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Pension Woes Spread Beyond Central States

A special master appointed by the U.S. Treasury Department rejected the Central States Pension fund rescue plan proposing deep benefit cuts, concluding that it couldn’t prevent the fund from collapsing.

Treasury’s Special Master Kenneth Feinberg told reporters he rejected the Central States request because of flawed investment assumptions (including an overly optimistic 7.5% rate of return; failed to distribute the benefit cuts equally among members; and sent notices to members that were overly technical and difficult for them to understand.

“We took all that the retirees said to us in our various town hall meetings under consideration,” Feinberg said.

The Teamsters Central States and Southwest Area Pension Fund wanted to slash benefits by up to 60% for 403,0000 retirees because the fund can’t afford to pay full benefits (AA, 12-15-15, P. 2).

Because it existed as a defined benefit plan in a deregulated trucking industry, Central States became financially unsound when the number of retirees collecting benefits exceeded employer contributions by Teamster trucking employers.

In recent months Central States has been joined by four more plans seeking benefit cuts, including the Teamsters Local 469 Pension Plan based in Hazlet, NJ. In 2014 it reported assets of $122.6 million and liabilities of $279.9 million. If approved, its plan cuts would impact an estimated 1,781 participants.

Other plans requesting permission for benefit reductions include the Iron Workers Local 16 fund in Baltimore, and Local 17 plan in Philadelphia.

“These actions highlight the risk that employers contributing to multi-employer funds are now facing,” says Paul Friedman of the Jackson Lewis law firm. “It is not beyond the realm of possibility that the burden of providing the promised benefits will fall even more heavily upon employers.”

Gays & Immigrants Top EEOC Agenda

Equal pay for women, and gay and immigrant rights are among the top issues on the Equal Employment Opportunity Commission’s agenda, agency attorneys told a recent legal conference.

In March the EEOC filed its first two lawsuits involving allegations of sexual orientation-based harassment and discrimination framed as claims of unlawful “sex discrimination.”

In addition to focusing on sexual orientation discrimination, the EEOC also recently filed federal lawsuits alleging unlawful sex discrimination against transgender individuals.  

EEOC recently proposed increasing the pay information employers are required to report to bolster its ongoing campaign against gender-based pay discirmination (AA 2-15-16, P. 1).

In April an EEOC equal pay charge was filed by five leaders of the U.S. Women’s National Soccer team against the U.S. Soccer Federation.

They charge that the players on the U.S. men’s soccer team are paid disproportionately more although the women’s team has had far better success on the field, dramatically increased the sport’s popularity, and raised substantial revenue for the federation.

EEOC and other federal agencies also are taking a close look at employers’ E-Verify practices and  whether noncitizens are being asked for more or different information to establish their identity or worker eligibility than U.S. citizens.

For example, EEOC is taking a hard look at whether U.S. citizens are told they can present a certain type of documentation, but non-U.S. citizens are asked to provide multiple forms of identification.

Of particular interest is software used by employers to streamline the application process, but which might identify and reject certain applications based on improper criteria, such as national origin.

Simply Being Obese Is Not a Disability

A federal appeals court has ruled that obesity is not a “disability” covered by the Americans with Disabilities Act, unless the condition was caused by some underlying physiological disorder.

On the other hand, if the applicant or employee develops a medical condition stemming from obesity, such as diabetes or hypertension, then it would be considered a disability.

The case heard by the Eighth Circuit U.S. Court of Appeals involves an applicant who saw a job offer from BNSF Railway withdrawn when medical examination showed that he had a Body Mass Index of 40.9 (he was 5’10” and weighed 285 pounds). BNSF’s policy was not to hire anyone with a BMI of 40 or higher.

The company created the policy because it believed people in this category are more likely to develop medical conditions that it didn’t want to deal with.

Keep in mind that a BMI of 25 to 29.9 is considered overweight, and a BMI of 30 or higher is considered obese. However, in spite of his weight, the applicant had no known medical conditions or limitations.

The appeals court judges found that the applicant was not disabled because he had no underlying medical condition that caused his obesity, nor any medical conditions that had resulted from it.

He wasn’t seen as disabled by BNSF, which regarded him only as someone with a too high BMI, the court determined. Refusing to hire someone because of fear that unhealthy habits could lead to health problems does not violate the ADA, either, the judges held.

The panel also refused to follow another decision involving BNSF where the Montana Supreme Court, relying on the 2009 ADA Amendments Act to interpret a state disability law, ruled that morbid obesity was a protected disability regardless of its cause or effects.

“As wellness programs take increased importance, this is a big issue to follow,” notes attorney Robin Shea of the firm of Constangy Brooks Smith & Prophete.

Retailers Overwhelmed by Regulations

The expanding scope of government regulation imposes increasing burdens on America’s small retail businesses and hinders their ability to create jobs and drive economic growth, research conducted by an industry association shows.

These are the conclusions drawn from a new survey report released recently by the National Retail Federation.

“Overregulation is undermining the resolve of small retailers,” declares NRF President Matthew Shay.

“To fulfill their role in driving the American economy, small businesses need the freedom to make the decisions that make sense for them instead of being burdened by one-size-fits all mandates.”

NRF worked with market research firm GfK to survey retail small business owners to gauge their views on the business environment, the health of their businesses and whether public policies that affect their operations support or hinder prospects for growth.

The policy implications couldn’t be more clear, Shay says. “It’s time for lawmakers, policymakers and candidates to take a hard look at how burdensome regulations are stifling America’s entrepreneurial spirit.”

The survey reveals that while small retailers are generally optimistic about the future, they are increasingly worried about the growing volume and cost of government regulations. Among the findings:

  • The vast majority (81%) say regulations weaken the appeal of owning a business.
  • Nearly seven-in-ten (69%) say they are “overwhelmed by regulations, rules, and mandates,” including labor regulations, health care mandates, tax codes and safety guidelines.
  • Worst of all, many believe the regulations imposed on them aren’t effective, NRF says.

Less than half (44%) said they believe that government regulations achieve the objectives they are supposed to meet.

Concerns were consistent regardless of political ideology and age, with majorities of conservatives and liberals, Millennials and older generations all saying they were worried about the impact of regulations.

The survey also looked at attitudes toward specific policies. NRF says that 79% of small retailers support efforts to lower federal tax rates by eliminating tax loopholes, and 73% of small retailers are concerned by the complexity of the federal tax code.

Nearly 60% believe that proposed fines for companies who utilize flexible employee schedules because of changing worker demands or business needs would hurt their businesses.

Small businesses suffer the most damaging impact from proliferating regulations, notes NRF. It points out that of the nearly 3.8 million retail establishments doing business in the U.S., 98% have fewer than 100 employees.

Overtime expansion proposed by the U.S. Department of Labor would likely result in negative consequences for nearly half (44%) of small business owners, the NRF survey also found.

More disturbing during this wave of minimum wage hikes taking place in states and cities throughout the U.S. is that more than one-third (37%) of small retailers say raising the minimum wage to $15 per hour would either cause their business to fail or threaten its existence.

Despite what retail small business owners put up with from their government, they remain optimistic about the future of their businesses and the economy, NRF says. “Even with a regulatory burden that is often complex and overwhelming, national small businesses continue to be the driving force behind American economic growth.”

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