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Rick Rossignol

Violations of FSLA Cost Employers

Posted by & filed under BLOG, Fair Labor Standards Act, Human Resources, Wage and Hour Compliance.

The Fair Labor Standards Act (FLSA) and state wage and hour laws generally require employers to pay employees a minimum hourly wage and overtime for working more than 40 hours a week. These statutes also classify workers who are required to receive overtime pay. Cases in which hourly employees claim they were not paid properly, including for overtime or tips, have increased in recent years. Most of the claims involve mis classifieds employees as exempt from the FLSA. Major settlements went up in 2012 from the previous year, with the top 10 settlements totaling $292 million, up from $221 million in 2011. The number of FLSA lawsuits have nearly quadrupled, to 7,064 in 2012. Getting employee classification right saves the employer time and money.

Insurance companies are limiting their coverage of wage and hour violations because their experience has been costly.
Violations of FSLA require employers to pay “liquidated” damages and interest as well as unpaid wages. Defending and paying wage and hour claims is not cheap.

What is Human Resources Role in the Company?

Posted by & filed under BLOG, Human Resources, Talent Management.

Human Resources means different things to employees… Because each employee’s experience with Human Resources is different. HR can be the person helping employees and bring new employees into the organization or they can be the last person employees see on their way out the door. HR has to be professional and be helpful in every situation, the organization is going to go through growth, as well as shrinking. In the last few years as organizations are focused on the bottom line and figuring out the most effective use of manpower. Companies have to make tough choices. And some of those will undoubtedly involve their employees. When that happens, it’s critically important for both morale and talent retention to evaluate everyone on your team as individual contributors–not line items on a spreadsheet, percentages, or some predetermined dollar amount.
Instead of focusing solely on “the numbers,” companies must take a more holistic approach to broader staffing issues by looking at 360 feedback, performance reviews, and the impact those changes will have on specific departments and the organization based on each individual.

In a healthy economic period, Human resources are focused on attracting and retaining talent. The companies that understand that talent wins the game work on providing a healthy work environment, opportunities for career and professional growth, and a “human” approach to the way organizations think about staffing. Employers work on branding themselves an employer of choice. We’re all free agents. Don’t let anyone tell you differently. In a corporate environment where employees are seen as resources, you have no choice but to think of yourself that way.

Meal Periods in California

Posted by & filed under BLOG, Fair Labor Standards Act, Human Resources, Wage and Hour Compliance.

Employers need to provide employees with meal periods. Not only should we provide them with a written policy to follow, but we should also meet with them and explain the policy. Getting it right is a shared responsibility of both the employer and the employees. You are creating the working relationship both sides will benefit from understanding their roles. The goal is creating an environment of good faith and fair dealing. That only happens by mutual understanding. Below is the employer’s responsibility for providing meal periods.

Meal periods

Revised 7/11/2012

In California, an employer may not employ an employee for a work period of more than five hours per day without providing the employee with a meal period of not less than thirty minutes, except that if the total work period per day of the employee is no more than six hours, the meal period may be waived by mutual consent of both the employer and employee. A second meal period of not less than thirty minutes is required if an employee works more than ten hours per day, except that if the total hours worked is no more than 12 hours, the second meal period may be waived by mutual consent of the employer and employee only if the first meal period was not waived. Labor Code Section 512. There is an exception for employees in the motion picture industry, however, as they may work no longer than six hours without a meal period of not less than 30 minutes, nor more than one hour. And a subsequent meal period must be called not later than six hours after the termination of the preceding meal period.IWC Order 12-2001, Section 11(A)

Unless the employee is relieved of all duty during his or her thirty-minute meal period, the meal period shall be considered an “on duty” meal period that is counted as hours worked which must be compensated at the employee’s regular rate of pay. An “on duty” meal period shall be permitted only when the nature of the work prevents an employee from being relieved of all duty and when by written agreement between the employer and employee an on-the-job paid meal period is agreed to. The written agreement must state that the employee may, in writing, revoke the agreement at any time. IWC Orders 1 -15, Section 11, Order 16, Section 10. The test of whether the nature of the work prevents an employee from being relieved of all duty is an objective one. An employer and employee may not agree to an on-duty meal period unless, based on objective criteria, any employee would be prevented from being relieved of all duty based on the necessary job duties. Some examples of jobs that fit this category are a sole worker in a coffee kiosk, a sole worker in an all-night convenience store, and a security guard stationed alone at a remote site.

If the employer requires the employee to remain at the worksite or facility during the meal period, the meal period must be paid. This is true even where the employee is relieved of all work duties during the meal period. Bono Enterprises, In. v. Bradshaw (1995) 32 Cal.App.4th 968.

If an employer fails to provide an employee a meal period in accordance with an applicable IWC Order, the employer must pay one additional hour of pay at the employee’s regular rate of pay for each workday that the meal period is not provided. IWC Orders and Labor Code Section 226.7 This additional hour is not counted as hours worked for purposes of overtime calculations.

In all places where employees are required to eat on the premises, a suitable place for that purpose must be designated. This requirement does not, however, apply to employees covered by IWC Order 16-2001, on-site occupations in the construction, drilling, logging and mining industries. For employees covered by IWC Order 16-2001, the employer must provide an adequate supply of potable water, soap, or other suitable cleansing agent and single-use towels for handwashing.

Under all of the IWC Orders except Orders 12, 14, 15, and 16-2001, if a meal period occurs on a shift beginning or ending at or between the hours of 10 p.m. and 6 a.m., facilities must be available for securing hot food and drink or for heating food or drink, and a suitable sheltered place must be provided in which to consume such food or drink. Under IWC Order 12-2001 for employees in the motion picture industry, hot meals and hot drinks must be provided for employees who are required to work after 12 o’clock midnight, except off-production employees regularly scheduled to work after midnight.

 

1. Q. What are the basic requirements for meal periods under California law?
A. Under California law (IWC Orders and Labor Code Section 512), employees must be provided with no less than a thirty-minute meal period when the work period is more than five hours (more than six hours for employees in the motion picture industry covered by IWC Order 12-2001).Unless the employee is relieved of all duty during the entire thirty-minute meal period and is free to leave the employer’s premises, the meal period shall be considered “on duty,” counted as hours worked, and paid for at the employee’s regular rate of pay. An “on duty” meal period will be permitted only when the nature of the work prevents the employee from being relieved of all duty and when by written agreement between the employer and employee an on-the-job meal period is agreed to. The test of whether the nature of the work prevents an employee from being relieved of all duty is an objective one. An employer and employee may not agree to an on-duty meal period unless, based on objective criteria, any employee would be prevented from being relieved of all duty based on the necessary job duties. Some examples of jobs that fit this category are a sole worker in a coffee kiosk, a sole worker in an all-night convenience store, and a security guard stationed alone at a remote site.
2. Q. How does an employer satisfy its obligation to provide a meal period according to the law?
A. An employer is not required to ensure that no work is performed.  However, an employer must do more than simply make a meal period “available.”  In general, to satisfy its obligation to provide a meal period, an employer must actually relieve employees of all duty, relinquish control over their activities, permit them a reasonable opportunity to take an uninterrupted 30-minute break (in which they are free to come and go as they please), and must not impede or discourage employees from taking their meal period.  (For employees in the health care industry covered by IWC Orders 4 or 5, however, minor exceptions exist as to the employee’s right to leave the employment premises during an off-duty meal period.)  Employers may not undermine a formal policy of providing meal periods by pressuring employees to perform their duties in ways that omit breaks (e.g., through a scheduling policy that makes taking breaks extremely difficult).  As the California Supreme Court has noted, “The wage orders and governing statute do not countenance an employer’s exerting coercion against the taking of, creating incentives to forego, or otherwise encouraging the skipping of legally protected breaks.”  Which particular facts in any given case will satisfy the employer’s obligation to provide bona relief from all duty may vary from industry to industry.  See Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004.
3. Q. What are the timing requirements for when any required first or second meal period must be provided during the workday?
A. In general, when an employee works for a work period of more than five hours, a meal period must be provided no later than the end of the employee’s fifth hour of work (in other words, no later than the start of the employee’s sixth hour of work).  When an employee works for a period of more than 10 hours, a second meal period must be provided no later than the end of the employee’s tenth hour of work (in other words, no later than the start of the employee’s eleventh hour of work).  The foregoing rules are subject to certain waivers by mutual consent (as explained above), and different rules apply to employees in the motion picture industry.  See Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004.
4. Q. My employer is not allowing me to take a meal period. Is there anything I can do about this situation?
A. Yes, there is something you can do if you are covered by the meal period requirements of the law. If your employer fails to provide the required meal period, you are to be paid one hour of pay at your regular rate of compensation (this is referred to as meal period premium pay) for each workday that the meal period is not provided. If your employer fails to pay the additional one-hour’s pay, you mayfile a wage claim with the Division of Labor Standards Enforcement.
5. Q. If there is bona fide relief from all duty during a meal period and the employer relinquishes all control over the employee’s activities, but the employee then freely chooses to continue working, is the employer liable for meal period premium pay?
A. No, the employer would not be liable for meal period premium pay where there is bona fide relief from duty and relinquishment of employer control (and no discouragement or coercion from the employer against taking the meal period).  However, in this circumstance, an employer that knows or has reason to know an employee is performing work during the meal period owes compensation to the employee for the time worked (including any overtime hours that have accrued as a result of working through the meal period).  See Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004.
6. Q. Is it permissible if I choose to work through my meal period so that I can leave my job 30 minutes early?
A. No, working through your meal period does not entitle you to leave work early prior to your scheduled quitting time. In order for an “on duty” meal period to be permitted under the Industrial Welfare Commission Wage Orders, the nature of the work must actually prevent the employee from being relieved of all duty, and there must be a written agreement that an on-the-job paid meal period is agreed to. Additionally, the written agreement must also state that the employee may, in writing, revoke the agreement at any time.
7. Q. Can my employer require that I stay on its premises during my meal period?
A. Yes, your employer can require that you remain on its premises during your meal period, even if you are relieved of all work duties. However if that occurs, you are being denied your time for your own purposes and in effect remain under the employer’s control and thus, the meal period must be paid. Minor exceptions to this general rule exist under IWC Order 5-2001 regarding healthcare workers. Pursuant to the Industrial Welfare Commission Wage Orders, if you are required to eat on the premises, a suitable place for that purpose must be designated. “Suitable” means a sheltered place with facilities available for securing hot food and drink or for heating food or drink, and for consuming such food and drink.
8. Q. I regularly work an eight-hour shift. What can I do if my employer doesn’t provide me with a meal period?
A. You can either file a wage claim with the Division of Labor Standards Enforcement (the Labor Commissioner’s Office), or you can file a lawsuit in court against your employer to recover the premium of one additional hour of pay at your regular rate of compensation for each workday that the meal period is not provided.
9. Q. What is the applicable statute of limitations on filing a meal period claim?
A. In the case of Murphy v. Cole, the California Supreme Court held that the remedy for meal and rest period violations of “one additional hour of pay” under Labor Code section 226.7 is a wage subject to a three-year statute of limitations. Accordingly, a claim must be filed within three (3) years of the alleged meal period violation. See attached Division memoranda regarding the Court’s decision.
10. Q. What is the procedure that is followed after I file a wage claim?
A. After your claim is completed and filed with a local office of the Division of Labor Standards Enforcement (DLSE), it will be assigned to a Deputy Labor Commissioner who will determine, based upon the circumstances of the claim and information presented, how best to proceed. Initial action taken regarding the claim can be referral to a conference or hearing, or dismissal of the claim.If the decision is to hold a conference, the parties will be notified by mail of the date, time and place of the conference. The purpose of the conference is to determine the validity of the claim, and to see if the claim can be resolved without a hearing. If the claim is not resolved at the conference, the next step usually is to refer the matter to a hearing or dismiss it for lack of evidence.

At the hearing the parties and witnesses testify under oath, and the proceeding is recorded. After the hearing, an Order, Decision, or Award (ODA) of the Labor Commissioner will be served on the parties.

Either party may appeal the ODA to a civil court of competent jurisdiction. The court will set the matter for trial, with each party having the opportunity to present evidence and witnesses. The evidence and testimony presented at the Labor Commissioner’s hearing will not be the basis for the court’s decision. In the case of an appeal by the employer, DLSE may represent an employee who is financially unable to afford counsel in the court proceeding.

See the Policies and Procedures of Wage Claim Processing pamphlet for more detail on the wage claim procedure.
11. Q. What can I do if I prevail at the hearing and the employer doesn’t pay or appeal the Order, Decision, or Award?
A. When the Order, Decision, or Award (ODA) is in the employee’s favor and there is no appeal, and the employer does not pay the ODA, the Division of Labor Standards Enforcement (DLSE) will have the court enter the ODA as a judgment against the employer. This judgment has the same force and effect as any other money judgment entered by the court. Consequently, you may either try to collect the judgment yourself or you can assign it to DLSE.
12. Q. What can I do if my employer retaliates against me because I asked him why we don’t get a meal period?
A. If your employer discriminates or retaliates against you in any manner whatsoever, for example, he discharges you because you ask about not getting a meal period, object to what you believe to be an illegal practice, or because you file a claim or threaten to file a claim with the Labor Commissioner, you can file a discrimination/retaliation complaint with the Labor Commissioner’s Office. In the alternative, you can file a lawsuit in court against your employer.

Tax Credits for Employers

Posted by & filed under BLOG, Human Resources, Talent Management.

As the economy heats up, so does the demand and competition for talent. There are a couple of programs employers can take advantage of and get tax credits as well as adding talent to their workforce. Need help finding the talent Your local Employment Development Department has a Veterans Rep that can help you find qualified veteran.

This is the link for The Disabled Access Credit http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Tax-Benefits-for-Businesses-Who-Have-Employees-with-Disabilities

 

Common 401k Mistakes

Posted by & filed under 401K, BLOG.

Here is a quick list of mistakes that employers make on their 401k plans.

COMMON COMPLIANCE ERRORS

This list, along with more detailed information on examination trends located on the IRS website can be used by plan sponsors to identify compliance risks in their own plans.

  • Missing plan document amendments
  • Not using the plan’s definition of compensation
  • Excluding eligible employees
  • Violating the plan’s loan provisions
  • Exceeding annual contribution limits
  • Failing nondiscrimination tests
  • Not making the required contribution in a top-heavy plan
  • Not following the plan’s formula for allocating plan contributions
  • Impermissible in-service or hardship distributions
  • Not making required minimum distributions (RMDs)

Another project that plan sponsors should anticipate in the coming months is further analysis and follow-up on the 401(k) Compliance Project conducted by the Employee Plans Compliance Unit. Initially launched in May 2010, this project required 1,200 randomly selected 401(k) plans to complete a lengthy questionnaire. The IRS is using the responses to gauge the overall compliance level in 401(k) plans and identify ways in which it can best use its resources to provide additional support and improve compliance.

In early 2012, the IRS published an interim report summarizing findings from the questionnaire responses. A copy of the interim report is available at www. irs.gov/Retirement-Plans/401(k)- Compliance-Check-Questionnaire- Interim-Report. The IRS will continue to analyze the data received as part of this project and will release a final report that can be used by plan sponsors to help identify and prevent common 401(k) plan compliance mistakes. The IRS has made it clear that overall plan compliance will continue to be a priority and encourages plan sponsors to use the original 401(k) questionnaire —available at http://www.irs.gov/pub/irs-tege/epcu_401k_ questionnaire.pdf — as an internal control tool for evaluating their own plan.

Another ongoing IRS enforcement initiative is the Learn, Educate, Self-Correct, and Enforce (LESE) examination project. The IRS uses the LESE examinations to assess compliance levels for randomly selected retirement plans with similar characteristics that they believe may reveal common problems. Examples of recent LESE examinations include topheavy 401(k) plans that failed to make the required contribution and plans that exceeded the annual additions limit.

Given the success of these targeted examinations, they will likely continue as part of the IRS’s enforcement initiatives. Plan sponsors who regularly self-audit their plans and use IRS outreach programs to keep their plans on course can avoid or reduce potential penalties for noncompliance. The IRS has developed self-audit and self-correction tools to aid in plan sponsors’ voluntary compliance efforts.

The DOL, through its Employee Benefits Security Administration, is responsible for enforcing the fiduciary rules and participant protections set forth in the Employee Retirement Income Security Act of 1974 (ERISA). Under its authority to both issue regulatory guidance and enforce these rules, the DOL has been extremely active. Examples of current projects include the fee transparency rules that became effective during 2012 and ongoing efforts to ensure timely deposits of employee contributions.

Plan sponsors have undoubtedly spent a great deal of time over the past year interpreting and complying with the DOL’s fee disclosure requirements. It is not unreasonable to think that compliance with these new rules will be a DOL audit and enforcement focus over the next few years.

Plan sponsors should assess their current process for collecting and analyzing the required service provider information to ensure they can withstand DOL scrutiny. Plan sponsors may find it helpful to work with their plan advisors to ensure they have properly identified all covered service providers who should be providing fee disclosure notices—and ensure they are using an appropriate, disciplined process for reviewing the information. Plan sponsors should also ensure that all participant fee disclosures contain the required information and will be delivered in a timely manner. As with other fiduciary functions, plan sponsors should maintain records of the steps taken to satisfy their responsibilities under the fee disclosure regulations.

Plan sponsors may also find it helpful to tap into some of the support materials developed by the DOL and others to help them understand and comply with the new service provider fee disclosure requirements. A few specific resources from the DOL include:

Healthcare cost in 2013

Posted by & filed under BLOG, Human Resources, Wage and Hour Compliance.

Here are some figures Buck Consultants put together after surveying 123 insurers and plan administrators nationwide: Preferred Provider Organization (PPO) costs are projected to increase 9.7% in the first half of 2013

High-Deductible Health Plan (HDHP) costs are expected to rise by 9.6% Point-of-Service (POS) plan costs are projected to increase by 9.5%, and

Health Maintenance Organization (HMO) costs are expected to rise by 9.3%.

Questions remain: Employers need to figure out how they are going to pay for the increases in Healthcare. Do they split the cost with employees? They need to develop their compensation and benefits strategy. Look at their turnover and figure out to keep their talent.

Minimum Wage rates go up in 2013

Posted by & filed under BLOG, Fair Labor Standards Act, Human Resources, Wage and Hour Compliance.

Because of changes in employment law, and minimum wages, the employer needs to review their exempt employees to make sure they still meet the salary test to be exempt. Below is a quick summary of the Federal, California, and the 13 states that have rates above the federal rates. Keep in mind in CA the salary test is 2 times the minimum wage. SF and SJ are going to be higher based on their minimum wage.

 

2013 SEES RISE IN MINIMUM WAGES

 

To be exempt from FSLA employee have to meet the salary test. Which is tied to the minimum wage. Employers should review compensation rates for both exempt and nonexempt employees, to ensure compliance with current legal thresholds. Set forth below are rates at the federal level, and for the states and localities that exceed federal levels for the most common job categories.

 

FEDERAL MINIMUM COMPENSATION CALIFORNIA
Nonexempt $7.25/hour $8.00/hour
San Francisco $10.55/hour (an increase from 2012)
San Jose $10.00/hour (effective approximately Feb./Mar. 2013)
Executive Professional or Administrative $1971.66 monthly on a salary basis $2,773.33/month on a salary basis
Computer $27.63/hour $39.90/hour, $6,927.75/month or $83,132.93/year (increase from 2012)
Highly Compensated $100,000 total compensation (including minimum $455 minimum weekly salary or fee) not in CA
Licensed practicing Medical Doctor or Attorney; Teacher None $72.70/hour (an increase from 2012)
Outside Sales None
In the following jurisdictions, rates higher than the federal rates prevail.
ALASKA Nonexempt $7.75/hour
ARIZONA Nonexempt $7.80/hour (an increase from 2012)
COLORADO Nonexempt $7.78/hour (an increase from 2012)
CONNECTICUT Nonexempt $8.25/hour
FLORIDA Nonexempt $7.79/hour (an increase from 2012)
ILLINOIS Nonexempt $8.25/hour (increase currently under consideration)
MAINE Nonexempt $7.50/hour
MASSACHUSETTS Nonexempt $8.00/hour
MICHIGAN Nonexempt $7.40/hour
MISSOURI Nonexempt $7.35/hour (an increase from 2012)
MONTANA Nonexempt $7.80/hour (an increase from 2012)
NEVADA Nonexempt $7.25/hour (if qualifying health benefits available)
$8.25/hour (all others) (increase may be announced in April 2013)
NEW JERSEY Nonexempt $7.25/hour (increase to $8.50/hour currently under consideration)
NEW MEXICO Nonexempt $7.50/hour
OHIO Nonexempt $7.85/hour (only for employers with gross revenue of ≥$288,000/yr) (increased from 2012)
OREGON Nonexempt $8.95/hour (an increase from 2012)
RHODE ISLAND Nonexempt $7.75/hour (an increase from 2012)
VERMONT Nonexempt $8.60/hour (an increase from 2012)
WASHINGTON, DC Nonexempt $8.25/hour
WASHINGTON STATE Nonexempt $9.19/hour (an increase from 2012)
Outside Sales Exemption guaranteed salary, commission, or fee