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HR Matters
HR Matters - January 2007 - Volume XI, Issue 117
January 30, 2007
LABOR & EMPLOYMENT NEWSEmployees of Parent Company Are Not Always Considered For FMLA Purposes. A customer service representative in New Hampshire was fired by her employer for taking time off to care for her daughter. To be eligible under the FMLA, an employee must work for an employer with 50 or more employees within 75 miles of the employee’s worksite. The employee worked for a facility that employed fewer than 50 employees. However, the employee’s facility operated as a wholly-owned subsidiary of a larger auto parts retailer that employed more than 50 workers at a separate site. Although the employee argued that the auto parts retailer’s employees should count toward fulfilling the FMLA’s 50 employee requirement, a federal Court of Appeals determined that the employee could not count the employees in her facility and the larger auto parts facility because the two companies were not a single “integrated employer” for purposes of the FMLA. The Court further held that while many of the employee’s employment documents included the auto parts retailer’s name or logo, the two companies could not be combined for FMLA purposes because the facilities did not have common management, interrelated operations, or centralized control of labor relations. (Engelhardt v. S.P. Richards Co.)
Written Reprimand Without Tangible Harm Found Not to be an “Adverse Act." An African American employee with the Georgia Department of Transportation received a written reprimand for alleged computer misuse. The employee alleged that white employees engaged in similar or worse misconduct, but they were not disciplined for their misconduct. The African American employee then sued the Transportation Department for disparate treatment race discrimination. To establish a prima facie case of disparate treatment race discrimination, an employee must show, among other things, that he/she suffered an adverse employment action. To prove the existence of an “adverse employment action” in a racial discrimination case, an employee must show a serious and material change in the terms, conditions, or privileges of his/her employment. A federal Court of Appeals found that the African American employee’s written reprimand was not an adverse employment action because it did not lead to any tangible harm in the form of lost pay or benefits, and there was no evidence that the employee was denied job promotions as a result of the reprimand. (Wallace v. Georgia Dep’t of Transp.)
IMMIGRATION NEWS
Don’t Miss Out on H-1B Visas. Now is the time for employers interested in obtaining first-time H-1B visas to begin planning. An H-1B visa is a good option for employers looking to supplement their existing labor force with highly skilled temporary foreign workers. Typically, H-1B visas are sought for workers employed in occupations such as architect, engineer, computer programmer, accountant, doctor, or college professor.
Each fiscal year, a cap is placed on the amount of temporary workers that can obtain an H1-B visa. Last year, the cap for non-exempt H1B applicants, was reached many months before the start of fiscal year 2007. Because it does not appear that Congress will provide any cap relief in the near future, employers should begin planning now. Applications for jobs starting in fiscal year 2008 (which runs from October 1, 2007 until September 30, 2008), can be filed beginning April 1, 2007. Because of the quickness that the cap was reached last year, we suggest that all H1B applications be made in April 2007.
If your company is considering filing visas for H-1B workers, you should consider immediately initiating those cases. Please contact Katherine Lasher at 513-629-2752 if you need assistance in this area.
WORKPLACE HEALTH & SAFETY NEWS
Temporary Total Benefits Terminated for Violation of Work Rule. The Ohio Supreme Court recently ruled that the Industrial Commission (“Commission”) properly terminated temporary total disability benefits for a 16-year-old fast food worker, who was severely burned at work. The 16-year-old, and two of his co-workers, was severely burned when a deep fryer exploded after the 16-year-old cleaned it with water in violation of a company rule and several warnings. After investigating the accident, the company terminated the 16-year-old for misconduct and requested the Commission to terminate his disability benefits because he had voluntarily abandoned his job. The Commission agreed. The Court upheld the termination of disability benefits because the worker willfully violated work rules and repeated warnings, and his injuries did not result from simple negligence. (State ex. Rel. Gross v. Indus. Comm’n of Ohio)
EMPLOYEE BENEFITS & EXECUTIVE COMPENSATION NEWS
Mental Health Parity Act Extended. The Mental Health Parity Act (the “Act”), which was set to expire on December 31, 2006, has been extended until December 31, 2007. The Act applies only to group health plans that provide mental health benefits and are sponsored by employers that have 50 or more employees. The Act prevents group health plans from placing annual or lifetime dollar limits on mental health benefits that are lower or less favorable than the limits for medical or surgical benefits offered under the plan. However, group health plans can impose some restrictions on mental health benefits, such as increasing co-payments or limiting the number of visits. Further, the Act does not apply to substance abuse or chemical dependency treatment. The Act also provides an exemption to group health plans if the application results in an increase of at least one percent in either the cost or coverage under the plan. In order for a qualifying plan to claim this exemption, the plan must notify the participants, beneficiaries and the DOL that it is claiming the exemption.
IRS Guidance. The IRS recently issued Notice 2007-7 to provide guidance on certain provisions of the Pension Protection Act of 2006 (the “PPA”). The Notice clarifies that the new hardship provision, which permits a participant’s beneficiary to receive a hardship distribution for medical, tuition, or funeral expenses, is an optional provision employers may, but are not required to, adopt. The PPA also provides that a direct rollover to a designated non-spouse beneficiary’s IRA constitutes an eligible rollover distribution. This provision is also optional and the 402(f) notice and mandatory 20 percent withholding requirements do not apply to this type of distribution. The PPA also requires faster vesting of nonelective or profit sharing contributions. The IRS explained that a plan may contain two vesting schedules, one for pre-act contributions and one for post-act contributions, so long as the plan separately accounts for the contributions.
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.