Jed, employed by Drysdale LLC, a janitorial contractor, recently began working nights at the Commerce Bank, supervised by the Bank’s Chief of Security. Jed’s family had health insurance until his wife lost her job early this year. Drysdale didn’t offer insurance, so Jed bought a policy through Healthcare.gov. With the federal subsidy, his premium is less than $50 monthly.
About six weeks ago, Drysdale got a Marketplace notice of the subsidy granted to Jed. After consulting its lawyer, Drysdale amended its standard contract to negate any indemnity obligation to customers for ACA taxes and penalties imposed on the customer with respect to Drysdale employees. The Bank noticed the change and inquired. Drysdale explained, using Jed’s example, that the Bank could have ACA obligations to Jed independent of Drysdale’s obligations to Jed.
On July 5, the Bank asked for a replacement after Jed was found asleep in a computer closet. Drysdale removed Jed from the Bank and has not reassigned him.
Today, Drysdale and the Bank received OSHA notices that Jed (represented by a labor union) had charged them with retaliation in violation of FLSA § 218c, which reads, in relevant part:
218c. Protections for employees
No employer shall discharge or in any manner discriminate against any employee with respect to his or her compensation, terms, conditions, or other privileges of employment because the employee (or an individual acting at the request of the employee) has—
(1) received a credit under section 36B of title 26 or a subsidy under section 18071 of title 42;
(b) Complaint procedure
(1) In general
An employee who believes that he or she has been discharged or otherwise discriminated against by any employer in violation of this section may seek relief in accordance with the procedures, notifications, burdens of proof, remedies, and statutes of limitation set forth in section 2087(b) of title 15.
(Emphasis ours.) When Jed applied for his subsidy, he was given three notices of this retaliation protection. Much to the employers’ surprise, they have only a few weeks to prove that Jed would have suffered the same fate even if they had been ignorant of his subsidy. But Jed says that he and the Security Chief had a deal: If Jed finished his work an hour early, he could nap before leaving for his day job. And OSHA’s rules say that Jed’s proof “burden may be satisfied, for example, if the complaint shows that the adverse action took place shortly after the protected activity, giving rise to the inference that it was a contributing factor in the adverse action.” 29 CFR § 1984(e)(3). Very probably, OSHA will issue a preliminary order reinstating Jed who, by the way, is now a union organizer. A damages trial will follow some months later.
Why is this the Bank’s problem? Because DOL enforces this law, and DOL’s “employee” definition is even broader than the definition used by the IRS. You may “employ,” for this purpose, a worker whom the IRS would recognize as an independent contractor. Jed’s supervision by the Bank’s Chief of Security goes a long way toward proving that the Bank was Jed’s joint employer.
Why is this Drysdale’s problem? Because it opened the Marketplace subsidy notice envelope. As we explained in several prior articles, there are ways to appeal subsidy errors without acquiring notice of the identities of subsidy recipients who might be among your employees. If you have not established those procedures yet, now would be a very good time to do so.