Archive for March, 2012

Pretax Transit Account Max to Remain $125

Bad news for employees who commute to work using mass transit. The House of Representatives this week declined to approve legislation to restore the amount of tax-eligible benefit to $240. That was the amount allowed under the 2009 stimulus law.

The transporation bill approved by the Senate would have  restored the $240 maximum, but since the House failed to approve, the eligible reimbursement for mass transit will remain $125.

However, the maximum pre-tax parking benefit remains $240.

This doesn’t make sense given rising gas prices. If the goal is to get people out of their cars and onto subways and buses, then you should give them a tax break at least equal to what employees who pay for parking get.

But that will have to wait for another day.

EEOC Publishes Final Rule on Reasonable Factors Other Than Age

A final rule from the Equal Employment Oppotunity Commission on the defense of “reasonable factors other than age” will be published in tomorrow’s Federal Register.

Employers can assert the defense to a charge of disparate impact age discrimination. The rule makes it clear that the employer retains the burden of persuasion to show that the defense applies to the particular situation.

Oral Arguments Close With Severability, Medicaid Expansion Issues

Today concluded the arguments before the U.S. Supreme Court on the constitutionality of the Patient Protection and Affordable Care Act. The questions presented were (1) whether, if part of the law is overturned, the remaining parts of the law can be saved; and (2) whether the statute exceeds Congress’ authority by requiring the states to expand their Medicaid coverage.

The first issue is known as severability. It’s a principal that if one part of a law does not pass constitutional muster, it needn’t imperil the entire law. What’s different in this case is Congress did not include a severability clause in the health care reform law. So the Justices must apply other principles to the question.

Health care policy experts agree that the provisions most at risk if the individual mandate were to be overturned are the ban on denying coverage to persons with preexisting conditions, and the limitations on how much insurers can vary rates among customers.

The law’s supporters argue that if the mandate is struck down, the other provisions have to go also, because they are unworkable without the mandate. They point to what happened in states such as New Jersey, New York, Kentucky and Washington, which attempted to introduce similar insurance regulations in the 1990s.

None, however, included a requirement that residents obtain coverage. Insurance rates skyrocketed in those states. The law’s supporters say this would also happen on a nationwide scale if the mandate is overturned.

Justices Appear Split on Constitutionality of Health Care Individual Mandate

Is the health insurance market unlike any other in that everyone will be in it eventually? If so, can the federal government require everyone to purchase health insurance or pay a fine?

Or is what Congress is doing essentially creating new commerce–beyond its authority to regulate commerce?

Those questions were at the heart of today’s second day of arguments before the U.S. Supreme Cout on the constitutionality of the Patient Protection and Affordable Care Act, the federal healthcare reform law.

Yesterday, there appeared to be consensus that the court  is not blocked from hearing the suit until the mandate is in effect and someone files a challenge over having to pay the fine. Today, there was no consenus on the individual. The court appeared to be split right down the middle on the question.

The court’s usual conservatives indicated the government has gone too far. “The federal government is not supposed to be a government that has all the powers; it’s supposed to be a government of limited powers,” Justice Antonin Scalia said. “What-what is left? If the government can do this, what, what else can it not do?

Conversely, Justice Steven Breyer, who usually aligns with the court’s liberal bloc, said “I look back in history, and I see it seems pretty clear that if there are substantial effects on interstate commerce, Congress can act.”

Justice Elena Kagan: “The aggregate of all of these uninsured people are increasing the normal family premium, Congress says, by $1,000 a year. These people are in commerce. They are making decisions that are affecting the price that everybody pays for this service.

The law’s supporters held out some hope that Justices Anthony Kennedy and John Roberts might be persuadable. Kennedy wondered if the government does not “have a heavy burden of justification to show authorization under the Constitution.”

Roberts, in questioning opposing counsel, acknowledged the government’s point that “we are all going to need some kind of health care; most of us will at some point.”

Oral arguments are not always predictive of how the court will ultimately rule. We should know the answer in late June.

Tomorrow’s argument concerns whether if the individual mandate is overturned, the rest of the law can be upheld, and whether Congress overreached in requring the states to expand Medicaid coverage.

Oral Argument Begins at Supreme Court on Health Care Reform Law

Employers have a lot at stake in the outcome of the U.S. Supreme Court’s deliberations over the constitutionality of the health care reform law.

Today began an unprecedented three days of oral arguments on the law’s constitutionality. The heart of the dispute is whether Congress has the power, under the commerce clause, to require that everyone purchase health insurance or pay a fine.

As sponsors of group health coverage, employers have a huge stake in this debate.

Like the population at large, businesses are split on whether they want the law upheld or struck down.

Here’s an excellent article on business’ view of the law on the eve of the high court arguments.


Fed Ex, OFCCP In $3 Million Settlement Over Hiring Discrimination Charges

It’s going to cost Federal Express a bundle to settle federal government charges of hiring discrimination. The Department of Labor announced Friday that two subsidiaries of the the package delivery company agreed to pay $3 million to close the case.

The contractor allegedly ran afoul of Department of Labor nondiscrimination regulations that apply to contractors as a condition of doing business with the government.

From the OFCCP’s announcement:

“During a series of regularly scheduled reviews, OFCCP  compliance officers found evidence that FedEx’s hiring processes and selection  procedures violated Executive Order 11246 by discriminating on the bases of  sex, race and/or national origin against specific groups identified at 23  facilities in 15 states. The affected workers include men and women as well as  African-American, Caucasian and Native American job seekers, as well as job  seekers of Hispanic and Asian descent. The reviews also uncovered extensive  violations of the executive order’s record-keeping requirements.”

“Under the terms of the conciliation agreement, the companies  will pay a total of $3 million in back wages and interest to 21,635 applicants  who were rejected for entry-level package handler and parcel assistant  positions at 22 FedEx Ground facilities and one FedEx SmartPost facility. FedEx  also has agreed to extend job offers to 1,703 of the affected workers as  positions become available. The 21,635 rejected job seekers represent one of  the largest classes of victims of any case in OFCCP’s history.”

It’s the largest financial settlement negotiated by OFCCP since 2004, and culminates compliance reviews spanning seven years and  numerous FedEx facilities in multiple states.

Read more.

EEOC, Wells Fargo Financial Settle Race Bias Claim

When a branch of Wells Fargo Financial in Michigan passed over a highly qualified black male for a loan processor position in favor of five less qualified white or younger women, it got the EEOC’s attention.

Something fishy there. The EEOC announced Friday that the company agreed to settle the case for $55,000.

Here’s key language from the EEOC’s announcement:

“The loan processor had  significantly more relevant work experience than all of the other candidates,  the EEOC said. Further, the loan  processor had the best combination of relevant, objective scores that measured  productivity, was “loan processor of the year” for 2007, the year immediately  proceeding the promotion decision, worked at the one of the largest and most profitable  offices in the relevant district, and was the “go-to person” for the district on  loan processing. The loan processor’s  personnel file was devoid of any disciplinary actions, and none of the decision  makers alleged that she had any behavioral problems. Despite her superior qualifications, the loan  processor was passed over for promotion, a decision which the EEOC charged was  based on her age and race.”

The company is out of business, so no other relief was ordered.

With selection practices like that, perhaps it’s no wonder that the company went under.

California Closes Loophole on Domestic Partner Group Health Coverage

When it comes to HR and benefit news affecting Californians, I routinely defer to my blogging colleague Christine Roberts, founder of the E is for ERISA website.

Today is no different. She wrotes about an important loophole being closed under California law regarding health insurance coverage for domestic partners residing in the state.

Until now, only employers who do most of their business in California had to provide group health coverage to domestic partners of California residents.

Earlier this year, the statute was amended to make this also a requirement for out-of-state employers who have employees in California though the majority of their workforce is in other states.

Read more about this development on her blog.

States Cannot Be Sued Under FLMA, U.S. Supreme Court Holds

States cannot be sued under the Family and Medical Leave Act for refusing to give an employee time off to recover from an illness, a divided U.S. Supreme Court held on Tuesday. The case is Coleman v. Court of Appeals of Maryland, 10-1016.

The high court refused to let Daniel Coleman sue the Maryland state Court of Appeals for damages for firing him after he asked for sick leave, blaming Congress for not equating family care and self-care when lawmakers wrote the FMLA.

family care and self-care when lawmakers wrote the Family and Medical Leave Act.

Writing for the majority, Justice Anthony Kennedy said Congress did not investigate self-care the way it did family care when it passed the FMLA, leaving little “widespread evidence of sex discrimination or sex stereotyping in the administration of sick leave.”

“Documented discrimination against women in the general workplace is a persistent unfortunate reality, and we must assume, a still prevalent wrong. An explicit purpose of Congress in adopting the FMLA was to improve workplace conditions for women,” Kennedy said.

But states may not be subject to suits for damages based on violations of a comprehensive statute unless Congress has identified a specific pattern of constitutional violations by state employers,” said Kennedy, who was joined in his opinion by Chief Justice John Roberts and Justices Clarence Thomas and Samuel Alito.

Four justices dissented, including Ruth Bader Ginsburg, who in an unusual move read her dissent aloud in court.

“The court’s judgment dilutes the force of the Act and that is regrettable,” she said. “But at least the damage is contained.”

The self-care provision remains valid Commerce Clause legislation and therefore applies, undiluted, in the private sector,” Ginsburg wrote.

Principal, School Board Charged With Permitting Hostile Work Environment

A principal at a suburban Washington, D.C. public school and the county board of education are the targets of a lawsuit alleging they permitted the school to maintain a hostile environment toward staff and students.

A group of educators at Kemp Mill Elementary School in Silver Spring, Md., have filed a lawsuit against the Montgomery County school board and Kemp Mill’s principal, claiming years of systemic harassment, and neglect by the board to do anything about it.

The group claims that since coming to lead Kemp Mill in 2007, Principal Floyd Starnes has engaged in “unabated and outrageous bullying behavior directed toward the Kemp Mill teachers, as well as the administrative and custodial staff,” according to the lawsuit.

The teachers repeatedly took their concerns to Montgomery County Public Schools leadership, but according to the complaint, the Montgomery County Board of Education failed to intervene.

The lawsuit states that Starnes referred to students and staff as “babes” and “dolls,” took young students into closets — some of whom emerged upset or crying — mooed like a cow at the staff over the intercom, retaliated against employees who reported issues, committed sexual harassment and bullying, created a hostile work environment where employees feared termination, and put false statements in staff evaluations.