July 2013
Happy birthday, America! We hope you enjoy a happy and fun-filled holiday this 4th of July.
HR Alerts
Question: Next year, based on the new Health Care Reform regulations, may our company still require a 90-day waiting period before new employees become eligible to enroll in the health plan?
Answer: Yes, your company may still impose a waiting period of up to 90 days for new employees entering your group health plan. However, it is important to note that beginning with an employer’s first plan year starting on or after January 1, 2014, an organization may not use a waiting period that exceeds 90 days. This restriction applies to all employers, regardless of size, that sponsor a group health plan, as well as to both grandfathered and non-grandfathered plans. The proposed guidance does not permit the employer to wait to offer benefits until the first of the month following 90 days of employment. (However, many employer advocacy groups have submitted comments asking for the allowance of a “first of the month following 90 days” waiting period, so it is still possible that the federal government may institute a safe harbor to allow this calculation method in its final guidance.) As the proposed regulations currently read, the employer must count all calendar days when calculating the 90-day waiting period, including weekends and holidays. If the 91st day is a weekend or holiday, the organization may set a policy permitting coverage to be effective earlier than the 91st day of employment, but it may not make the effective date of coverage later than the 91st day. If your current health insurance plan utilizes a longer waiting period, it may need to be adjusted in 2014 in order to comply with the new regulations.
These adjustments may include the authorization of mid-month enrollments if your organization opts to use a 90-day waiting period. There are some exceptions to this rule when the employer is unable to determine if a new employee’s average hours will be sufficient to qualify for health plan participation. When this occurs, the plan may take a reasonable period of time to determine whether the employee meets the plan’s eligibility requirements, which may include a measurement look-back period of up to 12 months. The guidance for new, variable-hour employees and the applicable measurement look-back period for determining if their hours are sufficient to qualify for health insurance eligibility will be detailed in our next Health Care Reform E-Alert. In the meantime, if you have any questions regarding the 90-day waiting period requirement, please contact your health insurance broker, health insurance provider or Human Resources Professional.
Protecting Your Unemployment Account
Employers are often surprised at how easily a former employee can establish a successful unemployment claim. With respect to unemployment claims, the largest misconception among employers is that terminating an employee for substandard performance will disqualify the individual from receiving unemployment benefits. In most states, unless the employee’s behavior rises to a level of “misconduct,” the claimant will be deemed eligible for unemployment benefits. Thus, terminating an employee for “poor performance,” “incompetence” or “inability to perform the job” will almost always qualify the former employee for unemployment benefits.
To further complicate these unemployment claim determinations, not only does the employer have to demonstrate that the employee’s behavior constitutes “misconduct” as defined by state law, the employer also has the burden of proving that the claimant either knew or should have known that he could lose his job as a result of the behavior in question. Therefore, it is important to develop documentation that clearly illustrates these points to a reasonable person in order to successfully contest unemployment claims.
To assist organizations in proactively preventing the establishment of successful unemployment claims, here are a few best practices to consider prior to terminating an employee:
Provide the employee with a written warning regarding the misconduct prior to termination. Although no labor law requires a private, non-unionized organization to warn an employee prior to termination, doing so may assist the employer in defending a potential unemployment claim. Also, if employees have been led to believe that certain steps will occur prior to termination, the employer should make a good faith attempt to follow those steps, or else risk losing the unemployment claim.
Distribute an Employee Handbook and obtain signed acknowledgment forms. Employers have a much better chance of successfully defending an unemployment claim if they can cite the specific Employee Handbook policy that was violated by the former employee. Distributing an Employee Handbook is an excellent means of demonstrating how employees were made aware of the policy, and of the consequences of noncompliance with workplace rules and guidelines.
Investigate all harassment, discrimination, wage and hour, and other serious workplace complaints. In most states, if an employee resigns with “good cause,” he will be eligible for unemployment benefits. If the individual can substantiate that he complained of a serious workplace concern, but the employer took no effective action to address the allegation or retaliated somehow against the claimant, the former employee is generally awarded unemployment benefits.
Remember the “reasonable person” standard. This is a common standard used when making unemployment decisions. Therefore, always consider whether a reasonable person would terminate an employee given the present circumstances prior to making the termination decision.
Treat employees fairly and consistently with respect to termination decisions. Remember, the state personnel processing claims are themselves employees, not employers, and they naturally have opinions of what they consider fair treatment. So whether right or wrong, it is important to keep this in mind when terminating employees. Additionally, past practices for a situation bearing similarity to other workplace policy violations should be taken into consideration. It will be more difficult for a former employee to successfully make an unemployment claim if the employer has documented evidence that an employee’s separation was conducted in line with company policies and past practices.
Hopefully these best practices will help the business to take some proactive measures to protect the company’s unemployment account prior to terminating employees. Of course, there are times when the potential cost of an unemployment claim is insignificant when compared with the financial, emotional or opportunity cost of continuing to employ the individual. Therefore, there are certainly strategic elements to consider in conjunction with these best practices when making termination decisions.
Question & Answer
Non-Discretionary Bonuses for OT
Q: Is an employer required to pay an employee while he or she is out of the office on jury duty?
A: It depends on the state in which your organization is located. Some states, and specifically some local jurisdictions, mandate payment for a portion of or all of the time that the employee spends in jury duty. If your state or jurisdiction does not mandate payment to employees who have been on jury duty, and you offer compensation to your employees for a portion or all of their jury duty, it is imperative that your practice is consistent among all employees.
Hiring Paperwork and Candidate Recruitment – Getting New Hires Onboard
The hiring and recruitment process is a time consuming one, but it is essential that an employer includes all of the crucial steps involved in getting a new employee acclimated to the organization. In order to ensure a smooth transition from candidate to newly hired employee, an employer must ensure that the organization initially searches to fill a specific role or to find a prospective candidate that will be able to fit that request. Some of the key aspects involved in the hiring process are: conducting a thorough recruiting effort, ensuring potential candidates are appropriately narrowed down, and providing a formal employment offer with a competitive compensation and benefits package.
Once the candidate has accepted the offer and has negotiated a starting date and rate of pay, the employer must move expediently in order to fulfill the onboarding tasks. If they have not previously been completed, background and reference checks should now be conducted. It is important to state in the offer letter that the job offer is contingent upon the successful completion of applicable background checks and/or a passed drug screening test.
Other hiring paperwork should be completed by the newly hired employee as soon as possible. The I-9 Form must be completed within three business days of the starting date of employment, as it is mandatory that the employer obtains the candidate’s proof of identity as well as eligibility to work in the U.S.
The W-4 Form, Direct Deposit Form, Emergency Contact Form, benefits paperwork and other relevant new hire paperwork should be completed on or before the first day of work. Utilizing a new hire checklist as well as a new hire orientation template will help ensure that the employee is being onboarded in a smooth, structured manner and will help verify that the employee is in receipt of tools, equipment and other necessary company property.
The hiring and recruiting process is a tedious and at times a time and financially-consuming one for employers. Advertising the position and receiving applications from viable candidates is a key step in finding the right fit. Employers who utilize thoughtful measures in understanding their organizational needs, identify a positive cultural match between employer and prospective candidates, and utilize a consistent means of obtaining candidate data will lay a foundation of positive recruitment. Ensuring that a position boasts an enticing compensation and benefits package, including working remotely and flexible work weeks/schedules, may make the difference between a job acceptance and rejection.
Finally, once the candidate begins his or her role, those first few weeks on the job are the most crucial timeframe in the employee’s employment with the company. As the new employee becomes acquainted with the organization and his or her respective department and role, the organization will enjoy the positive outcome of this formative timeframe that impacts the employee’s acclimation as well as his or her longevity with the organization. Studies have found that the more devoted an organization is in crafting a thorough onboarding program, the greater likelihood that the employee will remain employed with the company.
Though the recruiting, hiring and new hire orientation processes are time-consuming, investing energy into a thorough, streamlined onboarding procedure will provide a return on investment when the results are happy, long-term company employees.
Tool of the Month:
Notices of Exchanges and Subsidies FAQ: The US Department of Labor has released its Model Notices for an important, upcoming employer Health Care Reform requirement. Virtually all employers, regardless of size, are required to distribute a Notice of Exchanges and Subsidies to each employee (regardless of part-time, full-time or health plan enrollment status) by October 1, 2013. Also, beginning on October 1, 2013, this notice must be provided to each new employee within 14 days of the employee’s start date. There are two model notices available, one for employers that offer a company-sponsored health plan to some or all employees, and one for organizations that do not proffer an employer-sponsored health insurance plan.
Many find these Notices confusing, so the HR Pros have created a handy FAQ document that will explain everything you need to know about the Notices. To download the FAQ or the Notices, go to the “Health Care Reform” tab under the “Benefits” section in the HR Support Center.
HR Cast of the Month
Employers have the ability to positively influence their community through relationships with charitable organizations. Both large and small organizations may support charitable organizations and make it a simple and attractive practice to encourage its employees to do the same. Workplace giving is an easy and efficient way to make tax-deductible donations to charities through payroll contributions. Together with your company, you can partner to benefit your community by providing a much-needed stream of revenue to charities.
On July 15th, be sure to visit the HR Support Center, and listen to this month’s HRCast to learn more about this topic.
HR Tip of the Month
If your organization utilizes temporary or “on call” workers, or if a regular employee with your company has a role that is defined as having “on call” duties, you should ensure that consistent procedures regarding “on call” employees have been incorporated into the employer’s practices. An employee who is required to remain on the employer’s premises is working while “on call.” An employee who is required to remain “on call” while away from the office or after regular business hours, or who is allowed to leave a message where he/she can be reached, is not working (in most cases) while “on call.” Any constraints on the employee’s freedom when he or she is “on call” could require this time to be compensated.
Did you know?
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Minnesota will soon become the third state with a “Ban the Box” law that applies to both private and public employers, joining Massachusetts and Hawaii. “Ban the Box” refers to laws prohibiting the box on job applications that prospective employees are asked to check off if they ever have been convicted of a crime.
Quote of the Month
”To be successful, you have to have your heart in your business, and your business in your heart.” – Sr. Thomas Watson
A Look Ahead
July:
National Park and Recreation Month
National Hot Dog Month
National Eye Injury Prevention Month
National UV Safety Month
June 1: International Children’s DayJune 2: National Cancer Survivors DayJune 5: World Environment Day
July 1: Canada Day
July 1: National Postal Worker Day
July 4: Independence Day
July 5: Caribbean Day (United States)
July 6: National Fried Chicken Day
July 8: Liberty Bell cracked in 1835
July 14: Bastille Day
July 17: Sewing machine patented in 1790
July 21: National Ice Cream Day
July 23: World Youth Day
July 24: Amelia Earhart Day
July 24: Cousins Day
July 26: Aunt and Uncle Day
July 28: National Milk Chocolate Day
July 28: Parents’ Day
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
Legal Disclaimer: This message does not and is not intended to contain legal advice, and its contents do not constitute the practice of law or provision of legal counsel. The sender cannot be held legally accountable for actions related to its receipt
Paragon Business Services, Inc 