HR
News and Information
January 14, 2005
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NEWS IN THE COURTS
NEWS FROM THE BUSINESS AND LEGAL REVIEW
HR IN THE NEWS
FROM IPMA-HR HR Bulletin
SITE OF INTEREST ON THE WEB
REGIONAL AND STATE EMPLOYMENT AND UNEMPLOYMENT: NOVEMBER 2004
NEWS IN THE COURTS Female
Employee Can Be Fired For Not Wearing Makeup Based on reasoning that may be greeted with skepticism by many women, a federal appeals court in San Francisco has ruled that it was legal for Harrah's Casino to fire a female bartender for refusing to wear makeup. The all-male panel held, in a 2-1 split decision, that there was no evidence Harrah's makeup requirement imposed an unequal burden on male and female employees. Therefore, the casino's gender-specific "appearance standards" did not discriminate against women, the panel said. This case has created a stir nationwide, causing many employers to review their own "appearance standards" in anticipation of the ruling. Both parties found support from numerous friends of the court, including the American Civil Liberties Union of Nevada, Northwest Women's Law Center and California Women's Law Center for the former bartender. On Harrah's side were amici American Hotel & Lodging Association and the California Hotel & Lodging Association. The
Lawsuit She filed suit in the U.S. District Court for the District of Nevada under Title VII of the Civil Rights Act of 1964, alleging retaliation, disparate treatment and disparate impact in violation of Title VII and various Nevada state law claims. Although the District Court dismissed all of Jespersen's claims in December 2002, she appealed only the dismissal of her disparate-treatment claim. The U.S. Court of Appeals for the 9th Circuit affirmed in a majority opinion by Judge A. Wallace Tashima. The
Appellate Court Ruling Evaluating Harrah's "personal best" policy required the court to apply the "unequal-burdens" test to weigh the costs and time necessary for employees of each gender to comply with the standards. However, the majority found that Jespersen failed to present evidence concerning the cost and time burdens that must be borne by female bartenders but not male bartenders. Because there was no evidence from which the majority could assess the burdens of the policy on male bartenders either, Jespersen's claim failed, the majority concluded. The panel also rejected Jespersen's argument that the makeup requirement should be invalidated because it runs afoul of the U.S. Supreme Court's decision in Price Waterhouse v. Hopkins, 490 U.S. 228 (1989). In that case, the justices held that discrimination against an employee for her failure to conform to a traditional, feminine gender stereotype was gender discrimination under Title VII. The 9th Circuit explained that it adopted the unequal-burdens test for determining if appearance standards violated Title VII in a decision that was made after Price Waterhouse. Therefore, under that test, Jespersen's failed to meet her burden of showing that Harrah's gender-differentiated appearance standards violated Title VII, Judge Tashima said. The
Dissent Jennifer Pizer of the Lambda Legal Defense and Education Fund's Los Angeles office represents Jespersen. Counsel for Harrah's is Veronica Arechederra Hall of Littler Mendelson in Las Vegas, Nev. Jespersen v. Harrah's Operating Co., No. 03-15045, 2004 WL 2984306 (9th Cir. Dec. 28, 2004). Symptoms
Only Occurring in Single Workplace Aren't An ADA Impairment:
In Female Prisons, Gender Is A Title VII BFOQ For Guards: Okla.
Justice Alleges Age Discrimination In his lawsuit, Opala described himself as in good health and of sound mind. He said his age was "a significant factor" in being passed over for chief justice, a post that carries with it "ceremonial duties" and a bigger paycheck. A justice earns an annual salary of $107,000, the chief justice $110,000. Opala wants the federal court to void the rule change. Watt said he was served a summons Monday morning in the case but declined to comment further. Mo. Governor Rescinds Bargaining Rights By
DAVID A. LIEB JEFFERSON CITY, Mo. (AP) - Gov. Matt Blunt began making good on campaign pledges during his first full day in office Tuesday, rescinding the collective bargaining rights of thousands of state workers and ordering agencies to make several cost-cutting policy changes. Blunt halted the purchase or lease of new cell phones, office space and non-emergency vehicles. He also closed the state's office in Washington, D.C. Those were among the first pledges Blunt made when he began campaigning for governor nearly a year ago. The 34-year-old Republican was sworn in at noon Monday - becoming the nation's youngest serving governor and the first Republican governor to take office with a GOP Legislature in Missouri in 84 years. As secretary of state, Blunt had criticized former Democratic Gov. Bob Holden's June 2001 executive order granting collective bargaining rights to thousands of state employees and allowing unions to charge bargaining fees to employees who aren't union members. Blunt fought an administrative rule change allowing the fees, but lost a court battle with the unions when a judge said the secretary of state's office must publish the rule, allowing it to take effect. It was to finally go into effect at the end of this month. But on Tuesday, Blunt rescinded the executive order and withdrew the new rule. Several state employee bargaining units already have the fees included in contracts negotiated by unions. But Blunt said those provisions will have no effect - an interpretation unions may challenge. Jury Awards $500,000 in Raytheon Complaint LAWRENCE, Mass. (AP) - A Massachusetts jury has awarded $500,000 to a woman who said Raytheon Co. failed to investigate her sexual harassment complaint against a supervisor because he was the nephew of the company's former chief executive. A jury in Lowell found that the Waltham-based defense contractor and the supervisor, Spero Harakas, were both liable for the harassment Judith Williamson suffered while working as a secretary at a Raytheon office in Tewksbury. Raytheon has filed motions seeking a new trial or a dismissal or reduction of last month's jury award, company spokesman James Fetig said Monday. "The facts didn't support the damage award in the case," Fetig said. Williamson said she was harassed starting in 1999 by Harakas, then the manager of engineering and logistics group and Williamson's supervisor. The two had previously had a romantic relationship, but when Williamson told Harakas she couldn't be involved with him, Harakas became increasingly belligerent and critical of her job performance, her attorney, Kenneth Homsey, said. Williamson alleged Raytheon failed to investigate her claims against Harakas because he was the nephew of Thomas L. Phillips, who served as Raytheon's chairman and chief executive from 1975 to 1991 and retired from the board of directors in 2000. Williamson, 57, of Pelham, N.H., was eventually forced to accept a transfer, in violation of state fair employment laws, Homsey said. Williamson was reassigned to a similar position in Raytheon's Tewksbury operations and is no longer a Raytheon employee, Fetig said. He said his company "has a strong policy against sexual harassment." Michael Bernardo, an attorney for Harakas and Raytheon, declined to comment. Pair Arrested for Telling Lawyer Jokes HEMPSTEAD, N.Y. (AP) - Did you hear the one about the two guys arrested for telling lawyer jokes? It happened this week to the founders of a group called Americans for Legal Reform, who were waiting in line to get into a Long Island courthouse. "How do you tell when a lawyer is lying?" Harvey Kash reportedly asked Carl Lanzisera. "His lips are moving," they said in unison. While some waiting to get into the courthouse giggled, a lawyer farther up the line Monday was not laughing. He told them to pipe down, and when they did not, the lawyer reported the pair to court personnel, who charged them with disorderly conduct, a misdemeanor. "They just can't take it," Kash said of lawyers in general. "This violates our First Amendment rights." Dan Bagnuola, a spokesman for the Nassau County courts, said the men were "being abusive and they were causing a disturbance." He said he did not have the name of the lawyer who complained. Americans for Legal Reform monitors the courts and uses confrontational tactics to push for greater access for the public. The pair said that for years they have stood outside courthouses on Long Island and mocked lawyers. On Monday, however, Kash said he was due in court to answer a drunken driving charge from a year and a half ago. The men are due back in court on the disorderly conduct charge next month. Teacher Suspended Over Anti-Arab Remark DEARBORN, Mich. (AP) - A middle school teacher has been suspended with pay while officials investigate a report he told his students that Bedouin Arabs used the Quran as toilet paper. The teacher is on the faculty of Woodworth Middle School in Dearborn, a Detroit suburb of 100,000. About 30,000 Dearborn residents are Arab-American. Bedouins are members of historically nomadic tribes and make up about 10 percent of the population of the Middle East. The Quran is the Muslim holy book. Parents complained to the American-Arab Anti-Discrimination Committee and the Council on American-Islamic Relations. Imad Hamad, Michigan director of the American-Arab Anti-Discrimination Committee said the teacher should apologize. "I only wonder what was in his mind when he looked into their eyes and stated such an ugly description and such painful words," he said. A closed hearing on the teacher's status was held Tuesday, The Detroit News reported in its Wednesday editions. It said Superintendent John Artis was expected to decide the case this week. NEWS FROM THE BUSINESS AND LEGAL REVIEW OSHA
List Most Frequently Violated Standards for 2004 Enforcement is alive and well at OSHA. The agency issued citations for over 100,000 violations (broken down by paragraph) in Fiscal Year 2004. This was a slight increase over last year. More than 80,000 were considered serious. Initial penalties amounted to almost $120 million before penalty adjustments of more than $37 million. Failure to have a written hazard communication program continues to be the most frequently violated standard in general industry, while failure to have fall protection over 6 feet tops the list for construction. The "dirty dozen" for both general industry and construction follow. Two reminders about the list:
You will certainly note that the total penalty amounts, both original and adjusted, do not appear in descending order as the numbers of violations do. For example, the two relating to machine guarding are the highest in the general industry group, and the one for cave-in protection is by far the highest in the construction list, although the number of violations only ranks in 5th place. The reason should be obvious: the relative threat to human life and limb of the noncompliance. All in all, OSHA's annual reporting of the violations data, while seemingly mere dry statistics, represents a caring effort to increase the protection of workers in potentially dangerous operations. OSHA
to Issue Final Rule on Standards Improvement Process OSHA will publish a final rule in the January 5, 2005, Federal Register on the second phase of its standards improvement project. The project addresses inconsistent, duplicative, or outdated provisions in OSHA's safety and health standards for general industry, maritime, and construction. OSHA says the final rule revises or eliminates medical provisions in older standards that were once considered accepted practice, but have since been deemed obsolete or unnecessary in current medical practice. For example, annual rather than semi-annual medical examinations will now be required for long-term employees exposed to inorganic arsenic, coke oven emissions, and vinyl chloride. In addition, the final rule eliminates reporting requirements that OSHA says have failed to benefit employee health. For example, employers will no longer have to notify OSHA of all workplace releases for certain specified carcinogens. In addition, while employers are still required to establish regulated work areas for vinyl chloride, inorganic arsenic, acrylonitrile, and for the 13 known occupational carcinogens, they will no longer be required to notify OSHA each time they do so. The final rule updates chemical exposure provisions by making them consistent in terms of the frequency of monitoring and the manner of employee notification of monitoring results. HR IN THE NEWS OSHA
Changes Respiratory Protection Standard with New Protocol "Selecting the proper respirator is a vital step in protecting a user against potential over-exposures and adverse health effects," said OSHA Administrator John Henshaw. "The additional fit-testing protocol will help employers and employees to select the right respirator based on the conditions in their workplaces." The new fit-testing protocol, referred to as the Controlled Negative Pressure (CNP) REDON protocol, requires three different test exercises followed by two "redonnings" of the respirator. The three test exercises, listed in order of administration, are normal breathing, bending over, and head shaking. The procedures for administering the new CNP REDON protocol, with three test exercises and the two respirator donnings to an employee, and for measuring respirator leakage during each test, are summarized below:
Details of the new respiratory protection fit-testing requirements and the notice of the final rule are published in the August 4, 2004, Federal Register. OSHA
Rolls Out New HazCom Initiative The initiative follows an agency review of the standard and concerns expressed by some about the accuracy of material safety data sheets. The HCS, adopted 20 years ago, covers some 650,000 hazardous chemical products and more than 30 million American workers. "Appropriate and accurate hazard communication is essential to safe chemical management programs in the workplace," says OSHA chief John Henshaw. "Employers need good information to design protective programs for their employees, and employees need the same information to protect themselves. This initiative will help improve that process." The agency says compliance assistance is a key component of the initiative. OSHA has developed a new page on the agency's website which contains compliance assistance materials, OSHA's review of the issues, and draft documents for public comment. For the enforcement component of the initiative, Compliance Safety and Health Officers will use sample hazard information on selected chemicals to check the accuracy of MSDSs. Deficiencies will be brought to the attention of the party responsible for supplying the MSDS, and failure to make corrections may result in the issuance of citations. OSHA says it is also evaluating the adoption of the Globally Harmonized System of Classification and Labeling of Chemicals (GHS), and preparing a guide to increase awareness of the GHS. For more information, visit OSHA's HazCom webpage. Rule May Let Workers Keep Health Coverage By
JOHN HEILPRIN WASHINGTON (AP) - For U.S. workers who change or lose their jobs, a new rule issued by the Bush administration just before the end of 2004 could provide better access to group health plan coverage - in keeping with changes Congress agreed to eight years ago. The new rule, which becomes effective for health care plans starting July 1, is meant to implement more of the 1996 Health Insurance Portability and Accountability Act by making it easier to obtain group health coverage. It limits when pre-existing medical conditions can be excluded from coverage and requires group health plans and group health insurance issuers to offer "special enrollment" in certain cases. The law, pushed through Congress by President Clinton, was intended to guarantee access to health insurance for small businesses with 50 or fewer employees, and to require that insurers renew coverage for a person or group regardless of the health status of any member of the group. "In an era when American workers often change jobs, and even careers, several times in the course of their lives, it is important that they are able to respond to the modern workplace without having to fear for their health insurance," Health and Human Services Secretary Tommy Thompson said this week. Three federal agencies jointly issued the new rule based on the 1996 law. Bush administration officials said their rule "does not significantly modify the framework" the Clinton administration issued in April 1997 for implementing this part of the law. Yet it took another 7 1/2 years for the rule to be made final. "We have listened to public comment and worked to craft a rule that will provide maximum protection for consumers, while minimizing the burden on health plans," said Medicare chief Mark McClellan. When Clinton signed the law, his administration said it would affect about one in 10 U.S. workers - then an estimated 25 million Americans - and their families. Those were workers switching jobs, self-employed or with pre-existing medical conditions. Sen. Edward Kennedy, D-Mass., and former Kansas Republican Sen. Nancy Kassebaum Baker sponsored the law. The Bush administration changed the health insurance rule "to bolster ... consumer protections while minimizing the burdens imposed on group health plans and group health insurance issuers," Thompson's agency said in a statement. Among other things, those changes would require group health plans and group health insurance issuers to give workers a statement about their rights under the law. --- On the Net: Department of Health and Human Services: http://www.hhs.gov
Seven Benefit Plan Trends Affect This Year's Enrollment Season "Faced with rising health costs, employers are making several changes to their benefit programs that employees should anticipate seeing in their enrollment packages," said Tom Billet, a senior benefits consultant with Watson Wyatt. "And, with workers assuming more responsibility for making health care decisions, they'll need to carefully evaluate their options." Following are seven major trends that benefits experts at Watson Wyatt have identified for this year's open enrollment season.
Reprinted by permission. © CCH INCORPORATED Replacement
Cost Tops $13,000 for Workers Who Voluntarily Quit Turnover costs, which include recruiting, selection, training, and lost productivity expense, have climbed 6.8 percent from a $12,506 average cost in 2002. The leisure and hospitality industry had the highest turnover rate (voluntary quits and retirements), with an annual rate of 46.4 percent for the twelve months ending in August 2004. Retail trade was second highest at 33.2 percent. Companies in the manufacturing and transportation industries had smaller annual turnover rates of 16.5 percent and 18.2 percent, respectively. For large companies, different turnover rates can create large differences in total turnover costs. For a 40,000-employee company, total turnover costs would reach $80 million annually with a 15 percent turnover rate. The same firm with a 40 percent turnover rate would spend $214 million annually. Over the twelve months ending in August 2004, net hires to replace workers who quit or retired totaled 27.8 million. The total represents hiring to replace 24.9 million workers who voluntarily quit-typically to take another job-and 2.9 million who retired or left because of death, disability or other reasons. Reprinted by permission. © CCH INCORPORATED Sliding-Scale Plans Seeing a Renaissance By Maryann Hammers Providing affordable health coverage to customers is built into the corporate mission statement at Highmark Inc., a health insurance company in Pittsburgh. But like the shoemaker whose children had no shoes, many of the company's own employees couldn't afford the escalating premiums. The irony wasn't lost on Highmark's management. "We wanted to bring the intent of our mission in-house," says Richard Little, director of corporate employee benefits. So, in January 2004, Highmark found a solution: a salary-based employee-contribution program. Workers in higher brackets pay up to 4.2 percent of their salaries (up to 50 percent of total premium for the most expensive option); those who earn less pay as little as 10 percent of premium for that same plan. A sliding-scale solution such as Highmark's emerged about 15 years ago but fell by the wayside over the ensuing years. Now, as companies struggle to manage double-digit increases in health care premiums and sophisticated technology makes the programs less cumbersome to administer, they are enjoying renewed interest. A 2004 study by Mercer Human Resource Consulting found that just 4 percent of companies had implemented compensation-based plans (the number rose to 10 percent in organizations with 500 or more employees), but many human resources experts believe they will become more widespread as health care costs continue to rise. Yet for some companies, the programs may create more problems with morale, recruitment or costs than they solve. D. Kevin Berchelmann, president of Triangle Performance, a Bellaire, Texas-based consultancy, is a fan of sliding-scale premiums and says two of his clients have recently launched them. "It's difficult to explain to someone making $8 per hour why they pay the same for health care as a $200,000 executive," he says. "These programs allow for reasonable sharing of rising costs." Many
Workers Prefer Time Off to More Money (AP) Nearly 40 percent of 4,600 full-time workers said they would choose more time off work than a $5,000 annual pay hike. That was an almost 20 percent jump from three years ago when Salary.com asked the same question, and represented a significant shift in employee thinking. "Workers are saying they need a break from the stresses caused by increasing hours, reduced staff and the push for more productivity," said Tim Driver, a senior vice president at the Needham, Mass.-based software company. "It's also possible that following several years of layoffs and cost-cutting, an increasing number of workers are less inclined to believe that placing work above personal concerns will pay off in career advancement and pay." Benefits
Managers Turn Eye to Recruiting, Retention The recruiting, retention and motivation of employees is the second-biggest priority of benefits specialists, according to a study by Deloitte and the International Society of Certified Employee Benefit Specialists. This finding marks the first time in the survey's 11-year history that such "talent management" issues have cracked the list of top five priorities for a majority of benefit managers. Fifty-six percent cited it this year. Controlling health care costs (cited by 90 percent of respondents) was the No. 1 issue. Fifty-two percent cited addressing employee willingness to pay more for benefits as one of their top five priorities. The results are a reminder of the "damned if you do, damned if you don't" conundrum that faces many employers. Health care costs continue to rise, and many businesses are shifting costs to employees. At the same time, however, the job market is heating up, and employees will more often have the chance to compare benefits offerings among two or more companies. A total of 350 benefits specialists in the United States were surveyed. Reprinted from Workforce.com with permission. Workplace
Injury Rate Falls A total of 4.4 million nonfatal injuries and illnesses were reported in private industry workplaces during 2003, resulting in a rate of 5.0 cases per 100 equivalent full-time workers, according to the Bureau of Labor Statistics (BLS), U.S. Department of Labor. The rate of injuries and illnesses declined from 5.3 cases per 100 equivalent full-time workers in 2002. The decline is a result of a 7.1 percent decrease in the number of cases reported and a 0.7 percent decrease in the number of hours worked. For private industry in 2003, rates for injuries and illnesses ranged from 2.0 cases per 100 workers for small establishments (those employing 1 to 10 workers) to 6.2 for mid-size establishments (those employing 50 to 249 workers). Approximately 2.3 million injuries and illnesses were cases with days away from work, job transfer, or restriction; that is, they required recuperation away from work, transfer to another job, restricted duties at work, or a combination of these actions. The incidence rate for cases with days away from work, job transfer, or restriction was 2.6 cases per 100 workers, and the rate for other recordable cases was 2.4 cases per 100 workers. Of the 4.4 million nonfatal occupational injuries and illnesses in 2003, 4.1 million were injuries. There were about 269,500 newly reported cases of occupational illnesses in private industry in 2003. FROM IPMA-HR HR Bulletin Social
Security Reform Tops Legislative Agenda The Bush Administration is proposing two important changes to the system. First, by establishing private accounts where individual Americans would have some level of control over a small portion of their Social Security benefits. The benefits would be invested in the stock market, taking advantage of the traditionally positive rate of return on investments over a long period of time. The second change would involve reducing benefits by changing the way they are calculated. Instead of using the rise in wages over a worker's lifetime, the new benefits formula would rely on inflation, which is a much smaller figure. According to a Washington Post article, the Social Security benefits would be cut by nearly a third over the next several decades. The White House hopes that the private accounts will help soften the blow. The impact of these changes is uncertain. The White House Press Secretary, Scott McClellan said, "The President hasn't made any decisions about a specific proposal at this point, and I think that goes to your question. What the President has said is that this is a big priority, because this is a serious problem that we should not pass on to future generations. We need to work together in a bipartisan way to solve this problem now." IPMA-HR will be working to ensure that the retirement security of public employees is protected. The Association is a member of the Public Pension Network, a group of associations, retirement plans, and unions with a shared interest in the well-being of public sector retirees. Some groups such as the National Conference on Public Employee Retirement Systems (NCPERS) are opposed to the creation of private accounts. NCPERS describes the creation of private accounts as risky and expensive. Others, such as the National Conference of State Legislatures (NCSL) do not rule out the possibility of private investment but support it only within very strict confines. Mandatory coverage of all state and local government employees is likely to come up during the debate of Social Security reform. All the Public Pension Network groups, including IPMA-HR oppose mandatory coverage. State and local government entities operating outside the system already provide generous retirement benefits to their workers and mandatory coverage is likely to have a detrimental effect on these retirees. IPMA-HR will provide legislative updates on this issue as the debate progresses. In the meantime, please contact the government affairs department at: cchiapp@ipma-hr.org to let us know if you support or oppose the creation of private accounts as part of Social Security reform. Washington
Outlook The House of Representatives has 232 Republicans, 201 Democrats, one independent and one vacancy. The Senate has 55 Republicans, 44 Democrats and one Independent. Senate Minority Leader Tom Daschle (D-SD) lost his bid for re-election and the Democrats have selected Harry Reid (D-NV) as his replacement. Many of the committee chairmanships remain the same, but Senator Mike Enzi (R-WY) will take over as head of the Senate Health, Education, Labor and Pensions committee. Major issues for this Congress include the Bush Administration priorities: Social Security reform (discussed above), tax reform, and litigation reform. Capping damages in lawsuits is a key part of litigation reform and it may extend to medical malpractice although this is a highly contentious issue. Controlling medical costs is also likely to be hot issue in the 109th Congress but ultimate action is uncertain. Numerous proposals over the past several years to increase coverage of the uninsured and lower costs have been rejected. However, Senate Majority Leader Bill Frist (R-TN) is a doctor and health care reform remains a priority for him. A trend toward consumer driven health plans, such as expanding the availability of health savings accounts (HSAs) and support for the importation of drugs from Canada are two ways that public employers are seeking to lower health care costs. The United States Conference of Mayors (USCM) has recently adopted a policy in favor of allowing U.S. citizens access to cheaper drugs from Canada. On the regulatory front, IPMA-HR continues to seek clarification of the newly revised overtime regulations. The new regulations appear to require police sergeants and other first responders to be paid overtime if they have any responsibility for responding to emergencies, regardless of their rank or pay level. State and local budgets could be greatly impacted and IPMA-HR is working to address this situation. Health
Care Costs Are Number One U.S. Benefits Concern Other benefits issues of concern for senior management include retirement savings programs (44 percent), workers' compensation (31 percent), retiree benefits (25 percent) and long-term care (18 percent). The MetLife study was conducted during the third quarter of 2004. A total of 1,528 human resources/benefits executives from companies with at least two employees participated in the employer survey. FSA
"Use or It Lose" Rule Won't Be Changed By Treasury Department Unfortunately, workers have to guess in January how much money they will spend during the year. Similar to cell phone minutes, the funds cannot be rolled-over and revert to the employer if not used. Guess too high and an employee must either find some medical expenses before the end of the year or lose the money. Congress has attempted to pass legislation addressing this issue for the past several years and the Administration included a modification of the rule in the Treasury Department's budget proposals for fiscal years 2002, 2003 and 2004. However, nothing has been changed. Senator Charles Grassley (R-IA), Chairman of the Finance Committee, wrote to the Treasury Department, the agency with authority for implementing section 125 of the IRC, asking them to change the rule administratively rather than waiting for Congress to act. In his letter to the Treasury Department, Senator Grassley wrote "I am aware of no other area of benefits law in which we allow-let alone mandate-that employee dollars set aside for benefit expenses revert back to the employer. The current rule unjustly enriches employers at the expense of hard-working employees who participate in FSAs." In a letter dated December 23, 2004, the Treasury Department denied the request arguing that they lack the authority to make the change without Congressional action. Treasury Secretary Snow writes, "The use it or lose it rule was imposed in order to fulfill the Congressional mandate that cafeteria plans not provide for the deferral of compensation. The regulations interpret that requirement as prohibiting participants from carrying over unused benefits or contributions from one plan year to another." In addition, Secretary Snow says that allowing rollovers from one year to the next might negatively impact the use of health savings accounts (HSAs). Health savings accounts are also tax-advantaged plans that allow workers with high-deductible health insurance to set aside money to pay health expenses. The Bush Administration favors HSAs as a way to control health care costs. One possible solution proposed by Secretary Snow would be to allow a short-grace period following the end of the year in which expenses could still be deducted from FSAs without the employee forfeiting the money. Secretary Snow said the Department would be looking into whether or not it had the authority to make that change. Attention:
Employers with Workers Outside the Social Security System HHS
Issues Final Regulation on Access to Group Health Coverage The final regulation implements provisions of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) that provide greater portability and availability of group health coverage when workers and family members change or lose a job. The provisions set limits on preexisting condition exclusions that could be imposed and require group health plans and group health insurance issuers to offer "special enrollment" upon certain life events. The Departments of Labor and Treasury are issuing identical regulations simultaneously with a joint explanatory preamble. The regulation finalizes portions of an interim final regulation published on April 8, 1997, that limits the use and duration of preexisting condition exclusions imposed by group health plans and group health insurance issuers. It requires these entities to offer an immediate "special enrollment" opportunity to certain individuals who lose eligibility for other group health coverage or other health insurance, and to otherwise eligible new dependents. The final regulation, which becomes effective for plan years starting on or after July 1, 2005, does not significantly modify the framework of the 1997 interim final regulation. However, the response to comments received during the public comment period, the final regulation contains features that officials say are intended to bolster HIPAA's consumer protections while minimizing the burdens imposed on group health plans and group health insurance issuers. For example, the final regulation:
The departments of HHS, Labor, and Treasury also are publishing a proposed regulation that solicits comments on some potential additional aspects of HIPAA group health plan requirements. For example, the proposed regulation:
DOD
Introduces New Policy on Sexual Assault The policy is designed to provide a foundation through which DoD will improve prevention of sexual assault, significantly enhance support to victims and increase accountability. "The department is moving forward to make real changes and to make those changes stick," said Undersecretary of Defense for Personnel and Readiness David S.C. Chu in an interview with the American Forces Press Services. He added, "Sexual assault is a crime, and is not tolerated." Over the past year, DoD has worked with the different services, members of Congress, and national experts to address the crime of sexual assault within the armed forces. As a result, the Joint Task Force for Sexual Assault Prevention and Response was established in October 2004 as the single point of accountability for DoD's sexual assault policy. Its initial task was to develop policy incorporating the criteria set forth in Public Law 108-375, the Ronald W. Reagan National Defense Authorization Act for fiscal 2005, which directed the department to have a sexual assault policy in place by Jan. 1, 2005. The policies reflect recommendations from DoD's Joint Task Force on Care for Victims of Sexual Assault. Core areas include specific guidelines on how to investigate complaints, medical treatment and care for victims, reporting of sexual assault information, and expanding access to care through collaboration between military installations and local community support. In order to meet the Jan. 1, 2005, requirement from Congress, the department issued directive-type memorandums as the first step of a comprehensive, consistent policy. The department will be working closely with the services to implement the policies in an effective and timely manner. The joint task force will continue to provide oversight of the process. SITE OF INTEREST ON THE WEB U.S.
Labor Department Publishes Youth Employment Rules The Labor Department published today [16 December] in the Federal Register final regulations implementing changes to employment rules for youth. The new rules expand protections for youth working in restaurant cooking, roofing, and driving, among other changes. These rules are part of the department's ongoing effort to promote positive, safe work experiences for young workers, said U.S. Secretary of Labor Elaine L. Chao. This follows upon our very successful YouthRules' public awareness campaign launched in May 2002 to educate teens, parents, educators, employers, and the public about federal and state laws regarding young workers. The rules incorporate into the regulations the provisions of two statutory amendments to the Fair Labor Standards Act that deal with driving and the operation of compactors and balers by teenage employees. The first statutory change established criteria permitting 16 and 17-year-olds to load, but not operate or unload, certain waste-material baling and compacting equipment. The second statutory change delineated what limited on-the-job driving may be performed by qualified 17-year-olds. Provisions are also included to modernize the youth employment provisions regarding what types of cooking 14- and 15-year olds are permitted to perform. The new rules now permit those minors to clean and maintain cooking devices in some situations. The rules published today also expand the current prohibition against youth under age 18 working in roofing occupations to encompass all work on or about a roof , including work performed upon or in close proximity to a roof. Under the new provisions, youth may only perform such work if in an apprenticeship or student-learner program. The department published the rules following the review of comments received in response to a Notice of Proposed Rulemaking. The final rules address some of the recommendations made by NIOSH in a report to the department in May 2002. The complete text of the rule is now available in the Federal Register, online at http://www.gpoaccess.gov/fr/index.html; www.gpoaccess.gov/fr/index.html and the department's website at www.dol.gov. The department has also revised existing compliance assistance materials to comport with these new rules. These materials may be found at http://www.youthrules.dol.gov/; www.youthrules.dol.gov and http://www.wagehour.dol.gov/; www.wagehour.dol.gov. Information may also be obtained by calling the department's toll-free help line at 1-866-4USWAGE (1-866-487-9243). Rules
Become Effective in 60 Days http://www.dol.gov/opa/media/press/esa/ESA20042526.htm See new rules at http://frwebgate2.access.gpo.gov/cgi-bin/waisgate.cgi?WAISdocID=291557138493+0+0+0&WAISaction=retrieve or http://frwebgate2.access.gpo.gov/cgi-bin/waisgate.cgi?WAISdocID=291557138493+0+1+0&WAISaction=retrieve [PDF} or Summary at- http://frwebgate2.access.gpo.gov/cgi-bin/waisgate.cgi?WAISdocID=291557138493+0+2+0&WAISaction=retrieve REGIONAL
AND STATE EMPLOYMENT AND UNEMPLOYMENT: Regional and state unemployment rates were generally little changed in November. All four regions and 47 states and the District of Columbia recorded changes in their jobless rates of 0.3 percentage point or less from October, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Over the year, jobless rates declined in all four regions and in 42 states. The national unemployment rate was essentially unchanged over the month at 5.4 percent in November. Nonfarm payroll employment increased in 35 states and the District of Columbia over the month. http://www.bls.gov/news.release/laus.nr0.htm (for full report) State
Personal Income: Third Quarter 2004 Personal income growth for the nation slowed to 0.8 percent in the third quarter of 2004, down from an upwardly revised 1.6 percent second-quarter growth rate, according to new estimates released today by the U.S. Bureau of Economic Analysis. The eight BEA regions grew at very similar rates-differing from national growth by at most 0.2 percentage points-in contrast to last quarter when the Rocky Mountain region grew at nearly twice the pace of the Mideast region. http://www.bea.gov/bea/newsrel/SQPINewsRelease.htm Worker
Health Chartbook, 2004 The Worker Health Chartbook, 2004 is a descriptive epidemiologic reference on occupational morbidity and mortality in the United States. A resource for agencies, organizations, employers, researchers, workers, and others who need to know about occupational injuries and illnesses, the Chartbook includes more than 400 figures and tables describing the magnitude, distribution, and trends of the Nation's occupational injuries, illnesses, and fatalities. http://www.cdc.gov/niosh/docs/chartbook/ |
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