Federal Employment Law Update – March 2017
Hively and Discrimination on the Basis of Sexual Orientation
On April 4, 2017, the U.S. Court of Appeals for the Seventh Circuit ruled in Kimberly Hively v. Ivy Tech Community College that discrimination on the basis of sexual orientation is a form of sex discrimination under Title VII of the Civil Rights Act of 1964. This ruling is significant because the Seventh Circuit is the highest U.S. court to hold that sexual orientation is a form of sex discrimination under Title VII. For example, as recently as March 2017 the Eleventh Circuit Court held in Jameka Evans v. Georgia Regional Hospital that discrimination on the basis of an employee’s sexual orientation is not prohibited under Title VII. Because the courts are split on this issue it will likely be resolved by the U.S. Supreme Court, unless Congress gets involved.
OSHA Continuing Obligation Rule Nullified
On April 3, 2017, President Trump signed H.J.Res. 83, which invalidated the Occupational Safety and Health Administration’s (OSHA’s) Clarification of Employer’s Continuing Obligation to Make and Maintain Accurate Records of Each Recordable Injury and Illness Final Rule (“Continuing Obligation Rule”) that went into effect on January 18, 2017. The Continuing Obligation Rule authorized OSHA to cite employers for failing to record injuries or illnesses beyond a six-month statute of limitation set forth in the Occupational Safety and Health Act, and was promulgated to circumvent an earlier court case precluding OSHA from exceeding this six-month limitation period.
Because the joint resolution came about under the Congressional Review Act, the Continuing Obligation Rule is no longer effective. Additionally, OSHA is precluded from promulgating the same or a substantially similar regulation.
Read H.J.Res. 83
President Nullifies DOL Final Rule Regarding Drug Testing for State Unemployment Insurance System
On March 31, 2017, President Trump signed congressional joint resolution of disapproval (H.J.Res. 42) nullifying the U.S. Department of Labor’s (DOL’s) regulations, finalized on August 1, 2016 and effective September 30, 2016, that amended the Social Security Act by adding a new subsection permitting states to drug test unemployment compensation applicants as a condition of eligibility and deny jobless benefits for failing the test, under two specific circumstances:
- If they were terminated from employment with their most recent employer because of the unlawful use of a controlled substance.
- If the only available suitable work for an individual was in an occupation that regularly conducted drug testing.
According to President Trump, the DOL’s final rule imposed an arbitrarily narrow definition of occupations and constrained a state government’s ability to conduct a drug testing program in its unemployment insurance system.
This nullification became public law on March 31, 2017.
Read H.J.Res 42
EBSA Releases 2016 Enforcement Data
The Employee Benefits Security Administration (EBSA) has issued the results of its enforcement and compliance activity for employee benefit plans and participants in fiscal year (FY) 2016. EBSA’s oversight authority extends to nearly 681,000 retirement plans, approximately 2.3 million health plans, and a similar number of other welfare benefit plans, such as those providing life or disability insurance. As of October 2, 2015, these plans covered about 143 million workers and their dependents and included assets of over $8.7 trillion.
In fiscal year (FY) 2016, EBSA recovered $777.5 million for direct payment to plans, participants and beneficiaries. These recoveries include recoveries from enforcement actions and voluntary fiduciary corrections, as well as amounts recovered through the abandoned plan program and informal complaint resolution.
Read the EBSA Enforcement Fact Sheet
Fair Pay and Safe Workplaces Executive Order Revoked
On March 27, 2017, President Trump effectively put an end to Executive Order 13673 (Fair Pay and Safe Workplaces), also known as the “blacklisting” executive order. Signed on July 31, 2014 by President Obama, Executive Order 13673 required prospective federal contractors to disclose various labor law violations. As expected, President Trump signed a joint resolution (H.J. Res. 37) disapproving of the executive order pursuant to the Congressional Review Act. The President also issued an executive order (Revocation of Federal Contracting Executive Orders) revoking Executive Order 13673 and directing the Department of Labor to “consider promptly rescinding any orders, rules, regulations, guidance, guidelines, or policies implementing or enforcing” the revoked executive order.
Read the Executive Order
DOL Announces Delay in Beryllium Rule Effective Date
On March 22, 2017, the U.S. Department of Labor (DOL) announced that the effective date of the department’s final rule regarding exposure to beryllium (Occupational Exposure to Beryllium) has been changed from March 21, 2017 to May 20, 2017.
The delay will allow the Occupational Safety and Health Administration (OSHA) an opportunity for further review and consideration of the rule, in keeping with a January 20, 2017 White House memorandum (Regulatory Freeze Pending Review).
OSHA published the final rule on January 9, 2017, and previously announced the effective date would be postponed to March 21, 2017. On March 1, 2017, OSHA sought comments on a further extension to May 20, 2017.
OSHA has now determined that the further delay is appropriate for the purpose of additional review into questions of law and policy.
The extension of the effective date will not affect the compliance dates of the beryllium rule.
Read the Final Rule
IRS Issues Guidance Regarding FICA and RRTA Tax Refunds to Employees
On March 20, 2017, the IRS issued Revenue Procedure 2017-28, which provides guidance to employers for requesting, obtaining, and retaining employee consent to support an employer’s claim for credit or refund of overpaid taxes under the Federal Insurance Contributions Act (FICA) and the Railroad Retirement Taxes and Compensation Act (RRTA), and guidance regarding what constitutes “reasonable efforts” for an employer to proceed with a claim or refund of overpaid FICA or RRTA taxes if the employer is unsuccessful in obtaining employee consent using this process. The revenue procedure also requires the request for consent to include notification to employees that the employer cannot claim a refund on an employee’s behalf for any overpayment of the additional Medicare taxes that apply to certain high wage earners.
Revenue Procedure 2017-28 applies to consents requested on or after June 5, 2017, but will not require employers to solicit new consents or affect the validity of employee consents received pursuant to a request made prior to June 5, 2017, as long as the request was made pursuant to proposed revenue procedure 2015-15.