- advise their Human Resources Department and other employers with interview responsibilities not to ask applicants about their wage and salary history, and
- review their employment application(s) and remove any questions about past wages or salary.
Carmody attorneys, Vincent Farisello and Sarah Healey, will be presenting at the Employers Association of the NorthEast (EANE) CT Employment Law & HR Practices Update on Thursday, January 17th at the Hilton Garden Inn in Wallingford, CT. Vincent and Sarah will be speaking on the ever-changing landscape of employment laws and HR best practices.
If you are interested in the conference, please use EANE’s link below for more information and to register.
On December 14, 2018, a federal district court in Texas held in Texas v. United States that the Affordable Care Act’s (ACA) individual mandate is unconstitutional. The court also concluded that because the individual mandate cannot be severed from ACA, the entire law is invalid.
As you may recall, the ACA has both an individual and employer mandate. In 2012, the Supreme Court held, in National Federation of Independent Businesses v. Sibelius (“Sibelius”), that the individual mandate was a constitutional exercise of Congress’ power to tax. Although the individual mandate was upheld as a valid tax, the Supreme Court noted that the individual mandate would otherwise have been unconstitutional under the Constitution’s Commerce Clause.
Individual Mandate Held Unconstitutional Because the Penalty is Zero Beginning in 2019
In 2017, Congress passed the Tax Cuts and Jobs Act of 2017, which will reduce the individual mandate tax penalty to zero effective January 1, 2019. As a result, Texas and numerous other states commenced litigation arguing that the individual mandate was no longer a proper exercise of Congress’ taxing authority. The Texas court agreed, holding that, without a tax penalty, the mandate was now rendered unconstitutional under the Commerce Clause as the Supreme Court previously noted in the Sibelius case.
Entire ACA Held Unconstitutional Because the Individual Mandate Cannot Be Severed
The Texas federal court did not simply declare the individual mandate unconstitutional. It went on to consider what impact this had on the rest of the ACA—specifically, whether the individual mandate could be severed from the rest of the ACA. The Texas court noted that the Sibelius decision found two other provisions (guaranteed issue and community rating) of the ACA were inseparable from the individual mandate. Further, the court noted that the Supreme Court’s 2015 decision, King v. Burwell, determined that the same two provisions could not work without the individual mandate. Therefore, the Texas court concluded that it could not sever the individual mandate from ACA because the other provisions of the ACA were so intertwined. As such, the Court held that the entire law was unconstitutional.
What Should Employers Do?
An appeal of the Texas court’s decision is very likely. Therefore, employers should stay the course for now. For example, large employers subject to the employer mandate provisions of ACA should still file Forms 1095-C for 2018 and continue to offer coverage for 2019. Even if the decision is upheld, it is unlikely to be given retroactive effect, because the mandate was still a valid tax for 2018. If the court’s decision is upheld, then employers and insurers will have to decide what to do about many of the popular ACA requirements, such as dependent coverage to age 26, no cost for preventive care, etc. It remains to be seen how insurers will respond to the case. Keep in mind that Connecticut (and potentially other state’s laws) require many provisions in health insurance policies that are also contained in the ACA. We will continue to monitor the developments.
Carmody Torrance Sandak & Hennessey will hold a training session for supervisors on Thursday, December 6th on the prevention of sexual harassment in the workplace. The program will be presented from our Waterbury office, but individuals may also participate by video conference in our New Haven and Stamford offices. Registration starts at 8:15 a.m. and the program begins at 8:30 a.m. The fee is $75 per person and includes a continental breakfast.
For more information and to register, please click here.
Join us for the next session in the 2018 Human Resources Roundtable Breakfast Series on Thursday, November 29th!
Topic: “Developing a Safety Program and Other Common OSHA Safety Issues for the HR Professional”
For more information and to register, please click here.
8:00 a.m. Registration and Networking Breakfast
9:00 a.m. Program
12:30 p.m. Lunch
Major Changes to Non-Competes
Massachusetts passed a new law that will limit the enforceability of non-compete agreements entered into on or after October 1, 2018. Some highlights of the new law include: (1) the law applies to employees who live or work in Massachusetts, and to independent contractors; (2) non-competes are prohibited for employees classified as non-exempt under the Fair Labor Standards Act; (3) non-competes are not enforceable against employees who are terminated without cause or laid off; (4) employers must pay employees during the non-compete period either 50% of their salary (referred to as “garden leave” pay) or “other mutually agreed upon consideration”, which is not defined; (5) the non-compete cannot be for a period of longer than one year, with limited exceptions; and (6) non-competes signed after employment has commenced must be supported by “fair and reasonable consideration”, which is not defined. There are numerous other requirements. Please contact us should you require additional information.
Paid Family and Medical Leave
Starting January 1, 2021, eligible employees will be entitled to take up to 20 weeks of paid medical leave to attend to their own serious medical needs, up to 12 weeks of paid leave to care for a sick family member or a newborn, and up to 26 weeks of paid leave to care for a covered service member. The paid leave program will be administered by the state of Massachusetts and funded through a 0.63% payroll tax, which the employer and employee will split. Employees will be required to cover 100% of the contributions for family leave, and 40% of the contributions for personal medical leave. However, employers with over 25 employees must pay 60% of the contributions for personal medical leave. Employer and employee contributions will begin on July 1, 2019.
Before receiving payment during leave, the employee will have to take seven days of unpaid leave. Thereafter, the employee will be eligible for a weekly paid leave equal to 80% of the employee’s wages (capped at 50% of the state average weekly wage) plus 50% of their wages beyond that amount (capped at $850 per week), which is adjusted annually to remain at 64% of the state average weekly wage.
There are a number of other administrative and notice requirements. Please contact us should you require additional information regarding these requirements.
Increased Minimum Wage
Beginning January 1, 2019 and gradually increasing over the following five years, the hourly minimum wage in Massachusetts will increase from $11.00 to $15.00 and the tipped hourly minimum wage will increase from $3.75 to $6.75.
Sweeping Sexual Harassment Laws
The New York state budget that was enacted on April 12, 2018 includes numerous requirements concerning sexual harassment. The new requirements: (1) extend protection against sexual harassment to non-employees, including contractors, subcontractors, vendors and consultants; (2) prohibit employers from requiring employees to arbitrate sexual harassment claims; (3) prohibit employers from including non-disclosure provisions in settlement agreements for sexual harassment claims unless the employee prefers otherwise and certain other requirements are met; and (4) mandate all employers, effective October 9, 2018, to adopt a sexual harassment policy containing certain specific provisions, and to conduct annual interactive sexual harassment training for all employees covering certain specific topics.
On June 27, 2018, the United States Supreme Court issued a pivotal decision in Janus v. American Federation of State, County and Municipal Employees, which overturned more than 40 years of precedent. The Janus case involved “agency fees” that unions typically require non-union employees to pay. That is, employees who are covered under a union’s collective bargaining agreement, but choose not to join the union, do not have to pay full union dues. Instead, they pay agency fees to cover the basic costs that the union incurs in representing them. In Janus, the Court held that public employee unions cannot force non-union employees to pay agency fees because this requirement violates the First Amendment.
The Janus case overturned the Court’s prior decision in Abood v. Detroit Bd. of Educ. where the Court held that agency fees were constitutional so long as the union used the fees for non-political purposes, such as collective bargaining, contract administration, grievance adjustment purposes, and other activities “germane to the union’s duties as collective bargaining representative.” The Court reasoned that there was a compelling state interest in promoting “labor peace” and avoiding the issue of “free riders”—i.e., employees reaping the benefits of union representation without paying dues.
In Janus, the plaintiff was a non-union public employee who was required to pay an agency fee that was 78.06% of total dues, or $535 annually. The plaintiff challenged the agency fee claiming that it violated the First Amendment because it was “coerced political speech.”
The Court held in favor of the plaintiff describing the Abood decision as “poorly reasoned.” It also pointed out that the decision has led to “practical problems and abuse.” The Court explicitly rejected the “labor peace” and “free rider” justifications underlying the Abood decision, concluding that these justifications did not outweigh First Amendment protections. With respect to “labor peace,” the Court noted that there are millions of public employees in states that do not allow agency-fee arrangements and unions continue to represent them. On the issue of “free riders,” the Court concluded that the issue simply does not provide a compelling interest to override the First Amendment protections at issue. As a result, the Court concluded that mandatory agency-fees are unconstitutional and that public employees must affirmatively agree to pay union dues.
The Janus decision will have a significant impact on public unions particularly in states like Connecticut, which allow agency fees. We are monitoring developments following this decision and will update you as more details unfold. Please do not hesitate to ask us any questions you might have regarding this decision and its affects.
Join us for the next session in the 2018 Human Resources Roundtable Breakfast Series on Thursday, September 27th!
Topic: “Handling Generational Issues in the Workplace.”
For more information, please click here.
Join us for the next session in the 2018 Human Resources Roundtable Breakfast Series on Thursday, July 26th!
Topic: “Responding to a CHRO Charge: How to Put Your Best Foot Forward.”
For more information, please click here.