Here’s what happened:

A steel mill worker in Arkansas had been demoted after having four unexcused absences for drunkenness.

The man filed suit, claiming his employer violated the Family and Medical Leave Act (FMLA) by demoting him.

He claimed that several phone calls he’d made to his supervisor during the four-day absence should’ve alerted the company to his need for FMLA leave.

The court’s decision

But a court said the calls merely put the employer “on notice that he was upset and intoxicated,” not suffering from a serious medical condition that would warrant an offer of FMLA leave.

Also, a judge said the company had no prior knowledge of the employee’s alcohol problem. And even if it had known of the worker’s problem, the FMLA only protects absences for alcohol treatment, not alcohol use.

Cite: Scobey v. Nucor Steel-Arkansas.

The ruling now gives companies more power to discipline employees who don’t provide proper FMLA notification.

What happened

A worker took intermittent leave for migraines. The side effects of his medicine made him sleep — up to 27 hours at a time — and he knew it.

The man took two doses of meds prior to his shift, but he didn’t call to notify his supervisor that he needed an FMLA day. He slept through his entire shift.

When the company suspended him for 20 days, the man sued, claiming FMLA interference.

The company said he knew he needed FMLA leave — especially after taking the second dose. He could’ve notified the company prior to his absence but failed to do so.

What the court said

The court agreed, saying the man should’ve notified his supervisor as soon as he took his medicine.

Regs require workers to notify employers as soon as possible. The worker didn’t so his suspension wasn’t FMLA interference.

Cite: Valdivia v. BNSF Railway Co., U.S. Dist. Crt., ED KN, No. 07-2467-KHV, 2/12/09.

To facilitate passage, a number of proposals were recently consolidated within a single bill that could bring about the most sweeping reforms since the Family and Medical Leave Act became law 16 years ago. On June 25, 2009, Representative Lynn Woolsey (D. CA) introduced “The Balancing Act of 2009,” which incorporates multiple expansion efforts. Taken together, these provisions could have significant implications for employers and employees alike.

Within the bill is a proposal that would essentially convert FMLA to a paid-leave statute, allowing employees to take upwards of 12 weeks of paid leave over a 12-month period for qualifying family, medical or military-exigency reasons. Here’s the way it would work:

• A federal “Family and Medical Leave Insurance Fund” would be established to finance paid-leave distributions.
• Employers and employees would jointly subsidize the trust fund by contributing 0.2%  of employee earnings. That comes out to an average of about $100 per employee. The fund would be managed by the U.S. Department of Labor.
• The act would expand FMLA coverage by creating new forms of protected leave for both “parental involvement” and “family wellness.” Parental-involvement leave would allow workers to participate in certain academic and extracurricular activities of their children and grandchildren, while family-wellness leave would enable employees to assist family members in attending medical appointments and to care for elderly relatives.
• The legislation contains additional provisions that would: 1) require covered employers to provide a minimum of seven days of paid sick leave per year; 2) extend protection to victims of domestic violence and sexual assault; and, 3) allow leave to care for a broader category of family members, which would include domestic partners and same-sex spouses.
• While the FMLA currently covers only employers with 50 or more employees, the Balancing Act would expand the coverage to those with 15 or more employees. The bill would also extend eligibility to certain part-time employees who work 1,050 or more hours per year, a substantial reduction from the current minimum threshold of 1,250 hours per year.

Roughly one-third of U.S. employers offer currently domestic partner benefits, whether for opposite-sex partners, same-sex partners or both.

Regardless of your company’s policies – or your personal beliefs – it’s important to know how these benefits (or the lack thereof) are affected by federal and state regs.

Here’s a rundown of how COBRA, flexible spending accounts, HIPAA, FMLA and tax regulations affect these benefits:

COBRA

Currently, there’s no federal requirement for employers to offer COBRA to an employee’s domestic partner who loses coverage due to what would otherwise be a qualifying event. However, many employers choose to do so, anyway.

Be careful if you choose not to offer COBRA to domestic partners. You’re not necessarily in the clear legally. State insurance laws often vary from their federal equivalents.

Flexible spending accounts

In most cases, an employee’s flexible spending account (FSA) money may not be used to reimburse health care for a same-sex domestic partner, even if you do provide other domestic partner health benefits.

Reason: The IRS has ruled employer-sponsored health benefits are exempt from taxable income only if domestic partners (same or opposite sex) are legally considered spouses or dependents under state law.

Fifteen U.S. states plus the District of Columbia give tax-favored status to opposite-sex common-law marriages. Sixteen states that lack common law marriage statutes will grant tax-favored status to couples who register as common-law partners in other states.

The tax on healthcare expenses for partners that can’t get tax-favored status in your state is determined by your average local market cost for a domestic partner’s health coverage.

One case where FSAs might be used for same-sex partners: The partner meets criteria under the Working Families Tax Relief Act (WFTRA). Under WFTRA, the partner must live with the employee for more than half the year and receives more than half his or her support from the employee.

HIPAA

Domestic partner benefits are something of an anomaly under federal HIPAA regulations. In the first place, HIPAA protects the portability of employee health coverage. But domestic partner benefits aren’t necessarily portable if an employee changes jobs. It all depends on whether the new employer offers such coverage, and on state insurance laws.

On the flip side, if your organization’s health plan (like most) is covered under HIPAA, the act’s non-discrimination rules apply to domestic partners to the same extent that a spouse or dependent covered under your plans would be.

Example: If you offer domestic partner health benefits and have a wellness program in which an incentive for undergoing a health risk assessment is available to employee’s spouses, you can’t exclude the domestic partner from receiving the incentive.

As for HIPAA’s privacy rules for protected health information, it works the same for domestic partners as for anyone else covered on your health plan.

FMLA

Family leave under federal FMLA only may be taken to care for a spouse, child or parent with a serious health condition.

The regulations define spouse as “a husband or wife as defined or recognized under State law for purposes of marriage in the State where the employee resides, including common law marriage in States where it is recognized.”

In other words, an employee’s right to take family leave depends entirely on whether the relationship holds the legal status of a common law marriage (for opposite sex partners), civil union (for same sex partners) or same-sex marrage (in Massachusetts).

Taxes

Unlike typical benefits for spouses and dependents, domestic partner benefits are subject to both federal and state tax as a form of compensation, according to the Partners Task Force for Gay and Lesbian Couples.

In terms of administration, however, benefits such as paid bereavement leave tend to work the same in terms of their tax treatment.

The scene:

Warren Bridges looked at the copies of the e-mails handed to him by HR manager Susanna Diaz. “Yes, I wrote both of those,” he said. “So what?”

Susanna looked over her copies as she replied: “Well, you sent them to Lori a couple of weeks before you fired her. The first one says her performance is a problem ‘and could result in your termination.’ The second one thanks her for her service and says you had to let her go ‘as part of a companywide reduction in force.’”

“Right,” Warren nodded. “I was trying to let Lori down easy and say she got caught in a RIF.”

“Here’s the problem,” Susanna explained. “You replaced her with a man.”

“And …” Warren said.

“You gave her conflicting reasons for letting her go — poor performance and a RIF,” she said. “First, we never had a RIF. Second, with all the confusion about the real reason for firing her, you replace her with a man. That looks fishy.

Warren sighed. “I still don’t see the big deal.”

But Lori did. She sued the company for sex discrimination, saying there was no clear reason for the firing, and Warren — a man — replaced her with another man. The company said Warren was just trying to go easy on her, and the hiring of a male replacement was a coincidence.

Did the company win?

The judgment
No the company lost.

Even though the supervisor had good documentation backing his performance-based reasons for the firing, the judge still ruled in favor of the employee.

The judge’s reason: You can have good documentation, but that doesn’t mean there are grounds for throwing out other evidence that might show mixed reasons or bias.

In this case, the conflicting e-mails and the hiring of a male replacement were enough to overshadow the performance documentation. A lack of consistency in documentation and actions always calls into question the motives of the supervisor and the company, the judge said.

Ruling: Employee wins because of the doubt behind the company’s decision.

When there’s a charge of bias, conflicting information from the supervisor tends to set off alarm bells — and questions — in a judge’s mind:
• Why would they say one thing and then another?
• Were they trying to cover up something?

Combine those with the outward appearance of discrimination – a male supervisor replacing a female with a male – and you have the ingredients for a company loss in the courtroom.

[Based on: Parks v. Lebhar-Friedman, Inc.]

Is E-Verify ready for prime time? Definitely not, says a group of lawmakers who believe the system may be less accurate than previously thought.

Use of the  electronic system, designed to allow employers to verify employment eligibility of new hires, is slated to become mandatory Sept. 8 for companies who do business with the federal government.

But there are rumblings in Congress over whether E-Verify’s going to work. Sens. Charles Schumer (D-NY) and John Cornyn (R-TX) recently pointed out what was called a “gaping hole” in the system: It fails to detect identity fraud.

E-Verify simply matches a Social Security number and a name. Schumer, Cornyn and other officials said there aren’t sufficient safeguards against an illegal immigrant using the name, SSN and address of an unwitting U.S. citizen.

Schumer suggested additional measures to enhance employee eligibility verification, including fingerprints.

What’s it all mean? The argument is the latest chapter in the ongoing saga of the Obama administration’s plan to make employers the spearhead of its immigration enforcement program.

You’ll recall that Immigrant and Customs Enforcement (ICE) recently announced plans to audit 650 employers across the country for I-9 compliance, a move that was seen as the first step in heightened enforcement efforts against hiring illegal workers. ICE said it would be seeking to charge violators criminally, a shift from the civil actions the feds have pursued in the past.

About 137,000 employers currently use the E-Verify service, according to federal figures.  More than 6.4 million queries have been received thus far this year. That number would multiply substantially if federal contractors are required to use the system.

Will the Sept. 8 adoption date stand? The deadline’s been postponed several times before. We’ll keep you posted.

Here’s what happened:

An employee told his boss he needed FMLA leave to care for his newborn son, who was  in the hospital. He had worked for the company for less than a year, but would have been employed for 15 months by the time he’d use the leave.

The boss said he’d look into it. However, before any decision was made about his FMLA request, the company decided to let him go, citing an inadequate skill set.

The employee sued, claiming he was fired because he requested FMLA leave.

The company tried to have the case thrown out because the employee wasn’t eligible for FMLA when he was terminated, so he had no standing to sue.

But the court didn’t buy it. In addition to people who use FMLA, the law says employees who “attempt” to use it — meaning, according to the worker, people who ask for FMLA leave but are turned down — can still make a case for retaliation under the law.

That means managers need to be careful that documentation backs up any action taken against employees who’ve asked for FMLA leave — even if those employees weren’t eligible.

Cite: Reynolds v. Inter-Industry Conference on Auto Collision Repair

If an employee has taken FMLA leave, that can make the situation even more complicated. Take this recent case as an example:

A sales rep had been highly regarded by his employer. Three out of his four most recent performance evaluations rated him as “exceeding expectations.”

That changed after he took a month of FMLA leave to be treated for alcoholism.

Two weeks after he came back, it was time for his next review. His boss noted that his sales had dropped and there had been problems with his communication skills. The review concluded the employee failed to meet expectations, and he was placed on a 30-day performance improvement plan.

When he failed to bring his numbers back up in time, he was fired — and he sued the company. He claimed he was a good employee and was unfairly terminated because he took FMLA leave.

The employer argued that despite his previous success, his performance started to slip, as his most recent review showed.

But the company lost the case.

The reason: The court wasn’t convinced he would’ve gotten a poor review if he hadn’t taken leave. As the judge noted, missing a month of work must have caused his sales to suffer. The company should have adjusted its standards to account for the time he was gone.

Managers need to be careful about how they evaluate employees who return from medical leave. Even if bias isn’t intentional, companies can still get in trouble when an adverse action is in any way tied to an employee’s use of FMLA.

Cite: Burris v. Novartis Animal Health U.S., Inc.

That’s the message in a recent federal appeals court ruling in Illinois.

An instructional aide at a residential treatment facility for children was injured in two altercations with students.

She told the school she was stressed out by concerns of future injuries and needed to take leave. The school requested medical certification.

The woman brought in a physician’s certification form, stating she suffered from headaches and neck and arm pain. She also wrote in “plus previous depression” on the certificate and backdated her signature. The employer, suspecting the woman had altered the paperwork, contacted her physician.

The doctor confirmed the form had been changed, and the woman was fired for excessive absences.

The woman sued, claiming her FMLA rights had been violated. But the court ruled the employer had a right to deny the leave request because she’d added a bogus diagnosis to the certification form.

One caveat: The court pointed out that minor alterations to a certificate, like correcting a typo, might not disqualify an employee for leave.

Cite: Smith v. The Hope School

When it comes to obtaining and using employees’ health info, your firm’s health plan has more HIPAA rights than you may think.

Under HIPAA, your plan is allowed – without employees’ consent – to obtain individual health info (not just aggregate data) for the purpose of improving the quality of care. And there are a host of legal ways to use health data for this purpose.

Questions you can answer

Your plan’s TPA  is entitled to obtain and review a sampling of people’s personal health info to answer all of the following plan cost-related questions:

• What employees are and aren’t getting the right treatment?
• Which network doctors aren’t communicating treatments with
  each other, wasting resources?
• Which folks are and aren’t compliant with their prescription drugs?
•  Are the current health issues of your at-risk employees likely to be ones of concern a few years from now?

In short, you’re allowed to use the info to more accurately predict upcoming claims (and costs) in the short-term future.

What you can’t do with the info is make any employment-related decisions from your findings.  Legal experts debate if the prohibition includes charging smokers or other at-risk populations higher premiums.

But you can always use it when comparing the cost-effectiveness of different health plans or for making your wellness program even stronger.

Wellness program implications

Under HIPAA and ERISA, you’re allowed to use personal data as the starting point for having employees contacted regarding their health issues.
Based on the info you obtain, you can hand-pick people for educational mailings about specific health issues.

You’re even allowed to have a third party tell you if your employees have certain health problems (such as asthma or diabetes) and haven’t sought programs to treat the condition.

If you offer financial incentives as part of your wellness program, be aware that HIPAA’s non-discrimination rules require you to wipe the slate clean each plan year.

Legally, it’s still the safest policy to consult with an attorney before using health info apart from routine FMLA certifications or accommodating ADA.

But it’s good to know HIPAA is usually on your side in the battle to control health costs.