Last month, a district court in Texas issued a significant ruling in Texas v. United States declaring the Affordable Care Act (ACA), aka Obamacare, unconstitutional. The court held that since the individual mandate, which required people to either buy ...

 

Is the Affordable Care Act Still in Effect After Texas v. United States? and more...



Is the Affordable Care Act Still in Effect After Texas v. United States?

Last month, a district court in Texas issued a significant ruling in Texas v. United States declaring the Affordable Care Act (ACA), aka Obamacare, unconstitutional. The court held that since the individual mandate, which required people to either buy health insurance or pay a tax penalty, was repealed, the ACA was no longer a tax, and therefore Congress had no power to pass such a law, as it no longer fell under Congress’s taxing power. So, what does this mean for employers?

First, the ACA does still remain in effect. The ruling is being appealed, and the ACA will remain in place during the pendency of the appeal. The Trump Administration has said that it will continue to administer and enforce the ACA as it had before the court issued its decision.

With the ACA still in place, employers must continue to comply with the law, with those employers having more than 50 employees required to continue to provide health insurance benefits to their employees who work 30 or more hours.

Will the ACA ultimately be overturned by the courts? It is not clear, but my gut is that it probably will not be. The last time the ACA was challenged the Supreme Court engaged in some creative interpretations of the statute to find it constitutional. Justices Gorsuch and Kavanaugh have been appointed to the Court since then, and while I might see Gorsuch willing to overturn the ACA, I do not see Kavanaugh having any appetite to do that. Kavanaugh recently would not even agree to have the Court hear a challenge to Roe v. Wade, so it seems like he is pretty set on upholding existing law. This is supported by the way he ruled while he was an appellate court judge.

So, I would plan on the ACA being here to stay until at least the end of the next Congressional session in 2021. Given the inertia in Congress, I would also bet on the law remaining in place for many years after that. Feel free to contact me if you have any questions related to the ACA.
 

Employer May Be Inadvertently Granting FMLA

Recently a Connecticut district court indicated that unless the parties settled the case in question, it might find that plaintiff was entitled to FMLA job protections even though she was not eligible for FMLA. Plaintiff had worked for employer/defendant for just under one year when she was advised by her doctor to have Achilles tendon surgery to address hip and knee pain. She advised HR of her intent to take FMLA once she was eligible for the surgery. An HR representative directed her to begin her leave immediately “because she was a liability” even though she was not working under any restrictions. She was also told not to worry about her FMLA being approved and that her job would be waiting for her. Based on those assertions, plaintiff scheduled and underwent surgery eight days before her one year anniversary with the company, although she had initially intended to schedule her surgery after her one year anniversary. While she was on leave the company sent her a letter that she was ineligible for FMLA leave and that they were terminating her.

Plaintiff sued, claiming that she was denied her FMLA rights. The company sought dismissal of the suit on the basis that plaintiff was not entitled to the protections of FMLA because she had not worked there for at least one year. The court, in urging settlement of the case, noted the inherent unfairness in allowing the company to represent to her that she would be entitled to FMLA and then deny her coverage.

The lessons for employers are twofold. One is to ensure that anyone reviewing requests for leave or communicating with employees about FMLA should be well trained in the eligibility requirements. The other lesson is that those employers who are not otherwise covered by FMLA but who have an FMLA or similar type policy may want to remove or revise that policy because they could be conferring rights on employees to which they were otherwise not entitled.
 

Au Pairs Settle for $65.5 Million in “Price Fixing” Case

About 100,000 past and current international au pairs could share in the $65.5 million settlement fund on the claim that the au pair companies were “price fixing” or keeping the hourly rate for these individuals artificially low.

International au pairs are generally young people who come to the U.S. under a special government visa to provide childcare to families and experience the culture in America. The problem, according to the suit, is that a number of au pair sponsor organizations “conspired” to maintain a below minimum wage rate of pay of $4.35 an hour and failed to inform the au pairs of their ability to negotiate a higher pay rate. The lower minimum wage is allowed because au pairs also receive room and board as well as often receive other economic perks from their host families.

The settlement, which came just a month before trial was to begin, includes a commitment from the sponsor organizations to affirmatively notify au pairs of their ability to negotiate their hourly rate.

The legal fight over au pairs continues in Massachusetts where the courts are weighing whether au pairs are employees. Classifying au pairs as employees would not only entitle them to minimum wage but also overtime and other employment laws.
 

7th Circuit Adopts Per Week Wage Rates as Measure of FLSA Compliance

While various state wage laws and contract terms may regulate whether an employee is paid for all of their time worked, the Fair Labor Standards Act specifically establishes and enforces minimum wage and overtime obligations. The line between the two can become blurry when an employee claims that they were not paid at all for specific work time. So, does an Illinois employee who claims that they worked 30 hours in a week but were only paid for 28 of those hours have an FLSA claim because they were not paid at least minimum wage for two hours of work in that week?

Recently, the 7th Circuit Court of Appeals held that the proper test for a minimum wage claim is not whether the employer paid the employee the usual rate of pay or even the agreed upon rate of pay for all hours worked in a week, but rather whether the average rate of pay for all hours worked meets or exceeds the minimum wage rate. In Hirst v. Skywest, Inc. the plaintiffs were a putative class of flight attendants. They filed suit under the FLSA claiming that the company only paid them for their hours spent in the air and did not pay them for their work time on the ground. The court, in dismissing the claim, adopted the rule that an FLSA violation for minimum wage only occurs when an employee’s weekly average wage rate is below minimum wage. In this instance, the plaintiffs earned an hourly rate of pay such that, even when averaged out over more hours than they were actually paid, it exceeded the minimum wage rate. In other words, an employee who is paid $20.00 an hour but is only paid for 28 of the 30 hours that they worked in a week does not have an FLSA claim because their average hourly rate for the week of $18.66 is still greater than the minimum wage requirement.

The adoption of the average weekly wage rate calculation by the 7th Circuit does not give employers a shield in not paying workers for extra time worked. While this may preclude a federal FLSA claim, state wage laws, such as the Illinois Wage Payment and Collection Act, enforce employee claims that they were not paid for all hours worked. Employers should always be aware of their obligation to pay all wages earned in a timely manner.

Wage and hours laws can be complicated. The labor and employment attorneys at Ancel Glink can assist you with ensuring that your pay policies and practices comply with federal and state law and defend you if a pay dispute arises. Contact Margaret Kostopulos or Bob McCabe at 312-782-7606 to discuss your needs or email us at mkostopulos@ancelglink.com or rmccabe@ancelglink.com.
 

EEOC Rescinds Wellness Incentive Rules

Last month the Equal Employment Opportunity Commission (EEOC) rescinded wellness incentive program rules under the that the Obama-era EEOC passed in 2016. The rescission of these rules took effect on January 1.

Employee wellness plans are programs intended to promote health and fitness to employees, with employees obtaining benefits, like financial compensation, for hitting certain health and fitness targets. For example, wellness programs might offer free gym membership or discounts on insurance premiums if an employee stops smoking or enrolls in a weight loss program or does preventive health screenings.

Before May 2016, wellness plans were not regulated. That month, the EEOC passed regulations to make them compliant with the Americans with Disabilities Act and the Genetic Information Nondisclosure Act, requiring the programs to be available to all employees and to require the information collected from these plans to remain confidential. Additionally, enrollment in these wellness plans needed to be voluntary—employers could not require employees to participate.

After the passage of these rules, the AARP sued the EEOC, arguing that the rules allow employers to impose heavy financial penalties on employees who do not participate in employee wellness programs. A judge agreed, and invalidated the rules. The judge then gave the EEOC until January 2019 to revise the wellness rules. January 2019 has come, and the wellness rules have not been revised, and the EEOC has stated that it has no plans to do so until June 2019. Therefore, on January 1 the rules were rescinded. You can see the rescission of the ADA rules by clicking here, and you can see the rescission of the GINA rules by clicking here. Stay tuned for updates on whether new wellness rules are passed.