Following our earlier articles on Mandatory Coverage, we have had several questions about how/whether this applies in various common scenarios.

On July 1, 2013, Michigan's new arbitration law takes effect. The Revised Uniform Arbitration Act, Act 371 of 2012, addresses multiple private arbitration issues.

This is a continuation of our effort to help small employers understand what they need to know about the Affordable Care Act (ACA). Last month, we sent out an article focusing on ACA changes through the 2013 plan year. In this installment, we will discuss changes that the ACA will make in 2014.

In early February, the U.S. Department of Labor issued new Family and Medical Leave Act (FMLA) regulations that take effect on March 8, 2013. Changes in the regulations deal with expansion of the FMLA’s military leave provisions.

The U.S. Immigration and Customs Enforcement (“ICE”) audits hit a record high in 2012. All indicators point to a new record in 2013. Employer audits increased from 250 in fiscal year 2007 to more than 3,000 in 2012. From 2009 to 2012, fines increased dramatically from $1 million to $13 million. More than 238 company managers were arrested in 2012, according to ICE data. The Obama Administration has pledged to continue its aggressive approach to ICE audits. Indeed, all of the immigration reform packages currently being debated in Washington, DC include specific provisions for increased work authorization review and enforcement.

On Tuesday, February 12, 2013, Ingham County Circuit Judge Rosemarie Aquilina rejected the lawsuit filed by union activist Robert Davis challenging the Michigan Right-to-Work law. The lawsuit sought an immediate injunction against the enforcement of the law. The Court denied the request on procedural grounds, concluding that the case should have been filed directly with the Michigan Court of Appeals.

In late 2012, the lame duck Legislature quickly pushed through the Michigan Right to Work Law which makes it illegal to require an employee to financially support a union as a condition of employment.

What is an F-1 visa and who qualifies?

An F-1 visa allows foreign nationals to come to the U.S. as full-time students enrolled in a program leading to a degree or certificate. An F-1 student applicant must:

U.S. Citizenship and Immigration Services (“USCIS”) initiated the Entrepreneurs in Residence (“EIR”) initiative by launching an online resource center to assist entrepreneurs in navigating the complicated U.S. immigration system. The resource center, Entrepreneur Pathways, provides entrepreneurs who seek to start a business in the U.S. a simple way to navigate the immigration process. The initiative is in response to recent criticism of its often cumbersome immigration system that makes it difficult for aspiring entrepreneurs without U.S. passports to start businesses in the U.S. Two immigration options currently exist for foreign entrepreneurs.

On December 28, 2012, Governor Snyder signed the Social Network Account Privacy Act, which prohibits employers from requesting “access information” associated with “social networking accounts” for prospective and/or current employees. The law is designed to protect against employers requiring its employees or prospective employees to disclose access information to personal accounts as a requirement for employment. This practice gained national attention earlier this year when it was reported that job applicants were being required to submit their login information for Facebook accounts as part of the application process. The new law prohibits employers from requesting an employee or applicant to disclose access information associated with a social network account and from discriminating against an employee or applicant who fails to disclose the access information. The penalties for violating the law are both criminal and civil in nature. Violation of the act may be a misdemeanor, subjecting the violator to imprisonment up to 93 days and/or a maximum fine of $1,000. A victim may also bring a civil action to recover actual damages or $1,000, whichever is greater, and reasonable attorney fees and court costs.

Trademark owners should be aware of increased potential for trademark infringement from the implementation of new top level domains. Generic Top-Level Domains (“gTLDs”) appear at the end of Internet addresses (for instance, .com and .net), and are used to direct traffic online. In 2012, the Internet Corporation for Assigned Names and Numbers (“ICANN”) completed a registration period for corporate applicants to seek to register custom gTLDs. The applications include a number of industry applicants (for instance, .baby, or .basketball).

After our earlier Affordable Care Act (ACA) articles, ACA - What Must A Small Employer Do? - Part 1 - Issues Affecting Employers of All Sizes and ACA - What Must A Small Employer Do? Part 2 - Mandatory Coverage, clients asked for more information about calculating the “size” of the employer, i.e. the number of employees. At 50 full time employees, the pay-or-play penalties kick in. If an employer has 200 employees, then the automatic enrollment requirements apply. The requirement to include the value of the insurance coverage on the W-2 applies for employers that issued 250 or more W-2s in the prior year.

Employers must be careful about restricting their employees’ use of social media. While this area of the law is still developing, the National Labor Relations Board (the “NLRB”) continues to maintain its recent position that social media is the contemporary equivalent of a lunch-room or water-cooler chat among employees. As a result, social media dialogue will generally be protected by federal labor laws if the discussion arguably relates to wages, hours of work, benefits or other terms and conditions of employment.

All employers must learn about the Affordable Care Act (ACA). Most employers have been or will be significantly affected by the ACA. We will attempt to sort through this enormous body of law so that all employers, large andsmall, will have an understanding of where they fit and what their responses should be.

On December 31, 2012, Governor Snyder signed into law Public Act 497 of 2012 which provides that beginning December 31, 2013, a transfer of residential real property is exempt from uncapping property taxes if the transfer is to family members of “the first degree of kinship” and the use of the residential real property does not change following the transfer. This means that you can transfer your cottage or other residential real estate to your parents, siblings, or children without having to worry about the property taxes being reassessed at fair market value.

After much dissension and political maneuvering, Congress finally provided some certainty regarding estate and gift taxes at the end of 2012 by continuing permanently the $5,000,000 estate and gift tax exemption. The exemption, originally adopted for 2011, is adjusted for inflation and after adjustment the exemption was $5,120,000 in 2012 and is $5,250,000 for 2013. The adjustment will occur annually so that it will keep pace with inflation over time. The top marginal estate and gift tax rate increased from 35% to 40% under the new law. The new law avoided part of the “fiscal cliff” which would have reduced the exemption to only $1,000,000 and a 55% tax rate.

U.S. Department of Labor regulations require employers pay employees on H-1B work authorizations at least the prevailing wage. Similarly, the U.S. DOL prohibits employers from demanding employees pay H-1B government filing fees. In 2012, the DOL debarred a Washington information technology company from participating in the H-1B program for two years, assessed $405,000 in civil money penalties, and ordered payment of almost $1 million in back wages for pay related violations.

What is DACA? On June 15, 2012, President Obama announced a new plan to assist undocumented youth. It is not a new law, or even a regulation. It is not a long-term solution nor does it grant legal status. However, this program is a way for undocumented young people to ask the U.S. Immigration Service to exercise prosecutorial discretion to let them stay for two years at a time. DACA can also lead to a two-year work permit and a social security number.

Employers that use background checks, credit reports, etc. in making employment decisions are required to comply with the Fair Credit Reporting Act (FCRA). That Act obligates employers to inform applicants and employees if such reports (which are considered "consumer reports") may be used, to provide certain disclosures, and to obtain written authorization before securing and using the reports. If a “consumer report” will be the basis for “adverse action” such as a refusal to hire or a discharge, the employer must also provide a “pre-adverse action” notice to the applicant or employee and follow up with an “adverse action” notice containing specific information required by the Act.

Employers evaluating job candidates have an abundance of information at their fingertips. Most background checks, and sometimes a quick Google search, will reveal a candidate's prior arrest(s), regardless of whether he/she has ever been convicted of a crime. Employers should think twice, however, before using arrest and/or conviction records in making employment decisions.

Our July 2012 issue reported that in the case of Department of Environmental Quality v. Worth Township (May 17, 2012), the Michigan Supreme Court held that pursuant to Part 31 of the Natural Resources and Environmental Protection Act (“NREPA”) a municipality can be held responsible for, and be required to prevent the discharge of raw sewage originating from private septic systems within its borders. The Michigan Supreme Court remanded the case to the Michigan Court of Appeals, however, for a determination as to whether a Department of Environmental Quality directive and court order compelling remediation efforts constitute an unfunded state mandate in violation of the so-called Headlee Amendment, which prohibits the State from imposing unfunded mandates on local units of government.

In the case of City of Detroit v. Michigan (July 10, 2012), the U.S. District Court for the Eastern District of Michigan held that the Michigan Uniform Video Services Local Franchise Act (the “Uniform Franchise Act”) did not violate the Michigan Constitution, but that a key provision of the Act was preempted by the federal Cable Communication Policy Act (the “Federal Cable Act”).

Since 1980, the Emergency Municipal Loan Act, MCL 141.931 et seq., (the “Emergency Loan Act”) has authorized the State of Michigan’s Local Emergency Financial Assistance Loan Board (the “Emergency Loan Board”) to make emergency loans to financially-distressed counties, cities, villages, and townships under specified circumstances. Generally, emergency loans under the Emergency Loan Act are made from state surplus funds and, under most circumstances, the obligation to repay an emergency loan is a general obligation of the recipient municipality. On August 1, 2012, Governor Rick Snyder signed Public Act 284 into law, with immediate effect, to expand the eligibility criteria, to increase the amount of State funding for emergency loans, and to extend the maximum term of emergency loans from 20 years to 30 years. In addition, school districts, which were not previously eligible for emergency loans from the Emergency Loan Board, were added to the definition of “municipality” for a seven year period commencing retroactively on October 1, 2011, and continuing until September 30, 2018.

Our firm will host its annual hospitality reception at the Marriott Renaissance Center, Suite 6812, on Tuesday, January 22, from 4:00 to 8:30 p.m. If you will be attending the Conference, we invite you to visit us at our hospitality reception for snacks and refreshments. We look forward to seeing you.

In 1994, Michigan’s voters approved “Proposal A.” A key feature of Proposal A limited annual increases in property tax assessments to the lesser of 5%, or the rate of inflation, until a property is transferred. The calculated tax assessment is called the “taxable value.” The local assessor still keeps track of the “state equalized value,” (“SEV”) which is theoretically one-half of the property’s market value. When the property is transferred, the taxable value is automatically increased to the SEV– usually referred to as “uncapping.”

Michigan is finally administering a procedure for “Medicaid recovery” of financial support paid under the Medicaid system. Medicaid is a needs-based program to provide long-term nursing care (among other purposes). To qualify for Medicaid, a single person must have $2,000 or less of “countable” assets. Among the few assets which are not “countable” is the person’s homestead with up to $500,000 in equity (adjusted for inflation). In addition, term life insurance policies without a cash value are not countable assets.

The use of “Lady Bird Deeds” has become common in Michigan is a way to pass property upon death. The name comes from the mechanism that President Lyndon Johnson used to pass property to his wife, “Lady Bird” Johnson on his death. Some lawyers call these “enhanced life estate” deeds.

Tim Tornga assisted author Julie Appleby with an article published in USA Today, Perk may bring pain to some company pockets, on Thursday, May 9, 2013. The article focused on employer health care plans, and how they could be discriminatory.

Richard M. Wilson, Jr. will be a speaker at the First Annual Joint Conference of Northern and Southern Michigan County Road Commissions on Thursday, September 5, 2013. The Conference will be held at Boyne Mountain Resort in Boyne Falls, Michigan, and the Conference starts at 7:30 a.m. Richard will speak on road laws and his presentation begins at 2:30 p.m. Please contact the County Road Association of Michigan for more details on the Conference.

Jennifer A. Puplava will be a featured speaker at Trivalent Group’s 2013 Solutions Expo on Wednesday, June 12, 2013 at Frederik Meijer Gardens. The Expo opens at 7:30 a.m., and Jennifer will speak at several times during the Expo on Big Insights vs. Big Challenges: Legal Risks and Issues Associated with the Collection, Analysis and Use of Big Data. For more information on the Trivalent Group 2013 Solutions Expo, please visit: expo.trivalentgroup.com.

Nathaniel R. Wolf will be the featured speaker at the Grand Rapids Bar Association Labor & Employment Law Section Meeting on Wednesday, June 5, 2013 at the University Club in Grand Rapids. The meeting starts at noon and Nate will speak on Immigration Reform and Its Impact on the American Workplace. For more information on the GRBA Labor & Employment Law Section Meeting, please contact the Grand Rapids Bar Association.

A long-standing Manistee, Michigan law firm joined the Grand Rapids firm of Mika Meyers Beckett & Jones on May 1, 2013.

The Customized Workplace English™ Program of the Literacy Center of West Michigan is hosting an Immigration Reform Seminar on April 12 and Nate Wolf will lead the seminar.

Amy L. VanDyke has become a member of the firm.

The firm recently elected the following lawyers to its Management Committee for calendar year 2013: William A. Horn (Chair), John T. Sperla and Ronald M. Redick.

Mark A. Van Allsburg was recently featured in MiBiz’s 2012 Crystal Ball Issue. Mark was asked to give input on where he saw the economy going in 2013 and how that would that influence the energy industry and Mika Meyers Beckett & Jones.

James R. Brown was named by Best Lawyers as Grand Rapids’ Municipal Lawyer of the Year and Larry J. Gardner was named by Best Lawyers as Grand Rapids’ Oil & Gas Lawyer of the Year.