MBA News - Laws

What is the legal definition of harassment?

MBAHRO — Fri, 09 Jul 2010 20:58:00 GMT

What is the legal definition of harassment?

At least a few times a year, one of your managers, or one of their employees, will get into a situation and need to ask, “What is the legal definition of harassment?” Now, while this is usually a very loaded and stress inducing question to be asked by a manager, this article will just focus on giving you an overview of the legal definition.

So, what is the legal definition of harassment? Harassment is a kind of discrimination that can erupt from a handful of different categories. First, let’s highlight a few of the different types:

Sexual harassment

Unwanted sexually explicit words or advances, gestures and images.
Applying a positive or negative personnel action based on accepting or refusing sexual advances.
Can also be based on negative treatment on the basis of gender.

Race harassment

Most often occurs as offensive comments, jokes, gestures.
Includes even when the victim and harasser are the same race.

Religious harassment

Usually involves jokes, or other demeaning conduct based on a person’s religion and religious observances of holidays or dress.
Attempting to force an employee to participate or not participate in religious activities also constitutes religious harassment.

Other harassment categories

National origin harassment
Disability harassment
Age harassment
Genetic Information

Delivery - Harassment can occur

In person
In writing
By telephone (voice, text messaging)
Via e-mail
Or through any other means of communication. (text messaging, instant messaging)

Harassment can be physical, verbal or visual. Examples of verbal harassment include but are not limited to unwelcome comments, jokes, insults and name-calling. It can include any other words and conduct that demean, stigmatize, intimidate, or single out a person because of his or her sex, race, color, religion, national origin, age, disability or other legally protected status.

Examples of physical or visual harassment include but are not limited to unwelcome physical contact, damaging personal property, possession or display of derogatory pictures or other graphic materials.

So you see, the answer to, “What is the legal definition of harassment” has a long answer. Consult with your HR professionals to make sure you have your policies developed, documented and distributed to your employees.

The following resources can help with your research:

The Equal Employment Opportunity Commission’s (EEOC) Harassment information page has good information, as well as additional resources on the right-hand side of their page.

The Age Discrimination Employment Act

Facts about sexual harassment

Modern Business Associates is an HR company that frequently helps companies with their business issues. As a Professional Payroll and HR outsource organization, our clients rely on us to help them effectively deal with these kinds of topics.

Types of workplace harassment

MBAHRO — Sat, 03 Jul 2010 20:19:00 GMT

Types of workplace harassment

Workplace harassment comes in a variety of deliveries and categories.

The harassment delivery mediums include:

In person
In writing
By telephone
Via e-mail
Types of workplace harassment can also occur through any other means of communication. (text messaging, instant messaging)

Examples of physical or visual types of workplace harassment include but are not limited to unwelcome physical contact, damaging personal property, possession or display of derogatory pictures or other graphic materials.

The most frequent types of workplace harassment occur in the following categories:

Sexual harassment, which includes unwanted sexually explicit words or advances, gestures and images. Applying a positive or negative personnel action based on accepting or refusing sexual advances. It can also be based on negative treatment on the basis of gender.
Race harassment most often occurs as offensive comments, jokes, gestures. This includes even when the victim and violator are the same race.
Religious harassment usually involves jokes, or other demeaning conduct based on a person’s religion and religious observances of holidays or dress. Also, attempting to force an employee to participate or not participate in religious activities also constitutes religious harassment.
National origin harassment occurs when the nature of the slur is based on the perceived persons origin.
Disability harassment is when a physical or mental disability of the focus of the harassment message.
Age harassment is when subjects are left out, or asked to do something, based on their age.
Genetic Information is discrimination based on information the employer has about the employee, or hiring prospect’s genetic information. (Title II of the Genetic Information Nondiscrimination Act of 2008 (GINA), which prohibits genetic information discrimination in employment, took effect on November 21, 2009.)

With harassment arriving in many different forms, work with your HR professionals to make sure you have your policies developed, documented and distributed to your employees.

The following resources can help with your research:

The Equal Employment Opportunity Commission’s (EEOC) Harassment information page has good information, as well as additional resources on the right-hand side of their page.
Genetic Information Nondiscrimination Act of 2008 (GINA)
Facts about sexual harassment

U.S. Child Labor Laws - Changes that may affect your business

MBAHRO — Thu, 01 Jul 2010 19:30:00 GMT

U.S. Child Labor Laws - Changes that may affect your business

The Fair Labor Standards Act (FLSA) Child-Labor Regulations have recently been revised. On July, 19, 2010, the final revisions to the child-labor regulations under the Fair Labor Standards Act will become legally effective.

The Department of Labor has been receiving comments on these most recent suggested regulation changes to the U.S. child labor laws since 2007. The DOL states that these revisions are supposed to make it easier for people under that age if 18 to get a job. These revisions only apply to non-agricultural positions. The Department of Labor (DOL) is scheduled to revise the provisions concerning minors in agricultural employment. The revisions single out industries like banking, information technology and advertising.

While the regulations offer an array of rules to follow, the most recent revisions address specific issues:

There is a provision permitting 14 and 15 year olds to work in teaching, computer programming and other jobs of an “artistically creative nature.”

“Youth peddling” is not now banned. This is “the selling of goods or services to customer at locations other than the youth-employer’s establishment.” Though, being a volunteer can make it okay.
The new revisions to these U.S. child labor laws address the definition of the “workweek” for 14 and 15 year olds. It’s characterizes it as, “seven consecutive 24 hour periods.” This releases the employer from a strict Sunday through Saturday calendar week definition in terms of compliance with the totalj-hours limitations applying to minors.
DOL adopted regulations implementing the child-labor civil money penalty changes made in the Genetic Information Nondiscrimination Act of 2008 (GINA). GINA added penalties of up to $50,000 for each child-labor violation that results in death or serious bodily injury of any employee under 18. The penalties may be doubled to as much as $100,000 if the violation is determine dto be “willful” or if it’s "repeated."

Modern Business Associates frequently deals with employee issues. As a Professional Payroll and HR outsource organization, our clients rely on us to help them effectively deal with these kinds of topics.

Your Employee’s Work email expectation of privacy – New Supreme Court Decision adds some clarity.

MBAHRO — Mon, 28 Jun 2010 19:35:00 GMT

Your Employee’s Work email expectation of privacy – New Supreme Court Decision adds some clarity.

The latest Supreme Court ruling help that a California police department’s review of sexually charged text messages sent by the officer to his wife and to his mistress from his employer-issued pager, did not constitute an invasion of the employee’s privacy. This overturned a previous ruling by the 9^th Circuit. (Link to the full opinion in City of Ontario v. Quon).

As a business owner, you should take note that the Supreme Court’s decision was largely motivated by concept that the police department’s review of the messages was in line with its policy and was conducted for a valid business reason. Also, that the implications of the decision on the employees texts in this case could also be seen to apply to the work email expectation of privacy for the average employee.

The officer had exceeded the allotted monthly number of messaged approved for his text pager and, according with policy, the texts were then reviewed by his employer to determine the amount the officer would need to pay for non-work-related messages.

This court decision is the first in the area of an employer’s right to monitor the electronic communications of its employees sent and received during working time or with devices issued as part of the job.

As a business owner, it’s important to understand that:

The decision does not take away the right to privacy in all cases.
You should consider having a written policy for communication review policies and procedures for your company to avoid getting out of sync with your employees work email expectation of privacy (or texts, or phone calls).
Any search of employee communications should not go beyond what is necessary to achieve a legitimate business purpose. In this case, reviewing the records to determine the personal overuse of the texts.

Modern Business Associates frequently deals with privacy issues. As a Professional Payroll and HR outsource organization, our clients rely on us to help them effectively deal with these kinds of topics.

DOL says you may have to compensate employees for time spent putting on protective equipment required by law.

MBAHRO — Tue, 15 Jun 2010 19:54:00 GMT

DOL says you may have to compensate employees for time spent putting on protective equipment required by law.

The new Department of Labor’s (DOL) Administrator’s Interpretation, issued by Deputy Administrator Nancy J. Leppink), concerns whether you have to pay for the time employees use to change put on and take off protective equipment required by law. It’s entitles “SUBJECT: Section 3(o) of the Fair Labor Standards Act, 29 U.S.C. 203(o), and the definition of clothes.” (Administrator's Interpretation No. 2010-2)

Under the Fair Labor and Standards Act, you don’t have to pay employees for their time spend changing clothes or washing at the beginning or end of each workday. But, this new Administrator’s Interpretation explains that safety equipment is going to be treated separately, and that changing into and out of protective equipment required by law is now time that your employees will be compensated for.

So, if your employees are just putting on uniforms, then it’s probably not time that you need to pay them for. On the other hand, if they are putting on protective equipment to abide by safety laws, then it would be “on the clock” time.

These DOL has previously stated the opposite opinion regarding whether you have to pay for this time. So, read the new brief and consult your legal resources to see how it may apply to your business.

Modern Business Associates frequently deals with compliance issues. As a Professional Payroll and HR outsource organization, our clients rely on us to help them effectively deal with these kinds of topics.

Designing an Internship Program

MBAHRO — Fri, 04 Jun 2010 16:19:00 GMT

Designing an Internship Program

Designing an Internship Program can create a great way to pave the way to create relationships with local schools and pave the way to boosting your recruiting program. It’s not uncommon for over 20% of a company’s new-hires to come from its internship program.

Then designing an internship program, several factors should be considered:

Strategic Planning

Will your internship program be available year-round? Post openings at least eight weeks from the start date.
Will they need workspace?
Will they need computer access?
What kinds of meaningful projects will they participate in?

Supervising

Since internships are generally a training type of program, they will typically need a greater amount of supervision than the normal employees.

Each intern will need to be welcomed to the company and taken through many of the normal employee orientation efforts, like security, facility accommodations, punch in/out procedures, etc.

Compensation/Legal Compliance

Make sure you get advice on how to stay in compliance with federal and state laws regarding if your interns need to be paid. Generally, it is much harder to create a compliant unpaid internship program.

Whether the intern receives course credit for their efforts is also part of the equation when determining compliance. In an article by Patterson (1997), the author highlights information provided by the NACE general counsel on academic credit. Each local university will also have their own guidelines for internships taken for course credit.

Compliant Hiring of an Intern

Equal Employment Opportunity laws apply to the hiring of interns. You will want to check with your state to see if workers’ compensation laws cover interns. Just as you would a regular employee, it is important to provide interns with information on your safety and harassment policies, as employers may be held liable for intern safety and harassment issues.

Set and document goals for the Internship

Documentation is very important for effective learning to take place. It is strongly advisable that an employer and intern create mutually agreed upon learning objectives. Well documented learning objectives provide clear direction and targeted goals for the intern. This ensures both parties envision the same experience and reduces the possibility of misunderstanding and disappointment.

Feedback

Each internship program should include two-way feedback. The intern should be able to receive feedback on their performance. In addition, you need to get feedback on your internship program directly from the participants to understand if it is meeting the goals you have for your program. This feedback should come from the interns themselves, as well as your full-time staff that worked with the interns.

Modern Business Associates frequently deals with employee and intern programs. As a Professional Payroll and HR outsource organization, our clients rely on us to help them effectively deal with these kinds of topics.

Federal Employment Posters Update – Use the new NLRA poster by June 21st to stay in compliance.

MBAHRO — Wed, 02 Jun 2010 19:02:00 GMT

Federal Employment Posters Update – Use the new NLRA poster by June 21st to stay in compliance.

Now, under the National Labor Relations Act (NLRA), most federal contractors and subcontractors, by law, must inform employees of their rights.

The Department of Labor's regulations implement Executive Order (E.O.) 13496 E.O. 13496 advances the Administration's goal of promoting economy and efficiency of Federal government procurement by ensuring that workers employed in the private sector and engaged in activity related to the performance of Federal government contracts are informed of their rights to form, join, or assist a union and bargain collectively with their employer. Knowledge of such basic statutory rights promotes stable labor-management relations, thus reducing costs to the Federal government.

Pursuant to Executive Order 13496 and its implementing regulations, 29 C.F.R. Part 471, Federal contractors and subcontractors, beginning on June 21, 2010, must notify employees about their rights under the National Labor Relations Act (NLRA).

The NLRA is the primary law governing relations between unions and employers in the private sector, and guarantees the right of employees to organize and to bargain collectively with their employers, and to engage in other protected concerted activity with or without a union, or to refrain from all such activity.

Additionally, Federal contracts and subcontracts must include a provision requiring Federal contractors and subcontractors to post the notice.”

Display the correct federal employment poster for compliance. This poster details those employment rights, including the authority to organize and bargain collectively with their employers and to engage in other protected activity. The federal labor law posting provides contact information for the National Labor Relations Board (NLRB), the agency responsible for enforcing the NLRA.

Executive Order 13496 was signed by President Barack Obama on January 30, 2009 (74 FR 6107, February 4, 2009).

Again, be sure you stay in compliance by acquiring and properly displaying this poster by the mandatory June 21, 2010, deadline.

Fair Labor Standards Act (FLSA) and nonpaid internships: Quiz

MBAHRO — Wed, 19 May 2010 16:12:00 GMT

Fair Labor Standards Act (FLSA) and nonpaid internships: Quiz

The Fair Labor Standards Act (FLSA) requires that nonexempt employees receive at least minimum wage for all hours worked and must also receive time-and-a-half pay for all hours worked more than 40 during the workweek.

While the FLSA doesn't define what an intern is, nor provide an exemption from minimum wages or overtime for interns, it does define an employee as "any individual employed by an employer." The definition of "employ" under the FLSA "includes to suffer or permit to work."

Under federal law, for-profit organizations must pay workers unless the position fits six criteria. The following quiz helps to illustrate the six criteria.

Would the employee be correctly classified as a “Coordinator”, “Trainee”, or “Intern”?

For an unpaid internship to be lawful under the Fair Labor Standards Act (“FLSA”), the intern must be classified as a “trainee” rather than an employee.

Does the training need to be similar to that which would be given in a vocational school?

Yes.

Is the internship program for the benefit of the company to leverage willing people to help the company in exchange for experience?

No, the training is for the benefit of the trainee.

Can you use the unpaid internship program to delay hiring normal employees?

No, the trainees cannot displace regular employee positions.

Are you required to make some kind of hiring offer to unpaid interns at the end of the program, even if you know they won’t take it?

No, trainees are not necessarily entitles to a job at the completion of the training period.

To ensure compliance, employers offering unpaid internships should structure the position in a way that the intern receives the full benefit of the experience.

Failing to comply with wage and hour laws can lead to serious FLSA administration errors that could cost your business thousands in fines. Tools like the FLSA Compliance Kit can help you navigate through every FLSA regulation from child labor laws to timekeeping discrepancies.

Modern Business Associates frequently deals with designing internship programs. As a Professional Payroll and HR outsource organization, our clients rely on us to help them effectively deal with these kinds of topics.

Healthcare Reform Update

MBAHRO — Fri, 14 May 2010 15:58:00 GMT

Health Reform Bill HR3590 Update - Simple Cafeteria Plans

The American Society of Pension Professionals & Actuaries published an article summarizing "Simple Cafeteria Plans" that are available starting January 1, 2011, under the health reform bill (HR 3590). Please use the link below to access:

http://www.asppa.org/Document-Vault/PDFs/ASAPs/2010/10-13.aspx

Employee Benefits Cost Advantages to Restaurants that outsource HR

MBAHRO — Wed, 12 May 2010 18:14:00 GMT

Employee Benefits Cost Advantages to Restaurants that outsource HR

When a restaurant considers outsourcing its HR functions, it normally takes into account some estimated employee benefits cost advantages. But many of the advantages go beyond having your employees take advantage of group benefits rates through the PEO company.

By using an outsource, restaurant owners can relieve themselves of the costly administrative burdens of managing:

Claims management
Direct Deposits
Payroll Taxes
Applying the complex laws governing wages and tips that can make managing restaurant payrolls extremely difficult to manage.

A PEO can help reduce the employee benefits cost and the risk of compliance penalties through:

Arranging for competitive health coverage.
Creating a I-9 compliance evaluation, which ensures that all employees are compliant with INS regulations and avoiding penalties.
Performing a payroll process audit to make recommendations to stay in compliance with Fair Labor Standards Act regulations.

In a recent survey, the National Association of Professional Employer Organizations (NAPEO) found that a small business owner will spend 10 percent more time complying with workplace regulations than they did ten years ago.

Employee benefits cost reduction when firing or laying off staff.

PEOs can help restaurants make informed choices when planning to offer benefits to workers that will be fired or be a part of a layoff. Whether a company has an overworked HR staff in-house or no HR at all, a PEO allows restaurant owners to spend more time focusing on managing their restaurant.

Modern Business Associates frequently deals with employee benefits costs. As a Professional Payroll and HR outsource organization, our clients rely on us to help them effectively deal with these kinds of topics.

Introduction to pay deductions covered by the Fair Labor Standards Act (FLSA)

MBAHRO — Mon, 19 Apr 2010 17:07:00 GMT

Introduction to pay deductions covered by the Fair Labor Standards Act (FLSA)

The Fair Labor Standards Act (FLSA) establishes, among other things, federal standards for minimum wages and overtime pay that employers are required to follow.
Unless a specific minimum wage and overtime exemption applies, employees must be paid at least the applicable minimum wage for each hour worked and overtime for any hours in excess of 40 hours worked in the workweek.

Employees who do not qualify for an exemption are commonly referred to as "nonexempt employees" and those employees who do qualify are referred to as "exempt employees."

Risks

The issue of improper deductions applies to all employees, both nonexempt and exempt. An improper deduction from either is a violation of the FLSA law and such violations can result in investigations by the United States Department of Labor (DOL) and/or expensive and time-consuming litigation.
As an employer considering taking deductions from any employee's wages, you should be careful to ensure that taking the deduction will not violate the FLSA law.

Conclusion

It is essential that employers exercise care when making deductions from employee pay. For nonexempt employees, deductions may never cause the employee to earn less than the minimum wage and may never cut into pay for overtime hours. For exempt employees, unless a deduction is specifically listed in the CFR, making such a deduction will likely result in a violation of the FLSA and could result in loss of the minimum wage and overtime exemptions. With so much at risk, you should not hesitate to contact employment counsel in making deduction decisions.

Modern Business Associates frequently deals with payrol issues. As a Professional Employee Organization, our clients rely on us to help them effectively deal with these kinds of topics including the FLSA law.

Pay Deductions Quiz: Uniforms for a minimum wage employee.

MBAHRO — Fri, 16 Apr 2010 17:09:00 GMT

Pay Deductions Quiz: Uniforms for a minimum wage employee.

You hire a minimum wage employee to work as a cashier at your auto parts store. The employee signs an agreement to have $20.00 deducted from her first check to cover the cost of a uniform. You then, as agreed upon, deduct $20.00 from the employee's first check to cover the cost of the uniform.

Have you violated any Fair Labor Standards Act (FLSA) requirements?

Here, you have violated the FLSA's requirement that a nonexempt employee be paid the minimum wage for each hour worked. It makes no difference that the employee agreed to the deduction. Because the employee is a minimum wage employee, there was nothing that could legally be deducted from the employee's wage to cover the cost of the uniform. Any deduction puts the employee below the minimum wage level.

Modern Business Associates frequently deals with payroll issues. As a Professional Employee Organization, our clients rely on us to help them effectively deal with these kinds of topics including deductions and minimum wage laws.

Note these legal age issues when planning to layoff employees.

MBAHRO — Wed, 14 Apr 2010 17:11:00 GMT

Note these legal age issues when planning to layoff employees.

The Older Workers Benefit Protection Act (OWBPA) provides additional protection to employees covered by the Age Discrimination in Employment Act (ADEA). The OWBPA affects downsizing employers in two ways.

First, the OWBPA places strict requirements on an employee's release of an ADEA claim. Requirements include:

It requires such a release to be in writing as part of the information given to the employee during the layoff.
Employees must be able to easily understand the release. (the "knowing and voluntary requirement").
The employee must be advised to consult with an attorney after the day of the layoff.
Employees must be given a 21-day consideration period to evaluate the release
The employee must be given a seven-day revocation period after signature.

Second, the OWBPA includes potentially dangerous conditions for group layoffs. If an employer offers severance and an associated release to two or more employees, and any of the employees are 40 years old or older, the release must include:

A 45-day consideration period.
Information about those eligible to participate, eligibility factors used, and job titles and ages of any employees in the same job classification or unit not eligible to participate.

Modern Business Associates frequently deals with HR issues. As a Professional Employee Organization, our clients rely on us to help them effectively deal with these kinds of topics including designing processes for terminations and council when planning to layoff employees.

HIRE Act Requires Individuals to Sign an affidavit

MBAHRO — Thu, 01 Apr 2010 17:18:00 GMT

HIRE Act Requires Individuals to Sign an affidavit

The HIRE Act requires that an individual sign an affidavit attesting to certain requirements that would make the employer eligible for the payroll tax exemption available under the law. MBA has received several recent inquiries regarding where this affidavit can be obtained. Please be advised that the IRS is expected to issue a model affidavit to be used for this purpose (see http://www.irs.gov/businesses/small/article/0,,id=220749,00.html).

When the IRS publishes this affidavit, MBA will make it available to you. In the meantime, please exercise caution using any affidavits located on the internet, as they have not been approved by the IRS.

New jobs bill, how do I get the most retention tax credits.

MBAHRO — Mon, 29 Mar 2010 18:29:00 GMT

New jobs bill, how do I get the most retention tax credits.

President Obama signed into law a new jobs bill (HIRE Act) in March of 2010. The jobs bill pays you Retention Tax Credits to hang onto your employees.

As an incentive to retain employees who qualify for Social Security tax forgiveness, the jobs bill provides up to a maximum $1,000 tax credit to employers for each qualified retained employee as a Section 38(b) business tax credit. The credit is the lesser of 6.2% of wages or $1,000.

To be eligible for the jobs bill credit the qualified retained employee must:

Be employed for 52 consecutive weeks. There is no provision for prorating the credit.
Earn wages during the last 26 week period that are at least 80% of the wages for the first 26 week period.

Note

These jobs bill tax credits will be available to be taken on employers’ 2011 income tax returns.
The jobs bill does not allow carry back of any unused Section 38 business tax credits that are attributable to the provision for retaining workers.

As a Professional Employee Company, we want to note that the Congressional Record makes clear that a PEO client is entitled to the retention credit.

Modern Business Associates is available to assist as you navigate through the HIRE Act jobs bill and work toward maximizing your retention tax credits. While we focus on these areas, you can concentrate on your core business needs and goals. Should you have any questions, please do not hesitate to contact us.

Hiring Incentives To Restore Employment Act Social Security Tax Credits, how to earn the credits.

MBAHRO — Mon, 29 Mar 2010 18:27:00 GMT

Hiring Incentives To Restore Employment Act Social Security Tax Credits, how to earn the credits.

President Obama signed into law the Hiring Incentives to Restore Employment Act in March of 2010. The Hiring Incentives To Restore Employment Act carries a Social Security tax forgiveness credit. It starts immediately for employers hiring qualified employees through the remainder of 2010.

To be a qualified employee the new employee must:

Start work after Feb. 3, 2010 and before Jan. 1, 2011.
Be previously unemployed
Not have worked more than 40 hours within the 60 days prior to the employee’s start date.
Not replace current employees unless former employees were terminated for cause or left employment voluntarily.
Not be related to the employer

Note: Qualified employees may work less than full time hours, and under certain circumstances, may be rehired from a previous lay off.

Check our article on how to obtain the maximum credits from the Hiring Incentives To Restore Employment Act

Modern Business Associates is available to assist as you navigate through the Hiring Incentives To Restore Employment Act ( HIRE Act ) and work toward qualifying for your social security tax credits. While we focus on these areas, you can concentrate on your core business needs and goals. Should you have any questions, please do not hesitate to contact us.

Federal HIRE Act offers a tax credit on social security, how much can my company earn?

MBAHRO — Thu, 25 Mar 2010 22:42:00 GMT

Federal HIRE Act offers a tax credit on social security, how much can my company earn?

President Obama signed into law the Hiring Incentives to Restore Employment Act ( HIRE Act ) in March of 2010. The federal HIRE Act carries a tax credit on Social Security. It starts immediately for employers hiring qualified employees through the remainder of 2010.

The best way to generate the maximum tax credit on Social Security is to hire qualified employees early in the year, since the exemption stops on wages paid after January 1, 2011.

If an employee earning $40,000 annually is hired on April 1, 2010, the Social Security tax credit to the employer would be approximately $1,900.
If the same employee was not hired until Aug. 15, 2010, the savings would be lowered to $950.

The tax credit on Social Security can be used to offset scheduled tax deposit liabilities beginning April 1, 2010 and accrue with each payroll processed.

The maximum credit per qualified employee is $6,621.

Pay close attention to the HIRE Act requirements the employee must meet to activate the tax credits.

Modern Business Associates is available to assist as you navigate through the federal HIRE Act and work toward maximizing your tax credit on Social Security. While we focus on these areas, you can concentrate on your core business needs and goals. Should you have any questions, please do not hesitate to contact us.

You’ve just grown to have 20 employees. Did you know it comes with COBRA responsibilities?

MBAHRO — Thu, 25 Mar 2010 22:41:00 GMT

You’ve just grown to have 20 employees. Did you know it comes with COBRA responsibilities?

Here’s one tip when terminating employees or reducing their hours:

Employers offering group healthcare plans (including medical, dental, and vision) likely are covered by the Consolidated Omnibus Budget Reconciliation Act (COBRA), or an even more restrictive state or local law.

COBRA notices need to be issues correctly to avoid penalties.

Under COBRA, an employer with 20 or more employees must provide terminated workers and workers whose hours have been reduced (as well as qualified beneficiaries) with an opportunity to continue group coverage, usually for up to 18 months. (Continuation costs are borne by the employee.)

You can be fined both excise taxes and Employee Retirement Income Security Act of 1974 (ERISA) penalties for failing to properly notice employees, and can even be held liable for an unnoticed beneficiary's medical claims and related legal fees.

A note about using a third party administrator:

To ensure compliance, if you use a third party administrator, you must notify your administrator within 30 days of an employee's termination or reduction of hours; in turn, the administrator has 14 days to notify the employee and other beneficiaries of their right to continue coverage.

Tax credits mean good news for employers!

MBAHRO — Tue, 23 Mar 2010 22:47:00 GMT

Tax credits mean good news for employers!

On March 18, 2010 President Obama signed into law the Hiring Incentives to Restore Employment Act (HIRE Act). The HIRE Act carries two significant tax incentive components for employers: a Social Security tax forgiveness and a retention tax credit. The first starts immediately for employers hiring qualified employees through the remainder of 2010 and the second can be earned by employers who retain qualified employees for a minimum of 52 consecutive weeks. The following is an overview of how both incentives work.

Social Security Tax Forgiveness:

Employers will receive a 6.2% Employer Social Security Tax Exemption on wages paid to “qualified employees” after March 18, 2010 and before January 1, 2011, up to the Social Security maximum of $106,800. The maximum credit per qualified employee is $6,621. To be a qualified employee the new employee must:

· Start work after February 3, 2010 and before January 1, 2011.

· Be previously unemployed and not have worked more than 40 hours within the 60 days prior to the employee’s start date.

· Not replace current employees unless former employees were terminated for cause or left employment voluntarily.

· Not be related to the employer

Qualified employees may work less than full time hours, and under certain circumstances, may be rehired from a previous lay off. To obtain maximum tax savings per employee it is in the best interest of the employer to hire qualified employees as early in the year as possible as the exemption stops on wages paid after January 1, 2011. As an example, if an employee earning $40,000 annually is hired on April 1, 2010, the Social Security tax savings to the employer would be approximately $1,900. If the same employee was not hired until August 15, 2010, the savings would be cut approximately in half to $950. Social Security tax forgiveness can be used to offset scheduled tax deposit liabilities beginning April 1, 2010 and accrue with each payroll processed. Although the details on documenting qualified employees are still being worked out we wanted to provide an overview of this legislation now. We will continue to monitor and provide updates as additional information becomes available.

Retention Tax Credit:

As another benefit for retaining employees who qualify for Social Security tax forgiveness, the HIRE Act provides up to a maximum $1,000 tax credit to employers for each qualified retained employee as a Section 38(b) business tax credit. The credit is the lesser of 6.2% of wages or $1,000. To be eligible for the credit the qualified retained employee must:

Be employed for 52 consecutive weeks. There is no provision for prorating the credit.
Earn wages during the last 26 week period that are at least 80% of the wages for the first 26 week period.

These tax credits will be available to be taken on employers’ 2011 income tax returns. The HIRE Act does not allow carry back of any unused Section 38 business tax credits that are attributable to the provision for retaining workers. Finally, the Congressional Record makes clear that a PEO client is entitled to the retention credit.

Modern Business Associates appreciates your business and is available to assist as you navigate through these significant legislative changes. We look forward to continuing to support your organization’s payroll, employment tax, workers’ compensation and human resources needs. While we focus on these areas, you can concentrate on your core business needs and goals.

Should you have any questions, please do not hesitate to contact us.

Health Care Reform Legislation Signed Into Law

MBAHRO — Tue, 23 Mar 2010 22:45:00 GMT

Health Care Reform Legislation Signed Into Law - Patient Protection & Affordable Care Act (H.R. 3590) and the Health Care and Education Affordability Reconciliation Act of 2010 (H.R. 4872)

On March 23, 2010, President Barack Obama signed the Patient Protection & Affordable Care Act (H.R. 3590) and the Health Care and Education Affordability Reconciliation Act of 2010 (H.R. 4872) into law. This combined legislation significantly reforms health care, and will have an eventual impact on certain employers. (A summary of the legislation is available here.)Although the extent of the laws' impact on employers is unknown at this time (and at least 14 states have already filed federal legal challenges attacking the 2,400-page legislation’s constitutionality), MBA will continue to provide you with important updates regarding the steps you must take to ensure you are in compliance.

Please note that the majority of the reforms affecting employers do not become effective until 2014; however, certain important provisions take effect immediately, including providing tax credits in 2010 to qualified small businesses, prohibiting insurance companies from placing annual and lifetime limits on health insurance coverage, requiring certain health insurance plans to provide coverage for dependent children up to age 26, and banning pre-existing condition exclusions for children. In 2014, the key provisions affecting employers become effective. These include, but are not limited to, requiring U.S. citizens and legal residents to maintain qualifying health insurance, requiring large businesses who already offer health insurance to automatically enroll employees (employees will have the ability to opt out and purchase less expensive insurance on the open market), and subjecting certain businesses to fines for not providing employees with insurance coverage.

For a timeline of the legislation, please click here, or review the following summary of key provisions recently published by the Washington Post newspaper:

Within a year: provides a $250 rebate to Medicare prescription drug plan beneficiaries whose initial benefits run out.
90 days after enactment: provides immediate access to high-risk pools for people who have no insurance because of preexisting conditions.
6 months after enactment: bars insurers from denying people coverage when they get sick; bars insurers from denying coverage to children who have preexisting conditions; bars insurers from imposing lifetime caps on coverage; and requires insurers to allow young people to stay on their parents’ policies until age 26.
In 2011: requires individual and small group market insurance plans to spend 80 percent of premium dollars on medical services. Large group plans would have to spend at least 85 percent.
In 2013: increases the Medicare payroll tax and expands it to dividend, interest and other unearned income for singles earning more than $200,000 and joint filers making more than $250,000.
In 2014: provides subsidies for families earning up to 400 percent of the poverty level—or under current guidelines, about $88,000 a year—to purchase health insurance; requires most employers to provide coverage or face penalties; and requires most people to obtain coverage or face penalties.
In 2018: imposes a 40 percent excise tax on high-end insurance policies.
By 2019: expands health insurance coverage to 32 million people.

As stated above, MBA will continue to provide you with important updates regarding employer obligations under these new laws. In the meantime, if you have any questions, please contact an MBA Human Resources Manager at 1.888.622.6460.

What else do they look for during a Department of Labor (DOL) gov. compliance audit?

MBAHRO — Mon, 15 Mar 2010 22:54:00 GMT

What else do they look for during a Department of Labor (DOL) gov. compliance audit?

During a DOL gov. compliance audit, the investigator covers many areas of your business.

The primary focus is on your pay records.
DOL investigators also usually review the employer's adherence to federal child-labor laws, which prescribe the number of hours and times of day-night youths may work, as well as the jobs they may perform.

Click here for a link to the DOL’s FAQ on child labor laws
DOL investigators will also perform at least a cursory analysis of the employer's compliance with the Family and Medical Leave Act and will make sure mandatory posters are displayed. See DOL's Web site for poster information.

Click here for a link to the DOL’s FMLA information page

Modern Business Associates helps our clients deal with DOL gov. compliance audit issues. As a Professional Employee Organization, our clients rely on us to help them effectively deal with these kinds of labor issues.

WARN act can ruin your layoff plan, are you at risk?

MBAHRO — Mon, 01 Mar 2010 23:11:00 GMT

WARN act can ruin your layoff plan, are you at risk?

Here at Modern Business Associates, we frequently deal with federal labor and employment laws and how they affect our clients. Laws relating to layoffs have been a hot topic lately. The Worker Adjustment and Retraining Notification Act (WARN act) is one such hot legal issue.

The WARN act sets forth specific notification requirements for covered employers undergoing certain layoffs. (States including California, Illinois, Maine, and New Jersey have enacted similar legislation expanding an employer's notification obligations.)

In part, the WARN act requires employers with 100 or more employees to provide workers with 60 days written notice of:

Plant Closings
Mass Layoffs

Under the WARN act, a "plant closing" is a permanent or temporary shutdown of a single site of employment resulting in an employment loss of 50 or more employees during a 30-day period.

Under the WARN act, a "mass layoff" is either a reduction in workforce resulting in a single-site employment loss of at least 33 percent of the site's employees (a minimum of 50 employees must be affected), or an employer's overall loss of 500 or more total employees.

With certain exceptions, employers who fail to comply with the WARN act, face substantial monetary liability. An affected employer must identify and adhere to its obligations under the WARN act and its state counterparts.

Modern Business Associates frequently deals with complex HR issues. As a Professional Employee Organization, our clients rely on us to help them effectively deal with these kinds of topics including designing plans for layoffs and HR communication plans appropriate to federal labor laws.

Did you know salaried employees may not have an exempt status according to the Fair Labor and Standards Act (FLSA)?

MBAHRO — Wed, 17 Feb 2010 17:00:00 GMT

Did you know salaried employees may not have an exempt status according to the Fair Labor and Standards Act (FLSA)?

An employer, deciding about the exempt/non exempt status of an employee, who takes prohibited deductions, puts employees' exempt status at risk--meaning those employees potentially could be entitled to minimum wage and overtime for all hours they worked, going back at least two years

Who can get an exempt status anyway? Three criteria must be met before an employee can be classified as exempt according to the labor standards act.

1. The employee must make at least a certain minimum-salary level.

· The employee must earn a salary of at least $455 per week ($23,600 annually). If an employee does not earn at least this amount, the employee is not exempt and is entitled to minimum wage and overtime. Certain highly-compensated employees who earn at least $100,000 annually may also qualify as non-exempt.

2. The exempt status employee must be paid on a salary basis.

· The employee must receive a predetermined amount of compensation each pay period.

· While a pre-set salary is the norm, the regulations allow an employer to compute an exempt employee's earnings on an hourly, daily or shift basis if the employer guarantees at least $455 per week as a salary regardless of the number of hours, days or shifts worked and if a reasonable relationship exists between the guaranteed amount and the amount actually earned.

· Other than certain very specific deductions, the employee must receive at least his or her full salary for any workweek in which the employee performed any work.

· Note: The salary-basis test does not apply to outside sales employees, teachers and those practicing law or medicine. In addition, computer-tasked employees can be paid on either a salary or hourly basis.

3. The employee must perform executive, administrative, professional, outside sales or computer job duties.

· To be exempt, the work the employee performs must meet one of the job-duties tests, the most difficult test to pass.

· The most common job-duties test applicable to managers-supervisors is the executive-job-duties' test. Under this test, the employee must:

1. manage the enterprise or manage a department or subdivision,

2. customarily and regularly direct the work of at least two or more other full-time employees (or the equivalent), and,

3. have the authority to hire or fire employees, or have his or her recommendations on hiring, firing, promotion or other changes in job status be given "particular weight."

Modern Business Associates assist clients with determining the exempt/non-exempt status for their employees. As a HR outsourcing organization, our clients rely on us to help them effectively deal with these kinds of issues.

Benefits of Performance Appraisals include Compliance Protection

MBAHRO — Wed, 13 Jan 2010 16:18:00 GMT

Benefits of Performance Appraisals include Compliance Protection

A performance appraisal system, when properly managed, provides you with a means of measuring, maintaining, and improving your employee’s job performances. Through the job performance appraisal program, your company can:

Validate hiring decisions
Recognize employees' job performance strengths and weaknesses
Identify employees who are ready for promotion or greater responsibilities
Assess training needs

From a compliance perspective, you should be able to rely on performance appraisals to justify the full range of personnel decisions, including discipline and termination actions.

For example, if a performance appraisal reflects poor job performance by the employee and this employee is later terminated, the you can point to the performance appraisal to show the employee was not performing to standards. If, however, an employee with overall weak performance is given a good or even average appraisal, and the employee is later terminated without interim discipline, the performance appraisal will have the opposite result — the employee may use it to show the termination decision was not justified and instead, was based on a discriminatory or other unlawful factor.

A well designed and administered performance appraisal program can go far to protect employers from certain legal challenges to employment decisions.

Modern Business Associates frequently deals with performance appraisals. As a HR outsource organ, our clients rely on us to help them effectively deal with these kinds of topics including compliance protection.

Avoid audit penalties by understanding more about current exempt employee law and deductions

MBAHRO — Tue, 05 Jan 2010 16:27:00 GMT

Avoid audits. Exempt Employee laws and deductions. Modern Business Associates deals with these kinds of issues on a frequent basis. As a Human Resource Outsource Organization, our clients rely on us to help them effectively deal with these kinds of labor topics including appropriate deductions, Sick Leave Policies, and compliance issues like FMLA.