The HR Strategist: Bonus Issue - May 2015
In this issue:
- If an Employee Works on a Holiday, Must the Employer Provide Another Day Off?
- A Kickball Injury is a Workers' Compensation Claim?
- May is Mental Health Month
- Possible Changes to the ACA and the Full-Time Workweek Definition
- Did You Know?
The federal Fair Labor Standards Act (FLSA) does not require employers to provide additional pay or another day off to employees who work on a holiday.
However, some federal contractors may be required to do so under the McNamara-O'Hara Service Contract Act and the Davis-Bacon Act, which apply to construction contractors. Some employers also may be obligated to provide holiday benefits under state law or collective bargaining agreements. If not, holiday benefits may be provided at the employer's discretion.
To encourage employees to work on a holiday, as an employer, you can pay nonexempt employees one and a half times their regular rate of pay for holiday hours worked. Exempt employees typically have a guaranteed salary regardless of the number of days or hours worked. However, you may provide them with additional compensation for holiday work without jeopardizing their exempt status.
If you do elect to provide employees with another paid day off for working on a holiday, it is up to the you to decide whether the day must be taken during the same workweek, pay period, month, or quarter. Consider staffing and administrative issues when making that decision. Allowing the paid day off to be taken within a longer timeframe could result in tracking issues or in employees forgetting to take the day off and forfeiting it.
Whatever the decision, your policies should be clear in outlining the conditions of holiday benefits. For example, your policy should address the following questions:
- Who will be eligible?
- How will an employee be paid for working on a holiday?
- What happens when an employee is scheduled to be off on a holiday?
- If another paid day off is provided, when can it be taken and when would it be forfeited?
- What happens if an employee calls out of work when they were scheduled to work on a holiday?
- How are holidays handled when an employee works a compressed workweek or is on leave?
- Will employees be required to work the day before and the day after the holiday to be eligible for special pay or another day off?
The South Carolina Supreme Court recently ruled that injuries incurred by a man who organized a voluntary kickball game for fellow employees must be covered under workers' compensation.
The case, Whigham v. Jackson Dawson Communications, rested on the court's view that the man was "impliedly required" to attend the event because of his role in organizing it. The decision won't necessarily apply to other employees who were injured at an event where employees are encouraged – but not required – to attend. It does suggest, however, that employers should be aware that encouraging attendance may be regarded as an implied requirement.
Stephen Whigham, then the Director of Creative Solutions at Jackson Dawson Communications, came up with the idea of a company kickball game as a team-building event. He proposed the idea to his manager who not only supported and encouraged the idea, but also authorized him to spend $440 of company funds to rent a facility and buy t-shirts and snacks.
While playing, Whigham jumped to avoid being thrown out and landed awkwardly on his leg – shattering his tibia and fibula and had to have two surgeries. His doctor also told him he'd eventually need a knee replacement.
In South Carolina, one of three factors has to apply for an injury suffered during a recreational or social activity to be covered under workers' comp:
1. It occurred on work premises during a lunch or recreation period as a "regular incident of employment"
2. The employer expressly or impliedly required participation, or made the activity part of the service of an employee
3. The employer derived substantial direct benefit from the activity beyond the intangible value of improvement in employee health and morale
Whigham's initial claim for workers' compensation was denied and the decision was affirmed by the South Carolina Workers' Compensation Commission and later the South Carolina Court of Appeals.
However, Whigham argued that his injury qualified under two of criteria: participation was impliedly required and the employer derived benefit. Key to the case was whether Whigham's participation was truly voluntary – or impliedly required.
In its decision – reversing the earlier rulings, the court cited the testimony of Whigham's supervisor, who said that while attendance was not mandatory, he would have been "surprised and shocked" if Whigham had not attended after organizing the event. Additionally, Whigham's professional performance evaluations clearly reflected the kickball game was considered important.
According to the court's opinion, "The law is clear that when determining whether an employee is required to attend an event, a directive is not necessary if the employee is made to understand he is to take part in the affair."
The ruling also indicates that the court may not have been sympathetic to a workers' compensation claim by a line employee injured at the event, as Whigham's organization of the event and expected attendance as a manager "sets his participation apart from that of all the other employees."
The employer has asked the state high court for a re-hearing, but if the decision stands, employers should be aware that injuries at work-related events that are nominally voluntary may be compensable if there is an implied expectation of participation, especially for a manager who organized the event.
Mental Health Month has been observed since 1949 as a way to raise public awareness about mental health issues. Each year, organizations such as Mental Health America (MHA) and the National Alliance on Mental Illness (NAMI) promote Mental Health Month through public awareness media campaigns, events, and activities. Through sharing facts and dispelling misconceptions about mental health issues, supporters of Mental Health Month aim to reduce the stigma associated with mental illness.
Employers can spread the message about the importance of intervention to their workforce by downloading toolkits materials, which include fact sheets and handouts related to mental health, provided by MHA and NAMI. These materials include information on risk factors and warning signs for mental illness, the benefits of mental health screening, and where someone with a mental health issue can go to receive help.
One of the resources cited in the toolkits where someone with a mental health issue can get help are Employee Assistance Programs (EAPs). If your organization has an EAP, Mental Health Month is an ideal time to remind your employees of this valuable benefit. An early intervention program such as an EAP helps employees work through issues that are causing stress in their lives before they potentially cause problems on the job, thus benefiting employees and their supervisors and managers as well as the company.
Additionally, May is a good time to remind your supervisors and managers (or provide refresher training) about when and how to make an EAP referral to an employee who may be experiencing an issue. Remember to emphasize to your employees that use of an EAP is free and confidential. All counseling is kept confidential in accordance with federal and state laws and regulations. In order for any information to be disclosed about the counseling to management, the employee must give written permission, specifying what information can be disclosed and to whom.
Meanwhile, for an employer that wants to convey that they are committed to the well-being of its workers, posting or distributing these materials in the workplace during May would be a great way to send the message. Not only will it let your employees know that you are concerned about their mental well-being, but you will also be educating managers, supervisors, and co-workers who may know little about mental illness and how it can impact the performance of those who suffer from it.
Among the many changes to employment policy and practice initiated by the Affordable Care Act (ACA), perhaps none is currently as hotly contested as the definition of "full-time employee" and the correlating "workweek." Congress is considering amending the ACA to change what is considered a "workweek" from 30 hours to 40 hours.
When the ACA passed on March 23, 2010, a "full-time employee" was defined as a worker who performs, on average, at least 30 hours of service per week or 130 hours of service per month. "Hours of service" was defined to include not only hours worked but also hours accounted for by vacation time, holidays, time off due to illness or disability, jury duty, military duty, or leaves of absence.
On January 8, 2015, the House of Representatives passed the Save American Workers Act of 2015 (SAWA). For purposes of the employer mandate to provide minimum essential healthcare coverage, SAWA would effectively amend the Internal Revenue Code to define "full-time employee" as someone who performs, on average, at least 40 hours of service per week.
Moreover, SAWA would change the ACA's definition of "full-time employee" to an employee who "with respect to any month...is employed on average at least 40 hours of service per week." Further, "full-time equivalents" would be re-defined so that "an employer shall, in addition to the number of full-time employees for any month otherwise determined, include for such a month a number of full-time employees determined by dividing the aggregate number of hours of service of employees who are not full-time employees for the month by 174." If the changes are implemented, the number of full-time employees under the ACA would decrease, and many smaller companies that are on the cusp under the current definitions of full-time employees and full-time equivalents would be exempt from the law's provisions.
According to July 2014 Congressional Budget Office (CBO) estimates, if the ACA's definition of full-time is changed from 30 hours to 40 hours, the federal budget deficit would increase by $45.7 billion from 2015 to 2024 because of lost penalties and uncollectable taxes. The CBO has also predicted that the US economy will have the equivalent of 2.3 million fewer full-time workers by 2021, a loss that's three times higher than previous estimates, as employers continue to transition their workforces to more part-time employees to avoid the ACA mandates.
SAWA is now before the Senate Committee on Finance. The Senate is expected to review and make a decision on the legislation in the near future. However, President Obama has made it clear that he will veto any bill that changes the ACA's current definition of full-time employee.
On behalf of our clients, Human Resources inc. actively tracks any and all potentially changing guidelines under the ACA. Should an update to the legislation be released that affects your company specifically, we will contact you directly to discuss what changes need to be made to your policies and procedures.
Please meet Erin Roesler - one of our dedicated Client Services Specialists. Erin comes to us with a diverse background of payroll, benefits and Human Resources experience. She is the primary point of contact for a number of our clients and is responsible for payroll processing and benefits administration.
Here's a little information to get to know Erin better:
- Favorite color: Fuchsia
- Favorite book: The Sun Also Rises by Ernest Hemingway
- Favorite movie: Hitch
- Favorite sports team: Seattle Seahawks