RELIEF, PART THREE: Ohio Department of Insurance Provides Coverage Flexibility for Ohio Employees in the Wake of COVID-19

By Lauren Drabic*

On March 20, 2020, the Ohio Department of Insurance issued a Bulletin providing relief to certain insurance regulations in Ohio. This Bulletin followed Governor Dewine’s directive that agencies implement procedures to help prevent or alleviate the public health threat from COVID-19. The Bulletin applies to all health insurance carriers that reimburse the costs of health care services under a health benefit plan in Ohio, including insurance companies, stop loss insurers, and non-federal governmental health plans. The changes will alleviate the impact of COVID-19 by making it easier for employees to remain on their employers’ health insurance plans, providing a grace period for employers to make premium payments, and relaxing standards for continuation of coverage as follows:

• Employee Eligibility: Insurers must permit employers to continue covering employees under group health insurance policies even if an employee would otherwise become ineligible for coverage due to a decrease in the employee’s hours worked per week. Insurers must permit employers to continue providing coverage to employees regardless of any “actively at work” hours requirement or similar eligibility requirements. Furthermore, insurers are prohibited from increasing premium rates based on a group’s decrease in enrollment or participation due to the impact of COVID-19.
• Grace Period for Premium Payment: Insurers are required to give policyholders the option of deferring their premium payments, interest free, for up to 60 days from each original premium due date.
• Continuation Coverage: Employees’ options for continuation coverage depend on the size of their employer. For employers with 20 or more employees, employees may elect to continue coverage under COBRA under the normal notice and election procedures as long as at least one person remains actively employed with the employer. For employers with fewer than 20 employees, employees may elect to continue coverage under state continuation coverage for up to twelve months if one person remains actively employed and enrolled in the plan. If no active employees remain covered under a plan, employees become eligible for a special enrollment period, as detailed below.
• Special Enrollment: Employees who lose coverage are eligible for a special enrollment period to enroll in new coverage. They may do so through the federal exchange or through outside insurance providers. Individuals who apply for coverage on the federal exchange may qualify for premium subsidies. Their coverage becomes effective the first day of the next month after enrollment. Insurers providing policies outside of the federal exchange must waive normal special enrollment procedures and allow applicants to obtain coverage effective the day after their loss of employment.

This Bulletin is specific to the State of Ohio and does not affect health insurance coverage outside of this state. It will remain in effect until the expiration of the State of Emergency declared by Governor Dewine on March 9, 2020.

Separately and finally, the Ohio Department of Job and Family Services has created this form to help expedite the unemployment claim process.

Z&R will continue to monitor the latest information governing Ohio employers and has created a resource center. Previous Z&R articles addressing employer requirements and considerations during the COVID-19 pandemic can be found here:

• Coronavirus Considerations for Employers
• Ohio Provides Some Cover for Employers and Employees in Wake of COVID-19
• Federal COVID-19 response mandates paid leave (for now)
• Application of the Worker Adjustment and Retraining Notification Act (“WARN”) to Closures Caused by the COVID-19 Pandemic
• Ohio BWC: Allows Deferment of Premium Payments and Addresses Compensability of Contracting COVID-19

*Lauren Drabic works in Z&R’s Cleveland office and regularly advises clients on all employment matters. If you have questions regarding the Ohio Department of Insurance Bulletin other employment-related matters, please contact Lauren at lmd@zrlaw.com or 216.696.4441.

EMPLOYMENT LAW QUARTERLY | Volume XVIII, Issue iii

Download PDF

• Not So Fast (Food): Ohio Employer Goes Too Far With Supersized Influence Over His Employees’ Voting Decisions
• Elections and the Workplace: Employee Time Off for Voting
• EEOC Changes the Notice Employers are Required to Provide Employees Participating in an Employee Health Program
• Religious Discrimination on the Horizon: EEOC Targets Enforcement
• Z&R SHORTS

---

Not So Fast (Food): Ohio Employer Goes Too Far With Supersized Influence Over His Employees’ Voting Decisions

By Brad S. Meyer*

With a hotly debated election season upon us, everyone seems to have an opinion on the candidates and significant ballot issues. While political discussions are common in the workplace, Ohio employers cannot influence their employees’ votes.

More specifically, Ohio has a statute limiting an employer’s influence over how employees vote on Election Day. Ohio Revised Code 3599.05 makes it illegal for an employer or his agent or a corporation to:

print or authorize to be printed upon any pay envelopes any statements intended or calculated to influence the political action of his or its employees; or post or exhibit in the establishment or anywhere in or about the establishment any posters, placards, or hand bills containing any threat, notice, or information that if any particular candidate is elected or defeated work in the establishment will cease in whole or in part, or other threats expressed or implied, intended to influence the political opinions or votes of his or its employees.

A violation of this statute is punishable by a fine of $500 - $1,000.

In 2011, the owner of a fast food restaurant violated R.C. 3599.05 when, in the month preceding the election, the employer enclosed a letter containing the company’s logo on it with each employee’s pay check that stated:

As the election season is here we wanted you to know which candidates will help our business grow in the future. As you know, the better our business does it enables us to invest in our people and our restaurants. If the right people are elected we will be able to continue with raises and benefits at or above our present levels. If others are elected we will not. As always who you vote for is completely your personal decision and many factors go into your decision.

The letter then listed the candidates the owner believed would help the business move forward.

At least one employee filed a complaint against the owner with local prosecutors. The Ohio Secretary of State investigated the claim and recommended charges against the owner. Ultimately, the owner pled no contest to a violation of R.C. 3599.05 and agreed to pay a $1,000 fine.

Accordingly, Ohio employers must understand that there are limits to the amount of influence they can exert over their employees’ choices at the ballot box. If an employer wishes to publish political opinions to their employees, they should consult counsel to help avoid violating the law.
*Brad S. Meyer practices in all areas of public and private labor and employment law. For more information on political speech in the workplace or other labor and employment questions, please contact Brad at bsm@zrlaw.com or 216.696.4441.

---

Elections and the Workplace: Employee Time Off for Voting

By Brad E. Bennett*

As Election Day approaches, employers will receive requests from employees for time off from work to go vote. As there is no federal law governing time off for voting, numerous states have enacted laws governing employee leave for voting. In the 29 states that currently have laws providing for voting leave, the requirements vary. For example, 21 of those states require employers to provide paid time off to employees to vote.

The following table summarizes the key aspects of state voting laws:
DOWNLOAD PDF OF TABLE

In addition to the state laws summarized above, employers also should know about any local ordinances relating to employee time off for voting. With Election Day fast approaching, employers should understand the validity of an employee request for time off to vote and prepare for the impact of any voting-related absences upon business operations.

*Brad E. Bennett practices in all areas of public and private labor and employment law. For more information on employee leave or other labor and employment questions, please contact Brad at beb@zrlaw.com or 614.224.4411.

---

EEOC Changes the Notice Employers are Required to Provide Employees Participating in an Employee Health Program

By Patrick J. Hoban*

The Equal Employment Opportunity Commission (“EEOC”) recently published final rules under the Americans with Disabilities Act (“ADA”) for employers who offer certain wellness programs that collect employee health information. Specifically, the EEOC detailed what type of notice employers must provide regarding the use of employee health information. According to the EEOC, the new rules ensure that Employee Health Programs (“EHPs”) “are reasonably designed to promote health and prevent disease, that they are voluntary, and that employee medical information is kept confidential.”

Generally, the ADA prohibits employers with 15 or more employees from discriminating against individuals on the basis of a disability. To prevent such discrimination, the ADA restricts employers with respect to obtaining medical information from employees and applicants. Notwithstanding the general restriction, however, the ADA permits employers to make certain inquiries of employees regarding their health and to conduct medical exams of employees when such requests are part of voluntary EHPs.

Voluntary EHPs encompass health promotion and disease prevention programs and activities offered to employees as part of an employer sponsored health plan or as a benefit of employment. The EEOC promulgated the new rules to guide employers who may offer incentives to employees to participate in wellness programs that require them to answer disability-related inquiries or undergo a medical examination.

Under the ADA, participation in an EHP must be voluntary. An EHP is voluntary if: (1) it does not require employees to participate; (2) it does not deny coverage under any of its group health plans or limit the extent of benefits (with some limited exceptions) due to non-participation; (3) it does not result in any adverse employment action or retaliation against any employees; and (4) it provides notice to employees regarding the use of their health information.

The new rules issued by the EEOC provide employers further guidance on the fourth prong of the voluntary test - the notice requirement. While the EEOC provides a Sample Notice for Employee-Sponsored Wellness Programs, employers are not required to use the EEOC sample. Under the new rules, an employer is required to provide employees with notice that: “(A) is written so that the employee from whom medical information is being obtained is reasonably likely to understand it; (B) describes the type of medical information that will be obtained and the specific purposes for which the medial information will be used; and (C) describes the restrictions on the disclosure of the employee’s medical information, the employer representatives or other parties with whom the information will be shared, and the methods that the covered entity will use to ensure that medical information is not improperly disclosed (including whether it complies with the measures set forth in the HIPAA regulations).”

After much debate, the EEOC declined to include a requirement that employees participating in EHPs provide prior written and knowing confirmation that their participation is voluntary. In making its determination, the EEOC sought to ensure that no employee unwittingly authorized the dissemination of confidential and protected information, while refusing to place unwieldy burdens on an employer. In order to balance those competing interests, the EEOC ruled that “a covered entity may not require an employee to agree to the sale, exchange, sharing, transfer, or other disclosure of medical information, or to waive confidentially protections available under the ADA as a condition for participating in a wellness program or receiving a wellness program incentive.”

The EEOC rules go into effect on the first day of the first plan year for benefits beginning on or after January 1, 2017. With open enrollments quickly approaching, it is important for employers to make sure they are familiar with the new EEOC rules. Employers can expect the EEOC and employee groups to enforce compliance with the new notice rules through litigation.

Employers also must understand that this is just one of the rules that govern EHPs. Implementation of these programs requires compliance with a host of laws and regulations, including but not limited to: HIPAA, Title II of GINA (also enforced by the EEOC), the Affordable Care Act and others.

*Patrick J. Hoban practices in all areas of employment and labor law. If you have questions about employee health programs or other employment and labor law issues, please contact Pat (pjh@zrlaw.com) at 216.696.4441.

---

Religious Discrimination on the Horizon: EEOC Targets Enforcement

By Drew C. Piersall*

In a series of moves, the Equal Employment Opportunity Commission (“EEOC”) recently demonstrated its intent to pursue religious discrimination claims more actively. In July, the EEOC released a fact sheet “designed to help younger workers understand their rights and responsibilities” under anti-discrimination laws. The EEOC also announced its improved coordination with the Department of Labor (“DOL”) to prevent religious discrimination among federal contractors and subcontractors.

Title VII of the Civil Rights Act of 1964 (“Title VII”) forbids religious discrimination. Specifically, the statute’s “disparate treatment” provision prohibits employers from failing/refusing to hire, discharging, or otherwise discriminating against an applicant/employee “because of” the applicant’s/employee’s religion. Title VII defines religion to include all aspects of religious observance, practice, and belief.

Religious disparate treatment claims often arise in the form of “failure to accommodate” allegations. Generally, to succeed on a failure to accommodate claim, the applicant/employee initially must prove that: (1) he/she holds a sincere religious belief that conflicts with a job requirement; (2) he/she informed the employer about the conflict; and (3) the employer discharged or disciplined the applicant/employee for failing to comply with the conflicting job requirement.

Title VII defines religious belief broadly. For example, one court acknowledged that Title VII provides atheists with the same protections as members of other religions and found a plaintiff’s atheistic beliefs sincere. See Mathis v. Christian Heating and Air Conditioning, Inc., 158 F. Supp. 3d 317 (E.D. Pa. 2016). There, the plaintiff’s atheistic beliefs conflicted with a job requirement to wear an I.D. badge that included a religious mission statement.

The United States Supreme Court recently relieved applicants/employees from demonstrating, in some cases, that the applicant/employee informed the employer of a conflict between the job requirement and religious belief. In EEOC v. Abercrombie & Fitch Stores, Inc., 135 S. Ct. 2028 (2015), the Court held the employer does not need specific knowledge of the applicant’s/employee’s religion or need for accommodation in intentional religious discrimination cases. Rather, an employer who acts with the motive to avoid an applicant’s/employee’s religious practice or need for religious accommodation – even if based on nothing more than an unsubstantiated suspicion – may violate Title VII. An applicant’s/employee’s religion cannot be a “motivating factor” in the employer’s decision.

If an applicant/employee establishes a prima facie failure to accommodate claim, the employer must show that accommodating the employee would impose an undue hardship on the employer. Undue hardship means more than a de minimis cost. Historically, courts have considered accommodations that result in the following undue hardships: requiring an employer to pay overtime; requiring an employer to hire replacement employees; requiring an employer to make additional contributions to insurance and pension funds; requiring an employer to take action that compromises schedule or seniority systems; and requiring an employer to risk regulatory or criminal sanctions.

In addition, Title VII mandates that an employee cooperate with the employer’s attempts to provide a religious accommodation. Courts may be more likely to find undue hardship where the employee refuses to compromise. For example, a FedEx employee insisted that she keep her operations manager position and get all Saturdays off. The company showed such arrangement would have created a safety risk because the company needed all managers available every day during peak season to assist in loading and launching aircraft. The court found that allowing the employee not to work during peak season imposed an undue hardship. See Burdette v. Federal Express Corp., 367 Fed. App’x 628 (6th Cir. 2010).

Employers should address claims of religious discrimination and requests for accommodation carefully and on an individualized basis. In its Abercrombie & Fitch decision, the United States Supreme Court concluded Title VII does not demand mere neutrality with regard to religious practices. Rather, “it gives [employees seeking religious accommodations] favored treatment.” When evaluating accommodation requests, employers should evaluate carefully the costs of an accommodation, work with the employee to find a solution, and contact employment counsel with questions.

*Drew C. Piersall practices in all areas of employment and labor law. If you have questions about religious discrimination, accommodations, or the EEOC’s enforcement efforts, please contact Drew (dcp@zrlaw.com) at 614.224.4411.

---

Z&R SHORTS

Please join Z&R in welcoming Scott DeHart to its Employment and Labor Groups

Scott DeHart’s practice will focus on all areas of private and public sector labor and employment law and litigation. Scott graduated summa cum laude from New York Law School, where he focused his studies on labor and employment law. As a law student, Scott was selected as Champion of the NKU Grosse Moot Court Competition. Prior to joining Zashin & Rich, Scott pursued a career as a Human Resources practitioner, most recently as a Director of Human Resources at Columbia University. In that capacity, Scott ensured the effective design and administration of a broad range of HR programs and served on the university’s collective bargaining team.

Upcoming Speaking Engagements

Monday, November 7, 2016
George S. Crisci presents “The National Labor Relations Board – Obligations and Compliance” and “Other Employment Laws You Need to Know” at the National Business Institute’s Seminar on Human Resource Law from Start to Finish at the CMBA Conference Center, One Cleveland Center, 1375 E 9th St, Cleveland, Ohio 44114.

Friday, November 18, 2016
Jonathan J. Downes presents “FLSA – New Rules and Practical Solutions” at the CAAO Winter Conference during the 9:00 am – 10:30 am session. The conference takes place at the Embassy Suites Dublin, 5100 Upper Metro Place, Dublin, 43017.

Thursday, December 8, 2016
George S. Crisci will participate, as the Management Panelist, in the presentation “A View from the Chair of the National Labor Relations Board.” The featured panelist will be NLRB Chairman Mark G. Pearce. Patrick J. Hoban will participate, as the Management Panelist, in the presentation “Applying the NLRA to Employer Handbooks and Other Employer Policies.” The presentations will occur at 12:30 p.m. and 1:45 p.m., as part of the Ohio State Bar Association’s “National Labor Relations Board Update: Times and Laws are Changing” seminar, which will be held at the Ohio State Bar Association headquarters, 1700 Lake Shore Drive, Columbus, Ohio 43204.

For more information regarding this seminar, please contact Linda Morris – CLE Program Coordinator for the Ohio State Bar Association at 614-487-4408 or email at lmorris@ohiobar.org.

The Supreme Court Legislates New Life into the Affordable Care Act

By Patrick J. Hoban*

The Affordable Care Act (ACA) has created enormous administrative, operational, and financial challenges for public and private sector employers large and small. Since its enactment on March 23, 2010, the ACA has generated enormous controversy and questions about its legality. Yet, the ACA has survived and its mandates and regulations – including the Employer Mandate fines and reporting requirements – have required employers to expend time and resources to adapt, adjust, and prepare.

On June 25, 2015, the latest installment of the ACA saga came to a crescendo when the U.S. Supreme Court issued its long-awaited decision in King v. Burwell, Case No. 14-114 (Jun. 25, 2015). The sole issue before the Court was whether individuals who obtain health insurance coverage through a health insurance exchange “established by” the Federal Government and not by a “State” were eligible for ACA tax credits. Through an exercise of legal flexibility that delighted the ACA’s proponents and dazed its detractors, the Court upheld an Internal Revenue Service (IRS) regulation and interpreted the ACA to extend tax credits to individuals who obtain health insurance coverage through State or federally-established health insurance exchanges. If the Court had decided differently, the decision would have released employers in States that had not established Exchanges (35 of the 50 States – including Ohio) from the burdens of the Employer Mandate.

This is how we got here:

Background: Among its many, far reaching, and onerous provisions, the ACA requires that health insurance providers issue coverage to any applicant regardless of existing medical conditions. The ACA also requires insurers to adopt “community rating” for health insurance premiums which significantly restrict an insurer’s ability to set premiums based upon traditional actuarial factors. To guarantee that a sufficient number of relatively healthy individuals obtain coverage (and offset the costs of guaranteed issue and premium rate restrictions), the ACA further requires most individuals to purchase qualifying coverage or pay an annual “tax” (the Individual Mandate). With the goal of fostering a competitive marketplace for compliance with the Individual Mandate, the ACA introduced health insurance Exchanges – in short, online shopping forums for health insurance. The ACA provides that States may “establish” Exchanges for their citizens or, if a State elects not to, the Federal Government will establish “such Exchange” and operate it in the State.

To offset expected increases in health insurance premium costs generated by guaranteed issue, minimum essential coverage standards and rating limitations, the ACA created refundable, advanceble tax credits for individuals who earn between 100 and 400% of the Federal Poverty Line. To be eligible for an ACA tax credit, an individual must fall within the required income range, obtain coverage through an “Exchange established by the State,” and not have been offered group coverage by his employer.

In the years following the ACA’s enactment, 16 States and the District of Columbia established Exchanges at great cost to those States, and, through federal grants, the U.S. Treasury. The remaining 34 States (including Ohio) chose not to and the Federal Government established Exchanges to operate in those States. In 2013, the IRS issued a regulation interpreting the ACA to provide that tax credits were available to an individual who obtained coverage through an Exchange “established by the State” or established by the Federal Government. Accordingly, in 2014, the first year that tax credits were available, the IRS granted tax credits to qualifying individuals regardless of whether they obtained coverage through a “State established” or a federally established Exchange. The regulation was challenged in two separate actions on grounds that the ACA’s language clearly stated that only individuals who obtained coverage through an “exchange established by a State” were eligible for tax credits. In Halbig v. Burwell, 14-5018 (D.C. Cir. Jul. 22, 2014), the D.C. Circuit struck down the IRS regulation. On the same day, in King v. Burwell, 14-1158 (4th Cir. Jul. 22, 2014), the Fourth Circuit upheld the IRS regulation.

While the Obama Administration appealed the Halbig decision to the full D.C. Circuit for en banc review, the Plaintiffs in King appealed to the Supreme Court which accepted the case based on the split between the circuit courts. Notwithstanding the ACA’s myriad provisions affecting insurers, health insurance providers and individuals, employers – especially “Applicable Large Employers” (i.e., employers with 50 or more full-time employees or full-time equivalents) – had a dog in the fight.

Under the ACA’s Employer Mandate, Applicable Large Employers face fines of from $2,000 to $3,000 per year per full-time employee if they do not offer group health insurance coverage to full-time employees and their dependents that provides “minimum essential coverage” as established by the ACA, provides “minimum value” (pays for at least 60% of benefits costs), and is affordable (employee premium payments are less than 9.5% of their monthly compensation). Additionally, Applicable Large Employers are required to file multiple forms with the IRS (and provide copies to each employee) annually to verify employee access to coverage, employee premium payments, minimum value, and affordability. However, all of the Employer Mandate requirements were conditioned on a full-time employee’s eligibility for a tax credit for coverage obtained through an Exchange. In short, if an employee obtained coverage through a federally established Exchange and was not eligible for a tax credit, his employer would not be liable for Employer Mandate fines or reporting requirements (e.g., Ohio employers). A decision striking down the IRS tax credit regulation would have essentially nullified the Employer Mandate in Ohio and other States that did not establish Exchanges.

The Decision: In an opinion written by Chief Justice Roberts, the six-member Court majority first concluded that the phrase “established by a State” was ambiguous. It then determined that, because the issue of whether tax credits were available to individuals enrolled through federally-established exchanges was “key” to the operation of the ACA, Congress could not have intended to delegate authority to make that decision to the IRS. Then, based on analysis of the context of the ACA’s tax credit provisions, the Court held that the ACA’s overall purpose meant that tax credits had to be available under exchanges established by the Federal Government and not only those “established by the State.” The Court summarized its decision:

Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them. If at all possible, we must interpret the Act in a way that is consistent with the former, and avoids the latter. [The ACA] can fairly be read consistent with what we see as Congress’s plan, and that is the reading we adopt.

The majority also recognized that the procedure by which the ACA’s 900 pages were enacted resulted in “inartful drafting” because the Obama Administration and then Democrat Congressional majority “wrote key parts of the Act behind closed doors,” used a complicated budgetary process “which limited opportunities for debate and amendment,” and “bypassed the normal 60-vote filibuster requirement.” This process, the majority concluded, “does not reflect the type of care and deliberation that one might expect of such significant legislation.”

The Dissent: The dissenting opinion, written by Justice Scalia, rejected the majority’s conclusion that the phrase “exchange established by the State” was ambiguous. In short, the dissent contended that congressional intent is most clearly expressed through the plain language of the statute, and the plain language states that tax credits are not authorized for coverage through exchanges established by the Federal Government: “Words no longer have meaning if an Exchange that is not established by the State is ‘established by the State.’” Characterizing the majority’s interpretation as “jiggery-pokery,” the dissent accuses the majority of concocting ambiguity to “rewriting” the ACA based on its determination to correct the ACA’s structural flaws based on an understanding of its purpose that is contrary to its terms.

The dissent further objected to the majority’s reliance on the importance of tax credits to the overall structure of the ACA stating that, if denying tax credits to coverage through federally-established exchanges it would “only show that the statutory scheme contains a flaw, [and] would not show that the statute means the opposite of what it says.” Rejecting the majority’s “inartful drafting” rationale, the dissent asserted that “This Court . . . has no free-floating power ‘to rescue Congress from its drafting errors.” To this point, the dissent further stated:

This Court holds only the judicial power – the power to pronounce the law as Congress has enacted it. We lack the prerogative to repair laws that do not work out in practice, just as the people lack the ability to throw us out of office if they dislike the solutions we concoct. We must always remember, therefore, that “our task is to apply the text, not to improve upon it.”

****

Rather than rewriting the law under the pretense of interpreting it, the Court should have left it to Congress to decide what to do about the Act’s limitations of tax credits to state Exchanges.

What Do Employers Do Now: The King decision ends the most serious challenge to the ACA’s continued existence. Had the majority’s decision prohibited tax credits for coverage through federally-established exchanges, the ACA could not have survived without congressional action (unlikely) or the establishment of State exchanges by most of the 34 States that opted out. There are other, ongoing legal challenges to the ACA’s more limited provisions, and other potential challenges looming once the Employer Mandate takes full effect in January 2016. However, for now, employers must continue to identify their risks and obligations under the ACA by evaluating each employee’s “full-time” status under the ACA, determining whether to offer group coverage to “full-time” employees, confirm the “affordability” and “minimum value” of coverage offered, and comply with the bevy of reporting requirements arising under the ACA.

The Court has ruled and, while the political process may bring changes to the ACA in the next two years, the ACA is the law of the land.

Patrick J. Hoban, an OSBA Certified Specialist in Labor and Employment Law, practices in all areas of private and public sector labor relations. Pat regularly counsels employers on compliance with the ACA and has done so since 2010. Pat also frequently speaks on ACA issues. For more information about the ACA, labor & employment law, or any other workplace related issues, please contact Pat | pjh@zrlaw.com | 216.696.4441.

ACA Tax Credit Eligibility/Employer Mandate Fines Headed to the U.S. Supreme Court Ahead of Schedule - Employer ACA Liability Hangs in the Balance

By Patrick J. Hoban*

On July 25, 2014, Zashin & Rich Co., L.P.A. (“Z&R”) notified employers about the two conflicting opinions issued by federal courts of appeals over whether the IRS may grant tax credits to individuals who reside in states with Affordable Care Act (“ACA”) health care Exchanges established and operated by the federal government. See Halbig v. Burwell, No. 14-5018 (D.C. Cir. Jul. 22, 2014) (“Halbig”), King v. Burwell, No. 14-1158 (4th Cir. Jul. 22, 2014) (“King”).

The Halbig decision held that individuals who obtained health insurance through federal Exchanges were not eligible for tax credits under the ACA. However, the D.C. Circuit vacated Halbig on September 4, 2014, after the U.S. Department of Health and Human Services, the U.S. Justice Department, and the Internal Revenue Service (“IRS”) sought and were granted en banc review. At that point, there was no circuit split on the ACA tax credit issue as the Fourth Circuit in King upheld the IRS rule granting tax credits to individuals who obtained health insurance through federal Exchanges. However, the plaintiffs in King appealed the Fourth Circuit decision to the U.S. Supreme Court.

In the absence of a circuit split, many observers concluded that the Supreme Court would bide its time and await the decision of the full D.C. Circuit in Halbig. However, true to the unusual judicial and legislative events that have surrounded the ACA since its enactment in 2010, four justices of the Supreme Court granted review in King on November 7, 2014. This development renders the pending D.C. Circuit en banc decision in Halbig less significant as the issue will be addressed directly by the Supreme Court. It is expected that the Supreme Court will hear oral arguments this spring and render a decision by the end of June 2015.

As Z&R explained in its July Alert, the stakes for the ACA and employers’ liability under the Employer Mandate could not be higher. If the Supreme Court reverses King and strikes down the IRS rule, it will in effect render the Employer Mandate a nullity in the 34 states (including Ohio) which did not elect to establish “state operated” Exchanges. This is because employer fines under the Employer Mandate are conditioned upon full-time employees obtaining health insurance coverage through an Exchange and receiving tax credits to pay for that coverage under the ACA.

It is estimated that approximately 85% of individuals who obtained health insurance coverage through state and federally operated Exchanges in 2014 received some level of tax credit. In addition to disrupting the application of ACA Employer Mandate fines in states without state operated Exchanges, if the Supreme Court strikes down the IRS rule, it will significantly disrupt the application of individual taxes under the ACA’s Individual Mandate. Furthermore, such an outcome will pressure states that elected not to establish Exchanges to act to maintain existing ACA tax credit eligibility for their citizens.

In short, uncertainty will continue to surround the ACA’s Employer Mandate for some months. While a Supreme Court ruling on the “make-or-break” tax credit eligibility issue will clarify some questions, it is just as likely to generate more of the confusion that has characterized the ACA since 2010. As it has since the ACA was first introduced in 2009, Z&R will track ACA developments and provide regular updates and guidance to employers so they can successfully navigate the ACA maze.

Patrick J. Hoban, an OSBA Certified Specialist in Labor and Employment Law, practices in all areas of private and public sector labor relations. For more information about the ACA or labor & employment law, please contact Pat | pjh@zrlaw.com | 216.696.4441

ACA Tax Credits/Employer Mandate Fines Undermined by One Federal Circuit Court but Upheld in Another – Justice Roberts: Are You Ready for ACA Round 2?

*By Patrick J. Hoban

On July 22, 2014, two federal courts of appeals issued conflicting opinions over whether the IRS may grant tax credits to individuals who reside in states with Affordable Care Act (“ACA”) health care Exchanges established and operated by the federal government.  See Halbig v. Burwell, No. 14-5018 (D.C. Cir. Jul. 22, 2014) (“Halbig”), King v. Burwell, No. 14-1158 (4th Cir. Jul. 22, 2014) (“King”). 

The specific language of the ACA makes tax credits available to qualified individuals to subsidize the purchase of health insurance through “an Exchange established by the State.”  This language seemingly limits tax credits to coverage obtained through a “state-established” Exchange and not an Exchange established by the Federal Government in a state that has elected not to establish an Exchange (i.e., Ohio).  However, in 2013, the IRS promulgated regulations making tax credits available to qualifying individuals who purchase health insurance through an Exchange established by a state or by the Federal Government.  In Halbig and King, individuals argued that the ACA’s clear language limits tax credits to individuals who obtain healthcare through state-established Exchanges and that the IRS regulations were unlawful.

In Halbig, the D.C. Circuit Court of Appeals agreed, found the ACA language clear, and concluded “established by the State” means what it plainly says.  Since a federally-established Exchange is not an “Exchange established by the State,” the ACA does not authorize tax credits for insurance purchased on federal Exchanges.  The court further held that the ACA’s broad policy goals (facilitating universal health care coverage at lower costs) do not alter this plain language.  However, one of the three judges in Halbig dissented and concluded that, read in context and considered in light of the ACA’s larger purpose, Exchanges “established by the State” included federally-established Exchanges

Within hours of Halbig’s release, the Fourth Circuit Court of Appeals held that the IRS regulation granting tax credits for coverage obtained through federally-established Exchanges was lawful.  In King, the Fourth Circuit determined that, when read in context, the ACA tax credit provisions were “ambiguous.”  Although the court recognized that “common sense” and “a literal reading” favored the individual’s argument, when considered in light of the textual ambiguity and ACA’s overall purpose, the Fourth Circuit concluded that the U.S. Congress, through the ACA, had delegated to the IRS the authority to determine whether tax credits are available on federal Exchanges.  Accordingly, the court concluded that the IRS made a permissible statutory interpretation and that the tax credit regulation was lawful

Should Halbig stand, it will have a monumental impact on the ACA’s future.  Specifically, the Employer Mandate, which fines applicable large employers who do not offer group coverage to full-time employees and their dependents or offers “unaffordable” coverage or coverage that does not provide “minimum value,” will be unenforceable in the 34 states (including Ohio) in which federally-established Exchanges operate.  Because ACA Employer Mandate fines are conditioned on one full-time employee’s eligibility for ACA tax credits, without tax credits there can be no Employer Mandate fines.

In addition to the enormous consequences for the operation of the Employer Mandate, if Halbig is upheld, many fewer individuals will have to comply with the ACA’s Individual Mandate, which requires people to maintain “minimum essential coverage” or pay a “tax.”  The Individual Mandate does not apply to individuals for whom the annual cost of health care coverage, less any tax credits, exceeds eight percent of their projected household income.  Thus, absent ACA tax credits, more individuals will be exempted from Individual Mandate taxes if they do not obtain coverage.  As a consequence, experts predict that the covered pools in the Exchanges will include individuals who make greater use of covered benefits, driving up the cost of coverage under Exchanges.

The U.S. Justice Department announced that it will seek en banc review of Halbig before the full D.C. Circuit Court of Appeals (which has a 7 to 4 Democrat-president appointed majority).  The D.C. Circuit stayed the decision in Halbig pending appeal and the IRS will continue to grant tax credits to individuals obtaining coverage through federally-established Exchanges.  At present, there is no word on whether Appellants in King will appeal.  However, given the starkly conflicting decisions and the enormous impact of a decision denying tax credits for coverage in federally-established Exchanges, the U. S. Supreme Court likely will decide whether the IRS may grant tax credits to individuals through federal Exchanges, and the fate of the Employer Mandate in 34 states including Ohio.

Zashin & Rich Co., L.P.A. will continue to track these cases and, as it has since the ACA was introduced in 2009, provide regular updates so employers have the information needed to avoid unplanned liability under the ACA.

*Patrick J. Hoban, an OSBA Certified Specialist in Labor and Employment Law, practices in all areas of private and public sector labor relations.  Pat has advised employers on the ACA since its introduction in 2009 and has counseled employers on ACA compliance strategies since the statute’s enactment in March 2010.  For more information about these court decisions, the ACA, or labor & employment law, please contact Pat (pjh@zrlaw.com) at 216.696.4441.

New COBRA Guidance Changes Notification Requirements

*By Patrick J. Hoban

Recently, the Department of Labor (“DOL”) released guidance, available here, that changes employee notification requirements under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”).  Employees covered under a group health plan are entitled to notices regarding their rights under COBRA.  The new notice requirements include information regarding the Health Insurance Marketplace (“Exchanges”) under the Patient Protection and Affordable Care Act
The DOL has provided an updated model continuation coverage “general notice,” available here, and updated model continuation coverage “election notice,” available here.  Covered employees and covered spouses/dependents are entitled to the general notice upon the commencement of their employment and the election notice within a short time period following a “qualifying event” (e.g., termination of employment).  The DOL considers use of the model notices “to be good faith compliance with the . . . notice content requirements of COBRA,” at least until the DOL finalizes its rules with respect to the notices

The new general notice language informs employees of their potential eligibility for coverage through the Exchanges or under another group health plan (e.g., a spouse’s plan) through a “special enrollment period” as opposed to COBRA continuation coverage.

The new election notice language sets forth in bold print “You may be able to get coverage through the Health Insurance Marketplace that costs less than COBRA continuation coverage” and provides three pages of information relating to the Exchanges.  In addition to describing options other than COBRA continuation coverage, the election notice advises that “it can be difficult or impossible to switch to another” option once a decision is made

Additionally, the Department of Health and Human Services (“HHS”) released a bulletin, available here, announcing a “special enrollment period” lasting through July 1, 2014 for qualified individuals to drop their COBRA coverage and enroll in a plan under an Exchange.  This “special enrollment period” only applies to the federal Exchange and the HHS bulletin encourages state-based Exchanges to adopt similar enrollment periods.

Employers and plan administrators should take note of the model notices and remain alert as the notices are subject to change and may be modified as the DOL finalizes its rules.  For the time being, use of the model notices constitutes good faith compliance with COBRA’s notice requirements.

*Patrick J. Hoban practices in all areas of labor and employment law. For more information about COBRA notices or any other labor and employment needs, please contact Patrick pjh@zrlaw.com) at 216.696.4441.

EMPLOYMENT LAW QUARTERLY | Winter 2014, Volume XVI, Issue i

Download PDF

• Public Sector Alert: Tenth District Court of Appeals Lays the Groundwork for Disparate Impact Age Discrimination Claims Based On "Anti-Double Dipping" Policies
• Boxed In: What Can Employers Ask on Job Applications?
• Collateral Damage: the Effect of Criminal Convictions on Employment Applications
• Employer Provided Healthcare Insurance Costs Increasing for Smokers and Overweight Employees
• The Department of Labor’s Crackdown on Out-of-Date Employee Handbook is a Costly Reminder to Regularly Update Employee Handbooks
• Z&R Shorts

---

Public Sector Alert: Tenth District Court of Appeals Lays the Groundwork for Disparate Impact Age Discrimination Claims Based On "Anti-Double Dipping" Policies

By Todd M. Ellsworth*

For those of us who remember the television show Seinfeld, it is hard to forget the episode where George dips his chip, takes a bite, and then dips the same chip again. Just as George broke acceptable community standards, taxpayers often feel public employees do the same when they retire and then get rehired by their same employers. In doing so, the employee receives pay and benefits in addition to retirement benefits for performing the same or similar duties. The process, known as “double dipping,” has a long history in Ohio’s public sector. Public employers like retired rehires, or “double dippers,” because they get the same experience at a generally lower personnel cost. Retired rehires like the practice because of the obvious financial benefits. The benefits of “double dipping” are not as readily apparent to the general public, and paying someone twice for the same job is not a common practice in the private sector.

In response to growing public concern, some public agencies have attempted to prohibit “double dipping.” Ohio’s Tenth District Court of Appeals recently weighed in on the matter in Warden v. Ohio Department of Natural Resources, 2014-Ohio-35 (10th Dist. Ct. App. January 9, 2014).

In Warden, the Court found that the policy prohibiting “double dipping” did not constitute a direct cause of action for age discrimination. In addition, and although the Court held that Warden failed to properly plead or litigate a disparate impact claim, the Court addressed whether the employee established that the “anti-double dipping” policy had an adverse effect on older workers. That is, while the policy was facially neutral, did it have an adverse effect on workers aged forty and older. While the Court concluded that no statistical significance existed because the sample size was too small, the Court made it clear that an employee could establish such a claim if the employee could demonstrate sufficient statistical disparities. It is noteworthy that the Ohio Supreme Court has not yet addressed whether such policies could have a disparate impact on older workers. As a result, public sector employers should carefully consider these recent developments if they are considering implementing such a policy.

*Todd M. Ellsworth practices in all areas of labor and employment law. He has extensive experience counseling public sector employers on state and federal discrimination claims.

---

Boxed In: What Can Employers Ask on Job Applications?

By Andrew J. Cleves*
Recently, a movement has spread across the country to “Ban the Box” on job applications. The “Box” refers to a square that, when marked, indicates an individual has a criminal background. A growing number of cities and states have prohibited this question on job applications. Proponents argue such inquiries often automatically disqualify applicants and increase chances of recidivism. For employers, “Ban the Box” laws pose an increased burden on the job application and screening process.

Hawaii became the first state to “Ban the Box” in 1998. Currently, ten states (California, Colorado, Connecticut, Hawaii, Illinois, Massachusetts, Maryland, Minnesota, New Mexico, and Rhode Island) have some form of a “Ban the Box” law. Of those, five (California, Illinois, Maryland, Minnesota, and Rhode Island) passed “Ban the Box” laws or regulations in 2013 and four more have made these changes since 2009. On a more local scale, over fifty cities, including Chicago, Cleveland, and Cincinnati, have adopted some form of “Ban the Box” practices. In addition, the EEOC recommended banning the box on job applications as a best practice in a 2012 enforcement guidance. Some private employers, like Target, have removed such questions from job applications.

While many states and local governments have these measures in place, the laws or regulations and their subsequent effect on employers vary significantly. For many states, such as Connecticut and Maryland, the “Ban the Box” prohibition only applies to state employees. However, in places like Minnesota, the law applies to public and private employers alike. Even where these laws affect private employers, exceptions exist and the restrictions may be lifted at some point in the application process. Often, employers may inquire into an applicant’s criminal background after 1) the applicant was selected for an initial interview, 2) the applicant had an initial interview, or 3) the employer made a conditional job offer. In some instances, if an employer learns of an applicant’s criminal background and does not make a job offer, the employer must show the background was not tied to the employment decision.

Though “Ban the Box” efforts have grown, Ohio does not have such a law. In July 2013, Ohio legislators introduced House Bill 235 that would prohibit public and private employers from asking whether “the applicant has been convicted of or plead guilty to a felony.” However, as of January 2014, the bill had not moved past the Commerce, Labor and Technology Committee. While there is no statewide law, Lucas and Stark Counties and Cleveland, Cincinnati and Canton have “Ban the Box” measures in place. These measures only apply to public employers.

Employers need to understand what, if any, “Ban the Box” restrictions apply in the states, cities, and counties they do business. Employers also should carefully watch for “Ban the Box” developments.

*Andrew J. Cleves practices in all areas of labor and employment law. If you have questions about state or local “Ban the Box” laws and regulations or other hiring concerns, please contact Andrew (ajc@zrlaw.com) at 216.696.4441.

---

Collateral Damage: the Effect of Criminal Convictions on Employment Applications

By David P. Frantz*
Criminal convictions impact much more than the sentence and possible fines associated with the underlying offense. Convictions or guilty pleas may automatically bar individuals from consideration for certain jobs. For example, Ohio Revised Code 173.38(C)(3) and (F) prevent applicants convicted of certain crimes from working in a direct-care position with a community based, long-term-care provider. The Ohio legislature recently addressed the secondary impact of a criminal conviction, dubbed a collateral sanction, when Ohio Revised Code 2953.25 went into effect in September 2012. The law created Certificates of Qualification for Employment (CQE). CQEs lift the automatic bar(s) of the collateral sanction(s) and essentially give the qualifying individual a stamp of rehabilitation. The law then directs employers to consider these applicants on a case-by-case basis.

Though CQEs may sound daunting for employers, the Ohio legislature created a rigorous application process and granted employers certain protections. To apply, an individual must first wait either six months (misdemeanors) or one year (felonies) after the individual has been released from all sanctions related to the offense. Then, the individual must submit a detailed application to the Division of Parole and Community Services. Next, the local court of common pleas may take sixty days to review, gather additional information, and approve or deny the application. To grant an application, the court must find a) the CQE would materially help the individual find a job, b) the individual substantially needs the CQE to stay out of trouble, and c) granting the CQE would not pose a safety risk. Even then, the law prohibits courts from granting CQEs in some circumstances. For example, courts cannot grant CQEs to remove license denials or suspensions for health care professionals convicted of sexual battery or improper distribution of controlled substances.

Furthermore, the law grants substantive protections to employers who hire CQE holders. For general negligence lawsuits, the employer may submit the CQE as evidence that the employer took due care in hiring or retaining the CQE holder. For negligent hiring lawsuits, Ohio Revised Code 2953.25 grants the employer immunity. The employer may invoke these protections if the employer knew the individual held the CQE at the time of hire.

Employers should be wary of retaining CQE-holders who commit additional crimes after obtaining employment though. The law limits employer protection where a CQE holder is a) hired, b) “subsequently demonstrates dangerousness or is convicted of or pleads guilty to a felony,” and c) thereafter retains employment. In those cases, the employer may be liable for retaining the employee. The party bringing the claim must prove that a decision-maker knew of the transgression and willfully retained the employee. Furthermore, once someone obtains a CQE, the law presumptively revokes it if the person later commits or pleads guilty to a felony.

Despite the fact that county courts began accepting CQE applications in March 2013, only 40 had been filed in Cuyahoga County as of mid-December 2013. Of those 40, the courts granted 17 applications, rejected three, and have not made decisions on the remaining 20. As CQEs become more prevalent, it is likely your organization may soon receive an application with one. Given their infancy, to the extent you have questions about CQEs, you should contact your legal counsel.

*David P. Frantz practices in all areas of employment law. If you have questions about CQEs or hiring policies, please contact David (dpf@zrlaw.com) at 216.696.4441.

---

Employer Provided Healthcare Insurance Costs Increasing for Smokers and Overweight Employees

By Patrick J. Hoban*
As if there was not enough controversy surrounding the rollout of the Patient Protection and Affordable Care Act (ACA), many employees who smoke or are overweight may discover that their healthcare costs will increase. Consistent with a growing trend among employers to incentivize (or punish depending on your point of view) employees to live healthier lifestyles, ACA contains provisions allowing employers to charge employees who smoke or are overweight higher health insurance premiums.

ACA encourages employers to utilize “participatory wellness programs.” Examples of these programs include reimbursements for employee gym memberships and rewarding employees for attending health seminars or for completing health risk assessments. In addition to these participatory programs, employers can also implement “health-contingent wellness programs,” which reward employees who are able to meet specified goals or health-related requirements. These programs fall into two categories: (i) “activity-only” programs that reward employees who participate in specific activities (e.g., an exercise or diet plan); and (ii) “outcome-based” programs for employees who maintain healthy choices or goals (e.g., not smoking).

The “reward” for employees who utilize the health-contingent wellness programs can be up to 30 percent of the cost of health coverage for non-tobacco use related programs and up to 50 percent of the cost of health coverage for programs aimed at tobacco use prevention and cessation. Alternatively, employees who fail to participate in these health-contingent wellness programs can get charged up to 30 to 50 percent more for their health insurance premiums than their healthier, non-smoking coworkers.

Independent of the provisions of ACA, some employers have implemented policies under which they will not hire smokers. For example, employers have adopted non-smoking policies for new hires and require job applicants to take a urine test to detect the presence of nicotine in their systems. If an applicant tests positive for nicotine, he or she will not be hired but may re-apply after a 90-day waiting period. Employers considering a similar policy for new hires must beware as all states do not permit these policies. The following states and the District of Columbia prohibit employers from making hiring decisions or employment decisions, including demotions, suspensions, and terminations, based on whether the applicable individual smokes: California, Connecticut, Illinois, Indiana (excludes religious employers), Kentucky, Louisiana, Maine, Minnesota, Mississippi, Missouri, Montana, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Oklahoma, Oregon, Rhode Island, South Carolina, Virginia (applies to state employees only), West Virginia, Wisconsin, and Wyoming. States with similar laws that do not apply to hiring decisions but prevent employers from terminating employees for tobacco use during non-work hours include: Colorado, South Dakota, and Tennessee.

With the advent of ACA and as society continues to become more health conscious in general, many employers may find themselves having to make healthcare related decisions that they have not faced in the past. ACA encourages employers to implement wellness programs that can serve both as a carrot and a stick to incentivize employees to make healthier lifestyle choices. However, employers must ensure that these wellness programs - like all employer policies and programs - are not discriminatory and do not violate laws like the Americans with Disabilities Act, the Genetic Information Nondiscrimination Act, and corresponding state laws.

*Patrick J. Hoban practices in all areas of labor and employment law. He has extensive experience counseling employers on employee wellness programs and ACA. For more information about these topics or any other labor and employment needs, please contact Patrick (pjh@zrlaw.com) at 216.696.4441.

---

The Department of Labor’s Crackdown on Out-of-Date Employee Handbook is a Costly Reminder to Regularly Update Employee Handbooks

By Ami J. Patel*
An otherwise run-of-the-mill Family and Medical Leave Act (FMLA) violation claim made to the Department of Labor’s (DOL) Wage and Hour Division by a restaurant employee recently snowballed into a full-blown DOL investigation into the restaurant chain’s employee handbook. Pursuant to an agreement with the DOL, the restaurant must change its leave policy to comply with the FMLA and pay back wages owed to the individual employee. As a result of the publicity of the investigation and agreement, the restaurant chain could face increased exposure to claims by employees alleging FMLA violations under the company’s old policies. This crackdown should serve as a lesson and warning to employers using out-of-date handbooks that a single claim can lead to a major headache and unexpected liability.

Employee handbooks implicate a number of employment related laws and can lead to investigations by and proceedings before various federal and state administrative agencies. Employee handbook compliance is complex and requires regular updating. Taking the time to regularly update a handbook is a far better alternative than the potential consequences of using a non-compliant one.

The DOL’s investigation of the restaurant chain’s employee handbook focused on its FMLA policy. Under the FMLA, eligible employees who work for covered employers are entitled to take a maximum of 12 weeks of leave in a 12 month period for specified reasons. Among other things, in order for an employee to be eligible for FMLA leave, the employee must have worked for the employer for at least 12 months. However, contrary to what the subject handbook stated, those 12 months of employment do not need to be consecutive. The policy also did not include information on the FMLA’s family military leave provisions or intermittent and reduced-schedule leave.

Employee handbooks should aid employers in avoiding or prevailing in litigation. In order to maintain an employee handbook’s usefulness and minimize liability, employers need to ensure that their employee handbooks are up-to-date and compliant with ever-changing laws and regulations. All it takes is one claim by one employee to open a can of worms that can lead to other claims and substantial costs.

*Ami J. Patel practices in all areas of labor and employment law. She has extensive experience counseling employers on FLMA compliance and handbook issues. For more information about these topics or your other labor and employment needs, please contact Ami (ajp@zrlaw.com) at 216.696.4441.

---

Z&R Shorts

Zashin & Rich is pleased to announce the addition of Andrew Cleves to the firm’s Employment and Labor Group in its Cleveland office.
Andrew’s practice focuses on private and public sector labor relations and employment law. Prior to joining Zashin & Rich, Andrew represented public sector labor unions in Cincinnati. Andrew's experience includes advising clients in collective bargaining negotiations, contract arbitrations, and employment litigation. He has represented clients in state and federal court and before the Ohio State Employment Relations Board.

Upcoming Speaking Engagements

March 27, 2014
Stephen Zashin will present “Brainy FMLA: Advanced Instruction for FMLA Whiz Kids” at the “Administering the Family and Medical Leave Act in Ohio” seminar on March 27, 2014 at the Holiday Inn Cleveland South in Independence, Ohio. For more information, go to www.lorman.com/ID393028.

March 31, 2014
Jonathan Downes will discuss mediation at the SERB Academy on March 31, 2014. For more information contact Tammy Johnson at tjohnson@serb.state.oh.us.

April 17, 2014
Jonathan Downes will present “The Nuts and Bolts of Bargaining, Bargaining Strategies, and Media Relations” at the “Collective Bargaining for Public Safety Employees” seminar on April 17, 2014. For more information, go to www.lris.com.

April 29, 2014
Jonathan Downes will present “Update on Employment Law Matters Affecting Law Enforcement” and “Collective Bargaining and Union Issues Update” at the Ohio Association of Chiefs of Police (OACP) Chief’s Annual Conference on April 29, 2014.

April 30, 2014
Jonathan Downes will present “Employment Law Basics for Public Managers” at the Miami Valley Risk Management Association meeting on April 30, 2014, in Dayton, Ohio. For more information, go to www.mvrma.com.

May 2, 2014
Jonathan Downes will present “Legal Update” at the Ohio Association of Public Safety Directors Annual Conference on May 2, 2014, at the CCAO Conference Center in Columbus, Ohio.

May 14, 2014
Jonathan Downes will present “Employee Issues from Social Media” at the Ohio Jobs and Family Services Director’s Association Meeting on May 14, 2014.

May 21, 2014
George Crisci will present “Special Concerns when Dealing with Union Environments” at the National Business Institute’s “Employee Documentation, Discipline and Discharge” program on May 21, 2014, in Akron, Ohio.

May 21, 2014
Jonathan Downes will present “FMLA Issues and Update” and “Workplace Investigations” at the Ohio Jobs and Family Services Director’s Association Meeting on May 21, 2014 at the Hyatt Regency Columbus.

May 22, 2014
Jonathan Downes will present “Discipline of Public Employees” at the Ohio Association of Chiefs of Police (OACP) meeting on May 22, 2014, at the Reynoldsburg Police Department.

Delays, You Can't Just Have One. The Obama Administration Significantly Delays and Revises PPACA's Employer Mandate Again

*By Patrick J. Hoban

On February 10, 2014, the Department of the Treasury (“DOT”) and the Internal Revenue Service (“IRS”) issued final regulations for the Employer Shared Responsibility provisions of the Patient Protection and Affordable Care Act (“PPACA”). These final regulations, effective on January 1, 2015, delay full implementation of the Employer Mandate once again, in addition to clarifying and revising regulations governing enforcement of the Employer Mandate in the future.

As employers have become all too aware, PPACA requires that “applicable large employers” must offer group health insurance coverage to their full-time employees (and their dependents) or potentially face fines. To avoid potential fines, applicable large employers must offer coverage to at least 95% of their full-time employees (and their dependents). PPACA defines applicable large employers as those that employed an average of at least 50 full-time employees (including full-time equivalents) during the preceding calendar year. “Full-time” employment under PPACA is defined as an average of 30 hours of “service” per week (including all paid hours, actually worked and paid time off).

When enacted in March 2010, the Employer Mandate, including the potential for employer fines, was scheduled to take effect on January 1, 2014. As that date approached, employers struggled to evaluate the costs of either offering coverage to previously uncovered employees or paying fines. Several large, national employers announced reductions in employee hours to avoid Employer Mandate fines. As it became clearer that the administrative burdens and potential costs of the Employer Mandate would significantly burden many employers, in July 2013, the Obama Administration effectively suspended enforcement of the Employer Mandate for all applicable large employers until January 1, 2015.

In the face of continued outcry from employers, and after the glitch-plagued rollout of the Healthcare.gov website, the Administration has again delayed full implementation of the Employer Mandate. The final regulations issued on February 10, 2014, split applicable large employers into two categories and further delayed the Employer Mandate as follows:

The first category is employers with more than 50 but fewer than 100 full-time employees (including full-time equivalents) which are not subject to the Employer Mandate, or potential fines, until the later of January 1, 2016 or after the last day of a 2015 plan year ending in 2016 (e.g., plan year runs from July 1, 2015 through June 30, 2016). Applicable large employers claiming they have fewer than 100 full-time employees must also meet all of the following conditions:

• Employ at least 50 but fewer than 100 full-time employees (including full-time equivalents) during 2014;
• Not reduce the number of employees or employee hours of service to fall below 100 full-time employees (including full-time equivalents) between February 9 and December 31, 2014 to avoid Employer Mandate fines (excluding workforce reductions for “bona fide business reasons”);
• Not eliminate or “materially reduce” health coverage offered as of February 9, 2014 (including the employer share of premium contributions); and
• Certify to the IRS that it meets the above conditions (e.g., the employer must certify that it has not reduced its workforce to avoid Employer Mandate fines).

The second category is employers with 100 or more full-time employees which are subject to the Employer Mandate and potential fines starting January 1, 2015. However, employers in the second category are not subject to fines if they offer coverage to at least 70% of their full-time employees (and their dependents) until the later of January 1, 2016 or the last day of a plan year beginning in 2015.

Under the regulations issued on February 10, 2014, all applicable large employers (those employing 50 or more full-time or full-time equivalents) will be subject to the Employer Mandate as set forth in the statute as of the later of January 1, 2016 or the last day of a plan year beginning in 2015.
Additionally, the final regulations clarified and revised several issues, including:

• “Dependent” Definition. The final regulations confirmed that spouses are not considered “dependents” to whom an employer must offer coverage to avoid Employer Mandate fines. The final regulations also exclude foster children and step children from the definition of dependent.
• Breaks in Employment. The final regulations lowered the standard for breaks in employment allowing an employer to treat a former employee as a “new hire” for purposes of calculating full-time status under the Employer Mandate to 13 weeks from 26 weeks.
• Transitional Guidance. The final regulations provide additional guidance for employers regarding how and when to implement the optional “safe harbor look-back periods” for determining whether employees are full-time under the Employer Mandate.

The new regulations provide additional time for employers to consider how to comply with the Employer Mandate. However, in the face of ongoing uncertainty as to PPACA’s long term effect on health insurance costs, they do nothing to alleviate employer cost concerns and will likely increase administrative burdens and costs of compliance. It is unknown whether the Administration will announce further delays in implantation of or changes to the Employer Mandate. Employers can only keep track of these changes and evaluate their options accordingly. Unfortunately, when it comes to PPACA, the only certainty is that there is no certainty.

*Patrick J. Hoban, an OSBA Certified Specialist in Labor and Employment Law, practices in all areas of private and public sector labor relations. For more information about PPACA or labor & employment law, please contact Pat (pjh@zrlaw.com) at 216.696.4441.

False Start: Obama Administration Delays Implementation of Healthcare Penalties Until 2015

*By Patrick J. Hoban
 
The Obama administration announced yesterday that it will delay enforcement of the Patient Protection and Affordable Care Act’s (“PPACA”) employer mandate by one year, until January 1, 2015. Under the employer mandate, large employers (those with 50 or more full-time employees) must either offer employees and their dependents affordable group health insurance coverage that provides minimum value or pay a penalty between $2,000 and $3,000 per full-time employee.

The administration’s delay does not affect the establishment of healthcare exchanges, which must begin running by October 1 of this year. As a result, it is expected that small employers will still be able to offer healthcare to their employees through the healthcare exchanges.  Additionally, the delay in enforcement of the employer mandate will not affect the so-called “individual mandate” (which requires that individuals will obtain health insurance or pay a “tax”).

In delaying enforcement of the employer mandate, the Treasury Department cited the concerns of large employers about the implementation and complexity of complying with PPACA’s requirements. The Treasury Department has stated it will release proposed regulations within the next week. It is also likely that the delay in enforcing the employer mandate was designed to allow the government some breathing space to establish and begin operating the health insurance exchanges. Health insurance exchanges play a critical role in determining whether a large employer is subject to a fine and there is some doubt as to whether such exchanges will be operational as scheduled on October 1, 2013.

For now, large employers have an additional year to comply with PPACA’s health care coverage requirements. Employers should utilize this additional time to the fullest extent possible, carefully analyzing all options to ensure full compliance with PPACA once the employer mandate does take effect in 2015. As it has since 2009, Z&R will continue to track PPACA and notify you of significant developments.

*Patrick J. Hoban  has tracked PPACA’s effect on employers since the legislation was introduced in 2009 and has advised employers on strategies for complying with its various employer-specific provisions.  For more information about PPACA and its potential effect on your operations, please contact Pat (pjh@zrlaw.com) at 216.696.4441.

Better Late Than Never: The Department of Labor Joins the Ever-Expanding Obamacare Rulemaking Party

*By Patrick J. Hoban

While employers have been busy thinking about "affordability" and "standard measurement periods" to ensure that they comply with the Patient Protection and Affordable Care Act (PPACA), the Department of Labor (DOL) has opened a new front in the PPACA compliance battle. Specifically, the Occupational Safety and Health Administration (OSHA) issued interim final rules addressing employee whistleblower and retaliation claims under PPACA Section 1558 on February 27, 2013 (Interim Rules).

The Interim Rules, which took effect upon publication, prohibit an employer from retaliating against an employee for, among other things, receiving a federal tax credit or subsidy to purchase insurance through a health insurance exchange; reporting a potential violation of the law's consumer-protection provisions (such as the prohibition on denying health coverage to individuals with pre-existing conditions) and/or assisting or participating in a related government proceeding or investigation. Beginning January 1, 2014, the Interim Rules will apply to insurers whether or not they employ the complaining employee. Similar to other rights created by the Fair Labor Standards Act (and enforced by most courts), employees may not waive the rights created under PPACA Section 1558 (i.e., they cannot be released by agreement).

To initiate a claim under the Interim Rules, employees must file a complaint with OSHA within 180 days of an alleged violation and OSHA will investigate the complaint. If OSHA finds reasonable cause for a violation, it will issue an order, including required remedial action. An employer may appeal and request a hearing before an administrative law judge (ALJ) within 30 days and may appeal an ALJ's decision to a Department of Labor "Administrative Review Board." An employer may also appeal a final administrative decision to a federal court of appeals. If there is no final administrative decision within 210 days of the filing of an employee complaint, the employee may initiate an action in federal district court and obtain a jury trial.

A recently issued OSHA fact sheet concerning the Interim Rules lists potentially retaliatory employer actions as including: termination or layoff; "blacklisting;" demotion; denial of overtime or promotion; discipline; denial of benefits; failure to hire; intimidation; threats; and reduction of pay or hours. Claims made under these provisions will be analyzed under the familiar burden shifting standard applied to employment discrimination, and retaliation claims. The Interim Rules provide for remedies including back pay, front pay, compensatory damages, and reinstatement.

As PPACA's full-implementation date of January 1, 2014 draws closer, employers must ensure that they consider this new source for potential liability as they do existing employment laws prior to acting.

*Patrick J. Hoban, an OSBA Certified Specialist in Labor and Employment Law, practices in all areas of private and public sector labor relations. For more information about PPACA or labor & employment law, please contact Pat (pjh@zrlaw.com) at 216.696.4441.

EMPLOYMENT LAW QUARTERLY | Fall 2012, Volume XIV, Issue iii

Download PDF

• Putting a Price on Twitter Followers: The Importance of Employers Retaining Control of Their Social Media Accounts/li>
• Bad Medicine: Michigan Medical Marijuana Act Imposes No Restrictions on Private Employers Who Terminate Employees For Use of Medical Marijuana
• The Voters Have Spoken: What Employers Can Expect From President Obama’s Second Term
• Does Your Company Need Employment Practices Liability Insurance?
• Time Is Not On Your Side: Ohio Supreme Court Interprets 90-Day Notice Requirement Following Discharge for Workers’ Compensation Retaliation Claims
• Z&R Shorts

---

Putting a Price on Twitter Followers: The Importance of Employers Retaining Control of Their Social Media Accounts

By: B. Jason Rossiter*

A trade secrets suit accusing former PhoneDog LLC employee Nathan Kravitz of continuing to use a company Twitter account after his separation recently settled following litigation in the United States District Court for the Northern District of California.  Despite the case’s settlement and the lack of a formal court opinion, the case should serve as a warning to employers whose policies fail to address social media and related issues.

PhoneDog is an interactive mobile news web resource that reviews mobile products and services and allows users to research, price, and shop mobile carriers.  PhoneDog hired Kravitz in April 2006 as a product reviewer and video blogger and assigned him a Twitter account with the name (or handle) of “@PhoneDog_Noah”.  Kravitz regularly updated and submitted content (or tweeted) through the account.  PhoneDog assigned other employees Twitter accounts with similar names (“@PhoneDog_Name”) and claimed that all the Twitter accounts used by its employees, as well as the account passwords, constituted the company’s proprietary, confidential information.

Kravitz left PhoneDog in 2010.  After leaving PhoneDog, the company asked Kravitz to relinquish control of the Twitter account, which at the time had 17,000 followers.  Kravitz refused and instead changed the Twitter account name to “@noahkravitz”.  Kravitz continued to use the account and often tweeted to his followers, which had increased dramatically.

PhoneDog responded by filing suit for theft of company property, alleging $340,000 in damages calculated as $2.50 per follower per month for an eight month period.  PhoneDog claimed that Kravitz’s list of Twitter followers was akin to a client or customer list.  However, Kravitz’s attorneys presented documents demonstrating that PhoneDog had agreed to let Kravitz continue using the account following his separation and, in fact, asked him to continue tweeting occasionally on its behalf, which he did.  Under the only public terms of the parties’ settlement, Kravitz maintained sole custody of the account.

While the parties ultimately settled without a judicial decision, this case presents a valuable lesson for employers – that they should establish clear guidelines as to the use of social media and what happens to various social media accounts upon an employee’s discharge or separation.

*B. Jason Rossiter practices in all areas of employment litigation and is licensed to practice law in Ohio, Pennsylvania, and California.  Jason has extensive experience helping employers navigate through social media and related technology issues. For more information about this ever changing area, please contact Zashin & Rich at 216.696.4441.

---

Bad Medicine: Michigan Medical Marijuana Act Imposes No Restrictions on Private Employers Who Terminate Employees For Use of Medical Marijuana

By: Patrick M. Watts

The Sixth Circuit recently affirmed a district court’s dismissal of a former Wal-Mart employee’s claim of wrongful discharge.  The employee tested positive for marijuana, which he was using in accordance with the Michigan Medical Marijuana Act (“MMMA”).

The former Wal-Mart employee in Casias v. Wal-Mart Stores, Inc., used medical marijuana on the advice of his doctor and in accord with the MMMA.  The employee suffered from sinus cancer and an inoperable brain tumor.  When the employee suffered an injury at work, his manager took him to the hospital.  Pursuant to Wal-Mart’s policies, the hospital tested the employee for drugs, and he tested positive.  In response, the employee produced his user registry card to the hospital staff and explained that he was a qualifying patient under Michigan law.  He further stated that he did not use marijuana at work and that he did not come to work under the influence.

Wal-Mart’s corporate office directed the manager to discharge the employee for his use of marijuana.  The employee filed suit in state court, claiming wrongful discharge and violations of the MMMA.  Wal-Mart removed the case to federal court and moved to dismiss on the grounds that the employee failed to state a claim.  The district court dismissed the employee’s action for failure to state a claim.

The Sixth Circuit affirmed the district court’s ruling.  The court first analyzed and interpreted the statute, which provides that, “[a] qualifying patient who has been issued and possesses a registry identification card shall not be subject to arrest, prosecution, or penalty in any manner, or denied any right or privilege, including but not limited to civil penalty or disciplinary action by a business or occupational or professional licensing board or bureau, for the medical use of marijuana in accordance with this act . . .”  Casias argued that the term “business” in the MMMA is independent, while Wal-Mart countered that it modifies the phrase “licensing board or bureau.”  The Sixth Circuit sided with Wal-Mart's interpretation.  The Court found that the MMMA imposes no restrictions on private employers, including Wal-Mart.  The MMMA does not refer in any way to employment.  The Court also noted that its interpretation was in line with those of courts in California, Montana, and Washington holding that similar state medical marijuana laws do not govern private employment actions.

This decision is likely to surface in Colorado and Washington, two states which have recently legalized the use of marijuana for more than medical use.  To combat the tension between state laws which allow for marijuana use, and federal laws which do not, some states have introduced bills to reconcile these differences.  For example, a U.S. Representative from Colorado has recently introduced legislation which urges the Department of Justice to respect Colorado’s state law and not prosecute those citizens who are in compliance with state law, even if in violation of federal law.

The laws governing the use of marijuana throughout the country are ever-changing and employers need to be wary of these changes and how they impact the workplace.

---

The Voters Have Spoken: What Employers Can Expect From President Obama’s Second Term

By: David R. Vance*

On November 6, 2012, Americans voted to keep President Barack Obama in office for another four years. What can employers expect from President Obama’s second term as President?

First, it is noteworthy that the GOP retained control of the House of Representatives.  This makes it unlikely that the President will be able to push through any sweeping legislation, at least not until after the 2014 midterm elections.  However, a Republican controlled House is nothing new to the President, and he has worked around it in two ways.  First, the President has issued a large number of Executive Orders.  Second, the President has urged various federal agencies, including the Equal Employment Opportunity Commission (“EEOC”) and the Occupational Safety and Health Administration (“OSHA”), to take expansive, aggressive positions on existing laws.  The President is expected to utilize similar actions in his second term.

OSHA is one such agency which may become much more active.  OSHA’s Injury and Illness Prevention Program has been in development for over three years, but the Agency is expected to make it a focus during Obama’s second term.  OSHA also is expected to put comprehensive rulemaking in place to regulate crystalline silica, which is a form of quartz to which workers performing blasting, foundry work, tunneling, and sandblasting regularly are exposed.  Finally, OSHA has proposed stricter injury and illness reporting obligations on employers.  These regulations would require employers to report workplace amputations to OSHA within 24 hours, as well as all inpatient hospitalizations within eight (8) hours.

The EEOC is expected to take similar actions.  The EEOC’s Strategic Enforcement Plan calls for taking action against employers who require pregnant employees to take medical leaves of absence if they are unable to perform their job duties.  Currently, reasonable accommodation of normal pregnancy is not required.  The EEOC also intends to enforce non-discrimination against individuals based on their lesbian, gay, bisexual, or transgender status.  Currently, some courts have said that “gender stereotyping” and discrimination based on gender identity is a form of sex discrimination, but Title VII does not directly address this, and it does not prohibit discrimination based on sexual orientation.

The National Labor Relations Board (“NLRB”) has been aggressive during the last four years and that is not expected to change.  During the President’s first term, the Board’s decisions and rulemaking have favored organized labor.  This trend is expected to continue into the President’s second term.  Based on the Board’s actions during the President’s first term, employers should expect more Board decisions and opinions invalidating employer social media policies, taking a dim view toward employment-at-will disclaimers, and taking an expansive view on protected concerted activity.

President Obama’s reelection also means that the Patient Protection and Affordable Care Act (“PPACA”) is here to stay.  The three federal agencies tasked with PPACA’s enforcement are expected to move quickly to promulgate new regulations.  Although several legal challenges are still moving through the courts, employers need to ensure that they are compliant with the requirements of the Act.

Employers must also navigate new legalized marijuana statutes in two states.  Voters in Colorado and Washington have approved legalization of the sale or possession of marijuana in small amounts.  However, employers operating in these states should note that legalized marijuana may not affect the exclusion from protection under the Americans with Disabilities Act for “current use of illegal drugs.”  This is true because the illegal drug definitions in the ADA are based on federal law.  In other words, under the ADA as currently enacted, it may not be a violation for a Colorado or Washington employer to take action against an employee for testing positive for marijuana.  This is far from a settled area, however, as representatives in Congress from both states have introduced federal legislation asking the federal government to respect their states’ laws.

These are but a few of the changes and issues the President’s second term may pose for employers.  If the President’s first four years were any indication, employers can expect many more changes.

*David R. Vance practices in all areas of labor & employment law and has extensive experience dealing with administrative agencies, particularly the EEOC. If you have any questions on how any of these potential changes may affect your company, please contact David (drv@zrlaw.com) at 216.696.4441.

---

Does Your Company Need Employment Practices Liability Insurance?

By: Stephen S. Zashin*

Many employers maintain insurance coverage for the defense of claims brought by current or former employees.  This type of insurance is commonly known as employment practices liability insurance (“EPLI”).  EPLI policies typically provide coverage for a broad-range of claims including discrimination, retaliation, harassment and wrongful termination.  Most EPLI policies also cover other workplace torts.

Certain EPLI policies exclude coverage for claims arising under the National Labor Relations Act, the Worker Adjustment and Retraining Notification Act, the Employee Retirement Income Security Act, Occupation Safety and Health Administration claims, claims for punitive damages, claims alleging intentional acts and claims arising under workers’ compensation laws.  When purchasing a policy, employers need to be aware of any exclusions to the policy.  However, even with potential exclusions, most EPLI policies offer substantial coverage and can be tailored to the needs of an employer’s business.

Employers can purchase EPLI policies with coverage amounts up to millions of dollars.  EPLI policies generally include a deductible, which is often referred to as a self-insured retention, which varies based on the cost of the policy.  Typically, the cost of legal defense is included in the aggregate insurance limits, along with the costs of judgments and settlements.  The assignment of legal counsel is outlined in policy.  Oftentimes, the insurance company may appoint counsel from a pre-approved list of “panel counsel.”  Members of these pre-approved panels often have a continuing relationship with the insurance company and are selected based on their skill in defending employment based claims.

EPLI coverage is usually written on a claims-made basis.  This means the incident resulting in the claim must have occurred during the coverage period.  Employers often cannot forecast when a claim may be filed against them, and employees often file such claims months or even years after the alleged discrimination, harassment, or discharge occurred.  Therefore, it is important for employers to maintain consistent coverage.

No matter how carefully and skillfully an employer manages workplace conduct, a potential for a claim always exists.  The number of discrimination claims filed with the Equal Employment Opportunity Commission alone has steadily risen over the past few years, as has the amount of damages the EEOC has collected.  EPLI coverage can be an excellent resource for employers defending against an ever increasing number of employment related lawsuits and can help control the legal costs associated with such lawsuits.

The best way to avoid litigation is to establish strong workplace rules and strictly enforce them.  However, an employer’s management of workplace conduct is not foolproof and with employee lawsuits on the rise, now is good time for employers to consider obtaining an EPLI policy or renegotiating their current policy.

*Zashin & Rich Co., L.P.A. is approved to defend claims covered by most EPLI carriers. Stephen Zashin, an OSBA Certified Specialist in Labor and Employment Law and the head of the firm’s labor and employment group, has worked closely with numerous representatives from various insurance providers and can help put those relationships to work for you. For more information about EPLI coverage and how it can help protect your business, please contact Stephen (ssz@zrlaw.com) at 216.696.4441.

---

Time Is Not On Your Side: Ohio Supreme Court Interprets 90-Day Notice Requirement Following Discharge for Workers’ Compensation Retaliation Claims

By: Scott Coghlan*

Recently, the Ohio Supreme Court addressed when the 90-day period begins for a discharged employee to notify his or employer of a possible workers’ compensation retaliation claim under Ohio Revised Code Section 4123.90.  Under R.C. 4123.90, employers are prohibited from taking retaliatory action—defined as discharging, reassigning, demoting, or taking any other punitive action—against an employee following the employee’s pursuit of benefits associated with workers’ compensation.  The Court held that, as a general rule, the 90-day period begins to run on the date the employee is discharged.  However, the employer has an affirmative duty to notify the employee of the discharge within a reasonable period of time following the discharge so as not to interfere with the employee’s 90-day period.

In Lawrence v. City of Youngstown, the City of Youngstown suspended employee Keith Lawrence without pay.  Two days later, the city terminated Lawrence’s employment.  Lawrence alleged that he never received a copy of the termination letter.  Lawrence filed his complaint against the city in Mahoning County Common Pleas Court on July 6, 2007, alleging workers’ compensation retaliation under R.C. 4123.90 and racial discrimination.  In support of Lawrence’s R.C. 4123.90 claim, the complaint asserted that he had filed a workers’ compensation claim against the city and that his termination related to the filing.

After holding a hearing, the trial court ruled in Youngtown’s favor, and the magistrate granted summary judgment in favor of Youngstown.  As to Lawrence’s R.C. 4123.90 claim, the magistrate construed the disputed facts in favor of Lawrence and assumed that he did not know of his discharge until February 19, 2007.  However, the magistrate concluded that the operative date for starting the 90-day notification period was January 9, 2007, the date the city’s records indicated it discharged Lawrence, and that Lawrence’s delayed awareness of the termination was not relevant.

The Seventh District Court of Appeals affirmed.  As to the sole issue appealed by Lawrence, the court held that R.C. 4123.90’s 90-day notice period begins on the date of actual discharge, not the date the employee receives notice of his or her discharge.  Therefore, the appellate court determined that the trial court had no jurisdiction over the retaliation claim because Lawrence’s notice to his employer was received more than “ninety days immediately following the discharge.”

The Ohio Supreme court reversed the appellate court’s decision.  It held that “discharge” as used in R.C. 4123.90 means the date that the employer issued the notice of discharge, not the date of the employee’s receipt of that notice or the date of the employee’s discovery of a R.C. 4123.90 cause of action.  In this case, the employer apparently never sent a written notice to the employee (it sent it to the Union instead).  Lawrence eventually learned of his discharge, but his attorney did not send his notice of the claim until more than 90 days after Lawrence’s discharge (but less than 90 days after Lawrence received notice of his discharge).  The Court held that the lack of notice to the employee precluded dismissal of the case for failure to comply with the 90-day notice requirement.  The Court also concluded that R.C. 4123.90, when read in conjunction with R.C. 4123.95, places an implicit affirmative responsibility on an employer to provide its employee notice of the employee’s discharge within a reasonable time after the discharge occurs in order to avoid impeding the discharged employee’s 90-day notification obligation under R.C. 4123.90.  The Court reasoned that a reasonable time for an employer to inform an employee of a discharge is an inquiry dependent on the facts of each situation.  The Court did opine though that a delay of several days would not prevent the 90-day notification period from beginning to run on the actual day of the discharge.

Based upon this decision, employers should provide their employees with clear and timely notice of their discharges within a reasonable time after the discharge occurs.  According to the Ohio Supreme Court, this ensures that an employee will not be given additional time to meet his or her 90-day notice obligation.

*Scott Coghlan, the chair of the firms’ Workers’ Compensation Group, has extensive experience in all aspects of workers’ compensation law. For more information about workers’ compensation compliance, please contact Scott (sc@zrlaw.com) at 216.696.4441.

---

Z&R Shorts

Zashin & Rich Co., L.P.A. is pleased to announce the addition of Helena Oroz, Emily A. Smith, and Jonathan D. Decker to its Employment and Labor Group.

Helena’s practice encompasses all aspects of general workplace counseling, compliance, and employment litigation defense work.  After working as employment counsel for a Fortune-500 company and representing employers at an internationally esteemed law firm, Helena returned to Z&R to put her varied experiences and sharpened expertise to work for the firm's clients.

Emily’s practice focuses on labor relations, equal employment opportunity, employment discrimination, unfair competition, and all other employment related torts.  Prior to joining Z&R, Emily practiced in the areas of director and officer liability insurance coverage, employment practices liability coverage, and other professional liability coverage.  Emily practices in Z&R’s Columbus office.

Jonathan's practice encompasses all areas of employment and labor law, including employment discrimination, retaliation, and labor relations.  Jonathan earned his law degree from Cleveland-Marshall College of Law. While in law school, Jonathan was a legal extern with the United States Equal Employment Opportunity Commission. Jonathan also was a member of the school's nationally-ranked moot court team, where he earned the Lewis F. Powell Medal for Excellence in Oral Advocacy.
Please join us in welcoming Helena, Emily, and Jonathan to Z&R!

Ohio’s 2013 Minimum Wage Increase

On January 1, 2013, Ohio’s minimum wage will increase.  The new wage will increase by $.15 per hour to $7.85 for non-tipped employees.  The new minimum for tipped employees will be $3.93 per hour, plus tips, a wage increase of $.08 per hour.

There is also a slight change for companies that have to pay minimum wage.  As of next year, the minimum wage will apply to businesses with annual gross receipts of $288,000, a $5,000 increase over this year.  Companies with gross receipts under $288,000 must pay the federal minimum wage of $7.25 per hour.  The federal rate also applies to 14- and 15-year-old employees.