Paid Leave_shutterstock_371740363The state of Maryland appears poised to join seven other states and various local jurisdictions (including Montgomery County, Maryland) already requiring employers to provide paid sick and save leave. On April 5, 2017, the Maryland House of Delegates approved a bill previously passed by the Maryland Senate that would require most employers with at least 15 employees to provide up to five paid sick and safe leave days per year to their employees, and smaller employers to provide up to five unpaid sick and safe leave days. Although the bill contains an effective date of January 1, 2018, the actual effective date will depend on action by Governor Larry Hogan.

The following employees are not covered by the bill:

  • Employees who regularly work less than 12 hours a week;
  • Employees who are employed in the construction industry;
  • Employees who are covered by a collective-bargaining agreement that expressly waives the requirements of the law;
  • Certain “as-needed” employees in the health or human services industry.

Under the bill, an employer may not be required to allow an employee to:

(1) earn more than 40 hours of earned sick and safe leave in a year;
(2) use more than 64 hours of earned sick and safe leave in a year;
(3) accrue a total of more than 64 hours at any time;
(4) use earned sick and safe leave during the first 106 calendar days the employee works for the employer.

The bill also preempts local jurisdictions from enacting new sick and safe leave laws except for amending existing laws enacted before January 1, 2017, i.e. the existing law in Montgomery County.

The bill passed with enough support in both chambers to survive a promised veto by Governor Hogan, who favored an alternative that would require the benefit only for companies with at least 50 workers and make tax incentives available for smaller companies that offered the leave. However, if he still vetoes the bill, lawmakers will not have an opportunity to override the veto until next year’s legislative session beginning on January 10, 2018, which means the bill would not take effect until after January 1, 2018, and could possibly be subject to amendment in the next session.

*Marc-Joseph Gansah, a Law Clerk – Admission Pending in the firm’s New York office, contributed to the preparation of this blog post.

In a decision with significant implications for private hospitals, on March 7, 2017, the Third Circuit held in Doe v. Mercy Catholic Medical Center that medical residents may bring private causes of action for sex discrimination under Title IX against private teaching hospitals operating residency programs, and are not limited to claims under Title VII.

Title IX of the Education Amendments of 1972, 20 U.S.C. §1681, et seq., prohibits sex discrimination in any “education program or activity receiving federal financial assistance.” 20 U.S.C. § 1681(a). A former resident alleged the director of her program repeatedly sexually harassed her and then retaliated against her for resisting his advances and complaining about them, culminating in her termination from the program. In deciding a question of first impression, the Third Circuit held that Mercy could be sued under Title IX because, under the allegations of the complaint, its medical residency program constituted an “education program or activity” provided by a private organization principally engaged in the business of providing health care, 20 U.S.C. §1687(3)(A)(ii), that received Federal financial assistance. In so holding, Court established a test to determine whether a program is educational, asking whether it is structured as an educational program, allows participants to obtain a degree or certification or qualify for an examination, has instruction, tests, or grades, accepts tuition, and is promoted as educational.  The Court had little trouble finding that the allegations demonstrated plaintiff was enrolled in a multi-year regulated program of study and training that led to qualification to take a certification examination, and that this program was run by Mercy in affiliation with Drexel University’s College of Medicine, a university program also plausibly covered by Title IX.

Notably, the Court did not reach the question of whether Mercy’s receipt of Medicare payments constituted “Federal financial assistance” under Title IX because Mercy had not raised this issue in the District Court, although it expressed some skepticism towards Mercy’s argument that such payments merely flowed from “contracts of insurance.” In this regard we note that a number of courts have found Medicare payments can constitute Federal financial assistance for the purpose of coverage under Title VI and the Rehabilitation Act.

Importantly, the Court rejected Mercy’s argument that the plaintiff’s remedy should be limited to an action under Title VII (which would have been time-barred) because she was also an employee, finding that there is concurrent liability under Title IX. In this regard it followed decisions from the First and Fourth Circuits, rejecting conflicting decisions from the Fifth and Seventh Circuits that predated the Supreme Court’s decision in Jackson v. Birmingham Board of Education, 544 U.S. 167 (2005), where the Supreme Court found a high school coach who alleged a retaliatory termination could sue under Title IX. Thus, it found that causes of action exist under Title IX for claims of both retaliation and quid pro quo sexual harassment and that, where an individual is covered by both Title IX and Title VII, that plaintiff can file complaints through either means. However, the Court did not reach the question of whether Title VII’s potential applicability barred a Title IX claim for hostile environment because that claim was time-barred under Title IX’s two-year statute of limitations.

This case stands as a warning to hospitals and other health care institutions providing accredited teaching and training programs to ensure that they have in place and follow policies that not only bar sexual discrimination, harassment and retaliation, both in general and with respect to medical residency and other educational programs, but also provide an effective complaint procedure for addressing claims that these policies have been violated.  These institutions also should be aware that employees covered under both Title VII and Title IX may pursue their discrimination claims under Title IX in federal court without first exhausting their administrative remedies, as required under Title VII.

On February 15, 2017, Mayor Muriel Bowser signed the “Fair Credit in Employment Amendment Act of 2016” (“Act”) (D.C. Act A21-0673) previously passed by the D.C. Council. The Act amends the Human Rights Act of 1977 to add “credit information” as a trait protected from discrimination and makes it a discriminatory practice for most employers to directly or indirectly require, request, suggest, or cause an employee (prospective or current) to submit credit information, or use, accept, refer to, or inquire into an employee’s credit information. As discussed in our earlier advisory, the Act will take effect following a 30-day period of congressional review per the District of Columbia Home Rule Act, and publication in the D.C. Register, and shall apply upon inclusion of its fiscal effect in an approved budget and financial plan. The latter may not occur until this summer

On Monday, June 27, 2016, the U.S. Supreme Court declined to review a D.C. Circuit Court of Appeals decision upholding the new U.S. Department of Labor’s (DOL) requirement that home care providers pay the federal minimum wage and overtime to home care workers.  As we previously discussed, on August 21, 2015, the D.C. Circuit in Home Care Association of America v. Weil affirmed the validity of the Home Care Final Rule, which eliminated a long-existing prior regulation and barred third-party employers from claiming minimum wage and overtime exemptions for home care workers.

The U.S. Supreme Court’s decision not to grant review ends any hope that home care providers had that the implementation of the new regulation might be reversed. Accordingly, all home care providers should make sure that they are paying home care workers at least the federal minimum wage and overtime as well as any additional amounts required under state and local laws. Because Medicare, Medicaid and other government programs typically pay only at a flat hourly rate for home care services, providers will be forced to absorb the costs of any overtime or limit the number of hours home care providers work to avoid overtime costs.

Reversing a decision by the United States District Court for the District of Columbia, an August 21, 2015 decHomeHealthision by the Court of Appeals for the District of Columbia Circuit in Home Care Association of America v. Weil (pdf) has approved a regulation by the United States Department of Labor (“DOL”) extending federal minimum wage and overtime protections to home care workers and live-in domestic service employees employed by third parties.

We previously wrote about the decision by the District Court for the District of Columbia that vacated a DOL regulation that had been scheduled to go into effect January 1, 2015. The regulation would have eliminated a long-existing prior regulation and would have barred third-party employers from claiming minimum wage and overtime exemptions for “companionship” domestic service workers and live-in domestic service employees. The same court later also vacated a new, narrower definition of “companionship services.”

The D.C. Circuit thoroughly rejected the district court’s analysis and held that under the Supreme Court’s decision in Long Island Care at Home, Ltd. v. Coke, 551 U.S. 158 (2007), the question of whether to include workers paid by third parties within the scope of the statutory exemptions for companionship series and live-in domestic service employees was within the discretion of the DOL under its general grant of authority to promulgate implementation regulations.

The D.C. Circuit further found that the new, narrower construction of the statutory exemption was appropriate and consistent with a Congressional intention to include within FLSA coverage employees whose vocation is domestic service, rather than the type of assistance provided by a neighbor or an “elder sitter,” and that this construction was not arbitrary and capricious because DOL justified its shift in policy based on the changes in the industry since the prior regulation issued in 1975.

Finally, the D.C. Circuit rejected arguments that the new regulation would make home care less affordable and create an incentive to re-institutionalize the elderly and disabled, in particular relying on a lack of evidence that this had occurred in states that already had minimum wage and overtime projections for third party-employed home care workers.

Home health care providers already work on narrow margins and typically cannot recover overtime costs from the Medicare, Medicaid or other government program that pay for most of their services only at a flat hourly rate (which sometimes does not reflect recent increases in state and local minimum wages). Providers in states where the exemption was previously available will now have to absorb the costs of any overtime pay. In many cases, this will mean changing schedules to limit to the number of hours a home health care provider works  (thereby causing a reduction in the provider’s income rather than an increase) and hiring additional staff (with attendant additional administrative costs) to cover the hours that a single provider previously worked. This may also be be disruptive to the persons receiving the services, who may prefer having the same persons come every day, rather than multiple providers.

If no further review is sought, the previously vacated regulations could go into effect as early as September 21, 2015. Accordingly, home health providers should begin planning for this transition now. Note, however, that a petition for rehearing or for hearing en banc would delay effectiveness until two weeks after the petition is ruled upon. Also, if review is then sought before the Supreme Court, a stay may be sought. It is also possible that DOL will announce some type of transitional limited enforcement policy, similar to the policy it previously announced (pdf) of not bringing enforcement actions for the first six months of 2015 and exercising “prosecutorial discretion” in the next six months based on the extent to which there had been good faith efforts to bring home care programs into compliance. Home health providers should watch for DOL pronouncements in this regard.