Continuation of Health Benefits for Employees on Medical Leave
Question: I have an employee who has been off work with a workers compensation injury for over 6 months. What is my obligation to continue to keep this employee on the company health insurance plan?
Answer: It depends on a few things. The employee’s entitlement to continuation of health insurance benefits depends primarily (1) whether the employee qualifies for leave under the federal Family and Medical Leave Act (FMLA) or the California Family Rights Act (CFRA), and (2) the terms of the employer’s summary plan description for health insurance.
An employee may qualify for leave under the FMLA or the CFRA if the employee needs time off for a serious medical condition and has worked 1,250 hours in the prior 12-month period. This 12 weeks may run concurrently with an employee’s workers’ compensation leave. If an employee qualifies for leave under the FMLA or the CFRA, the employer should designate the first 12 weeks of the employee’s leave as FMLA and/or CFRA. Employees who are on FMLA or CFRA leave are entitled to continuation of health insurance benefits. During this time, the employer must continue the health insurance benefits on the same terms and conditions as if the employee continued to work. For example, if the employer normally covers 50% of the employee’s premiums, the employer needs to continue to cover that same portion. Employers must comply with these rules during the entire 12-week period.
Sometimes, an employee is off work for more than 12 weeks. Once the employee exhausts the 12 weeks of FMLA or CFRA, the employer must engage in the interactive process with the employee to determine if additional leave is required a reasonable accommodation. In these situations, the employer’s health insurance plan document will determine how long the employee may remain eligible for health insurance benefits. Even if the employee remains “eligible” for health insurance benefits, the employer has more flexibility with the terms and conditions of the benefits. For example, if the employer normally covers 50% of the employee’s premiums, the employer may require the employee to pay the entire premium after the initial 12 weeks are exhausted. Employers who are considering such changes should treat similar situations similarly to avoid possible discrimination claims. Employers should also be aware that certain types of leave (e.g. pregnancy-related leave) may increase an employee’s right to continuation of health benefits beyond 12-weeks.
Employers may contact their broker or review the plan document to determine when an employee becomes ineligible for coverage. Many policies state that after three or four months of medical leave, the employee becomes ineligible to participate in the plan as an active employee. At that time, unless the employee is on protected pregnancy disability leave or CFRA baby bonding leave, the employee’s company health insurance coverage would cease, and the employee would be offered health insurance continuation at the employee’s expense through the Consolidated Omnibus Budget Reconciliation Act (COBRA). The employee’s reduction in hours is a qualifying event under COBRA, and your health insurance broker or plan administrator can help you discontinue coverage for the employee and timely offer continued coverage under COBRA.
Employers sometimes believe that employees who are on workers’ compensation leave are entitled to health benefits indefinitely, but that is not the case. For more information on family and medical leaves, and pregnancy disability leave, visit https://calcivilrights.ca.gov/family-medical-pregnancy-leave/.
Update on Meal Period Waivers
Question: Some of my employees regularly waive their 30-minute meal breaks so they can leave earlier. We normally ask these employees to sign a meal period waiver for each shift for recordkeeping purposes, which is tedious. Are we able to have them sign a single form that applies to future work shifts?
Answer: Yes, but keep in mind that the waiver is only allowed if the total work shift is six hours or less. In California, an employee who works five hours or more must be provided with the opportunity to take an unpaid 30-minute meal period. This is commonly referred to as the “lunch break.” If the employee works a shift that is six hours or less, this meal period may be waived by the mutual consent of both the employer and the employee. This waiver, if applicable, allows an employee to stay clocked in and leave a half hour earlier.
Many employers implement waivers by having new hires sign a blanket (or “prospective”) meal period waiver for all shifts of six hours or less. Until recently, it was unclear whether this practice of obtaining prospective waivers was permissible. A recent California Court of Appeal ruled that prospective waivers are permissible, if certain conditions are met.
In Bradsbery v. Vicar Operating, Inc., several employees claimed that their former employer denied them the opportunity to take meal breaks on shifts between five and six hours. The employer argued that the employees had voluntarily signed written blanket meal period waivers early in their employment. In response, the employees claimed that the meal period waivers they signed were not enforceable because they were not signed only once, not on a per-shift basis. The trial court sided with the employer, and the employees appealed. The Court of Appeal also sided with the employer and held that prospective meal break waivers signed by employees are enforceable, provided the waivers are not “unconscionable or unduly coercive.” The Court of Appeal further clarified that the waiver must be signed voluntarily, and the employee must be able to revoke the waiver at any time.
The Court of Appeal decision in Bradsbery v. Vicar Operating, Inc. is a rare “win” for employers. The decision allows employers to manage flexible scheduling, particularly in industries like retail, professional services, healthcare, and hospitality, where short shifts are common. It is important to note that this case addresses only waivers for the first meal break—not the second meal break for shifts over 10 hours.
In light of this decision, employers should consider reviewing their waiver forms and practices to ensure they comply with the legal standards. To reduce risk, waivers should be clearly worded, signed, and tracked. Employers should consider training for managers on the scope and application of waivers. Managers should also be advised to promptly honor any revocation and to avoid retaliating against an employee who revokes a waiver. Employers should contact their labor counsel if they have questions about meal break waivers or if they would like to implement meal break waivers.
Maintaining Data Security in the Workplace
Question: My company recently experienced a data breach in which some of our employees’ personal information was accessed. Are there any employment laws that apply to this situation, and what can I do to protect this data going forward?
Answer: Yes, there are some general rules to follow and steps employers may take going forward. A breach affecting employee data is a costly and time-consuming ordeal for California businesses of any size. To minimize legal risks associated with such a breach, an employer in California should take immediate corrective action. This generally includes, at a minimum, a response to the current breach and prospective steps to prevent a future breach.
In California, employers commonly maintain and keep the private personal information of their employees. This information includes social security numbers necessary to verify work eligibility, health information necessary to document medical accommodations, payroll and timekeeping records necessary to calculate accurate payment of wage, and bank information necessary to process direct deposit of wages. This type of information is protected from unauthorized disclosure by the individual right to privacy under California and federal constitutional privacy laws. In addition to this general right to privacy, other specific laws further protect this information. For example, the California Civil Code requires businesses to maintain reasonable security procedures to prevent data breaches and provide notice to affected individuals if a breach occurs. Moreover, under the California Consumer Privacy Act (CCPA), which only applies to some employers, employees may have a private right of action associated with a data breach. Together, these protections and potential risks make it critical for employers to respond quick and implement safeguards going forward.
In general, a data breach occurs whenever unencrypted employee private information, or the ability to access such unencrypted data, is reasonably believed to have been acquired by an unauthorized person. If a data breach occurs, the employer should notify all affected employees of the breach as soon as possible. The notice should include, at a minimum, details about the breach, the types of information compromised, and the remedial and prospective steps the employer is taking to address the situation. The notice should also encourage employees to ask questions and receive updates on the situation. Businesses required to notify more than 500 California residents about a breach must also submit a sample copy of the notification to the Attorney General. Non-compliance with these rules may lead to penalties and legal risk.
Employers can minimize the potential of a burdensome data breach by maintaining reasonable security procedures and practices. Such policies and procedures may include encryption and security measures for employee data, regular data audits and risk assessments, third-party vendor due diligence, review of contractual language with vendors and customers, and a review of legal updates on the topic. Employers should also consider training Human Resources, supervisors, and other individuals with access to employee data. Training may occur periodically and cover important topics such as privacy laws, security measures, company practices, and remedial steps to take in response to a data breach.
Employers with questions about minimizing the risk of a data breach, or how to deal with an ongoing breach, should consult with a team comprised of both information technology individuals and legal counsel.
Employer Responsibilities In Form I-9 Process
Question: I’ve read in the news about the increased focus on immigration. I run a medium sized business and am worried about an I-9 audit. Can you remind me of my general obligations for I-9s?
Answer: The Form I-9 is a federal form used to verify an individual’s identity and authorization to work in the United States. Every employer, regardless of size, must complete Form I-9 each time they hire any person to perform labor or services in the United States in return for wages or other remuneration (e.g., food or lodging). The I-9 process should occur after a conditional job offer has been made and before the applicant starts work.
During the I-9 process, employers must provide the applicant with the entire Form I-9, including instructions and lists of acceptable documents. Employers should allow the applicant to choose what documentation to provide. Moreover, employers should accept an employee’s documentation as long as it appears to be genuine and belonging to the employee.
Employers should then complete an in-person, physical inspection of the documents provided by the applicant. During the review, the employer should ensure that the Form I-9 was properly completed and should ask the employee to correct errors or add missing information if necessary. Employers should then retain the completed Form I-9 and copies of the documentation provided by the employee in a secure location that is separate from the employee’s personnel file. Form I-9 records must be retained for at least three years from the date of hire or one year from the date of termination, whichever is longer.
Form I-9’s and supporting documentation may be inspected by federal immigration agencies. Normally, the inspecting agency will give employers a minimum of three (3) business days’ notice before starting an inspection. Under California law, employers must provide employees with notices before and after the inspection. The pre-inspection notice must inform all current employees of the federal immigration agency’s inspection request within 72 hours of receipt of the inspection notice from the federal agency. The notice must include the (1) name of agency conducting the inspection, (2) date the employer received the notice, (3) nature of the inspection, if known, and (4) a copy of the notice of inspection.
During the inspection, employers should present only the Form I-9s and the supporting documents requested. After the inspection, employers must provide notice to any “affected employee”—which means an individual who was identified as potentially lacking work authorization or having another document deficiency. This post-inspection notice should include a copy of the written immigration agency notice about the inspection results (often called a Notice of Suspect Documents). It should also include (1) a description of all deficiencies or other items identified in the Notice of Suspect Documents, (2) the timeframe for correcting any potential identified deficiencies, (3) the date and time of any meetings with the employer to correct identified deficiencies, and (4) the employee’s right to representation during this meeting. This notice should be hand delivered to affected employees, if possible.
The I-9 process can be cumbersome, and an I-9 audit can create significant liability for employers and employees alike. There are both federal and state penalties for failure to comply with an I-9 audit or failure to issue the required state notices. Employers with questions about the I-9 process may wish to consult with their labor counsel.