The ADAAA, Affirmative Action, and Other Hurdles Faced by

Health Care Employers

HCRAMD & MiAHCR 2014 Fall Conference

Presented By:Brad Taormina

September 26, 2014

Americans with Disabilities Act of 1990 (ADA)

Prohibits discrimination against qualified individuals with mental or physical disabilities

Enforced by the EEOC

Requires employers to provide reasonable accommodations to employees with disabilities

Who is “Disabled” ??

A person who is . . .

A person who was . . .

A person who is “regarded as”

. . . substantially limited in one or moremajor life activities.

ADA Amendments Act - ADAAA

Congress now says:

“The definition of Disability shall be construed in favor of broad coverage…”

“The question of whether an individual's impairment is a disability under the ADA should not demand extensive analysis"

"Major Life Activity" includes:

Caring for oneself Learning Manual tasks ReadingSeeing ConcentratingHearing WorkingEating BendingSleeping SpeakingWalking BreathingStanding CommunicatingLifting

*not an exhaustive list

"Major Bodily Functions" include:Immune systemNormal cell growthDigestionBowelBladderNeurologicalBrainRespiratoryCirculatoryEndocrineReproductive

  *not an exhaustive list

Disability exists without regard to "Mitigating Measures"MedicationMedical supplies, equipment & appliancesLow vision devices (not eyeglasses or contacts)ProstheticsHearing aidsMobility devicesOxygen therapyAccommodation, auxiliary aids, learned behavior

 

Reasonable Accommodation – Recognizing the Request

Not required to be on any particular form, or in any particular format

Employee request linked to a medical condition should trigger the interactive process

Reasonable Accommodation – Recognizing the Request

For Example:

Completion of employer’s reasonable accommodation form

Work restrictions

Employee tells supervisor, “I’m having trouble getting to work at my scheduled starting time because of the side effect of my medication. Can we work something out?”

Interactive Process

Informal dialogue and interaction between employer and employee to determine whether accommodation is needed because of a disability and, if needed, whether the accommodation will be effective

Often when will obtain physician statement verifying disability and outlining restrictions/accommodations

Accommodations That Are NOT Reasonable

Employers are not required to:

Create position

Eliminate or transfer essential job functions

Convert necessary full-time positions to part-time positions

Provide personal need items (hearing aids, eyeglasses)

“Reasonable” Accommodations Include:

Acquire or modify equipment Modify policies, exams, training Provide readers or interpreters Make workplace accessible If employee cannot perform

duties of current position, may need to place into a vacant position where work restrictions can be accommodated

Undue Hardship

Accommodation is not “reasonable” where it creates an “undue hardship” for the employer

EEOC describes standard as “stringent”

Whether a particular accommodation is reasonable must be assessed on case-by-case basis

Undue Hardship Consider the nature and cost of the

accommodation needed

Focus on resources and circumstances of the particular employer in relationship to the cost/difficulty of providing specific accommodation Significant financial difficulty

Significant administrative difficulty

Relationship between facility and employer

Undue Hardship Considerations (cont’d)

Impact on employer and employer operations

Overall financial resources

Size/Number of employees

Structure/functions of work force

Types/geographic location of other facilities

Affirmative Action BasicsWhat Is an Affirmative Action Program?HR management tool designed to ensure equal opportunity Encourages outreach and positive recruitment of minorities, females, veterans and individuals with disabilities Involves specific data tracking, reporting, analyses and self-auditing of nearly all HR functionsCompliance will require financial and personnel resources and executive level supportMost companies partner with an AA vendor

Affirmative Action BasicsWhat Is the Legal Source?Executive Order 11246 (1965)

Affirmative action for women and minorities

Section 503 of the Rehabilitation Act of 1973 Affirmative action for individuals with disabilities

Vietnam Era Veterans Readjustment Assistance Act of 1974

Affirmative action for protected veterans

Affirmative Action BasicsWho Enforces Affirmative Action Laws?Office of Federal Contract Compliance Programs ("OFCCP")

Stand alone branch of U.S. Department of Labor Has compliance audit and sanction authority Seeks “Title VII-type” remedies if finds

discrimination in hiring, promotions, terminations, compensation

Enforcement through administrative procedure subject to review by federal courts

Affirmative Action BasicsWho Is Covered by Affirmative Action Laws?Direct (or Prime) Federal Contractors – Provide goods or non-personal services to a federal agency

www.usaspending.gov www.fedspending.org https://www.fpds.gov/fpdsng_cms/

Covered Federal Subcontractors – Either (1) provide goods or non-personal services that are necessary to the performance of a prime federal contract; or (2) perform or assume any portion of the obligations under a prime federal contract

Affirmative Action BasicsWhat About Grants?Grants are considered "federal financial assistance" and do not cause recipients to be covered by OFCCP’s jurisdictionDistinguish:

Contracts: Federal government expects specific good or service in return for federal monies

Grants: Federal monies usually offered to promote research, training or other general funding for the nation's general betterment

Affirmative Action Basics

Medicare/Medicaid? TRICARE? Certain HMOs?

Affirmative Action BasicsJurisdictional Thresholds For “Basic Coverage” (which means you must ensure nondiscrimination and take affirmative action):

- Must have $10,000 of contracts (in aggregate) in any 12-month period - No minimum number of employees threshold

For “Full (AAP) Coverage” (which means you must also prepare written AAPs for each establishment):

- Must have at least 50 employees and at least one $50,000 contract at any location in organization- If “open-ended” (indefinite quantity) contract, OFCCP will aggregate transactions over the life of the contract

Affirmative Action BasicsWhat About Separate but Related Entities?Separately incorporated organizations may be considered a “single employer” for purposes of OFCCP jurisdiction and AA complianceOFCCP Uses a “5 Factor Test”

1. Common Ownership;2. Common Directors and/or Officers;3. De Facto Exercise of Control;4. Unity of Personnel Policies Emanating from Common

Source; and5. Dependency of Operations

Affirmative Action BasicsWhat Does It Mean to Be Covered?Must prepare and maintain written affirmative action plans for each "establishment.” This means, among other things:

− Divide employees into "job groups" and compare "incumbency" to "availability"

− Set “hiring goals” (NOT quotas) for minorities, females, veterans, disabled− Engage in and track affirmative action "outreach" efforts − Develop applicant tracking system and recordkeeping practices that

comply with OFCCP’s "internet applicant rule”− Regularly self-audit personnel activity (hires, promotions, terminations,

compensation) − Share all of this data with OFCCP if selected for a compliance review

Affirmative Action BasicsWhat Is at Stake?OFCCP compliance reviews tend to be long, burdensome and costly to defendOFCCP looks at your data for evidence of systemic discrimination, especially re hiring and compensationIf there are statistical indicators of discrimination that cannot be effectively explained, OFCCP will seek back pay remedies for the affected “class”OFCCP settlement demands are routinely in the six to seven figure range when the contractor is unprepared

History of OFCCP in Health CareIt Started Off Good…

1993 OFCCP “Directive 189”: Receiving reimbursement under Medicare Parts A and B or

Medicaid does NOT cause coverage. Medicare/Medicaid = federal financial assistance (like a grant)

2003 Bridgeport Hospital Case Fee-for-service health insurer (BCBS) contracts with federal

government (OPM) to provide reimbursement to federal employees for their medical care costs in exchange for premiums. BCBS contracts with hospital to provide covered medical services under the insurance policy. Hospital is NOT covered (because BCBS prime contract was for insurance only, and not medical services).

History of OFCCP in Health CareBut Then…

2007 UPMC Braddock case UPMC Health Plan, an HMO, contracts with federal government

(OPM) to provide health insurance and medical services to federal employees in exchange for premiums; HMO contracts with three area hospitals to provide some of those medical services

ALJ, ARB and (last year) D.C. District Court all said hospitals ARE covered because their subcontracts with HMO were necessary for the HMO to meet its obligations under the prime contract

2010 Florida Hospital of Orlando case Hospital participating as TRICARE network provider IS covered “Ping pong” litigation ensues

OFCCP in Health Care SummaryWhen are Health Care Providers Covered?

Common and “non-controversial” arrangements include direct contracts or subcontracts involving:

− Federal Bureau of Prisons− Department of Defense− Department of Veterans Affairs− Department of Health and Human Services− Centers for Medicare and Medicaid Services

Uncertainty exists (litigation still pending) about: Provider contracts with HMOs that include federal employees as

beneficiaries TRICARE network agreements

OFCCP has hinted but no litigation yet about: Medicare C and D

Why Is This Important for Recruiters?

OFCCP’s main focus during the course of an audit continues to be systemic discrimination in hiring Failure to hire cases – 66% of all cases

OFCCP is targeting the health care industry

Forms of Systemic Discrimination Disparate Treatment – Pattern or Practice

Intentional discrimination Members of one group are treated differently Company’s standard operating procedure (i.e., typical rather than

exception) The employer must justify each decision to show that it wasn’t intentional

discrimination

Disparate Impact Unintentional discrimination When a facially neutral process (e.g., a test, interview, residency

requirement) screens out a substantially higher percentage of one group than another

Can be justified via showing that the screening mechanism was job-related and/or business necessity

Hot Topics in Affirmative Action Internet Applicant Recordkeeping Rule

Recordkeeping requirements regarding the internet hiring process and the solicitation of race, gender, and ethnicity of “Internet Applicants”

What is an Internet Applicant? Individual submitted expression of interest in

employment through the internet Employer considered individual for employment Expression of interest indicated basic qualifications Individual did not withdraw him/herself from

consideration

Hot Topics in Affirmative Action1. Individual submitted expression of interest

in employment through the internet or related electronic data technologies

Rule applies to paper applications and all other applicants considered if the employer considers expressions of interest for the position via internet

Difference between advertising a position on the internet and expressions of interest

Broad Scope- Applies to email, resume databases, job banks, scanning technology, applicant screeners, and even resumes received by fax

Hot Topics in Affirmative Action Internet Applicant Recordkeeping Rule2. Employer considers the individual for employment in a

particular position. Triggered if the employer “assesses the substantive

information provided” in the expression of interest May establish protocol to refrain from considering

expressions of interest not submitted in accordance with standard procedures (e.g. unsolicited resumes not submitted for a particular position)

May use data management techniques such as random sampling or numerical limits, as long as the sampling procedure is appropriate

Hot Topics in Affirmative Action Internet Applicant Recordkeeping Rule3. Individual’s expression of interest indicates the basic

qualifications for the position: Qualifications that the employer advertised or

established in advance Basic qualifications must be objective (e.g. bachelor’s

degree vs. bachelor’s degree from ‘good’ school) Basic qualifications must be noncomparative (e.g. three

years experience vs. among top ten candidates in terms of years of experience)

Make and maintain a record of the basic qualifications

Hot Topics in Affirmative Action Internet Applicant Recordkeeping Rule4. Individual did not remove himself or herself from the

selection process prior to receiving an offer of employment: Includes express statement from applicant or “passive

demonstration of disinterest” Declining an invitation for an interview Declining a job offer Repeatedly failing to respond to phone calls or emails

regarding his or her interest in the job Can also be based on individual’s responses (e.g. willingness

to travel) as long as consistent

Hot Topics in Affirmative Action Internet Applicant Recordkeeping Rule

Must solicit demographic information of Internet Applicants

Preferred method of solicitation is voluntary self-reporting or self-identification

Must maintain the demographic information separately from the resume or application that will be reviewed during the selection process - this should be communicated to applicants

Hot Topics in Affirmative Action

Disability Inquiries and Interaction with ADAAA Effective March 24, 2014—or whenever their AAP

is next up for renewal following March 24, 2014—covered federal contractors will be required to invite applicants to voluntarily self-identify disability status at the pre-offer stage of employment.

BUT, making pre-employment disability inquiries is unlawful under the ADA.

Hot Topics in Affirmative Action

Disability Inquiries and Interaction with ADAAA The EEOC has recently confirmed, however, that

employers are not liable under the ADA “for an action that it is required to take by another federal statute or regulation.” 

HOWEVER, there is a significant legal risk if the voluntary invitation to self-identify disabled status is made available to applicants of employers not subject to the jurisdiction of the OFCCP. This is another reason why the analysis of coverage is so important.

Veterans Several federal and state laws that affect the

recruitment and hiring of veterans USERRA provides the broadest coverage

Protects past and present members of uniformed services from discrimination in hiring and employment

Requires employer to reinstate employees that were absent by reason of service, under certain conditions; employees must be restored to the position and benefits they would have attained if not for their absence due to military service

Veterans Michigan Reemployment Protection Act

Designed to strengthen the protections of USERRA as applied to Michigan employers

Eliminates the USERRA exceptions to the duty to reemploy returning service members

Other State Laws: Michigan statute permits public employees to add the

time spent in military service to the period of employment

Michigan statute affords returning employees the seniority they would have attained

Veterans Michigan Veterans Preference Act

Requires that honorably discharged veterans (who meet certain criteria) are given preference for appointment and employment with public employers.

The Act provides that the veteran must be qualified for the job, be of “good moral character,” and a Michigan resident for at least two years

The Act does not establish or define the strength of the “preference”

Michigan Court of Appeals has said that the veteran’s qualifications do not need to be “equal” to non-veteran in order to trigger the preference, but veteran’s qualifications must be at least comparable

Veterans Vietnam Era Veterans’ Readjustment Assistance

Act (VEVRAA) New Rules: New rules are designed to strengthen affirmative action

requirements related to the recruitment and hiring of protected veterans, including disabled veterans

Enforced by the OFCCP Protections are not limited to Vietnam era veterans,

protects: “Special Disabled Veterans” Recently Separated Veterans (3 years or less); and Those who served on active duty during a war

Veterans Vietnam Era Veterans’ Readjustment Assistance

Act (VEVRAA) New Rules: Set a benchmark for measuring success in recruiting

and hiring veterans by adopting affirmative action goal Invite voluntary self-identification (remember earlier

ADA warning) Retain, measure, and report data regarding the

number of veterans that apply and number that are hired

Find and use resources to reach out to and recruit protected veterans

Brad TaorminaAttorney at Law

Hall, Render, Killian, Heath & Lyman, P.C.btaormina@hallrender.com

DISCLAIMER: This information is not intended as legal advice or as a substitute for the particularized advice of your own counsel and should not be relied upon as such, as the advice appropriate for you will be dependent upon the particular facts and circumstances of your situation. The transmission or receipt of this information does not create an attorney-client relationship.