Costly Workplace Mistakes To Avoid This Year

Businesses have experienced a whirlwind of regulatory policy changes since the Obama administration took  office in early 2009.  Pro-labor regulatory changes are on the rise.  As a matter of fact, more changes in workplace law will occur this year than in the last ten years combined.

Through our website, written memos, and newsletters, the AdvanStaff HR support staff will make every effort to keep you apprised of changes as they come.  While our customer service staff is here to assist in keeping you out of compliance trouble, we need your help.  A culture of regulatory compliance starts at the work-site level.  In a combined effort, we can effectively work together to manage the regulatory responsibilities each employer inherits when they hire that first employee.

Between what’s already become law and what’s on the horizon, we want to help prepare and assist your company in avoiding costly mistakes.

What’s Already Become Law ….

1. New employer costs for COBRA require every employer to advance 65% of COBRA premiums (for 9 months) for any employee who is “involuntarily terminated without cause” from September 1, 2008 through December 31, 2009.  Employers are eventually reimbursed through payroll tax offsets.

   Avoid This Mistake: Failing to give terminated eligible employees (and qualified beneficiaries) the new COBRA notices.

   Adverse Consequences: Potential liability for medical expenses incurred by an eligible employee; expedited Department of Labor review of a claim if a subsidy is denied; federal lawsuit.

   For most clients, the AdvanStaff HR Benefit’s Department administers COBRA on your behalf.  Compliance assistance with this new federal mandate is provided by AdvanStaff HR.  However, proper compliance is not possible without full support at the  work-site employer level. 

   In order for AdvanStaff HR to carry out the proper termination procedure, the work-site employer must complete the termination form in its entirety.  The employee termination form contains vital information and instructions from employers which our staff requires in order to properly complete the termination process and protect you, the employer, while doing so.   Copies of this form can be downloaded from Web Edition.
   A termination form must be completed for each voluntary or involuntary terminated employee.  Reporting zero hours on a timesheet does NOT properly instruct the human resources department to terminate an employee.
   

2. New leave of absence obligations under the Family and Medical Leave Act require employers administering FMLA leave to provide employees new additional written notices. Applies to employers with 50 plus employees in a 75 mile radius.

   Avoid This Mistake: Failing to revise employee handbook and leave policies to comply with the new FMLA regulations; failing to provide special notices to employees requesting an FMLA leave.

   Adverse Consequences: Liability for lost compensation, benefits and/or additional leave; failure to provide new written notices may expose an employer to a federal lawsuit.

   Contact the AdvanStaff Human Resources Department to review and insure your Employee Handbook is updated with current policies. Keep in mind, FMLA only applies to work-site employers with 50 or more employee in a 75 mile radius.

3. New employer obligations under the Americans with Disabilities Act redefines “disabled” to include conditions that may be relieved by prescription drugs or medical devices.

   Avoid This Mistake: Assuming that an employee taking medication for a physical or mental condition is not disabled; assuming that relatively minor ailments fall outside the new protections under the Americans with Disabilities Act.

   Adverse Consequences: Refusal to make reasonable accommodations for new conditions qualifying as “disabilities” could open an employer to federal lawsuit.

   The AdvanStaff Human Resources Department is here to answer your questions relating to the American with Disabilities Act.  Don’t hesitate to request information when you have questions on this subject.

4. More lawsuits challenging employee pay and/or terminations.  A recent decision by the U.S. Supreme Court makes it easier for employees to claim that their employer may have retaliated against them in violation of federal civil rights laws. Additionally, a recently enacted law now gives employees extended time to file a lawsuit claiming “pay” discrimination.

   Avoid This Mistake: Failing to have written, legitimate, nondiscriminatory business reasons justifying adverse actions taken against employees (such as demotion, discharge, etc.).  Failing to have reasonable written justification for any pay discrepancies between male and female employees performing the same jobs.

   Adverse Consequences: Employers may be sued in federal court.  A successful plaintiff’s recovery may be significant and may include lost back pay and benefits, front pay or reinstatement, compensatory and punitive damages and the plaintiff’s attorney fees.

   There is no question we have seen a rise in employee allegations as the economic climate worsens.  Disgruntled employees and hungry attorneys are on the prowl for easy dollars.   More than ever, properly documenting employee discipline and the “final events” leading up to an employee’s termination are necessary to minimize wrongful termination allegations.  Having AdvanStaff HR on your side helps considerably, but proper disclosure and documentation of circumstances is a must.

What’s On the Horizon . . .

Where to start?  That’s the question of the day.  Several proposals are hanging out there on topics from taxing employer paid health care premiums and employer provided cell phone benefits to accommodating employees and management decisions to unionize.   There are simply too many possibilities to focus on without making this article a full-fledged volume.  We know several tax changes will most likely come about to offset major deficit spending.  The IRS will be first looking for “low-hanging fruit” in order to increase tax revenue.  This means they will start clamping down on the obvious by looking for basic, common violations such as employee vs. independent contractor classifications.

1. Fewer Independent Contractors and More IRS Scrutiny? The Federal Independent Contractor Proper Classification Act will enable workers to now request an IRS determination on their independent contractor status and could subject employers to tax ramifications and other liabilities, penalties and interest.

   Avoid This Mistake: Failing to audit your independent contractor relationships for compliance with the IRS test.

   Adverse Consequences: Retroactive liability on employers for taxes, employee benefits and statutory insurance.

   While it may be “tempting” to classify workers as independent contractors to minimize payroll tax liabilities, workers compensation premiums, employee benefit expenses, and more, it may not be legal.  Newly proposed regulations open the door for improperly classified workers to retroactively collect benefits and pay.

   Read our article on proper employee classification.   (You must be logged in and have manager access to read the article.)

As we enter into a new era of pro-labor regulation, it is clear that employers and work-site managers must take extra steps to protect the business entity from adverse risks.  AdvanStaff HR is here to help.  Following “Best Practices” and preventative measures is one of the deterrents that should minimize and manage regulatory compliance risk.

Contact AdvanStaff HR today if you have any questions about the subject matter included in this newsletter.