Unemployment Compensation Update

February 2011

Currently, there are three bills (a House Bill, a Senate Bill, and the Governor’s Bill) pending that could have significant impact on unemployment compensation awards.  All three of them call for a change to the way unemployment cases are construed, striving for a more neutral analysis of claims instead of liberally interpreting them in favor of the claimant.  Additionally, all three bills seek to broaden the definition of “misconduct,” thereby expanding the circumstances under which employees’ actions will disqualify them from benefits.  In that vein, at least two of the bills reference “chronic absenteeism” as potentially disqualifying behavior.  Other proposed changes address the duration of benefits.

Two of the bills seek to limit benefits to 12 weeks if the unemployment rate is 5% or lower, adding an additional week for each ½ percent increment, with a maximum of 20 weeks if unemployment is 9% or above.  The Senate bill instead ties the duration of benefits to the availability of “suitable work,” which, for the first 12 weeks, means “employment of an equal or higher skill level . . . which pays wages that are at least 80 percent of the individual’s average weekly wage . . . .”  After thirteen weeks, suitable work is defined as wages “equal to the weekly benefit that the individual is drawing.”  Interestingly, one of the bills (the House Bill) passed the House Economic Development and Tourism Subcommittee on February 10.   If you would like more detailed information about these bills, please contact me at 813.963.7736.

FICA Taxes Apply to Medical Residents.

In a recent decision, the U.S. Supreme Court ruled that medical residents are employees rather than students and, therefore, are subject to FICA taxes.  The Court held that the patient care services provided by medical residents do not qualify under the so-called “student FICA exemption” and that the wages paid to the medical residents for such services are therefore subject to FICA tax.  In reaching its decision, the Court cited to an Internal Revenue Service interpretation of the exemption which states that individuals regularly scheduled to work 40 hours per week or more do not qualify for the student exemption.   Accordingly, health care employers should review their pay practices as applied to doctors in residency programs to ensure appropriate tax withholdings.  Additionally, healthcare facilities should consider whether their interns and/or residents may be exempt professionals under the Fair Labor Standards Act if they enter such programs after the earning of the appropriate degree required for the general practice of their profession.

Court Holds that Nurse Could Not Pursue Claim Under "Church Amendment."

The Church Amendment, a law that prohibits any entity receiving federal funding from discriminating against health care personnel for performing or refusing to perform a lawful sterilization procedure or abortion, does not provide a private cause of action.  In a recent case, an operating room nurse filed suit against a hospital for allegedly requiring her participation in performing late-term abortions.  The nurse then sued the hospital in federal court, alleging violation of rights protected by the Church Amendment.  The District Court granted the hospital’s motion for summary judgment, dismissing the nurse’s claim on the ground that the Church Amendment did not create a private right of action.   The decision was affirmed by the federal appellate court, which stated that a private right of action exists only when there is “explicit evidence of Congressional intent” to create such a right.

Using Credit History as a Screening Tool.

Utilizing a job applicant’s credit history in making hiring decisions is under fire, and employers should keep an eye on current opinions when declining to extend a job offer on this basis.  While, in Florida, the Agency for Healthcare Administration mandates screening of caregivers, it is unclear whether, and to what extent, credit information should be considered.  At least three states have initiated lawmaking restricting the use of credit information, and the Equal Employment Opportunity Commission recently held a meeting to discuss the potential impact of employers’ use of such credit checks.  One state, Illinois, recently passed a law entitled the “Employee Privacy Act,” which generally prohibits employers from looking into an applicant or an employee’s credit history, ordering a credit report from a consumer reporting agency, and taking any adverse employment action due to the individual’s credit history or credit report.

Certain employers are exempt from the Act, including financial institutions, government agencies that require such credit checks, and qualified debt collection agencies.  Other exceptions to the Act’s prohibitions allow employers to conduct credit checks if they can show that credit worthiness is a “bona fide” job qualification.  Examples of such jobs would include positions that involve access to large amounts of cash, high-level managerial positions, and positions that grant a person access to private financial or confidential information of others.  Employers should keep their eyes on the result of the EEOC’s efforts as well as any movements in Florida to restrict credit checks in the employment setting.  Notwithstanding any movement in Florida in this regard, employers should remain mindful that any background checks they conduct remain compliant with the Fair Credit Reporting Act, as amended.