Employment Law Updates – What employers need to know

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Published May 2011

The following is a general overview of some regulatory changes affecting employer HR practices.


Significant Supreme Court rulings:

In March, 2011 two rulings by the US Supreme Court will have continuing impact on how employers conduct business. The ruling called the “cat’s paw” theory of discrimination was presented.  This ruling states that an employer can be held liable for discriminatory inclinations of a manager who influenced, but did not make, a decision to terminate.

Also, the US Supreme court decided that an employee’s complaint alleging violations of the federal Fair Labor Standards Act can be in written form or “oral” (need not be written)  to constitute “protective activity” for purposes of a retaliation claim.

Americans with Disability Act as Amended (ADAAA)

On March 25, 2011 the EEOC published the final, amended regulations following the passage of the ADA Amendments Act of 2008 (ADAAA).  The new regulations become effective on May 24, 2011, 60 days from publication. The ADAAA is not retroactive; it applies only to discriminatory acts that occurred on or after January 1, 2009.

The ADA’s definition of disability remains unchanged by the ADAAA:

  • A physical or mental impairment that substantially limits one or more major life activities;
  • A record (or past history) of such an impairment; or being regarded as having a disability

The ADAAA states that this definition of disability must be interpreted in favor of broad coverage.  The EEOC’s new regulations provide rules for use in determining whether an individual has a disability, and is therefore entitled to the protections offered by the ADA.  Additionally, the regulations also confirm that an individualized assessment of whether impairment substantially limits a life function remains necessary.

The new regulations also make it easier for individuals to establish coverage under the “regarded as” part of the definition of “disability.” The analysis must be directed at how the individual was treated, due to impairment, rather than the employer’s belief regarding the impairment.

Other ADAAA facts:

Service Animals. The rule defines “service animal” as a dog that has been individually trained to do work or perform tasks for the benefit of an individual with a disability. The rule states that other animals, whether wild or domestic, do not qualify as service animals. The rule permits the use of trained miniature horses as alternatives to dogs, subject to certain limitations. To allow flexibility in situations where using a horse would not be appropriate, the final rule does not include miniature horses in the definition of “service animal.”

Wheelchairs and Other Power-Driven Mobility Devices. The rule adopts a two-tiered approach to mobility devices, drawing distinctions between wheelchairs and “other power-driven mobility devices.” “Other power-driven mobility devices” include a range of devices not designed for individuals with mobility impairments, such as the Segway® PT, but which are often used by individuals with disabilities as their mobility device of choice. Wheelchairs (and other devices designed for use by people with mobility impairments) must be permitted in all areas open to pedestrian use. “Other power-driven mobility devices” must be permitted to be used unless the covered entity can demonstrate that such use would fundamentally alter its programs, services, or activities, create a direct threat, or create a safety hazard.

Genetic Information Nondiscrimination Act (GINA).

GINA is a comprehensive regulation outlining the provision of security and control of genetic information.

Within GINA, genetic information is defined as any information about an individual’s genetic tests; the genetic tests of the individual’s family members; and the manifestation of a disease or disorder in a family member.

There are no definitions for a genetic test presented in GINA. Guidance is given by example.  The following are not considered to be a genetic test: complete blood counts, new born screening tests, amniocentesis, cholesterol tests, liver-function tests; or tests for the presence of alcohol or illegal drugs.

It is illegal for employer to receive protected information, unless such receipt is “inadvertent”.  An employer’s receipt of protected information will not be considered “inadvertent” unless the employer has affirmatively directed the employee not to provide genetic information when responding to an otherwise lawful request for medical information (i.e. ADAAA or FMLA). Therefore, all FMLA, ADAAA, pre-employment physicals/tests, post accident medical reports, and medical leave process must be updated to prohibit the receipt of genetic information.

Federal Whistle Blower Protection

New Federal Whistle Blower Protections have been expanded to provide comprehensive protections for employees who provide information to the SEC, initiate or participate in SEC administrative actions, or make disclosure required by or protected by laws and rules under the SEC.

Creation of Electronic Files

Employers that wish to create and maintain electronic copies of personnel files and other HR documents need to keep the following in mind when designing the process:

  • Employee must be able to review files upon request
  • Records must be accessible to all who have authority and need to review.
    E-records must be kept confidential (review HIPAA security). This includes the potential for stolen or obtained login/password access.
  • Keep the personnel file, Workers Compensation, FMLA, medical, DOT and other files separated with restricted access to those identified as having a need to know.
  • Employers must have a detailed retention, storage and disposal plan in place for each of the file systems (these include Social Security numbers, medical, employment, court orders).
  • Formal announcement of updates to the system, e-policies, forms, and others must be made within 2 business days of any change.

Form I-9

The United States DOL issued final rulings on electronic signatures and storage of Forms I-9.  These rulings include:

  • Employers may complete, sign, scan and store I-9 forms electronically
  • The form I-9 must be completed by the third business day after the employee has started work
  • Employers may store forms either in paper form, electronically or through a combination of both
  • Employers may, but are not required to, provide Form I-9 transaction confirmations if requested by the employee

2011 Updated Posters Required

– Federal minimum wage

– Equal Employment Opportunity is the Law

– Safety and Health Protection on the job

– State Minimum wage

– California USERRA

– Notice of Employee Polygraph Protections Act

Also, employers that use Managed Professional Networks (MPNs) to provide treatment for worker’s compensation claims must post information informing employees about MPNs being used.

Fair Labor Standards Act (FLSA)

In April 2011, the U.S. Department of Labor (DOL) issued a final rule updating regulations issued under the Fair Labor Standards Act (FLSA).

The DOL updated rules regarding tip credits, which permit employers to pay tipped employees less than the minimum wage as long as the employee’s pay plus tip equals or exceeds the minimum wage. The DOL raised the maximum federal tip credit from $4.42 to $5.12 per hour. It also clarified that the FLSA does not impose a maximum contribution to a valid tip pool, which can only include employees who “customarily and regularly” receive tips.

Employers are allowed to pay an employee who is less than 20 years old a subminimum wage of not less than $4.25 per hour for the employee’s first 90 calendar days of employment. Several states, pursuant to legislation, have announced minimum wage rate increases effective Jan. 1, 2011 and changes to increase minimum wage for “tipped employees”.

Conclusion

Employers are encouraged to conduct a legal and regulatory employment practice review at least annually.

In addition, the 2011 ~ 2016 Strategic Plan for the Department of Labor emphasizes that employers are to conduct annual “audits” of their HR functions, policies and practices.  One part of the “audit” is a review of current, new and pending regulatory influences on the employer.