Monday December 18, 2017
 

Opioid crisis forcing employers to take drastic health plan steps

If your company is worried about employees’ abuse of opioid prescriptions, you’re not alone.

The majority of large employers (80%) are “concerned” about employees’ abuse of prescription opioids, according to the National Business Group on Health’s (NBGH) Large Employers 2018 Health Care Strategy and Plan Design Survey. And 53% of employers also said they’re “very concerned” about this type of abuse.

30% of employers taking action

It’s no secret opioid usage is a major problem in the U.S. After all, President Trump declared the opioid crisis a “public health emergency” recently.

But employers may be surprised to find how many of their peers are taking steps to prevent the crisis from negatively impacting their workplaces.

Nearly a third (30%) of large businesses have altered their health plans to restrict the use of prescription opioids.

And 21% of companies have added programs to manage prescription opioid usage.

Many experts believe these steps are necessary given the severity of the problem. As Brian Marcotte, NBGH president and CEO puts it:

“The opioid crisis is a growing concern among large employers,, and with good reason. The misuse and abuse of opioids could negatively impact employee productivity, workplace costs, the availability of labor, absenteeism and disability costs, workers’ compensation claims, as well as overall medical expenses.”

Specifically, what types of changes have employers made to their health plans and pharmacy benefit managers (PBMs) to prevent abuse? The NBGH says the most common strategies among employers are:

  • limiting the quantity of pills on initial prescriptions for opioids
  • limiting coverage of opioids to a network of pharmacies and/or providers
  • expanding coverage of alternatives for pain management, such as physical therapy
  • providing training in the workplace to increase awareness and recognition of signs of opioid abuse, and
  • working with health plans to encourage physicians to communicate about the dangers of opioids and to consider alternatives for pain management.

3 key safeguards

In addition to altering health and PBM plans, now is probably a good time to update key workplace policies. The National Safety Council recommends the following:

Create a drug-free workplace program (DFWP). This states what workers must do if they are prescribed meds that may cause impairment.

Test for prescriptions. Working with an attorney, employers can test for drugs that are legally prescribed and commonly abused.

Spell out what happens when abuse occurs. This should include how the abuse is identified, employees’ options (leave, etc.) and how a return works.

Post to Twitter Tweet This Post

Opioid crisis is forcing employers to take some drastic health plan steps

If your company is worried about employees’ abuse of opioid prescriptions, you’re not alone.

The majority of large employers (80%) are “concerned” about employees abuse of prescription opioids, according to the National Business Group on Health’s (NBGH) Large Employers 2018 Health Care Strategy and Plan Design Survey. And 53% of employers also said they’re “very concerned” about this type of abuse.

30% of employers taking action

It’s no secret opioid usage is a major problem in the U.S. After all, President Trump declared the opioid crisis a “public health emergency” recently.

But employers may be surprised to find how many of their peers are taking steps to prevent the crisis from negatively impacting their workplaces.

Nearly a third (30%) of large businesses have altered their health plans to restrict the use of prescription opioids.

And 21% of companies have added programs to manage prescription to manage prescription opioid usage.

Theses steps are necessary given the severity of the problem. As Brian Marcotte, NBGH president and CEO puts it:

“The opioid crisis is a growing concern among large employers,, and with good reason. The misuse and abuse of opioids could negatively impact employee productivity, workplace costs, the availability of labor, absenteeism and disability costs, workers’ compensation claims, as well as overall medical expenses.”

What types of changes have employers made to their health plans and pharmacy benefit managers (PBMs) to prevent abuse? The NBGH says the most common strategies among employers are:

  • limiting the quantity of pill on initial prescriptions for opioids
  • limiting coverage of opioids to a network of pharmacies and/or providers
  • expanding coverage of alternatives for pain management, such as physical therapy
  • providing training in the workplace to increase awareness and recognition of signs of opioid abuse, and
  • working with health plans to encourage physicians to communicate about the dangers of opioids and to consider alternatives for pain management.

Post to Twitter Tweet This Post

How HR can earn that elusive seat at the C-suite table

Human Resources plays a massive role in how a company is constructed. As a result, it deserves a seat at the executive table. But it’s not a seat that’s easily claimed. 

That’s why the recruiting experts at Peak Sales Recruiting have stepped up and put together a list of ways HR leaders can get themselves invited to that table.

————————————————————-

The perils of The Ballooning Executive Team date back to the 1950’s when General Motors CEO Alfred Sloan brought together a handful of business unit leaders to address company-wide issues.

Today, new roles like Chief Revenue Officer and Chief Information Officer continue this trend.  Ironically, the very department responsible for hiring these game-changing executives rarely gets a seat at the C-Suite table.  Although, due to a confluence of events, that is beginning to change.

The core competencies required of HR leaders has transformed dramatically in recent years due to advances in technology, new economic realities, shifting demographics and generational differences in the workplace.  Moreover, recent sex scandals with Harvey Weinstein and Kevin Spacey have CEOs turning to HR leaders to help implement training programs.

With unemployment levels falling to 4.1%, HR leaders are experiencing the most significant talent shortage since 2001. Obviously, they must be great recruiters to succeed but CEB Gartner recently reported that 71% of HR leaders are spending more time on business issues not related to HR or talent.

As we approach 2018, great HR leaders must also be tech-savvy, champion diversity and inclusion, and know how to create a winning culture that will boost revenue.

At Peak Sales Recruiting, we work together with HR leaders from world-class companies. Based on their collective experiences and the latest studies, here are 4 tips to be a great HR leader:

1. Align HR strategies with business objectives

A Korn Ferry Institute study found that increasing investment in aligning HR practices with business objectives resulted in a 7.5% decrease in employee turnover and, on a per-employee basis, $27,044 more in sales, $18,641 more in market value, and $3,814 more in profit.

Moreover, the study found that while it is helpful for your HR strategy to be based on industry best practices, aligning with your company’s business strategy has an even stronger impact.

Great HR leaders must, therefore, customize their approach based on real-time mission critical issues happening in their respective organizations. It’s also incumbent on them to make these priorities clear to every member of the HR department. They must cultivate young talent and spread responsibilities among a wide-range of direct reports to ensure policies are integrated seamlessly across all levels of the organization.

2. Develop employee-friendly policies that won’t break the bank

Despite record stock market numbers, many businesses remain reticent when it comes to spending following the 2008 financial crisis. The inability to offer large financial raises, coupled with millennials’ preference for a good work-life balance, means that HR leaders must create a positive company culture without breaking the bank.

While allowing employees to work remotely one day per week is great, it is not unique. Great HR leaders must be creative to differentiate from the competition.

As an example, given that Americans currently owe a record $1.4 trillion in student loan debt, companies such as Aetna, PricewaterhouseCoopers and Fidelity have allowed their employees to choose between a 401(k) match plan or help paying off their student loans. This flexible solution isn’t costing additional money, and it’s had a wonderful impact on company culture by customizing benefits for each individual employee based on their unique needs.

In fact, strong company culture has shown to boost revenue and profits. According to the Aberdeen Group, companies with formalized employee engagement programs have 26% greater average revenue growth than those who do not.

3. Build a great talent pipeline

To be successful, HR leaders must always be recruiting. Reactive recruiting leads to bad hires, which, according to the U.S. Department of Labor, can cost a company more than 30% of an employee’s first-year earnings. It’s critical to build a deep, diverse bench in case an employee takes a new job or becomes ill.

In the current opioid crisis, two-thirds of Americans abusing painkillers are employed, which means their performance is likely to suffer, and they may need to seek treatment or be replaced.

To prepare for the unexpected, HR leaders must network — physically at conferences and events — and virtually through digital and social media. To widen their networks, they should host job fairs at colleges known for their diversity to bring in fresh talent, ideas and new perspectives; and they should hire based on a person’s DNA and not just their resume.

4. Engage the board in hiring decisions 

Remember the time you hired that VP of sales who didn’t make his/her numbers? You are not alone. In fact, Glassdoor found that a staggering 95% of employers admitted to making bad hires.

As an HR professional, the way to mitigate fallout from making inevitable bad hires is to engage the board in the process and get their buy-in. This way if the employee fails to perform, you will not be held solely accountable.

Moreover, by working more closely with members of the C-suite, you’ll better understand the strategic priorities of the organization and make better hires.  This will improve the performance of the organization and can help cement your seat at the C-suite table.

While the challenges for HR leaders are great, there has never been more opportunity for them to impact a company’s bottom line. By following the tips above, HR leaders will get to work more closely with executives and may even earn themselves that elusive seat at the C-suite table.

Keith Johnstone is the Head of Marketing at Peak Sales Recruiting, a leading B2B sales recruiting company launched in 2006. It works with a wide-range of clients including boutique, mid-size and world-class companies including P&G, Gartner, Deloitte, Merck, Taser and others. Keith leads all marketing activities and has successfully grown revenue and lead volume every quarter. Follow @KJ_Peak

Post to Twitter Tweet This Post

When does ADA leave become unreasonable? Courts & EEOC say …

Overtime, FMLA, OT, Rule, DOL

Many questions spring up for employers when an employee exhausts their FMLA leave but still can’t return to work. Are you required to give them more leave under the ADA? If so, how much additional leave is too much? Can you fire them for needing too much time off? 

Employers have been faced with these questions a lot recently, and some answers are starting to emerge. This fall, it was the Seventh Circuit that decided (twice) that “a multi-month leave of absence is beyond the scope of a reasonable accommodation under the ADA.” More recently, the Eleventh Circuit came to the same decision.

But … while it may seem like a pro-employer pattern is emerging, additional ADA leave cases are still finding their way into the courtroom. Currently, the EEOC is suing the Blood Bank of Hawaii for firing three employees who were unable to return to work as soon as their FMLA leave ended instead of granting them more leave under the ADA. Is this case different than the others? Should a different outcome be expected?

Seventh Circuit decisions

The Seventh Circuit (which covers IN, IL, and WI) ruled in favor of the employers in two separate lawsuits, which had a lot of similarities. In both cases, employees had medical conditions, and after exhausting their FMLA leave, requested more leave as an accommodation under the ADA. The employers denied these requests, stating they were unreasonable, and the court agreed.

Severson v. Heartland Woodcraft came first. Raymond Severson had a back condition that required surgery. After his FMLA leave was exhausted, Severson requested additional time off. Heartland Woodcraft terminated him, but encouraged Severson to reapply once he was better.

Severson took the company to court, claiming his employer failed to give him the accommodation he needed — more leave. Heartland Woodcraft argued that Severson had already been granted six months of leave and it just wasn’t reasonable to give him any more time off.  The court ruled that Severson would not have been able to work if he had been granted this additional leave, which is an essential part of an ADA accommodation request. “Medical leave spanning multiple months does not permit the employee to perform the essential functions of his job,” the court said. It also added that long-term medical leave is what the FMLA is for, not the ADA.

The second Seventh Circuit ruling came in Golden v. Indianapolis Housing Agency. Marytza Golden was a police officer who was diagnosed with breast cancer. She exhausted her FMLA leave, and requested additional leave. Exactly how much leave she needed was unclear, but there was the potential that Golden would not return to work for six months. Her employer rejected the request and fired her. Golden sued, claiming the company violated the ADA.

The court once again ruled that several months of additional leave was unreasonable — especially since Golden had no clear return date. The court said in order to be protected under the ADA, Golden needed to be able to work with or without an accommodation. Since she was not able to work either way, Golden wasn’t ADA-protected and the employer was within its rights to not grant her additional leave, it ruled.

In both of these rulings, the Seventh Circuit made it clear that these long-term leave requests — above and beyond FMLA leave — were not reasonable accommodations. Also, the employees would not be able to do their jobs with these accommodations. “An extended leave of absence does not give a disabled individual the means to work; it excuses their not working,” the court said.

Eleventh circuit ruling

After Billups v. Emerald Coast Utilities Authority, the Seventh Circuit got some backup in deciding additional long-term leave wasn’t a reasonable accommodation.

Roderick Billups hurt his shoulder and took six months of leave, which he was entitled to because he was injured on the job. After exhausting his medical leave, he was still unable to return to work. Billups needed surgery, and as an accommodation under the ADA, requested six additional weeks off to recover. After the recovery time he said he’d be able to work without any limitations, but he was fired. In court, Billups argued that he had a projected return date, therefore his leave request was not open-ended. But the court said that Emerald Coast had already given him six months off, and Billups still was not able to perform his duties.

Not only that, but Billups could not think of any accommodations that would allow him to return to work before the six weeks of recovery time was up. The court said that the ADA prohibits employers from discriminating against “qualified individuals on the basis of disability,” but Billups was no longer qualified because he couldn’t perform the essential functions of his job.

The Eleventh Circuit (which covers AL, GA, and FL) ruled alongside the Seventh Circuit, stating long-term leave beyond FMLA leave isn’t a reasonable ADA accommodation.

That should pretty much settle things and give employers a clear picture of how to deal with the interaction between the ADA and FMLA, right?

Not so fast. The EEOC has other ideas.

Still pushing the envelope

With these three rulings paving the way, the EEOC’s case against the Blood Bank of Hawaii might seem repetitive. But it’s clear that the EEOC believes — at least in some cases — that employees are entitled to additional leave once their FMLA leave is exhausted. One could assume this case will play out like its predecessors, but there are a few reasons it could go the other way.

The one key difference in this case is that the blood bank had a very strict maximum leave policy. Once employees’ 12 weeks of FMLA leave were up, they were expected to return to work, free of any limitations, the EEOC says. It claims three employees were not medically cleared to go back to work after their FMLA leave was over, and they were fired. While two of the employees were requesting additional leave as an accommodation, one said she could return to work with an accommodation. The blood bank still fired her, according to the agency’s claim.

The fact that these employees were automatically fired is what’s fueling the EEOC’s case. “Employers have a duty to engage in the interactive process and provide reasonable accommodations to employees with disabilities,” EEOC regional attorney Anna Park said. “Employees should never be terminated simply because they need additional leave for their disabilities.”

The EEOC condemns the blood bank’s rigid leave policy, stating that each employee’s disability is unique, which is why it’s so important that employers work with that individual.

If you have an additional ADA leave case in the Seventh or Eleventh Circuit, the odds of being able to deny additional long-term leave under the ADA appear to be in your favor. If you are located outside of these two circuits, things are still pretty murky, but you could still use these rulings as a blueprint for how to justify denying added leave.

When it comes down to it, the most important thing you can do is engage with the employee making an accommodation request. Just having discussions about possible accommodations — up to and including additional leave — with the employee can go a long way in court, as seen in the Seventh and Eleventh Circuit rulings. Not having the discussion at all, like in the blood bank’s case, can land you in hot water.

Intermittent leave

Where does all of this put intermittent leave? When it comes to handling requests for that, the jury’s still out.

The Seventh Circuit did say that intermittent time off (i.e., a few days here and there) may be reasonable — as they’re often equivalent to a modified work schedule and, thus, may be required under the ADA.

Post to Twitter Tweet This Post

Landmark lawsuit: ACA employer mandate case costs Dave & Buster’s $7.4M

To avoid the employer mandate for not offering healthcare coverage, can employers cut employees’ hours to avoid having them count as full-time employees under the ACA? HR pros everywhere were hoping a first-of-its kind lawsuit would answer this question. 

Unfortunately, employers won’t get an answer to that question from the lawsuit we’re referring to.

The class-action lawsuit, Marin v. Dave & Buster’s, claimed the restaurant and entertainment chain purposely cut employees hours to below 30 per week to avoid the ACA required to provide all full-time employees (those working at least 30 hours per week) with health insurance or pay a penalty.

The suit claimed Dave & Buster’s move violated ERISA.

After trying — and failing — to get a high-profile lawsuit dismissed, Dave & Buster’s agreed to pay $7.425 million to settle the suit, which accused the restaurant and entertainment chain of illegally cutting staffers’ hours to prevent them from receiving healthcare benefits.

If the court approves the settlement terms, it will bring to an end a two-year lawsuit and could impact approximately 1,200 class members.

As HR Morning covered previously, the ERISA lawsuit was the first case in which an employer was accused of intentionally interfering with employees’ hours to avoid the ACA’s employer mandate.

ERISA Section 510

The lawsuit hinged on a very specific section of ERISA — the employees sued under ERISA Section 510.

Granted, ERISA was written primarily to apply to retirement plans. But Section 510 can be applied to a number of benefit plans as well — including healthcare coverage.

Section 510 says (the critical parts are in bold):

“It shall be unlawful for any person to discharge, fine, suspend, expel, discipline, or discriminate against a participant or beneficiary for exercising any right to which he is entitled under the provisions of an employee benefit plan, this subchapter, section 1201 of this title, or the Welfare and Pension Plans Disclosure Act [29 U.S.C.A. § 301 et seq.], or for the purpose of interfering with the attainment of any right to which such participant may become entitled under the plan, this subchapter, or the Welfare and Pension Plans Disclosure Act. 29 U.S.C. § 1140.”

According to the court, Dave & Buster’s health insurance plan is an employee welfare benefit plan under ERISA.

In the lawsuit, employees claim the restaurant chain violated Section 510 by reducing their hours below 30 per week to avoid Obamacare’s employer mandate to provide full-time employees with health insurance.

The suit claims that during a meeting at one Dave & Buster’s location, attended by the lead plaintiff Maria De Lourdes Parra Marin, a company general manager said that the Obamacare mandate would wind up costing the company upwards of $2 million. And to skirt those costs, the manager claimed the restaurant planned to cut the hours of full-time workers, which it then did, according to the suit.

The plaintiffs then claim that similar meetings were held company-wide.

Their case hinged on whether or not ERISA could actually be applied to health plans. In refusing to dismiss the suit, the court ruled it could.

D&B’s flawed defense

Dave & Buster’s tried to get the employees’ lawsuit thrown out during the summary judgment phase. It said the employees’ had no legally sufficient claim because Section 510 doesn’t apply to benefits “not yet accrued,” and it argued that employees must show more than a “lost opportunity to accrue additional benefits” to sustain a claim under ERISA Section 510.

But the court said the employer’s “intent” is what mattered — and not necessarily when employees were to obtain benefits.

It said for the lawsuit to proceed to trial, the plaintiffs had to demonstrate the employer specifically intended to interfere with benefits. They succeeded, according to the court.

A few things that hurt the restaurant in the case:

  • Marin’s account of a company general manager saying that the Obamacare mandate would wind up costing the company upwards of $2 million and that management was reducing employees’ hours to avoid that cost
  • similar meetings appeared to have been held at other Dave & Buster’s locations
  • an employee from another location posted on the restaurant’s Facebook page on June 9, 2013 that “[t]hey called store meetings and told everyone they were losing hours (pay) and health insurance due to Obamacare”
  • the senior VP of HR responded to a query from The Dallas Morning News about the employer’s reduced workforce by saying that “D&B is in the process of adapting to upcoming changes associated with healthcare reform,” and
  • a Dave & Busters filing with the Securities and Exchange Commission from September 29, 2014 stated that “Providing health insurance benefits to employees that are more extensive than the health insurance benefits we currently provide and to a potentially larger proportion of our employees, or the payment of penalties if the specified level of coverage is not provided at an affordable cost to employees, will increase our expenses.”

The court ruled that as long as these allegations are proven, the lawsuit “states a plausible and legally sufficient claim.”

The problem with this settlement from an employer standpoint: Without any clear guidance from the court, employers still run the risk of getting sued — for charges one court has already allowed to proceed to trial — if they implement ACA-circumventing strategies similar to Dave & Busters.

Post to Twitter Tweet This Post

Tricky new I-9 scam wreaking havoc on employers: What to watch for

If you get a very convincing email from the U.S. Citizenship and Immigration Services (USCIS) about info on your employees’ I-9s, don’t follow the instructions.

The I-9 info request is the latest in a series of sophisticated scams targeting employers. And the scam appears to working.

As many HR pros know, employers aren’t required to submit Forms I-9 to the USCIS so such a request may raise some red flags for some folks. But the request is tripping up employers because the emails look very authentic. In fact, the emails actually come from a uscis.gov address. Plus, they even contain labels from both USCIS and the Office of Inspector General.

As if that’s not enough to fool some time-strapped HR pros, many of the emails also contain other details designed to make the messages appear legitimate — like your company’s mailing address.

The USCIS, however, has made it abundantly clear it’s not sending any emails to employers about their I-9s. It’s also warning firms not to click on any links in the email or respond to the sender.

Employers may also be tripped up because the feds recently announced they are ramping up I-9 audits and they want to respond as quickly as possible to any I-9-related requests. Again, the USCIS will never email about an I-9 audit.

As Alliance 2020, a background screening and information services provider, reminds employers:

“Audits of I-9’s are conducted by the Immigration and Customs Enforcement or the Department of Labor and notification of an upcoming audit is always done by a written notice from the agency.  USCIS never requires employers to submit Forms I-9 to USCIS unless they are being audited….never requires an employer to email copies to them.  At this time, the Officials will choose where they will conduct a Form I-9 inspection. For example, officials may ask that an employer bring Form I-9’s to a U.S. Immigration and Customs Enforcement field office. Sometimes, employers may arrange for an inspection at the location where the forms are stored.”

What to do if you’re targeted

To prevent your company from falling victim to this I-9 scam, there are several preemptive steps you should take ASAP.

First, make sure your employees are aware of the I-9 scam email and what the phony email will look like.

If workers do receive an I-9 info request, they should forward those messages to the Federal Trade Commission via the ftccomplaintassistant.gov site.

Also, if you receive an email from the USCIS and aren’t sure it’s legit, you can always double-check by forwarding it to uscis.webmaster@uscis.dhs.gov.

Post to Twitter Tweet This Post

5 ways to make open enrollment easier on employees

Open enrollment is an important time of year, and it can also be confusing and a source of stress for employees. 

Thankfully, Andrea Meyer of the professional employer organization WorkSmart Systems, is here to help you arm your employees with knowledge and tools that ease the stress of open enrollment.

————————————————————

Here are five of the top ways employers can start to reduce their workers’ stress levels during open enrollment:

1. Highlight benefits changes

Set your employees up for success by making sure they’re aware of key changes to benefits or the enrollment process itself.

Encourage your employees to promptly review options and thoughtfully choose a plan once enrollment begins. Also, be sure employees are aware of the penalty for forgoing health coverage in 2018.

2. Identify problems

Make sure history doesn’t repeat itself by taking note of what went smoothly during open enrollment last year and where there were holes in the process. Were there certain benefits employees seemed to be more confused about? What were the most frequent questions employees had?

Take note of these challenging areas and brainstorm ways to alleviate them. From there, create goals related to these problems.

Example: Get __% of employees saving for retirement, or engage __% of employees in an open enrollment information session – and then set up a communications strategy accordingly.

3. Communicate early and often

You spent a lot of time planning for open enrollment. Make sure that your message actually gets to your employees with effective communication. The options are almost endless, but you can’t use them all.

Decide which communication methods will best communicate critical benefits details to employees – email, employee portals, videos and workshops, etc. Make sure all of your employees have the opportunity to be fully educated about their options.

Remember, benefits communication doesn’t stop at the end of enrollment. Follow up with employees to make sure they get the most out of their benefit elections.

4. Leverage new HR tech

The platform you use to facilitate enrollment can be the difference between a smooth, efficient open enrollment season and a stressful one for all involved. Decide how you plan to administer the process – is your current HR technology platform user-friendly, streamlined and integrated? If not, it may be time to look for a new solution.

In addition to an audit of your current HR technology, consider going mobile with your enrollment communication plan – whether that means sending texts about important deadlines or providing mobile-friendly educational videos.

5. Prepare your support team

Make sure your company’s leaders, managers and HR team are equipped with key messages, FAQS and talking points about open enrollment.

You need allies and can use the extra help with employee questions. Make sure these allies are able to get messages about open enrollment across in a clear, consistent manner. A consistent message from several sources will set up employees for success this open enrollment season.

Talk to your employees early and often about their open enrollment options. Hold info sessions – maybe more than one to accommodate employees’ varying schedules – and consider bringing in an expert to answer tougher questions. Above all else, be available for questions and other ways employees may need your assistance.

Andrea Meyer is the benefit manager at WorkSmart Systems Inc., an Indianapolis-based professional employer organization (PEO) founded in 1998. WorkSmart serves over 200 client companies with employees in 37 states. WorkSmart is an active member of the National Association of Professional Employer Organizations (NAPEO).

Post to Twitter Tweet This Post

Real-life Scrooges: The cheapest holiday gifts bosses have ever given their employees

When it comes to gift-giving, it’s the thought that counts. But things can get pretty awkward when gifts are downright thoughtless

Almost everyone has received a gift that was either unusual or lame, but FastUpFront, a small business news blog, has assembled a list of the cheapest or most insulting gifts that had employees wondering why their companies even bothered:

  • An employee received a gift certificate for a free medium soda or banana from the theme park where she worked. When she tried to purchase the banana, she was told the voucher did not include the tax, which she had to pay for out of pocket.
  • One employee got $100 in cash, which he assumed was a holiday bonus. After spending it on a family dinner out, he discovered it was not a bonus and had been deducted from his paycheck.
  • A boss took his employees out to a lunch and gifted them coffee mugs. When they got back from the lunch, bills for the meal and the mug were waiting for everyone at their desks.
  • Another boss took his workers out to a pricey restaurant and encouraged them to order expensive drinks and meals. At the end of the night, he requested separate checks for everyone.
  • One employee got the choice of a $5 bottle of wine or a plastic picture frame.

Honorable mentions

Here are some more cheap gifts from the list:

  • a dog leash
  • a copy of “The Little Engine That Could”
  • a grocery store gift card worth $7.58
  • a high five
  • an X-rated shot glass
  • a Mars Bar
  • microwave popcorn and sparkling cider
  • a $5 iTunes gift card
  • a pen that didn’t work, and
  • a Taco Bell watch.

 

 

 

Post to Twitter Tweet This Post

No answer on legality of cutting hours under ACA: Dave & Buster’s settles ERISA suit

overtime, lawsuit, DOL, FLSA

If you were hoping a court ruling on a recent ERISA lawsuit involving Dave & Buster’s would offer some clarity into whether it’s legal to cut employees’ hours to avoid having them count as full-time employees under the ACA, you’re going to be disappointed.

After trying — and failing — to get a high-profile lawsuit dismissed, Dave & Buster’s agreed to pay $7.425 million to settle the suit, which accused the restaurant and entertainment chain of illegally cutting staffers’ hours to prevent them from receiving healthcare benefits.

If the court approves the settlement terms, it will bring to an end a two-year lawsuit and could impact approximately 1,200 class members.

As HR Morning covered previously, the ERISA lawsuit was the first case in which an employer was accused of intentionally interfering with employees’ benefits to avoid the ACA’s employer mandate.

ERISA Section 510

The lawsuit hinged on a very specific section of ERISA — the employees sued under ERISA Section 510.

Granted, ERISA was written primarily to apply to retirement plans. But Section 510 can be applied to a number of benefit plans as well — including healthcare coverage.

Section 510 says (the critical parts are in bold):

“It shall be unlawful for any person to discharge, fine, suspend, expel, discipline, or discriminate against a participant or beneficiary for exercising any right to which he is entitled under the provisions of an employee benefit plan, this subchapter, section 1201 of this title, or the Welfare and Pension Plans Disclosure Act [29 U.S.C.A. § 301 et seq.], or for the purpose of interfering with the attainment of any right to which such participant may become entitled under the plan, this subchapter, or the Welfare and Pension Plans Disclosure Act. 29 U.S.C. § 1140.”

According to the court, Dave & Buster’s health insurance plan is an employee welfare benefit plan under ERISA.

In the lawsuit, employees claim the restaurant chain violated Section 510 by reducing their hours below 30 per week to avoid Obamacare’s employer mandate to provide full-time employees with health insurance.

The suit claims that during a meeting at one Dave & Buster’s location, attended by the lead plaintiff Maria De Lourdes Parra Marin, a company general manager said that the Obamacare mandate would wind up costing the company upwards of $2 million. And to skirt those costs, the manager claimed the restaurant planned to cut the hours of full-time workers, which it then did, according to the suit.

The plaintiffs then claim that similar meetings were held company-wide.

Their case hinged on whether or not ERISA could actually be applied to health plans. In refusing to dismiss the suit, the court ruled it could.

D&B’s flawed defense

Dave & Buster’s tried to get the employees’ lawsuit thrown out during the summary judgment phase. It said the employees’ had no legally sufficient claim because Section 510 doesn’t apply to benefits “not yet accrued,” and it argued that employees must show more than a “lost opportunity to accrue additional benefits” to sustain a claim under ERISA Section 510.

But the court said the employer’s “intent” is what mattered — and not necessarily when employees were to obtain benefits.

It said for the lawsuit to proceed to trial, the plaintiffs had to demonstrate the employer specifically intended to interfere with benefits. They succeeded, according to the court. So the employees’ lawsuit will proceed to trial, where Dave & Buster’s is looking — at best — at a costly defense bill or an expensive settlement.

A few things that spelled doom for the restaurant in the case:

  • Marin’s account of a company general manager saying that the Obamacare mandate would wind up costing the company upwards of $2 million and that management was reducing employees’ hours to avoid that cost
  • similar meetings appeared to have been held at other Dave & Buster’s locations
  • an employee from another location posted on the restaurant’s Facebook page on June 9, 2013 that “[t]hey called store meetings and told everyone they were losing hours (pay) and health insurance due to Obamacare”
  • the senior VP of HR responded to a query from The Dallas Morning News about the employer’s reduced workforce by saying that “D&B is in the process of adapting to upcoming changes associated with health care reform,” and
  • a Dave & Buster’s filing with the Securities and Exchange Commission from September 29, 2014 stated that “Providing health insurance benefits to employees that are more extensive than the health insurance benefits we currently provide and to a potentially larger proportion of our employees, or the payment of penalties if the specified level of coverage is not provided at an affordable cost to employees, will increase our expenses.”

The court ruled that as long as these allegations are proven, the lawsuit “states a plausible and legally sufficient claim.”

Bottom line: Without any clear guidance from the court, employers still run the risk of getting sued — for charges one court has already allowed to proceed to trial — if they employee ACA-circumventing strategies similar to Dave & Buster’s.

Post to Twitter Tweet This Post

The Essentials of HR and Talent Management November 2017 Kit

The Essentials of HR and Talent Management November 2017 Kit brings together the latest information, coverage of important developments, and expert commentary to help with your HR and Talent Management related decisions.

Learn more! 

Post to Twitter Tweet This Post