As the year comes to a close, you and your organization should reflect on the incredible work you all have done to get to this point, and prepare for the many updates and changes that you expect 2015 to bring. Your HR Professionals are available to guide you through these matters and give you the tools to strategize for the New Year.
Upcoming Changes to OSHA Reporting and Recordkeeping Requirements
On January 1, 2015, a final rule from the US Department of Labor’s Occupational Safety and Health Administration (OSHA) will take effect that will change the current injury and illness reporting and recordkeeping requirements. This new rule adds to the number of situations in which employers must notify OSHA of injuries and illnesses as well as modifying the list of low-hazard industries that are exempt from the annual recordkeeping requirements for illness and injuries.
2015 Labor Laws: Coming Soon to a Courthouse Near You
With the Affordable Care Act, midterm elections, and other scheduled labor law changes, there are several new major pieces of legislation heading our way in 2015. Below is a summary of some of the key labor laws and trends to keep in mind as we approach 2015:
1. The Employer Mandate – The Employer Mandate is the provision in the Affordable Care Act that requires all employers with 50 or more full time equivalent employees to offer a certain level of health insurance coverage at an affordable rate to all full time employees or face a penalty. An Employer Mandate penalty is triggered if the company fails to comply with the requirements and at least one full‐time employee of a covered employer receives a premium tax credit for purchasing individual coverage on one of the new State Insurance Exchanges, also called the Health Insurance Marketplace. Large employers (those with 100 or more full‐time equivalent employees) who do not comply with the Employer Mandate may begin incurring Employer Mandate penalties in each month of the 2015 tax year.
Midsized employers (those with 50‐99 full time equivalent employees) enjoy an additional year of reprieve as long as the organization did not reduce its worker’s hours/workforce to get below the 99 employee threshold without a bona fide reason or materially reduce its health care plan (the one that was in existence as of 2/9/14), though they will be required to comply with reporting requirements in 2015. For midsized organizations that do not comply with the provisions of the law, Employer Mandate penalties may begin being incurred each month of the 2016 tax year.
With the implementation of the Employer Mandate comes IRS reporting requirements. Employers subject to the Employer Mandate must begin Section 6056 (Employer Mandate) reporting for the 2015 tax year. These forms will be filed with the IRS and provided to employees in early 2016. Employers with 50 or more full time equivalent employees are required to complete and submit one Transmittal Form (IRS Form 1094‐C) and, for each employee, an Employee Statement (IRS Form 1095‐C). It may help you to think of the 1094‐C as similar to the W‐3 (a transmittal form) and the 1095‐C as similar to the W‐2 (a separate return for each employee). The IRS draft forms are available in the HR Support Center.
2. Minimum Wage Increases – Over the past several years, protests and increased political debate regarding minimum wage levels have become more prevalent. In the recent midterms, voters in Alaska, Arkansas, Nebraska, and South Dakota chose to increase their states’ minimum wages. In fact, by January of 2015, the majority of states will have minimum wages that exceed the federal $7.25 per hour. There are also several local jurisdictions that have recently increased their minimum wage rate. If your organization pays at or around the minimum wage rate, make sure you carefully investigate whether that rate will be increasing in 2015. We have placed a 2015 Minimum Wage Guide in the HR Support Center to assist you in this regard.
3. Paid Sick Leave – Requiring employers to offer either paid or unpaid sick leave is an emerging trend in employment law. In the recent midterm elections, four ballot measures passed requiring employers to offer either paid or unpaid sick leave in Massachusetts (statewide), Trenton NJ, Montclair NJ, and Oakland CA. Additionally, the California legislature recently passed a paid sick leave law that will be effective July 1, 2015. Connecticut and several local jurisdictions have existing sick leave provisions. So if you are in one of these areas, make sure you check the law and your sick leave policies to ensure you are compliant.
4. New Flexible Spending Account, Health Savings Account, and 401(k) Account Limits – In 2015, the maximum amounts for certain health and welfare benefit plans will be increasing as listed below:
- Medical Flexible Spending Accounts (FSA) – Beginning in 2015, the maximum amount an employee may contribute to a Medical FSA will increase to $2,550, up $50 from the 2014 limit.
- Health Savings Accounts (HSA) – Beginning in 2015, the HSA contribution limit for a single individual will increase to $3350, up $50 from 2014. The HSA family limit will increase to $6650, up $100 from 2014. The HSA catch-up contribution for participants age 55 or older will remain the same at $1000.
- 401(k) & 403(b) Account Contributions – Beginning in 2015, employees will be able to contribute up to $18,000 to their 401(k) or 403(b) plans, up $500 from 2014.
5. Overtime for Domestic Service Workers – Previously, the overtime provisions of the Fair Labor Standards Act (FLSA) did not apply to a large class of domestic service workers based on a “companionship service” exemption. However, beginning in 2015, the federal definition of companionship services has substantially changed. Additionally, the overtime exemptions for companionship services and live-in domestic service employees may only be claimed by the individual, family, or household using the services rather than third party employers such as home health care agencies. Therefore, a third party, such as a staffing agency or home health organization may not claim the overtime exemption, and must compensate domestic service workers using an overtime premium for all overtime hours worked.
So the time is now to begin planning for these statutory changes heading our way in 2015. Should you have questions or concerns regarding any of this new legislation, we recommend directing them to your Human Resources Professional.
Question & Answer
Q. We had a disciplinary issue with an hourly employee last week. Instead of reporting at normal time to work, we instead asked that they report later in the morning for a meeting with supervisors. In the meeting, we suspended her for two days and gave her instructions about when to report for duty again. She did not clock in prior to the meeting. Are we responsible for paying any minimum amount of time for the time that she showed up for the meeting and was then suspended?
A. Yes. The Fair Labor Standards Act defines the time that employers are required to pay for their employees’ work and provides different rules for exempt and non-exempt employees in this situation.
Under the Act, non-exempt employees are paid on an hourly basis and are eligible to receive overtime when they have worked more than 40 hours in a workweek. The law has specific rules that discuss how an employer should pay for time spent in lectures, meetings and training. An employer is not obligated to pay for the time spent in a meeting if all of the following criteria apply:
- The meeting takes place outside of normal hours;
- The meeting is voluntary;
- The meeting is not job-related
- No work is performed during the meeting.
In your situation, a disciplinary meeting is job-related, mandatory and likely to take place during normal hours. Since not all four criteria have been met, the company would have to pay the non-exempt employee for the time spent in the meeting.
The rules are different for exempt employees, but the time still must be paid. Because exempt employees are paid weekly salaries regardless of hours worked, there are strictly defined instances when an employer is permitted to deduct from the employee’s salary. If the meeting doesn’t fit into the approved list of deductions, the employer is not permitted to make the deduction. Specifically, the employer is not permitted to make partial-day deductions from an exempt employee’s pay. The only exception is when intermittent leave taken under the Family and Medical Leave Act.
This means an employer must pay a full day’s wages for an exempt employee who attends a meeting. While the law allows employers to pay an exempt employee a partial week’s salary in the final week of his or her employment, the regulations state that the employer must prorate the salary by days, not hours. For example, if a manager terminates the employee on a Wednesday morning, the employee should be paid wages for Monday, Tuesday and Wednesday.
Safety & Health in the Workplace: Pandemic Planning
With increased media coverage about the Ebola outbreak, employers may wonder what workplace action should be taken. This is also a good time to discuss keeping your workplace germ free as the flu season gets into full force. Keep in mind that the likelihood of Ebola affecting your workplace may be small, so consider this a good time to revisit pandemic protocols. Chances are you will have a much better chance of flu and cold germs around and the protocols are virtually the same. Employers are encouraged to consider the following controls to help protect the workplace:
- Develop policies that encourage ill workers to stay at home without fear of reprisal.
- Understand state and federal leave laws that apply for serious health conditions.
- Develop practices to minimize face-to-face contact with a sick worker such as extended use of e-mail, websites and teleconferences. Where possible, encourage flexible work arrangements such as telecommuting or flexible hours.
- Provide a work environment that promotes personal hygiene: provide tissues, no-touch trash cans, hand soap, hand sanitizer, disinfectants and disposable towels for workers to clean their work surfaces.
Note that employers in high-risk industries (e.g. health care, the airline industry) are encouraged to consult the CDC’s specific guidance about infection control and prevention.
As the likelihood of Ebola affecting other US workplaces is low, employers should be aware of safety concerns, while ensuring their actions don’t contribute to panic and don’t cause legal risk. Currently, the only affected countries in Africa are Guinea, Liberia, and Sierra Leone. It is recommended to defer all non-essential business travel to these countries. There is also a small cluster of cases in Mali, but there is no current recommendation to defer travel there at this time.
People traveling to affected areas who avoid high risk exposure (caring for Ebola patients, burying their bodies, or hunting/eating bats or bushmeat) are at low risk for infection. The virus does not travel through the air or via insect bites. The current outbreak is spreading person to person, via bodily fluids. People with Ebola can spread the virus to others only after they develop symptoms.
What should an employer do if employees have African travel plans?
- Keep in mind there are only three affected countries, and the risk of transmission is low unless an employee has engaged in high risk activities.
- Questions about diseases or exposure are disability-related. The ADA permits an employer to request medical information when there is a reasonable belief that a medical condition will pose a “direct threat.” A potential exposure to Ebola could constitute a direct threat, though employers must be careful to avoid unlawful stereotypes or assumptions and should limit inquiries to those who have traveled to affected countries. A company may not require an asymptomatic employee to get a medical exam.
- Other employees may raise concerns about an employee who traveled. Employers should recognize the right to raise perceived safety concerns while ensuring employees who traveled (or who may have been exposed) aren’t discriminated against. A well intentioned employer could run afoul of both ADA and Title VII. Overstepping could give way to a “perceived as disabled” claim under the ADA, or even a race discrimination claim if the employer’s actions are perceived to be targeted only to African staff in absence of a direct threat.
- Public Health authorities are screening travelers from the impacted West African nations, determining risk levels and mandating certain individuals be quarantined and monitored. Because public health authorities are making these decisions, employers will be relieved from determining the safety threat, for asking those quarantined to stay home from work. In the unlikely event an employee was diagnosed with Ebola, we recommend seeking legal counsel to determine how to reduce the risk of contagion without violating applicable law.
Remember that most of the time, having adequate hand washing, hand sanitizer and sick day policies in place will go a long way in keeping your workplace healthy and safe.
Tool of the Month:
Wage issues are some of the most frequent, expensive and challenging employer compliance problems. Compliant wage practices and classifications are your first and best defense. In order to best withstand a Department of Labor Wage and Hour Division investigation or audit, business owners and HR professionals must understand wage concepts such as the minimum wage and overtime and should be aware of all relevant state and federal wage and hour rules.
Please review this month’s tool by going to the Essentials tab in the HR Support Center and select Checklists from the drop down menu. You can search Wage and Hour in the toolbar provided. The Wage and Hour Checklist will populate at the top of that page.