By: Donald C. Erickson, Senior Counsel,
Fryberger, Buchanan, Smith & Frederick, P.A.,
Certified Labor and Employment Law Specialist by the Minnesota State Bar Association
As we move into another new year, employers face increased and new workplace challenges to stay abreast of the ever-changing employment laws, to avoid the costs of non-compliance, including working time lost due to the need to investigate or litigate claims, and to avoid fines, criminal penalties and harm to its business reputation. This article will set forth the issues for which employers continue to seek legal guidance and assistance.
Employment Applications: “Ban the Box” Fines
The “ban the box” law is a law that delays an employer’s right to ask an applicant about his or her criminal history until the employee is selected for an interview, or if there is no interview, until a conditional offer of employment has been made. In short, an applicant cannot be asked about criminal history on an employment application. The law does not apply to occupations, such as law enforcement and health care where the employer is required to conduct a background investigation.
The reason for the law was to allow candidates for employment to be considered for employment prior to disclosing criminal records. Allowing such inquiries on an application had a disparate impact upon minorities.
The Minnesota law became effective on January 1, 2014. During 2014, the Commissioner of the Minnesota Human Rights Department issued warnings to employers whose applications violated the law. However, in 2015 the Commissioner will impose fines for applications that violate the law. The amount of the fine will depend on the size of the employer:
10 of fewer employees: $100 per violation, not to exceed $100 per calendar month
11 to 20 employees: $500 per violation, not to exceed $500 per calendar month;
More than 20 employees: $500 per violation, not to exceed $2,000 per calendar month.
Employers should check their application forms, including their online application form, to make sure it does not violate the law. In connection with the check, employers should seek guidance to insure their applications also comply with EEOC guidance on the consideration of criminal violations and compliance with Minnesota and federal background check requirements.
Affordable Care Act: Employer Mandate
On January 1, 2015, the employer mandate, also known as the “pay or play mandate” became effective under the Affordable Care Act (“ACA”) for certain “large” employers. In 2015, employers with 100 or more employees must offer affordable and adequate health coverage that provides minimum value to at least 70% of its “full time” employees or pay a penalty if at least one employee acquires coverage through a health care exchange. A full time employee is defined under the ACA, as one who works at least 30 hours per week.
In 2016, the employer mandate will apply to require employers with 50 or more employees to offer coverage to 95% of its employees who work more than 30 hours per week.
Coverage is considered “affordable” if the employee’s required contribution to the plan does not exceed 9.5% of the employee’s W-2 income. Coverage is considered “adequate” if it covers at least least 60% of the health care costs.
We continue to get many questions from employers with less than 50 employees regarding whether they are required to offer health care coverage. The answer is that they do not under the ACA and in general, are not required to offer health care coverage unless it is required by a collective bargaining agreement or an employment contract.
We also get many questions regarding whether the penalties for failing to provide coverage start with the very first employee to whom coverage is not offered. They do not. In general, there is no penalty under the ACA for the first 30 failures to offer coverage.
Employers also continue to ask if they can avoid the requirement to offer coverage by cutting it full time employees so they are working less than 30 hours per week. The answer is no. In 2015, an employer will be required to certify that it has not reduced its workforce to drop under the 100 employee threshold, reduced work hours or materially changed or reduced benefits under an existing health plan.
The decision to “pay or play” is complex and goes beyond comparing the cost of the penalty to the cost of providing coverage. There are also numerous tax considerations that must be taken into account. In addition to cost, an employer must consider other non-legal factors such as the business culture it desires to create, employee morale and competitiveness to keep or attract new employees.
As this explanation greatly simplifies a very complex law, employers with specific questions should contact their employment counsel. In general, we have found that the insurers and their local agents are referring employers to the employer’s counsel for answers.
Protection of Company and Employee Privacy
With the increased use of computers, email, the internet, smart phones and other mobile devices, employers are facing new challenges to protect their confidential and proprietary information, trade secrets, financial information and employee information.
In Wisconsin, but not yet in Minnesota, employers are prohibited from requesting or requiring employees to provide the employer passwords for the employee’s social media accounts. Under the Wisconsin law, employees remain prohibited from unauthorized transfers of the employer’s confidential and proprietary information and financial information to personal devices. During an investigation of whether an unauthorized transfer has occurred, Wisconsin employers generally have the right to view the employee’s devices.
In Minnesota, the advice of counsel should be sought before attempting to obtain employee passwords to social media accounts. Access to employee social media accounts may result in the employer obtaining protected status information that could later lead to discrimination claims against the employer if the employer takes employment action based on the information. In other words, obtaining passwords may cause other legal problems and challenges for the employer.
While employees have common law duties of loyalty and confidentiality, employers should, with the assistance and advice of their employment law attorney, examine their confidentiality, social media, Internet, and use of electronic device policies. In addition, employers would be well advised to also examine their confidentiality agreements and employment agreements to insure that they have adequate and legally enforceable agreements in place to prohibit the taking of confidential, proprietary, financial and trade secret information.
If and when an employee with access to sensitive information separates from employment, employers should consider having a forensic copy made of the employee’s computer by a competent computer forensic expert. The forensic copy should be made before anyone else uses, or even turns on, the departed employee’s computer. This should not be done by the employer with its off the shelf software. Further information, in a specific situation, should be obtained from employment counsel. At this time, there is pending federal legislation to change the definition of “full time,” for purposes of the ACA, to 40 hours per week.