission to talk with their financial advisor or their accountant. If you suspect that your parent or loved one has been the victim of financial abuse, contact an attorney for advice. Don’t just sit back and accept the painful loss of savings and security from scams targeting seniors. Take action. Larry Frolik is a Distinguished Faculty Scholar and former Professor of Law at the University of Pittsburgh School of Law. A nationally known expert on the legal issues of the elderly, he currently serves on the Pennsylvania Supreme Court’s Advisory Council on Elder Justice in the Courts.
New ADA Resource May 10, 2016 New ADA Resource May 10, 2016. The EEOC issued a new ADA covering what employers owe disabled employees under the Americans with Disabilities Act. The new publication “Employer Provided Leave and the ADA” highlights several points we believe all disabled employees need to know. First, the ADA may require your employer to offer you a reasonable period of unpaid leave above and beyond what it offers to non-disabled employees. Most of our clients recognize that an employer cannot deny them benefits that it offers to non-disabled employees. What many disabled employees don’t know is that if an extended period of unpaid leave is the one thing that would permit a disabled employee to keep her job (for example, three weeks off in order to complete a cycle of chemotherapy), the employer must provide that leave unless it can demonstrate that doing so would be an “undue hardship.” Factors that may be considered to determine whether an employer has shown that a proposed accommodation would be an “undue hardship” include: the amount of leave required the frequency of leave the flexibility of leave (whether it could be taken on different days) the impact of leave on co-workers or the employer’s operations Second, an employer may not retaliate against a disabled employee for making use of additional unpaid leave, or any other “reasonable accommodation.” Many of our clients may not realize that illegal retaliation under the ADA could include an employer deciding not to promote a disabled person because she took a period of unpaid leave, or telecommuted for several months, as a reasonable accommodation for her disability under the ADA. Third, an employer may violate the ADA by forcing an employee to be “100% healed” before she returns to work. For example, if a disabled employee would be able to return from a period of unpaid leave if she were permitted to work from home half time as a reasonable accommodation, the employer must permit her to do so unless it can show independently that permitting her to work from home would cause it “undue hardship.”
Right to Sue Right to Sue – New CFPB Rule The U.S. Consumer Financial Protection Bureau (CFPB) recently proposed a new rule restoring consumers’ right to sue banks, credit card companies and consumer lenders in class actions. The CFPB’s new rule, proposed under the Dodd-Frank Wall Street Reform and Consumer Protection Act, restricts the financial firms’ practice of using the fine print in consumer contracts to prevent them from proceeding in a class action by way of arbitration clauses.” Class actions are important because they permit consumers to sue as a group for damages that are often too small to justify suing individually. For example, if a bank overcharges a customer by $1,000, few lawyers would be willing to accept that consumer’s case because the cost to sue would be far higher than any money they could recover. Class actions solve that problem by giving consumers the right to sue on behalf of GROUPS OF consumers. Those groups of consumers have all suffered the same injury, making the collective amount in dispute large enough to justify the expense of hiring lawyers and experts needed to pursue the class action lawsuit. As reported in a New York Times investigation (Arbitration Everywhere, Stacking the Deck of Justice), two recent Supreme Court decisions permitted financial firms to exempt themselves from class actions. The court allowed the firms to add “arbitration clauses” to the fine print of their contracts that waived consumers’ right to sue as a class action. Those cases were: AT&T Mobility v. Concepcion, 563 U.S. 333 (2011) and American Express Co. v. Italian Colors Restaurant, 133 S. Ct. 2304 (2013). Since consumers have virtually no bargaining power with their bank or credit card company, these contracts are typically “take it or leave it.” If the consumer wants the product or service, he or she has no alternative other than to accept these “arbitration clauses.” The CFPB’s new rule restores consumers’ right to sue in class actions by prohibiting arbitration clauses in certain consumer financial contracts. If you have questions about potential class action claims, feel free to contact Joe Kravec, Jim Pietz or Wyatt Lison.
