The Employer's Legal Resource - June 2010
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June 2010 |
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Form I-9s How long must employers retain I-9s? Employers must have existing I-9s for all employees hired after November 6, 1986. Employers should not remove any I-9s for employees who are still employed. Employers are required to maintain I-9s for terminated employees for the later of three years after the employee is hired or one year after employment is terminated. The key language in implementing this requirement is "later of." Are employers required to retain copies of the documents provided for the I-9? No. Retaining copies of the documents is optional. However, if an employer chooses to retain copies, it must do so consistently for all employees. Can I fill out a new I-9 instead of doing the reverification when the employee is rehired? Generally, yes. Employers have the option of completing a new I-9 instead of using the Section 3 reverification on the old I-9 when rehiring an employee as long as the rehire is within three years of the employee's original hire date. However, if the employee's original I-9 was completed on the I-9 dated June 5, 2007 or a previous version, the employer must complete a new form I-9 upon rehire. If an employer decides to complete a new I-9 they are not required to keep it with the old I-9. However, depending on the employer's filing and retention tracking system, it may be easier to do this, as the retention requirements would apply to both I-9s. Can an employer maintain I-9s electronically? Yes. However, there are very specific requirements for doing so. These requirements are contained in the Department of Homeland Security, Handbook for Employers, Instructions for Completing the Form I-9, available here. By Hilary L. Velandia, hvelandia@dsda.com Keeping up with the laws that impact employers and employees is a daunting task indeed. The Patient Protection and Affordable Care Act (also known as Health Care Reform) has within it many new requirements for employers, some of which translate into benefits for employees. Section 4207 of the Health Care Reform Act is one such section. It states that employers shall provide breastfeeding employees with "reasonable break time" and a private, non-bathroom place to express breast milk during the workday, up until the child's first birthday. Although this is an unpaid break, the employer is required to provide the place for the employee to express breast milk during the workday. There are several states that already have mandatory breaks for breastfeeding mothers. Oklahoma's law is not mandatory, however. See 40 O.S. 435. However, employers with multi-state business operations may be subject to varying state laws on this subject, some of which provide greater protection than the Federal law. Who is in charge of enforcing this law? This section of the Health Care Reform Act is an amendment to the existing wage and overtime laws governed by the Fair Labor Standards Act (FLSA). The Department of Labor will be responsible for defining the terms of the new law and we expect they will issue regulations providing additional guidance. What employers are covered? All employers are covered. Period. However, employers with under 50 workers are not required to comply if they show compliance would result in "an undue hardship by causing the employer significant difficulty or expense when considered in relation to the size, financial resources, nature, or structure of the employer's business." What employees are covered? This law applies to non-exempt employees. Employees exempt from the overtime provisions of the FLSA ("exempt employees") are not covered. What do I have to do to be in compliance? This amendment is effective immediately meaning you have to comply now. While it may be difficult to comply given what little guidance the Federal statute provides, until the regulations are issued, it is wise to lend a reasonable interpretation to all requirements. Eventually, the Department of Labor will define terms used in the law, such as "reasonable break time" and "significant difficulty or expense," however until that time state regulations governing this subject are likely the best place to look in making a determination of whether you have complied with the law. For instance, in Oregon the time provisions have been defined as a 30-minute break in every four-hour work period to occur in a private location. It is unlikely that the Federal regulations will provide less than the thirty minute break. Further, it is the employee that gets to decide when to take these breaks. As for privacy, the Act requires the employer provide a place that is "shielded from view" and "free from intrusion from coworkers and the public." Further, and importantly, the law specifically outlaws the designation of a bathroom for this purpose. However, the law does not further define this requirement of privacy. It is important to keep in mind, the job duties of a covered employee do not necessarily result in exemption from compliance with the law. While some employers will be able to show "an undue hardship by causing the employer significant difficulty or expense," you must remember this is balanced with an evaluation of "the size, financial resources, nature, or structure of the employer's business." The law applies to all employers and it will likely be difficult to meet the above test for exemption. This is a law that will require employers to be flexible, accommodating and in some instances creative. Why is it important to enact this at my workplace and how should I do it? This mandatory break time is now a right for non-exempt breastfeeding working mothers. Federal law requires employers to provide this break time, and employers will be subject to a variety of penalties for failing to comply with this law. Employers should review their policies and procedures manuals governing break times. Employers should make managers and supervisor aware that employees have a right to take this break for up to one year following the birth of a child. Employers should designate places that can be used for this purpose. The employer need not create a special place for this break, as long as the place(s) designated are not a bathroom, and is a place "shielded from view" and "free from intrusion from coworkers and the public" during the employee's break. By McLaine DeWitt Herndon, mherndon@dsda.com NOTE: For more about the new health care law, see the article featured in the April 2010 Healthcare Provider's Legal Resource by clicking here. Last year, President Obama issued Executive Order 13496 which, in part, instituted broader obligations on federal contractors and subcontractors to inform their employees of rights under the National Labor Relations Act. The Department of Labor issued the final rule on May 20. No later than June 19, 2010, federal contractors and subcontractors must post the prescribed notice conspicuously (e.g., employee bulletin boards next to the other posters) in all facilities where contract-related work is being conducted. For more information or to download the poster, click here. By Kristen L. Brightmire, kbrightmire@dsda.com ERISA Update Many ERISA plans contain a clause granting the claims administrator discretion to make benefit decisions. This grant of discretion is significant if a benefit decision winds up in court. If the claims administrator had discretion in making the benefit determination, a court will give deference to the administrator's decision and the decision will be upheld unless the administrator acted arbitrarily and capriciously. On the other hand, if the plan does not grant the administrator discretion to make the benefit decision, a court will review the decision "de novo" and will not grant any deference to the administrator's decision. But even though a plan may grant the plan administrator discretion in determining benefits, the administrator, by its conduct, may lose that discretion. That is what recently occurred in a case decided by the Tenth Circuit Court of Appeals - the court which hears appeals from federal district courts in Oklahoma. Mark LaAsmars obtained both life insurance and accidental death and dismemberment ("AD&D") insurance through an ERISA plan sponsored by his employer, Phelps Dodge. Phelps Dodge contracted with Met Life to provide these benefits, and Met Life was the claims administrator under the ERISA plan. The AD&D coverage provided coverage if the insured died "as the result of an accident." The accident had to be "the sole cause of the injury" and "the sole cause of the covered loss." LaAsmars was driving a pickup when it crashed, killing both he and a passenger. A toxicology report indicated LaAsmars had a blood alcohol content nearly three times the legal limit. His death certificate indicated the "immediate cause" of his death was head and internal injuries due to blunt force trauma as a consequence of a motor vehicle accident. When LaAsmars' parents filed a claim for benefits with Met Life, Met Life paid the life insurance benefits but denied the AD&D benefits. Met Life - which was granted discretion under the plan to make benefit determinations - interpreted the AD&D language to preclude coverage based on LaAsmars' intoxication. LaAsmars' parents administratively appealed Met Life's denial of benefits. The plan gave Met Life 60 days to decide the appeal, tracking the time limit contained in regulations implementing ERISA. However, Met Life took 170 days to deny the appeal. LaAsmars' parents then filed a lawsuit challenging Met Life's denial. The Tenth Circuit determined Met Life's 110 day delay in deciding the administrative appeal constituted a procedural irregularity which disqualified Met Life from obtaining the benefit of the discretionary language of the plan. Therefore, the court gave no deference to Met Life's interpretation of the AD&D policy, and, interpreting the policy de novo, reversed the plan administrator's decision and held that LaAsmars' death was an accident covered under the plan. Thus, in order to preserve the benefit of the discretionary clause of an ERISA benefit plan, administrators must act within the time periods set forth in the plan and regulations governing the plan, as well as comply with all other obligations the plan and regulations may impose upon the administrator in making benefit decisions. SUPREME COURT DECLINES TO REVIEW DECISION UPHOLDING A STATE'S ABILITY TO PROHIBIT DISCRETIONARY CLAUSES IN ERISA INSURANCE POLICIES The Ninth Circuit Court of Appeals recently upheld the ability of the State of Montana to prohibit the inclusion of discretionary clauses in ERISA-governed insurance plans. The insurance company that was the party in that case - Standard Insurance Company - asked the United States Supreme Court to review the decision. On May 17, 2010, the Supreme Court declined to review the decision, leaving the Ninth Circuit's decision intact. Besides Montana, at least 12 other states have passed legislation or regulations banning discretionary clauses in ERISA governed insurance policies - Alaska, California, Colorado, Hawaii, Illinois, Maine, Michigan, New Jersey, Oregon, South Dakota, Washington, and Wyoming. In addition, four other states - Idaho, Indiana, New Hampshire, and Utah - forbid discretionary clauses in insurance policies not governed by ERISA. Maryland, New York, and Texas are considering regulatory or legislative action that would prohibit discretionary clauses in all insurance policies. At the present time there is no pending legislation in Oklahoma to ban discretionary clauses in ERISA governed insurance contracts. However, with the Supreme Court's decision not to review the Ninth Circuit's approval of such a clause, more states - including Oklahoma - can be expected to consider whether they should join those states that prohibit such clauses. By Jon E. Brightmire, jbrightmire@dsda.com Child Labor After a lengthy review of child labor issues, the Department of Labor has issued new regulations, effective August 19, 2010. There are 250+ pages of regulations, but expect that the DOL website will have helpful fact sheets in the coming months. For now, if you employ persons under age 18, be aware that changes are on the horizon. By Kristen L. Brightmire, kbrightmire@dsda.com What's New AnnouncementS CHAMBERS AND PARTNERS USA 2010 HAS ANNOUNCED THAT FOUR DSDA LAWYERS WILL BE FEATURED AS LEADERS IN THEIR FIELD Elise Brennan - Corporate/Commercial- Healthcare Jon Brightmire - Labor & Employment Kristen Brightmire - Labor & Employment David McCullough - Native American Law For twenty years, Chambers has published the leading directories of the legal profession. Their reputation is based on the independence and objectivity of their research. This intensive, continuous research identifies and ranks the world's leading lawyers and law firms - those which perform best according to the criteria most valued by clients. Congratulations! CIVIL PROCEDURE and ELECTRONICALLY STORED INFORMATION OKLAHOMA WATER TOWN HALL Kassandra M. Bentley participated in the Oklahoma water town hall, conducted by the Oklahoma Academy, as part of the Oklahoma Comprehensive Water Plan. The town hall occurred on May 23-26. EDWARDS NAMED TO ABA POSITION IN ENVIRONMENTAL LAW Alicia Edwards was named Vice Chair for the Pesticides, Chemical Regulation, and Right-to-Know Committee of the Environment, Energy, and Resources Section of the American Bar Association. As Vice Chair, she has served as editor for her committee's contribution to the Section's "The Year in Review 2009," which was published in April. Dates to Remember June 20, 2010 Father's Day To sign up for additional newsletters or to edit your contact information, please click here. |
