Affordable Care Act
The U.S. Supreme Court affirmed the Fourth Circuit Court decision in King v. Burwell, holding that individuals who get their health insurance through the federal government exchange will be eligible for tax subsidies under the Affordable Care Act. The decision leaves employers in largely the same position they’ve faced since ACA’s passage, though it clarifies that they cannot avoid shared responsibility penalties with respect to an employee solely because he or she obtained subsidized coverage though an exchange set up by the federal government instead of by the state. Otherwise, requirements applicable to employers and group health plans continue to apply without change.
Employers should now focus on compliance: 2015 reporting requirements will be due in early 2016 for large employers and employers of any size that sponsor self-funded group health plans. Employers should take steps to make sure they understand their obligations and are currently tracking any necessary data. In our experience, most employers are not prepared for what’s coming down the pike.
The U.S. Supreme Court overturned the Sixth Circuit Court decision in Obergefell v. Hodges, holding that states must issue marriage licenses to same-sex couples and must also recognize a same-sex marriage performed in other states.
The decision significantly impacts employers with respect to employee benefits and policies. FMLA regulations defining “spouse” to include same-sex spouses are now fully enforceable, so employers should update their FMLA policies to provide the same coverages for same-sex married couples as for other married couples. Multi-state employers that have been juggling state-specific policies on other leaves that were based on state-law recognition of same-sex marriages can now implement a uniform policy that applies to all locations.
Group insurance, retirement and other employee benefit plans will also need to be reviewed and updated. Employees may want to update their emergency contact or beneficiary information listed on group life insurance or retirement plans. In light of potential income tax implications for newly recognized spouses, some employees may want to change their tax withholding information. Consult your benefits attorney for advice on required changes there will be several.
Also, to the extent that your HR policies do not yet expressly include sexuality, sexual preference, gender identity among the protected characteristics in your workplace, anticipate a strong push to mandate those protections soon. Prudent employers, moreover, may also start to anticipate how LGBT issues in the workplace will implicate other HR policies, such as Title VII’s obligation to accommodate certain religious beliefs and practices.
Proposed Revised FLSA Regulations Would Double Minimum Salary for Exempt Employees
DOL’s June 30, 2015 Notice of Proposed Rulemaking (NPRM) includes three major changes:
- Increasing the minimum salary requirement from $455 per week ($23,660 per year) to $970 per week ($50,440 per year) in 2016;
- Increasing the minimum annual pay required for the “highly-compensated” employee (HCE) exemption from $100,000 to $122,148; and
- Adding a mechanism for automatic adjustment to inflation for minimum salary and HCE levels over time by tying them to one of two potential economic indices.
Proposed revisions must go through a notice and comment period (usually 60 days), and may be subjected to further revision before being published as a “Final Rule.” The effective date the changes will become law is currently estimated around mid-2016 or later.
Notably, the DOL’s NPRM did not propose making the duties test for the executive exemption more rigorous, despite speculation based on policy remarks on the subject. While notice and comment is not likely to materially affect the proposals already put forth, increasing required responsibility for executive exemption should not be ruled out as part of the forthcoming Final Rule.
Employers who have employees that do not currently qualify for overtime compensation, but who make less than a $970 weekly salary should begin considering alternative pay plans now. In many instances, we can prepare an FLSA-compliant (now and prospectively) pay-plan that still fits within the company’s budget (with or without overtime). And addressing the problem before incurring unpaid overtime liability is always preferable.
DOL Releases New Model FMLA Forms
The DOL issued seven new model notice and certification forms valid through May 31, 2018; the previous versions having expired in February 2015. For the most part, the new model FMLA forms are the same as their previous versions, with one change: the addition of reference to the Genetic Information Nondiscrimination Act (GINA). The model forms are not required, but meet the requirements the DOL imposes on employers for FMLA paperwork and are therefore useful guides.
The new GINA language states: “Do not provide information about genetic tests, as defined in 29 C.F.R. Section 1635.3(f), genetic services, as defined in 29 C.F.R. Section 1635.3(e), or the manifestation of disease or disorder in the employee’s family members, 29 C.F.R. Section 1635.3(e).”
The new model forms are available on the DOL’s website: http://www.dol.gov/whd/fmla/2013rule/militaryForms.htm.