Listener Questions: EEOC, FSA’s, and 2018 NLRB Updates

Question: We are in the process of revising our employee handbook. Are there any anticipated new laws that will require policy changes in early 2018? If so, we will probably wait for those new policies before finalizing the handbook.

Answer: It is not easy to predict changes to laws or regulations, particularly when there has been a lot of activity in the courts and in Washington recently. With that said, in mid- to late December 2017, the National Labor Relations Board (NLRB) was active in overruling several decisions that significantly impact employers. One decision, Boeing Company and Society of Professional Employees in Aerospace, IFPTE Local 2001 [download], overruled previous NLRB precedents that, in recent years, resulted in successful challenges to employer policies, workplace rules, and handbook provisions for the indirect impact they had on protected concerted activity. In previous cases, some of those challenges related to something other than activities that are protected under the National Labor Relations Act (NLRA). For example, in one case, the policy in question required nurses and doctors in a hospital to foster “harmonious interactions and relationships.”

As you can imagine, cases using the standard adopted in prior NLRB decisions caused a lot of confusion and uncertainty for employers, as it was unclear how they could create a safe and harmonious workplace without being challenged with labor law violations. The NLRB’s December 14, 2017 decision created more predictability for employers by establishing a new standard for evaluating company rules that consider the extent of potential impact on NLRA rights and the business justification for creating those rules. To help employers make sense of the new standards, the NLRB established three categories of rules (providing examples of each) and how they will be analyzed or interpreted by the NLRB in future case.

This decision may provide a good opportunity to re-evaluate your handbook provisions and other employer policies and make updates. We recommend you work with counsel to help analyze any new provisions using the standards established in the case.

Gender Reporting and EEO-1 Survey

Question: How do we record a gender-neutral employee for EEO-1 reporting?

Answer: Until the Equal Employment Opportunity Commission (EEOC) addresses another gender or “nonbinary” option, employers are required to report all employees as either male or female, even when an employee chooses not to identify as one of the two genders. EEO-1 reporting for calendar year 2017 must be filed by March 31, 2018, and must include information on each employee’s race, gender, and job category. In general, companies that must report EEO-1 data are those that are:

• Subject to Title VII of the Civil Rights Act of 1964, as amended, with 100 or more employees; or
• Subject to Title VII of the Civil Rights Act of 1964, as amended, with fewer than 100 employees if the company is owned by or corporately affiliated with another company and the entire enterprise employs a total of 100 or more employees; or
• Federal government prime contractors or first-tier subcontractors subject to Executive Order 11246, as amended, with 50 or more employees and a prime contract or first-tier subcontract amounting to $50,000 or more.

Self-identification is the preferred method of identifying the gender information necessary for the EEO-1 report, and employees should be reported as the sex with which they identify. If the employee declines to self-identify, employers may reasonably use other available employment records or observations to determine the most appropriate sex determination. However, the situation remains that the only choices on the EEO-1 are male or female.

Transfer Flex Spending Account on Employment Termination

Question: Can an employee who terminates employment but still has money in his health flexible spending account (HFSA) continue to use it for claims? Or could that money be rolled over into his health savings account (HSA) with his new employer?

Answer: Internal Revenue Code § 125 regulations governing health flexible spending accounts (HFSAs) do not permit disbursements, transfers, or rollovers.

HFSA contributions can only be used to reimburse eligible expenses incurred while the employee is covered during the plan year (including any grace period or carryover period if the particular employer’s HFSA plan includes one of those provisions). If the employee terminates, his or her HFSA coverage period ends unless COBRA continuation coverage is elected. For instance, if the plan year begins January 1 and your employee’s last day of employment is June 30, he may submit claims for eligible expenses incurred between January 1 and June 30 only. If, however, he elects COBRA to continue making HFSA contributions (on an after-tax basis), he may continue to incur claims eligible for reimbursement.

In summary, unused HFSA contributions cannot be cashed out nor rolled over to an HSA.

About the author, Rhamy

Rhamy grew up watching and working with his mother and grandmother in the senior insurance market. This familiarity with the struggles faced by people trying to navigate the incredibly complicated and heavily regulated healthcare market led him to start Poplar Financial while working on his degree at the University of Memphis. After completing his MBA and Bachelors in Finance and Economics, Rhamy guided Poplar Financial through the disruptive opportunity that is the Affordable Care Act. Since then Poplar Financial has received numerous awards from major insurance carriers and has completed its fourth year in a row of doubling in size. Now his team focuses on the processes around human resources and specializes in providing companies with between 20 and 1000 employees with the payroll, benefits, and HR needs.