Author Archives: Holland & Hart

January 10, 2017

Tips For Accommodating Depression, PTSD, and Other Employee Mental Illnesses

An estimated 16.1 million adults in the United States had at least one major depressive episode in 2015, according to the National Institute of Mental Health. This number represents 6.7% of all adults age 18 or older in the U.S. About 7 or 8 out of every 100 people will have posttraumatic stress disorder (PTSD) at some point in their lives, says the U.S. Department of Veteran Affairs, National Center for PTSD. That number goes up to about 11 to 20 out of every 100 for veterans who served in Operations Iraqi Freedom and Enduring Freedom.

As these number show, depression, PTSD, and other mental illnesses are relatively prevalent in our society. At some point, you will be faced with an employee who suffers from a mental condition and you need to know your obligations related to potential accommodations for such employees. The Equal Employment Opportunity Commission (EEOC) recently released information to help explain workplace rights for employees with mental health conditions under the Americans With Disabilities Act (ADA). Incorporating the EEOC’s guidance, here are our top practical tips for accommodating individuals with mental impairments.

Tip #1 – Don’t Get Hung Up On Disability Definition

Following the 2008 enactment of the Americans With Disabilities Amendments Act (ADAAA), it is easier for an individual seeking protection under the ADA to establish that he or she has a disability within the meaning of the statute. In fact, the ADAAA states that the definition of disability should be interpreted in favor of broad coverage of individuals.

Mental conditions, such as depression, PTSD, bipolar disorder, schizophrenia, and obsessive compulsive disorder (OCD), need not be permanent or severe to be deemed a disability. Instead, as long as the condition substantially limits a major limit activity, such as the individual’s ability to concentrate, interact with others, communicate, sleep, eat, learn, think, or regulate emotions, it will be considered a disability. Even if the employee’s symptoms are sporadic or episodic, if they limit a major life activity when active, the condition will likely qualify. This means that in most cases, you should focus on whether you can accommodate the individual, rather than whether the individual meets the legal definition of having a “disability.”

Tip #2 – Accommodate “Known” Mental Impairments

You have an obligation to reasonably accommodate “known” impairments for otherwise qualified individuals. Generally, this means that an applicant or employee must ask for a reasonable accommodation. But remember that the disabled individual need not use any special words to trigger your accommodation obligation. In other words, the person does not need to specifically say he or she needs a reasonable accommodation or mention the ADA. The individual instead may simply say that they need a change at work, such as needing to arrive late on certain days in order to attend therapy sessions, and your accommodation responsibility begins.

Generally, however, you are not obligated to provide an accommodation when one has not been requested or no work-related change has been mentioned. But, if you have knowledge of an employee’s mental condition (perhaps from prior conversations or medical documentation) and that “known” disability impairs the employee’s ability to know of, or effectively communicate a need for, an accommodation that is obvious, you should engage in a discussion with the employee about potential accommodations.

Tip #3 – Ask For Documentation

When an employee requests a reasonable accommodation due to a disabling condition, ask the employee to put the request in writing, describing the condition and how it affects his or her work. You may also request a letter from the employee’s health care provider documenting the mental condition and that the employee needs a work accommodation because of it. However, even if the employee declines to provide a request for accommodation in writing, you still have an obligation to engage in the interactive process and potentially accommodate that individual.

Be careful not to discriminate in your requests for documentation. It is best to have a uniform practice of requesting this written information for all accommodation requests, for both physical and mental disabilities, so that you cannot be charged with singling out a particular employee based on a mental illness.

Tip #4 – Keep An Open Mind About Accommodations

Don’t jump to the conclusion that an accommodation will necessarily be burdensome or costly. Some reasonable accommodations for mental disabilities may be relatively benign. Examples may include allowing the employee to wear headphones to drown out excessive noise, writing down work instructions rather than verbal instructions, changing shifts or start/end times to allow for doctor or therapy appointments, or working in a private room.

Of course, if an accommodation will result in significant expense or disruption to your business, you may be able to decline it due to undue hardship. But don’t assume that upon first request. Instead, engage in an interactive process with the employee, including input from his or her health care provider, to consider possible accommodations. A brainstorming session can often produce a variety of workable solutions, and you can choose the one that best suits your business, as long as it permits the employee to perform his or her job. Be sure to confirm those discussions in writing with the employee to avoid disputes down the road about what was discussed and/or agreed upon. Read more >>

December 22, 2016

Small Employers Permitted To Reinstate Health Premium Reimbursement Arrangements

By Kevin Selzer

With the health and welfare benefit plan industry eyeing potential regulatory changes under a Trump administration, President Barack Obama signed into law a new rule that partially restores health plan flexibility restricted by the Affordable Care Act (ACA). The 21st Century Cures Act (Act) allows small employers to establish arrangements that reimburse employees for premiums on health coverage that is not maintained by the employer (e.g., coverage obtained by an employee on a state exchange/marketplace).

Background On HRAs and the ACA

In 2013, the IRS released guidance stating that an employer arrangement designed to reimburse premiums for non-employer maintained health coverage (on a pre-tax or after-tax basis) is a group health plan that violates certain ACA reforms. This guidance was widely viewed to prevent employers from using a health reimbursement arrangement (HRA), integrated with non-employer maintained health coverage, as a way of circumventing the ACA employer mandate (for large employers). However, the guidance applied to all employers, much to the ire of small employers, many of whom relied on these arrangements to provide a pre-tax cost-effective health benefit. Certain transition relief was provided for small employers, but the relief ended in mid-2015. As a result, many small employers were left out in the cold.

Small employers responded in different ways. Some adopted stipend or similar programs, whereby employees would be paid additional taxable compensation without strings attached (i.e., the employee could decide to use the amounts for health coverage or not). The end-result, however, was that tax-favored health benefits were generally limited to employers capable of sponsoring a major medical health plan.

21st Century Cures Act Permits Certain HRAs

The Act permits certain small employers to sponsor arrangements that will reimburse employees on a pre-tax basis (if certain conditions are met) for amounts incurred for independent (non-employer maintained) health coverage, including health insurance premiums. These arrangements, called qualified small employer health reimbursement arrangements (QSEHRAs), must meet the following requirements:

permitted only for small employers, defined as those who did not have an average of 50 full-time employees, including full-time equivalents, in the prior year;
the employer may not otherwise offer a group health plan to any employees;
the employer must offer the QSEHRA to all employees (with certain limited exceptions);
the maximum annual benefit is $4,950 for reimbursements of employee-only coverage and $10,000 for reimbursements of family coverage;
the reimbursement will be nontaxable if the eligible employee demonstrates that he or she has minimum essential coverage; and
the employer must provide eligible employees with notice containing required disclosures.

The rule changes are intended to be effective January 1, 2017.

December 21, 2016

No Such Thing As A Free Lunch!

By Brad Cave

Hundreds of hourly employees sued their former employer alleging that they were due additional overtime pay. They asserted that the company failed to include their $35 daily travel meal reimbursement in their regular rate of pay when calculating time-and-one-half, meaning they were paid less overtime than they were due. The Tenth Circuit Court of Appeals, whose decisions apply to Wyoming, Colorado, Oklahoma, Kansas, New Mexico, and Utah, recently analyzed their claim.

Calculating Regular of Pay

The Fair Labor Standards Act (FLSA) requires employers to pay employees at one and one-half times the employee’s “regular rate” of pay for all hours worked in excess of 40 per workweek. An employee’s regular rate of pay includes all remuneration paid to the employee, subject to certain exceptions. If a part of an employee’s pay is left out of the “regular rate” calculation, the employee’s overtime rate will be undervalued.

A large group of former hourly employees for a nationwide seismic-mapping services company filed a lawsuit claiming that the company violated the FLSA by failing to include an established meal allowance, which was paid to employees while traveling, in the employees’ regular rate of pay. In their collective action, the parties asserted that the company required employees to travel away from home and stay in hotels near remote job sites for four to eight weeks at a time. Employees then typically returned home for about two to four weeks before traveling to another remote location. They often worked more than 40 hours per week while at the remote location, triggering overtime pay.

Per Diem For Meals

The company provided its employees with a $35 per diem for meals for all days at the remote location as well as the days spent traveling to and from the remote job location. The company did not pay the $35 meal reimbursement on days that employees worked from their home location or when food was provided at the remote job site.

Exception To “Regular Rate” For Traveling Expenses

The regular rate of pay generally must be calculated to include all remuneration for services paid to the employee. One exception to this rule is that employers can exclude from the regular rate all reasonable payments for traveling expenses incurred by an employee in the furtherance of his employer’s interests and properly reimbursable by the employer. The regulations state that this exemption includes the “reasonably approximate amount expended by an employee, who is traveling ‘over the road’ on his employer’s business, for . . . living expenses away from home . . . .” 29 C.F.R. § 778.217(b)(3). The company argued that the $35 meal payments were exempt travel expenses and therefore, need not be included in the calculation of the employees’ regular rate.

Meal Reimbursement Was Exempt Travel Expense

The employees countered by arguing that the $35 payments were not exempt travel expenses because the employees were no longer traveling while they worked at the remote job sites for four to eight weeks at a time. They also argued that the phrase “living expenses” did not include the cost of food. The Tenth Circuit disagreed on both arguments.

The Court reasoned that the employees’ position that they were no longer “traveling over the road” when they reached their remote job site was a “hyper-literal interpretation.” The Court instead read “traveling” more broadly to include not just time in transit, but also time away from home. On the employees’ argument that the cost of food did not qualify as a “living expense,” the Court agreed with prior determinations by the U.S. Department of Labor to find that the cost of food away from home is an additional expense that the employee incurs while traveling for the employer’s benefit and therefore, is a living expense. The Court ruled that the $35 per diem meal reimbursements were exempt travel expenses and need not be included in the employees’ regular rate when determining overtime pay. The Court upheld summary judgment in favor of the company. Sharp v. CGG Land Inc., No. 15-5113 (10th Cir. Nov. 4, 2016). Read more >>

December 1, 2016

DOL Appeals Overtime Rule Injunction: Webinar At Noon (MT) Today

By Mark Wiletsky

On the very day that its final overtime rule was supposed to go into effect, the U.S. Department of Labor filed an appeal of last week’s preliminary injunction that temporarily halted the rule. The appeal will be heard by the Fifth Circuit Court of Appeals, which is located in New Orleans, Louisiana.

Will Appeal Be Expedited?

Appellate rules for the Fifth Circuit permit parties to file a motion for an expedited appeal, which means the appeal would be heard and ruled upon in a much shorter timeframe than normal, e.g., the normal timeframe for an appeal can be a year to 18 months. The court will grant such motion only for good cause. We expect that the DOL might try to expedite its appeal, especially given the change in administration coming in late January. As of this morning, however, there is no indication that the DOL has moved for an expedited appeal, but it is possible that it hasn’t been listed on the docket or otherwise been made public yet.

The DOL could also ask the district court to stay the preliminary injunction pending the appeal – in other words, to allow the new overtime rules to go into effect pending the outcome of the appeal. It is unlikely that the district court judge would grant a stay, but it would be a logical next step. Again, no motion to stay the injunction is yet listed on the court’s docket.

Webinar At Noon To Discuss Injunction and Appeal

Please join our free webinar at noon (MT) today (December 1, 2016) as I discuss what the preliminary injunction of the DOL’s overtime rule and the pending appeal mean for employers. I’ll also discuss options for employers who have been considering, or may even have implemented pay practices in anticipation of the overtime rule changes. Register for the webinar here. We will record the webinar for those unable to attend.

November 28, 2016

Dora Lane and Steve Gutierrez Discuss Impacts of Hold on Proposed Overtime Rule

pay-stub-and-money-shutterstock_373813009 Holland & Hart labor and employment attorneys Dora Lane and Steve Gutierrez discuss potential impacts on employers and employees of the hold on the proposed Overtime Rule. Dora Lane was interviewed on Reno’s Channel 2 News. Steve Gutierrez talked with KDVR Fox 31 in Denver.

Watch the Reno interview

Watch the Denver interview

November 23, 2016

DOL’s Overtime Salary Threshold Increase Is On Hold – Now What?

By Mark Wiletsky

Many human resource professionals got into the office today not knowing whether to laugh or cry. Most are happy that the Department of Labor’s (DOL’s) new overtime salary requirement will not go into effect next Thursday, December 1, 2016, due to a federal judge’s grant of a nationwide preliminary injunction which prevents the DOL from implementing and enforcing the new rule. (See our post yesterday reporting on the injunction.) Yet, many organizations have already spent countless hours preparing for the new rule to go into effect next week and are wondering what to do now. Let’s review where things stand and your best options going forward.

Nationwide Injunction Delays Final Overtime Rule

In September, twenty-one states sued the DOL in federal court in Texas seeking to stop the DOL’s final rule that more than doubles the salary threshold for the so-called white collar exemptions and calls for automatic increases every three years. Business groups and industry associations also filed suit in the same Texas court seeking a similar outcome. The state-plaintiffs filed an emergency motion for a preliminary injunction. Shortly thereafter, the business-plaintiffs filed an expedited motion for summary judgment. The two cases were consolidated under Judge Amos L. Mazzant, III.

On November 16, 2016, Judge Mazzant heard oral argument on the state-plaintiffs’ emergency preliminary injunction motion. He issued his ruling yesterday, granting the preliminary injunction on a nationwide basis.

To prevail on their preliminary injunction motion, the states needed to show, among other things, that they would have a substantial likelihood of success on the merits of their case. The court ruled that the states met that burden, finding that the plain meaning of the executive, administrative, and professional exemptions in the Fair Labor Standards Act (FLSA) focused only on the duties of such positions, without a minimum salary level. The court stated that although the FLSA delegated authority to the DOL to establish the types of duties that might qualify an employee for these exemptions, it did not authorize the Department to disqualify employees who meet the duties requirements but do not meet the salary level established in the DOL’s final rule. The court concluded that the DOL exceeded its delegated authority and ignored Congress’s intent by raising the minimum salary level so that it “supplants the duties test.”

Anticipating The Next Legal Move

The preliminary injunction is only the first step in this legal challenge to the DOL’s final overtime rule, but it provides a huge blow to the Obama administration’s efforts to raise wages for U.S. workers. The DOL could appeal the court’s ruling to the Fifth Circuit Court of Appeals, but according to a DOL statement, the agency is still “considering all of [its] legal options.” Whether an appeal would be successful is unknown. Absent an appeal, the Texas lawsuits continue, with a permanent resolution still to be decided. Read more >>

November 22, 2016

Overtime Rule Put On Hold: Court Grants Nationwide Injunction

By Mark Wiletsky

The new overtime salary requirement will not go into effect on December 1, 2016. A federal judge in Texas today issued a preliminary injunction in a challenge to the U.S. Department of Labor’s (DOL’s) new overtime salary threshold. Judge Amos L. Mazzant, III, of the U.S. District Court for the Eastern District of Texas, Sherman division, ruled that the DOL does not have the authority to utilize a salary-level test or an automatic updating mechanism under the final rule.

The nationwide injunction means that the DOL rule which doubled the salary requirement for the white collar exemptions from $455 to $913 per week will not go into effect on December 1, 2016, as scheduled.

OT Changes Are Delayed, Not Necessarily Dead

Two lawsuits were filed in the Texas court seeking to stop the new overtime rule from becoming effective. The first one was brought by twenty-one states and the second by numerous business associations. The two cases were consolidated and will proceed before Judge Mazzant.

By granting the preliminary injunction, the judge has delayed the rule from becoming effective until further legal proceedings may occur. The court will need to rule on whether the injunction becomes permanent. The business parties’ motion for summary judgment, which seeks to throw out the final rule for good, has already been briefed and may be decided on an expedited basis.

Stay tuned as we will provide further analysis of the court’s ruling.

November 16, 2016

Judge Declares Persuader Rule Unlawful With Permanent Nationwide Injunction

By Brian Mumaugh

The U.S. Department of Labor’s final persuader rule was dealt yet another blow today as federal Judge Sam Cummings of the Northern District of Texas issued a permanent injunction declaring the rule unlawful. The ruling will prevent the persuader rule from being enforced anywhere in the nation.

Rule Would Have Expanded Disclosures of Union-Avoidance Activities

As we’ve reported before, the DOL’s final persuader rule, issued this past March, would have expanded the reporting requirements of both employers and their hired labor consultants who assist with union-avoidance activities. Under the Labor-Management Reporting and Disclosure Act (LMRDA), when employers hire outside consultants, including attorneys, who are directly involved in “persuading” workers whether or not to join a union or engage in collective bargaining, they must file a report disclosing the consulting relationship as well as the fees paid to the consultant. Under the now-enjoined “new rule,” the DOL expanded the scope of reportable activities to include not only those that involved the consultant making direct contact with employees, as was previously included as reportable “advice,” but also those activities where the attorney or labor consultant works with the employer behind the scenes to draft or review documents, presentations, speeches, and other materials to aid the employer in opposing union organizing and other related activities.

Legal Challenge Prevailed

The DOL’s expansion of the rule as to what constitutes reportable “advice” was highly controversial. The DOL was set to begin enforcing the final rule on July 1, 2016, but numerous business groups filed lawsuits claiming that the DOL overstepped its bounds and that the rule was unlawful. On June 22nd, a Minnesota federal judge declined to issue a preliminary injunction to block the rule, but less than a week later, Judge Cummings in Texas did just that. He issued a preliminary injunction blocking the DOL from enforcing the rule nationwide.

With today’s order, Judge Cummings turned his preliminary injunction into a permanent block on enforcement of the rule. The result is that the employers and labor consultants, including lawyers, will continue to report their persuader activities consistent with the prior rule. In other words, only those activities that meet the “advice” standard under the prior persuader rule are reportable. Such activities generally include only those that involve direct contact between the consultant and the employees.

Is This Rule Dead Forever?

It remains to be seen whether the DOL will appeal this order, but for now, the final persuader rule appears dead. With the new GOP administration taking office in late January, it is unlikely that the DOL, under GOP leadership, would try to advance this union-friendly rule in the years to follow. We’ll keep you posted on any new developments.

November 9, 2016

Colorado Minimum Wage Hike Passes

By Mark Wiletsky

Colorado voters decided to raise the minimum wage to $12 per hour over the next four years. By about a 54-to-46 margin, Colorado passed Amendment 70 which amends the Colorado constitution to gradually raise the state’s minimum wage.

Gradual Increases In Minimum Wage

Amendment 70 raises the hourly minimum wage in Colorado by 90 cents per hour each year, starting from the 2016 minimum wage of $8.31. The annual increases will be as follows:

$9.30 in 2017
$10.20 in 2018
$11.10 in 2019
$12.00 in 2020

Tipped employees will continue to be entitled to a minimum wage that is $3.02 per hour less than the regular state minimum wage. The minimum wage for tipped workers is currently $5.29 per hour, plus tips. It will then go up by 90 cents per hour each year until reaching $8.98 in 2020.

After 2020, annual adjustments will be made to reflect increases in the cost of living.

Adjustments Already in Colorado Constitution

This is not the first time that Colorado voters have approved a Constitutional amendment increasing the minimum wage. In 2006, Colorado voters approved Initiative 42 which increased the minimum wage from $5.15 to $6.85 per hour, and added a provision to the Colorado Constitution that requires an annual adjustment in the state minimum wage based on the Consumer Price Index (CPI). That measure was approved with 53 percent voting “yes” and 47 percent voting “no.” Under that amendment, the Colorado Department of Labor and Employment has set the state minimum hourly wage each year, adjusting it either up or down according to the changes in the CPI over the prior year.

Under this year’s Amendment 70, the minimum wage will only be adjusted up for increases in the CPI. It will not go down, even if the cost of living decreases. Read more >>

November 8, 2016

EEOC Questions Whether “Big Data” Analytics Help or Hinder Workplace Diversity

By Jude Biggs

As more and more employers use new analytical tools for recruiting and hiring, the potential exists for employment decisions to become more fair, objective and unbiased. But could the use of big data and technology-driven decision-making disfavor candidates who lack a robust digital footprint? These are questions that the Equal Employment Opportunity Commission (EEOC) will continue to explore after an initial “big data” public meeting in Washington, D.C. in October.

What Is “Big Data?”

The EEOC refers to “big data” as the use of algorithms, data scraping of the internet, and other technology-based methods of evaluating huge amounts of information about individuals. Big data can include computer algorithms that are based on various factors designed to correlate to successful characteristics on the job; for instance, a model may look for longevity on the job, degrees from particular institutions, membership in certain organizations, or a multitude of other factors. Computer models then use this seemingly objective criteria to scan the internet for individuals possessing the desired characteristics in “passive” candidate searches. Other types of predictive or talent analytics, based on the harvesting of a wide range of empirical data, are being incorporated into HR recruiting and decision-making platforms.

According to a recent survey of Society of Human Resource Management (SHRM) members, about one-third of respondents reported that they use big data in employment. The proportion was even higher among larger employers.

Why Does the EEOC Care About Big Data?

The EEOC is trying to get ahead of this issue by making sure that employers’ use of technology-driven HR tools does not lead to discrimination in the hiring process. EEOC Chair Jenny Lang noted that while big data has the potential to drive innovations that reduce bias in employment decisions, “it is critical that these tools are designed to promote fairness and opportunity, so that reliance on these expanding sources of data does not create new barriers to opportunity.”

What Are The Potential Advantages of Technology-Based HR Decisions?

Technology is here to stay so the question is not will it be used in the HR context but rather how should it be used to best achieve employers’ goals. Using technology and big data can result in many positive outcomes, including that it:

may help identify non-traditional candidates who would not have been considered for a particular job previously
can help overcome implicit and explicit prejudice and bias in the workplace
can improve person-job fit
may increase diversity in the workplace
may expand the pool of candidates with the qualities necessary to succeed
may reduce employee turnover.

In fact, given the global nature of online data, it is possible for certain types of employers to increase their diversity dramatically, by being able to cast a larger net to find applicants.

What Is The Potential Downside of HR’s Use of Big Data?

As with anything technology-related, the outcome is only as good as the computer program, factors selected, and data used. Many algorithms focus on correlation of successful characteristics without looking to specific job requirements. For example, a set of characteristics of high-performing employees may reflect the group’s demographics (for instance, graduation from an Ivy League school) rather than their skills or abilities to perform certain jobs (for example, leadership shown during a military deployment or creation of a successful program serving the poor). In such cases, algorithms may match people characteristics, but not job requirements.

Using big data may perpetuate past discrimination. If an algorithm is based on looking for applicants with the same characteristics as those possessed by existing managers, secretaries or high-tech programmers in a company, then the algorithm may limit diversity. Similarly, certain talent-seeking algorithms may rely too much on the make-up of the company’s current staff, meaning that minorities or other groups not currently represented in the workforce continue to be passed over.

Think about whether individuals who do not have a robust online presence will be at a disadvantage in the new, data-mining recruiting world. Individuals with lower incomes or in rural areas may not have ready access to computers, lessening their ability to engage digitally. Other individuals may choose not to engage in many online activities. Or, others who are at the start (or end) of their careers may not have established much of an online presence. Employers who focus only on technology-driven programs to identify and hire candidates may miss out on large groups of qualified individuals who simply lack significant online experience that is discoverable by algorithms.

In addition, the collection of other data points, such as attendance or leave-related data, may discriminate against disabled individuals, giving rise to ADA concerns. Moreover, such data, coupled with information about gaps in employment, could disproportionally hurt female candidates who are more likely to have taken time off of work for pregnancy or child-rearing reasons. Read more >>