Blog : Labor and Employment Issues

Requests for Employee’s Medical Information Restricted by GINA

Employers should ensure that their managers and human resources personnel are familiar with the requirements of the Genetic Information Nondiscrimination Act of 2008 (“GINA”).  The EEOC issued final regulations, effective January 10, 2011, clarifying this recent addition to the growing number of statutes protecting employees with which employers must comply.  GINA expanded the protections under Title VII of the Civil Rights Act, prohibiting employers from engaging in all forms of discrimination in regard to hiring, discharge, compensation, terms, conditions, or privileges of employment based upon genetic information.  Requesting, requiring or purchasing genetic information about employees or their families is prohibited, except in limited circumstances, under GINA.

New warning/notice language is mandatory when requesting that a health care professional conduct an employment-related medical examination on an employer’s behalf, including when an employer requests an individual’s medical information as permitted when administering requests for FMLA leave.  The final regulations provide the following “safe harbor” warning/notice language for employers to use when requesting medical information:

The Genetic Information Nondiscrimination Act of 2008 (GINA) prohibits employers and other entities covered by GINA Title II from requesting or requiring genetic information of an individual or family member of the individual, except as specifically allowed by this law. To comply with this law, we are asking that you not provide any genetic information when responding to this request for medical information.  ‘Genetic information,’ as defined by GINA, includes an individual’s family medical history, the results of an individual’s or family member’s genetic tests, the fact that an individual or an individual’s family member sought or received genetic services, and genetic information of a fetus carried by an individual or an individual’s family member or an embryo lawfully held by an individual or family member receiving assistive reproductive services.

This “safe harbor” provision should now be included in all requests to a health care professional conducting an employment-related medical examination on an employer’s behalf.  For additional information concerning your duties and restrictions under GINA, contact John C. Schrier at 231-722-5401.

 

Workers Compensation Rights

The Risks and Rewards of Utilizing Independent Contractors

In an increasingly competitive environment where every expense must be scrutinized, reducing your workforce and taking advantage of the cost savings of independent contractors can be very appealing. However, this is not something to be entered into lightly and employers must be aware of the increasing risks of classifying workers as independent contractors.

Benefits.
There are clear benefits to employers utilizing independent contractors. Employers are not responsible for the usual payroll taxes – unemployment tax, medicare and social security. Employers also save on health benefits, vacation time, sick leave and retirement benefits.

Risks.
However, along with the traditional risk of lack of direct control and direction over independent contractors, employers now must also consider the increasing risk that the IRS, state unemployment and workers’ compensation agencies, insurance companies or the courts may find that these workers were misclassified, leading to penalties for the employer. IRS and state workforce agencies are dramatically increasing their scope and scrutiny of companies who might be misclassifying employees as independent contractors. Recently, FedEx Ground was assessed $319 million in back taxes on the earnings of their drivers, whom FedEx treated as independent contractors but the IRS found to be common law employees.

The classification of workers can be difficult, made more so by the fact that law is enforced by different agencies, each using different criteria and with different reasons for making decisions regarding the same working relationship. The most important factor, however, is the employer’s right to control and direct the way the individual performs his or her work. Other factors can include the method of payment, whether the work is specialized or a part of the employer’s regular business, whether tools or supplies are provided, whether the individual is working for several principals, where the work takes place, and the right to discharge.

To give an idea of the complexity that can be involved it determining worker status – just take a look at just one of the agencies – the IRS. The IRS has recently replaced its long-standing 20-Common Law Factors Test. The new approach focuses on three categories: Behavioral Control – the right of the employer to direct how the worker does the work; Financial Control – who has the right to direct or control the business part of the work and the funding and expenses; and Relationship of the Parties – how do the parties perceive the relationship. (For more information see www.irs.gov, or Publication 1779 and 15-A). If you are still unclear whether your relationship qualifies as independent contractor status, either the business or the individual can file a Form SS-8 with the IRS. The IRS will review the facts and circumstances and officially determine the worker’s status.

Another risk with independent contractors is the potential legal cost. Because independent contractors are not covered by an employer’s workers compensation plan, utilizing independent contractors leaves open the possibility to personal injury lawsuits if workers suffer an injury on the job. Employers need to consider the potential cost of losing the protective shield that workers compensation provides.

Summary.
Reclassifying former employees as independent contractors may seem like a great way to help your business through tough economic times, but remember there are significant risks. Remember the old saying – “You can’t have your cake and eat it too.”

The comments in this article are not intended to be a substitute for legal guidance or advice for a specific situation.  You should obtain informed legal counsel to assist in your decisions relating to any issues which may be raised in this article.  For additional information regarding the above topic, call 231-722-1621.

Avoid Getting Sued by Employees

There are precautions you can take to avoid getting sued by your employee or independent contractor. If they are truly an independent contract, you need to make sure you have a written agreement in place and do not treat them like an employee. They should be free to contract with other companies to do similar work. However, you should make sure they hold your work and information in confidence through provisions in the contract. As stated in a recent Wall Street Journal article linked below, there are other precautions that must be addressed to protect yourself against employees: (1) Are they exempt from employee wage and hour rules? (2) Do you have proper policies in place regarding discrimination and harassment? (3) Have you documented the employee’s history with the company?

Here is the full article. If you have questions about dealing with employees, please contact Jeffery Jacobson.

Tax Credit for COBRA Premium Payments Paid for Unemployed Individuals

COBRA provides certain former employees, retirees, spouses, former spouses and dependent children the right to temporary continuation of health coverage at group rates. COBRA generally covers health plans maintained by private-sector employers with 20 or more full and part-time employees.

The American Recovery and Reinvestment Act of 2009 established a tax credit for an employer-provided subsidy for employees who involuntarily lose their jobs during the period beginning Sept. 1, 2008, and ending Dec. 31, 2009. The IRS issued a news release Feb. 26 outlining information for employers. Individuals who qualify for the COBRA subsidy premium should follow the following link for more information: http://www.irs.gov/newsroom/article/0,,id=204505,00.html