Hospitality Labor and Employment Law Blog : Hotel, Restaurant, Resort & Spa Lawyers & Attorneys: Epstein Becker & Green Law Firm: Hospitality Law

Presented by:  Gretchen Harders and Kara M. Maciel

Tuesday, March 5, 2013 at 12:00pm EST / 9:00am PST

To Register, please click here

Please join Epstein Becker Green’s Labor & Employment practitioners as we continue to review the Affordable Care Act and its ongoing impact on hospitality employers and their group health plans and programs.

This webcast will provide an update on the implementation of the law including planning for 2014 and beyond and will focus on how the law will impact hospitality employers both large and small, and what they should do now to plan for it.

During this program, Epstein Becker Green practitioners will:
 
• Review the ACA implementation timeline
• Discuss the structure of the law and basic concepts affecting hospitality employers 
• Discuss critical employer decision making and planning for 2014
• Review alternative plan design options available to hospitality employers
• New developments

Registration Is Complimentary and Reservations are Limited

Don't Miss This Opportunity!   To Register, please click here.

By Greta Ravitsky

I wrote the January 2013 edition of Take 5: Views You Can Use, a newsletter published by the Labor and Employment practice of Epstein Becker Green.

In it, I summarize five actions that hospitality employers should consider taking in 2013 as the DOL steps up its audit efforts under the leadership of the reenergized Obama administration,

1. Assess the Workforce
2. Choose Whether to “Pay” or to “Play”
3. Evaluate Existing Wellness Programs and/or Implement New Wellness Programs to Enhance Employees’ Health Profiles and to Avoid or Minimize the “Cadillac Tax”
4. Understand and Be Ready to Comply with New Tax-Related Changes and Requirements
5. Conduct Self-Audits to Ensure Compliance

The following is an excerpt:

With the U.S. presidential election behind us, it is clear that the Patient Protection and Affordable Care Act (“Affordable Care Act”) is likely here to stay, having survived a U.S. Supreme Court case challenge last June. While affected employers can avoid facing penalties until 2014 for not making health care coverage available to their workforce, the U.S. Department of Labor (“DOL”) has begun auditing employers’ group health plans for compliance with other requirements of the law that are already in effect. As the DOL steps up its audit efforts under the leadership of the reenergized Obama administration, below are five actions that employers should consider taking in 2013.

Read the full version on EBGlaw.com.

By: Kara M. Maciel, Adam Solander, Brandon Ge and Philo Hall

As we blogged about previously, the Affordable Care Act provides unique compliance obligations for hospitality employers, many of whom employ large numbers of part-time and seasonal employees.  On December 28, 2012, the Internal Revenue Service (“IRS”) released a Notice of Proposed Rulemaking (“NPRM”) on Shared Responsibility for Employers Regarding Health Coverage (the “Employer Mandate”) under the Affordable Care Act (“ACA”). The NPRM largely incorporates previously released guidance on the subject (IRS Notices 2011-36, 2011-73, 2012-17, and 2012-58).  Employers may rely on these proposed regulations for guidance until final regulations are issued.

Comments on the NPRM are due to the IRS by March 18, 2013.  The IRS has also scheduled a public hearing on April 23, 2013 to receive feedback on these issues. The Employer Mandate requirements under the NPRM take effect on January 1, 2014.

Overview

The Employer Mandate provides that employers with 50 or more full-time employees (including full-time equivalent employees) will be penalized if any full-time employee receives a premium tax credit or cost-sharing reduction to purchase health coverage through an Affordable Health Insurance Exchange (“Exchange”). Generally, an employee is eligible for a cost-sharing subsidy if: (1) an employer does not offer its full-time employees the opportunity to enroll in coverage; or (2) an employer offers its employees the opportunity to enroll in coverage, but the coverage is “unaffordable” or does not provide “minimum value.”

Applicable Large Employers

Under ACA, employers are considered to be “applicable large employers” and, therefore, subject to the Employer Mandate if they employ 50 or more “full-time” employees or a combination of “full-time” and part-time employees that equals 50 “full-time” equivalent employees.  

A full-time employee is an employee (including seasonal employees) who provides an average of 30 hours of service per week.  To calculate the number of “full-time equivalent” employees, an employer must aggregate the number of hours worked by all part-time employees (including seasonal employees) and divide this figure by 120.  The average monthly number of full-time employees plus “full-time equivalents” for the preceding calendar year determines whether an employer is an “applicable large employer.”

There is a seasonable employee exception, which applies when an employer’s workforce exceeds 50 full-time employees for no more than 120 days or four calendar months (which need not be consecutive) during a calendar year if the employees in excess of 50 during that period were seasonal employees. Employers may use a reasonable, good faith interpretation of the term seasonal worker until the IRS issues further guidance.

For purposes of determining whether an employer employs at least 50 full-time employees, companies that have common ownership or are otherwise related (such as certain franchises) will be combined using a test codified at Section 414 of the Internal Revenue Code.  However, this aggregation rule will not be applied to companies for the purposes of determining potential liability and payment amount under the Employer Mandate.

Full-Time Employees

An employee’s hours of service include each hour for which the employee is paid for performance of services, or entitled to payment even when no work is performed (for example, due to vacation, illness, or leave of absence).

Previous guidance proposed, and the NPRM adopted, a “look-back stability safe harbor method” for determining whether employees worked the requisite average of 30 hours per week to be considered full-time. Generally, under this approach, employers are allowed to select a period of time between three months and one year to use as a “measurement period” to determine if an employee worked an average of 30 hours a week.  If an employee provided 30 hours of service per week during the “measurement period,” then the employer must treat the employee as a full-time employee for a corresponding “stability period” regardless of the number of hours of service the individual works over that time period. Generally, an employer must use the same look-back period for all employees but may use different periods for certain categories of employees.

Offer of Coverage/Dependent Coverage

The Employer Mandate imposes liability on employers who do not offer their full-time employees the opportunity to enroll in minimum essential coverage. One of the more controversial aspects of the NPRM is that it requires employers to offer coverage to not only full-time employees, but their dependents as well. The NPRM defines dependents as children up to age 26, but does not include spouses in the definition.

To provide employers sufficient time to implement these changes, the NPRM provides a transition relief period with respect to dependent coverage for 2014. Under this relief, any employer that takes steps in 2014 to fulfill its obligations to offer coverage to dependents of full-time employees will not be liable for any tax payment under the law solely on account of failing to offer coverage to dependents in plan year 2014.

Determination of Affordability and Minimum Value

If an employer offers full-time employees the opportunity to enroll in minimum essential coverage, the employer will still be liable if the coverage is either “unaffordable” or does not provide “minimum value.” Coverage is affordable if the employee’s premium obligation for self-only coverage does not exceed 9.5 percent of the employee’s household modified adjusted gross income. Because, household income is not readily known to employers, the NPRM provides three safe harbors that provide more certainty with regard to the affordability of coverage.

The minimum value standard will be further addressed in subsequent guidance. A calculator will be available that will be similar to the actuarial value calculator provided by the U.S. Department of Health and Human Services. A plan will be deemed to provide minimum value if it covers at least 60 percent of the total allowed cost of benefits that the plan is expected to incur.

Calculation of the Penalty

If an applicable large employer does not offer coverage or offers coverage to less than 95 percent of its full-time employees, it must pay a penalty of $2,000 for each full-time employee (minus the first 30) if any employee receives a premium tax credit.

For employers that offer coverage for some months but not others during a calendar year, the penalty will be computed separately for each month in which the employer did not offer coverage.

This penalty will be equal to 1/12^th of $2,000 for each full-time employee employed for the month (minus up to the first 30 depending on whether the employer is related to other employers).

If an employer offers coverage to 95 percent or more of its full-time employees, it must nonetheless pay the tax penalty if one or more full-time employees receive a premium tax credit on the basis of the coverage not being “affordable” or not providing “minimum value.” This penalty will be equal to 1/12^th of $3,000 for each full-time employee who received a premium tax credit for the month.  The NPRM provides that the amount paid under this scenario cannot exceed the amount the employer would have had to pay if it did not offer coverage.

EBG counsels clients on ACA implementation requirements and will continue to track developments in the area.

Please join Epstein Becker Green’s Health Care & Life Sciences and Labor & Employment practitioners as we continue to review the Affordable Care Act and its ongoing impact on hospitality employers and their group health plans.

In less than a year, hospitality employers employing at least 50 full-time employees will be subject to the Employer Shared Responsibility provisions. Under these provisions, if hospitality employers do not offer health coverage or do not offer affordable health coverage that provides a minimum level of value to their full-time employees, they may be subject to a tax penalty under the proposed regulations just issued by the Internal Revenue Service.

During this program, Epstein Becker Green practitioners will:

• Review the basics of the Employer Shared Responsibility provisions and proposed regulations
• Define employer status under the proposed regulations
• Clarify the definition of "full-time" employees and dependents who must be offered coverage
• Discuss the determination of affordable and minimum value coverage
• Review employer liabilities and penalties

This is the third session in the Employer Affordable Care Act Webinar Series for employers on upcoming rules and regulations implementing the Affordable Care Act. Please stay tuned for upcoming webinars on:

• Exchange Implementation
• Essential Health Benefits
• Quality Reporting
• And others...

Epstein Becker Green Presenters:
Mark E. Lutes
Frank C. Morris, Jr.
Adam C. Solander

Wednesday, January 9, 2013
1:00 - 2:00 pm EST
10:00 - 11:00 am PST

Registration Is Complimentary and Webinar Space Is Limited

Don't Miss This Opportunity! To Register, please click here.

Contact Elizabeth Gannon at 202/861-1850 or egannon@ebglaw.com for more information. If you missed the first two webinars in the New ACA Implementation Regulation series, the audio recording and presentation slides are now available.

On Tuesday, December 18, Epstein Becker Green attorneys Gretchen Harders, Frank C. Morris, Jr., and Adam C. Solander offered a one-hour webinar titled “What Employers Need to Know Now!” as the second webinar in a series on the New ACA Implementation Regulations: Employer Impact.

The webinar included:

• ACA implementation timeline
• Structure of the law and basic concepts affecting hospitality employers
• Critical employer decision making and planning for 2014
• Alternative plan design options available to hospitality employers

The webinar recording and presentation slides for “What Employers Need to Know Now!” are now available. Contact Elizabeth Gannon at 202/861-1850 or egannon@ebglaw.com, to obtain a password to download the files.

Please join Epstein Becker Green’s Health Care & Life Sciences, Employee Benefits, and Labor & Employment practitioners as we continue to review the Affordable Care Act and its ongoing impact on hospitality employers and their group health plans and programs.

Since the Presidential election, The U.S. Department of Health and Human Services is moving quickly to implement the Affordable Care Act. Rules have been released in the past few weeks concerning participation in federal exchanges, discrimination based on pre-existing conditions, essential health benefit requirements, and expanded employment-based wellness.

During this program, Epstein Becker Green practitioners will:

• Review the ACA implementation timeline
• Discuss the structure of the law and basic concepts affecting hospitality employers
• Discuss critical employer decision making and planning for 2014
• Review alternative plan design options available to employers

This is the second in the Employer Affordable Care Act Webinar Series for hospitality employers on upcoming rules and regulations implementing the Affordable Care Act. Please stay tuned for upcoming webinars on:

• Exchange Implementation
• Shared Responsibility
• Calculation of Full-time Employees
• Quality Reporting
• And others…

Presenters: Gretchen Harders Frank C. Morris, Jr. Adam C. Solander

Registration Is Complimentary and Seating Is Limited

Don’t Miss This Opportunity! To Register, please click here.

In addition to this blog, EBG’s PPACA and HEAL blogs will also post ACA regulatory developments.

For additional Information, please contact Elizabeth Gannon at 202/861-1850 or egannon@ebglaw.com.

Please join Epstein Becker Green’s Health Care & Life Sciences and Labor & Employment practitioners in a webinar series for Hospitality employers.

On Friday, November 30, Epstein Becker Green attorneys Frank C. Morris, Jr., and Adam C. Solander offered a one-hour webinar titled “The New Wellness Program Regulations, Part of a Webinar Series on the New ACA Implementation Regulations: Employer Impact.”

The webinar discussed:

• the proposed regulations and the impact these regulations could have on your overall wellness strategy
• areas where employer comment is needed
• recent wellness litigation trends
• where EEOC fits in the picture

This was the first in the Employer Affordable Care Act Webinar Series for Hospitality employers on upcoming rules and regulations implementing the Affordable Care Act.  Please stay tuned for upcoming webinars on:

• Exchange Implementation
• Shared Responsibility
• And others …

Registration is complimentary.

In addition to this blog, EBG’s PPACA blog will also post regulatory developments.

For additional Information, please contact
Elizabeth Gannon at 202/861-1850 or egannon@ebglaw.com, or Lisa Blackburn at 202/861-1887 or lblackburn@ebglaw.com.

Now that the Supreme Court of the United States has upheld essentially all of the provisions of the Obama administration's Affordable Care Act ("ACA"), hospitality employers are faced with looming deadlines to bring their group health plans into compliance with the ACA's numerous new requirements. We have prepared for employers a timeline of the highlights of the upcoming deadlines for compliance with the ACA that apply to non-grandfathered group health plans.

Click here to access a copy of the timeline.

By: Paul Rosenberg

Last week the National Labor Relations Board (“NLRB”) urged the U.S. Court of Appeals for the Sixth Circuit to uphold its controversial Specialty Healthcare decision.  The NLRB’s 3-1 split decision in Specialty Healthcare and Rehabilitation Center of Mobile, overturned a 1991 decision and held that an employer that challenges a proposed bargaining unit on the basis that it improperly excludes certain employees is required to prove that the excluded workers share “an overwhelming community of interest” with those in the proposed unit. 

The NLRB argued its ruling merely codifies an old standard – not created a new one.  The NLRB also asserted that it is only required to approve an appropriate bargaining unit – not the most efficient unit or the one that is the most convenient for the employer.  On the contrary, in its brief before the Court, the company argued that the NLRB's decision to approve the “mini unit” represented a “sea change” that will have an impact not merely in the health care industry, but in all cases falling within the board's jurisdiction.  That brief argued that the “overwhelming community of interest” standard effectively makes every discrete job classification (i.e. job title) a viable bargaining unit and essentially delegates unit determination to the petitioning union.

Congress has also entered into the fray.  Earlier this week, South Carolina Senator Graham announced that he would introduce an amendment to the Labor, Health and Human Services appropriations bill when the Senate Appropriations Committee marks it up.  The measure would ban the use of federal funds to implement the Specialty Healthcare ruling.  Senator Graham explained the legislation is necessary to protect the private sector: 

You expect an agency not to become a political advocacy group, and this ruling is just creating havoc in the private sector when the private sector is not doing fine.

Hospitality employers should continue to monitor whether Specialty Healthcare is allowed to stand.  Should the ruling remain in-tact, UNITE HERE, IUOE and other labor unions will have an open road to cherry pick job titles within departments.  To prepare for this possibility hotels’ executive committees should conduct quarterly reviews with department heads to determine if there are weak areas within specific departments which may be susceptible to organizing.  Once areas of vulnerability are discovered they should be promptly corrected.

By: Jay P. Krupin and Dana Livne

Historically, the United States has continuously attracted international commerce and investment. In recent years, in spite of a challenging economic situation, international hospitality groups continue to seek opportunities in the US for financial growth, promotion, and strategic reasons. When they do so, they must comply with unfamiliar and complex labor and employment laws which are constantly changing. In the US especially, the increasingly litigious environment can affect every step of the enterprise – right from the start. Particularly, in a presidential election year, international hospitality groups that are planning to hire and employ a workforce in the US are advised keep apprised of legal shifts in these three important areas:

Health Care Reform

The Patient Protection and Affordable Care Act, also known as “Health Care Reform,” was enacted into law to extend and amend health insurance coverage to employees in the United States. Earlier this month, the U.S. Supreme Court heard oral arguments on the law’s validity, and a decision is expected in June 2012. Hospitality groups, in particular, will need to plan ahead in light of the decision and prepare to manage significantly increasing costs of coverage.

Management-Labor Relations

In the United States, trade unions have reemerged as a power base to ostensibly represent employees’ interests. The current state of the US economy, concerns about job security, the critical status of pension funds, and recent health care reforms will continue to collectively strengthen the unions’ hands in 2012 and 2013. Unsurprisingly, there have been recent waves of pressure from the National Labor Relations Board (“NLRB”) on employers.

A number of updates in this area will have major implications for hospitality providers in the US, including:

• New notice posting requirements obliging employers to display posters informing workers of their right to unionize.
• The appropriate standard to be applied in determining the scope of a bargaining unit is undergoing radical changes.
• The NLRB amending its rules to make it easier for unions to organize employees through changing its election process.

Social Media

No business sector is immune to the profound impact social media is having on the workplace. Hospitality employers seeking to hire may be tempted to base employment assessments on data attained through social media. However, there is a very thin line that must be carefully navigated when basing employment decisions on information gathered through the use of social media. Any social media policies an employer may wish to enforce on its workforce in the US will also need to be crafted creatively and be cognizant of content which is legally protected “concerted activity.” Such a policy will ensure that seemingly disproportionate social media policies do not result in charges of discrimination on the basis of union membership, while effectively protecting the valid business interests of the employer.

It is no surprise that international hospitality groups can become the target of government scrutiny, especially in the run-up to the Presidential Elections. When setting up operations in a new country, hiring and employing a new workforce is a crucial process. Early planning and preparation will put the employer in a much stronger position to steer these upcoming waves of change and ensure the success of the operation in the US. Doing it right – from the start – will have positive consequences for business productivity and, ultimately, the bottom line.

By:  Kara M. Maciel

Over six months ago, Congress passed the most significant and comprehensive health reform law (“PPACA”) that employers have faced in decades. The hospitality industry, in particular, will be confronted with unique challenges to comply with PPACA’s regulations, including a broader definition of a full time employee, expanded employee protections with respect to breaks and whistleblower rights, and notice requirements. As the hospitality industry attempts to grapple with the myriad of new compliance obligations, there has been widespread confusion over what health care reform consists of and what employers must do immediately and in the coming years to comply. In this blog series, we will analyze specific challenges that hospitality employers will face in response to health reform.  

New Definition of Full Time Employee

Hoteliers, restaurateurs, and other hospitality employers regularly rely on part-time employees for a majority of their workforce. The nature of the jobs and the high turnover results in many employees working 25- 30 hours per week, with some working more during busier times of year or as a result of fluctuating occupancy levels. For example, hotel banquet or restaurant private dining staff may work more hours per week during the winter holiday season when many companies host large parties for employees and clients.   

Under PPACA, a full time employee is now defined as an employee who works at least 30 hours per week. If an employer has at least 50 full time employees, employers are required to provide “minimum essential” health coverage by 2014 or else potential financial penalties could be assessed. Accordingly, hospitality employers must evaluate their workforce to determine if they could reach this key 50 full time employee threshold, by looking at the hours worked by all employees, including part-time employees, in a given month. This poses unique challenges to hoteliers and restaurateurs when employees fluctuate their hours working over 30 hours per week in one month, but not the next. Under PPACA, the employee would be eligible for health benefits retroactively for the month he or she qualifies, and then could be cut off from the plan the next month if he or she fails to meet the hours requirement. 

Depending on the employer’s ability to provide “minimum essential” coverage, PPACA’s new definition of full time employee will force hospitality employers to change how they plan for and manage health costs. Some employers may decide to alter their scheduling and hiring decisions to manage health costs. A restaurant may decide to replace all part-time staff with full-time employees to ensure coverage under PPACA or, alternatively, increase the number of part-time employees so more people can work the hours and decrease the number of employees eligible for health benefits. In either event, evaluating the workforce and developing strategic plans to address the number of employees is essential to confront PPACA’s requirements and manage costs. 

Break Time for Nursing Mothers – But Where?

Effective immediately, all hospitality employers must provide unpaid, reasonable break time to non-exempt, female employees who are nursing to express milk for up to one year after the birth of the child. The Department of Labor has issued a Fact Sheet regarding the new break requirement. 

The employer must provide a designated break room that cannot be a restroom and that must be shielded from view and free of intrusion. For hoteliers, this space could include a vacant guest room or other private meeting space. But what about for restaurants or other hospitality employers that do not have separate private office or meeting space? Restaurants will have to evaluate their space to provide a location for hostesses, waitresses, cooks and chefs who work in the public space. This requirement could easily pose a logistical challenge for these employers. For small employers (less than 50 employees), this break time can be exempted from this provision if the employer can demonstrate undue hardship.

Accordingly, all employers should determine where such break time should occur, and update their handbooks, policies and procedures in order to properly notify employees of their rights to take an unpaid break for nursing. Also, all managers should be trained in the new break requirements, and advised that any adverse actions taken against an employee for requesting break time could result in exposure to a retaliation claim.   

Conclusion: Health care reform will have significant impact on the hospitality industry across the United States. By knowing PPACA’s unique challenges and requirements, hoteliers will be able to make informed decisions and understand how to implement the new obligations. As identified above, employers should already be taking a number of steps to comply with the Act’s requirements and begin to prepare for future obligations. Stay tuned for Part II of this series in which we will discuss expanded whistleblower protections for employees, potential penalties for failing to provide health coverage, and grandfathered health plans. 

For more information on PPACA and the impact on the health care delivery system, check out our colleagues’ blog Heath Reform Musings.