Department of Labor Issues Rules Implementing Affordable Care Act’s Whistleblower Protections

Employers face a laundry list of obligations under the Affordable Care Act (ACA) – mandatory health insurance for full-time employees, new reporting requirements, and numerous new taxes, to name just a few. Failure to comply with these obligations may result in hefty fines, so rest assured the federal government will be actively monitoring compliance when the bulk of the law becomes effective in 2014.

The federal government is not the only one watching employers, however. Employers should also be concerned about the watchdogs in their own backyards – whistleblowing employees. The ACA prohibits an employer from retaliating against an employee because the employee reported a violation of its provisions, such as the prohibition of lifetime limits on coverage, the requirement for plans to cover preventative services with no cost sharing, and the prohibition on denying coverage due to a preexisting condition. The ACA also prohibits an employer from retaliating against an employee because the employee received a tax credit to participate in a state health insurance exchange.

On February 27, 2013, the Department of Labor published an interim final rule implementing the ACA’s whistleblower protections. The rules clarify that retaliation includes intimidating, threatening, restraining, coercing, blacklisting or disciplining an employee with respect to the employee’s compensation, terms, conditions, or privileges of employment. To be protected from retaliation, the employee does not need to prove that the employer’s conduct actually violated the law. The employee’s belief that the employer’s conduct violated the ACA can be mistaken, provided that it is held in good faith and objectively reasonable.

If an employer retaliates against an employee, then the employee can file a complaint with the Occupational Safety and Health Administration (OSHA). Complaints must be filed within 180 days after a violation of the ACA occurs. The statutory burdens of proof weigh heavily in favor of the employee. The employee must prove by a preponderance of the evidence that his or her protected activity was a “contributing factor” in the employer’s action. To escape liability, the employer must prove by “clear and convincing” evidence (a higher burden) that it would have taken the same action in the absence of the employee’s protected activity.

The Department of Labor will be accepting public comments on the rule for 60 days after the rule was published on February 27, 2013. Comments may be submitted electronically via the federal e-rulemaking portal at www.regulations.gov, or by mail or fax. For more information, visit OSHA’s website at www.osha.gov.

Contact: Nathan Pangrace


Old Compliance Warnings Renewed in Light of Immigration Reform

In recent weeks, there have been extensive and serious discussions about an overhaul of the federal immigration system. While proponents of the reform disagree on many issues, they agree that reform must be accompanied by a more effective and efficient employment eligibility verification system and stronger workplace enforcement.

The leaked White House immigration reform plan envisions the phased-in use of an employment verification program that will become mandatory for almost all employers in the course of four years. Whether this program will be an expansion of the existing E-Verify program or a brand new one, employers should be prepared for a period of adjustment for proper training of human resources staff and for working out any system problems.

In addition, employers should be more vigilant about their compliance with employment eligibility verification laws and be prepared for increased audits and penalties for knowingly hiring unauthorized workers, failing to verify a worker’s employment eligibility, or otherwise making mistakes when completing Form I-9. This course of action should not come as a surprise. For some time now, the government’s preferred method of workplace enforcement has been the audit of Form I-9 records. The number of employers who are audited continues to increase, as do penalties for both substantial and technical violations. (1.) Employers should keep in mind the following:

An ounce of prevention is worth a pound of cure: If human resources staff has not received adequate training on how to complete Form I-9, it is necessary that they receive it as soon as possible. Ensuring that the form is filled out correctly and timely will prevent costly mistakes.

Expect the worst and prepare: An employer has very little time to prepare for an audit of Form I-9 records by U.S. Immigration and Customs Enforcement (ICE). Typically, ICE will allow three business days for the employer to collect and hand over the records. Often, ICE will request supporting documentation also, such as a copy of the payroll, list of current and terminated employees, and business licenses. Employers should have a system in place that enables quick access or generation of these documents and lists. That way, it can use its time for reviewing I-9 records, complete potential corrections if needed, and assess and prepare for any potential liability.

Employers are advised to proactively conduct self-audits with or without the assistance of an immigration attorney. They should review and revise their Form I-9 and immigration compliance policies, and ensure that their human resources representatives are well trained, not only in routine matters, but also on how to respond to audits and internal reports of violations. While conducting self-audits, employers should be careful not to cause additional problems, such as using whiteout, correction tape or black marker, re-verifying an expired “green card,” or being overly zealous and over-documenting employment eligibility. When in doubt about best compliance or correction practices, ask for help.

Know how to respond to the potential results of an audit: If an employer has been selected for an I-9 audit, the administrative inspection process is initiated through a Notice of Inspection (NOI) by ICE, compelling the production of the employer’s Form I-9 records. Upon review of the records, if ICE finds technical or procedural violations, such as failure to provide an employee’s maiden name, address, or the name of the translator or preparer of the form, the employer is given ten business days to make corrections. The employer will be given time to correct any technical violations, typically 10 days. It should do so immediately. Any technical violations that remain uncorrected will have the same weight as any substantive violations. Substantive violations include failure to fill out Form I-9, failure to review and verify employment eligibility documents, etc. ICE will notify the audited party, in writing, of the results of the inspection. Monetary fines will be assessed for all substantive violations and any technical violations that remain uncorrected and ICE will issue a Notice of Intent to Fine. The employer may engage in settlement discussions with ICE or bring its case to the Office of Chief Administrative Hearing Officer for further review.

In sum, it is expected that government efforts to enforce employment eligibility verification laws and regulations will be a central part of the new immigration reform. Employers should follow these developments closely because they will affect employment practices for all regardless of whether foreign nationals are currently on a company’s payroll.

(1.) The U.S. Immigration and Customs Enforcement (ICE) has indicated that Form I-9 audits of employers increased from 250 in fiscal year 2007 to more than 3,000 in fiscal year 2012. The total amount of fines assessed has grown to nearly $13 million in fiscal year 2012 from $1 million in fiscal year 2009. Furthermore, the number of company managers arrested as part of criminal investigations resulting from Form I-9 audits has increased.



Workers’ Compensation: A Case of Non-Compensable Salmonella Poisoning

On February 4, 2013, the Third District Court of Appeals of Ohio decided the case of Serraino v. Fauster-Cameron, Inc., 2013-Ohio-329. Ms. Lindamarie Serraino worked as a medical technologist for Fauster-Cameron, Inc., dba Defiance Clinic, when she allegedly contracted salmonella poisoning from a contaminated lunch served in the Clinic’s break room in 2005. Ms. Serraino filed a workers’ compensation claim in 2007, and the Industrial Commission denied it administratively at all levels. She then filed an appeal into Common Pleas Court. At the trial court level, the Bureau of Workers’ Compensation and the Clinic filed a joint motion for summary judgment, arguing that Serraino’s poisoning did not occur in the course of or arise out of her employment with the Clinic. The trial court granted this motion, and Ms. Serraino appealed.

In its review, the appeals court focused on the facts of this case. In 2004, the Clinic began a lunch program in which it periodically invited local caterers to sell their food to employees in the Clinic’s break room. The appeals court noted that the caterers, without guidance or assistance from the Clinic or its employees, set the menu, prepared and served the food, and collected payment from each patron. Additionally, anyone with access to the break room (including the general public) could purchase food from the caterers. Employee participation in the program was optional, and the Clinic did not receive any portion of the caterers’ sales.

With most workers’ compensation cases, the focus is normally on the location of where the injury occurred. However, in this case, the appeals court commented that the location was “purely fortuitous, as [Ms. Serraino] could have consumed the contaminated food anywhere on or off the employer’s premises.” Instead, the appeals court opted to focus on the activities that gave rise to Ms. Serraino’s injury. The appeals court held that the Clinic had no control or input over the food service provided to its employees by an independent third party and that there was an insufficient causal connection between Serraino’s salmonella poisoning and her employment with the Clinic. Thus, the trial court’s decision granting summary judgment was upheld.



U.S. Department of Labor Issues Final Rule to Implement Amendments to FMLA

On February 5, 2013, the United States Department of Labor marked the twentieth anniversary of the signing of the Family and Medical Leave Act (FMLA) by issuing a Final Rule that implements and interprets two statutory expansions of FMLA protections.

The Final Rule relates to amendments to the FMLA by the National Defense Authorization Act for Fiscal Year 2010 and the Airline Flight Crew Technical Corrections Act. These amendments expanded the FMLA’s military family leave provisions and modified existing rules with the purpose of enabling airline personnel and flight crews better able to make use of the FMLA’s protections. Some highlights of the Final Rule as it relates to the military family leave provisions are outlined below.

The FMLA includes two special military family leave entitlements: military caregiver leave and qualifying exigency leave. Prior to the recent amendments to the FMLA, military caregiver leave was limited to eligible employees who are the spouse, son, daughter, parent, or next of kin of a current servicemember with a serious injury or illness incurred in the line of duty to take up to 26 workweeks of FMLA leave during a single 12-month period to care for the servicemember. The Final Rule now expands this military caregiver provision to include leave to care for certain veterans with a serious injury or illness that was incurred or aggravated in the line of duty. Likewise, the Final Rule further expands military caregiver leave to allow leave for current service members with a serious injury or illness that existed prior to service but was aggravated in the line of active duty. Military caregiver leave for a veteran is not available until the Final Rule becomes effective on March 8, 2013.

The Final Rule also expands the list of health care providers who can provide a medical certification to support FMLA military caregiver leave to include health care providers who are not affiliated with the military. However, if a medical certification is obtained from a non-military affiliated health care provider, the employer may request a second or third opinion. In contrast, health care certifications obtained from healthcare providers associated with the military are not subject to second or third opinions.

The second type of military family leave entitlements under the FMLA is qualifying exigency leave. This leave permits an eligible employee whose spouse, son, daughter, or parent is a member of the military to take up to 12 workweeks of leave for qualifying exigencies arising out of the military member’s active duty or call to active duty. Prior to the amendments to the FMLA, such leave was limited to eligible employees who spouse, son, daughter, or parent is a member of the National Guard or Reserves. The Final Rule implements amendments to the FMLA that expanded such leave to now include eligible employees whose spouse, son, daughter, or parent is a member of the Regular Armed Forces. The Final Rule further incorporates the statutory requirement that the military member (whether in the National Guard, Reserves, or Regular Armed Forces) must be deployed to a foreign country.

The full version of the Final Rule can be found here: http://www.ofr.gov/OFRUpload/OFRData/2013-02383_PI.pdf

Contact: Emily Wilcheck