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VIGILANT COUNSEL NEWSLETTER – February 18, 2010
02-22-2010 |
 Medicaid/CHIP premium assistance resources: new notice available
The U.S. Department of Labor (DOL) recently issued a model notice for employers to use in notifying employees about group health plan premium assistance available under state Medicaid programs or the Children’s Health Insurance Program (CHIP), as required by the Children’s Health Insurance Program Reauthorization Act of 2009. Employers must give the notice to all employees, regardless of whether they are enrolled in the health plan, if the employee resides in a state in which Medicaid or CHIP premium assistance is available. California, Idaho, Montana, Oregon and Washington all have these kinds of premium assistance programs. The notice must be given to all employees by the later of: the first day of the first plan year after February 4, 2010 or May 1, 2010, and annually thereafter.
No overtime exemption for helicopter pilots
Helicopter pilots must be paid overtime, or at least that’s what the U.S. Third Circuit Court of Appeals says. The Port Authority of New York and New Jersey have considered their helicopter pilots exempt from overtime under the learned professional category of the federal Fair Labor and Standards Act (FLSA). In order to qualify as a learned professional, an employee must primarily perform work that requires advanced knowledge in a field of science or learning, which is normally acquired through an advanced degree. While helicopter pilots are undoubtedly highly skilled, and undergo vigorous training and supervision in order to obtain their certifications, there is no requirement that they possess an advanced degree. Their knowledge is obtained through skills-based education, not intellectual academic instruction, and, according to the court, that means helicopter pilots do not qualify as learned professionals under the FLSA (Pignataro v. Port Authority of New York and New Jersey, 3rd Cir, Jan. 2010).
To learn more about overtime exemptions under the FLSA, check out our Legal Guide, “When Is an Employee Exempt Under Federal Law?” (1052).
Employers face COBRA subsidy transition issues
Question: A former employee on COBRA, who exhausted his nine months of COBRA subsidy on November 30, 2009, dropped his spouse’s coverage at our December open enrollment and switched to a less expensive plan. Now that he has been notified that he’s entitled to six more months of COBRA subsidy he wants to go back to the coverage that he and his spouse had. Do we have to allow him to switch back?
Answer: The Department of Labor (DOL) says yes. Informally, the DOL has stated that you must allow an assistance eligible individual (AEI) to go back to the coverage he would have had, had he known about the recent subsidy extension that was part of the Department of Defense Appropriations Act, 2010. This AEI and his spouse are also entitled to extra time to pay those retroactive premiums. For more information, see Vigilant’s Legal Guide, “COBRA Provisions of the American Recovery and Reinvestment Act of 2009” (6015). And stay tuned for more on the COBRA subsidy—there is legislation introduced in Congress that, if passed, would extend the COBRA subsidy eligibility and would create more transition and notice issues. Vigilant will keep members informed.
Spotlight on Safety: Learn to embrace incident investigation
When done correctly, investigations can be used to identify deficiencies that adversely affect not only safety but also efficiency, quality, and the work environment as a whole. Sadly, a large percentage of investigations are so superficial that they risk being completely useless because real causes are never identified. Good investigations involve more than simply filling out a form; they provide the basis for deciding the likelihood of recurrence and the potential for major loss. Investigations don’t need to take a lot of time when investigators are trained and know what they’re doing. With the right investigation process, managers, supervisors and employees will have confidence in their ability to identify real workplace risks that exist due to substandard work practices and conditions.
Learn to take advantage of opportunities that present themselves when workplace mishaps occur. Call your Vigilant safety professional for help or check out our Investigating Accidents class, which teaches how to identify real accident causes, and develop action-oriented prevention methods in a quick and timely fashion.
New tax self-reporting obligation for health plans
Under recently finalized IRS regulations, employers who maintain ERISA-covered group health plans must self-report excise taxes that are owed to the IRS due to failure to comply with laws such as COBRA, HIPAA, and other federal laws affecting group health plans (74 Fed Reg 45994, Sept. 8, 2009). This self-reporting obligation went into effect on January 1, 2010. Previously, there was no way for plans to self-report excise tax liabilities and the IRS rarely assessed excise taxes for failures discovered during an audit. Now, failure to self-report excise taxes owed will result in IRS penalties and interest. This new reporting requirement makes it more important than ever to make sure that your plans are in compliance with federal law. Contact your health plan advisor with questions.
CALIFORNIA: New guidance on California WARN Act
A faltering printing company mistakenly believed that, since they were trying to find a buyer, they didn’t need to give employees 60 days’ notice before closing their doors. The California Department of Industrial Relations (DIR) set the record straight in a recently issued opinion letter. Much like the federal Worker Adjustment and Retraining Notification Act (WARN Act), if an employer is covered under the California WARN Act it must give employees 60 days’ notice before conducting a mass layoff or closing an operation. But the employer is excused from giving the notice if it’s actively seeking capital or business that would stop the need to conduct a plant closure. Although the printing company had been trying to find a buyer for the business, the DIR determined that it wasn’t excused from giving the notice because finding a buyer is different from seeking new capital or business. Finding new capital or business would mean the doors would have stayed open and employees would have presumably kept their jobs, but finding a new owner doesn’t necessarily mean the same thing (DIR letter to Puneet Sandhu re: Insync Marketing Solutions, LLC, Jan. 4, 2010).
Tips: Both the California and federal WARN Acts are tricky to understand and even trickier to apply in real life situations. If your company is facing a mass layoff or sale of the business, call your Vigilant staff representative for assistance. See the California section in our Legal Guide: “WARN Act: Mass Layoff or Plant Closure” (1709).
CALIFORNIA: Partial-day leave bank deductions under four hours are OK
Employers may deduct from exempt employees’ leave banks for partial-day absences, even when the absence is less than four hours, according to an opinion letter from the California Division of Labor Standards Enforcement (DLSE). The letter is a reversal of the DLSE’s previous position, and will allow employers greater latitude in deducting from paid leave banks.
As a general rule, one of the requirements for ensuring that an employee is exempt from overtime is to pay a uniform salary, regardless of variations in quantity or quality of work. If an exempt employee works part of a day, then normally you must pay the full salary. With the right policies in place, however, you’re allowed to use banked sick leave or vacation hours to pay for the missed time. The DLSE previously limited such use of leave banks to partial-day absences of four hours or more, but the new opinion letter brings California in line with federal law (DLSE Opinion Letter 2009.11.23). For more information, see our Legal Guide, “Salary Basis Test for Overtime Exemptions” (1219).
WASHINGTON: Employers can access driving records for business purpose
Washington employers should be aware that they have the right to ask the state Department of Licensing for the driving records of applicants or employees who will be driving as part of their job duties. Legislation that took effect on July 26, 2009, allows employers to request a driving record abstract as long as it is for employment purposes related to driving at the employer’s direction. Previously, insurance carriers could obtain such information, but employers couldn’t do so unless the job involved transporting children under 18, adults over 65, or people with disabilities (2009 Wash Laws Ch. 276). If some of your workers drive company vehicles, you should review our Model Policy, “Use of Company Vehicles” (3301).
Can You Believe It!
A finance director who stole nearly $30,000 from the safe at the car dealership where he worked tried to argue that he shouldn’t be convicted of embezzlement because he only took the money to get a salesman fired, not because he planned to keep it. The salesman tried to stuff a fat envelope of cash and checks into the slot of the company safe, but it got stuck. He asked the finance director to keep an eye on it while he went to get some smaller envelopes. When he came back, the finance director said the envelope had dropped into the safe on its own. It took a couple of weeks for the employer to track down the missing money, but ultimately it was the finance director, not the salesman, who was fired. A California appeals court later affirmed his conviction for embezzlement (People v. Sisuphan, Cal App, Jan. 2010).
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UPCOMING EVENTS, TRAINING CLASSES AND WEBINARS:
To register for class contact Nicole Forward at n.forward@vigilantcounsel.org or call 1-800-733-8620.
Events:
2010 Vigilant 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.
Customer Service Skills
February 24, Everett, WA
March 18, Bellingham, 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.
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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, Joe Angyus
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