AAIM COMPLIANCE UPDATE – JUNE 2024
The past couple of weeks have been busy from an employment law perspective. The courts, government agencies, and state legislatures have been busy! Here are a few things to catch you up.
What You’ll Learn About
EQUAL EMPLOYMENT OPPORTUNITY
- The Equal Employment Opportunity Commission (EEOC) filed suits against 15 employers because they failed to file their EEO-1 reports for 2021 and 2022. While not unprecedented, it’s been more than a decade since this occurred. If you missed the June 4 deadline to file your EEO-1 report for 2023, there is a grace period that allows you to submit your data by July 9. Who has to submit data? Private-sector employers covered by Title VII with:
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- 100+ employees
- federal contractors (or first-tier subcontractors) with 50 employees + $50,000+ in federal contracts; or
- with fewer than 100 employees if it has a joint employer relationship with another entity and together the entities have 100 employees or more.
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- The U.S. Circuit Court of Appeals for the Eleventh Circuit, which covers Florida, Georgia, and Alabama, recently ruled that a group health plan’s exclusion of “drugs for sex change surgery” and “services and supplies for a sex change and/or the reversal of a sex change” is facially discriminatory and violates Title VII of the Civil Rights Act of 1964. The court determined that “because transgendered persons are the only plan participants who qualify for gender-affirming surgery, the plan denies health care coverage based on transgender status.” In 2020, the U.S. Supreme Court in Bostock v. Clayton County, Georgia, determined that discrimination based on transgender status entails discrimination based on sex under Title VII. The Eleventh Circuit court applied that court case to their decision related to group health plan exclusions. Regardless of where your business is located, employers are encouraged to review their group health insurance plan exclusions and consider eliminating those exclusions to avoid the risk of potential litigation.
FAIR LABOR STANDARDS ACT
Business groups have banded together to challenge the recently issued U.S. Department of Labor (DOL) final rule that would substantially increase the guaranteed weekly salary that must be paid to exempt workers. The plaintiffs argue that the DOL exceeded their authority in issuing such a substantial increase. Additionally, they argue that the automatic increase to the salary threshold violates the Administrative Procedure’s Act notice-and-comment requirements and that they failed to explain their change of policy. What does this mean for employers? Proceed as planned with the first increase becoming effective July 1, 2024, unless and until a federal court enjoins this new rule.
OCCUPATIONAL SAFETY & HEALTH ADMINISTRATION (OSHA)
- OSHA has updated its Hazard Communication Standard. The goal of these changes is to make for a safer environment for employees and first responders. These updates include:
- New criteria for classifying certain health and physical hazards
- Revised Labels
- Amended content for Safety Data Sheets
- New provisions for trade secrets
- OSHA’s “Walkaround Rule” was effective May 31. This rule allows third parties, including union representatives, to access employers’ private property to accompany an OSHA official during a workplace safety inspection. This rule is being challenged. Business groups have joined together to file a lawsuit alleging that OSHA exceeded its authority and violated the Administrative Procedure’s Act.
MARIJUANA
The Department of Justice has issued a proposed rule that would reschedule marijuana from a Schedule I to a Schedule III substance under the Controlled Substances Act. If finalized, the rule would reclassify marijuana as a drug with “moderate to low potential for physical and psychological dependence.” Will this help employers navigate the murky waters of medical and recreational marijuana use? Probably not. It doesn’t affect the challenges employers face with enforcing their drug-free workplace and drug testing policies. It also doesn’t clarify how a changed federal rule on marijuana will affect state laws regarding marijuana.
WHISTLEBLOWERS – SARBANES-OXLEY
The Sarbanes-Oxley Act of 2002 (SOX) applies to publicly traded companies or companies that are required to file certain reports with the Securities and Exchange Commission (SEC). Provisions of SOX include protections for employees who “blow the whistle” on activities that may be related to fraud and/or abuse. Under SOX, the employee must show that their protected activity “was a contributing factor in the unfavorable personnel action alleged in the complaint.” However, in the case of Murray v. UBS, the U.S. Supreme Court concluded that whistleblowers only need to demonstrate that their protected activity was a contributing factor to an unfavorable personnel decision, not that the employer acted with retaliatory intent. This decision is expected to make it easier for whistleblowers to establish claims of retaliation.
BENEFITS
Self-insured plans must pay the Patient-Centered Outcomes Research Institute (PCORI) fees that were established by the Patient Protection and Affordable Care Act by July 31, 2024, for plan years ending in 2023.
- For plan years ending after October 1, 2023, and before October 1, 2024, the fee is $3.22 per covered life.
- For non-calendar year plans (those ending on or after October 1, 2022, but before October 1, 2023), the fee per covered life is $3.
STATE NEWS
- Minimum wage rates in certain states and municipalities will increase on July 1. Need info about your state? Please contact the Solutions Team at team@aaimea.org.
- Florida has a new employment law bill that goes into effect July 1. Under CS/HB 433, political subdivisions are prohibited from maintaining a minimum wage other than a state or federal minimum wage. The new law also prohibits political subdivisions from controlling, affecting, or awarding preferences based on the wages or employment benefits of entities doing business with the political subdivision; revising and providing applicability; etc. Critical for private businesses, though is the authority granted to state government to set rules and guidelines related to heat exposure. To get a head start on that provision of this law, we encourage all employers to review and implement OSHA’s guidelines to prevent heat illness.
- Illinois has issued final rules for the Paid Leave for All Workers (PLAW) Act. Employers may require employees to provide up to 7 days’ notice of the need for leave if it was foreseeable, but if the leave is unforeseeable, an employee must only provide as much notice as is practical. The Act also prohibits employers from asking employees for the reason they are taking the leave or for any documentation supporting the need for leave. A change the final rule made was to define “operational needs” that could be used to deny PLAW leave requests. The final rule defines “operational needs” and would allow denial if: 1) the policy for considering requests under the Act, including any basis for denial, is disclosed to the employee in writing; 2) the policy establishes certain limited circumstances in which paid leave can be denied in order to meet the employer’s operational needs; and 3) the policy is consistently applied and does not, in effect, deny employees adequate opportunity to use the leave over the 12-month period.
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