Author: Site Staff

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Before exiting for a one-month recess, Congress passed a 10-year $792 billion tax cut that contains a host of retirement incentives for employers and employees. The bill would allow employees to sock away more money in pre-tax accounts such as 401(k) plans and would permit older workers to contribute even more. In addition, the new rules would allow workers to contribute after-tax money to their 401(k) or 403(b) plan and would make rollovers between plans easier.

Will the bill become law?
Probably not in its present form. President Clinton has repeatedly threatened to veto any tax cut as large as the one Congress has passed. However, the President and congressional Democrats appear amenable to a smaller overall cut, somewhere in the vicinity of $300 billion over 10 years.

It remains to be seen whether Congress and the President can get together this fall. But the package just passed by Congress will serve as the blueprint for any final agreement that may be reached later in the year. So employers need to be aware of the possible changes on the table.

Higher pre-tax contributions.
The bill would gradually increase the maximum amounts that employees can contribute on a pre-tax basis to 401(k) plans and tax-sheltered 403(b) annuities. Presently, the limit is $10,000 per year. Congress would gradually increase this limit until it reaches $15,000 in 2005. The limit would then be adjusted for inflation. In addition, the maximum annual pre-tax contributions that could be made to a SIMPLE plan would gradually increased until the limit reaches $10,000 in 2004. This limit would also be adjusted for inflation. SIMPLE plans are geared to small employers.

Catch-up contributions for older workers.
The contribution limits under 401(k) plans, 403(b) annuities, SIMPLE plans, 457 plans, and IRAs would be increased for workers who are age 50 or older. These older workers would be able to contribute more. The amount of additional contributions permitted would rise gradually. By year 2005, older workers would be able to contribute 50% more than other employees to such plans.

After-tax 401(k) and 403(b) plans allowed.
Employers would be allowed to provide participants in 401(k) plans and 403(b) plans with the opportunity to contribute to these plans on an after-tax basis. Qualified distributions from such accounts would be tax-free to the employees, similar to the Roth IRA concept.

Easing rollover rules for qualified plans and IRAs.
With an increasingly mobile workforce, legislators are looking to make pensions more “portable,” so that workers can transfer more of their accrued benefits from job to job. Toward this end, Congress has changed the rules to allow rollovers of distributions between qualified plans, 403(b) annuities, and 457 plans. Also, the new rules would allow IRA distributions to be rolled over into a qualified plan, 403(b) annuity, or 457 plan. The 60-day period for making a valid rollover could be waived under certain circumstances, including cases of casualty, disaster, or other events beyond the reasonable control of the individual.

Cite: The text of relevant portions of the tax bill as passed by Congress are reproduced at 29,102 of the CCH PENSION PLAN GUIDE.

Source: CCH Incorporated is a leading provider of information and software for human resources, legal, accounting, health care and small business professionals. CCH offers human resource management, payroll, employment, benefits, and worker safety products and publications in print, CD, online and via the Internet. For more information and other updates on the latest HR news, check our Web site at http://hr.cch.com.

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.

Scenario: An audit turns up a $500 cash shortage at the front desk of the hotel you work in. The only suspect is the front desk clerk. Should you make the clerk take a lie detector test, just to be sure, before you take action?

Answer: Absolutely not. The Employee Polygraph Protection Act (EPPA) contains a specific exemption for voluntary polygraphs in the event of a cash shortage or possible theft. But the problem with giving the polygraph is that it creates a new set of rights for the individual.

Under the EPPA:

• The individual being polygraphed must be advised of his or her right to refuse to take the polygraph or to terminate the exam at any time.

• You cannot fire an employee based on his refusal to take the polygraph or based only on its results.

• Therefore, if the hotel chooses to administer the polygraph, the employee can decline, and then contend that the reason for the termination was his refusal to submit to the exam. Even if the employee takes the polygraph, the hotel will be hard-pressed to take action without facing an EPPA claim unless the employee admits to the conduct.

Better Approach:
The solution is to establish detailed cash-handling procedures. If you’re faced with a shortage, use your internal investigation to establish that the employee had control over the money that was missing.

It’s generally difficult to “prove” an employee took the missing money. You can almost always establish, however, that the person failed to follow your cash-handling procedures. Therefore, the employee can be terminated for failing to handle cash in accordance with hotel policy.

Source: Hospitality Workforce Trends: A Monthly Newsletter on Employment Law and Employee Relations, published by M. Lee Smith Publishers. For more information call 800-274-6774.

Human Capital

Share the stress–add your own signs to the mix if you want.
10. You wake up in a panic. . . in the middle of an important CEO meeting.

9. You’re paranoid that the plant-watering crew are IRS agents in disguise.

8. You get up from your desk to do something, and then forget what it was.

7. No one in your office smiles. . . at you.

6. Antacids are included on your expense report.

5. You want to quit, but you’re addicted to the stress.

4. You chip a tooth biting on your pen.

3. Those funky-colored stress toys on your desk need retreading.

2. You’re considering adding an HRMS to your appointment book.

1. You answer every phone call with “Mommy?”

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Issue: In the workforce training you developed since last summer’s Supreme Court decisions in Burlington Industries, Inc. v. Ellerth, 118 S. Ct. 2257 (1998), and Faragher v. City of Boca Raton, 118 S. Ct. 2275 (1998), you emphasize that the company is vicariously liable for unlawful harassment by supervisors. You stress (1) the company is responsible for the acts of its supervisors and for preventing harassment and (2) employees are responsible for avoiding or limiting the harm from harassment. In your training, you attempt to explain that when there is no tangible employment action, the employer may be able to avoid liability or limit damages by establishing an affirmative defense that includes two necessary elements:

• the employer exercised reasonable care to prevent and correct promptly any harassing behavior, and
• the employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or otherwise to avoid harm.

You feel confident of the preventive measures you’ve implemented in developing and enforcing an antiharassment policy and complaint procedure. But supervisors’ questions about what to do if harassment is reported make it clear they don’t know what “immediate and appropriate corrective action” means.

Answer: “Immediate and appropriate corrective action” will ultimately depend on the particular factual circumstances and, in some cases, the nature of the employer’s workforce. However, here are some guidelines from the EEOC:

Effectiveness.
Remedial measures should be designed to stop the harassment, correct its effects on the employee, and ensure that the harassment does not recur. These remedial measures need not be those that the employee requests or prefers, as long as they are effective.

Discipline.
In determining discipline, keep in mind that the employer could be found liable if the harassment does not stop. At the same time, overly punitive measures may subject the employer to claims such as wrongful discharge and may simply be inappropriate. To balance these concerns, disciplinary measures should be proportional to the seriousness of the offense. If the harassment was minor, such as a small number of “off-color” remarks by an individual with no prior history of similar misconduct, then counseling and an oral warning might be all that is necessary. On the other hand, if the harassment was severe or persistent, suspension or discharge may be appropriate.

Impact on complainant.
Remedial measures should not adversely affect the complainant. Thus, for example, if it is necessary to separate the parties, then the harasser should be transferred (unless the complainant prefers otherwise). Remedial responses that penalize the complainant could constitute unlawful retaliation and are not effective in correcting the harassment. Remedial measures should be designed to put the employee in the position he or she would have been in had the misconduct not occurred.

Examples of measures to stop the harassment and ensure that it does not recur:

• oral or written warning or reprimand;
• transfer or reassignment;
• demotion;
• reduction of wages;
• suspension;
• discharge;
• training or counseling of harasser to ensure that he or she understands why the conduct violated the employer’s anti-harassment policy; and
• monitoring of harasser to ensure that harassment stops.

Examples of measures to correct the effects of the harassment:

• restoration of leave taken because of the harassment;
• expungement of negative evaluation(s) in employee’s personnel file that arose from the harassment;
• reinstatement;
• apology by the harasser;
• monitoring treatment of employee to ensure that he or she is not subjected to retaliation by the harasser or others in the workplace because of the complaint; and
• correction of any other harm caused by the harassment (e.g., compensation for losses).

Complaint procedure.
Instruct all supervisors and managers to address or report to appropriate officials complaints of harassment, regardless of whether they are officially designated to take complaints and regardless of whether a complaint was framed in a way that conforms to the organization’s particular complaint procedures. For example, if an employee files an EEOC charge alleging unlawful harassment, the employer should launch an internal investigation even if the employee did not complain to management through its internal complaint process.

Furthermore, due care requires management to correct harassment regardless of whether an employee files an internal complaint, if the conduct is clearly unwelcome. If there are areas in the workplace with graffiti containing racial or sexual epithets, management should eliminate the graffiti, not wait for an internal complaint.

Train.
Ensure that all supervisors and managers understand their responsibilities under the organization’s anti-harassment policy and complaint procedure. Periodic training can help achieve that result. Such training should explain the types of conduct that violate the employer’s anti-harassment policy; the seriousness of the policy; the responsibilities of supervisors and managers when they learn of alleged harassment; and the prohibition against retaliation.

An employer should keep track of its supervisors’ and managers’ conduct to make sure that they carry out their responsibilities under the organization’s anti-harassment program. For example, an employer could include such compliance in formal evaluations.

Screen.
Reasonable preventive measures include screening applicants for supervisory jobs to see if any have a record of engaging in harassment. If so, it may be necessary to reject a candidate on that basis or to take additional steps to prevent harassment by that individual.

Track.
Finally, keep records of all complaints of harassment. Without such records, the employer could be unaware of a pattern of harassment by the same individual. Such a pattern would be relevant to credibility assessments and disciplinary measures.

Cite: The information reproduced above is taken from the EEOC Employment Guidance: Vicarious Employer Liability for Unlawful Harassment by Supervisors, released by the EEOC on June 21, 1999.

Source: CCH Incorporated is a leading provider of information and software for human resources, legal, accounting, health care and small business professionals. CCH offers human resource management, payroll, employment, benefits, and worker safety products and publications in print, CD, online and via the Internet. For more information and other updates on the latest HR news, check our Web site at http://hr.cch.com.

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.

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Employee benefit plan fiduciaries who do not take appropriate action may find themselves personally responsible for losses resulting from their failure to prudently manage Y2K issues. So says Juliane Majette, Group Supervisor, U.S. Department of Labor, Pension and Welfare Benefits Administration, San Francisco, California. Y2K issues should be a top priority for all employee benefit plan fiduciaries; the problem is real, Majette points out, and the time for resolving Y2K issues is running out.

Potential problems.
The inability of a computer to interpret the correct date of benefits information affects all aspects of plan administration. The most obvious problem is that computers will not be able to correctly interpret date-sensitive information. As a result, functions such as calculating and paying benefits could become snarled. Specifically, computers may not be able to:

• determine eligibility for benefits or vesting;
• accurately record terminations;
• track investment fund trades;
• record participant loans; or
• determine eligibility for retirement.

A Y2K problem could also affect management of a plan’s investments. If the assets of a retirement plan are invested in companies that are Y2K compliant, those non-compliant companies may be bad investments for the plan. In addition, many employers’ computers provide links to service providers for their employees. While these systems may be compatible now, compatibility will have to be re-checked once both computer systems are Y2K compliant.

Too late for implementing a Y2K plan.
If a plan fiduciary does not have a Y2K plan in place, it is now too late. Under these circumstances, an employer should be working with a contingency plan. Unfortunately, a contingency plan would most likely involve going back and entering data by hand.

Liability for plan fiduciaries.
Fiduciaries of ERISA-governed plans will be held personally liable for losses resulting from their failure to prudently manage the Y2K problem. Government plans, which are exempt from ERISA’s requirements, are also well-advised to use DOL guidance regarding how benefit plans should approach Year 2000, since state courts will most likely find the DOL’s position relevant in any Y2K-related lawsuits against public entities.

Communication.
Communicating a plan’s Y2K preparedness to plan participants is just as important as getting a Y2K plan or contingency plan in place. The DOL has issued guidance stating that plan fiduciaries must inform participants and beneficiaries of the steps being taken to ensure that the Y2K problem will not disrupt operation of the plan or payment of benefits.

Source: CCH Incorporated is a leading provider of information and software for human resources, legal, accounting, health care and small business professionals. CCH offers human resource management, payroll, employment, benefits, and worker safety products and publications in print, CD, online and via the Internet. For more information and other updates on the latest HR news, check our Web site at http://hr.cch.com.

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.

The next HR technology revolution begins in Boston at the 2000 IHRIM Spring Conference and Exposition.

See more than 350 exhibits designed for HR, HRIS, HRIM and IT professionals during the expo.

There will be over 80 useful educational tracks including Managing and Implementing Projects – Strategic Visioning – Global Perspectives and more!

Browse through this section for a preview of the remarkable four-day event IHRIM has in store for you!

Our industry moves fast! Innovations happen overnight. Staying on top of the latest ideas and tools means connecting with vendors that pave the way for the future in technology.

The encyclopedia defines a trade show, or exposition, as “an organized public display of industrial and artistic productions, designed usually to promote trade and to reflect cultural progress.” ¹

People attend trade shows for many different reasons: to learn about new trends in their field, to attend seminars taught by industry leaders and to view new products and services that could save money and enhance their company’s performance.

Often times the exposition hall at a trade show can have the feel of a circus or flea market and we at Workforce understand how confusing it can be to find exactly what you may be looking for on that exposition floor. That’s why we’ve assembled an online list of top vendors who will be at your show. You can browse through their profile, see what products they have available and even print up a valuable coupon for special show offers!

Be prepared when you attend your next trade show—select the convention you will be attending from the list to the right.

 

1 The Columbia Encyclopedia, Fifth Edition Copyright ©1993, Columbia University Press. Licensed from Inso Corporation. All rights reserved.

The Industry Standard, an Internet business magazine, recently ran an article about a young college graduate in Texas who was looking for a job at a Web site.

Her résumé didn’t do justice in describing her talents, so she walked in the door of a local Internet company in a different costume each day. One day, she wore designer clothes, making the point that she thought the Web site should add a fashion section. Another day, she wore a football uniform, representing her interest in adding sports online. A third day, she dressed like the sun—reflecting what she felt was the importance of adding a weather report to the site’s repertoire.

She got the job. It’s a good reminder for you as a job seeker to try to use creative means, whatever they may be, to show what you’ve accomplished, beyond just what you can show with your résumé.

It’s also a good reminder for those doing the hiring not to get too caught up in an 8 1/2″ x 11″ sheet of paper, and to do what you can to stimulate the creativity of job applicants, just as you stimulate the creativity of your employees.

SOURCE: The Industry Standard, August 16-23, 1999.