Employers must know the rules for different kinds of work breaks

The Fair Labor Standards Act (FLSA) does not require employees (other than minors) receive any breaks, either paid or unpaid.  FLSA regulations outline only when breaks must be paid if they are offered at the employer’s discretion.

There is one exception with the implementation of the new federal Patient Protection & Affordable Care Act.  Under the FLSA, employers must now must provide nonexempt mothers with the time and space to express breast milk for one year after the birth of a child.  Few employers limit this right to nonexempt employees only, and many states have laws that that are stricter than the federal law.

The regulations divide breaks into two categories:  rest breaks and meal breaks.  In terms of payment, different rules apply depending on the type of break.

Rest breaks:  Regulations stipulate that an employer must pay workers if the period is 20 minutes or less. Breaks lasting five to 20 minutes are common and promote efficiency.

Meal breaks:  Regulations stipulate that ordinarily an employer must pay workers if the break is less than 30 minutes.  The regulations leave open the possibility that shorter meal periods may be noncompensable in special circumstances.  However, the burden is on the employer to prove that special circumstances apply for justifying the shorter break.

Keep in mind the regulations do not always fit today’s work place.  Sometimes it is hard to tell whether a break is to rest or to consume a meal.

For this reason it is not surprising that some U.S. Department of Labor (DOL) investigators, as a matter of enforcement, have taken the position that an employer must pay workers for all breaks that are less than 30 minutes.  By doing this, they don’t have to engage in a break-by-break analysis.

In such cases, the DOL’s position is inconsistent with its own regulations and case law.  But a 30-minute rule does avoid litigation over that issue.

Even if a meal break is 30 minutes it does not mean it automatically occurs without pay.  The employer must consider the length of the break and whether the employee is free from work.  If the employer requires the employee to stay in his or her work area, they may have to pay the employee, even if the break is 30 minutes or more.  Similarly, if the employer asks an employee to do any work during the break, the employee may have to be compensated for the entire break.

Source:   SHRM.org

 

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Debbie Strahle, Partnership Manager

Case study: Fair Labor Standards Act violation proves costly for business owner

It is important to train supervisors and managers so they know the minimum wage and overtime requirements under the Fair Labor Standards Act (FLSA) and when to report employee concerns and complaints.  This is the key to avoiding costly fines for the company AND its executives.

Nearly all employers are subject to the requirements of the FLSA, and the potential penalties for violations can be costly.

Case study against NY supermarket chain

Case in point is a wage-and-hour lawsuit against Gristede’s Foods, Inc. in which the company’s owner has been held personally liable for payments to employees in the case.

The New York supermarket conglomerate employed approximately 1,700 employees.  In 2004, a group of Gristede’s employees filed a class/collective action lawsuit alleging that the company failed to pay overtime under the FLSA.  The employees prevailed, and the parties entered into a multi-million-dollar settlement.

When Gristede defaulted on its payment obligations under the settlement agreement, the employees asked the U.S. District Court for the Southern District of New York to hold John Catsimatidis, the long-time owner, chairman and CEO of the company, personally liable for the payments.  The district court granted the employees’ request.

Catsimatidis appealed to the 2nd U.S. Circuit Court of Appeals, but the appellate court upheld the lower court’s decision, ruling that Catsimatidis was an employer under the FLSA and could be held personally liable for violations of the Act.

Owning company was active in running day-to-day

The 2nd Circuit Court made this decision regardless of the fact that Catsimatidis managed employees at a very high level.  For example, he wasn’t typically involved in the day-to-day operations of individual supermarkets.  He didn’t hire or fire most employees or set specific wages or schedules, and he had only limited interaction with the managers who handled those types of decisions.  It also didn’t matter that Catsmatidis wasn’t accused of making decisions that violated the FLSA.

Rather, the court concluded that Catsimatidis was an employer and he was active in running the company.  This included having contact with individual stores, employees, vendors, and customers and supervision of certain managerial personnel such as the chief financial officer and the chief operating officer.  The ruling concluded that this gave him ultimate responsibility for employees’ wages and signed paychecks.

In early December 2013, Catsimatidis petitioned the U.S. Supreme Court to hear the case and overturn this ruling of personal liability.  At this time, it is not known if the high court will hear the case.

With court decisions like these, corporate officers should be more motivated than ever to ensure that their companies and agencies are in compliance with the FLSA’s requirements.  Now is a good time to review and update your policies to ensure that employees understand their obligation to accurately report all time worked.  Contact BCN Services if you need to consult on any FLSA matters.

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Sue Kester, HR Manager

Individual Insurance and the Affordable Care Act: Part 2

We are back with Part 2 of BCN’s ongoing series about the Individual Health Insurance Market, also called IHIM.  The IHIM is in a state of constant flux and following is an update and some solutions regarding the individual market.

  1. BCN can help your organization or employees navigate this constantly changing landscape.  We have staff that is certified as Individual Market Experts.  We can assist any current client or employee with this process.
  2. Healthcare.gov, the national health care exchange website, appears to be up and working, although we are getting varying reports regarding ease of use, connectivity and being able to complete the process.  Some people are having no problems, while others are still frustrated with the technology.
  3. The deadline for signing up to receive coverage effective Jan. 1, 2014 has been pushed back from Dec. 15, 2013 to Dec. 23, 2013.
  4. Consumers and insurers are being told that any consumer that has paid by Dec. 31 2013 is guaranteed coverage starting Jan. 1, 2014.

There are still strong concerns surrounding the program.  They range from difficulty accessing the program, security issues, network issues (thinking your doctor is in the network, but they are not), and coverage issues (are you in the program or not), etc.

If you or your employees are feeling overwhelmed or just need someone to discuss the available options, please contact the BCN call center at 1-800-891-9911.

One option that is not getting a lot of attention is that individuals can access an insurance carrier’s private health care exchanges and, in many cases, this has been proven to be a more user friendly experience for insurance sign-up.  This is one of the options the BCN Individual Marketplace experts will evaluate for employees to see if it is an option based on their income, needs and available carrier networks.

BCN will continue to keep you updated on the most important issues facing your organization.

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Employers must accommodate religious observance requests

During this holiday season, your company may get requests from employees for time off that are not traditionally designated as a holiday by most companies. How should those requests be handled, and how do you accommodate these requests due to a religious observance?

In most cases, you would need to seriously consider an employee’s time off request when it is for a religious holiday. Under Title VII’s protection of an employee’s religion, employers are obligated to provide religious accommodations similar to the American’s with Disabilities Act reasonable accommodation requests. Religious accommodations often present themselves in the form of a request for time off for religious observances which do not conform to the employer’s holiday schedule. Unless this would be an undue hardship, an employer should accommodate such requests in a consistent and non-discriminatory fashion.

Employees should be able to use relevant paid time off benefits consistent with company policies to observe holidays. If an employee has exhausted all paid time off benefits, they should be given unpaid time off to observe a religious holiday. If the employer allows flexible work schedules or make-up time, employees requesting time off to observe a religious holiday should be afforded these same options.

If the accommodation would cause an undue hardship for your company, the accommodation does not have to be made. According to the EEOC, “an employer can show undue hardship if accommodating an employee’s religious practices requires more than ordinary administrative costs, diminishes efficiency in other jobs, infringes on other employees’ job rights or benefits, impairs workplace safety, causes co-workers to carry the accommodated employee’s share of potentially hazardous or burdensome work, or if the proposed accommodation conflicts with another law or regulation.”

If you cannot accommodate the request, the employee should be notified as soon as possible and you should provide the hardship rationale supporting the denial.

Employers unsure of whether an accommodation creates undue hardship sould contact BCN’s Human Resources Customer Service Center to discuss the situation before denying this request.

As always, if you have a situation that needs immediate attention, contact BCN’s Human Resources Customer Service Center (hr@www.bcnservices.com or (800) 891-9911 ext. 4) and we will work diligently to help you with all your employee relations issues.

BCN wishes you a prosperous, happy and healthy holiday season!

 

 

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Kate Douglass, Senior, HR Generalist

Tips for reducing liability while hosting company holiday parties

With the holiday season approaching, many companies may be planning holiday parties to show appreciation to employees and staff. These celebrations reward employees for their hard work during the year and can go a long way toward boosting employee morale.

But for company party planners, the many benefits of the traditional company party should not overshadow the legal and safety risks that these gatherings can create, especially where alcohol is served. According to one study, 36 percent of employers reported behavior problems at their most recent company party. These problems involved everything from excessive drinking and off-color jokes to fist fighting and sexual advances.

So how do you reduce your legal liability and still have a safe and enjoyable company party this holiday season? Follow as many of the listed recommendations as possible:

  1. If possible, do not serve alcohol. Simply have a catered lunch at the company’s offices.
  2. If you do serve alcohol, use drink tokens or a ticket system or have a “cash bar” instead of an “open bar” to limit the amount of alcohol served.
  3. Invite spouses and significant others especially if you believe that their attendance will make it less likely employees would engage in inappropriate conduct or excessive alcohol consumption at the party.
  4. Offer a wide variety of non-alcoholic beverages.
  5. Always serve food if you serve alcohol. Foods rich in protein and starch tend to slow the absorption of alcohol in the bloodstream where salty and greasy foods may increase thirst.
  6. Make attendance voluntary. If an employee is required to attend the party and is injured or harmed, the employer is more likely to be held responsible than if attendance was voluntary.
  7. Designate managers to pay attention to behavior at the party and to be prepared to act if inappropriate or potentially unsafe conduct occurs.
  8. Before the party, circulate a memo to your entire workforce reminding everyone that your company’s policies concerning workplace harassment and other inappropriate conduct apply at holiday parties.
  9. Limit drinking time to one or two hours during the party or if dinner is served, offer alcoholic beverages only at a reception before dinner and then close the bar. Or, you may stop serving alcohol one or two hours before the party officially ends.
  10. Make arrangements before the party to provide transportation for those employees who are unable to drive after the party has ended.

Following some basic precautions will protect your business and allow you to host an enjoyable party.  Have a happy holiday!

 

 

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Lisandra Quinones, Human Resources Administrator

New OSHA system takes a global approach to classifying chemical hazards

When was the last time you saw the words “OSHA” and “harmonized” in the same sentence?  That’s what we thought too.

But as of Dec. 1, 2013, we all need to be aware of some upcoming changes about chemical hazards and OSHA’s new Globally Harmonized System, or GHS.  The changes are definitely for the better and the Dec. 1 date will not require much time or energy beyond some basic employee training.

That said, BCN Services’ clients should be aware of the following:

  • The Globally Harmonized System takes an international approach to hazard communication and provides world-wide agreement on classifying chemical hazards with a standardized approach to labeling safety data sheets.  (Material Safety Data Sheets will now be referred to as Safety Data Sheets).  The new system will provide a harmonized classification criteria for the health, physical and environmental hazards of chemicals.
  • One of the major drivers of this change has been the globalization of the world economy.  GHS establishes a standard “language” to understand the hazards of chemicals no matter where you are in the world or where the chemicals are shipped to or shipped from, which is a vast improvement towards safety.
  • You will gradually start to see new labeling.  Chemical distributors will no longer be able to ship containers that do not comply with new labeling as of Dec. 1, 2015 and chemical manufacturers, importers, distributors and employers must start using new labels and safety data sheets by June 1, 2015.  (BCN Services will provide more information as those dates approach).

Here’s what you need to do at this point

  1. OSHA requires employers to have their employees who handle hazardous chemicals and substances trained on the new label elements and safety data sheet formats by Dec. 1, 2013.  Examples of hazardous chemical and substances are:  asbestos, carcinogens, vinyl arsenic, inorganic arsenic,  lead, cadmium, benzene, formaldehyde, ethylene oxide, spray finishing using flammable and combustible materials, oxidizing gases,  gases under pressure, pyrophoric liquids/solids/gases.  If you do not work with such substances, this new standard may not apply.
  2. If this new standard does apply to any of your employees, call BCN Services at 800.891-9911, ext. 108 and we can set-up a 17 minute on-line safety course entitled “Globalize Your Communication” that will take care of your training compliance.  Upon receipt of a user name and password from BCN Services, visit www.www.bcnservices.com. Just click here for the steps to get to the course once you’re at our website.
  3. BCN Services will handle all record keeping for this OSHA-compliant training.
  4. Training can be accomplished individually or in a group setting with several employee’s taking the online course  together.  It’s your choice.
  5. To receive your user name and password, contact Danielle Knuth via email at dknuth@www.bcnservices.com.
  6. To discuss any questions you may have regarding the Globally Harmonized System, please contact Patrick Boeheim at 800.897-9911, ext. 108.

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Patrick Boeheim, Risk Manager

Your Next Government Deadline (psssst…it’s OSHA!)

Years ago, before seat belt laws were even dreamed of, I took an insurance class as part of a fleet insurance safety program.  I remember the impact walking out of that class:  From that moment on, my routine was to get in the car, pull that strange shoulder strap (kind of a new feature in cars!) across my body, and connect that buckle.  I felt pretty unsafe—almost naked—if I discovered I hadn’t buckled up.

Fast forward a lot of years.  I just became certified by OSHA by completing my “OSHA 10-Hour”, in a class with seven of BCN’s best clients.   It is a designation which I always looked at with interest, because 10 hours of anything, particularly government regulation, seems daunting.  I can assure you, the risk management professionals that organized and taught this class needed every minute to focus the audience of owners, managers, and key administrators on learning to stay safe, and complying with the very detailed OSHA law.

In every module, we started by reviewing raw statistics on fines assessed to businesses, and what drove those amounts.  Chilling, to say the least.  Then we learned step by step,  video by video, demonstration by demonstration, situation by situation, what it takes to do it right.  The Safety Data Sheet (what used to be Material Safety Data Sheet, or MSDS), is your roadmap.  PPD’s are required by us as business owners to protect workers from untimely and serious injury (lost time, cost).  Reacting properly to an incident, from reporting, to investigating using the 5-Whys, gives you a shot to prevent the next injury and get it right going forward (lost time, cost).  Too often, we just accept that things happen in the workplace; I can confidently say that these problems can be prevented.

So you are all worried about Obamacare (the Affordable Care Act), right?  How about December 1st?  What’s that, you say?  All of our worksites will have completed the initial requirement for the Globally Harmonized System for OSHA compliance by that date.  We will then work to help you through Phase II and beyond.

As a business owner, when I hire people, it is my responsibility to keep my employees safe, no matter what the environment.  OSHA always seemed like a four letter word and something to avoid.  But the truth is, the OSHA body of work provides a great framework to keep employees productive, creating your products and delivering your services, and making you more profitable.  I couldn’t recommend this  OSHA 10-hour workshop enough for creating a great business environment and culture of success.

Thank you to Amerisure, Wells Fargo, attending clients, and the entire Risk Management team of BCN Services.  The next “Certified OSHA-10 Hour” is scheduled for February 6 & 7, 2014.  I would highly recommend this to our clients.  Please contact us to reserve your spot in this workshop.

 

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Andrew (Andy) C. Hans, CEO

Individual insurance and the Affordable Care Act: Part 1

BCN’s goal with our weekly blog is to provide our partners with information that is important to our clients and employees.  Recently, as you might imagine, we are fielding many questions, comments and concerns regarding individual insurance and health care exchanges under the federal Affordable Care Act, also known as Obamacare.

This week we will begin to explore health insurance for the individual and try to answer the questions we have been receiving.  Please feel free to send comments and questions to us as we venture down this path.

As more and more employees, employers and the general public  is exposed to the world of health insurance, many people are confused by the language of insurance.  A recent poll found only 14 percent of Americans could define and understand the basic terms commonly used to define health plans.  The questions we receive at BCN support these numbers.

Today we will identify and define the most common terminology used for individual as well as group plans:

  1. Deductible:  The amount you owe before your health insurance benefits kick in. For example, if your deductible is $500, your insurance won’t pay for anything until your costs are more than $500.
  2. Co-pay:  A co-payment, or co-pay, is the amount the insured person pays every time he or she receives a health service. For instance, if your co-pay to see a doctor is $25, you pay that amount each time you see him or her. The insurance takes care of the rest.
  3. Co-insurance:  Your part of the costs of a health service that is covered by insurance. It is calculated as a percentage and you pay it in addition to whatever deductible you may owe. For example if your plan allows $100 for a doctor visit and you’ve already met your deductible, your 20 percent co-insurance payment would be $20. The insurance plan picks up the rest of the cost.
  4. Out-of-pocket maximum:  The most you pay during the period of your policy (most policies are in effect for one year) before your insurance plan begins to pay 100 percent of the allowed amount. This total does not include your balance-billed charges, your premium, or health care services that your plan doesn’t cover. (Some plans don’t count payments to out-of-network providers (see No. 8 below), , co-insurance payments, co-payments, other expenses or deductibles toward this amount, so read the plan instructions carefully.)
  5. Premiums:  The fee you pay to be enrolled in your insurance plan.
  6. Claim:  The bill you or your doctor or health care provider submits to your health insurance company.
  7. Allowed amount:  This may also be called an “eligible expense” or “negotiated rate” or “payment allowance.” It is the maximum amount on which payment is based for health care services that are covered by your insurance.
  8. In- and out-of-network:  An in-network provider is a health care office that has contracted with the health insurance company to provide services for people on that insurance plan. An out-of-network provider is someone who does not have such a relationship with the insurance company. Typically, insurance will only cover the cost of services from health care providers who are “in-network.”
  9. Essential health benefits:  This is the set of health care services that must be covered by certain plans starting in 2014. There are 10 categories in which insurance plans must provide services and items: Maternity and newborn care, prescription drugs, rehabilitative services and devices, lab services, ambulatory patient services, emergency services, hospitalization, wellness and preventive services, chronic disease management, and pediatric services that include vision and oral care.  For more about how these 10 categories will be handled, see this article: Essential health benefits.
  10. Preventive care:  Routine health care that includes checkups, patient counseling and screenings to prevent disease, illness and other health complications.

Next week we will begin exploring the options, costs and alternatives to the healthcare exchanges.

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Pay overnight employees correctly during daylight-saving time change

Daylight-saving time often creates confusion on how to pay employees that work the overnight period when daylight time begins or ends. The old tip for “Spring Forward, lose an hour on the overnight shift” or “Fall Back, add an hour to the overnight shift” is often helpful.

Most states participate in daylight-savings time. Those employees working the overnight shift when daylight-Saving time begins each spring work one hour less because the clocks are set ahead one hour. Those employees working the graveyard shift when daylight-saving time ends in the fall work an extra hour because the clocks are set back one hour at 2 a.m.

For example:

A scheduled shift starts at 11 p.m. and ends at 7:30 a.m. the next day; your employee works an eight- hour shift and receives a 30-minute lunch break.

  • On the Sunday that daylight-saving time ends (Nov. 3, 2013) at 2 a.m., the employee works the hour from 1-2 a.m. twice because at 2 a.m. all of the clocks are turned back one hour to 1a.m. Thus, on this day the employee worked 9 hours, even though the schedule only reflected 8 hours.
  • On the Sunday that Daylight Savings Time starts at 2 a.m., the employee does not work the hour from 2-3 a.m. because at 2 a.m. all of the clocks are turned forward to 3 a.m. Thus on this day, the employee only worked 7 hours, even though the schedule was for 8 hours.

The Fair Labor Standards Act requires that employees be credited with all of the hours actually worked. Therefore, if the employee is in a work situation similar to that described above, he or she worked (nine) 9 hours on the day that daylight-saving time ends and seven (7) hours on the day that daylight-saving time begins. This assumes, of course, that the employee actually worked the scheduled shift as in our example.

One interesting side note to daylight-saving time: A study by Michigan State University industrial and organizational psychology doctoral candidates Christopher Barnes and David Wagner, reported by various sources, says that workplace accidents spike 5.7 percent on the Monday after we set our clocks forward 1 hour in the spring compared with other Mondays throughout the year. They also reported that a University of British Columbia study found an 8 percent increase in accidents on the changeover day.

The reason? It’s lack of sleep. Although the researchers say that workers actually lose only 40 minutes of sleep on that night, even that small amount of time is significant, Barnes explained.

Barnes said that studies have shown that lost sleep causes attention levels to drop off, and that the impact could be greatest in jobs requiring a high level of attention to detail. So while reportable physical accidents increase, Barnes maintains that it is not unreasonable to think that non-reportable workplace mistakes , such as transposing figures, probably rise as well.

No such spike occurs in the fall when clocks are set back! That’s because workers are getting extra time to sleep.

The study used data from the “American Time Use Survey” conducted by the U.S. Bureau of Labor Statistics and from the U.S. Dept. of Labor Mine Safety and Health Administration. The study was sponsored by the Society for Industrial and Organizational Psychology, whose members study and apply scientific principles to workplace issues.

The researchers also reported that their findings show that not only do the number of accidents increase, but their severity as well.

So if the studies prove to be true, businesses should see a benefit the week of Nov. 3, 2013 with employees experiencing increased work performance because of an extra hour of sleep!

Can we help you with questions about matters of employee pay and other benefits?  Contact BCN Services at 1-800-891-9911 or email hr@www.bcnservices.com.

 

 

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Jeff Walsh, Partnership Manager

Federal tax ruling changes tax advantages and benefits for same-sex couples

On Aug. 29, 2013, The Department of Treasury and the Internal Revenue Service ruled on treatment of taxation for same-sex married couples, regardless of the couple’s state of residence.

The June 2013 U.S. Supreme Court ruling in United States v. Windsor overturned the Defense of Marriage Act (DOMA) requiring the federal government to recognize same-sex marriages equally to opposite-sex marriages for all federal laws and benefits, including tax advantages never before offered to same-sex couples.

The Supreme Court ruling does not require all states to recognize same-sex marriage.  States retain the authority of whether to recognize same-sex marriages, even if the couple is legally married in a state that recognizes them.  However, for federal tax purposes, all legally married same-sex couples, regardless of whether they live in a state that recognizes these marriages, will benefit from the federal ruling.

These tax advantages include treatment of benefit premium deductions for same-sex married couples under Section 125 of the IRS Code.  Prior to DOMA being overturned, same-sex married couples who participated in an employer sponsored health plan could not have their total premium contribution taken on a pre-tax basis.  The employee could contribute his or her portion on a pre-tax basis, but the difference between a “single” employee contribution, and the “two-person” contribution was required to be deducted after tax.  From 2013 forward, the premium contribution amount for a same-sex spouse from an employee’s paycheck must be taken on a pre-tax basis.  The same advantages apply to medical flexible spending accounts (FSAs), and Health Savings Accounts (HSAs).  Same-sex married couples now receive the same tax advantages including the ability to claim each other’s medical expenses against FSA and HSA accounts.

Employees who were in a same-sex marriage prior to 2013 and did not receive the same tax advantages as opposite-sex married couples may amend their previous tax filings within the IRS period of limitations.  (Generally, the period of limitations is three years from the date the return was filed, or two years from the date the tax was paid, whichever is later.)

The State of Michigan does not currently recognize same-sex marriage.  Employers may opt to offer “domestic partner” coverage for same-sex married couples, but it is not required.  If a BCN Services client opts to offer such coverage, we are prepared to follow the federal tax guidelines accordingly. We will also administer reimbursements from employees’ FSA accounts per federal guidelines.

Please contact your BCN Partnership Manager if you have questions and, as always, employees should feel free to call our Human Resources call center if they have questions about their coverage or benefit deductions.  Contact us at 1-800-891-9911 or visit us atwww.www.bcnservices.com or email hr@www.bcnservices.com.

 

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Frank Lewandowski, Partnership Manager