HR Compliance Questions of the Week

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Excessive Absenteeism

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Question:

I have an employee with excessive absenteeism and tardiness due to her pregnancy. She has been with the company less than eight months. Per her physician’s request she has been asked to stop working and has asked us for a leave of absence for six to eight months.  The company can not afford to hold this position for such a long time. What are our legal obligations?

Answer:

Since each State has different State-specific laws, we’ll address your question from a federal perspective. You should also confirm your obligations with your respective State as they could be more restrictive.

From a federal viewpoint, you should be concerned with the Family Medical Leave Act (FMLA) and Pregnancy Act. Because this employee has not been employed an entire year, she is not eligible for FMLA protection. The Pregnancy Act only requires that you provide the employee the same treatment provided others with medical disabilities. So, as long as you are treating her equal to other employees with a short-term disability, you do not need to hold her position. The real issue to be addressed is her absence not her pregnancy.

Based on the limited information you have shared, unless your State has different laws, it appears your company has no obligation to hold the position for the employee.

Do difficult situations with employees keep you awake at night? Strategic HR understands how conflicts with employees can make or break your day (or a good night’s sleep). Call us when you encounter a difficult situation – we can help coach your managers, suggest solutions or advise you on a specific problem. Learn more about our Employee Relations services by visiting our Employee Relations page.

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Voluntary Classification Settlement Program

Last Updated
in ,

Question:

What is the new Voluntary Classification Settlement Program (VCSP) and what, if anything, does my company need to do?

Answer:

The new Voluntary Classification Settlement Program (VCSP) was developed by the IRS to provide payroll tax relief to employers that reclassify their workers (as employees) for future tax periods. Part of the Fresh Start initiative created by the IRS, this program aims to increase compliance and reduce the tax burden for employers. Under the VCSP employers will pay 10 percent of the employment taxes that would have been due for the most recent tax year on the workers being reclassified. Employers also avoid interest and penalties on the payment and will not undergo an audit for tax purposes in prior years.

To take part employees in question must have previously been treated as independent contractors or other non-employees. Employers need to file an application with the IRS at least 60 days before beginning the treatment of these workers as employees. Employers will be notified whether or not they are eligible to participate and in doing so, the IRS will not share the reclassification with the Department of Labor.

It’s never ending. Just when you thought you had a handle on recent regulatory changes something new crops up. There isn’t enough time in the day to keep on top of everything! That’s where Strategic HR can help. We stay on top of the changes so you don’t have to. Ask us for assistance with any of your benefits, compensation or other regulatory needs. Please visit our Benefits & Compensation page for more information on any of these services.

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Am I Required to Offer COBRA?

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Question:

How do I determine if I have to offer COBRA to our employees for their health insurance? We are ‘on the bubble’ with 21 employees this year, but some are part time. 

Answer:

According to the Department of Labor, group health plans for employers with 20 or more employees on more than 50 percent of its typical business days in the previous calendar year are subject to COBRA. Both full and part-time employees are counted to determine whether a plan is subject to COBRA. Each part-time employee counts as a fraction of an employee, with the fraction equal to the number of hours that the part-time employee worked divided by the hours an employee must work to be considered full-time.

Providing adequate Benefits and Compensation for your employees is key to the recruitment and retention of a well performing workforce, and having the right policies in place can make or break a company. Strategic HR understands this critical need and can help you structure your benefit and compensation system to meet today’s competitive market. Please visit our Benefits and Compensation page for more information on how we can help get you competitive today.

 

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The Pros and Cons of Using a “Release” During a Termination Case

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Question:

What are the pros and cons of using a “release” during a termination case?

Answer:

Many companies assume that an employee termination automatically means offering the employee severance pay and a separation agreement with a release of claims to avoid a potential employee lawsuit.  There are certainly advantages to the use of separation agreements to prevent possible legal headaches, but they may not be appropriate in all instances.

An employer should consider factors, such as employer policy, practice and employee relations philosophy when determining whether to offer a terminated employee a severance package in return for a release of claims. Typically the amount of severance is insignificant when compared to the cost of defending an employee claim, especially when the termination is a difficult one or the person being terminated is likely to assert a claim.  On the other hand, there are sometimes factors that may deter you from offering severance with a release of claims.  For example, some employers offer severance to ALL employees due to fear of lawsuits (regardless for the reason of the termination), and this can drive up overall costs for the company. It is also important to note that just by offering an employee a severance agreement with a release of claims; the company may unintentionally generate claims.

Finally, employers should carefully consider any precedent established by offering severance with a release of claims to only certain groups of employees.  Some terminated employees have claimed “reverse discrimination” and argued that the employer engaged in unlawful discrimination due to offering severance only to terminated employees in a certain category.

Labor laws are constantly changing and Strategic HR knows how difficult it can be to keep up. We offer a handy desktop reference that defines the different labor laws and how they apply to employers. Please visit our HR Store for this and other valuable desktop references.