In a rare bi-partisan move, just before the Christmas break Congress passed a spending bill for 2020 that included a repeal of the so-called Cadillac tax. The tax, which was an excise tax on costly health plans, was due to go into effect on January 1, 2022, after a number of delays as to its effective date in the face of objections from states where health insurance is most expensive, including Connecticut. The bill was signed by the President on December 20, 2019.

Part of the Obama era Affordable Care Act, the tax would have charged health plans 40% of the cost of the plan above certain thresholds. Employers across the country, but particularly in the Northeast and California were bracing for the tax, and implementing changes to health plans to circumvent or minimize its impact, including, shifting more costs to employees. The repeal appears to close the book on the dreaded tax once and for all.

The Labor and Employment attorneys at Berchem Moses PC can assist you with any labor and employment compliance issues you may have.

The federal Fair Labor Standards Act (“FLSA”) requires that employees receive overtime calculated at one-and-a-half times the “regular rate” of pay for hours over 40 in a workweek unless the employees are “exempt” from overtime.  A new rule, slated to go into effect on January 15, 2020, makes it easier to determine the regular rate of pay, and thus, the overtime due to a non-exempt employee who works more than 40 hours in a workweek.   (If you have “non-exempt” employees earning less than $684 per week, read why you probably need to make some changes to your payroll by January 1, 2020.)

First, what is the “regular rate” of pay and why does it matter?  Suppose a company hires an employee to sell widgets.  The employee is to be paid $12 per hour.  If this is the only compensation the employee will receive, then $12 per hour is the regular rate of pay, and any overtime must be paid at $18 per hour.  But what if the company promises the employee a $500 bonus if he sells 1,000 widgets in a month?  That is referred to as a “non-discretionary bonus,” and that bonus must be included in determining the regular rate.  The $500 bonus is divided out among all the hours the employee worked that month and added to the employee’s hourly rate.  If the employee worked 200 hours that month, then the employee’s regular rate is actually $14.50, not $12, during that month.   This matters because the employee in this example also worked overtime.  Any overtime due must be paid at $21.75 per hour, not the $18 per hour rate that did not include any bonus compensation.

What other payments need to be included in the regular rate?  Some payments employers make to employees are required to be apportioned out over the hours worked and included in the regular rate, as in the example above.  But other payments are “excludable” from the regular rate.  Examples of “excludable” payments include health insurance payments and discretionary bonuses.  (A “discretionary” bonus is awarded at the employer’s sole discretion, such as a holiday bonus that could be given in any amount or not at all.)

Now, we come to the Final Rule that the U.S. Department of Labor recently announced.  The Final Rule clarifies that the following payments are excludable from the regular rate of pay:

  • the cost of providing certain parking benefits, wellness programs, onsite specialist treatment, gym access and fitness classes, employee discounts on retail goods and services, certain tuition benefits (whether paid to an employee, an education provider, or a student-loan program), and adoption assistance;
  • payments for unused paid leave, including paid sick leave or paid time off;
  • payments of certain penalties required under state and local scheduling laws;
  • reimbursed expenses including cellphone plans, credentialing exam fees, organization membership dues, and travel, even if not incurred “solely” for the employer’s benefit; and clarifies that reimbursements that do not exceed the maximum travel reimbursement under the Federal Travel Regulation System or the optional IRS substantiation amounts for travel expenses are per se “reasonable payments”;
  • certain sign-on bonuses and certain longevity bonuses;
  • the cost of office coffee and snacks to employees as gifts;
  • discretionary bonuses, by clarifying that the label given a bonus does not determine whether it is discretionary and providing additional examples and;
  • contributions to benefit plans for accident, unemployment, legal services, or other events that could cause future financial hardship or expense.

The Final Rule also clarifies that “call-back” pay is excludable in certain circumstances when such payments are not prearranged.

It is important to carefully assess whether a payment is or is not to be included in the regular rate and not to assume that a generous employer is necessarily complying with the law.  A “generous” employer who gives a guaranteed year-end bonus violates the law if it fails to include the bonus when determining the regular rate.  By contrast, a “stingy” employer who never gives a bonus, would not run afoul of that particular provision of the law.  Wage-and-hour law is one area of law where, unfortunately, generosity can backfire if the proper legal analysis is not performed.

Our team of labor and employment attorneys can assist employers in evaluating employee compensation plans and ensuring compliance with all applicable labor and employment laws.  Contact us to arrange a wage-and-hour self-audit for your organization.

A marshal arrives at your office with a formal looking paper.  You are being subpoenaed to appear at a deposition and provide documents relating to an employee in a state court matter.  The subpoena requests that you provide all documents related to the employee’s employment, including all personnel and medical records.  What are your obligations as a Connecticut employer?

The first consideration is the Connecticut law protecting the confidentiality of personnel files.  This law is applicable to private-sector employers, but not government employers.  Section 31-128f of the Connecticut General statutes provides that personnel files and medical records of employees shall not be disclosed without the employee’s authorization, except in limited circumstances.  One of those circumstances is “pursuant to a lawfully issued administrative summons or judicial order, including a search warrant or subpoena, or in response to a government audit or the investigation or defense of personnel-related complaints against the employer.”  Therefore, the disclosure of personnel and medical records is not barred by this law in this instance.

What about HIPAA?  Many employers believe that HIPAA bars them from disclosing an employee’s health information.  If the employer is not self-insured, HIPAA does not protect medical records in its possession.  (If the employer is itself a health care provider, such as a hospital, and the employee has patient records with the employer, those records are subject to HIPAA.)  So, in most cases, HIPAA does not apply.

Consider next the Americans with Disabilities Act (“ADA”), Family and Medical Leave Act (“FMLA”), and Genetic Information Nondiscrimination Act (“GINA”).  Each of these statutes comes with confidentiality requirements protecting medical/genetic information.  The Equal Employment Opportunity Commission “EEOC” held in a 2011 case that complying with a state court subpoena by providing information that was confidential under the ADA was a violation of that statute.  The ADA provides for limited exceptions to its confidentiality rules and a state court subpoena was not such an exception.  (Incidentally, it appears that even a state court order would not be sufficient.)  GINA and FMLA have similar privacy protections, so the same result can be expected.

Finally, consider non-medical records that could be confidential, such as financial information, Social Security numbers, and teacher evaluations.

An employer who receives a subpoena that raises these issues should consult with counsel about how best to respond.  Often, the best course of action is to contact the attorney who issued the subpoena and request that appropriate authorizations be provided so that the records can be disclosed.  If the attorney insists on all the records and will not provide authorizations, the next step would be for the employer to file a motion to quash the subpoena in court.  Simply ignoring the subpoena is not advisable.

The attorneys in the Labor and Employment Law practice group at Berchem Moses, PC can assist employers with all aspects of the employer-employee relationship, including responding to subpoenas.

Back in March 2019, we advised that the U.S. Department of Labor announced a proposed rule that would change the minimum salary threshold for the so-called “white collar exemptions.” On September 24, 2019, the U.S. Department of Labor issued its long awaited final rule on overtime.

The final rule revises the earnings thresholds used to exempt executive, administrative, or professional employees from FLSA’s minimum wage and overtime requirements by raising the salary threshold from $455 per week ($23,660 annually) to $684 per week ($35,568 annually). Nondiscretionary bonuses and incentive payments (including commissions) may account for up to 10 percent of the minimum salary level under the rule, while discretionary bonuses would not count toward the exemption threshold.  Further, the threshold for the “highly compensated employee” exemption is also increased under the rule (from $100,000 to $107,432), but Connecticut does not recognize this exemption, so employers should not rely upon it for employees in this state.

Now that the new rule has been issued, employers will need to either raise salaries of affected employees to ensure they meet the threshold or begin treating these employees as non-exempt. Employers have little time to adjust, however, as the new rule takes effect January 1, 2020.

Our team of labor and employment attorneys can assist employers in adjusting to the new white-collar exemption requirements and ensuring compliance with all applicable labor and employment laws.  Contact us to arrange a wage-and-hour self-audit for your organization.

Municipal and Board of Education employers may have recently received an email from the State Comptroller reminding them that the deadline to comply with new legislation requiring submission of certain information regarding employee health plans to the State is fast approaching.

Pursuant to Section 352 of the Budget Implementer (Public Act 19-117), not later than October 1, 2019 (and annually thereafter), public employers are required to submit a report to the State containing the following information:

  • the total number of employees covered under its health care plan;
  • the coverage type selected by each covered employee;
  • the total premium for each coverage type, inclusive of employee and employer shares and medical and pharmacy coverage;
  • the amount of any employer contributions to health savings or health reimbursement accounts;
  • the number of participants in such health care plans, including employee dependents;
  • a summary of benefits and coverage for each health care plan offered and the number of employees enrolled in each such plan; and
  • information concerning employer retirement plans and benefits and the total costs to such employer associated with the provision of such plans and benefits in the preceding year.

No need to panic though – the required information should be available in two documents readily accessible to employers, i.e. the Summary of Benefits and Coverage and the Health Plan Renewal for each plan and/or carrier.  Required documents should be emailed to healthbenefitsreporting@ct.gov.

Please contact our labor and employment attorneys for any questions or assistance regarding your compliance with this new requirement.

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Want to make sure you are up to date on other new legislative requirements impacting employers?  Join us at 8:00 a.m. on September 27 for our next HR Bootcamp discussing new legislation on minimum wage, paid family leave, sexual harassment training, workers’ compensation, and more.  Please email kdavoli@berchemmoses.com or call (203)882-4198 to register. Check out other upcoming HR Bootcamp topics at https://www.berchemmoses.com/BMD-News/Seminars.shtml

In new legislation expected to be signed by the Governor shortly, the state is making significant changes to its sexual harassment law.  These changes are a response to the nationwide #metoo and #timesup movements to bring awareness to and combat sexual harassment.

While other technical changes were made, this article focuses on the most important information for employers to know about the new law.  Most changes go into effect October 1, 2019.

Expanded Training Requirements

Connecticut currently requires employers with 50 or more employees to provide two hours of training to their supervisors regarding sexual harassment.  Under the new law, all employers will be required to train supervisors by October 1, 2020.  New supervisors after that date must be trained within six months of becoming a supervisor.   The law expands the training requirement to non-supervisors as well for employers with three or more employees by October 1, 2020 or within six months of hire. The requirement to train non-supervisors is new under this legislation.  Employers must provide a training update for supervisors and non-supervisors every ten years.  The Commission on Human Rights and Opportunities (“CHRO”) will develop an online training and education program for employers to use.

New Notice Requirements

Employers are currently required to provide information concerning the illegality of sexual harassment and remedies available to victims of sexual harassment, which is typically done through a labor law posting. Employers with three or more employees will now be required to email, not later than three months after the employee’s start date with the employer, a copy of the information contained in the posting to each employee by email with a subject line that includes the words “Sexual Harassment Policy” or similar words.  This requirement applies if the employee has an email address, whether or not the email address is provided by the employer. If the employer does not provide an email address, the information must be included on the employer’s website if it has one.

Remedying Sexual Harassment in the Workplace

In some situations, employers may try to remedy sexual harassment by transferring the victim of harassment to another location or department.  The legislation provides that employers can only modify the victim’s conditions of employment with written agreement from the victim.

Changes to CHRO and Court Processes and Remedies

The deadline to file any kind of state law employment discrimination or harassment claim is expanded from 180 days to 300 days after the adverse employment action.  This applies to discrimination and harassment claims based on race, religion, national origin, and other protected classes, not just sex.  This change applies to actions occurring on or after October 1, 2019.

The legislation also provides expanded remedies at the CHRO, allowing a hearing officer to award a complainant compensatory damages and reasonable attorney’s fees and costs.  Unemployment and other offsets from damages must be turned over from the employer to the CHRO.  Punitive damages would be available in court.

The #metoo and #timesup movements are ushering in significant changes, and this legislation is likely just the beginning. Employers should follow all requirements in this legislation and implement all industry-appropriate best practices.  A jury in this new era is unlikely to be forgiving of an employer failing to do everything in its power to prevent sexual harassment.

The attorneys in the Labor and Employment Law practice group at Berchem Moses, PC are available to assist you with navigating these changes to the sexual harassment law, as well as any other labor and employment-related matters.

Legislation that would make changes to the state’s laws on sexual harassment and discrimination passed the General Assembly.  The law would, among other things, expand the sexual harassment training requirements, increase the time to file a civil rights charge, and increase the remedies available to complainants at the Commission on Human Rights and Opportunities.

However, word on the street is that other legislation designed to fix issues in this new legislation could be forthcoming, as soon as today.  When the dust settles on this legislation, we will provide comprehensive analysis of the changes so that you are prepared to comply with the new law. 

The attorneys in the Labor and Employment Law practice group at Berchem Moses, PC are available to assist you with navigating these changes to the sexual harassment law, as well as any other labor and employment related matters.

Late Friday, Connecticut joined neighboring states New York, New Jersey and Rhode Island and became the latest state to pass a paid leave bill. Governor Lamont has signaled he will sign the measure when it reaches his desk.  The bill makes sweeping changes to current Connecticut FMLA laws, although the benefits would not become available to employees until January 1, 2022.

The new law will provide up to 12 weeks of replacement wages, payable on a sliding scale up to a maximum of 95 % for minimum-wage earners, capped at $900 a week.  Employees needing leave because of pregnancy could get an additional two weeks.  Additionally, starting January 1, 2022, Connecticut FMLA benefits will apply to all private sector employers with at least one employee, a significant change from the current 75 employee threshold.  While the new legislation shortens the amount of leave from 16 weeks to 12 weeks, it also shortens the length of time an employee must work before becoming eligible from 12 months and 1000 hours to 3 months with no minimum hour requirement.

Other changes include a provision that employers requiring employees to use employer-provided paid leave must allow their employees to retain at least two weeks of paid leave and the expansion of the definition of “family member” to include siblings, parent-in-laws, grandparents, grandchildren, or “an individual related to the employee by blood or affinity whose close association the employee shows to be the equivalent of those family relationships.”

In addition to private sector employees, the legislation covers non-union State employees, as well as unionized municipal and local or regional board of employees whose bargaining units have negotiated inclusion in the paid leave program. In those cases where unionized public employees have negotiated inclusion, non-union employees for those employers would also be covered.

Although employers have over a year to prepare for these changes, the legislation will undeniably create concern and stress for many employers who have never had to consider or deal with FMLA leave before.  Reviewing your policies and understanding this law is going to take time and employers would be wise to get a head start.

The attorneys in the Labor and Employment Law practice group at Berchem Moses, PC are available to assist you with navigating these changes to paid leave, as well as any other labor and employment related matters.

Back in March, it looked like the State legislature was going to tackle some big issues in labor and employment. (See previous blog here) The regular session will end on June 5. What happened to all those proposals?

Well, the “Time’s Up” legislation also passed the Connecticut Senate by an overwhelming margin and is headed to the House.  Among the various provisions of this bill, there would be a requirement that all workplaces with three or more employees provide sexual harassment instruction to every worker.  Currently, employers with 50 or more workers must offer this training to supervisors.

Paid Family and Medical Leave received favorable reports from Labor, Finance and Appropriations Committees and is still hanging on but time is running out for the legislature to act. Other proposals impacting the workplace appear to have lost steam and are unlikely to pass this session.

The Labor and Employment attorneys at Berchem Moses PC can help employers keep up to date on the legislative changes impacting the workplace and maintain compliance with any new obligations.

Last night, the State Senate approved increasing Connecticut’s minimum wage to $15 per hour by 2023 and the bill is headed to the Governor’s desk.  Under the bill, minimum wage increases to $11 per hour effective October 1, 2019 and then incrementally by one dollar per year thereafter, reaching $15 by June 1, 2023.  The Governor is expected to sign the legislation.

In addition, beginning January 1, 2024, annual minimum wage increases will index to the federal employment cost index for “wages and salaries for all civilian workers”.  Also, starting October 1, 2019, the bill changes the “training wage” in Connecticut.  The new law eliminates the training wage exceptions for “learners and beginners” and limits the training wage to only those under age 18, allowing  training wage to be paid  only in the first 90 days of employment, rather than the first 200 hours.  The training wage has to be the greater of $10.10 per hour or 85 percent of the minimum wage.

The Labor and Employment attorneys at Berchem Moses PC can help employers keep up to date on the legislative changes impacting the workplace and maintain compliance with any new obligations.