In this issue:

• June is National Safety Month
• Are Your Unpaid Internships Legal?
• IRS Issues 2015 HSA Limits
• Baltimore City Council Vote to “Ban the Box”
• Maryland Governor Signs Minimum Wage Increase into Law
• Did You Know?

Are Your Unpaid Internships Legal?

It’s internship season, and once again there are lots of talented individuals willing to join your company for the summer – and many are willing to work for free. The question is, should you let them?

The short answer is: No – except in the rarest of situations – you shouldn’t let them work for free. Also, note that these guidelines apply to “for-profit” private sector employers only. If you are a government entity or a non-profit sector employer, unpaid internships are fair game.

The Department of Labor (DOL) is very clear; for an unpaid internship to be legal under the Fair Labor Standards Act (FLSA), it must meet the following six requirements:

1. The internship must offer training similar to that given in an educational environment; in other words, it should offer an experience and teachings similar to that of a school
2. The internship should benefit the intern only – not the business
3. The intern doesn’t replace regular employees, but instead works under their close supervision
4. The employer should derive no immediate benefit from the intern’s work, and on occasion may actually be hampered by the intern’s presence
5. The intern is not entitled to a job at the end of the internship
6. The intern understands that he or she is not entitled to wages

In the event interns are brought on as paid – even though temporary – employees, the FLSA’s minimum wage and overtime requirements will apply to them. According to the DOL:

“…if the interns are engaged in the operations of the employer or are performing productive work (for example, filing, performing other clerical work, or assisting customers), then the fact that they may be receiving some benefits in the form of a new skill or improved work habits will not exclude them from the FLSA’s minimum wage and overtime requirements because the employer benefits from the intern’s work.”

For more information, please visit the Department of Labor’s website.

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IRS Issues 2015 Health Savings Account Limits

On Wednesday, April 23, 2014, the IRS announced the cost-of-living increases applicable to Health Savings Accounts (HSAs) and high-deductible health plans (HDHPs) for 2015 in Revenue Procedure 2014-30.

The limits effective for the 2015 calendar year are:

• Self-Only: maximum annual HSA contribution for self-only HDHP coverage will increase from $3,300 to $3,350.
• Family: maximum annual HSA contribution for family HDHP coverage will increase from $6,550 to $6,650.
• The age 55 catch-up contribution continues to be $1,000.

The minimum HDHP deductible limit changes:

• Self-Only coverage increased from $1,250 to $1,300
• Family coverage increased from $2,500 to $2,600

The annual maximum for HDHP out-of-pocket expenses (deductibles, co-payments and other amounts but not premiums) will increase from $6,350 to $6,450 for self-only and for family coverage from $12,700 to $12,900.

If you have any questions about how this will affect your current HSA or health plan, please contact Chris Rutzebeck, Benefits Consultant at 443-321-7738 or chris@hri-online.com.

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Baltimore City Council Votes to “Ban the Box”

Bill 13-0301, titled “Ban the Box – Fair Criminal Records Screening Practices” passed the Baltimore City Council on April 28th, 2014 and is expected to go into effect 90 days after adoption.

Baltimore’s new law prohibits most employers from inquiring about applicants’ criminal background before making a conditional offer of employment. The bill’s sponsors claim the restrictions are needed to help Baltimore residents with criminal convictions obtain employment.

The bill applies to all Baltimore employers with 10 or more full-time employees in the City. It also covers contract, temporary, seasonal, and contingent workers as well as employees who work for a temporary agency or other employment agency.

Employers in Baltimore will be prohibited from inquiring about or taking adverse action against an applicant on the basis of an arrest or criminal accusation if the arrest or accusation isn’t pending and didn’t result in a conviction. It also restricts preliminary inquiries into applicants’ criminal records.

Before making a conditional job offer, an employer won’t be allowed to:

• Require an applicant to disclose his or her criminal record or reveal whether he or she has a criminal record
• Conduct a criminal record check
• Ask an applicant or others whether the applicant has a criminal record

Employers can reject an applicant with a criminal background as long as the information isn’t obtained before an interview or if federal or state law requires a criminal background check before hire. If an employer doesn’t interview an applicant, it can’t make an inquiry into or gather information about the applicant’s criminal record.

For more information, please see the latest resource guide from the National Employment Law Project.

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Maryland Governor Signs Minimum Wage Increase into Law

Governor Martin O’Malley signed legislation on May 5, 2014 that will gradually raise Maryland’s minimum wage to $10.10 an hour.

The minimum wage bill will begin raising the current $7.25 an hour minimum wage in January 2015. The Maryland law will phase in the increase, raising the minimum wage from its current $7.25 to $8.00 on January 1, 2015 and to $8.25 on July 1, 2015. Subsequent increases will bring it to $8.75 on July 1, 2016, $9.25 on July 1, 2017, and finally to $10.10 on July 1, 2018.

Maryland joins 21 other states that, along with the District of Columbia, have set a rate above the federal minimum wage.

If you have questions or concerns about how this new law may affect you and your business, please contact Michael Lanham, Client Services Manager, at 443-321-7726 or mlanham@hri-online.com.