Welcome
We hope your summer is off to a bright and productive start. As part of the recent upgrades to the HR Support Center, we hope you will take advantage of the following enhancements: the Wage and Hour Quick Guides section and the additional articles within the Knowledge section. Lastly, since June is National Safety Month, make sure you view the safety-related documents (i.e. checklists, guides, and forms) in the HR Support Center.
HR Alerts
New Pension Benefit Statements Rule Proposal. Expected to make an announcement in June 2012, the Employee Benefits Security Administration (EBSA) is working on a proposed Employee Retirement Income Security Act (ERISA) rule that would require the presentation of a participant’s accrued benefits as a lifetime income stream of benefit payments.
New Proposals on Employer Health Insurance Coverage. By June 11, 2012, the Internal Revenue Service (IRS) will accept comments about a new proposed ruling. The Centers for Medicare & Medicaid Services (CMS), Center for Consumer Information and Insurance Oversight (CCIIO), and the IRS released four documents related the Affordable Care Act (ACA) that address employer-provided group health insurance plan reporting requirements and the availability of premium tax credits to individuals and families. The ACA makes tax credits available to help individuals pay insurance premiums, but these credits do not apply if the individual is eligible for employer-provided coverage that is both affordable (in terms of required employee contribution to premium payments) and provides “minimum value” (in terms of overall cost-sharing).
HHS New Medical Loss Ratio Reporting Requirement. The Department of Health and Human Services (HHS) Centers for Medicare & Medicaid Services (CMS) issued a final rule that imposes new reporting requirements on health insurance issuers that meet or exceed the applicable Medical Loss Ratio (MLR) standard for the 2011 reporting year. CMS requires issuers that meet or exceed the MLR standard to send a notice to policyholders that the issuer has met the minimum MLR standard for the 2011 reporting year. An issuer must provide the notice with the first plan document to enrollees on or after July 1, 2012.
Unemployed Applicants: The New Protected Class
In today’s economic times, a competitive job force embraces workers with various knowledge, skills, abilities, education, and experience levels. Hiring managers attempt to compare and contrast these items when determining the best job candidate for a specific position. With respect to experience, many hiring managers consider long gaps in employment history on the resume or employment application to be a strike against a potential job candidate. However, due to the high levels of unemployment the country has experienced in the past few years, lawmakers are taking measures to ensure the job candidates who have experienced recent periods of unemployment are still considered viable candidates.
The Equal Employment Opportunity Commission (EEOC) is the agency that oversees discrimination in hiring practices. Some of the traditional protected classes include race, color, religion, national origin, age (40 and over), disability, military or veteran status, etc. Protected classes were developed from previous anti-discrimination laws such as the Civil Rights Act of 1964, Age Discrimination in Employment Act (ADEA), Equal Pay Act, Americans with Disabilities Act (ADA), and the Genetic Information Nondiscrimination Act (GINA).
On April 5, 2012, President Obama signed into law the JOBS Act (Jumpstart Our Business Startups) that is intended to prohibit employers from discriminating against job applicants because they are unemployed. Under the Act, it is “an unlawful employment practice” if a business with 15 or more employees refuses to hire a person “because of the individual’s status as unemployed.” Unselected job applicants will have the right to file a complaint with the EEOC if they are disqualified from consideration due to a recent period of unemployment. The JOBS Act contains the “Fair Employment Opportunity Act of 2011” (FEOA) that treats unemployed job applicants as a protected class under Title VII. The FEOA would make it an unlawful employment practice for an employer or employment agency that:
Fails or refuses to consider or hire an individual based upon his or her status as unemployed.
Instructs an employment agency to disqualify an unemployed individual from consideration, screening, or referral for employment.
Refuses to consider or refer an unemployed individual for a job opportunity.
Publishes advertisements which indicate that unemployed individuals are disqualified or will not be considered for employment opportunities.
Employers are encouraged to look carefully at their hiring methods (especially when viewing recent gaps in employment history) and to assess the role an applicant’s unemployed status has on hiring decisions. There are several remedies that apply within the JOBS Act that include injunctive relief, reinstatement, lost wages, punitive damages, emotional distress damages, and reasonable attorney’s fees and costs. Employers need to use caution when inquiring into the reasons underlying an applicant’s current unemployment status. Remember, anything more than a minimal investigation into an applicant’s current status (i.e. unemployed) may be considered as an influencing factor in the hiring decision. This can expose the employer to liability if the individual is not ultimately considered or hired for a position.
Question & Answer
Direct Deposit
Q. How can we encourage more of our employees to use direct deposit?
A. Although some state laws indicate employers cannot “require” direct deposit, employers should still inform employees about the benefits of using direct deposit options. Some benefits include:
- Convenience and time savings. Reduces travel time to go to the bank to cash the check.
- Safety and security. It reduces issues around lost, stolen or misplaced checks.
- Reliability. The money will be available the morning of the payment or sooner.
- Money management. Helps with managing money into different accounts (i.e. savings plan).
- Eco-friendly. It helps the environment by electing a “paperless” option, which saves trees.
Job Reference Immunity Laws – Who’s in Favor?
Many businesses have initiated “Job Reference” policies restricting the nature of information that may be provided about current and former employees to third parties. While it is at times tempting to feel obligated to provide detailed information regarding a former employee’s performance in an effort to help the prospective employer, doing so may expose the company to some liability. Former employees have successfully sued their past employers for libel, slander, defamation, or negligent misrepresentation arising out of job references. Therefore, it is recommend proceeding with caution with job references and verifications in order to reduce the company’s exposure.
A fairly common company policy is to only release information that is completely objective in nature, such as the former employee’s dates of employment and job title. If the prospective employer would like additional information (such as salary information), generally employers require the prospective employer to send a written request for such information that includes the former employee’s written authorization to release the information. Company policies should prohibit the release of information that is subjective in nature.
While the “less is more” approach has been taken by most employers, some HR Professionals recommend taking a more “need to know” approach. The premise behind this approach is that the company’s failure to provide critical information may in fact expose the company to liability. For example, if a current employer gives a reference check with limited information about an employee, and is aware that the employee committed a work-related crime (such as employee theft), a court could argue that the former employer had an obligation to disclose that information. This would apply if the employer was asked specific questions such as, ”Is this employee rehireable?” Or, “Has this employee committed a crime at your work site?” There may be some ethical obligation for a former employer to disclose certain information. For example, if an employer states a former preschool teacher was an excellent employee and never had performance issues, yet chose not to mention this same teacher was convicted of molesting a student, the company may have mislead the inquiring prospective employer. Therefore, the goal is to ensure reference checks are generally neutral; unless extenuating circumstances are present.
Many states have adopted some type of Reference Immunity Laws that ensure employers are protected who opt to provide reference checks. The state laws vary considerably in how they “limit” information to be disclosed by former employers. For example,Californialimits immunity to the disclosure of “job performance” information to be stated in an objective or subject manner.Marylandsuggests employers acting in good faith may not be held liable for disclosing to a prospective employer any job information about job performance or the reason for the termination of employment. Since there are several states with reference immunity laws, it is recommended to check your state laws or consult with a HR Professional. Remember, if a reference check is conducted on behalf of a federal, state or regulatory authority, employers may not be held liable for any information that is requested/required or provided to the agency. Employers who knowingly disclose information that is false or misleading are not protected under these laws.
It is always a best practice to document employee actions, act in good faith, exercise restraint and always obtain written consent from the applicant. Another tip is to insert a waiver in a departing employee’s severance package releasing the business from all claims based on the voluntary disclosure of information about the employee to a third party. Reference immunity laws essentially protect employers from civil liability if they provide good-faith references or negative truthful information regarding former employees. Therefore, both employers and employees may or may not be in favor of this law.
Tool of the Month:
Risk Management Guide
Risk management consists of (1) identifying and analyzing the events that may cause loss to a business and (2) choosing the best ways to address potentials for such loss.
The Risk Management Guide will help provide you information regarding:
Proprietary Information Protection
- General Crime Prevention
- Insurance Considerations
Download the Risk Management Guide today from the HR Support Center under the Essentials section.
HRCast of the Month
Smartphone Apps Employees Might Use against Employers
Which smartphone tools are your employees downloading about their workplace rights that can be used against their companies? This month’s HRCast explores this question and provides listeners with insightful answers and helpful tips.
On June 15th, be sure to visit the HR Support Center, and listen to this month’s HRCast to learn more.
HR Tip of the Month
Verbal Warnings
As a best practice, managers should document verbal warnings. While a copy does not necessarily need to be provided to the employee, it should include details of how the employee was made aware of the action. It is also recommended for managers to keep a detailed copy of the verbal warning describing when, where and why a warning was issued in the Manager’s files. Such documentation may prove helpful if the company is ever required to defend an unemployment or discrimination claim
Did you know?
40%
According to a January 2012 Document Security Survey, 40% of adults believe it is never acceptable to take confidential company information out of the office, but others think it is acceptable to do so under certain circumstances, including when the boss says it is okay, to finish a late-night project from home instead of at the office, to work over the weekend or while on vacation, when the information is about themselves, when the manager will not find out, and when family or friends promise to keep it confidential. (Source: FileTrek).
Quote of the Month
“If you pick the right people and give them the opportunity to spread their wings—and put compensation as a carrier behind it—you almost don’t have to manage them.”
– Jack Welch
A Look Ahead
June:
National Safety Month
June 14:
Flag Day
June 17:
Father’s Day
June 19:
Juneteenth
June 20:
First Day of Summer
Contact Us
Paragon Business Services, Inc.
7610 N Stemmons Frwy
Suite 600
Dallas, TX 75247
Additional Contacts
Phone: 866-444-4615
Fax: 214-951-1920
Paragon Business Services, Inc 