The Equal Employment Opportunity Commission has issued new enforcement guidance explaining when an employer’s policies affecting pregnant employees might violate federal law.  The new guidance appears in an updated chapter of the EEOC’s enforcement manual, and in a related set of questions and answers.  Among other topics, the new guidance addresses the rights of pregnant employees under employer health plans, fringe benefit programs, and other benefit plans.

Pregnancy Treated Like Other Conditions Affecting Work Capacity

Employers with more than fifteen employees are prohibited from discriminating against employees on the basis of their sex.  The Pregnancy Discrimination Act, which was enacted in 1978, established that discrimination in employment based on pregnancy, childbirth, or related medical conditions is a form of sex discrimination.

The EEOC’s guidance states that employers must treat women affected by pregnancy or related medical conditions in the same way that they treat other employees who are similar in their ability or inability to work.  If the employer provides workplace accommodations, such as disability leave or light duty assignments, to employees who are not pregnant but whose work limitations are similar, the employer must offer the same accommodations to pregnant employees.

The Supreme Court recently agreed to review a federal court of appeals decision in Young v. United Parcel Service, which concluded that an employer did not discriminate on the basis of pregnancy when it provided light-duty assignments to employees with on-the-job injuries, but denied this accommodation to employees with medical restrictions arising from other causes (including pregnancy).  The EEOC’s new guidance takes the opposite position: it states that a distinction based on the cause of the employee’s limitations, rather than on the employee’s ability or inability to work, violates the Pregnancy Discrimination Act.

Several commenters (including two dissenting EEOC Commissioners, whose statements are available here and here) have questioned whether it was prudent for the EEOC to issue guidance before the Supreme Court has addressed the scope of the Pregnancy Discrimination Act in the Young case.  When the Supreme Court decides the case, the EEOC might have to amend its guidance to reflect the Supreme Court’s interpretation of the Pregnancy Discrimination Act.  For the present, however, the new guidance describes the positions that the EEOC intends to take when it enforces the rights of pregnant workers.

Health Plan Coverage

The new guidance emphasizes that employers offering group health coverage must include coverage of pregnancy, childbirth, and related medical conditions, and must apply the same terms to pregnancy-related costs that they apply to other costs.  An express exception in the Pregnancy Discrimination Act permits employers to refuse to cover the cost of abortions, except where the life of the mother would be endangered by a full-term pregnancy.  To the extent that medical complications arise from an abortion, however, the group health plan must cover the cost of treating the complications.

The new guidance also confirms that the Pregnancy Discrimination Act requires group health plans to cover prescription contraceptives to the same extent that the plans cover prescription drugs, devices, and services designed to prevent medical conditions other than pregnancy.  (The guidance acknowledges that there might be statutory or constitutional exceptions for employers with religious objections to contraceptives, but it does not explain to what extent these exceptions apply under the Pregnancy Discrimination Act.)

The guidance on contraceptive coverage is consistent with the position the EEOC has taken in individual enforcement actions.  This issue has been litigated in federal and state courts, with mixed results.  Although the Affordable Care Act has largely resolved the issue by requiring non-grandfathered group health plans to cover most contraceptive methods and services as a form of preventive care, the requirements of the Pregnancy Discrimination Act remain relevant for grandfathered group health plans and other plans that are exempt from ACA’s preventive-care mandate.

Other Benefits

The EEOC guidance confirms that employers must provide medical leaves of absence to pregnant women on the same basis that they provide medical leaves to employees affected by other medical conditions.  Women on pregnancy-related medical leave must accrue seniority and other benefits, such as additional service credit under retirement plans, on the same terms that apply to other types of medical leave.  The EEOC guidance suggests that restrictive leave policies, such as a 10-day ceiling on sick leave or a policy denying sick leave during the first year of employment, might have an impermissible disparate impact on pregnant women.

The fathers of newborns might also be affected by the requirement to treat employees in the same way without regard to their sex.  For example, if an employer provides leave to new parents (beyond the period required to recuperate from childbirth), the employer must provide the parental leave on the same terms to similarly-situated men and women.

Employers might wish to review their leave policies and benefit programs to determine whether the benefits they offer are consistent with the new EEOC guidance.

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Photo of Amy N. Moore Amy N. Moore

Amy Moore advises public and private companies and tax exempt organizations on a wide range of tax, ERISA, and employment law issues concerning all types of benefit programs.  Ms. Moore counsels some of the world’s largest multinational companies on the design and implementation…

Amy Moore advises public and private companies and tax exempt organizations on a wide range of tax, ERISA, and employment law issues concerning all types of benefit programs.  Ms. Moore counsels some of the world’s largest multinational companies on the design and implementation of innovative benefit strategies, including the restructuring of retirement programs to meet the needs of the modern work force; the use of surplus pension and insurance assets to provide non-traditional benefits; and the establishment of funding and security arrangements for welfare plans and executive compensation.  She represents clients in connection with pension fund investments in private equity funds, hedge funds, group trusts, and derivatives.  She also advises on benefits and compensation issues in acquisitions and divestitures, debt finance, joint ventures, and other corporate transactions.  Ms. Moore represents companies in audits and contested agency proceedings involving benefit plans and advises clients on employee benefits issues that arise in connection with ERISA litigation and settlements.  She also counsels employers on issues of plan administration and the correction of operational problems under government-sponsored remedial programs.