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HR and Tax Newsletter - September 2004

Fair Labor Standard Regulations on Track for August 23, 2004

Congress adjourned without blocking the implementation of the new wage hour regulations. However there is a risk that the regulations may be nullified by Congressional action either later this year or next year. Although some commentators are concerned about legal action to nullify the regulations, the likelihood that a lawsuit would be successful is small.

Supreme Court Limits Effect of Plan Amendments

The Supreme Court has held that retirement plans covered by ERISA cannot be amended if the amendment reduces the value of a participant's accrued benefit even if the reduction in value is the result of a contingent condition that may never occur. The amendment before the Supreme Court provided for a suspension of benefit payments if a retired participant took a supervisory position. Read broadly this case can be applied to any plan amendment that imposes a significant condition on the receipt of a benefit. Central Laborers' Pension Fund v. Heinz.

Religious Discrimination Lawsuits Increasing

Religious discrimination claims are up 30 percent since 2000. Claims involve both employer and employee religious activities. Employers who attempt to impose their religious beliefs on employees by, for example, having them sign a company prayer, risk liability for a hostile religious environment. On the other hand, employers must sometimes deal with employees who oppose company policy on religious grounds, for example, an employee who wishes to wear a button that attacks the beliefs of others. In these cases the employer must make a reasonable accommodation, such as allowing the employee to wear the button in the workplace but only if covered up. A third type of conflict can arise when an employee who tries to impose religious beliefs on customers. The courts have concluded that in the situations employer should try to separate the employee from customers that might be subject to proselytizing. They have also concluded that employers do not have to allow employees to impose their religious beliefs on customers.

Three tips:

If a company offers bible study accommodation to one denomination it should offer them to other denominations.

Anti-harassment policies should include religious harassment.

Do not ignore complaints based on religious activities.