Employment Law Update: Beyond Affirmative Action. Cara Crotty & Sylvia Smith Constangy, Brooks, Smith & Prophete, LLP

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1 Employment Law Update: Beyond Affirmative Action Cara Crotty & Sylvia Smith Constangy, Brooks, Smith & Prophete, LLP

2 workers compensation employment litigation A wider lens on workplace law labor relations wage & hour OSHA e-law immigration global mobility benefits/erisa affirmative action trade secrets /noncompete

3 Constangy offices Bar admissions where you need us

4 46% of our executive committee are women & minorities 35% 83% of our partners are women (national average 22%) of our associates are women or minorities singular focus #4 firm in the U.S. for women attorneys Top 100 firm for minority attorneys Top 10 firm for black attorneys Top 100 firm for women attorneys Top 25 firm for women partners diverse perspectives The FIRST NLJ350 law firm to have an African-American named partner Source for averages: Law360

5 Presenters Cara Crotty Partner Columbia, SC Chair, Affirmative Action/OFCCP Compliance Practice Group Sylvia Smith AAP Specialist Atlanta, GA

6 Topics Final Rule on FLSA White Collar Exemptions Final Rules on Wellness Programs Final Rule on Sex Discrimination Guidance on Pregnancy Discrimination Proposed Guidance on National Origin Discrimination

7 Final Rule on FLSA White Collar Exemptions

8 Major Changes in FLSA Final Rule Covers executive, administrative, professional, and highly compensated employees Salary threshold raised from $455/week to $913/week $47,476 per year 40 th percentile of lowest wage census region Comp for highly compensated employee raised to 90 th percentile nationally, which is $134,004 Automatic increases to these percentiles every 3 years First increase set for January 1, 2020 Effective December 1, 2016

9 Other Facets of FLSA Rule Non-discretionary bonuses and incentive payments (including commission) can satisfy up to 10% of new salary level Paid at least quarterly No change to duties test No carve-out for colleges and universities Non-enforcement policy for organizations serving people with disabilities

10 What to do with Exempt Employees Below Thresholds? Raise salaries to $47,476 Reclassify to non-exempt status Determine regular rate of pay to calculate OT rate Factors to consider Impact on benefits, vacation/pto accrual, bonuses Employee relations State law requirements (notice, calculating OT)

11 Economic Consideration Any salary below $43,160 will have to be raised at least 10% now and every three years. Compare to cost of OT How many hours are exempt employees working? Weekly salary/40 x 1.5 x expected OT hours

12 EEOC s Final Rules on Wellness Programs

13 Two Rules: ADA & GINA ADA Applies to requests for health information from employees GINA Applies to requests for health information from employees family members Apply to health insurance plans whose plan years begin on or after January 1, 2017

14 Wellness Program Health promotion and disease prevention programs and activities offered to employees as part of employersponsored group health plan or as a benefit of employment Often ask for health risk assessment or biometric screening for risk factors Rules apply to wellness programs that have disabilityrelated questions or medical exams to earn reward or avoid penalty

15 What employees are covered? Rules apply to wellness plans available to: Employees who are not enrolled in employer s group health insurance Employees who are enrolled in only one of a variety of group health insurance options offered by the employer Employees who are enrolled in an Obamacare plan through an exchange for which the employer provides reimbursements

16 Voluntary If a wellness program is reasonably designed, it can offer incentives/inducements to employees and spouses if it is voluntary Participation is not required Health insurance coverage is not denied or limited because employee or spouse declines to participate Employees are not retaliated against, or coerced, intimidated, or threatened if they choose not to participate or fail to achieve certain health outcomes Must provide notice that explains what medical information will be obtained, how it will be used, who will receive it, and restrictions on disclosure Meets limits on incentives/inducements

17 Incentives & Inducements ADA = incentives GINA = inducements Incentives/inducements for participation in wellness programs that collect information protected by ADA or GINA include Financial In-kind De minimus Employee and spouse can each get a max of 30% of the cost of employee-only coverage Must be reasonably designed to promote health or prevent disease

18 Not Reasonably Designed Wellness program not reasonably designed if: Collects data without providing feedback or using it to design program that fits needs of participants Subterfuge for evading law Appears to be designed to shift health costs from employer to employee Requires overly burdensome amount of time for participation Involves unreasonably intrusive procedures Requires employees to incur substantial costs for medical exams

19 Tobacco/Smoking Cessation Incentives Subject to 50% limit in HIPAA and ACA If program requests medical information or exam within meaning of ADA, subject to 30% limit in EEOC s rule

20 OFCCP s Final Rule on Sex Discrimination

21 Sex Discrimination Rule Effective August 15, 2016 Rescinds prior Sex Discrimination Guidelines Defines sex Pregnancy, childbirth, or related medical conditions Gender identity Transgender status Sex stereotyping Sexual orientation not included But covered by recent changes to EO 11246

22 Examples of Disparate Treatment Making distinctions between married and unmarried individuals that are not applied the same to men and women Steering women into lower paying jobs Denying transgender employees access to restrooms or similar facilities designated for use by the gender with which they identify Treating individuals adversely because they have received, are receiving, or are planning to receive transition-related medical services designated to facilitate the adoption of a sex or gender other than the individual s designated sex at birth Trans-exclusive health benefits unlawful

23 Examples of Disparate Impact Relying on recruitment or promotion methods, such as word of mouth or tap on the shoulder that are not job-related and consistent with business necessity Height and weight qualifications that are not necessary for the job Strength, agility, or other physical requirements that are not necessary for the job (or exceed what is necessary)

24 Compensation Discrimination Compare similarly situated employees Tasks performed Skills, effort, levels of responsibilities Working conditions Job difficulty Minimum qualifications Other objective factors Legitimate factors Particular skill or attribute Education Work experience Position, level, or function Tenure Performance ratings Market forces/prior salary depend on each case

25 Pregnancy Discrimination Must be treated the same as other persons not so affected, but similar in their ability or inability to work Lactation = pregnancy-related condition Denial of adequate time and place to express milk considered unlawful Failure to provide leave, or providing insufficient leave, may be unlawful if it has adverse impact and is not jobrelated and consistent with business necessity

26 Examples of Sex Stereotyping Taking adverse action against a woman based on stereotypes about attire Harassing a male employee because he is effeminate or not masculine Treating individuals adversely based on their sexual orientation Treating individuals adversely based on sex-based stereotypes about caregiver responsibilities

27 Examples of Best Practices Avoiding gender-specific job titles (lineman) Designating single-user restrooms and facilities as gender-neutral Encouraging both men and women to engage in caregiving activities Providing appropriate time off and flexible workplace policies for both men and women

28 EEOC s Guidance on Pregnancy Discrimination

29 Updated Following Young v. UPS Supreme Court decision 2015 PDA Discrimination based on pregnancy, childbirth, or related medical conditions is prohibited sex discrimination Requires employers treat women affected by pregnancy or related medical conditions the same as non-pregnant applicants or employees who are similar in their ability or inability to work ADA Impairments related to pregnancy may be disabilities if they substantially limit one or more major life activity Pregnant women may be regarded as disabled

30 Protection for those Not Currently Pregnant No differential treatment based on Fertility Childbearing capacity Desire to become pregnant Past pregnancy Concerns about risks to pregnant woman or fetus rarely justify restricting from certain jobs

31 Medical Conditions Related to Pregnancy Symptoms Back pain Disorders Preeclampsia Gestational diabetes Complications Bed rest After-effects of delivery Lactation Must be able to address lactation needs to the same extent as coworkers are able to address other similarly limiting medical conditions

32 Other Concerns Caregiving responsibilities Harassment Equal access to benefits Light duty Leave Health insurance

33 Examples of Pregnancy-Related Disabilities Pelvic inflammation Pregnancy-related carpal tunnel syndrome Disorders of cervix or uterus that necessitate physical restrictions for full-term pregnancy Sciatica Gestational diabetes Preeclampsia Association with newborn with a disability

34 Pregnancy & Reasonable Accommodation Redistributing non-essential functions Modifying policies for more frequent breaks or drinks at workstation Modifying schedule due to morning sickness Telework if bedrest required Granting additional leave Reassigning to light duty position temporarily Providing equipment, such as stool for sitting

35 EEOC s Proposed Guidance on National Origin Discrimination

36 What is National Origin Discrimination? Discrimination because: Individual or ancestors is from a certain place Individual has physical, cultural, or linguistic characteristics of particular national origin group Individual is non-american or foreign born Belief that individual (or ancestors) is of certain national origin Association with someone of particular national origin Citizenship status

37 Discriminatory Practices Relying on word of mouth recruitment or posting in racially homogenous areas, if it has the purpose or effect of excluding others Relying on discriminatory customer preferences Segregating applicants and employees based on national origin Refusing to hire individual who does not have SSN Language restrictive policies that are not job-related Decisions based on accent unless it interferes materially with job performance Imposing citizenship test, unless required by federal law

38 Questions? Cara Crotty, Esq Sylvia Smith, AAP Specialist