Labor Law Update
California CPA
December 2009
What Employers & Their Advisers Need to Know for 2010
By Mark E. Terman, Esq.
This time last year, employers wondered whether Barack Obama and a Democratic majority in Congress would mean changes to the playing field for employers. So far, the answer is not really. While more federal laws have changed than in past years, none have dramatically increased burdens on employers in California, where significant employee rights and annual employment law changes are a part of doing business here. All told, it was a light year for added employment regulation in our state.
Health Issues
The H1N1 virus threat raises questions for employers who need to provide a safe workplace without violating employee rights under the disability discrimination, privacy and other laws. The Equal Employment Opportunity Commission’s recent interpretive memorandum, “Pandemic Preparedness in the Workplace and the Americans with Disabilities Act,” provides guidance and is
available online
.
For example, during a pandemic, an employer may, without violating the ADA:
-
Require infection control practices, such as regular hand washing; coughing and sneezing etiquette; proper tissue usage and disposal; and working at other employer facilities or telecommuting);
-
Send employees home if they display flu-like symptoms, such as fever or chills and a cough or sore throat;
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Ask employees that report feeling ill at work or that call in sick if they are experiencing flu-like symptoms, though information about employee illness must be kept as a confidential medical record;
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Encourage such employees to stay away from work and consider telecommuting as a short-term measure;
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Make further inquiries, even if disability-related, if justified by a reasonable belief based on objective evidence that the severe form of pandemic influenza poses a direct threat; and
-
Require medical certification as a condition of return to work.
Employers may not require medical examinations of employees, such as measurement of employee body temperatures, unless the pandemic becomes widespread in the community as assessed by state or local health authorities or the Centers for Disease Control and Prevention. Additionally, employers may not ask whether employees have any medical condition that could make them more vulnerable to infection; and require employees to receive vaccines.
CDC
and
California Department of Public Health
resources are available online. Seek advice of counsel on other laws that may affect the EEOC’s guidance.
Cal-COBRA Subsidized Too
The American Recovery and Reinvestment Act of 2009 includes a requirement that employers pay 65 percent of the group health care insurance plan premiums for COBRA-eligible employees that elect COBRA for up to nine months. This applies when the employee was involuntarily terminated from employment between Sept. 1, 2008, and Dec. 31, 2009. Eligible individuals pay 35 percent of their COBRA premiums.
The employer may recover the 65 percent premium paid by taking a credit on quarterly federal employment tax returns. Certain high-income individuals may have to repay all or part of the premium subsidy through an increase in their income tax liability for the year. Subsidy eligibility ends when the individuals are eligible for coverage under another group medical insurance plan or Medicare, or when the normal period for COBRA eligibility ends.
Federal COBRA covers employers with 20 or more employees. Employers of 19 or fewer employees and their group medical insurers are covered by Cal-COBRA, and the ARRA’s subsidy provisions does not directly apply. California AB 23 filled the gap and provides similar benefits and obligations for employees subject to Cal-COBRA.
Lack of Worker’s Comp Insurance
Effective Jan. 1, SB 313 mandates and increases penalty assessments against employers caught without required workers’ compensation insurance that have been issued an order by the Labor Commissioner to stop all operations until insurance is obtained.
The Labor Commissioner must now assess the uninsured employer $1,500 per employee or require the employer to deposit to the state Uninsured Employers Benefit Trust Fund the greater of twice the amount that should have been paid for workers’ comp insurance for the uninsured period or $1,000 per employee.
Problems triggered by lack of workers’ comp insurance seem to occur most frequently when an employer fails to pay premiums or place coverage, or misclassifies its workers as independent contractors rather than employees. As if the risks of a stop order, assessments and lack of insurance were not bad enough, the “no-fault” nature of the workers’ comp system is lost, and courts presume the employer was negligent.
Computer Software Employees
California Labor Code Sec. 515.5 contains an overtime pay exemption for certain highly skilled computer professionals who spend more than 50 percent of their working time in top-level intellectual or creative work that requires the exercise of discretion and independent judgment. This would include software engineers and programmers, plus systems designers and analysts. To qualify for exemption, the employee must also be paid at least a certain amount per hour or a salary equal to that hourly rate.
The Department of Industrial Relations resets these rates each Oct. 1 based on the “percentage increase” in California Consumer Price Index for Urban Wage Earners and Clerical Workers (CCPI). Even though the CCPI declined 1.4 percent from the previous year, the DIR determined that the rates will stay the same as last year because there was no increase. Unless the Labor Commissioner reconsiders this determination, the following rates remain in effect as of Jan. 1: $37.94 per hour or a $79,950 annual salary.
Military Families Get a Break
In 2008, the Family Medical Leave Act was amended to permit up to 26 weeks of unpaid leave to FMLA-eligible employees to care for a spouse, son, daughter, parent or next of kin that is injured while serving on active military duty. Also added was up to 12 weeks of leave for urgent needs related to reservist or National Guard member’s spouse, son, daughter or parent’s call to active service. A maximum of 26 weeks was set for employees that take military-related FMLA leaves and nonmilitary release FMLA leaves in a year.
Signed into law Oct. 28, the National Defense Authorization Act expands exigency and caregiver leave provisions for military families under FMLA. The act expands the caregiver leave provision to include veterans that are undergoing medical treatment, recuperation or therapy for serious injury or illness that occurred any time during the five years preceding the date of treatment. It also expands the exigency leave benefits to include family members of active duty service members.
No Genes at Work
The Genetic Information Nondiscrimination Act of 2008 (GINA) became effective Nov. 21 and prohibits employers from discriminating against individuals based on genetic tests and information in hiring, promotion, discharge, pay, fringe benefits, job training, classification, referral and other aspects of employment. It also restricts employers’ acquisition of genetic information and strictly limits disclosure of genetic information.
Genetic information includes information about genetic tests of applicants, employees or their family members; the manifestation of diseases or disorders in family members (family medical history); and requests for, or receipt of, genetic services by applicants, employees or their family members. The act requires that employers immediately post a new EEOC poster, which can be downloaded
online
.
Is an I-9 Enough?
Employers risk substantial fines and criminal action if they knowingly employ workers that do not have the legal right to work in the United States. Employers must also obtain and keep completed U.S. Citizenship and Immigration Services I-9 forms, with copies of required papers, to verify employment eligibility of all new hires. A recently issued I-9 (OMB Form 1615-0047; expires Aug. 31, 2012) should be used. It can be
downloaded online
.
In 2007 and 2008, the Department of Homeland Security issued proposed rules that would have deemed an employer to have actual knowledge of workers’ lack of legal right to work in the United States if the employer did not comply with verification procedures after it received a “no-match” letter from the DHS or Social Security Administration. No-match letters state that the Social Security number provided with payroll filings does not match with the SSA database. A federal court in San Francisco enjoined implementation of the proposed rule citing “serious questions” as to whether the DHS and SSA exceeded their authority in making the rules. The DHS rescinded the proposed rule Nov. 6, stating that it would focus on I-9 compliance, E-Verify (see below) and other measures to increase immigration law compliance.
If no-match letters continue to be issued, employers who receive them should not hastily fire the affected workers, as there may be honest mistakes in the employee’s or the government’s information that can be rectified.
Expanded E-Verify
E-Verify is an online employment verification system operated jointly by the DHS and SSA. Participating employers can quickly check the employment eligibility of new hires online by comparing information from an employee’s Form I-9 against SSA and DHS information.
Beginning Sept. 8, employers with federal contracts or subcontracts that contain the E-Verify clause are required to use E-Verify to determine the employment eligibility of employees performing direct, substantial work under those federal contracts and new hires organization-wide—regardless of whether they are working on a federal contract.
The new rules require insertion of the E-Verify clause in all prime federal contracts with a period of performance longer than 120 days and a value above $100,000. The rule also covers subcontractors if a prime contract includes the clause. Other employers may voluntarily use E-Verify after an offer of employment has been accepted or with current employees. Find E-Verify information
online
.
As with no-match letters, use caution before rejecting an employee or taking further steps to verify if E-Verify returns a negative report.
Up Against the Wall
Workplace posters, notices and pamphlet requirements usually change at least once a year. For example, the EEOC mandated a new poster under GINA. Most government agencies will look for poster compliance if on site to inspect or investigate for another reason, and there are monetary penalties for failure to display some posters. The California Chamber of Commerce and other vendors can provide a complete set of nearly 20 required federal and state posters and notices at a relatively nominal cost.
Mark E. Terman, Esq.
is the partner in charge of Reish & Reicher’s employment law practice group.
