A segment of the corporate world thought they had the perfect solution to avoid the requirements of the Affordable Care Act by limiting employee hours to under 30 hours a week. Now, according to the Employment law firm Fisher and Phillips, a New York based Federal Judge has allowed a case to move forward which argues that this action violates the ERISA regulations. Brought by employees of the Dave & Buster fast food chain. Fisher and Phillips points out that Section 510 of ERISA prohibits discrimination and retaliation against plan participants and beneficiaries with respect to their rights to benefits. More specifically, ERISA Section 510 prohibits employers from interfering “with the attainment of any right to which such participant may become entitled under the plan.” Because many employment decisions affect the right to present or future benefits, courts generally require that plaintiffs show specific employer intent to interfere with benefits if they want to successfully assert a cause of action under ERISA Section 510. The court found that the class of plaintiffs set forth sufficient evidence in support of their claim that their participation in the health insurance plan was discontinued because the employer acted with “unlawful purpose” in realigning its workforce to avoid ACA-related costs. In this regard, the employees claimed that the company held meetings during which managers explained that the ACA would cost millions of dollars, and that employee hours were being reduced to avoid that cost.
Sound familiar? When you make decision be sure you get legal advice regarding the other ramifications of the decision before it comes back to haunt you