Title Goes Here

Association of Corporate Counsel - AustinJune 2013

Pay or Play? Facing the Challenge of 2014

Overview

Affordable Care Act – Status Employer Shared Responsibility

Five Key QuestionsConsequencesConsidering the Options

PPACA – The Fight Continues…

Sharing is Mandatory

The Five Questions

Question #1: Are you covered? Question #2: Do you have a plan and if so,

who’s in it? Question #3: Is your plan affordable? Question #4: Does your plan provide

minimum value? Question #5: Will any employees receive a

subsidy for exchange coverage?

Question #1

Are you covered?

50+ FTEs employer-wide?

NO YES

What ALEs You?

Are you an A.L.E.? A controlled what? Counting noses

Question #2, Part 1

Do you have a plan?

NO YES

A Failure to Plan

An Offer You Can’t Refuse?

Measuring Up?

No Coverage for You!

Question #3

Does your plan offer minimum value?

NO YES

Pays at least 60% of costs

for MEC?

How Low Can You Go?

Question #4

Is your plan affordable?

NO YES

Cost of self-only coverage under

lowest cost plan > 9.5% of household

income?

Brother, Can You Spare 9.5%?

Question #5

Will any employee be eligible for

subsidized exchange

coverage?

Your Fate Hangs in the Balance

The Final Equation

No Coverage

Skimpy Coverage

Unaffordable Coverage

“Good” Coverage

$$$ $$ $*

*Unfortunately, “good” coverage costs $$$

The “Big” Penalty – 4980H(a)

The “Lesser” Penalty – 4980H(b)

So, Now What?

Pay? Or Play?

Points to Ponder

Evasive Maneuvers

Workforce Restructuring

Recap & Strategies

Do the math – calculate potential penalties and know how they impact you

Data management – develop timely access to accurate personnel data

Worker classification – correctly identify common law employees

Enrollment - execute mistake-free open and special enrollment periods

Questions?

Title Goes Here

Presented By:

Jacquelyn P. Maroney

6/20/13

Comprehensive Immigration Reform:Proposed Legislation’s Impact on Employers

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On April 17, 2013, the “Gang of 8” introduced S.744, the Border Security, Economic Opportunity, and Immigration Modernization Act of 2013 in the Senate.

Key provisions of interest to employers: H-1B and L-1 visas New visa program for lower-skilled workers Employment verification

Immigration Reform 2013

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Positive & Negative Impact on Employers

+ More H-1B Professional Work Visas Available

- Lengthier & more expensive process to obtain H-1B Professional Work Visas

- Additional rules and fees relating to “outsourcing” H-1B and L-1 workers to third-party sites

+ New Work Visa (“W”) Classification for Lower- Skilled Workers

- Mandatory E-Verify

- Increased civil and criminal liability for employing authorized individuals

+ Eliminating State-by-State Patchwork of State Immigration Laws

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H-1B Professional Work Visas(+) Increase in the Cap Current: Annual numerical limit is 65,000/year. Proposed:

Increase cap to 115,000/year; May further increase cap to 180,000/year maximum

depending on labor demands and unemployment rates. Possible quota increases of 5,000 to 20,000 within fiscal year, if

cap is reached and unemployment rates for professionals is below 4.5%.

Current: 20,000 additional H-1Bs available to those with U.S. advanced degrees

Proposed: Amend this to 25,000 additional H-1Bs available only to those with U.S. advanced degree in STEM fields.

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H-1B Professional Work Visas(-) New Rules Requiring Test of Labor Market

Recruitment—All H-1B employers would be required to post H-1B jobs on DOL website and engage in good faith recruitment (using industry-wide standards).

Non-Displacement—All employers must attest that they have not displaced a U.S. worker with purpose of replacing worker with H-1B employee.

DOL given expanded authority to review LCAs and audit H-1B employers. LCA process expanded (14 days). Most fines for LCA violations would be doubled.

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H-1B Professional Work Visas(-) New Rules/Fees on Outsourcing H-1B dependent employers prohibited from

outsourcing H-1B employees. Dependent employers have 15% or more full-time,

equivalent H-1B employees. Intending immigrants are not counted in calculation toward

H-1B dependency if under “covered employer” (i.e., employer has filed I-140 petitions for 90% of L-1 and H-1B visa holders in 12 months preceding last six months).

H-1B non-dependent employers required to pay a $500 fee for each outsourced H-1B worker.

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L-1 Intra-company Transfer Visas(-) New Rules on Outsourcing

The Senate amended bill prohibits L-1B outplacement if 15% or more of the employer’s full-time equivalent workforce is made up of L-1Bs, including intending immigrants.

Otherwise, L-1B outplacement prohibited unless: The worker is controlled and supervised by petitioning

employer; The placement is not an arrangement to provide labor

for hire; and The employer pays a fee.

DHS granted expanded investigative powers.

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New “W Visa” (+) Program for Lower-Skilled Workers New nonimmigrant classification for foreign

workers in low-skilled jobs.

Beginning in 2015, the annual cap for W visas is 20,000 for the first year and increases to 75,000 by the fourth year.

For each year after the fourth year, the annual cap will be calculated according to a statistical formula taking into account various factors.

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Employment Verification

(+) All state and local laws and policies that relate to employment re-verification would be invalidated.

(-) U.S. companies must implement the enhanced E-Verify employment verification system over a 5-year phase-in period to prevent unauthorized workers from obtaining employment in the U.S.

Employers with more than 5,000 employees phased in within 2 years. Employers with more than 500 employees phased in within 3 years. All employers, including agricultural employers, phased in within 4 years.

(-) Civil and criminal liability would increase substantially.

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Title Goes Here

Presented By:

Jacquelyn P. Maroney

6/20/13

Comprehensive Immigration Reform:Proposed Legislation’s Impact on Employers

June 20, 2013Employment Law Update

Chris Wike (Austin)

Overview

Mission Consolidated Independent School District v. Garcia (Age Discrimination)

Texas West Oaks Hospital, LP v. Williams (Non-Subscriber Cases)

Miller v. Raytheon Co. (Emotional Distress Damages)

Symcyzk v. Genesis Healthcare Corp. (FLSA)

Arbitration Agreements and Jury Waivers

Age Discrimination

Mission Consolidated I.S.D. v. Garcia

Mission Consolidated I.S.D.

Plaintiff was a 48 year-old Mexican-American female

Replaced by a 53 year-old Mexican-American female

Brought claims under the Texas Labor Code for discrimination based on race, national origin, gender, and age

Mission Consolidated I.S.D.

Lower court dismissed race, national origin, and gender, but maintained age claims under “otherwise showing” standard

Texas Supreme Court rejected McDonnell Douglas test and held that Texas law requires a plaintiff to show that they were replaced by someone younger

Mission Consolidated I.S.D.

What this ruling does NOT apply to: Group layoffs—must be a true replacement case

Direct evidence cases—only applies to cases where McDonnell Douglas test comes into play

Non-Subscriber Workplace Injuries

Texas West Oaks Hospital, LP v. Williams

Texas West Oaks Hospital

Defendant was a non-subscriber to WC insurance and Plaintiff-employee was injured on the job

Texas Supreme Court found that negligence claims arising out of on-the-job injuries are “health care liability claims” under the Texas Medical Liability Act

Texas West Oaks Hospital

Practical implications:

Plaintiff must file an expert report within 120 days from date the petition was filed

Failure to comply leads to mandatory dismissal with prejudice

Defendant must be a health care provider and must be a non-subscriber to WC insurance

Emotional Distress Damages

Miller v. Raytheon Co. (5th Cir.)

Raytheon Co.

Age discrimination case brought under Texas Labor Code Chapter 21 and ADEA

Group layoff decisional group consisted of 34, 49, 53, 54, 55 All were terminated except 34 year-old

Jury awarded $350K in back pay (X2) and $1M in emotional distress damages Emotional distress lowered by court to $100K

Raytheon Co.

5th Circuit held that Plaintiff’s self-serving testimony was insufficient to maintain award of emotional distress damages without testimony of medical expert

Practical implications

FLSA Collective Actions

Symczyk v. Genesis Healthcare Corp.

Genesis Healthcare Corp.

The Question: Can you pick off a named plaintiff to moot a putative collective action?

U.S. Supreme Court held that a mooted plaintiff can no longer represent a putative class as they have no personal interest in the case

Genesis Healthcare Corp.

The kicker: The SC did NOT address issue of whether an unaccepted offer of full relief moots a plaintiff’s claims

Genesis Healthcare Corp.

Kagan’s dissent: “Feel free to relegate the majority’s decision to the farthest reaches of your mind: the situation it addresses will never again arise.”

5th Circuit holds that an unaccepted offer of full relief does moot claims of individual plaintiff in FLSA case, but courts should allow a reasonable time to file a certification motion (Sandoz v. Cingular Wireless (2008)).

Arbitration Agreementsand Jury Waivers

Arbitration Agreement Pros: Avoids jury uncertainty allowing claims to be

decided on the merits Generally less expenditure on costs of defense Can potentially prevent collective claims

Arbitration Agreements

Arbitration Agreement Cons: Split-the-baby mentality Certain limitations for employers May spend a great deal of time litigating

enforceability if not well-constructed

Arbitration Agreements

Arbitration Agreement…meh… May not be material difference in amount of final

award Limited right to appeal Simplified procedure and evidence rules

Jury Waivers

In lieu of arbitration agreements Power of courts behind decision Appeal rights Same diminished value of plaintiff’s claims Judges may be more receptive to dispositive

motions What you may lose…

Class/collective action waivers Considerations

OWBPA compliance

Arbitration Agreementsand Jury Waivers

Ensure agreement complies with law of all states where you have employees

Have stand alone agreement apart from handbook

Provide in Spanish

June 20, 2013Employment Law Update

Chris Wike (Austin)