U.S. Supreme Court decision on gay marriage impacts some employer-sponsored benefits

On June 26, 2015, the U.S. Supreme Court of the United States ruled that the 14th Amendment to the United States Constitution compels all states to issue marriage licenses to two people of the same gender and recognize legal marriages between two people of the same gender.

The Obergefell v. Hodges decision was sweeping, all but ending a decades-long battle to bring marriage equality to gay couples. Thirty seven states and the District of Columbia already recognized same-gender marriages before the ruling. Michigan was among 13 states that banned gay marriage through a state constitutional amendment defining marriage to be between one man and one woman.

With this historic decision, all U.S. states and territories can no longer ban same-gender marriage either by state constitutional amendment or popular ballot vote.

Although the decision comes from the highest court of the United States, there are many unanswered questions. The decision did not address matters of discrimination based on religious beliefs, nor did it lay out a step-by-step plan for employers and health insurers to handle the new legislation. This blog specifically focuses on the impact the SCOTUS decision has on employer-sponsored benefits.

Fully insured health plans are now legally bound to recognize same-gender marriages exactly as they would marriages of opposite genders. Although 2013’s United States v. Windsor SCOTUS ruling extended favorable tax treatment on premium dollars paid by employees towards same-gender spouses and dependents coverage, that ruling did not extend those benefits nationwide. The favorable tax treatment of premium dollars now applies to same-gender married couples in every U.S. state and territory.

Small-group employers have always had the option of excluding spousal coverage under their benefit plans. Now, however, the exclusion must be uniform and not directed at same-gender marriages. If an employer disqualifies spousal coverage or requires spouses to take insurance through their own employer prior to enrolling in the company’s plan, the condition must be applied to both same-gender and opposite-gender spouses.

Employers with self-funded medical plans are not forced by the Obergefell ruling to allow same-gender spouses to enroll in their group health plan. It is advised that employers with self-funded plans consider the potential for litigation if they choose, at this point, not to allow same-gender spouses to enroll in their group health plans.

There are still several roadblocks and gray areas due to this ruling: How do groups handle their plan if they already allowed “domestic partners” to enroll? Is there a time limit that vendors will allow domestic partners to become legally married before they disallow coverage? If employers choose to continue allowing domestic partner coverage for same-gender couples, they should be sure to open it to opposite-gender domestic partners, if they did not before.

As always, BCN Services will guide clients and employees through these complexities as they occur. Please encourage your employees to call us with any questions they may have. Timeliness can play a factor, depending on the specific situation

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Frank Lewandowski, Partnership Manager

Be prepared for new federal rules governing overtime exemption

The U.S. Department of Labor has finalized its recommendations for revisions to the laws governing employees considered exempt from overtime.

These recommendations have been submitted to the Office of Management and Budget and are expected to be substantial changes to the current law. The goal of the recommendations is to significantly increase the number of employees eligible for overtime.

Currently, employees are considered exempt from overtime under these situations:

  • Employees must be paid a salary of at least $455 per week to qualify as exempt form overtime (time and one-half for any hours worked over 40 in a pay week).
  • Job duties must include factors such as:
    • The employee must have significant influence in decisions of hiring or firing.
    • The manager should have significant authority to make decisions on matters that affect the operations of the business.
    • A significant portion of the manager’s time must be spent “managing” the business. Management responsibilities should not be incidental to the employee’s work.

The proposed rules are expected to increase the minimum salary to as much as $900 per week or more. This is a significant increase that could affect the bottom line for many companies.

Additionally, the factors the DOL uses when determining if an employee is exempt (called the duties test,) are expected to change as well. The new duties test is expected to include hard-and-fast rules requiring exempt employees to spend at least 50 percent of their time executing management or administrative duties.

Time spent in “exempt” functions is not the only consideration when determining exempt status. Other considerations include:

  • The relative importance of the executive duties as compared with other types of duties
  • His or her relative freedom from supervision
  • The fact that his or her salary is greater than the wages paid to other employees for the type of nonexempt work performed by the executive/manager

Expect to see significant publicity once the final rules are announced. They could potentially affect millions of employees. The DOL has begun using its website to publicize new rules and laws, even creating downloadable phone apps to assist employees in calculating their overtime. The new requirements will likely be front page news on websites, social media sites and television news. Employees will become aware of the changes quickly.

With significant changes to the rules for overtime exemption, it is imperative that employers conduct an audit of their current exempt employees, correct any misclassifications, pay for any unpaid overtime and be prepared to make necessary changes to remain in compliance of the new rules.

As always, BCN stands ready to assist you in evaluating your exempt employee’s status. Please contact your Partnership Manager to assist in a review of your current employees’ status and to prepare to make changes as required by any new rules or laws.

 

Jeff Walsh (200x190)

Jeff Walsh, Partnership Manager

Minimum wage increases in Michigan take effect starting Sept. 1

As you may be following in the news, Michigan’s minimum hourly wage has been approved to increase to $9.25 per hour by 2018.

This will be accomplished through a series of incremental bumps with the first one happening Sept. 1, 2014.  During August, be sure to watch your payroll packets for a copy of the updated compliance posters that must be posted in your workplace.

In addition to this first bump, the next increase will occur on Jan. 1, 2016 to $8.50 per hour.  From there it will move up to $8.90 on Jan. 1, 2017 and to $9.25 on Jan. 1, 2018.  In legislating these increases, lawmakers determined that a gradual increase would be better for employers who might need time to adjust to paying employees more.

The law also increases the hourly minimum for employees who receive tips from $2.65 per hour to $3.52 per hour.  Employers with these employees need to be aware – as always – that if the combined hourly total of tips received and wages does not meet the state minimum wage, that it is incumbent upon the employer to make up the wage difference.

  • Below is a link to the new Michigan Minimum Wage and Overtime poster if you are looking for a sneak preview, and as always, please contact your Partnership Manager at BCN Services with any questions or concerns regarding your individual employment strategy:Email: hr@www.bcnservices.com
  • Phone: 734-994-4100 or 800-891-9911
  • Contact us here

Minimum wage and Overtime Poster

 

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Sue Kester, HR Manager

Though employees generally don’t understand labor law, many assume that they do

Frequently we hear employees claim that the “Labor Board” requires the employer to pay for lunches, provide paid vacations, sick days or other benefits. They also may claim that you cannot require them to work overtime hours.

Federal requirements for employers are regulated by the Fair Labor Standards Act (FLSA). These federal requirements are actually quite limited. As an employer, the FLSA requires employers to pay their employees minimum wage and overtime at the rate of time and a half the employee’s regular rate of pay.

Under federal law employers are NOT required to provide:

  • Vacations
  • Holidays
  • Sick Pay
  • Premium pay for weekend, holiday or shift work (beyond the required time and one-half for hours worked over 40 in one week)
  • Pay raises (unless to comply with minimum wage requirements under the law)
  • Other fringe benefits, except as required under the Affordable Care Act
  • Discharge notices, reason for discharge or immediate payment of wages upon termination.
  • Lunches (paid or unpaid)
  • Breaks  (however, if you provide breaks of 20 minutes or less that time is compensable)

Additionally the FLSA does not limit the number of hours you can schedule or require an employee to work (either daily or weekly, including overtime) as long as you pay time and one-half for time worked in excess of 40 hours. Note: this only applies to employees 16 years of age or older.

Some cities and states are more restrictive

That said, many states, and some cities have passed or are considering legislation that will add requirements for employers. For example, many states and cities have higher minimum wage rates than the federal government.

Most states have youth labor laws that limit the number of hours that minors may work. Some states require payment of final wages immediately upon termination. A few states require paid breaks and/or lunches and some states require overtime (time and one-half) for hours worked in excess of 8 hours per day rather than 40 hours per week.

Several cities and a few states have passed paid sick leave requirements.

Additionally, for those working under federal contracts, an Executive Order from the President has raised minimum wage for employees covered under those contracts. In cases where there is a difference between federal and state laws, the law that benefits the employee will always take precedence.

There continue to be changes that may impact employers on national and state and local levels. BCN Services monitors the ever-changing scope of legal requirements for our clients and will keep you apprised of anything that impacts your business.

If you have specific questions regarding employer’s requirements under federal, state or local government regulations, please contact your Partnership Manager. If you are an employer that does not currently work with us, please contact us for assistance or more information.

 

 

Jeff Walsh (200x190)

Jeff Walsh, Partnership Manager

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.

 

 

Jeff Walsh (200x190)

Jeff Walsh, Partnership Manager

Tracking employee time can really add up

Managing employee time is an essential part of most businesses, from retail to manufacturing to professional.  The Patient Protection and Affordable Care Act (PPACA),  or Obamacare, has put new focus on employer calculations of time, in order to calculate the status of their workforce.  Here is a real-world example:

The PPACA mandates that employees with more than 30 average hours per week (based on a calculated look back period average of between 90 days and one year) be deemed full time for the purposes of health coverage.   This company’s cost will be a minimum of $2,000 (tax) up to the cost of family health insurance for this employee ($15,000)

A more global tracking issue that affects costs for all employees in your company is simply the LOSS of time due to inadequate data collection.  The Return on Investment (ROI) of investing in current technology and data capture is well documented in human error, auditing, and lost time.

In the following example, bad timekeeping costs this 50-member employee group more than $21,000 per year, or $439 per employee per year. This shows the effects of an inadequate data collection system*:

Human Error Factor Savings- A

A

     Number of Employees

50

B

     Average hourly rate

$10

C

     Average hours worked per week

38

D

     Total weekly payroll (A x B x C =D)

$19,000

E

     Human error factor

0.25%

     Total weekly savings (D x E)

$48

 

Auditing Savings- B

A

     Number of Employees

50

B

     Minutes saved per card

6

C

     Total pay period minutes saved (A x B=C)

300

     Total pay period hours saved (C/60)

5

     Hourly rate for Department Heads

$25

     Weekly Department Head savings

$125

 

Lost Time Savings- C

A

     Lost productivity per day

0.1

B

     Avg. employee’s rate/hour

$10

C

     Avg. wages overpaid/day/emp (A x B= C)

1

D

     Avg. wages overpaid/wk/emp (C x 5)

5

E

     Total number of employees

50

     Total wages overpaid/wk (D x E)

$250

 

Summary

A

     Human error savings (F1)

$48

B

     Audit savings (F2)

$125

C

     Lost time savings (F3)

$250

D

     Total weekly savings (A + B + C)

$423

 

Total annual savings (D x 52)

$21,970

 

Savings/worksite employee

$439

*Studies conducted annually by national payroll and staffing associations

BCN works closely with its clients to create efficient, cost-effective data capture of employee time, which gives clients greater control of scheduling and time management.  Call us at (800) 891-9911 for further information about tracking your employees’ time.  Or contact us here.

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Andrew (Andy) C. Hans, CEO

Time is Money: What is Compensable Time?

Working outside of one’s scheduled work time without compensation is generally known as “working” off- the-clock. The United States Department of Labor (DOL) recognizes off-the-clock work as one of the most common violations of the Fair Labor Standards Act (FLSA).

The Fair Labor Standards Act provides information about the type of work for which an employee must be compensated. Under the FLSA, a work day begins when an employee starts his or her “principal activity,” and ends when finishing the last principal activity of the day. The FLSA definition of a work day may be longer than an employee’s scheduled shift or normal office hours.

Listed below are some of the more common off-the-clock violations:

  • Requiring employees to work extra hours without pay.
  • Requiring employees to perform work before or after they clock in for their shift.
  • Failing to pay employees for the entire time they are performing work, not just the time they are “clocked in.”
  • Automatically deducting a meal period from an employee’s hours when no meal period was actually taken.
  • Deducting break time(s) from an employees work hours.
  • Requesting that employees work on the weekend without clocking in.
  • Failing to compensate employees who bring work home and continue to work outside of their “regular” workday.
  • Failure to pay employees for pre- and post-shift work. These activities involve “donning” (putting on) or “doffing” (taking off) protective equipment or uniforms.

Our advice is to not leave employees guessing about your Company’s policy on off-the-clock work. Make it clear that off-the-clock work is not permitted and that there may be disciplinary action for it. Set up a process encouraging employees to report off-the-clock work to the HR Department without fear of retaliation.

The policy should give clear instruction to employees, as an employer’s effort to prevent off-the-clock work will be a key element of its affirmative defense of an off-the-clock work claim.

As always, it is imperative to know and understand all of the regulations that apply to your business at all levels: federal, state, and local. Failure to know and apply these regulations can lead to hefty fines.

BCN Services’ Human Resource Department  is available to you to help in implementing a compensable time policy, if you do not currently have one in place. Call us at 1-800-891-9911 or visit us at www.www.bcnservices.com.

Kate Douglass (200x174)

Kate Douglass, Senior HR Specialist