All posts tagged law

What Does President Trump’s Executive Order on ACA Mean?

Worker repairing  an engine rotor winding of copper wire.

Donald Trump’s first act after assuming the presidency was to sign an executive order that authorizes federal agencies to scale back as many parts of the Affordable Care Act as possible within the confines of the law.

The executive order does not abolish the landmark legislation, but sets the stage for agencies to act immediately on regulations that are deemed overly burdensome. The agencies, particularly the Department of Treasury and the Department of Health and Human Services (HHS), will have wide latitude in making regulatory changes thanks to the broad scope of the order.

But don’t expect immediate changes in the law. Regulations cannot be rewritten, amended or replaced without going through the rule-making process, which includes notice and comment periods. That can take months, or sometimes years.

Another reason you should not expect immediate change is that the order specifically states that agencies can act only “to the maximum extent permitted by law.”

The order came on the heels of the House of Representatives approving a budget blueprint that will allow Republicans to repeal major provisions of the ACA without the threat of a Democratic filibuster in the Senate. But that action can only undo parts of the law that have an effect on the federal budget and they would need some cooperation from Democrats to repeal other parts and forge a replacement.

That means that most of the laws and regulations governing employer plans will likely stay in place for the moment, although it’s unclear for how long.

Trump has been on record saying that the repeal of the law should not take place until a replacement plan is also in place, in order to avoid creating disruptions in the market. He also said that everyone in the United States would be covered.

Here are some of the more relevant passages of the executive order:

“…it is imperative for the executive branch to ensure that the law is being efficiently implemented, take all actions consistent with law to minimize the unwarranted economic and regulatory burdens of the Act, and prepare to afford the States more flexibility and control to create a more free and open healthcare market.”

It also said the HHS secretary and other agency heads “shall exercise all authority and discretion available to them to waive, defer, grant exemptions from, or delay the implementation of any provision… that would impose a fiscal burden on any State or a cost, fee, tax, penalty, or regulatory burden on individuals, families, healthcare providers, health insurers, patients, recipients of healthcare services, purchasers of health insurance, or makers of medical devices, products, or medications.”

As mentioned, the process for making regulations takes time. Proposed regulations have to be drawn up and they have to go out for public comment, including holding hearings so that all sides can argue for or against the changes or recommend adding more changes.

Adding more confusion and concern, Trump senior adviser Kellyanne Conway said that the president may stop enforcing the law’s tax penalty against people who don’t buy insurance. But that move alone could snowball into an ugly scenario where more healthy individuals bale out of their insurance policies, which in turn would likely lead to insurers abandoning the public insurance exchanges.

She said that he would consider repealing the employer mandate quickly, as well. But that may be not be legal as the individual and employer mandates are explicit provisions of the law passed by Congress, and they cannot be overridden by the executive branch.

FMLA, FLSA Lawsuits Surge, Exposing Employers to Large Awards

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The number of employee lawsuits against employers for Family Medical Leave Act (FMLA) and wage and hour violations has skyrocketed in the last five years and your firm could be the next target even for a small misstep, which can be costly.

The Department of Labor has increased its budget and the number of investigators pursuing employers who violate the Fair Labor Standards Act (FLSA), which covers wage and hour complaints, including exempt and non-exempt employee violations, overtime violations and similar issues.

Employment law attorneys say that the surge in FMLA complaints is a result of more people knowing about the law as the DOL has expanded its reach and publicized the act in press releases about actions it has taken against various employers.

Also, they say, the term “serious health condition” is broadly defined, making it easy for employees to satisfy.

Here we take a look at the problem and what you can do to avoid being sued.

 

FLSA

Wage and hour lawsuits are typically filed under the Fair Labor Standards Act, and they’ve been creeping up, a trend employment lawyers attribute to more people working from home and technology, which has blurred the lines between when workers are on or off the clock.

 

FLSA cases filed:

Fiscal 2015: 8,160

Fiscal 2014: 7,500

 

Notable FLSA settlements from last decade:

Walgreens – $23 million

Wells Fargo – $15 million

Roto-Rooter – $14.2 million

 

What you need to know:

  • There are four main areas you need to be concerned with: minimum wage, overtime pay, record-keeping and youth employment.
  • Make sure you properly classify your employees as non-exempt or exempt (the minimum salary to be classified as exempt is currently $47,476 a year).
  • There are six exempt positions: executive, administrative, learned professional, creative professional, computer professional and outside sales staff.
  • Track exempt employees’ hours just in case.
  • Compute overtime properly.
  • Telecommuting can expose you to FLSA liability when employees work or send work-related e-mails outside normal working hours.
  • Employees must be compensated for time spent answering e-mails during off hours, including vacation.

 

FMLA

Qualifying reasons for FMLA leave, according to the DOL, include: birth of a child; a serious health condition that makes the employee unable to perform their work functions; and to care for a spouse, child or parent with a serious health condition.

The rapid rise in FMLA lawsuits is a direct result of the law becoming increasingly complex for employers to navigate, and its increased enforcement. The number of FMLA cases filed last year hit 1,108, almost a fourfold increase from the 280 that were filed in 2012.

 

FLMA cases filed:

2014: 1,108

2013: 877

 

Notable settlements or awards:

Staples Inc. – $275,000

Solvay Chemical – $1.5 million

Christ Hospital and Medical Center – $11.6 million

 

What you need to know

  • Post and distribute information about employees’ FMLA rights and include it in your employee handbook.
  • Don’t retaliate against someone seeking FMLA leave.
  • Develop an internal process for employees to use when applying for FMLA leave.
  • Make sure managers and supervisors apply your FMLA process consistently.
  • Be careful to balance any pushback against the employee, but you have the right to ask for more information from the employee and their doctor. And you can monitor the use of FMLA days.

Pay Extra Attention to Safety for Teen Workers

portrait of a salesgirl working  in  gift box store

Summer is coming and many employers take on additional staff, including teenagers who are new to the workforce.

These new workers need special attention and training in workplace safety as they have no experience on the job. Every year about 70 teenagers die while working in the U.S., while another 100,000 are injured seriously enough to require emergency room treatment.

Keep in mind there’s a lot you can do to prevent injuries to your teen workers, and the measures you take to keep them safe will help protect all employees.

The first thing is that you need to know the law and OSHA workplace safety and health regulations. Check your compliance and make sure teens are not assigned work schedules that violate the law, or given prohibited tasks like operating heavy equipment or using power tools. Make sure they have their work permits if under 18.

Make sure also that your supervisors who give teens their job assignments know the law. Encourage supervisors to set a good example, as they are in the best position to influence teen attitudes and work habits.

Ensure that all jobs and work areas are free of hazards. The law requires you to provide a safe and healthy workplace. Involve every worker in your Injury and Illness Prevention Program.

Train teens to put safety first. Give clear instructions for each task, show them what safety precautions to take and point out possible hazards. Prepare teens for emergencies, accidents, fires and violent situations. Show them escape routes and explain where to go if they need medical treatment.

Your teen employees are the next generation of workers. You will help them develop personal skills that make them more likely to go on to further their education and succeed in life.

As you hire these young people, know that you do make a difference.

Educating them about professional standards, workplace health and safety, rights on the job, and how to communicate effectively will shape the workplaces of the future, as well as keep your business running smoothly.

Agency Mulls Not Counting Portion of First Aid Claims in X-Mods

first aid stuff

California’s workers’ compensation rating agency is developing new guidelines that would exempt a portion of first aid claims from being included in the calculation of employers’ X-Mods.

Under state regulations, employers are required to report injuries that require first aid and are not severe enough for the employee to seek medical treatment or miss work. But despite the rules, few employers report the claims to their insurance companies.

The Workers’ Compensation Insurance Rating Bureau hopes that creating an exemption in the experience rating plan for first aid claims and injuries would increase reporting.

According to the trade press, the Rating Bureau is working on a plan that would exclude a portion of every claim from the X-Mod formula. The amount for that exemption has not been set and it’s likely that the change, even if approved this year, won’t take effect until at least 2017 or 2018.

But regardless, the move would be a welcome development for California employers, many of which are reluctant to notify their insurers of any injuries that involve only first aid treatment for fear that it will affect their X-Mod or because they are confused by the rules. The reporting of first aid claims is typically not mandatory in most other states.

The industries in which the lack of first aid claim reporting is most prevalent are the construction and restaurant industries, but it occurs in other sectors as well, according to the Rating Bureau.

When employers fail to report first aid claims it causes problems for claims adjusters, hinders workers’ ability to access workers’ comp benefits and has a negative impact on the employers that play by the rules and report all of their claims.

Also, what starts as an injury that only requires first aid treatment can later develop into a full-blown claim if the initial injury worsens.

According to the trade publication Workers’ Comp Executive, the Rating Bureau is looking at imposing a first aid claim exemption of $250, $500 or $1,000. It has been testing the different amounts and the effects on ensuring reliability of employers’ X-Mods.

 

Depending on the amount, it would have a substantial impact on reportable claims:

  • The $250 threshold would eliminate 15% of the claims in the system.
  • The $500 threshold would eliminate 36%.
  • The $1,000 threshold would eliminate 54%.

 

The biggest concern is that eliminating so many claims could reduce the rating system’s ability to accurately predict system costs and set accurate rates.

The Rating Bureau expects that at the $250 threshold, the change would mostly affect employers who have no other claims and that it would push up their X-Mod by just one percentage point on average.

The committee studying the issue “thought this was a reasonable trade off to get more claims into the system,” David Bellusci, the Rating Bureau’s chief actuary, said during a classification and rating committee meeting in early April, according to the trade publication.

The perception there is that the honest employers reporting all of their claims, including these smaller first aid only claims, are at a disadvantage to employers that are not currently reporting these claims.

Also, the Rating Bureau plans to work Cal/OSHA in regard to changing the definition of first aid. Cal/OSHA regulations do not require that employers report injuries that require first aid to the agency.

 

New Legislation Aims to Cut Workers’ Comp Drug Costs

Gov. Jerry Brown is expected to sign recently passed legislation that could further reduce workers’ comp claims costs in California.

The Legislature in September passed AB 1124, which would establish a new drug formulary that would limit the types of medications that can be used to treat injured workers.

The law is seen as vital to controlling costs as the cost of some medications – particularly off-label, compound medications and specialty drugs – continues to rise at a quickening pace.

Also, because California’s workers’ comp system lacks a drug formulary, payers have often complained of price-gouging for certain pharmaceuticals, like compound medications.

California insurance experts are optimistic that a new workers’ compensation prescription drug formulary will help injured workers and reduce claims costs.

Both insurers and employers have expressed optimism about the effects of the legislation if signed into law.

Over the past decade, the workers’ comp spend on prescription drugs has increased more than 250% through the first two years of treatment and accounts for some 13% of a claim’s overall medical costs, according to the California Workers’ Compensation Institute, which has studied the issue. The share goes higher as claims age, and often accounts for 20% of the medical costs in a claim.

The institute’s research suggests that a formulary could save California employers anywhere from $124 million to $420 million a year, depending on how restrictive the Division of Workers’ Compensation (DWC) makes the formulary.

The estimate is based on the experience of Texas and Washington states when they adopted a workers’ comp formulary to stem double-digit increases in spending on prescription drugs.

Not only that, but the increasing prevalence of doctors prescribing highly addictive opioid medications is also a concern for employers and insurers. While the drugs are not particularly expensive, overuse and abuse can lead to worse workers’ comp outcomes, such as longer times away from work.

Mark Pew, senior vice president for Prium, told the news website workcompcentral.comthat potential savings will follow from the most important role of a formulary, that is, “to make sure injured workers are only taking drugs that are appropriate for their conditions. Cost savings are a side effect of doing the right thing for the patient from a clinical standpoint.”

Pew said that for many providers and patients, prescribing or taking drugs is the easiest way to try to address pain.

However, a lot of patients receiving powerful narcotic painkillers don’t report any improvement in function or quality of life, and they are still reporting pain at a six, seven or eight on a 10-point scale, he added. The medications are not doing anything to address the root causes of the pain, the injured worker doesn’t return to work, dosages increase and new drugs are required to deal with side effects.

Pew said there might be some situations in which a strong opioid is appropriate for non-malignant cancer pain, and a formulary would still allow injured workers access to these drugs in such situations.

The legislation does address this issue by requiring the DWC to include in the formulary guidance how an injured worker can access drugs for off-label use “when evidence-based and medically necessary.”

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Changes to California’s New Paid Sick Leave Law

Less than two weeks after it took effect, California’s paid sick leave law has been changed with important amendments that affect most employers in the state.

The new changes took effect immediately upon Gov. Jerry Brown signing the fixer legislation to last year’s Healthy Families Act of 2014. The new law gives employers some new flexibility in how they accrue paid sick leave.

To make sure that you stay on top of the new law and understand your responsibilities, the following are the main changes:

 

Employer standard

The old law: Under the original version of the law, if an employee worked in California for 30 or more days within a year from the start of employment they were entitled to paid sick days to be accrued at a rate of one hour for every 30 hours worked.

The new law: Now, an employee who works in California for 30 or more days within a year from the start of employment is entitled to paid sick days so long as the employee works for at least 30 days within the previous 12 months with the same employer.

 

Sick leave accrual method

The old law had one standard for calculating paid sick leave accrual, but the new law allows for other methods.

Under the amended law, employers may provide for employee sick leave on a basis other than one hour for each 30 hours worked, provided that the accrual is:

(1)   On a regular basis, and

(2)   The employee will have 24 hours of accrued sick leave available by the 120th calendar day of employment.

 

An employee is allowed to use accrued paid sick days beginning on the 90th day of employment.

 

Limiting sick day use

The old law: An employer could limit the employee’s use of paid sick days to 24 hours or three days in each year of employment.

The new law: An employer may limit an employee’s use of paid sick days to 24 hours or three days in:

(1)   Each year of employment,

(2)   A calendar year, or
(3) A 12-month period.

 

Grandfathered status

The new law gives employers more flexibility when accruing paid sick leave.

The law states that an employer may use a different accrual method, other than providing one hour per every 30 hours worked, provided that the accrual is on a regular basis so that an employee has no less than 24 hours of accrued sick leave or paid time off by the 120th calendar day of employment or each calendar year, or in each 12-month period.

But if employers changed their existing policy, the grandfathering provision does not apply. At that point, an employer has to comply with the accrual method above, or front load three days of paid sick leave at the beginning of each 12-month period.

This section does not prohibit the employer from increasing the accrual amount or rate.

 

‘Pay’ rates when sick

The new law prescribes options for employers to calculate the “pay” for sick leave under this law:

  • Paid sick time for nonexempt employees shall be calculated in the same manner as the regular rate of pay for the workweek in which the employee uses paid sick time, whether or not the employee actually works overtime in that workweek.
  • Paid sick time for nonexempt employees shall be calculated by dividing the employee’s total wages, not including overtime premium pay, by the employee’s total hours worked in the full pay periods of the prior 90 days of employment.
  • Paid sick time for exempt employees shall be calculated in the same manner as the employer calculates wages for other forms of paid leave time.

 

Reinstatement and sick time balances

Under the new law, employers are not required to reinstate accrued paid time off for an employee who is returning after less than a year of leaving their employer if they were paid for their accrued time off upon separation.

 

Record-keeping

The new law also clarifies that the employer does not have to inquire for record-keeping purposes why someone took paid time off. Because of this, the employer is not liable for failing to accurately keep records when, for example, it has a paid-time-off policy and the employee does not announce the purpose of the paid time off.

 

The takeaway

These changes are important and your human resources manager needs to know about them so that your organization stays compliant, which reduces the chances of being sued by someone.

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Prepare Now for New Sick Leave Law

California’s paid sick leave law takes effect July 1 and if you haven’t begun preparing for this change, you should start now.

Did you know that parts of the law have already taken effect? Do you know what they are?

There are actions you should take now to prepare for the law, and you should also have policies in place before the law takes effect. We explain here.

 

What you should be doing now

  • Post the new paid sick leave notice in a place where employees can easily see it.
  • Provide the updated Wage Theft notice to nonexempt employees.
  • Know that anti-discrimination and anti-retaliation provisions already apply, even before employees being accruing benefits on July 1.
  • Check if there’s a local ordinance for paid sick leave that applies to your workers.

 

Before July 1

  • Review your existing policies for sick leave and paid time off.
  • Choose which method you’ll use to provide paid sick leave benefits to employees – accrual, lump sum or existing policy.
  • Ensure your policies cover all eligible employees, and for all permissible uses.
  • Communicate your paid sick leave policy to your staff.
  • Train supervisors and managers about specific paid sick leave rights for employees.
  • Update your payroll systems to track sick leave.

 

On July 1 and after

  • Begin providing paid sick leave benefits on July 1 to employees who have worked in California for more than 30 days within a year from their start date.
  • Allow employees to start using accrued paid sick days on the 90th day of employment, and upon reasonable request.
  • Follow the law’s requirements regarding usage, record-keeping and timely payment.
  • Track paid sick leave and update record-keeping systems as required.
  • Show how many days of paid sick leave an employee has available, either on a pay stub or on a written document issued the same day as the paycheck.

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