Business Up Front - October 2002

Business Up Front

Are You Able to Accommodate the Disabled?

James J. McDonald Jr., an attorney with Fisher & Phillips LLP, a national firm specializing in labor issues, reports that the development of laws under the Americans with Disabilities Act (ADA) over the last few years shows two trends. First is a changing definition of "disability." Persons in wheelchairs now account for less than 1 percent of the claims filed under the ADA. The largest number of ADA claims are being filed by persons with psychological disorders, and the second largest number are filed by employees with back problems.

The second trend is a dramatic expansion of an employer’s obligations to accommodate a disabled employee. The Equal Employment Opportunity Commission (EEOC) and the courts have emphasized that an employer must engage in an "interactive process" of accommodating a disabled employee. What does this process require? Even more importantly, how can you show that you have fulfilled your obligation?

McDonald says some or all of the following accommodation obligations may apply:

An employee need not specifically ask you for a "reasonable accommodation." An employee is not required to say, "I’m disabled and I require a reasonable accommodation." A request for some time off to deal with a health issue, or for a different work schedule will suffice.

You cannot unilaterally determine the appropriate accommodation. The law requires a give-and-take exchange between the employer and a disabled employee over the appropriate accommodation. While you need not grant the employee’s requested accommodation, you must at least consider and discuss it with the employee as part of an "interactive process."

You must try to locate another vacant position for a disabled employee who can no longer perform his or her job. It’s not necessary to create a new position, but if an employee becomes unable to perform his or her current job because of a disability, you should survey all other vacant positions to determine if one is suitable.

Disabled employees may not be required to compete for other job vacancies. If employees who can no longer perform their old jobs on account of a disability are qualified for another job vacancy, they must be given that job – even though better-qualified applicants may exist.

If the first attempted accommodation fails, try again – and again. Your accommodation obligation does not end with the preliminary accommodation of a disabled employee. If that accommodation turns out later not to work, the process of accommodation must begin all over again.

Sweeping It Under The Rug

Survey Shows Auditors Conceal Accounting Problems

Auditing firms almost universally fail to warn of accounting irregularities, according to a study issued in July by Weiss Ratings, Inc. The Weiss study determined that auditing firms gave a clean bill of health to 93.9 percent of the public companies that were subsequently cited for accounting irregularities. Due to various factors, including the accounting problems, the stock of the 33 companies studied dropped drastically, implying an aggregate loss to shareholders of almost $1.3 trillion. Only one auditing firm, issued a "going concern" warning on any of the 33 companies involved in the accounting irregularities.

There have been at least 33 public companies recently involved in, or cited for, significant accounting irregularities. With just one exception, each of these companies was audited by one of the Big Five auditing firms:

In addition to analyzing firms with accounting irregularities, Weiss Ratings also studied audits issued to 228 companies that subsequently filed for bankruptcy between January 1, 2001 and June 30, 2002. In this group, Weiss found that 96 companies, or 42.1 percent, had been given a clean bill of health by their auditors. These 96 companies had a peak market cap of $26 billion, nearly all of which was lost by shareholders.

The report concludes: "The data demonstrate a broad and massive failure by auditors to adequately detect and warn of accounting irregularities and bankruptcies, despite their responsibility as the first line of defense against precisely such problems."

Working for the Man

While preparing for your Fourth of July barbeque this year, you may have missed an important national observance. On July 1, 2002, Americans celebrated Cost of Government Day (COGD), the date in the calendar year when the average American worker has earned enough to pay off his or her share of the burdens of government at the local, state and federal levels. This year, Americans worked 181 days to pay taxes and comply with the regulatory costs of government at the federal, state and local levels.

Americans for Tax Reform (ATR) prepares a report on COGD each year. This year, the report showed that Americans will work:

79 days to pay for all federal spending.

41 days to pay all state and local spending.

38 days to pay the costs of federal regulations.

3 days to pay the costs of state regulations.

Taxpayer advocate Grover Norquist, who heads ATR, said, "Americans will have worked half of their year to fund the activities of the government. This is a sad commentary some 226 years after so many men died to free Americans from the clutches of another government." ATR has calculated Cost of Government Day for each of the past seven years, and published with it a report detailing those costs. This year’s report and the executive summary can be found on ATR’s Website at www.atr.org/cogd2002.

Alzheimer’s Costs Business $61 Billion a Year

American business spends $61 billion a year on Alzheimer’s disease, a twofold increase from the amount calculated just four years ago and a dollar amount equivalent to the total earnings of the top 10 Fortune 500 companies – according to a new study from the Alzheimer’s Association. The report warns that the cost to U.S. businesses and the nation will continue to soar as baby boomers hit the highest risk age for getting the disease. The calculations that formed the $61 billion cost were based on 4 million people. The number with Alzheimer’s is expected to increase up to as many as 14 million by the middle of the century.

Study author Dr. Ross Koppel provides detailed breakdowns of the $61 billion and calculates that the cost to business of healthcare for people with Alzheimer’s disease is $24.6 billion, including a business tax contribution to federal healthcare costs and research. The report adds that the total cost to businesses of workers who are caregivers for people with Alzheimer’s disease is $36.5 billion. This includes absenteeism, worker replacement cost, continuing insurance for workers on leave, temporary worker replacement fees and Employee Assistance Program usage.