Category: Benefits

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How to calculate PTO hours + accruals

Summary

  • Paid time off comes in many different types, including vacation, sick leave, personal leave, and bereavement time. – More

  • Your company can also choose to have workers accrue their time off, offer PTO up front, or even offer unlimited time off. – More

  • No matter your company’s specific time off policy, automatic PTO tracking software calculates leave for you and ensures proper coverage. – More

Workers are finally starting to take more time off for vacation and rest, a pretty significant shift in America’s always-hustling working culture. According to a Korn Ferry survey in 2021, 79% of workers said they planned to use more vacation days that year than in years past, and 82% said they would appreciate more vacation time in our post-pandemic world.

Paid time off (PTO) has always been valued by employees. 76% of American workers feel that it’s very important their company provides PTO. Paid sick time (74%) and paid holidays (74%) are also very important among workers. 

Also read: Paid Sick Leave Laws by State

Employers can retain more workers, lower stress levels, and improve productivity among their workforce by developing a clear and fair PTO policy. But there’s no “one size fits all” approach to adopting the perfect plan for your company — you’ll have to sort out the right policy based on your workforce needs, then make sure you’re calculating time off banks correctly to help each worker get the time they’re entitled to.

Breaking down the types of PTO

There are a few different reasons why an employee might use their PTO. Depending on your company policy, they might use any available PTO day for any of these reasons, or they might have an allotment of days for each category.

  • Vacation: This is your run-of-the-mill bank of time for employees to use for day trips, staycations, travel, weddings, or the like. If it’s something they’re planning for, they’ll likely use vacation days.
  • Sick time: If an employee isn’t feeling well enough to work, they can take a sick day to rest up. Well-being also includes mental health; according to a survey by Breeze, 63% of respondents said they had taken a mental health day in the last year.
  • Personal days: Personal time is for when things happen outside the worker’s control. Maybe they’re stuck in a blizzard coming home from their in-laws, or they have to say goodbye to the family pet. Personal leave is there for life’s curveballs.
  • Parental leave: Companies aren’t legally required to offer paid parental leave, but some still offer it as a benefit to their workers. More businesses than ever were paying maternity and paternity leave benefits after the pandemic, but that trend is curtailing again. According to SHRM, 35% of companies offered paid maternity leave in 2022, and 27% offered paid paternity leave.
  • Jury duty: If an employee gets called in for their civic duty, their employer may choose to offer them PTO for at least part of their service.
  • Bereavement: Bereavement time is meant for employees who lose a loved one. Some companies only allow bereavement leave for close relatives. Workers can use this time to attend the funeral or other memorial services, or just take time for themselves to grieve without thinking about work.

How does PTO work?

You can allocate time off to your employees using a few different systems. In a traditional PTO format, workers accrue time off based on their hours or days worked. But more employers these days are leaning towards more flexible time off policies.

Accruing Time Off

With this type of policy, your workers will accrue time off based on every hour or day they work. The accrued time off will be added to their PTO bank, and they can take time off when they have enough hours banked. You can choose to lump all types of PTO together or distinguish between vacation and other types of PTO.

Usually, employees accrue different types of PTO at different rates. For example, for the year, your policy might grant ten days of vacation, five sick days, five bereavement days, and three personal days. Then, for each 40-hour workweek, employees will accrue their vacation time faster than their sick time, bereavement leave, or personal time. Employees with more years of service might also accrue more paid days of leave per year.

With an accrued time off policy, employees have to wait until enough time is banked to use their PTO. That means that you can’t just look at scheduling needs when weighing PTO requests — you’ll also have to track each worker’s banked PTO to ensure they have enough balance.

Unlimited Time Off

In an unlimited time off system, there’s much more flexibility for employees to take days off as they wish. There is no set number of days in an unlimited PTO system. Instead, employees can take off as many days as they’d like, for any reason, as long as the time off is approved by the company and they’re still fulfilling their individual responsibilities.

This flexibility can be a benefit to employees. There’s usually a level of trust that workers will take the time they need to stay rested and attend to personal matters while remaining productive at work.

However, an unlimited PTO policy also comes with some severe drawbacks. Studies show that employees, on average, take less time off under an unlimited policy than those who operate under a traditional policy. This is most likely due to a sense of guilt and other unspoken, toxic workplace stigmas around taking leave. 

Just like in a traditional accrued time off structure, managers and company leadership still have to approve time off in an unlimited policy. If you opt for this type of format, the difference is you won’t be looking at the hours available in an employee’s time off bank. Before you approve any leave, you’ll still typically review factors like workforce coverage, scheduling needs, and productivity.

Under an unlimited PTO policy, you also don’t have to pay employees for the time off they’ve accrued when they exit your company. In a traditional PTO system, you do owe workers for any unused PTO time that they’ve banked during their tenure. When an employee leaves, they’re usually entitled to a payout of the days of PTO they accumulated.

How to calculate PTO

Small-business and startup consultancy Bizfluent notes that calculating PTO by pay period allows organizations to evenly distribute an employee’s time off accumulation throughout the year.  Organizations with hourly or part-time employees should consider providing PTO based on the number of hours worked. When an organization calculates PTO hourly, it allows employers to award less PTO for hourly employees who do not report to work (for whatever reason) or for part-time employees who do not always work the same number of hours in a pay period.

One metric employers can follow to calculate PTO is dividing the annual PTO hours by annual work hours. For example, if an hourly employee earns 80 hours of PTO each year and works 40 hours a week, or 2,080 hours per year, divide 80 by 2,080. That works out to an employee earning 0.038 hours of PTO for each hour worked.

The PTO formula is:

Hours of PTO / hours worked each year = hours of PTO earned per hour worked

So in our above example, the organization’s PTO formula for this employee would be:

80 hours / 2,080 hours = 0.038 hours of PTO earned per hour worked

How to navigate common PTO challenges

Even if you set a clear PTO policy, there are bound to be situations or employee requests that fall outside of the policy that you’ll still have to balance. The key is to treat all employees fairly and accurately track PTO balances so you know exactly where you stand.

A sick employee has already used all their days.

Combining sick leave and vacation into one PTO category can lead to unplanned consequences for employees. If a sick employee has used all their PTO days, they might feel compelled to show up ill and risk infecting co-workers.

Help employees plan for this by offering guidance during onboarding or in posts throughout the year via internal communications about the importance of banking some PTO for sick days. For example, advise employees to consider paid time off as five days of vacation, four sick days or an unplanned emergency, and one day for a special occasion.

A new employee needs to use PTO days before accruing them.

Companies often hire employees with previous personal commitments for which they need time off after being hired. Prospective candidates often are honest and upfront about this as the hiring process progresses. 

Since most policies establishing how to calculate PTO makes it hard for employees to take time off in the early months of their employment, many employers will allow employees to “borrow” their PTO. Allowing 40 hours of borrowed time gives an employee a full week off. To avoid lump accumulations and to calculate PTO more accurately, companies can implement earning PTO incrementally with each pay period.

If you allow your employees to borrow ahead on their PTO plan, you’ll need to track the borrowed hours accurately. You’ll also need visibility into the rest of your attendance and scheduling to quickly identify and resolve any coverage issues, especially for unplanned absences like a death in the family.

Tracking PTO doesn’t need to be difficult

Effective leave management is crucial for shift-based workforces. For one, it promotes employee well-being and reduces burnout. It also keeps you compliant with various wage and hour laws in your state. But most importantly, handling PTO properly keeps shifts organized and lowers the chance of scheduling mistakes. 

You could manually approve, calculate, and track PTO across your workforce – this is fine enough for a small business. But one slight misstep can wreak havoc on timesheets and schedules. To save yourself the headache, utilizing an automated PTO tracker is a good idea. For shift workers, it is important that something like this be mobile-first and optimized for self-service; this way, the admin work is as non-intrusive as possible.

Mobile app that employees can use to request PTO

An app like this can do things like:

  • Automatically track leave balances
  • Calculate and apply PTO to timesheets
  • Prevent employees on leave from accidentally being scheduled
  • Allow employees to request leave and check their balances
  • Let managers review past and upcoming time off on a calendar
  • Allow managers to create custom accrual rates

Pretty sweet, right? If you want to learn more about how this all works, contact us today. 

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What is Earned Wage Access (EWA)? A Few Considerations

An astronaut husky holding an iiphone with money raining down

Summary

  • Earned wage access (EWA) programs are an increasingly popular way for employees to access their earned wages before their next scheduled payday.
  • Implementing an EWA program helps employers attract and retain top talent and reduces employee absenteeism. 
  • Before implementing an EWA program, ensure that any direct deposit arrangements are compliant with your state laws and consider the associated charges for using an EWA service.

In a bid to improve employee retention in the current landscape, employers are turning to advancements in payment technology and alternative payroll processes. One solution that is gaining momentum is earned wage access (EWA), also known as on-demand pay. 

Earned wage access programs allow employees early access to parts of their salaries before their scheduled pay period. Unlike payday loans and advances, EWA solutions only grant employees access to money that they have already earned.  

Initially a concept that gained popularity in the gig economy, EWA programs have now drawn the attention of employers and employees across all industries. Research shows that access to EWA has become a priority for job seekers around the country. 

From small businesses to large corporations, there are a number of things to consider before adding EWA as an employee benefit to your retention strategy. Employers must understand the different EWA models out there as well as the common features across EWA providers, integrating it into their payroll system and remaining in line with any regulatory requirements. 

The two types of EWA models

Earned wage access products generally require employees to download a mobile app that they will later use to gain on-demand access to their salaries. These advances are paid directly into the employees’ account or to a dedicated pay card. EWA products function in one of two ways.

  • Employer-sponsored – In these cases, the employer contracts an EWA service provider and integrates it directly into their own payroll system using an API. In these models, the employer pays a flat rate for the use of the service.
  • Direct-to-consumer – Here, an agreement is set up directly between the employee and the EWA provider. The employee receives funds directly into their account and is charged a transaction fee each time a withdrawal is made. 

The 4 main features of an EWA service 

Although there are differences between earned wage access services, there are four core features that are common in any solution out there.

  1. The funding of EWA – The capital for granting employees access to their funds usually comes directly from the EWA provider. The service provider pays through their own available funds or through a debt facility. The service provider verifies that the funds are, in fact, available through an integration with the employer’s payroll provider.
  2. Disbursement methods – There are various ways that funds are distributed to employees: Direct deposit, a pre-allocated bank account that the employee sets up through the EWA provider, or a prepaid card.
  3. Method of payment collection by EWA provider – The vendor is usually repaid directly from the upcoming pay cycle.
  4. The time it takes a payment to reach the employee – This varies depending on the method used:
    • Direct deposit – the next business day
    • Prepaid or debit cards – takes up to 48 hours
    • Bank transfers – instant but can carry a fee
    • EWA vendor-provided bank accounts – free and instant  

Benefits of earned wage access for employees

Earned wage access has gained popularity with employees over the last few years as a great way to ease the financial stress of trying to survive between paychecks. Rising inflation over the past few years continues to worsen as experts believe that we are hurtling toward a cost of living crisis. Forty-one percent of employees have received pay raises this year. Of these, only 28% claim to have received a raise higher than the current inflation rate. 

 

Webinar: How to Navigate the Inflation Crisis

 

One study found that the reasons for utilizing EWA varied between employees from different age groups. Gen Z workers tend to use it to pay for everyday expenses like groceries or make loan or rent payments. It reduces the stress of not having the cash flow available until the next payday. 

Millennials also used EWA to cover family-related expenses, bills, and unexpected expenses related to vehicle maintenance. Gen X and boomers rely on EWA for family expenses, bills, and groceries but also use it to cover any emergency medical expenses. Either way, EWA has broad appeal across all age groups. 

The COVID-19 pandemic and the uncertainty that followed meant that more people started to prioritize building up a financial safety net. Earned wage access makes this easier to do. Unlike payday loans and advances, employees are less likely to accumulate debt from high-interest rates and overdraft fees. 

Benefits of earned wage access for employers

Signing up for an EWA program means more work for your human resources team, but the benefits of offering your employees more flexible access to their paychecks could outweigh the effort required.

Employees continue to struggle with inflation and trying to keep up with the high costs of living. Research shows that 78% of employees are seeking alternative employment in hopes of achieving better financial well-being.

 

Webinar: How to Stop Employee Turnover

 

By offering your staff the option of EWA and contributing to their financial wellness, you are more likely to attract top talent. In fact, 76% of employees agree that it is important for employers to offer EWA. Besides attracting talent, looking out for your staff’s financial health through EWA helps you improve your employee retention. 

A lack of financial well-being is a major cause of stress for many employees. Furthermore, stress is the third-leading cause of long-term workplace absence and the fourth cause of short-term absence. Improving this situation means your employees will also be more present at work. 

What to consider before implementing an EWA program

When looking at integrating an EWA program into your company, there are two things to consider: the associated fees for you or your employees and the legal implications of doing so based on where you are based. 

It is important to understand your state’s direct deposit laws. Some states only allow employers to pay via direct deposit when the employee gives their consent through a written agreement. If the EWA program you have signed up for requires a separate bank account to be set up, this might not be applicable within that agreement. You may need to obtain additional written authorization to ensure compliance with laws and regulations.

The charges associated with EWA programs vary from one provider to another. Some involve charging employers a flat fee, while others charge employees per transaction. Before contracting an EWA service provider, you need to budget for any charges you will absorb or analyze whether or not your staff are willing to pay transaction fees themselves. 

A successful EWA program begins with accurate timekeeping 

If you are going to offer EWA, you need to ensure that the wages employees have access to are accurate as soon as they are recorded. After all, fixing pay errors is much harder when employees have already spent their money. With automated time and attendance software, you can record accurate timesheets in real-time before they even reach your payroll or EWA system. This way, you can give your employees immediate access to their funds with peace of mind.

Workforce.com’s time and attendance is also synced with an employee scheduling system, meaning you can see wage and hour variances in real-time and on timesheets. With this visibility, you’ll be able to immediately catch where and when an employee’s pay doesn’t match up to their scheduled hours.

To find out more about how to lock in accurate wages BEFORE employees get access to them, check out our whitepaper on timekeeping below, or get in touch with us today.

The Practical Guide to Time and Attendance

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EEOC says that employers legally can offer incentives to employees to get vaccinated in almost all instances

COVID-19, FMLA, mask, OSHA

Employers have been anxiously waiting for the EEOC to publish its guidance for employers on incentives offered to employees in exchange for getting vaccinated against COVID-19. Late last week, the EEOC finally released that guidance. The issue is whether the incentive renders the vaccine coerced and therefore non-voluntary, which would be unlawful under the ADA and GINA.

What did the EEOC say:

  • An employer may offer an incentive to employees to voluntarily provide documentation or other confirmation that they received a vaccination on their own.
  • An employer may offer an incentive to employees for voluntarily receiving a vaccination administered by the employer or its agent as long as the incentive is not so substantial as to be coercive, and as long as the employer does not acquire genetic information while administering the vaccines. The EEOC does not offer any guidance as to what “so substantial as to be coercive” means, but it’s safe to assume that the incentives employers are offering (a day or two of added PTO, payments or gift cards up to a couple hundred dollars) will not meet this standards and are safe. And when states are offering the vaccinated the chance to win a million dollars…
  • An employer may not offer any incentives to an employee in exchange for a family member’s receipt of a vaccination from the employer or its agent, as such incentive would necessarily require the disclosure of the family medical history of the employee, which would violate GINA.
  • An employer may offer vaccinations to an employee’s family members if those vaccines are voluntary, employees are not penalized if their family members are not vaccinated, and all medical information obtained from family members during the pre-vaccine screening process is only used for the purpose of providing the vaccination, is kept confidential, and is not provided to any managers, supervisors, or others who make employment decisions for the employees.
  • Employers may (and I’ll add, should) provide employees and their family members with information to educate them about COVID-19 vaccines and raise awareness about the benefits of vaccination.
This guidance is not earth-shattering or surprising. With more than 50 percent of the country having received at least one dose of the COVID-19 vaccine, it provides confirmation and legal comfort to those employers that have already offered such incentives. It also follows an important governmental trend we’ve recently seen across agencies—the adoption of policies intended to incentivize people to get vaccinated. Whether its PTO for vaccines, the CDC’s new mask rules, or OSHA reversing course and eliminating its prior guidance that required the reporting of adverse reactions to employer-mandated vaccines, the federal government is actively breaking down barriers that discourage or disincentivize employees from getting vaccinated.
With only 40.7 percent of the country fully vaccinated, we are a long way from the number needed to reach the all-important herd immunity, if we ever get there. While it feels like life is starting to return to normal, the COVID-19 pandemic is not over yet. Do your part and get your shot. And, if you’re an employer looking to get as many of your employees vaccinated as possible, you can rest easier knowing that the EEOC will not penalize you for offering vaccine incentives to your employees.
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Fixing some common misconceptions about HIPAA

health care, employee health

Ever since the CDC amended its COVID-19 guidance to say that the fully vaccinated no longer need to wear masks indoors, I’ve read myriad variations of this tweet:

Friendly reminder that under HIPPA, your vaccination status is private.

Or this tweet:

The rule is simple, HIPAA protects EVERY American from disclosing ANY of their health records to ANYONE.

Their point? That medical privacy laws protect their vaccination status, and it’s illegal for any business to ask as a condition of anything.

They are very, very wrong. So, I thought today I’d clear up some common misconceptions about HIPAA specifically and medical privacy more generally.

  1. HIPAA stands for the Health Insurance Portability and Accountability Act. It’s HIPAA. Not HIPPA, HIPPO, or anything else.
  2. Broadly speaking, HIPAA does protect the privacy of individuals’ medical information. But not all medical information and only in certain circumstances.
HIPAA applies only to “covered entities,” defined as: (1) health plans; (2) healthcare clearinghouses; (3) healthcare providers that electronically transmit certain health information; and certain “business associates” of covered entities. If an employer does not fall into one of those categories, HIPAA does not apply to it at all. Thus, HIPAA does not apply to employee health information collected or maintained by an employer in its role as an employee’s employer.
For employees, HIPAA does not:
  • Prohibit an employer from asking for a doctor’s note related to an absence (or, in the case of COVID-19, an employee’s vaccination status).
  • Impact the ability to request information necessary to administer programs, such as health care benefits, workers’ comp, or sick leave.
  • Protect all health data maintained in employment records, only those employees’ medical and health plan records that relate to their participation as a member of the employer’s healthcare plan.
For businesses dealing with the public (such as a retail store or restaurant, for example), HIPAA simply does not apply at all. HIPAA does not prohibit a business from asking a customer about his or her vaccination status as a condition to entry or donning a mask upon entry. Period. Hard stop.
An employer that merely asks its employees for proof of vaccination status does not violate other laws, such as the Americans with Disabilities Act. The ADA does place limits on an employer’s disability-related inquiries of its employees. But, as the EEOC has clearly and succinctly stated, “requesting proof of receipt of a COVID-19 vaccination is not likely to elicit information about a disability and, therefore, is not a disability-related inquiry.”
The bottom line is that private businesses absolutely can require employees to provide vaccination status as a condition of employment (subject to certain reasonable accommodation obligations), and further a business can require the same as a condition to entry.
A business can’t force anyone to provide that information, it can legally deny access to anyone who won’t or can’t provide it. We all have a choice to make — to vax or not to vax. It’s really this simple. If you don’t want to wear a mask, get vaccinated. If you don’t want to get vaccinated, wear a mask.
If you don’t want to do either, then accept that there are places you won’t be able to go for now and for the foreseeable future.
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We are in the midst of a public mental health crisis; how employers can help

employers mental health; Millennials and mental health

Consider these statistics, courtesy of the National Institute of Mental Health, which recently examined mental health issues one year into the COVID-19 pandemic:

  • 31 percent of people report symptoms of anxiety or depression​.
  • 13 percent report having started or increased substance use​.
  • 26 percent report stress-related symptoms​.
  • 11 percent report having serious thoughts of suicide in the past 30 days​.
These grim numbers tell me that COVID-19 has created a national mental health crisis. At least some of your employees are struggling. Your challenge is what to do about it.
Here are four suggestions.
1. Check the benefits available to your employees. Do you have an employee assistance plan and are its mental health and counseling services are up to date? Are your health insurance plan’s mental health benefits easy to access and affordable? Do your employees know about state-offered resources, such as Ohio’s CareLine, a 24/7 community administered emotional support call service (800-720-9616)?
2. Revisit paid time off policies and consider providing employees the time they need to take care of themselves and their families. And understand that everyone’s situation at home is different. Some only have themselves to worry about, while others have families, older parents, etc. None of this is ideal, but for some, it’s less ideal than for others, depending on how much non-work responsibilities are on one’s plate.
3. Consider holding town halls or all-employee meetings that focus on mental health awareness. If senior leadership encourages education and communication around mental health issues, your employees will be more likely to access care if and when they need it. Leadership always starts from the top, and it’s vital that leadership leads on this issue.
4. Small gestures of kindness can go a long way. An extra day paid day off, a gift certificate for takeout meals or grocery deliveries or a surprise delivery of a mid-day snack can help employees feel appreciated and connected instead of overwhelmed and stressed.
Also, do not forget about or ignore your ADA obligations. The statute covers mental impairments no differently than physical impairments. If an employee is suffering from a mental illness you have an affirmative obligation to reasonably accommodate that employee, which might involve, for example, unpaid time off for the employee to obtain needed treatment.
Finally, do not ignore these issues or your employees who are living with them. Mental health illnesses are no different than other illnesses from which we suffer.
Treating them differently only increases the stigma that surrounds them and pushes individuals deeper into their illnesses and further away from the treatment they need.

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EEOC commissioner wants industry-specific COVID-19 guidelines

COVID-19, vaccine, flu

Last week, the EEOC held a public meeting on the impact of the COVID-19 pandemic on civil rights in the workplace. Following up on the remarks at that meeting, EEOC Commissioner Keith Sonderling, speaking at a virtual summit held by the Institute for Workplace Equality, said that employers need guidance on whether their COVID-related decisions are legal, and that the EEOC should issue industry-specific guidance to clear up these ambiguities.

Law 360 quotes Commissioner Sonderling:

I stress that the commission must issue new, common-sense guidance on return-to-work and other timely issues. Moving forward, the EEOC must begin to issue industry-specific guidance to address the array of issues that are becoming prevalent as the pandemic enters its final stage. … It’s my belief that businesses must know they will not be penalized by the federal government or through litigation for taking bold steps to help their workers thrive amid COVID-19 and ultimately return to the workplace.

High on my list of topics that the EEOC must quickly address is the legality of vaccine incentives. Another issue that I’d love to see the agency address is whether certain industries (e.g., health care, education) can be more strict with vaccine requirements than others, even for employees who might otherwise require a legal exception.

With vaccine hesitancy a legitimate barrier to reaching herd immunity, we need rules that will permit employers to get as many individuals vaccinated as possible. We need to be breaking down barriers, not erecting them.

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Biden administration announces $15 minimum wage for all federal contractors

minimum wage

On April 27, the White House announced that effective Jan. 30, 2022, all federal contractors will be required to incorporate a $15 minimum wage in new contract solicitations, and by March 30, 2022, all federal agencies will need to implement the minimum wage into new contracts and into existing contracts with annual options to renew.

The Executive Order that implements these changes will also tie this new minimum wage to inflation and adjust accordingly annually, eliminate the tipped minimum wage for federal contractors by 2024, and extends the required $15 minimum wage to federal contract workers with disabilities.

“But Jon,” you ask, “I’m not a federal contractor; why should I care?”

You should care because this Executive Order will move the minimum wage needle. Other companies will have to begin voluntarily offering a $15 minimum wage to compete in the job market for new hires. As a result, eventually and over time a $15 minimum wage will spread to all employers nationwide. If Congress won’t act on this issue, President Biden will force employers to act on their own.

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Wage law implications of employer-sponsored earned wage access products

EWAP, pay, compensation, money

Nearly 40 percent of Americans struggle to cover an unexpected $400 expense, according to a 2019 report by the Federal Reserve.

Earned wage access products, or EWAPs, offer a potential solution to this problem by allowing employees to be paid in real time for the hours the employee has already worked, instead of waiting until payday to receive payment. Each EWAP employs a different system for advancing earned wages and recouping those amounts from the employer.

The majority of EWAPs require employees to download an application on their phone, through which employees can request an advance on their earned wages. The advance on the employee’s paycheck is typically paid to the employee by depositing the funds into an account or loading it onto a payroll card. This advance is then deducted from the employee’s next paycheck, along with any applicable fees.

Explaining the EWAP models

There are two distinct EWAP models: employer-sponsored and direct-to-consumer. In an employer-sponsored model, the employer directly contracts with the EWAP application provider and the EWAP application is integrated into the employer’s payroll systems. Examples of employer-sponsored EWAP applications include Instant, DailyPay and Earnin. In the direct-to-consumer model, the EWAP provider offers services directly to the employee and recoups advanced funds directly from the employee’s bank accounts after the employee gets paid.

EWAPs provide employees with greater flexibility to use their paychecks in a manner that fits their financial needs. Employees can meet unexpected expenses without resorting to overdrafts, high interest credit cards or payday loans.

By offering EWAPs as part of their benefit packages employers can help curb employee financial stress, which can lower employee absenteeism and potentially increase employee productivity and employee retention. Companies including Walmart and McDonald’s offer EWAP options to its employees.

State, federal oversight of EWAPs

Due to the nascency of EWAPs, there is little regulation at either the state or federal levels. Regardless, employers considering EWAPs as part of their benefit packages must carefully evaluate whether the EWAP implicates wage laws that an employer must comply with.

For instance, employers considering EWAPs that deposit an employee’s earned wages into an account set up by the EWAP provider could run afoul of state direct deposit laws.

Most states, such as New York and California, only permit employers to pay wages by direct deposit with the written consent of the employee. Employee authorizations allowing direct deposits of wages into an employee’s bank account may not extend to the deposit of funds into a separate EWAP provider created account. Accordingly, employers should consider obtaining additional written authorizations from employees to deposit their earned wages into an EWAP account to ensure compliance with applicable direct deposit laws.

Potential for additional fees

As an alternative to direct deposit, employers also have the option to utilize EWAPs that deposit an employee’s earned wages onto payroll cards. Employers should be wary of any transaction or loading fees imposed on an employee by the EWAP provider or the third-party payroll card issuer. This is because many states, such as California, require employees paid via a payroll card to have access to their full wages without any fees. In other states, such as Minnesota, while employers are prohibited from charging an employee any participation or loading fees to receive wages, EWAP providers may charge employees transaction fees to access their earned wages. In such circumstances, the employer should provide the employee with a written disclosure upfront stating the terms and conditions of the payroll card option, including a complete itemized list of all fees that may be deducted from the employee’s payroll card account. Alternatively, in order to avoid this potential issue altogether, employers should consider paying all such fees instead of the employee, if possible.

Most EWAP providers charge a monthly membership fee ranging from $5 to $8 a month or a per transaction fee ranging from $1.99 to $3.99 per transfer, which are either paid by the employer or the employee. These fees are typically deducted from an employee’s paycheck, along with the advanced wages. Generally, an employer may not deduct or withhold any part of an employee’s wages without employee authorization. Albeit nominal, membership and transaction fees may be considered as wage deductions. As a result, employers should consider paying any such fees on behalf of its employees, or obtain written authorization from its employees allowing EWAP providers to directly charge the employee any fees, in order to comply with wage deduction requirements.

Wage assignment laws

Moreover, EWAPs that require employers to transfer an employee’s earned wages into an account set up by the EWAP provider may also implicate assignment laws. Wage assignments are prohibited in some states and regulated to varying degrees in others. Some states require specific authorizations or significantly limit how much money an employee can assign to a third party.

In California, no more than 50 percent of the employee’s wages may be assigned at the time of the payment of wages, and the wage assignment must be notarized, and include written consent of the employee’s spouse if married. This is an important consideration for employers, as wage assignment laws vary from state to state.

As more employers offer EWAPs as part of their benefit packages, it is imperative that employers closely examine the particular EWAP’s payment structure in order to understand the benefits and legal risks of the application. At a minimum, employers should consider paying all transaction fees and obtain any relevant authorizations so as to not infringe on any state-specific wage laws.

Employers should also assess whether EWAPs implicate state and federal consumer protection, data security and privacy laws. Given that there is little current regulation on the use of such products, employers should insist on limitation of liability and indemnification clauses while negotiating contracts with EWAP providers to ensure that they will not be liable for any legal issues implicated by EWAPs in the future.

Avoid added expenses due to data entry errors and payroll oversights. Integrate your payroll system with Workforce.com’s platform for automated timesheet exports and calculations, allowing you to stay on top of your wage costs. 

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CDC allows large employers to establish vaccination sites

COVID-19, vaccine, flu

The CDC released guidance permitting large employers to establish temporary sites to vaccinate employees.

The CDC on March 16 said that employers should consider opting for an on-site vaccination program if they have a large number of employees with predictable schedules and enough space to set up a pop-up clinic while still allowing for COVID-appropriate social distancing.

Employers should consider pushing employees to off-site vaccination clinics if they have a smaller number of employees, employees with flexible or non-predictable schedules, mobile employees who don’t have one worksite, or employees who’d prefer not to have their employer administer their vaccine.

Employers who choose to set up a vaccination site still must follow the EEOC’s guidelines on managing vaccines under the ADA, Title VII, and GINA (which I summarized here).

Bravo to the CDC for implementing policies to encourage as many employees to get shots in their arms as quickly as possible. It’s the only way we are going to stay ahead of the more contagious (and perhaps more deadly) variants and beat this pandemic. To this end, I highly recommend that you check out the CDC’s COVID-19 Vaccine Communication Toolkit for Essential Workers, in addition to these 5 tips on building vaccine confidence in your workplace:

  • Encourage your leaders to be vaccine champions. These leaders should reflect the diversity of the workforce. Invite them to share with staff their personal reasons for getting vaccinated and remind staff why it’s important to be vaccinated.
  • Communicate transparently to all workers about vaccination. See Key Things to Know, Frequently Asked Questions, and Myths and Facts for up-to-date information.
  • Create a communication plan. Share key messages with staff through breakroom posters, emails, and other channels. Emphasize the benefits of protecting themselves, their families, co-workers, and community. This fact sheet is available in numerous languages.
  • Provide regular updates on topics like the benefits, safety, side effects, and effectiveness of vaccination; clearly communicate what is not known.
  • Make visible the decision to get vaccinated and celebrate it! Provide stickers for workers to wear after vaccination and encourage them to post selfies on social media.

Now please do your family, friends, coworkers, me, and society in general a huge favor and get vaccinated as soon as your state allows you to do so. We are all counting on you.

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Prepare for the glut of COVID-19 whistleblower tag-along claims

fulfillment center, distribution center, COVID-19

The headline reads, “Ex-Manager Sues Ample Hills in Lawsuit Alleging Harassment and Unsafe COVID-19 Protocols” (boldface/emphasis mine).

Here’s the lede:

Bryce Mottram, a former general manager at one of quirky ice cream purveyor Ample Hills’ scoop shops, has filed a lawsuit in New York Eastern District Court alleging that he was fired from the company in retaliation for speaking up about instances of sexual harassment and unsafe COVID-19 workplace protocols at the company.

I firmly believe that for the next year-plus, just about every employment-related lawsuit will contain a COVID-19 whistleblower tag-along claim.

In other words, employees will sue for discrimination and safety-related retaliation, or harassment and safety-related retaliation, or breach of contract and safety-related retaliation, or fill-in-the blank and safety-related retaliation. I’ve already seen it happen in cases, and it makes an already complicated employment dispute that much more complicated and dangerous.

This likely reality means that employers must double down on implementing and enforcing COVID-19 safety rules in the workplace. Have a written COVID-19 safety policy and strictly enforce it. If you don’t know what should be in this policy, OSHA recently published a terrific guide.

  • Separate and send home infected or potentially infected people from the workplace.
  • Implement physical distancing in all communal work areas, including remote work and telework.
  • Install barriers where physical distancing cannot be maintained.
  • Suppress the spread of the hazard using appropriate and properly worn face coverings.
  • Improve ventilation.
  • Provide the supplies necessary for good hygiene practices.
  • Perform routine cleaning and disinfection.
These points are just a start, and I recommend you consult with OSHA counsel or a COVID-19-knowledgable safety consultant to draft and implement your plan (including training your employees).