[November 25, 2013] The Massachusetts Health Connector has announced that it will no longer enforce several of Massachusetts’ health reform requirements, including the law requiring employers to provide a Section 125 Cafeteria Plan or pay a surcharge.
According to the Connector, the Section 125 requirement is incompatible with recent guidance from the Department of Labor (“DOL”) about the Affordable Care Act. Governor Deval Patrick will pursue legislation to repeal the state’s Section 125 requirement, the Employer Health Insurance Responsibility Disclosure (Employer HIRD) form, the Free Rider Surcharge, and the recently created Section 125 Notification Requirement. In the interim, the Connector will not enforce these requirements.
Pursuant to the DOL’s guidance, Massachusetts employers may no longer offer Section 125 plans that allow non-benefits eligible employees to purchase their own non-group health insurance using pre-tax income. Employers may, however, leave such plans in place until the expiration of the employees’ health plans in 2014. Employers should discuss with benefits counsel any necessary amendments to their Section 125 plan documents.
This change does not affect Section 125 plans for benefits-eligible employees: employers may continue to offer such plans and may continue to allow employees to pay their group health insurance premiums on a pre-tax basis.
[November 20, 2013] Should the EEOC be allowed to send an e-mail to 1,000 employees of a company, at their work e-mail accounts, to hunt for evidence against the company? One New York employer has sued the EEOC in federal court challenging the EEOC’s use of this tactic.
The EEOC’s e-mail told employees that the EEOC was investigating claims of discrimination by the employer, and contained a link to an internet survey about the employer. The employer apparently did not receive advance notice of the email, and the email did not specify that the EEOC’s inquiry was limited to age discrimination claims and that no finding of discrimination had been made.
The employer sued the EEOC pursuant to the Administrative Procedures Act and the U.S. Constitution, claiming that the e-mail was an abuse of power, an unreasonable search in violation of the Fourth Amendment, and an infringement on the employer’s constitutional right to due process. The lawsuit seeks an injunction that would prohibit the EEOC from using any information it gathered through the mass email.
The EEOC has moved to dismiss the suit, arguing that other methods of communication would have had the same impact, and that the e-mail was within the EEOC’s investigative power. The court has not yet ruled on the motion.
[November 15, 2013] The “scorecard” in a recent, relatively small class action settlement in Massachusetts seems to offer insight in such questions as: Why do class actions get litigated – and almost always settled? Who are the real winners and losers?
A federal district court judge in Massachusetts recently approved a $2.2 million settlement of claims that a Massachusetts hospital violated the Fair Labor Standards Act (“FLSA”) and the Employee Retirement Income Security Act (“ERISA”). The more than 5,000 class members alleged that they were not paid for hours worked over 40 hours per week, including: (1) work during uncompensated meal breaks; (2) work before and after their shifts; and (3) training after regular work hours.
The parties arrived at the settlement after extensive mediation. The $2.2 million settlement was based on an analysis of payroll data, including the actual hours and pay rates for each employee, the employees’ statements about their uncompensated hours, and their claim for attorneys’ fees.
With that background, here is the “scorecard” in this settlement:
Plaintiffs’ Attorneys: + $733,000
Each Plaintiff (average): + $250 (approx.)
Defendant Hospital: – $2,200,000
The plaintiffs’ attorneys will walk away with one-third of the settlement, an enormous pay day for them of more than $733,000. In contrast, some individual class members will receive as little as $25!
A more detailed discussion of this case will be published soon as an E-Alert. Stay tuned!
[October 18, 2013] Pursuant to a consent judgment announced by the U.S. Department of Labor (“DOL”) last month, a Boston fur company and its owner will pay almost One Million Dollars to 14 employees to settle wage and hour claims brought by the DOL in the federal court in Massachusetts.
While the employer has not admitted any liability, the DOL alleged that the workers: (1) were required to work 10 hours per day, six days per week at the animal hide business; (2) were paid a daily wage that was far below the minimum wage; and (3) were not paid overtime.
The DOL further alleged that the employer retaliated against several workers for cooperating with the DOL’s investigation.
The federal Fair Labor Standards Act (“FLSA”) authorizes the DOL to gather data concerning wages, hours, and other employment practices; enter an employer’s premises and inspect its records; and question employees to determine whether any person has violated any provision of the FLSA.
We recommend that any employer facing a DOL investigation work closely with legal counsel to properly narrow the scope of the investigation and to comply appropriately with the DOL’s requests.
[October 4, 2013] Many employers may have questions about the operational status of federal agencies and courts during the ongoing shutdown of the federal government. Some current information of interest to employers is summarized below:
- Department of Labor (“DOL”): Most DOL offices, including the Employment and Training Administration (“ETA”) and the Wage and Hour Division, have suspended their operations. Therefore, such matters as Labor Condition Applications, Prevailing Wage Determinations, Applications for Temporary Employment Certification, and Applications for Permanent Employment Certification will not be accepted or processed during the shutdown. However, the Office of Workers’ Compensation Programs will continue to process certain types of benefits claims.
- Equal Employment Opportunity Commission (“EEOC”): The EEOC will continue to accept and process charges but will not investigate cases during the shutdown. All mediations and federal sector hearings will be cancelled, and FOIA requests will not be processed. Also, EEOC staff will not be available to answer questions or provide assistance to the public.
- Federal Courts: Currently, the federal courts remain open. However, the federal judiciary will reassess the situation if the shutdown continues through October 15, 2013.
- National Labor Relations Board (“NLRB”): As all but a handful of the NLRB’s employees have been furloughed due to the shutdown, the agency’s regional offices have been closed, and the NLRB is not processing unfair labor practice (“ULP”) or representation cases. Most filing deadlines will be tolled while the shutdown continues. However, since the NLRB may not have the authority to extend the statutory six-month limitations period for filing ULP charges, the agency has recommended that ULP charges be faxed to regional offices if necessary to ensure compliance with the six-month filing requirement.
- U.S. Citizenship and Immigration Services (“USCIS”): Because USCIS is funded by user fees (rather than appropriations), the agency is continuing to operate. However, the E-Verify employment eligibility confirmation system is unavailable during the shutdown. Employers enrolled in the E-Verify program will be given additional time to create E-Verify records and resolve Tentative Non-Confirmations once the system becomes operational again.
Employers should be aware that this information may be subject to change, particularly if the shutdown is prolonged. Thus, employers should closely monitor further developments in these areas.