Insight & Impact: Labor & Employment Regulatory Update
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ISSUE: What’s that Smell? Medicinal Marijuana Spells Change in the Air for Employee Drug Testing Policies
In states that have legalized the use of marijuana for medicinal purposes, employers may no longer be able to deny employment to applicants who test positive for marijuana. In a recent decision, the Massachusetts Supreme Judicial Court held that a state law legalizing the use of medicinal marijuana justified a former employee’s disability discrimination claim, despite the fact that marijuana is still illegal under federal law.
In Barbuto v. Advantage Sales and Marketing, LLC, the Massachusetts Supreme Court rejected a employer’s argument that a former employee was not a “qualified handicapped person” under Massachusetts law because the accommodation she sought—her continued use of medical marijuana—is a crime under federal law. After accepting an entry-level position, the plaintiff notified a company representative that she would test positive for marijuana on a mandatory drug test because she was prescribed the drug to treat her Crohn’s disease. The representative told her that her medicinal use of marijuana would not be a problem. After she completed her first day of work, plaintiff received a call from HR, notifying her that she was being terminated for testing positive for marijuana because “we follow federal law, not state law.”
“The fact that the employee's possession of medical marijuana is in violation of federal law does not make it per se unreasonable as an accommodation,” the Massachusetts Supreme Court reasoned. “The only person at risk of federal criminal prosecution for her possession of medical marijuana is the employee. An employer would not be in joint possession of medical marijuana or aid and abet its possession simply by permitting an employee to continue his or her off-site use.”
IMPACT: As the first case of its kind, Barbuto sets the stage for how medicinal marijuana use in the workplace may be treated by courts in the future. It remains to be seen how this court’s line of reasoning will play out for employers with statutorily or contractually required drug-free workplace programs that include testing for marijuana. As this area of law continues to develop, employers operating in states that have legalized the medicinal use of marijuana should consider the following:
- Ensure that their drug testing policy is up to date and clearly states the employer’s position on marijuana use.
- Be cautious with regard to denials based on a positive drug test.
- If an employee requests an accommodation involving the use of medicinal marijuana, engage the employee in the interactive process and contact your local Q&B attorney for further assistance.
Please contact Otto Immel at 239-659-5041 / [email protected] for answers to your specific questions.
ISSUE: Trump Administration Torpedoes Compensation Portion of EEO-1 Report Due March 31, 2018
On August 29, 2017, the Office of Management and Budget (OMB) delayed the new compensation and hours component of the EEO-1 report that the Equal Employment Opportunity Commission (EEOC) revised on September 29, 2016. The stated reasons for the delay were concerns that the compensation and hours data collection was impractical, overly burdensome, and did not sufficiently protect privacy and confidentiality.
IMPACT: The OMB action essentially cancels the compensation and hours component of the report. EEOC must submit a new EEO-1 data collection package for OMB to review and publish a notice in the Federal Register announcing the delay of the implementation of the changes and the authorization for use of the prior EEO-1 report form. For now, employers with 100 or more employees and federal contractors with 50 or more employees should plan to use the prior EEO-1 report for their next filing on March 31, 2018. While this is great news, the march toward pay transparency and pay discrimination claims continues. Increasing numbers of state and local laws, activist shareholders of public companies, and company announcements of the results of their pay equity analyses continue the pay equity pressure on companies. Privileged compensation analyses are still recommended.
If you have any questions on the EEO-1 report form or on pay equity, please contact Pamela Ploor at 414-277-5661 / [email protected] or your Quarles & Brady attorney.
ISSUE: New ERISA Disability Regulations – Comply Now or Wait for a Possible Delay?
In December 2016, the U.S. Department of Labor ("DOL") issued final regulations relating to claims procedures for disability benefits. These regulations came at the tail end of President Obama's administration. The claims procedures provided for some immediate, and rather modest, changes. But they made more substantial changes for claims made on or after January 1, 2018. Many plan sponsors have begun identifying how these rules will impact their claims administration process. That is likely a good idea.
IMPACT: Scope of Rules. The new regulations are somewhat unique in how broadly they apply. They clearly apply to disability plans which are subject to ERISA's claims procedure rules (e.g., some, but not all, short-term disability plans; most long-term disability plans). But they also apply to other plans that base benefits upon an individual's disability. For example, retirement plans may provide for a benefit distribution, or perhaps vesting, upon a disability. The new regulations apply to the retirement plan's determination of whether a "disability" exists. Thus, plan sponsors should examine all health, welfare, retirement plans – and even executive compensation plans – to determine if they are impacted by these new rules.
Note that there is an exception where a plan does not determine "disability" but instead relies upon a different entity's determination of disability. For example, suppose a retirement plan provides a benefit if a person is determined to be "disabled" by the Social Security Administration or an employer's long-term disability plan. The decision is being made by the third party entity. That entity (e.g., the employer's long-term disability plan) may be subject to the new claims procedure rules. Or it may not (e.g., the Social Security Administration). But the retirement plan would not be subject to the new rules because it is not making its own, independent determination of "disability". It is just relying on another entity for that determination.
New Rights for Individuals. Under the new regulations, individuals covered by the plan receive new rights and plans have new obligations. These include:
- Denial notices must discuss why the claim was denied. This includes an explanation if the plan disagrees with the individual's experts. The standards used by the plan must be discussed;
- Appeal-related denial notices must include a statement about the individual's right to bring a legal action and any deadlines applicable to such an action;
- If the plan considers new or additional evidence or rationales, the plan must notify the individual;
- If at least 10% of residents in a claimant's county speak the same non-English language, the notice may need to contain a discussion of language assistance services;
- If the plan fails to strictly follow the rules, the individual may bring a lawsuit without exhausting the claims procedure; and
- Those who are deciding claims and appeals on behalf of the plan must be independent and impartial.
Act Now or Wait? The DOL notice announcing a review of these regulations (View Rule) suggests (but does not firmly promise) that the DOL may make an announcement about its review in September 2017. That may provide enough time for plan sponsors to work in October through December 2017 to ensure compliance. But many plan sponsors may find that time period too short to take action. For those who are comfortable waiting (knowing they may need to act more quickly at the end of the year), a modest wait is fine. But for those who need additional time, they likely must act now, even though the regulations may be delayed, modified or revoked.
For more information, contact John Barlament at 414-277-5727 / [email protected].
As of August 24, 2017, OSHA has temporarily shut down its ITA portal for electronic submission while the agency investigates a "potential compromise" of an employer's electronic data. The Department of Labor has notified the affected employer, and OSHA is currently working to examine the issue and determine the extent of the problem. Given this setback and the Trump Administration's recent suggestions that it is considering reversing the electronic submission requirement entirely, employers should continue gathering their relevant recordkeeping requirements but hold off on electronic submission until further notice.
ISSUE: OSHA's Final Rule "Improve Tracking of Workplace Injuries and Illnesses" Imposes New Electronic Submission Requirements on Employers
In May of 2016, the Occupational Safety and Health Administration (OSHA) issued a final rule "Improve Tracking of Workplace Injuries and Illnesses" to revise its existing recording and reporting occupational injuries and illnesses regulation. The final rule requires employers in certain industries to electronically submit to OSHA injury and illness recordkeeping data included on the 300A, 300, and 301 forms. The final rule also includes provisions that encourage employees to report work-related injuries or illnesses to their employers and prohibits employers from retaliating against workers for doing so.
IMPACT: Employers with 250 or more employees that are currently required to keep OSHA injury and illness records must electronically submit data contained in OSHA forms 300A, 300, and 301, except for those fields that contain personally identifiable information (e.g., employee name, address, and health care provider). Employers with 20 to 249 employees that are classified in certain high risk industries must electronically submit all data fields currently contained in the OSHA form 300A. OSHA will provide a secure website for the electronic submission of information but intends to make the submitted data readily available to the public in standard open formats on its website, and interested parties will be able to search and download the data.
The electronic reporting requirements will be phased in over two years. When the final rule was first published in May of 2016, the first electronic submission deadline for all covered employers of their 2016 Form 300A was set as July 1, 2017. In June of 2017, however, OSHA published a notice of proposed rulemaking to extend this deadline to December 1, 2017. Next year, employers with 250 or more employees will be required to submit information from all 2017 forms (300A, 300, and 301) by July 1, 2018. Similarly, employers with 20-249 employees in certain high risk industries will have to submit information from their 2017 Form 300A by July 1, 2018. Beginning in 2019 and every year thereafter, the information for all covered employers must be electronically submitted by March 2.
Employers should make their electronic submissions of recordkeeping information online at OSHA's Injury Tracking Application (ITA) launch page, which can be found here.
For more information about the electronic submission requirements, please contact Fred Gants at 608-283-2618 / [email protected].
ISSUE: International Travel Tips for Foreign Nationals in the Current Immigration Climate
Foreign nationals traveling abroad during the summer and holiday months may encounter circumstances that impact their return to the U.S. and even necessitate unforeseen delays in obtaining visas at the U.S. consulates abroad. October 1 is an important deadline for the automatic change of status for visa students working pursuant to the "cap-gap" work authorization. Many delays or inadvertent problems can be avoided with proper planning.
IMPACT: As foreign nationals travel abroad during the summer and holiday months, here are a few items to consider when exiting and reentering the United States to make travel plans run smoothly:
- We have witnessed much back and forth this year between the Trump Administration and the federal courts regarding the President's Travel Ban. Currently, the travel ban applies to foreign nationals from Iran, Libya, Somalia, Sudan, Syria, and Yemen who cannot demonstrate a "bona fide relationship" with a qualifying individual, business or organization in the United States.
- Heightened scrutiny has led to delays in visa issuance at U.S. consulates around the world. If an employee requires a new visa stamp to return to the United States, he/she should schedule a visa appointment early in the trip and have a plan if the visa application is held up in administrative processing, which can cause delays lasting several weeks or longer.
- F-1 visa students working pursuant to "cap-gap" work authorization who leave the U.S. before USCIS approves the H-1B petition will abandon the request to automatically change status from F-1 to H-1B on October 1. Although the underlying H-1B petition may still be approved, the individual will be required to exit the United States, obtain an H-1B visa at a U.S. consulate, and then reenter in order to effectuate an H-1B status. In certain situations, an F-1 student may lose his/her work authorization after traveling abroad during the cap-gap. However, if the H-1B petition and change of status request have already been approved, the employee usually may travel abroad without disrupting his work authorization and his/her H-1B status will still go into effect on October 1.
- Premium Processing for most H-1B extension categories remains suspended. Lengthy processing times can complicate international plans if an employee requires a new H-1B visa stamp while abroad.
As with any international travel, we advise consulting your Quarles & Brady Immigration Attorney to discuss potential risks. For more information, contact Eric Ledbetter at 312-715-5018 / [email protected] or Emily Shircel at
414-277-5217 / [email protected].