Was I supposed to provide a “reasonable accommodation” for that?

If you are reading this blog post then chances are you are in one of three situations: 1) an Employee is suing you under the Americans with Disabilities Act (“ADA”) for failing to provide a reasonable accommodation; 2) an Employee asked for sick leave or extended leave under the Family Medical Leave Act (“FMLA”) and are now asking for an extension; or 3) an Employee made a comment to you and that comment has made you wonder if you should be doing more. This post is going to focus more on the last two scenarios because if you are being sued for failing to make a reasonable accommodation, you should seek an Attorney pretty fast to ensure you are preserving your best defenses from the beginning.

I also want to make a couple of assumptions known before continuing – this post assumes that you are a qualified employer, the employee is a qualified employee, and your company is subject to the ADA. This is a crucial first step when even determining if a reasonable accommodation, or the interactive process, is needed, but is one that will not be discussed here. Lastly, this is a very broad overview of reasonable accommodations – this subject is very fact intensive and should be analyzed further by an Attorney if you are truly worried.

The ADA is a federal law which does in fact create preferential treatment of one employee over another. In fact, Courts have said that by definition, the ADA requires employers to treat employees with disabilities differently that employees without one. Due to this, you have to be careful about what is being asked of you.

When to begin the Interactive Process

FMLA Leave or Sick Leave

As an entrepreneur that is subject to the FMLA and ADA requirements, you may not have known that the two federal regulations could cross paths. Even if you did everything right under the FMLA regulations, you may have failed under the ADA requirements. When an Employee is out on extended leave, or FMLA leave, their disability could qualify under the “covered employee” definition of the ADA. When this happens, you have to be careful with conversations. The Employee may not be knowingly making an ADA request for a reasonable accommodation today, but could find out tomorrow after you have denied it.

Here is one type of scenario that you need to be concerned with. When you receive an FMLA request to be out for the full 12 weeks, and you grant it, you may be required to extend that leave another couple weeks or months.

If an employee brings a doctor’s note to you and the note tells you that the employee is almost ready to come back to work but really needs a couple more weeks off, this should send alarms off in your head. Just because the employee has used all of their sick leave, personal leave, and has exhausted their FMLA leave, you may be required to give them more leave under the ADA’s reasonable accommodation. This is because the Courts have found that extending leave is “reasonable” when it is not an “indefinite leave.”

This of course gets a little trickier when the employee has been out for 12 weeks and is then coming back in and asking for an additional 8 months of leave. Or, better yet, the doctor’s note tells you that the employee cannot come back tomorrow and she is unsure when the employee will be able to come back. When you’re dealing with these situations, call your Attorney.

Random Request for an Accommodation:

You have to be listening to your employees when they come in and make complaints about their back hurting, or not being able to drive at night time, or not being able to hear or see while at work, or not being able to concentrate without their pet snake being beside them. What you may dismiss as a common complaint could turn around and bite you tomorrow because you dismissed it.

Best practice is to say, “How can I help you?”

That’s right – when an employee comes forward and says something to the effect of “Man, I could really use [Insert Anything Here] because of my [Insert any Condition Here],” you should immediately be wondering if the ADA applies. Worst case scenario, the ADA applied and you ignored it – now having to pay an Attorney to fix everything.

The next most important thing to do is, DOCUMENT EVERYTHING. This part is so important that I am going to bold, italicize, and underline it. As soon as the employee made the request – I could really use X – you should be taking notes about what the employee said and what you said to help. This way, you can send the notes to your lawyer and your lawyer can make sure you’re protected.

Just because an employee has asked for a specific accommodation, “I could really use my pet snake at work to help me calm down,” does not mean you have to give that specific accommodation! (Let’s be real, who wants to work when their co-worker has a pet snake slithering around!) As the employer, you have the right of choosing what is reasonable. You just have to go through that interactive process of talking it over with the employee.

As always, the Attorneys at Stock and Leader, LLP are happy to further counsel you and your employees on the ADA, or other leave laws, to ensure you are doing everything you can to stay compliant. Remember, asking an Attorney today could save you thousands in time and money tomorrow.

 

Citations:

The Americans with Disabilities Act of 1990, as amended,  42 USCS §§ 12101 et seq

EEOC Fact Sheet – “The FMLA, the ADA, and Title VII of the Civil Rights Act of 1964”

U.S. Airways Inc. v. Barnett, 53 U.S. 391, 122 S. Ct. 1516 (2002).

Ruggiero v. Mount Nittany Medical Center, 2018 US App. LEXIS 15056 (3rd Cir. 2018)(unpublished)

Sessoms v. University of Pennsylvania, 2018 US App. LEXIS 16611 (3rd Cir. 2018)(unpublished)

B-Corp…C-Corp…S-Corp…What Corp?

In the past 5 years, Pennsylvania has added another letter to the discussion on Corporations – the “B” Corporation. Simply put, this was Pennsylvania recognizing an ever-growing trend of entrepreneurs being socially or environmentally responsible.

What is a “Benefit” Corporation and Why do I need to know about it?

Traditionally speaking, corporations are businesses that try to maximize profits for their shareholders. Benefit corporations, on the other hand, are businesses that are organized for profit, with a corporate purpose of creating general public benefit, in addition to any other purposes they have as a business corporation. Simply put, “a benefit corporation offers entrepreneurs and investors the option to build, and invest in, businesses that operate in a socially and environmentally responsible manner.”

For entrepreneurs that want to create a business that not only makes money, but also puts a social issue at its core, the benefit corporation, or B-Corp, may the right entity choice for you.

But what is the difference between C/S/B-Corp?

There are a few key differences between the three entities and knowing those differences are important when making your decision to incorporate.

C-Corp just means that the corporation was incorporated “normally,” or with no variation from the original and most typical type of corporation. C-Corp is another term for a regular corporation. These are the corporations that can generally be owned by anyone (or other entities), is double taxed (this means that the corporation files a tax return at the end of the year and the shareholders have to report their income when they receive a dividend), and lastly, has a duty to their shareholders.

S-Corp just means that an entity was incorporated under Sub-Chapter S of the Tax-code. (One of those variations from a regular C-Corp) Ownership in an S-Corp is limited to individuals who are U.S. citizens or resident aliens. This means entities cannot own a share of the S-Corp! They are also limited to 100 shareholders, while normal C-Corps can have as many as they want. Lastly, one of the biggest and most notable differences, is the S-Corp’s tax structure. S-Corps have pass-through taxation status. This is just like an LLC or Partnership. The S-Corp will not be taxed as an entity because the shareholders will have to report their percentage of income or losses, regardless if the corporation passed a dividend to the shareholders, on their tax returns. This is a major variance from the regular C-Corp taxing structure. Remember, a C-Corp as an entity is taxed on its profits at the end of its fiscal year and then the Shareholders are taxed after the C-Corp makes a distribution.

B-Corps are another variation from the regular C-Corp; this designation is made at the time of incorporation with the Department of State. When forming the B-Corp, the corporation must designate it as such in the articles of incorporation and check the appropriate box when you fill out the form from the Commonwealth. (A link to the Department’s forms can be found here.) The biggest difference with the B-Corp is that each year, the B-Corp must prepare and distribute to its shareholders an Annual Benefit Report describing its efforts to create public benefit during the preceding year. The report must be filed with the Department of State, which makes it a matter of public record. The biggest benefit, as already stated, is that B-Corps are allowed, in fact required, to carry on primarily for its stakeholders. The difference between a stakeholder and shareholder is everything. A shareholder is a stakeholder but a stakeholder may not be a shareholder. In other words, included in the term “stakeholder” are employees and creditors in addition to shareholders. So this means that the Board of Directors for the B-Corp can make a decision which would benefit the employees of company instead of making a larger profit for the shareholders.

Since the pivotal case of Dodge v. Ford Motor Company in 1919, Courts have agreed that the primary purpose of a C-Corp is to carry on for it’s shareholders. In this case, the Dodge brothers were shareholders of the Ford Motor Company. Ford, being truly ahead of his time, decided he would distribute less in profits to his shareholders in order to redistribute more money into the business. Ford also lowered the price of his trucks from 900 dollars to around 380 dollars. This of course cut-into long term profits and dividends, but also allowed more people afford the luxury vehicle. Ultimately, the Court decided that Ford had to distribute a larger dividend to his shareholders because that is what C-Corps are all about. If only B-Corps would have been a thing in 1919!

Conclusion

B-Corps aren’t for everyone! But, they may be for you if you are a social entrepreneur looking to create profit in your idea while also bringing about social or environmental responsibility. There is a lot when it comes to the differences between each of the many different types of business entities and the different taxing structures which follow. Because of this, always make sure you contact an attorney before making any decisions regarding your future business. Checking with an attorney today could save you a lot of money and headache tomorrow!

Sources:

http://benefitcorp.net/businesses/find-a-benefit-corp field_bcorp_certified_value=&state=Pennsylvania&title=&op=Go&sort_by=title&sort_order=ASC

http://www.dos.pa.gov/BusinessCharities/Business/Resources/Pages/Pennsylvania-Benefit-Corporation.aspx

https://ssir.org/articles/entry/s_corps_c_corps_and_b_corps_oh_my_corporate_structure_matters

https://www.mnat.com/files/epub/ThePublicBenefitCorporationGuidebook_FrederickHAlexander.pdf

http://benefitcorp.net/sites/default/files/Benefit%20Corporations%20Chart.pdf

http://benefitcorp.net/

What’s the Fuss about Employer Offered Health Insurance?

With there being so much media attention on Health Care in past few years, many employers are unaware of whether they are required to offer health insurance, whether they should offer health insurance, and if do, what offering it might entail.

In Pennsylvania, small business owners are not required to offer health insurance through the business. While what qualifies as a small business differs state by state, Pennsylvania considers small businesses as any businesses that employ less than 50 full-time employees. However, it should be noted that just because small business owners are not required to offer health insurance, they are always welcome to do so; if business owners offer health insurance, they are required to follow the same rules.

Under the Employer Shared Responsibility provision of the Affordable Care Act, all employers with 50 or more full-time employees must offer at least one plan that is ACA-compliant or they will face fines of $2,000 per employee.

There are many pros for employers to offer health insurance to their employees. One being a 50% Tax Credit allowed for federal income. This can help lower the cost of health plan premiums. Employers can still deduct from their taxes the rest of their premium costs not covered by the tax credit.

The Small Business Health Options Program (SHOP)

If you own a small business in Pennsylvania, you can purchase qualifying coverage for your employees through SHOP, or through a private broker or insurance agent. However, you may qualify for tax credits worth up to 50% of your premium costs if you use SHOP.

If an employer uses SHOP, they have greater flexibility with the coverage options. Employers are able to offer one plan or let employees choose from multiple. Employers are also able to offer only health coverage, only dental coverage, or both. In addition, employers are able to choose how much they pay toward their employees’ premiums, and whether to offer coverage to their dependents.

Enrolling in SHOP insurance is generally the only way for small businesses to take advantage of the Small Business Health Care Tax Credit. Employers may qualify if they have fewer than 25 full-time equivalent employees making an average of about $50,000 or less.

Can I, the Employer, Enroll in the SHOP Program too?

Many employers find it useful and convenient to enroll in the coverage they offer to their employees. Through the SHOP program, Employers are eligible to enroll as long as at least one of their employees, who isn’t a business owner, partner, or family member, enrolls in the coverage as well.

How much will this Cost Me?

As with all health and dental plans, employers and their employees have to pay a monthly premium. The employer decides up front exactly how much they can afford to contribute towards their employees’ premiums. The employers will also decide if they will offer and contribute toward dependent coverage.

SHOP health plans are put into 4 plan categories (Bronze, Silver, Gold, and Platinum) based on how employees and the plan can expect to share the costs for health care. Employers can offer employees a choice of plans, or can select a single plan to offer.

The plan category affects monthly premium costs, and the portion of the bill employees pay for things like hospital visits or prescriptions. It also affects the total amount employees spend out-of-pocket for the year if they need a lot of care. The categories don’t reflect the quality or amount of care the plans provide. Dental plans are put into 2 categories, low and high, based on how employees and the plan expect to share the costs for dental care. The dental plan category affects the total amount employees will likely spend out-of-pocket for dental benefits during the year.

Which Plan Category is the “best?”

Like all good answers, the answer to this question really depends on the employer and employees.

Out-of-pocket costs – what the employees pay when they get care – are just as important as the monthly premiums.

Plans with higher monthly premiums usually have lower out-of-pocket costs. For example, employees will likely pay a higher premium with a Gold health plan but may have lower out-of-pocket costs when they get care. Likewise, premiums are usually higher with a High dental plan, but employees may not have to pay as much when they get dental care.

Plans with lower monthly premiums usually have higher out-of-pocket costs. For example, employees will likely pay a lower premium with a Bronze plan but pay a higher share of the costs when they get care. Likewise, employees will likely pay a lower premium with a Low dental plan, but their out-of-pocket costs may be higher when they get care.

Platinum health plans will likely have the highest monthly premiums and lowest out-of-pocket costs. The plan will pay more of the costs if employees need a lot of medical care.

What is an Agent or Broker?

Generally, agents work for a single health insurance company, while brokers sell plans from several. Both can help an employer compare plans and complete enrollment. Employers don’t pay more by using an agent or broker. They’re generally paid by the insurance company whose plans they sell. They may not be able to sell all available plans. An employer can find agents and brokers near them here!

Resources:

Small Business Health Care Tax Credit Estimator – https://www.healthcare.gov/shop-calculators-taxcredit/

See SHOP health insurances prices in your area – https://www.healthcare.gov/small-businesses/shop-rates/

Citations

https://www.blr.com/HR-Employment/Benefits-Leave/Healthcare-Insurance-in-Pennsylvania

http://www.insurance.pa.gov/Coverage/Pages/For-Employers.aspx

http://www.ncsl.org/research/health/small-business-health-insurance.aspx

http://healthcoverageguide.org/reference-guide/laws-and-rights/laws-related-to-health-insurance/

https://www.healthcare.gov/small-businesses/provide-shop-coverage/

https://www.einsurance.com/insurance-guide/pennsylvania/health-insurance/