Applying the lessons learned in 2013 can be the building blocks for what’s ahead in 2014. The obstacles created by this environment of unprecedented policy changes and regulatory scrutiny coupled with a new incoming legislature, will undoubtedly create formidable challenges for HR professionals in the year ahead. Mitchell Boyarsky, Director in the Gibbons Employment & Labor Law Department, will serve as a guest speaker at the upcoming program, “Human Resources Roundtable: On Your Mark, Get Set….Are Your Ready for the 2014 Challenges?” This program is being hosted by the Commerce and Industry Association of New Jersey on Wednesday, December 4, at the Hilton Hasbrouck Heights in Hasbrouck Heights, NJ.
Category: Employee Benefits
On September 25, 2013, the City of Jersey City became the first municipality in New Jersey to pass paid sick leave legislation. City Ordinance 13.097, which takes effect on January 23, 2014, makes Jersey City the seventh U.S. state or municipality to enact legislation mandating paid sick leave. Previously, New York City, San Francisco, Seattle, and Portland passed similar laws. The District of Columbia and the state of Connecticut have also passed such legislation. The Jersey City ordinance mandates that individuals employed by employers with 10 or more employees accrue 1 hour of paid sick time for every 30 hours worked, up to a maximum accrual of 40 hours. Those individuals employed by employers with less than 10 employees will accrue sick time under the same formula, however it need not be paid.
U.S. Supreme Court Ruling in Windsor Striking Down DOMA Will Expand Workplace Protections for Employees in Legally Recognized Same-Sex Marriages
The U.S. Supreme Court issued a critical decision on June 26, 2013, striking down a provision of the Defense of Marriage Act (“DOMA”) that limited the definition of marriage for federal purposes to unions of opposite-sex couples. The Court’s ruling in United States v. Windsor will have far-reaching implications for employers, at least in those states that recognize same-sex marriages, in terms of leave administration, benefits eligibility and workplace protections. In another case decided the same day, Hollingsworth v. Perry, the Court let stand a Federal District Court ruling in California that an amendment to the California Constitution limiting marriage to opposite sex couples was unconstitutional. In neither case did the Court require all states to recognize same-sex marriages.
Employers are reminded that the Federal Department of Labor (“DOL”) has issued new model COBRA election notices for single employer health plans aligned with Patient Protection Affordability Care Act (“PPACA”) requirements. Under COBRA (the Consolidated Omnibus Budget Reconciliation Act), employees who experience a qualifying event, such as a loss of employment, are able to continue coverage under the employer’s group health plan for themselves and qualified beneficiaries by paying the COBRA premium. The new model notices are available on the DOL website in both English and Spanish.
In US Airways, Inc. v .McCutchen, decided on April 16, 2013, the U.S. Supreme Court once again emphasized that in disputes involving employee benefits plans governed by the Employee Retirement Income Security Act, 29 U.S.C. § 1001, et seq. (“ERISA”), it is the unambiguous language of the plan in question that controls the rights of the parties and that general equitable principles cannot be used to supersede the terms of the plan. In areas where the plan is silent, however, courts may employ appropriate equitable principles to construe the plan. At issue in US Airways was the reimbursement provision of an employer’s health benefits plan that purported to give the employer the right to recoup medical benefits paid to an employee injured in an automobile accident who thereafter recovered funds from third parties as a result of the accident, although the amount the employee actually recovered after paying his attorney was less than the amount he owed his employer. The Supreme Court rejected the employee’s attempt to apply equitable principles of unjust enrichment to limit the application of the reimbursement provision. Holding, however, that the plan was silent as to the allocation of the costs, including attorneys fees, incurred by the employee in his efforts to recover from third parties, the Court further held the equitable principle known as “the common fund rule” should apply, entitling the employee to reasonable attorneys fees from the funds recovered. The decision makes clear the importance to employers of accomplishing the objectives of their benefits plans with clear-cut language.
Earlier this month, a new bill, A3970, was introduced in the New Jersey State Assembly by Assemblymen Peter J. Barnes, III, Joseph V. Egan, and Wayne P. Deangelo limiting the enforcement of certain provisions in employment contracts if the individual is eligible for unemployment compensation. It is unclear if the bill will ultimately pass, and be signed into law by the Governor, but there appears to be support within the state Assembly and Senate. The bill provides that if an unemployed individual is found to be eligible to receive unemployment compensation benefits, that individual shall not be bound by any covenant, contract, or agreement not to compete, not to disclose, or not to solicit. The bill only applies to agreements entered into AFTER the date of enactment.
Are You an “Applicable Large Employer” Required to “Play or Pay” Under the ACA’s Employer Mandate and the IRS’ Proposed Shared Responsibility Regulations?
In addition to the controversial and much-litigated Individual Mandate, the Patient Protection and Affordable Care Act of 2010 (“ACA”) includes an equally controversial (though not quite as heavily litigated) “Employer Mandate.” The Employer Mandate can be found in new section 4980H of the Internal Revenue Code. Effective for plan years beginning in 2014, “applicable large employers” will face a choice. They must either (i) offer substantially all (at least 95%) of their full-time employees (employees working on average 30 or more hours per week) and their non-spousal dependants “affordable” health insurance providing “minimum essential coverage” and “minimum [actuarial] value” or face potential penalties. If such coverage is not offered penalties apply if any of their full-time employees qualify under the ACA for a premium tax credit or cost-sharing reduction in connection with the purchase of health insurance.
EBSA Provides Additional Guidance Regarding the Patient Protection and Affordable Care Act, the Mental Health Parity and Addiction Equity Act and the Health Insurance Portability and Accountability Act
The U.S. Department of Labor’s Employee Benefits Security Administration (“EBSA”) recently provided additional guidance on its website regarding implementation of provisions of the Patient Protection and Affordable Care Act (PPACA), implementation of the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) and the Health Insurance Portability and Accountability Act of 1996 (HIPAA). This guidance, which is provided in the form of Frequently Asked Questions and responses, was prepared jointly by the Departments of Health and Human Services, Labor and the Treasury.
New York State employers who extend funeral or bereavement leave to employees after the death of a relative must, effective October 29, 2010, provide the same leave after the death of a same-sex committed partner. Although this amendment to the New York Civil Rights Law creates no obligation for employers who do not offer funeral or bereavement leave to any employees, it does require a change for the many New York employers who currently provide such leave to various groups of defined relatives, but not to same-sex committed partners. Those policies and related practices should be revised promptly to comply with the new law. Additionally, while the new law does not apply to employers outside New York State, they may want to consider similar revisions for business reasons.