Our colleagues , at Epstein Becker Green, have a post on the Retail Labor and Employment Law blog that will be of interest to many of our readers in the health care industry: “Proposed Federal Bill Would Pre-Empt State and Local Paid Sick Leave Laws.”

Following is an excerpt:

On November 2, 2017, three Republican Representatives, Mimi Walters (R-CA), Elise Stefanik (R-NY), and Cathy McMorris Rodgers (R-WA), introduced a federal paid leave bill that would give employers the option of providing their employees a minimum number of paid leave hours per year and instituting a flexible workplace arrangement. The bill would amend the Employee Retirement Income Security Act (“ERISA”) and use the statute’s existing pre-emption mechanism to offer employers a safe harbor from the hodgepodge of state and local paid sick leave laws. Currently eight states and more than 30 local jurisdictions have passed paid sick leave laws.

The minimum amount of paid leave employers would be required to provide depends on the employer’s size and employee’s tenure. The bill does not address whether an employer’s size is determined by its entire workforce or the number of employees in a given location. …

Read the full post here.

In a recent update to the IRS’ Questions and Answers on Employer Shared Responsibility Provisions under the Affordable Care Act, the IRS has advised that it plans to issue Letter 226J informing applicable large employers (ALEs) of their potential liability for an employer shared responsibility payment for the 2015 calendar year, if any, sometime in late 2017.  The IRS plans to issue Letter 226J to an ALE if it determines that, for at least one month in the year, one or more of the ALE’s full-time employees was enrolled in a qualified health plan for which a premium tax credit (PTC) was allowed (and the ALE did not qualify for an affordability safe harbor or other relief for the employee). The IRS will determine whether an employer may be liable for an employer shared responsibility payment, and the amount of the potential payment, based on information reported to the IRS on Forms 1094-C and 1095-C and information about the ALEs full-time employees that were allowed the premium tax credit.

In my blog last year “ACA Information Reporting: Ensuring Big Data Analyses Do Not Lead to Big Penalties,” the terms of a Letter 226J were still unclear, yet the imperative to establish an approach for reviewing and responding to these types of letters was forewarned.  If an ALE receives a Letter 226J from the IRS, the employer will have only 30 days from the date of the letter to dispute liability for a penalty payment.  With the holiday season and other year-end deadlines, preparing a response with sufficient detail will undoubtedly become a daunting task.  As provided on the model Letter 226J, employers that wish to dispute the liability assessment will need to:

  • Complete, sign, and date a Form 14764, Employer Shared Responsibility Payment (ESRP) Response, and send it to the IRS by the due date along with a signed statement explaining why the employer disagrees with part or all of the proposed ESRP,
  • Ensure that the statement describes changes, if any, the employer wants to make to the information reported on Form(s) 1094-C or Forms 1095-C,
  • Make changes, if any, on the Employee PTC Listing using the indicator codes in the Instructions for Forms 1094-C and 1095-C for the tax year shown on the first page of this letter,
  • Include the revised Employee PTC Listing, if necessary, and any additional documentation supporting the employer’s changes with the Form 14764, ESRP Response, and signed statement.

If the ALE responds to Letter 226J, the IRS will acknowledge the ALE’s response to Letter 226J with an appropriate version of Letter 227 (a series of five different letters that, in general, acknowledge the ALE’s response to Letter 226J and describe further actions the ALE may need to take).  If, after receipt of Letter 227, the ALE disagrees with the proposed or revised employer shared responsibility payment, the ALE may request a pre-assessment conference with the IRS Office of Appeals.  The ALE should follow the instructions provided in Letter 227 and Publication 5, Your Appeal Rights and How To Prepare a Protest if You Don’t Agree, for requesting a conference with the IRS Office of Appeals.  A conference should be requested in writing by the response date shown on Letter 227, which generally will be 30 days from the date of Letter 227.

Now is the time to consider a self-audit of 1095-C reporting, as well as organization of documents that may be needed to prepare a response and/or appeal to the IRS. If the ALE does not respond to either Letter 226J or Letter 227, the IRS will assess the amount of the proposed employer shared responsibility payment and issue a notice and demand for payment, Notice CP 220J.

Our colleagues , at Epstein Becker Green, have a post on the Retail Labor and Employment Law blog that will be of interest to many of our readers in the technology industry: “New Jersey’s Appellate Division Finds Part C of the “ABC” Independent Contractor Test Does Not Require an Independent Business

Following is an excerpt:

In a potentially significant decision following the New Jersey Supreme Court’s ruling in Hargrove v. Sleepy’s, LLC, 220 N.J. 289 (2015), a New Jersey appellate panel held, in Garden State Fireworks, Inc. v. New Jersey Department of Labor and Workforce Development (“Sleepy’s”), Docket No. A-1581-15T2, 2017 N.J. Super. Unpub. LEXIS 2468 (App. Div. Sept. 29, 2017), that part C of the “ABC” test does not require an individual to operate an independent business engaged in the same services as that provided to the putative employer to be considered an independent contractor. Rather, the key inquiry for part C of the “ABC” test is whether the worker will “join the ranks of the unemployed” when the business relationship ends. …

Read the full post here.

For the second time in as many years, California Governor Jerry Brown has vetoed “wage shaming” legislation that would have required employers with 500 or more employees to report gender-related pay gap statistics to the California Secretary of State on an annual basis beginning in 2019 for publication on a public website. Assembly Bill 1209 (“AB 1209”), which we discussed at length in last month’s Act Now advisory, passed the Legislature despite widespread criticism from employers and commerce groups.  This criticism included concerns that publication of statistical differences in the mean and median salaries of male and female employees without accounting for legitimate factors such as seniority, education, experience, and productivity could give a misleading impression that an employer had violated the law.  Opponents also decried the burden the bill would place on employers to do data collection and warned that it would lead to additional litigation.  In vetoing the measure, Governor Brown noted the “ambiguous wording” of the bill and stated he was “worried that this ambiguity could be exploited to encourage more litigation than pay equity.”

However, the same pen that vetoed AB 1209 signed another pay-equity law last week: Assembly Bill 168 (“AB 168”).  AB 168 precludes California employers from asking prospective employees about their salary history information.  “Salary history information” includes both compensation and benefits.  Like similar laws passed recently in several other states and cities, the policy underlying the inquiry ban is that reliance upon prior compensation perpetuates historic pay differentials.  Opponents have argued that such a ban will make it more difficult for employers to match job offers to market rates.  Go to our Act Now Advisory on AB 168 for a comprehensive review of this new law.

When: Thursday, September 14, 2017 8:00 a.m. – 4:30 p.m.

Where: New York Hilton Midtown, 1335 Avenue of the Americas, New York, NY 10019

Epstein Becker Green’s Annual Workforce Management Briefing will focus on the latest developments in labor and employment law, including:

  • Immigration
  • Global Executive Compensation
  • Artificial Intelligence
  • Internal Cyber Threats
  • Pay Equity
  • People Analytics in Hiring
  • Gig Economy
  • Wage and Hour
  • Paid and Unpaid Leave
  • Trade Secret Misappropriation
  • Ethics

We will start the day with two morning Plenary Sessions. The first session is kicked off with Philip A. Miscimarra, Chairman of the National Labor Relations Board (NLRB).

We are thrilled to welcome back speakers from the U.S. Chamber of Commerce. Marc Freedman and Katie Mahoney will speak on the latest policy developments in Washington, D.C., that impact employers nationwide during the second plenary session.

Morning and afternoon breakout workshop sessions are being led by attorneys at Epstein Becker Green – including some contributors to this blog! Commissioner of the Equal Employment Opportunity Commission, Chai R. Feldblum, will be making remarks in the afternoon before attendees break into their afternoon workshops. We are also looking forward to hearing from our keynote speaker, Bret Baier, Chief Political Anchor of FOX News Channel and Anchor of Special Report with Bret Baier.

View the full briefing agenda and workshop descriptions here.

Visit the briefing website for more information and to register, and contact Sylwia Faszczewska or Elizabeth Gannon with questions. Seating is limited.

Our colleagues Brian W. Steinbach and Judah L. Rosenblatt, at Epstein Becker Green, have a post on the Heath Employment and Labor blog that will be of interest to many of our readers in the technology industry: “Mayor Signs District of Columbia Ban on Most Employment Credit Inquiries.”

Following is an excerpt:

On February 15, 2017, Mayor Muriel Bowser signed the “Fair Credit in Employment Amendment Act of 2016” (“Act”) (D.C. Act A21-0673) previously passed by the D.C. Council. The Act amends the Human Rights Act of 1977 to add “credit information” as a trait protected from discrimination and makes it a discriminatory practice for most employers to directly or indirectly require, request, suggest, or cause an employee (prospective or current) to submit credit information, or use, accept, refer to, or inquire into an employee’s credit information. …

Read the full post here.

Our colleague Sharon L. Lippett, a Member of the Firm at Epstein Becker Green, has a post on the Financial Services Employment Law blog that will be of interest to many of our readers in the technology industry: “New DOL FAQs Provide Additional Guidance (and Comfort) for Plan Sponsors.”

Following is an excerpt:

Based on recent guidance from the Department of Labor (the “DOL”), many sponsors of employee benefit plans subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA Plans”) should have additional comfort regarding the impact of the conflict of interest rule released by the DOL in April 2016 (the “Rule”) on their plans. Even though it is widely expected that the Trump administration will delay implementation of the Rule, in mid-January 2017, the DOL released its “Conflict of Interest FAQs (Part II – Rule)”, which addresses topics relevant to ERISA Plan sponsors. As explained below, these FAQs indicate that the Rule, as currently designed, should not require a large number of significant changes in the administration of most ERISA Plans. …

Read the full post here.

Our colleagues Joshua A. Stein and Frank C. Morris, Jr., at Epstein Becker Green have a post on the Health Employment And Labor blog that will be of interest to many of our readers in the technology industry: “The U.S. Access-Board Releases Long-Awaited Final Accessible Medical Diagnostic Equipment Standards.”

Following is an excerpt:

As part of a flurry of activity in the final days of the Obama Administration, the U.S. the Architectural and Transportation Barriers Compliance Board (the “Access Board”) has finally announced the release of its Accessibility Standards for Medical Diagnostic Equipment (the “MDE Standards”). Published in the Federal Register on Monday, January 9, 2017, the MDE Standards are a set of design criteria intended to provide individuals with disabilities access to medical diagnostic equipment such as examination tables and chairs (including those used for dental or optical exams), weight scales, radiological equipment, mammography equipment and other equipment used by health professionals for diagnostic purposes. …

Read the full post here.

Earlier this month, in the waning moments of the Obama Administration, the U.S. Architectural and Transportation Barriers Compliance Board (the “Access Board”) took the long-anticipated step of requiring websites of federal government agencies to comply with the Web Content Accessibility Guidelines (“WCAG”) 2.0 Levels A and AA.  (The Access Board was established in 1973 to develop and maintain standards for accessible design in the built environment, transit vehicles and systems, telecommunications equipment and electronic and information technology.)

On Thursday, January 5, 2017, the Access Board announced the release of the long anticipated “Information and Communication Technology (“ITC”) Standards and Guidelines,” which update and combine the previously separate requirements of Section 508 of the Rehabilitation Act of 1973 (requiring federal agencies to make their electronic and information technology accessible to people with disabilities) and Section 255 of the Communications Act of 1934 (requiring telecommunication equipment manufacturers and service providers to make their products and services accessible to people with disabilities), into one rule.  The ITC Standards and Guidelines (also referred to as the “508 Refresh”) were officially released by the Access Board on Monday, January 9, 2017 and published in the Federal Register on January 18, 2017.

This final rule includes the following noteworthy changes from the previously published Notice of Proposed Rulemaking (“NPRM”):

  • Provides a “Safe Harbor” provision;
  • Incorporates the Web Content Accessibility Guidelines (“WCAG”) 2.0 Levels A and AA by reference;
  • Covers all types of public-facing content, as well as nine (9) categories of non-public-facing content that communicate agency official business; and
  • Extends the previously contemplated compliance dates.

Application

To Whom Do the ITC Standards and Guidelines Apply?

The Section 508-based ITC Standards apply only to Federal Agencies subject to Section 508 of the Rehabilitation Act of 1973 who develop, procure, maintain or use ITC and is intended to ensure Federal employees with disabilities have comparable access to, and use of, such information and data relative to other Federal employees unless doing so would impose an undue burden.

The Section 255-based guidelines apply to manufactures of telecommunication equipment and address the accessibility of newly released, upgraded, or substantially changed telecommunications equipment (as well as support documentation and services, including electronic documents and web-based product support) subject to Section 255 of the Communications Act of 1934.

Who Do the ITC Standards and Guidelines Not Apply To?

  • Private Businesses – including healthcare, retail, hospitality, financial services, etc.;
  • State and Local Government Agencies;
  • Public Schools;
  • Colleges; and
  • Non Profit Entities.

It should be noted, however, that when the DOJ publishes proposed website accessibility regulations applicable to the private sector, and consistent with the DOJ’s long standing position, website accessibility will very likely be defined as compliance with WCAG 2.0, levels A and AA, just as the Access Board has used these guidelines in the Section 508 Refresh.

Deadlines

On Tuesday, January 10, 2017 the Access Board held a briefing at their Washington, D.C. office to provide a top level overview of these new rules and to provide a public question and answer session.  During this meeting, the Access Board reinforced the following information:

  • The final rule was set to be “effective” 60 days from the date of publication in the Federal Register.  Therefore, as the final rule was published in the Federal Register on Wednesday, January 18, 2017, the “effective” date was set to be Sunday, March 19, 2017.  (It is worth noting on January 20, 2017, White House Chief of Staff Reince Priebus issued a memorandum from the White House to the heads of executive departments and agencies calling for a sixty (60) day postponement of the effective date of regulations that have been published in the Federal Registry but not yet taken effect.  Therefore, this date may yet be delayed.)
  • Notwithstanding that deadline:
    • Compliance with the Section 508-based Standards is not required until 12 months from the date of publication in the Federal Register.  Therefore, the anticipated date of compliance for the Section 508-based Standards will be Thursday, January 18, 2018; and
    • Compliance with the Section 255-based guidelines will not be required until the guidelines are adopted by the Federal Communications Commission.

The United States Department of Labor’s Office of Federal Contract Compliance Programs (“OFCCP”) on January 17, 2017, just days before the inauguration of President Donald Trump, filed a lawsuit against Oracle America, Inc. (“Oracle”), alleging discrimination in its compensation and hiring practices, and its refusal to produce requested records and data. See Complaint. The lawsuit, filed with the Office of Administrative Law Judges, stems from a compliance review initiated by the OFCCP on September 24, 2014 at Oracle’s Redwood Shores headquarters in California, housing 7,000 employees.

As a federal government contractor, subject to Executive Order 11246, the Rehabilitation Act and the Vietnam Era Veterans’ Readjustment Assistance Act, Oracle is contractually obligated not to discriminate in employment on the basis of certain protected characteristics, which include race, color, religion, sex, sexual orientation, gender identity, national origin, disability, and status as a protected veteran. In addition, Oracle is required to take affirmative action to ensure that applicants and employees are afforded employment opportunities without regard to these protected characteristics. As part of its contracts with the federal government, Oracle also agrees to allow the OFCCP to inspect its employment records to ensure the company’s compliance with its non-discrimination and affirmative action obligations.

The lawsuit seeks to redress violations of Executive Order 11246 stemming from the tech giant’s alleged “systemic compensation discrimination” against qualified women, Asians and African Americans employed in Information Technology, Product Development and Support positions (encompassing 80 job titles), and its “pattern and practice of hiring discrimination” against qualified White, Hispanic and African American applicants in favor of Asian applicants, namely Asian Indians, in the Professional Technical 1, Individual Contributor and the Product Development job groups (involving 69 job titles). The OFCCP specifically alleged that there were “gross disparities in pay” and “[statistically] significant overrepresentation” of Asians in the applicant pools and affected positions. In making its findings, the OFCCP indicated that Oracle refused to produce prior year compensation data and complete hiring data, and further refused to produce documentation demonstrating that it had performed “an in-depth review of its compensation practices” and that it had analyzed its applicant-hiring data for adverse impact.

Having found discrimination, the OFCCP issued a Notice of Violations, and three months later a Notice to Show Cause seeking an explanation for why the agency should not initiate enforcement proceedings. Seven months later, after conciliation efforts failed, the OFCCP instituted the instant action. While only Oracle and the OFCCP know what was discussed and debated in an attempt to bring about a resolution, clearly the OFCCP was not satisfied with Oracle’s explanations justifying the pay disparities and hiring practices, nor pleased with the company’s refusal to produce the additional compensation and hiring data requested. As a result, the OFCCP is seeking a decision finding that Oracle’s compensation and hiring practices violated Executive Order 11246, and an order permanently enjoining the company from failing and refusing to comply with its obligations, cancelling its federal government contracts, debarring it from entering into future contracts until remedying its prior noncompliance, and requiring it “to provide complete relief to the affected classes, including lost compensation, interest and all other benefits of employment resulting from Oracle’s discrimination.” Simply put, there are millions of dollars at stake.

Action Steps Employers Should Take Now

While it is still unclear what agenda the Trump Administration will expect the OFCCP to follow, so long as the status quo remains, federal government contractors should take heed. The OFCCP clearly intends to send a message with this and other lawsuits recently filed. Contractors should therefore be proactive to ensure that their compensation practices are not causing significant pay disparities that cannot be justified. They also need to ensure that their hiring practices are such that they are considering a diverse slate of candidates drawn from well-balanced recruiting pools and making hiring decisions without regard to gender, race and ethnicity. Both can be accomplished by contractors engaging counsel to conduct self-audits to ensure that they are in compliance and meeting all of their non-discrimination/affirmative action obligations as a federal government contractor. If such action is not taken, then they may face the same level of scrutiny and consequences as Oracle.