Sign Up
Stay current with GH&R Newsletters. Click here to sign up.
HR Matters
U.S. Supreme Court Creates New Standard for Bias Retaliation
August 8, 2006
LABOR & EMPLOYMENT NEWS
U.S. Supreme Court Creates New Standard for Bias Retaliation. Recently, the U.S. Supreme Court unanimously broadened the definition of retaliation under Title VII of the 1964 Civil Rights Act (Title VII). The new standard for retaliation includes acts that are "materially adverse" to a reasonable employee, including transfers or suspensions that do not result in a loss of pay, benefits, or privileges. An employer suspended a female forklift driver for 37 days over the Christmas holiday period after she complained about being harassed by her foreman. Although the employer disciplined the foreman, it transferred the female employee to a more physically demanding job. Eventually, the employer reinstated the female employee with pay. The Court emphasized that "material adversity" is significant in evaluating retaliation cases because it is important to separate "significant" from "trivial" harms. Also, the Court noted that retaliation is not just limited to things that occur inside the workplace, since employers can chill dissent and the reporting of discrimination in other ways. (Burlington N. & Santa Fe Ry. Co. v. White)
Employers Have 4 Hours to Provide OSHA Records. C.F.R. Part 1904 provides guidance to employers regarding Form 300 (Log), Form 300A (Summary), and Form 301 (Incident Report). Collectively, the forms are referred to as "Part 1904 records." When an OSHA investigator requests Part 1904 records from an employer, the employer has four business hours to provide the records. For more information on how to respond to an OSHA investigation, contact a GH&R Labor & Employment attorney.
WORKPLACE HEALTH & SAFETY NEWS
Join a Safety Council and Earn a Premium Discount. State fund employers who become active members of local safety councils can receive a one-time, 4-percent premium discount from the BWC. To qualify for the discount, state fund employers must: (1) enroll with a local safety council by Sept. 30, 2006; (2) attend at least 8 monthly meetings from July 1, 2006 to June 30, 2007; (3) send a representative to a chief executive officer event; and (4) submit semi-annual workplace accident reports for calendar year 2006. For more information, contact the BWC at 1-800-644-6292.
Injured Workers May Refuse a Light-Duty Job Based on a Doctor's Advice. The Supreme Court of Ohio recently considered whether a workers' compensation permanent total disability (PTD) claim should be barred because the injured worker refused a job offer. The Industrial Commission approved an application for PTD based on a treating psychologist's report that the injured worker was incapable of "work of any kind, however sedentary or lacking in stress that work may be." The employer appealed the Commission's decision because it had offered the injured worker a light-duty job that the worker never attempted. The Court upheld the Commission's decision on two grounds. First, the injured worker was entitled not to attempt the light-duty job based on his doctor's advice. Second, the Commission had properly relied on the doctor's report since it was not flawed. (State ex rel. Kroger Co. v. Paysen)
IRS Correction Program. The IRS has recently updated its voluntary correction program for qualified retirement plans. The changes are effective September 1, 2006, although employers can start using them now. The new guidance addresses a number of common operational failures, such as loans, exclusion of employees, and spousal consent. The guidance also addresses the availability of correction by plan amendment. Employers who adopt a corrective amendment will have to submit the plan for a determination letter during their plan's normal filing cycle and disclose the corrective amendment. Other changes include the format of the application and lower compliance fees in certain circumstances. This may be a good time for plan sponsors to review their plans for any operational problems.
Calculation of Excise Taxes on Late Elective Deferrals. The IRS recently issued a revenue ruling addressing the calculation of excise taxes on the late deposit of employee elective deferrals into a 401(k) plan. A Department of Labor (DOL) regulation requires that elective deferrals generally be deposited as of the earliest date on which they can "reasonably be segregated" from the employer's general assets. The IRS has ruled that the late deposit of elective deferrals is a loan by the plan to the employer, which is a prohibited transaction. The IRS imposes a 15 percent excise tax on the "amount involved" between the plan and the disqualified person (in this case, the employer). The IRS further determined that for the late deposit of elective deferrals, the "amount involved" was the amount of interest calculated on the deferrals, not the actual amount of deferrals. Payment of the IRS excise tax does not prevent the DOL from assessing civil penalties. Therefore, an employer may also want to file under the DOL's voluntary fiduciary correction program to avoid those additional penalties.
Statutory Penalties for COBRA Violation Can be Costly. An employer assured an employee who was being laid off that his health coverage would remain in effect, and that the employer would pay for his first two months of COBRA coverage. The employee scheduled knee surgery a few days after he was laid off. After his surgery he found out that his employer had allowed his health coverage to lapse even though the premiums had been deducted from his paycheck. No COBRA notice was sent to the employee. The employee sued. The court awarded the employee $119,968.50, of which $90,860 was the maximum statutory penalty for the employer's failure to inform the employee of his COBRA rights. The court awarded the maximum penalty because it felt the employer's conduct was "at best incompetent and at worse fraudulent." This case serves as a reminder that significant penalties can be incurred for COBRA violations. (Shepard v. O'Quinn)
This Newsletter is a periodic publication of Graydon Head & Ritchey LLP and should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general information purposes only, and you are urged to consult your own advisor concerning your situation and any specific legal question you may have.