Articles Posted in Employment Benefits

By Edgar M. Rivera

On May 24, 2017, the Eighth Circuit Court of Appeals affirmed the district court’s dismissal of plaintiff Brittany Tovar’s sex discrimination claim under Title VII of the Civil Rights Act of 1964 (Title VII). The court held that Defendant Essentia Health’s denial of insurance coverage for Ms. Tovar’s son’s transition-related medical procedures did not state a claim for sex discrimination under Title VII, since Ms. Tovar did not suffer discrimination based on her own sex and therefore lacked statutory standing.

Ms. Tovar, a nurse practitioner, worked for Essentia Health from 2010 to 2016. During her employment at Essentia Health, she was enrolled in an employer-provided health insurance plan that also covered her teenage child, who is a transgender boy, meaning that he was designated female at birth but identifies as male. In 2014, doctors diagnosed Ms. Tovar’s son with gender dysphoria and recommended various treatments, including medications and gender reassignment surgery, for which Ms. Tovar sought coverage under her employer’s insurance plan.

By Owen H. Laird, Esq.

Last month, President Trump laid out a tax cut plan that, among other things, would lower the corporate tax rate to fifteen percent from the current rate of thirty-five percent. This reduction in the corporate tax rate is one of the most significant changes proposed by Trump; his plan would primarily benefit corporations and the wealthy. Although President Trump is constantly in the headlines, even to the extent that a signature tax proposal is overshadowed, it is important to pay attention to the less sensational actions taken by the Trump administration that will have long-lasting effects on the American public.

A recent article in the New York Times delved into potential effect of the drastic cut to the corporate tax rate: if the corporate tax rate is significantly less than the personal income tax rate, individuals would be incentivized to form corporations and pass any income they earned through that corporate entity, forsaking the traditional employee-employer relationship. Many workers are already considered “independent contractors” rather than employees. If these independent contractors formed a C-corporation and ran their income through it, that income would be taxed at the corporate rate, rather than the normal individual rate. If the tax incentives were high enough, whole classes of workers might choose to restructure their employment by becoming independent contractors and incorporate themselves in order to lower their tax burdens.

Lev Craig

On May 2, 2017, the Republican-majority U.S. House of Representatives passed H.R. 1180, or the “Working Families Flexibility Act.” The bill, which will now move to the U.S. Senate for consideration, would amend the Fair Labor Standards Act (FLSA) to enable employers to offer employees accrued paid time off for overtime hours worked, in place of cash wages.

The act would amend § 207 of the FLSA to add a provision stating that “[a]n employee may receive, […] in lieu of monetary overtime compensation, compensatory time off at a rate not less than one and one-half hours for each hour of employment for which overtime compensation is required.” In other words, the law would allow employees to choose between receiving overtime premium pay and accruing compensatory time off, or “comp time,” for any hours worked over 40 in a work week. According to the terms of the bill, employers cannot force employees to accrue comp time rather than receive overtime pay, and the employer and employee must enter into a written agreement in order for the employee to use the comp time option. Employees’ accrued comp time would be capped at 160 hours, which the employee would be allowed to cash out for its monetary value at any time, and employers would be required to pay employees the cash value of any unused time at the end of the year.

Lev Craig

Last Friday, the parties submitted a settlement agreement for approval in Cote v. Walmart, a class action suit filed in federal court alleging that Walmart discriminated against gay Walmart employees by denying spousal health insurance coverage to same-sex married couples. The settlement would provide $7.5 million for current and former Walmart employees who could not obtain employer health insurance benefits for their same-sex spouse.

The suit was the first class action filed on behalf of gay employees after the Supreme Court’s June 2015 ruling extending marriage equality in Obergefell v. Hodges, according to the Boston-based LGBT legal advocacy group GLAD. Jackie Cote filed suit in the District of Massachusetts in July 2015, bringing claims against Walmart under Title VII of the Civil Rights Act of 1964 (Title VII) and the Massachusetts Fair Employment Practices Law on behalf of Walmart employees who were married to a same-sex spouse and did not receive spousal health insurance benefits from Walmart between 2011 and 2013.

Edgar M. Rivera

As reported by Reuters, Democratic New York State Assemblyman Joseph Morelle has proposed introducing legislation that would allow workers at gig-economy companies to opt into a company-funded portable benefits program. Gig-economy companies use independent contractors to provide rides (like Uber and Lyft), deliveries (like UberEats), housecleaning (like Handy), and other services through websites and apps. They claim not to employ their workers but instead hire independent contractors to provide their customers services. However, independent contractors generally do not receive basic employment benefits, including health insurance, and as more workers join the gig economy, more are forced to secure health insurance elsewhere or go without. Assemblyman Morelle said that he plans to introduce the legislation early next year; it would be the first bill of its kind in the United States.

Perhaps anticipating the sting of impending legislation, Handy, a web-based home cleaning services company, has circulated a draft bill that would establish guidelines for a portable benefits plan for New York workers at gig-economy companies.  Its draft bill establishes a program whereby participating gig-economy companies would pay the equivalent of 2.5% of workers’ income into individual health savings accounts. Handy’s cleaners in New York earn approximately $20 an hour and work, on average, 10 hours a week. A 2.5% health stipend deposited into an individual account would amount to about $800 a year for a Handy worker earning $33,000—less than one third of the cost of an individual silver plan on the New York State health insurance market, according to the Kaiser Family Foundation.  n return, workers who enter into the program accept their classification as nonemployees, which proscribes them from suing for benefits like overtime pay, joining unions to collectively bargain for better benefits, and receiving mandatory employer payroll contributions, like Social Security and Medicare.

Jennifer Melendez

On November 15, 2015, the National Union of Healthcare Workers (NUHW) and the health insurance company Kaiser Permanete (Kaiser) arrived at a tentative agreement ending a 5 year dispute regarding employee compensation and patient treatment.

In November of 2011, NUHW’S health care clinicians made a complaint on behalf of their patients, which prompted a 15-month investigation by the state. The investigation resulted in the California Department of Managed Health Care (DMHC) finding that Kaiser’s patients endured illegally long waiting periods for their treatments and were refused access to care, in violation of California’s Mental Health Parity Act and that Kaiser clinicians were instructed to falsify appointment times to hide those long waits. The DMHC fined Kaiser $4 million for these infractions. The DMHC states:

Yarelyn Mena and Owen H. Laird, Esq.

As President Barack Obama’s tenure nears an end, he and his administration have been pushing for far-reaching changes in employment laws that may benefit thousands of workers across the country.

At the beginning of his presidency, many workers—both Democrats and Republicans—did not support the President because he took and supported actions that appeared to be against workers’ interests.  For example, the President moved slowly to fill important employment agency positions, such as the National Labor Relations Board (NLRB), which resulted in the delay of Democratic appointees and caused proceedings at the NLRB to come to a halt.  Labor unions also were unhappy that the President failed to side with union members when legislation threatened to allow employers to hold secret ballot elections concerning leadership voting methods.

Jennifer Melendez and Edgar M. Rivera, Esq.

On August 5, 2015, Netflix announced it would offer its employees one year of paid parental leave. The new policy allows parents to set their own schedules – taking leave as necessary – for the first year of their child’s life and gives them the option to return to work full or part-time. Netflix Chief Talent Officer, Tawni Cranz, stated:

The updated policy is intended to help the company retain valuable employees. We want employees to have the flexibility and confidence to balance the needs of their growing families without worrying about work or finances…We’ll just keep them normally, eliminating the headache of switching to state or disability pay.

Yarelyn Mena and Owen H. Laird, Esq.

Many employees might be surprised to learn that a determination by the Social Security Administration (“SSA”) can affect their right to benefits from a private pension plan. The Second Circuit has allowed pension plan administrators, depending on the language of the plan, to do just that.

In July 2005 Francy Ocampo applied for disability benefits under the Social Security Act after herniated disks prevented her from working. Ms. Ocampo worked as an office cleaner for more than 20 years, and was a member of the Services Employees International Union (“SEIU”), Local 32BJ. In December 2006, an SSA administrative law judge determined that Ms. Ocampo was disabled by the definition in the Social Security Act, defined as “an inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months,” and thus was eligible to receive disability benefits. In March 2007, the SSA notified Ms. Ocampo that she would receive disability benefits for five months.

In June 2013, the New York City Council passed the Earned Sick Time Act (ESTA), extending protection to nearly all workers who must miss work because they or their family members become ill. Then, on February 26, 2014, with the support of Mayor Bill de Blasio, the City Council voted to strengthen the new law, which finally went into effect on April 1, 2014. According to an information sheet released by the Department of Consumer Affairs (DCA), which is responsible for investigating violations of the law and punishing violators, all employees of private companies now accrue sick time at the rate of 1 hour per 30 hours worked, up to 40 hours per year. For employees of companies that employ five or more, sick time must be paid at the employee’s regular hourly rate; for smaller companies sick time is unpaid. Employers will be able to require employees to give them advance notice that they will claim sick time when such notice is possible, and they may demand documentation from a health care provider when the employee uses accrued sick time for more than three consecutive workdays. However, in all cases employers are forbidden from retaliating against employees who claim forty or fewer hours of sick time per year. Employees who started their jobs prior to April 1, 2014 will become eligible to use their sick days on July 30, 2014; others become eligible 120 days after their first day of employment.

Under the new law, employees are now entitled to carry over up to 40 hours of sick time to the following year, but employers are only required to grant a total of 40 hours in a given year.

Similar laws have been passed, or are currently being debated, by legislative bodies across the country. San Francisco, Washington D.C., Portland, Newark, and Jersey City, NJ have laws similar to New York city’s new law. Connecticut has a statewide sick pay law, which guarantees paid sick leave to non-exempt “service workers” who work for companies with fifty or more employees. Vermont and Massachusetts could be next to enact such measures, and twenty other states and the cities of Chicago, Philadelphia, San Diego, and Eugene, OR have similar legislation currently pending. There have been few prospects of actually passing a paid sick leave law at the federal level, but there has been some activity on the issue: in 2013, Senators Harkin (IA) and DeLauro (CT) introduced The “Healthy Families Act,” which was first introduced in 2004. That legislation has not succeeded thus far, but has steadily picked up cosponsors and votes, and proponents of the law hope the passage of sick pay laws in an increasing number of cities and states will provide enough political momentum to pass a version of the bill.