The Patient Protection and Affordable Care Act ("PPACA") will impact every citizen in a variety of ways and challenge employers to meet its requirements. It remains to be seen whether the PPACA will survive the multiple lawsuits already filed against it and the elections coming this November. As currently written, however, beginning in 2014 the PPACA will require employers who employ as few as fifty employees to provide federally approved health insurance or pay a fine. While the PPACA imposes multiple health insurance changes affecting every citizen, this article highlights a few broad points every business should be aware of.
Discrimination Suits
Among many other issues of concern to businesses, the PPACA will most likely lead to an increase in discrimination lawsuits. Unfounded discrimination claims are already a constant concern. Unfortunately, the PPACA creates a new protected class, the poor, who will sue employers at every opportunity when they are subject to adverse employment actions.
This problem has been created because Congress decided that certain employees should be more costly to employ than others. Employers will be required to pay increased fines for employees who elect to receive premium subsidies from the government. Whether a person qualifies to receive these subsidies will depend upon their income or family income, if applicable. This will result in circumstances where it becomes more costly to employ a person if their spouse loses his or her job, thus lowering their family income. Because this presents an obvious disincentive to hire such individuals, the new law provides that taking an adverse employment action against them, because of their economic status, is unlawful discrimination. This results in an entirely new class of workers that can, and very likely will file discrimination claims based upon their individual or family income level.
As a result, employers are further encouraged to ensure that employment decisions are consistent. Consistency is no easy task and requires an evaluation of the many and varied relationships within each workplace. Congress' foray into health care has increased the need to maintain constant vigilance in this area.
Fifty Employees
Employers having fewer than fifty employees escape the clutches of the PPACA. This has many creative business people coming up with ways to make sure their company stays under this magic number. There are a variety of methods that can be used to lower the number of employees and remain productive. There are also many ways that employers can run afoul of the heavy regulatory requirements in this area.
One method for lowering the number of employees is to move them into independent contractor positions. Many people are under the mistaken assumption that this can be accomplished by simply changing a person's method of pay. This is not the case. State and federal agencies all have stakes involved. They have worked very hard over the past century to legislate and regulate every aspect of the employer-employee relationship and they will not let you just decide to step around those laws with an accounting trick. Moreover, different agencies have different standards. The IRS assesses the relationship under one test, the Department of Labor another. Additionally, each State and its various administrative bodies take different approaches. It is not impossible for a worker to be a legitimate independent contractor, it is difficult. As a result, make sure to thoroughly review the matter with counsel before proceeding.
Private Break Areas
While most of the PPACA staggers into place over the course of the next eight years, at least one area of the new legislation has already gone into effect. Employers must now accommodate employees who need to express breast milk. Specifically, employers are required to provide a "reasonable break time" and "a place, other than a bathroom, that is shielded from view and free from intrusion from co-workers and the public, which may be used by an employee to express breast milk." 29 U.S.C. § 207(r)(1). Employers with fewer than fifty employees are not required to comply with this requirement if they can demonstrate that providing this benefit would present an undue hardship. More than likely, detailed regulations will soon follow that tell us exactly how to implement this new unfunded mandate. Finally, if this is making you rethink your hiring decisions, refer once again to the above-mentioned "Discrimination" section of this article.
Change
No matter what your opinion of the substantive value of the recent health care legislation, employers can learn an important lesson from the way in which it was brought about. At the very least, this new law has caused a great amount of strife and confusion throughout the country. This is due in large part because our government altered much over a short period of time. Employers should keep this example in mind when contemplating changes in the workplace. Generally, employees do not mind change when it results from a maturely developed and deliberative process. They do mind rushed, wholesale alterations in their working lives. Even if the change is perceived as a positive step, it can cause workplace inefficiencies and disruptions. Additionally, employees often start thinking that they really are interested in union representation during times of great upheaval. Keep this example in mind when considering how not to implement new workplace policies and procedures.
Conclusion
Last year, we expected that the Democratically controlled Congress and White House would change labor and employment laws drastically. The PPACA is not the vehicle in which we thought they would accomplish that, but they certainly have driven a bulldozer through the employment landscape. During the remainder of 2010, we may see more workplace oriented legislative action like Union Card Check or paid Family and Medical Leave. Or, if employers are fortunate, our leaders may just get tied up in knots over Cap and Trade and immigration issues and leave American employers with a moment to catch their breath.
Please contact us at Ferguson Law Group for any Employment Law questions or issues you may have.
FERGUSON LAW GROUP
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