AGC's Human Resource and Labor News - April 10, 2015 / Issue No. 02-15 (Print All Articles)

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Save The Date: Construction HR & Training Professionals Conference Set for Oct. 7-9 in St. Louis, MO

HR and Training Professionals in the Construction Industry will come together in October for AGC’s Annual Construction HR and Training Professionals Conference.

HR and Training Professionals in the Construction Industry will come together in October for AGC’s Annual Construction HR and Training Professionals Conference.  The conference will take place October 7-9 in St. Louis, MO at the Hyatt Regency at the Arch.   Registration and hotel information will be available at http://www.agc.org/trainingHRConference in the coming weeks.

The conference will continue to offer unique educational and networking opportunities for HR, training, 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.

Back this year is a special strategic management workshop for HR and training professionals, which will be held the afternoon of Oct. 7. This pre-conference workshop will help participants understand their firm’s top business challenges in order to align HR and training with the company’s strategic corporate goals.  

Mark your calendars now and stay tuned for more details.  We look forward to seeing you in St. Louis!

For more info, contact Tamika Carter, Director, Construction HR, at cartert@agc.org or (703) 837-5382.


AGC to Host Webinars on E-Verify & Form I-9 Compliance April 28 & 29

Deceptively considered one of the simplest forms completed during the hiring process, Form I-9 is often riddled with errors that could place your company in jeopardy if audited by the U.S. Department of Homeland Security (DHS).

Deceptively considered one of the simplest forms completed during the hiring process, Form I-9 is often riddled with errors that could place your company in jeopardy if audited by the U.S. Department of Homeland Security (DHS).  Its companion, E-Verify, often leaves employers confused about what to do when an employee's documents may not check out.  To help construction contractors avoid the pitfalls of non-compliance, AGC is hosting two webinars in April.  An April 28 webinar will address the real deal on Form I-9, and an April 29 webinar will address issues surrounding E-Verify. Both webinars are ideal for project managers, superintendents, office managers, HR staff, or anyone who signs Form I-9 and/or uses E-Verify. 

Each webinar will be held from 2:00-3:30 p.m. EDT.  To register for the webinar on Form I-9, click here, and to register for the E-Verify webinar, click here.

On April 28, attendees will learn to avoid the most common mistakes made while completing Form I-9 plus best practices for completing the form on new hires before the first day of work, photocopying documents, dealing with missing forms, handling remote hires and re-hires, and using the Spanish-language Form I-9. On April 29, attendees will learn about recent changes and updates in E-Verify plus best practices for overcoming the particular challenges associated with using E-Verify in the construction industry.  Dave Basham, Management & Program Analyst for the U.S. U.S Citizenship & Immigration Services Division of DHS, will be the presenter on both days. 

Both webinars are ideal for project managers, superintendents, office managers, HR staff, or anyone who signs Form I-9 and/or uses E-Verify on behalf of the company.


How to Prepare for New “Quickie Election” Rule Covered at AGC Convention

Contractors concerned about enhanced opportunities for union organizing under new regulations can take steps now to be prepared, explained attorney Rick Samson of Ogletree Deakins at AGC of America’s Annual Convention in San Juan, PR.  Samson spoke at a March 18 session titled “Understanding and Preparing for New Union Representation Procedures” hosted by the Open Shop Committee and Chairman Bob Lanham.

Contractors concerned about enhanced opportunities for union organizing under new regulations can take steps now to be prepared, explained attorney Rick Samson of Ogletree Deakins at AGC of America’s Annual Convention in San Juan, PR.  Samson spoke at a March 18 session titled “Understanding and Preparing for New Union Representation Procedures” hosted by the Open Shop Committee and Chairman Bob Lanham. 

The new regulations expedite the timeframe between the date when a union files a petition for a Board-supervised election to represent a group of employees and the date of the election.  They also expand the breadth of information that targeted employers must provide to the union in the shortened timeframe and may defer the resolution of certain disputes until after the election.  Samson explained the details of the changes and the impact on both open-shop and union contractors.  The rule is scheduled to take effect on April 14, although an AGC-supported lawsuit to block the rule is currently pending.

Rather than waiting for a notice of a union election petition, Samson advised, a concerned contractor can prepare in advance by taking such steps as:  identifying possible bargaining units in the workforce; identifying who is a statutory supervisor; preparing draft position statements; compiling data on the union, ensuring that wages and benefits are competitive and that personnel policies are legal and fair; and training managers and supervisors.  Working with a labor attorney and/or consultant may be needed, as this is a highly specialized area.

Handouts from the session are posted on the Labor & HR Topical Resources page of AGC’s website at www.agc.org/topicalresources.  Select the main category “Unions/NLRA” and the subcategory “Union Organizing Campaigns & Representation Elections.”

On behalf of AGC members who could not attend the session, the Open Shop Committee is planning to cover this topic again during its next quarterly web meeting.  The date is not yet set but will be announced soon via the Open Shop e-Forum and other AGC communications.

For more info, contact Denise Gold, Associate General Counsel, at goldd@agc.org or (703) 837-5326.


Building Trades President McGarvey Shares Views and Priorities at AGC Convention

North America’s Building Trade Unions (the Building Trades) “will work with whoever will work with us,” said its president Sean McGarvey during a session at AGC of America’s Annual Convention on March 19 in San Juan, PR.  “We’re not about political parties.  We’re about [construction workers]…Both parties have changed, and we have no permanent friends and no permanent enemies.  That’s our approach,” he said.

North America’s Building Trade Unions (the Building Trades) “will work with whoever will work with us,” said its president Sean McGarvey during a session at AGC of America’s Annual Convention on March 19 in San Juan, PR. “We’re not about political parties. We’re about [construction workers]…Both parties have changed, and we have no permanent friends and no permanent enemies. That’s our approach,” he said.

The comments were made in the context of McGarvey sharing his perspective on last year’s battle for multiemployer pension reform.  With cooperation between AGC and the Building Trades stronger than ever, we were able to accomplish critical legislative changes in a very challenging political environment, he noted.  We’re also working shoulder-to-shoulder to advance the gas tax and infrastructure funding but are not likely to get very far in the near future, according to McGarvey.  He sees success more likely under the next Administration and is encouraged to see that expected presidential candidates from both parties already have infrastructure investment as part of their platforms.

McGarvey also spoke of political battles at the state level, where initiatives to enact right-to-work laws and to repeal prevailing wage laws have been gaining momentum.  He expressed confidence that organized labor will successfully block those initiatives.  He reported that union numbers have actually gone up in Indiana since the state enacted right-to-work legislation in 2012, conceding, though, that much of that growth is attributable to replacement of workers lost to the industry during the recession. 

 

On the topic of labor supply and training, McGarvey talked about his focus on recruiting minorities, women, and veterans into the industry, particularly in major metropolitan areas.  He cited the Building Pathways pre-apprenticeship program in Boston as an example.  The Building Trades and employers sponsor 1600 training facilities across the U.S. and 300 in Canada, reported McGarvey, at a cost of over $1 million a year.  “We have a phenomenal training infrastructure, but we’re terrible at marketing it,” he said.  At the beginning of his remarks he showed the audience a new video created by the Building Trades that showcases this training.  He also shared that he regularly meets with CEOs in the oil, gas, and nuclear industries – big construction owners particularly for maintenance work – to discuss their needs and concerns.

The session was presented by AGC’s Union Contractors Committee and facilitated by Chairman Vic DiGeronimo, Jr.

For more info, contact Denise Gold, Associate General Counsel, at goldd@agc.org or (703) 837-5326.

 


NLRB Issues Guidance Concerning Employee Rules

On March 18, 2015, the general counsel for the National Labor Relations Board (NLRB or Board) issued a Report Concerning Employer Rules.

On March 18, 2015, the general counsel for the National Labor Relations Board (NLRB or Board) issued a Report Concerning Employer Rules.  The report was issued in an effort to provide guidance on the use of employer rules as they relate to the National Labor Relations Act (NLRA).  Using a few of the most frequently litigated employee handbook rules, the report includes several examples of common employee handbook policies and why the Board may or may not find those policies to be lawful.  Both union and non-union employers may find this information useful, as both are subject to the NLRA. 

The first part of the report address the legality of employer rules pertaining to the following topics:

  • Confidentiality;
  • Employee conduct;
  • Third-party communications;
  • Restricting, banning or protecting the use of company logos, copyrights and trademarks;
  • Restricting photography and recordings, and related equipment;
  • Restricting employees from leaving work; and
  • Conflicts-of-interest.

The second part of the report discusses rules from a Wendy’s International LLC handbook that the Board deemed unlawful along with revised, lawful rules that Wendy’s adopted under a settlement agreement with the Board.

Employers are advised to carefully review their handbooks to ensure that all of their workplace policies comply with the Board’s current guidance.  Because of increased NLRB scrutiny of such matters and the often blurry line between lawful and unlawful rules, consultation with a qualified labor attorney may be in order.

For information related issues, visit AGC’s Labor & HR Topical Resources web page.  The primary category is “Unions/NLRA” and the subcategory is “Protected Concerted Activity.”


Labor Department Publishes Videos on Davis-Bacon Wage Survey Process and Form, Plans More Survey Briefings

The Wage & Hour Division (WHD) recently made available on its website two video presentations for construction employers regarding Davis-Bacon Act wage surveys.

The Wage & Hour Division (WHD) recently made available on its website two video presentations for construction employers regarding Davis-Bacon Act wage surveys.  One presentation, the Davis-Bacon Wage Survey Process, explains how Davis-Bacon wages are established, as well as survey instructions and the importance of survey participation.  The other presentation, Completing WD-10, walks construction contractors through the process of completing Form WD-10, the Davis-Bacon wage survey form.  The videos were created in response to a request from AGC to make information more easily accessible to contractors electronically, rather than requiring travel to live, in-person events.  Both videos are located on WHD’s website. 

In an effort to increase survey participation among contractors, WHD informed AGC that it is also planning to test the use the webinars to conduct pre-, mid- and post-survey briefings.  Historically, the agency only conducted pre-survey briefings to educate contractors prior to the start of Davis-Bacon wage survey.  Pre-survey briefings were live, in-person events that required employers to miss time away from the office to travel to and attend such events.   According to WHD, adding mid-survey briefings will help to educate contractors and interested parties on the status of a survey that is in-progress.  Post-survey briefings will be provided once a Davis-Bacon wage determination is published, where WHD will provide contractors with information regarding the results of the survey and the published rates.

For more information about Davis-Bacon wage surveys, including survey status by state, visit WHD’s website.  For more information about the Davis-Bacon Act, visit AGC’s Labor & HR Topical Resources webpage.  The primary category is “Wages & Benefits.” The secondary category is “Davis-Bacon Act.”


IRS Releases Final Instructions, Forms for Employer Information Reporting Requirements Under Health Care Law

The Department of the Treasury and the Internal Revenue Service (IRS) recently released final instructions and tax forms for the Affordable Care Act’s (ACA) information reporting requirements for employers and health insurers under Internal Revenue Code sections 6055 (Forms 1094-B and 1095-B) and 6056 (Forms 1094-C and 1095-C).

The Department of the Treasury and the Internal Revenue Service (IRS) recently released final instructions and tax forms for the Affordable Care Act’s (ACA) information reporting requirements for employers and health insurers under Internal Revenue Code sections 6055 (Forms 1094-B and 1095-B) and 6056 (Forms 1094-C and 1095-C). The agencies also released final transmission forms that will be used to submit the information to the IRS. The IRS initially released the draft tax forms on July 24, 2014, and the draft instructions on August 28, 2014. The final forms and instructions are largely consistent with draft forms and instructions released last summer. Instructions for electronic filing of the information returns are under development. Employers who file at least 250 forms annually are required to file electronically.

Instructions for section 6056 state that employers must provide information to the IRS and employees about coverage that employers offer to employees. Section 6055 requires employers who offer self-insured plans and insurers to report to the IRS information on individuals enrolled in coverage, including employee and dependent Social Security numbers. However, the final instructions for forms 1094-B and 1095-B clarify that health insurers may provide taxpayer identification numbers (TINs) for covered individuals who do not have Social Security numbers. The information reporting requirements generally apply to large employers under the ACA, i.e. employers with at least 50 full-time equivalent employees.

Employers must collect information about the coverage period beginning January 1, 2015, the effective date of the employer mandate. Information returns will be filed for the first time in 2016. The final regulations apply the same filing schedule used for Forms W-2 and 1099 to the section 6055 and 6056 reporting. The rules provide that section 6055 and 6056 returns must be filed annually with the IRS by March 31 if filing electronically (or by February 28 otherwise) of the year immediately following the calendar year to which the return relates. Statements to employees must be provided annually by January 31.

Editor’s Note: The content of this article was contributed by Heather Meade, Sarah Egge and Daniel Esquibel of Ernst & Young’s Washington Council EY Practice (WCEY).   This information should not be relied upon as legal or tax advice. 

For additional ACA resources and information, visit AGC’s Affordable Care Act webpage.


Affordable Care Act Cadillac Tax Questions Answered

The Cadillac tax of the Affordable Care Act (“ACA”) begins in 2018.  While many employers recently have adjusted health benefit coverage levels to satisfy the legal minimums of the Employer Mandate, the Cadillac tax may require these same employers to once again adjust coverage levels but this time to avoid exceeding maximum levels specified by ACA.

The Cadillac tax of the Affordable Care Act (“ACA”) begins in 2018.  While many employers recently have adjusted health benefit coverage levels to satisfy the legal minimums of the Employer Mandate, the Cadillac tax may require these same employers to once again adjust coverage levels but this time to avoid exceeding maximum levels specified by ACA.

This brief Q&A describes the tax and the recent IRS Notice 2015-16 describing tentative rule-making proposals by the IRS.

Q1:      What is the Cadillac tax percentage?

A1:       40%.

Q2:      To what health care costs does the 40% apply?

A2:       The tax does not apply to an employer’s entire cost of coverage for its employees during a tax year.  It applies only to the portion of an employer’s health care costs that exceed applicable thresholds set forth in the Code for such tax year.  If an employer’s cost exceeds the applicable threshold, an employer is deemed to provide high cost or Cadillac coverage and is subject to the tax.

Q3:      What are the thresholds?

A3:       The thresholds for 2018 are $10,200 annually for single coverage and $27,500 annually for family coverage.

Q4:      How are the thresholds adjusted?

A4:       There are several adjustments contemplated by the Code:

  • The thresholds are increased by $1,650 and $3,450 respectively if a majority of employees covered by the plan are engaged in a high risk profession.  The Code defines construction as a high risk profession among numerous others. 
  • For multiemployer plans, the threshold for all employees is the family threshold (adjusted for high risk, if applicable). 
  • The Code contains special rules for 2018 inflation adjustments to the thresholds. 
  • After 2018, the thresholds will increase according to a cost of living formula. 
  • The Code also provides an age and gender adjustment to the thresholds but only if the demographics of an employer’s plan population substantially vary from the demographics of the national workforce.

Q5:      Who is liable for the tax?

A5:       If an employer provides high cost fully-insured coverage, the insurance company is liable for the tax.  If multiple insurance companies issue coverage to a plan, the tax is apportioned ratably on the basis of each carrier’s premiums.  If an employer provides high cost self-insured coverage, the employer generally is liable for the tax if it administers the plan.  For a multiemployer plan, the board of trustees will be liable for the tax if it provides high cost coverage.

Q6:      Who is required to calculate the tax liability for high cost coverage?

A6:       The employer is required to calculate the tax and, for a fully-insured plan, notify its insurance carrier of tax owed by the carrier, if any.  The employer must also notify the Secretary of the Treasury.  For a multiemployer plan, the board of trustees must calculate the tax, if any, and notify the Secretary.

Q7:      Are there penalties if an employer miscalculates and/or underpays tax for high cost coverage?

 A7:      Yes.  In addition to paying any unpaid tax (or coordinating payment of unpaid tax by the plan’s insurance carrier), the employer also is subject to an excise tax equivalent to the amount of the underpayment plus interest.  The IRS may forgive the excise tax if an employer demonstrates that the error occurred despite the exercise of reasonable diligence or if a good faith error is corrected within 30 days of its discovery.

Q8:      How is the annual cost of coverage determined?

A8:       For a fully-insured plan, the annual cost is equivalent to the annual premiums.  For a self-insured plan, the Code requires annual cost to be determined in a manner similar to COBRA.  The IRS dedicated much of its recent Notice 2015-16 to the issue of how to calculate the annual cost of coverage in self-insured plans.  The agency discussed the COBRA methodology and announced in the Notice that it will issue regulations on the issue. 

Q9:      What COBRA methodology is relevant to determining the cost of self-insured coverage under the Cadillac tax?

A9:       COBRA permits two methods of calculating the cost of self-insured coverage: the actuarial method and the past-cost method.   The actuarial method sets the cost by actuarial projection before the tax year begins based on plan design and plan demographics.  The past-cost method looks back to total plan costs incurred during a prior 12-month determination period and then sets the annual cost before the current tax year begins based on that past amount adjusted by an inflation factor as published by the Department of Commerce.  The IRS in Notice 2015-16 has requested comments on the specific costs to be incorporated into these calculations (i.e. claims submitted v. claims incurred, administrative expenses, a ratable portion of overhead, etc).

Q10:    Is an employer free to choose either cost calculation method for a self-insured plan?

A10:     Yes.  The employer generally may elect either method.  However, an employer is not permitted to use the past-cost method where a significant demographic change occurred in the plan population during the determination period.  Also, per its Notice, the IRS is considering a rule requiring an employer to maintain its elected method for a minimum period of 5 years following its election.  The IRS believes this would prevent abuse that could occur if employers swapped methodologies from one year to the next.

Q11:    Are there drawbacks to the actuarial or past-cost method for self-insured coverage?

A11:     Yes.  The IRS Notice acknowledges the awkwardness of adapting these COBRA methodologies to the Cadillac tax in that both methodologies result in an employer’s tax liability generally being established at the outset of the applicable tax year.  This is so because COBRA requires premiums to be set in advance and therefore both methodologies result in the cost of coverage being determined prospectively; however, traditionally, taxes are determined retrospectively based on actual facts and circumstances that occurred during a taxable period.  In the Notice, the IRS requested comments on the feasibility of basing the potential tax liability on actual costs incurred during a tax year (rather than using the COBRA methodologies which establishes costs in advance of the tax year). 

Q12:    Can an employer have multiple cost calculations within a single plan for a tax year by separating or combining employees into sub-groups based on objective criteria?

A12:     Yes.  There are several methods required and/or permitted:

  • The IRS requires that an employer separate employees based on single or family coverage.  The cost for the single group would then be determined separately from the cost of the family group. 
  • The IRS Notice proposes a required separation by benefit package (i.e. HMO v. PPO, gold plan v. silver plan).  The cost for each benefit package would then be determined separately.
  • The IRS Notice proposes a permissive separation based on other traditional criteria such as nature of compensation, job category, collectively-bargained status, geography, and similar categories.
  • The Code permits pre-65 and post-65 retirees to be combined into one group.

Each level of separation or combination is layered on top of the prior level.  For example, an employer with single and family HMO and PPO coverage would have four sub-groups of cost calculation: single HMO, single PPO, family HMO and family PPO.  After separating and/or combining the various groups, the employer would determine whether it exceeded the Cadillac tax threshold per each group and it would be liable for the tax on a group-by-group basis (i.e. not on its total plan population).

Q13:    Are pre-tax salary reduction contributions included in an employer’s cost calculation?

A13:     For Health FSAs, the Code states that such contributions are included in the cost calculation.  For HSAs, the IRS Notice proposes that such contributions be included in the cost calculation.

Q14:    How should an employer determine the annual cost of an HRA?

A14:     The IRS Notice proposes that an employer determine the annual cost of an HRA by adding all claims paid by the HRA during the tax year and dividing it by the number of participants.

Q15:    Does the Cadillac tax take effect for all employers on January 1, 2018?

A15:     It depends.  The tax applies to taxable years beginning on or after January 1, 2018.  A taxable year is a company’s fiscal year.  If an employer’s taxable year is the calendar year, the tax begins on January 1, 2018; otherwise, the tax will begin on some later date in 2018.  For fully-insured plans, the insurance carrier’s taxable year may also be relevant because the insurance carrier is the entity liable for the tax.   For self-insured plans, the effective date is generally the start date of the employer’s taxable year.  For multiemployer plans, the effective date is the first day of the plan year.

Editor’s Note:  This article was written, and is reprinted with permission, by Mark Levengood) and Jennifer Abrams of the law firm of Susanin, Widman & Brennan, P.C., located in Wayne, PA.  Susanin, Widman & Brennan, P.C., concentrates its practice in labor law, employment law, employee benefits, and construction law.  In addition to construction claims and litigation, the firm provides advice to and representation of management in employment discrimination litigation; sexual and other forms of harassment claims; wage and hour investigations; occupational, safety and health inspections; employee benefits; unfair labor practice charges; collective bargaining negotiations; and labor disputes, union campaigns, strikes, pickets, grievances and arbitrations.  Its practice is national in scope, and its clients range in size from small, privately held businesses to Fortune 500 companies.  Visit Susanin, Widman & Brennan at www.swbcounsellors.com.


AGC Submits Comments on Multiemployer Pension Reform Implementation

On April 6, AGC filed two group comment letters on implementation of the Multiemployer Pension Reform Act of 2014 (MPRA). 

On April 6, AGC filed two group comment letters on implementation of the Multiemployer Pension Reform Act of 2014 (MPRA).  One letter was sent to the Pension Benefit Guaranty Corporation (PBGC) in response to a Request for Information about plan partitions and facilitated mergers.  The other letter was sent to the Internal Revenue Service (IRS) in response to a Request for Information about suspensions of benefits.    

The following contractor associations joined AGC on the comments:  The Association of Union Constructors, Mechanical Contractors Association of America, National Electrical Contractors Association, and Sheet Metal and Air Conditioning Contractors’ National Association.  Professionals from Horizon Actuarial Services and the law firm Cox, Castle & Nicholson assisted in the drafting.

The letter to IRS highlights that the benefit suspensions under MPRA are designed to address the pressing needs of plans in critical and declining status to act expeditiously to avoid insolvency while saving the maximum amount of benefits possible. AGC believes the intent of the statute is clear, but that the approval process should include a review of the decision‐making process in designing the benefit suspensions and not a full reconsideration of the judgment of the plan trustees and their advisors. AGC asked IRS to provide guidance that clearly sets expectations for the applications while not creating unnecessary burdens on plan trustees that could delay necessary action. Once guidance has been issued, IRS should review and approve applications for benefit suspensions as quickly as possible.

The letter to PBGC reiterates comments to the IRS regarding the need for expedient review.  It further asserts that, because partitions and facilitated mergers will usually occur concurrently with benefit suspensions, it is important for PBGC and Treasury to communicate actively with each other throughout the approval process.

AGC will continue to monitor the implementation of MPRA and comment when appropriate. AGC is also advocating for additional legislative reforms to the multiemployer system, including the creation of new plan designs which would further help stabilize the system while limiting employer liability and providing lifetime retirement security to plan participants.

For more information, contact Jim Young at youngj@agc.org or Denise Gold at goldd@agc.org.


Supreme Court Questions Employer's Light Duty Policy in Pregnancy Discrimination Case

The U.S. Supreme Court ruled in a March 25 decision that an employee should have her day in court to determine whether or not United Parcel Service, Inc. violated the Pregnancy Discrimination Act when it denied light-duty work to a pregnant employee who was restricted from heavy lifting by her medical provider.

The U.S. Supreme Court ruled in a March 25 decision that an employee should have her day in court to determine whether or not United Parcel Service, Inc. violated the Pregnancy Discrimination Act when it denied light-duty work to a pregnant employee who was restricted from heavy lifting by her medical provider.

UPS had a policy limiting work accommodations (such as light duty) to three classes of workers regardless of whether or not the workers requested light duty as a result of pregnancy. The Court held that the employee had shown that there was a genuine factual dispute as to whether or not UPS treated some employees more favorably without having reasonable, non-discriminatory reasons for doing so.

Background
The Pregnancy Discrimination Act (PDA), enacted in 1978, amended the definition of sex discrimination under Title VII of the Civil Rights Act to include discrimination based on pregnancy. Pursuant to the PDA, employers are prohibited from discriminating against employees because of pregnancy, childbirth, or related medical conditions, and employers are prohibited from singling-out pregnancy for different treatment when it comes to
benefits or other conditions of work.

Last year, the Equal Employment Opportunity Commission (EEOC) published a set of guidelines interpreting the meaning of the PDA and directing employers to treat pregnant employees the same as other employees requesting light-duty work. Under the EEOC’s interpretation, employers should not be permitted to reserve light-duty work for workers suffering on-the-job injuries. The Supreme Court stated that the guidelines were inconsistent with prior positions advocated by the Government, and the Court did not give them any weight in formulating its decision.

The Driving Force
Peggy Young was employed by UPS as a part-time delivery driver, delivering packages from its facility based in Landover, Maryland. In 2006, Young became pregnant and was advised by her medical provider to refrain from lifting heavy packages. Young provided her supervisor at UPS with a doctor’s note stating that she should not lift more than 20 pounds during the first 20 weeks of her pregnancy and that she should not lift more than 10 pounds thereafter. UPS’s occupational health manager informed Young that, according to company policy, Young would not be permitted to work there as long as she had the lifting restriction, even though Young was willing to do light-duty work.

UPS had a policy of accommodating workers with light-duty restrictions if the restrictions were the result of a work-related injury. (Its policy also permitted accommodations for workers who were considered “disabled” under the ADA and for drivers who temporarily were unable to drive because of DOT certification requirements, but the pertinent provision in this case was the accommodation for workers injured on the job.)

Because Young’s restriction was not the result of a work-related injury, UPS denied her request for light-duty work. Since Young was not able to perform the regular duties of her job, which required her to be able to lift and deliver heavy packages, UPS did not allow her to return to work at all. Young exhausted all of her FMLA leave time and went on an extended, unpaid leave of absence, and her medical benefits eventually expired. Young eventually returned to work at UPS at some point after the birth of her child. She filed suit against UPS for damages, including her loss of income and benefits, alleging that UPS violated the PDA by denying her employment during the time of her restriction instead of assigning her to a light-duty position.

Question Before the Court
The trial court dismissed Young’s lawsuit before trial because: (a) Young did not have any direct evidence of discrimination; and (b) she did not establish that she had been treated less favorably than any nonpregnant employees with similar work restrictions. Under established anti-discrimination law, Young was required to prove one or both of these elements in order to have a valid claim of discriminatory treatment by her employer. The U.S. Court of Appeals for the Fourth Circuit affirmed the decision of the trial court, holding that the PDA does not require employers to give special treatment to pregnant employees.

The parties called upon the Supreme Court to address the validity of UPS’s policy in general, in light of the mandates of the PDA prohibiting discrimination based on pregnancy. Young stressed the need for the Court to interpret one clause of the Pregnancy Discrimination Act, which states that "women affected by pregnancy, childbirth, or related medical conditions shall be treated the same for all employment-related purposes, including receipt of benefits under fringe benefit programs, as other persons not so affected but similar in their ability or inability to work."

Young argued that this clause means that she should have been treated the same as workers requesting light duty due to work-related injuries, even if there were other nonpregnant employees who were denied light-duty work. The lower courts had interpreted this argument as giving pregnant workers a “most favored nation” status in the realm of all employees.

While the Court acknowledged that it was doubtful that Congress intended such a result, the Court emphasized that, when an employer implements a policy that, in effect, imposes a burden on pregnant workers, an employee should be afforded the opportunity to show that the reasons for the policy are insufficient to justify the burden.

The Court’s Ruling
The Court found that Young should be afforded that opportunity. Finding that an employee can create an issue for trial by providing evidence that the employer accommodated “a large percentage of nonpregnant workers while failing to accommodate a large percentage of pregnant workers.” The Court stated that Young had shown there was a real question as to “whether UPS provided more favorable treatment to at least some employees whose situation cannot reasonably be distinguished from hers.” The Court left it to the lower court to determine whether or not she had also shown that there was a real question as to whether UPS’s reasons for having treated Young less favorably than it treated those other nonpregnant employees were pretextual.

What Does the Decision Mean for Employers?
Although the question before the Court was limited to the narrow issue of UPS’s light-duty policy (which has since been revised), the Court’s holding could be interpreted as applying to a broader range of employer practices. What this means for employers is that pregnant employees may, in effect, enjoy a “most favored nation” status among the realm of impaired employees, and employers should review the reasons for any policy that might impose a burden on pregnant employees. If a policy makes accommodations for some workers but not others, it would be prudent to consider what accommodations might be made for a pregnant employee in order to avoid running afoul of the PDA.

Young v. UPS, Case No. 12–1226 (S.Ct., 3/25/15).

Editor’s Note:  This article was written by guest author Sally F. Barron of the law firm Fisher & Phillips, LLC, and reprinted from the original with permission.  It is not intended to be, and should not be construed as, legal advice for any specific fact situation.


Definition of Spouse Expanded Under FMLA, Halted in Four States by Federal Judge

On March 26, the U.S. Department of Labor’s (DOL) recently announced change to federal regulations under the Family and Medical Leave Act (FMLA) that would expand the definition of spouse to include same sex marriages was halted by a federal judge in Texas.

On March 26, the U.S. Department of Labor’s (DOL) recently announced change to federal regulations under the Family and Medical Leave Act (FMLA) that would expand the definition of spouse to include same sex marriages was halted by a federal judge in Texas.  The revised regulations were scheduled to take effect on March 27.  Judge Reed O'Connor of the U.S. District Court for the Northern District of Texas granted a request for preliminary injunction as requested by attorneys general for Texas, Arkansas, Louisiana, and Nebraska.  The states argued that the final rule unlawfully interferes with state laws that prohibit same-sex marriage and bar recognition of out-of-state same-sex marriages.  While the preliminary injunction remains in effect, the rule will be enforced in the other 46 state.  DOL revised the regulations in response to the U.S. Supreme Court’s ruling in United States v. Windsor. That ruling struck down the federal Defense of Marriage Act provision that interpreted “marriage” and “spouse” to be limited to opposite-sex marriage for the purposes of federal law. 

The regulations were to update the FMLA’s definition of spouse so that an eligible employee in a legal same-sex marriage would be able to take FMLA leave for his or her spouse regardless of the state in which the employee resides. Currently, the regulatory definition of spouse does not include same-sex spouses if an employee resides in a state that does not recognize the employee’s same-sex marriage.  Under the revised rule, eligibility for federal FMLA protections was based on the law of the place where the marriage commenced. This “place of celebration” provision was to allow all legally married couples, whether opposite-sex or same-sex, to have consistent federal family leave rights regardless of whether the state in which they currently reside recognizes such marriages.

AGC will continue to monitor the outcome of this case and will provide updates to members as they become available.


OFCCP Creates LGBT Resources for Federal Contractors

In response to requests from federal and federally assisted contractors, the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) has created a directory of organizations and other entities that offer resources and guidance to employers around issues related to creating an inclusive workplace for lesbian, gay, bisexual, and transgender (LGBT) employees.

In response to requests from federal and federally assisted contractors, the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) has created a directory of organizations and other entities that offer resources and guidance to employers around issues related to creating an inclusive workplace for lesbian, gay, bisexual, and transgender (LGBT) employees.  The request came from employers wanting to better understand how to treat employees and job applicants without regard to their sexual orientation or gender identity following the publication of the Final Rule implementing Executive Order 13672

The directory, which includes information from both the public and private sectors, will be updated periodically.  OFCCP welcomes the use of the directory by private sector employers who may find it to be informative, even though it was developed for public sector use and may not be directly applicable. Employers may access the new directory by visiting OFCCP’s website.


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