Education Matters: September 2022

Education

Table Of Contents

T. Oliver Yee

| Los Angeles Savana Jefferson Associate | Sacramento Meredith Karasch

Senior Counsel | Los

Copyright © 2022

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Education Matters is published monthly for the benefit of the clients of Liebert Cassidy Whitmore. The information in Education Matters should not be acted on without professional advice. To contact us, please call 310.981.2000, 415.512.3000, 559.256.7800, 916.584.7000 or 619.481.5900 or e-mail info@lcwlegal.com.

Title

Sixth Circuit Holds Title IX Claim Does Not Accrue Until Plaintiff Knows Or Has Reason To Know Of Injury.

Dr. Strauss was a university physician and athletic team doctor at the Ohio State University (the University) who allegedly abused hundreds of young male students under the guise of performing medical examinations. The abuse occurred between 1978 and 1998. Dr. Strauss served as a physician until 1996, when the University placed him on leave while it investigated his conduct; and ultimately decided to terminate his employment with the Athletics Department. Dr. Strauss remained at the University as a faculty member. The University also did not publicly provide reasons for these decisions.

In 2018, the University conducted an independent investigation into Dr. Strauss’s conduct, which substantiated the allegations of abuse. The investigation report found that many students complained to the University about Dr. Strauss’s examinations of male students, but despite this, the University took no meaningful action to prevent the abuse. Additionally, the University required students to be examined and treated by Dr. Strauss, often implicitly making students feel that they risked their scholarships or athletic opportunities if they refused. Dr. Strauss’s victims subsequently brought Title IX suits against the University alleging that the University was deliberately indifferent to their heightened risk of abuse. The plaintiffs argued that the University knew about, facilitated, and covered up Dr. Strauss’s sexual abuse. The trial court rejected the plaintiffs’ claims as untimely and barred by the statute of limitations.

The Sixth Circuit Court of Appeals disagreed with the trial court and rejected the argument that the plaintiffs’ claims were untimely. The Sixth Court concluded that the “discovery rule” determines when a Title IX claim begins to accrue. Under the discovery rule, a claim accrues when a plaintiff knows or has reason to

know that the defendant injured them. In other words, the plaintiff must discover both their injury and its cause. In this case, the Sixth Circuit noted that many plaintiffs adequately alleged they did not know they were abused until 2018, and at the time of the abuse, they were young and did not know what was medically appropriate. Rather, Dr. Strauss gave them pretextual, false medical explanations for the abuse, and the plaintiffs did not have reason to know that others had previously complained about Strauss’s conduct. Additionally, the University’s failure to adequately investigate the complaints it received over decades against Strauss, its misrepresentations to students about its knowledge of Strauss’ conduct, and its decision to allow him to quietly step away from his university job, all blocked the students from comprehending the full extent of OSU’s enabling role in the abuse. This concealment means that the two-year statute of limitations within which the plaintiffs must bring a suit did not start at the time of the abuse but at the time the University disclosed the full extent of it.

Snyder-Hill v. The Ohio State University (6th Cir. 2022) WL 4233750.

NOTE:

This is a case from the Sixth Circuit and therefore not binding authority in California. However, this case provides educational institutions with insight on how a federal court interpreted the statute of limitations for a Title IX claim.

College’s Nonrenewal Of Coach’s Contract Was Adverse Employment Action Supporting A Title IX Retaliation Claim.

Carroll College (College) is a Catholic liberal arts college in Helena, Montana. The College employed Bennett K. MacIntyre from 2006-2016, first as the Community Living Director and later as the Associate Athletics Director. MayIntyre also received a stipend for serving as the head coach for the College’s golf team.

In September 2015, MacIntyre wrote in his employee self-evaluation that he aimed to “assist Carroll Athletics in becoming Title IX compliant.” In January 2016, MacIntyre informed the College’s Title IX Coordinator and Director of Human Resources about potential Title IX violations. MacIntyre also alleged workplace harassment, hostile work environment, and discrimination involving Kyle Baker, the Interim Director of Athletics, and Dr. Tom Evans, the President of the College.

The next month, Baker submitted a performance review of MacIntyre and gave him the lowest possible score in each category. MacIntyre then filed a formal grievance alleging, among other things, discrimination and hostile work environment. To resolve complaints, the College and MacIntyre entered into a settlement agreement in which the College agreed to remove Baker’s negative review, pay MacIntyre in back wages, and hire MacIntyre as a full-time golf coach for two years from 20162018. Meanwhile, the new Athletic Director, Charlie Gross, learned of MacIntyre’s grievances and Title IX complaints from various memos and from MacIntyre directly. MacIntyre also complained of gender inequity to a member of the College’s Board of Trustees.

Around this time, the College started experiencing budget problems because of declining

student enrollment. In June 2017, the Vice President of Finance, Lori Peterson, emailed Gross about the need for budget cuts in the athletic department, asking whether the College needed a head golf coach or whether the position was stipendonly. Two months later, Gross proposed reductions in the athletic department budget, including the recommendation to make the golf coach a stipend-only position. The Board of Trustees adopted those recommendations. As a result, MacIntyre’s pay reduced significantly and he lost some of his employment benefits.

MacIntyre filed another grievance in June 2018, alleging retaliation for complaining about Title IX violations. An outside investigator investigated his claims, but could not determine by a preponderance of the evidence that the alleged violations occurred.

MacIntyre filed a lawsuit against the College, alleging the College refused to renew his contract in retaliation of his complaints about gender inequity. The College moved for summary judgment and the trial court granted the motion, holding that MacIntyre failed to allege a prima facie case of retaliation under Title IX. Specifically, the trial court held that the nonrenewal of MacIntyre’s contract was not an adverse employment action.

The Ninth Circuit disagreed with the trial court. In order to make a prima facie case of retaliation, a plaintiff without direct evidence of retaliation must show that (1) they engaged in protected activity, (2) they suffered an adverse action, and (3) there was a causal link between the two. A plaintiff only needs to make a minimal threshold showing retaliation, and is not required to prove their retaliation claims to the level of a preponderance of the evidence standard.

The Ninth Circuit explained that an adverse employment action is one that may be reasonably likely to deter employees from engaging in protected activity, like reporting discrimination. Here, the nonrenewal of an employment contract is likely to deter a reasonable employee from reporting discrimination. MacIntyre and another coach testified that they expected their contracts to be renewed, which was enough to make a minimal threshold showing that MacIntyre suffered an adverse employment action when his contract was not renewed.

The Ninth Circuit reversed the trial court’s grant of summary judgment to the College and remanded the case.

MacIntyre v. Carroll College (2022) --F.4th ---- [2022 WL 4101176].

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CBA/Arbitration

Court Finds Broad Arbitration Clause In CBA Insufficient To Delegate Issue Of Arbitrability To An Arbitrator.

In 2018, the California Legislature passed Assembly Bill No. 705 in response to concerns that too many students were being referred to remedial courses upon entering the community college system, which they believed discouraged students from pursuing a college education and timely completing their degree. Assembly Bill 705 amended the Education Code such that a district could not require students to enroll in remedial English or mathematics courses that lengthened their time to complete a degree, unless a placement assessment shows the student is highly unlikely to succeed in transferlevel coursework. In response to this, the Los Angeles Community College District (District) sent an email to all faculty notifying them that the District removed remedial English and math courses two levels before transfer level from the Fall 2019 schedule because they were inconsistent with Assembly Bill No. 705, and would be directing students to other academic supports.

The Los Angeles College Faculty Guild (Guild) represents faculty at nine community colleges in the District. The Guild filed grievances in response to the District’s removal of the courses. When the District denied their grievances, the Guild submitted the matter to arbitration pursuant to the grievance procedure of the collective bargaining agreement (CBA). The District refused to arbitrate, stating that the claims in the grievances were outside the scope of representation under the Educational Employment Relations Act (EERA) and outside the scope of the CBA.

The Guild filed a motion and petition to compel arbitration. They argued the grievances involve violations of several provisions of the CBA that were subject to arbitration and therefore an arbitrator should decide on the issue, and not the court. The trial court denied both and dismissed the action, finding that the CBA did not delegate the arbitrability decision to the arbitrator, and so it was for the court to decide. The trial court also found that the claims were outside the scope of representation under the

EERA and therefore not arbitrable. Additionally, the trial court found that the District’s decision to cancel the courses did not violate the CBA. The Guild appealed.

The California Court of Appeal for the Second District agreed with the trial court. It found that the court, and not an arbitrator, is the appropriate entity to review the question of arbitrability when the parties do not clearly agree to submit the question to arbitration, such as the case here where the CBA did not delegate the issue of arbitrability to the arbitrator. The court also found that the District’s decision to cancel remedial English and mathematics courses was a decision about the content of courses and curriculum, a matter within the District’s discretion, and not within the scope of representation. Under the EERA, the “determination of content of courses and curriculum” are matters within the discretion of the public school employer. The court found that the District’s decision to cancel these courses was a managerial one outside the scope of representation and therefore was not an arbitrable issue.

Los Angeles College Faculty Guild Local 1521 v. Los Angeles Community College District (2022) S.O.S. 5046.

The Los Angeles College Faculty Guild Local 1521 case is a good reminder that Community Colleges may need to implement layoffs even in situations where the District is not facing a decrease in funding. Keep in mind that classified employees are now entitled to a March 15 notice and hearing process similar to faculty members. Districts are required to comply with prescriptive procedures set forth in the Education Code in implementing reductions in force. While districts will not be able to issue employee layoff notices until March 15, 2023, they should begin preparing for layoffs far in advance of March 15.

Districts should consider the following nonexhaustive list in preparation for layoffs:

1. Classified Reductions-in-Force

• Ensure the district’s classified seniority list is up to date, including:

◦ Correct dates of hire or hours worked (as applicable to each district); and

◦ Classifications held.

• Provide the seniority list to the employees and exclusive representative.

• Determine which employees have bumping rights and determine their new assignment.

• Provide notice to the classified exclusive representative of the intent to implement layoffs so that it may request impacts and effects bargaining.

2. Academic Reductions-in-Force

• Verify faculty service areas and hire dates of employees and have employees sign and date verification of current employment information.

• Update the district’s academic seniority list including faculty service areas, employee status (temporary, contract, permanent), and seniority dates. Review the following for purpose of calculating seniority dates:

◦

Ensure “look back” time in temporary status has been included when calculating the seniority date;

◦

Review temporary and part-time contracts to ensure the district provided notice of temporary status prior to the employee’s first day of work (i.e., Kavanaugh issues);

•

◦

Review temporary employee FTE to ensure the district has sufficient employees on leave to “balance” all temporary employees (other than part-time, temporary faculty members);

◦

Review part-time, temporary employee loads to ensure they have not worked more than 67 percent of a full-time load for more than two semesters in three years;

◦

Add any administrators who the district intends to release and include retreat rights to the seniority list;

◦

Ensure categorical employees are placed on the seniority list if the funding for their positions remains in place.

Provide the seniority list to the employees and their exclusive representative and notice of intent to implement layoffs so that they may request impacts and effects bargaining.

NOTE: Liebert Cassidy Whitmore is available to provide advice and counsel on layoff preparation and support districts as they navigate these issues.

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Duty of Care

District Did Not Owe Duty To Ensure Students Were Safe Against Unforeseeable Acts Of Third Party.

On April 10, 2017, Cedric Anderson entered his wife’s classroom at an elementary school in the San Bernardino City Unified School District. Anderson shot and killed his wife, a student, and himself in front of a class of students. Students who witnessed the shooting, through their guardians, sued the District for negligence and dangerous conditions of property.

The students argued that the District had a duty to take reasonable steps to protect them from criminal activity, and the District created a dangerous condition by failing to lock the front office door and equip classrooms with doors that locked. Rather, a curtain covered the entrance to their classroom. The District argued that they owed no duty to the students because Anderson’s actions were not foreseeable, the school property was not a dangerous condition because there was no defect, and Anderson was not using the school property with due care. Anderson had previously visited the school and never posed a threat or caused any problems, and his wife never informed anyone at the District of their marital issues. When Anderson arrived at the school’s front office, he said he was dropping something off for his wife. The trial court agreed with the District, and the students appealed.

On appeal, the Court of Appeal concluded that even though the District had a special relationship with the students, which gave rise to a duty to protect them, the District was not liable to the students in this case. In reaching its decision, the court analyzed foreseeabilityrelated factors, including 1) the foreseeability of harm to

the plaintiff; 2) the degree of certainty that the plaintiff suffered injury; and 3) the closeness of the connection between the conduct and the injury suffered. While the court acknowledged that this was a tragic event, it concluded that “imposing a duty on a school district to ensure that its school is safe from every trusted visitor would be entirely unfounded and unfair.” The court found the District had no actual knowledge that Anderson posed a risk of harm to his wife or anyone at the school. To the contrary, Anderson had previously visited the school without incident, and his wife never expressed any concern to family or the District about his potential for violence or her safety.

The court also noted that public policy favors against imposing a duty on school districts to ensure that students are safe from third party criminal conduct of known visitors – such as teachers’ spouses and family members. The court noted “the extent of the burden to shoulder such a duty and the consequences to school personnel would be extremely heavy. Districts would become the insurers of the safety of students in the event of any intentional harm (including from within), even if the districts have no reason to expect it. This is an unrealistic responsibility.”

C.I. v. San Bernardino City Unified School District (2022) S.O.S. 4260.

Community College Districts Student Housing Projects

– Student Housing Agreements.

The final California 2022 Budget Act significantly expanded the impact of the Higher Education Student Housing Grant Program (Program), created in 2021, by dramatically increasing funding for the Program. The Program supports one-time grants to either construct student housing, or acquire and renovate commercial properties, to provide affordable, low-cost housing options for students attending the University of California, California State University, and the California Community Colleges. The Program requires 50% of grant funding to be available to community colleges. The 2022 Budget appropriated $1.4 billion to grants under the Program, and almost $18 million to specific community college districts for the purpose of exploring whether it is feasible to offer affordable student rental housing.

Currently, few community college districts offer on-campus student housing. However, with the massive influx of funds, student housing on many community college campuses is set to expand dramatically in the next few years. Any community college district receiving funds under the Program should consider and prepare for a host of challenging legal issues regarding risk mitigation and compliance that arise when educational institutions offer housing to their students.

One way to manage risk associated with offering student housing is to ensure that a comprehensive student housing agreement is in place. This agreement should include rules and expectations of the resident students and provisions needed to protect the district. The following bullets highlight some key issues to consider when preparing these agreements.

• License Agreement: Student housing agreements should be prepared as license agreements, not lease agreements and include a provision stating that the relationship between the district and student is one of licensorlicensee and not that of landlordtenant. A license gives the student permission to use the student housing under certain terms and conditions, but no property interest in it.

• Term: Districts should include a commencement date and an end date for the license agreement to ensure the resident students are fully aware of the date they must vacate the property.

• Compliance with District Policies and Student Conduct Regulations: Student Housing Agreements should require students to abide by all District policies and student conduct regulations, and any applicable California statutes or regulations governing student conduct. Districts should also develop specific student housing policies that set standards for student conduct in student housing, including setting student expectations for privacy in student housing. The student housing

agreement should require students to acknowledge and abide by these policies.

• Fees and Payment Plans: Districts should include provisions identifying amounts students must pay for student housing. They should consider providing options for payment in full, or installment plan payment terms, and include provisions regarding penalties for failure to timely pay fees.

• Occupancy/Guests: Many community college students have spouses, partners, or children, and may seek housing not just for the student, but also for others. Districts should consider occupancy limits, in light of applicable laws and regulations, including anti-discrimination laws. Districts should also consider including policies and limitations on guests, including requiring district approvals for guests who will stay for extended periods.

• Maintenance: Student housing agreements should identify what furnishings (i.e. bed, desk, dresser) the District will provide, and potentially what furnishings students should or must provide. The agreements should also allocate responsibility for maintaining individual student housing and any common areas or shared premises. Typically, districts will be responsible for ordinary wear and tear, but students should be responsible for any damage to student housing premises caused by their or their guests negligence or specified misconduct.

housing

• Smoking/Alcohol/Drugs: Districts should include their policies and expectations for smoking, alcohol use, and drug use on the premises.

• Meal plans: Some student housing agreements also include the terms and conditions governing any meal plan for dining options offered within the student housing complex. Districts that intend to offer dining options associated with student housing should develop meal plan programs, which address meal plan terms and conditions, including meal plan options, fees, dining hall access, and student identification and meal tracking, as part of the student housing agreement.

• Security: Districts must consider and evaluate their legal obligations with respect to student security in student housing. Agreements should include provisions that address security of student housing premises, such as provisions regarding sign-in or key cards, and visitors and guests in student housing spaces.

• Right of Entry: Districts should reserve the right to enter the student housing space for any lawful purpose, including emergency, health safety maintenance, or management of applicable rules and regulations.

• Cancellation/Revocation: Districts should consider the terms by which they or the students may cancel the student housing agreements, including notice requirements and any payment obligation following

cancellation. The student housing agreement must make clear that the District may revoke the license to use student housing upon the occurrence of certain events.

Typical reasons to revoke a student housing license include failure to comply with student conduct policies, or the terms of the student housing agreement, failure to maintain minimum enrollment requirements, or dismissal from the college. The agreement should also include provisions governing the right to, and amount of, any refund in the event of revocation.

• Checkout Requirements: Districts should also consider and include provisions regarding when students must vacate assigned housing, including checkout procedures to assess cleanliness and damage, and specific fees for damage to the premises.

• Insurance and Responsibility for Damaged or Lost Property: Agreements should note, where applicable, that the district does not have insurance to cover personal property damage, and recommend students obtain insurance to cover personal property damage.

In addition to preparing comprehensive student housing agreements, Districts offering student housing will have to consider their obligations under applicable fair housing laws, such as California’s Fair Employment and Housing Act (FEHA), which generally provide that all individuals have the right to housing free from discrimination on the basis of certain protected

classes, such as age, race, national origin, religion, disability, sex, gender identity, gender expression, and marital status.

Districts must also evaluate their compliance obligations under Title II of the Americans with Disabilities Act and other federal, state or local laws that regulate accessible design in connection with providing housing for disabled students, such as those who use wheelchairs and other mobility aids. Similarly, Districts must consider their obligation to provide reasonable accommodations upon request to persons with disabilities under applicable laws protecting people with disabilities. Examples of reasonable accommodations include permitting emotional support or assistance animals for certain students even if the district has a no pets policy, or a special room type or location, such as a room on the first floor.

LCW’s Business and Facilities Practice group has a deep bench of experienced legal professionals in addressing student housing issues, including preparing student housing agreements, student housing related policies, and navigating the challenging legal and operational issues with respect to student housing.

violence

Employer Must Show A Credible Threat of Violence To Get A Restraining Order On Behalf Of Its Employee.

On March 24, 2021, Matthew Mehdi Rafat visited a local branch of the Technology Credit Union bank. Rafat made a cash deposit with the assistance of a Bank employee named M.L. The court refers to this employee by her initials only to preserve her privacy. After the cash deposit, Rafat wanted to open a business account. M.L. explained to Rafat that Bank policy prevented her from opening a business account for him on the same day he requested one. Instead, Bank policy required Rafat to first complete a questionnaire for review.

M.L. began working with Rafat to complete the questionnaire, but Rafat became aggressive, frustrated, and began belittling her once she asked the first question regarding the nature of Rafat’s business. Rafat began videotaping M.L. and kept getting closer and closer to the plexiglass screen that separated them. Rafat ignored M.L.’s repeated requests to stop videotaping her. Rafat left the Bank after M.L. eventually gave him both hers and her manager’s business cards.

Rafat emailed M.L.’s manager that same day to say that M.L. had refused to open an account for him and to ask the manager to investigate M.L.’s “refusal and slash or incompetence.”

The next day, Rafat returned to the Bank, made a video recording of himself outside the Bank, and momentarily entered the Bank to get another business card. He did not interact with M.L. while in the Bank.

On March 26, Rafat sent M.L’s manager another email attaching the video he had taken as well as threatening to both file a lawsuit and a complaint with an unnamed federal agency.

The Bank filed a request for a Workplace Violence Restraining Order (WVRO). The trial court found that Rafat was overly aggressive and lost his cool on March 24, 2021, but concluded that this conduct did not meet the WVRO standard. But, the trial court found that Rafat’s conduct on the following day did meet the WVRO standard because: Rafat had returned to the Bank; posted the video of the interaction to YouTube; and concerned M.L’s manager so much that she hired security for the Bank. Rafat appealed.

The California Court of Appeal reiterated the standard for a WVRO. For an employer to obtain a WVRO on behalf of its employee, the employer must show that the employee endured “unlawful violence or a credible threat of violence.”

The Court of Appeal found there was no unlawful violence. Next, the Court of Appeal reviewed whether Rafat made a credible threat of violence, and determined he did not. The Court characterized Rafat’s conduct as “indisputably rude, impatient, aggressive, and derogatory”. The only threats Rafat made were of litigation and a complaint to a federal agency. The only actions he took towards M.L. were berating her, complaining to her supervisor, and posting an accurate video of their March 24 interaction. This video also contained no implication nor suggestion of violence. The Court of Appeal was forced to reverse the trial court’s judgment and vacate the WVRO.

Tech. Credit Union v. Rafat, 2022 WL 3444075 (Cal Court of Appeal).

NOTE: It is becoming exceedingly common for public-facing employees to receive rude and aggressive behavior. This case illustrates the difficulty in obtaining a WVRO if no violence or threat of violence occurs. Even if the WVRO standard cannot be met, employers should give their employees a safe workplace through other means. Maintaining up-to-date security procedures can also help employees feel safe.

Did You Know?

Whether you are looking to impress your colleagues or just want to learn more about the law, LCW has your back! Use and share these fun legal facts about various topics in labor and employment law.

• The California Department of Public Health has published return to work criteria and isolation guidance addressing Monkeypox cases.

• Effective July 1, 2022 the Department of Fair Employment and Housing (DFEH) was renamed the California Civil Rights Department (CRD). On August 15, 2022 the CRD began making appropriate updates to their website, posters, and brochures, and can now be reached at: https://calcivilrights.ca.gov.

• Employers have the right to implement a non-negotiable decision prior to the completion of impacts bargaining under certain circumstances.

new to the Firm!

We are pleased to announce that Ronnie M. DeCesare, has joined Liebert Cassidy Whitmore as our newest Executive Director. Ronnie has over 20 years of leadership experience in the legal industry with a proven record for strategic business successes. He remains a committed leader who believes in fostering internal collaboration that ultimately provides our clients with the best legal counsel and superior service levels.

Seana Azad is an associate in the San Francisco office of Liebert Cassidy Whitmore. As a litigator, Seana has represented dozens of clients in arbitration and state and federal court and has experience representing clients from prelitigation through trial.

Cara Strike, an associate in our Los Angeles office, specializes in matters concerning employment and education law, and has experience litigating harassment and discrimination matters. She is also well-versed in Title IX issues and claims.

We are happy to welcome our new law clerks! Please welcome Larissa Alvarez, Morgan Johnson, Alexandra Seymour, Jophiel “Anthony” Co and Gabriella Kamran.

IRS Lowers The ACA Affordability Percentage For 2023 Tax Year – Employers Should Revisit Affordability Calculations.

In Revenue Procedure 2022-34, the IRS recently announced an important indexing adjustment related to the Affordable Care Act (ACA), providing that the ACA affordability percentage for the 2023 tax year will be 9.12%. This new ACA affordability percentage threshold is down from 2022’s percentage of 9.61%, and it is the lowest affordability percentage the IRS has set since the ACA’s Employer Mandate requirements first became effective in 2015.

Accordingly, applicable large employers (ALEs) providing health plans to their full-time workforce beginning January 1, 2023 must ensure an employee’s required contribution amount toward the lowest cost plan offered to the employee is no more than 9.12% of the threshold calculated under one of the safe harbor approaches (described below). As a reminder, an employer is an ALE if it employed an average of 50 full-time employees, including full-time equivalents, during the preceding calendar year.

The ACA affordability test is based on the employee-share of the premium for employee-only coverage under the ALE’s lowest cost provided plan (regardless of which plan the employee chooses) and in which the employee is eligible to enroll. Based on the IRS’ recent adjustments for tax year 2023, ALEs will need to assess whether the coverage it offers is affordable. The IRS provides three safe harbors for ALEs to determine whether their coverage is affordable. ALE’s must apply any given safe harbor on a reasonable and consistent basis (i.e. the same safe harbor to everyone in the same bargaining group).

1) Federal Poverty Line Safe Harbor

a. The employee’s required contribution toward the lowest-cost plan offered to the employee cannot exceed 9.12% of the federal poverty line for a single individual, divided by 12. ALEs may use the federal poverty line threshold in effect within six months before the first day of the plan year. The 2022 federal poverty line for a single individual in the contiguous 48

states (including D.C.) is $13,590. Therefore, in order for coverage to be affordable under this safe harbor, the employee’s required contribution cannot exceed $103.28, broken down as follows: $13,590 x 0.0912 = $1,239.40 / 12 = $103.28).

2) Rate of Pay Safe Harbor

a. This safe harbor assesses the affordability percentage (9.12% for 2023) based on the rate of pay for hourly full-time employees (0.0912 x hourly rate of pay as of the first day of coverage x 130 hours) and salaried full-time employees (0.0912 x monthly salary). That calculation is then used to determine the affordability threshold. If the employee’s required contribution toward the lowest-cost, employee only coverage offered to the employee is below the threshold, then coverage is affordable.

3) Form W-2 Safe Harbor

a. The Form W-2 safe harbor provides that coverage is “affordable” if the employee’s required contribution toward the lowestcost, employee-only coverage plan option does not exceed 9.12% (2023) of the employee’s wages on IRS Form W-2 in the “Box 1” section. This is generally the least utilized affordability safe harbor since employers may not be able to make determinations ahead of time as to whether their coverage will be “affordable” since form W-2 is not processed until year end.

ALE’s should also note that flex credits or cashin-lieu can negatively impact the “required contribution” amount in the above calculations. In light of the IRS’ recent indexing adjustments, ALEs should review their benefit arrangements to ensure they are still offering “affordable” coverage for the next plan year. This lower ACA affordability threshold means ALEs may need to contribute more toward employee health premiums in order to make coverage affordable.

Note:

The IRS can assess tax penalties to an ALE that offers unaffordable coverage to its ACA defined full-time employees. The penalty is triggered when an employee purchases coverage through Covered California and receives a subsidy. The ACA penalty amounts for the 2023 tax year have not yet been released, but the penalty for offering unaffordable coverage for the 2022 tax year is $4,120 annualized, per employee who is offered unaffordable coverage.

Consortium Call Of The Month

Did You Know? LCW has four community college district consortiums across the State! Consortium members enjoy access to quality training throughout the year, discounts on other LCW products and events, and unlimited, complimentary telephone consultation with an LCW public education attorney on matters relating to employment and education law questions (including questions involving governance, business, facilities, and student matters!). We’ve outlined a recent consortium call and the provided answer below. Client confidentiality is paramount to us; we change and omit details in the ERC Call of the Month.

Question: Answer:

We have an employee who has been working remotely for the last year because their doctor submitted a note recommending a telecommuting arrangement. We are hoping to begin our fiscal year with everyone working in the office. Can we revisit this accommodation?

Yes. When an employee submits a note from a medical professional requesting an accommoda-tion, the employer must engage in the interactive process. But, an employer is not required to implement the medical professional’s recommended accommodation if another option provides a reasonable accommodation. The employer can request more information about the employee’s limitations and then the employer can work with the employee to fashion a reasonable, effective accommodation through the interactive process. Because the interactive process is a continuing obligation, the employer can revisit this accommodation, request an update and more information about the limitation, and then choose an effective accommodation that works for all the parties.

If you would like to receive more information about our Consortium services or would like to join, please contact Megan Leis at mleis@lcwlegal.com.

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