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Posted on April 7, 2011August 9, 2018

Labor Department Seeks Comment on Electronic Benefit Transmission Rules

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


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


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


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


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


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


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


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


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


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


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


 


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Posted on March 30, 2011August 9, 2018

High Court to Decide if Religious School Allowed ADA Ministerial Exception

The U.S. Supreme Court will decide whether a religious school can claim a “ministerial exception” to a discrimination charge under the Americans with Disabilities Act laws for a teacher who taught primarily secular subjects.


The case the court accepted March 28 in Equal Employment Opportunity Commission and Cheryl Perich v. Hosanna-Tabor Evangelical Lutheran Church and School involves Perich, who was a “called” teacher at the Redford, Michigan-based school.


Qualifying as a called teacher requires a certificate of admission into the teaching ministry. A called teacher receives the title of “commissioned minister,” but religion consumed only 45 minutes of Perich’s seven-hour school day, according to court papers.


Perich was terminated in 2005 from her position after the school refused to reinstate her after a disability leave, although a doctor said she could return to work with no restrictions. She then filed a lawsuit, claiming discrimination and retaliation under the Americans with Disabilities Act.


A lower court agreed with the school that it was entitled to a “ministerial exception” to the ADA and dismissed the case.


However, in its unanimous opinion last year, a panel of the 6th U.S. Circuit Court of Appeals in Cincinnati disagreed. The “legislative history makes clear that Congress intended the ADA to broadly protect employees of religious entities from retaliation on the job, subject only to narrowly drawn religious exemption,” the appeals court ruled.


“The fact that Perich participated in and led some religious activities throughout the day does not make her primary function religious,” the appeals court said. “This is underscored by the fact that teachers were not required to be called or even Lutheran to conduct these religious activities, and at least one teacher at Hosanna-Tabor was not Lutheran.”


The U.S. Supreme Court will decide whether a religious school can claim a “ministerial exception” to a discrimination charge under the Americans with Disabilities Act laws for a teacher who taught primarily secular subjects.


The case the court accepted March 28 in Equal Employment Opportunity Commission and Cheryl Perich v. Hosanna-Tabor Evangelical Lutheran Church and School involves Perich, who was a “called” teacher at the Redford, Michigan-based school.


Qualifying as a called teacher requires a certificate of admission into the teaching ministry. A called teacher receives the title of “commissioned minister,” but religion consumed only 45 minutes of Perich’s seven-hour school day, according to court papers.


Perich was terminated in 2005 from her position after the school refused to reinstate her after a disability leave, although a doctor said she could return to work with no restrictions. She then filed a lawsuit, claiming discrimination and retaliation under the Americans with Disabilities Act.


A lower court agreed with the school that it was entitled to a “ministerial exception” to the ADA and dismissed the case.


However, in its unanimous opinion last year, a panel of the 6th U.S. Circuit Court of Appeals in Cincinnati disagreed. The “legislative history makes clear that Congress intended the ADA to broadly protect employees of religious entities from retaliation on the job, subject only to narrowly drawn religious exemption,” the appeals court ruled.


“The fact that Perich participated in and led some religious activities throughout the day does not make her primary function religious,” the appeals court said. “This is underscored by the fact that teachers were not required to be called or even Lutheran to conduct these religious activities, and at least one teacher at Hosanna-Tabor was not Lutheran.” 


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


 


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Posted on March 30, 2011August 9, 2018

IRS Delays Smaller Employer Deadline to Report Insurance Costs on W-2s

The Internal Revenue Service said on March 29 that it will give smaller employers even more time to comply with a health care reform law requirement that employers report the cost of coverage on employees’ W-2 wage and income statements.


In addition, the IRS also clarified that the reporting requirement does not apply to retirees receiving health care coverage.


Under the reform law, employers were required to provide health care cost information on 2011 W-2 statements that are distributed to employees in 2012. But last year, the IRS waived that requirement for 2011 and said the health care cost reporting requirement would apply to 2012 W-2s, which are issued in 2013.


Under the guidance, employers that issue fewer than 250 W-2s in 2011 will not be required the cost of coverage on the 2012 W-2s.


Those employers “will not be required to report the cost of health coverage … prior to January 2014. This transition relief will continue until the issuance of further guidance,” the IRS said.


In addition, the IRS made clear that employers will not have to issue W-2s to retirees who receive health care coverage but no longer receive wages or salary.


“An employer is not required to issue Form W-2 including the aggregate reportable cost to an individual to whom the employer is not otherwise required to issue a Form W-2,” the IRS said.


The IRS guidance resolves a key question raised by employers with retiree health care plans, said Andy Anderson, a partner with law firm Morgan, Lewis & Bockius in Chicago.  


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


 


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Posted on March 30, 2011August 9, 2018

Fiduciary Duty Rule Pushed Back By SEC

The Securities and Exchange Commission staff member who coordinated the agency’s study of a universal fiduciary duty for retail investment advice said March 28 that a follow-up regulation won’t come until later in the year.


The fiduciary study, mandated by the Dodd-Frank financial regulatory reform law, was delivered to Congress in January. The staff report called for SEC commissioners to extend the fiduciary duty requirement to broker dealers to protect investors, who it says are confused by differing standards that investment advisers and brokers must meet.


The study, however, has run into resistance from the two Republican SEC commissioners, Kathleen Casey and Troy Paredes, who dissented when it was transmitted to Capitol Hill. They argued that the study’s conclusion was not backed up by rigorous economic analysis.


Congressional Republicans recently sent a letter to SEC Chairman Mary Schapiro urging her not to proceed with the rulemaking, citing the same concerns expressed by Casey and Paredes.


A Dodd-Frank timeline on the SEC website says that the agency will promulgate a fiduciary-duty regulation sometime between April and June. The Dodd-Frank law authorizes the SEC to proceed with the rulemaking.


But Jennifer McHugh, senior adviser to Schapiro and coordinator of the fiduciary study, told an audience at an Investment Company Institute conference in California that SEC action will “likely occur later in the year.”


She said that the agency has not formed a “rulemaking team” and is “meeting with outsiders to get their reaction rather than moving straight to rulemaking.”


“We’ve been focused on practical, real-world implications” of imposing a universal standard of care, she said.  


Filed by Mark Schoeff Jr. of InvestmentNews, a sister publication of Workforce Management. To comment, email editors@workforce.com


 


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Posted on March 25, 2011June 29, 2023

What ICE’s Latest Round of 1,000 Audits Means to a Business

U.S. Immigration and Customs Enforcement, the principal investigative arm of the Department of Homeland Security, is issuing 1,000 notices of inspection to businesses across the country.

The action demonstrates the Obama administration’s ongoing commitment to a work-site enforcement strategy that focuses on employer compliance and much higher administrative fines.

Much is potentially at stake here, and employers that did not receive a notice should take advantage of their good fortune and ensure that they are in compliance now. One or two additional rounds of audits are expected during this calendar year.

No single industry will be targeted above another. ICE has publicly confirmed that aside from continuing to focus on critical infrastructure sites, any business of any size may be audited.

The notices are not random, however. Companies are chosen based on tips and leads from the public or other government agencies.

Furthermore, the Obama administration has continued to make it clear that the days when immigration compliance could be ignored and considered the “cost of doing business” are long gone.

The actual cost of noncompliance involves fines ranging from $110 to $16,000 per violation, a loss of branding, potential federal contract debarment and a large sum of money spent on internal reviews and legal fees.

In essence, the government is working to ensure that employers, regardless of size, have a workforce consisting of employees authorized to work in the United States. The I-9 audit approach and focus on civil enforcement has been successful in raising general awareness and notifying companies of their administrative responsibilities.

The Obama administration’s criminal prosecution of businesses and individuals the Justice Department considers immigration lawbreakers is also chilling. Employers must realize that immigration compliance goes beyond having a legal workforce.

Even if the employer has no unauthorized workers in their employ, they still need to make sure that their hiring and documentation practices are in compliance. Given that costly violations can include errors in the way the I-9 form was filled out, less-than-perfect I-9 practices have become a significant and expensive liability.

The bottom line is that businesses must take proactive steps to ensure full compliance or face serious consequences. It bears noting that actions taken before a government-initiated audit or investigation generally help mitigate damages, reduce exposure and save the company both time and money in the long run.

Whether an employer received a notice, it would be well worth it to retain experience immigration compliance counsel in order to understand its responsibilities. And if the employer has received notification, it should not respond on its own.

The good news is that there are steps employers can begin working on with their attorney to promote a culture of compliance in their workplace. Consider the following best practices, and get started immediately:

• Establish a comprehensive immigration compliance policy.

• Conduct in-house audits of Form I-9 documents and company policies as well as E-Verify, if applicable. Carefully decide on how these audits will be conducted with phases, samplings and other dividers being considered.

• Establish written policies, protocols and training for employment verification. Remember having a “paper” policy that is not integrated with your actions is more harmful than helpful.

• Diligently authenticate the identity of job applicants to ensure that they are who they say they are.

• Consider the use of E-Verify and other best practices advocated by the government after consulting with your attorney.

• Establish protocols for addressing issues with differing Social Security numbers.

• Establish and maintain safeguards against the use of the I-9 process for unlawful discrimination. Ensure your team is well-versed in your policy.

• Create a protocol for immigration compliance related to contractors, subcontractors and vendors. Draft specific language for your contracts that ensure those you do business with have their own processes in place for compliance.

Workforce Management Online, March 2011 — Register Now!

Posted on March 22, 2011August 9, 2018

No Unemployment Insurance for Willful Misconduct

An employee who insulted his supervisor was guilty of willful misconduct and is not entitled to unemployment insurance, a Connecticut appellate court has ruled in upholding a lower court.


According to the decision in Andre Joseph v. Administrator, Unemployment Compensation Act by the Connecticut Appellate Court in Hartford, Joseph began working in 2007 for Minnesota-based United Healthcare Services Inc., now UnitedHealthcare.


In 2008, the company named Debbie Lee as his accounting supervisor. Lee attempted to train Joseph on reconciling accounts on several occasions, but his work continued to be unsatisfactory, according to the March 22 decision.


When his reconciliations were past due because he was unable to complete his work using the methods Lee had ordered, she again sent him an email in January 2009 explaining the methods she wanted him to use.


The plaintiff replied, “You do not have the technical accounting skills to be a supervisor and that will be your downfall.” When Lee responded that she had 20 years of accounting experience, Joseph wrote that “non value added experience non contemporary.”


Joseph was dismissed the same day the emails were exchanged. A referee upheld the dismissal, stating Joseph’s actions constituted “willful misconduct” and he was not entitled to unemployment insurance.


A lower court ruled that Joseph was not entitled to reconsideration of the Employment Security Division Board of Review’s decision to reject his assertion that he was discharged as a whistle-blower for challenging UnitedHealthcare’s practices and denied him benefits.


The appellate court agreed. “The appeals referee concluded, and the board agreed, that the emails that the plaintiff sent to Lee insulted her personally and undermined her supervisory authority and, therefore, his actions rose to the level of willful misconduct in the course of employment. There is sufficient evidence in the record to support this finding,” the court ruled.  


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


 


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Posted on March 22, 2011August 9, 2018

Judge Temporarily Halts Wisconsin Public Employee Law

A Wisconsin circuit court judge on March 18 temporarily blocked a state law that would require pension contributions from most state and local employees as well as limit their collective bargaining rights.


The lawsuit, filed March 16 by Dane County District Attorney Ismael Ozanne alleged the legislation was adopted in violation of Wisconsin’s open meetings law. The state Senate and state Assembly passed the legislation March 9-10, respectively. It was signed into law by Gov. Scott Walker on March 11.


The order by Dane County Circuit Judge Maryann Sumi stops Wisconsin secretary of state Douglas La Follette from publishing the bill, which legally blocks its implementation.


A hearing on the injunction is scheduled for March 29. The law was to become effective March 26.


The law excludes police and fire employees, who would continue to have full collective bargaining powers, enabling employers to pick up their pension contributions.


For employers without a collective bargaining agreement in force, employees would be required to pay half of the annual actuarially required retirement plan contributions, according to a written statement of the Wisconsin Department Employee Trust Funds.


The three systems affected by the legislation are the $79.8 billion Wisconsin Retirement System, the $4.5 billion Milwaukee City Employees’ Retirement System and the $2.1 billion Milwaukee County Employees Retirement System.  


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


 


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Posted on March 14, 2011August 9, 2018

Wage and Hour Lawsuits Top Employer Litigation Concerns

Richard Wilcox was a technician for Alternative Entertainment Inc., a satellite equipment company based in Madison, Wisconsin. In October 2009, Wilcox led a class-action lawsuit with about 2,000 Michigan and Wisconsin employees, claiming the company paid employees on a per-job rate, without additional pay for overtime, and didn’t properly deduct wages for alleged faulty work.


Wilcox’s employer argued otherwise, but to avoid the expense of going to court and other factors, Alternative Entertainment settled with the plaintiffs this month for a little more than $2 million.


“We hope that this settlement, along with the other cases against employers in the cable and satellite TV industry, will cause employers to review their pay policies to make sure they are in compliance with federal and state laws,” says William Parsons, a shareholder from Madison-based law firm Hawks Quindel which represented the plaintiffs.


Wage and hour lawsuits like this one are skyrocketing, and settlements are consistently high, says Gerald Maatman Jr., co-chair of law firm Seyfarth Shaw’s class-action defense group.


In 2010, 6,761 wage and hour lawsuits were filed, which was a 10 percent increase from 2009 and a 67 percent increase from 2005 when there were 4,039 lawsuits, according to the Administrative Office of the United States Courts. Meanwhile, the top 10 wage and hour settlements totaled $336.5 million in 2010, down slightly from the total of $363 million in 2009, according to the Chicago-based law firm’s latest Workplace Class Action Litigation Report.


“This is the tort of the day,” Maatman says, adding that wage and hour lawsuits should be an employer’s top concern. “Every year the number of cases goes up. Who knows when we are going to get to the top of the bell curve.”


The Fair Labor Standards Act of 1938 sets certain standards in today’s workplace, such as minimum wage and overtime pay, and is intended to protect workers from unfair employer practices. Even with the 2004 amendment to the law, employer attorneys say it is still easy for employers to be out of compliance.


“It is Depression-era legislation that was enacted to address industry workforce problems that don’t exist today,” says Sean Scullen, a partner at Quarles & Brady in Milwaukee. “It hasn’t kept pace with the modernization of the workplace, and employers are not in compliance as a result.”


The number of wage and hour class-action lawsuits is increasing because of several factors, lawyers agree. First, unlike technical lawsuits involving pension law, experts aren’t always necessary, and lawsuits can be brought by one client with a single allegation, Maatman says. Secondly, after years of limited federal resources to enforce the federal law, the Obama administration has stepped up its actions. Third, many unemployed workers have found it easier to report violations after they’ve been let go from the company where the problem occurred.


“Once they’ve lost their job they lose that inhibition,” Parsons says.


Many employers are conducting audits to make sure wage and hour policies are firmly in place, says Mark Batten, partner and co-chair of Proskauer Rose’s class- and collective-action practice group in Boston. Companies typically wouldn’t want to talk about their practices because of the ease in filing wage and hour lawsuits, employer lawyers agree.


“Rampant litigation is forcing employers to wake up. Employers are changing policies and are paying more attention, doing more audits than they used to,” Batten says. “Audits are unavoidable. It’s the only way [employers] really know they’re doing the right thing.”


Employers need to look at and document many factors, including how they count hours worked and calculate overtime, classify employees and their work environment, and other recordkeeping policies to minimize their exposure to wage and hour claims.


Lawyers say that employers who have reporting mechanisms in place for employees to state problems are less likely to face any trouble in court.


“Almost every [employee] handbook has a reporting mechanism for sexual harassment,” Scullen says. “It’s not hard to create a similar mechanism for raising concerns” about wage and hour issues.


Courts are beginning to offer guidance for employers. Last year, a federal judge in the Western District of New York dismissed a case against Black & Decker, where the employee claimed his supervisor told him not to record his overtime hours. The court said the company had written policies and training information instructing employees to accurately record all time worked. The case was dismissed.


“This is the type of case that gives hope to employers,” Maatman says. “It lays out a road map for what employers can do in terms of complaint procedures.”
 


Workforce Management Online, March 2011 — Register Now!

Posted on March 6, 2011August 9, 2018

How Employers Can Avoid Gender Discrimination Charges

Employers can take several steps to prevent gender discrimination charges and, if they are made, address them and limit any potential damages, experts say.


The first step is an effective policy.


Keep it simple, says Robin Shea, a partner with law firm Constangy, Brooks & Smith in Winston-Salem, North Carolina. Simply say, “We will not discriminate” on the basis of protected categories.


Employers’ anti-discrimination policies should not be “too elaborate,” Shea says. “In fact, sometimes, I think, too much detail can cause problems, because if the employer doesn’t follow it to the letter, they get into trouble for not following their policy,” she says.


But employers must move beyond merely having a policy, observers say.


If “you just have a paper policy nobody really pays attention to, or nobody spends much time emphasizing or enforcing, that’s when, in my view, problems can arise,” says Paul Starkman, a partner with law firm Arnstein & Lehr in Chicago.


“Make sure that the policy is adhered to and that decision-makers generally aren’t making decisions based on stereotypes about gender roles,” says Richard Tuschman, a partner with law firm Duane Morris in Miami. “For example, an employer should not pay a man more because he’s the breadwinner of the family if, in fact, that’s the case, which in many cases these days, it’s not.” That “would be discriminatory,” he says.


If managers are trained “to promptly spot and correct a problem, more often than not it’s not going to grow into litigation,” Starkman says.


Shea says employers “do need to make sure, as a matter of practice, that they are conducting regular harassment training. Probably once a year would be ideal.”


Tracey Kennedy, a partner with law firm Sheppard Mullin Richter & Hampton in Los Angeles, says, “I think many employers see training as too costly,” but “it’s the difference between investing in something and paying for it at the back end” in the form of lawsuits.


Starkman says employers should have “a good structure and procedures in place where employees can have a place where they feel safe about raising these issues, even if they don’t need to or want to file a formal complaint.”


Gregg Lemley, a shareholder with Ogletree, Deakins, Nash, Smoak & Stewart in St. Louis, says employers also should be wary of “unexplained disparities in pay for people who are performing similar work.”


Many companies “aren’t really making an effort to be sure they have consistent benchmarks to be sure there’s no adverse impact” with regard to either the salary at which they hire people, or in how their salary increases over time, he says.


Shea suggests that employers conduct a pay audit annually to look for “any discrepancies that can’t be explained,” and make appropriate corrections.


Communications also are important.


Shea says sometimes employers “don’t do a very good job” of explaining that someone failed to get promoted not because he or she was being discriminated against, but for another “very good reason.”


“You just have to sit down sometimes with the employee, and say, ‘Here are your qualifications. This is why we thought [another employee] was more applicable to this position,’ ” she says. “Nobody ever wants to do this because it has the potential of being an unpleasant conversation, but I think this makes a big difference to people if you can try to explain those things to them.”


This issue should be considered during recruitment, as well, says Martha Zackin, of counsel to Boston-based law firm Mintz, Levin, Cohn, Ferris, Glovsky and Popeo. It is “very tempting for people who do recruitment to go by word of mouth and recruit the people that you know, who are like you.” Instead, employers should seek to have a more diverse workforce.


Miles says once a complaint is made, “it’s important to have an interactive dialogue with the employee to understand exactly what their problem is and what they’re expecting to be done about it.”


“Certainly, if the concern hasn’t been brought to the attention of the employer” before a charge is filed, “it’s very important that the employer promptly investigate the allegations and make a determination if there’s any merit to the allegations” and try to address it, says Emily Borna, a partner with law firm Jackson Lewis in Atlanta.


If the employer finds that there has been disparate treatment “or adverse action because of someone’s protected status,” it should be resolved right away and appropriate action taken to stop it, Borna says.


Furthermore, if the person bringing the charge still is in the workplace, it is important “to be sure there’s no unlawful retaliation” against that person, says Borna. “But at the same time, that person isn’t entitled to special treatment … or to be insulated from any action if there’s wrongdoing on some other basis,” she says.


Workforce Management Online, March 2011 — Register Now!

Posted on March 6, 2011August 9, 2018

Nine Tips for Avoiding Gender Discrimination

Steps that employers can take to prevent gender discrimination charges or address them once they have been made include:


• Establishing a clear, simply stated policy.


• Avoiding gender stereotypes, such as assuming a man is the family’s breadwinner.


• Training employees on avoiding gender discrimination at least annually.


• Establishing a complaint procedure that employees can use without fear of repercussions.


• Conducting pay audits to uncover and address unexplained pay disparities.


• Establishing good communications to explain employment decisions that could cause worker disgruntlement.


• Making a concerted effort to hire a diversified workforce.


• Acting promptly to correct any disparate treatment once a charge is made.


• Avoiding unlawful retaliation but not giving special treatment if the employee who has filed a complaint still is in the workforce.


Workforce Management Online, March 2011 — Register Now!

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