September 2018 Updates in Labor and Employment Law

Minnesota’s Minimum Wage Increases Beginning January 1, 2019

            Effective January 1, 2019, Minnesota’s minimum wage will increase.  Large employers (annual gross revenues of $500,000 or more) will be required to pay employees $9.86 per hour (up from $9.65 per hour).  Small employers (annual gross revenues of less than $500,000) will be required to pay at least $8.04 per hour (up from $7.87 per hour).  The youth wage (under 18 years of age) and 90-day training wage (under 20 years of age) also increase from $7.87 per hour to $8.04 per hour.  These wage rates will not apply to work performed in Minneapolis because of the city’s higher minimum wage ordinance, which is $11.35 for employers with more than 100 employees and $10.25 for employers with 100 or fewer employees.  (These Minneapolis rates are effective through June of 2019, with another increase July 1, 2019).  The City of St. Paul is also considering a higher minimum wage of $15.00 per hour. 

New Fair Credit Reporting Act (FCRA) Form Required

            The Consumer Financial Protection Bureau issued updated model disclosure forms under the FCRA.  The FCRA requires various notices and protections for persons whose backgrounds are being investigated.  As of September 28, 2018, employers must use a new model summary of rights, which can be found at https://files.consumerfinance.gov/f/documents/bcfp_consumer-rights-summary_2018-09.docx.  Employers that obtain background checks from third parties during the hiring process should ensure that they are providing the new FCRA form to applicants and obtain appropriate authorization before obtaining the background check information. 

USERRA Claim Allowed to Proceed When Veteran Applied to Position at Different Location of Prior Employer      

            In Scudder v. Dolgencorp, LLC, 900 F.3d 1000 (8th Cir. 2018), the United States Court of Appeals for the Eighth Circuit held that members of the military who apply for new jobs with their former employers upon returning from deployment are protected by federal law which requires companies to rehire veterans.  The Court ruled that the Uniformed Service Employment and Reemployment Rights Act (USERRA) requires employers to rehire any veteran who applies for “a position of employment,” with their prior employer.  The plaintiff, Scudder, was a sergeant in the Arkansas National Guard and was hired by Dolgencorp, d/b/a Dollar General in 2013.  He was deployed to Afghanistan in 2014, where he was injured, and then spend about fifteen months in recovery.  In 2016, Scudder contacted Dollar General, stating his former supervisors had not responded to his inquiries about returning from leave.  He asked Dollar General’s contracted leave administration company if he was required to “put in [his] two weeks,” which the administrator interpreted as a resignation.  In response, Scudder sent an email stating that he wanted to continue working for Dollar General.  He received no response.  He also applied online for a position managing a different Dollar General store in Arkansas, noting he had worked for Dollar General before he was deployed.  He was not hired. 

            Scudder sued Dollar General for violating USERRA by refusing to reinstate him upon returning from military leave.  Dollar General argued that Scudder’s application for the manager position was not a “demand for re-employment” under USERRA because he was not seeking to be reinstated to his old job.  The lower court dismissed the case, but the Eighth Circuit reversed.  The Eighth Circuit determined that USERRA requires only that military veterans apply for “a position of employment” with their former employers and notify them of their return from leave.  Scudder met that bar in his online application by noting his prior experience with Dollar General and the fact that he left for a deployment. 

            This case serves as a reminder for employers to maintain direct contact with employees on any form of leave. This will help avoid communication missteps and ensure a smooth transition back into the workplace.

Lawsuit Over Health Insurance Coverage for Gender Reassignment will Proceed

            A lawsuit against Essentia Health and HealthPartners regarding denied coverage for gender transition care has been allowed to proceed past a motion to dismiss.  Tovar v. Essentia Health, No. 16-cv-100-DWF-LIB (D. Minn. Sept. 20, 2018).  Plaintiff Brittany Tovar was an employee of Essentia and received health insurance benefits.  She later added her son as a beneficiary.  He was diagnosed with gender dysphoria, and his doctors deemed gender transition care medically necessary.  His doctor recommended that he begin taking two medications to treat gender dysphoria.  Tovar sought coverage for these medications as well as pre-authorization for gender reassignment surgery for her son through the plan, but HealthPartners, Essentia’s health plan administrator, denied coverage.  At that time, the Essentia plan categorically excluded coverage of services for gender reassignment. 

            Tovar and her son sued HealthPartners and Essentia in the District of Minnesota federal court under the Affordable Care Act (“ACA”).  HealthPartners and Essentia moved to dismiss the case.  The judge ruled that denying insurance coverage for transgender health care is unlawful under Obama-era administrative rules interpreting the ACA.

            While the Trump administration has stated it will submit new regulations to remove transgender health protections under the ACA, it has not yet done so.  Various courts have also determined that gender identity discrimination is unlawful sex discrimination under federal Title IX and Title VII.  Employers should be mindful of these issues when selecting health plan benefits for employees. 

If you have questions regarding this article please contact Heather Bredeson (952-921-4624 or hbredeson@seatonlaw.com) or any other attorney at Seaton, Peters & Revnew, P.A.

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