EEOC’s Wellness Program Rules in Doubt

Q.  Are the EEOC’s Wellness Program rules still valid?

A.  The ADA and the Genetic Information Nondiscrimination Act both permit an employer to seek medical information as part of a wellness program if the employee participates voluntarily.  However, neither statute defines the term “voluntary.”

Effective January 2017, the EEOC issued rules allowing incentives of up to 30 percent of the cost of  coverage for employees participating in a health-contingent wellness program, in which the participant receives an award for satisfying a health-related factor.  These rules aligned the EEOC’s position with the regulations under the  Health Insurance Portability and Accountability Act (HIPAA), such that employers were able to rely on the 30 percent incentive limit to comply with HIPAA, the ADA and GINA.

In October 2016, AARP filed a lawsuit against the EEOC, arguing that the EEOC’s 30 percent incentive rendered wellness programs involuntary because employees would feel coerced to participate in wellness programs and to disclose medical information to avoid losing the benefit of the incentive.  The court concluded that the EEOC did not offer a reasoned explanation for its decision to construe the term “voluntary” to permit employers to offer incentives of up to 30 percent for participation in wellness programs.

For more information about this important case, please click here.


Zero Tolerance Drug Testing Policies in the Age of Medical Marijuana

Q:  My Company wants to institute a drug testing policy that would automatically disqualify an applicant for employment if they test positive for illegal drugs, including medically-prescribed marijuana. Is this legal?

A.  The law regarding the responsibility of employers to accommodate medical marijuana use continues to evolve as more states pass laws allowing for marijuana use for medical and recreational reasons. In Pennsylvania, for example, the law is silent as to whether an employer can rely upon a positive drug test as a reason to reject the applicant for employment. However, the statute lists specific areas in which employers may prohibit employees from working while under the influence of marijuana – operating or controlling government-controlled chemicals or high-voltage electricity, performing duties at heights or in confined spaces; and performing tasks that threaten the life of the employee or his/her coworkers.  By implication, outside these specified areas, employers may be required to accommodate marijuana use, so long as it does not occur at work.

In New York, the law goes even further, providing that certified patients shall not be subjected to “disciplinary action by a business” for exercising their rights to use medical marijuana. A patient with a prescription for medical marijuana in New York State is considered to have a “disability” under the New York State Human Rights Law.  This means that New York employers must provide reasonable accommodations to employees or prospective employees who are certified to use marijuana for medical reasons.

The Massachusetts Supreme Judicial Court recently ruled that employers may be held liable for disability discrimination under Massachusetts state law if they fire an individual for using medical marijuana. In that case, the employee was fired after her first day of work for failing a drug test, despite the fact that the employee had informed the company that her doctor has prescribed marijuana as a way to manage her Crohn’s disease.  The court held that using medical marijuana is as lawful as using any other prescription medicine, despite the fact that it is illegal under federal law.  Further, the court stated that it would be a reasonable accommodation for an employer to allow its employees to use medically-prescribed marijuana away from the employer’s place of business unless the employer can show undue hardship.

It is quite possible that the growing number of states that have enacted medical marijuana legislation will follow the lead of the New York legislature and the Massachusetts court in adding medical marijuana use – at least outside of the workplace – to the list of accommodations that are considered to be reasonable. That means that employers will not be able to rely on positive drug test results for marijuana for employees working in non-safety-related positions without engaging in the interactive process with the employee or applicant.  The employer will have to analyze whether the employee’s use of marijuana outside of working hours will prevent the employee from performing the essential functions of his or her job.  Moreover, the employer will want to monitor the employee to ensure that the accommodation does not impact the employee’s job performance.

– Tracey E. Diamond


Physical Exams as a Condition of Employment: Are They Permissible?

Q.  My Company would like to have all applicants for employment submit to a pre-employment physical examination to ensure that they are fit for the position. Is this allowable?

A.  Employers may require an applicant to submit to a pre-employment physical examination, but only after a conditional offer of employment has been made, and even then only under the following conditions:

  • All other candidates in the job category must also be required to submit to the physical;
  • The candidate’s medical history is kept separate from other employment-related records and is treated confidentially; and
  • The results are not used to discriminate against the applicant under the Americans with Disabilities Act (“ADA”) or other discrimination laws.

To ensure that there is no ADA violation, the physical examination should be limited to an assessment of whether the applicant is able to perform the duties of the position, with or without an accommodation. To avoid a claim under the Genetic Information Nondiscrimination Act (“GINA”), the physician should not request information about the applicant’s family medical history.

It would be helpful to provide the physician with a copy of the job description prior to the examination so that the physician is familiar with the responsibilities expected of the position.

Employers will want to tread carefully in making an adverse employment decision based on the results of a physical exam. The applicant’s offer may not be rescinded unless the issue is job-related and consistent with business necessity, or creates a direct threat to health and safety of the applicant or others, and the condition cannot be reasonably accommodated.  Moreover, the company could violate discrimination laws if it rescinds an offer based on non-medical information learned as a result of the physical (for example, the applicant’s age, religion, etc.)  Likewise, employers could land in hot water if they rescind an offer after learning about an employee’s pregnant condition as the result of the exam.

–Tracey E. Diamond

New York Paid Family Leave Benefits Law: Key Provisions and Tips for Preparation

Q: What do I need to know about the new New York Paid Family Leave Benefits Law?

A: The New York Paid Family Leave Benefits Law (“NY PFL”) provides employees with paid leave for bonding with a new child, caring for a close relative with a serious health condition, and leave associated with when their spouse, partner, child, or parent is on active military duty or has been notified of an impending call of active duty.

Unlike the federal FMLA, which applies to employers with 50 or more employees within a 75 mile radius, all New York employers that have employed one or more individuals for 30 consecutive days are subject to the new law. The NY PFL also expands the definition of a covered employee from the FMLA.  Employees who have worked for at least 26 consecutive weeks (for employees whose regular schedule is 20 or more hours per week) or 175 days (for employees whose regular schedule is less than 20 hours per week) are eligible for NY PFL.

The NY PFL begins January 1, 2018, and will be phased in over a four-year period. For 2018, employees can take a maximum of 8 weeks of leave, and the maximum pay during the leave is 50% of the employee’s average weekly wage, which caps at 50% of the state average weekly wage (which is currently $1,296).  For example, in 2018, an employee who makes $1,000 per week would receive a benefit of $500 per week.  An employee who makes $2,000 per week would receive a benefit of $648 per week (half of $1,296).  Both the maximum weeks of leave and maximum pay during leave will increase over the four-year phase-in period, with 12 weeks of leave in 2021 and payment increased to a maximum of 67% of the employee’s average weekly wage.

Unlike NJ Paid Family Leave, which is administered through the State’s existing Temporary Disability Benefits Program, the NY PFL will be administered through each individual employer’s disability policy (or through self-insurance), and the premiums will be funded by employees through payroll deductions. The current rate of contribution for NY PFL is 0.126 percent of an employee’s weekly wage, up to a maximum of $1.63 per week.  Employers may start making the deductions on July 1, 2017, so  employers should contact their disability insurance carriers and payroll providers to prepare.

If the need for NY PFL is foreseeable, employees must provide at least 30 days of notice of their need for leave, and if the need is not foreseeable, the employee must provide notice as soon as practicable. Similar to the FMLA, employers must maintain employees’ existing health insurance benefits for the duration of NY PFL, and employees are entitled to reinstatement upon their return to work.

Employers may permit employees to use sick or vacation leave so that they can be fully compensated for time-off, but employers cannot require use of sick or vacation leave. If an employee is eligible for leave under both FMLA and NY PFL, employers may designate the leave as both FMLA and NY PFL, even if the employee declines to apply for NY PFL payments.

To prepare for the law and set employees’ expectations, employers should consider communicating with their employees about the new law in advance, especially if employers will be making payroll deductions in the coming months. It is also prudent to explain the maximum wages that the NY PFL will provide – many employees may assume “paid family leave” means that they will receive full wages while on leave.

It is also important for employers to train managers and human resources personnel on the NY PFL so that it is properly implemented. Employers should train key staff on the details of NY PFL, as well as the interaction between the NY PFL and other types of leave. As we have discussed above, NY PFL has some similarities to the FMLA, but also has distinct differences, such as eligibility requirements and coverage.  Employers should be careful not to assume that the two laws cover the same events.  For example, leave under the NY PFL cannot be taken for an employee’s own serious health condition, while FMLA leave can.  This means that a pregnant employee may take up to 12 weeks of FMLA leave, and then take additional leave under the NY PFL to bond with her child.

Employers should stay tuned for continuing developments as the NY PFL is interpreted by the courts. In addition, New York State published updated regulations at the end of May, for which the comment period recently closed.  We expect that the State will issue updated guidance and/or revised final rules in response to these comments.

Jessica Rothenberg

Pitfalls and Best Practices When Hiring for the Summer Season

Q: I hire seasonal employees for the summer.  Are there any particular considerations I should be aware of?

A: Seasonal employees can provide much needed support during the summer months.  However, there are certain issues to consider.  First, it is important to clarify upfront that employees are only expected to work for the summer, while at the same time reminding employees that the relationship is at-will and can be ended at any time by either party.

Another issue to consider is benefits. Many employers do not provide seasonal employees benefits other than what is legally mandated.  That practice is fine from a legal standpoint so long as it is applied consistently.  In terms of legally mandated benefits, it is essential for employers to understand which benefits apply to seasonal employees.  In certain circumstances, larger employers may be required to offer certain seasonal employees health benefits under the Affordable Care Act.  Moreover, depending on the jurisdiction, seasonal employees may be eligible for paid sick leave.

In New York City, for example, most employers have to allow employees who work more than 80 hours in a calendar year to accrue sick leave. While sick leave begins to accrue on the first day of employment, however, employees may not use sick leave until 120 days after the start of employment.  Thus, most seasonal workers will accrue sick leave, but will not be employed long enough to actually use it.  In contrast, Philadelphia’s sick leave law explicitly excludes seasonal workers, who are defined as people who have been hired for a temporary period of not more than sixteen weeks during a calendar year.

Seasonal employees also would be eligible for worker’s compensation benefits and potentially may be eligible for unemployment insurance benefits.

In addition to the benefits issues, employers also should be aware that seasonal employees are subject to the same wage and hour laws as other employees. Under federal law, non-exempt employees (whether seasonal or not) must be paid overtime for hours worked over 40 in a week.  Employers should be sure to be in compliance with state law requirements for overtime, as well as meal and rest breaks.

For employers who organize summer company events, such as barbeques, if attendance is mandatory, employees (including seasonal employees) should be compensated for their time. If attendance is truly voluntary, then employees who attend the event do not need to be compensated for their time. Consider establishing guidelines for appropriate employee conduct at such social events, particularly if they include alcohol.

Finally, while it may be tempting for employers to bypass the standard hiring and orientation processes for seasonal employees, it is crucial that seasonal employees are given policies and training in key areas, such as non-discrimination and harassment. In particular, employers should emphasize policies on sexual harassment, as well as other forms of harassment, and make clear that their policies apply equally to both seasonal and non-seasonal employees.  In addition to ensuring seasonal employees themselves are trained on such policies, it is also important for all employees to understand that seasonal employees are covered by the policies.  Employers who employ seasonal employees should consider revising their written policies so that seasonal employees are specifically included in the list of individuals protected and subject to anti-harassment policies, as well as EEO policies more generally.

Jessica Rothenberg