Source: https://beneflexsb.com/federal-employment-law-update-june-2017/
Timestamp: 2017-10-18 09:18:09
Document Index: 118657118

Matched Legal Cases: ['§ 8', '§ 7', '§ 7', '§ 7', '§ 7', '§ 300']

Federal Employment Law Update – June 2017 - Beneflex
Fiduciary Rule Takes Effect
On June 9, 2017, the U.S. Department of Labor (DOL) fiduciary rule takes effect. The rule requires retirement plan advisors to recommend investments that are in a plan participants’ best interest regardless of fees or commissions. It also expands the definition of an investment advice fiduciary under the federal Employee Retirement Income Security Act (ERISA).
Under the rule, a person is a fiduciary if he or she receives compensation for providing advice with the understanding that it is based on the particular needs of the person being advised or that it is directed to a specific plan sponsor, plan participant, or individual retirement account (IRA) owner. Such advice can include decisions regarding what assets to purchase or sell, and whether to rollover funds from an employment-based plan to an IRA. The fiduciary can be a broker, registered investment adviser, or other type of adviser, some of whom are subject to federal securities laws and some of whom are not. Additionally, under the rule’s updated definition of fiduciary investment advice, advisers to plan participants and sponsors are required under ERISA to provide investment advice in their client’s best interest.
The DOL has stated that it will not enforce the rule until after January 1, 2018, when the disclosure and new contract requirements take effect. In addition, on February 3, 2017 President Trump signed a Presidential Memorandum directing the DOL to examine the rule. However, the memorandum does not impact the effective date of the rule.
Read the Final Rule, the DOL’s Final Rule website, and ThinkHR blog post
CMS Issues a Request for Information Regarding PPACA
On June 8, 2017, the Centers for Medicare & Medicaid Services (CMS) issued a Request for Information (RFI) seeking public input on reducing the regulatory burdens of the Patient Protection and Affordable Care Act (PPACA). According to the RFI, the CMS seeks recommendations and input from the public on how to create a more flexible, streamlined approach to the regulatory structure of the individual and small group markets. According to the CMS, the goal of this process is to identify and eliminate or change regulations that are outdated, unnecessary, or ineffective; impose costs that exceed benefits; or create inconsistencies that otherwise interfere with regulatory reform initiatives and policies. The RFI will be open for public comment for 30 days.
On June 7, 2017, U.S. Secretary of Labor Alexander Acosta announced the withdrawal of the U.S. Department of Labor’s (DOL’s) 2015 and 2016 informal guidance on joint employment and independent contractors (No. 2015-01 released July 15, 2015, on independent contractors; and No. 2016-01 released on January 20, 2016, on joint employment). Removal of the administrator interpretations does not change the legal responsibilities of employers under the Fair Labor Standards Act (FLSA) and the Migrant and Seasonal Agricultural Worker Protection Act (MSAWPA), and the DOL will continue to fully and fairly enforce all laws within its jurisdiction, including the FLSA and the MSAWPA.
These withdrawals are relevant because the issuance of informal guidance (pronouncement of agency views) during President Obama’s tenure was contradictory to the DOL’s prior practice of issuing guidance via regulations, subject to public notice and comment rulemaking procedures, and opinion letters, which are fact specific and submitted by the public. These withdrawals are a demonstration of the current administration’s shift from the prior administration’s tactics.
Visa Program Fraud and Abuse
On June 6, 2017, U.S. Secretary of Labor Alexander Acosta directed agencies to aggressively confront visa program fraud and abuse. After reviewing the U.S. Department of Labor’s foreign worker visa programs, the secretary determined that it is now the policy of the department to “vigorously enforce” all laws within its jurisdiction governing the administration and enforcement of non-immigrant visa programs, including:
Directing the department’s Employment and Training Administration (ETA) to develop proposed changes to the Labor Condition Application, and for the division to review their investigatory forms, to better identify systematic violations and potential fraud, and provide greater transparency for agency personnel, U.S. workers, and the general public.
Directing the division, ETA, and the Office of the Solicitor to coordinate the administration and enforcement activities of the visa programs and make referrals of criminal fraud to the Office of the Inspector General.
Establishing a working group made up of senior leadership from ETA, the division, and solicitor’s office to supervise this effort and coordinate enforcement to avoid duplication of efforts and maximize the efficiency of the department’s activities regarding the visa programs.
The secretary also announced that the department is prioritizing and publicizing the investigation and prosecution of entities in violation of visa programs. For example, the department obtained a preliminary injunction under the H-2A visa program from the U.S. District Court for Arizona for illegal and life-threatening housing provided to agricultural workers by a farming employer.
Supreme Court Broadens Application of ERISA’s Religious Exemption Provision
On June 5, 2017, in Advocate Health Care Network, et al. v. Stapleton, et al., the Supreme Court of the United States (Supreme Court) held that a benefit plan maintained by a principal-purpose organization qualifies as a church plan under the federal Employee Retirement Income Security Act (ERISA), regardless of who established the plan, including church affiliates. ERISA exempts church plans from its otherwise comprehensive regulation of employee benefit plans.
The case was before the Supreme Court to overturn lower court rulings holding that the exemption only applied when an actual church established the benefit plan. The petitioners in the case are three church-affiliated nonprofits that run hospitals and other healthcare facilities that offer defined-benefit pension plans to their employees. The plans were established by the hospitals — not by a church — and are managed by internal employee-benefit committees. The petitioners argued that a 1980 amendment to ERISA clarified that church-affiliated organizations (not only churches) could maintain such a benefit plan and still be exempt. According to the Supreme Court, “[T]he question presented is whether a church must have originally established such a plan for it to so qualify. ERISA, we hold, does not impose that requirement.” As a result, hospitals have more freedom from ERISA’s plan requirements.
Read the Slip Opinion
Second Circuit Upholds NLRB’s Order:Employer’s ‘No Recording’ Policy in the Workplace Violates NLRA
On June 1, 2017, the United States Court of Appeals for the Second Circuit (Second Circuit) issued a summary order in Whole Foods Market Group, Inc. v. NLRB (16-0002-ag, 16-0346), affirming the National Labor Relations Board (NLRB) order (363 NLRB No. 87 (2015)) that found an employer’s rules prohibiting recording of company meetings or conversations in the workplace violates § 8(a)(1) of the National Labor Relations Act (NLRA) by maintaining overbroad no-recording policies.
The two policies at issue were as follows:
“To encourage open communication, free exchange of ideas, spontaneous and honest dialogue and an atmosphere of trust, [employer] has adopted the following policy concerning the audio and/or video recording of company meetings:
It is a violation of [employer] policy to record conversations with a tape recorder or other recording device (including a cell phone or any electronic device) unless prior approval is received from your store or facility leadership. The purpose of this policy is to eliminate a chilling effect on the expression of views that may exist when one person is concerned that his or her conversation with another is being secretly recorded. This concern can inhibit spontaneous and honest dialogue especially when sensitive or confidential matters are being discussed.”
Section 7 of NLRA guarantees employees the right “to engage in . . . concerted activities for the purpose of collective bargaining or other mutual aid or protection.” It is “an unfair labor practice for an employer . . . to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 157 [(“Section 7”)].” “In determining whether the mere maintenance of rules such as those at issue here violates Section 8(a)(1), the appropriate inquiry is whether the rules would reasonably tend to chill employees in the exercise of their Section 7 rights.”
According to the NLRB decisions, § 7 protects audio recording if employees are acting in concert for their mutual aid and protection and no overriding employer interest exists. The Second Circuit found that Whole Foods’ policies were overbroad, with language that could “chill” an employee’s exercise of § 7 rights because the policies, as written, were not limited to controlling those activities in which employees are not acting in concert. Whole Foods’ attempt to separate the act of “recording” from conduct falling within § 7’s protection ignores that its policies prohibit recording regardless of whether the recording is in relation to employees’ exercise of their § 7 rights. As written, those policies prevent “employees recording images of employee picketing, documenting unsafe workplace equipment or hazardous working conditions, documenting and publicizing discussions about terms and conditions of employment, or documenting inconsistent application of employer rules” without management approval.
Of note, the Second Circuit added, “This is not to say that every no-recording policy will infringe on employees’ Section 7 rights. It should be possible to craft a policy that places some limits on recording audio and video in the work place that does not violate the Act. Whole Foods’ interests in maintaining such policies can be accommodated simply by their narrowing the policies’ scope.”
Read the Summary Order
On May 4, 2017, President Trump released an executive order entitled “Promoting Free Speech and Religious Liberty,” prompting the U.S. Secretary of the Treasury, the Secretary of Labor, and the Secretary of Health and Human Services to consider issuing amendments to the Affordable Care Act (ACA). These amendments would address conscience-based objections to the preventive-care mandate promulgated under 42 U.S.C. § 300gg-13(a)(4). Specifically, the referenced section of the U.S. Code requires that a group health plan and a health insurance issuer offering group or individual health insurance coverage must provide birth control coverage for women who request it under the plan and do so without allocating cost sharing to the employee. The religious liberty guidance offered in the order would effectively release religious universities and charities from this contraceptive requirement.
The order is essentially a proposal and does not modify current law, nor does it create any right or benefit enforceable at law or in equity.