Phyllis Shurn-Hannah

Monday, 22 July 2002 09:48

Hot Issues in HR

Looking back on 1999, there have been several important changes in human resource policies and guidelines issued by the Equal Employment Opportunity Commission (EEOC) and some being currently debated by Congress, the EEOC and the IRS. The following is a summary of those changes in three key HR areas: the Americans with Disabilities Act, Undocumented Workers and Pension Plans.

Changes in the Americans with Disabilities Act

Summary: In March, the EEOC released new guidelines for reasonable accommodations and undue hardship under the Americans with Disabilities Act (ADA).

The bottom line: From now on, if an employer has some idea that an employee with a disability will need special accommodations, then the responsibility now rests with the employer to provide those needs. The employer also can’t “require” the disabled employee to go to another “company” appointed physician for a second opinion, even if the employer has doubts about the employee’s personal physician’s diagnosis of the existence of an ADA disability and the need for reasonable accommodation.

These EEOC guidelines also have some specific changes that companies must familiarize themselves with, especially in the areas of reassignment, denial of leave of absences by employees with disabilities, job restructuring and/or reassignment, disability-related misconduct, telecommuting, and accomodation of medical side effects.

The federal courts can be expected to afford significant weight to the EEOC guidance, even though EEOC guidelines generally do not command the deference that is afforded to formal regulations. Nevertheless, these types of guidelines receive significant judicial consideration and also alert employers to the likelihood that the EEOC will challenge specific employment policies and decisions.

Changes Regarding
Undocumented Workers

Summary: In October, under federal employment discrimination laws, the EEOC modified its position on remedies available to undocumented workers (those without legal authorization to work in U.S.).

The bottom line: The EEOC states now that “even if the workers are undocumented they are still entitled to the same remedies as any other worker — including back pay and reinstatement.” They have also outlined different levels of remedies and addressed the issue of retaliation and the employer’s liability.

Converting Traditional Pension Plans to Cash Balance Plans

Summary: As political pressure builds against converting a traditional benefit pension plan to a cash balance pension plan, companies considering this move should do their homework and understand the positives and negatives. Agencies such as the EEOC, IRS and Congress are currently examining these plans.

The bottom line: The crux of the debate is whether older workers, who are closer to retirement, are unlawfully discriminated against when employers convert from traditional-defined benefit pensions plans to cash balance pension plans. Experts estimate that in a conversion, an employee who is five to 10 years away from retirement may lose 20% to 50% of the expected age 65 benefit. However, the ERISA Industry Committee (ERIC), a trade association representing larger employers, says cash balance plans don’t violate the ADEA just because benefits accrue more rapidly in a cash balance plan during an employee’s initial years of employment.

Several alternatives exist to alleviate the potential problems that may result from a conversion. Employers and employees should be aware of what is involved. We will be hearing more about these plans in the coming year.

Phyllis Shurn-Hannah is president of Cascade Associates, Inc., a human resource consulting and staffing/recruiting company in Blue Bell, PA.