Legal Compliance Questions of the Week

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What Employers Need to Know About Vaccination Surcharges and Mandates

HR Question:

Our company is weighing our options between implementing COVID-19 vaccination incentives, surcharges, or a mandate. What employment laws do we need to consider in our decision-making process?

HR Answer:

As you can imagine, Delta Airlines’ announcement of a vaccination surcharge and President Biden’s hint that mandatory vaccination rules may be forthcoming are generating a lot of questions. As such employers are evaluating the pros and cons of vaccination programs. Employment considerations are beyond the scope of this blog post, but the design of the vaccination program will ultimately determine what laws apply from a benefits industry perspective. Some decision points that impact the laws that apply include:

  • Will the incentive be tied to the group health plan or premium in any way?
  • Will vaccines be provided by the employer or an organization hired by the employer?
  • Will vaccination status simply be reported by the employee?

These decision points dictate the compliance considerations and laws that will apply to the incentive program. The laws that may apply include HIPAA, ACA, ADA, and others. The following is an overview of some of the considerations under each of these laws.

Health Insurance Portability and Accountability Act (HIPAA)

If the incentive provided by the employer is tied to the group health plan, the plan must comply with HIPAA nondiscrimination rules. The HIPAA rules define wellness programs as either participatory or health-contingent activity-based or health-contingent outcomes-based.

  • Participatory programs do not require individuals to meet a health-related standard to receive the reward and incentives under participatory programs are unlimited.
  • Health-contingent programs require individuals to meet a health-related standard to receive the reward.

While there is some debate whether vaccination status is participatory or health-related, many attorneys are advising employers to treat a vaccination reward or surcharge as a health-contingent activity wellness program because vaccination may not be recommended for certain individuals due to underlying health concerns.

The HIPAA rules require that a health-contingent activity-based program must:

  • Be reasonably designed to promote health and prevent disease;
  • Be made available to all similarly situated individuals, which includes providing a reasonable alternative or waiver to any individual for whom it is medically inadvisable or unreasonably difficult to receive the vaccine;
  • Provide an opportunity to qualify for the reward at least once per year;
  • Limit any incentives under the terms of the wellness program to no more than 30% of the cost of coverage (based on single rate if only employees may participate or family rate if dependents may participate); and
  • Disclose the availability of a reasonable alternative standard for anyone for whom it is medically inadvisable to receive the vaccine

Any vaccination incentive must be combined with any other wellness incentive given for a participant meeting a health-contingent factor when determining if the 30% limit is satisfied (unless the other incentive relates solely to non-use of tobacco). Additionally, employers may be required to provide religious accommodation under the terms of the wellness program for those individuals with closely held religious beliefs.

Affordable Care Act (ACA) Affordability

Another watch out for employers when incentives are tied to the group health plan is affordability under the ACA’s shared responsibility provisions (applicable to employers with 50 or more full-time equivalent employees). Employers must make an affordable offer of coverage or risk a penalty if an employee enrolls in marketplace coverage and receives assistance. Offers of coverage are considered affordable if they are less than 9.83% of household income in 2021 (decreased to 9.61% for 2022). When calculating whether or not an offer of coverage is affordable (including under any of the three safe harbors), the employer must assume that all participants fail to meet the health standard (in this case vaccination) and must pay the higher premium.

There is one exception with regard to tobacco use. Employers may assume that employees are non-tobacco users when determining affordability. In this case, employers may determine affordability based on the non-vaccinated (or non-wellness)/non-tobacco user rate.

Americans with Disabilities Act (ADA)

The ADA applies to employer wellness programs when the program makes a disability-related inquiry or medical exam. If the employer, or third-party on behalf of the employer, requests medical information as a screening before providing the vaccine, the plan must comply with the terms of the ADA and should consult employment counsel.

For employers who intend to simply verify vaccination status, EEOC guidance indicates that vaccination status alone is not considered a disability-related inquiry. Therefore, vaccination status alone will not trigger an employer needing to comply with the EEOC wellness plan rules.

Complicating Factors

Beyond the direct compliance requirements posed under vaccination programs, there are also administrative challenges:

  • What is considered a reasonable accommodation under the ADA or a reasonable alternative standard under HIPAA for individuals who require an exemption from vaccination?
  • How will employers accommodate employees that have valid religious objections to receiving the vaccination?
  • What will employers accept as proof of vaccination? Vaccine cards are given to those that have received the vaccine; however, there are reports of fraudulent vaccine cards.
  • Employers that offer a one-time bonus or gift cards should remember that these incentives are taxable income.

Conclusion

Employers have many issues to consider when it comes to offering incentives/penalties to encourage vaccination. This is a new dilemma employers are facing as they consider return to work plans and the safety and health of their employees. President Biden’s announcement that the Occupational Safety and Health Administration (OSHA) is working on guidance that may require certain employers to mandate vaccines could complicate the issue further. Time will tell and we need to wait and see whether and when OSHA issues guidance requiring mandatory vaccination. Employers should consider engaging legal counsel in the discussion and design of any vaccination program to have a clear understanding of compliance and potential risks from both an employment and benefits perspective.

The information contained in this document is informational only and is not intended as, nor should it be construed as, legal or accounting advice. Neither HORAN nor its consultants provide legal, tax nor accounting advice of any kind. We make no legal representation, nor do we take legal responsibility of any kind regarding regulatory compliance. Please consult your counsel for a definitive interpretation of current statute and regulation and their impact on you and your organization. 

Special thank you to Shelly Hodges-Konys, Director of Compliance with HORAN for contributing to this edition of our HR Question of the Week.

If you’re overwhelmed with trying to stay on top of ever-changing HR compliance rules and regulations, strategic HR is here to help! Our senior HR consultants can help you to identify and understand relevant regulations, assess the impact on your company, and advise you on the appropriate times to seek legal counsel. Learn more about our HR Compliance & Recordkeeping services, or contact us today.

Can I Ask if My Employees Are Vaccinated?

Can we ask if our employees are vaccinated? Isn’t this a HIPAA violation or an illegal inquiry under the ADA or somehow confidential information?

Employers can ask for proof of vaccination unless there is a state or local law or order to the contrary.*

When an employer is requesting or reviewing medical information in its capacity as an employer, as it would be when asking about an employee’s vaccination status, it is considered to be an employment record. In such cases, HIPAA would not apply to the employer. The Americans with Disabilities Act (ADA) will govern the collection and storage of this information.

The Equal Employment Opportunity Commission (EEOC), which enforces the ADA, has stated that asking about vaccination is not a disability-related inquiry, though it could turn into one if you ask follow-up questions about why the employee is not vaccinated. Asking a yes or no question, or requesting to see the employee’s vaccination card, does not violate any federal laws or require proof that the inquiry is job-related.

Finally, just because employees think that something is or should be private or confidential doesn’t mean they can’t be required to share it with their employer. Social Security numbers, birth dates, and home addresses are all pieces of information an employee may not want to advertise, but sharing is necessary and required for work. Vaccination status is similar. However, all of this information, once gathered, should not be shared by the employer with third parties, except on a need-to-know basis.

*It appears that some governors may attempt to prevent certain entities from requiring “immunity passports” (e.g., proof of vaccination) through an executive order (EO), though as of July 31, none of the EOs already issued appear to apply to private businesses and their employees. Also note that if there is a law in place that prevents treating vaccinated and unvaccinated employees differently (like in Montana), you may be able to ask, but not take any action based on the response.

Should we keep a record of who is vaccinated or make copies of vaccination cards? If we do, how long should we keep that information?

If you’re asking about vaccination status, you’ll want to keep some kind of record (so you don’t have to ask multiple times), but how you do this is up to you, unless state or local law has imposed specific recordkeeping requirements. You may want to keep something simple like a spreadsheet with the employee’s name and a simple “yes” or “no” in the vaccination column. If you’d prefer to make a copy of their vaccination card, that should be kept with other employee medical information, separate from their personnel file. Per OSHA, these records should be kept for 30 years.

If we keep a record of who is vaccinated, can we share it with managers who will be required to enforce policies based on that information, such as masking and social distancing?

Yes. We recommend not sharing this information any more widely than necessary. While anonymized information is okay to share (e.g., “80% of our employees are vaccinated”), each employee’s vaccination status should be treated as confidential, even if the fact that they are wearing a mask to work seems to reveal their status publicly. Obviously, managers will need this information if they are expected to enforce vaccination-dependent policies, and employers should train them on how they should be enforcing the policies and how and when to escalate issues to HR or a higher level of management.

Special thanks to the HR Support Center for providing this edition of our HR Question of the Week. 

For further COVID-19-related resources, check out our COVID-19 Employer Resources page or contact us for direct assistance. 

This article does not, and is not intended to, constitute legal advice.  Information and content presented herein is for general informational purposes only and readers are strongly encouraged to contact their attorney to obtain advice with respect to any legal matter.  Only your individual attorney can provide assurances that the information contained herein is applicable or appropriate to your particular situation or legal jurisdiction.

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Dress Code Policy: What is “Normal” Today?

HR Question:

My company is interested in updating the dress code policy.  What is “normal” today and are there any specific things I should keep in mind in making this update?

HR Answer:

Workplace appearance and grooming standards are nothing new. However, what they encompass continues to evolve as we consider cultural and generational needs and desires. Most companies have long created rules surrounding dress for employee safety (think manufacturing and healthcare), proper representation of company culture (think financial advisors / legal firms), or creating an overall “tone” for the workplace (think amusement parks / golf courses, etc.). Regardless of the reason, what we have seen is that the standards continue to become more relaxed, overall.

The Casual Movement

What started as “casual Fridays” has evolved to “casual summers,” which has now evolved to casual work environments all year round.  Over the past few years, we have seen companies such as Virgin Atlantic, Goldman Sachs, and even Target relax their dress code standards. And as a result of the COVID-19 pandemic, many employees have spent a year or more working from home in more relaxed, comfy attire.

Fabrics are changing, expectations are shifting, and retailers are scrambling to meet the new blend of professional and comfortable styles. Many employers have adopted a “Dress for Your Day” approach, expecting employees to be able to read the needs of the situation – jeans for casual days, and more professional attire for client meetings.

Legal Considerations

As HR professionals, we must also consider potential legal issues with dress codes. Employers must be aware that dress, grooming, and appearance can conflict with an employee’s religious beliefs or traditions, ethnicity, national origin, gender identification, or even disability. For example, there may be clothing, hairstyles, facial hair, and tattoos that are in line with cultural beliefs, yet could be considered discriminatory. We must consider these regulations when we look to creating a policy for our company.  In addition, we must also look locally.  Today, some localities have specific anti-discrimination laws that can very easily impact dress code rules.  For example, the New York City Human Rights Law specifically states that it’s unlawful to have a dress code that prohibits natural hair or treated hair that closely associates with race or religion.

Embracing All Styles

In an HR Snapshot, the HR Support Center highlighted that “some states have made natural hairstyle discrimination illegal by amending their employment discrimination laws to specifically define race as including traits associated with race, including hair texture and protective hairstyles. Protective hairstyles include (but aren’t limited to) afros, bantu knots, curls, braids, locs, and twists.” The goal of such laws is to encourage and celebrate natural hairstyles, while protecting those individuals who wear such hairstyles for a myriad of reasons, including “because they are easy, protective, or part of how they identify themselves.”

Overall, companies should look internally at what is NECESSARY for their environment. Yes, it may be important for your company to not allow certain types of dress for safety or industry-related reasons, but avoid a one-size-fits-all approach.  Make sure the policy meets the business need, complies with regulatory requirements (or accommodations are made), and that there is purpose for the requirement. Employers should only implement what is necessary and consider the creation of a respectful and inclusive workplace. Status quo will not suffice in today’s tough recruitment market and cultural revolution. As stated by Millennial and General Z speaker and generations expert, Ryan Jenkins,“’this is always how we’ve dressed'” is not an acceptable answer in today’s 21st-century workplace. Revisit your company dress code to ensure it is positioning you for next-generation growth and success.”

Special thanks to Patti Dunham, Samantha Osborne, and the HR Support Center for contributing to this edition of our HR Question of the Week. 

Labor laws are constantly changing and strategic HR inc. 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.

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What is the Employee Retention Tax Credit (ERTC)?

HR Question:

What is the Employee Retention Tax Credit (ERTC) and how can I take advantage of this program?

HR Answer:

As an incentive to employers of all sizes to keep employees on payroll, the Employee Retention Tax Credit (ERTC) was created to help employers navigate the unprecedented impact of COVID-19.  The ERTC is a refundable tax credit formed within the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), and further extended/expanded under the Consolidated Appropriations Act (CAA) and American Rescue Plan Act (ARPA).

Originally, to be eligible for the credit as of March 2020, an employer must actively carry on a trade or business during the calendar year 2020 and meet either of the following:

  1. Full/Partial Suspension Test: If an eligible employer experiences a calendar quarter in which trade or business is fully or partially suspended due to an order of government authority restricting commerce, travel or group meetings (this includes but is not limited to commercial, social and religious purposes) due to the COVID-19 pandemic.
  2. Gross Receipts Test: If an eligible employer experiences a significant decrease in gross receipts (AKA revenue) resulting in more than a 50% drop when compared to the same quarter in the previous year. (Until gross receipts exceed 80% of gross receipts in the prior quarter).

Originally, the credit was worth 50% of “qualified wages” – including health care benefits – up to $10,000 per eligible employee from March 13, 2020 – December 31, 2020. In other words, the maximum benefit for 2020 resulted in credit of up to $5,000 per employee.  Companies can STILL do this today.

CAA Changes

In December 2020, Congress revised the provision resulting in the Consolidated Appropriations Act (CAA), extending the credit for eligible employers that continue to pay wages during COVID-19 closures or recorded reduced revenue through June 30, 2021. The CCA also:

  • Increased the amount of the credit to 70% of qualified wages, beginning January 1, 2021, and raised the limit on per-employee qualified wages from $10,000 per year to $10,000 per quarter. In other words, you can obtain a credit as high as $7,000 per quarter per employee.
  • Expanded eligibility by reducing the requisite year-over-year gross receipt reduction from 50% to only 20%. And it raised the threshold for determining whether a business is a “large employer” — and therefore subject to a stricter standard when computing the qualified wage base — from 100 to 500 employees.
  • Provided that employers who receive PPP loans still qualify for the ERTC for qualified wages not paid with forgiven PPP funds. (This provides an incentive for PPP borrowers to maximize the nonpayroll costs for which they claim loan forgiveness.)

ARPA Changes

The American Rescue Plan Act (ARPA) was created to increase the speed of recovery to the economic and health struggles faced by COVID-19. The new law extended the ERTC through the end of 2021 and expands the pool of employers who can take advantage of the credit by including so-called “recovery startup businesses.” A recovery startup business generally is an employer that:

  • Began operating after February 15, 2020, and
  • Has average annual gross receipts of less than or equal to $1 million.

While these employers can claim the credit without suspended operations or reduced receipts, it’s limited to $50,000 total per quarter.

The ARPA also targets extra relief at “severely financially distressed employers,” meaning those with less than 10% of gross receipts for 2021 when compared to the same period in 2019. Such employers can count as qualified wages any wages paid to an employee during any calendar quarter — regardless of employer size. Otherwise, the ARPA continues to distinguish between large employers and small employers for purposes of determining qualified wages.

Note that the ARPA extends the statute of limitations for the IRS to evaluate ERC claims. The IRS will have five years, as opposed to the typical three years, from the date the original return for the calendar quarter for which the credit is computed is deemed filed.

Additional IRS Guidance

Prior to the passage of the ARPA, the IRS issued additional guidance on the ERTC that helps determine whether operations were partially suspended because of a COVID-19 related government order.

The IRS has previously stated that “more than a nominal portion” of operations had to be suspended, meaning:

  • Gross receipts from the suspended operations are 10% or more of total gross receipts,
  • Hours of service performed by employees in the suspended operations are 10% or more of total hours of service, or
  • Modifications to operations result in a reduction of 10% or more of the employer’s ability to provide goods or services.

How can my company claim the ERTC?

The ERTC is a payroll tax credit to be reported on Form 941 and may be up to a total of $33,000 per employee for 2020/2021 depending on facts. Any eligible employer can claim ERTC in either/both 2020 and 2021. Special care should be taken when calculating and claiming the credit, especially if the business also received a PPP loan, or other government funding since COVID-19, as IRS rules required an analysis to avoid any “double-dipping.”

Every business is unique and the amount of your ERTC will vary depending on the time period, number of employees, and other factors. To effectively position your business with the benefits of the ERTC, it is encouraged to partner with a tax consultant who knows your industry and the tax laws. To have a discussion about the potential of ERTC during calendar years 2020 and 2021, reach out to Clark Schaefer Hackett consultants Phil Hurak (pshurak@cshco.com ) or Kevin Dehner (kcdehner@cshco.com) today.

Special thanks to Phil Hurak and Kevin Dehner for writing this edition of our HR Question of the Week!

For additional information regarding the ERTC, please visit the CSH COVID Resource Center containing articles on ERTC, PPP, FFCRA, and other benefits potentially available to your business.

strategic HR inc. knows that keeping abreast of legal compliance issues can be daunting, especially when the laws keep changing. We can help you stay compliant by fielding your questions and offering resources to help you identify and mitigate compliance issues. Visit our Legal Compliance page to learn about our auditing services which can help you identify trouble spots in your HR function.

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Can I Require My Employees to Receive the COVID-19 Vaccine?

HR Question:

As vaccines continue to roll out, can I require that my employees receive the vaccine?

HR Answer:

Many employers are now beginning to face the difficult decision of whether or not to require vaccines for their employees. Some employees may refuse to come back into the office without it, others may staunchly refuse to receive the vaccine right away or at all. So how are employers expected to navigate this world of grey regulations and guidelines?

Can Employers Require Their Employees to Receive the Vaccine?

The answer? It’s complicated. In order to address some of the various guidelines, requirements, and generally muddy waters that the vaccination presents, the Equal Employment Opportunity Commission released some guidance for employers.

In fact, Graydon Law summarized some of the available guidelines for employers to consider when implementing such a policy. While this may allow employers to have a better understanding of some of the nuanced situations they may face when implementing a mandatory vaccine policy, no one should go it alone. To answer our first question: while it’s possible for employers to implement a mandatory employee vaccination policy, they should not do so without consulting legal counsel.

Should Employers Require Their Employees to Receive the Vaccine?

This answer is a little more difficult to pin down.

In an HR Question of the Week for strategic HR inc., Lee Geiger, Graydon Law attorney and our valued partner, raised some excellent questions for business leaders to ask themselves before establishing a mandatory vaccine. Issues such as industry patterns and potential exposure related to the company’s services are given questions with more concrete answers. Additional questions such as internal logistics, consequences for those who refuse the vaccine without ADA protection, and deciding who in the company will serve (as Geiger put it) as the “Vaccine Police” may begin to further cloud the situation.

Can an Employer Provide Incentives to Employees for Getting the Vaccine?

While this may seem like a great way to encourage all of your employees to get vaccinated, it can lead to even more issues.

  • In the EEOC’s eyes, the vaccination is seen as a wellness activity which is currently under review as it relates to incentives.  As of May 4, 2021, we still await technical assistance direction from the EEOC on whether or not vaccine incentives can be offered.  In a statement on April 22, 2021 the EEOC indicates that guidance will be issued with no date on when that will occur.
  • Under the Fair Labor Standards Act (FLSA), remember if you offer cash, it could be viewed as a nondiscretionary bonus which means you may need to adjust the pay to any non-exempt employees who worked overtime during the same period that they received the cash incentive. Also, you may be required to pay the employee for their time to get the vaccination.
  • If you don’t allow employees in the workplace without the vaccine, you run the risk of actually not having enough employees to run the business.
  • Employee engagement may be impacted as some employees see this as their decision and their employer shouldn’t be telling them what to do in this regard.
  • If an employee does get the vaccine, what liability would you as an employer have if the employee had side effects? Would it be a workers compensation issue or worse – a legal issue?
  • The legal alphabet soup gets even more complicated when you consider OSHA (Occupational Safety and Health Act) requirements, which require employers to provide a safe workplace, or NLRA (National Labor Relations Act) in which an employer cannot impact a worker’s “concerted activity.”

Nothing about COVID has been easy and the rules seem to continue to change daily.  Perhaps one approach may be to help educate employees on the impacts of COVID, the benefits of the vaccine, and additional preventative measures to be taken.

As employers, it very hard to navigate what to do in our workforces. Mandating or incentivizing getting the vaccine is meant to protect employees and customers.  However, it can actually lead to many other complicated issues.  Employers will need to take a close look at the impacts of mandating or incentivizing and decide if the need for the vaccine in their workplace outweighs those risks.

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Are Employee Gift Cards Considered Taxable Benefits?

HR Question:

To thank my employees for their extra efforts, I have provided them with a $50 gift card.  Accounting is telling me I have to report the value of the gift cards as taxable benefits.  Is that true?

HR Answer:

Yes, it’s true! According to the IRS, cash, gift certificates, and gift cards are considered taxable fringe benefits and must be reported as wages. But you may be relieved to know that this rule doesn’t apply to all gifts or perks that you may give to employees.

The IRS tells us that we can exclude the value of a “de minimis” benefit from an employee’s wages.  For those unfamiliar with a “de minimis” benefit, the IRS defines it as “any property or service you provide to an employee that has so little value (taking into account how frequently you provide similar benefits to your employees) that accounting for it would be unreasonable or administratively impracticable.” Most employers tend to categorize de minimis gifts in the under $50 range, but for some, it can go upward of $100.

In comparison to cash or cash equivalents which are always considered taxable benefits, small gifts have much more flexibility when it comes to tax responsibilities according to the IRS. But how organizations denote “small” is still up for negotiation. When deciding on a gift or fringe benefit for an employee, consider the value and the frequency of the gift or benefit. For example, purchasing a book for an employee for their birthday would be excluded. Purchasing a book every month for an employee would not be excluded due to the frequency of the gift, regardless of the value of the book.

Additional Examples of Tax-Exempt Benefits

Other examples of de minimis benefits include such things as some meals, occasional parties, occasional tickets for events (not season tickets), holiday or birthday gifts (other than cash or cash equivalents). Essentially, occasional gifts that can’t be redeemed for cash value can be considered as these exempted benefits.

There is also an exemption for achievement awards, which come with additional rules of their own. Examples of these gifts include gifts for achievements such as safety milestones or length of service or anniversary milestones. Certain achievement awards can be excluded from the employee’s wages if the awards are tangible personal property and meet certain requirements. Notable exceptions from The Tax Cuts and Jobs Act prohibit certain property as an employee achievement award, including vacations, lodging, stocks, bonds, and securities. Limitations are further detailed in the Act, including $400 maximum for non-plan awards and up to $1600 if you have a documented, non-discriminatory program surrounding the awards.

Additional requirements exist for these achievement awards. For example, length-of-service awards can’t be received during the employee’s first five years of employment or more often than every five years. Also, safety awards can’t be given to more than 10 percent of eligible employees during the same year.

Employee awards are an important part of employee engagement.  It is important, however, to make sure you don’t turn that $100 thank you gift card into a much more expensive “gift” by assuring you are properly handling the taxes accompanying such a gift.

strategic HR inc. knows that keeping abreast of legal compliance issues can be daunting, especially when the laws keep changing. We can help you stay compliant by fielding your questions and offering resources to help you identify and mitigate compliance issues. Visit our Legal Compliance Services to learn more.

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What Does the American Rescue Plan Act Mean for Me?

As of Thursday, March 11, 2021, President Biden signed into law the American Rescue Plan Act of 2021. The act provides a wide range of extensions, clarifications, and further avenues for funding for many businesses. We’ve summarized the major points below. 

New 100% COBRA Premium Subsidy: Beginning April 1, 2021, and ending September 30, 2021, employers with eligible employees (employees who have been involuntarily terminated or whose hours have been reduced due to COVID-19, back to November 2020) could be eligible for the subsidy, which covers the employees’ COBRA premiums. The subsidy will later be applied to the employers’ quarterly taxes.  

  • Keep in mind, the subsidy is available until the individual’s maximum COBRA coverage period ends, or Sept. 30, 2021 (whichever is earliest).
  • Employees must be notified if they are eligible for the subsidy. This includes notification to anyone impacted back to November 2020 – even if they did not elect COBRA coverage at the time. The Department of Labor will provide model notices within 30 days from the date of the enactment.
  • What can employers do now? Look for the model notices and connect with their COBRA vendor to review the changes and alert any former employees whose COBRA coverage extends into this six-month period.

Changes to Families First Coronavirus Response Act, including Sick and Family Leave: Tax credits for emergency paid sick leave and family leave have been extended through September 30, 2021.  As with the extension of this leave from January 1, 2021, to March 31, 2021 – this appears to be a VOLUNTARY election by employers.  It is not mandated.  Changes include:  

  • Wages covered by the family leave credits have been raised from $10,000 to $12,000.
  • The Act adds additional reasons employees can qualify for paid sick leave and family leave including obtaining an immunization related to COVID-19 or recovering from any injury, disability, illness, or condition related to such immunization.
  • The previous 80-hour per employee limit for paid sick leave will reset after March 31, 2021. Additionally, the previous 10-week per employee limit for paid family leave will reset after March 31, 2021.

Direct Stimulus Payments: A third round of payments will be issued. $1,400 direct payments to individuals making less than $75K, as well as a child tax credit of up to $3,600 depending on the age of the child.

Grants for Restaurants: A program has been established to grant financial support (i.e., to cover payroll costs) for eligible businesses based on decline in gross revenue over 2020.

Extended – The Employee Retention Tax Credit: Employers who have continued to pay wages throughout COVID-19-related closures, or those who have experienced reduced revenue due to the pandemic through December 31, 2021, may be eligible for an extended tax credit. 

The American Rescue Plan Act is one of the most wide-spread efforts by the U.S. Government to combat the devastating effects of the COVID-19 pandemic. For further COVID-19-related resources, check out our COVID-19 Employer Resources page or contact us for direct assistance. 

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What is the Current Status of EEO-1 Reporting?

HR Question:

What is the current status of EEO-1 reporting?

HR Answer:

After delaying the opening of the 2019 EEO-1 Component 1 Data Collection due to the pandemic, the EEOC announced the 2019 and 2020 EEO-1 Component 1 Data Collection is now on schedule to open in April 2021. Filers should begin preparing to submit data in anticipation of the April 2021 opening.

The precise opening date of the collection, as well as the new submission deadline date, will be announced by posting a notice on the EEOC’s home page as well as on the new dedicated website for the EEOC’s data collections.  As in previous years, a notification letter will also be sent to eligible filers.

Does my business need to file the EEO-1 report?

If you have fewer than 100 employees and no federal contracts, you are not subject to EEO-1 reporting requirements. Only two categories of employers need to submit EEO-1 data:

  1. Organizations with 100 or more employees (excluding public primary and secondary schools, institutions of higher education, tribes, and tax-exempt private membership organizations);
  2. Federal contractors with 50 or more employees, that also are prime or first-tier subcontractors with a contract worth $50,000 or more; or are a depository for US government funds in any amount; or are an issuing and paying agent for US Savings Bonds and Savings Notes.

What information do I need to report?

The EEOC has divided the information it requires into two categories, referred to as components.

Component 1 data: This is the information that has always been required. It includes data about all employees by job category, race, ethnicity, and sex. If you have never filed the EEO-1 report before and believe you need to, start here.

Component 2 data: This is the newly required information. It includes data about all employees, including W-2 wages, total hours worked, race, ethnicity, and sex.

For both types of data, the preferred method of reporting is through the EEO-1 Survey Application, which generates a table for employers to provide the required information. Employers do not need to worry about creating and formatting a complicated report.

Additional Information

The EEOC has provided answers to Frequently Asked Questions to help guide you through the process.

Thank you to the HR Pros from our HR Support Center for contributing to this edition of our HR Question of the Week.

strategic HR inc. knows that keeping abreast of legal compliance issues can be daunting, especially when the laws keep changing. We can help you stay compliant by fielding your questions and offering resources to help you identify and mitigate compliance issues. Visit our Legal Compliance page to learn about our auditing services which can help you identify trouble spots in your HR function.

 

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New Year, New COVID Questions: Mandate the Vaccine? Extend Paid Leave?

HR Question:

Although I was hoping to leave the challenges of 2020 behind, I’m finding that they’re seeping into 2021 – along with new challenges. Now, I’m faced with new COVID questions to confront: mandate COVID vaccines … or not? Extend Paid Sick Leave and EFMLA … or not? How do I make the best decisions here?

HR Answer:

Unfortunately, COVID is still with us, but hope is on the horizon with the vaccine. Employers across the country (and the world) are struggling with the same COVID questions you are about whether or not to mandate that all employees get vaccinated. The EEOC has made it clear that employers CAN require that employees get the COVID vaccine (in most cases).  However, the question becomes whether employers SHOULD require it. There is no perfect answer, so we’ll default to the typical lawyer answer: “It depends.”

Companies need to consider whether mandating vaccination is necessary. Because each business is different, there is no universal litmus test for employers.

Here are some common factors that employers should consider:

  • In what industry is your company? (Healthcare is different than construction.)
  • What are other similar businesses doing? (We’re all in this together.)
  • Are your employees designated to an early phase/group for vaccine eligibility?
  • If not, when could you reasonably expect the vaccine to be readily available? (There’s no need to create a stir now if your employee population consists primarily of healthy people in their twenties and thirties who will be toward the end of the eligibility list.)
  • If there is continued exposure, how will that harm your business?
  • How will your employees react?
  • What will the consequence be for employees who refuse to get vaccinated?
  • Who is going to be the “Vaccine Police” and track everything? (“1, 2, 3 … Not IT!”)

 

It’s okay to take a “wait and see” approach

These are not easy questions. Keep in mind that the law requires employers to make accommodations for individuals with disabilities and religious concerns. Also important: there is no prize for being the first to mandate vaccination. At this point, many businesses are encouraging employees to get vaccinated, but taking a “wait and see” approach when it comes to mandating. Part of the “encouraging” process includes educating employees about the benefits of vaccination. This includes reminding them that the company will not be providing paid leave if they are off for COVID purposes. If your employees are already on board with vaccination, there is no reason to take a heavy-handed approach.

Should you extend Paid Sick Leave and EFMLA?

The other COVID questions keeping HR professionals awake at night is what to do about extending Paid Sick Leave and Emergency FMLA. Congress and the President gave companies the option to continue providing these leaves to employees and receive tax credits through March 31, 2021. Many of our clients are continuing the leaves. Some are not.

Here are factors to consider:

  • How has leave usage impacted staffing and customer service?
  • Have employees been using the leave properly or abusing the leave?
  • Is it a hardship on the company or other employees to continue providing leave?
  • What is the impact on employees who legitimately need the leave?
  • How will the decision impact employee morale?
  • How many employees are currently on leave?
  • Is the employer a public or private entity?

 

Communication is key

Regardless of your decision, communication is key. It is critical for employers to communicate the decision to end or extend benefits so that employees are aware of their options. The decision should be company-wide so there is no favoritism of one employee versus another.

As usual, things with COVID continue to evolve. Good ideas a few months ago may be bad ideas today, so make sure to keep up to date. I know we’re all tired of hearing about these “unprecedented times,” but nonetheless, we will carry on. Deep breaths. Smile. 2021 is going to be better. Bring. It. ON!

Special thanks to attorney Lee Geiger from Graydon for contributing to this issue of our HR Question of the Week! As a valuable partner to strategic HR inc., we appreciate both his legal expertise and wit.

Whatever HR challenge your business may be facing, strategic HR inc. can help! Whether it’s by developing a comprehensive strategic business plan through our HR Strategy services or helping you navigate COVID-19 HR strategy issues, our team of experienced consultants is waiting to partner with you. 

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How Year-End HR Responsibilities Have Changed in 2020

HR Question:

This year has created many new HR requirements. Is there anything, in particular, I should be aware of as I prepare to tackle my year-end HR responsibilities?

HR Answer:

As we approach the end of 2020, there are many upcoming reporting requirements to prepare. It’s important to recognize that each organization’s situation may be different depending on their number of employees, benefits offered as fully insured or self-insured, and differences among state rules and regulations.  However, below are some common reporting requirements and tips to consider to make sure you are providing a good-faith effort.

TIP: Create an HR Calendar and use it as a checklist.  This will help with compliance and preparing for the following year.

W-2 / 1099 Reporting and Communication to Employees

W-2 reporting is typically a standard process, however, there are a few details to consider:

  • For reporting of FFCRA sick and family leave wages on Form W-2 in Box 14, or in a statement provided with the W-2, refer to the guidance provided in the IRS Notice 2020-54.
    • TIP: Utilize the IRS Model language for employee instructions on pages 8-9 of the Notice.
  • For reporting of Employer-Sponsored Health Coverage – under the Patient Protection and Affordable Care Act (ACA), certain employers are required to include the cost of providing health coverage on Form W-2. If your number of W-2’s processed in the previous year (2019) was under 250, you are NOT required to provide this information. For more information on this, visit the IRS guidance on Reporting Employer-Sponsored Health Coverage.
  • Run reports with preliminary W-2 information, cross-check with payroll data, and correct any errors.
  • Reminder: this is the time to send out 1099 statements to your independent contractors who earned over $600 in compensation. Work with your accounting/finance department to make sure these important tax forms are not missed.

TIP: Create a communication piece for employees that provides guidance on how to read the Form W-2 along with when and how the W-2 Forms will be available.  Create this communication as you work through your process, and include a link or copy of the communication in your HR calendar/checklist.

ACA Reporting

IRS 2020 Instructions for Forms 1094-B, 1095-B, 1094-C, and 1095-C indicate the deadline has been extended from January 31, 2021 to March 2, 2021.

NOTE:  The deadline for filing Forms with the IRS remains unchanged at February 28, 2021 for paper copies and March 31, 2021 for electronic filing.

As you prepare your ACA reporting, keep in mind the following:

  • If you are an employer that falls under the NON-Applicable Large employer (ALEs) AND you have self-insurance health coverage, the IRS has provided Transition Relief.
  • On Form 1095-C, you are now required to include the “Plan Start Month” box.
  • Become aware of the new additions made to the 1095-B and 1095-C relating to individual coverage HRAs (ICHRAs).
    • On the Instructions provided by the IRS on the “What’s New” section, it indicates that a new code of G must be used on 1095-B, line 8 to identify an individual coverage HRA – refer to this IRS publication for details.
  • ACA identifies its full-time employees based on each employee’s hours of service and what they are entitled to payment for, such as vacation, holidays, leave of absence, etc.
    • FFCRA requires two new types of leave – the Public Health Emergency Leave (PHEL) and Emergency Paid Sick Leave (EPSL) that will continue to count for ACA purposes.
  • Be sure to check the affordability of your plan under ACA for 2021 as the affordability threshold has changed for 2021.

TIP: For further assistance, check out the Affordable Care Act Tax Provisions for Employers.

Limits for FSA, HSA, and Retirement for 2021

The following limits have been set for 2021:

  • The IRS has announced that the contribution limit for Health Flexible Spending Arrangements (Health FSAs) will remain at $2,750 in 2021. For 2020, the contribution limit was also set at $2,750.
  • HSA contribution limit (employer and employee): Self Only: $3,600 / Family: $7,200
  • HSA catch-up contributions (age 55 or older): $1,000
  • High Deductible Health Plan (HDHP) deductibles minimum: Self Only: $1,400 / Family: $2,800
  • HDHP out-of-pocket maximum amounts: Self Only: $7,000 / Family: $14,000

TIP: Create a communication to go along with the 1st paycheck reminding employees to check for changes made during Open Enrollment and include these limits as a reminder.  You should also make sure your payroll system is updated to stop all contributions that exceed these maximums.

Our Virtual HR Support Center has many tools you can use to create your specific checklist as you take care of your year-end HR responsibilities. Please contact us if you would like more information.

Special thanks to Janine Cummings, PHR, SHRM-CP for contributing to this edition of our HR Question of the Week! 

strategic HR inc. knows that keeping abreast of legal compliance issues can be daunting, especially when the laws keep changing. We can help you stay compliant by fielding your questions and offering resources to help you identify and mitigate compliance issues. Visit our Legal Compliance and Recordkeeping page to learn about our auditing services which can help you identify trouble spots in your HR function.

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Do We Have to Provide Employees Time Off to Vote?

HR Question:

We received a request from an employee for time off to vote. My state doesn’t require voting leave, but this employee works in a different state, and we have employees located across the country. What do I need to do here?

HR Answer:

If an employee of yours works in a state with a voting leave law, you will need to comply with that law. Most states require that employers provide at least a few hours of employee time off to vote, and many of those states require some or all of that time to be paid. In New York, for example, all registered voters are allowed to take off as much time as is necessary to enable them to vote and are entitled to be paid for up to three of those hours. You’ll also want to check any applicable voting leave laws for notice requirements and for specifications on when during an employee’s shift the time off should be given. You can find all this information on the HR Support Center by entering “voting leave” in the search bar. Workplace Fairness also has an online interactive tool to allow you to look up voting laws by state.

To keep things simple and fair, you might consider implementing a single company policy that meets or exceeds all applicable state requirements. That way there’s no confusion about what your policy is, employees in states without leave requirements won’t feel like they’re being excluded, and everyone in your company will have the opportunity to vote. Some employers even go the extra mile by cancelling all meetings on election day or making that day a paid holiday.

Thank you to our HR Support Center for providing the response to this edition of our HR Question of the Week.

Do you wish your HR Handbook and Job Descriptions would write themselves? Would you like to have 24/7 access to HR forms, checklists, and templates so you don’t have to “recreate the wheel”?  Check out our Virtual HR Solutions to see how we can make “going it alone” not so ALONE! In addition to comprehensive online HR resources & tools, you can also have unlimited access to HR professionals via phone/email/chat.

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Can I Store My I-9 Forms Electronically?

HR Question:

I have heard of other employers storing all of their I-9’s electronically, rather than in paper form. Is that acceptable? Is there anything I need to know before moving to store my I-9 Forms electronically?

HR Answer:

Yes, many employers are moving to the electronic completion and storage of their employees’ I-9 Forms. According to U.S. Citizenship and Immigration Services, you may maintain the forms either electronically or on paper, with a few requirements to keep in mind.

If you are storing them offsite, you must be able to produce the documents within 3 days of the request from an auditor. If you decide to maintain your records electronically, you have the option of using an online payroll provider which should allow the employees to complete the form online and store it. Alternatively, you can have employees complete the hard copy paper form and then scan and upload the original signed form. Either option is an acceptable alternative for electronic storage. The paper form can then be destroyed once it has been properly stored electronically.

Regarding the documents that are provided as “proof” for the I-9, employers are not required to create or attach photocopies of documentation submitted to satisfy the Form I-9 requirements during the employment eligibility verification process, but the practice is permissible.  If you choose to make photocopies of the documents, make sure that you do it for ALL employees to avoid any potential claims of discrimination.

If you are using an electronic system, U.S. Citizenship and Immigration Services (USCIS) require you to make sure the system you are using can meet the following requirements:

  • It has controls that ensure the system’s integrity, accuracy, and reliability;
  • It has controls that can prevent and detect the unauthorized or accidental creation of, addition to, alteration of, deletion of, or deterioration of an electronically completed or stored Form I-9, including the electronic signature if used;
  • You have an inspection and quality assurance program in place that regularly evaluates the system and includes periodic checks of electronically stored Form I-9’s, including the electronic signature if used;
  • You have an indexing system that allows users to identify and retrieve records maintained in the system; and
  • The system has the ability to reproduce legible and readable paper copies.

In addition, you are required to document the process and procedures used for collecting and maintaining the documents. You can find additional details on the requirements for storing I-9’s electronically on the U.S. Citizenship and Immigration Services website.

Finally, keep in mind that you must have a secure IT system in place. The system should be able to audit who accessed the files and/or edited them, as well as ensure that only authorized individuals have access to the records. You must also have a system in place that ensures the information is securely backed up in the event of a system crash.

Storing your I-9’s electronically can be a wonderful solution for these documents – just be sure you have a process in place with the appropriate safeguards and systems. The USCIS warns us that if the records cannot be retrieved during an audit, even if there is proof of a system crash, you will be in violation.

Thanks to Patti Dunham, MBA, MA, SPHR, SHRM-SCP for contributing this edition of our HR Question of the Week!

strategic HR inc. knows that keeping abreast of legal compliance issues can be daunting, especially when the laws keep changing. We can help you stay compliant by fielding your questions and offering resources to help you identify and mitigate compliance issues. Visit our Legal Compliance and Recordkeeping page to learn about our auditing services which can help you identify trouble spots in your HR function.

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What Should I Consider Before Doing a Reduction in Force?

HR Question:

I may need to restructure my workforce as a result of the downturn in business activity. What should I consider from a fairness and legal standpoint?

HR Answer:

Determining the need for a Reduction in Force (RIF) is a challenging decision to make, but it is sometimes necessary to keep the business running in a positive way. According to the Society for Human Resource Management (SHRM), the definition of a RIF “occurs when changing priorities, budgetary constraints, or other business conditions require a company to abolish positions.”

Before moving forward with a RIF, we recommend that you thoroughly consider all of your options. Some states offer assistance to employers that may help them avert layoffs or receive early intervention to help the workforce impacted by a RIF. For example, Ohio Job and Family Services’ Office of Workforce Development offers a Rapid Response (RR) program that is funded by the U.S. Department of Labor. Services may include customized workshops, training, up-skilling, retooling, certifications or skill matching.

If you determine that your organization needs to move forward with a reduction in force, you should use a carefully planned approach. You will need to be aware of and adhere to state and federal regulations to ensure compliance throughout your process. This will help to protect your organization against employment litigation. It is also important to train your management staff on what they can and cannot do in the RIF process. This is a time to go back to the basics when it comes to managing your human resources and protecting your business.

8 Recommended Steps to Follow When Considering a Reduction in Force

1. Select the Employees for the Layoff

It’s important to determine an objective criteria process for your selection process. Consider factors such as criticality of the position to the business, seniority, performance review scores and any corrective action documents that may have been issued. This is the time that accurate and timely employee documentation throughout the year is important as it will play a big part in your selection process.

You will need to remind managers of the importance of using objective criteria in the selection process and not to make decisions based on who they like or dislike. You may also consider having a “no backfill for one year” rule to ensure the RIF is truly necessary and not a way for managers to “clean house.”

Once you have an initial list of employees to be laid off, you should apply steps 2 – 5 below to ensure that you are in compliance with state and federal regulations.

2. Avoid Adverse / Disparate Impact

According to SHRM, adverse or disparate impact refers to “employment practices that appear neutral but have a discriminatory effect on a protected group. Adverse impact may occur in hiring, promotion, training and development, transfer, layoff, and even performance appraisals.” For help in understanding and navigating this, check out SHRM’s toolkit to avoid adverse impact in employment practices.

3. Review Federal and State WARN Regulations

If an organization is contemplating a RIF or a layoff, there are several factors to take into consideration such as reviewing state and federal statutes, including the Worker Adjustment and Retraining Notification Act (WARN). WARN offers protection to workers and even communities by requiring employers to provide a 60-day notice in advance of a plant closing or what they deem as a mass layoff.  This Act is only applicable to employers with 100 or more employees.

4. Review ADEA and OWBPA Regulations

You will need to comply with two federal regulations that offer protections based on age: ADEA and OWBPA.

The Age Discrimination in Employment Act (ADEA), protects employees 40 years of age and older from discrimination on the basis of age in hiring, promotion, discharge, compensation, or terms, conditions or privileges of employment.

The Older Workers Benefit Protection Act (OWBPA) is an Act that amends the ADEA to clarify the protections given to older individuals in regard to employee benefit plans, and for other purposes.

5. Determine Severance Packages, Benefits Coverage, and Additional Services (if any)

As you develop severance packages, benefits coverage, and any other services that you will offer, you should review the Employee Retirement Income Security Act (ERISA) to ensure compliance. ERISA is a federal law that sets minimum standards for most voluntarily established retirement and health plans in private industry to provide protection for individuals in these plans.

6. Train Supervisors and Managers

These individuals are your first-line of defense (and many times your biggest legal threat) when it comes to employees’ perception of company policies, procedures, and decisions. Although human resources would always like to be the ones to address employee concerns, your front-line managers and supervisors are doing it on a daily basis whether they want to be or not. They should be properly trained on how to handle employee concerns.

Some suggestions for supervisor/manager training include:

  • Basic Discrimination Laws: Be sure supervisors and managers are aware of basic discrimination laws. Assist them with increased communication and employee relation skills so they are able to respectfully support company decisions and communicate with employees regarding their concerns or issues.
  • Staying Compliant and Consistent: Ensure managers and supervisors are clearly aware of what they can and cannot do from a legal perspective. Those involved in the employment process should know and document the process used when restructuring or selecting employees for layoff, and then use it – consistently. A clear legally defendable (non-discriminatory) reason when selecting those who will be let go is the most important aspect of restructuring. In addition, managers and supervisors should be guided by human resources to ensure an appropriate message is being delivered when HR isn’t delivering it.
  • How to Maintain Good Documentation:We all know that documentation is essential for a good legal defense, but also remember it can hurt as well. Train your staff on what good documentation looks like and what to avoid. Remind them that everything is subject to review in a lawsuit – employee warnings, performance evaluations, and even those simple notes we write down on a sticky note and throw in their file. Be aware of what you are putting down into writing and make sure it is objective and defendable.

7. Prepare for Reduction in Force Meetings

As you prepare for your layoff meetings, have a clear plan of what is going to be communicated, who is responsible for communicating the message, and how the message will be delivered both to those who are being directly impacted and those who will remain. It can be helpful to think through your anticipated frequently asked questions and prepare answers prior to your meetings.

8. Inform Your Workforce of the Layoffs

As you deliver the news of your reduction in force, remember that the golden rule still stands in employment – treat your employees the way you would like to be treated. Think about how you would prefer to be treated during these tough times when decisions are so difficult. Treat your employees with dignity and respect at all times. Provide notice of the layoff if it is reasonable, and provide some type of outplacement if you are able.

Be sure to listen to your employees as well. Employees are more likely to file a claim against employers when they feel like they are ignored or that their concerns are not addressed. Although your message may not always be what they want to hear – allow them to be heard and feel a part of the process.

Remember also, the RIF not only effects the person being released from his/her job, but also the remaining employees. There can be an emotional toll on those who remain, in addition to the impact it may have on their job duties as well. Be prepared to provide the resources and tools necessary to help your staff to stay engaged and do well through this difficult time of transition.

How to Handle Changes  to Job Responsibilities

Moving forward, your next consideration is to have a plan about who will absorb each exited person’s job tasks. You should determine if this situation requires a long term solution or if you foresee returning to the prior structure again when the budget allows. Job descriptions for those positions affected by the lay-off will need to be reviewed to reflect changes to the responsibilities and functions of the position. Sometimes you may find the change has actually improved the position making it more efficient.

You may also want to consider a salary review for the positions affected. Since some individuals are now performing the functions of multiple positions, is a pay increase warranted and feasible?

Remember, the job description is based upon the position itself, not the individual performing the job. Make sure to get input from all relevant parties – supervisor and employee – when determining the final role of an impacted position.

In addition, we recommend that you consider cross-training employees on job tasks to be ready for these unforeseen times and to have coverage in the absence of employees when they are out of the office for personal reasons.

To ensure your compliance with all federal and state laws and regulations in the process of a reduction in force, we encourage you to consult with your attorney to review your plans before implementation. Be prepared with a plan and look at the strengths and weaknesses of your team so you are not caught off guard!

 

If your business is considering a reduction in force, the team at strategic HR inc. is available to help coach you through the process and decisions that will need to be made.  We are here to help you through the tough times – just contact us.

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Compensating Employees for Travel Time

Question:

We have employees who occasionally have to travel from one of our offices to another during their work day.  Are we required to pay them for their travel time?

Answer:

This is a very common situation, and the quick answer is it depends.  Exempt employees generally are not entitled to additional compensation for travel time, so when evaluating whether or not to compensate for travel time you should focus only on your non-exempt staff.  Work-related travel time NOT connected to the employee’s regular commute to and from work should generally be compensated and count toward an employee’s hours worked for the purposes of calculating overtime.

You should also have your travel time pay practices and policies reviewed by your legal counsel for the states and localities in which your employees are working to ensure compliance with applicable laws, and to ensure that your policies and practices are appropriate to your particular situation.

If an employee is commuting from home to their usual work site, it is not counted as compensable work hours; however, non-exempt employees who travel as part of their principal working duties should be compensated. Examples might include an office administrator traveling between multiple offices for meetings or a repairman going from one assignment to the next.

Another example of compensable travel time is if the employee is traveling from home to a non-typical work location and back home in the same day.  The amount of time that the employee spends traveling to and from the non-typical work location that exceeds the employee’s normal commute is considered compensable travel time.

Generally, employees should be compensated for all time spent traveling during regular business hours.

Please bear in mind that laws exist in numerous states that provide expanded definitions of travel time or impose additional requirements for travel time pay. The Fair Labor Standards Act (FLSA) addresses this issue specifically in Section 29 CFR § 785.38 (Portal-to-Portal Act).

strategic HR inc. knows that keeping abreast of legal compliance issues can be daunting, especially when the laws keep changing. We can help you stay compliant by fielding your questions and offering resources to help you identify and mitigate compliance issues. Visit our Legal Compliance and Recordkeeping page to learn about our auditing services which can help you identify trouble spots in your HR function.

 

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FSLA – Update Notice

Question:

What is the final rule by the Department of Labor to the Fair Labor Standards Act regarding overtime pay?

Answer:

By now, you have heard that the Department of Labor (DOL) has FINALLY announced the updates to the Fair Labor Standards Act (FLSA). This is a final rule by the DOL to make an estimated 1.3 million American workers newly eligible for overtime pay.

What happened with the last FLSA Rule?

As a reminder, this dated piece of legislation was updated and scheduled to go into effect December 2016.  After much legal activity and postponements, it was never implemented, even after many employers made adjustments to comply.

What is the newest FLSA change?

In summary, the FLSA final rule increases the salary level for the “white-collar” exemptions, and it is scheduled to go into effect January 1, 2020.  Here are the critical pieces you need to prepare for:

  • The current required salary to pass the salary test for exempt status is $455 per week ($23,660 annually).
  • The new required salary level for exemption will be $684 per week ($35,568 annually). You CAN use nondiscretionary bonuses and incentive payments to satisfy up to 10% of the required salary level.  What that means is, for example, you can continue to classify your shift manager who is making $33,000 per year as exempt, as long as you provide nondiscretionary bonuses of at least $2,568, which would get them to the $35,568 requirement.
    • Examples of non-discretionary bonuses could include attendance bonuses, individual or group production bonuses, bonuses for quality and accuracy of work, retention bonuses, and profitability bonuses.
  • There is NO CHANGE to the duties test. Remember…there are 2 parts to the test to determine exemption – salary AND duties.  Only the salary levels test is  changing with this revision.
  • The new level for highly compensated employees will be $107,432. Currently, it is $100,000.

If your current exempt employees don’t meet this new salary requirement, you will either need to take steps to ensure they do meet this requirement or they will need to be reclassified as non-exempt and eligible for overtime. For more details on this final rule, visit the DOL FLSA Update.

Do I really need to worry about the new FLSA rule again?

Bottom line, the updated revisions are different than those proposed in 2016, and they are scheduled to go into effect January 1, 2020.  Similar to the last go around in 2016, it is best to prepare in advance for this change. Is it going to be repealed again?  One never knows, but we need to be prepared regardless.  The good news is that the final rule is not as severe as the 2016 recommended changes, so this change may not be as cumbersome for you to implement.

What should we do now to prepare for the FLSA final rule?

To prepare for FLSA’s final rule, look at your current properly classified exempt staff (those not receiving overtime) and review their current salary levels.  If they are making more than $35,568 annually – you are good to go!  If they are making less than that amount, review any nondiscretionary bonuses they may receive.  Make sure those total no more than 10% of the required salary level to help push them up over the threshold.  If it does not take them over the threshold, you will need to do one of two things: increase their salary to meet the minimum threshold or transition them to hourly status where they would be eligible for overtime.

Our best advice is to make sure that you have taken the steps to be prepared in advance before the new rule goes into effect.

If you’d like help in conducting this analysis for your organization, strategic HR inc. can help. Just reply here and we can have an initial discussion about your organization and discuss next steps. 

 

 

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How to Manage Creditable Coverage Reporting and Notices

HR Question:

I reported “creditability” of my prescription plans in March of this year and now I am getting notices that it is due in October.  Are these the same notices?  Is this the same creditable coverage document and what do I need to do?

HR Answer:

Creditable coverage documents and notices can be confusing because they include two different “parts.”  Do not confuse the reporting of Creditability to the Centers for Medicare and Medicaid Services (CMS) with the notices you must provide to your employees.

Group health plans offering prescription drug plans to members over the age of 65 (whether primary or secondary coverage) are required to report the creditability of the plan and provide those eligible for coverage a creditability notice.  Employers must provide not only those employees and dependents insured under the plan, but also those that may be eligible to be insured under the plan, a Creditable Coverage notice.  This document informs individuals whether or not the drug coverage your plan provides is creditable or actuarially equivalent to what is available under the standard Medicare Part D plan.

These notices must be sent out AT LEAST once a year BEFORE October 15 and prior to an individual’s initial Medicare enrollment period.  The easiest way to do this is to send it to ALL PARTICIPANTS annually, and easier yet is to add it to the open enrollment materials which can include this along with all of the other alphabet soup items necessary for distribution (SPD, CHIPRA, HIPAA, WHCHRA, etc.)  A sample of the notices that must be distributed can be found in this DOL compliance assistance guide.

Specifically, the Medicare Part D Creditable Coverage notices (creditable and non-creditable) are provided by the Centers for Medicare and Medicaid Services.

The notices to employees (above) should not be confused with CMS notification.  In addition to the notices provided to employees, employers are also required to report the creditability of their plan online to CMS each year.  For plans that are on a calendar year (think January renewal), creditability must be reported no later than March 1 using the Disclosure to CMS Form.  The online disclosure should be completed annually no later than 60 days from the beginning of a plan year, within 30 days after termination of a prescription drug plan, or within 30 days after any change in creditable coverage status.  Because of these different due dates, it may be easier for employers to send out BOTH notices in March rather than October.

With all of these requirements, there is good news!  Your broker or group healthcare provider can tell you whether or not your plan is creditable AND The Centers for Medicare and Medicaid Services provides the model notices and a direct link to the online form for reporting.  Creating and distributing these notices should be fairly easy and a quick item to knock off your to do list.  Just get the notices on your calendar each year and don’t forget to include both pieces.

 

strategic HR inc. knows that keeping abreast of legal compliance issues can be daunting, especially when the laws keep changing. We can help you stay compliant by fielding your questions and offering resources to help you identify and mitigate compliance issues. Visit our Legal Compliance & Recordkeeping page to learn about our auditing services which can help you identify trouble spots in your HR function.

 

 

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Under What Circumstances Is Caregiver Status Protected?

Question:

If our employee has a child with special needs, are they considered to be in a “protected” category in any way?

Answer:

The employee isn’t necessarily “protected”; however, under the ADA (Americans with Disabilities Act– which covers private employers with 15+ employees and all state & local government employees) there is protection for employees who are “associated” with a person with a disability.  It’s a bit of a gray area, but essentially the company cannot treat a worker less favorably based on stereotypical assumptions about the employee being able to perform their job duties while also caring for their disabled child (in your example).  A company shouldn’t refuse to hire a candidate because they know their child has a disability (some employers might do this due to worrying about the employee being away from work, high insurance premiums, etc.).  So, even though a company doesn’t have to make reasonable accommodations for someone who is associated with someone with a disability, the employer can’t discriminate against them.  The EEOC enforces the ADA discrimination laws.

Additionally, for a company who meets the guidelines for FMLA, the Department of Labor does specify that parents of adult children with disabilities (or any child with a serious health condition perhaps stemming from a disability) would be entitled to the 12 weeks/year of job protected leave.  Here is a link to the Department of Labor’s guidelines.

FMLA and other workplace compliance issues  can be difficult to understand, let alone enforce. That’s where strategic HR inc. has you covered. We bring years of HR experience and know-how to the table. We can assist you with your tough compliance issues and help you sleep more soundly at night. Visit our Compliance page to learn more.

 

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Post-Accident Drug Test: Workers Compensation?

Question: 

Say what? The employee who failed his post-accident drug test gets workers compensation?

Answer:

Employers might assume that an injured worker’s positive post-accident drug or alcohol test will automatically defeat a related workers’ compensation claim.  However, in Ohio at least, the reality is a bit more complicated.  Under Ohio law, a positive, post-accident drug test raises only a “rebuttable presumption” that the injured worker’s use of drugs or alcohol proximately caused the industrial injury.  Since this legal presumption is “rebuttable,” the burden then shifts back to the employee to prove that the impairment did not cause the accident. This burden-shifting “rebuttable presumption” can be a potent defense to some claims. However, the presumption is triggered only if the following elements are first satisfied:

  1. The employer must have previously posted written notice that a positive test may disqualify the employee from benefits. To satisfy this requirement, employers often include this notice in their substance abuse section of the employment handbook.
  1. The detected levels of alcohol or other controlled substances must have been above the applicable threshold. These levels are mandated by federal law. Alternatively, if the injured worker refuses to submit to a test, the presumption will be triggered.
  1. A post accident test will qualify for the presumption only where: (1) the employer had reasonable cause to suspect that the employee was under the influence of drugs or alcohol at the time of the accident; (2) the testing was done at the request of a police officer; or 3) the testing was done at the request of a licensed physician, who is not otherwise employed by the employer.

Ohio law defines “reasonable cause” as evidence that an employee is or was using alcohol, a controlled substance, or marijuana, drawn from specific, objective facts and reasonable inferences drawn from those facts in light of experience and training.  Examples of reasonable cause might include: direct observation of use; pattern of abnormal conduct; criminal investigation of employee for drug use; report of use by credible source; or repeated or flagrant violations of the safety or work rules of employer.

These requirements seem to create a conflict between the rebuttable presumption rule and an employer’s right to implement a zero tolerance drug policy at their workplace.  In fact, Ohio law specifically addresses this tension.  The statute provides that “nothing in this section shall be construed to affect the rights of an employer to test employees for alcohol or controlled substance abuse.”  See O.R.C. §4123.54(D).

Thank you to Lindsey K. Deck, Esq. and Karl R. Ulrich, Esq., for sharing your expertise in this week’s Question of the Week. Lindsey and Karl are both attorneys at Sebaly Shillito + Dyer. To contact Lindsey, please call (937) 222-2500. To contact Karl, please call (937) 222-2052. Click here to visit their website. 

Too many new Labor Law changes to keep up with? Let strategic HR inc. help you navigate the employment law minefield. Ask us for assistance with any of your Legal Compliance needs. Please visit our Compliance page for more information or call us (513-697-9855) if you have a specific question or need.

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Can We Hire Someone on a J-2 Visa?

Question:

What is a J-2 Visa holder? Can we hire a J-2 Visa holder for a position that is located in the United States?

Answer:
A J-2 Visa holder is a spouse or dependent of a J-1 Visa holder.  A J-1 Visa is a non-immigrant visa issued by the United States to research scholars, professors, and exchange visitors participating in programs that promote cultural exchange, especially to obtain medical or business training within the U.S.

A candidate that is a J-2 Visa holder is eligible to work in the United States if they have an Employment Authorization Document (EAD) from the Department of Homeland Security or Immigration.

When you onboard the J-2 Visa holder as an employee of your company, you would use the information on the Employment Authorization Document as a “List C” documentation on the I-9 form.  An Employment Authorization Document does have an expiration date.  Be sure you take note of is the expiration date.  You will need to get an updated Employment Authorization Document from the employee if the individual continues employment after the expiration date.

When employing an individual that is a non-US citizen, it is always best to make your attorney aware and consider consulting an immigration attorney to ensure you are in compliance.

strategic HR inc. knows that keeping abreast of workplace compliance issues and deadlines can be daunting, especially when the laws keep changing. We can help you keep up to date on these changes by offering resources to help you identify and mitigate compliance issues and by making sure you are informed of changes and reacting in a timely manner. Our HR Audit will help your organization identify trouble spots in your HR function. Visit our HR Audit page to learn more about this helpful service.

 

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Is It Acceptable to Cut a Live Check to Entice an Employee to Return Company Property?

Question:

One of our employees quit, but hasn’t returned their company key or equipment.  We typically use direct deposit, but is it acceptable to require employee to pick up their final paycheck when company property has not been returned?

Answer:

This can definitely get tricky, as it is understandable that you want to ensure receipt of all company property. Regardless of whether the employee has failed to return company property, it is important to remember that you must meet federal and state final pay deadlines. Federal law requires final pay at the next regular payday, but some states require final pay sooner.

While withholding an employee’s final paycheck is not allowed, there are some cases in which deductions may be permitted under federal law. For non-exempt employees, the Fair Labor Standards Act (FLSA) permits deductions for unreturned equipment as long as it does not reduce the employee’s pay below the minimum wage and does not cut into any overtime pay. Some states prohibit this practice or have additional requirements. Please check your state law before making a deduction. Deductions for unreturned equipment are never permitted for employees classified as exempt from overtime.

There is no legal issue with cutting a “live” check for their final paycheck instead of direct deposit as long as you follow both the federal and state final pay laws.

 

We understand, there are just too many new Labor Laws to keep up with. Not only are there laws that govern hiring practices, safety concerns and recordkeeping requirements, then there are the compensation and benefit laws. Let strategic HR inc. help you navigate the employment law minefield. Ask us for assistance with any of your Legal Compliance needs. Please visit our Compliance page for more information or call us if you have a specific question or need.

What Does In Loco Parentis Mean In Regards to a FMLA Claim?

Question:

I thought if an employee wants to take FMLA leave to care for a child they have to show proof of guardianship, but now I’m hearing that’s not necessarily the case because of “in loco parentis”… what does this mean?

Answer:  

When an employee requests FMLA leave to care for a family member who is obviously not their child or parent, an initial reaction would be for the employer to deny the request.  However, under the FMLA, the U.S. Department of Labor Wage and Hour Division definition of “parent” and “son or daughter” includes any other individual who stands in loco parentis (“in the place of a parent”) to the employee or child.  In these cases a legal or biological relationship is not required.  Failing to recognize the in loco parentis relationship could result in an FMLA interference claim.

Employers should act diligently when an employee requests FMLA leave to care for an individual who is not obviously a parent or child, and should explore whether an in loco parentis relationship exists.  An employer may require an employee to provide reasonable documentation or a statement of the family relationship.  Employers should keep in mind that a simple statement asserting that the requisite family relationship exists is all that is needed for in loco parentis situations where there is no legal or biological relationship.

The FMLA regulations define in loco parentis as including persons with day-to-day responsibilities to care for or financially support a child.  Courts have indicated some factors that determine in loco parentis status include:

  • the age of the child;
  • the degree to which the child is dependent on the person;
  • the amount of support, if any, provided; and
  • the extent to which duties commonly associated with parenthood are exercised.

An eligible employee is entitled to take FMLA leave to care for a person who provided such care to the employee when the employee was a child. If the individual stood in loco parentis to the employee when the employee was a child, the employee may be entitled to take FMLA leave even if he or she also has a biological, step, foster, or other parent, provided that the in loco parentis relationship existed between the employee and the individual when the employee met the FMLA’s definition of a “son or daughter.”  Although no legal or biological relationship is necessary, grandparents or other relatives, such as siblings, may stand in loco parentis to a child under the FMLA as long as the relative satisfies the in loco parentis requirements.

 

FMLA, the ADAAA and other labor laws can be difficult to understand, let alone enforce. That’s where strategic HR inc. has you covered. We bring years of experience and know-how to the table. We can assist you with your tough compliance issues and help you sleep more soundly at night. Visit our Compliance page to learn more.

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What Laws Apply When Businesses Reach 50 Employees?

Question:

My organization is growing and we are about to reach 50 employees. What do I need to do now?

Answer:

Congratulations! Reaching a workforce of 50 employees is a terrific milestone; and likely the result of business growth and success! In the employment arena, there are a few regulatory requirements when employers reach an employee count of 50 or more:

Family Medical Leave Act:

The Family and Medical Leave Act (FMLA) FMLA applies to all public agencies, all public and private elementary and secondary schools, and companies with 50 employees or more. FMLA is designed to help employees balance their work and family responsibilities by allowing them to take reasonable unpaid leave for certain family and medical reasons. It also seeks to accommodate the legitimate interests of employers and promote equal employment opportunity for men and women.

An employer is not immediately covered under the FMLA when it reaches 50 employees. Instead, the employer needs to maintain 50 employees or more on the payroll for a period of 20 or more calendar work weeks (not necessarily consecutive work weeks) in either the current or preceding calendar year.

What to do:  If you expect your headcount to remain steady at 50 employees or more, you’ll need to monitor your headcount closely. Once you satisfy the 50 employees over 20 or more calendar work weeks), you’ll need to implement an FMLA policy and begin offering the benefit to your workforce. It’s recommended you draft the policy ahead of time and be ready to implement it once it becomes a requirement.   

The Affordable Care Act (ACA):

The Affordable Care Act (sometimes known as ACA, PPACA, or “Obamacare”), is a comprehensive health care reform law enacted in March 2010. The law has 3 primary goals:

  • Make affordable health insurance available to more people.
  • Expand the Medicaid program to cover all adults with income below 138% of the federal poverty level. (Not all states have expanded their Medicaid programs.)
  • Support innovative medical care delivery methods designed to lower the costs of health care generally.

Employers with 50 or more full-time and/or full-time equivalent (FTE) employees must follow the Employer Shared Responsibility Provision. Employers with 50 or more full-time employees and/or FTEs that don’t offer affordable health insurance to qualified employees may be subject to penalties.

What to do:  First, determine if you’re an “Applicable Large Employer” (ALE) under the ACA which equates to 50 or more full-time employees and full-time equivalent employees (FT/FTE). The ACA classifies “full time” employment as 30 hours a week of work or more. So, when you’re calculating your total number of employees, you’ve got to include both full-time employees as well as those who work the equivalent of full-time hours.

Secondly, review your health plans to determine if they meets ACA requirements. Providing access to “affordable” health insurance of “minimum value” is one of the core purposes of the ACA. Review ACA requirements against your current benefit plans and work with your human resources professional or insurance broker to identify what changes (if any) need to be made in order to be in compliance.

ACA Reporting:

Once you have 50 or more full-time employees and/or FTE employees, you also have new responsibilities for information reporting.

What to do: The IRS details the pertinent information about your potential reporting requirements.

Federal Contractor Requirements:

If you’re an employer who works on federal contracts, there are additional Federal requirements once you reach 50 employees or more:

  • Affirmative Action Plans (AAPs) outline an organization’s policies and procedures for proactively recruiting, hiring, training, and promoting women, minorities women, minorities, people with disabilities, and veterans to ensure that all individuals have equal opportunities in employment. Employers with 50 employees or more and $50,000 in government contracts must have an Affirmative Action Plan.
  • EEO-1 Reporting – The Equal Employment Opportunity Commission (EEOC) requires all federal contractors who have 50 employees or more to fill out and submit the EEO-1 Report. The report requires employers to provide a count of employees by job and then by race, ethnicity, and gender.

 

Are you concerned that you are not in compliance with the required labor laws? Let strategic HR inc. help. Visit our Legal Compliance page for more information.

Final Rule for Disability Claims Procedures Effective as of April 1st

Question:

As an employer, what questions should I be asking about the final rule released by Department of Labor (DOL) providing new requirements for disability claims procedures?

Answer:

As of April 1, 2018, group health plans must comply with new procedural requirements when administering disability benefit claims. While this is no April Fool’s joke, there is good news for employers – insurers and third-party administrators will manage or assist with the necessary changes.

DOL’s Final Rule

The DOL notes that employees who request disability benefits deserve similar protections consistent with rules for group health plan claims. As such, the final rule governs the requirements of disability claims procedures of ERISA-covered plans that provide disability benefits, requiring that plans, plan fiduciaries and insurance providers comply with additional procedural protections when dealing with disability benefit claimants. The new requirements include increased disclosure rules, such as:

  • Improvement to Basic Disclosure Requirements: Benefit denial notices must contain a more detailed discussion of reasons for denial of a claim and the standards used in making the decision.
  • Right to Claim File and Internal Protocols: Benefit denial notices must include a statement that the claimant is entitled to receive, upon request, the entire claim file and other relevant documents. Benefit denial notices also must include the internal rules, guidelines, protocols, standards or other similar criteria of the plan that were used in denying a claim, or a statement that none were used.

There are additional requirements, reference the DOL’s Fact Sheet regarding the Final Rule for disability claims procedures.

What does this mean for employers?

In light of these new requirements, employers have been asking what needs to be done in order to comply. As mentioned above, group health plans that provide disability benefits under an ERISA covered plan are affected and should operate in compliance with the new rule as of April 1st. However, it is important to note that for employers who provide disability benefits via a fully-insured plan, the carrier should implement necessary changes and update documents to comply with these new rules. For employers with self-funded disability plans covered under ERISA, their administrators should assist with updating any documents and processes. Also important to note, short-term disability arrangements considered to be payroll practices are not subject to ERISA (and the new procedures do not apply).

Employers should confirm with their insurers or third-party administrators that there is compliance with the new rule for disability benefit claims filed after April 1st. Please contact your HORAN representative with any questions.

THANK YOU to HORAN for providing the content for this Question of the Week. HORAN serves as a trusted advisor on employee benefits, wealth management and life and disability insurance.  To learn more about HORAN, please contact your HORAN for additional information.

 

We understand, there are just too many new Labor Laws to keep up with. Not only are there laws that govern hiring practices, safety concerns and recordkeeping requirements, then there are the compensation and benefit laws. Let strategic HR inc. help you navigate the employment law minefield. Ask us for assistance with any of your Legal Compliance needs. Please visit our Compliance page for more information or call us if you have a specific question or need.

Don’t Snooze Through Wage Garnishments!

Wage Garnishments! How exciting! Not buying the enthusiasm? Me either. Garnishments just might be the most boring wage & hour topic ever. Nonetheless, most employers will have to deal with employee wage garnishments at one point or another. It might be for child support, alimony, taxes or an employee with bad debt. Regardless of reason, it is important to make sure they are done properly. Please bear with me and don’t fall asleep until you’ve at least read the first paragraph or two. I’ll do my best to keep you awake and you might even learn something along the way.

Question: Do we really have to? Can’t we just fire the employee instead of garnishing wages?

Answer: It depends. (You didn’t really expect a straight answer, did you?) The Consumer Credit Protection Act (“CCPA”) prohibits an employer from firing an employee whose earnings are subject to wage garnishment for any one debt. However, if the employee has two or more debts, the CCPA does not prohibit discharge. Before discharging an employee for excessive wage garnishments, employers are wise to run the scenario past employment counsel to make sure there are no other factors which might lean against termination.

Question: How much are we required to garnish?

Answer: It depends. (Are you noticing a pattern here?) The amount of an employee’s wage that is subject to garnishment is determined by the employee’s “disposable earnings.” Disposable earnings are essentially the net amount of an employee’s pay after legally required deductions are made – i.e., Uncle Sam gets his cut first. The Department of Labor (“DOL”) has a fancy formula for determining the amount. I’m fairly certain that the formula was designed by NASA engineers on a mission to design something more complicated than the IRS tax code. There are different limits depending upon whether the garnishment is for child support, alimony, bankruptcy, taxes or other debt. Clear as mud, right?

As a general rule, the first $217.50 of the employee’s disposable weekly income is not subject to garnishment. After that, employers need to apply the DOL’s formulas for determining the amount, which can vary from 10% of disposable earnings all the way up to 60%, depending upon the reason for the garnishment. Here is a link to DOL guidance on calculating garnishment amounts. It is definitely worth contacting employment counsel (or a rocket scientist) when determining the proper amount to garnish.

Question: What’s the DOL’s new garnishment guidance?

Answer: It depends. (Just making sure you’re still awake!) The DOL recently issued Opinion Letter CCPA2018-1NA which addressed whether lump-sum payments are considered earnings subject to garnishment under the CCPA. With a few exceptions, the quick answer is that the vast majority of lump sum payments are subject to garnishments. The DOL’s standard is “whether the employer paid the amount in question for the employee’s services.” If the payment is for the employee’s services in almost any way, the payment will be subject to garnishment.

The DOL determined that these lump-sum payments are earnings subject to garnishment:

  • Wages
  • Commissions
  • Bonuses (discretionary, non-discretionary, performance, productivity, referral, sign-on)
  • Profit sharing
  • Relocation incentive payments
  • Attendance awards
  • Safety awards
  • Cash service awards
  • Retroactive merit increases
  • Holiday pay
  • Severance pay
  • Termination pay
  • Workers’ compensation payments for wage replacement
  • Insurance settlements for back/front pay.

These lump-sum payments are not earnings subject to garnishment:

  • Workers’ compensation payments for medical reimbursements
  • Wrongful termination insurance for compensatory or punitive damages
  • Buybacks of company shares

As with the other DOL opinion letters Graydon has covered, this opinion letter does not represent a significant directional change for the DOL. It is consistent with what we’ve advised clients for years. What is significant is that these opinion letters provide assurances that employers are on the right track. It is also significant that the DOL is once again taking a proactive approach to helping employers figure things out before they step into a pot of boiling water.

Thanks for staying awake! Buehler? Buehler?

THANK YOU to Lee Geiger at Graydon for providing the content for this Question of the Week. Graydon serves as a trusted legal advisor on all aspects of employment law.  To learn more about Graydon, please contact Lee Geiger at Lgeiger@graydon.law or www.Graydon.law for additional information.

 

Is your head spinning? Too many new Labor Law to keep up with? Let strategic HR inc. assist you with navigating the employment law minefield. We can help you with any of your Workplace Compliance and Recordkeeping needs. Please visit our Legal Compliance page for more information or feel free to call us if you have a specific question or need.

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Can you be an Employee and Independent Contractor for the Same Company?

Updated October 6, 2020

 

HR Question:

Can an individual that is working for us be both an employee AND an independent contractor?

HR Answer:

According to IRS guidelines, it is possible to have a W-2 employee who also performs work as a 1099 independent contractor so long as the individual is performing completely different duties that would qualify them as an independent contractor.

Some legitimate examples that we have seen of this circumstance are:

  • A Receptionist who also owns a cleaning service business with their spouse: The company contracts with the team to perform janitorial services after hours for the office.
  • A Sales Manager also performs graphic design work for several local businesses after hours: The company contracts with the individual to create a new logo for the company.
  • A Maintenance Technician also owns a fabricating business of their own: The company contracts with the individual to fabricate equipment for the company.
  • A custodian who works for a county public school: The county views him as an employee and issues him a Form W-2 for these services. He also owns and operates a business that provides snow plowing services on nights and weekends. The county contracts with the individual to provide snow plowing services.

An employee owning their own business is not a requirement, but rather one of the factors to consider when determining if someone may be properly classified as an independent contractor. If you feel confident in the IRS criteria on the whole, you may classify their separate work as independent contractor work. Employers must be sure they fully understand the DOL criteria that distinguish contractor versus employee!

Criminal penalties and liability for backpay may be imposed against organizations and leaders if FLSA laws are violated.  The DOL has recently concentrated on employer misclassification of independent contractors.  Additional auditors have been engaged to direct their attention toward this area of compliance.

It is widely believed among tax professionals that having a worker receive both a W-2 and 1099 increases the likelihood of an IRS audit.

NOTE:  In the same timing as this article was rewritten, the DOL has proposed rules that Secretary of Labor Eugene Scalia indicated will “bring clarity and consistency to the determination of who’s an independent contractor under the Fair Labor Standards Act.”  strategic HR inc. will provide updates once the new regulations are finalized.

 

strategic HR inc. knows that keeping abreast of legal compliance issues can be daunting, especially when the laws keep changing. We can help you stay compliant by fielding your questions regarding properly classifying your employees and other HR matters. We offer resources to help you identify and mitigate compliance issues. Visit our Legal Compliance & Recordkeeping page to learn about our auditing services which can help you identify trouble spots in your HR function.

Which States Have a Minimum Wage Increase in 2018?

Question:
Does the minimum wage increase every year? I heard it was recently raised again in Ohio.

Answer:
The national minimum wage is $7.25 – however, each State also has regulations regarding the minimum that can be paid to employees.

  • Locally Indiana and Kentucky both follow the prevailing minimum wage set forth by the Federal government.
  • However, Ohio wages are based on the U.S. Consumer Price Index and was just recently raised on January 1, 2018 – now the minimum wage in Ohio is $8.30 an hour. The wage is still $7.25 for employers who gross less than $305,000 per year  and for 14- and 15-year-old workers—the federal minimum wage standard. Tipped employees are paid $4.15 (tip amount plus this must equal $8.15) for tipped workers. (Click Here for a copy of the Ohio Minimum Wage Poster for 2018)
  • Multiple states have a minimum wage increase for 2018. A good resource to refer to is the Department of Labor State Minimum Wage Laws.  

Below is a summary of changes effective January 1, 2018: (Note: Some local laws may require different minimum wage rates).

  • Alaska: $9.84 per hour.
  • Arizona: $10.50 per hour.
  • California: $11.00 per hour with 26 employees or more; $10.50 per hour with fewer than 26 employees.
  • Colorado: $10.20 per hour.
  • Florida: $8.25 per hour.
  • Hawaii: $10.10 per hour.
  • Maine:  $10.00 per hour.
  • Michigan: $9.25 per hour.
  • Minnesota: $9.65 per hour for large employers (annual gross revenue of $500,000 or more); $7.87 per hour for small employers (annual gross revenue of less than $500,000).
  • Missouri: $7.85 per hour.
  • Montana: $8.30 per hour.
  • New Jersey: $8.60 per hour.
  • New York: (effective 12/31/17)
    • $11.00 per hour Nassau, Suffolk, Westchester counties;
    • $10.40 per hour remainder of New York ($11.75 for fast food employees in fast food places outside of New York City).
  • Ohio: $8.30 per hour (gross receipts of $305,000 or more); $7.25 per hour (gross receipts under $305,000).
  • Rhode Island: $10.10 per hour.
  • South Dakota: $8.85 per hour.
  • Vermont: $10.50 per hour.
  • Washington: $11.50 per hour.

Are you hesitant when it comes to navigating Wage and Hour issues or other federally mandated rules and regulations? strategic HR inc. understands your uncertainty. Ask us for assistance for any of your benefits and compensation needs. Please visit our Benefits & Compensation page for more information on any of these services.

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Compensating Employees for the Company Holiday Party

Question:

Our company is having a company holiday party, so do we need to pay our employees to attend?

Answer:

It’s that time of year when companies are planning holiday parties as a way to build morale and celebrate the past year with their employees.  In regards to compensation for attending the company holiday party, the obligation to pay employees for attendance at a holiday party applies only to nonexempt employees.  Exempt employees do not need to be paid extra for time spent attending.  The big thing to consider is whether or not attendance is required.  If attendance at the event is strictly voluntary, and you clearly explain this up front with all employees (including non-exempt) then you are not required to pay employees to attend.  Holiday parties scheduled during the regular work day will always be compensated.  Conversely, no compensation is owed for holiday-party attendance that is 100% voluntary and strictly for the benefit of employees.

One other point to remember is that while attendance at a holiday party may be 100% voluntary for most employees, those who are working the event — even if the work is voluntary — must be paid.

In conclusion, when planning your holiday party, remember the following:

  • Make attendance at the holiday party entirely voluntary and clearly convey that message to employees.
  • Consider scheduling the party during regular working hours when nonexempt employees are paid anyway.
  • To the extent attendance is required, publish the hours of the party and enforce them.
  • Neither ask nor permit nonexempt employees to prepare for and/or work at the party outside regular work hours.
  • Remember there are various legal considerations. For example, serving alcohol, especially if provided without limitation, can lead to employee DUIs and tort claims, as well as reduced inhibitions that might lead to harassment claims.

 

We understand, there are just too many new Labor Laws to keep up with. Not only are there laws that govern hiring practices, safety concerns and recordkeeping requirements, then there are the compensation and benefit laws. Let strategic HR inc. help you navigate the employment law minefield. Ask us for assistance with any of your Legal Compliance needs. Please visit our Legal Compliance page for more information or call us if you have a specific question or need.

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2017 Updates to the Form I-9

Question:

Someone mentioned to me that we were using an old version of the Form I-9. What’s the latest version and where can I find it?

Answer:

On July 17, 2017, the US Citizenship and Immigration Services (USCIS) released a new version of the Form I-9. The new version has a few changes to the instructions and the list of acceptable documents. Plus, it should streamline the certification process for some foreign nationals. Employers completing the Form I-9 online will be able to select Form FS-240 (Consular Report of Birth Abroad).  

For more details on the changes, visit “What’s New” I-9 Central.  Employers can begin using the new I-9 (Rev. 07/17/2017 N) immediately​, but most ​are required to make the ​switch to the new form beginning September 18.

The Form I-9 is used to:

  • Verify employment eligibility in the United States, and
  • Must be completed within 3 days of an employee’s start date.

It is not required to:

  • Retain copies of the documentation proof;
  • However, many organizations do to prevent any confusion or errors.

The completed I-9 must be retained until one year after termination or three years after hire, whichever is longer. It is not required, but recommended, to retain all completed I-9s in a binder/folder. Some organizations will even keep terminated employee’s I-9 forms in a separate folder to aid in shredding once past the mandatory retention requirements.

 

We understand, there are just too many new Labor Laws to keep up with. Not only are there laws that govern hiring practices, safety concerns and recordkeeping requirements, then there are the compensation and benefit laws. Let strategic HR inc. help you navigate the employment law minefield. Ask us for assistance with any of your Legal Compliance needs. Please visit our Compliance page for more information or call us if you have a specific question or need.

Managing Frequent ADA Accommodations

Question:

I have an employee with a disability and I have made frequent ADA accommodations for them but lately their attendance is horrible.  Frequent call-ins for one thing or another or doctors’ visits have become the norm.  I can’t keep my production line running and I can’t plan for it.  Does the ADA require that I just live with this?  Are they exempt from my attendance policy as an accommodation?

Answer:

Although the ADA would like to require you to modify the schedule for this individual, and even in some circumstances alter the time and attendance requirement for this person as a reasonable accommodation, it is not necessary if it is causing an undue hardship.  Employers DO NOT have to exempt an employee from:

  • Time and attendance requirements,
  • Allow them to come and go as they please, or
  • Accept irregular, unreliable attendance.  

If the frequent and/or unpredictable nature of such absences put a strain on your operations (can’t meet production standards in this example) and a reasonable accommodation cannot be made, it is within your right to follow the attendance policy you have set forth for all of your employees.  If the poor attendance cannot be accommodated and it is causing production problems, customer issues, or costs you additional money in overtime to have someone “cover” for the missed shift, these may be examples of undue hardship for the company.  In this example, the employee is not meeting an essential duty of the job, ADA accommodations would impose an undue hardship, and discipline is warranted, up to and including termination.

According to the EEOC, It is not necessary to provide a reasonable accommodation if doing so would cause an undue hardship.  Undue hardship means that an accommodation would be unduly costly, extensive, substantial or disruptive, or would fundamentally alter the nature or operation of the business.  Among the factors to be considered in determining whether an accommodation is an undue hardship are the cost of the accommodation, the employer’s size, financial resources, and the nature and structure of its operation.  For more detailed information on ADA Accommodations, visit The U.S. Equal Employment Opportunity Commission page: The ADA: Your Responsibilities as an Employer.

 

Is your head spinning? Too many new Labor Laws to keep up with? Let strategic HR inc. assist you with navigating the workplace compliance minefield. We can help you with any of your  compliance needs. Please visit our Legal Compliance page for more information or feel free to call us if you have a specific question or need.

As a Federal Contractor, are you aware of the Affirmative Action Plan (AAP) Requirements by the OFCCP?

Question:

Are you a Federal Contractor?  If so, are your recruiters aware of the Federal Contractor AAP requirements to use the local State Employment Agency for job openings? Are they networking with veteran and disabled organizations to recruit and fulfill the 6.9% Veteran benchmark and 7% utilization goal for Disabled?  And, are they aware of your current year AAP goals for minorities and females as they recruit to fill those jobs with goals?  

Answer:

As a reminder, if you have a single federal contract of $50,000 or more AND 50 employees, you must record and document your outreach efforts by completing an Outreach Assessment as required by the Office of Federal Contract Compliance Programs (OFCCP).  This documentation is important in case of an OFCCP audit.  Note: Outreach and recruitment was the second most cited violation by the OFCCP in 2015.   

There are 3 questions that need to be analyzed in your recruiting efforts and documentation:  (These records must be retained for 3 years.)

  1. Did the recruiting activity attract qualified applicants who are protected veterans and/or disabled?
  2. Did the recruiting activity result in the hiring of protected veterans and/or individuals with disabilities?
  3. Did the recruiting activity expand your outreach to protected veterans and/or individuals with disabilities in the community?

It is required that contractors create an AAP within 120 days after the award of the federal contract.  Federal Contractor AAP requirements state that the following information must be documented and updated annually: 

  1. Number of protected veteran applicants; 
  2. Total number of applicants for all jobs; 
  3. Total number of job openings and jobs filled; 
  4. Number of protected veterans hired; and
  5. Total number of applicants hired.

 

A special thanks to Karen Whiteside, President of KBW Associates, for sharing her expertise with us. Karen’s website is at www.kbwassociates.com, To receive her quarterly newsletter, contact her at aapsuppport@kbwassociates.com or 760.771.6553.

 

Federal Contractors face a huge hurdle of regulations, including creating Affirmative Action Plans. Strategic HR, inc. knows that keeping abreast of legal compliance issues are important and can be a challenge, especially when the laws keep changing. We can help you stay compliant by offering resources to help you identify and mitigate compliance issues and by making sure you are informed of changes and reacting in a timely manner. Visit our Legal Compliance page to learn more about this helpful service.

 

Has Trump’s Administration Changed ACA Compliance?

Question:

With regards to the new presidential administration and ACA compliance, is it still necessary to provide the ACA forms to our employees or should we wait and see what happens and if the legislation is repealed?

Answer:

No, you definitely should not wait!  You will be out of compliance.  

Regardless of what is going to happen (repeal or not) the ACA compliance regulations are still in place TODAY.  So, employers must continue to ‘play by the rules’ until a legal ruling is in place.

The bottomline is to keep doing what you were doing.  

If you haven’t completed the forms yet, the good news is that the IRS actually extended the deadline for employers to furnish the 1095-B and 1095-C forms for 2016.  

  • Typically they are due on January 31.  The deadline has been extended until March 2, 2017 to get those forms out.  Not a lot of time but an extension is an extension.  

It is important to note that even though the dates to furnish these forms has been extended, the deadline for the 1094-B and 1094-C are still due March 31, 2017 (electronic filers) and February 28 (paper filers).  These documents are generally required by employers with 50+ employees, but check out the requirements to make sure you do (or do not) have to comply.

Recordkeeping is one of the more mundane tasks associated with Human Resources, but is extremely important and can get you into hot water if not done properly. Keeping appropriate recruiting and hiring documentation is vital to proving, if needed, your employment processes are compliant.  Strategic HR, inc. has a great online tool that’s affordable, easily downloaded and ready for immediate use.  Our Recordkeeping desktop reference has everything you need to see at-a-glance recordkeeping requirements mandated by law.  Visit our Desktop Reference page to learn more.

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Is It Important to Use Consensual Relationship Agreements?

HR Question:

We just found out that two of our employees are in a romantic relationship and we don’t currently utilize consensual relationship agreements. Although they’re not in a supervisor/subordinate relationship, should we still be concerned? What should we do?

HR Answer:

Although romantic relationships in the workplace are quite common, you do have reasons for concern about employees dating.

Of course, the #1 fear for most employers is the risk of a sexual harassment lawsuit.  The difficulty for the employer is proving that a relationship is consensual.  The best approach is to first meet with both employees independently and determine whether there is any possibility that the agreement is not consensual. In particular, you should:

  • Make sure that the employee understands the company’s sexual harassment policy;
  • Emphasize to your employee that they will not be retaliated against for reporting sexual harassment;
  • Explain the procedure for reporting sexual harassment; and
  • Document the employee’s file with a summary of the interview.

Assuming that the relationship is indeed consensual, a great tool is to require the employees to enter a “Consensual Relationship Agreement.”   The agreement, signed by both employees and management, provides that the employees will not allow the relationship to interfere with or impact the work environment, and also confirms and documents that the relationship is consensual and voluntary.  It is highly encouraged that the employer attach a copy of the company’s sexual harassment policy to the agreement to prove that the employee was aware of the sexual harassment policy and had the opportunity to report any inappropriate conduct by the other employee.  If done properly, a consensual relationship agreement will make it more difficult for an employee to claim that the relationship was “unwelcome.” In addition, the agreement will create a question about why the employee did not seek to stop the harassment by reporting it to management.

Consensual Relationship Agreements can be an important tool in managing the risk of sexual harassment claims; however, they must be created and administered with care.

Unsure what “Consensual Relationship Agreements” looks like? If you subscribe to our Virtual HR Solutions, you can access a sample of this agreement along with other HR-related policies, forms, checklists, toolkits, and more.  As a Virtual HR Solutions subscriber, you have 24/7 access to these easily customizable self-service tools.  Contact us for a free demo.

Electronic vs. Paper I-9 Forms

Question:

Can I maintain my I-9 Forms electronically or do I need to keep a paper copy?

Answer:

Yes – the documents can be stored either way the employer prefers.  The U.S. Citizenship and Immigration Services (USCIS) does have basic requirements, however, if you wish to store your documents electronically.  The USCIS provides the following guidelines for electronic storage of the documents:

  • Include controls to ensure the integrity, accuracy and reliability of the electronic generation storage system.
  • Include controls to detect and prevent the unauthorized or accidental creation of, addition to, alteration of, deletion of or deterioration of an electronically completed stored Form I-9, including the electronic signature, if used.
  • Include controls to ensure an audit trail so that any alteration or change to the form since its creation is electronically stored and can be accessed by an appropriate government agency inspecting the forms.
  • Include an inspection and quality assurance program that regularly evaluates the electronic generation or storage system, and includes periodic checks of electronically stored Form I-9, including the electronic signature, if used.
  • Include a detailed index of all data so that any particular record can be accessed immediately.
  • Produce a high degree of legibility and readability when displayed on a video display terminal or reproduced on paper.

The record retention requirements for storage do not change based on how the documents are stored – they stay the same.

Be sure you are using the newest I-9 effective January 22, 2017.

Let strategic HR inc. help you navigate the employment law minefield. Ask us for assistance with any of your legal compliance needs. Please visit our Compliance page for more information on any of these services.

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FMLA and Maternity Leave

Question:  

I am pregnant and am looking to take some time off after the baby is born under the Family Medical Leave Act.  I have worked for my employer for over 3 years off and on but they aren’t consecutive. Do I still qualify for FMLA?

Answer:

Everyone’s favorite HR answer….Maybe!  In order to be eligible to take leave under the FMLA, an employee must:

  • Work for a covered employer
  • Work 1,250 hours during the 12 months prior to the start of leave
  • Work at a location where 50 or more employees work at that location or within 75 miles of it
  • Have worked for the employer for 12 months

However, the 12 months of employment are not required to be consecutive to qualify for FMLA leave. The regulations state, “…only employment within seven years is counted unless the break in service is due to an employee’s fulfillment of military obligations, or governed by a collective bargaining agreement or other written agreement.”

For more details on FMLA – See the Federal Department of Labor page regarding the Federal Leave. Employers are also reminded that some states have more generous FMLA laws.  Check your state regulations as well to make sure you are complying with your state leave laws.

Strategic HR, inc. knows that keeping abreast of legal compliance issues can be daunting, especially when the laws keep changing. We can help you stay compliant by offering resources to help you identify and mitigate compliance issues, such as our HR Audit which helps identify trouble spots in your HR function.

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English-Only Rules in the Workplace

Question:

The owner of our company wants to institute an “English-only” rule, requiring our employees to only speak English in the workplace.  I’m just not comfortable with this at all.  Is this even legal?

Answer:

The Equal Employment Opportunity Commission (EEOC) has issued a position statement indicating that English only policies in the workplace violate the law – unless there is a business necessity.  The EEOC has indicated that the rule should be limited to times when it is needed for safe and/or efficient operations.  If a rule appears justified and is instituted, it is highly recommended that the rule not be enforced during breaks and lunches.  For the EEOC statement regarding English only workplace rules go to:-  EEOC, Employment Rights of Immigrants Under Federal Anti-Discrimination Laws and scroll down to “Speak-English-Only Rules.

A few thoughts to keep in mind, you can translate critical documents into other languages fairly easily.  Think about what those key documents or postings may be. A few examples are employment application, employee handbook, safety warnings.  Often the cost to translate is minimal either using an online solution or reaching out to a translation company (ie. Affordable Language Services)

 

strategic HR inc. knows that keeping abreast of legal compliance issues can be daunting, especially when the laws keep changing. We can help you stay compliant by fielding your questions and offering resources to help you identify and mitigate compliance issues. Visit our Compliance page to learn about our auditing services which can help you identify trouble spots in your HR function.

 

 

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

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, inc. 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.

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Value of Job Descriptions

Question:

Do I really need job descriptions for my employees?  Are they legally required?  We have a small staff and everyone has to be willing to do everything.  Job descriptions will just give them a reason to not do something I ask them to do.

Answer: 

No, job descriptions are not a legally required document, however, they are an important part of compliance and can help protect an organization in a number of different ways.  Job descriptions help define a job by determining and documenting the responsibilities of the position and the physical requirements of the job.  This document is not “how to” or a procedure outline (which can change frequently) but rather what individuals are accountable for in the job.  Defining this in a job description can help by:

  • Providing a clear picture of the job to applicants applying for the job
  • Helping current employees see what they are accountable for
  • Helping supervisor coach to improved performance for employees
  • Help determine appropriate salary levels for a position based on the expectations, education and experience requirements for the role
  • Allow individuals to evaluate the physical aspects necessary for the position and what the work environment is like – does it require heavy lifting, is it a “desk job”, does it involve frequent travel, computer work, phone calls, etc.
  • Allow organizations to determine if an employee can perform the physical functions of a job or if an accommodation could be made for those applying for a job or coming off of a medical leave or workers compensation leave (as an example)

It is agreed, if your job descriptions aren’t up to date, they can cause more harm than good.  However, the positive aspects of a job description outweigh the negatives and can help you in legal matters providing you with documentation on the job requirements and support actions you may have taken.  As a supervisor, take a few minutes during the performance review process to work with your employees and update the job description so they can stay current.  Doing one at a time with reviews make the process a bit more bearable.

Job descriptions are really something that shouldn’t be relegated to the bottom of the “wish list”. When done correctly they serve a multitude of functions. However, we know how stretched the average human resources department (or person) is, and job descriptions are usually a “when time permits” activity. If you are putting off creating or revising your job descriptions due to lack of time or staff, give us a call. We would love to help – dare we say it’s “in our job description”. Visit our Benefits and Compensation page to learn how we can assist you with your job description and other needs.

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Employment Posters

Question:

We have our federal employment posters available for employees, but which posters must also be seen by applicants and what’s the best way to ensure that we are complying?

Answer:

With the majority of recruiting transactions, happening online, it can be difficult to comply with the requirements for would-be employees to have access to employment posters. There are three federal employment law posters that must be available to applicants: the FMLA poster, the EEO poster and the Employee Polygraph Protection Act poster. For applicants coming to your location you need to make sure these three posters are in a place where candidates will see them.

The Department of Labor (DOL) offers this guidance:
“Most of our poster regulations were written before the Internet was used for job postings. Until the regulations are revised, please place a prominent notice on the website where the job postings are listed stating that ‘Applicants have rights under Federal Employment Laws’ and provide a link to the three posters:

Please note, however, that posting the notice on the employer’s website in this manner is not a substitute for posting these EEO posters in conspicuous places on the employer’s premises where otherwise required.

It’s safe to say this is one legal requirement that we’ll need to keep an eye on!

Strategic HR, inc. knows that keeping abreast of legal compliance issues and deadlines can be daunting, especially when the laws keep changing. We can help you stay compliant by offering resources to help you identify and mitigate compliance issues and by making sure you are informed of changes and reacting in a timely manner. Our HR Audit will help your organization identify trouble spots in your HR function. Visit our HR Audit page to learn more about this helpful service.

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Small Necessities Laws

Question:

What is the Small Necessities Leave Act and should I be concerned about it?

Answer:

The Small Necessities Leave Act (SNLA) gives employees the right to take leave for family obligations providing a limited number of hours annually, covering specific activities that are not included under the Federal Family and Medical Leave Act (FMLA) – such as for parents to attend school-related events and activities for their children. The hours of leave allowed under the SNLA is in addition to the 12 weeks leave allowed under the FMLA. Additionally, the hours do not need to be taken all at once, but can be taken intermittently, as long as it does not exceed the allowed maximum as mandated by the state.

Only a small number of states offer SNLA, these include:

  • California – 40 hours
  • DC – 24 hours
  • Illinois – 8 hours
  • Louisiana – 16 hours
  • Massachusetts – 24 hours
  • Minnesota – 16 hours
  • North Carolina – 4 hours
  • Rhode Island – 10 hours
  • Vermont – 12 hours
  • Nevada makes it unlawful to terminate an employee for using leave to attend a child’s school-related activities.

To be eligible for the SNLA an employee must have been employed with employer for at least 12 months, having actually worked at least 1,250 hours during the previous 12 months with that employer, and be employed at a company with 50 or more employees within 75 miles.

SNLA can be taken to:

  • Participate in school activities directly related to the educational advancement of the employee’s child(ren), such as for parent-teacher conferences or interviewing for a new school.
  • Accompany the child(ren) of the employee to routine medical or dental appointments, such as checkups or vaccinations.
  • Accompany an elderly relative of the employee to routine medical or dental appointments or appointments for other professional services related to the elder’s care, such as interviewing at nursing homes or group homes.

The employee must give seven days’ notice of intent to take such a leave if the leave is foreseeable. If the need for the leave is not foreseeable, the employee must give notice as soon as practicable. Leave can be calendar or fiscal year.

The SNLA leave is generally unpaid leave but, similar to the FMLA, employees may use accrued paid time and have the leave paid or the employer may require that the employee use such accrued time.

One of the stickiest aspects to human resources management is Employee Relations. Are you having difficulties in your company that stem from employee-employer related issues? Strategic HR, inc. has years of experience in employment relations. Visit our Employee Relations page to learn how we can help you resolve some of your toughest ER problems.

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IRS Fresh Start Initiative

Question:

What exactly is the IRS “fresh start initiative” and is there any benefit for a small business?

Answer:

The IRS Fresh Start Initiative is part of IRS’s refined tax collection process. The goal of this program, implemented in early 2011, is to make IRS tax payment easier for small businesses. Your business can make monthly payments through an installment agreement if you’re not financially able to pay your tax debt immediately. It is important to note that you will reduce or eliminate the amount of penalties and interest you pay and avoid the fee associated with setting up an installment agreement if you pay your tax bill in full.

Small businesses who currently have employees can qualify for an In-Business Trust Fund Express Installment Agreement (IBTF-Express IA). These installment agreements generally do not require a financial statement or financial verification as part of the application process.

The criteria to qualify for an IBTF-Express IA are:

  • You owe $25,000 or less at the time the agreement is established. If you owe more than $25,000, you may pay down the liability before entering into the agreement in order to qualify.
  • The debt must be paid within 24-months or prior to the Collection Statute Expiration Date (CSED), whichever is earlier.
  • You must enroll in a Direct Debit Installment Agreement (DDIA) if the amount you owe is between $10,000 and $25,000.
  • You must be compliant with all filing and payment requirements.

To Request an In-Business Trust Fund Express Installment Agreement, contact your local IRS office.

** Speaking of taxes, don’t forget the deadline to distribute W-2’s and 1099’s to your employees and contractors was January 31st.  Additionally, the deadline for filing Form 940 (Employer’s Annual Federal Unemployment Tax Return Tax Form) was also January 31st.

We understand, there are just too many Labor Laws to keep up with. Not only are there laws that govern hiring practices, safety concerns and recordkeeping requirements, then there are the compensation and benefit laws. Let strategic HR inc. help you navigate the employment law minefield. Ask us for assistance with any of your Legal Compliance needs. Please visit our Compliance page for more information or call us if you have a specific question or need.

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Unemployment For Seasonal Workers

Question:

Are seasonal employees eligible for unemployment if they meet the minimum requirements of length of service and wages?

Answer:

More and more states are saying “no”. There are many jobs that only last for a portion of the year, which have typically been eligible for jobless benefits. Federal law gives each state the option to decide whether or not to allow those seasonal workers to receive benefits. Many states are stripping some workers of their eligibility as a way to save money.

For example, some states identify specific seasonal industries that operate approximately nine months out of the year and do not allow those workers unemployment benefits in the off-season. In all, approximately 15 states restrict the payment of unemployment benefits to workers who earned some or most of their wages in seasonal jobs. The seasons are defined differently with some being based on the time frame and others on the industry.

Currently, federal law prohibits professional athletes from accessing unemployment benefits between seasons. Additionally, teachers who work directly for school districts have been ineligible to take unemployment during the summer.

However, for other workers it’s up to the individual states to decide. As a result, as with many thing HR-related, it is important to check the unemployment laws within your state.

Are you concerned that you are not in compliance with required labor laws? Do you have multiple locations in different states and struggle with knowing which laws to follow? Don’t know where to turn to find the latest news regarding HR compliance? Let strategic HR inc. help keep you in the loop and out of hot water. Visit our Compliance page for more information on how we can help.

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Voluntary Classification Settlement Program

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 inc. 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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Tip Credit Regulations

Question:

What can you tell me about the tip credit regulation issued by the Department of Labor in 2011?

Answer:

The Wage and Hour Division of the Department of Labor states that, effective May 5, 2011, a tip is the sole property of the tipped employee regardless of whether the employer takes a tip credit.  The difference between the hourly rate paid by the employer and the standard federal minimum wage is what we call a tip credit.  Further, the employer is prohibited from using an employee’s tips, whether or not it has taken a tip credit, except as a credit against its minimum wage obligations to the employee, or in furtherance of a valid tip pool. This amendment results in major changes to the existing tip-credit-notice regulations, specifically in regards to the ownership of employee tips, pooling tip arrangements, and required communications to employees.  The tip credit provision was originally created through the 1966 amendments to the Fair Labor Standards Act, and specifically permitted employers to credit a portion of their employees’ tips against their minimum wage obligations.  Under the Fair Labor Standards Act, employers are allowed to pay their servers below minimum wage as long as their tipped employees receive tips that amount to at least $30 a month.

The sudden change to tip credit requirements caught the restaurant industry by surprise. The major industry trade groups requested a 90 day delay for implementing the new rules, but the DOL did not acquiesce to this appeal.  They felt that the amendment came at an inopportune time due to the weak economy paired with rising commodity costs.  The National Restaurant Association, The Council of State Restaurants, and the National Federation of Independent Business sued the Department of Labor in June 2011 because the agency did not allow restaurants to comment before the provision went into effect.  The NRA also noted that the DOL only gave restaurants 30 days to communicate the changes to employees comply with the new regulations.  The DOL counters that there was plenty of forewarning through the 2008 release of original regulations, and the agency felt that the amendment needed to be put in place as soon as possible due to the sheer number of alleged violations and lawsuits.

Strategic HR, inc. has the answers to all of your tough Benefits and Compensation related questions. Whether you need a job analysis of your positions or need to update (or write) job descriptions, strategic HR inc. can do the job. Please visit our Benefits & Compensation page for more information.

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Personality Tests Prior to Interview

Question:

Is it okay to ask candidates to take an on-line personality profile before anyone from the company talks to the candidate? Only those candidates who “pass” the profile will move forward in the process. I’m concerned that using such a test to screen candidates could be legally questionable.

Answer:

Generally speaking it is not recommended to conduct a personality assessment as the first step in the recruitment process, as personality fit is only one factor in the hiring equation. Any assessment used for hiring purposes needs to rely on the bona fide occupational qualifications (BFOQ) of the position. Additionally, the test itself needs to be proven reliable and valid for testing those BFOQs. There are many pre-employment tests sold that are loaded with inappropriate questions – questions not necessarily linked to the necessities of the job. If the assessment can be shown to be related to the skill needs of the position and it is administered to all the applicants equally for that position then it should be okay. But when talking about personality assessments, that’s another matter.

While many large corporations use such tests as part of their initial on-line screening, if the test has not been vetted and causes a disparate impact (i.e. has a detrimental impact on one group of applicants versus another group), this can cause major legal headaches. What happens, for example, if the test results are deemed voided? Should the employer not rely on them at all? If the employer does not rely on them, what about the applicants that did well on the test – do they have a possible legal claim along with the applicants who did not get hired? These instances often give rise to very expensive lawsuits with lots of publicity – the New Haven firefighter case decided in 2009 by the Supreme Court is a great example.

If a personality test “must” be done, it would be best to do so only after hire, as a tool to help guide management in building a relationship with the new employee, or it should only be administered to final candidates as a tool to help distinguish between candidates; not select a final candidate. A personality profile isn’t something that should be used as a tool for hire, unless it can be shown to be job related. And it should never be THE tool to determine if a candidate is hired or not, but one of many tools.

Regarding the legal risk associated with using such a test, this is a very complicated legal area, and can easily give rise to litigation. You should check with your legal counsel before using such a test.

Strategic HR, inc. understands the complexity and pitfalls of hiring. From applicants to candidates to prospects, we know the ins and outs of sourcing, screening and selecting your next new employee. For more information on how we can help you fill your job openings efficiently and cost effectively, visit our Recruitment page.

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What is the P3 Initiative?

Question:

What is the Department of Labor’s “P3 Initiative”?

Answer:

The purpose of the Department of Labor’s (DOL) P3 Initiative, introduced in 2011, was to require employers to “take full ownership” over their adherence to DOL requirements and promote openness and transparency when it comes to the health and safety of employees. The goal of the program is to have employers “find and fix” violations, ensuring compliance with safety, wage and anti-discrimination laws, before an investigator comes into the workplace. In other words, the burden is on employers to obey the law, not on the DOL to “catch” employers in a violation.

P3 refers to Plan / Prevent / Protect and applies to those employers who are covered under the Wage and Hour Division (WHD), Occupational Safety and Health Administration (OSHA), Mine Safety and Health Administration (MSHA), Office of Federal Contract Compliance Programs (OFCCP) and/or the Employee Benefits Security Administration (EBSA). P3 requires obligated employers to:

  • Plan – develop written plans for identifying and fixing violations
  • Prevent – implement the plans and create processes to implement the overall  strategy
  • Protect – test the processes regularly with designated compliance employees to ensure they are working

It is expected that the finer details of the P3 Initiative will be announced sometime in 2013. Stay tuned.

Is your head spinning? Too many new Labor Law to keep up with? Let strategic HR inc. assist you with navigating the employment law minefield. We can help you with any of your Legal Compliance needs. Please visit our Compliance page for more information or feel free to call us if you have a specific question or need.

Multicolored wheel divided into 7 equal sections Recruitment, Training and Development, Benifits and Compensation, Communicating, Employee Relations, Recordkeeping, and Health safety and security with Legal compliance written on the outer edge and company strategy in the center benefits and compensation is emphasized

Am I Required to Offer COBRA?

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, inc. 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.

 

Multicolored wheel divided into 7 equal sections Recruitment, Training and Development, Benifits and Compensation, Communicating, Employee Relations, Recordkeeping, and Health safety and security with Legal compliance written on the outer edge and company strategy in the center the outer edge is emphasized

Employee Accomodation under the ADA

Question:

Are employers required under the Americans with Disabilities Act to accommodate someone who can’t perform essential job functions? What if the employer provides an accommodation and the employee still has problems doing the job?

Answer:

In many cases, YES! The Americans with Disabilities Act (ADA) requires employers to accommodate someone with a disability unless that accommodation would cause what the EEOC defines as “undue hardship” for an employer. These accommodations may vary significantly in scope and whether or not it would cause an “undue hardship” depends on the size of the company and the cost of the accommodation, just to name a few of the factors. So even if the applicant or current employee cannot perform the essential job functions, accommodations may need to be made.

Let strategic HR inc. help you navigate the employment law minefield. Ask us for assistance with any of your sticky legal compliance needs. Please visit our Compliance page for more information on any of these services.

 

Multicolored wheel divided into 7 equal sections Recruitment, Training and Development, Benifits and Compensation, Communicating, Employee Relations, Recordkeeping, and Health safety and security with Legal compliance written on the outer edge and company strategy in the center the outer edge is emphasized

Impact Of Miscarriage On Leave

Question:

We had an employee request, and was granted, maternity leave under our leave policy.  After the leave was granted, she had a miscarriage. How should this impact the maternity leave and how long should we allow her to be out?

Answer:

From a legal perspective, maternity leave falls under the Family Medical Leave Act (FMLA), which allows eligible employees 12 weeks of job protected leave for the birth, adoption or placement of a child, the employee’s own serious health condition, or to care for a family member with a serious health condition. The above circumstance would most likely qualify as leave taken for the employee’s own serious health condition. To be covered, you will need to have the employee obtain certification from her health care provider. The length of time she takes for leave, up to the 12 weeks, may largely be determined by when her doctor releases her. Other benefit programs that may come into play in this situation could be short term disability and your Employee Assistance Plan, if you have either of these in place.

Be sure to review your Maternity Leave Policy to make sure it is in compliance with FMLA regulations. The Department of Labor (www.dol.gov) offers guidance for managing FMLA claims and our team at strategic HR inc. can also assist you with this and other compliance questions.

One of the stickiest aspects of human resources management is Employee Relations. Are you having difficulties in your company that stem from employee-employer related issues? Strategic HR, inc. has years of experience in employment relations and can help coach you through challenging employee relation issues. Visit our Employee Relations page to learn how we can help you resolve some of your toughest ER problems.

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Performance Review Copies

Question:

Am I required to provide my employees with a copy of their performance reviews?

Answer:

We consider it a best practice to give employees a copy of their performance review since it is being discussed with them, it can affect your/management’s decisions regarding their compensation, and it is a signed document. However, no law mandates that you provide it to the employee.  See below for an excerpt from Nolo on State Laws on Access to your Personnel File:

While many states now have some type of law regulating personnel files…most of these laws control not the content of the files, but, rather:

Whether and how employees and former employees can get access to their personnel files,

• Whether employees are entitled to copies of the documents in them, and

• How employees can contest and correct erroneous information in their files.

In some states, [employees] have a right to see those files only if they are related to a lawsuit [the employee] filed against [his/her] employer or former employer. Even then, [he/she] might be in for a legal battle over what portions of the files are relevant to the case. But, in many states, [employees] have the right to see the contents of [their] personnel file—or at least some of the documents in it—without filing a lawsuit.

In Ohio, for example, “there is no law in Ohio that requires an employer to grant an employee access to his or her personnel file. There are, however, two key exceptions: medical records and wage and hour records” (Source).

Let strategic HR inc. help you navigate the employment law minefield. Ask us for assistance with any of your legal compliance needs. Please visit our Compliance page for more information on any of these services.