ENOCH:HR        

Many millions more Americans not previously covered by the ADA will be covered by the law as of Jan. 1, 2009, because of the ADA Amendments Act (ADAAA), Camille Olson, an attorney with Seyfarth Shaw in Chicago, told SHRM Online. Olson said that employers should provide just as much managerial training about the amended law now as they did after the ADA was first enacted.

“Employers that never got the ADA and don’t get it right now are in for a rude awakening,” Francis Alvarez, an attorney with Jackson Lewis in White Plains, N.Y., added in a Sept. 26 interview. He said that employers that didn’t understand the ADA have been “coddled and protected” by a series of U.S. Supreme Court decisions that “insulated them from challenge.”

Now that the insulation of such decisions as Sutton v. United Air Lines (527 U.S. 471 (1999)) and Toyota Motor Manufacturing, Kentucky v. Williams (153 U.S. 184 (2002)) has been stripped away, he said, employers will have to defend themselves vigorously from ADA claims by showing they had processes to make individual assessments of employees’ qualifications with or without accommodations. “Employers will be put to the test to evaluate employees one by one,” he said. “I don’t think they’re ready.”

Expanded Definition of Disability

The ADAAA didn’t change the definition of “reasonable accommodation,” but employers will have many more occasions to go through the interactive process of identifying a reasonable accommodation because of the law’s expansion of the term “disability,” according to Olson.

The ADAAA expands the definition of “disability” in several ways, including by:

• Rejecting Sutton. As a result, employers no longer may take into account mitigating measures such as hearing aids or insulin when determining whether someone has a disability. However, eyeglasses and contact lenses still may be taken into account.
• Rejecting Toyota Motor Manufacturing’s interpretation of “substantially” and “major life activity” in the definition of disability, which is a physical or mental impairment that substantially limits a major life activity, a record of disability or being regarded as having a disability. The Supreme Court had said that to be substantially limited in performing a major life activity under the ADA “an individual must have an impairment that prevents or severely restricts the individual from doing activities that are of central importance to most people’s daily lives.” The ADAAA directs the EEOC to revise its regulatory definition of “substantially limits,” finding that its definition of the term as “significantly restricted” is inconsistent with congressional intent.
• Adding a definition of “major life activities” to the ADA, including a lengthy illustrative list of major life activities, including caring for oneself, performing manual tasks, seeing, hearing, eating, sleeping, walking, standing, lifting, bending, speaking, breathing, learning, reading, concentrating, thinking, communicating, working and the operation of a major bodily function, such as functions of the immune system, normal cell growth and digestive, bowel, bladder, neurological, brain, respiratory, circulatory, endocrine and reproductive functions.
• Removing the “substantially limits” requirement from the “regarded as” prong of ADA disability. Now someone with an impairment can be regarded as having a disability, even without the perception that the impairment limits a major life activity, provided that the impairment is not an impairment with an actual or expected duration of six months or less.
• Providing that an impairment that is episodic or in remission is a disability if it would substantially limit a major life activity when active.

The ADAAA also amended the ADA to clarify that employers do not have to reasonably accommodate someone who is only regarded as having a disability. It didn’t make sense for some courts to interpret the ADA as requiring an accommodation for an impairment that was only regarded as being a disability rather than an actual disability, Myra Creighton, an attorney with Fisher & Phillips in Atlanta, noted in a Sept. 26 interview.

But the definition of disability has been “vastly expanded” by the ADAAA, Victoria Zellers, an attorney with Cozen O’Connor in Philadelphia, told SHRM Online. Before the law, employers had to look on a case-by-case basis to determine whether many diseases were covered, she said. “Cancer sometimes was and sometimes wasn’t,” she noted, saying the same was also true, for example, with epilepsy and diabetes. “Now with bodily functions being a major life activity, those diseases most likely are covered under the ADA, unless they are extremely mild,” she said.

The ADAAA borrowed from New Jersey and New York state law prohibitions on disability discrimination by incorporating “major bodily function” into the ADA’s definition of major life activity, Frederic Leffler, a Proskauer Rose attorney in New York, remarked during a Sept. 16 webcast. Leffler noted that the state laws provide more expansive definitions of disability than the ADAAA, as do other states, such as California, where impairments need only limit rather than substantially limit major life activities to be covered.

But in states that do not have more expansive definitions of disability than the ADA, as amended by the ADAAA, Zellers expects that more plaintiffs will get past summary judgment motions because of the changes to the federal law. ADA plaintiffs can be sympathetic for juries, which may put employers at risk for more ADA damages awards and increase the pressure to settle earlier and for more.

Steps To Take

HR professionals should take a number of steps to prepare for the ADAAA, experts say. These steps include:

• Providing ADA training to supervisors and managers. Training should remind managers of their duty to accommodate not only employees with disabilities but also applicants with disabilities. Olson suggests sending a brief memo to every manager to alert them that the ADA has been amended to provide a much broader definition of who is covered and that it is incumbent on managers to alert HR to reasonable-accommodation requests. She recommended that HR attend managers’ meetings before the end of 2008, taking a few minutes to explain the new law and ensuring that managers know who to go to if there are issues.
• Reviewing the interactive accommodation process. The informal discussion with employees about accommodations shouldn’t be stilted and should, according to Alvarez, reflect an employer’s understanding of its need to be flexible, within reason and without sacrificing consistency. But the process shouldn’t be ad hoc either. It should be well documented and overseen by HR.
• Reevaluating policies to make sure that they comply, especially in the application and interactive processes.
• Making sure that job descriptions accurately describe what employers believe are the essential functions of the position.
• Developing internal protocols on how to approach situations. Internal protocols can, according to Alvarez, help ensure consistent treatment and avoid other EEO claims of disparate treatment.
• Developing tools, forms, letters and processes to handle accommodation requests. “If employers wait until there is a reasonable accommodation request” to identify tools, forms and processes, they will find themselves “very off balance and reactive,” he cautioned.

New Mindset

As a result of the ADAAA, “HR should stop being lawyers and diagnosticians,” according to Lawrence Lorber, a Proskauer Rose attorney in Washington, D.C. Lorber said employers should focus instead on the essential functions of the job and job restrictions to identify a reasonable accommodation.

Much about the ADA has not changed. The ADA still prohibits medical inquiries and examinations, except in limited circumstances such as if an employee requests a reasonable accommodation and the employee’s disability isn’t obvious. The confidentiality of medical information that employers retain has to be maintained in files that are separate from personnel files. Employers still are required to provide only reasonable accommodations to individuals who, with or without accommodations, are qualified to perform the essential functions of their positions. And the ADAAA does not change the fact that employers do not have to provide accommodations that will result in an undue hardship.

But there will be much greater uncertainty about who is covered now that Supreme Court decisions that provided more clarity about the definition of “disability” have been rejected, according to Alvarez.

“The ADA was intentionally vague and intended to force employers to avoid preconceived judgments about what people with disabilities can and cannot do, so they have to figure it out on a case-by-case basis,” he remarked. The interactive process for identifying an accommodation can be slow and deliberative and “rarely has a clear answer,” which he said can make employers uncomfortable.

The ADAAA will require employers to change their mindset, he remarked, to “accept, embrace and master uncertainty when dealing with employees who have disabilities.” Employers that embrace this uncertainty instead of fighting it will, he predicted, be in a “better position in the market to compete and find the right talent.”

Allen Smith, J.D., is SHRM’s manager of workplace law content.

Danka, the copier sales and service company, has an HR solution others may want to copy: It has no HR employees. It outsourced its entire HR process to Gevity, a supplier that specializes in workforce alignment, administrative relief and business protection.

"It was a leap of faith," admits Meredith Johnson, Gevity regional vice president, who is responsible for the Danka account. While outsourcing many functions of HR is now the norm, she notes it is unique for companies to outsource their HR strategy. "It was a bold move," she adds.

But Danka was ready for a bold move; business challenges forced it to take a new approach. In the late1990s copiers switched from analog to digital machines. A large proportion of Danka's installed base consisted of analog equipment. "Our competitors targeted these customers and the result was the loss of some of our installed base," recalls Keith Nelsen, Danka's Chief Administrative Officer and General Counsel.

"We also had a momentary gap in our product portfolio which led to a decline in revenues which continued for some period of time," he says. The only way the company could survive was to cut costs.

Danka was not new to outsourcing. Early on it outsourced its payroll and benefits, which were not part of HR, to ADP. Now it was ready to outsource even more. The HR department was a prime candidate. Nelsen says it "faced significant challenges" due to leadership changes and the impact on the department of substantial downsizing over a long period of time. And its HR technology was in need of an upgrade.

-------------------------------------------------------------
The HR department faced significant challenges
due to leadership changes and substantial downsizing.
And its technology was in need of upgrading.
-------------------------------------------------------------

Finding Places to Cut Costs

Gevity began servicing Danka on August 1, 2005. The transition took one day, according to Nelsen.

Gevity's first task: cut costs and produce efficiencies.

The first place Gevity looked was the payroll department. Prior to outsourcing to Gevity, the payroll department was a separate entity that reported independent of the HR function. Payroll was immediately folded into the HR department. It was also clear that "the payroll department was overstaffed," Johnson recalls. Danka had two managers overseeing seven payroll people. Gevity eliminated three positions and consolidated the work under one manager. The HR department currently runs efficiently with 29 employees.

Johnson also eliminated a contract recruiter "who Danka was paying a great deal of money with no accountability."

The last place Johnson looked for cost savings concerned Danka's California employees. Danka was paying the employees' state disability premiums. "This was a pretty significant cost for a small number of people," says Johnson. Instead, the company decided to use that cash to benefit all Danka employees. "It was quite a re-alignment," she adds.

Outsourcing to Gevity cut HR costs by as much as 50 percent, according to Nelsen. Gevity charges Danka by the head, where ADP charged by the transaction. "We don't have a lot of add-on expenses," says Johnson. "We can plan on our HR expenses, and this is appealing to us," says Nelsen.

Other Benefits

Danka found Gevity's affordable employer and manager self-service platform a big draw. Oracle powers the Gevity platform; Danka uses Oracle to run its financials and procurement. "It was appealing because we were already an Oracle shop," says Nelsen.

Gevity trained 250 Danka managers to use the self-service platform. Unlike at other organizations where managers resisted the self-service initiative, Johnson says Danka managers have been receptive.

Nelsen says Danka HR employees who work for Gevity now enjoy better benefits. "We had been cost-challenged for so long, we had to cut benefits, like the match to our 401(k) plan," says the Danka executive. "When our employees hopped on the Gevity bus, they got better benefits," he says.

Finally, Nelsen says outsourcing allowed Danka to tap into Gevity's HR technology. Due to a starvation of capital, Danka's HR technology had grown hopelessly out-of-date. The new technology has improved many of the HR functions, he reports. For example, the technology "helped us rationalize our compensation," says Nelsen.

Governing the Relationship

In the beginning, Nelsen and Johnson met for 30 minutes every week. The two leaders decided to continue the meetings as a key component of their governance structure. Johnson and her team do the legwork and make recommendations to Nelsen, who makes all decisions. They two act like co-workers; Nelsen calls Johnson his "VP of HR."

Gevity's service-level agreements (SLAs) contributed to the decision to choose this particular supplier. "They agreed to a strong package of SLAs at a good price," Nelsen says. He also liked the fact that they were located just half an hour away. (Both companies are in Florida.)

Gevity, which has over 8,000 clients servicing 136,000 employees, has over 200 HR consultants in the field. It requires its employees to have a bachelor's degree in HR and certifications from the Society for Human Resource Management (SHRM). It likes to call its brand of outsourcing "insourcing."

-------------------------------------------------------------
Outsourcing provider Gevity requires its employees
to have SHRM certifications.
-------------------------------------------------------------

The supplier formed the Gevity Institute in 2003. Its first research project, in partnership with Dr. Christopher Collins of Cornell University's Center for Advanced Human Resource Studies, was to determine if workforce alignment worked as well for smaller companies as it did for Fortune 500 behemoths. Its findings: the use of high performance employee management practices, including those available from HR outsourcing, are associated with 22 percent faster revenue growth, 23 percent better profit growth, and 67 percent lower employee turnover.

Lessons Summed Up

• Many companies outsource discrete HR processes. But Danka outsourced its entire HR process to Gevity. This is possible when there are strong SLAs and a good working relationship between the two executives.

• When a company is in survival mode, outsourcing the entire process is one way to rationally cut costs while improving services.

• This relationship cut HR costs by as much as 50 percent. The supplier improved processes but also analyzed every aspect of its HR spending to wring out unnecessary expense.

Adapted, with permission, from Outsourcing Journal,
published by Outsourcing Center, an Everest Group company

Beth Ellyn Rosenthal is the editor of Outsourcing Journal.

Just because you call them temps doesn't mean courts will.

Managers who rely on temporary employees should factor in the growing legal risks of using temps and independent contractors.

Increasingly, courts are looking at the employer's degree of control to decide whether workers are temps or independent contractors, or, in reality, employees. If employers misclassify employees, liability may arise under a host of federal and state employment laws.

Misclassification can be costly. In December 2007, the Internal Revenue Service (IRS) ordered a transportation company to pay $319 million in unpaid employment taxes and penalties after the agency determined that drivers were misclassified as independent contractors. IRS officials are now scrutinizing the misclassification of workers as independent contractors more closely. According to a May 15 New York Law Journal article, the IRS has entered into data-sharing agreements with at least 29 state workforce agencies to share the results of employment tax examinations.

Lawmakers rumble about the misclassification of employees in state capitals and on Capitol Hill. Massachusetts Gov. Deval Patrick, a Democrat, issued an executive order on March 12 to intensify the state's enforcement initiatives against employers who misclassify workers as independent contractors. Employers who violate Massachusetts' independent contractor law now face treble damages for all wage and hour violations.

And on May 21, Rep. Rob Andrews, D-N.J., chair of the U.S. House Education and Labor Committee's Subcommittee on Health, Employment, Labor and Pensions, introduced the Employee Misclassification Prevention Act (H.R. 6111) to clarify that the Fair Labor Standards Act (FLSA) prohibits misclassifying employees as independent contractors.

The misclassification of workers is surfacing in litigation as well, including a troubling federal appeals court decision this year that shows the risk to employers from courts' application of the joint employer test.

Legislators' and judges' increased attention to the misclassification of workers should concern even employers with few workers. Some are discovering in court that employment laws they assumed did not apply to them, including the Family and Medical Leave Act, in fact do.

Wake-Up Call

The term "temporary employment"—also known as "contingent employment"—typically refers to a situation in which an employee is hired with the expectation that he or she will leave employment within a certain period of time, which is often not spelled out in detail. The employee may be either full time or part time, and may be hired through an agency or a company's hiring process. The employee can be under contract or without any written performance parameters. Some companies provide health care benefits to certain contingent workers; others do not.

The wake-up call for employers about the legal risks of temporary employment began in earnest when the 9th U.S. Circuit Court of Appeals decided that "temporary" employees at Microsoft were entitled to the same benefits as full-time employees (Vizcaino v. Microsoft, 173 F.3d 713 (9th Cir. 1999)). The decision resulted in unanticipated and substantial financial liability: The case, initiated in 1992, concluded in 2005 with a distribution of $97 million to 10,000 temporary employees.

Control Tests

In numerous other cases, temporary employees initially hired and designated as independent contractors ultimately have been deemed employees because of the level of control exercised over the workers.

The courts have applied a "totality of the circumstances" analysis to determine whether an employer-employee relationship exists, and have relied on the nonexhaustive list of factors set forth by the U.S. Supreme Court in Nationwide Mut. Ins. Co. v. Darden (503 U.S. 318 (1992)).

These factors include:

• Skill level of the job provided.
• Source of the equipment and tools used by the individual.
• Location where the work was done.
• Duration of the employment relationship.
• Whether the employer is free to assign additional projects to the employee.
• Employee's control of his or her own work schedule.
• Method of payment.
• Employee's role in hiring and paying assistants.
• Whether the work is part of the regular business of the employer.
• Whether the employer is in business.
• How employee benefits are conducted.
• Tax treatment of the employee.

Various other control tests include the IRS's former 20-factor test and current 11-factor test, the "relative nature of the work test" employed in many workers' compensation cases, and the so-called "ABC" test often used in the unemployment benefits context.

Whether the employer actually controls the means and manner of the individual's work proves the most important consideration in all of these tests. More control typically results in a court's determination that an employment relationship exists.

Shared Employment

Most employers now recognize that to avoid liability as an unintended statutory employer, they must avoid the type of control that might lead an individual otherwise designated as an independent contractor to be viewed as an employee for purposes of federal employment law. However, even in circumstances where companies share control of a temporary employee's duties, liability may be assessed in certain situations.

For instance, in a 2003 case in New York, a grocery chain and a placement agency were held to be joint employers for payment of minimum wages and overtime under the FLSA to temporary workers who delivered groceries on foot to residents in New York City (Ansoumana v. Gristede's Operating Corp., 255 F. Supp. 2d 197 (S.D.N.Y. 2003)).

Even more troublesome, in a 2002 case, an individual sought employment with a janitorial contractor after being released from federal prison. He was hired by the contractor and assigned to a medical center. When medical center managers found out about the worker's prior incarceration, they refused to let him work there.

The individual sued the hospital under Title VII, and the hospital filed a motion to dismiss, alleging that the individual had no standing to sue.

The court disagreed and let the case go forward on both the Title VII race discrimination claim and a claim that the hospital had tortiously interfered with future employment opportunities. The court extended its analysis beyond the direct employment relationship to create employer liability against a company that merely was in a position to interfere with the plaintiff's future employment relationships (Caston v. Methodist Medical Center of Illinois (215 F. Supp. 2d 1002 (C.D. Ill. 2002)). While the holding in this district court case is limited geographically and may be somewhat anomalous, it is worth noting as an example of the direction these cases have been moving.

Integrated Employer Test

In analyzing whether liability attaches to an entity for claims brought by a temporary employee, courts typically use the "integrated employer" test, where separate but related entities are deemed to be parts of a single employer for purposes of the federal statute at issue, or the "joint employer" test, where two separate, unrelated entities each have sufficient control over an individual worker to create liability for either.

The integrated employer test generally involves four factors in determining whether two entities should be treated as an integrated employer:

• Common management of the two companies.
• Interrelation between the operations of the companies.
• Central operation of labor relations.
• Some degree of common ownership or financial control.

Typically, the integrated employer test is used when determining whether the appropriate employees are aggregated for the numerosity test in applying a federal statute, for instance, 15 employees for purposes of Title VII. While common ownership of two companies, standing alone, is not enough to create an integrated employer, identical officers, boards and principal places of business might be sufficient.

This analysis is seldom successful when applied to a situation involving a temp agency and a client because the two companies rarely share business resources. Typically, there will not be shared management, shared resources or central control of labor relations, even though two entities will maintain a working relationship with the temporary employee.

Joint Employer Test

Increasingly, courts are using the joint employer test to assess liability against companies hiring temporary workers through a staffing agency. These cases usually involve a staffing service and a client that exercise some level of joint control over an individual employee. Unlike the integrated employer, joint employers may be separate and distinct entities with separate owners, boards of directors and managers, but they almost always share certain aspects of the control over the work and working conditions of the temporary employee.

A joint employer relationship can exist:

• When two companies share an employee's services or interchange employees.
• When one company acts directly or indirectly in the interest of the other company in relation to the worker.
• When the two companies may be viewed as sharing control of the employee because one entity controls, is controlled by or is under common control with the other.

The use of a temporary agency can expose the agency and its client to liability under the second prong because the agency can be deemed to be working in its client's interest by managing the staffing needs of that client.

Staffing companies often offer the flexibility companies need. While alternate staffing arrangements have distinct advantages, employers should factor in and take steps to limit their legal risks, particularly as courts scrutinize these arrangements more closely.

By Maria Greco Danaher

 

ENOCH:HR continues to seek qualified candidates for the hundreds of civilian vacancies at US Naval installations such as the Naval Academy, the Washington Navy Yard, the National Naval Medical Center, Patuxent Naval Air Station, the Naval Station in Dahlgren, VA, and more.  Here is a partial listing:

• ADMINISTRATIVE ASSISTANT,
• AIR TRAFFIC CONTROLLER,
• BUDGET ANALYST,
• COUNSELOR,
• DENTAL HYGIENIST,
• DENTIST,
• DISPATCHER,
• EMT
• FIRE FIGHTER,
• HUMAN RESOURCES,
• IT SPECIALIST,
• MANAGEMENT ANALYST,
• MEDICAL ASSISTANT,
• MEDICAL TECHNICIAN,
• NURSE,
• PHYSICIAN (Many Disciplines),
• PHYSICAL THERAPIST,
• PHYSICIAN’S ASSISTANT
• POLICE OFFICER,
• PROGRAM ANALYST,
• RECREATION SPECIALIST,
• SAFETY & HEALTH SPECIALIST,
• SOCIAL WORKER

As a federal government employee, Department of the Navy employees enjoy competitive compensation, a comprehensive benefits package and opportunities for advancement unsurpassed by any private industry offering.  They also enjoy the opportunity to serve a cause greater than profitability. In many instances, hiring preference is given to military and government personnel, but there are also many opportunities open to all US citizens. If you, or anyone you know, is interested in learning more about these great opportunities, contact Dave Enoch.