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United Bumps Retiree Travel Perk to Back of Line

United Airlines retirees will take a back seat to current employees under a new policy on travel privileges at United Continental Holdings Inc.


The decision, announced late last month, is angering United retirees, who previously had priority over current employees when flying standby on otherwise empty seats.


The new policy, which takes effect Jan. 1, gives all current and retired workers of the Chicago-based airline eight vacation passes a year that guarantee both priority when flying standby. Once those passes are used up, however, current employees get priority over retirees.


The policy is similar to Continental’s rules before the airline merged with United. Under United’s old plan, retirees with more than 25 years of service had top priority when it came to flying standby on unused seats.


Flight privileges are among the most cherished perks for airline employees and retirees, especially in the case of United, which slashed its pension program in bankruptcy.


More than 3,600 people have signed an online petition objecting to the change. Among the comments by hundreds of retirees: “This is unbelievable. I worked years giving back my pay and then years with no pay raise at all. My medical is ridiculous. … My pension was destroyed. All we have left are our travel benefits and now we are supposed to accept this package. United has never gotten the concept of treating their employees well.”


As the company merges the two airlines, it has to choose common policies for a host of benefits.


“We went through a careful and thoughtful process to align the travel benefit programs of our two companies,” United said in a written statement. “This program recognizes the hard work of both active employees and retirees, and provides meaningful travel privileges that are competitive with the industry.”


As with the paying public, the travel experience for employees is determined by status.


While all employees and retirees technically have the privilege to fly in unused coach seats whenever they’re available, the reality is the seats are limited.


The new policy of eight vacation passes is an improvement for Continental retirees, who previously didn’t get priority boarding privileges. Those were reserved for current employees.


But Continental executives aren’t likely to be happy with the new rules, either.


Continental’s old policy gave priority to management over rank-and-file. The new policy doesn’t distinguish between managers and line workers.  


Filed by John Pletz of Crain’s Chicago Business, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.


 


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Labor Department Stiffens Incentive Pay for Flex Workweek Employees

Starting May 5 employers who pay workers overtime under a fluctuating workweek system may find themselves facing penalties for providing bonuses and other types of incentive pay to its non-exempt salaried employees—something that was allowable until the U.S. Department of Labor issued new regulations April 5 forbidding the practice.


The system, which is used in a variety of industries from retail to technology to the service sector, allows employers to pay workers a fixed salary regardless of the number of hours actually worked. The new regulations, which amend the Fair Labor Standards Act of 1938, will likely lead employers using this method to eliminate all incentive rewards such as commissions, bonuses or prizes, says Lee Schreter, a shareholder with Littler Mendelson, a labor and employment law firm based in San Francisco.


“Employers will no longer be able to reward employees for doing a good job if they use the fluctuating workweek method and I think that’s unfortunate,” she says.


Schreter says that many employers are unaware of these changes because the Labor Department “has not done a good job” of publicizing them and has provided little guidance on the matter “other than publishing the 100-plus pages of the final rule, which are not user-friendly,” she says. And the department has given employers only 30 days to comply. After that they would be subject to investigation and enforcement, she says.


“The department has done a sleight of hand and employers must make a very quick change if they are using the fluctuating workweek and paying incentives to come into compliance,” she says. Small businesses that may lack a large human resources staff will most likely be caught unaware, according to Schreter.


“They aren’t likely to read the DOL website and unless they belong to a trade association they may not know these rules are going to take effect.”


In addition to changes in the fluctuating workweek, employers with tip-earning workers must now inform the employee if they plan to claim an employer tip credit, which allows employers to use part of a workers tip to pay their minimum wage salary. The new regulations also provide that the maximum tip credit an employer may claim is $5.12 an hour and that the tip credit cannot be larger than the tips the employee actually receives, among other provisions.


While the tip credit notification doesn’t have to be in writing, Schreter says she is telling her clients to put it on paper.


“The penalty for not giving notice is paying the difference between the tip credit claimed and the hourly salary of the employee,” she says. “That kind of liability can put a small business out of business. Employers will want to report the tip credit on their pay stub, which means they have less than 30 days to reformat their pay stub.”  


—Rita Pyrillis

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Demand for H-1B Visas Off to Slower Start

Demand is off to a slower start this year than previous years for H-1B visas that are used to bring in employees with college degrees and special skills such as technology workers.


U.S. Citizenship and Immigration Services began accepting H-1B visa petitions for fiscal 2012 on April 1. However, only 5,900 petitions had been filed by April 8 under the general H-1B visa cap of 65,000, and only 4,500 petitions had been filed under a 20,000-visa cap for those with master’s degrees or higher.


In comparison, the Immigration Department had received 13,500 petitions under the 65,000 cap in fiscal 2011 and 5,600 petitions under the 20,000 cap in the same time period—between April 1, 2010, and April 8, 2010.


Demand had been stronger in previous years. The caps were reached in one day for fiscal 2008.


Staffing firms, including those that provide information technology workers, have been among those using H-1B visas.   


Filed by Staffing Industry Analysts, a sister company of Workforce Management. To comment, e-mail editors@workforce.com.


 


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Detroit 3 Are Expected to Add 36,000 Tier 2 Jobs by 2015

The Detroit 3 are expected to add 36,000 factory jobs by 2015, all of them paying new-hire wages and benefits that are half of what is typically paid to traditional United Auto Workers employees, economist Sean McAlinden said on April 12.


The carmakers are producing near the limits of what the current UAW work force of 102,000 can do on maximum overtime, said McAlinden, who spoke with reporters on the sidelines of a lecture at Wayne State University in Detroit.


They will have to hire to increase production once all laid-off UAW members nationally are back to work by September, he said.


“They’ll all be Tier 2 hires,” said McAlinden, executive vice president of research at the Center for Automotive Research in Ann Arbor, Michigan.


The Detroit 3 are authorized under their current contracts with the UAW to have up to 25 percent of their hourly workers in the lower-wage category. Those provisions extend until 2015, even though the Detroit 3 are beginning informal contract talks with the UAW to replace the current four-year contracts that expire in September.


McAlinden said UAW contract concessions in 2007 and 2009 have reduced the average hourly UAW compensation with wages and benefits to about $58 an hour, just $2 more an hour than that of Toyota at its massive Georgetown, Kentucky, assembly plant.


He said General Motors Co., if it could get its current 49,000 hourly workforce to 20 percent Tier 2, would bring its average hourly compensation to $48 an hour. That would mean greater profits for the carmaker, he said.


McAlinden said Ford Motor Co. has a 50-50 chance of being the UAW’s first target for negotiations since the company is the most profitable of the Detroit 3 and workers have the right to strike.


He added that Alan Mulally’s 2010 compensation of more than $26 million has galvanized Ford rank-and-file to demand more money in this year’s talks. It is a symbol that every worker recognizes. “It didn’t help,” McAlinden said

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Bloggers Hit Huffington Post With Labor Lawsuit

A class-action lawsuit filed April 12 in federal court in New York City alleges that as many as 9,000 unpaid bloggers for the Huffington Post were unjustly denied compensation despite contributing content that helped the liberal-leaning website’s price tag soar to $315 million.


Jonathan Tasini, a labor activist, writer and occasional political candidate is the named plaintiff in the lawsuit, which seeks at least $105 million in damages from HuffingtonPost.com, Huffington Post co-founders Arianna Huffington and Kenneth Lerer, and AOL. In February, AOL bought the Huffington Post for an estimated $315 million.


“Bloggers have essentially been turned into the modern-day slaves on Arianna Huffington’s plantation,” said Tasini, who wrote 216 entries on the site, beginning in December 2005. “Huffington Post is nothing without the bloggers who create the content.”


Tasini was also the lead plaintiff in a lawsuit against the New York Times in which the Supreme Court ruled in 2001 that the paper could not license the work of freelancers to electronic databases without the writers’ permission.


In a written statement, an AOL spokesman said that the lawsuit was “wholly without merit.” He said that Huffington Post’s bloggers use the site “to connect and help their work be seen by as many people as possible. It’s the same reason people go on TV shows: to promote their views and ideas.”


Huffington Post was founded in May of 2005 by Huffington and Lerer, and, according to the complaint, had 26 million unique visitors per month as of this past January.


In addition to the lawsuit, Tasini said he has teamed up with the Newspaper Guild and National Writers Union in an attempt to get bloggers to stop writing for the Huffington Post.


Tasini will release an open letter on April 13 demanding progressive bloggers stop posting on the site. And he said pickets outside Arianna Huffington’s home are planned.


“Anybody blogging for Huffington Post is a scab, producing content for someone who is attacking workers,” he said.


Jesse Strauss, a lawyer for the plaintiffs, said that the key legal question in the case is putting a value on the contributions of the unpaid bloggers. He said the case goes beyond Huffington Post, and that he was looking to have a “standard set about how bloggers should be compensated.”  


Filed by Daniel Massey of Crain’s New York Business, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.


 


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Labor Department Seeks Comment on Electronic Benefit Transmission Rules

The Labor Department is asking for public comment on possible changes to its rules involving electronic transmission of benefit plan information.


Under those 2002 rules, electronic transmission of benefit plan information, such as COBRA notifications, summary plan descriptions and individual benefit statements, is permitted for employees who have access to electronic information at their employer’s work site as part of their duties.


In addition, employers can transmit benefit plan information electronically to employees, such as traveling sales staff or telecommuters, who also have access to electronic information.


The rule also permits employers to communicate electronically with employees who do not have computer access at work and with plan participants, such as retirees, provided they have prior consent from the individuals.


In a notice published in the April 7 Federal Register, the Labor Department said there have been substantial changes in technology since 2002, including expansion of wireless networks, improvements in computing power, and introduction of smartphones and other personal computing devices.


Through other rulemaking initiatives, the Labor Department said it has received comments that communicating benefit information electronically would be more efficient and less costly than paper for health care plans.


But some plan participants still prefer hard copies over electronic copies even when they have computer access, the Labor Department said.


Among other things, the agency wants to know if the 2002 rules should be changed. It also wants comments on whether disclosure rules should vary based on the types of benefit documents, such as annual funding notices and COBRA election notices.


Comments, which are due June 7, can be emailed to e-ORI@dol.gov. The subject line should include RIN 1210-AB50.


Comments also can be mailed to Office of Regulations and Interpretations, Employee Benefits Security Administration, Room N-6555, U.S. Department of Labor, 200 Constitution Ave., N.W., Washington, D.C. 20210, Attention E-Disclosure RFI.  


Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, email editors@workforce.com.


 


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Should We Worry That a Manager Pals Around With HR Staff?

Dear Worrywart:

Your question is a good one—right at the heart of human resources and what the various constituencies look to your team for.

Among other things, managers have a right to expect that their HR staff provides them with timely, well-reasoned, unbiased counsel. On a daily basis, your staff is called upon to be umpires who call balls and strikes exactly how they see them, not how they might like them to be. Managers also count on your staff to reliably help them keep a finger on the pulse of their organization, a task that requires the confidence of the workforce. In a similar vein, the general employee population looks to your team as honest brokers of policy and employment matters, and people who will keep confidences.

HR’s ability to effectively perform those roles is materially impaired by either the real existence or appearance of a relationship that is compromised by partiality.

Does that mean that HR professionals can’t be friends with employees (management or otherwise) within their sphere of influence? No, of course not. It does mean, though, that HR professionals should be ever mindful to avoid both the existence and the appearance of compromising behavior, and know where the boundaries are. As the title implies, it also means that they really must be a “professional.” In particular, they must take pains to ensure that their dealings with friends, and for that matter, those with whom they have a much cooler relationship, are consistently aboveboard and evenhanded.

Were I in your shoes, I would neither attempt to chill the relationship nor ask either of the parties to put it in the closet. And I wouldn’t worry unduly about it, absent any signs of compromised behavior. I would, however have a chat with either the involved HR rep, or perhaps my entire staff to remind them of the need to be, like Caesar’s wife, above suspicion at all times. If they need more specific direction than that, they might be on the wrong bus.

SOURCE: Bill Catlette, Contented Cows, Memphis, Tennessee

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The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.

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Fidelity Says Health Care Reform Law Cuts Retirees Costs

A 65-year-old couple retiring in 2011 without employer-provided retiree health insurance will need about $230,000 to pay future medical-related expenses, Fidelity Investments said in an analysis.


That’s down 8 percent from last year’s estimate of $250,000 and is the first annual decrease in the 10 years Fidelity has been making the projections.


The $20,000 decline in the estimate from last year was driven by provisions in last year’s health care reform law that expanded Medicare coverage of brand name prescription drugs once retirees’ drug costs hit a certain level.


While the savings produced by the health reform law are “a welcome relief to many seniors, it should be considered a one-time adjustment, at least for the time being,” Fidelity Executive vice president Brad Kimler in Boston said in a written statement.


Of the $230,000 needed to cover a retired couple’s health care expenses, Fidelity estimates 31 percent will go toward paying Medicare Part B and Part D premiums; 45 percent will be consumed by expenses not covered by Medicare, such as coinsurance and deductibles imposed by Medicare; and 24 percent for out-of-pocket prescription drug expenses.


A summary of the analysis, which was released March 31, is available at fidelity.com/inside-fidelity/individual-investing/2011-rhcce.  


Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, email editors@workforce.com.


 


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Worker’s Death En Route to Conference Compensable

A landscape manager was within the “course and scope of his employment” when he died en route to pick up a co-worker to attend a leadership conference, a Texas appeals court found.

The March 30 ruling by the 3rd District Court of Appeals in Texas in Zurich American Insurance Co. v. Chantal McVey upholds a lower court’s decision rejecting Zurich’s argument that Troy McVey’s beneficiary was not entitled to workers’ compensation benefits because he was not acting in the course and scope of his employment when he died in an auto accident.

On the day of the accident, McVey was driving a company-owned truck he regularly used to perform his work. He was scheduled to attend his employer’s leadership conference and planned to pick up the co-worker, who also was required to attend the event and lived near McVey’s route to the company gathering, court records show.

Court records also state that the employer “emphasized policies that its employees should be efficient when making company-funded travel and made employees subject to dismissal for repeated perceived abuses.”

Zurich’s arguments suggested that McVey essentially was engaged in “an everyday trip to work,” court records state.

But the appeals court found that a “coming-and-going” rule that bars benefits for accidents while traveling to work does not apply in this case. It said McVey was engaged in travel that furthered his employer’s business. Therefore, his death is compensable, the court said.  

Filed by Roberto Ceniceros of Business Insurance, a sister publication of Workforce Management. To comment, email editors@workforce.com.

 

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CMS to Stop Accepting Early Retiree Reimbursement Applications

The Early Retiree Reinsurance Program, or ERRP, will stop accepting applications after May 5 as the $5 billion program’s funds are being depleted rapidly, the Centers for Medicare & Medicaid Services said.


The program, created by the health reform law, partially reimburses employers and other organizations that have early retiree health care plans.


“We have projected the availability of program funding based on the rate at which appropriated funds are currently being used to reimburse plan sponsors, and we have concluded that we have approved a sufficient number of applications to exhaust the program funding,” the CMS said in a March 31 filing that is to be published in the April 5 Federal Register.


As of March 17, the CMS had approved applications submitted by nearly 5,400 plan sponsors and paid about $1.8 billion in reimbursements to about 1,300 plan sponsors.
Of the $1.8 billion distributed, $206.8 million, or more than 10 percent, was distributed to the United Auto Workers Retiree Medical Benefits Trust.


The trust is a voluntary employees’ beneficiary association, which was set up by the UAW under a 2007 collective bargaining agreement between General Motors Corp., Ford Motor Co., Chrysler and the UAW.


Under that agreement, the automakers agreed to contribute more than $50 billion to the Voluntary Employee Beneficiary Association plan. In return, the automakers no longer have to provide health care benefits to UAW-represented retirees and their dependents. The UAW is responsible for managing the VEBA and paying retiree health care claims.


Other big recipients of ERRP funds include:
• AT&T Inc., $140 million
• Verizon Communications Inc., $91.7 million
• Public Employees Retirement System of Ohio, $70.6 million
• Teacher Retirement System of Texas, $68.1 million
• Georgia Department of Community Health, $57.9 million
• California Public Employees’ Retirement System, $57.8 million
• State of New York, $47.9 million
• State of New Jersey Treasury Department, Pension Accounting Services Department, $38.6 million
• General Electric Co., $36.6 million
• Employees Retirement System of Texas, $30.2 million
• The commonwealth of Kentucky, $29.7 million.
Under the ERRP, the federal government reimburses plan sponsors for a portion of claims incurred starting June 1, 2010, by retirees who are at least age 55 but not eligible for Medicare, as well as covered dependents, regardless of age.
After a participant incurs $15,000 in health care claims in a plan year, the government will reimburse 80 percent of claims up to $90,000.  


Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.


 


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