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Swipe Right HR – May 2024

🗓️ May 2024

Keeping HR pros updated with important compliance, benefits, and human resources information.

Federal Trade Commission Bans Non-Compete Clauses

On April 23, 2024, the Federal Trade Commission (FTC) issued a final rule prohibiting most non-compete agreements between employers and employees, set to take effect 120 days (about 4 months) after its publication in the Federal Register. The rule is designed to abolish these clauses for most workers, with a limited exception for pre-existing agreements involving senior executives.

The new regulation provides a broad definition of non-compete clauses, encompassing any provisions that restrict or penalize employees from pursuing employment elsewhere once their current job ends. It also bans “forfeiture-for-competition” clauses, which force employees to choose between receiving severance pay and working for a competitor.

Additionally, the rule requires employers to inform all affected employees, except senior executives, that their non-compete agreements are no longer valid, offering recommended language for these notifications.

An exception is maintained for non-compete clauses established during the genuine sale of a business, which may now include specific employee scenarios.

Employer Considerations

This rule represents a major change in U.S. employment practices, prompting employers to quickly review and adapt their compensation and retention strategies.

Pregnant Workers Fairness Act Issued

On April 15, 2024, the Equal Employment Opportunity Commission (EEOC) released the final regulations for the Pregnant Workers Fairness Act (PWFA), which will take effect on June 18, 2024. This legislation requires employers with 15 or more employees to manage accommodation requests related to pregnancy, childbirth, or associated conditions in the same manner as they would under the Americans with Disabilities Act (ADA).

The PWFA provides a broad definition of “pregnancy, childbirth, or related medical conditions,” encompassing a wide array of situations, including fertility treatments and lactation. Employers must offer reasonable accommodations, such as job restructuring, flexible work hours, and adjustments to the work environment, among other possibilities.

The regulations clarify that accommodations are not contingent on the severity of the condition, and employers may only refuse accommodations if they present an undue hardship, which must be thoroughly evaluated through an interactive process.

Employer Considerations

Employers are advised to review and update their HR policies and training programs to ensure they comply with the PWFA and consider any additional local or state regulations.

2024 Privacy Rule Amended – Strengthens protections for Highly Sensitive PHI

On April 22, 2024, the Department of Health and Human Services (HHS) issued new regulations under the Health Insurance Portability and Accountability Act (HIPAA) to protect protected health information (PHI) related to reproductive health care. This move addresses concerns that PHI could be misused under new state laws following the Supreme Court’s ruling in Dobbs v. Jackson Women’s Health Organization. The aim of this regulatory update is to maintain patient confidentiality and protect individuals’ rights amid evolving legal frameworks in reproductive health. 

Key aspects of these regulations include: 

  • Enhanced PHI protection: The new rule prohibits regulated entities, such as healthcare providers and health plans, from using or disclosing PHI for the purpose of investigating or penalizing individuals or providers involved in lawful reproductive healthcare.
  • Definition of reproductive health care: The regulations cover a wide range of services, including contraception, prenatal care, pregnancy termination, and fertility treatments.
  • Attestation requirement: Regulated entities must obtain a signed attestation confirming that any request for PHI is not intended to investigate or penalize lawful reproductive health care.
  • Updated Notice of Privacy Practices (NPP): Covered entities are required to update their NPPs to clearly inform individuals about the use and disclosure of their PHI related to reproductive health care, with these updates to be completed by February 16, 2026.

Employer Considerations

It is essential to stay informed with HHS guidance, ensure that NPPs are up to date, and consult legal counsel when managing PHI related to reproductive health care.

Harassment Prevention Guidance Released

The Equal Employment Opportunity Commission (EEOC) has recently released final enforcement guidance on workplace harassment. This comprehensive document consolidates and updates previous guidance from 1987 to 1999, reflecting changes in the law and the evolving dynamics of the modern workplace, including virtual environments and the impact of digital technology.

Key highlights of the guidance include:

  • Protection from harassment: It reaffirms that federal laws protect employees from harassment based on race, color, religion, sex, national origin, disability, age (40 or over), or genetic information.
  • Scope of harassment: Harassment can occur not only between coworkers and supervisors but also through interactions with customers, contractors, and other third parties.
  • Legal and technological updates: The guidance includes recent legal precedents, such as the Supreme Court’s decision in Bostock v. Clayton County and addresses new challenges like online harassment.

Employer Considerations

Employers should review the Summary of Key Provisions and assess whether their employees might face barriers in understanding the law. Employers should:

  • Have a clear, easily understandable anti-harassment policy.
  • Implement a safe and effective procedure for employees to report harassment, offering more than one reporting option.
  • Provide regular training for all employees, including supervisors and managers, on the company’s anti-harassment policy and complaint process.
  • Ensure that the anti-harassment policy is being followed and that the complaint process is effective.

Question of the Month

Q. If an enrolled employee’s dependent loses coverage and needs to enroll under the employee’s plan, is that an opportunity to switch medical plans and carriers, or are they restricted to their current plan?

A. The employee can enroll the dependent in any plan option offered by the employee’s employer. This is a HIPAA special enrollment right and the right extends to any benefit plan option, even if the employee was not previously on that option.

Here is an example from the HIPAA special enrollment regulations:

Facts. Individual A works for Employer X. X maintains a group health plan with two benefit packages—an HMO option and an indemnity option. Self-only and family coverage are available under both options. A enrolls for self-only coverage in the HMO option. A’s spouse works for Employer Y and was enrolled for self-only coverage under Y’s plan at the time coverage was offered under X’s plan. Then, A’s spouse loses coverage under Y’s plan. A requests special enrollment for A and A’s spouse under the plan’s indemnity option.

Conclusion. In this example, because A’s spouse satisfies the conditions for special enrollment under paragraph (a)(2)(ii) of this section, both A and A’s spouse can enroll in either benefit package under X’s plan. Therefore, if A requests enrollment in accordance with the requirements of this section, the plan must allow A and A’s spouse to enroll in the indemnity option.

Our Compliance Team is here if you have any questions or would like us to help you with your group benefits.

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