Articles

Donald Erickson

2013 Employment Law Update

New FMLA, Social Media and Health Care Rules

With the advent of another new year, it is time for employers to review recent changes in the employment laws, update their Employment Handbooks and policies, and prepare for coming changes in laws, particularly in the health care area, that are and will continue to affect them. 

This article will review some of the major changes in the laws of which employers need to be aware.  It certainly is not exhaustive and does not cover all changes.  It should be viewed as a means to “raise red flags” that need appropriate legal attention.

Much has happened at the Federal level that requires employer attention. 

  • The Family Medical Leave Act (FMLA).  There have been many changes to the FMLA regulations.  The U. S. Department of Labor has issued its so-called “Final” FMLA regulations.  The Final regulations amend definitions of terms and expand employee eligibility and entitlement to FMLA leave.  Employers subject to the FMLA absolutely must review and revise their FMLA policies to comply with the Final regulations.  A listing of the major changes is contained near the end of this article.
  • Social Media Policies must be reviewed and revised in light of guidance from General Counsel to the National Labor Relations Board (NLRB) to avoid Unfair Labor Practice Charges (ULP).  This applies whether the employer is unionized or not.
    • Under the National Labor Relations Act (NLRA) two or more employees have the right to engage in “protected concerted action” against their employer to act together to try to improve their pay and working conditions or fix job-related problems, even if they aren’t in a union.
      • Many employers have social media policies that prevent employees from communicating via social media about their employer, other employees, or criticizing members of their employer’s management.
      • In the past year, more than sixty (60) opinions have been filed by General Counsel for the National Labor Relations Board (NLRB) regarding social media policies which violate employee’s rights under the NLRA.
      • Policies that flatly prevent or prohibit an employee from discussing working conditions or criticizing management in social media, such as Facebook and Twitter, may result in Unfair Labor Practice (ULP) charges as such a policy prevents the employees from engaging in protected concerted action.
      • Even when the employer has not enforced the policy, the existence of the policy alone may result in an ULP charge.
    • Fortunately, the NLRB has published guidance on Social Media Policies that will be acceptable and not violate the employee’s rights to engage in concerted protected action.
      • The guidance should be closely followed by employers when modifying their social media policies.
      • Assistance in reviewing and revising your social media policy is available from the author.
  • New Health Care Flexible Spending Account (Health FSA) Limits – For calendar year 2013, the limit on Employee contributions of pretax dollars to their Health FSA is limited to $2,500.  In future years the $2,500 limit will automatically be adjusted for the cost of living. 
    • The 2013 $2,500 limit does not include any Employer matching contributions. 
    • The 2013 $2,500 limit is on contributions made in calendar year 2013, not on reimbursements made from a Health FSA in 2013.  Thus amounts contributed in 2012, but not paid out until 2013 will not count against the $2,500 limit. 
    • Plans must be amended by December 31, 2014; however, the $2,500 limit will be effective in 2013, whether the plan is amended or not.
    • Assistance in amending your plan to comply with the law is available from the author.
  • Health Care “Play or Pay Rules”  On January 1, 2014, employers with more than fifty (50) full time employees will become subject to the new “Play or Pay” mandate under the Affordable Care Act.  In other words, starting in 2014, the employer must “Play;” that is, offer appropriate health care coverage to its full-time employees or “Pay” a penalty for not doing so.   

There has been much talk in the press about companies that will attempt to avoid the Play or Pay mandate by reducing employee hours to no more than twenty-nine (29) per week.  However, will such a tactic work to avoid the mandate?  Not necessarily, but it may avoid the $2,000 per employee annual penalty for not providing coverage.

  • The 50-employee threshold will be determined by the number of Full Time Employees (FTE) the employer employs each month in 2013 added to the number of Full Time Equivalent Employees (FTEE).  If the sum is over 50, the employer will be subject to the Pay or Play rules.
    • To determine the number of FTE employees, the employer should count the number of employees who work an average of 30 hours or more per week during the month. 
    • To determine the number of FTEE employees, for employees who average less than 30 hours per week, add the total number of hours worked by all such employees and divide the sum by 120.  The resulting number with be the number of FTEE employees. 
    • Add the number of FTE employees to the number of FTEE employees.  If the resulting number is 50 or more, the employer is subject to the Pay or Pay mandate.
  • Only FTE employees (not FTEEs) are counted to determine if there will be a $2,000 per employee penalty.
    • There is no penalty under the Play or Pay mandate if the employer does not provide appropriate health care coverage (defined as “affordable Minimum Essential Coverage”) to its FTE employees and there are 30 or less FTE employees.
    • Thus many small businesses may be able to avoid the $2,000 per FTE employee penalty in 2014 if they do appropriate staffing planning in 2013.
  • As the rules are complex, and do not allow an employer to simply reduce employee hours starting in 2014, employers who have concerns should consult with their health care or legal professionals.  Employers may consult with the author if they desire additional information.

Proposed prohibition on enforcement of non-competes by Minnesota employers.  At the state level, changes are also being proposed.  The most significant proposed change is a bill that would, if passed and signed into law, make most non-compete agreements unenforceable.  Overbroad non-competes that do not protect a legitimate business interest of the employer are generally not enforceable regardless of whether this legislation passes.  Employers need to insure they have in place appropriate non-solicit, confidentiality, and non-raiding agreements and policies.  Assistance in reviewing your agreements and policies can be obtained from the author.

 

CHANGES TO FMLA BY FINAL REGULATIONS

The FMLA generally applies to Employers that employ fifty (50) or more employees during twenty (20) or more calendar weeks in a calendar year within 75 miles of the worksite of an employee who desires to take FMLA leave. 

In general, an employee may obtain FMLA leave for the birth or adoption of a child or for serious health condition of the employee, the employee’s spouse, son, daughter, or parent.  In addition, FMLA leave is available when an employee’s spouse, son, daughter, or parent is on active duty and has been notified or received orders to active duty.  Similarly an employee may be entitled to FMLA leave for a service member, who is a son, daughter, spouse, parent or next of kin, has a serious injury or illness and it is necessary for the employee to care for a servicemember. 

Prior to the Final FMLA regulations, an eligible employee could receive FMLA leave if the employee:

  1. Had been employed for at least twelve (12) months; and
  2. Had been employed for at least 1250 hours during the twelve (12) month period immediately before the start of FMLA leave. 
    1. The 12 months of employment need not be consecutive but could be counted if there was a break of service of less than seven (7) years. 

The US Department of Labor has now published FMLA Final Regulations effective March 8, 2013 that changes many of the eligibility rules.  The Final Regulations expand employees’ rights to take FMLA leave.

A good introduction to the major changes in the FMLA Final Regulations can be found in the US Department of Labor’s publication of a side by side comparison of the Final Regulations to the previous Regulations.  This comparison can be found at: http://www.dol.gov/whd/fmla/2013rule/comparison.htm

Employers subject to the FMLA must review their current FMLA policies to insure compliance with the 2013 Final regulations.  In all cases, changes to their FMLA policies will be required.  Assistance in amending or changing your current FMLA policy may be obtained from the author.

In general, the major changes in the FMLA rules include:

  • A new category of FMLA leave for employees to care for the serious health condition of a parent of a military member;
  • The expansion of the amount of an employee’s leave entitlement for Rest and Recuperation leave from five (5) calendar days to fifteen (15);
  • The expansion of Servicemember leaves to include care for the serious medical condition of an “eligible veteran.”  Generally, an “eligible veteran” will be a former servicemember, who was released from active military duty within the last five years, but not counting the period of time between October 28, 2009 and March 9, 2013;
  • The Expansion of Servicemember Leave to include serious injuries or illnesses aggravated (not solely caused) by active duty military service;
  • New or revised documentation to certify eligibility for FMLA;
  • The expansion of the Employer’s right to require second or third opinions from health care providers who are not affiliated with the military or its health care providers;
  • The counting of an employee’s time in military service as “time worked” for the employer to qualify the employee for FMLA leave;
  • The counting of FMLA leave as “time worked” for the employer;
  • New recordkeeping requirements that obligate the Employer to comply with the Genetic Information Nondisclosure Act (GINA).

As the FMLA rules changes are now effective, employers must revise their current FMLA policies if they have not already done so.  Employees may obtain assistance from the author to amend their policies.

 

SUMMARY

Employment laws and rules continue to become more complex for employers.  This article has attempted to highlight some “red flags” for employers caused by recent changes in the laws and regulations.  It is, by no means, a complete listing or explanation of any of the recent changes.  Employers should consult with their employment law representatives for specific advice to fit their specific situation.  The author is available to consult with employers.

 

By: Donald C. Erickson, MSBA Certified Labor and Employment Law Specialist, Fryberger, Buchanan, Smith and Frederick, P.A., 302 West Superior Street, Suite 700, Duluth, MN 55802, derickson@fryberger.com, Direct Line: 218-725-6852  Mobile 218-391-0145

 Published by: Business North, January 2013.