Category: Compliance

Virginia state employees would contribute 5 percent of pay to the Virginia Retirement System, Richmond, under a proposal released Dec. 17 by Gov. Bob McDonnell.

State employees have not contributed to the $51.9 billion system since 1983, when the state agreed to cover employee costs in lieu of an employee pay raise, said Jeanne Chenault, a system spokeswoman.

Under McDonnell’s proposal, state employees would get a 3 percent salary increase and the state would increase its contribution rate to the system by 2 percent, starting July 1, 2011.

The legislation would increase total contributions to the system, which he said is underfunded by $17.6 billion, by more than $300 million a year.

“Without action now, the solvency and future viability of the entire system is at risk,” McDonnell said in prepared remarks to state lawmakers on Dec. 17. “Nearly every public and private pension plan in America requires employees to contribute something toward the cost of their retirement plan. Virginia’s approach to pensions is behind the times and economically unsustainable.”

Diana Cantor, the system’s board chairman, said in a written statement, “The VRS board of trustees welcomes the governor’s proposal to provide an increase in contribution rates, especially during these difficult economic times when state revenues are still below pre-recession levels and the future of reliable investment returns continues to be uncertain.”

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

 

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Injuries sustained by obese workers often require substantially more medical care and are more likely to become permanent disabilities than similar injuries suffered by employees who are not obese, a study released Dec. 13 found.

How Obesity Increases the Risk of Disabling Workplace Injuries, produced by Boca Raton, Florida-based NCCI Holdings Inc., reports on differences in treatment patterns between a sample of more than 7,000 claims with obesity as a secondary diagnosis and another 20,000 claims with virtually identical demographic characteristics but lacking an obesity diagnosis.

The range of medical treatments, costs and duration are typically, but not always, greater for obese claimants, researchers found.

A look at shoulder and arm sprains, for example, found that “the obese claim is significantly more costly due to an entire range of treatments including physical therapy and complex surgery that the nonobese claim did not incur,” the report stated.

“Essentially, the nonobese claim had only an office visit, X-ray and drug treatment the day of the injury and a follow-up office visit the next day,” according to the study. “In total, the nonobese claim had four treatments, while the obese claim had more than 75. A major cost driver for the obese claim was complex surgery.”  

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

 

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Traveling from a business dinner to a company-owned storage facility while an employee is on the way home falls within the scope of employment, the Texas Supreme Court has ruled.

The high court’s 8-1 decision in Liana Leordeanu v. American Protection Insurance Co. overturned a state appellate court ruling involving a pharmaceutical sales representative who worked from her apartment and drove a company car.

Leordeanu dined with clients, and her route home took her past a company-provided storage unit adjacent to her apartment complex. The unit was used to store drug samples, court records show.

She intended to stop at the unit when she ran off a highway and was seriously injured.
American Protection denied a workers’ compensation claim, concluding that Leordeanu was not acting “in the course and scope of employment” when the accident occurred, court records state.

A jury later disagreed, but an appellate court reversed the jury’s decision.

In its Dec. 3 ruling, however, the Texas Supreme Court said that under Texas law, Leordeanu was acting in the course and scope of employment because she was on her way from an employer-sponsored dinner to an employer-provided facility, and she was acting in furtherance of her employer.

The Supreme Court’s ruling affirmed the trial court’s judgment.  

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

 

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Voters in Washington state have rejected a measure that would have allowed private insurers to compete for employers’ business in the state’s workers’ compensation system.

More than 58 percent of voters on Nov. 2 rejected Initiative Measure No. 1082, according to the Washington Secretary of State’s office. Washington is among four U.S. states that have a monopoly workers’ comp system.

The Building Industry Association of Washington, along with insurance industry support, sought to end the Labor and Industries Department’s monopoly. Organized labor and trial lawyers opposed the initiative.

The measure would have eliminated a Washington practice of requiring workers to pay a portion of workers’ comp premiums as well as allowed private insurers to sell policies.   

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

 

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Insurance Commissioner Wayne Goodwin said Oct. 27 that North Carolina workers’ compensation insurance policy loss costs will increase an average of 0.6 percent, effective April 1, 2011.

The North Carolina Rate Bureau had requested an average increase of 1.2 percent in loss costs. But a settlement between his office and the rate bureau will result in $7 million in savings for North Carolina business, the commissioner said.

The settlement also resulted in a 4.1 percent increase for assigned risk market accounts. In 2009, the commissioner ordered a 9.6 percent decrease in voluntary market loss costs and no change in assigned risk loss costs.  

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

 

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A law requiring fired employees to file workers’ compensation claims within six months of their termination is unconstitutional, Oklahoma’s Supreme Court has ruled in a case involving cumulative trauma.

A trial court in Ponca Iron & Metal Inc. vs. Jackie Wilkinson originally found that Wilkinson was entitled to medical care and up to 52 weeks of temporary total disability benefits beginning in August 2006, court records show.

She was terminated in December 2005 from a job that included keyboard use and filing work.

A Workers’ Compensation Court upheld the trial court’s finding, but a Court of Civil Appeals reversed and remanded the case. On remand, the trial court denied the employer’s argument that a six-month statute of limitations applied to the case.

The trial court held that the statute of limitations in the law cited by the employer “unreasonably singles out employees who have been terminated and have sustained cumulative trauma injuries.”

The trial court also said the law is in direct conflict with a general, two-year statute of limitations for filing cumulative trauma injuries.

Oklahoma’s Legislature enacted the law cited by the employer to curtail fired workers from filing retaliatory workers’ comp claims, court records state.

In ruling on the case Oct. 19, the Oklahoma Supreme Court agreed that the state law is unconstitutional. It ruled that “the classification of injured employees on the basis of continued vs. terminated employment is a false and deficient classification of the larger class of injured employees because it creates preference for members in the continued employment group and results in unequal treatment for certain members of the terminated group.”

The temporary total disability benefits award was sustained.   

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

 

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FedEx Corp. will pay the state of Montana a $2.3 million settlement over misclassification of FedEx Ground drivers as independent contractors, Montana Attorney General Steve Bullock announced Oct. 21.

The settlement follows a yearlong investigation by Montana that found FedEx Ground drivers are employees, not independent contractors, and that FedEx owed unemployment taxes, penalties and interest, according to the attorney general’s office.

Montana will reimburse drivers $1.1 million for unemployment insurance coverage that was paid by them. The remaining $1.2 million will go to the state’s general fund.
FedEx did not admit wrongdoing in the settlement.

“As a result of the investigation, FedEx will change its business practices in Montana,” according to the attorney general’s office. FedEx Ground will “implement a new pickup and delivery model in Montana,” the office reported.  

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

 

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Dear Big Task:

Your organization would appear to value a variety of developmental assignments in “training up” its future leaders. Differing pay structures make this a complicated but not insurmountable task. Nonetheless, even though you have already decided to make this change, it would be productive to review the specific reasons that your separate pay structures were created in the first place. It also gives you a chance to explore ways in which this system could be made to work. At the very least, this will uncover specific business conditions or needs that should be considered in any conversion process—especially since the challenge of integrating four pay structures within your organization likely will be highly visible to managers and employees.

In implementing this change, ensure that whichever integrated system you develop effectively meets the business needs of each of the companies. Enhancing leadership development opportunities, as well as performance, are of course your organization’s ultimate goals. There are other considerations, however. The pay structures were probably put in place to address specific competitive labor-market considerations. As a result, your organization will need to “market price” benchmark jobs across each of the companies to make a thorough appraisal of the competitive pay situation. Once this process is complete, a cross-functional team can be created to “level” both benchmark and managerial positions across the companies, independent of the market data, to determine internal job worth. This second step is crucial since internal equity is a major consideration in talent development—and could become a serious issue if similar types of positions are placed in different levels.

The two sets of information then can be combined to create a salary structure that works for the integrated organization. This structure can assume a variety of shapes. Your organization may find that broad grades or broad bands are most appropriate. Or a traditional structure may best suit the organization’s needs. It is important that positions be placed in salary ranges that enable the organization to attract and retain top-notch employees, as well as to reward high-performing employees (particularly potential leaders). Your organization should carefully evaluate, again in light of business needs and strategy, the advantages and disadvantages of each type of salary grade/band structure.

Two often-overlooked elements of this type of conversion are costs and communications. You do not want to set the new salary ranges too high, as cost becomes an issue (especially if the original range was set at a lower point). The goal is to balance your desire to pay people a competitive wage while at the same time ensuring that costs do not spike needlessly. A full business/cost analysis of various alternative structures allows the top management team to make an informed decision. Nor should you overlook the issue of communication. You may need to advise employees and managers of the process and the desired outcomes, as well as the rationale for the change, before starting the process. 

Once you begin implementing the new system, be sure to communicate the changes to both managers and employees—again, so they are aware of the business reasons. This will help managers more easily administer salaries for their work groups. If salary adjustments are required to adjust pay levels between companies, these can be done in two or three steps. Compensation is one of the most visible and fundamental business management systems. Care and planning should inform any changes to that system.

SOURCE: Robert Fulton, Pathfinder’s Group Inc., Glenview, Illinois, June 17, 2010

LEARN MORE: Please read why transparency is pivotal when changing pay structure.

Workforce Management Online, August 2010 — Register Now! 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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Dear Workforce Newsletter

Women in New York state earned a median weekly income last year of $720, or about 84 percent of the $858 earned by men in the state, the U.S. Bureau of Labor Statistics reported Tuesday, August 10.

Women in the Empire State fared better than other women across the country, who earned a median income of $657, or 80 percent of the $819 nationwide median income brought in by men. But the gap between male and female salaries in New York did not narrow from 2008, when it reached a record high. The numbers reflect workers in full-time wage and salary positions.

“In terms of women making strides, the ratios haven’t changed a lot in the last few years,” said Martin Kohli, a BLS regional economist. “Women have not been making additional gains in terms of closing the wage gap.”

Kohli attributed the relative strength of New York women’s wages in part to the mix of industries in which local workers are employed. Men in New York are more likely than men in other states to be employed in service jobs, such as security guards and food workers, which pay a median weekly wage of $470. In New York, 17.2 percent of men are employed in the service sector, versus just 12.9 percent nationwide.

Meanwhile, factory jobs, which pay a median of $610 a week nationally, are much less common among New York men. Just 4.9 percent of men here work in factories, compared with 8.8 percent nationwide.

“The surprising thing is men who live and work in New York just don’t make a lot,” Kohli said. “A lot of the service jobs, like janitors, are just not particularly high-paying jobs.”

One area in which women in New York were less likely than women in the rest of the country to be employed was in high-paying management, business and financial jobs, which pay $1,138 a week. Nationwide, 16.2 percent of those jobs are held by women, versus just 12.7 percent in New York.

Nationally, the median weekly earnings of women ranged from $518 in Louisiana to $938 in the District of Columbia. In the Northeast, women in Pennsylvania and Maine were the only ones to fall below the national average.

Connecticut’s women had the highest median wage in the northeast, at $824. The state also had the highest wage for men, who earned $1,099.  

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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Actuaries for the San Francisco-based Workers’ Compensation Insurance Rating Bureau of California have recommended a roughly 30 percent rate increase for policies incepting January 1.

The recommendation made Wednesday, August 4, by the WCIRB’s actuarial committee must be approved by the governing committee before it goes to the California Department of Insurance for approval or disapproval.

The state bureau’s governing committee is scheduled to meet August 11 to vote on the matter, a spokesman said.

Rising medical costs and the Department of Insurance’s past rejections of rate increases resulted in the need for an approximately 30 percent increase, the spokesman added.

Last year the Department of Insurance rejected the bureau’s call for a workers’ comp insurance rate increase of nearly 24 percent.  

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

 

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