Understanding your New & Pre-existing COBRA Requirements

The Consolidated Omnibus Budget & Reconciliation Act (COBRA) is designed to permit individuals who would otherwise lose their health insurance coverage to continue coverage through their employer, or former employer, at group rates. Employees electing COBRA coverage are responsible for paying the full premium themselves and may be required to pay a 2% administrative fee.

COBRA applies to employers with 20 or more employees who offer group health insurance. However, many states have enacted their own COBRA requirements which cover employers with less than 20 employees. Download our COBRA Continuation by State form to determine whether or not your state has specific guidelines on the issue.

…And as if general COBRA requirements aren’t already confusing enough, the American Recovery & Reinvestment Act (ARRA) - signed into law on February 17, 2009 - has added another element to COBRA: subsidized premiums. Below is a break-down of existing COBRA requirements as well as new COBRA provisions under the ARRA:

General COBRA Requirements (pre-ARRA enactment):

1. Covered employers. Employers must comply with federal COBRA requirements if they have 20 or more employees and offer group health insurance. However, as mentioned above, many states have enacted their own COBRA regulations that cover employers with less than 20 or more employees. Check your state requirements here.
2. Qualifying events. An individual is entitled to COBRA coverage when certain “qualifying events” would otherwise trigger him or her to lose health insurance coverage under their employer’s group plan. Such events include: termination or reduction in hours; divorce or legal separation of a covered employee from his or her spouse; death of a covered employee; change in dependent status; eligibility for Medicare; and the bankruptcy of an employer from which a covered employee has retired.
3. Employer notice requirements. An Initial Notice of COBRA Rights must be provided to all covered employees and their covered spouses when a plan first becomes subject to COBRA. This notice must also be provided at the time an individual’s coverage begins, including when new employees obtain coverage and when spouses are added. When certain qualifying events occur (including the death of a covered employee, termination or reduction in hours, and the employee becoming entitled to Medicare), the employer must notify the plan administrator within 30 days. The plan administrator then has 14 days from the date of receiving notification of the qualifying event in which to advise the qualified beneficiary of COBRA rights.

4. Employee notice requirements. A covered employee or qualified beneficiary is required to notify the plan administrator of a qualifying event that is a divorce or legal separation of the covered employee or when a dependent child ceases to be a covered dependent under the plan terms. When one of these events occur, the employee has 60 days to notify the plan administrator.
   

5. Premiums. Under COBRA, qualified beneficiaries are responsible for 100% of the premiums as well as a 2% administrative fee, if the employer chooses to charge such a fee. The initial payment for COBRA continuation coverage is due 45 days after the date on which the election of COBRA continuation coverage is made.Timely payment for subsequent periods of coverage is due 30 days after the first day of that period. A group health plan must allow payment for COBRA continuation coverage in monthly installments. A plan is permitted to also allow payment at other intervals (i.e., weekly, quarterly, or semiannually).
   

6. Duration of coverage. The maximum COBRA coverage period extends from 18-36 months, depending on the type of qualifying event.In the case of a termination in employment or reduction of hours, the maximum coverage period ends 18 months after the qualifying event. In the case of a qualifying event that is the death of the covered employee, the divorce or legal separation of the covered employee, or a dependent child exceeding the plan’s age limit for coverage, the maximum coverage period ends 36 months after the qualifying event. For a COBRA coverage timeline depicting maximum coverage periods based on each type of qualifying event, click here.
7. End of coverage. COBRA coverage ends when the qualified beneficiary exceeds the maximum coverage period or upon the occurrence of one of the following events: the qualified beneficiary becomes enrolled under another group health plan; premium payments are late; the employer no longer provides any group plan; or the qualified beneficiary, after electing COBRA coverage, becomes entitled to Medicare benefits.

New COBRA Provisions (post-ARRA enactment):

The American Recovery & Reinvestment Act (ARRA) grants individuals involuntarily terminated between September 1, 2008 and December 31, 2009 a subsidy toward their COBRA premium payments. Under the ARRA, employers are still required to follow the above guidelines, while keeping in mind the following:

1. Assistance eligible individuals (AEIs). Assistance eligible individuals are those individuals that are entitled to receive a subsidy toward their COBRA premiums. Although COBRA covers other qualifying events, subsidy eligible individuals only include those involuntarily terminated between September 1, 2008 and December 31, 2009. For purposes of the ARRA, an involuntarily terminated individual is one who is terminated for reasons other than gross misconduct, and does not include those who resign or abandon their jobs.It’s important for employers to identify assistance eligible individuals now so that they can easily prepare and send COBRA notices by the April 18^th deadline.
2. Amount of subsidy. Assistance eligible individuals who elect COBRA coverage will receive a 65% subsidy toward their applicable COBRA premium for a period of nine months. For example, if an individual’s monthly COBRA premium is $1,000, the individual would only be required to $350 for nine months (or until their COBRA coverage ends). The remaining $650 is subsidized and would be paid by the employer. Although employers must provide 65% of the COBRA premium up-front, they are reimbursed in the form of a tax credit. Assistance eligible individuals may start receiving the subsidy as early as March 1, 2009.
3. Premiums for March & April. Although subsidized premiums began March 1, 2009, the ARRA permits assistance eligible individuals to be charged for the full premiums for the months of March & April. However, if assistance eligible individuals pay the full premiums for these months, they are entitled to a credit toward future COBRA premiums. If this credit is not used within 180 days, the employer must send assistance eligible individuals a reimbursement check.

4. Compliance timeline. Immediate notification to assistance eligible individuals is not necessary. The Department of Labor (DOL) plans to release a model notice by mid-March. Employers will then have until April 18^th to send notices to assistance eligible individuals. It’s recommended that employers use the DOL approved notice, and therefore wait until it is issued, rather than attempt to draft the notice themselves. This will ensure all appropriate information is included and that assistance eligible individuals are fully aware of their rights under the ARRA.

5. Loss of the subsidy. An assistance eligible individual loses their right to subsidized premiums once they have received the subsidy for nine months, once he or she exceeds their maximum COBRA coverage period, or once he or she becomes eligible under another group health plan. Whether the individual chooses to enroll in the plan for which they became eligible doesn’t matter; they will still lose their eligibility for the premium subsidy. However, this does not mean the individual is no longer covered under COBRA.

6. AEIs that declined COBRA. Individuals involuntarily terminated since September 1, 2008 (but before ARRA enactment) that failed to elect COBRA coverage during their initial election period are entitled to an additional opportunity to elect COBRA. These individuals have 60 days from the date notices are sent in which to do so. If the individual choose to elect coverage, their length of total COBRA coverage starts from the date in which they were terminated, not the date from which they elected coverage.

7. AEIs already on COBRA. Assistance eligible individuals that elected COBRA coverage prior to ARRA enactment must receive notice of the premium subsidy by April 18, 2009 and their premium payments must be reduced by 65%. As mentioned above, the Act does permit assistance eligible individuals to be charged for the full premiums for the months of March & April; however, they must be reimbursed.

8. Employer reimbursement. Employers are responsible for paying 65% of applicable premium payments; however, they will receive reimbursement for their share of the payments in the form of a tax credit. Employers may request reimbursement by filing IRS Form 941, which is filed quarterly by all employers in order to report their payroll taxes.

Understanding your requirements as they pertain to COBRA as well as your state-specific health insurance continuation laws is essential for ensuring legal compliance. With the ARRA already in effect, employers need to take action now in order to prepare for administering the COBRA subsidy and ensuring COBRA notice deadlines are met.

Chances are you have questions about how COBRA affects you and how to implement the proper changes and administrative steps in your company. Not to worry–HR411 is here to help!We’ve developed an all-in-one solution to help you easily meet your requirements: The Complete COBRA Compliance Kit.This comprehensive kit provides all the guidance, tools and resources you need to get and stay in compliance, PLUS unlimited emailsupport for all your COBRA questions from a team of HR Experts!

Alert: New Provisions Bring Major COBRA Changes

On February 17, 2009 President Barack Obama signed the American Recovery and Reinvestment Act. This Act directly affects your COBRA requirements, and it is critical that any employers subject to COBRA with businesses based in the United States take action immediately to ensure compliance with the new COBRA regulations and avoid fines and penalties.

We here at HR411.com want our readers to be aware of these changes and are offering FREE educational webinars this month that will explain the new COBRA requirements under the ARRA and teach you what you need to do to protect your business and ensure compliance. Click the registration links below to get more information and reserve your seat.

March 11th 2009 11:00AM-12:00PM | REGISTER NOW

March 25th 2009 2:00PM-3:00PM | REGISTER NOW

Cost Effective Strategies for Retaining your Top Employees

Even given today’s economic uncertainty, creating a reward system that attracts and retains talented employees is important for the success of any organization. While you may not be able to afford to offer your employees regular pay increases, there are some other simple and cost effective ways to reward your workers.

To help keep your best workers around, consider implementing some of the initiatives found below:

1. Find out what your employees want. Pay isn’t always most important. For many employees what is most important at work is the satisfaction that comes from a job well done, being recognized and appreciated for one’s efforts, and having the flexibility to balance work with personal obligations. Get a feel for what your employees want before implementing a new reward system. All that may be necessary are some simple changes, such as putting more effort into recognizing your employees or providing your workers with the autonomy that they desire.
2. Extra time off. Providing extra time off is a simple way to offer a desired benefit without cutting into your bottom line. The extra time off is a win-win; it provides employees with an opportunity to catch up on personal business or just get some much needed R&R. And when your employees return, they’ll come back with a renewed commitment to their work and a feeling of rejuvenation.
3. Bonuses for meeting targets. Offering employees a bonus for reaching certain sales targets is a simple motivator to ensure an employee’s hard work is rewarded. With the revenue made from reaching company sales goals, you can afford to share the reward with the employees who made it happen – and who will likely make it happen again.
4. Flexible schedules. Most employees desire a work schedule that easily enables them to balance work with their personal life. To meet these demands, consider offering options such as telecommuting, flextime, job sharing, and shift swapping when appropriate. Employers that fail to offer their employees the flexibility to leave work early to care for a sick child or to attend a parent-teacher conference are not likely to keep quality employees around for very long.
5. Increased responsibilities. Most employees are interested in performing work that is challenging. Whereas, work that is repetitive or requires little thought often results in disengagement. Increase job responsibilities and you will likely see an increase in dedication and commitment.
6. Make advancement opportunities known. Employees that work toward a personal goal, such as career growth are motivated to work hard. So, let your employees know they’re doing well, inform them of advancement opportunities, and work with them to help them reach their career goals.
7. Just say “thank you”. It’s the thought that counts. So if you can’t afford a pay increase this year, think of other creative ways to show your employees that they’re appreciated. Simple forms of recognition, such as praise, thank you notes, and “employee of the month” awardscan go a long way in keeping your employees happy.
8. Tie rewards to performance. When rewards are tied to job performance, employees are more likely to put forth the effort and produce quality results. On the contrary, when employees come to expect pay increases or other rewards “just because”, their performance is likely to remain marginal. It’s important to reward employee performance soon after a job well done so that the employee makes the connection between their hard work and the reward received.

Given the circumstances of the current economy, pay increases may not be on the top of your company’s to-do list. But to be effective, employee rewards don’t have to dip into your company’s budget. Alternatives to pay increases, such as a formal employee recognition program, an extra day off, or even a simple “thank you” go a long way in showing employees that they’re appreciated – and that may be all that’s needed to keep your top performers around.

Understanding Workplace Safety & Health Requirements under OSHA

Federal workplace safety and health laws are designed to ensure safe working conditions by setting national standards for workplace safety and health practices. The Occupational Safety and Health Administration (OSHA) administers and enforces the safety and health requirements that were established with the Occupational Safety & Health (OSH) Act. Virtually all employers are subject to the Act’s requirements, which established standards for workplace safety and health, hazard communication, recordkeeping, and safety training.Below are some of the key employer requirements as they pertain to the OSH Act:

1. General duty standards. OSHA imposes on each employer an obligation, known as the general duty clause, to maintain a safe hazard-free workplace. The general duty clause requires every company to provide employees with a workplace free from recognized hazards that are causing, or are likely to cause, death or serious physical harm. This requirement is designed to protect employees in situations where there are no established standards and covers any potentially dangerous or unhealthful workplace condition not otherwise covered by the Act.
2. Recordkeeping – Annual Deadline Approaching! OSHA requires employers with 11 or more employees to keep records of all occupational illnesses and injuries regardless of severity. There are three forms employers are required to use for completing and maintaining records relating to workplace injuries: (1) OSHA Form 300: Injury and Illness Log, which contains a brief description of each recordable injury and illness; (2) OSHA Form 300A: Summary of Work-Related Injuries and Illnesses, is a list of injuries and illnesses that were recorded during the previous calendar year. This form must be posted in the workplace from February 1st to April 30th each year; and (3) OSHA 301: Injury and Illness Incident Report, which includes detailed information about each injury or illness incident. Learn more about the annual OSHA posting requirement. Download the OSHA forms and instructions here.
3. Post the OSHA notice. All employers are required to post the federal OSHA poster, entitled “Job Safety & Health Protection”, which informs employees of the safety and health standards that apply to the worksite as well as their right to notify OSHA of workplace hazards. Employers in states operating OSHA-approved state plans should obtain and post their state’s equivalent poster. Your posting requirements are available for download in the State & Federal Resources area of the website.
4. Safety training. Under the OSH Act,employers are required to educate employees about safe operating procedures and train them to follow such procedures. To ensure all employees understand how to practice safety in the workplace, be sure to provide regular training on safety protocol, hazard protections, and emergency response procedures. Consider incorporating this training into your new-hire orientation and mandate annual safety training thereafter. HR411 can help meet your safety training requirements with our ready to go training programs on health and safety. Click here for a listing of related programs.
5. Safety committees. Many states require certain types of businesses to establish safety and health committees. For example, in Connecticut employers with 25 or more employees are required to develop safety committees at each worksite. Other states with this requirement include: Minnesota,Nevada, and Oregon.Check your state requirements in the Workers’ Compensation and OSHA sections of our state & federal laws. Even if not required, safety and health committees are a cost effective way to prevent on the job accidents and ensure a safe workplace. To be effective, the committee should meet regularly, conduct periodic worksite inspections, review investigations of occupational accidents, and generate and implement suggestions for preventing future accidents.
6. Hazard communication. The OSH Act mandates workers have a “right-to-know” what workplace hazards exist. Specifically, employers must ensure that employees can identify and understand hazardous chemical substances in the workplace, the physical and health hazards associated with them, and how to take protective action.As such,employers must develop a workplace chemical list, label all containers that contain hazardous substances, provide hazard warnings, and notify employees of their rights under the hazard communication standard. For more on your hazard communication requirements, visit the Right to Know/Hazard Communication section of our State & Federal Laws.
7. Provide access to logs when requested. An accident report log must be made available to employees when reasonably requested. Employers should allow employees to review accident report logs within one business day following a written request.
8. Anti-retaliation. When an employee reports unsafe working conditions to OSHA, or requests an OSHA inspection, the employer is prohibited from discriminating against him or her. Use caution when taking employment actions against an employee that has recently filed a complaint with OSHA. Any decision, including discipline, demotion, transfer, or termination may be viewed as retaliation in response to the employee’s claim.
9. Penalties. If it has been found that an employer has violated OSHA regulations, a citation will be issued. When a citation is issued, the employer has the option of correcting the violations and paying the penalties, negotiating with OSHA to have the citation or penalties amended or withdrawn, or contesting the citation before the OSHA Review Commission. Employers have 15 days to contest the citation. When issued, employers must post the citation in the workplace for 3 days or until the violation has been abated, whichever is longer.
10. State requirements. Each state has the right to develop its own standards under a federally approved state OSHA plan. While the standards under a state plan may differ from federal OSHA regulations, they must provide for at least as much protection as the federal standards. The following states currently have their own OSHA approved safety and health plans: Alaska, New Mexico, Arizona, California, North Carolina, Oregon, Hawaii, Indiana, South Carolina, Iowa, Tennessee, Kentucky, Utah, Maryland, Vermont, Michigan, Minnesota, Virginia, Nevada, Washington and Wyoming. New York, New Jersey, and Connecticut have state programs that cover public employees only. Click here for a state by state comparison of OSHA requirements. Businesses operating in states with their own OSHA approved state plans must comply with their states’ standards. For more information on your state requirements visit the OSHA section of our state & federal laws.

Employee safety and health is certainly important for the well-being of your workers, but the benefits of a healthy work environment go beyond just that. A workplace free of hazards means less workers’ compensation costs, decreased employee absenteeism and tardiness, and increased employee productivity. Make it your job to ensure all employees are provided with a safe and healthful work environment.

Understanding your Pay Requirements under the FLSA

The Fair Labor Standards Act (FLSA) governs employer pay practices and sets requirements pertaining to minimum wage, overtime, equal pay, child labor, and recordkeeping. Under the Act, all non-exempt employees must be paid at least the minimum wage per hour and must receive overtime for all hours worked in excess of 40 in a given week.But, what are hours worked? Does time spent waiting to be called into work count as hours worked? What about time spent traveling for company business? Or time spent on breaks? The FLSA sets strict requirements pertaining to when employees must be paid given these types of circumstances.

Below are some of those “gray areas” in which non-exempt workers may be entitled to pay under the FLSA:

1. Breaks. Although there are no federal laws requiring that employers provide their workers with breaks, if breaks are granted employers cannot place any restrictions on employee activities while on break. If employers require that employees continue to do work while on their break, than that time must be paid. Federal law does not require breaks, however several states say otherwise. Some mandate employees receive breaks if working a certain number of hours a day. Check your state requirements in the Rest Periods section of our State & Federal Laws.
2. Meals. Employers are not required to pay employees for time spent during bona fide meal periods. Bona fide meal periods are breaks that ordinarily last at least 30 minutes. During an unpaid meal period, an employee must be completely relieved from duty for the purpose of eating a regular meal. Employees required to work while eating must be paid for the time. For example, a receptionist required to eat at her desk while waiting to receive calls, must be paid for that time. It is not necessary that an employee be permitted to leave the premises if he or she is otherwise completely freed from his or her job duties.
   

3. On-call. Depending upon the amount of freedom an employee has, if he or she must answer work-related phone calls or be on-call to work on short notice, pay for that time may be required. On-call workers who must remain on company premises or so close that use of their personal time is severely restricted must be paid.If employees are free to use this time primarily for personal activities, they don’t have to be paid. When determining whether or not to pay non-exempt workers for time spent on-call consider the following: the promiximity the employee must reamin to company premises; the amount of time the employee has to respond to calls, pages, or emails; and the duration of the on-call period.
   

4. Waiting time. Time spent by non-exempt employees waiting for work must be paid if that time meets the FLSA definition of “engaged to wait”. Engaged to wait means an employee has been asked to wait for an assignment. Even if the employee spends that time performing non-work related activities while waiting, the time is still compensable. It’s important to distinguish between engaged to wait and “waiting to be engaged”. Time spent reading the newspaper before an employee’s scheduled shift begins (“waiting to be engaged”) is not considered compensable.
5. Sleeping time. That’s right; an employee catching some ZZZ’s may be entitled to pay under the FLSA. An employee required to be on duty for fewer than 24 hours is working, even though he or she is permitted to sleep or engage in other personal activities when not busy. When an employee is required to be on duty for 24 hours or more, such as doctors or nurses in hospital settings, the employer and employee may agree to exclude from paid work time meal periods and a scheduled sleeping period of 8 hours or less, provided adequate sleeping facilities are furnished and the employee can enjoy an uninterrupted period of sleep. If the sleeping period is more than 8 hours, only eight hours is to be excluded from pay. If there is no agreement, the 8 hours of sleeping time is to be considered paid work time. If sleep is interrupted to an extent that the employee cannot get at least 5 hours of sleep, the entire period must be counted as working time.
6. Travel time. Under some circumstances, employers are required to pay employees for time spent traveling. Regular commute time is not compensable, but when a non-exempt employee is given a one-day assignment at a different location than their regular worksite, the time spent traveling must be paid. Employees required to drive to different worksites to perform their regular duties (e.g., electricians) must also be paid for the time spent driving between worksites. Further, travel that keeps an employee away from home overnight is designated as “travel away from home” and is paid work time when it “cuts across the employee’s workday”, for example 9am to 5pm. The time is not only hours worked on regular workdays, but also during the corresponding hours on non-work days. Time spent as a passenger on a plane, boat, bus, or in a car is excluded from compensable time.
   

7. Lectures, meetings, trainings. Employees are not required to be paid to attend trainings or other activities as long as the following four conditions are met: (1)the event is outside of normal work hours; (2) it is voluntary; (3) it is not job-related; and (4) no other work is being performed during the event.

8. Callback pay. Callback pay applies when employees are “called back” to perform work beyond regularly scheduled hours. No federal law guarantees employees a minimum number of hours of work when they are called back. However, the hours they do work must be paid.In the case of an emergency, if an employee is called back to work beyond his or her usual working hours and must travel a “substantial distance,” the employer may be required to pay for the employee’s travel time as well as the additional hours worked.
   

9. Report-in pay. When an employee is called to work and there is no work available, the employer may be required by state law to pay for a minimum number of hours of work (reporting premium). Report-in pay applies when employees report to work as scheduled, but are unable to work due to unusual circumstances. No federal law requires employers to pay employees in this situation. However, many states have laws that set minimum pay requirements when employees report in or are called back to work. For additional information, refer to the Callback Pay/Report-in Pay section of our State & Federal Laws.

Employers should use caution in situations in which employees are required to be ready to report to work on short notice, travel for purposes of performing their job duties, or are in some way or another restricted in their personal activities. Under these circumstances employees may be entitled to pay under the FLSA.

Just give it to me straight: What’s required under the FMLA?

It was about this time last year we were on the edge of seats waiting for the highly publicized changes to the Family Medical Leave Act (FMLA) to be released. Early 2008 brought an amendment to the FMLA known as the National Defense Authorization Act which added two new circumstances in which employees are entitled to family medical leave. What does 2009 bring?The Department of Labor (DOL) has recently issued new regulations interpreting the FMLA, which are scheduled to take effect on January 16, 2009. These regulations are intended to improve to provide needed clarity for workers and employers regarding their rights and responsibilities under the Act.

So, what does this mean for employers? It means the Act isn’t as fuzzy, but it also means employers must strictly comply with its requirements. Let’s break down your requirements under the FMLA: the past, the present, and the future:

1. Create or update an FMLA policy. Employers subject to the FMLA requirements – those with 50 or more employees in a 75 mile radius - should have a written policy communicating their compliance with the Act. The policy should address qualifying circumstances in which leave will be granted, the company’s requirements for medical certification, and other FMLA practices the company follows, such as how the FMLA year is calculated and whether or not the use of paid time off (PTO) is required as part of FMLA leave. Consistent with the Act’s amendments and the final rules scheduled to take effect shortly, if you have a written FMLA policy be sure that you update it accordingly.
2. Grant leave when required. Employers operating with 50 or more employees within a 75 mile radius must grant an employee FMLA leave if the employee has worked for the employer for at least 12 months (which need not be continuous) and 1,250 hours within the past year. And of course, an employee is only entitled to FMLA leave under certain prescribed circumstances, which include: the birth or adoption of a child; for the employee’s own serious health condition or the serious health condition of a family member; a qualifying “exigency” for a covered family member on active duty for short-notice deployment, military events, and post-deployment activities; and to care for a spouse, son daughter, parent or next of kin who is a member of the armed forces and is undergoing medical treatment or is medically unfit to perform military duties due to an injury or illness incurred while on active duty.
3. Require notice. When possible, employees requesting leave must provide 30 days notice of their need for FMLA leave. If an employee fails to provide the required 30-days’ notice of their intention to take FMLA when there is no reasonable excuse for the delay, the employer is allowed to postpone the start of leave for at least 30 days from the date the employee provides notice. When leave is not foreseeable, the Act previously permitted employees to notify their employers of their need to take FMLA leave up to two business days after an absence. The new rules, which take effect January 16^th, now require employees to follow the employer’s regular call-in procedures for reporting an absence, unless there are unusual circumstances preventing the employee from doing so.
4. Requiring medical certification. FMLA does not require that employers demand medical certification from employees. However, if you do request medical certification, you must provide employees with written notice of this requirement. Just remember, if you request medical certification, you must do so consistently, not on a case-by-case basis. An employee’s failure or refusal to provide the certification if it is requested is a valid reason to deny leave.
5. Ensure privacy. In order to protect employee health information, the final rules indicate that those contacting health care providers in order to obtain medical certifications must be either a human resource professional, leave administrator, or a management official. Under no circumstances may the individual be the employee’s direct supervisor. Those permitted to contact health care providers may not ask for additional information beyond what is required in the certification form.
6. Notify employees of their rights. When the final regulations take effect January 16th, employers will be required to provide employees with written notification of their rights and responsibilities under the Act. A general notice about FMLA - through a poster, a policy in the company’s employee handbook, or upon hire – is required. In addition, an eligibility notice along with a rights and responsibilities notice must be provided within 5 days of a leave request and a designation notice must be provided within 5 days of determining whether the leave is covered under FMLA.
7. Offer flexibility. Intermittent leave allows employees to take a day off of work here and there while returning to work in between. For example, an employee who needs to take his mother for radiation treatment every Friday for 10 weeks would require intermittent leave of 10 days across a 10 week period. Reduced leave allows an employee to take a part of a day off; the smallest interval of time allowed for reduced leave is the smallest interval of time the employer uses in its payroll system to account for absences or leave.Intermittent or reduced leave is not permitted for the adoption, foster care, or birth of a child, unless the employer and the employee agree to such an arrangement.
8. Request a return to work authorization. Employers may require that employees who take leave due to their own serious health condition are not permitted to return to work until they provide medical certification that indicates their ability to resume their essential job functions with or without a reasonable accommodation. If accommodation is necessary, the fitness-for-duty request should ask the healthcare provider to specify the needed accommodation. If you do require this certification, it must be applied uniformly to all employees returning to work from a leave due to their own serious health condition.
9. Light duty. An employer may not require, but an employee with a serious health condition may voluntarily agree to perform “light duty” work to in order to accommodate his or her circumstances. Time spent performing light duty work does not count against an employee’s FMLA leave entitlement.
10. Job restoration. Employees are entitled to be restored to the same (or similar) position held prior to taking leave. Similar positions must allow for the same pay, status and benefits awarded to the employee in their previous position.
11. Retain FMLA records. The FMLA requires employers to retain the following records for a three year period: a record of dates FMLA leave is taken; the hours of FMLA leave taken if in increments of less than one full day; copies of all FMLA notices; records of any dispute between the employer and an employee regarding the designation of leave as FMLA leave; and FMLA-related medical records and documents pertaining to medical certifications, re-certifications, or medical histories of employees or employees’ family members, created for the purposes of FMLA.
12. State requirements. Many states have their own version of family and medical leave (FML) laws. Although some state FML laws mirror the federal requirements, others provide for different provisions and/or cover employers who may not be subject to the federal Family and Medical Leave Act. Employers must comply with the law, state or federal, that provides for greater employee leave rights. For your specific state requirements, visit the Leave of Absence section of our State & Federal Laws.

Understanding your requirements as they pertain to the FMLA or your state-specific family and medical leave laws is essential for ensuring legal compliance. The final rules take effect January 16, 2009 and employers must be sure their policies and practices appropriately reflect the new provisions.

Holiday Bonuses: Are they worth the headache?

Holiday bonuses are a way for employers to recognize and reward employee accomplishments throughout the year and have become a tradition in many companies. Whether it’s a reward given to an employee for their individual contributions or a holiday gift that all employees receive, bonuses have been known to drive productivity and foster employee commitment.

Given the current state of the economy, bonuses may become a thing of the past. But, employers interested in keeping this holiday tradition alive can do so rather cost effectively. Just remember, there are some important considerations that should be made before you begin administering this year’s bonuses.

When divvying up employee bonuses, use the tips found below to ensure employee commitment is retained, company budgets aren’t squashed, and you aren’t setting yourself up for legal trouble:

1. Is it even in the budget? The feasibility of granting employees bonuses should be considered annually. The amount offered or whether a bonus will be provided at all, should depend on company earnings and whether the company has achieved certain targets throughout the year. Before making any promises or dipping into the company’s cash flow, be surea year-end bonus is something that the company is in the position to provide.
2. It’s supposed to be about appreciation. It’s the thought that counts. So if you can’t afford a holiday bonus this year, think of other creative ways to show your employees that they’re appreciated. Simple forms of recognition, such as praise, thank you notes, and even an extra paid day off is something we can all use a little more of. These simple gestures can serve to drive employee productivity, even during the end of the year “slump”.

3. How much should we give? The amount of the bonus should be based upon company financials. While there is no widespread formula used to calculate employee bonuses, 5-10% of an employee’s salary is typical for lower-level staff and 10-20% is more common for management level employees.
4. Tie bonuses to performance. When rewards are tied to job performance, employees are more likely to put forth the effort and produce quality results. On the contrary, when employees come to expect pay increases “just because”, their performance is likely to remain marginal.
5. Plan a bonus structure carefully. Large differences in pay-outs may cause hostility among employees – especially if some have been with the company longer than others. When dishing out bonuses think fair and equitable distribution, either based on seniority, job performance, or some combination of the two. However you go about determining bonus amounts, be sure the process is fair, free from bias, and is applied consistently.
6. Involve everyone. If at all possible, try to ensure everyone receives some form of bonus. While it may not be realistic to give your temp a 10% bonus, a gift card or other form of appreciation may be more practical. Whether it be monetary or not, everyone should be recognized in some way during the holiday season.
7. Manage employee expectations. A holiday bonus is something that may change from year to year, given budget constraints. As such, there may be some years in which administering holiday bonuses just isn’t practical. Because they aren’t always predictable, company bonuses should never be etched in stone or in any way promised to employees. If your company has regularly given holiday bonuses, but will be unable to this year, try to let employees know as early as possible; many factor in their holiday bonus as part of their yearly earnings.
8. Never make any promises. Bonuses that are discretionary are not usually viewed as implied contracts. But, those offered to encourage employees to achieve some desired goal are likely to be held enforceable once employees satisfy whatever criteria you have established to qualify for the bonus. Employers promising this for that will likely be required to uphold their end of the bargain. One way to avoid liability is to communicate publicly (and often) that bonuses are awarded entirely at the discretion of management and are not intended to be binding.

Given the country’s current economic state, bonuses may not be on the top of your company’s year-end to-do list. But, to be effective bonuses don’t have to dip into company budgets. Alternatives to monetary bonuses, such as gift cards, an extra day off, or even a simple holiday card go a long way in showing employees that they’re appreciated. Just remember, whether monetary or not, bonuses should always be distributed fairly and consistently.

10 Critical Considerations for Administering Time off During the Holidays

With the holiday season right around the corner, employers need to start thinking about how to manage employee time off requests. This time of year is often hectic for us all with a lot of our focus dedicated to last minute shopping, preparing for and entertaining house guests, and traveling to family gatherings. With so much to do and such little time to do it in, many employees decide to use their paid time off during the holiday rush.Although some employees may feel as though they are entitled to time off during the holiday season, there is no law requiring employers to provide paid time off; however, refusing to may seriously affect morale. Besides, a few days off around the holidays can help employees come back to work recharged and energized for the New Year.

Even though you may realize the importance of granting employee time off, it may not be as simple as signing off on an employee’s request. For employers in the retail business and those operating 24/7 establishments, scheduling time off around the holidays can be a challenge. The tips found below provide guidance for administering time off in a fair and consistent manner while ensuring business operations continue to run smoothly.

1. Develop a clear time off policy. A paid time off policy should be created that clearly defines who is eligible for time off benefits and how much time employees are permitted to take off per year (this is typically based on tenure with the company). In addition, the policy should cover what happens to unused time at the end of the year (i.e., is it forfeited or can employees carry it over to the next year?) and what procedures employees are to follow when requesting time off.
2. Communicate your policy. A policy is no good if employees don’t know it exists. It’s important to clearly communicate your time off policy so employees know what procedures they need to follow when requesting time off (i.e., how requests for time off are to be submitted and how far in advance they must be submitted). It’s recommended that as the holiday season approaches, employers distribute the company’s time off policy and even hold brief meetings to ensure understanding of the policy’s requirements.
3. Establish criteria to drive time off decisions. Before a flood of time off requests come your way, it’s important to think about how you will determine whether or not time off will be granted. Will the determination be made based on seniority, on a first come first served basis, or will the decision be driven by scheduling needs? Having established criteria in place will ensure managers are consistent in granting employee time off requests.
4. Hire seasonal help. If business picks up drastically around the holidays, you might want to consider hiring temporary or part-time employees to meet the added demand. Many retail stores utilize this practice around Christmas, but other businesses can also benefit from the extra help, especially when their full-time staff is taking time off.
5. Seek volunteers. Some employees may want to work a holiday for the sake of overtime or holiday pay, so before scheduling time off ask if anyone is opting to work during the holidays.
6. Offer incentives. If scheduling conflicts still exist, consider providing employees with incentives to take time off during less desirable times of the year. For instance, if most of your workforce plans a vacation during the holiday season, consider allowing employees to take an extra day or two if they wait until the holiday season is over and the vacation rush has subsided. Just be sure you offer this incentive consistently and that all employees are aware of it.
7. Require notice. Part of your time off policy should address how soon time off requests are to be made. Typically, employers require at least two weeks notice prior to an absence lasting one or two days. When additional days are requested, employees should provide even more notice, typically one month. This will allow you to plan accordingly by bringing in additional workers, requesting co-workers to work overtime, and/or planning major projects to be completed prior to the employee’s absence.
8. Document. When employees request time off they should be asked to complete a leave request form indicating the type of time off they will be using (i.e., vacation, sick or personal time) and the number of days they plan to be absent. Management’s signature on this form indicates approval to take time off. This form should be stored in the employee’s personnel file.
9. Administration. To easily keep track of employee time off, use our absence tracking log. This form allows you to easily monitor the amount of paid time off an employee has used and the number of days an employee has remaining. This form should be stored in the employee’s personnel file along with their time off request form.
10. Consider alternatives. Consider offering alternative work schedules during the holiday season in order to meet business demands while allowing employees to fulfill their personal obligations. A compressed workweek, for example, enables employees to put in their normal hours for the week in a shorter period of time (four 10 hour days for example, rather than five 8 hour days). Flex-time is another option, which enables employees to report to work early and leave early, or report to work late and leave late. These options enable employees to continue to work the same number of hours per week, while allowing them to better meet the demands of their personal lives.

To attract and retain talented workers, it’s important for employers to offer benefits such as paid time off. Paid time off gives employees an opportunity to fulfill personal obligations, spend time with family, go on vacation, and simply get some needed R&R. However, administering time off around the holidays can be a challenge due to the number of requests that often fall on managers’ desks. Therefore, it’s important to have established procedures in place relating to who is eligible for time off, how soon requests must be submitted, and how determinations for time off will be made. Following established company practices will ensure employee time off doesn’t get in the way of business requirements.

Medicare Part D Notification Requirements

If you are an employer that offers Medicare Part D prescription drug coverage to your employees then you are required to meet an important approaching deadline. Annually, by November 15, employers offering Medicare Part D must disclose whether their prescription drug plan is creditable or non-creditable. A plan is considered creditable if the amount the plan expects to pay, on average, for prescription drugs for covered individuals is the same or more than what standard Medicare prescription drug coverage would be expected to pay on average.

Because the information you provide to your employers relating to Medicare Part D could affect their decision to enroll, the Centers for Medicaid and Medicare Services (CMS) has published specific guidelines regarding the content, timing, and manner in which the notification is to be made. Recommendations relating to this notification requirement are found below:

1. Medicare Part D eligible employees. Anyone with Medicare can join a Medicare prescription drug plan. If an individual is entitled to Medicare Part A and/or enrolled in Part B, he or she is eligible for Part D. A person has Part A coverage if he or she is at least 65 years of age and receives monthly Social Security benefits. All Part D eligible individuals who are covered by an employer or union health plan with outpatient prescription drug coverage must receive a notice, regardless of whether the employer or union coverage is primary or secondary to Medicare. The notice must be provided to active employees and their spouses as well as those who are covered as retirees, disabled, or are on COBRA.
2. Evaluate the plan. Before sending out the disclosure notice, employers must determine if their prescription plan meets the creditable coverage standard established by CMS. Coverage is known as creditable if the plan’s sponsor’s prescription drug coverage is at least as much as the expected amount of paid claims under standard Medicare prescription drug coverage. Coverage is considered “non-creditable” if the expected amount of paid claims under the plan’s sponsor’s prescription drug coverage is less than the expected amount of paid claims under standard Medicare prescription drug coverage. Whether the plan is creditable or non-creditable will determine the type of notice you will need to provide to Medicare Part D eligible employees.
3. Non-creditable notice. If coverage isnot considered creditable, then Medicare-eligible beneficiaries will need to enroll in Medicare Part D when they first become eligible or they will be subject to one percent of the premium as a penalty for each month they choose not to partake in the Part D program. Because of the penalties associated with late enrollment, it is imperative non-creditable plans be disclosed to Part D eligible employees. CMS has indicated that the content of the non-creditable disclosure notice must include the following: that the prescription drug coverage provided is not creditable; the meaning of creditable coverage and why it is important; that the individual may be subject to the payment of higher Part D premiums if he or she fails to enroll in a Part D plan when first eligible; and that an individual generally may only enroll in a Part D plan from November 15 through December 31 of each year.
4. Creditable notice. If the group’s coverage is creditable, then the Medicare-eligible beneficiaries do not have to sign up for Medicare Part D. The creditable coverage notices received by the employer will be accepted as evidence of coverage and CMS will waive the penalty if the beneficiary chooses to enroll in the Part D program at the end of the plan year. The content of the creditable notice must include the following: that the prescription drug coverage provided is creditable; the meaning of “creditable coverage” and an explanation of why creditable coverage is important. Also included must be a cautionary statement expressing that even though coverage is creditable, an individual could be subject to the payment of higher Part D premiums if he or she subsequently has a break in creditable coverage lasting 63 days or more before enrolling in a Part D plan.
5. Recommended content. Although not required, CMS recommends employers also provide the following in their disclosure statements: an explanation of the beneficiary’s rights to a notice (i.e.: the times when a beneficiary can expect to receive a notice and the times a beneficiary can request a copy); an explanation of option(s) beneficiaries will have available to them when the Medicare Part D benefit becomes available; a clarification of the circumstances (if any) under which an individual could get his/her prescription drug coverage back if they drop their current coverage and enroll in a Medicare prescription drug coverage; and information on how to get assistance in paying for a Medicare prescription drug plan as well as contact information for the Social Security Administration (SSA).
6. When to notify. At a minimum, the disclosure must be made at the following times: (a) prior to November 15th each year; (b) before an individual’s initial enrollment period for Part D (as they age in); (c) before the effective date of coverage for any Medicare-eligible individual that joins the plan; (d) whenever prescription drug coverage ends or changes so that it is no longer creditable or becomes creditable; and (e) upon a beneficiary’s request.
7. Method of delivery. Employers have flexibility as to the method in which disclosure notices are disseminated. The notice does not necessarily need to be provided in a separate mailing; the notice may be included with other member information materials, including initial and open enrollment materials. If employers choose to include notices in with other plan participant information, then the disclosures must be prominent and conspicuous and in at least 14 point font. One notice for the eligible individual and all covered dependents is permitted, unless it is known that a spouse or dependent resides at a different address. The employer can provide the notice through electronic means but only if the Medicare beneficiary has indicated that he or she has adequate access to electronic information, and has been informed of his or her right to obtain a paper version. Additionally, employers may arrange for the notice to be provided by a third party, such as their health insurance carrier.
8. Disclosure to CMS. In addition to employee disclosures, a disclosure of creditable coverage status must also be provided to the CMS on an annual basis and upon any change that affects whether the coverage is creditable. Employers are required to make the disclosure using the standard Disclosure to CMS form, which can be found here.
9. Penalties. Employers must be aware that failure to comply with the CMS disclosure requirements may result in government fines and penalties.

Medicare Part D offers eligible employees with a low cost prescription drug benefit. It is an extremely valuable perk to offer your staff. However, it is important to understand employer requirements as they relate to Medicare Part D. Following the guidelines above will ensure that Part D eligible employees are making educated decisions before choosing to enroll in the plan.

Time off to Vote: What’s required? What’s not?

With this year’s presidential election right around the corner, employers need to start thinking about how to handle voting time off requests. While not all states have requirements pertaining to voting leave, those that do impose harsh penalties on employers failing to comply.Generally, states with voting leave laws require employers to provide registered voters with time off from work to vote – typically two to three hours. In most cases time off is only granted if the employee does not have sufficient time outside of work hours to cast their ballot.

Although requirements vary by state, there are some basic guidelines all employers should follow when it comes to granting employees time off to vote:

1. Create a policy. Employers should develop a policy relating to voting time to ensure that all employees and managers understand company procedures relating to voting time. The policy should cover: which employees are eligible to take time off to vote (i.e., registered voters who are unable to vote during non-working hours); the amount of time employees are permitted to take off to vote; if the time will be paid or unpaid; whether advance notice is required by employees requesting time off; and if it is necessary for employees to provide proof that they voted. Employers should re-evaluate their voting leave policies to ensure they comply with state-specific requirements. Policies should also be re-distributed to employees well before Election Day so they’re given enough time to review it, seek clarification if needed, and if applicable make leave requests in a timely fashion.

2. Pay. Most states with voting leave laws require employers pay their employees for time spent voting, although some states specify only a certain number of hours must be paid. If pay is required, employers must comply. It’s important to note that if pay is obligatory requiring employees use accrued paid time off is not permitted.
3. Notice. Employers are certainly within their rights to request that employees provide advance notice of their need for leave. When notice is required, it is recommended that it be in writing and at least 24 hours prior to Election Day. Employers may even want to require employees file requests even earlier in order to coordinate schedules and allow for the appropriate coverage.

4. Proof. To ensure employees are actually using time off to vote, employers may request they provide proof, which is typically done in the form of a voter’s receipt. In some states, pay for time spent voting may be contingent upon the employee’s ability to provide such evidence.

5. When. To ensure efficient business operations with minimal interruption, employers may be permitted to specify the hours in which employees can take time off to vote. Typically, these hours are either at the beginning of an employee’s shift or at the end of their shift.
6. How long. In most states two or three hours is typical for providing employees time off to vote. This is usually the case only when employees do not have two or three consecutive works before or after work to vote. While some states specify the number of hours that must be provided, other requirements are rather vague. For example, quite a few states indicate that employers must provide “reasonable” or “sufficient” time for employees to vote. Under these circumstances, employers should use their best judgment in determining what constitutes adequate time off to vote.
7. Retaliation. Employers are prohibited from taking disciplinary or retaliatory action against an employee opting to exercise his or her right to vote – the same goes for those who choose not to vote. Employers and managers should be cautious of any actions that may be construed as retaliatory. For example, if an employee votes prior to their scheduled shift, but fails to properly anticipate the time needed to vote, discipline should not be administered if the employee is late as a result. Taking disciplinary action in this situation may be viewed as a form of retaliation against an employee exercising his or her voting rights.

8. State requirements. Employers failing to fulfill their voting leave obligations may be subject to hefty fines. Penalties range from a slap on the wrist (i.e., a $50 fine) to significant fines (up to $20,000 and jail time)! That’s why it is imperative for employers to understand their state requirements before implementing a policy relating to voting time. Requirements vary among states with regards to how much time is to be provided, whether time off is to be paid or unpaid, and whether or not employees must provide notice of their anticipated need to take voting leave. Check your state requirements here.

Even if your state does not have specific provisions relating to voting time, granting employees time off to vote is a benefit you may want to consider providing. Giving employees sufficient time to exercise their right to vote demonstrates the company’s commitment to their employees and their political rights.