On December 31, 2016, Judge Reed O’Connor of the United States District Court for the Northern District of Texas entered an injunction to apply nationwide in Franciscan Alliance v. Burwell, Case No. No. 7:16-cv-00108-O. The order prohibits the Department of Health and Human Services (HHS) from enforcing the portions of the nondiscrimination rule under ACA Sec. 1557 that prohibit discrimination on the basis of “gender identity” or “termination of pregnancy.” The court left untouched the portions of the rule that prohibit discrimination on the basis of disability, race, color, age, national origin, or sex other than gender identity. The decision can be found here: http://courthousenews.com/wp-content/uploads/2017/01/Texas-rule.pdf. On January 9, 2017, the ACLU filed a request for a formal ruling on their intervention in the case, which was apparently ignored by the Court earlier in the litigation, and a request for a stay pending the appeal they would file if intervention is granted. We will keep watch on any appeal of this decision.
In December 2016, the U.S. Equal Employment Opportunity Commission (EEOC) issued a resource document that explains workplace rights for individuals with mental health conditions under the Americans With Disabilities Act of 1990 (ADA).
Depression, PTSD, & Other Mental Health Conditions in the Workplace: Your Legal Rights explains that job applicants and employees with mental health conditions are protected from employment discrimination and harassment based on their conditions. They may also have a right to reasonable accommodations at work. Reasonable accommodations are work adjustments that can help individuals to perform their jobs and remain employed. The resource document also answers questions about how to get an accommodation, describes some types of accommodations, and addresses restrictions on employer access to medical information, confidentiality, and the role of the EEOC in enforcing the rights of people with disabilities.
EEOC charge data shows that charges of discrimination based on mental health conditions are on the rise. During fiscal year 2016, preliminary data shows that EEOC resolved almost 5,000 charges of discrimination based on mental health conditions, obtaining approximately $20 million for individuals with mental health conditions who were unlawfully denied employment and reasonable accommodations.
“Many people with common mental health conditions have important protections under the ADA,” said EEOC Chair Jenny R. Yang. “Employers, job applicants, and employees should know that mental health conditions are no different than physical health conditions under the law. In our recent outreach to veterans who have returned home with service-connected disabilities, we have seen the need to raise awareness about these issues. This resource document aims to clarify the protections that the ADA affords employees.”
Oregon is teed up to consider statewide legislation that would require employers to end the abusive practice of unpaid on-call hours and “random scheduling” and require compensation for shifts canceled at the last minute. The bill for Fair Scheduling, proposed by Sen. Michael Dembrow in late September 2016, is supported by Commissioner Steve Novick and could go into effect after September 2017.
Visit http://pamplinmedia.com/but/239-news/327482-206939-oregon-could-become-first-fair-scheduling-state for more information and http://www.portlandoregon.gov/novick/article/568951 to read testimony from real people impacted by random and last minute scheduling.
On August 29, 2016, the U.S. Equal Employment Opportunity Commission (EEOC) issued its final Enforcement Guidance on Retaliation and Related Issues, to replace its 1998 Compliance Manual section on retaliation. The guidance also addresses the separate “interference” provision under the Americans with Disabilities Act (ADA), which prohibits coercion, threats, or other acts that interfere with the exercise of ADA rights.
“Retaliation is asserted in nearly 45 percent of all charges we receive and is the most frequently alleged basis of discrimination,” said EEOC Chair Jenny R. Yang. “The examples and promising practices included in the guidance are aimed at assisting all employers reduce the likelihood of retaliation. The public input provided during the development of this guidance was valuable to the Commission in producing a document to help employers prevent retaliation and to help employees understand their rights.”
The guidance addresses retaliation under each of the statutes enforced by EEOC, including Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act (ADEA), Title V of the Americans with Disabilities Act (ADA), Section 501 of the Rehabilitation Act, the Equal Pay Act (EPA) and Title II of the Genetic Information Nondiscrimination Act (GINA).
Since EEOC’s 1998 Compliance Manual section on retaliation, the U.S. Supreme Court has issued seven decisions addressing retaliation under EEOC-enforced laws, and the filing of EEO claims that include a retali-ation allegation has continued to grow. Charges of retaliation surpassed race discrimination in 2009 as the most frequently alleged basis of discrimination, accounting for 44.5 percent of all charges received by EEOC in FY 2015. In the federal sector, retaliation has been the most frequently alleged basis since 2008, and retaliation findings comprised between 42 percent and 53 percent of all findings of EEO violations from 2009 to 2015.
EEOC is responsible for enforcing federal laws against employment discrimination. Further information about the agency is available at www.eeoc.gov.
In May 2016, the Department of Labor enacted several important changes to the Fair Labor Standards Act (FLSA) relating to overtime-exempt employees. These amendments substantially expand the number of salaried workers that will be able to claim overtime wages. These new rules go into effect on December 1, 2016. It is important for unions and employees to understand these changes in order to ensure that employers can be held accountable to pay their workers fairly. The most important changes are:
1. An increase in the salary threshold for Executive, Administrative, Professional and Computer (“EAP”) employees (from $23,660 to $47,476). This means employees making less than $47,476 cannot be FLSA-exempt regardless of their duties.
2. An increase in the salary threshold for Highly Compensated Employees (HCE) (from $100,000 to $134,004). This means employees making more than $134,004 are FLSA-exempt under a relaxed “duties” test – only minimal involvement in EAP-related duties is required.
3. The creation of an automatic updating mechanic to increase these levels in the coming years.
4. Under the new rules, the employer may count nondiscretionary bonuses and incentive payments towards salary thresholds, but they may not count for more than 10% of the total.
More specific detail on each of these changes follows:
1. Salary Threshold for Executive, Administrative, Professional and Computer employees
One of the largest categories of overtime-exempt employees are Executive, Administrative, Professional and Computer employees. Each of the exemptions is intended to cover salaried employees in highly-skilled or managerial positions and each of these four categories has a slightly different “duties test.” However, the tests do not apply unless the employee meets the salary basis test as well. The salary basis test has two components: (1) the employee must be paid on a salaried, not an hourly, basis, and (2) the salary paid must exceed a minimum threshold.
The rules for salary basis payment have not changed. Generally speaking, the salaried employee must receive as pay a predetermined amount of compensation, which cannot be reduced because of variations in the quality or quantity of the employee’s work. An employee’s salary under these exemptions must be paid each week an employee works, regardless of the number of hours worked each day (exempt employees do not need to be paid in a week in which no work is performed). Reductions in pay for part-day absences destroys the exempt status of the employee, even if the employee otherwise satisfies the applicable duties test. An hourly employee can be docked pay for each hour missed.
Since 2004, the salary threshold to meet any of these exemptions has remained at $23,660 per year ($455 per week). The 2016 FLSA amendments raise this salary threshold to $47,476 ($913 per week). This salary level change will open up overtime eligibility to many more employees.
2. Salary Threshold for Highly Compensated Employees
In addition to the salary-based overtime exemptions for EAP employees, prior to December 1, 2017 there is an exemption for employees who earn more than $100,000 per year. The HCE exemption has substantially lower standards for evaluating the duties of the employee, known as a “minimal duties test.” An HCE overtime-exempt employee has to simply be in a position where the employee’s primary duty includes performing office or non-manual work and the employee customarily or regularly performs at least one of the exempt duties of an EAP overtime-exempt employee.
The 2016 FLSA amendments raise this salary threshold from $100,000 per year to $134,004 per year. The types of pay that can meet this threshold are wider than that of the EAP exemption — the total annual compensation may consist of commissions, nondiscretionary bonuses and other nondiscretionary compensation; though medical, retirement and fringe benefits are not included. The rise in the HCE threshold will render more highly-compensated employees eligible for overtime, provided they are not exempt under the traditional duties tests for Executive, Administrative, Professional and Computer (“EAP”) employees.
3. Automatic Updating
Prior to the 2016 FLSA amendments, there was no formula or structure to update the overtime-exempt salary thresholds; the levels remained stagnant since 2004. With the passage of the 2016 FLSA amendments, the EAP salary threshold is now set at the 40th percentile of weekly earnings of full-time salaried workers in the lowest wage Census Region (currently the South; $47,476 per year) and the HCE salary threshold is set to equal the 90th percentile of earnings of full-time salaried workers nationally ($134,004 per year). Rather than waiting for the Department of Labor to choose when to update this level in the future, these levels are slated to update automatically every three years based on the 40/90 percentile bases. The Department of Labor is required to public the upcoming salary thresholds 150 days before their effective date.
4. Inclusion of Nondiscretionary Bonuses and Incentive Payments for EAP Employees
Prior to the 2016 FLSA amendments employers were not allowed to include nondiscretionary bonuses and incentive payments, such as commissions, in calculating the annual salary of an EAP overtime-exempt employee. After December 1, 2016, employers will be permitted to use nondiscretionary bonuses and incentive pay in the calculation of an employee’s annual salary, however, nondiscretionary bonuses and incentive pay is capped at 10 percent of the required salary threshold. Discretionary bonuses, such as an unannounced holiday bonus, or a bonus that is at the subjective discretion of a manager, do not count toward the EAP overtime pay threshold.
BHMK filed a class action lawsuit on behalf of naturopathic physicians and their patients. The lawsuit alleges that two insurance companies—Health Net Health Plan of Oregon, Inc., and American Specialty Health Group, Inc.—violated the Patient Protection and Affordable Care Act (“ACA”) by discriminating against naturopathic physicians.
The ACA mandates non-discriminatory health care with the goal of improving the quality, affordability, and accessibility of patient care. Specifically, insurance companies cannot discriminate against a health care provider acting within the scope of their state-issued license.
The State of Oregon has licensed naturopathic physicians since 1928 with a broad scope of practice that allows naturopathic physicians to serve as primary care providers, provide preventative services, prescribe pharmaceuticals, and order tests necessary to diagnose and treat illness.
The lawsuit alleges that Health Net and American Specialty Health violated the non-discrimination mandate by limiting patient access to naturopathic physicians licensed in Oregon. Those discriminatory practices include prohibiting reimbursement to naturopathic physicians for certain types of care, capping annual reimbursement amounts to naturopathic physicians, and paying naturopathic physicians less than other providers performing the same service.
The lawsuit seeks several remedies, including: (1) reimbursement to individuals who have been denied benefits under their health insurance plans; (2) repayment of profits retained by the insurance companies as a result of their discriminatory practices; (3) enforcement of non-discriminatory practices in the future; and (4) a declaratory judgment clarifying application of the ACA’s non-discrimination mandate.
A landmark ruling by the National Labor Relations Board (NLRB) in the Browning-Ferris Industries of California case vastly expands the definition of corporate employee by redefining “joint employer,” providing additional protections for millions of workers. This decision is a win for workers because it expands the number of entities that can be considered joint employers and prevents employers from evading responsibility through use of subcontractors or franchisees. The NLRB describes the impetus for the rule change as follows: “With more than 2.87 million of the nation’s workers employed through temporary agencies in August 2014, the Board held that its previous joint employer standard has failed to keep pace with changes in the workplace and economic circumstances.” The NLRB will continue to apply the joint employer test: (1) whether both entities are employers under common law; and (2) whether both entities share essential terms and conditions of employment. However, the NLRB will now consider as a factor whether an employer has exercised control over terms and conditions of employment indirectly through an intermediary, or whether it has reserved the authority to do so. The decision can be read here.
The EEOC has finally issued a ruling that sexual orientation workplace discrimination is illegal under federal law – the Civil Rights Act of 1964. This provides litigants an additional source of protection and cause of action against employers discriminating on the basis of their sexual orientation. The EEOC found that although the Act does not contain an explicit prohibition on sexual orientation discrimination, “an allegation of discrimination on the basis of sexual orientation is necessarily an allegation of sex discrimination.”
On Wednesday, July 15, 2015, the U.S. Department of Labor issued guidance on how to distinguish between employees and independent contractors. Employee misclassification is and has been a serious problem for workers seeking to make a living as employers seek to classify them as independent contractors, depriving them of overtime pay and benefits, such as unemployment insurance. Employers often assert that determining whether a worker is an independent contractor is fuzzy, but the new guidelines provide additional clarification on interpreting the existing regulations. The guidelines focus heavily on “FLSA’s statutory directive that the scope of the employment relationship is very broad” and “the broader concept of economic dependence.” The guidance ends with a clear conclusion: “most workers are employees under the FLSA’s broad definitions.” Read the guidance here.
For over two decades Greg Hartman has represented a coalition of public sector labor unions in protecting the rights of members under Oregon’s public employee retirement system. This representation has involved not only litigation but multiple appearances before the Oregon legislature as well as before the Public Employee Retirement Board. Greg has handled several cases which have resulted in billions of dollars of saved benefits for members of the Public Employee Retirement System. He was lead counsel in the case Strunk et al. v. Public Employee Retirement Board et al., in which the Oregon Supreme Court held a portions of the 2003 reform legislation were unconstitutional, thereby reinstating over $2 billion of benefits for PERS members.
Most recently Greg, along with partner Aruna Masih, pursued legal challenges to the 2013 changes to PERS benefits in the case of Moro et. al. v. State of Oregon et. al. before the Oregon Supreme Court. On April 30, 2015, the Oregon Supreme Court held that most of the changes to PERS cost-of -living adjustment (COLA) made by the 2013 legislature, including those that were part of the “Grand Bargain,” unconstitutionally impaired PERS members’ contract rights.
At issue in the Moro case was $5.3 billion dollars in benefits for PERS members and retirees. The Supreme Court’s decision finding the SB 822 and SB 861 reductions to COLA unconstitutional for benefits earned before the effective dates of the changes means that over $4 billion of the $5.3 billion in benefits at issue have been protected. This represents a significant victory for PERS retirees and members.
The court affirmed the changes to the 1991 (SB 656) and 1995 (HB 3349) income tax offsets for out of state retirees and to COLA for benefits that members earn on or after the effective dates of SB 822 (May 6, 2013) and SB 861 (October 8, 2013). A complete copy of the Supreme Court’s decision can be found through the link to the pleadings on our PERS Litigation page.