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Employment Law News from Vigilant: 01/21/2010
01-21-2010 |
VIGILANT COUNSEL NEWSLETTER – January 21, 2010
New COBRA subsidy guidance from IRS
The IRS recently informally explained how to claim the payroll tax credit on the COBRA premium subsidy when a payment is made in 2010 for 2009 coverage. According to the IRS, if an assistance eligible individual (AEI) pays his or her 35 percent of the premium for some period of 2009 coverage in 2010, the employer must take the payroll tax credit during the quarter in 2010 during which it was received, or during a later quarter. The credit may not be claimed for the quarter during 2009 that corresponds to the period of coverage. (Source: Informal written IRS response to inquiry from Mercer.)
Tips:
In other COBRA news, the U.S. Department of Labor has released model notices for use in notifying AEIs of their rights under the extended COBRA premium subsidy. Also, see our Fact Sheet, “COBRA Provisions of the American Recovery and Reinvestment Act of 2009” (6015).
No OT for local delivery drivers when product originated out of state
An appeals court recently ruled that truck drivers for a wine distributor were not entitled to overtime, even though their routes were entirely within a single state, because, according to the court, they were the final step in the wine’s movement in interstate commerce. Employers generally don’t have to pay overtime to drivers who operate in interstate commerce (the movement of goods across state lines). Drivers who operate in intrastate commerce (movement of goods within a single state) are generally entitled to overtime. In this case, out-of-state suppliers shipped the wine to the employer’s warehouse, where the employer paid its drivers to distribute the wine within the state. Some of the wine had been preordered by retail stores and the rest was typically stored in the warehouse for no more than a month before being sold to stores within the state. The wine was not repackaged or altered in any way at the warehouse. The court ruled that the temporary storage in the warehouse was not enough to break the chain of commerce that originated outside the state, so the drivers were working in interstate commerce, even if their routes were exclusively within one state (Collins v. Heritage Wine Cellars, Ltd., 7th Cir, Dec. 2009).
Tips: It can be tricky to determine whether a driver is truly interstate (and therefore exempt from overtime under federal wage and hour law) or intrastate (and entitled to overtime under federal wage and hour law). See our Fact Sheet, “Motor Carrier Safety Requirements” (3146) for guidance. If your drivers are based in Washington, be aware that state law requires you to pay overtime, regardless of whether or not your drivers operate in interstate commerce.
Time to post OSHA 300A summary
It’s that time of year again: time to post your OSHA 300A Summary of Work-Related Injuries and Illnesses by February 1 and leave it up until April 30. Don’t forget your 300A form must list the total number of 2009 job-related injuries and illnesses that you logged on the OSHA Form 300 Log of Work-Related Injuries and Illnesses. Accurate recordkeeping is important now more than ever, since OSHA has launched a national recordkeeping emphasis program and safety inspectors will be particularly interested in reviewing your 300 Log and making sure you’ve correctly posted the 300A Form.
Need to brush up on your recordkeeping skills? Contact Nicole Forward (800-733-8620 or n.forward@vigilantcounsel.org) to view our on-demand webinar, “OSHA 300: Recordkeeping Basics and Recent Developments.” If you have specific questions or issues, contact your Vigilant safety professional.
DOL finalizes deposit safe harbor for small plans
The U.S. Department of Labor (DOL) recently finalized its rule that gives employers a “safe harbor” of seven business days in which to deposit participant contributions to a small pension plan and be deemed to have deposited them in a timely manner. Contributions to an ERISA pension or welfare benefit plan that are withheld from employees’ wages (for example, 401(k) contributions), are plan assets and must be deposited in the plan as soon as they reasonably can be segregated from the employer’s assets. The DOL’s “safe harbor” for small plans (fewer than 100 participants) presumes that participant contributions are deposited in a timely manner if deposited within seven business days from the date they are withheld from employees’ wages (75 Fed Reg 2068, January 14, 2010). There is no safe harbor for larger plans, so contributions should be deposited into the plan as soon as possible. Depending on a government enforcer’s assessment, “as soon as possible” for a larger plan could require a speedier deposit, or it could be as late as the 15th business day of the month following the month in which the contributions were withheld from the employees’ wages. Contact your retirement plan advisor with questions.
Why office betting pools may be a gamble
Super Bowl is just around the corner and it’s time to get ready. Big screen TV? Check. Over-sized nachos? Check. Office betting pool? Not so fast.
Although many employers allow or even encourage a friendly wager over the big game, remember that betting pools may be illegal under state law depending on how they’re structured. For example, betting pools are allowed in Montana only if a randomly assigned grid is used. In Washington, sports betting pools are allowed only if using a 100-square grid and entrants pay $1 or less to play. In Oregon, office betting pools are generally illegal unless a city or county ordinance specifically authorizes it (ORS 167.117 to .121). In California and Idaho, office betting pools are always illegal no matter how they’re structured (Cal Penal Code 336.9 and Idaho Code 18-3802).
If you’re allowing employees to conduct an office betting pool, make sure you know your state’s law and how to comply. Clearly communicate to employees what will be allowed or prohibited, including whether any amount of company time can be used to participate, and make sure everyone understands that participation is strictly voluntary. With those worries behind you, sit back and enjoy the big game (and the over-sized nachos)!
Updated E-Verify manual now available
E-Verify users should take a look at the updated user manual now available from the Department of Homeland Security. The updated manual offers more in-depth discussion on topics of interest and helpful tips for employers to make the E-Verify process easier. If you still have questions after reading through the manual, don’t hesitate to contact your Vigilant staff representative for help. Using E-Verify to check the employment eligibility of new hires is voluntary, unless you have covered federal contracts—for more information, see our Fact Sheet, “E-Verify for Federal Contractors” (6140).
Q&A: What to do when coworkers break up?
Question: Two of our employees were dating, but now they’ve broken up and we’re worried about the impact it may have on the workplace. What should we do?
Answer: The first thing you need to do is assess the situation. When employees stop dating, hurt feelings, jealousy and uncomfortable situations are bound to boil over into the workplace. But you don’t always need to get involved. Pay attention to how the individuals interact with each other and whether their work performance is affected by the breakup. If everyone is getting along and there’s no indication of a problem, stay out of it. But if you notice hostility or inappropriate touching or comments going on between the employees, it’s time to take action. Even if those actions were welcomed or acceptable to the individuals at one point in time, the situation has changed and allowing it to continue could lead to a harassment claim. Sit down individually with each employee to discuss your concerns and your expectations going forward. If necessary, conduct a harassment investigation and take the appropriate steps to protect the victim. Also be aware of any domestic violence issues that may creep up; if one party has been abusing or stalking the other party, you may have a heightened obligation to protect your employee’s safety.
Need to discuss a particular situation? Your Vigilant staff representative would be happy to help. Also see our Fact Sheet, “Harassment in the Workplace: Avoiding Liability” (3288).
CALIFORNIA: Expanded Prop 65 list includes wood dust
Four more substances, including wood dust, have been added to California’s official list of carcinogens and reproductive toxicants under Proposition 65, the Safe Drinking Water and Toxic Enforcement Act of 1986. On December 18, 2009, the state Office of Environmental Health Hazard Assessment announced that it was adding wood dust and zidovudine (AZT) to the list as substances that can cause cancer, and adding tert-amyl methyl ether (TAME) and ethyl-tert-butyl ether (EBTE) as substances that can cause birth defects. Businesses must provide warnings whenever workers or the public are exposed to substances on the Proposition 65 list. An example warning is available on our website.
MONTANA: Employer lucks out on discrimination claim
A Montana employer lucked out and was found by a state agency not to have illegally discriminated against a probationary employee that supervisors described as “too old for the job” and looking “like he’d had a stroke.” Reinhardt was a locomotive engineer trainee who had difficulty with many of the physical aspects of the job. When being evaluated by senior engineers, he was described as being unsteady on his feet, out of balance, acting as if he’d had a stroke and “too old for the job.” Eventually, Reinhardt was terminated over concerns about his ability to safely perform the job. He filed a complaint with the Montana Department of Labor and Industry, claiming he’d been discriminated against on the basis of age and disability. Almost miraculously, the hearing officer decided that the statements made about Reinhardt’s age and physical condition were not evidence of discrimination, but rather, were just a layman’s way of describing how Reinhardt appeared during performance evaluations (Reinhardt v. BNSF Railway Co., Montana Dept. of Labor & Industry, Nov. 2009).
Tips: Train managers in the appropriate way to evaluate an employee, by describing any performance deficiencies objectively and without use of labels relating to their age or assumptions about their physical condition. If, after observing an employee having difficulty on the job, you have concerns over the employee’s physical condition, the Americans with Disabilities Act (ADA) permits you to seek a professional medical opinion. Contact your Vigilant staff representative for assistance.
OREGON: Gag rule being challenged by Oregon businesses
Oregon’s new “employer gag rule,” which went into effect on January 1, 2010, is being challenged by Oregon business groups who say it violates free speech rights and is preempted by the National Labor Relations Act. The new law prohibits employers from requiring attendance at meetings where the employer’s views about politics, religion or unions will be discussed. Oregon business groups filed a lawsuit in federal court seeking to block the law and Vigilant will keep you updated as the case progresses. In the meantime, we recommend you comply with the new requirements, including posting a notice of employee rights in your workplace. The government will not be creating a model notice, so we recommend you simply post a copy of the law (2009 Or Laws Ch 658). For more information, contact your Vigilant staff representative.
WASHINGTON: Workers’ comp funding in jeopardy
Based on a State Auditors report released December 28, 2009, the Washington Department of Labor and Industries (L&I) underestimated just how big the hole is in the workers’ compensation balance sheet.
An actuarial analysis prepared by Towers Perrin estimated the accident fund had a nearly 75 percent chance of insolvency within two years and an 89.5 percent chance of having its liabilities exceed its assets within five years. A 33 percent rate increase would be necessary in order to break even.
For the medical fund, which pays for medical care and related services, including some vocational rehabilitation, the analysis said there was a 3.9 percent probability of insolvency in two years, and 26.5 percent within five years. A 24.5 percent rate increase would be necessary to save that fund.
L&I is defending the findings because the fund that is being referred to is a surplus fund. Nevertheless the current pension and time loss duration trends and the State Auditor's findings are of serious concern. When L&I announced a 7.6 percent average rate increase, although a 19.4 percent increase was indicated, we were fearful about future rate stability and sustainability.
Now more than ever it is time for employers to be heard. Contact your Representatives in the state House of Representatives about tightening up the definition of occupational disease and allowing private workers' comp insurance carriers in our state. Encourage them to support a hearing on proposed House Bill 2950, which would authorize voluntary medical provider networks, permit voluntary settlement agreements, and redefine occupational diseases to only cover conditions that are primarily work-related. Washington state is one of only four states whose workers' comp insurance program is run by the state. Now is the time for employers to have more competitive options. If you need help locating your legislators, just enter your zip code at WashingtonBusinessVotes.com.
For more information, contact Nancy Dicus at 800-733-8620 or n.dicus@vigilantcounsel.org. Stay tuned for some regional informal roundtables in your area on this topic as well.
Can You Believe It!
The co-owner of a construction company in Hermantown, Minnesota, thought one of the guys working in a trench wasn’t doing his job right, so he “nudged” the worker with a backhoe. Not too surprisingly, the co-owner has been charged with second-degree assault (fortunately, the employee escaped with only bruises).
(Source: Minneapolis Star Tribune, Nov. 9, 2009)
Events, training classes and webinars
Our annual Washington Safety & Workers’ Comp Conference is coming to Everett in May. A five-class safety certificate series is starting up in Tigard, Oregon. Monthly classes on supervisory skills such as communications, conflict resolution and time management will be offered in Vancouver, Washington. Also, numerous webinars on employment-related topics are available for on-demand viewing.
UPCOMING EVENTS, TRAINING CLASSES AND WEBINARS:
Events:
2010 Washington Safety & Workers’ Comp Conference
May 13, Everett, WA
Join us for a full day of fresh and exciting ideas to help you manage your safety and workers’ comp program, as well as new ways to prevent injuries and reduce costs.
Training:
Don't see classes in your area? Contact Nicole Forward at n.forward@vigilantcounsel.org to request classes in your community.
Safety Certificate Series in Tigard, OR
Five safety classes in five months. To register, contact Nicole Forward at n.forward@vigilantcounsel.org or call 1-800-733-8620. Or, sign up for individual safety classes at $120 per person, per class (see listings below).
Principles of Safety Management
January 27, Tigard, OR
Legal Issues for Supervisors
February 11, Vancouver, WA
Safety Inspections
February 24, Tigard, OR
Communications Skills 101: Interpersonal Communications
March 11, Vancouver, WA
Investigating Accidents
March 31, Tigard, OR
Preventing Discrimination and Harassment
April 15, Vancouver, WA
Active Safety Leadership: Part 1 – Building a Positive Safety Culture
April 28, Tigard, OR
Conflict Resolution
May 13, Vancouver, WA
Active Safety Leadership: Part 2 – Enhancing Your Leadership Ability
May 26, Tigard, OR
Meaningful Meetings and Time Management: Getting the Most from Each Minute
June 10, Vancouver, WA
On-demand webinars:
Recent webinars are available as on-demand recordings that you can watch and listen to on your computer. Available titles range from $99 to $159. Contact Nicole Forward at n.forward@vigilantcounsel.org or call 1-800-733-8620 for information or to purchase any of our currently available titles:
ADA Amendments Act: Significant Changes for Employers
Addressing Harassment: Added Value Through Avoided Exposure
After the Layoff: Surviving the Stress
Avoid the Fine! Audit your I-9s
Background Checks: The Good the Bad and the Ugly
California Dreamin’ – Hiring and Terminating Employees in California
California Dreamin’ – Health and Safety
Employee Retention – Key Strategies for Reducing Turnover
FMLA: Sweeping Changes and Expanded Rights
Investigating Employee Complaints
Keeping Morale Up When the Business Cycle is Down
OSHA 300: Recordkeeping Basics and Recent Developments
Reasonable Accommodation: Understanding Your Legal Obligations
The Employee Free Choice Act
The New COBRA Requirements: What Employers Need to Know Now
Wage Withholding Basics (California, Oregon & Washington available)
Wage Withholding: Understanding Child and Spousal Support Orders
Wage Withholding: Handling IRS Tax Levies, Federal Garnishments and Bankruptcy
________________________________________
Vigilant Counsel is a publication of Vigilant, 6825 S.W. Sandburg St., Tigard, OR 97223, telephone 503-620-1710. © 2010 Vigilant. This publication presents general information in nontechnical language. Before applying this information to specific management decisions, consult legal counsel, or consult Vigilant staff in the following offices:
Everett, WA—425-349-4477
Spokane, WA—509-276-2277
Tigard, OR—503-620-1710
Eugene, OR—541-485-7296
Redding, CA—530-222-3500
Writers This Issue: Kristine Cienfuegos, Diane Weisheit, Karen Davis
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