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.

 

EEOC Issues Guidance Interpreting National Origin Discrimination

Q:  What does it mean to discriminate against someone based on their national origin?

A:  Title VII prohibits employers from acting in a way that would have the purpose or effect or discriminating against an employee because of his or her national origin.

But what does the term “discrimination based on national origin” really mean?

The Equal Employment Opportunity Commission (“EEOC”) recently issued an Enforcement Guidance on this subject. Although the EEOC’s position at times is broader than controlling case law, the Enforcement Guidance is helpful because it offers insight into how the EEOC will investigate claims of alleged national origin discrimination in the future.  It is significant that 11 percent of EEOC Charges filed in 2015 contained an allegation of national origin discrimination.

According to the EEOC, national origin discrimination means discrimination because an individual (or his or her ancestors) is from a certain place or has the physical, cultural, or linguistic characteristics of a particular ethnic group. National origin discrimination often overlaps with race, color, or religious discrimination because a national origin group may be associated with (or, according to the EEOC, perceived to be associated with) a particular religion or race.

Title VII prohibits an employer from using certain recruitment practices, such as sending job postings only to ethnically or racially homogenous areas or audiences, or requesting that an employment agency refer only applicants of a particular national origin group. Importantly, employers may not rely on the discriminatory preferences of coworkers or customers as the basis for an adverse employment action in violation of Title VII.  Thus, for example, a retail store may not reject an applicant for not fitting its “all American image.”

Social Security Numbers

The EEOC also addressed an issue that sometimes trips up employers. According to the EEOC, having a policy or practice of screening out candidates who lack a Social Security number implicates Title VII if it disproportionately screens out work-authorized individuals of a certain national origin, such as newly arrived immigrants or new lawful permanent residents, and thus has a disparate impact based on national origin. The EEOC has clarified that newly-hired employees should be allowed to work if they can show that they have applied for but not yet received a Social Security number.

Accents

Under Title VII, an employer may refuse to hire (or fire) an individual if his or her accent interferes materially with job performance. To meet this standard, however, an employer must be able to provide evidence showing that: (1) effective English communication is required to perform job duties; and (2) the individual’s accent materially interferes with his or her ability to communicate in spoken English. Likewise, an English fluency or English proficiency requirement is permissible only if required for the effective performance of the position for which it is imposed.

According to the EEOC, the key is to distinguish a merely discernible accent from one that actually interferes with the spoken communication skills necessary for the job. Evidence of an accent materially interfering with job duties may include documented workplace mistakes attributable to difficulty understanding the individual, assessments from several credible sources who are familiar with the individual and the job, or specific substandard job performance that is linked to failures in spoken communication.

Hostile Work Environment Claims

The EEOC’s Enforcement Guidance also issued an important reminder to employers that harassment based on an employee’s national origin could give rise to liability for a hostile work environment. A hostile work environment based on national origin can take different forms, including ethnic slurs, ridicule, intimidation, workplace graffiti, physical violence, or other offensive conduct directed toward an individual because of his birthplace, ethnicity, culture, language, dress, or foreign accent.  None of this behavior should be tolerated in the workplace.

Promising Practices

The EEOC lists several “promising practices” for employers to consider to avoid liability for national origin discrimination:

  • Use a variety of recruitment methods to attract as diverse a pool of job seekers as possible;
  • Identify your Company as an equal opportunity employer;
  • Implement clearly-defined criteria for evaluating performance;
  • Distribute a policy prohibiting harassment based on national origin and train employees regarding their rights and obligations under the policy.

Tracey E. Diamond