Flurry Of New Laws/Regulations Has Employers Scurrying To Come Into Compliance

The last 12 months have seen what is certainly the most active period of federal employment legislation and regulation changes in the last 25 years. A spate of new laws – with more likely to arrive in upcoming months – has left employers scrambling to comply.

The deluge started on May 21, 2008, when President Bush signed into law the Genetic Information Nondiscrimination Act (GINA). GINA prohibits employers from using genetic information in hiring, firing, pay, or promotion decisions. GINA also applies to health insurers, and prohibits them from rejecting coverage or raising premiums for healthy individuals based on personal or familial genetic predisposition to develop particular diseases. GINA also forbids health insurers from requiring a genetic test.

In Fall 2008, Congress passed the Americans With Disabilities Act Amendments Act (ADAAA). Effective January 1, 2009, this sweeping amendment to the Americans With Disabilities Act (ADA) overturns a number of Supreme Court decisions and completely changes the legal landscape under the ADA. The core of the ADA defines as a disabled individual one who suffers from a physical or mental impairment if it substantially limits one or more major life activities. Over a ten-year period of time, a series of Supreme Court decisions had weakened this definition to the point where claims under the ADA were not only relatively rare, but courts were ruling in employers’ favor more than 95 percent of the time.

The ADAAA does the following:

(1) The definition of major life activities will now include “caring for one’s self, performing manual tasks, seeing, hearing, eating, sleeping, walking, standing, lifting, bending, speaking, breathing, learning, reading, concentrating, thinking, communicating, and working.” This list is illustrative, not exhaustive. Major life activities are also expanded to include “major bodily functions,” including but not limited to “functions with the immune system, normal cell growth, digestive, bowel, bladder, neurological, brain, respiratory, circulatory, endocrine, and reproductive functions.” This broad definition effectively overturns the decisions of a number of federal courts that had limited the scope of “major life activities” to very narrow areas.

(2) The new definition of “major life activities” has been substantially changed to provide that an impairment need only substantially limit one major life activity to qualify as a disability, and not just life activities that are of “central” or primary importance to individuals’ lives. This overturns the narrower interpretation by the Supreme Court in Toyota Motor Manufacturing, Kentucky, Inc. v. Williams, 534 U.S. 184 (2002).

(3) The ADAAA provides that the determination as to whether someone is disabled must be made without considering corrective or mitigating measures. Thus, a person whose condition is controlled by medication, medical supplies or equipment, hearing aids, prosthetics, or other assisted technology can no longer be excluded from the definition of “disabled” because of these mitigating measures. This change overturns the Supreme Court’s decision in Sutton v. United Airlines, Inc., 527 U.S. 471 (1999). The only notable exception is that poor vision that is correctable with lenses is not considered an impairment. However, the ADAAA prohibits any employment test or qualification standard that tests applicants based upon their uncorrected vision, unless a certain level of uncorrected vision is consistent with business necessity.

(4) The definition of “disability” now specifically includes impairments that are either in remission or are episodic.

(5) The “regarded as” portion of the definition of disability has been significantly changed. The employee will not be required to prove that the employer believed that the impairment affected a major life activity or that the impairment actually did so. The “regarded as” prong of the definition of disability will not apply to impairments that are “transitory and minor,” which is defined to mean “an actual or expected duration of six months or less.” This six-month limitation applies only to the “regarded as” portion of the definition.

(6) No claim of “reverse disability discrimination” may be made by a non-disabled person.

A third major area of revision came with the Department of Labor’s (DOL) new Family And Medical Leave Act (FMLA) regulations that were effective January 16, 2009. The regulations dealt with a number of lingering FMLA issues, as well as how the DOL intended to apply the National Defense Authorization Act of 2008, which amended the FMLA to extend coverage for military families. The new regulations do the following:

(1) Exigency Leave. Eligible employees with a spouse, child, or parent on active duty or called to active duty in the National Guard or Reserves in support of a contingency operation may take up to the normal 12 weeks of leave because of any “Qualifying Exigency.” The regulations define “Qualifying Exigencies” as (1) short-notice deployment; (2) military events and related activities; (3) childcare and school activities; (4) financial and legal arrangements; (5) counseling; (6) rest and recuperation; (7) post-deployment activities; and (8) additional activities agreed to by the employer and the employee. (Note: Exigency leave is not available to families of service members in the regular armed forces).

(2) Military Caregiver Leave. An eligible employee who is the spouse, son, daughter, parent or next of kin of a covered service member (includes a current member of the Regular Armed Forces, as well as the National Guard or Reserves) may take up to 26 weeks of leave to care for such service member with a serious injury or illness incurred in the line of duty, on active duty. The 12-month period begins on the first day the employee takes leave for this purpose.

(3) Light Duty. If an employee who qualifies for FMLA leave voluntarily accepts a light-duty assignment, the time spent performing light-duty work does not count against the employee’s 12-week FMLA entitlement.

(4) Attendance Awards. An employer may disqualify an employee from a bonus for attaining a job-related performance goal, such as “perfect attendance” bonuses, even where the employee has not met the goal due to FMLA absences, unless the bonus is otherwise paid to employees on an equivalent leave status for a non-FMLA reason. (Note: This changes the DOL’s position on the issue)

(5) Intermittent/Reduced Leave/Leave Increments. Employers must account for FMLA leave in increments no greater than the shortest period of time the employer uses to track other forms of leave (as opposed to the shortest increments tracked on the employer’s payroll system), provided the increment used for tracking FMLA leave is not greater than one hour. (Note: This is a rejection of employer requests that intermittent leave would have to be in increments of four hours or more).

(6) Serious Health Condition. The DOL modified the definition of “serious health condition” in three ways. First, where a condition involves more than three consecutive days of incapacity plus two visits to a healthcare provider, the first healthcare visit must take place within seven days of the first day of incapacity, and both visits must occur within 30 days of the beginning of the period of incapacity. Second, where a condition involves more than three consecutive days of incapacity plus one visit to a healthcare provider and continuing treatment, the regulations require the visit to a healthcare provider to take place within the first seven days of incapacity. Third, the new regulations define “periodic visits” for chronic serious health conditions as at least two annual visits to a healthcare provider.

(7) Employee Notice of FMLA Leave. In a regulation that is sure to spawn litigation, the DOL now requires employees requesting FMLA leave for the first time for a particular condition to provide sufficient information for the employer to determine whether the leave qualifies under the FMLA. The regulation also states (1) that employees are not required to specifically mention the FMLA when requesting leave; and (2) that calling in “sick” is insufficient to trigger the FMLA.

(8) Medical Certification. For the first time, employers will be allowed to contact healthcare providers directly to determine the reasons for FMLA leave, but only after the employer has first given the employee an opportunity to correct any problems with the medical certification already provided. The employer representative contacting the healthcare provider must be either a healthcare provider, a human resources professional, a leave administrator or a management official. The employer’s direct supervisor is specifically prohibited from contacting the employee’s healthcare provider. In addition, the DOL has developed two new forms for medical certification, one for the employee’s serious health condition, and the other for a family member’s.

In one of his first acts as president, Barack Obama signed the Lilly Ledbetter Fair Pay Act on January 29, 2009. The Act amends Title VII of the Civil Rights Act, the Age Discrimination In Employment Act, The Americans With Disabilities Act, and the Rehabilitation Act. The new legislation declares that an unlawful employment practice occurs when: (1) A discriminatory compensation decision or other practice is adopted; (2) an individual becomes subject to the decision or practice; or (3) an individual is affected by application of the decision or practice, including each time there is a payment of compensation. The new statute overturns the Supreme Court’s decision in Ledbetter v. Goodyear Tire and Rubber Co., 550 U.S. 618 (2007), which had dismissed on statute of limitations grounds a lawsuit brought by a female employee contending that she was the victim of the present effects of past pay discrimination. The new law eliminates the normal filing period for pay discrimination claims, and allows employees to file charges with the issuance of each paycheck tainted by past discrimination.

A temporary change in COBRA rules went into place March 1, 2009, as a result of the federal Stimulus Bill. Under the rules, employees who were terminated involuntarily between September 1, 2008, and December 31, 2009, as well as their covered dependents, are eligible for a subsidy of 65 percent of the health insurance premiums they would be required to pay for up to nine months. Under normal COBRA rules, the employees must participate in the same group health plan in which they participated at the time of termination. These “assistance eligible individuals” would be required to pay only 35 percent of the premium charged under the plan. Employers would be able to recover the other 65 percent of premiums in the form of credits against their income tax withholding and FICA taxes. If the premiums due an employer exceeded its tax obligations, the federal government would issue a check to make up the difference.

The subsidy does not apply to employees or their dependents who have an adjusted gross income of more than $125,000 ($250,000 for joint taxpayers) in the year in which the employees received the subsidy. The new law also gives involuntarily terminated employees and their dependents 90 days to select coverage under a different, lower-cost option than the one in which they were enrolled at the time of their involuntary termination.

Potential Changes To Come

It is clear that all will not be quiet on the Washington front in the upcoming months with respect to employment legislation. Congress has signaled that it will consider bills that would do the following: (1) Establish a national collective bargaining law covering public safety employees; (2) consider changes to the Fair Labor Standards Act’s overtime requirements; (3) eliminate or substantially modify an employer’s ability to compel arbitration of employees’ claims under Civil Rights laws; (4) enact an “equal pay for equal work” statute; (5) expand OSHA to specifically include federal, state, and local employees; (6) substantial changes in the way private sector labor unions are allowed to organize for collective bargaining purposes, including the lightening-rod bill, known as the Employee Free Choice Act.

This article appears in the April 2009 issue