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Risky Business: The Most Challenging Workforce Issues Facing Health Care Employers Today
The employment law landscape is evolving rapidly, especially for health care employers. Timothy A. Hilton, Partner, Husch Blackwell LLP, and Gary McLaughlin, Partner, Mitchell Silberberg & Knupp LLP, discuss the areas of greatest concern for health care employers. They cover wage and hour issues, considerations related to remote work, and religious and ADA accommodation issues. Timothy and Gary spoke about this topic at AHLA’s 2025 Annual Meeting in San Diego, CA.
Watch this episode: https://www.youtube.com/watch?v=T_ltW2fsTWo
Learn more about the AHLA 2025 Annual Meeting that took place in San Diego, CA: https://www.americanhealthlaw.org/annualmeeting
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SPEAKER_01:Hello, everybody. Good afternoon or good morning, depending on when and where you're watching this. My name is Tim Hilton. I'm a partner practicing in the healthcare space of labor and employment law at Hush Blackwell LLP in Kansas City. We're a full-service national firm, and I practice, as I said, in our labor and employment group. And I'm here with Gary McLaughlin. We're doing a podcast today following up on a talk that we gave at the AHLA a 2025 annual meeting in San Diego. And we're going to cover a few of the topics that we spoke about last month. Specifically, we're going to talk about some wage and hour issues, some issues associated with remote work, and then also some thorny religious and ADA accommodation issues. And Gary's going to start it off, but Gary, why don't you introduce yourself?
SPEAKER_02:Thanks, Tim. I'm Gary McLaughlin. I'm a partner at Mitchell's Silberberg and Nupp in Los Angeles, California. And I practice employment law. My practice includes a wide range of employment litigation matters. And I especially do a lot of wage and hour class and representative work. And I'm going to start it off talking about some key kind of wage and hour issues. First, we're going to talk about some regular rate issues, which can be tricky for lots of employers but especially healthcare employers. So I know employers across the healthcare industry have been facing a lot of staffing shortages and recruitment and hiring and retention challenges over the last number of years. And That's often led employers to kind of seek new and innovative ways to recruit and retain employees through various types of incentive compensation, benefit programs and whatnot. And those can be great for retention and recruitment, but they can also sometimes create some perhaps unanticipated wage and hour and particularly overtime consequences, because in many instances, those types of benefits and incentive compensation programs need to be factored into the regular rate for purposes of calculating over time. And that's something that can sometimes be overlooked when employers are rolling out a new compensation or benefits or incentive program. So I'm gonna start just kind of with a basic overview of what the regular rate is. So as many of you probably know, who follow any employment, law matters, the regular rate isn't necessarily just the base hourly rate that an employee earns. Other types of compensation may need to be included in that. So the basic formula under the FLSA, the federal law, is that the regular rate equals total compensation for the work week divided by total hours worked for the work week, subject to certain statutory exclusions. And that formula is simple enough. It seems very straightforward until you really start getting into the details and then it can become very complicated. And there's a great deal of gray area that exists in terms of what needs to be included in the regular rate, how to include it in the regular rate and whatnot. So again, it can quickly become complicated. So kind of building on that basic, simple formula, some of the general principles regarding the regular rate. So all compensate, generally speaking, all compensation for hours worked or services rendered or performance needs to be included in the regular rate. So Again, that maybe sounds simple enough as well, but it starts to get a little more complicated in determining, well, is something actually compensation for hours worked or not, or for services or performance? And that's where it can... often get a little bit tricky. So for example, some things that sort of obviously need to be included in the regular rate are things like non-discretionary bonuses. If it's a bonus that's dictated by a formula, you hit a certain production target or whatever it may be that's defined by formula, it's non-discretionary. If you hit those numbers, you get a bonus pursuant to a particular formula or something. That's pretty straightforward, pretty clear that that needs to be included in the regular rate. So that type of compensation is going to increase the regular rate. It's going to increase, therefore, the amount of overtime compensation that is owed, how much overtime premium is owed, if the employee works overtime during that same period. But some other things that maybe are less obvious. So per diems and stipends, those may need to be included in the regular rate as well. And I say may because it's not always clear-cut. It often depends on how the program actually works. There may be per diems that do not need to be included in the regular rate. There may be some that do need to be included in the regular rate, depending on how they operate and how they function and how the program is set up. Shift differentials is another thing that likely needs to be included in the regular rate. If an employee is getting paid extra to work certain shifts, say an overnight shift, things like that, weekend shifts, and there can be much more. I'm going to talk about a few kind of maybe somewhat common kind of bonuses that come up when we're speaking, when we're talking about employee recruitment and retention. So referral bonuses.
SPEAKER_01:Yeah, Gary, can I ask a question about this? And maybe you're going to cover it, but how does it work when a bonus might be earned over a period of time, but it's paid in a given time? Does that impact the regular rate for when it's paid or for the entire time when the bonus was being earned.
SPEAKER_02:Right. So generally speaking, the regular rate is going to be calculated and that incentive compensation bonus or whatever it is, is going to be factored in over the period of time for which it's earned, which may not necessarily be when it's actually paid. It might be paid sometime after the end of a period, such as a monthly bonus that's paid the following pay period after the close of the month or quarterly bonus that's paid sometime in the following quarter. But generally, you're going to look at the time period for which the compensation was earned. So if it's a monthly bonus, that's probably going to be the month to which it applies. If it's a quarterly bonus, it's going to be likely the quarter, the three-month period over which you actually earned that bonus. And that's where with some of these types of bonus programs I'm going to talk about, it can be a little unclear about what that period is. So a referral bonus, a bonus where an employee gets some sort of bonus when they refer a successful candidate for hire. Generally, that does not need to be included in the regular rate, although there are some caveats. And I should say sort of at the beginning that Generally, I'm going to be kind of speaking in terms of federal law, FLSA. Many times state law tracks what the FLSA would require, but there can be some deviations. And so certain state law may be more protective of employees. For example, I practice in California and it's sort of notoriously more protective of employees in many instances compared to the FLSA. So I'm going to be talking sort of usually in general terms under the FLSA, but always be mindful of what state you're operating in and whether there could be differences under state law in terms of what needs to be included in the regular rate or how it needs to be calculated. So a referral bonus... Like I said, generally not included in the regular rate, assuming that it's a voluntary program. These efforts don't involve significant amounts of time. And it's really done after hours amongst friends and colleagues and neighbors and acquaintances. It's kind of in a social setting. It's not really supposed to look like work. A retention bonus. So a bonus that's, say, you earn because you get hired and remain employed for a certain period of time. Those generally do need to be included in the regular rate. And I'm going to talk in a moment, Tim, about sort of related to your question, which is, well, how do you figure out what period of time that applies to? A sign-on bonus. So a bonus that's a flat amount that's paid to someone when they sign on to take the job. That's sort of a maybe. It kind of depends. And one of the key factors is whether that sign-on bonus needs to be paid back if you don't remain employed for a certain period of time. And if you do have to pay it back, if your employment ends, let's say within a year or whatever the time period is, then it may need to be included in the regular rate because then it really, even though it might be called a sign-on bonus or a signing bonus, it really functions as a form of retention bonus in many ways. So I mentioned retention bonuses can get complicated. So let me just kind of give an example to illustrate that. Let's say, an employee has an offer letter that says that they get a retention bonus that's sort of in several tiers. It's$500 upon completing the first 90 days,$1,000 upon completing the first year of employment, and then$5,000 upon completing the second year of employment. So we kind of have three different payments that arguably cover different periods of time. It's probably pretty clear that the first$500 for the first to complete the first 90 days, that was earned over the first 90 days of employment. But what about these next payments, the subsequent payments, that$1,000 that was earned when you hit your one-year anniversary? Was that just earned for days 91 through 365? Or was it earned over that whole year because you had to be employed over the entire year? Same with that... second anniversary bonus of$5,000. Is that just for the second year of employment or was it earned over the first entire two years of employment? And this may depend on how it's described in the offer letter and how it actually, what the description is and what the plan documents say. So again, definitely a gray area, but pay attention to the details because it could depend on how it's worded, how it's communicated to the employee. Per diems is something else that can get tricky. I think ostensibly per diems are usually kind of considered some sort of payment for expenses that an employee might incur when they're traveling away from the regular workplace. So for example, travel nurses and the like. However, sometimes they can function more as a payment for services rendered rather than reimbursement for expenses. So for example, let's say you get a flat amount per week Um... If it doesn't vary based on how many hours you worked and the services performed, then that may be properly treated as reimbursement for expenses, not wages for services rendered. But sometimes it can fluctuate. So for example, if there's a connection, courts will look at the connection between the payment and hours worked. Does the per diem go up if your hours worked increase? Or does it go down if you work fewer hours? It may depend on whether the per diem is paid regardless of whether costs are actually incurred. And it could also depend on whether the employee is required to provide any sort of attestation regarding costs that were incurred. And if it fluctuates based on hours worked, if you're getting it regardless of whether you actually incur costs, and if you don't have to actually demonstrate that you incurred any costs Then a court may look at that and say, that really is compensation for hours worked. And that would be basically treated almost like just an additional wage that you're earning. And that may need to be included in the regular rate. So be very careful when you're dealing with per diems, how exactly that program works, how it's structured and how it's paid. A
SPEAKER_01:lot of- If you're at a stopping point, I just had a thought and I wanted to just get your thoughts on it. I mean, all of this stuff, when you start talking about calculating differently from 91 to 365 and one to 90 and per diems and all this stuff, I mean, it strikes me that that counsels employers to simplify things and pay a higher rate up front, but it strikes me that the talent pool has an expectation of bonuses and other types of compensation that are separate from your base pay or your base salary. I don't know if you want to react to this, but I just think it's an interesting self-fulfilling prophecy that employers have started doing stuff like this and then your competitors have to do it as well because it's what the talent pool is expecting.
SPEAKER_02:I think that's a good point. I often deal with feel questions from employers where they're sort of paying a certain way. It's like, well, why are you doing it this way? This seems perhaps more complicated than it needs to be. Sometimes the answer is, well, that's what people expect. They don't see a per diem. For example, they're not going to be happy. You know, they're going to feel like somehow it's lesser, even if maybe they're getting a higher hourly rate.
SPEAKER_01:Yeah. And then, of course, the counter being if you're going to gross it up on the front end and end up paying people a significantly higher hourly rate, there's going to be a ton of people who don't work out. And so you've sort of anchored yourself at that point of, hey, this is what we pay. And I could see that being a, creating a separate business problem. So, but it is interesting that these stuff gets so complicated and it is sort of what people expect to see in their offer letters.
SPEAKER_02:Yeah. And if we're talking about per deems and specifically, it can also be tax consequences and that can be a motivation. If it's done properly and it's treated as reimbursement, the employee may not owe taxes on that. If it's If you eliminate the per diem and just increase their hourly rate, then that's all taxable. So that can make a difference to employees as well. And I suppose employers need a balance like... the benefits that come through simplicity versus the risks that come from maybe a more complicated program, one that may be viewed as more competitive or desirable for employees. So I think it's smart for employers to always kind of go through that analysis and not just sort of jump on a bandwagon without thinking about why they're doing it, what those legal consequences are.
SPEAKER_01:It's kind of the converse of what I see in the exempt versus non-exempt space. And when we went back and forth with various changes to the exemptions and changes to the salary basis test, I had conversations with people about like, well, just make that person hourly if it's going to be complicated. And it's sort of the same thing because there is a stigma is not the right word for it. But, you know, people have an expectation of being salaried, even though from an economic perspective, they might be better off to be to be non-exempt. So it's kind of one of those things, how the culture developed around FLSA. And we have to we as lawyers and counselors have to, you know, work that into our analysis.
SPEAKER_02:Right. And when you talk about classification issues, then, you know, normally you might think, well, these employees are classified as exempt. We don't have to really, we can pay sort of whatever we want. We don't have to worry about overtime and regular rate. And that's generally true if they're properly classified. But if that classification gets challenged, then all of these other incentive compensation bonuses, et cetera, that you're paying on top of salary suddenly might need to get retroactively included in the regular rate for damages and suddenly, you know, you might have, you know, in hindsight, you say, well, I never would have paid them this way if I had realized that. So that's something.
SPEAKER_01:Yeah, it all sounds great until you find out that they're not actually exempt. Right. And you might not find that out until you're well down the road in litigation.
SPEAKER_02:Right. And in California, where I practice, generally, when there is a misclassification case, whatever compensation you pay them, salary, bonuses, et cetera, that's considered compensation only for non-overtime hours. And there may be an opportunity to calculate it differently under the FLSA, but that can be very punitive for employers in California where, say, you're scheduled to work 50 hours a week and you get a healthy salary for that. Well, if you're deemed to be misclassified, the law in California is going to say that salary, no matter how high it was, was only for 40 hours per week. And now you have automatic overtime. And what's more, that overtime premium under California is going to be for all those hours above 40 or above eight in a day it's going to be time and a half so you're gonna you get really hit um hard so we're not really delving into classification issues today but it's always in the background when you are classifying people as um exempt there's that risk that if you don't get it right or if it's challenged then all these other things we're talking about come come into play and can be um you know expensive to say the Employers often with staffing shortages and recruitment challenges and retention challenges often are looking for new and innovative ways to attract and retain employees. They're coming up with new bonus plans, new incentive compensation plans that don't necessarily fit the traditional molds of a regular bonus or a retention bonus or whatever. There, I think you have to be especially careful and really understand how that compensation benefit program works. And here's just an example. And this is one that I mentioned during our, when we spoke at the annual meeting earlier this summer. And this comes from just an example from a publication that I saw where a company had a star system for home caregivers. It was a home care company. And there was this like star system that you earn different ways in terms of performance and hours and whatnot. And then you earn these points essentially, and those all got kind of wrapped up into this point system where then you could choose certain benefits. You earned a certain number of points and then a certain number of points might allow you to select a certain benefit and more points may allow you to select a different benefit. And so then the question there may be like, well, okay, how does that work? If you earn more stars by working more hours or doing a better job and your performance or the services you're providing, then those are things that may need to be included in the regular rate. I don't know, Tim, if you've seen other examples in your practice of sort of kind of creative bonuses that employers are doing that might, you know, kind of perhaps raise flags about whether there could be regular rate implications.
SPEAKER_01:Yeah, I mean, anytime I don't do a ton of wage and hour litigation or counseling, but, you know, whenever I see, especially in the healthcare space, because we know there's shift differential and all sorts of things that are at play here. And, you know, I mean, I do damages calculations all the time and leading up to mediation, okay, well, what's this person's, you know, what are their lost wages to date or what do we think their lost wages through trial are going to be? And it gets, yeah, really complicated when you're looking at, okay, well, they were 40 in this pay period and they were 35 at a shift differential and then they had this bonus and that bonus. And, you know, it gets really complicated. So absolutely. And when you are, you know, in real time trying to, you know, calculate it, because, of course, that's the other thing that's interesting here is that no one, of course, in 2025 is sitting there doing the math themselves here. And I know that there are employers that are, you know, oh, gosh, the payroll system made a mistake. Well, guess what? You know, the court doesn't necessarily care about that, at least depending on the jurisdiction that you're in. Because if the data got put in incorrectly and somebody got shorted what they were owed, we're responsible for how we calculate it, even when it's being done by a third-party payroll processor. I
SPEAKER_02:even sometimes hear from employers that, well, our payroll system won't allow us to do that, to calculate this or do a certain calculation, and that can be problematic. The last thing I want to talk about in terms of wage and hour issues is what I call boot up claims, which is kind of what it sounds like. An employee, generally all employees nowadays need to get onto a computer system to work. And computers take time to boot up. On, it needs to boot up. You may need to get into certain internal programs or platforms to do your job, whether it's timekeeping platforms or other types of platforms. And all of those programs take time to open, booting up, turning the computer on, then logging into a certain program, etc. And we're seeing more and more claims and lawsuits over this issue. And sometimes it may be what you might think is very small amounts of time, a few minutes here and there, but those can arise, those can give rise to claims and can add up. And courts will look at, under federal law at least, you know, whether the time is de minimis is still an issue that under the FLSA they'll look at, but they'll also look at whether that time is integral or indispensable to their principal activity. So if you need to use a certain program to do your job and you need to log on and boot up and get into that program before you can really start your work, then there may be a good argument that that is compensable time, at least if it's not de minimis. But I know, I don't When I get in in the morning and I turn on my computer, it takes several minutes before I can really do anything on the computer.
SPEAKER_01:It's funny you say that because one of my first jobs before law school was working in a call center. And I'm just now remembering as you say it that, I mean, I never went and did the math on this, but they always said that, oh, well, you start getting paid as soon as your first call is placed. And there's all this logging in and dialing up in the old days of how it works. And I'm sure that would not fly, at least in 2025, from a boot-up perspective, and probably didn't fly back then either, but nobody knew.
SPEAKER_02:And call centers is where a lot of these cases have arisen, and that's where we see these claims a lot. But you can also see it with other types of remote employees. So a lot of employees are working, maybe doing, say, something, operating as a call center, right? But they're not going into an office necessarily. They're working from home, or they're doing maybe some sort of telehealth function or whatever it is. an administrative function and they're doing it from home. And when they get their coffee and go into their second bedroom or whatever and home office and turn on their computer, that might take a few minutes. And you might think, well, they're just at home. They're not really working, but that could arguably be compensable. So with remote employers, it's something to think about. And kind of speaking of remote employees, that was another topic we want to cover today. Tim, do you want to talk a little bit about kind of some of just sort of the key considerations when you're dealing with a remote workforce? Maybe, you know, including like, well, if they're working remotely, they could be potentially working from anywhere. You know, what law applies to these people?
SPEAKER_01:Yeah, absolutely. And I mean, you know, I referenced it a bit ago, but I mean, talk about the law having to grow up to meet the cultural moment. I mean, the example I always give to people is every And of course, there was remote work before the COVID-19 pandemic. But I think we're just in such an entirely different world. And I always have been, for the last five years or so, been giving people the example of the employer that I was working with. I believe it was immediately before the pandemic, like January or February of 2020. And they had an employee. It was a local company. It was not a national company that had offices all over. But they had an employee. who was effectively doing an office job, you know, white collar, worked at a computer, you know, type job. And he or she, I won't say, give any more details, but had a medical condition that had arisen. And lo and behold, the doctor that this employee was seeing was in an entirely different state and just so happened to be nearer to the employee's family. And so it was one of these situations that creates a lot of suspicion among the employees. about, oh, this employee now wants to work remotely with their child in another state because the specialist that they're seeing, that's where that specialist is based. And just to give an example of how we're just in a totally different world than we were five and a half years ago, this was, again, an office job where you dial up and you're working on a computer all day and taking phone calls. And I remember being told and believing it pretty strongly Oh, well, this this job can't possibly be done remotely. You know, that's that's almost scoffing at it. Now, fast forward a few months and I was doing my job remotely. Huge swaths of the economy were doing their jobs remotely. So so, yeah, it creates it's it's it's a whole new world in that sense. And while I do think there's a little bit of a again, I don't want to say backlash, but I think the pendulum has swung a little bit, you know, more towards, you know, back in the 80s. office, and I think we'll continue to see that pendulum swing back and forth, you know, putting aside what's the best, you know, what's the best business function, you're going to have people who want to work remotely or need to work remotely due to, you know, an accommodation issue. And we went over it, you know, in our talk in July. It triggers just about every imaginable issue. I remember, you know, if you're thinking to take the workers' compensation perspective on it. If somebody falls down the stairs at their house, that's very likely not a compensable work comp injury. But if they injure themselves on a piece of equipment that they're using to do their job, particularly something that you've provided them to do their job, that very likely is a compensable work comp injury. So yeah, it triggers wage and hour. It triggers tax. I know my partners who practice in immigration regularly get questions from their clients in terms of, oh, well, this employee is going to work from Spain or is going to work from Australia next semester or next year. Please let me know how that works. And we've gotten so far down this path that sometimes people have to be reminded like, well, that's a question of Spanish law. That's a question of Australian law and Australian immigration or tax law. So, I mean, it just goes to show you how far we've gotten into the remote workforce And other than in the accommodation space being a big part of it. So I do want to talk a little bit about that because you're going to get, before I launch more and more into the accommodation space, you're going to get more and more requests for accommodations to work remotely. And you're going to need to evaluate that from the typical reasonable perspective, engaging in the interactive dialogue, the same as you do everything else. But you do before, if and when you grant those types of accommodations, You're going to want to consider all sorts of wage and hour, all sorts of other labor and employment issues, which I know our slides are probably available. We went over the whole litany of them. But yeah, as Gary was just alluding to, the boot up idea of wage and hour, how does that work in a remote employee? We all know, I think, from a basic wage and hour perspective, that if we're aware that somebody is working, then even if they're not supposed to be working that time or if they weren't permitted to work overtime or something like that, if we're aware that they're working, which I think you can look at all the technological ways that we're aware that our employees are working. I mean, even 15 years ago when I first started practicing, I was dealing with cases of, you know, oh, this person was responding to text messages and emails long after their working hours. So how can we possibly say we weren't aware that they were working? I think as the technologies increases, and our ability to monitor people's keystrokes and stuff like that, it's going to get more and more difficult to say there's no clock in, clock out, leave the office type thing in the remote workspace. Gary, what do you see from a wage and hour perspective in the remote work world?
SPEAKER_02:Well, I think a couple of things jump out. One is tracking time worked. just like in an office job, if you're working remotely, you still have to be, you know, just as rigorous in keeping track of employees' time. And I think when employees are working remotely, non-exempt employees really is what we're focused on in this discussion is there may be a tendency to be a little more lax, right? It's like, well, I kind of work. The employee might be like, well, I'm kind of working throughout the day, taking little breaks when I want to, whatever. It's flexible. That works for that employee, right? But it still is important to accurately and rigorously track employees' hours work. So if they're working sort of on and off throughout the day, they should be clocking in and out on and off throughout the day and accurately recording when they start and stop in states that, well, even under federal law, if you're going to give people meal breaks, and especially in states that mandate meal breaks, you need to be rigorous about that as well. Again, there might be a tendency to think, well, they're at home, they can kind of take breaks whenever they want. We don't have to really worry about that. Well, you still do, and you need to document them. And you need to make sure, you know, you're still complying with all the legal requirements that would apply to an at home, or I'm sorry, an in office in when they are working from home. So that's something that's really important. And you mentioned, you know, I think keystroke monitors, like those are some technologies that maybe is sort of the flip side of timekeeping, which is monitoring whether employees are really working, right? And are they working the hours that they're recording? That can be another concern. And you mentioned like times keystroke monitors and whatnot, which can be somewhat sometimes controversial. So, you know, employees might feel like they're under a surveillance state when employers are doing that. But again, from both perspectives, tracking time and monitoring hours worked and time worked is really important.
SPEAKER_01:Yeah, and you allude to it, but there is a flexibility in remote work and there are people who are much more traditional that don't like that. But I'll tell you, it's here to stay. And when you've got that level of flexibility, it brings in the ultimate labor and employment question of are we treating similarly situated people equally, right? So it's a nightmare scenario of, oh, I've got two people who work remotely, you know, one of whom gets to take breaks and clock in and out whenever he or she feels like it as long as they do a full eight. But this person who works remotely, if there's an argument that I'm not allowing them to have that privilege or to have that same flexibility, or my in-office employees, I'm not allowing them to have that flexibility. You know, that's a recipe for, you know, some sort of disparate treatment claim, and maybe rightly or wrongly, but it's a problem whenever you've got employees who are theoretically subject to the same standards and job descriptions and stuff like that, who are being managed, even if by different people, but especially by the same person in an entirely different way. So, you know, that's the ultimate thing to think about is, are we treating everybody equally as much as possible.
SPEAKER_02:Yeah. And another thing that jumps out to me in terms of wage and hour issues is expense reimbursement for remote employees and whether you need to be in need to and or should be reimbursing employees for all those remote work expenses, whether it's using their cell phone, because probably many times when employees are working remotely, they're using their personal cell phones to communicate their Internet service because they most likely need to add access company systems. So under the federal law, under the FLSA, expense reimbursement is not required unless it would actually, you know, those expenses that are unreimbursed would actually sort of effectively drop your compensation below minimum wage. But some state laws like California, where I practice, do require expense reimbursement, and there's other states out there as well. California tends to be at the forefront of this, but there's other states out there that have expense reimbursement. laws. And California has, for some years, courts have found that if you're required to use a cell phone for work, the employer needs to reimburse a portion of your cell phone plan. And that's true, even if you have, say, an unlimited calling and data plan. So you're not actually spending any more money to use it for work, and you would have had it regardless of work. Well, California law says you need to, employer needs to reimburse a portion of that, because they can't, like, pass those expenses on to the employee. And that's been sort of extrapolated to other types of remote work expenses like potentially internet. And the law is really evolving in this area, but there's a variety of other types of expenses that at least arguably might need to be reimbursed, say, in California and potentially other states that have expense reimbursement requirements like not just cell phone and internet, but maybe your electricity, because if you're working from home, you're using more electricity during the day. Maybe you're heating, air conditioning, maybe arguably some portion of the space that you use. So if you have a spare bedroom that you've turned into a home office and you use that for work, well, maybe there's an argument that some portion of your mortgage or rent the employer is on the hook for because you're essentially, you know, that's an expense that you're arguably incurring and using for work. And I've seen those in California, those kinds of claims asserted. The law isn't really settled on how far that can be taken, but plaintiffs are certainly making those arguments. So I think that you'll probably see more and more of that in other states. But even if you operate in a state where expense reimbursement is not mandated, there's still going to be the question of, are you going to choose to inverse employees for those expenses because there may be an expectation that you will. And then there's a couple of different ways you might approach it. You might have an employee actually turning their actual expenses. This was my phone bill this month. This was my internet, whatever. That can get burdensome from an administrative standpoint. You might also choose to just pay a flat stipend per month, which is much simpler. But then the question about what's the right amount is always sort of There's not really no like bright line rules and determine exactly what the right amount is. And there can be advantages and disadvantages to a stipend. Obviously, a stipend is easier to administer. It's predictable. Employees don't have to submit bills or anything like that. It's just, you know, let's say$75 a month,$50 a month,$100 a month, whatever it is. And that's going to say arguably cover all your remote work expenses. So in the disadvantages, though, is you might be potentially over-reimbursing employees. You might be under-reimbursing them. And then another risk is that it may be taxable as wages, because under IRS rules, if you're paying them employees a remote work stipend that covers sort of all of their remote work expenses without any need to submit bills or anything, then that may be treated as taxable wages. In contrast, I think under the IRS rules, if it's just a cell phone reimbursement plan, you can do a flat that stipend, that's not taxable. But if it's not just a cell phone reimbursement plan, but it's some broader reimbursement plan that's intended to cover a variety of expenses, and you just do it as a flat amount, then that may be taxable. So now the employee might have to pay taxes on that, needs to be reported. You might have to think about, well, do we need to gross it up to account for that? So it can get complicated, even in states that aren't requiring reimbursement. But if you choose to do that, then there's There's a very, you know, various considerations and they can have, you know, legal consequences. I know, Tim, you were starting, you had talked about complications in the remote work setting, but I know that this is an area of law where there's a lot of, you know, a lot of emerging issues, a lot of, you know, it's not, there's, it seems like there's you know, the types of things that need to be accommodated just keep growing and the laws keep expanding in this area. So what are some of the kind of, you know, kind of beyond just the remote work setting, but just really what are sort of some of the key sort of emerging accommodation issues out there?
SPEAKER_01:Absolutely. Yeah. I'm going to talk, I'm going to bring us home here and I'm going to talk about, you know, both religious accommodations, which were subject to a fairly recent Supreme Court decision and And it isn't, I'll just say upfront that religious discrimination, religious accommodation issues are not things that I've seen come up a ton in my practice, but it does when there's an important case like this that comes out, it is important to remind ourselves of what's going on here. And I will also say that we've been told by EEOC that claims of religious discrimination, claims of failure to religiously accommodate under the new administration are being given higher scrutiny, and that can impact how EEOC is conducting an investigation, how EEOC is conducting conciliation discussions, and that's the context that I've seen it discussed recently about, was in the context of a conciliation agreement, that certain things, certain terms, because it was a religious case, had to go up to a higher level of approval. So, yeah, I'm going to talk about both Title VII religious accommodations, and so I'll talk about that for I think that we all understand what the non-discrimination elements of Title VII deal with. Obviously, we don't take any employment actions, hiring, firing, promotion, demotion, all those things. We don't make those based upon anything other than job-related issues. That includes race, gender, and it does include religion. Where ADA and Title VII religious Religious are the two major points where employers have positive obligations beyond just the negative obligations of, well, don't discriminate, don't do this. Religious is the area and disability, which I'll talk about second, where employers do have affirmative obligations to go beyond. And where this comes up is where there's a conflict between a religious practice and an individual's job. So one of the big things to think about is what is religion? I mean, that's a philosophical question, and I would tell you that under Title VII and under EEOC guidance, it's much broader than we might think of in the colloquial sense. Obviously, take any of the major religions in the U.S., you're going to have dozens or even hundreds of denominations that are practicing it quite differently, and they are united by what might seem to an outsider to be very small similarities. And so that means that I've had tons of people come to me. I'll use pandemic as an example. We had lots of accommodations requests associated with vaccine mandates. We had lots of accommodation requests associated with masks. And we had those not only in the ADA space, but in the religious space as well. And I had people tell me, well, that's not what the Bible says, or that's not what that means that that person is saying. And the problem is that because there's that huge diversity and because inherently of the First Amendment, we're not going to get courts coming in and telling somebody, well, that's not really what your religion says or you're not practicing that correctly. And when you explain it to people in that sense, that it really does impact a First Amendment consideration that the government is not going to get involved in those kinds of decisions. And then that means that you're going to own Yeah. And that's that's tough. That's tough to push back on. And really, the only context in which I've seen that be successful is when you have contemporaneous, real time, you know, evidence that the employee is not being sincere. Like if you're able to go to their Facebook or you're having other employees who they're telling, hey, that I'm not really believe I don't really believe this. I'm just saying it because I want to get that day off or I'm just saying it because I don't want to take the COVID vaccine. or something like that. Other than that, you're not going to win on whether something is sincerely held. You can ask for supporting documentation. I always worry a little bit when we get into the question of asking for supporting documentation. And also, just from a practical standpoint, it's probably not going to get you anywhere because there is no real rule about, well, what qualifies as supporting documentation. documentation that's going to support the employee's position. I've had people, and as frustrating as it was, I had people that were downloading things off of a certain website that were even for sale in terms of, hey, here's a document that's going to prove your religious accommodation. Or it could be something as simple as a letter from a practitioner or a clergy figure to provide that supporting documentation. And we're talking about this, the converse in the disability space in a minute, but you kind of, when you kind of have to start with the assumption that you're not going to win on the idea of is it sincerely held, is it really even a religion, because EEOC has guidance that lots of things that don't qualify in my mind of what, in the colloquial sense of what is a religion, it doesn't have to be something that's widely practiced, it doesn't have to be something that's formally practiced, it doesn't have to be associated with any known sect or denomination. It can even be things that really veer more into the philosophical of EEOC has guidance that it has to concern ultimate ideas about life, purpose, and death. And unfortunately, the boundaries of this are really governed by the fact that there thankfully aren't tons of these types of claims and there aren't tons of employees who are out there really pushing the boundaries of this. I think we got to the point in the COVID pandemic of seeing people really kind of push the boundaries of what they were willing to say was their religion. You can certainly come up with lots of hypotheticals about, well, what if I said that this was my philosophy and does that qualify as a religion? You're not usually going to see those kinds of issues come up in reality. So the recent case was Groff v. DeJoy, which was decided by the Supreme Court a few years ago and dealt with a postal worker. And the specific facts of it dealt with mail delivery on Sunday, which, of course, when I was growing up, there was no mail delivery on Sunday and it was no issue. But with the advent of e-commerce, there became more and more and more and more private deliveries through the USPS. And ultimately, Mr. Groff was ultimately came to a head with the Postal Service over being required to work on Sundays. Ultimately, the Supreme Court ruled in this to overrule the standard for what is an undue burden under a TWA case from the 70s, I believe. And the TWA case had taken the position that anything beyond a de minimis burden on the employer is an undue burden. Groff rejects that and says that's far too narrow, and it ultimately is, they don't take this position, but ultimately saying that such an employer friendly standard is not going to fly and reaches the point that that if it's creating substantial increased cost in relation to the conduct of a particular business, then you might be in the area of undue burden. So really, this is bringing Title VII religious accommodations fairly in line with disability accommodations under ADA, which is what I'm gonna talk about next. And ADA and its state corollaries, these are, again, really thorny issues. And especially when you work in the confluence of, I mean, you may have an employee situation that impacts ADA accommodations, it might impact FMLA, it might impact your own company's personal STD or LTD, short-term disability, long-term disability policies, and also work comp. And whenever I have a case, you always have to really think about it in all of those different areas. I mean, I I've had employers who would take the position of, Oh, we don't, we don't provide light duty. And then when you really dig into it, then you find that they do provide light duty all the time for a work comp injury. So that's just an example of, well, we can't accommodate that with light duty, except that we do accommodate light duty in other situations and creating the inference that we're treating ADA accommodations in a less favorable light. Um, and, and just very recently I dealt with a case of, um, a person who, when their FMLA expired, was immediately let go. And the idea was that, well, they must have applied for LTD, and that's why. We weren't able to find that proof. So reasonable accommodations are what are important. This is a tough one that lawyers say a lot, the word reasonable, but it makes it very circumstantial. In the ADA space, there are not a to create a new job for somebody. You don't have to grant indefinite leave. And removing an essential function is not going to be a reasonable accommodation. I'm going to put a big asterisk on that last one, because what are the essential functions? And I will just tell you that it's great to have job descriptions. It's great to say that these are the essential functions. If you're going to fight over whether or not something's an essential function in litigation, that's going to get to the space of of, well, okay, you put on paper that those are the essential functions. How does the job work in reality? We are getting pretty close to the end of our time. So I'm going to wrap up here. But Gary, did you have anything you wanted to add on the ADA front or other types of accommodations?
SPEAKER_02:No, no, nothing to add. I thought that was great. You hit on some of the really key emerging issues. And I think with the religious accommodation, it's interesting because I think that's an area where we've had a really significant shift in the law here in just recent years. So even I remember the beginning of the pandemic operating under one standard and now we're operating under different standards.
SPEAKER_01:Yeah. And, you know, religion and politics are a recipe for disaster in the workplace sometimes. But thanks for everybody for tuning in today. Gary, it was great to see you again. I hope you all caught our presentation last month. And I know AHLA is very excited about the 2026 annual meeting in New York. It's been, I guess, many years since they've had it in New York. And I know I'm excited about that and look forward to seeing you all there as well.
SPEAKER_02:Thanks a lot, Tim. This was
SPEAKER_01:fun.
UNKNOWN:See you, Gary. Bye.
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UNKNOWN:you