Can Attendance Be An Essential Job Function?

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One of the features BWSI has built into its staffing software is the standard Do Not Use (DNU) and No Show/No Call flags on employees and candidates.  As a staffing agency it is obviously imperative to your business that your contingent workforce shows up for their assignments in a timely and regular manner.  This is to say nothing of the goodwill and potential loss of a client should they fail to do so.  However, given the Americans with Disabilities Act (ADA), you could have issues with terminating an employee under the guise of not allowing a reasonable accommodation if that employee has a disability.  Recently, however, the Ninth Circuit Court of Appeals has ruled that predictable attendance can be an essential function of certain jobs (see Samper v. Providence St. Vincent Medical Center (9th Cir. 10-35811 4/11/12) )

Without getting into the details of the aforementioned case, most staffing agencies BWSI deals with have a defined attendance policy for their employees.  The most common policy we see is an allowance of 3-5 unplanned absences per year (from the date of hire), with absences due to family medical leave, bereavement, and jury duty not counting against these unplanned absences.  The ADA law says that an employer must make reasonable accommodation for employees with disabilities, so your hands seem to be tied if you have an employee with excessive absences that you are making reasonable accommodation for.  However, the district court in the above case granted summary judgment in favor of the defendant reasoning that the employee was not able to adhere to the attendance policy so they were unqualified for their position.  One of the key items cited by the Ninth Circuit was the written policy demonstrating “attendance” and “punctuality” as listed in the “standards of performance” in the written job description.  Given that in this case, the employee was a neo-natal nurse, nothing could be more obvious than the need for their attendance and its effect on patient care in light of excessive absences.

It is important to note that this decision does not give employers a pass to require adherence to strict attendance policies and allow them to terminate employees who are in violation of said policy.  However, there are many instances where an employee’s attendance at the workplace is essential to the performance of their position—you can’t interact with customers at a service desk remotely, for example.  You, as the employer, must still be cognizant that you must make exemptions to any attendance policy as reasonable accommodation required under the ADA depending on the position in question.  BWSI feels that clearly written job descriptions that also outline standards of performance, including attendance, can help protect staffing agencies from litigation.  As with anything of this nature, you should consult with qualified counsel for guidance in this area, particularly if you deal in employee-friendly states such as California and Delaware.

The Affordable Care Act and What It Means To Your Business—Nondiscrimination Rules

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While BWSI is primarily a software and services company that only deals with software solutions in the staffing industry, we also do a great deal of business consulting when working with our clients and prospects.  One of the things that we have consistently seen in working with staffing agencies that offer benefits to their contingent workforce (or ‘temps’ if you will) is the existence of a two-tier plan.  This means that one tier of benefits, usually a more generous and rich plan, is offered to an agency’s internal employees such as recruiters and sales professionals and a different tier at a usually lower benefit (and employer contribution level) is offered to the contingent employees.  With the passage of the Patient Protection and Affordable Care Act, all insured group plans will be subject to nondiscrimination tests similar to self-insured plans which would quite probably put an end to the two-tier benefit model.

In order to pass the nondiscrimination tests, you will need to meet two requirements:

  1. Your health plan cannot discriminate in favor of highly compensated individuals in regards to their eligibility to participate in the plan.  To put it simply, this means that the plan must demonstrate that it benefits at least 70% of all eligible employees.
  2. Your health plan cannot discriminate in favor of participants who are highly compensated as to the benefits provided—i.e. you must offer the same benefits to both highly compensated and non-highly compensated employees.  This also means that differences in plan features such as employer contribution levels, copays, deductibles, and waiting periods are not acceptable.

Obviously, item #2 is where most staffing agencies that offer benefits will have an issue.  Quite simply, I can’t recall a staffing agency that BWSI has worked with that offered benefits to its contingent workforce and didn’t have this situation.  As of this writing, enforcement of the nondiscrimination testing has been delayed as the IRS hasn’t issued guidelines, but that is expected to be forthcoming soon.  Many things regarding testing guidelines have been bandied about, but some of the things that BWSI hopes are in the testing guidelines include:

  • Employer contributions not tested as ‘benefits’
  • Testing based on availability/offer of coverage and NOT participation—i.e. if all participants have access to all plan options, it would not be discriminatory if said participants don’t elect the coverage.
  • Certain employees should be excludable from testing guidelines such as those under 25 (can still be covered on their parents plan), part-time & seasonal employees, and those employees that are covered by another plan for example.

There is a great deal of lobbying and posturing going on in Washington D.C. over these guidelines, so it is imperative that you stay abreast of possible changes and issues as it affects your business.  Just to illustrate how serious the nondiscrimination tests are, if you fail them, you can be fined $100 per day excise tax per affected employee!  For a staffing agency of modest size, this can quickly add up to some serious money, much less those paying several hundred employees per week.  It is also important to note that the nondiscrimination failure penalties are separate and in addition to any penalties for failing to offer affordable coverage.

It is BWSI’s opinion that this part of the legislation will have a significant impact on all staffing agencies, particularly those that offer the two-tier benefits plan.  At a minimum, business will have to come up with other creative ways to compensate their employees outside of their benefit plan provisions.

 

Dress it up—the ins and outs of a dress code policy

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As one of the leading developers of staffing software, I have been fortunate to travel all over the country (actually, I am only missing two states to cap all 50 including Puerto Rico) meeting with clients and prospects.  I have seen everything from very formal to borderline ballpark casual and often get questions about how to write and enforce a dress code or appearance policy.  If you were to ever pop-in unannounced at BWSI’s offices, you would probably find that this question, directed at me in particular, is somewhat laughable since I have the terms ‘dress jeans’ and ‘good flip-flops’ in my vernacular.  That being said, you can legally implement and enforce an appearance policy with several caveats.

  • Discrimination Issues:  Your policy should be as gender-neutral and allow for as much reasonable accommodation for religious reasons as is prudent.  There are circumstances, albeit limited, where an employee can claim religious reasons for a particular type of dress or garb.  BWSI highly recommends that if this situation arises and you are uncomfortable for making such accommodations that you consult qualified counsel for guidance.  One should note that piercings and tattoos are not generally afforded protection as a religious reason.
  • Written Policy:  You should have a clearly and carefully written policy for your dress code/appearance policy.  It should in no way be subjective or inconsistent, but firmly based on business decisions/safety reasons for said policy.  It shouldn’t be an exhaustive list of what an employee can and cannot wear, although you can prohibit certain articles of clothing (tank tops or jeans for example).  By including certain articles of clothing that are prohibited (such as jeans), you eliminate any subjectivity as to whether an employee’s clothing is professional enough or projecting the image you want to project.
  • Acknowledgement: You can choose to have an employee sign-off on the dress code/appearance policy as part of their onboarding process.  A common way I have seen this done is to include it in the employee handbook, which usually has an acknowledgement/acceptance sign-off associated with its receipt.
  • Training:  This is one item where you can invite trouble.  All staff responsible for enforcing the dress code/appearance policy should have some directed training above and beyond simply going over the policy.  Improperly trained/untrained staff could be placed in a situation to make a poor or uninformed decision in situations related to gender or religious issues as it relates to the appearance policy.
  • Be Consistent:  Uniform enforcement of the policy is key to keeping your appearance policy within legal boundaries.  Ensure that what applies to one employee applies to all as far as your appearance policy and its enforcement are concerned.

Based on BWSI’s experience, staffing agencies that have a defined dress code/personal appearance policy for both their internal staff and contingent employees project a much more professional appearance.  It is important to realize that with your contingent employees, they are the public face of your business as they go out on assignment.  You do not have to tolerate an unprofessional appearance, but there are certain legal guidelines that one should be aware of.