Hello,

Here is the latest blog issue of “This & That” Tuesday. I hope you find it to be informative and useful.

Patient Protection and Affordable Care Act (PPACA)

The law will become effective in 2014, however; there are some major new requirements that need to be in place before 2014 so it would be a good idea to start planning for those. 

• Summary of Benefits and Coverage – For any open enrollment periods beginning on or after September 23, 2012, group health plans must provide employees with a new notification called a Summary of Benefits and Coverage (SBC). The SBC is similar to a Summary Plan Description but is intended to be a more concise document focusing on available coverage, cost-sharing provisions, benefit limitations, and similar issues. The SBC, however, is not a substitute for a Summary Plan Description. The group health plan must provide an SBC on an annual basis, typically during each open enrollment period. Failure to provide an SBC may result in a penalty of up to $1,000 per enrollee/participant.
• W-2 Reporting Requirements – Employers must report the value of employees' health coverage on annual W-2 forms. This requirement is effective for the 2012 tax year, so W-2 forms issued in January 2013 should include this information. Employers which issue fewer than 250 W-2 forms are currently exempt. 
• Changes to Health Care Spending Accounts – Effective on January 1, 2013, the definition of "qualified medical expense" is narrowed which will affect reimbursements and withdrawals under all types of health care accounts, such as flexible spending accounts, health reimbursement arrangements, health savings accounts, and Archer medical savings accounts. Over-the-counter medications will no longer be a "qualified medical expense." Additionally, the amount employees could contribute to health care flexible spending accounts will be capped at $2,500. 
• Nondiscrimination Requirements for Fully Insured Plans – Group health plans which are fully insured will be subjected to annual testing to determine whether their benefits are disproportionately favorable to highly-compensated employees. The effective date of these requirements has been delayed, and further guidance is expected before they become effective. Grandfathered health plans will not be subject to testing.

Brooks County, Texas Settles EEOC Retaliation Discrimination Suit

Brooks County, Texas will pay $20,000 and furnish other relief to settle an employment discrimination lawsuit filed by the EEOC. The EEOC had charged that the county government unlawfully retaliated against an employee for filing an age discrimination complaint.

According to the EEOC’s suit, Brooks County repeatedly refused to give a salary increase to the employee and failed to consider her for another position because she had previously filed a complaint of age discrimination, which resulted in a civil suit against Brooks County.

Retaliating against individuals who oppose what they believe to be discriminatory conduct on the basis of age (40 years of age or older) violates the Age Discrimination in Employment Act (ADEA). The EEOC filed suit after first attempting to reach a pre-litigation settlement through its conciliation process.

The two-year consent decree settling the suit enjoins Brooks County from engaging in any further conduct prohibited by the ADEA, and requires the county to pay $20,000 to the retaliation victim. In addition, Brooks County must implement an effective policy against age discrimination and retaliation and post a notice that it will comply with all the provisions of the ADEA. The county must also provide training on age discrimination, including retaliation, to all its elected officials with authority to hire, promote, terminate and demote employees.

Ready Mix to Pay $400,000 to Settle Racial Harassment Lawsuit

Ready Mix USA, a major cement and concrete products company, will pay $400,000 and furnish other relief to settle a lawsuit for racial harassment filed by the EEOC.

The EEOC charged in its lawsuit that a class of African American males at Ready Mix’s Montgomery-area facilities was subjected to a racially hostile work environment. The EEOC said that a noose was displayed in the worksite, that derogatory racial language, including references to the Ku Klux Klan, was used by a direct supervisor and manager and that race-based name calling occurred. Ready Mix denies that racial harassment occurred at its worksites. The EEOC filed suit against Ready Mix USA LLC after first attempting to reach a pre-litigation settlement through its conciliation process.

The consent decree settling the suit provides that Ready Mix will pay a total of $400,000 in compensatory damages to be apportioned among the seven class members. The two-year decree enjoins Ready Mix from engaging in further racial harassment or retaliation and requires that the company conduct EEO training. Ready Mix will be required to modify its policies to ensure that racial harassment is prohibited and a system for investigation of complaints is in place. The company must also report certain complaints of harassment or retaliation to the EEOC for monitoring.

Content of Commission Agreement Is Important

California Labor Code sec. 221 prohibits employers from engaging in “self-help” by withholding from an employee’s wages any money owed to the employer. However, in the case of commission wages, the employer and employee often have a written agreement that provides for an advance on commissions, and a charge-back for recouping commission advances if the conditions required for payment of a commission are not met.

Under California law, employers and employees may agree that an employee must satisfy certain conditions before earning a sales commission and an employer may recoup an advance if these conditions are not satisfied. However, to rely on those conditions as a basis for recouping an advance paid for a commission, the condition must be clearly expressed and generally must be set forth in writing. This is another reason to have clearly written, detailed commission agreements in plain, easy to understand English.