Jan. 01 - Jul. 31, 2008
One month and counting...are you ready?

The second wave of federal minimum wage increases signed into law on May 25, 2007, will go into effect on Thursday, July 24, 2008. On this date, the federal minimum wage will increase from the current $5.85 per hour to $6.55 an hour. For employers of minimum wage employees, this is a reminder to make sure all employees will earn at least $6.55 an hour for all time worked on, and after, July 24th.

For employers of "tipped employees," the federally-mandated minimum cash wage which must be paid directly to the tipped employee will not increase from $2.13 an hour. However, the increase in minimum wage means employers must ensure that the tips received, combined with the direct cash wage, satisfy the new minimum wage requirement.

The U.S. Department of Labor has developed updated posters containing the information about the new federal minimum wage. These posters are available for free download at the DOL's website: http://www.dol.gov/esa/regs/compliance/posters/flsa.htm

One word of caution: Certain states have minimum wage laws that set amounts higher than the federal mandates for both minimum wage and tip credit. Wise employers will also check the requirements in the states where they operate for any other adjustments that follow from the increase of the federal minimum wage.

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Genetic Information Non-discrimination Act Now Law

After over ten years of debate, President Bush on May 21, 2008 signed into law the Genetic Information Nondiscrimination Act (GINA or "Act"). GINA has been called the "first civil rights law of the 21st Century" and protects individuals from discrimination on the basis of their genetic information in both employment and health care. The employment provisions of GINA go into effect in November 2009, by which time the Department of Labor is charged with enacting its regulations for GINA. The health care provisions become effective in May 2009. GINA is designed to increase protection for those with genetic conditions from health insurance and employment discrimination without the requirement that the individual display symptoms of the condition.

Employment provisions

GINA prohibits an employer from discriminating against an employee based on genetic information of the individual or a family member of the individual in the areas of hiring, firing, compensation, terms or privileges of employment. GINA does not limit the definition of family member to blood relatives. Rather, it defines a family member as (a) the spouse of the employee; (b) a dependent child of the individual, including a child who is born to or placed for adoption with the individual; or (c) a parent, grandparent or great-grandparent. Under GINA, an employer may not request, require or purchase genetic information of the individual or family member except (1) where the employer inadvertently requests or requires the information; (2) for genetic services offered by the employer (including wellness programs); (3) for purposes of complying with the Family and Medical Leave Act, and (4) where the employer purchases commercially available documents such as newspapers or magazines. GINA provides an exception for genetic monitoring of biological effects of toxic substances in the workplace but only under certain conditions. The remedies under GINA for violation of the employment provisions are the same as those provided under Title VII for unlawful discrimination and retaliation in employment although GINA at present does not allow a disparate impact cause of action.

Health care provisions

GINA provides that health care plans cannot require a plan participant to undergo a genetic test to be eligible for coverage under a health care plan. Health care plans, whether insured or self-insured, group or individual plans, cannot prevent an individual’s eligibility to enroll in the plan or adjust premium or contribution rates based on an individual or family member’s genetic information. The Act provides that any reference to genetic information concerning an individual or family member includes genetic information of (a) a fetus carried by a pregnant woman; and (b) an embryo legally held by an individual or family member utilizing assisted reproductive technology. Nevertheless, GINA provides an exception for health care treatment in that a patient may undergo a genetic test or be advised on the provision of a genetic test or services through a wellness program and not run afoul of the law. With respect to federal medical privacy laws, GINA specifically amends the Health Insurance Portability and Accountability Act (HIPAA) by adding the category of genetic information to the list of health-related information that is "protected health information" under HIPAA.

Remedies for violation of the Health care provisions

For employer-sponsored or union-sponsored health plans that are covered by the Employee Retirement Income Security Act of 1974 (ERISA), GINA adds new enforcement provisions authorizing the Department of Labor to impose civil monetary penalties directly against plan sponsors of group health plans and against the issuers of health insurance covering insured health plans for violations of the healthcare provisions of GINA. The penalties can be as much as $100 a day for each day of noncompliance. The $100 a day penalties are capped at a total of $500,000, but only if the noncompliance was unintentional. In addition, plan participants of ERISA plans can utilize the normal enforcement provisions of ERISA including suits to obtain equitable relief such as injunctions if the ERISA provisions of GINA are violated.

Amendments to Fair Labor Standards Act through GINA

In addition to prohibiting discrimination based on genetic information, GINA amended the Fair Labor Standards Act of 1938 (FLSA) in a few important respects, by increasing penalties for violations of anti-oppressive child labor provisions or certain child labor safety requirements. Employers now may be penalized up to $50,000 for the death or serious injury of any employee under the age of 18. If the violation is willful or repeated, the penalty may be doubled. GINA raises the maximum penalty for other child labor violations from $10,000 per worker to $11,000 per worker and increased the maximum civil penalty for willful violation of the FLSA overtime and minimum wage provisions from $1,000 per violation to $1,100.

Expected outcomes of the Act

A majority of states have their own laws that are more stringent than GINA in their requirements, standards and implementations, and GINA specifically provides that such state laws supersede GINA. According to the National Human Genome Research Institute, 31 states including Texas have already adopted laws regarding genetic discrimination in the workplace. In those states, GINA is not expected to have a major impact.

Because GINA increases protections only for some medical information, addressing those only with genetic conditions, GINA has been criticized as privileging those with genetic conditions over those with nongenetic conditions. Whether public and private health insurance ultimately will limit their coverage of genetic testing as a response to GINA, based on privacy concerns, remains to be seen. Prudent employers who do not already have them should consider developing clear, written policies and procedures prohibiting conduct that would violate GINA and training on the content and boundaries of GINA. The Act requires employers to put genetic information on any employee or family member of an employee, however obtained, in a confidential medical record file, as a further protection from any inference that the information would be used to discriminate against the employee based on the content of the information. As with other federal anti-discrimination laws, the Equal Employment Opportunity Commission (EEOC) will provide the administrative framework by which GINA is enforced. The EEOC is also charged with establishing the Genetic Nondiscrimination Study Commission six years after enactment of GINA to review the developing science of genetics and evaluate whether a disparate impact cause of action should be provided under the Act.
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***Remember, you are always welcome to call or email your VP for Legislative Action Stephanie John if there is a legislative issue you would like MC-SHRM to address. Stephanie's email information is listed on this website in the General section.



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