Sep 232017
 

Starting January 1, 2018, employers in Washington will be required to provide most of their employees with sick leave.

Accrual

  • Most employees must accrue paid sick leave at a minimum rate of one hour of paid sick leave for every 40 hours worked. This includes part-time and seasonal workers.
  • Paid sick leave must be paid to employees at their normal hourly compensation rate.
  • Employees are entitled to use accrued paid sick leave beginning on the 90th calendar day after the start of their employment.
  • Unused paid sick leave of 40 hours or less must be carried over to the following year.

Usage

Employees must be paid sick leave:

  • To care for themselves or their family members
  • When the employee’s workplace or their child’s school or place of care has been closed by a public official for any health-related reason
  • For absences that qualify for leave under the state’s Domestic Violence Leave Act.

Employers may allow employees to use paid sick leave for additional purposes.

Rulemaking for paid sick leave

The Department of Labor & Industries (L&I) is developing rules to explain and enforce the new requirements. These rules will include:

  • Procedures for employers to notify their employees
  • Recordkeeping and reporting requirements regarding paid sick leave
  • Processes to protect employees from retaliation for the lawful use of paid sick leave

The rules are being developed in two phases:

  1. employer requirements and employee rights, and
  2. enforcement of the new law

Opportunities for public comment on employer requirements and employee rights ended September 1. Rulemaking for enforcement of the new law is underway and includes opportunities for public comment at these public hearings:

November 8, 10:00am
Spokane Center Place Auditorium
2426 N Discovery Pl
Spokane Valley, WA 99216

November 9, 10:00am
L&I Tumwater Auditorium
7273 Linderson Way SW
Tumwater, WA 98501

A prehearing overview of the draft proposaed rules begins at 9 a.m. for each public hearing.

 

Source: Washington Department of Labor & Industries

 Posted by at 10:41
Jun 232017
 

To recap our previous post, wage discrepancies between employees may only be based on the following bona fide reasons:

  1. A seniority system;
  2. A merit system;
  3. A system measuring earnings by quantity or quality of production (including piece rate);
  4. Workplace location;
  5. Travel (if necessary and regular for employees);
  6. Education;
  7. Training;
  8. Experience; or
  9. A combination of these factors, if they account for the entire pay discrepancy.

Discrepancies attributable to the factors above should be reasonable. For instance, paying an employee who has a master’s degree 10% more than her older colleague with a bachelor’s degree may be reasonable. Paying her 75% more and claiming the difference is due to the higher level of education would likely not hold up in court.

The law also prohibits employers from asking applicants how much they make in their current or former positions, and likewise prohibits employers from asking an applicant’s current or former employers about their wages. This is intended to prevent the continuation of pay discrepancies that could be traced back to an employee’s inclusion in a protected class. If employers come across this information without asking (e.g. the candidate volunteers it), they should ensure that it does not influence their offer.

An employee who brings a successful civil claim against an employer under this law will be entitled to a year of back pay, liquidated damages equal to that amount (thereby doubling the award), and reasonable attorneys’ fees.

No Intent or Bad Faith Required

It is crucial for employers to understand that discriminatory intent is not necessary to violate this law. An employee does not need to prove that she is paid less because she is a woman, or black, or a veteran; if the employer cannot explain the pay differential based solely on the allowable reasons listed above, the employee will win her case. This makes it essential that employers conduct an internal audit of their pay scales to uncover any differences in pay that they are unable to explain.

Negotiation, Desperation, or a Job Seekers’ Market Are Not Acceptable Reasons

Another important takeaway is that negotiation is not an acceptable basis for wage discrepancies, nor will it serve as a defense in litigation. Oregon’s EPA—while not prohibiting negotiation—will significantly limit the situations in which negotiation is appropriate. For instance, while offering a generous bonus schedule and fringe benefits to an applicant for a one-of-a-kind position may be acceptable, wages and benefits for positions of “comparable character” should remain the same, unless the discrepancies can be justified by the acceptable reasons listed above.

Additionally, over-the-top offers made because a position needs to be filled quickly, or because an applicant-friendly job market is emboldening job seekers to ask for higher pay, may prove problematic down the road. The law does not allow for employers to reduce employee pay to comply with the law, meaning that lower-paid employees may need to receive raises instead.

Action Items for Employers
  1. Administer (or hire someone to conduct) an audit of your overall pay structure as well as an analysis of job groups and individual wages. The analysis should focus on whether differences in pay can be fully and reasonably explained by the bona fide factors above. Doing the audit sooner rather than later will allow you to plan for what may be significant changes in pay structure.
  2. Edit any application forms, interview templates, or other documents that ask applicants or their employers about current wages or salary history. If you don’t want to change your practices now, put it on your calendar to revisit these documents in 2018.
  3. Exercise caution with respect to offers or raises, starting now. Because the law does not allow for employee pay to be reduced for compliance, wages that are inordinately high due to factors not on the bona fide reason list (e.g. negotiation, desperation) could necessitate across-the-board increases.

Source:  HR Support Center

 Posted by at 11:16
Dec 192015
 

Beginning January 1, 2016, Oregon employers will be required to provide up to 40 hours of sick time each year, depending on how many hours an employee works. Employers with 10 or more employees (six or more for Portland employers) must offer these hours as paid sick time.

Who Is Covered?
The law applies to most employees—exempt, non-exempt, full-time, part-time, temporary, and seasonal. However, the law excludes a very small number of categories of employees from coverage: independent contractors, employees who receive paid sick time under federal law, participants in certain work training and work-study programs, certain railroad workers, and individuals employed by their parent, spouse, or child. There is no exception for small employers; organizations with one or more employees will be required to provide sick time.

Accrual
An employee will begin to earn and accrue sick time on the first day of employment or on January 1, 2016, if they are already employed at that time. Sick time must accrue at a rate of at least one hour for every 30 hours worked. An employee who is exempt from overtime requirements is presumed to work 40 hours in each workweek for the purpose of accrual of sick time unless the actual workweek of the employee is less than 40 hours, in which case sick time accrues based on the actual workweek of the employee.

An employee must be allowed carry over up to 40 hours of unused sick time to the subsequent year. An employer must restore previously accrued unused sick time to an employee who is reemployed by that employer within 180 days of separation.

Use
Employees may take sick leave to care for themselves or a family member. Uses include mental and physical illness, injury or health condition, need for medical diagnosis, care or treatment for a physical or mental illness, injury or health condition, need for preventative medical care, any acceptable use under the Oregon Family Leave Act, to seek legal or medical services if the employee is the victim of domestic violence, sexual assault, or stalking, or in the case of a public health emergency. Employees are also allowed to donate accrued sick time to another employee if their employer allows it.

Compliance Requirements
Employers must provide written notice of the law’s requirements to each employee. The Bureau of Labor and Industries has provided a poster for this purpose.

Employers should also provide written notification, at least quarterly, to each employee of the amount of accrued and unused sick time that remains available for use. Pay statements may be used to satisfy this notification requirement.

Next Steps
Employers who already have sick time or PTO policies in place should determine if their current policies will meet the requirements of the new law. Employers who do not currently offer sick time should determine how they plan to implement the new requirements. All employers should ensure that they have the appropriate notice and record keeping procedures in place prior to January 1, 2016.

Ask your Time 4 Payroll representative if you need assistance in implementing Sick Leave tracking at your company.

 Posted by at 19:17
Jan 022015
 

After controversy, debate, and delays, the Employer Mandate has arrived. This provision of the Affordable Care Act (also known as the “Play or Pay” provision) requires all employers with 50 or more full-time equivalent employees to offer a certain level of health insurance coverage at an affordable rate to all full-time employees or face a possible penalty.

Large employers (those with 100 or more full-time equivalent employees) that do not comply with the Employer Mandate may begin incurring penalties in each month of the 2015 tax year. Midsized employers (those with 50-99 full-time equivalent employees) enjoy an additional year of reprieve (to 2016) as long as the organization did not reduce its workers’ hours/workforce to get below the 99 employee threshold without a bona fide reason or materially reduce its health care plan as it existed on February 9, 2014. Employer Mandate penalties are incurred on a monthly basis, but paid annually.

It’s important to note that the IRS will only apply Employer Mandate penalties to an organization if the employer is subject to the Employer Mandate, fails to comply with the Mandate, and has at least one full-time employee shop in the Marketplace and receive a federal premium subsidy. Employers have no control regarding whether a full-time employee opts to shop in the Marketplace, so the only fool-proof way to avoid penalties is to follow these three steps:

  1. Offer a health insurance plan that meets the minimal essential coverage requirements;
  2. Offer at least one such plan at an “affordable rate”; and
  3. Offer at least one such plan to all full-time employees regularly working 30 or more hours per week and their dependent children.

If you follow these three steps, your organization will be immunized from any type of Employer Mandate Penalties, regardless of which employees opt to shop in the Marketplace or what types of premium subsidies they receive.

With the implementation of the Employer Mandate comes new IRS reporting requirements. Employers with 50 or more full-time equivalent employees must begin Section 6056 (Employer Mandate) reporting for the 2015 tax year. These forms will be filed with the IRS and provided to employees in early 2016. Although the actual reporting will not be performed until early 2016, some of the data included in the reporting must be classified by month. So now is the time to begin tracking this data.

Employers subject to the reporting requirements must complete and submit one Transmittal Form (IRS Form 1094-C) for the organization and one Employee Statement (IRS Form 1095-C) for each employee. Employers that sponsor a self-funded health plan have additional reporting requirements. The IRS draft forms are available in your HR Support Center.

Anxiety is understandably high in regard to both the Employer Mandate and the new IRS reporting requirements associated with the Mandate. The penalties have the potential to be substantial for some employers, and the regulations are somewhat tedious and technical. Some anxiety can be mitigated by reviewing the “Navigating the Employer Mandate” guide, which provides detailed common-sense instructions on how to comply with the Employer Mandate, including sample penalty calculations, IRS reporting requirements and much more.  Your Certified Public Accountand and Human Resources Professional can also be great resources for you.

 Posted by at 08:28
Dec 222014
 

Two requirements of health care reform that affect employers will be going into effect on January 1, 2015. First, after much debate and delay, the first phase of the Employer Mandate (or “Play or Pay” Provision) will begin. Once it is fully implemented, this provision of the Affordable Care Act will require all employers with 50 or more full time equivalent (FTE) employees to offer a certain level of health insurance coverage at an affordable rate to all full-time employees or face a possible penalty.

For 2015, only non-compliant large employers (those with 100 or more FTE employees) will face penalties. Midsized employers (those with 50-99 FTE employees) will have an additional year of reprieve (until 2016) so long as the organization did not (1) reduce its workforce or workers’ hours to get below the 99 employee threshold without a bona fide reason or (2) materially reduce its health care plan as it existed on February 9, 2014. Employer Mandate penalties are incurred on a monthly basis, but paid annually.

With the implementation of the Employer Mandate comes new IRS reporting requirements. Employers with 50 or more FTE employees must begin Section 6056 (Employer Mandate) reporting for the 2015 tax year. These forms will be filed with the IRS and provided to employees in early 2016. Although the actual reporting will not be performed until early 2016, some of the data included in the reporting must be classified by month. So now is the time to begin tracking this data. The IRS draft samples for both required reporting forms (1094-C and 1095-C) are available in your HR Support Center.

For more information on these soon-to-be-effective provisions and how they may affect your organization, we encourage you to review our “Navigating the Employer Mandate” white paper in your HR Support Center or contact your HR Professional.

 Posted by at 19:20
Sep 112014
 

Are employees in your organization saving enough for their retirement? Someday, each of us would like to relax and enjoy the fruits of our labor. In general, Americans are not saving enough for that “Someday” when they will retire. Most don’t have pensions and must depend on Social Security for most of their income.

Social Security offers a my Social Security account to help people prepare for and manage their “Someday.”

With a my Social Security account you can:

  • Get your online Social Security Statement;
  • Verify your lifetime earnings;
  • See estimates of your future benefits;
  • Manage your benefits; and so much more.

Ten-thousand people reach retirement age daily and many are unprepared. Social Security encourages you and your employees to plan now by opening a personal my Social Security account at socialsecurity.gov/myaccount.

Opening a my Social Security account online is quick, safe, free, and easy. Please encourage every person in your organization, and those you come in contact with, to open his or her own personal my Social Security account at socialsecurity.gov/myaccount.

 Posted by at 15:19
Dec 122013
 

Portland’s Protected Sick Time Ordinance mandates the provision of up to 40 hours of sick leave per year to all employees of at least 90 days and who have worked at least 240 hours in a year within Portland city limits.

Employers with 6 or more employees must provide at least one hour of paid Sick Time for every 30 hours of work performed by the employee within the city.  Employers with 5 or fewer employees must provide a minimum of one hour of unpaid sick time for every 30 hours of work performed within the city.

Employers with existing Sick Leave or PTO policies that meet or exceed the requirements of the Ordinance are deemed in compliance.

Employees may use their sick leave to attend to medical care for themselves or their family members, closure of school or child care provider, domestic violence cases, and for other health reasons.

To be eligible, employees must have worked 240 hours in a year within the City. If a person changes employers or is separated from their employer for more than 6 months, then he/she will need to reestablish eligibility.  Employees may not use Sick Leave during the first 90 days of their employment, though they accrue Sick Leave from the first day of employment in the City.

Employers may require an Employee to provide reasonable notice of an absence for Sick Leave. This means abiding by the Employer’s notification policy.  If there is no such policy in place, it should be implemented prior to the effective date of the Ordinance.

When an employee uses Sick Leave more than 3 consecutive days or the Employer suspects a pattern of abuse of the Sick Leave ordinance, the Employer may request documentation that the Sick Leave is being used for a qualifying absence.  If the employee fails to provide the required documentation, the Employer may deny the use of Sick Time for the absence taken until the Employee provides the documentation.

Employers must provide employees with written notice of their entitlement to Sick Time, conditions for its use, and instructions on how to file a complaint.

Employers must notify each Employee, at least quarterly, of the amount of accrued and unused Sick Time available for use by the Employee.

In addition, employers with employees working any time in Portland must display this poster along with the other required labor posters.  For more details, refer to the final administrative rules provided by the City of Portland.

If you would like Time 4 Payroll to help track Portland Sick Leave accruals, let us know.  A small fee will apply.

 Posted by at 16:29
Apr 132013
 

Traditionally, employers offered separate paid time off benefits to employees, such as paid vacation, sick leave and personal days.  In recent years, however, many companies have moved to a more flexible Paid Time Off or “PTO” benefit that incorporates all policies into one all-inclusive plan.

There are different opinions on whether employers benefit from offering PTO instead of the traditional plans.  If you are trying to design your future policy, here are some advantages and disadvantages of offering a combined PTO plan:

Advantages of a PTO Policy

  • Employees do not have an incentive to lie about being sick or having a doctor’s appointment in order to use all of their annual sick days.  This results in more transparency in the employee/employer relationship.
  • Research consistently illustrates that incorporating a PTO policy will result in employees taking more vacation time and fewer sick days.  Employers benefit in two ways:  1) Employers typically receive more notice about scheduled vacations, affording more time to plan for adequate coverage; and 2) Employees return to work more refreshed and productive following vacation leave.
  • Employees tend to value the flexibility that PTO provides.
  • Simplified administration, since employers only have to track PTO hours as opposed to separate tracking of vacation, sick, and personal time for each employee.

Disadvantages of a PTO Policy

  • Employees are more likely to consume all of their PTO, whereas they may not have expended all of their sick or personal holidays in the past.
  • Employees may tend to save all of their PTO time for vacations and come to work when they are sick, at times causing illness among other employees.
  • In some states, all earned PTO must be paid out upon separation of employment.  For companies with separate sick leave and vacation policies, state law often mandates that accrued and unused vacation time be paid out upon termination of employment, sparing the employer from compensating the departing employee for unused accrued sick and personal days.

Regardless of which plan you choose, you may want to put incentives in place for your employees to actually take time off, for instance a “use it or lose it” clause, or a cap on accruals so that if time off is not taken, then no more time can be accrued.

Also, keep in mind that these are optional benefits, but once they are in place, the company will have to abide by its own rules.  When an employee leaves, the company will have to pay for any accrued, unused vacation or PTO time.

Source:  HR Support Center

 Posted by at 08:28

Employer-Provided Cell Phones

 Benefits  Comments Off on Employer-Provided Cell Phones
Sep 212011
 

Wondering whether company-paid cell phone service should be considered a fringe benefit, and as such added to the employee’s wages as income?

The IRS provides the following guidance:

  • If the cell phone is provided by the employer for business reasons (other than compensation), then it’s not considered a taxable fringe benefit.  For example, if the employer needs to contact the employee at all times, or if the employer requires the employee to be able to talk to customers while away from the office.
  • If there is no substantial business reason for the employee to carry a company cell phone but yet the employer chooses to provide it, then it is considered a taxable fringe benefit and must be reported as income on the employee’s W-2.

Contact us if you need further assistance on this topic.

Source:  IRS

 Posted by at 07:14