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New York Sick-Days Bill Set to Be Reintroduced

Legislation compelling employers to provide workers with up to nine paid sick days was scheduled to be reintroduced Thursday, March 25, by New York Councilwoman Gale Brewer, setting the stage for a battle between business groups intent on killing or at least gutting the bill and the labor-backed Working Families Party, which has made its passage a top priority.


The new bill is expected to contain changes from the one that was debated last year—notably, a shift in the definition of a small business, from fewer than 10 employees to fewer than 20. The bill will require small businesses to give workers five sick days and larger ones to provide nine. Fines would be levied at a rate of $1,000 per violation.


“No one opposes the right of employees to stay home when they’re sick without fear of retribution,” says Matthew Greller, an attorney at Tonio Burgos & Associates who is lobbying against the bill. “But we don’t think in this time in this recession should be proposing another unfunded mandate on businesses.”


Brewer’s office insists the councilwoman has listened to the business community’s reservations and incorporated their suggestions into the new bill—which is aimed at an estimated 1.5 million New York workers who get no paid sick time.


The bill is expected to have 35 sponsors, compared with 39 the last time around. But several council newcomers who are members of the just-launched Progressive Caucus—including Jumaane Williams and Daniel Dromm—have replaced officials who were only lukewarm supporters of the idea. The caucus has made adoption of paid sick days one of its founding priorities.


Supporters planned to rally outside City Hall to press for passage.


“President Obama’s health care reform is a big leap forward, but if you’re like the 48 percent of New York City’s workers that can’t take a day off without losing pay, seeing a doctor when you need to may still be impossible,” says a Working Families Party spokesman. 


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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E-Verify at a Glance

 

Federal contractor with the federal acquisition rule (FAR) E-Verify clause in contract

Federal contractor without the FAR E-Verify clause

No federal contracts currently, but competing for one or more

No federal contracts now and none expected anytime soon

Located

in a jurisdiction where

E-Verify is required

Must I enroll in and use E‑Verify?

Yes. Within 30 days, company must register or change its designation to FAR contractor if already registered.

No

No

No

Yes

May I enroll in and use E‑Verify?

 —

Yes, but for new hires only.

Yes, but for new hires only.

Yes, but for new hires only.

 —

Should I check new hires if I’m enrolled in E-Verify?

Yes. Must begin using for all new hires within 90 days of enrollment.

Yes. Must begin using for all new hires immediately upon enrollment.

Yes. Must begin using for all new hires immediately upon enrollment.

Yes. Must begin using for all new hires immediately upon enrollment.

Yes. Must begin using for all new hires immediately upon enrollment.

Should I use E‑Verify for existing employees working on federal contract?

Must E-Verify all employees working directly on the federal contract, but not employees who work indirectly on contract (e.g., admin staff). 

No

 —

 —

 —

Should I use E‑Verify for existing employees?

Employer must choose whether to E-Verify all existing employees or only the ones working directly on federal contract;180 days to comply.

Must not

Must not

Must not

Must not

Workforce Management Online, March 2010 — Register Now!

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Obama Signs Health Care Reform Measure

President Barack Obama on Tuesday, March 23, signed the sweeping health care reform legislation that was passed by the House of Representatives on Sunday night.


The legislation will massively revamp the nation’s health care delivery and financing system. The biggest changes would be expanding Medicaid and establishing federal health insurance premium subsidies to the lower- and middle-income uninsured.


Congressional budget analysts estimate those changes could result in as many as 32 million uninsured gaining coverage. The Senate will begin debate on a second reform measure, a so-called reconciliation bill that also was approved by the House. That bill is designed to alter certain aspects of the main reform measure.


The legislation is packed with provisions that will directly affect employer-provided health care plans.


Some will require almost immediate action by employers. For example, within six months after enactment, employers will have to amend their plans to extend coverage to employees’ adult children up to age 26, if those dependents are not eligible for other group coverage.


Bigger changes are further down the road. By 2013, employers will have to redesign their flexible spending accounts to impose a $2,500 annual limit on contributions. There is no limit now, though employers typically impose limits between $4,000 and $5,000.


Also in 2013, employers providing prescription drug coverage to Medicare-eligible retirees will lose a tax break. Under a 2003 law, employers providing prescription drug coverage at least equal to Medicare Part D receive tax-free payments from the government equal to 28 percent of what they spend—within a certain range—on retiree prescription drug coverage.


The subsidy will continue under the legislation, but employers will be barred from taking a tax deduction on expenses equal to the subsidy starting in 2013.


That change in tax law may lead some employers to drop the coverage, benefit experts say.


Starting in 2014, employers with at least 50 employees that do not offer coverage will pay a tax of $2,000 for each employee without coverage. In computing the tax, the first 30 employees would not be counted.


Also in 2014, a new affordability test will kick in that could result in employers facing assessments unless they redesign their plans. If the premium paid by an employee exceeds 9.5 percent of their income and the employee uses federal health insurance premium subsidies to purchase coverage through new state health insurance exchanges, the employer would have to pay an assessment of $3,000 for that employee.


Employers most exposed to that assessment will be those with relatively low-paid workforces and that require employees to make hefty premium contributions relative to their income.


Starting in 2018, a 40 percent excise tax would be imposed on health insurance premiums exceeding $10,200 for single coverage and $27,500 for family coverage. The cost thresholds triggering the tax will be slightly higher for plans covering retirees or employees in certain high-risk industries.


In 2019, the thresholds would rise to match the increase in the Consumer Price Index, plus one percentage point. 


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


 


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More People Roll Over Their 401(k) Assets

More people are rolling over their 401(k) savings into IRAs when they leave their jobs or retire, according to research published Wednesday, March 17, by Charles Schwab & Co. Inc.


The research found 69 percent of assets held by 401(k) participants were distributed from former employers’ plans within 12 months of leaving a job, confirmed Eric Hazard, a spokesman for Schwab. Thirty-one percent kept their money in their former employer’s 401(k) plan.


Of the assets that were moved, 80 percent were rolled over into IRAs, 10 percent were taken in cash distributions, 8 percent were moved into new employer plans, and 2 percent were taken in other forms of distributions, according to a Schwab statement on the report.


The research was based on records of 12,198 employees who left jobs in the fourth quarter of 2008; Schwab then checked where the employees had distributed their 401(k) assets by the end of 2009. The data were obtained from a database of 1.5 million participants in Schwab-administered 401(k) plans, Hazard said.


“We are definitely seeing an uptick in the number of 401(k) plan participants who choose to roll over plan assets instead of cashing out or leaving savings with a previous employer,” Catherine Golladay, vice president of 401(k) advice and education at Schwab, said in the release.


In an earlier study, Schwab found that among participants who left an employer in the first quarter of 2008, 57 percent of assets were moved out of a former employer’s plan by the first quarter of 2009, while 43 percent of assets remained in the plan, the news release said.


Of those distributed assets, 75 percent were rolled over into IRAs, 14 percent were taken as cash distributions, 7 percent were transferred to new employer’s plans, and 4 percent were taken in other forms of distributions, Hazard said.


Filed by Robert Steyer of Pensions & Investments, a sister publication of Workforce Management To comment, e-mail editors@workforce.com.


 


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Ex-Owners of Temp Firm Accused of Paying $24 Million Under the Table

Two former owners of a temporary employment agency in Stoughton, Massachusetts, were charged Wednesday, March 17, on suspicion of paying more than $24 million in cash to workers in an effort to avoid paying more than $7 million in taxes and hundreds of thousands of dollars in workers’ compensation insurance premiums, the FBI has announced.


Michael Powers, 45, of Westport, Massachusetts, and John Mahan, 46, of Stoughton, were each charged with one count of conspiracy to defraud the IRS and their workers’ comp carrier, one count of mail fraud and two counts of false tax returns, according to the FBI.


Powers and Mahan owned Commonwealth Temporary Services Inc. from 2000 to 2004, which supplied temporary workers to businesses throughout eastern Massachusetts, according to the FBI. They each face a maximum of five years in prison and a $250,000 fine on the conspiracy charge, a maximum of 20 years in prison and a $250,000 fine on the mail fraud charge and, three years in prison and a $250,000 fine on the tax fraud charges. 


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


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House Passes Stopgap COBRA Subsidy Extension

Federal COBRA health insurance premium subsidies would be extended temporarily once again under legislation approved Wednesday, March 17, by the House of Representatives.


Under the bill, H.R. 4851, proposed Tuesday by Ways and Means Committee Chairman Sander Levin, D-Michigan, and approved by the House on a voice vote, the 15-month, 65 percent federal premium subsidy would be extended to employees involuntarily terminated from April 1-30.


Without an extension, employees laid off after March 31 would not be eligible for the subsidy.


As part of a broader bill, H.R. 4213, the Senate last week approved a longer extension to enable employees laid off through the end of the year to receive the subsidy, but the House has yet to take up that measure because of funding concerns about certain provisions in the bill, observers say.


The latest stopgap extension would continue the politically popular subsidy for newly laid-off employees and allow Congress more time to try to reach agreement on the broader bill with the longer extension.


“There is no doubt in my mind that, through one way or another, the subsidy will be extended through the end of the year,” said Frank McArdle, a consultant with Hewitt Associates Inc. in Washington.


Earlier this month, legislators approved and President Barack Obama signed into law a 31-day extension to ensure that employees laid off from March 1-31 would be eligible for the subsidy.


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


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House Committee to Consider Pension Funding Relief Bill

The House Ways and Means Committee is scheduled Wednesday, March 17, to consider a soon-to-be-introduced jobs bill that is expected to include provisions that would give employers more time to amortize pension shortfalls.


The measure also is expected to include provisions to mandate better disclosure of 401(k) plan fees to plan participants.


The details of the pension funding relief provisions in the forthcoming legislation, the Small Business and Infrastructure Jobs Tax Act of 2010, are not available yet. But Washington observers expect the provisions to be similar to those embedded in a broader bill the Senate passed last week.


Under the Senate measure, H.R. 4213, employers could choose to use one of two schedules to amortize shortfalls. Under one schedule, employers could fund shortfalls over 15 years for any two plan years between 2008 and 2011. Current law requires employers to fund shortfalls over seven years.


Under the other alternative, employers would have to pay interest on a funding shortfall for only the two plan years they choose. After that, the regular seven-year amortization period would begin.


The Senate bill, though, includes certain conditions that employers would have to meet to obtain funding relief, including making extra contributions if any employee earns more than $1 million a year.


The Ways and Means Committee also is expected to include conditions employers would have to meet to qualify for the relief, though the details of those conditions are not yet known.


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


 


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Hiring Freeze Starts to Thaw as Advertising Business Hunts for Talent

After a nearly yearlong hiring freeze and having shed 14,000 employees, WPP chief Martin Sorrell had a bit of good news last week: The holding company is staffing up.


It’s a welcomed announcement for an industry that lost almost 200,000 jobs between December 2008 and January 2010. Advertising and public relations firms from Edelman to OMD to BBH are adding to their ranks, crediting a stronger business outlook and a need to add people with new skills.


“Agencies had to respond to what was going on in 2009 by making some massive cuts,” said Pat Mastandrea, founding partner-CEO of the Cheyenne Group. She said that when the market started to turn around in the fourth quarter of 2009 and budgets started to grow back, you had agencies that were too lean. “Now those agencies are in the process of having to address that by recruitment. And it’s even stronger in the first quarter of 2010 than it was in the last quarter of 2009.”


A search on LinkedIn jobs revealed nearly 1,300 agency listings for positions ranging from account executive and account director to senior account executive and business development specialist. That’s still a far cry from the number of jobs lost, and it’s hard to believe the industry will ever equal the size it once did. But the recovering economy, new business and an uptick in spending from existing clients has Edelman hiring “in a big way,” said Laura Smith, managing director-U.S. human resources. And it’s not just replacing the jobs it cut last year. “It’s mostly growth,” she said. “At this time last year we had 25 positions open, and today we have a little over 100.”


Alan Cohen, U.S. CEO of Omnicom Group’s OMD, said his agency’s increased hiring is driven by the health of the media business in general and the amount of new business the agency has brought in over the past two years.


Social media recruiting
While many agencies are still working with recruitment firms, some like BBH and Edelman are relying heavily on social media outlets such as Facebook, Twitter and LinkedIn or their own Web sites.


Edelman’s in-house recruiters have been trained to use social media to seek candidates, especially for the digital positions, said Smith. “We don’t put ads in the paper anymore and it shocks me that companies still do,” she said.


Agencies are also seeking new types of hires. BBH Labs announced last week on its site that it’s “looking for a rare breed of person,” for whom “technology is your oxygen—you need it every second of the day and always want the freshest air, but you understand that not everyone is like you, so you can translate it into natural consumable language.”


Ann Brown, founder of recruiter Ann Brown Co., said it’s not just digital jobs that are being filled. “Fortunately there are a number of agencies evolving the way they need to be and are hiring people with 360-degree experience,” Brown said. “They don’t want to train anybody in digital if all they have is a traditional background. They want people coming in to look at things from all sides.”


Edelman’s Smith said the agency has been hiring people across the board in practices areas such as corporate, public affairs, health care and technology.


Brown said that while CFOs are still keeping the reins pulled tightly on certain aspects of spending, they do appear to be feeling more comfortable about filling some of the slots vacated through layoffs last year.


Harris Diamond, head of Interpublic Group of Cos.’ Constituency Management Group, said, “There is and will be hiring going on” in areas such as social innovation. “But there are other areas of our businesses where, frankly, you just lose some people and there won’t be replacements for them.”


“There are signs of life, but I have to be honest: For the last 2½ years we have had little jumps in hiring for four to six weeks and then it will settle back down,” said Paul S. Gumbinner, president of recruiter Gumbinner Co. “We do have more jobs in the house right now. … I’m just not sure it’s going to last.”


Filed by Michael Bush of Advertising Age, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.


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