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This week’s stories include ...
(1) Final Regulations on Wellness Programs Take Effect
Our top story: The Equal Employment Opportunity Commission’s (EEOC’s) final rule on wellness programs will go into effect, despite a challenge from the AARP. The new regulations state that an employer may require medical examinations or information as part of a wellness program that provides discounts of 30% or less on the cost of health care coverage. The AARP sought a preliminary injunction to block the regulations, arguing that they violate the privacy of its members. The motion was denied, but a permanent injunction remains a possible outcome as the litigation continues. Adam Solander, from Epstein Becker Green, has more on the new regulations:
“Most wellness programs will have what’s called a ‘health risk assessment,’ where they ask for medical information about the employee in order to participate in the wellness program. Under the ADA, however, employers are generally barred from making any sort of medical-related inquiry or any inquiry related to a person’s health. There is an exception to that general rule, which is a voluntary wellness program. So what the EEOC’s regulations do is they provide a framework as to what is voluntary for an employee wellness program. ... The AARP has vowed to continue to fight this and to appeal and get the permanent injunction. But, for the most part, these regs are now effective, and employers have to implement the wellness program as they had planned prior to that date.”
(2) Second Circuit Denies Cumulative Liquidated Damages
The U.S. Court of Appeals for the Second Circuit resolves a split on cumulative liquidated damages. The Fair Labor Standards Act and the New York Labor Law both allow for liquidated damages equal to 100% of unpaid wages. Federal law awards these damages on a compensatory basis, while the New York law allows damages as a punitive measure. Some lower courts in the Second Circuit have granted plaintiffs double damages, reasoning that the awards serve different purposes. Others have declined to award cumulative damages. The Second Circuit weighed in last month, affirming a lower court’s denial of cumulative liquidated damages. Because the ruling came as a summary order, it does not create precedent, but it’s likely to have a persuasive effect on other courts.
(3) ACA Transgender Discrimination Rules Blocked
A federal judge blocks transgender discrimination rules under the Affordable Care Act (ACA). The Franciscan Alliance, along with two other religious nonprofit medical groups and several states, recently filed a lawsuit claiming a regulation in Section 1557 of the ACA violates the Administrative Procedure Act and the Religious Freedom Restoration Act. A federal judge in Texas issued a nationwide preliminary injunction, halting enforcement of the provisions relating to gender identity and termination of pregnancy. Other provisions of 1557, including those prohibiting discrimination on the basis of disability, race color, age, national origin, or sex, other than gender identity, remain in effect.
(4) Employers Must Begin Using Form I-9
Employers are required to verify the work authorization of each employee they hire using Form I-9, the Employment Eligibility Verification. U.S. Citizenship and Immigration Services published a revised Form I-9 last November, and all employers must begin using this new version by January 22, 2017.
(5) Tip of the Week
Eben Krim, Chief Employment Counsel for the Performance Materials and Technologies division of Honeywell International, has advice on managing a contingent or third-party workforce under heightened joint-employer scrutiny:
“Employers should be aware of new developments from the Board in the area of joint employment. Recently, the Board indicated that something as simple as a social responsibility code could be viewed as indicia of joint employment. ... Companies looking to reduce their risk of joint employment, either in the union organizing space or in the employment discrimination area, should refocus on the contractual relationship they have with their staffing providers, examining contractual language, but also focus on scope of control and supervision of day-to-day activities.”
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