State News

VERMONT WORKERS' COMPENSATION UPDATE
JANUARY TO MARCH 2013
by Keith J. Kasper Esq.

DEPARTMENT OF LABOR HEARING DECISIONS

LeClaire v. Ford of Brattleboro Inc., Opinion No. 1-13WC (Jan. 3, 2013).
Defendant's attempt to terminate TTD benefits due to concurrently disabling heart condition denied. "As it was in Wood, the critical fact here is that during the time when Claimant's non- work-related condition precluded treatment, his work-related injury continued to be totally disabling. Given the express language of the statute, which mandates that temporary total disability benefits be paid for so long as the work injury 'causes total disability for work,' 21 V.S.A. §642, sufficient grounds for discontinuing them in this case do not yet exist."

Roy v. The Howard Center, Opinion no. 2-13WC (Jan. 10, 2013).
Claimant's mental-mental claim found compensable as finding dead co-worker satisfies unusual stress standard. Treating psychiatrists' opinion found more credible than that of IME doctor's opinions as more objectively based.

Kibbie v Killington/Pico Ski Resort, Opinion No. 3-13WC (Feb. 5, 2013).
Request for Summary judgment denied as prior settlement agreement which left open treatment for TBI did not necessarily foreclose proposed physical therapy recommendation.

Pawley v Booska Movers, Opinion No. 4-13WC (Feb. 5, 2013)
Attorney fees awarded to Claimant for one carrier initially denying claim compensable but then retracting that defense after depo of Defendant's expert witness.  "Were this the first time Claimant had sought to establish the compensability of either incident, I likely would conclude that Dr. Pulde's report provided a reasonable basis for his employer to deny his claim for benefits. The fact is that Claimant's employer previously had accepted compensability, however. True, this occurred while another carrier was on the risk. But the statute equates employer with insurer, so both are thereby bound. 21 V.S.A. §601(3); Workers' Compensation Rule 2.1190. Given this particular circumstance, I conclude that Vanliner had no reasonable basis for denying the compensability of Claimant's August 2011 DVT on the grounds that it was not related to his employment."

Puzic v Huber + Suhner, Opinion No. 5-13WC (Feb. 5, 2013).
Defendant's IME opinion found credible even though Hearing Officer did "not accept as credible his conclusion that Claimant's ongoing symptoms were most likely due to rheumatoid arthritis or to her 2009 fall while shopping. However, I do accept as credible his conclusion that there is no medical basis whatsoever for relating Claimant's symptoms back to her 2002 work injury. That injury, which was diagnosed at the time as a myofascial strain caused by repetitive shoulder activities, resulted in no permanent impairment, no documentable structural defects, no objectively verifiable range of motion limitation and only minor functional restrictions. I conclude that there is no medical process by which Claimant's ongoing symptoms, which in the nine years since have both worsened and become more diffuse, reasonably can be attributed to her initial work-related insult."

Maluk v Plastic Technologies of Vermont, Opinion No. 6-13WC (Feb. 5, 2013).
Pro se Claimant fails to qualify for TTD benefits. "Here, the uncontradicted medical evidence establishes that claimant was capable of working, albeit with modified duty restrictions, at all times subsequent to his November 30, 2011 injury. The credible evidence further establishes that Defendant was providing suitable modified duty work. By first calling in sick and then abandoning his job, Claimant removed himself from the work force without a medical basis for doing so. Whatever wages he lost thereafter were a function of that decision, not his work injury."

Simmons v Landmark College, Opinion  No. 7-13WC (Feb. 28, 2013)
Defendant's IME doctor's opinion as to reasonableness of fourth neck surgery found more credible than that of treating surgeon. Symptoms found compensable as related to issues covered by Form 22, but not surgery to correct said symptoms.

DeChantal  v Sears, Opinion No. 8-13WC (Feb 28, 2013)
Claimant's low back injury found compensable based upon Claimant's IME opinion that  work activities caused a "'classic presentation'...[as] Claimant's symptoms progressed from feeling a 'twinge' or pop while engaged in a vehicle repair job at work on July 19th to being unable to get out of bed on July 21st."

Randall v Health Services Group,  Opinion No. 9-13WC (Mar. 12, 2013).
Treating physician's opinion as to proposed cervical surgery found not as persuasive as treating surgeon's opinion as  to causation of cervical condition and reasonableness of proposed cervical surgery. IME doctor "has not explained adequately h ow it  is that the benefit Claimant derived (or not) form her shoulder surgeries is likely to be an accurate predictor of whether she will (or will not)benefit from cervical surgery."

Haskins v Green Mountain Coffee Roasters Opinion No. 10-13WC (Mar. 18, 2013)
IME expert's opinion rejected over that Claimant's treating physician. "Had there been evidence from which he could determine, to the required degree of medical certainty, that the carpal tunnel symptoms Claimant was exhibit form September through November 2011 were due to a burgeoning systemic inflammatory response or autoimmune disorder, I might have found his opinion persuasive."  However, DOL accepts IME doctor's opinion that chiropractic treatment of CTS was not reasonable.

The ALJ found that the claimant was an employee. She noted that although the MMA fights only occurred a few times a year, the evidence indicated that the employer regularly conducted special events. The Judge did note that while the claimant was called to work because he possessed knowledge necessary to customize lighting, she found that this was not an occupation that required special skills. The Judge also found there was no evidence that the employer would have allowed the claimant to hire assistants or substitutes. Furthermore, the employer had the right to hire, discharge and determine the claimant's pay. The employer also owned all of the equipment including the lights, microphones and computers. The Judge also noted that the claimant was paid by the hour, which was indicative of an employment relationship. The ALJ also found that there was a continued relationship since the employer regularly called the claimant to perform these services, despite the fact that he only worked five separate occasions. The Judge did note that the details of the work were controlled by the claimant suggesting independent contractor status. The Judge also noted that the claimant was paid by a 1099 which would also suggest independent contractor status. However, after reviewing all of the evidence in the record, the Judge noted that the weight of the evidence supported that the claimant was an employee. The Commission affirmed.

No Evidence for ALJ's Award of TTD and ALJ May Order a Change in Provider But Cannot Direct

Employer to Use Specific Provider

In Lisa Bush v. West Chester House, Injury No. 10-109482, the ALJ issued a Temporary or Partial Award in which he opined that the claimant was entitled to 6 weeks of TTD benefits as a result of a carpal tunnel release which was performed on November 12, 2010. The ALJ based his Award on Dr. Crandall's testimony that a surgery such as the one performed on the claimant generally requires 6 weeks of recovery. The Commission noted that there was no testimony in the record regarding the claimant's ability to compete in the open labor market or the total amount of time she missed from work due to her surgery. Therefore, the claimant failed to meet her burden of proving her entitlement to 6 weeks of TTD benefits awarded by the ALJ.

The Commission also addressed the ALJ's decision to award treatment with a specific physician. The ALJ ordered a change in provider to Dr. Glogovac. The Commission first noted that the claimant did not prove that the employer waived its right to direct her medical treatment, and the ALJ did not even make that finding in his Award. Second, the claimant failed to prove that her health and recovery had been endangered by the medical treatment provided by the employer. Furthermore, the Commission noted that even if the claimant met this burden, the only relief provided under the statute was that the Division or Commission may order a changein physician, surgeon, hospital or other requirement. The statute does not authorize the Division or Commission to appoint a specific doctor to provide the claimant's medical treatment. Therefore, the Commission found that the ALJ erred in ordering the claimant's medical treatment to be provided specifically by Dr. Glogovac.

The Legislature is Back in Town - Take Heed!

The Legislature is considering a number of bills involving changes to comp – some minor, somenot so minor. The bills which would have the greatest impact on system participants if passed include:

• HB 3022 - Creates a deadline for disputing extent of injury, requiring the carrier to dispute the treating doctor’s determination of the extent of the compensable injury by requesting a DD exam or BRC within 90 days of receiving the treating doctor’s report.

• HB 2630 - Provides that the right to dispute extent of injury is waived if not contested within 60 days of the date that the carrier receives written noticeof a "new manifestation of the original injury, an additional injury, or an additional diagnosis." The bill does not clarify what constitutes written notice for the purposes of this section. If passed, this will have a huge impact on carriers, as every medical bill and report received will need to be carefully reviewed immediately upon receipt for any mention of a new diagnosis or condition.

• HB 2627 - Provides that a party need only "contest" the first valid certification of MMI and IR within 90 days to prevent it from becoming final, clarifying thatcontesting the certification only requires the party to file a written notice with the Division, which shall not serve as a request for a BRC, and expressly stating that a BRC should be requested when the party is fully prepared to enter into the dispute resolution process.

• HB 2660 - Provides that a party may not call an expert to testify on an issue during a CCH or in court unless the party exchanged a report of the expert witness in accordance with the exchange rules.

• HB 2629 - Provides that the Division shall use the range of motion model from the 4^th edition of the AMA Guides to determine impairment for all lumbar injuries, instead of the injury or diagnosis-related estimates model.

• HB 1468 - Provides that communications between the carrier and the employer are confidential and privileged if the communication is: (1) in furtherance of the employer’s rights under chapter 408, 409, or 410; (2) in anticipation of an administrative or judicial proceeding; or (3) for the purpose of facilitating the provision of professional services by the carrier to the employer.

• HB 1155 - Removes the word "temporary," so that the statute would allow a carrier to suspend payment of any kind of income benefits if an employee fails to submit to a designated doctor exam.

• HB 2249 - Provides that a claimant is also entitled to LIBs for a whole person IR of 85% or higherbased on the 6^th edition or a subsequent edition of the AMA Guides that is the result of compensable injuries suffered in a single incident.

• HB 3280 - Provides that a health care provider cannot seek reimbursement for health care from the injured worker unless the injury has been finally adjudicated not compensable,or the employee fails to request a BRC to dispute the carrier’s denial of compensability within 45 days after receipt of the denial.

Participants Weigh In On Proposed Change To Rule 130.1

WorkCompCentral.com reports that based on the comments received by the Division, carriers and defense attorneys are largely supportive of proposed changes to Rule 130.1, which would clarify that certifications of impairment ratings based on dates other than the date of MMI are barred from evidence. The Division proposed the changes in response to a ruling by the Court of Appeals for the 6^th Appellate District inSORM v. Joiner that a hearing officer could consider a doctor’s report that based the claimant’s IR on his condition as of July 5, 2006, even though the claimant did not reach MMI until five days later. The OIEC is opposing the proposal.

A Reminder Never Hurts - Medical Fee Dispute Process

For medical fee disputes filed on or after June 1, 2012, a party may appeal the decision by requesting a BRC within 20 days of receipt in accordance with 133.307(g). In the absence of a timely request for a BRC, the decision becomes final. If the dispute is not resolved at the BRC, a party may elect to resolve the dispute through binding arbitration, or the party can request a SOAH hearing by filing a written request with the Division’s Chief Clerk of Proceedings no later than 20 days after the BRC. However, the losing party is required to reimburse the Division for the costs of SOAH’s services and any applicable interest. Information on SOAH costs can be found athttp://www.tdi.texas.gov/wc/mfdr/documents/soahmfdcchcosts.pdf.

2013 Disciplinary Actions

Disciplinary orders were entered against doctors John Gray Andrew, Howard Thomas Douglas III, George Howell Johnson, Sr., Charles W. Kennedy, Jr., and Asra Oberoi for failure to comply with requirements for designated doctor examination and reporting. Dr. Darey Allen Philbrick was removed from the workers’ compensation system and no longer has a medical license.

Another system participant, Dr. Ernest Roman, permanently surrendered his license to practice medicine per the terms of an agreed order in lieu of further disciplinary proceedings against him before the Texas Medical Board for alleged improper operation of a pain management clinic.

Governmental Immunity May...Or May Not Cover Third-Party Administrators

The Amarillo Court of Appeals recently affirmed the trial court’s summary judgment disposing of claims for damages alleged by the injured worker to be the result of tortious conduct by MHMR, the Risk Management Fund, and the Division. The Court of Appeals agreed that the trial court lacked subject matter jurisdiction because the defendants are immune from suit, finding no clear or unambiguous waiver of that immunity in the Labor Code or Texas Tort Claims Act that would permit suit against them for intentional torts. However, the Court reversed the judgment with respect to defendant JI Specialty Services, holding that the record did not establish that governmental immunity precluded the trial court’s jurisdiction over the claims against MHMR’s third party administrator. The Court found the cases relied on by Specialty Services inapplicable, as they were decided on other grounds rather than any finding that the third-party administrator shared the government entity’s immunity. The Court noted that an Austin Court of Appeals opinion not cited by either party holding that the third party administrator for a state agency was entitled to assert sovereign immunity was based on the relationship between the administrator and the agency as defined by the terms of their contract, while there was no contract in evidence in this case, but cautioned the parties not to read into the discussion any suggestion of the Court’s opinion regarding whether a more developed record might support Specialty Services’ claim of immunity.Taylor v. Lubbock Regional MHMR, JI Specialty Services, Inc., Texas Council Risk Management Fund and TDI-DWC, issued January 8, 2013.

When an employee moves for legitimate reasons, but labor market research cannot be performed in the new hub community, the community at the time of injury should be used.  Here, because the appointed counselor could not perform labor market research in the town in Mexico where claimant moved, the trial court erred in finding the hub for determining loss of earning capacity (LOEC) was Mexico. The Court also held that in a modification action to terminate a running TTD award, the employer’s burden of proving a decrease in incapacity was satisfied by showing the claimant reached MMI.  The burden of proving entitlement to permanency remained with claimant.

Case Report – By Karin L. Weingart, March 29, 2013

Gore v. WVOIC and Boone County Parks & Recreation Comm’n, (W.Va. 3/28/2013)

On March 28, 2013, the West Virginia Supreme Court of Appeals issued a decision supporting the ranges of permanent impairment in spinal injuries which limit excessive permanent partial disability awards.  In a Memorandum Decision inGore v. WVOIC and Boone County Parks & Recreation Comm’n, No. 11-0612 (W.Va. 3/28/2013), the Court addressed the petitioner’s challenge to the Rule 20 tables for ranges of permanent impairment for spinal injuries.  In West Virginia, the basic operation for permanent impairment ratings for lumbar, thoracic, and cervical injuries requires the IME physician to assess impairment pursuant to the range of motion model for impairment found in the American Medical Association’s Guides to the Evaluation of Permanent Impairment, 4^th Edition.  The resulting impairment rating is then applied to the appropriate category in the corresponding table in W. Va. C.S.R. § 85-20 (“Rule 20”) and adjusted accordingly, if needed, to fall within the appropriate range. 

The claimant challenged the rule and procedure, arguing that although the workers’ compensation statute gives the Commission authority to “adopt standards for the evaluation of claimants and the determination of a claimant’s degree of whole body medical impairment” the Legislature clearly intended that a claimant be compensated based upon medical impairment personal to him.  The claimant argued that W. Va. C.S.R. §§ 85-20-64.1 and 64.2 are in direct conflict with W. Va. Code § 23-4-6(i). The claimant asserted that each claimant is to be compensated commensurate with the degree of his or her medical impairment, not a preconceived estimate of impairment based upon diagnostic codes. The claimant argued that the Rule 20 tables for ranges of impairment base permanent partial disability awards on diagnosis rather than actual whole person medical impairment specific to the claimant.  He also noted that the Court had previously determined in Repass v. Workers’ Compensation Division, 212 W.Va. 86, 569 S.E.2d 162 (2002) that diagnosis based disability ratings were invalid and unreliable because they conflict with the proper time for such ratings, the proper treatment of progressive injuries, the procedure for reopening, and consideration of second injuries.

In theGore opinion, an unanimous Court recognized that the Legislature charged the Board of Managers in W. Va. Code § 23-4-3b with the task of adopting ranges of permanent partial disability for common injuries.  The Court further found that the Board’s decision to determine impairment by using the AMA Guides Range of Motion model and applying that to the appropriate table is consistent with the intention of the Legislature as expressed in W. Va. Code § 23-4-6(i).  The Court also cited to their prior decision in Simpson v. West Virginia Office of Insurance Commissioner, 223 W. Va. 495, 678 S.E.2d 1 (2009), where the Court stated that W. Va. C.S.R. Table § 85-20-C (2004) is valid and is a proper exercise of the rule-making authority delegated to the Workers’ Compensation Board of Managers by the Legislature in W. Va. Code § 234-3b(b) (2005). 

The Goredecision upholds a standard developed by the Board of Managers and which has been a key factor in containing what had previously been rather excessive PPD awards for common spinal injuries.

Karin L. Weingart, Esq.

Spilman Thomas & Battle, PLLC

kweingart@spilmanlaw.com

On March 1, 2013, the Alabama Court of Civil Appeals released its opinion in Ex Parte Russell Threadgill wherein it denied in part and granted in part the employee’s petition for mandamus relief.

At trial, the employee claimed that he had two accidents. His first accident allegedly resulted in injuries to his back, left leg, right arm, and right shoulder. His second accident allegedly resulted in injuries to his left ankle and right shoulder. The employee testified that his second accident was the direct and natural consequence of injuries resulting from the first accident. Specifically, he claimed that the tingling and numbness in his left leg from the first accident caused him to fall. The employer presented medical evidence that rebutted the employee’s claims by demonstrating that the employee had not been experiencing those problems prior to the second accident. The judge ultimately held that the employee’s second accident was not a direct and natural consequence of his previous injuries. Additionally, the judge found that the second accident was not compensable because the employee could not show that his employment caused him to roll his ankle and fall.

The Court of Civil Appeals agreed that substantial evidence supported the trial judge’s finding that the employee’s job did not cause the second accident and that the second accident was not a direct and natural consequence of his previous injuries.  However, the Court found that the trial judge erred  in denying benefits for the right shoulder injury solely on the grounds that the second accident was not compensable. The Court stated that evidence indicated the shoulder injury may have been the result of the first accident and that the trial judge failed to resolve that dispute. The trial judge was therefore directed to determine whether or not the right shoulder injury was the result of the first accident.

My Two Cents:

Because the Court granted the employee’s petition in part, the trial judge will likely do one of two things: Either find the shoulder injury was the result of the first accident and award benefits or find that the shoulder injury was not the result of the first accident and deny benefits.

_________________________________________

About the Author   
 
This blog post was written by Trey Cotney, Esq. of Fish Nelson LLC, a law firm dedicated to representing employers, self-insured employers and insurance carriers in workers’ compensation matters. Fish Nelson is a member of The National Workers’ Compensation Network (NWCDN). If you have any questions about this article or Alabama workers’ compensation issues in general, please feel free to contact the author at tcotney@fishnelson.com or any firm member at 205-332-3430.

Taking a Look at the Latest on Affordable Care Act

Eric E. Kinder

Erin Jones Adams

Spilman Thomas & Battle, PLLC

           Employers nationally continue to struggle with how to respond and adapt to the ever- changing landscape that is the Patient Protection and Affordable Care Act (often known as ObamaCare or the ACA). We at Spilman Thomas & Battle will continue to work with you through 2013 and beyond as the implementing regulations for the ACA continue to be issued. We are working to identify strategies to help employers navigate the process in the manner that best serves their respective industries.

           Before discussing guidance issued recently regarding wellness programs that are part of a health care plan, there is news of a bit of a reprieve. Originally all employers were to provide notice to their employees regarding their state health insurance exchange no later than March 1 of this year. The written notice would inform employees of the existence of the health exchanges in their state, the manner in which an employee may contact the exchanges and information on how an employee may be eligible for a premium tax credit if the employee purchases a health plan through an exchange and other related tax issues. States, however, have been slow to decide if they were going to establish an exchange, and if so, what the rules for that exchange would be. Accordingly, the Department of Labor has stated that employers are not required to comply until it issues regulations regarding employer compliance with these notice requirements. Currently, the Department of Labor expects the timing for distribution of notices to be late summer or fall of this year, and it is considering providing model generic language that employers can use. We will send out information to employers when these regulations are issued.

           A question many employers have asked relates to the establishment or continuation of their wellness programs. The federal government recently issued draft regulations on how employers can ensure their wellness programs are nondiscriminatory under the law. These rules would apply to all wellness programs that are part of a health plan, including those already in existence.

           An initial matter, the regulations do not apply to wellness programs not connected to a health plan; employers who have wellness programs separate and apart from their plans need not worry. Employers with programs offering health insurance premium reductions need to read on.

The regulations established two categories of wellness programs. The first is participatory wellness programs available to all employees (or all similarly-situated employees) that either do not provide a reward or do not condition the reward based on the individual meeting certain health criteria. Examples of participatory wellness programs include programs that reimburse all or part of the costs of membership in a fitness center or that provide a reward to employees who attend a monthly, no-cost health education seminar. In general, participatory wellness programs are legal without further review.

On the other hand, health-contingent wellness programs are only permitted where they meet five specific standards. A health-contingent wellness program requires an individual to satisfy a standard related to health to obtain a reward. To survive legal scrutiny, a health-contingent wellness program must meet the following five conditions.

(1)      Frequency of opportunity to qualify – The program must provide the employees the opportunity to qualify for the reward at least once per year.

(2)      Size of reward – In general, a health-contingent wellness program reward may not exceed more than 30% of the cost of employee-only health care coverage. Programs designed to prevent or reduce tobacco use, however, may offer rewards up to 50% of the cost of employee-only health care coverage.

(3)      Uniform availability and reasonable alternative standards - A reward under a health-contingent wellness program must be available to all similarly-situated individuals, which means a “reasonable alternative standard” (including a waiver of an otherwise applicable standard) must be provided for meeting the goal if it is either unreasonably difficult due to a medical condition or where it is medically inadvisable for the employee to attempt to satisfy the standard. In defining what a reasonable alternative standard is, the regulations provide a few rules. First, if the reasonable alternative standard is an educational program, the plan insurer must make the program available (as opposed to telling the employee to find the program) and must pay for it. Where the reasonable alternative standard is a diet program, the employer does not need to pay for the costs of the dietary food, but must pay for any membership or participation fee. And where the reasonable alternative standard is compliance with the recommendations of a medical professional, the plan must provide reasonable alternative standards that can be met within recommendations provided by the individual’s physician.

(4)      Reasonable design – Health-contingent wellness programs must be reasonably designed to promote health or prevent disease, may not be overly burdensome, cannot be a subterfuge for discrimination based on a health factor or disability and may not be highly suspect in the method chosen to promote health or prevent disease. That said, plans and insurers may conduct screenings and measurements in order to target wellness programs effectively, but the program must still be made available to all individuals who do not meet this standard. Again, the program must also provide different, reasonable means for qualifying for the same reward.

(5)      Notice of other means of qualifying for the rewards – Plans and insurers must disclose the availability of other means for qualifying for the reward for the possibility of waiver of the otherwise applicable standard and all plan materials describing the terms of the health-contingent wellness program. If, however, plan materials merely mention that a program is available without describing its terms, this disclosure is not necessary. To be safe, plans should include language such as the following in the description of all health-contingent wellness programs: “Your health plan is committed to helping you achieve your best health status. Rewards for participating in a wellness program are available to all employees. If you think you might be unable to meet a standard or a reward under this wellness program, you might qualify for an opportunity to earn the same reward by a different means. Contact us at [insert contact information] and we will work with you to find a wellness program with the same reward that is right for you in light of your health status.”

The draft regulations make clear the federal government is increasingly supportive of the use of workplace wellness programs as a means to promote health and prevent disease. While the proposed regulations offer employers certain flexibility in developing and maintaining wellness programs, employers must not forget to vet their wellness programs against other laws that impact the provision of wellness programs, such as the ADA or GINA. The draft regulations are intended to apply to plan or policy years beginning on or after January 1, 2014. Employers who currently sponsor wellness programs should review and consider revising those programs pursuant to the proposed requirements. Employers who aim to develop wellness programs should consider the conditions discussed above, keeping in mind that the final regulations have not yet been issued. If you have questions about the ways in which the ACA impacts your existing or planned wellness program, please contact Eric Kinder at 304.340.3893 orekinder@spilmanlaw.com.

How to Survive the Department of Labor’s Wage and Hour Enforcement

By Carl H. Hellerstedt, Jr.

           As most employers know, the federal wage/hour law under the Fair Labor Standards Act (“FLSA”) includes the requirement to pay “non-exempt” employees time and one half of their “regular rate” for work in excess of 40 hours in a work week. The U.S. Department of Labor (“DOL”) is charged with enforcing the FLSA through its Wage and Hour Division. (It is currently engaged in a multi-year ongoing enforcement initiative focused on vendors performing services for the fracking and pipeline industry that has recovered nearly $200,000 in wages in that industry alone.) Prudent employers will want to be diligent to ensure compliance with wage and hour matters in light of the DOL’s willingness to audit employers.

How Can You Protect Yourself from a DOL Audit?

Employers should perform an internal audit at least once a year, addressing the following topics:

·       Record-keeping: Computer-based payroll systems will contain the information necessary to meet most DOL requirements. Time worked and bonus calculation records should be kept as part of the pay records, which should be kept for a minimum of three years.

·       Employee vs. Independent Contractor: The distinction between an employee and an independent contractor is not governed solely by how the parties title themselves; the DOL has specific tests to determine who is an employee and who is an independent contractor and often focus on who controls the manner of work. Employers using independent contractors should be careful to ensure that they are not directing, or only minimally directing, how and when independent contractors are performing their duties.

·       Exempt vs. Non-Exempt: The exemptions from the overtime requirements which are often at issue in the shale industry include whether the employee meets the criteria to be exempt under the “salaried basis,” “professional,” “executive” or “administrative” categories. Determining if the employee meets the exemption criteria can be extremely fact-intensive.

·       Compensable Time: A major area of litigation in recent years has centered on what should be considered to be time worked and therefore compensable and count toward overtime hours. This includes the use of cell phones and computers outside of normal working hours. Travel time can also be an issue in circumstances where the employer provides a take-home vehicle. The employer should have a written policy on the use of take-home vehicles to insure that the commute from home to work is not compensable.

Be Aware That Noncompliance with the FLSA Can Result In Considerable Costs!

           The FLSA has provisions for doubling the amount of unpaid wages and overtime, attorney fees and for a special form of class action. When current or former employees hire private counsel to prosecute FLSA claims, the employer can expect a class action suit for double damages going back three years under the FLSA, as well as a companion claim of violations of the applicable state wage payment law and state overtime law. State laws are often used because some state law provisions are actually more favorable to the employee than the FLSA. Such is the case in matters including the use of class actions, the scope of exemptions and the calculation of overtime.

For more information, please contact:

Carl H. Hellerstedt, Jr.

412.325.3308

chellerstedt@spilmanlaw.com

Immigration Reform May Affect All Employers

On January 29, 2013, President Obama announced his plan for comprehensive immigration reform. While the proposal to require mandatory, phased-in electronic employment verification has obvious implications for employers, the proposal to provide a pathway to earned citizenship may have an unforeseen effect on employers, as well. While surprising to some, many individuals in all walks of life do not have work authorization but are still members of the workforce.

Consider the following scenario: a long-term employee approaches you or a supervisor in your company and advises you that she provided you with a false social security card at the time she was hired, but that she now has a valid social security card and that she would like to update her records. How should an employer handle such a situation?

Several different issues are implicated in this and similar situations. At the outset, the employer will need to determine whether the employee was authorized to work in the past and whether the employee has current (and future) work authorization. Section 274A of the Immigration and Nationality Act provides that it is unlawful for an entity to hire an individual knowing the individual is unauthorized to work. The statute also provides that it is unlawful for an entity tocontinue to employ an individual knowing she is or has become unauthorized for employment.

In the scenario we presented, the employer may have a defense to any charges that it knowingly employed an alien unauthorized to work in the United States in the past because the employer completed the I-9 process and determined that the employee’s offered documents were valid at the time. If the employee does not have current work authorization at the present time and going forward, however, the employer will be liable for violating the Immigration and Nationality Act if it continues the employee’s employment.

If the employee is currently authorized to work, the employer must consider the separate issue of the employee’s misrepresentation during the hiring process. The employer must review the particular facts of the situation, including whether the employee provided false information on the employment application, the I-9 form, or other company documents. The employer will need to review its policies and procedures, as well as its past practice in similar situations. Is there a written policy that provides for disciplinary action for falsification of employer documents? Does the employment application state that the individual represents that all of the information provided is accurate? Has the employer previously allowed an employee to continue their employment after discovering a misrepresentation in similar circumstances (for example, on a resume)? The employer should focus on its specific policies, whether the employee had notice of its policies, and treating employees with consistency for similar misconduct.

The most difficult issue for employers to face is when a long-term, well-loved, star employee advises her employer that she is or was undocumented. Even if it is possible to continue this employee’s employment in the future without violating the Immigration and Nationality Act, the employer must carefully consider whether maintaining the employment relationship will establish a precedent for other similar situations.

When confronted with this or a similar situation, the employer should gather all the facts and then contact legal counsel for assistance in navigating all the issues that may arise.

For more information, please contact:

Larissa C. Dean

304.291.7924

ldean@spilmanlaw.com

http://www.gardnerlaw.net/AuditAreasOfFocus.pdf