July 2012 Volume XI No. 5 Taking Care of Business
About Us Comments Unsubscribe Disclaimer

Gender Identity Discrimination is Sexual Discrimination

The U.S. Equal Employment Opportunity Commission (“EEOC”) recently held a transgender individual may state a case for sex discrimination under Title VII of the Civil Rights Act of 1964 in Macy v. Bureau of Alcohol, Tobacco, Firearms and Explosives, EEOC Appeal No. 0120120821 (April 23, 2012). Although the EEOC failed to make a determination on the merits of whether sexual discrimination occurred, it did hold discrimination based on an individual’s gender identity, change of sex, and/or transgender status was a form of sexual discrimination prohibited under Title VII and remanded the matter for further adjudication.

In the Macy case, Mia Macy was known as a male and worked as a police detective in Phoenix, Arizona. For family reasons, she relocated to San Francisco and applied for a position with the Bureau of Alcohol, Tobacco, Firearms, and Explosives agency in a crime laboratory. Macy, who was still a man while applying, was offered the position pending a security background check. While the security background was being conducted, Macy informed the officer she was in the process of transitioning from male to female. Five days later Macy was informed the position was no longer available due to budget reductions. However, Macy later discovered the position had not been cut and another individual had been hired for the position. Macy subsequently filed a complaint.

The EEOC held in its decision that Macy’s discrimination based on gender identity, change of sex, and/or transgender status was a form of sexual discrimination prohibited under Title VII of the Civil Rights Act of 1964. Previous to this ruling, gender identity discrimination was viewed as outside the scope of Title VII’s sex discrimination prohibitions. However, the EEOC reasoned “Title VII states that, except as otherwise specifically provided, ‘all personnel actions affecting [federal] employees or applicants for employment. . . shall be made free from any discrimination based on . . . sex. . .’” The EEOC further explained “the term ‘sex’ ‘encompasses both sex–that is, the biological differences between men and women–and gender.’” Yet, Title VII bars not just discrimination because of biological sex, but all gender stereotyping, meaning failing to act and appear according to expectations defined by gender. As such, the EEOC stated such discrimination based on an individual’s gender identity, change of sex, and/or transgender status was prohibited by Title VII.

Although such employment occurrences similar to the above case are rare, employers should be mindful of the recent change in federal agency law. Furthermore, employers should ensure their policies of non-discrimination and employee privacy and confidentiality cover such events which might occur in an employee’s life. Employers should consider drafting a specific transition guideline which would provide some direction to HR departments and employees.

Please contact us at www.hwelaw.com if you have questions regarding this article or if we can be of assistance.

 

Give Article Feedback »    |   E-mail HWE »

PPACA Mandates New W-2 Requirements

Keith Wolak
Keith Wolak

On June 28th, the United States Supreme Court upheld arguably all of the substantive provisions of the Patient Protection and Affordable Care Act (PPACA). In addition to all those in the health care and insurance industries who were waiting to know the fate of this law, you can add another interested group: your accounting department.

Beyond rolling out new health insurance changes, the PPACA creates a series of new taxes and tax reporting requirements. This article will discuss the new “W-2" reporting requirements.

Initially, W-2s were to include the aggregate value of employer sponsored health coverage beginning in 2011 by reflecting this information on the W-2s issued on or before January 31, 2012. The W-2 reporting was one of the first requirements to be postponed after the law was passed. However, the day of reckoning is near as the last legal challenge before the Supreme Court has been resolved and the 2012 reporting requirements are fast approaching.

The first thing to note is the current guidelines are in the form of “transitional relief.” This means there will be more guidance and regulations to come, and that any future changes will be provided at least six (6) months before the calendar year in which they become effective. Therefore, we know what to expect for the year 2012 and who needs to augment their W-2s due January 31, 2013.

If your company issued 250 or more W-2s in 2011, you need to report the aggregate value of employer sponsored health coverage on your 2012 W-2s. Remember that you are counting W-2 forms, not employees at year end. Employers with high employee turnover may be surprised to find themselves over this threshold. If you are below this threshold, you currently have no reporting requirements, but stay tuned for future developments.

If you are required to prepare these augmented W-2s you can assure your employees that this amount is NOT taxable income to your employees in 2012. However, this information is scheduled to be used to impose an excise tax on employees who enjoy high end “Cadillac Health Plans” beginning in 2018. Also note, employers are not required to send a W-2 to a retiree or COBRA participant without wages or other W-2 amounts merely to provide this new health cost information.

For those required to report, you will need to calculate the value of health coverage under a group health plan made available by the employer. However, this amount does NOT include long term care policies, disability income policies, policies for dental or vision care that are subject to “separate premiums,” or specified disease coverage (such as a cancer policy) that is not excludable from gross income and does not provide for an after tax deduction. Also excluded are Employee Assistance Programs, Wellness Plans, and on-site clinics if the employer does not charge a premium for federal continuation coverage.

Other excluded items include Archer Medical Savings Accounts, Health Savings Accounts, and Health FSA Salary Reductions, all of which are subject to their own separate reporting requirements. However, if the employer matches the employee’s contributions to a Health FSA, then the employer match is included in the W-2 reported amount.

If you would like additional guidance on whether you are required to augment your W-2s in 2012, especially if you are a participant in a Multiemployer plan, or if you would like assistance in calculating your coverage costs to be reported, please contact us.



Please contact us at www.hwelaw.com if you have questions regarding this article or if we can be of assistance.

Give Article Feedback »    |   E-mail HWE »

Copyright © 2012 Hoeppner Wagner & Evans LLP
All rights reserved www.hwelaw.com

DISCLAIMER: The materials provided (or those distributed at other times) and this presentation are not intended to be legal advice. This information is presented for educational purposes only and nothing in the materials or the presentation shall constitute legal advice, accounting or other professional advice or services. The facts and circumstances of a specific legal or accounting matter are unique and the materials and the presentations are not intended to apply to you or to a specific case, client or taxpayer. You should seek legal or other advice for your specific questions or concerns. The law changes constantly. The principles discussed in the materials and/or in the presentation may change. Hoeppner Wagner & Evans, LLP, and each of the speakers, authors or presenters assumes no liability whatsoever in connection with the use of the information or with future rulings that may affect the material presented.

Nothing in this presentation or these materials can be used for the purposes of avoiding tax penalties that may be imposed on a taxpayer. It further cannot be used or referred to in promoting, marketing or recommending a partnership or other entity, investment plan or arrangement, and a taxpayer receiving such information under such circumstances should seek advice from an independent tax advisor. As always, professionals should be consulted with the comprehensive and precise facts of a situation before providing or taking advice.