AGC's Human Resource and Labor News - July 25, 2013 / Issue No. 4-13 (Print All Articles)

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New Secretary of Labor Confirmed; Confirmation of New NLRB Members Expected Soon

On July 19, the U.S. Senate confirmed Thomas Perez to be the next Secretary of Labor. The confirmation was part of a bi-partisan compromise over a number of stalled presidential nominations. The deal includes an agreement over appointments to the National Labor Relations Board (NLRB or Board) that is expected to soon give the Board a full complement of five confirmed members for the first time in several years.

On July 19, the U.S. Senate confirmed Thomas Perez to be the next Secretary of Labor. The confirmation was part of a bi-partisan compromise over a number of stalled presidential nominations. The deal includes an agreement over appointments to the National Labor Relations Board (NLRB or Board) that is expected to soon give the Board a full complement of five confirmed members for the first time in several years.

The deal enables the Senate to avoid the so-called “nuclear option,” a change in Senate rules that would have made it easier to end a filibuster. Senate Majority Leader Harry Reid threatened to invoke the nuclear option after Republicans threatened to filibuster the confirmations of Perez, of nominees to the NLRB, and of several others.

Perez was serving as the assistant attorney general for the Civil Rights Division of the U.S. Department of Justice at the time of his nomination. He previously served as the secretary of Maryland’s Department of Labor, Licensing and Regulation. He will replace Deputy Secretary Seth Harris, who has been serving as acting secretary since Hilda Solis resigned as Secretary of Labor in January.

As part of the compromise, Pres. Obama agreed to withdraw his February nominations of Democrats Sharon Block and Richard Griffin to the NLRB and to replace them with two new nominees. Block and Griffin are currently serving on the Board under unconfirmed and highly controversial “recess” appointments. The two new nominees are Nancy Schiffer, associate general counsel at the AFL-CIO, and Kent Hirowaza, chief counsel to NLRB Chairman Mark Pearce. Republicans agreed not to oppose the confirmation of the new nominees or the confirmation of Pearce for a new term. Also part of the package to restore a five-member Board is the confirmation of management-side labor lawyers Philip Miscimarra and Harry Johnson, III. Sources say that Pres. Obama intends to nominate Griffin to be the next general counsel of the NLRB, but it is unclear whether this was part of the compromise.

With a new secretary in place, the Department of Labor is expected to move forward on various regulatory initiatives that have been on hold. Of the greatest concern to AGC are regulations coming out of the Office of Federal Contract Compliance Programs (OFCCP). These include a late-stage initiative to change regulations concerning the recruitment and employment of veterans and individuals with disabilities and an early-stage initiative to change regulations concerning the recruitment and employment of women and minorities in construction. (For more information about these initiatives and related advocacy efforts by AGC, click here and here.) Among AGC’s other concerns is a regulatory initiative known as the “persuader rule” that would broaden reporting requirements of certain labor relations consultants. (For more information on AGC’s efforts in this area, click here.)

As for the NLRB, the confirmations will provide a new opportunity for the Board to implement its “quickie election rule.” The rule – which would expedite the election process in union representation elections – has been suspended since a court ruled that the Board adopted it without the necessary quorum. With a full complement restored, the Board could re-adopt the rule without the procedural inadequacy. In its adjudicatory role, we expect that the newly constituted Board will continue to act much like the Board has acted throughout the Obama Administration – issuing decisions that tend to favor organized labor and curtail management rights. One silver lining is that, once the Board has two Republicans again, we can expect more dissenting opinions. Such opinions can be very helpful in court challenges to Board decisions.


AGC Webinar Addresses Changes to Form I-9 and General Immigration Compliance

AGC recently hosted a webinar on The New Form I-9: What You Need to do to Avoid the Pitfalls and Stay Compliant. An on-demand version of the webinar is available for purchase from the AGC Bookstore.

AGC recently hosted a webinar on The New Form I-9: What You Need to do to Avoid the Pitfalls and Stay Compliant. An on-demand version of the webinar is available for purchase from the AGC Bookstore.

As of May 7, 2013, all employers are required to use a new Form I-9, Employment Eligibility Verification Form. The new form comes with new rules affecting which documents can be used to verify the employment eligibility of workers and is longer and more complex than the previous version. There are also new instructions and additional data fields for employees and employers.

During the webinar, immigration attorney David Whitlock of Miller & Martin, PLLC, walked participants through each section of the new form, identified the changes and educated them on how to remain compliant. Some of the areas specifically addressed by Mr. Whitlock include the new spaces for the employee’s email address and phone number and the new 3-D barcode box. He also explained when it is appropriate for employers to complete the “preparer” section of the form. In addition, Mr. Whitlock discussed issues related to the physical address used on the form by employees working away from home, form I-9 storage for existing and former employees, and the proper use of the reverification and rehire section of the form – an often confusing section for construction employers that routinely lay-off and re-hire workers.

Before the close of the webinar, Mr. Whitlock advised employers to conduct periodic self-audits of forms and correct any errors prior to an audit. Details were provided on the proper way to correct errors and steps to take should a Notice of Inspection be received.

For more information on immigration compliance, please visit AGC’s Labor and HR Topical Resources web page. Select the main category “Other Legal Issues” and the subcategory “Immigration and Employment Eligibility.”


New OSHA Enforcement Focuses on Temporary Workers

On April 29, 2013, the Occupational Safety and Health Administration (OSHA) issued a memorandum to its regional administrators advising them of a new effort using enforcement, outreach and training to protect temporary workers from workplace hazards. The guidance is the result of a series of reports of temporary workers suffering fatal injuries during the first days on the job.

On April 29, 2013, the Occupational Safety and Health Administration (OSHA) issued a memorandum to its regional administrators advising them of a new effort using enforcement, outreach and training to protect temporary workers from workplace hazards. The guidance is the result of a series of reports of temporary workers suffering fatal injuries during the first days on the job.

The memo advises regional administrators to direct compliance safety and health officers (CSHOs) to first determine, within the scope of their inspections whether any employees are temporary workers and whether any of the identified temporary employees are exposed to a violative condition.” Second, CHSOs “should assess – using records review and interviews – whether those workers have in fact received required training in a language and vocabulary they understand.” For purposes of this information gathering, OSHA is focused on temporary workers supplied and paid by a staffing (or “temp”) agency. An OSHA official confirmed to AGC in a recent conversation that the effort is not intended to cover directly hired temporary employees or employees managed by a professional employer organization (“PEO”).

Within OSHA’s Information System, the directive instructs CHSOs to flag worksites where any temporary employees are exposed to violative conditions. In addition, inspectors are now required to capture the name of the workers’ staffing agency, the agency’s location, and the extent to which the temporary workers are being supervised on a day-to-day basis by either the host employer or the staffing agency.

As a result of this new enforcement directive, construction contractors that use staffing agencies to supply temporary workers are advised to follow the guidelines outlined in the directive and document training provided to both temporary and regular workers. Employers should also evaluate the supervising structure under which temporary workers report in order to avoid any potential co-employer liability issues.


Why Should You Attend AGC’s 2013 Construction HR and Training Professionals Conference?

In the video below, Ann Michalski, HR Director for AGC member-company Joseph B. Fay Company, talks about AGC’s Construction HR and Training Professionals Conference. She describes her experiences and explains why you should attend this year’s event in Chicago, Ill.

In the video below, Ann Michalski, HR Director for AGC member-company Joseph B. Fay Company, talks about AGC’s Construction HR and Training Professionals Conference. She describes her experiences and explains why you should attend this year’s event in Chicago, Ill.


With construction companies working with fewer staff and tighter budgets, AGC has created a single Construction HR and Training Professionals Conference that will provide two full days of sessions for HR and for training professionals. The conference will continue to offer unique opportunities for HR, training, education, and workforce development professionals in the construction industry. Sessions for training professionals will cover the most cutting-edge techniques in training and development currently in use and envisioned for the future in the industry. The HR sessions will help HR professionals in the industry remain up to date and compliant with employment laws and best practices. Some sessions will interest both HR and training professionals alike. Walk away from this year’s conference with practical skills that you can begin to implement immediately. Plus, take away insights from colleagues who face the same challenges you see every day. Learn more and register here.


Another Circuit Court Strikes Down AGC-Opposed NLRB Posting Rule

The U.S. Court of Appeals for the Fourth Circuit has ruled that the National Labor Relations Board’s (NLRB) notice-posting rule is invalid. The regulation, which has been on hold for over a year and has never taken effect, would require most employers to post designated notices informing employees of certain rights under the National Labor Relations Act (NLRA), including the right to organize. The decision is the latest in a series of significant victories by employers challenging the Board’s authority in court, including a decision last month by the D.C. Circuit striking down the same rule on different grounds.

The U.S. Court of Appeals for the Fourth Circuit has ruled that the National Labor Relations Board’s (NLRB) notice-posting rule is invalid. The regulation, which has been on hold for over a year and has never taken effect, would require most employers to post designated notices informing employees of certain rights under the National Labor Relations Act (NLRA), including the right to organize. The decision is the latest in a series of significant victories by employers challenging the Board’s authority in court, including a decision last month by the D.C. Circuit striking down the same rule on different grounds.

To assess the scope of the Board’s authority, the Fourth Circuit considered the plain language, structure, and history of the NLRA, as well as comparisons to other labor statutes. It found that Congress has empowered the Board to act only in a reactive manner; not a proactive one. While the NLRA does grant the Board authority to issue regulations, that authority is limited to carrying out the agency’s statutorily defined roles in addressing unfair labor practice charges and in conducting representation elections upon request. Furthermore, the court noted, Congress has enacted other labor laws expressly giving “sister agencies” authority to promulgate notice requirements at the same time it chose not to do so in the NLRA. The court, therefore, held that the Board exceeded its authority in issuing the challenged rule.

The Board has not yet indicated how it will respond. While the agency has some options for seeking review of the Fourth Circuit and D.C. Circuit decisions, the fact that two appellate courts have ruled against it on separate grounds renders it unlikely that the Board will pursue the matter further.

While employers need not comply with the Board’s posting rule at this time, covered federal contractors must still comply with similar posting rules issued by the Department of Labor and FAR Council.

For more information, please contact Denise Gold at (703) 837-5326 or goldd@agc.org.


Court Finds NLRB Denied Contractor Association Due Process in Striking Down Applicant and Employee Referral Programs

The U.S. Court of Appeals for the Fifth Circuit (LA, MS, TX) has refused to enforce a National Labor Relations Board (NLRB) order finding that the Houston chapter of the Independent Electrical Contractors (IEC) was operating an applicant referral service unlawfully.

The U.S. Court of Appeals for the Fifth Circuit (LA, MS, TX) has refused to enforce a National Labor Relations Board (NLRB) order finding that the Houston chapter of the Independent Electrical Contractors (IEC) was operating an applicant referral service unlawfully.

As reported in a previous article, the IEC offered a centralized employee applicant referral system to its member contractors. The system operated much like a union hiring hall but without union involvement. IEC advertised for electricians, accepted and handled employee applications, and then provided them to member firms looking to hire. IEC also offered members a “shared man” program. This service enabled members in need of additional electricians to “borrow” employees from other members with less work for up to 60 days. As part of the COMET campaign conducted in the 1990’s, “salts” working for the International Brotherhood of Electrical Workers (IBEW) filed over 200 applications through the IEC referral service. None of the salts was hired. After the IBEW filed unfair labor practice charges, the NLRB general counsel issued complaints alleging that IEC’s programs discriminated against the hiring of union members and salts in violation of Sec. 8(a)(3) of the National Labor Relations Act (NLRA). An administrative law judge agreed. However, when the Board reviewed the decision, it chose not to adopt the administrative law judge’s 8(a)(3) findings. Instead, the Board found that the referral system violated NLRA Sec. 8(a)(1) because it tended to interfere with the NLRA rights of union members and salts, including their right to seek employment on equal terms with other applicants.

The court found that the Board committed a fatal error in changing its liability theory on appeal. The Board denied IEC due process of law and misapplied its own precedents by applying a novel theory “against which the accused party had no notice or opportunity to defend,” the court held. This rendered the Board’s findings of a violation unenforceable.

Because the court rested its decision on procedural grounds and did not address the merits of the Board’s 8(a)(1) conclusions, AGC chapters and others operating or considering programs similar to the IEC programs at issue here should continue to proceed with caution and to seek the advice of qualified labor counsel.

Indep. Elec. Contractors of Houston, Inc., Case No. 10-60822 (5th Cir., 6/17/2013).


Year-to-Date Collective Bargaining Settlements Yield First-Year Increase of 2.2 Percent

The first report on collective bargaining settlements for 2013 has been released by the Construction Labor Research Council (of which AGC is a member). Settlements reported to CLRC to date yielded an average first-year wage-and-benefit increase of 2.2 percent or $1.04. For newly negotiated, multiyear agreements, the average second year increase was 2.1 percent or $1.09, and the average third-year increase was 2.1 percent or $1.10. As percentages, these increases are higher than contracts settled in 2012 and 2011 for contract year one, and lower than 2012 and 2011 for years two and three.

The first report on collective bargaining settlements for 2013 has been released by the Construction Labor Research Council (of which AGC is a member). Settlements reported to CLRC to date yielded an average first-year wage-and-benefit increase of 2.2 percent or $1.04. For newly negotiated, multiyear agreements, the average second year increase was 2.1 percent or $1.09, and the average third-year increase was 2.1 percent or $1.10. As percentages, these increases are higher than contracts settled in 2012 and 2011 for contract year one, and lower than 2012 and 2011 for years two and three.

CLRC also found that the trend toward negotiating shorter-term agreements has regressed. Only 20 percent of agreements negotiated so far this year were for one year, and 73 percent were for three years or more.

The report is a preliminary one, with yearly averages and other data likely to change as additional settlements are added throughout the year. Updated reports are scheduled for release in September and December.

The full report, which contains additional information and graphs, has been sent to the Union Contractors e-Forum and is posted in the Labor & HR Topical Resources area of AGC’s website under the main category “Collective Bargaining,” subcategory “Collective Bargaining Agreement Data.”

AGC’s collective bargaining chapters are reminded to please send settlements information to CLRC (clrc@clrc.biz) promptly after reaching settlements with unions. Chapters are also advised that CLRC is presently offering a discount of 25 percent or more on custom projects for local chapters of member organizations provided that the project is ordered both before January 31, 2014, and at least three months before completion is needed. Such projects include analyses of local:

  • Market share
  • Union vs. nonunion wage and fringe benefits comparisons
  • Contract costs

For more information about these services, please call CLRC directly at (202) 347-8440.


AGC Wants to Know Whether You’re Facing Worker Shortages

Over the past several months, AGC of America has received a number of reports, most of which were anecdotal, about sporadic shortages of workers and talent in certain parts of the country. At the same time, overall construction employment, while rising steadily, remains well below peak employment levels. As a result, we’re having a hard time gauging the extent of worker shortages and if and where those shortages may be impacting construction projects. Please take a few brief minutes to complete our survey so we can conduct a better assessment of if, where, and to what extent there are actual shortages of skilled craft workers or qualified construction professionals. Your input will help us correctly calibrate our messaging to elected officials and the media and will also guide our efforts to support workforce development. To take the survey, go to http://www.surveymonkey.com/s/AGCWorkerShortageSurvey.

Over the past several months, AGC of America has received a number of reports, most of which were anecdotal, about sporadic shortages of workers and talent in certain parts of the country. At the same time, overall construction employment, while rising steadily, remains well below peak employment levels. As a result, we’re having a hard time gauging the extent of worker shortages and if and where those shortages may be impacting construction projects. Please take a few brief minutes to complete our survey so we can conduct a better assessment of if, where, and to what extent there are actual shortages of skilled craft workers or qualified construction professionals. Your input will help us correctly calibrate our messaging to elected officials and the media and will also guide our efforts to support workforce development. To take the survey, go to http://www.surveymonkey.com/s/AGCWorkerShortageSurvey.

Thank you in advance for your time and support.


AGC-Supported Efforts Lead to Delay of Affordable Care Act’s Employer Mandate

On July 2, 2013, the Department of Treasury announced that the employer mandate requirements of the Affordable Care Act (ACA) will be delayed for one year, until January 1, 2015. The decision came after several complaints from the employer community regarding the complications, confusion and lack of understandable guidance surrounding compliance with the provision. The employer mandate requires that large employers, as defined by the ACA, either provide health coverage for its full-time employees and equivalents or pay a penalty. Implementation was to begin January 1, 2014.

On July 2, 2013, the Department of Treasury announced that the employer mandate requirements of the Affordable Care Act (ACA) will be delayed for one year, until January 1, 2015. The decision came after several complaints from the employer community regarding the complications, confusion and lack of understandable guidance surrounding compliance with the provision. The employer mandate requires that large employers, as defined by the ACA, either provide health coverage for its full-time employees and equivalents or pay a penalty. Implementation was to begin January 1, 2014.

AGC is a member and active participant of Employers for Flexibility in Healthcare, a coalition of organizations that represent employers affected by ACA. The primary purpose of the group is to ensure that employer-sponsored health coverage remains a competitive option for the members of each organization. Transition relief from the employer mandate is a top priority of the coalition.

The transition relief provided by the Treasury Department delays the requirement for employers to report information of the health coverage offered to workers, as well as any shared responsibility payments required of employers. The delay of the employer mandate does not affect any other components of the ACA at this time.

AGC will continue to work with legislators and regulators to make ACA implementation less costly and less complex for its members. In the meantime, covered employers are encouraged to continue efforts to comply with the requirements of the Act as if the effective date had not changed. By doing so, an employer may evaluate the effect of the law on a company using real-life examples without the fear of being penalized for mistakes.

For more information, visit AGC’s dedicated ACA-resources webpage at www.agc.org/healthcarereform.


Employers Should Avoid Misclassifying Employees as Independent Contractors to Gain ACA Tax Credits

The implementation of the Affordable Care Act’s (ACA) tax credit for employers with fewer than 25 employees and the looming requirement that large employers (those with 50 or more full-time-equivalent (FTE) employees) provide affordable health insurance to their full-time employees or pay a penalty have resulted in some employers trying to limit the number of employees in their organization. One method that is gaining popularity (and that we do not recommend) is broadly classifying workers as independent contractors instead of employees. Employers should not try to manipulate the system to obtain the ACA’s tax credits or avoid its requirements. Misclassifying an employee as an independent contractor can result in substantial penalties and quickly erase any benefit.

The implementation of the Affordable Care Act’s (ACA) tax credit for employers with fewer than 25 employees and the looming requirement that large employers (those with 50 or more full-time-equivalent (FTE) employees) provide affordable health insurance to their full-time employees or pay a penalty have resulted in some employers trying to limit the number of employees in their organization. One method that is gaining popularity (and that we do not recommend) is broadly classifying workers as independent contractors instead of employees. Employers should not try to manipulate the system to obtain the ACA’s tax credits or avoid its requirements. Misclassifying an employee as an independent contractor can result in substantial penalties and quickly erase any benefit.

Motivating factors under the ACA
There are several provisions in the ACA that arguably incentivize an employer to reduce its number of employees. The Act provides tax credits to small employers. Tax-exempt organizations and small employers that pay at least 50% of the premium cost of employees’ health insurance qualify for a special tax credit. Employers with fewer than 25 FTEs who average less than $50,000 in wages per year are eligible. In 2014, the maximum credit will increase from 35% to 50% of premiums paid by eligible small employers and from 25% to 35% of premiums paid by eligible tax-exempt employers. The maximum credit is provided to employers with 10 or fewer FTEs who individually earn an average of $25,000 or less each year.

Soon, the ACA will require large employers to provide healthcare coverage to their employees or pay a penalty (the “play or pay” provision). Whether an employer is subject to possible penalties depends on its number of full-time employees (defined as those working 30 or more hours per week), including FTEs. If an employer has 50 full-time employees, including FTEs, it qualifies as a large employer and is subject to the “play or pay” provision. Independent contractors do not qualify as employees. Beginning January 1, 2014, if a large employer doesn’t offer coverage or its coverage doesn’t provide minimal value, it may find itself subject to monetary penalties.

If an employer is close to being considered a small or large employer based on its number of full-time employees and FTEs, it is very unwise to manipulate those numbers by converting employees to independent contractors or replacing some portion of its existing workforce with independent contractors. Each worker must be carefully and individually analyzed to determine whether he should be classified as an employee or independent contractor.

Independent contractor test
Establishing that someone truly is an independent contractor isn’t easy. Although not specifically set forth in the ACA, it appears that the appropriate test to determine independent contractor status is set forth in IRS Publication 15A. The IRS previously applied what was commonly referred to as the 20-factor test. In response to pressure for simplification, the agency recently created an 11-factor test. The 11 factors are organized into three categories: (1) behavioral control, (2) financial control, and (3) relationship of the parties.

When it comes to behavioral control, you should examine the following areas:

  • Instructions that you give the worker; and
  • Training that you give the worker.

In terms of financial control, you should consider the following:

  • The extent to which the worker has unreimbursed business expenses;
  • The extent of the worker’s investment;
  • The extent to which the worker makes services available to the relevant market;
  • How the worker is paid; and
  • The extent to which the worker can realize a profit or loss.

The third category is the type of relationship between the parties. When contemplating that factor, you should consider:

  • Written contracts describing the relationship the parties intended to create;
  • Whether the company provides the worker with employee-type benefits (e.g., insurance, a pension plan, vacation pay, or sick pay);
  • The permanency of the relationship; and
  • The extent to which services performed by the worker are a key aspect of the company’s regular business.

You should consider all 11 factors. Unless an employer is confident it can satisfy all the factors, it should assume that the government agency administering the law will take the position that workers are employees and not independent contractors. For that reason, it generally is advisable to take a conservative approach when classifying workers as independent contractors.

Bottom line
Any employer that is on the line in terms of whether it is classified a large or small employer and is contemplating potential penalties under the ACA should (1) exercise extreme caution if it attempts to manipulate its number of employees by reclassifying them as independent contractors and (2) consult with legal counsel. The penalties for improperly classifying workers could substantially outweigh the benefits of a tax credit or the penalties under the ACA.


Editor’s note: This article was written by guest author
Gesina M. Seiler and originally posted in the Wisconsin Employment Law Letter. Ms. Seiler is a litigator and partner with Axley Brynelson, LLP. As a prominent member of Axley’s Affordable Care Act (“ACA”) Team, Ms. Seiler has written countless articles on the ACA, including updates on proposed rules and employer checklists that have been published in various newsletters and other publications across the state. Ms. Seiler has also served as an expert on various ACA panels, and has given several presentations on the topic, including a Wisconsin State Bar Presentation on requirements employers will face in 2013, 2014 and beyond. Ms. Seiler may be contacted at gseiler@axley.com.


This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader must consult with legal counsel to determine how laws or decisions discussed herein apply to the reader’s specific circumstances.


Employers Impacted by U.S. Supreme Court DOMA Ruling

The United States Supreme Court has issued two decisions that expand same-sex marriage rights. In the first, United States v. Windsor, No. 12-307 (June 26, 2013), the Court ruled unconstitutional a law denying federal recognition of legally-married same-sex couples. In the second, Hollingsworth, et al. v. Perry, No. 12-144 (June 26, 2013), the Court effectively permitted same-sex marriage in California. These decisions have wide-ranging implications for employers.

The United States Supreme Court has issued two decisions that expand same-sex marriage rights. In the first, United States v. Windsor, No. 12-307 (June 26, 2013), the Court ruled unconstitutional a law denying federal recognition of legally-married same-sex couples. In the second, Hollingsworth, et al. v. Perry, No. 12-144 (June 26, 2013), the Court effectively permitted same-sex marriage in California. These decisions have wide-ranging implications for employers.

Background
In the watershed case of United States v. Windsor, the Supreme Court struck down Section 3 of the Defense of Marriage Act of 1996 (“DOMA”), holding that it violated the equal protection component of the Fifth Amendment’s Due Process Clause. The text of Section 3 states:  In determining the meaning of any Act of Congress, or of any ruling, regulation, or interpretation of the various administrative bureaus and agencies of the United States, the word “marriage” means only a legal union between one man and one woman as husband and wife, and the word “spouse” refers only to a person of the opposite sex who is a husband or a wife.

Windsor involved Edith Windsor and her late, same-sex spouse, Thea Spyer. Windsor and Spyer were legally married in the couple’s state of residence (New York, which recognized their marriage) at the time Spyer died in 2009. However, pursuant to Section 3 of DOMA, the federal government did not recognize the couple as legally married. Accordingly, Windsor was required to pay more than $363,000 in federal estate taxes on her inheritance of Spyer’s estate. Yet, pursuant to federal tax laws, because New York had recognized the couple’s marriage, this tax would not have been levied against Windsor if Spyer had been a man.

Windsor sued the United States, claiming she was unconstitutionally discriminated against on the basis of her sexual orientation. The U.S. District Court for the Southern District of New York and the U.S. Court of Appeals for the Second Circuit both sided with Windsor and struck down Section 3 of DOMA. The Supreme Court agreed.

Hollingsworth, et al. v. Perry involved a 2008 California ballot initiative known as “Proposition 8.” Proposition 8 defined “marriage” as between one man and one woman. After California voters approved Proposition 8, same-sex couples who had been legally married in California sued the state and its officers claiming Proposition 8 was unconstitutional. The U.S. District Court for the Northern District of California and the U.S. Court of Appeals for the Ninth Circuit both found Proposition 8 to be unconstitutional. The Supreme Court in Hollingsworth ruled the Ninth Circuit lacked standing to hear the appeal.

Implications for Employers
First, the Family and Medical Leave Act of 1993 (“FMLA”) requires private employers who employed at least 50 employees on each working day during at least 20 calendar weeks in the current or preceding calendar year to grant qualifying employees time off to care for their sick spouse. However, under Section 3 of DOMA, the term “spouse” as used in the FMLA meant only “a person of the opposite sex.” Thus, an employee who had legally married his or her same-sex partner in a state that permits same-sex marriage or in a foreign country was not entitled to FMLA leave to care for that partner because the partner was not a “spouse” under federal law.

Now that Section 3 of DOMA has been overturned, employers covered by the FMLA must grant to qualifying employees time off to care for their sick, same-sex spouses.

Second, under the Internal Revenue Code (“IRC”), an employee’s gross income does not include employer-provided insurance coverage, including coverage for a “spouse.” Accordingly, if an employer affords its employees the benefit of putting their “spouses” on their health plan, those spousal benefits are not taxed. Prior toWindsor, this meant that spousal benefits for employees in opposite-sex marriages were not taxed, while spousal benefits for employees in same-sex marriages were taxed. Employers were required to impute the value of an employee’s same-sex spouse’s coverage into the employee’s income.

Now that Section 3 of DOMA has been overturned, the Internal Revenue Service (“IRS”) will revert to its pre-DOMA interpretation of the IRC to determine how to interpret the term “spouse,” meaning the IRS will defer to each state’s law regarding the definition of the term “spouse.” See IRS Revenue Ruling 58-66. Therefore, if an employee’s same-sex partner is considered a “spouse” under state law, the partner’s benefits are not to be considered part of the employee’s gross income and the IRS will not tax that partner’s health benefits.

Consequently, the employee’s net income will decrease, resulting in a decrease in the amount of payroll taxes the employer and employee will be required to pay. Additionally, many employers have put into effect programs that reimbursed same-sex legally-married couples for the additional tax cost imposed upon such couples because of DOMA. Those employers should examine their programs to review continuing necessity or appropriateness.

Same-sex marriage is legal in 12 states (Massachusetts, Connecticut, Iowa, Vermont, New Hampshire, New York, Washington, Maine, Maryland, Rhode Island, Delaware, and Minnesota), the District of Columbia, and three Native American tribes (Coquille Tribe, Suquamish Tribe, and the Little Traverse Bay Bands of Odawa Indians). The Supreme Court’s decision in Hollingsworth will add California to that list.

Employers with operations in multiple states will have to deal with a patchwork of state laws governing what constitutes a spouse. Unsurprisingly, Windsor does not address whether pre-DOMA law will apply retroactively for tax purposes and/or benefit plan purposes. For example, unresolved issues include questions concerning claims for income tax refunds based on the recognition of spousal status, as well as Federal Insurance Contributions Act (“FICA”) tax refund claims by employees and employers and the rights to spousal benefits under pension and health plans. Employers, with the assistance of counsel, should monitor any upcoming guidance from the IRS and U.S. Department of Labor that will direct how employers should address spousal benefits and any retroactive application of Windsor.

Third, since there is no legal requirement that employers provide benefits to their employees at all, Windsor and Hollingsworth do not dictate who must be covered under employers’ benefit plan(s). Rather, most plans explicitly define terms like “spouse” and “marriage.” Now is the time to examine your benefit plan(s) with counsel to ensure that benefits are designed in a manner that is consistent both with the company’s goals and applicable laws.

Finally, “spousal privilege” protects the content of confidential communications between spouses during their marriage from testimonial disclosure. In federal proceedings (e.g., depositions and trials), under DOMA, this privilege did not include the confidential communications of legally-married same-sex partners. Now that Section 3 of DOMA has been struck down, same-sex married couples will almost assuredly be entitled to the same spousal privilege protections as opposite-sex married couples in federal proceedings. Employers should speak to counsel about the implications of this change with respect to any ongoing litigation.

Editor’s note: © 2013 Jackson Lewis LLP. Reprinted with permission. Originally published at www.jacksonlewis.com<http://www.jacksonlewis.com>. Jackson Lewis LLP is a national workplace law firm with offices nationwide.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader must consult with legal counsel to determine how laws or decisions discussed herein apply to the reader’s specific circumstances.


AGC Webinar Shares Best Practices for Engaging Hispanic Workers in Construction

AGC recently hosted a webinar on The Hispanic Workforce: Best Practices for Construction Employers. According to the Center for Construction Research and Training, 30 percent of all construction workers are Hispanic. Therefore, understanding and exploring the impact culture plays when working with a Hispanic workforce is vital to the success of construction companies nationwide. The webinar serves this need and can help contractors provide a safer and more welcoming environment for Hispanic employees. An on-demand version is available for purchase from the AGC Bookstore.

AGC recently hosted a webinar on The Hispanic Workforce: Best Practices for Construction Employers. According to the Center for Construction Research and Training, 30 percent of all construction workers are Hispanic. Therefore, understanding and exploring the impact culture plays when working with a Hispanic workforce is vital to the success of construction companies nationwide. The webinar serves this need and can help contractors provide a safer and more welcoming environment for Hispanic employees. An on-demand version is available for purchase from the AGC Bookstore.

Webinar speakers included Tricia Kagerer, a risk management executive with American Contractors Insurance Group, and Grace Herrera, safety and training manager for ConAgra foods. Both are former risk, safety and training managers for CF Jordan construction, an AGC-member company located in the border city of El Paso, TX. They described their experiences performing workplace safety investigations and interviews with employees in the construction industry, which led them to realize how much of an impact culture has on the way employees behave at work. They also shared many strategies that they put into practice to help improve safety and communication. For example, they found a higher success rate when training Hispanic workers as a team or in small groups, rather than providing individual training.

Kagerer and Herrera also addressed the new Occupational Safety and Health Administration’s (OSHA) enforcement directive using enforcement, outreach and training to protect temporary workers from workplace hazards. The directive is due to a series of reports of temporary workers suffering fatal injuries during the first days on the job. As a result, OSHA’s Compliance Safety and Health Officers (CSHO) are directed to “assess, using records and interviews, whether those workers have in fact received required training in a language and vocabulary they understand.” When providing such training in English to workers who do not speak English as their first language, Herrera advised, trainers should speak clearly and be patient, as many workers are often translating, simultaneously, in their minds. She also explained the importance of selecting a translator who understands the dialect of the workers being trained when using an English-to-Spanish translator. Because many workers use slang, she noted, if the translation is too “proper” or formal, the workers may not understand or the translation itself may become inaccurate.

The information shared in this webinar is essential for the success of any construction company with non-Hispanic trainers and supervisors of Hispanic workers, including but not limited to crew leaders, project managers, superintendents, trainers, HR managers, and senior staff. For the complete on-demand recording of the webinar, including slides and handouts, visit the AGC Bookstore. For more information on safety communications, visit AGC’s Labor and HR Topical Resources web page. Select the main category “Other HR Issues” and the subcategory “Safety Communications.”


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