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Posts Tagged ‘Department of Labor’

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Contractor or Employee? Misclassification of employees key enforcement issue in 2010

Thursday, April 29th, 2010

The Department of Labor (DOL) announced that $12 million of its 2011 budget will go towards increasing enforcement of wage and overtime laws involving misclassification of employees.

The U.S. Secretary of Labor Hilda L. Solis addressed the need to “secure minimum and overtime wages and to help middle class families remain in the middle class. Working on the issue of misclassification is key to attaining those goals because misclassification of employees as independent contractors deprives employees of critical workplace protections and employment benefits to which they are legally entitled.”

As state and federal governements look for additional revenue cracking down on employers who misclassify employees can generate needed funds stated an article recently reported  in the New York Times.

Currently misclassification is not against the law, but its practices often violate labor and tax laws, such as failing to pay employees overtime or minimum wage.  Congress is also considering additional regulations on this issue.

For additional information and resources visit the IRS website to download the Independent Contractor vs Employee Guide or view KPA’s webinar, Contractor or Employee: How to Tell the Difference.

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The best HR website you aren’t using and it’s free!

Wednesday, April 7th, 2010

  http://www.bls.gov 
 If  you don’t have this site booked marked on your desktop do it now.  Why? Because the site is full of great information for HR professionals and managers and it is free ( beyond our tax dollars paying for it).  Need to know the latest salary information, cost of benefits or unemployment data?  It’s all right there.  Need to create a job description? Go to the Occupational Handbook  section and find out what the standard is for educatation and training, earnings, what workers do on this job and working conditions- for hundreds of jobs.  Bookmark the site, I use it almost daily and I bet you will too.

Join the conversation: what is your favorite HR website?

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Should Every Employee Use A Timecard?

Monday, March 29th, 2010

If you don’t have all of your employees using timecards you might want to reconsider.  Many employers only use timecards for non-exempt employees- but it is a good idea to have all employees keep accurate records of their time.  Having everyone keep track of hours worked  provides for accurate  records of wage payments against time worked - which in today’s litigious society is alway a good idea- as long as the records reflect correct wage and hour practices on the employer’s part.  A couple of things to consider:

1)  As a rule of thumb don’t  make exempt employees use PTO for absences of less than a day.   Exempt employees can be expected to use available PTO for partial days absence but you cannot reduce their pay if they don’t have enough hours so what is the point really?

If the employee is taking more time off than expected treat as a disciplinary matter.

2) Automate your timekeeping process- there are any number of vendors and online programs that can make keeping accurate records easy for the employee and for the payroll department.

3) If you allow nonexempt employees to work from home, you still need to keep track of their comings and goings, just as you would if they were in the office. You need to be sure their time is being calculated correctly, that they’re not working unauthorized overtime, and that they’re not in fact on the clock (in the form of work-related e-mails, texts, or phone calls) when they should be off it.

4) Make sure that all employees are classifed correctly as exempt or non-exempt.  Salaried is not a classification related to overtime wage payment but rather a method for payment. Salaried employees can be non-exempt.  If you aren’t sure how to classify an employee check out the Department of Labor website or the KPA webinars -Essentials of Wage and Hour Law,  Advanced Wage and Hour Law or California Wage and Hour Law.

5) It is usually (there are some exceptions) illegal  to give non-exempt employees “comp time” instead of paying overtime.  However for the exempt employee who has been putting in 60 hour work weeks comp time can be a great moral booster- and having good records of all that hard work is just another reason to keep accurate time worked records.

Join the conversation: Do you require all employees to use a timecard of some type?

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What Does New Healthcare Bill Mean for Employers? Less Then You Might Think It Does

Wednesday, March 24th, 2010

Beyond personal or political preferences, what does health care reform mean for employers?  Not much for those with less than 50 employees and maybe even lower costs overall for employers with more than 50 employees.

  • Employer Responsibilities - The legislation would require an employer with more than 50 full-time employees to pay $2,000 per employee if the employer fails to offer health coverage and has at least one full-time employee receiving a premium assistance tax credit or cost-sharing reduction created by the legislation. The first 30 employees of the employer would be excluded from the calculation of the penalty.
  • Dependent Coverage - The legislation would also require health plans that provide dependent coverage to provide it up to age 26. This provision would apply to existing health plans in addition to new plans beginning six months after enactment. For coverage of these non-dependent children prior to 2014, the requirement on group health plans is limited to those adult children without an employer offer of coverage.
  • Breaks for Breastfeeding - The legislation would amend the Fair Labor Standards Act to require that employers provide unpaid breaks for employees to express breast milk. The legislation would also require that employers provide a private location for employees to have these breaks.
  • Tax on “Cadillac” Plans - Beginning in 2018, there would be an excise tax on any “excess benefit” of employer-sponsored coverage. The legislation defines “excess benefit” as one that exceeds $10,200 for individual coverage and $27,500 for family coverage. The thresholds would be indexed to inflation.
  • Automatic Enrollment - The legislation would require that employers with more than 200 employees automatically enroll full-time employees in health coverage. The legislation would allow employees to opt-out of the coverage after automatic enrollment.
  • Lower Costs - Congressional Budget Office estimated that the legislation would have a relatively small effect on premiums for employer-based healthcare insurance.  For employers with more than 50 employees, premiums could be as much as 3 percent lower under the legislation than they would be under current law in 2016, according to the CBO’s projections.

Several other provisions would affect employers as well, including the creation of state-based exchanges for purchasing health plans and incentives for small employers to offer healthcare coverage.

Join the conversation: what effect will healthcare reform have on your business?

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Tax Breaks for Hiring the Unemployed

Monday, March 22nd, 2010

Unless your business is a non-profit by design or simply losing money because of the economy you should be using tax credits to reduce your tax bill-unless you like paying higher than required taxes. On March 18, 2009, President Obama signed the Hiring Incentives to Restore Employment (HIRE) Act, (Public Law No. 111-147), which, among other things, provides a tax break for employers who hire employees who have been unemployed for the preceding 60 days. The law provides that private employers who hire previously unemployed workers between February 3, 2010 and December 31, 2010 may qualify for a 6.2% payroll tax incentive. Essentially, this incentive exempts employers from paying Social Security taxes on wages paid to these employees after March 18, 2010.  The law applies to businesses, agricultural employers, tax-exempt organizations and public colleges and universities. 

Employers must obtain an affidavit from each unemployed worker who is hired, stating that this person has not been employed for more than 40 hours during the 60-day period ending on the date the person begins employment. The IRS has indicated that it is developing a form employees can use to make the required statement.

Employees hired to fill existing vacancies qualify for the exemption as long as the employee the new hire is replacing separated from employment voluntarily or for cause. Family members and other relatives do not qualify.

Additionally, for 2011, employers can claim up to an additional $1,000 in general business tax credits for hiring unemployed workers for each previously unemployed worker they hire.

 The IRS has published “Two New Tax Benefits Aid Employers Who Hire and Retain Unemployed Workers,” available at: http://www.irs.gov/newsroom/article/0,,id=220326,00.html.

Join the conversation: Do you use tax credits to reduce your tax bill?

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Yet another discrimination settlement with a dealership, but this time for disability discrimination.

Monday, March 8th, 2010

The number of lawsuits, claims and settlements’ involving dealerships and the EEOC continues to grow in 2010.  Beyond gender and age discrimination employees must also ensure that they do not discriminate against individuals with real or perceived disabilities.   Just this month a dealership in Hawaii settled a claim that included a $32,500 payment to a job applicant and a three year consent decree to remedy alleged disability discrimination.   The consent decree requires that the dealership implement an internal policy, procedures and staff training to safeguard against disability discrimination. The car dealership must also submit annual reports to the EEOC to track future complaints of disability bias and requests for disability-related accommodations during the hiring process.

In its lawsuit (EEOC v. Valley Isle Motors, Ltd., Case No. CV09-0053 HG KSC), the EEOC asserted that the car dealership reneged on an offer to hire a job applicant as a salesperson only after a urine test revealed he was taking prescribed medication. Valley Isle Motors then erroneously perceived the applicant as too disabled to do the job despite normal medical test results and medical authorization to the contrary, the EEOC said.    The EEOC press release quoted Anna Y. Parks, regional attorney for the EEOC’s Los Angeles District Office. “Employers cannot make assumptions about a prospective employee’s ability to work… the ADA expressly prohibits that stereotypes of this nature weigh into the decision to hire or deny hire to an individual.” Timothy Riera, director of the EEOC’s Honolulu Local Office, added “Employers should heed the lesson learned by Valley Isle Motors and be mindful to judge a candidate by his or her qualifications, not some ill-informed presumption. Communication with prospective employees is the key in determining whether one’s actual or perceived condition will interfere with work. Businesses should take advantage of appropriate training opportunities that are available to learn how to appropriately engage in that interactive process.”

The bottom line is that employers cannot make an assumption about the candidate’s ability to perform the work and must make certain that all hiring practices are in  accordance with the Americans with Disabilities Act. Here are five simple steps that will help toward ensuring that you are not discriminatory toward individuals with real or perceived disabilities.

1) Have a clear, complete and detailed job description for every position so that you can objectively judge a candidate’s ability to do the job against the actual requirements.

2) Confirm with a medical expert that the applicant can do the job with reasonable accommodations or that the perceived disability is even real.  A medical exam may be necessary and your expert should have experience in Occupational or Workplace Health.

3) Consider that individuals with disabilities often make high quality and loyal employees.  Tax credits may be available to assist companies with making reasonable accommodation and for hiring individuals with disabilities.

4) Take advantage of the tools and training available through your state or federal office of the Department of Labor including the excellent information on the EEOC website.  http://www.eeoc.gov/laws/types/disability.cfm

5) Consult with qualified legal hiring prior to not hiring any individual with a disability.

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Does Background Screening Really Reduce Risk?

Tuesday, March 2nd, 2010

  If you haven’t already reviewed your screening and hiring policies on applicants with criminal records put it on your “to do list” for 2010.   Highly published and expensive lawsuits related to negligent hiring make it seem that background screening is necessary step in your hiring process- but is it?   With experience both as a HR Director and working for a leading background screening vendor, my answer is maybe- it can be an important step and will reduce risk but only if done in accordance with best practices and within the state and federal regulations.  

 The Employment Opportunity Commission (EEOC) and the federal courts will soon require evidence-based screening and hiring policies. Within the next 12 to 18 months, employers can expect to see the EEOC issue new guidelines that require empirical evidence for the “business necessity” defense in racial discrimination cases that arise from screening and hiring practices.  Employers will benefit from having clarity in what is permissible.  If you now use the common five-year, seven-year, 10-year or lifetime employment bars for people with criminal records you need to think about how you can validate this information and show business necessity for the specific employment bar.  Most screening vendors claim that criminal checks reduce workplace violence, theft and fraud, but  don’t have any meaningful empirical evidence- with the expected EEOC guidelines and recent lawsuits on discrimination based on background screening they should be working to produce this information over the next several months.   If you current vendor can’t help you will need to consider a new vendor.  Employers may also look to the work of social scientists such as Alfred Blumstein and Shawn Bushway.  Blumstein published a major study in 2009 that actuarially identifies the point at which an individual with a criminal record is at no greater risk of committing a crime than other individuals of the same age. 

 The bottom line is that employers should not use background screening as the only criteria for hiring or screening applicants.  Behavioral interviewing and assessment testing along with reference checking are also important tools.  If  you are using background screening having job-specific hiring policies and a case by case review of all background screening results is recommended- and don’t forget two time tested HR practices for mitigating risk:  proper supervision and effective performance management.

Join the conversation: Do you use background screening in your hiring process and do you believe it reduces the risk of a bad hire or a negligent hiring lawsuit? 

 

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Department of Labor (DOL) investigation and enforcement in 2010

Wednesday, February 3rd, 2010

Investigation and enforcement is the Department of Labor’s focus in 2010. Despite an overall reduction of $300 million in discretionary spending, the Department of Labor will ask Congress for an increase in workplace enforcement funding of $67 million, or 4 percent, according to the budget it released on Monday, February 1.

In an online video statement and Q&A, Secretary of Labor Hilda Solis  emphasized department funding for investigation and enforcement along with training programs. The agency request for fiscal year 2011, which begins October 1, 2010, totals $117 billion.   Secretary Solis indicated that the $1.7 billion allocated in the DOL budget for worker protection programs would allow the agency to restore staffing to 2001 levels. Of the 350 employees that the department expects to add over the next fiscal year, 177 are investigators and other enforcement staff.

For instance, the Wage and Hour Division would receive $244 million in funding, a $20 million increase, and hire 90 new investigators. The Occupational Safety and Health Administration would get $573 million, an increase of about $14 million.  OSHA will add 25 new inspectors in 2011 and reallocate 35 to enforcement from a program that helps businesses comply with safety laws.

“We need to decide whether we will spend our limited resources on supporting those companies who really ‘get it,’ who are doing a great job at protecting their employees,” Solis said. “Or do we spend our scarce resources on companies that disregard workplace safety and allow workers to die in situations that could easily have been prevented?”

The department also indicated that it is going to crack down on employers that define workers as independent contractors rather than employees. Critics say the move allows companies to pay lower wages and benefits. As part of a joint initiative with the Department of Treasury, the DOL budget includes $25 million to target “misclassification” and hire 100 additional enforcement personnel.

Are your HR and OHSA programs in compliance? If not you might want to think about improvements before one of the new investigators comes  knocking at your door.

Join the conversation- do you agree with the emphasis on investigation and enforcement?

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Tip of the Month: Simple Four Step Plan to Reduce Employment Litigation Risks

Monday, February 1st, 2010

Compliance-TipEmployment litigation and high dollar settlements are on the rise in dealerships.    With the past 60 days alone a dealerships Colorado paid over$ 1.5M , an Ohio dealership paid  over $80,000 and a dealership in Georgia will pay $140,000 to settle claims of race, age and gender discrimination.  Consider taking these four simple steps to ensure your dealership is not next in line to pay a high cost employment litigation settlement.

1) Understand the law and your responsibilities as an employer. KPA offers free webinars on employment law and best practices presented by leading attorneys and HR professionals .
2) Establish legally appropriate policies and training for all employees. Make sure you keep complete and accurate record.
3) Invest in HR Management software to automate and force compliance in the hiring, employee management and termination process.
4) Purchase EPLI (Employment Practices Litigation Insurance) coverage for your dealership.

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Yet another employment discrimination settlement for an Auto Dealership- Are You Next?

Friday, January 29th, 2010

Within the past 60 days three dealerships have reached big dollar settlements with the EEOC for races, age or gender discrimination. Most recently a dealership in Georgia paid out $140,000. With 250 new investigators and a perceived easy target in dealerships I won’t be surprised to see more of these claims in the coming months.  Dealerships seems to be a favorite target for the EEOC these days, and too many make it too easy.

Beyond the four simple steps I offered in an earlier blog “ $1.5 Employment Litigation Recipe” you should also consider EPLI (Employment Practices Liablity Insurance) coverage for your dealership.     Prevention is key- training, a nontolerance attitude and enforcement of policies to ensure that discrimination doesn’t happen or is swiftly dealt with at your dealership will signifcantly reduce your risk  but having EPLI provides peace of mind in the event of claim occur.

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