Allen Roberts, a Member of Firm in the Labor and Employment practice and co-chair of the firm’s Whistleblowing and Compliance Subpractice Group, in the New York office, wrote an article titled “Impact: Employers Brace for Change – Top 5 Issues Facing Businesses, as appeared in Insurance Advocate.”

Following is an excerpt:

By popular account, the Affordable Care Act (“ACA”) would preserve the base of insureds and extend health insurance coverage to as many as another 32 million Americans. That estimate could be wrong if ACA disrupts patterns and experience of spouse and dependent coverage on employer-paid policies. Much of the political and media comment has focused on mandates, exchanges, and reasons that employers may maneuver to satisfy requirements concerning employee coverage, or drop it completely. Left out of the discussion has been the cost of covering family members of employees and the opportunity to shift employer dollars away from spouse and dependent premiums and place more dollars in premiums for individual employees. If that happens, spouses and dependent children will receive insurance coverage under employer-provided plans only if their premiums are paid by the employee, a household member, or some third party. Otherwise, those family members must obtain insurance elsewhere or join the ranks of the uninsured, something that might have been unimaginable for many of them—and perhaps for advocates of ACA who have considered it a move towards universal health care coverage.

Click here to read the article in its entirety.

The attached file is used by permission from Insurance Advocate – Vol. 124, No. 6 / March 18, 2013.

In the wake of Hurricane Sandy, employers with employees and operations impacted by Hurricane Sandy are asking what types of tax and employee benefits relief may be available to them and their affected employees.  The Internal Revenue Service (“IRS”), the Department of Labor (“DOL”) and the Pension Benefit Guaranty Corporation (“PBGC”) have moved quickly to provide disaster relief guidance for affected employers and their employees.

IRS Relief.  In response to Hurricane Sandy, on November 2, 2012, the IRS in IR-2012-84 declared Hurricane Sandy a “qualified disaster” for federal income tax purposes under Section 139 of the Internal Revenue Code of 1986, as amended (the “Code”).  The IRS then acted to institute the following relief measures:

  • Qualified disaster relief payments.  The designation of Hurricane Sandy as a “qualified disaster” under Code Section 139 allows employers to make “qualified disaster relief payments” for expenses resulting from or attributable to Hurricane Sandy.  Qualified disaster relief payments are excluded from the employees’ federal gross income and are not wages for purposes of employment taxes.  Qualified disaster relief payments are defined as payments that are not covered by insurance made for personal, family, living or funeral expenses resulting from the qualified disaster, including the costs of repairing or rehabilitating personal residences damaged by the qualified disaster and replacing their contents.
  • Sharing and/or donating accrued vacation, sick and PTO leave.  On November 6, 2012, the IRS announced in IR-2012-88 and IRS Notice 2012-69 that employees will be permitted to forego vacation, sick or personal leave and contribute the value of the leave as a cash payment for the relief of victims of Hurricane Sandy.  The cash payments may be contributed to a Code Section 170(c) private foundation, including an employer-sponsored foundation, for the relief of victims of Hurricane Sandy, as long as those amounts are paid to the organization on or before January 1, 2014.  The leave contributed by an employee will not be included in the employee’s gross income or wages and the right to make a contribution will not result in constructive receipt for purposes of income or employment taxes.  Electing employees, however, may not claim a charitable contribution deduction under Section 170 for the value of the cash payment.  On November 6, 2012, the IRS also announced in IR 2012-87 an expedited review and approval process for Code Section 170(c) private foundations that are newly established to help individuals impacted by Hurricane Sandy.
  • Delay of tax filing deadlines to February 1, 2013.  On November 2, 2012, the IRS announced in IR-2012-83 that certain taxpayers affected by Hurricane Sandy will be eligible for filing and payment federal tax relief.  Affected individuals and businesses located in certain counties of the States of Connecticut CT-2012-48 (effective October 27), New Jersey NJ-2012-47 (effective October 26), New York NY-2012-47 (effective October 27) and Rhode Island RI-2012-30 (effective October 26), as well as relief workers working in those areas, will have until February 1, 2013 to file certain tax returns and pay any taxes due.  This includes the filing of the fourth quarter individual estimated tax payment, payroll and excise taxes for the third and fourth quarters, and Form 990 and Form 5500 if the deadlines or extensions occur during the applicable extended filing period.  The extension does not apply to Forms W-2, 1098 and 1099, or Forms 1042-S and 8027.  The IRS is also waiving failure to deposit penalties for federal and excise tax deposits on or after the applicable disaster area effective date through November 26, 2012 if deposits are made by November 26, 2012.
  • Expansion of hardship distributions and participant loans under 401(k) plans, 403(b) plans and 457(b) plans.  On November 16, 2012, the IRS announced in IR-2012-93 and IRS Notice 2012-44that a qualified retirement plan will not be treated as violating any tax qualification requirements if it makes hardship distributions for a need arising from Hurricane Sandy or loans to employees or former employees whose primary residence or place of employment is in a qualified disaster area.
    • Hardship distributions and loans also may be made to employees who have relatives living in the qualified disaster area impacted by Hurricane Sandy.  Relatives for this purpose include an employee’s grandparents, parents, children, grandchildren, dependents, or a spouse.
    • Certain documentation and procedural requirements, and other limitations, are not required if the plan administrator makes a good-faith diligent effort to satisfy those requirements and the plan administrator, as soon as practicable, uses reasonable efforts to assemble any forgone documentation.
    • If the plan does not provide for loans or hardship distributions, the plan may be amended to allow for Hurricane Sandy distributions no later than the end of the first plan year beginning after December 31, 2012.
  • Code Section 409A deferred compensation plans.  Hurricane Sandy may qualify as an “unforeseeable emergency” affecting a service provider that allows for a distribution under a nonqualified deferred compensation plan subject to Code Section 409A.  Though not clear, it may be possible for a plan to be amended to allow for payment upon an unforeseeable emergency after the occurrence of the emergency.

DOL Relief.  The DOL is providing disaster relief by allowing plans to take certain actions that otherwise could be a violation of Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).  The DOL will not consider the following events to be a fiduciary violation under ERISA:

  • The plan provides for loans and hardship distributions in compliance with the IRS Hurricane Sandy disaster relief guidance described above.
  • There is a temporary delay under the plan in forwarding participant contributions and loan repayments from payroll processing services in the Hurricane Sandy qualified disaster area and the affected employers and service providers act reasonably.
  • There is a blackout period under a retirement plan related to Hurricane Sandy and the plan is not able to comply with the requirements to give participants and beneficiaries 30-day advance written notice of the blackout.
  • Group health plans make reasonable accommodations due to Hurricane Sandy for plan participants and beneficiaries for deadlines and documentation in filing claims for benefits, including COBRA elections.
  • Group health plans and issuers are not able to comply with pre-established claims procedures and disclosures due to the physical disruption to the plan or service provider’s principal place of business from Hurricane Sandy.

PBGC Relief.  The PBGC is providing limited disaster relief for a plan or plan sponsor located in the qualified disaster area, specifically Connecticut, New Jersey, New York and Rhode Island, or a plan or plan sponsor that cannot reasonably obtain information from a service provider, bank or other person whose operations were directly affected by Hurricane Sandy.  The PBGC relief includes the following:

  • Any premium payment required to be made on and after October 26, 2012 and on or before February 1, 2013 (the “PBGC disaster relief period”) will not be subject to penalties if made by February 1, 2013.
  • Single-employer standard terminations and distress terminations deadlines required to be made during the PBGC disaster relief period are extended to February 1, 2013.
  • Reportable event post-event notice deadlines for the PBGC disaster relief period are extended to February 1, 2013.  Pre-event reportable event notice deadlines may be extended on a case-by-case basis.
  • Annual financial and actuarial information reporting for certain large underfunded plans, missed contributions or funding waivers may be extended on a case-by-case basis.
  • If information is requested under an allowable extension of a Form 5500 filing date, and the Form 5500 is eligible for a filing extension under the IRS guidance for Hurricane Sandy, the allowable extension will commence on the last day of the qualified disaster extended deadline.
  • Requests for reconsiderations or appeals are extended through the PBGC disaster relief period.
  • Multiemployer plans’ premium deadlines will be extended as described above.  The PBGC will not assess a penalty or take enforcement action for the failure to comply with multiemployer plan deadlines during the PBGC disaster relief period.

All employers with employees and operations impacted by Hurricane Sandy directly or indirectly should take immediate action to review the relief available for their businesses and employees.

For further information on employment considerations for qualified disasters such as Hurricane Sandy, please see our client advisory entitled HR Guide for Employers – Responding to Natural Disasters.

By Amy J. Traub, Gretchen Harders, Anna Kolontyrsky, and Margaret C. Thering

With the reelection of President Obama, it is clear that employers should be preparing to comply with all of the applicable provisions of the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (the “Affordable Care Act”).  As employers well know, the Affordable Care Act contains comprehensive healthcare reform provisions, including, among other things, the mandate that larger employers face penalties starting in 2014 if they do not make affordable healthcare coverage available to their workers, the so-called “pay or play” mandate.  We have already seen efforts by the Department of Labor (“DOL”) to audit employers’ group health plans for compliance with the Affordable Care Act.  Given that we expect the Obama Administration’s DOL to continue its audit efforts, we recommend that all employers conduct a self-audit of their compliance efforts with healthcare reform.  Even small employers should assess the size of their work force to determine whether they fall within the threshold requirements for the pay or play mandate.  How many employers have actually conducted self-audits of their group health plans and taken other recommended steps towards compliance?  The DOL wants to know.

As an initial matter, employers should immediately be preparing for the following upcoming requirements and changes:

  • Form W-2 Reporting.  Beginning with the 2012 tax year, employers issuing 250 or more Form W-2s must include the cost of employer-sponsored health coverage on each worker’s Form W-2.  This must be prepared and provided to employees in January 2013.
  • Notice of Exchange.  No later than March 1, 2013, employers must provide employees and new hires with a written notice of the availability of the healthcare exchanges.  The notice must describe the services provided by the exchange and inform employees of their potential eligibility for a premium tax credit or a cost-sharing reduction.  The Department of Health and Human Services is expected to issue a model notice.
  • Limit on FSA Salary Reductions.  For Plan years commencing after December 31, 2012, a $2,500 annual limit on salary reduction contributions applies to health flexible spending accounts (health FSAs).
  • Elimination of Employer Deduction.  Commencing January 1, 2013, the employer deduction for subsidized retiree prescription drug expenses is eliminated.
  • FICA  Tax Increase (Unearned Income Medicare Contribution). FICA tax for 2013 will increase by 3.8% on certain unearned income (e.g., capital gains, dividends, proceeds from sale of a home) of high-income individuals with adjusted gross income (AGI) over $200,000 annually; $250,000 if married filing jointly; or $125,000 if married filing separately.
  • Medicare Tax Increase. In 2013, the employee portion of Medicare tax on wages will increase by 0.9% for high-income individuals earning wages over $200,000 annually; $250,000 if married filing jointly and $125,000 if married filing separately. The Medicare tax increase will apply to wages in excess of such thresholds.

Additional Affordable Care Act mandates become effective as of January 1, 2014, including, among other things, the employer “pay or play” mandate, limits on waiting periods to 90 days and the elimination of annual dollar limits on essential health benefits.

As far as the existing rules under the Affordable Care Act are concerned, we understand the DOL already has begun issuing audit letter requests to audit employer’s group health plans.  As is typical of a DOL group health plan audit, the DOL is requesting documentation that demonstrates an employer’s compliance with the Affordable Care Act.  For example, the following information has been requested from both grandfathered and non-grandfathered health plans:

  • For plans with dependent care coverage, a sample of the notice describing enrollment opportunities relating to coverage of children up to age 26;
  • A list of participants who have had their coverage rescinded and the reasons for any such rescissions; and
  • If the Plan imposes a lifetime limit, documents relating to that limit for each plan year.

 For non-grandfathered health plans, DOL has requested the following information:

  • The Plan’s claims and appeals procedures, including notices regarding adverse benefit determinations and final external review determination notices.  This request is meant to demonstrate that the Plan has adopted the new internal and external claims procedures pursuant to the Affordable Care Act;
  • Contracts with independent review organizations (“IROs”) or third-party administrators providing external review.  The Affordable Care Act requires non-grandfathered health plans to contract with three Independent Review Organizations (IROs) to handle external claims appeals;
  • Documents related to preventive health services.  Under the Affordable Care Act, non-grandfathered plans must cover certain preventive care services without cost sharing, including the new standards for women’s preventive care services (which includes coverage of contraceptives); and
  • Documents relating to the Plan’s emergency services benefit.  This request allows the DOL to verify that emergency hospital services are provided without requiring prior authorization or higher cost sharing amounts.

For group health plans that claim grandfathered status, the DOL has requested records documenting the terms of the Plan, the participant notice of grandfathered status and any additional documents to confirm the Plan’s grandfathered status.

An insufficient response to a DOL audit request could lead to additional inquiries and even lawsuits.  Additionally, various penalties could be imposed by the DOL and/or the Internal Revenue Service for failure to implement certain Affordable Care Act-related coverage mandates.

Employers therefore are again reminded to perform a healthcare reform self-audit as their first order of business and continue their compliance efforts.  Employers should further take steps to be sure that their efforts are well-documented by: (1) preserving all records relating to the Plan administration, design, and maintenance, including contracts with third-party service providers; (2) preserving all documents distributed to employees that provide notice of the Affordable Care Act’s provisions; and (3) ensuring that all written policies that implement any Affordable Care Act mandates are easily obtainable for production.

In a previous blog, we have provided a timeline of what provisions of the Affordable Care Act are applicable to most employers and the deadlines or expected deadlines for compliance.  We also have blogged on the most recent guidelines on the upcoming pay or play penalties and the 90 day waiting period limitation.

As the Obama Administration takes steps to enforce the Affordable Care Act, self-audits of employers’ group health plans are critical.

Kara Maciel, Member of the Epstein Becker Green Labor and Employment, Litigation, and Health Care and Life Sciences  Practices, was recently interviewed by Employment Law360 concerning employer wellness programs. 

According to the article, businesses are turning to wellness programs to curb health care expenses, but programs that aren’t carefully crafted can open employers up to costly privacy and discrimination litigation, attorneys say.  Wellness programs can lead to big savings for employers by targeting behaviors that can cause  conditions that drive up their health care expenditures. But programs that give employers too much  information about their employees can leave employers vulnerable to claims that they have violated the  Health Insurance Portability and Accountability Act, the Americans with Disabilities Act, the Genetic  Information Nondiscrimination Act, and state privacy and nondiscrimination laws, experts say.  “Employers really can open themselves up to a litigation minefield if they do not properly craft their programs in a legally compliant way, with a particular focus on discrimination and privacy issues,”  EpsteinBeckerGreen’s Kara M. Maciel said. 

 Click here to read the entire Employment Law360 article

On December 6, 2011, the U.S. Department of Labor (“DOL”) issued a proposed rule on Form M-1 filing requirements, a proposed rule on DOL ex parte cease and desist orders, a notice of proposed form revision to Form M-1 and a notice of proposed form revision to Form 5500  implementing new requirements for multiple employer welfare arrangements (“MEWAs”) under the Patient Protection and Affordable Care Act (“PPACA”) (referred to as the “Proposed Rules”).  PPACA prohibits false statements or representations of fact about a MEWA’s financial condition, benefits provided and its regulatory status in connection with the marketing of participation in a MEWA.  The deadline for submitting public comments to the Proposed Rules is March 5, 2012. 

MEWAs are multiple employer welfare arrangements or similar entities that offer or provide medical benefits to employees of two or more employers that are not under common control of a single employer.  Employer plans that participate in MEWAs are subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) in the same manner as any other employer sponsored employee benefit plan.  MEWAs covered by ERISA are subject to broader State insurance regulation than single employer ERISA welfare plans.  MEWAs generally have been used by small employers as an alternative to traditional health insurance coverage as they enable small employers to purchase health coverage at large group premium rates.  Many MEWAs do not satisfy the reserve thresholds or contribution and consumer protection requirements under State law applicable to licensed health insurance issuers.  In its fact sheet announcing the Proposed Rules, the DOL stated that MEWAs promote “abusive and fraudulent practices and become financially unstable,” and cited to examples of MEWAs that failed to cover millions of dollars in unpaid claims and benefits.

New Reporting Requirements.  An employer who sponsors an employee benefit plan subject to ERISA through participation in a MEWA is obligated to file a Form M-1 with the DOL.  This is not solely the obligation of the MEWA for reason that each employer’s plan, with the exception of certain employee associations, constitutes a distinct ERISA plan independently subject to the requirements of ERISA.  Unless the employer has a designated plan administrator responsible for the filing of the Form M-1, the employer is statutorily presumed to be the plan administrator of the plan it sponsors. 

The Proposed Rules expand the DOL reporting requirements for MEWAs and impose substantial penalties for failure to report.  The reporting rules also apply to multiemployer arrangements claiming they are exempt from the MEWA requirements.  Typically,  these are plans and arrangements established pursuant to a collective bargaining agreement (referred to by the DOL as “ECEs”).

  • MEWAs are required to file annual reports with the DOL on Form M-1 by March 1 of the year following the taxable year.  All MEWAs and ECEs are required to file a Form M-1 within 90 days of the MEWA’s or ECE’s origination or establishment.
  • The Proposed Rules would require MEWAs to file a Form M-1 with the DOL 30 days prior to registration, and ECEs to file a Form M-1 30 days prior to origination, as well as an annual Form M-1.  The Proposed Rules make clear that the obligation to file Form M-1 extends to all MEWAs, whether or not ERISA-covered plans, and ECEs.  Although the requirements may differ as to what constitutes a registration event for MEWAs and an origination event for ECEs, the Preamble to the Proposed Rules makes clear the general intent is to require all such arrangements to be subject to similar reporting requirements. 
  • MEWAs that are ERISA plans filing Form 5500 annual reports will be required to prove their compliance with the Form M-1 filing requirements.  MEWAs that are ERISA plans of small employers (less than 100 employees) will no longer be exempt from the requirement to file a Form 5500 annual report.
  • The Proposed Rules impose civil and criminal penalties for a MEWA’s failure to file or the fraudulent filing.  Civil penalties are up to $1,100 per day from the date of failure to file or the filing of the fraudulent Form M-1.  Criminal penalties are up to 10 years imprisonment, fines under Title 18 of the United States Code or both. 

In conjunction with the issuance of the Proposed Rules, the DOL proposed changes to Form M-1 to incorporate the new reporting requirements.  The proposed Form M-1, among other things, requires contact information of all persons associated with the MEWA, including promoters and third party vendors and providers.

On January 23, 2012, the DOL issued its revised Form M-1 for 2011, which has been updated to reflect PPACA requirements that became effective in 2011.  The 2011 Form M-1 is due by March 1, 2012, unless an extension to May 1, 2012 has been previously requested.

DOL Authority to Take Immediate Action Against MEWAs Deemed Fraudulent.  PPACA authorizes the Secretary to issue ex parte cease and desist orders when it appears that the conduct of a MEWA is:  (a) fraudulent; (b) creates an immediate danger to the public safety or welfare; or (c) is causing or is expected to cause significant, imminent and irreparable public injury. 

Fraudulent conduct is defined under the Proposed Rules as acts or admissions of a MEWA or a MEWA’s agent or employee that are committed knowingly and with an intent to deceive or defraud participants of the financial condition, benefits offered, management of the MEWA or the existing regulatory status of a MEWA under Federal or State law.  The DOL appears particularly concerned with MEWAs making false claims that the arrangement is established pursuant to a collective bargaining agreement and therefore exempt from MEWA requirements as an ECE.  Conduct that creates an immediate danger to the public safety or welfare or that is expected to cause significant, imminent or irreparable public injury does not require intent.  Examples of such conduct include a failure to establish or maintain ERISA claims procedures or a record keeping system, embezzlement or unreasonable compensation or payments to MEWA operators or third party providers. 

The Secretary may also issue a summary order to seize the assets of a MEWA that the Secretary determines is in a financially hazardous condition.  A financially hazardous condition occurs when a MEWA in imminent danger of becoming unable to pay benefit claims when due, a MEWA has sustained a significant loss of assets or the MEWA or a person responsible for the MEWA has been the subject of a cease and desist order.

A person that is adversely affected by a cease and desist or summary seizure order may request an administrative hearing regarding the order. 

What This Means for Employers.  The proposed civil and criminal penalties for failure to file Form M-1 raise the stakes for employers.  All employers that participate in a MEWA, including arrangements subject to collective bargaining agreements, should review the MEWA’s status and compliance with the Form M-1 filing requirements, as well as the requirements of ERISA-covered plans to file Form 5500 Annual Reports.  Employers also should be careful not to enter into any arrangement that inadvertently creates a MEWA.  This can occur in a variety of circumstances, such as a merger or acquisition, or the consolidation of plans offered by subsidiaries or affiliates that are independent employers that offer their own benefit plans.

A member of the Firm, Daly D.E. Temchine, aptly comments that the requirements of the Proposed Rules and the enforcement authority provided to the Secretary to act quickly have the potential to make MEWAs a more secure mechanism for employers to use as a vehicle for the provision of health benefit coverage to their employees. The disclosures required to be made by MEWAs enable employers, or their brokers or other agents, to conduct more informative investigations of a MEWA’s finances and operations than had previously been the case.  The availability of information, however, also creates a potential for greater liability on the part of an employer, broker or agent who fails to seek out that information and places in jeopardy the benefits promised to eligible participating employees.”

 

Acquirers of businesses often prefer to buy the assets of a seller, rather than the stock, to avoid assuming the seller’s liabilities.  Indeed,  the general common law rule is that a purchaser of assets does not assume the seller’s liabilities absent an agreement to do so, fraud or other inequitable conduct between the parties, whereas in a stock sale, the buyer steps into the shoes of the seller and assumes all assets and liabilities of the seller.  In an asset sale, the seller, in turn, would typically use part or all of the sale proceeds to pay its liabilities.  During the pre-sale due diligence process, the parties typically exchange information about themselves including, most importantly, information concerning the seller’s assets, actual and potential liabilities and claims, employee and employee benefits information and so on, and the acquirer often hires many of the seller’s employees in order to carry on the business.

Unwittingly, however, asset purchasers may, under recent decisions, actually assume liability for ERISA and other employment-related liabilities and claims despite an intention to the contrary.  Federal circuit and district courts have departed from the general rule and expanded liability under the federal common law successorship doctrine.  For example, in a 2011 decision in Einhorn v. M.L. Ruberton Construction Co., 632 F. 3d 89 (3d Cir. 2011), Ruberton agreed to purchase assets and hire employees of Statewide, a construction contractor.  Ruberton took over several of Statewide existing projects as well.   Under two collective bargaining agreements, Statewide was delinquent in making employee benefit contributions  to a union’s pension and welfare funds and, as part of a deal struck among the parties and the union, Statewide agreed to remit the payments owed to the funds. After the sale closed, Statewide defaulted, and the funds’ administrator sued Ruberton to recover the delinquent funds contributions.  See Reed v. EnviroTech Remediation Services, Inc. et. al., Civ. No. 09-1976 (D. Minn. July 1, 2011).

The Third Circuit Court of Appeals applied the successorship doctrine to hold Ruberton liable for Statewide’s debts to the ERISA funds to “vindicate important federal statutory policy” and because Ruberton had notice of the liability prior to sale and there was sufficient continuity of Statewide’s operations after the sale.  Id. at 99.  This same rationale has been used to hold an asset purchaser liable for claims of employment discrimination, FLSA wage and hour claims, and claims of unfair labor practices under the National Labor Relations Act brought against the seller of which the purchaser was aware at the time of sale.  See Brzozowski v. Correctional Physician Services, 360 F. 3d 173 (3d Cir. 2004) ; Steinbach v. Hubbard, 51 F. 3d 843 (9th Cir. 1995) ; Golden State Bottling Co., 414 U.S. 168 (1973) .

The bottom line:  Buyer beware if you are or may be a  “successor” to the seller!  Asset purchasers must pay careful attention to due diligence information and understand that they may be unable to legally avoid responsibility for ERISA and other employment/labor-related claims and liabilities of the seller.   In order to best protect themselves against what happened to Ruberton and others in the cases discussed above, these issues must be factored into the negotiations of the purchase price, indemnification obligations, mandatory payments, reserves, and other terms of the deal.

On August 30, 2011, the National Labor Relations Board (the “Board”) issued a highly controversial and very pro-labor rule requiring employers to post notices informing employees of their right to join or form a union.  The rule was originally supposed to go into effect in November, but was subsequently pushed back to January 31, 2012 as a result of mounting criticism against the rule.  Indeed, several lawsuits have been filed by business groups alleging that the Board overstepped its discretion in imposing the rule on employers.  A federal judge in one of the cases recently asked the Board to further postpone the posting requirement so that the legal challenges could be heard, and the Board agreed, this time postponing the rule’s implementation to April 30, 2012.  

If the rule is implemented, employees will be required to post it in all locations at which the company traditionally posts notices, such as wage and hour and discrimination posters.  If greater than 20% of the workforce speaks a foreign language, the employer shall have to post the notice in that language too. 

Under the rule, employer notices would be required to contain a long list of employee rights under Section 7 of the National Labor Relations Act.  Some of the more prominent examples include an employee’s right to:

  • Organize a union to negotiate with their employer concerning wages, hours, and other terms and conditions of employment;
  • Form, join or assist a union;
  • Bargain collectively through a union;
  • Strike an picket;
  • Discuss wages, benefits, and other terms and conditions of employment;
  • Take action with one or more co-workers to improve working conditions by raising complaints with their employer, a government agency, or a union;
  • Choose not to do any of these activities, including not joining a union.

In addition to these rights, the notice also informs employees of actions that an employer may not take against employees, such as interrogating employees about their union support; firing or disciplining employees because of their support for the union; and prohibiting employees from wearing union paraphernalia except under special circumstances.  The notice also lists certain activities that are unlawful for unions, such as threatening or coercing employees, refusing to process a grievance, and discriminating against employees who do not support the union.

As a result of the notice, employees may ask their managers questions about the union, and the notice could even serve as a catalyst to a union orgainizing campaign or internal or external complaints of violations of employees’ labor law rights.  It is, therefore, crucial that  supervisors and managers are appropriately trained so that they know how to respond to employee questions or complaints without committing an unfair labor practice.