Updates: Federal Law Alerts from June 2015

From: Federal Law Alerts

Updates: Federal Law Alerts from June 2015

DOL Releases Proposed Overtime Rules

On June 30, 2015, the Department of Labor (DOL) announced a proposed rule to update the regulations governing the white collar employee and highly compensated employee exemptions to the minimum wage and overtime pay protections under the Fair Labor Standards Act (FLSA).

According the rule, the DOL proposes to:

  • Set the standard salary level at the 40th percentile of weekly earnings for full-time salaried workers ($921 per week, or $47,892 annually);
  • Increase the total annual compensation requirement needed to exempt highly compensated employees (HCEs) to the annualized value of the 90th percentile of weekly earnings of full-time salaried workers ($122,148 annually); and
  • Establish a mechanism for automatically updating the salary and compensation levels going forward to ensure that they will continue to provide a useful and effective test for exemption.

The proposed rule was published in the Federal Register on July 6, 2015. Employers will have 60 days from the date of publication in the Federal Register.

Read the Proposed Rule
Read the Proposed Rule Fact Sheet
Read the Proposed Rule FAQs

Supreme Court Recognizes Same-Sex Marriage

On June 26, 2015, in a 5 – 4 decision, the Supreme Court decided in the case of Obergefell v. Hodges that the Fourteenth Amendment to the U.S. Constitution requires all states to grant same-sex marriages and recognize same-sex marriages lawfully performed in other states as a fundamental right.

This is the court’s second major ruling on the subject of marriage. The U.S. v. Windsor decision in 2013 expanded the definition of marriage to include same-sex marriages but was limited to federal law and did not impact state rules, creating legal, benefits, and tax implications for employees and employers in the states where same-sex marriages were not allowed.

This ruling will have direct implications for many human resources and benefits programs, and we expect the federal Department of Labor and the Internal Revenue Service as well as state employment and insurance departments to issue further regulatory guidance based on the court’s ruling. Areas for employers in all states to consider include:

  • Same benefits and tax treatment (federal and state) for same-sex spouses:
    • Fully insured health and welfare plans must extend coverage to same-sex spouses.
    • Self-funded (self-insured) health and welfare plans may continue to use plan-specific definitions of spouse with the understanding that federal and state nondiscrimination laws apply. Further, the ERISA pre-emption provision protections for design flexibility for employers providing self-funded plans may no longer apply.
  • Multistate employers providing benefits will now have consistency relating to benefits elections administration and notifications for same-sex couples in states that previously did not recognize the marriage.
  • Differences in federal and state pre- and post-tax benefits calculations for same-sex couples in states where the marriages were not recognized will be eliminated.
  • Paid time off (PTO) programs, including leaves of absence and time off for family members, should be reviewed to include same-sex spouses.

Employers should review all company policies, benefits, and programs referring to programs for spouses to include same-sex spouses.

Read the Decision

EEOC Updates Pregnancy Discrimination Guidance

On June 25, 2015, the Equal Employment Opportunity Commission (EEOC) released an updated Enforcement Guidance on Pregnancy Discrimination and Related Issues, along with a Q&A and fact sheet for small businesses. The updated guidance was released in light of the U.S. Supreme Court’s decision in Young v. UPS.

The updates to the guidance are limited to several pages regarding the recent decision in Young, issued in March 2015. The updated guidance reflects the Supreme Court’s conclusion that women may be able to prove unlawful pregnancy discrimination if the employer accommodated some workers but refused to accommodate pregnant women. The court explained that employer policies that are not intended to discriminate on the basis of pregnancy may still violate the Pregnancy Discrimination Act (PDA) if the policy imposes significant burdens on pregnant employees without a sufficiently strong justification.    

The decision in Young does not affect most of the July 2014 EEOC Enforcement Guidance on Pregnancy Discrimination and Related Issues and therefore the following topics remain the same:

  • The PDA’s application to current, past, and potential pregnancy.
  • Termination or refusal to hire someone because she is pregnant and other prohibited employment actions based on pregnancy.
  • Application of the PDA to lactation and breastfeeding.
  • Prohibition of forced leave policies.
  • The obligation to treat women and men the same with respect to parental leave policies.
  • Access to health insurance. 

The EEOC also points out that the Young decision did not address the effect of the Americans with Disabilities Act Amendments Act of 2008 (ADAAA) on workers with pregnancy-related impairments. Accordingly, that discussion in the guidance also remains the same. The guidance notes that, “Changes to the definition of the term ‘disability’ resulting from enactment of the [ADAAA] make it much easier for pregnant workers with pregnancy-related impairments to demonstrate that they have disabilities for which they may be entitled to a reasonable accommodation under the ADA.”

Read the Updated EEOC Enforcement Guidance on Pregnancy Discrimination and Related Issues
Read the Q&A about the EEOC’s Enforcement Guidance on Pregnancy Discrimination and Related Issues
Read the Pregnancy Discrimination Fact Sheet for Small Businesses

IRS Releases 2015 Draft Forms 1094 and 1095 for Information Reporting

On June 16, 2015, the Internal Revenue Service (IRS) released draft 2015 versions of the Form 1094 and 1095 series. These forms are used to satisfy the Affordable Care Act’s (ACA) reporting requirements. Once the forms and related instructions are finalized by the IRS, the 2015 forms will be used for the mandatory reporting for the 2015 calendar year, due in early 2016.

Download the draft forms:

  • Form 1094-B, Transmittal of Health Coverage information Returns
  • Form 1095-BHealth Coverage
  • Form 1094-CTransmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns
  • Form 1095-CEmployer-Provided Health Insurance Offer and Coverage

Final Rule Issued on Summary of Benefits and Coverage

On June 16, 2015, the departments of Health and Human Services, Labor, and the Treasury issued a final rule regarding the Summary of Benefits and Coverage (SBC) and the uniform glossary requirements for group health plans and health insurance coverage in the group and individual markets under the Affordable Care Act (ACA). The regulations are intended to make it easier for consumers and employers to compare health insurance coverage options, while streamlining processes for issuers and group health plans.

Read the Final Rule
Read the Fact Sheet on the Final Rule

OSHA Publishes Guide to Restroom Access for Transgender Workers

On June 1, 2015, The Occupational Safety and Health Administration (OSHA) published A Guide to Restroom Access for Transgender Workers. The publication includes a description of best practices and makes employers aware of federal, state, and local laws that reaffirm the core principle of providing employees with access to restroom facilities based on gender identification.

Read A Guide to Restroom Access for Transgender Workers