2015
EMPLOYMENT LAW UPDATE
What Every Employer Needs To Know
Today’s Agenda
1. Litigation Trends
2. Company Policies
•
•
•
•
Employee Handbooks
Dress Code
Discipline
Social Media
3. Wage & Salary (DOL)
•
•
•
Independent Contractors
Exempt and Non-Exempt
Meal & Rest Periods
4. Discrimination (DOJ)
•
•
•
ADA/FMLA/Workers’ Compensation
Fitness for Duty
Substance Abuse
5. Affordable Care Act
•
•
Myth v. Fact
Penalties for Non-Compliance
© 2015 The Weston Group
All Rights Reserved.
Today’s Speakers
Scott Leuning JD
Attorney
Patricia Dougherty RN SPHR
Managing Partner
Goosman Law Firm
The Weston Group
Offices in Sioux City IA and Sioux Falls SD
Practice focuses on medical malpractice
Practice focuses on HR support services for
defense, health law, employment law,
small to medium sized businesses. The Weston
and complex civil litigation. Also
Group provides on-site, online and unlimited
experienced in medical regulatory
phone/email access to businesses across the
matters, commercial litigation, and
US. The Weston Group assesses a company's
representing municipalities and school
practices and develops strategies and solutions
districts.
tailored to enhance organizational success.
© 2015 The Weston Group
All Rights Reserved.
Federal
Employment Law
ADA- Disability Discrimination
Affirmative Action
Age Discrimination
Class Actions
COBRA
Employee Benefits
FLSA & Wage & Hour
FMLA
Immigration
HIPAA
National Origin
OSHA
Race Discrimination
Religious Discrimination
Sex Discrimination
Sexual Harassment
WARN
© 2015 The Weston Group
All Rights Reserved.
Litigation Trends

61% of businesses expect to see a jump in the
number of litigation matters they will be
handling in 2015

Corporate counsels are embracing early case
assessment as a litigation management tool
© 2015 The Weston Group
All Rights Reserved.
Litigation Trends
EEOC Statistics
NATIONAL
Totals # of Claims Filed
2009 -93,205
2010 – 100,231
2011 – 111, 259
2012 – 99,507
2013 – 93,727
2014 – 88,778
Retaliation Cases (42% of total)

Texas consistently has the highest number of EEOC claims

Nationally: Settlement dollars have increased by 68% in
the last 10 years
© 2015 The Weston Group
All Rights Reserved.
Employment Discrimination Trends
• 60% increase in ADA cases from 2010-2012
• Discharge
• Reasonable accommodation
• Harassment
• Discipline
• Title VII and ADEA remain stable
• Discharges
• Sexual harassment
• Discipline
• Intimidation
• Hiring
Department of Justice Issues
© 2015 The Weston Group
All Rights Reserved.
Historical South Dakota Charges
80
70
95% Increase since 2009
60
2009
50
2010
40
2011
30
2012
2013
20
2014
10
0
© 2015 The Weston Group
All Rights Reserved.
Top Five Litigation Risks
#1 Misclassification of Independent Contractors**
#2 Wage & Hour Violations**
#3 Gender & Race Discrimination*
#4 Americans with Disabilities Act*
#5 Family & Medical Leave**
* Discrimination cases – DOJ
** Department of Labor issues
© 2015 The Weston Group
All Rights Reserved.
Goosmann Law Firm’s
Guide to Employee Handbooks:
What Every Employer Needs to Know
SCOTT LEUNING
101 South Reid Street, Suite 307
Sioux Falls, SD 57103
(605) 371-2000
Scott@Goosmannlaw.com
AGENDA

Overview of Employee Handbooks.

Key Elements to Include in Your Handbook

Questions
DO I REALLY NEED A HANDBOOK?

Unless You Have No Employees, the Answer Is YES.
◦ Your handbook provides a blue print for your vision.
◦ Your handbook sets forth your expectations for employees.

Your Handbook Helps Reduce the Possibility of
Litigation
◦ Addressing workplace discrimination
◦ Addressing leave issues
◦ Addressing

Having a Handbook Makes Your Life Easier
CONTENTS OF AN EMPLOYEE
HANDBOOK
Company Overview and
Vision
 At-Will Employment
Statement
 Workplace Commitments
 Company Policies &
Procedures
 Employment Classification

Attendance Policies
 Leave Policies
 Work Performance
 Discipline Policy
 Employee Health & Safety
 Benefits
 Acknowledgement of
Receipt

COMPANY OVERVIEW & VISION
 This section should provide your employees
with general history and background about
your company.
 If you have a vision or mission statement
place it in this section.
PURPOSE OF THE HANDBOOK

Handbook has been prepared to inform new employees of the
policies and procedures of this company.

The handbook is not all-inclusive nor intended to provide
strict interpretations of policies.

The handbook offers an overview of work environment.

The handbook is not a contract, either expressed or implied,
guaranteeing employment.

Company reserves the right to unilaterally revise, revoke,
terminate or change any policies.

This handbook replaces any and all previous handbooks.
AT-WILL EMPLOYMENT

Employment at this company is at-will.

Employment relationship can be terminated at any time, with
or without reason or notice by either the employer or the
employee.

At-will employment relationship exists regardless of any
statements by the office personnel to the contrary.

At-will nature of this employment relationship can only be
modified in writing.
EQUAL OPPORTUNITY EMPLOYMENT

Establish that company is an equal opportunity employer.

No unlawful discrimination against employees or applicants on basis
of race, color, religion, creed, sex, national origin, age, disability,
marital status, veteran status, or any other status protected by
applicable law.

Note that reasonable accommodations will be made for qualified
individuals with disabilities to the extent required by law.
NON-HARASSMENT/NONDISCRIMINATION POLICY

Include a section that outlines your company’s nonharassment policies.

Include instructions as to how to report harassment
and who to report it to.

Follow the policy once it is implemented, including
promptly investigating claims made by employee.
COMPANY POLICIES AND PROCEDURES

Professional Conduct.

Dress Code.

Pay Periods.

Company Property.

Social Media.

Privacy.

Personnel Files.
PROFESSIONAL CONDUCT

Include a general statement about employees being
respectful and courteous.

Statement
that
general
cooperation
between
coworkers and supervisors is expected.

Individuals who act in an unprofessional manner may
be subject to disciplinary action.
DRESS CODE

If your employees deal extensively with the public
you may want a dress code.

Factors to consider:
1)
2)
3)
4)
5)
Your business’s public image
Nature of the work performed by employees
Safety standards
Employee privacy interests
Whether the dress code will create morale problems
DRESS CODES AND THE LAW

Your dress code cannot treat some employees less
favorably because of their national origin.

If dress code conflicts with an employees’ religious
practices
and
the
employee
requests
an
accommodation, employer must modify the dress
code or permit an exception unless is causes undue
hardship.

Dress codes must be modified to accommodate a
disability.
DRESS CODES AND THE LAW

Employers can require employees to remove piercings or
cover body art.
(Such policies must be uniform for
gender)

Under the law an employee has no legal right to show
body art in the workplace that isn’t considered a
religious or racial expression.

Dress code policies must target all employees
PAY PERIODS

This is the section every employee with read!

Include information as to who to contact if there is a
mistake in pay calculation.

Address whether advances will be permitted.

Address issue of lost or misplaced checks.
COMPANY PROPERTY

Specify how company equipment will be treated.

In your policy “business use only?”

Company vehicles—off-duty use, other drivers, etc.

Computers/Phones:
internet use, downloading software,
etc.

Remind employees that they should have no expectation of
privacy in their use of company computers or other
electronic equipment.
SOCIAL MEDIA
 You cannot ignore social media.
 If
you don’t have a social media policy,
you need one in your handbook.
SOCIAL MEDIA DEMOGRAPHICS

72% of all internet users are active on social media

71% of users access social media with mobile device

18-29 year olds have 89% usage

30-49 year olds have 72% usage

50-59 year olds have 60% usage

23% of Facebook users login at least 5 times per day
SOCIAL MEDIA POLICIES

The reality is that your employees probably access
social media during work hours.

If not, they are probably talking about your business
at times on social media.

How do you address this issue?
SOCIAL MEDIA/NLRB RULINGS

You cannot broadly ban employees from exercising
their right to communicate with each other with the
aim of improving wages, benefits, working
conditions.

You can prohibit vulgar, obscene, threatening or
harassing activity.

You can also prohibit employees from disclosing
confidential and/or proprietary information.
CONTENTS OF A SOCIAL MEDIA POLICY
R*E*S*P*E*C*T







Responsibility
Etiquette
Selectivity
Privacy
Efficiency
Confidentiality
Transparency
RESPONSIBILITY
Employees must be responsible about:
1)
The content they post
2)
The audience their posts reach
3)
The potential effects of an improper post
ETIQUETTE

Not all social media posts are absolutely
protected by law.

An employee who uses social media to harass,
intimidate or bully other employees violates the
employer’s legal requirement to maintain a
workplace free of harassment and
discrimination.

Your social media policy must convey that such
behavior will not be tolerated.
SELECTIVITY

Employee posts about company products should be
posted with caution.

Decisions about when to respond, and what to say,
about criticisms made against your company, need
to be made at the corporate level and that should
be spelled out in your social media policy.
PRIVACY
Your social media policy should prohibit
employees from disclosing private matters such
as:
 Medical issues
 Leaves of absence
 Identifying information about employees,
including Social Security Numbers, and dates
of birth.
EFFICIENCY
Employees may occasionally use social media at
work, but it must not affect workplace expectations
regarding employee performance.
CONFIDENTIALITY
Company confidentiality applies to social media.
Confidential nonpublic information, business plans,
pricing models, attorney-client privileged documents,
etc. should not be disclosed on social media.
TRANSPARENCY
Employer posts on social media must be transparent
and honest.
Positive comments about business products/services
must be accurate.
You cannot pay people for positive posts (Samsung)
PRIVACY

Be explicit as to the level of privacy expected in
workplace.

Specify that company retains access to all company
property, including computers, desks, file cabinets,
storage facilities.

Employees should know they should not expect privacy
when on company grounds or when using company
property.
PERSONNEL FILES

No statutory provision in South Dakota.

You may want to establish a policy allowing employees
access to their personnel file upon request.

You should have a policy that employees must promptly
notify company of any changes of address, marital
status, number of dependents, emergency contact, etc.
EMPLOYMENT CLASSIFICATION

Exempt employees.

Non-exempt employees

Part-time vs. Full-time employees.
ATTENDANCE POLICIES

General statement regarding hours of operation.

Tardiness and Breaks

Leave policies:
◦ Vacation.
◦ Sick Leave
◦ Family Medical Leave Act/Leave of Absence

Holidays

Jury Time

Military Leave
Work Performance

Expectations

Reviews

Insubordination
DISCIPLINE POLICY

General Statement:
The company reserves the right to discipline and/or
terminate any employee who violates company
policies or rules of conduct. Poor performance and
misconduct are also grounds for discipline or
termination.
DISCIPLINE POLICY (cont.)

List of actions considered unacceptable and
considered grounds for discipline….
If you include a list, ALWAYS include saving language:
“This list is not comprehensive; rather, it is meant
merely as an example of the types of conduct that this
company does not tolerate. These actions include, but
are not limited to:
DISCIPLINE POLICY (cont.)

Progressive Discipline Language:
Be careful about setting up progressive stages of
discipline, this could be interpreted as being binding
because you are guaranteeing certain steps to be
taken for discipline.
Progressive discipline may defeat your at-will
employment status.
TERMINATION

Reiterate that employment is on an at-will basis.

Set out what happens upon termination:
◦ Continue to work until last scheduled day of
employment;
◦ Turn in all reports and paperwork required by employer;
◦ Return all files, company property and equipment;
◦ Turn in all passwords to supervisors;
◦ Participate in an exit interview.
EMPLOYEE HEALTH AND SAFETY
◦ 2013: 4,405 workplace fatalities
(12 per
day on average)
◦ 2013: 2.9 million
injuries at work
accident-related
EMPLOYEE HEALTH AND SAFETY

Accident Prevention

Training on any Equipment

Maintaining a Safe Work Area

Protective Equipment

Procedure for Reporting Unsafe Conditions
EMPLOYEE SECURITY
1)
Workplace homicide is leading cause of death among
female workers in U.S.
2)
2011: 780 workplace fatalities due to violence
(homicides and suicides)
3)
Shootings account for 78% of workplace homicides
4)
Disgruntled employees/Domestic Violence
EMPLOYEE SECURITY POLICIES
1)
Security badge system
2)
No unescorted guests
3)
When employees are terminated or laid off be
sure to get their badge
4)
Surveillance cameras
5)
Adequate lighting if you have night shift
EMPLOYEE BENEFITS

Health Insurance

Retirement Plan

Workers’ Compensation

Disability Coverage
EMPLOYEE BENEFITS
Sample Disclaimer Language:
This handbook contains descriptions of some of
our current employee benefits. Many of the
company’s benefit plans are described in more
formal plan documents available from [insert
name/title]. In the event of any inconsistencies
between this handbook or any other oral or written
description of benefits and a formal plan document,
the formal plan document will govern.
TERMINATION

Situations may arise where an employee decides to quit.

Request that employee provide two weeks notice.

This notice does not alter at-will employment.

Terminating employees are required to turn in all
company property.

Failure to turn in company property may result in
withholding final paycheck.
TERMINATION

Include information regarding final paycheck.

COBRA benefits

Exit interview
◦ Complete necessary forms
◦ Collect company property
◦ Discuss employment experiences with company
ACKNOWLEDGEMENT OF RECEIPT
Be sure to have employee sign and date, as well
as the employee’s supervisor or other
authorized person.
Questions?
Short Break
Top Five Risks
#1 Misclassification of Workers as
INDEPENDENT CONTRACTORS
• Civil penalties against an employer of up to $1,000 per
misclassified employee for a first violation and up to $2,500
per misclassified employee for each subsequent violation
• Misclassification of employees as independent contractors
can result in substantial liability and penalties for, among
other things, back taxes, overtime pay, workers
compensation, employee health benefits, and retirement
benefits
© 2015 The Weston Group
All Rights Reserved.
Top Five Risks
#2 WAGE & HOUR VIOLATIONS
•The Fair Labor Standards Act (FLSA) sets minimum wage
and overtime pay standards for employment.
•The Act also gives the U.S. Department of Labor's (DOL) Wage
Hour Division (WHD) the authority to investigate and gather
data regarding the wages and hours of employment for entities
subject to the requirements of the Act.
• Employers that violate minimum wage or overtime pay
provisions may have to pay back wages and penalties.
•Recent settlements:
•AT&T = $1 Billion
•Walmart = $40 Million (in Massachusetts alone!)
© 2015 The Weston Group
All Rights Reserved.
Top Five Risks
#2 WAGE & HOUR VIOLATIONS
•
Just over 40% had deductions illegally taken from their
paycheck (for breakage or to pay for tools or other items
required for work, for example)
•
Exempt vs. Non-Exempt – HUGE
•
The DOL has added 250 new investigators and damages/
attorney’s fees will be doubled for “willingly and knowing”
violations
© 2015 The Weston Group
All Rights Reserved.
Nonexempt and Exempt

Nonexempt employees
-Hourly

Exempt employees
-$455/week
-Cannot be subject
to reduction because of
variations in the quality or
quantity of work
-Docking issues
WHO DETERMINES
CLASSIFICATION?
© 2015 The Weston Group
All Rights Reserved.
What Hours Count?
Employees must be paid for
work “suffered or permitted”
by the employer even if the
employer does not specifically
authorize the work.
 If the employer “knows or has
reason to believe” that work is
occurring, the employee must
be paid for the hours—even if
off-site or off-shift.

MANAGE THE ISSUE
© 2015 The Weston Group
All Rights Reserved.
Rest Periods
◦ Meals
 Required under FLSA?
 30 minutes UNINTERRUPTED
 Automatic deductions
◦ Work breaks
 5-20 minutes
 Not a guarantee
◦ Sleep time
© 2015 The Weston Group
All Rights Reserved.
Top Five Risks
#3 GENDER & RACE DISCRIMINATION
Sexual Harassment in the Workplace: It's Not Always
What You Think
 Male – Female
 Female – Male
From 1990 to 2009, the percentage of sexual
harassment claims filed by men has doubled from 8
percent to 16 percent of all claims, according to the
Equal Employment Opportunity Commission.
 Same sex harassment
Most often settlements
EEOC states these are also on the rise
© 2015 The Weston Group
All Rights Reserved.
Top Five Risks
#3 GENDER & RACE DISCRIMINATION
Sexual Harassment in the Workplace: It's Not Always
What You Think
 The perpetrator does not have to be part of the same
company as the victim.
 Any party acting as an agent of the employer such
as a real estate agent or consultant can be a
perpetrator in a harassment claim.
 In addition, a harasser could be a delivery person
from another company.
 The company who sent the delivery person could be
held accountable for the harassment.
© 2015 The Weston Group
All Rights Reserved.
Top Five Risks
#3 GENDER & RACE DISCRIMINATION
Sexual Harassment in the Workplace: It's Not Always
What You Think
 The victim does not have to suffer economic or job
related injury to file a harassment claim.
 Hostile work environment harassment is harassment that
typically must be intentional, severe, recurring and
pervasive, and interfere with an employee's ability to
perform his or her job
 Work Place Romance…..
© 2015 The Weston Group
All Rights Reserved.
Top Five Risks
#3 GENDER & RACE DISCRIMINATION
WORKPLACE ROMANCE
 In a survey by CareerBuilder.com in 2009, 40% of
respondents revealed that they have dated a
coworker
 When can consensual sex create a hostile workplace
environment?
 Sexual favoritism
 California Supreme Court held that "when
such sexual favoritism in a workplace is
sufficiently widespread it may create an
actionable hostile work environment”
© 2015 The Weston Group
All Rights Reserved.
Top Five Risks
#4 Americans with Disabilities Act
• The ADAAA, which took effect in January
2009, makes it significantly easier for a
plaintiff to establish that he or she is
disabled under the ADA
• While the ADAAA retains the ADA’s definition
of “disability” as a substantial limitation of a
major life activity, it stipulates that its
meaning “shall be construed in favor of
broad coverage of individuals
© 2015 The Weston Group
All Rights Reserved.
Top Five Risks
#4 Almost everyone is covered by ADAAA
• More people with disabilities filed charges of
discrimination against their employers last year
than at any other time in the 20-year history of
the Americans with Disabilities Act
• USA Today: The number of ADA charges filed in
2009 hit an all time high with almost 21,500
ADA related charges being filed with the EEOC
© 2015 The Weston Group
All Rights Reserved.
Defining Disability
◦ Physical or mental
impairment that
substantially limits a
major life activity
◦ Record of impairment
◦ Regarded as having an
impairment
© 2015 The Weston Group
All Rights Reserved.
Defining Disability

(cont.)
Covered:
◦
◦
◦
◦
◦
◦
◦
AIDS or HIV virus
Epilepsy
Learning disability
Limited or no use of limbs
Mental retardation
Paralysis
Hearing, vision, or speech impairment
© 2015 The Weston Group
All Rights Reserved.
Defining Disability

(cont.)
Not covered:
◦ Impairments of short duration
◦ Temporary impairments
◦ Illegal drug use
© 2015 The Weston Group
All Rights Reserved.
ADA and Addictions
◦ Alcoholism covered (not while on duty!)
◦ Current use of illegal drugs not covered
◦ Other addictions not covered
 Gambling
 Sex Addict
 Etc.
© 2015 The Weston Group
All Rights Reserved.
Basic Statutory Obligations
◦ We may not
discriminate based on
disabilities
◦ We must make
reasonable
accommodations
◦ We may hire the best
qualified applicant
© 2015 The Weston Group
All Rights Reserved.
Reasonable Accommodation
◦ Changes that allow
a qualified individual
to do the job
◦ Reassignment to
light duty
© 2015 The Weston Group
All Rights Reserved.
Medical Information
◦ All medical
information must be
kept strictly
confidential
© 2015 The Weston Group
All Rights Reserved.
Job Interviews

Don’t ask about the:
◦ Existence of a
disability
◦ Nature of a disability
◦ Severity of a
disability
© 2015 The Weston Group
All Rights Reserved.
Job Interviews

(cont.)
Only ask about reasonable
accommodation when:
◦ Describing the hiring process
◦ Disability is obvious or disclosed
◦ Describing or demonstrating how
the job is performed
© 2015 The Weston Group
All Rights Reserved.
After the Job Offer
◦ Post-offer inquiries
about
accommodation
are allowed
◦ Pre-employment
physicals may be
allowed
◦ Medical exams may
be requested
© 2015 The Weston Group
All Rights Reserved.
Medical Certification & Exams
◦ Reasonable medical
records may be
requested—not all
medical records
◦ Medical exams may
be requested when
documentation is
insufficient
© 2015 The Weston Group
All Rights Reserved.
Direct Threat
◦ Employee with disability poses a significant risk
of substantial harm in the workplace
◦ We are not required to accommodate
◦ We must determine direct threat
© 2015 The Weston Group
All Rights Reserved.
Top Five Risks
#5 FAMILY & MEDICAL LEAVE
• According to WorldAtWork.org, claims related to FMLA
have increased by more than 10 percent this year
• More people in the United States are becoming aware
of their rights under FMLA or perhaps less companies
want to provide family medical leave protection to
workers in such tough economic times.
© 2015 The Weston Group
All Rights Reserved.
Top Five Risks
#5 FAMILY & MEDICAL LEAVE
The top reasons for FMLA leave:
• Personal illness or injury
• Care for a child
• Care for an elderly relative.
• Time off for pregnancy
• Time off for the adoption of a child or birth of a child
• Care for a recently injured military member
© 2015 The Weston Group
All Rights Reserved.
Top Five Risks
#5 FAMILY & MEDICAL LEAVE
Most important to remember:
•
•
•
•
•
•
•
•
•
Determine if employee is eligible
Make employee aware of eligibility
Start the paperwork process
Be sure you get completed paperwork
Access resources if you don’t understand the condition
Track utilization if intermittent
Get re-certification if needed
Track exhaustion of leave
BE CONSISTENT!
© 2015 The Weston Group
All Rights Reserved.
For the Birth or Placement of a Child

Both the mother and father are entitled to FMLA
leave for the birth or placement of the child
and/or to be with the healthy child after the birth
or placement (bonding time)

Employees may take FMLA leave before the
actual birth, placement or adoption

Leave must be completed by the end of the 12month period beginning on the date of the birth
or placement
© 2015 The Weston Group
All Rights Reserved.
85
Serious Health Condition
Illness, injury, impairment or physical or
mental condition involving:
• Inpatient Care, or
• Continuing Treatment by a Health Care Provider
• Does not need to be an MD
• An overnight stay in a hospital, hospice, or
residential medical facility
• Includes any related incapacity or subsequent
treatment
© 2015 The Weston Group
All Rights Reserved.
86
Amount of Leave
•
Employee’s workweek is basis for entitlement
Eligible employees may take up to 12 workweeks*
of FMLA leave:
•
– for the birth or placement of a child for adoption or
foster care;
– to care for a spouse, son, daughter, or parent with
a serious health condition; and
– for the employee’s own serious health condition.
© 2015 The Weston Group
All Rights Reserved.
87
Intermittent Leave
•
Employee is entitled to take intermittent or
reduced schedule leave for:
– Employee’s or qualifying family member’s serious
health condition when the leave is medically necessary
– Covered service member’s serious injury or illness
when the leave is medically necessary
– A qualifying exigency arising out of a military
member’s covered active duty status
•
Leave to bond with a child after the birth or
placement must be taken as a continuous block
of leave unless the employer agrees to allow
intermittent or reduced schedule leave
© 2015 The Weston Group
All Rights Reserved.
88
12-Month Period
Method determined by employer
•
Calendar year
•
Any fixed 12-month leave year
•
A 12-month period measured forward
•
A rolling 12-month period measured backward
© 2015 The Weston Group
All Rights Reserved.
89
Employer Responsibilities

Provide notice

Maintain group health insurance

Restore the employee to same or equivalent job
and benefits

Maintain records
© 2015 The Weston Group
All Rights Reserved.
90
Job Restoration
•
Same or equivalent job
– equivalent pay
– equivalent benefits
– equivalent terms and conditions
•
Employee has no greater right to
reinstatement than had the employee
continued to work
•
Bonuses predicated on specified goal may
be denied if goal not met
© 2015 The Weston Group
All Rights Reserved.
91
Prohibited Employer Actions
Employers cannot:
• interfere with, restrain or deny employees’
FMLA rights
• discriminate or retaliate against an employee
for having exercised FMLA rights
• discharge or in any other way discriminate
against an employee because of involvement in
any proceeding related to FMLA
• use the taking of FMLA leave as a negative
factor in employment actions
© 2015 The Weston Group
All Rights Reserved.
92
Fitness for Duty
•
For an employee’s own serious health condition,
employers may require certification that the employee
is able to resume work
– Employer must have a uniformly-applied policy or practice
of requiring fitness-for-duty certification for all similarlysituated employees
•
If state or local law or collective bargaining
agreement is in place, it governs the return to work
•
Not permitted for intermittent or reduced schedule
leave unless reasonable safety concerns exist
•
Authentication and clarification
•
Employee responsible for any cost
© 2015 The Weston Group
All Rights Reserved.
93
Exhaustion of Leave

If the employee is not able to return to work at
expiration of available leave you may need to
determine if additional leave may be an
accommodation under the ADA.

Not all serious medical conditions are disabilities.

Put the employee on written notice that leave is
exhausted, and if they need an accommodation,
including additional leave, inform the employee what
steps will need to be taken.
◦ Initiate the interactive process.
© 2015 The Weston Group
All Rights Reserved.
94
Americans With Disabilities Act
Family & Medical Leave Act
Workers’ Compensation
“THE TORNADO”
© 2015 The Weston Group
All Rights Reserved.
ADA / FMLA / WC
ADA – 15+ Employees
Department of Justice
FMLA – 50+ employees
Department of Labor
WC
– 1+ Employee
Department of Labor
© 2015 The Weston Group
All Rights Reserved.
Easy Steps to Remember

Work related?

How many employees do you have?

How long has employee been here?

Chronic or just serious?
◦ Validate the diagnosis
If ADA, FMLA and WC,
GET HELP!!!
© 2015 The Weston Group
All Rights Reserved.
Common Mistakes Employers Make

Reactive rather than proactive

“Training does not produce revenue”

Improper termination
◦ Be sure to have a consistent corrective action policy

Assuming there is no strong basis for immediate
termination, giving at least one warning is important to
demonstrate fair treatment
Jurors LIKE employees
© 2015 The Weston Group
All Rights Reserved.
Common Mistakes Employers Make

Lack of quality documentation

Favoritism

False comfort
◦ Employment-at-will

Do the right thing!
© 2015 The Weston Group
All Rights Reserved.
Substance Abuse in the Workplace

Substance abuse in the workplace results in:
◦ Absenteeism
◦ Diminished productivity
◦ On-the-job injuries
◦ Potential company liability.
© 2015 The Weston Group
All Rights Reserved.
Substance Abuse in the Workplace

The annual cost of alcoholism and drug addiction
to U.S. businesses is approximately $120
billion, which is more than the productivity loss
due to heart disease, diabetes and stroke
combined!
© 2015 The Weston Group
All Rights Reserved.
Substance Abuse in the Workplace

Twelve percent of full-time employees acknowledged either
having used an illicit drug or having had five or more
drinks at a time five or more times, or both, in the
previous month.(1)
1 .Source: Substance Abuse and Mental Health Services Administration. The NHSDA Report. National
Household Survey on Drug Abuse.
© 2015 The Weston Group
All Rights Reserved.
Warning Signs of Substance Abuse

Typical warning signs of substance
abuse at work include:
Personal Appearance
disheveled appearance
unsteady gait
slurred speech
bloodshot or glazed eyes
odor of alcohol on breath.
© 2015 The Weston Group
All Rights Reserved.
Warning Signs of Substance Abuse

Typical warning signs of substance abuse
at work include:
Dependability
Monday/Friday absence pattern
increased tardiness or failure to call in
frequent absences from work area
missed deadlines
© 2015 The Weston Group
All Rights Reserved.
Warning Signs of Substance Abuse

Typical warning signs of substance abuse at work
include:
Declining Quality of Work
• Increased errors
• work frequently needs to be redone
• inability to understand
• follow through on complex assignments,
• inability to carry out instructions
• low productivity.
© 2015 The Weston Group
All Rights Reserved.
Warning Signs of Substance Abuse

Typical warning signs of substance abuse at work
include:
 Declining Attitude
• uncooperative; increased conflicts with co-workers and customers
• appears nervous
• Distracted
• quick to anger
• exhibits signs of paranoia such as blaming others.
© 2015 The Weston Group
All Rights Reserved.
Warning Signs of Substance Abuse

Typical warning signs of substance abuse
at work include:
Judgment
Illogical reasons for decisions
violates policies and procedures
takes inappropriate risk
inattentive to safety procedures.
© 2015 The Weston Group
All Rights Reserved.
Substance Abuse in the Workplace

NO ONE SIGN SHOULD BE TAKEN AS AN INDICATION
OF SUBSTANCE ABUSE.

Some or all signs could be indicative of a problem
and could constitute grounds for testing based upon
reasonable suspicion.

A supervisor needs to discuss his/her observations
with HR before approaching or confronting an
employee.
© 2015 The Weston Group
All Rights Reserved.
Supervisor Responsibility

Knowing AND communicating our policy

Tracking employee work performance

Documenting and discussing changes with employees

Discussing any suspicions of substance abuse with HR

Assisting with disciplinary action

Following up with a referral to the Employee
Assistance Plan.
© 2015 The Weston Group
All Rights Reserved.
Drug & Alcohol Policy

Review & discuss draft policy
© 2015 The Weston Group
All Rights Reserved.
Goosmann Law Firm’s Guide
to the Affordable Care Act:
How Does It Affect Small Businesses
SCOTT LEUNING
101 South Reid Street, Suite 307
Sioux Falls, SD 57103
(605) 371-2000
Scott@Goosmannlaw.com
QUESTIONS?
SHORT BREAK
AGENDA

Overview of Affordable Care Act.

Key Elements that Affect Small Businesses
◦ Businesses with less than 25 employees
◦ Businesses with less than 50 employees
◦ Businesses with more than 50 employees

Questions
OVERVIEW OF ACA

It’s been a law for five years.

It’s faced legal challenges

It’s faced political challenges

It’s still here…
AFFORDABLE CARE ACT:
MYTH v. FACT
Affordable Care Act: Myth v. Fact

Myth:
All employers are required to buy
health insurance for employees under the ACA.
Affordable Care Act: Myth v. Fact

Myth: All employers are required to buy health
insurance for employees under the ACA.

Fact: The ACA does not require businesses to
provide health insurance for their employees.
◦ 2015 businesses with 100 or more full-time employees or full-time
equivalent (FTE) employees that do not provide coverage to their full-time
employees may be subject to an Employer Shared Responsibility payment.
◦ In 2016 that threshold drops to companies with 50 or more full-time
employees or FTE employees.
◦ 96 percent of companies in United States have less than 50 employees and
therefore are not subject to the rules of the ACA.
Affordable Care Act: Myth v. Fact

Myth: Since my state hasn’t set up its own health
exchange, the health care law doesn’t apply to me.
Affordable Care Act: Myth v. Fact

Myth: Since my state hasn’t set up its own health
exchange, the health care law doesn’t apply to me.

Fact: Every state has a health insurance marketplace.
◦ The marketplace may be run by the state or federal
government, or a partnership of both.
◦ Insurance plans in the Marketplace are offered by private
companies and all plans will cover the same core set of
benefits, called Essential Health Benefits.
◦ No plan can turn you or your employees away because of a
medical condition.
Affordable Care Act: Myth v. Fact

Myth: The Affordable Care Act is causing health
insurance rates to rise.
Affordable Care Act: Myth v. Fact

Myth: The Affordable Care Act is causing health
insurance rates to rise.

Fact: ACA contains a number of provisions to
slow health care costs.
◦ Insurance companies must publicly disclose & justify
premium rate hikes of 10% or more.
◦ Insurers must spend 80% of premium costs on medical
care. (must refund the difference if they don’t).
◦ Since ACA passed premiums have grown at less than 5%
annually. In 2014 that rate was 1.7%.
HEALTH INSURANCE PREMIUMS UNDER
AFFORDABLE CARE ACT
Before the Affordable Care Act (ACA), small
businesses paid on average 18% more in
premiums than their larger competitors for the
same benefits. The ACA helps small employers
by lowering premium cost growth and
increasing access to quality, affordable health
insurance.
REDUCTION OF PREMIUM GROWTH
RATE
Before ACA:




Fewer choices
Higher premiums and
unpredictable rate increases
Higher rates for groups with
women, older workers & those
with chronic health concerns
Waiting periods or no coverage
for pre-existing conditions.
Under ACA ins. companies:







Must spend 80% of premiums
on actual medical care
Must disclose and justify rate
hikes of 10% or more
Can’t charge higher rates or
deny coverage because of preexisting conditions
Can’t charge higher rates for
women or older employees
Must pool risks across small
groups
No annual limits on coverage
Must provide core package of
“essential health benefits”
ACA MAKING A DIFFERENCE

6.6 million young adults have coverage through parents’ plans.

17 million children cannot be denied coverage due to preexisting conditions.

15 million Americans cannot be dropped by their insurance
companies.

6.1 million seniors saved over $5.7 billion in prescription
drugs.

Use of electronic records has increased.
HOW WILL ACA IMPACT
SMALL EMPLOYERS?
24 or
fewer
HOW WILL ACA IMPACT SMALL
EMPLOYERS?
Number of
Full-Time
Equivalent
(FTE)
employees
50 and
above
It depends on size of
employer.
Up to 50
How many employees
does the employer
have?
CALCULATING NUMBER OF FTEs IN YOUR BUSINESS

Use the most recent year.

Exclude seasonal employees (those who
work less than 120 days a year).

Count the number of people who worked an
average of 30 or more hours per week.

Add to this amount the number of hours
worked per week by non-full time employees
and divide by 30.
CALCULATING NUMBER OF FTEs IN YOUR BUSINESS
Mike owns a business with 20 employees. He has:
15 employees working average of 40 hours/week
 2 employees working average of 15 hours/week
 1 employee working average of 25 hours/week
 2 employees working average of 27 hours/week

Full time employees = 15
Non full-time hours (15+15+25+27+27) ÷ 30 = 3.6
(always round down for FTEs) 3
Mike has 18 FTEs
24 OR FEWER EMPLOYEES:
SMALL BUSINESS HEALTH
CARE TAX CREDIT
24 or
fewer
EMPLOYERS WITH 24 OR
FEWER FTE EMPLOYEES
May qualify for tax credit
to offset costs:
Number of
Full-Time
Equivalent
(FTE)
employees
50 and
above
Up to 50
•
Average annual wages
below $50,000, and
•
Contribute uniform
50% or more toward
employees’ self-only
premium costs
Maximum tax credit
employers with 10 or
fewer FTE and average
annual wages less than
$25,000.
SMALL BUSINESS HEALTH CARE TAX CREDIT

2010-2013 up to 35% of small employer’s premium
contribution.

2014 and beyond, credit increased to 50% (35% for
tax exempt employers).
◦ To take advantage of the credit, employees must enroll in
coverage offered by employer through one of the SHOP
certified plans.
◦ Credit can be claimed for any 2 consecutive taxable years
beginning in 2014 (or beginning in a later year).
SMALL BUSINESS HEALTH CARE TAX CREDIT
Employer has
24 or fewer
FTE
employees
Employees;
average
annual wages
are less than
$50,000
Employer pays
uniform
amount of at
least 50% of
premium for
employee
Up to *50% Federal Tax Credit in 2014 if forprofit entity
*SHOP participants only
UP TO 50 EMPLOYEES:
The Federally-Facilitated
SHOP Marketplace
24 or
fewer
EMPLOYERS WITH UP TO
50 FTE EMPLOYEES
Number of
Full-Time
Equivalent
(FTE)
employees
50 and
above
Up to 50
•
If employer chooses
to offer coverage,
you may do it
through Small
Business Health
Options Program
(SHOP)
•
Enhanced SB Health
Care Tax Credits
available for
employers with 24 or
fewer employees
participating in SHOP
What is the Federally-Facilitated
SHOP Marketplace?
The Small Business Health Options Program





Health Insurance Marketplace created by the ACA
Offers small employers a choice of qualified health and dental
plans and tools for making informed choices.
Gives eligible small employers access to Small Business Health
Care Tax Credit—worth up to 50% of employer’s premium
contributions.
Works with new insurance reforms to create competition on price
and quality.
Offers online purchase and enrollment.
Note: Employers with fewer than 50 full-time equivalent employees, aren’t required to offer health
insurance, and there’s no penalty if they choose not to.
Who Can Purchase SHOP Coverage?
(1) Must have 50 or fewer full-time equivalent (FTE)
employees.



With at least one employee who is not a co-owner or
spouse;
Including tax-exempt and religious employers;
Offer health insurance coverage to all full-time
employees
Who Can Purchase SHOP Coverage?
(2) Must Offer health insurance coverage to all
full-time employees.

Generally these are employees working 30 hours or
more per week.

Do not need to offer coverage to your part-time
employees (those working 29 hours or less per
week).
Who Can Purchase SHOP Coverage?
(3) At least 70% of your full-time employees
must enroll in the SHOP Plan. (75% in South
Dakota and Iowa)
Employees with coverage through another employer
plan, Medicare, Medicaid, the military, or veteran’s
programs are not included in calculation.
EXAMPLE OF 75% PARTICIPATION CALCULATION
You offer coverage to 16 full-time employees.
 2 have coverage through a spouse’s employer
 1 is covered by Medicare
 1 is covered by Tricare
16 employees total, minus 4 who aren’t included = 12
employees who count toward the 75% requirement.
75% of 12 employees = 9
At least 9 of your employees must enroll to qualify for
SHOP plan.
EXCEPTION TO 75% PARTICIPATION REQUIREMENT
If you can’t meet the minimum participation
rate you can apply for coverage from
November 15 through December 15
every year.
This is designed to let
employers that don’t meet the participation
rate offer a SHOP plan.
BROWSE BEFORE BUYING

Online tool shows price estimates for Federally-facilitated SHOP
Qualified Health Plans and Qualified Dental Plans.

Price estimates are based on the age-ranges of employees and
location of business.

Agents, brokers or Navigators can help employers use this tool.

Employers can get final quotes for 2015 coverage as part of online
enrollment process on HealthCare.gov
New Features of FF-SHOP in 2015

Small employers can access SHOP online (HealthCare.gov)
◦ Browse, select and offer employees health and dental coverage
◦ Have employees enroll in SHOP coverage online
◦ Find and authorize a SHOP broker to help with online enrollment

No paper application will be accepted

SHOP-registered agents and brokers can access online
features and manage accounts when authorized by clients
50 OR MORE EMPLOYEES:
Employer Shared
Responsibility for Employee
Health Insurance Coverage
24 or
fewer
EMPLOYERS WITH 50 OR
MORE FTE EMPLOYEES
•
Number of
Full-Time
Equivalent
(FTE)
employees
50 and
above
Up to 50
In 2015 there are
various types of
transitional relief
available for
employers with 5099 full-time/full-time
equivalent
employees.
MOST SMALL FIRMS ARE EXEMPT

ACA exempts all employers that have fewer than 50
full-time employees (including FTEs) from
employer shared responsibility provisions.

That exempts about 5.8 million out of 6 million
firms.

Those 5.8 million firms employ nearly 34 million
workers
2015 PHASE-IN PERIOD

The employer responsibility provision will apply
to firms with 100 or more full-time employees
starting in 2015.

This provision will expand to employers with 50
or more full-time employees starting in 2016.
TWO SCENARIOS FOR POTENTIAL
PAYMENT
EITHER
(1) An employer does not offer coverage to at least
95%* of its full-time employees (and dependents)
OR
(2) The coverage offered to employer’s full-time
employees is not “affordable” or does not provide
“minimum value” or particular full-time employee
was not offered coverage. AND
At least one full-time employee receives a premium tax credit in
the individual Marketplace.
* For 2015, replace 95% with 70%
Coverage Provides
Minimum Value
• Plan
must
cover,
on
average, at least 60% of
the plan’s total cost of
incurred benefit.
• HHS and IRS have an
online
calculator
employers can use to
input their plan details and
determine if it meets the
60% value threshold.
Coverage Is Affordable
Coverage is unaffordable if the
full-time employee’s share of
the
lowest
cost
self-only
coverage
that
provides
minimum value costs more than
9.5% of employee’s annual
household income.
Affordability safe harbor: If
the cost to the employee of a
self-only plan is not more than
9.5% of employee’s wages as
reported on Box 1 of the W-2,
it’s
deemed affordable for
purposes of Employer Shared
Responsibility.
Penalty if Coverage Not Offered to Enough
Employees

Payment applies if any full-time employee receives a
premium tax credit for coverage purchased in the
individual Marketplace.

Payment owed: $2,000/year times number of full-time in
excess of 30 (in excess of 80 for 2015).

Payment is calculated separately for each month for which
coverage not offered ($166.67/month).

Payment is based on employer’s number of full-time
employees for that month.
Penalty if Coverage Is Not Affordable or
Doesn’t Meet Minimum Value

Payment owed: $3,000/year per full-time
employee who receives a premium tax credit for
coverage purchased in the individual
Marketplace.

Payment is calculated on monthly basis ($250
per month).
Key Points Regarding Penalties

Penalties depend on whether employer offers coverage and the
quality of that coverage, rather than whether an employee
accepts the offer of coverage.

No payment is owed for part-time employees even if they
receive a premium tax credit.

Only receipt of the premium tax credit in the individual
Marketplace triggers these payments. If employee obtains
coverage from another source no penalty.

Employers that offer coverage to full-time employees must also
offer coverage to dependents of those full-time employees
under age 26 (coverage of spouse not required).
How to Avoid Penalty Payments
To avoid a payment for failing to offer health
coverage, employers need to offer coverage to 70
percent of their full-time employees in 2015 and
95 percent in 2016 and beyond.
Incentives for Continuing to Offer Health
Insurance Coverage

The cost of providing health insurance coverage is
tax deductible by the employer. Employer shared
responsibility payments are not tax deductible.

Employers offering health insurance coverage can
tailor that coverage to provide the benefits most
valued by your employers and maintain a
competitive advantage in recruiting and retaining
employees.
Questions?
SCOTT LEUNING
101 South Reid Street, Suite 307
Sioux Falls, SD 57103
(605) 371-2000
Scott@Goosmannlaw.com
The Weston Group
101 South Reid Street
Suite 307
Sioux Falls, South Dakota 57104
Office (605) 275-4747
HR@TheWestonGroup.com
www.TheWestonGroup.com