October 2003 - RECENT DEVELOPMENTS IN WORKFORCE ISSUES



Flexible Spending Accounts and Non-Prescription Drugs
According to IRS Revenue Ruling 2003-102, released on September 3, 2003, over the counter medicines are now reimbursable with pre-tax dollars through health care flexible spending accounts, provided that the medications are used for the “diagnosis, cure, mitigation, treatment or prevention of disease.” In the same Revenue Ruling, the IRS also ruled for the first time that employer-sponsored group health plans may cover nonprescription drugs without reimbursement for those expenses being treated as taxable income to the employee.

Overtime Pay
On March 31, 2003, the United States Department of Labor published proposed revisions to its overtime regulations that would revise and clarify the different job duties tests used to determine whether any particular employee is exempt from overtime compensation. Because the Senate blocked the proposed regulations as written, the Department of Labor will probably further modify the proposed regulations before they are final. We will keep you posted on any developments.

New Mandated Reporters under the Elder Abuse and Neglect Act
The Elder Abuse and Neglect Act has been amended to add paramedics and Emergency Medical Technicians to the list of mandated reporters of elder abuse and/or neglect. Additionally, the amendments state that physicians, dentists and dental hygienists who fail to report abuse, neglect and financial exploitation shall be reported for professional discipline, and imposes criminal penalties against other mandated reporters who fail to report. Public Act 93-0300, effective 7/23/2003.

New Whistleblower Act
Public Act 93-0544 creates the Whistleblower Act, which provides new whistleblower protections for Illinois private sector employees. The Act prohibits Illinois employers from enforcing any rule or policy that prevents an employee from disclosing information to a government or law enforcement agency if the employee has “reasonable cause to believe” that the information discloses a violation of any state or federal law, rule or regulation. The Act also prohibits employers from retaliating against employees (1) for disclosing information to the government or a law enforcement agency concerning a violation of law, rule, or regulation or (2) refusing to participate in an activity that would violate a law, rule, or regulation. Public Act 93-0544, effective 1/1/2004.

Consideration of Applicant’s Recovery For Background Check Act Waiver The Illinois Department of Public Health has proposed amendments to the Health Care Worker Background Check Act that would allow the Department of Public Health to consider, for purposes of determining whether a waiver should be granted, the following information as evidence of the applicant’s ability to perform the employment responsibilities competently and of the fact that the applicant does not pose a threat to the health or safety of patient: the applicant’s participation in a drug/alcohol rehabilitation program and continued involvement in recovery and the applicant’s participating in anger management or domestic violence prevention programs. 27 Illinois Register 39, p. 15028 (September 29, 2003).

Notice of Mental Problem Under the FMLA
Avon Products has petitioned the U.S. Supreme Court to review the Seventh Circuit Court of Appeals decision. In the recent case of Byrne vs. Avon Products, the defendant, Avon Products, discharged Byrne, an employee, for sleeping and reading on the job while responsible for overseeing a steam system. After his discharge, Avon was informed by Byrne’s psychiatrist that Byrne was being treated for severe depression that may have affected his work. While employed, Byrne never gave Avon notice of his need for FMLA leave. The Court of Appeals held that if Byrne can prove either that the sudden change in his behavior was itself notice of a mental problem or that he was unable because of his medical condition to give notice of his need for FMLA leave, Avon would have to reinstate him. The Supreme Court has not yet decided whether it will hear this case. Byrne vs. Avon Products 328 F.3d 379 (7th Cir. 2003)

Can a therapist-patient relationship exist between an employer and employee?
An appeals court in Indiana held that there was a genuine issue of material fact for determination by a jury as to whether a woman who was employed by a clinic which was owned by a psychologist and a psychiatrist also had a therapist-patient relationship with the psychologist, her employer, because she sought advice from him. The court suggested that some of the factors to consider are whether or not the employee made appointments to speak with her employer; whether the services were billed; whether other employees sought advice; and whether or not she was ever told that her conversations would not professional consultations. Thayer v. OrRico, No. 79A02-0211-CV-974, 2003 WL 21802269 (Ind. Ct. App., Aug. 6, 2003).