As a service to our clients in Vermont, BDS has summarized many of the key federal laws adopted over the years to protect employees from unfair or illegal actions in the workplace. Compliance with these laws and subsequent regulations is important since the penalties for non-compliance can be substantial and implementing these laws is relatively straightforward. Also keep in mind that Vermont may have its own mandates, which we have, to the extent possible, incorporated into this summary. Finally, please be advised that this is only a summary of each statute and cannot possibly cover all aspects of the law. For your convenience we have included the name of the department responsible for each law and a link to its website.

Of course you are welcome to Contact BDS if you have any compliance questions.

• ADA – AMERICANS WITH DISABILITIES ACT – TITLE 1 – 1990
• ADEA – AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1978
• THE CIVIL RIGHTS ACT, TITLE VII OF 1964 and THE PREGNANCY DISCRIMINATION ACT – 1978
• COBRA – THE CONSOLIDATED OMNIBUS RECONCILATION ACT – 1985
• ERISA – EMPLOYMENT RETIREMENT INCOME SECURITY ACT, TITLE 1 - 1974
• FMLA – FAMILY AND MEDICAL LEAVE ACT – 1993
• HIPAA – HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT - Credit for prior medical coverage
• HIPAA PRIVACY REQUIREMENTS – THE PRIVACY RULE and THE SECURITY RULE
• USERRA – THE UNIFORM SERVICES EMPLOYMENT AND REEMPLOYMENT RIGHTS ACT

ADA – AMERICANS WITH DISABILITIES ACT, TITLE 1 – 1990 (effective date: July 26, 1994)

GENERAL PROVISIONS: Prohibits discrimination on the basis of disability against a qualified individual with respect to any term, condition or privilege of employment, including job application procedures, hiring practices, advancement, job training, compensation, employee benefits, discharge and all other aspects of employment.

EMPLOYERS SUBJECT TO THE LAW: Employers with 15 or more employees in a typical work week in the current or preceding calendar year.

EMPLOYEES PROTECTED BY THE LAW: Candidates for employment and employees with physical and/or mental impairment that substantially limits one or more major life activities, even though the individual can perform the essential functions of the job.

PENALTIES FOR NON-COMPLIANCE: Compensatory and punitive damages for intentional discrimination subject to certain limitations. Attorney’s fees and those of expert witnesses may also be assessed.

LAW ADMINISTERED BY: DOJ – U. S. Department of Justice, EEOC – Equal Employment Opportunity Commission, www.ada.gov

ADEA – AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1978

GENERAL PROVISIONS: Prohibits employment discrimination on the basis of age (40 years of age or older), but permits a reduction in the level of some group benefits (other than health insurance) for older workers, so that the cost is no greater than for younger workers. With few exceptions for executive positions, compulsory retirementis no longer allowed.

EMPLOYERS SUBJECT TO THE LAW: Employers with 20 or more employees working for at least 20 work weeks in the current or preceding calendar year. The employer must be engaged in an industry affecting commerce.

EMPLOYEES PROTECTED BY THE LAW: All workers 40 years or older. As far as employer benefits are concerned,certain benefits, but not health insurance, can be reduced as a worker increases in age, especially when he/she turns 65. The law permits age reduction schedules for life insurance, benefits and reductions in short- term and long-term disability insurance plans for workers aged 65 and older.

PENALTIES FOR NON-COMPLIANCE: Employers may be required to reinstate an affected employee and purge his/her personnel record of any adverse and illegal action taken by the employer and may also be liable for back pay, liquidated damages and legal fees.

LAW ADMINISTERED BY: DOJ – U. S. Department of Justice, EEOC – Equal Employment Opportunity Commission, www.eeoc.gov/types/age

THE CIVIL RIGHTS ACT, TITLE VII OF 1964 AND THE PREGNANCY DISCRIMINATION ACT - 1978 (a federal amendment to the Civil Rights Act)

GENERAL PROVISIONS: Prohibits discrimination on the basis of race, color, creed, religion, sex or national origin. The 1978 federal amendment requires that women affected by pregnancy, childbirth or related medical conditions be treated the same for employment-related purposes. VERMONT has extended the act to protect against discrimination on the basis of sexual orientation.

EMPLOYERS SUBJECT TO THE LAW: Employers engaged in interstate commerce that employ 15 or more employees for at least 20 work weeks in the current or preceding calendar year. The 1978 amendment protects women of child-bearing age and pregnant workers.

EMPLOYEES PROTECTED BY THE LAW: All employees in each of the protected classes. The Pregnancy Discrimination Act also applies to male employees if the discrimination affects the receipt of fringe benefits to spouses covered by those same benefits.

PENALTIES FOR NON-COMPLIANCE: Compensatory and punitive damages for intentional discrimination subject to certain limitations as well as attorney’s fees and charges for expert testimony.

LAW ADMINISTERED BY: DOJ – U. S. Department of Justice, EEOC – Equal Employment Opportunity Commission, www.eeoc.gov/types/

COBRA – THE CONSOLIDATED OMNIBUS RECONCILATION ACT – 1985

GENERAL PROVISIONS: Requires employers give notice to terminated employees and their dependents (called qualified beneficiaries) to elect, within a specified period of time, to continue health care coverage, typically up to 18 months, but under certain circumstances up to 29 or even 36 months. VERMONT requires employers of 2 to 19 employees to offer continuation of health coverage for up to 6 months, often referred to as VIPER.

EMPLOYERS SUBJECT TO THE LAW: Employers with 20 or more employees on at least 50% of working days during the preceding year offering group health plans (medical, dental, vision, EAP and flex plans) and/or retirement plans. Church and governmental plans are exempt from COBRA.

EMPLOYEES PROTECTED BY THE LAW: All employees eligible for the employer’s welfare benefit plan(s) or pension retirement plan(s), provided, however that an employee dismissed for gross misconduct forfeits his/her rights to continuation coverage. Long-term care coverage is not subject to COBRA rules. States, political subdivisions and governmental agencies are covered by parallel COBRA provisions under Public Health Service Act, Title XXII.

PENALTIES FOR NON-COMPLIANCE: Employer is required to pay excise tax of $1,000 per day per qualified beneficiary ($200/day/family) denied coverage to a maximum depending on the type of plan(s) and the nature of the violation. Suits may result in monetary damages and attorney’s fees. The carrier or TPA may also be assessed an excise tax.

LAW ADMINISTERED BY: ESBA – Employee Benefits Security Administration, U. S. Department of Labor, www.dol.gov

Downloadable COBRA Documents:

Employer Responsibilities		PDF		Word
Continuation of Coverage (For Employee)		PDF		Word

ERISA – EMPLOYMENT RETIREMENT INCOME SECURITY ACT, TITLE 1 - 1974

GENERAL PROVISIONS: Provides minimum consistent standards for employee benefits and retirement plans. Also establishes reporting and disclosure requirements.

EMPLOYERS SUBJECT TO THE LAW: All U. S. employers, including a group of employers, offering employee benefit plans and/or pension benefit plans, except for church and governmental plans maintained solely to comply with worker’s compensation, unemployment compensation or state disability laws.

EMPLOYEES PROTECTED BY THE LAW: All participants (employees or former employees and their dependents entitled to benefits under the Plan) who are or were eligible for the employer-sponsored welfare benefit plan(s) and/or employee pension benefit plan(s). Employees are protected from retribution by an employer due to a participant exercising any right to which he/she is entitled under ERISA.

PENALTIES FOR NON-COMPLIANCE: Penalties vary according to the provision(s) of the Act that is violated, but may include fines up to $1,000 per day for failure to file Forms 5500 and 5500C, as well as criminal penalties for willful violations.

LAW ADMINISTERED BY: ESBA – Employee Benefits Security Administration, U. S. Department of Labor, www.dol.gov

FMLA – FAMILY AND MEDICAL LEAVE ACT – 1993

GENERAL PROVISIONS: Requires employers to grant eligible employees up to 12 weeks unpaid leave (with some exceptions) each year for the birth or adoption of a child, the care of a child or spouse or parent with a serious health condition or for the worker’s own serious health condition that makes it impossible to perform his/her job.

EMPLOYERS SUBJECT TO THE LAW: Employers with 50 or more employees within a 75 mile radius working 20 or more calendar weeks during the current or preceding year. Part-time employees and employees on unpaid leave are included in the count. Law applies to non-profit organizations, governmental entities and Congress.

EMPLOYEES PROTECTED BY THE LAW: Any employee who has worked at east 1,250 hours during the previous 12 months at a location where the employer had at least 50 employees within a 75 mile radius.

PENALTIES FOR NON-COMPLIANCE: Employees may sue for loss of wages and benefits caused by a violation of the Act. An employer should have a clear written family-leave policy that is consistently enforced.

LAW ADMINISTERED BY: DOL - U. S. Department of Labor, www.dol.gov

HIPAA – HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT - Credit for prior medical coverage August 21, 1996 (effective date: July 1, 1997)

GENERAL PROVISIONS: Protects the right of new employees or employees who previously waived medical insurance because of prior medical coverage, to transfer the credit of such prior coverage to eliminate or reduce the new carrier’s period of time to deny claims due to a pre-existing condition limitation in the policy. VERMONT’s law is less restrictive: for employers with less than 50 employees, a newly hired employee must show evidence of only a 9-month period of comparable prior coverage and is allowed up to a 90-day gap in coverage during this prior 9-month period to qualify for protection under HIPAA.

EMPLOYERS SUBJECT TO THE LAW: All health plans of all employers regardless of size. Employers, carriers or TPA’s are required to issue Certificates of Creditable Coverage for employees who lose their health benefits due to a layoff, leaving the job, or reduction of hours so as to no longer be considered an eligible employee. This Certificate serves as evidence of prior creditable coverage.

EMPLOYEES PROTECTED BY THE LAW: All employees who can demonstrate evidence of “Creditable Coverage” in the form of a Certificate of Creditable Coverage from a prior carrier. If an employee can show evidence of 12 months (9 months in Vermont) of continuous coverage (18 months for late enrollees) with a gap in coverage of no more than 63 days (90 days in Vermont), then the new carrier is required to cover and pay claims on medical services or treatment for a pre-existing medical condition.

PENALTIES FOR NON-COMPLIANCE: Compliance and penalties are shared between an employer and the carrier/TPA. Penalties for non-compliance are up to $100 per day for each offense.

LAW ADMINISTERED BY: HHS - U. S. Department of Health and Human Services, www.hhs.gov/ocr/hipaa

HIPAA PRIVACY REQUIREMENTS – THE PRIVACY RULE (effective date April 14, 2004)
HIPAA PRIVACY REQUIREMENTS – THE SECURITY RULE (effective date April 21, 2006)

GENERAL PROVISIONS: A second major provision of HIPAA prohibits employers, health insurance carriers, TPA’s, medical providers, business associates (i.e. agents) or any person or entity from disclosing either intentionally or unintentionally or inadvertently Protected Health Information (PHI), as defined in the Act, of any individual who is participating in a health plan, without express written authorization of the patient and then only to the designated individual(s) or entity.

EMPLOYERS SUBJECT TO THE LAW: All health plans of all employers regardless of size.

EMPLOYEES PROTECTED BY THE LAW: All employees participating in any of the employer-sponsored benefit plans including medical, dental, vision, flex, short-term or long-term disability and/or EAP plans.

PENALTIES FOR NON-COMPLIANCE: General non-compliance of HIPAA security, privacy and electronic data interface (EDI) can result in fines up to $100 per violation, $25,000 per person for all identical violations in a calendar year. Specific non-compliance with the Privacy Regulations: $50,000 fine and imprisonment for one year if knowingly obtaining or disclosing individual PHI.

LAW ADMINISTERED BY: HHS - U. S. Department of Health and Human Services, www.hhs.gov/ocr/hipaa

USERRA – THE UNIFORM SERVICES EMPLOYMENT AND REEMPLOYMENT RIGHTS ACT (October 9, 1996)

GENERAL PROVISIONS: Prohibits discrimination against an employee who is a member of, applies to be a member of, has performed, applies to perform, or has an obligation to perform service in a uniformed service, including the Reserves and the National Guard. VERMONT’s Military Leave Law requires employers to grant up to 15 days annual leave to non-temporary employees who are in a military reserve unit.

EMPLOYERS SUBJECT TO THE LAW: All employers regardless of size.

EMPLOYEES PROTECTED BY THE LAW: Employees who are assigned to serve their country are protected for their initial employment, reemployment, retention in employment and action(s) by person(s) attempting to enforce these protections. Employee must provide advance notice to the employer unless precluded by military necessity and the employee must report back to work in a timely manner. Seniority is accrued as if there was no interruption on the job.

PENALTIES FOR NON-COMPLIANCE: Complaints should be directed to the Veterans Employment and Training Services (VETS) and if not resolved, can be submitted to the U. S. Attorney General. Also a complainant may file private court action. Awards can include back pay and/or lost benefits and fines may be doubled in cases of “willful” disregard of the law.

LAW ADMINISTERED BY: OSC – U. S. Office of Special Council, www.dol.gov/vets and osc.gov/userra.htm