Hot Topics - June 29, 2009

Supreme Court Rules for White Firefighters in Reverse Discrimination Claim

In a case posted June 29, 2009, the United States Supreme Court held that the City of New Haven, Connecticut violated racial protections of Title VII of the Civil Rights Act of 1964 when it threw out results of promotion exams for lieutenant and captain positions when white and Hispanic candidates outperformed black candidates. (Ricci v. DeStefano, U.S., No. 07-1428, 6/29/09).

After administering the promotion exams and getting results that would have justified promotion of only white and Hispanic candidates, the City decided not to certify the test results, citing as its reason the fear of being sued under a disparate impact theory by the unsuccessful black firefighters. The Federal District Court granted summary judgment for the City and the Second Circuit Court of Appeals affirmed.

In a 5-4 decision the Supreme Court reversed, holding that the City s action in discarding the test results violated Title VII s protections against race discrimination. Put briefly, the Court held that the City s fear of litigation was not justified because there was no evidence that the exams were not job related and consistent with business necessity or that there existed an equally valid, less discriminatory method of evaluation that the City refused to adopt. Instead the City s reliance on race to the detriment of individuals who had passed the examination was an impermissible violation of Title VII, and judgment for the white firefighters was therefore appropriate.

This decision is also notable because Judge Sonia Sotomayor, the current Supreme Court nominee awaiting confirmation by the U.S. Senate, was on the Second Circuit panel that ruled in favor of the City.

Survey Finds Flexible Schedules as the Most Coveted Employee Benefit during Summer

In a recent survey, employees cited flexible schedules as their most sought after summer benefit. Leaving work early on Fridays followed closely in the number two spot. Office Team conducted this research by contacting more than 450 workers via telephone who were 18 years or older and who worked in an office setting.

Workers were asked, "Which of the following summer benefits would you most like to have?" Their responses include:

• Flexible schedules (38 percent)
• Leave early on Fridays (32 percent)
• Activities ( e.g., company picnic, potluck) (6 percent)
• More relaxed dress code (5 percent)
• Other (4 percent); and
• Don't know/no answer (15 percent).

According to MSEC survey data, 85% of organizations in Colorado offer company picnics/parties/and dinners. These outings may be expensive, and based on this survey, are a benefit that may not be widely appreciated by employees.

Colorado employers do a better job of providing some types of alternate work schedules. According to MSEC survey data, 88% of Colorado employers allowed for some type of alternate work arrangements. These arrangements include allowing part time schedules (84% of surveyed Colorado employers), occasional telecommuting options (54% of surveyed Colorado employers), regular telecommuting (27% of surveyed Colorado employers) and allowing alternate start and end times as long as the employee works the appropriate number of hours (69% of surveyed Colorado employers).

Employers who are considering implementing flexible schedules or allowing workers to leave early on Fridays during the summer should consider wage and hour implications for the non-exempt staff. Please consult MSEC's HRS or ELS department for further assistance.
CCH online (June 11, 2009)

IRS Announces 2010 HSA Contribution Limits

The Tax Relief and Health Care Act of 2006 made several modifications to Health Savings Accounts (HSA). One such modification was changing the HSA contribution limitation to the High Deductible Health Plan (HDHP) annual deductible maximum. Prior to this act, the contributions into an HSA were limited to the actual plan deductible. This change has allowed HSA participants to contribute thousands more to their HSAs if they so desired.

Because contributions are now dictated by the HDHP annual deductible maximums, the act also required the IRS to issue annual HSA contribution figures by June 1st of the prior year. Having this information earlier is beneficial to employers in determining plan design during annual contract renewals as well as giving employers greater lead time in communicating changes to employees. The 2010 calendar year HSA limitations are:

For calendar year 2010,

• Annual HSA contribution limit for individual with self only HDHP coverage is $3,050
• Annual HSA contributions limit for family HDHP coverage is $6,150
• For 2010 a HDHP is defined as:
  • Minimum annual deductibles of $1,200 for self-only or $2,400 for family coverage
  • Maximum out-of-pocket expenses of $5,950 for self-only coverage and $11,900 for family coverage

Please see the IRS website for further details.

May Unemployment Numbers Recently Released

Colorado continues to fare better than the national average in unemployment. The seasonally adjusted unemployment rate rose to 7.6 percent. The current jobless rate is up 2.9 percentage points from a year ago when it stood at 4.7 percent. Unemployment rate figures for the same time period show the U.S. Average at 9.4%.

After adjusting for normal seasonal movements, the estimated number of employed Colorado residents dropped 21,000 over the month to 2,513,900. This is a decrease of 83,700 from last May's total of 2,597,600. The estimated count of unemployed persons trended up 3,300 during the month and has risen 77,000 from a year ago.

May is generally a month of rising unemployment in most Colorado labor areas due to a lull in tourist activity and the entry of seasonal jobseekers. This year was no exception as 35 of Colorado's sixty-four counties recorded higher unemployment rates on an unadjusted basis, 5 were unchanged, and 24 had lower rates. Cheyenne County saw the lowest rate in the State at 3.2 percent while Dolores County topped all areas at 14.9 percent.

Question of the Month - July 2009

Can I Require a Fitness-For-Duty Certification of an Employee Returning from FMLA?
Yes, in many cases, employers can require employees returning from FMLA to provide fitness-for-duty certifications. In fact, the new FMLA regulations expanded employers' ability to obtain fitness-for-duty certifications and made it possible to obtain more meaningful information. The ability to obtain fitness-for-duty certifications is not unlimited, however. Employers are not entitled to fitness-for-duty certifications for each absence taken on an intermittent or reduced leave schedule.

An employer may have a uniformly-applied policy requiring employees returning from FMLA leave for their own serious health condition to submit a certification that they are able to resume work. Fitness-for-duty certifications may be required when the need for FMLA leave is due to the employee's own serious health condition. The employer may seek certification only for the condition that caused the need for leave.

The employer must notify the employee that a fitness-for-duty certification is required on the Designation Notice. The employer issues this notice when it has sufficient information to determine that the employee's leave qualifies for FMLA - typically following receipt of the initial medical certification form.

Formerly, fitness-for-duty certifications could only be obtained when the employee was out on a block of FMLA leave, not when the employee was on intermittent leave. The new FMLA regulations have expanded the employer's ability to obtain fitness-for-duty certifications to include certain intermittent leave situations. Now, where reasonable safety concerns exist, an employer is entitled to fitness-for-duty certification for such absences up to once every 30 days. A reasonable safety concern is a reasonable belief of significant risk of harm to the employee or others. Employers should consider the nature and severity of the potential harm and the likelihood that it will occur.

Under the previous FMLA regulations, fitness-for-duty certifications only needed to be a simple statement from a health care provider saying that the employee was able to return to work. Under the new regulations, the employer can make fitness-for-duty certifications more meaningful by requiring the employee's health care provider to specifically address the employee's ability to perform the essential functions of the position. To take advantage of this, the employer must include a list of the essential functions of the employee's position on the Designation Notice.

Second and third opinions are not permitted on fitness-for-duty certifications, however, employers can contact the employee's health care provider to clarify or authenticate the certification if needed. If an employee fails to provide the required fitness-for-duty certification, employers are able to delay restoration until the employee has provided the required fitness-for-duty certification.