Week in Review

April 06, 2015

Finance committee member vows to fix small business reimbursement policy under ACA
Many small businesses continue to be unaware that they are no longer permitted under the Patient Protection and Affordable Care Act (ACA) to provide a benefit to their employees that many have provided for years — reimbursing their employees for the cost of health insurance purchased on the individual market. Senate Finance Committee member Charles E. Grassley, R-Iowa, addressed the issue during a recent committee hearing on where the president's health care law stands after five years. Grassley said he will work to reverse the situation in order to permit small businesses to continue to reimburse their employees for health insurance premiums on a pre-tax basis. "Small businesses that fail to recognize this could face as much as a $100 per-day per-employee penalty simply because they want to help their employee obtain health coverage," Grassley said at the Finance Committee hearing. "This fails to meet the common-sense test." Health reimbursement arrangements are prohibited under the ACA and the IRS will begin imposing penalties against small businesses with health reimbursement arrangements in July.

EEOC sues Georgia medical practice for pregnancy discrimination
The EEOC has filed yet another lawsuit challenging pregnancy discrimination under Title VII. Last week, the agency filed a suit alleging that a Canton, Georgia, medical practice specializing in cosmetic skin care treatments violated Title VII by firing a newly hired licensed skin care therapist shortly after learning that she was pregnant. The company terminated the skin care therapist just two days after she informed the company's owner that she was pregnant, according to the EEOC's complaint. When the employee questioned why she was terminated, the employer allegedly told her that she had deceived the company by not disclosing her pregnancy during the interview.

Virginia enacts social media privacy law effective July 1, 2015
Virginia has enacted a social media privacy law. A new statute is added to the Code of Virginia by H.B. 2081 that prohibits employers from requiring current or prospective employees to disclose the username or password of their social media account. In addition, employers are prohibited from requiring an employee to add an employee, supervisor, or an administrator to the list of contacts associated with the employee's social media account.
An employer would not be prohibited from viewing information about a current or prospective employee that is publicly available. Further, the law does not affect an employer's existing rights or obligations to request an employee to disclose his or her username or password in order to access the employee's social media account if such activity is reasonably believed to be relevant to a formal investigation or proceeding by the employer of allegations of an employee's violation of federal, state or local laws or regulations or of the employer's written policies. However, in such instances, the employer may only use the employee's username and password for the purposes of the formal investigation or a related proceeding.

Virginia Governor McAuliffe signs Executive Order to "ban the box" on state employment applications
Virginia Governor Terry McAuliffe signed Executive Order 41 (2015) on April 3, 2015, reforming state hiring practices by removing questions regarding criminal history from employment applications. The Order makes clear that criminal history shall not be a determining factor in employment decisions, unless an individual's criminal history bears specific relation to the job for which they are being considered. Executive Order 41 "bans the box" on employment applications requiring applicants to indicate if they have been convicted of a crime, which will allow many applicants to be more thoughtfully considered for positions for which they are well-qualified. The Order will apply to all agencies, boards and commissions within the executive branch of government subject to the authority of the Governor and covered by the Virginia Personnel Act. The Order encourages similar hiring practices among private employers operating within the Commonwealth and state government contractors.

NLRB hearings against McDonald's put updated joint-employer concept to the test
On March 30, the National Labor Relations Board began a series of consolidated hearings on cases that charge McDonald's USA, LLC, as a joint employer along with multiple franchisees that are accused of violating workers' rights by, among other things, making statements and taking actions against them for engaging in activities aimed at improving their wages and working conditions-including their participation in nationwide fast-food worker protests during the past two years. The hearings will put the Board's concept of an updated joint-employer standard to the test. Thirteen complaints were initially filed in December 2014, with six more filed in February 2015. The McDonald's cases are front and center in the battle over whether the NLRB's joint employer standard should be adjusted to reflect current business models. The question of whether a franchisor can in some cases be considered a joint employer with a franchisee has become a hot-button issue. The franchise model is one of those current business models that may necessitate an updated joint-employer test in the view of some stakeholders, but certainly not those who support the franchise community. "The lawsuits against McDonald's are aimed at using government to upend successful business franchise arrangements that work for so many entrepreneurs and employees," according to Competitive Enterprise Institute senior fellow Aloysius Hogan. "It's not just McDonald's on trial-if the lawsuits succeed, workers and consumers will be negatively impacted, as well. This attempt to designate businesses as joint employers could transform virtually everyone into an employee of a big conglomerate that, in turn, faces huge liabilities and expenses and is more easily unionized. The salaries, jobs, and purchasing power of real people are put at risk by these lawsuits brought by Big Labor." The NLRB is holding consolidated hearings in three Regional locations in the Northeast, Midwest, and West to address violations that require remedial relief as soon as possible. The hearings will take up allegations of unlawful actions committed against employees at McDonald's restaurants in the jurisdiction of six Regional Offices.