On October 13, 2016, the Occupational Safety and Health Administration (“OSHA”) issued final regulations governing employee protection claims (for retaliation or whistleblowing) under section 1558 of the Patient Protection and Affordable Care Act (“ACA”). Section 1558 amended the Fair Labor Standards Act to provide protections to employees who may have been subject to retaliation for seeking assistance under certain affordability assistance provisions of the ACA or for reporting potential violations of the ACA’s consumer provisions.
While the final regulations predominantly relate to legal procedure involving complaint processing, the preamble to the final regulations provides some insight into how OSHA interprets whether an employer violates the retaliation provisions of the FLSA by reducing the hours of its employees to avoid the imposition of the Employer Shared Responsibility provision of the ACA. Under the Employer Shared Responsibility provision, applicable large employers (as defined in the ACA) must either offer qualifying health coverage that is affordable and provides minimum value to their full-time staff (and dependent children) or be subject to an employer shared responsibility payment, if at least one full-time employee receives a premium tax credit at the Exchange.
In the preamble to the final regulations, OSHA states that the whistleblower protections apply to the situation where an employer reduces an employee’s hours to avoid or reduce its liability under Section 4980H, reasoning that the Employer Shared Responsibility provisions of the ACA do not prohibit an employer from reducing an employee’s hours of service in order to avoid a potential employer shared responsibility payment. However, OSHA goes on to caution that, if an employer reduces the service hours of an employee it knows received a premium tax credit or subsidy, the employer could be found to have violated the retaliation prohibition in the FLSA if the employee’s receipt of a premium tax credit or subsidy was a contributing factor in the employer’s decision to reduce the hours and the employer is unable to show by clear and convincing evidence that it would have taken the same action in the absence of the protected activity.
Because school districts have started receiving statements from the government notifying them when an employee has received a premium tax credit, school districts should use caution in any employment action involving such an individual including reducing service hours. It is important to point out, however, that OSHA’s interpretations set forth in the preamble are not binding. Moreover, the Regulation may be subject to future amendment under the Trump Administration.
Please contact Barb Erickson or Heather Brickman with your inquiries.