The Department of Labor’s Wage and Hour Division (WHD) has issued three new fact sheets on unlawful retaliation under the Fair Labor Standards Act (FLSA), Family and Medical Leave Act (FMLA), and the Migrant and Seasonal Agricultural Worker Protection Act (MSPA).

Days after a U.S. District Court judge for the D.C. Circuit suggested that the National Labor Relations Board postpone the effective date of its notice posting rule, the agency has agreed to do so. As announced in a press release, the Board:

On September 14, 2011, the IRS issued updated guidance(pdf) on the tax treatment of employer-provided cell phones, effectively treating both business and personal use of such phones as exempt from an employee’s wages.

The Small Business Jobs Act removed cell phones from the definition of “listed property” beginning January 1, 2010, meaning they no longer required heightened levels of substantiation to qualify as a business expense. However, Congress had not altered the use of an employer-provided cell phone as a fringe benefit. As a result, the value of employer-provided cell phones was still subject to inclusion in an employee’s wages unless a specific exclusion applied.

In Notice 2011-72 the IRS observed that “[m]any employers provide their employees with cell phones primarily for noncompensatory?business reasons.” Accepting what is a common business reality today, the IRS announced that if an employer provides an employee with a cell phone “primarily for noncompensatory business purposes,” the cell phone will be treated as a working condition fringe benefit and the value of the cell phone usage will be excluded from the employee’s wages.

The IRS explained that “noncompensatory business purposes” can include “the employer’s need to contact the employee at all times for work-related emergencies, the employer’s requirement that the employee be available to speak with clients at times when the employee is away from the office, and the employee’s need to speak with clients located in other time zones at times outside of the employee’s normal work day.” It added that providing cell phones to “promote the morale or good will of an employee, to attract a prospective employee or as a means of furnishing additional compensation to an employee” do not qualify as being “primarily for noncompensatory business purposes.”

In addition to the business use of a cell phone, the IRS also announced that it will treat the value of any personal use of such a cell phone as a nontaxable?de minimis fringe benefit. Therefore, personal use will also be excluded if the business use of the phone is for noncompensatory business purposes.

These new administrative rules are effective for periods beginning January 1, 2010. They apply to both employer-provided cell phones, as well as reimbursement of employee-owned cell phones.

In light of these changes, employers should consider reviewing their cell phone policies. Many policies prohibited any personal use of employer-provided cell phones. Companies may want to reconsider those policies in light of the IRS’ new guidance. Employers should also ensure that any employer-provided cell phone or reimbursement is for a noncompensatory?business purpose and is not merely to promote morale, attract employees or to add to an employee’s compensation.

By: William Weissman

High-hazard, non-construction employers with 20 or more employees will be subject to inspections under the Occupational Safety and Health’s 2011 Site-Specific Targeting (SST) programmed inspection plan. (pdf)? Last year’s SST applied to employers with at least 40 employees. The purpose of the SST is to enable OSHA to focus its inspection resources on workplaces that experience the highest injury and illness rates, as identified by data compiled in the 2010 OSHA Data Initiative (ODI)survey of approximately 80,000 establishments in selected high-hazard industries. According to OSHA, the worksites are randomly selected for inspection from a primary list of 3,700 manufacturing, non-manufacturing, and nursing and personal care facilities. Another change from last year’s program is the incorporation of a study to measure the program's impact on injury and illness rates and future compliance with OSHA standards.

Generally, the SST “defines key terms, describes the three inspection lists, provides scheduling and inspection procedures, and gives information on OSHA coding.” In addition, the report includes three appendices that provide information on the industry groups included in the 2010 ODI, includes a checklist for compliance safety and health officers (CSHOs), and instructs Area Offices on how to use the Inspection Targeting website. The targeted employers are culled from various manufacturing, non-manufacturing, and nursing and personal care facilities.

As was the case under last year’s SST, if a CSHO?discovers that an establishment slated for inspection is a Voluntary Protection Programs (VPP) site, he or she must exit the site without conducting an inspection, and the establishment must be deleted from the inspection list. Similarly, if the establishment takes part in OSHA’s Consultation Safety and Health Achievement Recognition Program (SHARP), then the inspection officer must leave the site without conducting an inspection. If the establishment’s application to either of these programs is pending, then the inspection will be deferred.

In addition to the SST program, OSHA operates a number of national and local emphasis inspection programs aimed at specific high-risk hazards and industries.

In a press release, OSHA’s Assistant Secretary of Labor David Michaels said: “By focusing our inspection resources on employers in high hazard industries who endanger their employees, we can prevent injuries and illnesses and save lives,” adding: “Through the SST program we examine all major aspects of these operations to determine the effectiveness of their safety and health efforts.”

by Ilyse Schuman

The Occupational Safety and Health Administration has issued a new a compliance directive: Enforcement Procedures for Investigating or Inspecting Incidents of Workplace Violence. The purpose of the directive is to establish uniform procedures for OSHA field officers when responding to incidents and complaints of workplace violence. The directive also provides guidelines for conducting inspections in industries the agency deems particularly vulnerable to workplace violence, including healthcare, social service settings and late-night retail establishments. Specifically, the directive “highlights the steps that should be taken in reviewing incidents of workplace violence when considering whether to initiate an inspection in industries that OSHA has identified as susceptible to this hazard.” In conjunction with the directive, OSHA has launched a web pageto assist employers in preventing incidents of workplace violence.

The directive explicitly states that it does not require an OSHA response to every complaint or fatality related to workplace violence “or require that citations or notices be issued for every incident inspected or investigated. Instead, it provides general enforcement guidance to be applied in determining whether to make an initial response and/or cite an employer.” Employers that fail to reduce or eliminate “serious recognized hazards” which may include workplace violence may be found in violation of the general duty clause. To that end, OSHA directs field inspectors to “gather evidence to demonstrate whether an employer recognized, either individually or through its industry, the existence of a potential workplace violence hazard affecting his or her employees.” The directive also encourages OSHA investigators to “focus on the availability to employers of feasible means of preventing or minimizing such hazards.”

In workplaces where a potential for violence against employees has been identified, the directive states that employers should be encouraged to develop and implement a workplace violence prevention program. Although OSHA Compliance Safety and Health Officers should discuss with the employer potential controls for these types of hazards, the directive provides that it is the employer’s responsibility to employ the most effective feasible controls available to protect its employees from acts of workplace violence. The selection of abatement methods should be based on specific hazards identified in a workplace analysis of the facility/place of employment, temporary duty locations and workers’ travel routes while on duty.

Among other documents contained in the directive’s appendix is a list of potential abatement methods for employers in all industries and those with primarily administrative workplaces. The appendix also sets forth more specific recommendations for those employers in the retail industry and those with healthcare and social services facilities. OSHA has previously published guidance documents on workplace violence aimed at late-night retail establishments?(pdf) and healthcare and social services industries. (pdf)

by Ilyse Schuman

The Department of Labor’s Employee Benefits Security Administration (EBSA) has issued an interim policy (Technical Release 2011-03) (pdf) setting forth the conditions that a plan administrator must meet in order to provide electronic disclosures of information required under the EBSA’s final participant-level fee disclosure rule. Generally, this rule requires retirement plan sponsors and fiduciaries to disclose certain plan and investment-related information, including that related to fees and expenses, to participants and beneficiaries in participant-directed individual account plans, such as 401(k)s. The rule allows for the electronic disclosures – including the use of continuous access websites – under certain circumstances. According to the Technical Release, plan administrators will not be subject to an enforcement action based on their electronic disclosures if they comply with the conditions established by the interim policy.

Generally, a plan administrator may provide electronic disclosures only to employees that ordinarily have access to computers – i.e., using computers is an integral part of their duties – and/or if the employee, retiree or beneficiary has provided consent to receive such disclosures electronically. However, as outlined in the Technical Release, disclosures that are not included in a pension benefit statement can only be furnished electronically if the following six conditions are met:

1. Recipients must voluntarily provide plan sponsors, administrators, or their employers with an email address;


2. Along with a request for an email address, participants and beneficiaries must be provided with a clear and conspicuous Initial Notice that contains:
   
   
   
   • A statement explaining that providing an email address for disclosure purposes is voluntary, and that as the result of providing the email address, the required disclosures will be made electronically;
   
   
   • Identification or a brief description of the information that will be furnished electronically and how it can be accessed by participants and beneficiaries;
   
   
   • A statement that the participant or beneficiary has the right to request and obtain, free of charge, a paper copy of any of the information provided electronically and an explanation of how to exercise that right;
   
   
   • A statement that the participant or beneficiary has the right, at any time, to opt out of receiving the section disclosure information electronically and an explanation of how to exercise that right; and
   
   
   • An explanation of the procedure for updating the participant’s or beneficiary’s e-mail address.
   
   
   
   


3. The plan administrator must provide an Annual Notice to each such participant or beneficiary that contains much of the information provided in the Initial Notice;


4. The plan administrator must take “appropriate and necessary measures reasonably calculated to ensure” that the individuals receive the information;


5. The plan administrator must take “appropriate and necessary measures reasonably calculated to ensure that the electronic delivery system protects the confidentiality of personal information”; and


6. The electronic notices must be “written in a manner calculated to be understood by the average plan participant.”

The guidance also contains a special transition provision aimed at employers/plan sponsors who already have participants’ email addresses on file. In this instance, steps one and two will be deemed to have been satisfied, provided a special “Transition Group Initial Notice” is sent containing information specified in the Technical Release.

In a statement, EBSA?Assistant Secretary of Labor Phyllis C. Borzi said: “This technical release responds to requests by some plan sponsors and service providers to expand the ability of ERISA plans to use modern electronic disclosure technologies to communicate with plan participants while ensuring that all workers will benefit from the increased transparency provided by our fee disclosure rule.”

This interim policy will be in force until the EBSA issues further guidance on this topic.

by Ilyse Schuman

In an informal discussion letter, (pdf) the Equal Employment Opportunity Commission’s Office of Legal Counsel reiterates the position that an employer-provided wellness program that offers financial inducements to provide genetic information as part of a wellness program runs afoul of Title II of the Genetic Information Nondiscrimination Act (GINA). Among other restrictions, GINA limits the ability of health insurers and employers to collect genetic information, which includes family medical history. Whether and to what extent employer-provided wellness programs and health surveys that solicit information about family medical history violate GINA and other statutes and regulations is a rising concern for employers.

As discussed in the EEOC letter, which was written in response to a request for guidance on this issue, Title II of GINA does permit employers to gather genetic information about employees and their family members when it offers health or genetic services – including wellness programs – on a voluntary basis. The EEOC issued a final rule implementing the employment provisions of GINA in November 2010. As outlined in the rule and the discussion letter, prior consent to participate in a wellness program must be voluntary, knowing, and written. In addition, “while individualized genetic information may be provided to the individual receiving the services and to his or her health or genetic service providers, genetic information may only be provided to the employer or other covered entity in aggregate form.” The EEOC letter notes that the final rule states that employers may not offer financial inducements for employees to provide genetic information as part of a wellness program. However, the final rule provides that employers may offer a financial inducement for completing a health risk assessment that includes questions about genetic information so long as the employer identifies such questions and makes clear that the employee is not required to answer the questions about genetic information in order to receive the financial inducement.

The EEOC letter further explains that an employer may use the voluntarily-provided information about the employee “to guide that individual into an appropriate disease management program,” provided it opens the program up to all employees if the program includes financial incentives to participate or reach certain health-related outcomes. The EEOC letter declined to address the concern that an example used in the GINA Title II final rule to illustrate this point is at odds with the regulations implementing Title I of GINA, which restricts the use of genetic information by group health plans and health insurance issuers. The reason given in the letter for failing to explain the apparent inconsistency between the two regulations was that the EEOC is not responsible for enforcing Title I. However, the letter states that the Commission’s goal in formulating its position on wellness program incentives and the examples cited was to be consistent with the Title I rules.

The Commission further declined to take a position on whether and to what extent Title I of the Americans with Disabilities Act (ADA) would permit an employer to offer financial incentives to participate in a wellness program that included disability-related inquiries or medical exams, but stated that it would take any comments on this issue under advisement.

Despite the guidance provided in the EEOC letter, much still remains unclear. In October 2010, the Department of Labor’s Employee Benefits Security Administration (EBSA) issued guidance in the form of Frequently Asked Questions (FAQs) that discussed the interaction between GINA’s restrictions and employer-provided group health plans and insurance providers. As previously discussed, this guidance outlines certain constraints placed on insurance plans and issuers in providing incentive-based wellness programs, which appear at odds with the provisions in the Patient Protection and Affordable Care Act that are designed to increase the use and effectiveness of employer-sponsored wellness programs. Specifically, the Affordable Care Act recognizes the value of incentive-based wellness programs by increasing the amount of the reward allowed under the current HIPAA regulations beginning in 2014. As reflected in the Affordable Care Act, incentive-based wellness programs can be an effective tool for employers seeking to reduce health care costs and improve the productivity of their workforce.

Given the complexity and apparent inconsistency of the federal statutes and rules governing wellness programs, employers are cautioned to consider all applicable legal requirements when designing their wellness program.

By: IIyse Schuman