Employer Advisor

Minnesota Legislative Update 2015: Responsible Contractor Law Amended to Include Motor Carriers

By: Corie Tarara

Minnesota’s 2015 legislative session officially came to a close on May 18. The following is a summary of the new laws, amendments, and other updates employers need to keep in mind.

Responsible Contractor Law – Amendments Affect Motor Carriers

The Responsible Contractor Law, enacted in July 2014, requires contractors to meet minimum criteria before being awarded publicly owned or financed projects that exceed $50,000. Significant amendments to the Responsible Contractor Law were signed into law by Governor Dayton. The Responsible Contractor Law amendments apply to construction contracts based on solicitation documents issued on or after July 1, 2015.

Motor Carriers: One of the biggest changes to the law is that motor carriers used on a covered contract will be required to meet the minimum criteria of a “responsible contractor.” A motor carrier is “a business or natural person providing for-hire transportation of materials, equipment, or supplies for a project.”

If a person or business is a motor carrier then they must now comply with several requirements.Under the law, motor carriers must verify, under oath, that they comply with certain state and federal employment laws, such as those governing: minimum wage; overtime pay; comparable wages; prevailing wages; prompt payment of wages and benefits due on termination; workers’ compensation and unemployment insurance; misrepresentation of employment relationship; and certain related penalties, among other requirements.

Motor carriers must also provide annually to each contractor and subcontractor with which it will have a direct contractual relationship, a signed statement under oath verifying that the motor carrier is in compliance with the minimum criteria.

Contractors: A contractor is not a “responsible contractor” if it “repeatedly fails to pay” statutorily required wages or penalties under certain circumstances within a three-year period. The amendments clarify that a failure to pay wages or penalties is “repeated” only if it involves two or more separate and distinct occurrences of underpayment within a three-year period. The amendments also clarify that to determine whether a contract exceeds the $50,000 threshold, the value of tax increment financing must be excluded from the calculation.

Contractors are no longer required to provide verification of subcontractors and motor carriers in response to a solicitation for a bid. Now, the apparent successful contractor must supply all subcontractor and motor carrier verifications before the final construction contract can be executed.

The supplemental verifications must include signed statements, under oath, from each subcontractor and motor carrier.

Additionally, the amendments remove the requirement that a contractor’s verification of compliance be made through a signed and notarized statement. Instead, contractors may now verify compliance electronically using an electronic signature.

Working Parents Act (WPA)

The proposed WPA was a follow-up to the Women’s Economic Security Act that went into effect last year. The bill sought to impose additional employer requirements across a broad range of topics, including reporting and disclosure, family leave, earned sick time and safe time, and also sought to expand mandatory parental or caregiver leave. The bill did not pass this session, but is anticipated to be revived next year.

Revisions to the Workers’ Compensation Statute

The workers’ compensation laws were amended to impose additional prompt payment obligations and electronic reporting requirements on self-insured employers. ***

EEOC Issues Proposed Regulations for Workplace Wellness Programs

By: Tara Adams

On April 20, 2015, the Equal Employment Opportunity Commission (EEOC) issued a notice of proposed rulemaking regarding how the Americans with Disabilities Act (ADA) applies to employer wellness programs that are part of a group health plan. At this time, the regulations are only proposed, but provide an indication as to the EEOC’s future approach to wellness program regulation.

The term "wellness program" refers to programs and activities typically offered through employer-provided health plans as a means to help employees improve health and reduce health care costs. Some wellness programs ask employees to engage in healthier behavior (for example, by becoming more active, not smoking, or eating better), while other programs obtain medical information from employees by asking them to complete a health risk assessment or undergo biometric screening for risk factors (such as high blood pressure or cholesterol).

A wellness program is considered an employee health program when it is reasonably designed to promote health or prevent disease. For example, asking employees to complete an assessment or have a biometric screening for the purpose of alerting them to health risks (such as having high cholesterol or elevated blood pressure) is reasonably designed to promote health or prevent disease.

The ADA permits employers to conduct medical inquiries and examinations of employees if the inquiry is (a) job-related and consistent with business necessity or (b) voluntary as part of an employee health program. According to the EEOC, a wellness program is voluntary as long as it: (a) does not require employees to participate; (b) does not deny access to health coverage or generally limit coverage under its health plans for non-participation; and (c) does not take any other adverse action or retaliate against, interfere with, coerce, intimidate, or threaten employees (such as by threatening to discipline an employee who does not participate or who fails to achieve.

Additionally, an employer must provide a notice clearly explaining what medical information will be obtained, how it will be used, who will receive it, and the restrictions on disclosure.

Under the proposed regulations, an employee is not “required to participate” in a wellness program if the total incentive available under all wellness programs does not exceed 30 percent of the cost of employee-only coverage.

While employers do not have to comply with the proposed rule, many of the requirements explicitly set forth in the proposed rule are already requirements under the law. For example, employers should make sure they do not require employees to participate in a wellness program; do not deny health insurance to employees who do not participate; and do not take any adverse employment action or retaliate against employees who choose not to participate in wellness programs or who do not achieve certain outcomes.

Additionally, employers must provide reasonable accommodations that allow employees with disabilities to participate in wellness programs and obtain any incentives offered. For example, if attending a nutrition class is part of a wellness program, an employer must provide a sign language interpreter, absent undue hardship, to enable an employee who is deaf to participate in the class. Employers also must ensure that they continue to maintain any medical information they obtain from employees in a confidential manner. ***