ILLINOIS LEGISLATURE AND GOVERNOR CONTINUE TO SHIFT PENSION LIABILITY TO SCHOOL DISTRICTS

By James Petrungaro

 

June 1, 2018

 

            The 2018 budget passed by the Legislature on May 31st includes a new piece of pension liability cost-shift buried some 700 pages within that is sure to have a significant impact on school districts. Once House Bill 3342, which passed both chambers, is signed by Governor Rauner, the 6% soft cap on end-of-career salary increases for teachers will sharply decrease to 3%.

             Under the current Pension Code, school districts have been able to give teachers (and administrators) end-of-career creditable earning increases of up to 6% over the prior year’s earnings. Any increases beyond 6% given in the years used to determine the teacher’s pension (typically the final four years) would result in the school district paying a penalty to TRS. That penalty was equal to the actuarial value of the increase beyond 6% upon in the teacher’s annuity. Unless Governor Rauner vetoes House Bill 3342 (which he is not expected to do), that 6% limit drops to 3% for any contracts and collective bargaining agreements authorized after Governor Rauner signs the bill. Any contracts authorized before the Governor’s signing are grandfathered in – and the 6% cap would apply. For those contracts authorized after the Governor signs the budget legislation, school districts will pay contributions to TRS for end-of-career creditable earnings increases exceeding 3% per year.  

            This new form of pension cost-shift joins last year’s legislation, which shifted some TRS contributions from the State to school districts for employees earning more than the Governor (typically limited to administrators). This latest legislative effort, however, will no doubt have a large impact at the bargaining table, as school districts must be careful to understand the added financial exposure. We stand ready to assist you in through that process.

 

SCHOOL DISTRICTS MUST ADOPT SPECIFIC SEXUAL HARASSMENT POLICIES BY JANUARY 15, 2018

By Anthony Scariano III and James Petrungaro

 December 1, 2017 

            Recently, the news media have been rife with reports of sexual harassment that has occurred in many of our nation’s most valued and well-known institutions. Noticing this trend, and increased amounts of complaints from its own members, the Illinois General Assembly has acted with legislation.  

Public Act 100-0554, in relevant part, amends the State Officials and Employees Ethics Act so that “governmental units,” which include school districts, must adopt a resolution to establish a policy prohibiting sexual harassment with the following requirements: (1) the policy must prohibit sexual harassment; (2) the policy must include details on how an individual can report an allegations of sexual harassment, including options for making a confidential report to a supervisor, ethics officer, or the Illinois Department of Human Rights; (3) the policy must include a prohibition on retaliation for reporting sexual harassment allegations, including availability of whistleblower protections under the State Officials and Employees Ethics Act, the Illinois Whistleblower Act, and the Illinois Human Rights Act; and (4) the policy must include the consequences of a violation of the prohibition on sexual harassment and the consequences for knowingly making a false report. 

            For school districts that subscribe to the Illinois Association of School Board’s Policy Reference Education Subscription Service (“PRESS”) and have adopted the model Policy 5:20, your policy likely already substantially complies. The PRESS model policy needs modification to clarify the process for filing harassment claims and to expand the recitation of available laws providing whistleblower protections.  

            PRESS is expected to release modifications to Policy 5:20 sometime in January 2018. The mandated policy must be adopted by school districts no later than January 15, 2018. The attorneys of Scariano, Himes and Petrarca, Chtd. stand ready to assist your Board with complying with this new legislative requirement. Should your District wish to modify its policy before PRESS releases its expected update in January 2018, or if your District does not participate in PRESS and you need assistance, do not hesitate to contact us.

 

NEW BOARD OF EDUCATION TO ORGANIZE BY MAY 2ND AND NEW BOARD MEMBER TRAINING REQUIREMENTS LOOM

April 26, 2017

Organization Meeting

With the results of the April 4th consolidated general election mostly certified by now, school boards in Illinois are reorganizing to seat new board members. No later than May 2, 2017, all school boards must hold their organization meeting where the oath of office will be taken, the new board will be seated, new board officers elected, board committees appointed and a schedule of regular board meetings will be approved.

Board Member Training

New board members must complete two kinds of mandatory training sessions and we recommend that a third type of training be taken as well.

Pursuant to the Open Meetings Act (“OMA”), new board members must complete OMA training within 90 days of taking the oath of office. The board member has the option of completing either:

  1. The online training tutorial provided by the Attorney General’s Office of the Public AccessCounselor (PAC); or

  2. OMA training provided by the Illinois Association of School Boards (IASB). Seehttp://iasb.com/training/nbmw.cfm for registration information.

    Once the OMA training has been completed, the board member must file a certificate of completeness with the school district’s administrative office.

    New board members must also complete professional development leadership training (PDLT) which is mandated by the School Code. Compliance with this provision is required within one year of the board member being seated to the board. School districts must indicate on their website which of its board members have completed the PDLT training.

    A third type of training is required under Performance Evaluation Review Act (PERA) for any board member who will be called upon to vote on a teacher dismissal based upon an optional alternative evaluation dismissal process. So while that training is not legally mandated for all school board members, it is necessary as a practical matter. The PERA training must be completed before a board member can vote on a PERA dismissal – which can arise during the first year of office. Accordingly, we recommend that the training be accomplished sooner than later.

    The trainings detailed above are required only once per board member. A board member who has been reelected to office and who has received these training previously has the option of attending the trainings, but is not legally required to do so.

    Following past elections, Scariano, Himes and Petrarca has provided direct training to new school board members in the areas of PDLT and PERA, while the IASB provided the same training. Instead of duplicating the efforts of our colleagues at IASB, this year we have partnered with IASB to provide the PDLT and PERA board member training. On June 16, 2017, Lynn Himes and James Petrungaro will be presenters for the PERA and PDLT training sessions at IASB’s New Board Member Workshop at the Tinley Park Convention Center. See http://iasb.com/training/nbmw.cfm for registration information. IASB will also be providing the mandatory OMA training on that day, allowing for board members to complete all three mandatory trainings in a single day.

    Tags:    Board Governance

                Reorganization

                OMA

                PERA

                Personnel

ILLINOIS SUPREME COURT DETERMINES SCHOOL BOARDS ARE OWED DEFERENCE OVER HEARING OFFICERS IN TENURED TEACHER DISMISSAL CASES

By James A. Petrungaro and Anthony Scariano III

 

January 6, 2017

             In a decision with vast implications for schools statewide, the Illinois Supreme Court recently determined that although hearing officers play an important role in tenured teacher dismissal cases, the school board’s decision on a hearing officer’s findings and the tenured teacher’s continued employment is entitled to deference.

            The facts in Beggs v. Bd. of Educ. of Murphysboro Comm. Unit Sch. Dist. No. 186, are quite detailed and lengthy, far too much to discuss at length in this bulletin. In short, the school board did not agree with the hearing officer’s findings of fact and ultimate recommendation that the tenured teacher at-issue should be reinstated, notwithstanding the teacher’s work attendance issues. Accordingly, pursuant to Section 24-12(d)(8) of the School Code, the school board supplemented the hearing officer’s findings of fact and modified them. The school board also made a final decision to dismiss the tenured teacher despite the hearing officer’s recommendation that the teacher be reinstated. Obviously unhappy with the school board’s overturning of the hearing officer’s recommendation, the tenured teacher filed a lawsuit in circuit court seeking administrative review of the school board’s final decision. After the Circuit Court reversed the school board’s decision, and the Appellate Court agreed with the Circuit Court, the school board appealed to the Illinois Supreme Court.

            The majority of the Supreme Court’s focus was on the Appellate Court’s opinion that the hearing officer’s decision, not the school board’s, should be given deference when reviewing tenured teacher dismissal cases. Ultimately, the Supreme Court determined that the plain language of Section 24-12 of the School Code provides that the school board’s decision is final for purposes of administrative review. Therefore, the Supreme Court reviewed the school board’s supplemental factual findings in addition to the hearing officer’s findings when determining the correctness of the school board’s decision.

            Ultimately, The Supreme Court found that the overwhelming majority of the school board’s factual findings were against the manifest weight of the evidence (i.e., not credible), and the school board’s decision to dismiss the teacher was therefore clearly erroneous. The decision therefore serves as a reminder that school boards intending to refute and ignore an ISBE hearing officer’s findings of fact and recommendation to reinstate a tenured teacher should be wary that those decisions will be reviewed with careful scrutiny by the Court. Nevertheless, the Court’s decision regarding the deference owed to school boards (as opposed to hearing officers) in teacher dismissal cases sets important and valuable precedent for boards of education.  As always, if you are faced with a situation regarding potential discipline of a tenured teacher, we are here to guide you through that process.    

RECENTLY ENACTED LEGISLATION AFFECTING SCHOOL DISTRICTS

September 2, 2016

             As school districts begin a new school year, Scariano, Himes and Petrarca, Chtd. is pleased to provide the following summary of some of the new laws that may affect your district’s operations. To access our recent eBlackboard on the Local Government Travel Expense Control Act, which was approved by Governor Rauner on July 22, 2016, please click here.  If you have any questions or concerns about the following, please contact your attorney at Scariano, Himes and Petrarca, Chtd. 

Student Residency Procedures

 Public Act 99-0670 

            This amendment to the School Code makes several significant changes to the process by which school districts adjudicate student residency matters. As of January 1, 2017:

 1. The school district’s initial determination that the student is a non-resident must detail the specific reasons why the school district arrived at that determination.

 2. If a hearing is requested, at least 3 calendar days before the hearing, both parties must submit to each other all written evidence, testimony, and a list of witnesses. The hearing notice sent by the school district must notify the person requesting the hearing that if the above is not disclosed in time, it will be barred at the hearing unless the other party consents.

 3. Extends the deadline for a school board to decide residency matters to 30 calendar days (from 15) after the conclusion of the hearing.

4. Gives the person who enrolled the student the ability to petition the regional superintendent for review of the board’s decision regarding the student’s residency and details the procedures governing that review.

 Open Meetings Act and Transparency of IMRF Retirement Payments

 Public Act 99-0646

             This law requires school boards to discuss, and disclose, at a minimum, the following at an open meeting before making a “disclosable payment” to IMRF employees (a payment that would increase the employee’s reportable monthly earnings by at least 6%, and is made between a year and 90 days before the employee retires) who began participation in IMRF before January 1, 2011, and are not subject to a collective bargaining agreement: (1) the employee’s name; (2) the purpose and amount of the increase or payment; (3) the employee’s retirement date; (4) the effect of the payment upon the employee’s expected retirement annuity; and (5) the effect of the payment upon the liability of the employer to the Article 7 fund.

FOIA – Noncompliance and Associated Fees and Presumptions

 Public Act 99-0586 

            This Public Act makes the following changes to the Freedom of Information Act effective January 1, 2017:

 1. If a requester seeks relief in circuit court after a request is denied, there will be an automatic presumption that the school district willfully and intentionally failed to comply with FOIA if: (1) the Attorney General’s Public Access Counselor (“PAC”) issued a binding opinion regarding the request; (2) the school district does not seek administrative review of the PAC’s opinion within 35 days of being served with the PAC’s opinion; and   (3) the school district does not comply with the PAC’s opinion within 35 days of being served with the PAC’s opinion.

 2. The school district can rebut the presumption in #1 above by showing that it is making a good faith effort to comply with the PAC’s opinion, but compliance was not possible within the 35-day time frame.

 3. If a requester seeks relief in circuit court after a request is denied, and the court determines that the school district willfully and intentionally failed to comply with FOIA, or acted in bad faith, an additional penalty of $1,000.00 (on top of any civil penalties assessed per occurrence of bad faith or willful non-compliance) may be imposed for each day non-compliance continues if: (1) the school district fails to comply with the court’s order after 30 days; (2) the court’s order is not on appeal or stayed; and (3) the court does  not allow additional time for compliance with the court order. 

Speech Rights of Student Journalists Act

 Public Act 099-0678 

            Effective July 29, 2016, public high school students who gather, compile, write, edit, photograph, record, or prepare information for dissemination in school-sponsored media have the right to exercise freedom of speech and press in school-sponsored media, regardless of whether the media is supported financially by the school district or produced in conjunction with a class. The Act prohibits prior restraint of material prepared for official school publications unless the speech is: (1) libelous, slanderous, or obscene; (2) constitutes an unwarranted invasion of privacy; (3) violates federal or State law; or (4) incites students to commit an unlawful act, to violate policies of the school district, or to materially and substantially disrupt the orderly operation of the school. The Act places the burden on school officials to show justification without undue delay prior to limiting the student speech that is in question, and provides civil and criminal immunity to school districts, employees, and parents/guardians for student expression, except in cases of willful or wanton misconduct. 

Prevailing Wage Resolutions

Senate Bill 2964 (vetoed) 

            Senate Bill 2964’s most significant amendment to the Prevailing Wage Act would have required the locally approved prevailing wage to be no less than the rate for similar work performed under collective bargaining agreements in the area so long as those agreements covered at least 30 percent of workers on the project. However, on July 22, 2016, Governor Rauner issued an amendatory veto, which returns the bill to the House and Senate. Both houses can vote to either accept the Governor’s proposed amendments with a simple majority, or with at least 60% of the vote in both houses, override the Governor’s amendatory veto. Unless either of those actions happen, SB 2964 is dead. 

School Construction Projects and Zoning Compliance

Public Act 99-0890 

            Boards of education are now required to comply with any valid local government zoning ordinance or resolution that applies where the pertinent part of the school district is located. This law amends the Counties Code, Township Code, and Illinois Municipal Code and requires counties, townships, and municipalities to make reasonable efforts to streamline the zoning application and review processes for school boards and minimize the administrative burdens involved in the zoning review process. This includes requiring counties, townships, and municipalities to reduce application fees and other costs, limiting the number of times a school board must amend site plans, and reduce the number of copies that need to be submitted to each body of local government during the zoning review process.  

Amendment to the School Breakfast and Lunch Program Act

 Public Act 99-0850 

            This law requires school boards to provide “breakfast after the bell” (i.e. breakfast in class, grab and go breakfast, and second-chance breakfast) to students in each school building: (1) in which at least 70% of students qualify for free or reduced-price lunches based upon the previous year’s October NSLP claim; or (2) in which at least 70% of students are low-income based upon the Fall Housing Data from the previous year (for schools that do not participate in the NSLP). The effective date of the law is January 1, 2017. However, the program would not need to be implemented until the first school day of the 2017/2018 school year. 

            There is a “safe-haven” for school districts who are already providing school breakfast effectively to 70% or more of free or reduced-price-eligible students or if expense reimbursement would not cover the costs of implementing a “breakfast after the bell” program. The board must hold a public hearing and pass a resolution if it finds that, pursuant to a cost analysis, the reimbursement would not cover the cost of the program. 

Food Contracts

 Public Act 99-0552 

            Effective July 15, 2016, school boards are prohibited from entering into a contract to purchase food if the contract terms prohibit the board or school district from donating food to food banks, including, but not limited to, homeless shelters, food pantries, and soup kitchens. 

Insuring School Buses

 Public Act 99-0595 

            Allows the Illinois Vehicle Code’s minimum insurance requirement for school buses of $2,000,000 to be satisfied by either: (1) a $2,000,000 combined single limit primary commercial automobile policy; or (2) a $1,000,000 primary commercial automobile policy and a minimum $5,000,000 excess or umbrella liability policy. 

Prohibition of Employers’ Access to Employees’ and Applicants’ Online Accounts

 Public Act 99-0610 

            Effective January 1, 2017, the Right to Privacy in the Workplace Act will be amended to prohibit employers or prospective employers from requiring or coercing any employee or applicant for employment to: (1) provide their username, password, or any other information that would allow the employer or prospective employer to gain access to the employee’s or applicant’s personal online account; (2) access the employee’s or applicant’s personal online account in the presence of the employer or prospective employer; (3) invite the employer to join a group affiliated with any personal online account of the employee or applicant; and (4) join an online account established by the employer or add the employer to the employee’s or applicant’s list of contacts that enable the contacts to access the employee’s or applicant’s personal online account. The amendments also prohibit employers from retaliating against employees who refuse to do any of the above.

             The amendments also carve out several “safe havens” for employers who may, under certain circumstances, need to screen, access, or gather content from employees’ or applicants’ personal online accounts. 

Withdrawal from Special Education Joint Agreements (Elementary Schools)

 Public Act 99-0729 

            This law amends the School Code immediately to allow elementary school districts (maintaining grades up to and including the 8th grade) to withdraw from special education joint agreements subject to various, specific conditions.

ADA Training During Teacher Institute Days

 Public Act 99-0616 

            Beginning with the 2016-2017 school year, teacher institute days must include, at least once every 2 years, professional development on the subject of the Americans with Disabilities Act as it pertains to the school environment.

Interfund Transfers

 Public Act 99-0713 

            In a previous eBlackboard, we told you that Section 17-2A of the School Code granted boards of education the authority to transfer money between the Educational, Operations and Maintenance and Transportation Funds for any reason, but that authority would expire on June 30, 2016. Through Public Act 99-0713, the legislature has extended the authority for the transfers under Section 17-2A to June 30, 2019. In addition, Section 17-2.11(j), which grants boards of education the authority to transfer surplus life safety tax revenue and interest to the Operations and Maintenance Fund, was similarly extended. Both types of transfers require notices, hearings and resolutions. 

Monthly Reports of Concussions from High Schools

 Public Act 99-0831 

            This law immediately requires the IHSA to mandate its member schools that employ certified athletic trainers to complete a monthly report on concussions suffered by its student-athletes during a school-sponsored activity or event. This mandate requires the reporting to take place immediately during the months of the 2016-2017 school year. The law provides immunity to IHSA-member high schools from civil and criminal liability that could result from reporting the required information, except for willful or wanton misconduct. The law also gives the IHSA the authority to “take action” against a member school if the member school fails to adhere to its reporting requirements. 

Epi-Pen Administration

 Public Act 99-0711 

            We previously reported on amendments to the School Code that affected epinephrine administration in schools. This law further amends those School Code provisions to add school buses to the list of locations where asthma medication and epinephrine auto-injectors (better known as Epi-Pens) can be carried and administered. Additionally, if a school district’s independently-contracted transportation provider maintains a supply of undesignated Epi-Pens, the amendments require those school districts to send a report to ISBE detailing how many undesignated Epi-Pens are in the transportation contractor’s supply. Recall that “undesignated” Epi-Pens are prescribed in the name of a school district instead of a particular student.    

Charter School Authorizations and Renewals

 Public Act 99-0840 

            This law amends the Charter Schools Law to provide that initial charters granted on or after January 1, 2017 shall be for 5 school years. Additionally, charters granted on or after the bill’s effective date may be renewed by a local board for incremental periods not to exceed 10 school years, and not to exceed 5 school years if renewed by the Charter Schools Commission.

ATTORNEY GENERAL'S BINDING OPTION HOLDS THAT EMAILS SENT AND RECEIVED ON PERSONAL EMAIL ACCOUNTS THAT PERTAIN TO PUBLIC BUSINESS ARE "PUBLIC RECORDS" UNDER FOIA

August 29, 2016

By James A. Petrungaro and Anthony Scariano III

            Earlier this month, the Illinois Attorney General’s Public Access Counselor (“PAC”) Office issued a binding opinion that has sweeping implications under the Freedom of Information Act (“FOIA”). The opinion stemmed from a FOIA request submitted by CNN to the Chicago Police Department for “all emails related to Laquan McDonald from Police Department email accounts and personal email accounts where business was discussed” for 12 police officers within two date ranges. As you may recall, Laquan McDonald was shot and killed by a Chicago police officer in October of 2014 and the release of the police video related to the incident sparked outrage, protests and the firing of CPD Chief Gary McCarthy, among other CPD changes. 

             The PAC’s opinion addressed whether emails on the officers’ personal email accounts met FOIA’s definition of “public records,” which includes electronic communications “pertaining to the transaction of public business...having been prepared by or for, or having been or being used by, received by, in the possession of, or under the control of any public body.” Ultimately, the PAC determined that the emails on the officers’ personal accounts were public records.

             The PAC reasoned that because public bodies always act through its employees and officials, emails discussing public business that those employees and officials prepare and possess do not lose their public character merely because the public body does not possess them on its servers. To the PAC, the inquiry under FOIA should be focused on the content of correspondence (such as emails), and not the method by which the correspondence is sent. 

             The PAC also reiterated the Illinois General Assembly’s intent when it created FOIA, which was to ensure that the public had full access to records pertaining to the transaction of public business. If the General Assembly’s intent was ignored, the PAC opined, public officials would be able to circumvent FOIA’s reach by using personal devices to discuss public business. The PAC did not address whether its decision concerning the reach of the Illinois FOIA is permitted by the Fourth Amendment of the United States Constitution, which prohibits unreasonable government searches and seizures of persons and their property.

            The City of Chicago has not yet announced whether it will appeal the PAC’s decision and its time for doing so has not yet expired. Although the PAC’s decision is binding on only the City of Chicago, the broad ruling of the decision and the likelihood that the PAC would issue a similar ruling in other cases means that it is effectively the law of the land unless and until overturned by a judge. Your attorneys at Scariano, Himes and Petrarca stand ready to assist you with navigating this far-reaching FOIA decision.

 

New Regulations Clarify Overtime Entitlement

By John Fester

 May 26, 2016 

Last week the U.S. Department of Labor announced updates to federal wage regulations that will increase worker eligibility for overtime.  As a refresher, the general rule is that all employees are entitled to overtime after working 40 hours in a workweek, unless one of the exceptions set forth in the Fair Labor Standards Act (“FLSA”) applies.  Illinois also has an overtime law, but this update will focus primarily on the FLSA and the new regulations. 

The good news is that nothing in the new regulations applies to teachers.  Teachers remain exempt from overtime, regardless of salary level.  However, other school district employees will be impacted by the changes.  This is because the minimum salary that must be paid to a non-teaching employee in order to exempt that employee from overtime eligibility rises from $23,660 ($455 per week) to $47,476 ($913 per week) on December 1, 2016.  Employees paid hourly, or paid an annual salary of less than $47,476, will be eligible for overtime and no further analysis is needed. 

Remember that annualizing an hourly rate is not the same as being paid a “salary” for FLSA purposes.  Being paid on a “salary basis” means an employee regularly receives a predetermined amount of compensation each pay period.  The predetermined amount cannot be reduced because of variations in the quality or quantity of the employee’s work. With few exceptions (for example,  unpaid FMLA leave), an exempt employee must receive the full salary for any week in which the employee performs any work, regardless of the number of days or hours actually worked. 

However, the fact that an employee is paid on a salary basis is not alone sufficient to exempt that employee from the FLSA's overtime requirements.  Generally, one of the FLSA’s “white collar” duties exemptions must also apply.  These exemptions exclude "bona fide" executive, administrative, and professional employees from overtime requirements. Determining whether a “white collar” duty exemption applies requires a fact-specific review of a position’s actual job duties.  These exemptions will almost always apply to central office administrators (superintendent, assistant superintendents, directors, business managers, etc.) and building administrators (principals and assistant principals).   

Conversely, the “white collar” exceptions will rarely apply to support staff positions because of the authority required for the executive exemption; the discretion and independent judgment required for the administrative exemption; and the advanced knowledge and consistent exercise of discretion and judgment required of the professional exemption.  For example, even if you have an administrative assistant earning a salary of more than $47,476 on December 1, the position will remain eligible for overtime unless the administrative exemption test can be satisfied. 

Employers have a range of options for responding to the increased standard salary level. For each affected employee newly entitled to overtime pay, employers may, subject to applicable collective bargaining agreements and bargaining obligations: 

  • Increase the salary of an employee to whom a “white collar” duties exemption applies to at least the new salary level to retain his or her exempt status;
  • Leave the employee below the new threshold and pay an overtime premium (or compensatory time) of one and a half times the employee's regular rate of pay for any overtime hours worked;
  • Reduce or eliminate overtime hours;
  • Reduce the amount of pay allocated to base salary and use the difference to account for overtime for hours worked over 40 in the workweek, in order to hold total weekly pay constant; or
  • Use some combination of these responses.  Obviously, some responses will be received better than others by the employees. 

Just as has been done for non-exempt employees in the past, it will be essential for employers to keep accurate records of hours worked for those employees who become newly eligible for overtime on December 1.  As a refresher, the following records should be kept (preferably electronically) for each non-exempt employee for three years: 

            1.         Employee's full name and social security number.

            2.         Address, including zip code.

            3.         Birth date, if under 19.

            4.         Gender and occupation.

            5.         Time and day of week when employee's workweek begins.

            6.         Hours worked each day.

            7.         Total hours worked each workweek.

            8.         Basis on which employee's wages are paid (e.g., per hour, per week)

            9.         Regular hourly pay rate.

            10.       Total daily or weekly straight-time earnings.

            11.       Total overtime earnings for the workweek.

            12.       All additions to or deductions from the employee's wages.

            13.       Total wages paid each pay period.

            14.       Date of payment and the pay period covered by the payment.  

Also in the area of recordkeeping, the Illinois Department of Labor recently required the following information be kept for all employees:  name and address, the hours worked each day in each work week, the rate of pay, copies of notice of hire rate and notice of any subsequent changes, the amount paid each pay period and all deductions made from wages or final compensation. Additionally, for employees given paid vacation, employers must maintain for a period of not less than 3 years accurate records of the number of vacation days earned for each year and the dates on which vacation days were taken and paid.  The consequence for failing to keep these records is the inability to contest the employee’s recollection and estimate of time worked but not paid, overtime worked but not paid, and the amount of vacation pay owed at separation. 

This does not necessarily mean non-exempt employees must punch a time clock each day.  Employers have options for accounting for workers' hours.  There is no particular form or order of records required and employers may choose how to record hours worked for overtime-eligible employees.  For example, where an employee works a fixed schedule that rarely varies, the employer may simply keep a record of the schedule and then indicate the changes to the schedule that the worker actually worked when the worker's hours vary from the schedule. 

We recommend you take some time this summer to review positions currently paid less than $47,476 per year, identify those that you presently treat as exempt from overtime, and analyze the identified positions to determine whether it makes sense to try to continue the overtime exemption by raising the employee’s salary, or whether other steps should be taken to ensure overtime compliance on and after December 1, 2016. 

Questions regarding overtime eligibility or exemption require a very fact specific analysis.  If you have questions about a particular position or positions in your district, please contact your attorney at Scariano, Himes and Petrarca.  

SH&P FOILS UNWARRANTED FOIA REQUESTS

September 11, 2015

By Paulette A. Petretti and Parker R. Himes 

            On July 17, 2015, Judge David Akemann, presiding in the Sixteenth Judicial Circuit, Kane County, Illinois, granted the Firm’s motion to dismiss a complaint against an Illinois community college, which claimed that the college had violated the Illinois Freedom of Information Act (“FOIA”).  The violations were allegedly manifested by the College’s invocation of FOIA exemptions as grounds to deny requests for voluminous data, databases and compilation of generic student information.

            In David Hites v. Waubonsee Community College, the controversy focused on the validity of FOIA requests seeking data and information that the College did not aggregate in the ordinary course of business, such as aggregated zip codes of GED students, numbers of registered students who lack social security numbers, and records of numbers of students taking ABE/GED classes on certain campuses. The plaintiff argued that even though the public body had not created or maintained records such as those requested, the College should nonetheless be required to “query” its numerous databases to compile the requested data.  To the extent that the College declined to perform queries, Hites demanded that he be given direct access to the databases in order to perform his own queries.  The plaintiff’s arguments were premised on his assertion that every piece of data (e.g. reference to a social security number or a zip code) is a public record and is subject to disclosure, pursuant to FOIA. The Court rejected plaintiff’s theory that each piece of data contained in a database is its own unique public record subject to FOIA disclosure and relied on a strict construction of the meaning of “public record” under FOIA.

 

            The Court ruled that a public body is not required to aggregate data which it does not aggregate in the regular course of business.  Notably, the Court found that “plaintiff’s requests do not seek ‘public records’ as the term is defined in the Act, but rather seek numerical tallies, the compilation of which is not required of the College by FOIA.” Importantly, “plaintiff’s insistence that he is not requesting that the College review its files and prepare a tally and/or produce general data, information, and statistics belies the text of his own FOIA request.”  The Court reminded plaintiff that, “well settled in Illinois law is the principle that a request to inspect or copy must reasonably identify a public record, as opposed to general data, information, or statistics.”  The Court ruled that “the College is not obligated under FOIA to answer general inquiry questions concerning the number of students that fall within the very specific categories crafted by plaintiff.  In order to answer the above-referenced five requests, it would require the creation of new records, which explicitly is not required under the Illinois Freedom of Information Act.  Thus dismissal relative to these requests is proper.”

 

            Just as the College is not required to compile data from physical records, the Court stated that “FOIA does not require the College to query individual data fields contained on the College’s database and create a new report that the College had not already generated or otherwise used.”  The pleadings and testimony in this case demonstrated to the Court that the College does not prepare or maintain any documents or databases that aggregate the data sought by plaintiff.

 

The plaintiff alternatively argued that requested pieces of data, such as zip codes, could be found on various paper forms, including the student registration form, used by the public body.  Notwithstanding this fact, the College pointed out that locating, copying and redacting thousands of forms, almost 10,000 documents, would take months to complete.  Responding to the request would also necessitate pulling employees off their important day-to-day tasks, because student registration records include confidential information that only certain authorized employees may inspect.  Therefore, in order to respond to the request, the College would be required to hire temporary employees to do the day-to-day work of confidential employees processing the request, costing the public body tens of thousands of dollars.  The Court found that responding to the requests using the paper forms would cause an undue burden on the public body that FOIA seeks to avoid.  Additionally, in noting that over the course of several years Hites had repeatedly asked for the same information, the Court pointed out that “repeated requests from the same person for the same records that are unchanged or identical to records previously provided or properly denied under this Act shall be deemed unduly burdensome.”

 

Moreover, the Court found that “querying” the numerous databases maintained by the public body for individual and unrelated pieces of data would have unduly burdened the public body, in that most of the College’s IT department would be taken off their regular tasks, causing significant interference and disruption for the College’s functions.  With regard to the question of burden, the Court found that “the College has successfully demonstrated that the burden of complying with the plaintiff’s remaining FOIA requests outweighs the public’s interest in obtaining the requested information.”

 

In summary, the College disagreed with plaintiff’s position that there existed public records that were responsive to his requests. In keeping with the College’s position, the Court determined that plaintiff’s requests were barred by statutory provisions and that the College’s invocation of exemptions and objections was warranted. 

 

            This FOIA ruling provides significant legal authority for any public sector entity seeking to challenge requests to obtain compilations of data, which are not aggregated in the ordinary course of business.  Moreover, to the extent redaction of public records is demanded, this case confirms that a showing of undue disruption of public resources will serve to bar such requests. 

 

Supreme Court Clarifies Long Reach of Title VII in Religious Discrimination Case

July 1, 2015

By Anthony Scariano III and James A. Petrungaro

 

            The U.S. Supreme Court has weighed in again on unlawful employment practices. In EEOC v. Abercrombie and Fitch, the court analyzed the religious accommodation standard in Title VII of the Civil Rights Act of 1964, holding that discrimination occurs when an applicant’s need for a religious accommodation is a “motivating factor” behind the decision not to hire. What makes this case significant is that the court held that an employer commits religious discrimination where it fails to hire because of a candidate’s suspected need for a religious accommodation, even if an accommodation was not actually requested or needed.

            Samantha Elauf is a practicing Muslim who, as part of her faith, wears a headscarf. She applied and interviewed for a job at one of Abercrombie’s stores. Abercrombie has a “look policy” that prohibits its employees from wearing caps. Since Abercrombie’s interviewer was concerned that Elauf’s headscarf would violate the policy, the interviewer asked a district manager whether the headscarf would be a problem. In doing so, the interviewer informed the manager that she believed that Elauf wore the headscarf because of her faith. The manager told the interviewer that the look policy would be violated and directed the interviewer not to hire Elauf. The EEOC filed a lawsuit against Abercrombie on Elauf’s behalf, contending that Abercrombie intentionally discriminated against her by refusing to hire her.

            Abercrombie defended its decision by arguing that Elauf never asked for a religious accommodation, meaning Abercrombie did not actually know whether she was wearing her headscarf for religious reasons or whether she desired a religious accommodation. But the Court rejected that position, holding that Abercrombie’s motive was dispositive of the issue, not its actual knowledge. Notably, the Court’s reasoning in this Title VII case stands in stark contrast to its interpretation of the Americans with Disabilities Act, which prohibits discrimination based upon known disabilities.  

            In its decision, the Court also explained title VII’s religious accommodation standard as it applies to otherwise “neutral” workplace policies, such as Abercrombie’s “no cap” rule. There was not much dispute that Abercrombie’s “no cap” policy was neutral. But the Court clarified that a neutral policy cannot overcome Title VII’s religious accommodation standard, stating: “Title VII does not demand mere neutrality with regard to religious practices – that they be treated no worse than other practices. Rather, it gives them favored treatment…”

           The Court’s decision in Abercrombie exhibits the broad reach of anti-discrimination laws. Where employers make discriminatory hiring decisions, even if based upon a mere suspicion of an applicant’s need for religious accommodation, they risk being in violation of Title VII. Employers are also on notice that a religious accommodation need will prevail over neutral employment policies, though the Court did not rule out the usual “undue burden” defense. If you have any questions or concerns about Abercrombie’s application to your interviewing or application process, please do not hesitate to contact us. 

GOVERNOR’S EXECUTIVE ORDER DOES NOT IMPACT SCHOOL DISTRICT EMPLOYEEs’ “FAIR SHARE” FEES

February 10, 2015

By:  Adam Dauksas

Yesterday, Governor Bruce Rauner issued an executive order that seeks to abolish “fair share” fees for  state employees who do not wish to join a public sector union.  The Governor’s executive order does not, however, extend to local governmental employees, such as those employed by school districts.

In Illinois, public employees are free to choose not to join a union but must still pay “fair share” fees, which are used to support a union’s collective bargaining efforts that benefit all employees, regardless of union membership.  “Fair share” fees may not be used by public unions for political activities, but, according to the Governor, such a distinction cannot possibly be made because public sector unions bargain directly with the government.  Thus, says the Governor, some public employees are being required to sponsor political activities that they do not agree with, which is in violation of the First Amendment.

As a practical matter, if your collective bargaining agreement requires you to deduct “fair share” fees from bargaining unit members who have not joined the union, you must continue to make those deductions and remit the fees to the appropriate union.   If such provisions are declared illegal or unconstitutional as applied to Illinois public school employees, we will issue further guidance.

The Impact of the Opportunities for Qualified Applicants Act on School Districts

February 3, 2015

By Jacqueline M. Litra

The Opportunities for Qualified Applicants Act, which took effect on January 1, 2015, prohibits employers and employment agencies from inquiring about, considering or requiring disclosure of applicants’ criminal history until an applicant has been: (1) determined qualified for an interview and notified of his/her selection for an interview; or, (2) if there is no interview, after a conditional offer of employment is made.  Some of our clients have expressed confusion over how this new law impacts them.

The Act defines “Employer” as any person or private entity that has 15 or more employees and any agent of such an entity or person. School Districts do not fit within this definition of “Employer” because they are public, not private entities.  Additionally, the Act expressly states that the prohibited pre-screening practices do  not  apply  to  positions  where  employers  are  required  to  exclude  applicants  with  certain  criminal convictions from employment by state or federal law.  The pre-screening practices prohibited by the Act are allowed for school districts because school districts are required to review criminal history reports for employees and are prohibited from employing individuals with certain convictions.

As a result of the new law, the Illinois Association of School Boards, through its PRESS policy service, recommended changes regarding candidate criminal histories through its proposed Administrative Procedure (Interview Questions for Board Policy 5:30).   In our opinion, the proposed revision provides an overly conservative approach to inquiring about criminal convictions.  School districts can still inquire as to whether an applicant has ever been convicted of a crime, especially at an interview.   In addition, it is possible that attempting to utilize the broad classifications of offenses in the Administrative Procedure’s recommended question could result in applicants failing to report a relevant conviction because he/she is unfamiliar with the offenses included in each broad category.

Accordingly, we advise that school districts are not required to follow the new language on convictions in the IASB Administrative Procedure – Interview Questions or to change their pre-screening practices as a result of the Opportunities for Qualified Applicants Act.

If  youhave any questions  regarding appropriateemploymentpractices,  please contact  yourattorney at Scariano, Himes and Petrarca, Chtd.

DEADLINE FOR THE FIRST PERA JOINT COMMITTEE MEETING

October 15, 2014

By Jacqueline M. Litra

School districts are acutely aware of the looming implementation deadlines for PERA compliant teacher evaluation plans and the 180-day timeline for the PERA joint committee to reach agreement on incorporating student growth into the teacher evaluation plan.  However, some may not realize that the Illinois State Board of Education’s Rules require that the first meeting of a school district’s PERA joint committee occur by November 1 of the school year immediately preceding the school district’s implementation date.

School districts whose student performance ranks in the lowest 20% must implement a PERA compliant teacher evaluation plan by September 1, 2015.  Those school districts should have their first official PERA joint committee meeting no later than Friday, October 31, 2014. School districts in the bottom 20% of the student performance list should have been informed by the Illinois State Board of Education of that placement on or around September 22, 2014.

PERA joint committees must reach agreement on the use of data andindicators on student growth as a significant factor in rating teacher performance within 180 calendar days of the committee’s first meeting. Accordingly, a PERA joint committee that has its first meeting on October 31, 2014 has until April 29, 2015 to reach agreement.

All remaining school districts are required to implement a PERA compliant teacher evaluation plan by September 1, 2016.  Those school districts should officially convene their PERA joint committees by Friday, October 30, 2015. A PERA joint committee that has its first meeting on October 30, 2015 has until April 27, 2016 to reach agreement because 2016 is a leap year.

If you have any questions regarding the requirements of PERA and the responsibilities of the PERA joint committee, we are available to guide you through this difficult process.

AFFORDABLE CARE ACT EMPLOYER MANDATE DELAYED FOR MEDIUM SIZED EMPLOYERS

September 19, 2014

By Parker Himes

The Treasury Department on Monday announced that employers with 50-99 full-time employees will be given until 2016 to offer insurance to full-time employees before risking a federal penalty. The 2016 deadline is two years longer than the original deadline under the Affordable Care Act.  Under the Act, a full-time employee is anyone who works 30 or more hours per week.

Also announced on Monday is another type of grace period for employers with 100 or more full-time employees. Originally, employers were required to offer coverage to 95% of full-time employees by 2015.  Under the new rules, however, employers with 100 or more full-time employees can avoid the federal penalty for failing to offer coverage by offering insurance to just 70% of full-time employees by 2015 and 95% of full-time employees by 2016.  Importantly, however, employers are still subject to a $3,000 penalty for each employee in the 30% not offered health insurance who buys coverage on a state health-care exchange and qualifies for subsidized premiums.

Administration officials also said Monday that they will issue a separate set of rules in the next few weeks related to how employers must report their employees’ insurance status to the government.   The Firm will be monitoring the law’s progress and will keep you up to date on any significant developments.

If you have any questions related to this issue or any other aspect of the Affordable Care Act, we encourage you to contact an attorney at the Firm for clarification.

Finally, please join us for a presentation on the Affordable Care Act at the Firm’s 34th  Annual School Law Seminar on Saturday, March 1 at McDonald’s Hamburger University in Oak Brook.  As always, board members, district and building level administrators may register for no cost on the Firm’s website (http://edlawyer.com/law-seminar-registration). We look forward to seeing you there.

ILLINOIS ADOPTS NEW PREGNANCY ACCOMMODATIONS LAW

 September 19, 2014

By Adam Dauksas

 Effective  January1,  2015,  Illinois  school  districts  must  begin  providing  reasonable  accommodations  to pregnant employees who request them.  In an expansion of pregnant employees’ rights beyond what is provided under the federal Family and Medical Leave Act (“FMLA”), the Governor signed into law House Bill 8 late last month, which amends several sections of the Illinois Human Rights Act.

This state law will soon make it a civil rights violation for an employer, after a job applicant or employee (including a part-time, full-time, or probationary employee) requests a reasonable accommodation, to not make such an accommodation for any medical or common condition related to pregnancy or childbirth.  Where the employer can demonstrate that the accommodation would impose an undue hardship on its normal operations, however, the accommodation need not be made.   The law provides examples of what a “reasonable accommodation” in this instance might be:

  • More frequent or longer bathroom, water, or rest breaks.
  • Private non-bathroom space for breastfeeding.
  • Seating.
  •  Assistance with manual labor.
  •  Light duty.
  • Temporary transfer to a less strenuous or hazardous position.
  • A part-time or modified work schedule.
  • Appropriate adjustment or modifications of examinations.
  • Time off to recover from conditions related to childbirth.
  • Unpaid leave.

In addition, the law makes clear that school districts will also be prohibited from denying employment opportunities or benefits to, or taking adverse action against, a pregnant employee if the denial or adverse action is based on the need of the district to make reasonable accommodations.  Further, districts will not be able to require a pregnant employee to accept a reasonable accommodation when she did not request one, nor can a district require an employee to take leave if another reasonable accommodation can be provided.  Moreover, under the law, school districts will not be allowed to retaliate against an employee because she requested, attempted to request, used, or attempted to use a reasonable accommodation.

Lastly, school districts will be required to provide notice to their employees concerning these new rights at a conspicuous location on the district’s premises where notices to employees are customarily posted and in any employee handbook.  The Illinois Department of Labor will prepare the notice documents and make them available on its website.

Should your district have any questions about these changes in the law, including what might constitute an “undue hardship,” please do not hesitate to contact Scariano, Himes and Petrarca, Chtd.

Chief School Business Officer Requirements

By John E. Fester

A recent TRS Employer Bulletin was issued regarding the participation of business administrators in TRS (Bulletin 14-06). Please note the following excerpts:

“Therefore, individuals serving as the CSBO and required to hold a [professional educator] license with the CSBO endorsement must have CSBO in their titles. If a school business-related position does not include CSBO in the title, the position does not require licensure even if the individual holds a CSBO endorsement.”

“Effective with the 2014-15 school term, for a school business official to be reportable to TRS, he/she must hold the CSBO endorsement and must have CSBO in his/her title. For example, the title of the position may be CSBO, Assistant Superintendent/CSBO, etc.”

If you need to make this change, we recommend changing the title in the job description and amending employment contracts to reflect the title change. As a general rule, if an employee does not have a professional educator license, or is serving in a position that does not require such a license, the person is not eligible for TRS membership.  If you have questions regarding this topic, please contact your attorney at Scariano, Himes and Petrarca.

New Changes to the Teacher Reduction in Force Procedures

 July 1, 2014

By Jacqueline M. Litra

On June 13, 2014, House Bill 5546 was signed into law as Public Act 98-0648.  This Amendatory Act is the most recent amendment to Senate Bill 7. The Act significantly amends the reduction in force procedures established in SB 7 by creating recall rights for certain teachers reduced from Group Two.

Now, if a school board has any vacancies from the beginning of the term following the reduction in force through February 1 of that term, such positions must be offered to qualified teachers dismissed from Group 2 with a “Needs Improvement” evaluation rating on either of their last two evaluations.  If a teacher has more than one rating, the other rating must be proficient or better for recall rights to apply. These new recall rights do not apply to teachers rated “Unsatisfactory.” These changes apply to layoffs made during the 2013-2014 school year.

These recall rights apply to probationary teachers laid off from Group 2.  Accordingly, it is important that school districts use the non-renewal process and not the layoff process for probationary teachers who are not making the cut.

The Act codifies the fact that only one evaluation rating each term may be used for determining the sequence of honorable dismissal. If there are multiple performance evaluations during a school year (other than evaluations as part of a remediation plan), the last evaluation before the sequence of honorable dismissal list is established will be the one evaluation used. School districts may only average multiple evaluation ratings without agreement from the union.

The Act also clarifies that the sequence of honorable dismissal list, which districts are required to provide to the union at least 75 days before the end of the school year, must include teachers by name and categorized by position and group.

Your attorneys at Scariano, Himes and Petrarca stand ready to assist you in navigating the ever-changing reduction in force procedures and your re-defined responsibilities under this Act.

SCHOOLS ALLOWED TO PREDICT FUTURE HARMFUL IMPACT OF EMPLOYEE’S FIRST AMENDMENT SPEECH

November 15, 2013

By Paulette A. Petretti

On December 3, 2013, the U.S. Court of Appeals for the Seventh Circuit entered an opinion in the matter of Bryan Craig v. Rich Township High School District 227, et al., in which the Court addressed the issue of whether a school district could terminate a guidance counselor who self-published a book he wrote on his personal time containing adult relationship advice entitled “It’s Her Fault.” The Court reviewed the school’s charges for termination which included, among other considerations, that the publication had caused disruption, concern, distrust and confusion among members of the school district community, that the book violated the district’s sexual harassment policy because it created a hostile and offensive educational environment, and that the guidance counselor failed to present himself as a positive role model.  After analysis of Craig’s provocative themes and sexually explicit terminology, spanning discussions of penis sizes, oral sex, and differences in women’s vaginas, the Court determined that the school district’s interest in protecting the integrity of counseling services at the high school “dwarfed” the guidance counselor’s interest in publishing “It’s Her Fault.”

While the Court was willing to acknowledge that Craig’s book did address a matter of public concern because it, in part, addressed the structure of adult relationships, the Court found the weight of Craig’s First Amendment message to be extremely limited.  In light of the limited weight of Craig’s speech interest, the Court concluded that the school district’s interest in preventing a likely disruption of their guidance counseling service outweighed Craig’s limited speech interest and was sufficient to justify Craig’s discharge.  Craig’s termination did not offend the First Amendment.

In arriving at its decision, the Court examined the unique relationship between a guidance counselor and students and found that the school district reasonably gauged how students’ response would impact conditions at the school.  For example, the Court under stood how easily female students could feel uncomfortable seeking advice from Craig given his professed inability to refrain from sexualizing females.  In his book, Craig confesses a “weakness for cleavage” and another portion of a woman’s anatomy and admits that these body parts served as distractions in his encounters with women.  Knowing Craig’s tendency to objectify women, the school district could reasonably anticipate that some female students would feel uncomfortable reaching out to Craig for advice.  In deed, there was a reasonable danger that some students would forego receiving the school’s counseling services entirely rather than take the risk that Craig would not view them as a person but instead as an object. Accordingly, the Court deemed the school district’s concerns as substantial grounds for terminating Craig’s employment.

Here, the school district reasonably predicted that “It’s Her Fault” would interfere with the learning environment. The Court respected the school district’s concern that the book would be available to students.  Parents and students had aired complaints to the administration and the book was available for purchase, without age restrictions, over the internet.  Craig dedicated the boo k to his students who “consistently reach out” to him about relationships and encouraged those students to “keep listening and learning.”  The school’s assessment of how Craig’s students, particularly his female students, would respond upon reading or hearing about the “hypersexualized” content of his book loomed large in the Court’s analysis.

The opinion stresses that a public school teacher holds a position that by its very nature requires a degree of public trust not found in many other positions of public employment.  Particularly as a guidance counselor, Craig was required to maintain a safe place for his students in order to ensure they remain willing to come to him for advice.  With the publication of his book, Craig betrayed the trust required of his job.  The school district’s interest in delivering appropriate educational services outweighed Craig’s interests in providing advice about “adult” relationships. Therefore, the Court upheld the dismissal of his complaint, which invoked protection under the First Amendment.

Scariano, Himes and Petrarca partners Paulette A. Petretti and Darcee C. Williams defended the school district defendants against Craig’s First Amendment claims in federal district court and on appeal. A copy of the opinion, which is rather colorful in i ts review of the book and the school district’s decision, is available  here.

TRS Pension Cap – Start Date for Contracts

By John E. Fester

TRS has recently cast doubt on whether an employment contract starting on May 31, 2014 will be considered “effective on or before June 1, 2014” for purposes of pension cap grandfathering.  Because May 31 is a Saturday, and TRS generally does not recognize weekends as days on which service credit can be earned, it could be argued that the contract is not truly effective until Monday, June 2 (the first day of creditable service), which is after the June 1 deadline.  In order to protect against this argument, employees seeking to have a multi-year contract in place for purposes of pension cap grandfathering should make sure the effective date of the contract (i.e. the first day of creditable service under the contract) is earlier than May 31, 2014.  If you have any questions regarding this matter, please contact your attorney at Scariano, Himes and Petrarca.

 

FULL-TIME EMPLOYEE UNDER THE AFFORDABLE CARE ACT

 July 9, 2013

By Parker Himes

A full-time employee under the Affordable Care Act is defined as an employee working 30 hours or more, not 35 hours as stated in a previous article.  While the 30 hour standard has not changed, over the next year and a half the Obama Administration will explore ways to make the law more palatable to employers, which could include modifying the definition of full-time employee to include only those employees working 35 hours or more.  In fact, Senator Susan Collins (R-ME) and Senator Joe Donnelly (D-IN) recently proposed bipartisan legislation, titled the “Forty Hours is Full Time Act of 2013” (S. 1188), that would change the definition of full-time employee to 40 hours under the Act.  We will monitor the progress of this bill.

During this time, further guidance will be forthcoming concerning the definition of “employee” under the Act. The Administration anticipates that the guidance on this issue, and many others, will help clarify employers’ responsibilities and help employers implement the infrastructure necessary to comply with the law.  It is important to note that any number of changes could occur between now and January 2015.  The Firm will be monitoring the law’s progress and will keep you abreast of any developments.

If you have any questions about this issue or any other related to the Affordable Care Act, we encourage you to contact an attorney at the Firm for clarification.

OBAMA ADMINISTRATION DELAYS EMPLOYER MANDATE UNDER AFFORDABLE CARE ACT

July 8, 2013

By Parker Himes

Last week, the Obama administration delayed the effective date of the Affordable Care Act’s employer mandate, which requires companies with 50 or more employees to offer health insurance to workers or pay a penalty.  The delay pushes the inception of the employer mandate back to January 2015.  At that time, employers will be required to provide health insurance  to  employees  working  35  hours  or  more.    Administration officials  reason  that  the  delay  will  allow  a reassessment of the reporting burdens and will give employers more time to arrange compliance with the law.

Conversely, the individual mandate will not be delayed.   Health care exchanges are slated to be up and running by October 1, selling coverage that takes effect January 1, 2014.  The Administration notes that many of the employees who will not receive coverage through employers until 2015 will be able to obtain coverage from these health care exchanges.

For employers, the delay could reduce pressure to develop the data collection and infrastructure necessary to track full- time employees based on the law’s complex rules.  The Administration points out that a majority of the large companies covered by the mandate (including most school districts) already provide their employees with health insurance that complies with the employer mandate.  James A. Klein, president of the American Benefits Council, touts the delay as providing “vital breathing room to implement the law in a more thoughtful and administratable way…Major employers have led the way in providing coverage to their workers and are expending great resources to ensure compliance with the new law.” Todd Leeuwenburgh, Health Reform’s Employer Mandate Delayed: Obama Recognizes Employer Concerns, Thompson’s HR Compliance Expert, July 3, 2013.

Yet, the delay does not apply to employer compliance with the law’s other insurance mandates. These mandates include:

1) coverage for dependent children up to age 26; 2) no exclusions for pre-existing conditions; 3) no annual or lifetime limits on payments; and 4) coverage with no cost-sharing for preventative services; among others.

The Obama administration has promised to provide more clarity to employers regarding the mandate over the next year and a half.  For now, however, employers can take advantage of the breathing room afforded by this delay to form their strategy for compliance with the law.

If you find yourself dealing with issues related to the employer mandate, we urge you to contact an attorney at the Firm so we can help to find a favorable resolution.