WORKPLACE ISSUES FOR 2003 

by Kelly Cheary Sulzberger, Esq., Muller Mintz, P.A. 

            In past years, the management of human resources has been a constantly changing and evolving field, and this year looks like it will be no different.  Following are some key issues that HR Managers and Office Administrators need to be aware of in order to stay on the right side of the law. 

ARE YOU HIP WITH HIPAA? 

            As the April 14, 2003 deadline approaches for complying with the mandates of the Health Insurance Portability and Accountability Act (HIPAA), employers need to make sure that they have taken appropriate steps to assure that protected health information (PHI) isn’t improperly used or disclosed for employment or other benefit plan purposes.   

            HIPAA is the first comprehensive federal law protecting the privacy of health information.  Generally, it gives individuals more control over health information; sets boundaries on the use and release of health records; and establishes appropriate safeguards to protect the privacy of health information.  HIPAA applies to health plans (both third-party and self-insured), healthcare clearinghouses, and healthcare providers.  Many employers who sponsor group health plans are also covered.  Notably, the regulations apply to all forms of medical records, including paper, electronic, and oral communications. 

            Most covered employers will only need to worry about HIPAA to the extent they have a benefits department, benefits specialists in their HR departments, or office managers/administrators that act as liaisons for group health insurance purposes.  To ensure the security of PHI, such employers should implement the following safeguards:

1. Written privacy procedures:  must include who has access to the protected information, how it will be used within the entity, and when the information may be disclosed.

2. Employee training and designation of a privacy officer:  must train employees regarding privacy requirements, and must designate an individual responsible for ensuring the procedures are followed.

3. Access to medical records:  patients must be able to see/obtain copies of their medical records.  Records should include a history of the disclosures made.

4. Secure records:  implement “reasonable safeguards” to ensure that individually identifiable health information is not readily accessible to those without authorization.

5. Separation:  provide for adequate separation between the group health plan administrator and the plan sponsor. 

The deadline for compliance is approaching; severe civil and criminal penalties can be imposed for noncompliance.  So make sure your are “hip” with HIPAA! 

PATRIOTIC JOB PROTECTIONS 

            With a war against Iraq looming, employers should be reviewing their obligations under the Uniformed Services Employment and Reemployment Rights Act (USERRA) and applicable state law.  USERRA prohibits employers from taking adverse employment action against employees or applicants for employment if the action is motivated in part by the employee’s or applicant’s military service.  To be protected, an employee or applicant must be a member of the National Guard or a Reservist in one of the Armed Services.  State military duty and governor call-ups of National Guard members are excluded.  Employees who are called to active duty are generally protected for up to five years.  

            USERRA provides that employees called to active duty (whether voluntarily or involuntarily) must be reinstated upon their return, providing that they have submitted timely and proper notice to the employer.  In that regard, employers need to be aware that there are different reinstatement requirements depending on the length of the active duty.  

            Upon return from active duty, employees are generally entitled to the same position, status, and seniority they would have enjoyed had they not been on military leave.  Further, upon their return, they must be “made whole” with respect to pension credit and contributions and length-of-service privileges, and their health insurance must be reinstated.   

            This is a very basic and very general overview of USERRA.  The law is extremely detailed and explicit as to the rights and obligations of both the employer and the employee.  Thus, USERRA should be reviewed closely when addressing military leave issues. 

BECOMING FLSA-COMPLIANT IS A NEBULOUS TASK 

            The FLSA mandates the payment of overtime wages unless an employee falls under one of the narrow exemptions provided under the Act.  Thus, proper classification of employees as exempt or non-exempt is critical to avoiding liability under the FLSA.  A recurring problem in the legal industry, however, is the proper classification of paralegals.  Some firms treat paralegal positions as exempt under the administrative or professional exemption categories.  Those classifications, however, may not be correct in all cases.   

            With respect to paralegals, the key is whether the person “customarily and regularly exercises discretion and independent judgment.”  In most cases, it can be argued that a paralegal’s duties indeed require discretion and independent judgment.  The Department of Labor, however, has opined that “most” paralegals are engaged in “production” work, requiring the application of a particular skill set rather than discretion and independent judgment.  Because the exemptions are narrowly construed, it is wiser for law firms to err on the side of caution and treat paralegals as non-exempt.  Indeed, misclassifications can result in the payment of back wages, liquidated damages (which can double the back pay award), attorney’s fees, and fines of up to $1,000.00 per violation.  The employer and its officers can also be criminally prosecuted if the violation is willful. 

            At present, Congress is seeking to update the FLSA, and the DOL is in the process of revamping its regulations pertaining to exemptions.  Thus, better guidance may be on the horizon for employers.   

CELL PHONE USE IS NOT ALWAYS FREE AND CLEAR 

            If your employee handbook does not contain a policy on the use of cell phones for business purposes while driving, your firm could be setting itself up for a multi-million dollar fall.  Just ask the Virginia law firm of Cooley Godward, whose associate’s cell phone use allegedly contributed to the death of a 15-year old girl.  The girl’s parents brought a wrongful death action against the law firm, seeking $30 million in damages.  The suit alleged that the law firm encouraged employees to use their cell phones to conduct business, and failed to implement a safety policy concerning the use of cell phones while driving.   

            Other companies have found themselves in a similar bind.  For instance, a Miami-Dade County jury hit a Florida lumber company with a personal injury damages award of $21 million.  A brokerage company recently settled a case for $500,000.00.  What do all these cases have in common?  The employees causing the automobile accidents were engaged in work-related cell phone calls or were using a company-issued cell phone at the time of the accident. 

            So what is an employer to do?  The easy answer is to ban cell phone use by employees while driving.  However, the economic realities of business (and, particularly, the practice of law) may make a complete ban impracticable.  Thus, in most cases, the employer will be faced with drafting a cell phone policy that clarifies the circumstances under which cell phone use will be allowed.  Implementing an effective policy, however, will require the employer to take into account a number of considerations.  First and foremost, the employer will need to make it abundantly clear to its employees that they are not required, as a condition of employment, to use their cell phones (even if the phones are provided by the company) while driving.  The employer may even want to go so far as to say that if the employee uses a cell phone, for business purposes, while driving, he or she assumes the risk.  The employer should also assess the need for requiring employees to use hands-free devices if they engage in business-related calls while driving, as well as the conditions under which business-related phone calls will be allowed.  For instance, the employer may want to limit the dialing of phone numbers to when the car is stopped, or require employees to pull off to the side of the road to make and receive calls (however, this latter consideration may lead to other potential liability concerns).  The employer may also want to prohibit cell phone use during adverse driving conditions, such as heavy traffic and bad weather. Of course, any policy implemented should be strictly enforced. 

            Although these steps will not guarantee a defense to liability, they will at least place the employer in a stronger position legally than an employer who fails to implement any policy regulating cell phone use by employees.