February 2014 Newsletter
In this issue:
- 2013 W-2 Success
- Unused Vacation Days Take a Toll
- Most Common 401(k) Retirement Plan Match is....
- Amendment to the District of Columbia's Accrued Sick and Safe Leave Act of 2008
2013 W-2 Success
HRi successfully sent out approximately 4,000 W-2 forms this year. Copies were available online as of January 21st, 2014 and hard copies were mailed on January 20th, 2014.
If you need to access your W-2 online, please Click Here to log on to the HRi website. Click on the "Employee Self-Service Login" and enter your username and password.
Thank you to everyone for providing your information timely and efficiently. We could not have achieved these results without you!
Unused Vacation Days Take a Toll
Up to 94% of HR professionals think vacation is "extremely" or "very" important for reasons related to morale, wellness, performance and retention. Unfortunately, many full-time employees working for organizations who offer paid-vacation plans, fail to take all their days, which can negatively affect performance and morale, according to a survey by the Society for Human Resource Management (SHRM) in collaboration with and commissioned by the US Travel Association. Among the findings:
- Slightly more than half of organizations (55%) offer paid vacations, while the remaining 45% offer paid-time-off plans that combine vacation and sick days.
- New employees with one year of service receive an average of 11 paid vacation days.
- Overall, 61% of organizations report that, on average, employees have at least 3 unused vacation days each year.
- 62% of organizations let employees roll over vacation days – 54% allow limited rollover, and 8% provide unlimited rollover. 38% require employees to use all of their vacation days each year or lose them.
As an employer, there are a few steps to take to ensure your workforce is taking advantage of this benefit:
- Monitor employee's vacation time. If people are not taking time, find out why.
- Make sure the vacation policy fits your culture and is applied accurately and fairly.
- Encourage people to use their time and ensure there is no stigma around requesting vacation.
Most Common 401(k) Retirement Plan Match
According to Aon Hewitt's 2013 Trends & Experience in Defined Contribution Plans survey, 77% of respondents say 401(k) plans are the No. 1 way workers save for retirement. Plan sponsors made a significant shift in defining success for their plans this year, saying successful plans are ones that help workers save enough, as opposed to 2011's top response citing high participation rates.
Many plan sponsors are taking aggressive steps to help workers become better savers for retirement. Today, the most common match is dollar-for-dollar on the first 6% workers save in their 401(k) plans.
Employers today are simplifying and strengthening plans to help workers get the most out of their accounts. Some of the changes include:
- Relaxing eligibility requirements: For years, workers had to wait a year or more before being allowed to join their 401(k) plans. In 2013, more than 75% of plan sponsors allow workers to participate right away.
- Simplifying investment choices: Today 86% of plans surveyed offer target-date funds — investments that automatically become more conservative as the investor nears retirement.
- Offering savings education and advice: Three out of four employers surveyed are helping employees understand their plans better by offering outside investment advisory services. Nearly 60% have one-on-one financial counseling, 55% use online guidance, and 52% offer managed accounts
- Other areas of focus include increasing the availability of tax-savvy Roth 401(k) accounts and decreasing the reliance on company stock.
Amendments to the District of Columbia's Accrued Sick and Safe Leave Act of 2008
Since 2008, the District of Columbia's Accrued Sick and Safe Leave Act (ASSLA) has required DC employers to provide employees with paid leave:
- to care for themselves or their family members, and
- for work absences associated with domestic violence or abuse
Specifically, ASSLA provides workers with the ability to earn and take from three to up to seven days of covered paid sick leave each year, depending on the size of the employer:
- 7 days per year for employers with 100 or more employees
- 5 days per year for employers with 25 - 99 employees
- 3 days per year for employers with 24 or less employees
On January 2, 2014, Mayor Vincent C. Gray signed the Earned Sick and Safe Leave Amendment Act of 2013 (Amendment), which significantly amends ASSLA. In particular, the Amendment:
- provides for immediate accrual of leave and availability for use after 90 days
- includes tipped restaurant and bar employees
- changes the provisions on retention of accrued leave
- broadens retaliation protections
- creates new record-keeping requirements, and
- adds new enforcement and penalty provisions, particularly private civil actions and recovery of attorney's fees
The Amendment is expected to take effect in mid-February. Click here for more information on each provision.
What HRi Clients Should Know
We are currently reviewing your leave policies to ensure compliance with the specific requirements of the amended ASSLA. If necessary, we will update your leave policy, per your approval to:
- provide a sufficient number of paid covered hours of leave
- provide that covered leave begins accruing when the employee starts work and can be used after 90 days of employment
- make sure that your policies address whether (and to what extent) covered leave can be carried over to the following year and clearly state that covered leave is not paid out on termination
- ensure that your policy and/or practice also follows ASSLA's new requirements for maintaining or restoring accrued leave for employees who transfer to other positions or who leave employment and are rehired within a year
- ensure that your anti-retaliation policy conforms to the Amendment, if applicable
Did You Know?
Our 401(k) Administrator, Alison Lalla, attended the Annual Slavic 401(k) Compliance Course in Boca Raton, FL on February 5th and 6th.
The course covered many topics including:
- Use of Forfeiture Funds. Attendees reviewed Revenue Ruling 84-156 which states "forfeitures may be used to pay for administration expenses and/or future employer contributions to a 401(k) plan."
- Plan Mergers. This topic focused on the length of time it typically takes when merging plans, what to expect during blackout periods, and how to explain the transition to plan participants.
- Non-Discrimination Testing. During this session, attendees reviewed ACP/ADP tests as the tests determine whether the highly compensated employees are benefiting more than the non-highly compensated employees and how the determination is calculated.