In the 2016 NPELRA Collective Bargaining Survey, a majority of public employers who responded indicated that they currently have a wellness program, and more than half of those employers indicated that it was an incentive based wellness program, with incentives ranging from rebates on health club memberships, cash, gift cards, time off and insurance premium discounts. In May of this year, the Equal Employment Opportunity Commission (EEOC) issued new rules pursuant to the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA), which include a new notice requirement. In June, the EEOC issued a sample notice for employers to provide their workers to notify them about how information collected in a wellness program will be used, and confidentiality practices. Every public employer should take the EEOC rules and guidance into account if they have or are considering an employee wellness program, with or without incentives, and make certain they are in compliance. The rules, which become effective in 2017, are available in the Federal Register ( regulations under the ADA ; regulations under GINA ).
The term wellness program generally refers to health promotion and disease prevention programs and activities offered to employees as part of an employer sponsored group health plan, or separately as an employment benefit. Many such programs require an employee to complete a health risk assessment, or undergo biometric screenings, which often include blood pressure and cholesterol tests. Some programs include components designed to help employees lose weight, stop smoking or learn about nutrition. According to the EEOC, the new ADA rule only applies to wellness programs that require employees to answer disability related questions or undergo a medical examination in order to earn a reward or avoid a penalty. It would not apply, for example, to a wellness program that only requires employees to engage in a certain activity, such as attending a weight loss class or walking a certain amount each week in order to earn an incentive.
Last November, the Legal Corner alerted public employers to the EEOC’s proposed rulemaking to amend regulations implementing Title II of GINA, as they relate to employer wellness plans. Title II of GINA protects job applicants, current and former employees and trainees from employment discrimination based on their genetic information. It also prohibits covered employers from using genetic information in making decisions about employment.
Title I of the ADA prohibits employers from discriminating against individuals on the basis of a disability. Title I also prohibits employers from denying disabled workers access to wellness programs on the basis of disability, and requires employers to provide reasonable accommodations to allow employees with disabilities to participate in wellness programs.
An Overview of the New Rules and Notice Requirement
In its press release describing the new rules, the EEOC noted that while ADA and GINA generally prohibit employers from obtaining and using information about employees’ own health conditions or about the health conditions of their family members, including spouses, both laws “allow employers to ask health-related questions and conduct medical examinations, such as biometric screenings to determine risk factors, if the employer is providing health or genetic services as part of a voluntary wellness program.” (Emphasis added.)
The new final rule under the ADA provides that wellness programs that are part of a group health plan and ask questions about an employee’s health or include medical examinations may offer incentives of up to 30% of the total cost of self-only coverage. For example, if the total cost for the plan in which the employee is enrolled is $6,000 annually, the employer can reward the employee up to $1,800 for participating in the wellness program and/or achieving certain outcomes. The final GINA rule provides that the value of the maximum incentive attributable to a spouse’s participation may not exceed 30% of the total cost of self-only coverage, the same incentive allowed for the employee. Significantly, no incentives are allowed for health information concerning an employee’s children, or in exchange for specified genetic information, such as family medical history or the results of genetic tests, of an employee, the employee’s spouse and an employee’s children.
The new rules include important restrictions designed to safeguard health information. The ADA and GINA rules only permit information from wellness programs to be disclosed to employers in aggregate terms.
The New Notice Requirement
The ADA rule requires employers to give participating employees a notice that tells the employee what information will be collected as part of the wellness program, with whom it will be shared and for what purpose, the limits on disclosure and the way information will be kept confidential. In June, the EEOC issued a sample notice to help employers who have wellness programs comply with the obligations under the new ADA rule. The notice is available here. In addition, the EEOC has posted a short question and answer document describing the notice requirement and how to use the sample notice.
The EEOC’s sample notice makes it clear that the wellness program is voluntary only, includes spaces for the employer to delineate the incentives available under the program, and specifically addresses the confidentiality of personally identifiable health information, in an effort to protect employee privacy. For example, the notice provides that:
Although the wellness program and [name of employer] may use aggregate information it collects to design a program based on identified health risks in the workplace, [name of wellness program] will never disclose any of your personal information either publicly or to the employer, except as necessary to respond to a request from you for a reasonable accommodation needed to participate in the wellness program, or as expressly permitted by law. Medical information that personally identifies you that is provided in connection with the wellness program will not be provided to your supervisors or managers and may never be used to make decisions regarding your employment.
While employees are not required to sign the notice, it must be provided and the burden will surely be upon the employer to make sure the notice has been provided to participating employees.
Wellness Programs Must be Voluntary
An employee’s participation in a wellness program that includes disability related inquiries or medical examinations must be voluntary under the ADA. Indeed, that is one of the purposes of the foregoing notice requirement. Voluntary participation means, for example:
– An employer may not require an employee to participate;
– An employer may not deny an employee who elects not to participate in a wellness program access to health coverage or prevent an employee from choosing a particular plan offered to employees generally;
– Take adverse employment action against an employee who chooses not to participate in a wellness program or fails to achieve certain health outcomes.
What Should Employers Do?
As a result of the newly issued regulations and notice requirement, public employers should consider taking the following steps:
1. Review any wellness programs to insure that they fully comply with the EEOC’s ADA and GINA incentive rules. Make certain your covered wellness programs are voluntary only.
2. Develop a notice to be given to all employees who choose to participate in a voluntary wellness program.
3. Make certain that any medical information gathered pursuant to a wellness program is treated in a confidential manner, as required by the new rules.
4. Employment decisions should not be based upon confidential information gathered about a particular employee pursuant to a wellness program.
5. Educate any managers or supervisors responsible for administering your wellness program about the new requirements.
On July 22, 2016, Governor Rauner signed the Local Government Travel Expense Control Act into law (Public Act 099-0604). This law requires all non-home rule units of local government, including municipalities, school districts, special districts and community college districts, to regulate travel expenses at the board level. Thus, every covered unit of local government must adopt a resolution or ordinance that, at a minimum, contains for following provisions:
- Allowed reimbursable activities (e.g., conference attendance, travel for business meetings, etc.);
- The maximum amount that the unit of local government will reimburse for travel, meal and lodging expenses; and
- A standardized form for documenting travel, meal or lodging expenses, as well as “the nature of the official business” for which reimbursement is sought.
Travel, meal or lodging expenses may not be approved unless the minimum documentation requirements have been met.
Timelines
- Effective date: January 1, 2017.
- Phase-In period : 60 days, i.e., until March 2, 2017. After March 2, 2017, expenses for employees or officers that exceed the minimum allowable expenses must be approved by a roll call vote of the Board at an open meeting, and all expenses of board members or corporate authorities must also be approved in this manner.
- Sanction for failure to adopt a compliant expense policy : If a covered unit of local government fails to implement expense regulations by ordinance or resolution within 180 days of the effective date (June 29, 2017), no expenses can be approved until the unit of local government comes into compliance with the law.
Entertainment Expenses
After January 1, 2017, no unit of local government can reimburse any board member, employee or officer for entertainment expenses such as tickets for sporting events or other amusement unless such entertainment expenses are “ancillary to the purpose of the program or event” (e.g., as part of a convention).
Applicability of FOIA
Documents and information submitted in compliance with this new law “are public records subject to disclosure under the Freedom of Information Act.”
Summary
To implement the law, each unit of local government will need to define acceptable standards and procedures for reimbursement of expenses, as well as the maximum reimbursement amount for travel, meals, and lodging. Although the law is deceptively simple, a number of factors will have to be reviewed and addressed in establishing an expense policy that complies with this new law. If you have any questions or if you would like assistance in drafting a new policy that will be in compliance with this new law, please contact your Clark Baird Smith LLP attorney.
Earlier this year, we reported on new regulations issued by the U.S. Department of Labor , which would dramatically increase the minimum salary required for an employee to be classified as “exempt” from the overtime rules contained in the Fair Labor Standards Act.
On Tuesday, November 22, 2016, the new DOL salary basis test was blocked . See State of Nevada v. United States Department of Labor , Case No. 4:16-CV-00731 (Nov. 22, 2016). The court found that the state plaintiffs satisfied all of the prerequisites necessary to issue a preliminary injunction to suspend the December 1, 2016 implementation of the regulations that would have doubled the minimum salary threshold required to qualify for the Fair Labor Standard Act’s “white collar” exemption. This “preliminary injunction” preserves the nation-wide status quo with respect to the current salary basis test (i.e. $455 per week) while the court determines the merits of the case.
Significantly, the court’s opinion suggests that the DOL does not have the authority to define a minimum salary level. The court stated: “it is clear Congress intended the [Executive, Administrative, and Professional] EAP exemption[s] to apply to employees doing actual executive, administrative, and professional duties. In other words, Congress defined the EAP exemption[s] with regard to duties, which does not include a minimum salary level.”
The immediate takeaway from this decision is that employers, for the time being, do not need to change any employee’s exempt status classification based on those new regulations, which have now been blocked at least on a temporary basis (and will perhaps become obsolete or permanently blocked in the future). Employers should be mindful that they do not “whip saw” their employees, flip flopping them from exempt to non-exempt, and back again depending on future litigation and legislation. This could have significant impact on morale in the workplace. Please stay tuned, this injunction is immediately appealable. This is not likely to be the end of the litigation or legislation in this area.
Please contact a CBS LLP attorney with questions about what this means for your workplace.
On January 11, 2016, the U.S. Supreme Court heard Oral Argument in the case of Friedrichs v. California Teachers Ass’n , Case No. 14-915, which has the potential to change the landscape of public sector labor relations throughout the country. In Friedrichs , a group of California public school teachers is challenging the constitutional precedent allowing for the inclusion of agency shop clauses in public sector collective bargaining agreements. This precedent was first established by the U.S. Supreme Court nearly forty years ago, in Abood v. Detroit Board of Education , 431 U.S. 209 (1977).
Abood involved an agency shop clause that compelled public employees to pay union dues, despite their opposition to their union’s political and social agenda. At the time, the Supreme Court ruled that an agency shop clause was constitutionally permissible in public sector contracts, as long as the compelled union dues were used to finance collective bargaining, contract administration, and grievance adjustments that benefited all bargaining unit employees. By contrast, the Abood Court held that public employees cannot be compelled by a collective bargaining agreement to contribute money to a union’s political and ideological causes that are not germane to its collective bargaining obligations.
Until recently, this constitutional holding was never directly challenged by public employees. In Friedrichs , however, a group of public school teachers now argue that the political/collective bargaining distinction first announced in Abood was shortsighted, because it overlooked the fact that a union’s bargaining positions are inherently “political” to the extent they affect a public employer’s operations and finances. During Monday’s oral argument, Justice Scalia summarized this problem by stressing the difficulty in separating political/ideological activities from collective bargaining activities. “ [ E]verything that is collectively bargained with the government,” said Justice Scalia, “is within the political sphere, almost by definition .” He listed examples, “Should the government pay higher wages or lesser wages? Should it promote teachers on the basis of seniority[?] … – all of those questions are necessarily political questions.”
It became apparent during the oral argument that a number of Justices rejected the notion that a public sector union must be able to compel public employees to pay their “fair share” of union dues, otherwise, those employees will become figurative “free riders.” Such free riders, argued the Unions, enjoy the benefits of collective bargaining without having to pay for them. Justice Kennedy seemingly discounted the notion of free riders, however, stating during oral argument that “the union basically is making these teachers compelled riders for issues on which they strongly disagree.”
At one point, the petitioning teachers were asked whether public sector unions would still be able to secure sufficient funding in order to perform their collective bargaining responsibilities in the absence of fair share clauses. Counsel for the teachers pointed to the federal government experience as evidence for why the elimination of agency fees will not lead to the demise of public sector unions. Specifically, the Petitioners noted that the federal government (in its employer capacity) does not permit unions to compel federal employees to pay agency fees, which in turn has resulted in only about a third of all federal employees maintaining formal union membership. Yet, statistics show that federal sector unions not only survive, but thrive in this environment. Considering these statistics along with the public sector union density rate in California (90%), the Petitioners argued that it is highly unlikely that California public sector unions would suddenly “disintegrate” if agency shop clauses are held unconstitutional.
Interestingly, the petitioning public school teachers have asked only for prospective relief. In that regard, fair share fees already collected under existing collective bargaining agreements would not have to be returned. A union’s future bargaining efforts, however, could no longer be subsidized by compelled union dues.
Ultimately, the Petitioners’ counsel opened and closed their oral argument by stating that public sector unions have every right to pursue whatever political or ideological positions they deem appropriate. These unions do not, however, have the right “to demand that the other side subsidize their views on these essential questions of basic public importance.”
Several commentators believe that Justices Scalia, Kennedy, Thomas, Alito, Chief Justice Roberts, and even, perhaps, Justice Breyer – all nominated by Republican presidents – will join together to overrule Abood and find public sector agency shop clauses to be unconstitutional. If that occurs, numerous public sector collective bargaining agreements will be impacted on a going forward basis. Such a ruling also would limit an important source of funding for public sector unions across the country, which in turn could limit union influence on a variety of political and social causes. The Supreme Court is expected to rule on this important issue by the end of June.
Clark Baird Smith LLP attorneys will discuss the potential bargaining ramifications of this decision in greater detail at the annual Employment Law Seminar on March 4, 2016, hosted by the Illinois Public Employer Labor Relations Association.
On March 29, 2016, the U.S. Supreme Court issued a divided 4-4 per curium decision in Friedrichs v. California Teachers Ass’n , 2016 WL 1191684, which affirmed a decision by the U.S. Court of Appeals for the Ninth Circuit that upheld the constitutionality of public sector fair share/agency shop agreements. This decision leaves the lower court’s decision undisturbed, creates no newly binding U.S. Supreme Court precedent on the issue, and leaves the door open for other parties to pursue future challenges to the U.S. Supreme Court. Therefore, the Ninth Circuit’s decision is still binding precedent on the states that fall within its jurisdiction, such that requiring teachers to opt out of ‘non-chargeable’ union expenditures (such as political or ideological causes) that exceed a union’s collective bargaining duties is constitutional.
The Ninth Circuit based its decision on the U.S. Supreme Court’s precedent set in Abood v. Detroit Board of Education , 431 U.S. 209 (1977), which held that public employees can be compelled by a collective bargaining agreement to contribute money to a union in order to fund the union’s collective bargaining obligations to bargaining unit members. At the conclusion of oral arguments in Freidrichs, however, many commentators believed Abood ’s days were numbered, and that the Court would soon rule that public sector fair share/agency shop agreements are unconstitutional. After Justice Scalia’s death in February 2016, however, the Supreme Court justices could not form a majority opinion on the issue, which leaves us with today’s 4-4 per curiam decision. As a result, the Supreme Court’s Abood decision remains the applicable Supreme Court precedent on the constitutionality of fair share fee clauses in public sector collective bargaining agreements, which by definition includes those in Illinois public sector contracts.
Meanwhile, in Illinois, the constitutionality of fair share/agency shop clauses in public sector collective bargaining agreements was challenged in a lawsuit originally filed by Governor Rauner. See Janus v. AFSCME 31 et al., 1:15CV01235. This case was initially filed in February 2015, but was stayed pending the Supreme Court’s decision in Friedrichs. A status hearing is currently scheduled for July 7, 2016. Given today’s Friedrichs decision, it is anticipated that this Illinois case will now move forward to decision, and may become the vehicle for a new Supreme Court challenge to the constitutionality of public sector fair share fee clauses. At this juncture, however, the ultimate outcome of such a new challenge would appear to depend on the views of the person who takes Justice Scalia’s seat on the Supreme Court.