August 2013 Newsletter
In this issue:
- FLSA: Can You Be Held Personally Liable?
- More Employers are Opting for High Deductible Health Plans (HDHPs)
- EEO-1 Reporting Deadline Nears
FLSA: Can You Be Held Personally Liable?
The United States 2nd Circuit Court of Appeals recently found the President & CEO of Gristedes Foods, a NYC-based chain of small supermarkets, to be personally liable as an employer under the Fair Labor Standards Act (FLSA) for the company's default on payment obligations under an overtime-settlement agreement.
The 2nd Circuit Court applied the following four-factor test to determine if the President and CEO was an employer under the "economic realities" of an employment relationship and whether the alleged employer:
- had the power to hire and fire employees
- supervised and controlled employees' work schedules or conditions of employment
- determined the rate and method of payment
- maintained employment records
Under the FLSA, the greater an individual's control, the more likely he can be held liable as an employer. Even if the individual does not constantly exercise operational control, the fact that he possesses such a level of control that his decisions directly affect the nature or conditions of employees' employment may be enough to create an employer-employee relationship.
In order to protect yourself and your company against FLSA lawsuits, take a proactive approach.
- Educate yourself on FLSA rules and regulations, what they mean, and how they impact your business.
- Decide where you are at risk. Review all of the pay bands in your company. Are they consistent per employee respective to each job category? Make sure to follow FLSA guidelines in regards to exempt and non-exempt distinction.
- Review pay practices and policies. How is overtime computed? Does it include production bonuses?
- Develop a regular system of reviewing and updating job descriptions. There is often a disconnect between what's on paper and what an employee is actually doing.
- Set up complaint policies and procedures. Employers usually have compliance programs for Title VII. Use the same or similar procedures for FLSA.
More Employers are Opting for High Deductible Health Plans (HDHPs)
Historically, one of the perks of working at a big company has been generous health benefits with modest out-of-pocket costs. However, small, mid-sized, and large companies alike are now offering their employees only one option: a plan with a relatively high deductible linked to a savings account for medical expenses.
According to the Kaiser Family Foundation, nearly 20% of all employer-covered workers were enrolled in an HDHP last year. This number has more than doubled since 2009. High Deductible Health Plans coupled with a Health Savings Account (HSA) are becoming increasingly popular with employers for a number of reasons.
It saves money. A higher deductible means a lower premium. Even though your out-of-pocket expenses might be more, the savings with an HDHP versus paying the premium of a traditional plan is considerable. Also consider the impact this may have on your workforce. Not only can both employees and employers contribute to the HSA, but the money is tax-free as long as it is used for medical expenses. This money then belongs to the employee even if he leaves the job! What a good attraction and retention tool.
Individuals are more conscious in choosing healthcare. Because employees may also have personal funds invested in the HSA, they are more likely to pay greater attention to health costs, avoid needless care, and shop for the best deal. An analysis done by the Robert J. Wood Foundation found that HDHPs can reduce healthcare spending by 5-14%. The reductions were mainly due to lower spending on prescription drugs and outpatient care.
Employers also need to education and inform their employees about High Deductible Health Plans and Health Savings Accounts. Since an individual will have more out-of-pocket costs, employees need to be given the tools to compare cost and quality in order to make good healthcare decisions.
EEO-1 Reporting Deadline Nears
The EEO-1 Form is a report filed with the Equal Employment Opportunity Commission, mandated by Title VII of the Civil Rights Act of 1967, as amended by the Equal Employment Opportunity Act of 1972. The Act mandates that employers report on the racial/ethnic and gender composition of their workforce by specific job categories.
All employers that are located in the 50 states and the District of Columbia and have at least 100 employees are required to file EEO-1 survey annually with the EEOC. Federal government contractors and first-tier subcontractors with 50 or more employees and at least $50,000 in contracts must file as well. If an employer has met that threshold at some point during the year, and especially during the third quarter, it would be wise to either file or seek legal guidance to determine compliance. Employment figures from any pay period in the third quarter (July through September) may be used. Reports must be filed by September 30th each year.
If you are currently an HRi client, we automatically perform this reporting and submit the forms to the EEOC on your behalf. If you are not a client of HRi and would like more information or have any questions or concerns, please contact Lorry Twisdale, Quality Manager at ltwisdale@hri-online or by phone at 443-321-7717.
Did You Know?
Our CFO, Tricia Stock, attended a two day SHRM seminar called HR Business Partner that focused on the primary skills that HR professionals need to have to become successful business partners in their organizations.
HR professionals have the opportunity to become more impactful in their organizations as HR moves towards a partnership role. To do this, strategic HR leaders say to focus on the following tasks:
- Build your skill as a strategic contributor
- Track metrics that managers value
- Ensure HR role is running smoothly
- Learn about the organization
- Ask: How can HR make a difference?
- Move away from the policing role!