Skip to main content
search
All Posts By

robintek

Aug 01
Love0

IRS PROVIDES CLARIFICATION REGARDING THE PATIENT PROTECTION AND AFFORDABLE CARE ACT

By Employment Resources

The Internal Revenue Service has issued guidance on the favorable tax treatment of health care coverage for employees’ nondependent adult children, to whom such coverage was extended under the Patient Protection and Affordable Care Act (“Patient Protection Act”). The Patient Protection Act requires that employer group health plans that provide for dependent coverage must continue to make such coverage available to employees’ adult children until age 26, regardless of the child’s student status and regardless of whether that child meets the definition of “dependent” under Sec. 152 of the Tax Code. This requirement is effective for plan years beginning on or after Sept. 23, 2010 (thus, for calendar year plans, starting with the plan year that begins Jan. 1, 2011). The favorable tax treatment addressed in Notice 2010-38 is effective as of March 30, 2010, and applies to covered nondependent adult children who do not turn age 27 during the employee’s tax year. Employers may rely on what an employee tells them as to the adult child’s date of birth.

What Notice 2010-38 does is to permit this favorable tax treatment to apply beginning March 30, 2010, to employees in plans that had already allowed coverage of nondependent adult children, but which were imputing income to employees to account for the coverage. It also permits the favorable tax treatment for plans that voluntarily expand coverage to nondependent adult children in advance of the date required by the Patient Protection Act.

The clarifications and guidance in IRS Notice 2010-38 include the following:

  • An adult child who is employed elsewhere, and who is eligible for coverage through that employer but declines it, still may be covered on a tax-free basis under a parent’s plan, so long as he or she has not turned age 27 by the end of the year. (Note that the Patient Protection Act grandfathers plans in existence on March 23, 2010, so that these plans are not required to offer coverage to adult children who are eligible for coverage at their current employer. If a plan chooses to extend coverage to these individuals, the coverage is tax-free to the employee so long as the child has not turned 27 in the tax year.)
  • An adult child who is married still may be covered on a tax-free basis under a parent’s plan, so long as he or she has not turned age 27 by the end of the year. If the adult child’s spouse also were covered, that coverage would not receive the favorable tax treatment, and the employer would be required to impute income to the employee reflecting the value of the spouse’s coverage.
  • The exclusion applies to employee pre-tax contributions for health plan coverage under a cafeteria plan, as well as to health plan flexible spending account reimbursements and to employer-provided health reimbursement arrangements (HRAs). The notice states that the IRS will be amending cafeteria plan election change regulations retroactively to March 30 to allow changes for adult children under age 27 becoming newly eligible for coverage, or becoming eligible for coverage beyond the date the adult child otherwise would have lost it. Thus, a plan that chooses to allow employees to cover nondependent adult children in 2010 can permit employees to make election changes in order to do this on a pre-tax basis, or to make an FSA change to reflect the addition of the adult child. Employers that opt for this must amend plans by Dec. 31, 2010, to reflect this change.
  • As noted above, for purposes of the tax exclusion, the adult child need not be a “dependent” of the employee. “Child” means an individual who is a son, daughter, stepson, stepdaughter, legally adopted individual, individual placed with the employee for adoption, or foster child.

Consult with our plan providers and benefits professionals to help determine the plan amendments and communications necessary to comply with the Patient Protection Act and to ensure employees receive the favorable tax treatment for coverage of nondependent adult children now provided by the Tax Code.

Aug 01
Love0

FIVE STEPS TO A DRUG-FREE WORKPLACE

By Risk Management Bulletin

About three in four drug or alcohol abusers have jobs – and they don’t leave their problems at the door when they arrive at work!

According to OSHA, an effective drug-free workplace program should have five components:

  1. A Drug-Free Workplace Policy. Your policy should include a stated purpose or rationale, a clear description of prohibited behaviors, and an explanation of the consequences of violating the policy
  2. Supervisor Training. Have your supervisors trained in understanding the policy and its implications, recognizing and dealing with employees who have substance-related performance problems, and referring these employees to available assistance. Make supervisors responsible for monitoring employee performance, staying alert to performance problems, and enforcing the policy.
  3. Employee Education. Effective education addresses company-specific details about the policy and program, together with general information about the nature of substance abuse; its impact on work, health, and personal life; and types of available assistance. You can provide education through safety meetings and training sessions, home mailings, workplace displays, brown-bag lunches, guest speakers, seminars, and new-hire orientation sessions.
  4. Workplace Assistance. Employee Assistance Programs (EAPs) offer an alternative to dismissal and minimize the employer’s legal vulnerability by demonstrating efforts to support substance-abusing workers who need help. EAPs provide counseling and referrals, plus other services such as supervisor training and employee education. If you don’t offer these services, maintain a resource file from which employees can access information about community-based resources, treatment programs, and help lines
  5. Drug Testing. The most common test is urinalysis. Other types are the breath-alcohol test, blood test, hair analysis, and saliva or sweat tests. Reasons for testing include pre-employment screenings, reasonable suspicions of use, post-accident, return-to-duty, random, and periodic tests. Private employers have latitude in implementing testing, unless they’re subject to federal regulations (for example, the U.S. Department of Transportation drug-testing rules for employees in safety-sensitive situations). Many employers use testing guidelines by the Substance Abuse and Mental Health Services Administration (SAMHSA).

Finally, bear in mind that creating and implementing a successful drug-testing program takes time and patience!

Aug 01
Love0

EMPLOYERS’ LIABILITY INSURANCE: BEYOND WORKERS COMP

By Risk Management Bulletin

Although Workers Comp policies go by the official name of “Workers Compensation and Employers Liability,” it’s easy to overlook the “Employers Liability’ coverage, which protects your business against liability arising from physical injury and occupational illness claims that Workers Comp doesn’t cover. The Employers Liability section resembles a Commercial General Liability (CGL) policy, defending the employer against claims and paying the employee, dependents, or others in cases of employer negligence.

Consider these types of claims:

  • Action-Over: Let’s assume that Curbside Concrete’s employee is injured in an accident while driving a company mixer and sues the other driver, who then sues Curbside, arguing that a defect in its truck caused the accident. Employees who use tools are especially prone to filing claims of this type: the employee sues the manufacturer of a tool that injured them on the job. The manufacturer then counter-sues the employer for negligence in failing to supervise the employees on the safe use of its tool.
  • Loss of Consortium: A seriously injured or dead employee might have a relative or spouse who sues the firm for the resulting loss of normal relations with the disabled or deceased companion. This absence can affect a son or daughter with a mother or father who can no longer fulfill the proper role of a parent, as well as someone whose spouse’s sexual function has diminished.
  • Consequential Bodily Injury: A worker’s injury has an adverse on one of their relatives. For example, after Joe suffers an injury on the job, his sister must now quit her job to drive him to the occupational therapist every day.
  • Dual Capacity: A firm faces a suit beyond its role as the injured worker’s employer. Mike, the building maintenance worker, is injured while installing a basketball hoop in the company gym by a drill manufactured by his employer, Dynamic Drill, Inc. He files a suit against Dynamic as creator of the tool, not as the employer. A dual capacity claim allows Mike to circumvent the prohibition under Workers Compensation law against suing his employer.

These workplace occurrences are not far-fetched. Our risk management professionals would be happy to provide a thorough review of your Workers Comp policy to make sure that you have the protection you need.

Aug 01
Love0

SICK BUILDING SYNDROME: HOUSEPLANTS TO THE RESCUE

By Risk Management Bulletin

The focus on energy conservation has been making our buildings get tighter and tighter, allowing less and less air exchange. This can result in “Sick Building Syndrome,” with pollutants trapped inside the building causing such symptoms as sensory irritation of the eyes, nose, throat; neurotoxic or general health problems; skin irritation; nonspecific hypersensitivity reactions; and odor and taste sensations.

Causes include flaws in heating, ventilation, and air conditioning (HVAC) systems. contaminants produced by out gassing some types of building materials, volatile organic compounds (VOC), molds, improper exhaust ventilation of ozone, light industrial chemicals used within, or fresh-air intake location /inadequate air filtration). Three major pollutants –formaldehyde, benzene, and trichloroethylene – are used in building materials, cleaning products, paint, adhesives, varnishes, and oils found in homes and workplaces throughout the nation.

If you’re looking for an inexpensive and easy way to improve indoor air quality, look no further than the common houseplant, says a study by NASA and the Associated Landscape Contractors of America (ALCA) on improving indoor air quality. NASA was looking for ways to purify the air in space stations. However, the study turned out to have some down-to-earth applications: houseplants not only brighten the environment in homes and workplaces, but also have the ability to cleanse indoor air and remove harmful pollutants.

So how could a little houseplant get rid of these nasty, dangerous air contaminants when sophisticated, powerful HVAC systems can’t seem to manage the job? The answer: To survive, houseplants use a process called photosynthesis that produces food from carbon dioxide and hydrogen, converting energy from light absorbed by chlorophyll in the plant’s leaves. Carbon dioxide and hydrogen, of course, are readily available in air. Because houseplants are so good at absorbing these gases, at the same time they also absorb other gases – including harmful indoor air pollutants!

Plant photosynthesis does us another big favor by releasing a waste product that we need to survive – oxygen. So having plants around not only removes pollutants, but refreshes indoor air with regular infusions of oxygen.

The NASA/ALCA study also found that some houseplants were better than others at removing specific pollutants. For example, bamboo palm, peace lily, golden pathos, red-edged dracaena, and spider plant were good at filtering out formaldehyde. Peace lily, English ivy, and bamboo palm worked best for removing benzene from indoor air, while peace lily and bamboo palm worked well for filtering trichloroethylene.

Jul 01
Love0

WILL YOUR CGL POLICY COVER YOUR LIABILITY FOR SOMEONE ELSE’S INJURY?

By Construction Insurance Bulletin

Two work crews building a new home are taking a break. One of the employees of the plumbing contractor and a carpenter get into a little verbal sparring. It starts out good-natured but turns heated, and the plumber picks up a metal nut and flips it in the other man’s direction. At that moment, the carpenter stands up directly in the nut’s path. It strikes him in the eye; the ensuing injury is so severe that he loses part of the sight in that eye. He sues the plumbing contractor and the employee who threw the object. Employer and employee both look for coverage and defense under the plumber’s Commercial General Liability (CGL) insurance policy. Although the policy will likely cover the employer, coverage for the employee is not certain.

A CGL policy normally does not cover a person (an “insured”) for liability for injuries or damages “expected or intended from the standpoint of the insured.” If the insurance company concludes that the plumber’s employee either expected or intended to injure the carpenter with the thrown nut, it will not cover either his liability or defense costs. As R. Steven Rawls and Rebecca C. Appelbaum explained in a recent article, when courts have interpreted this policy language, they tend to agree on the meaning of the word “intended” but differ on the meaning of “expected.” Courts in various states have approached the meaning of “expected” in different ways.

  • Expected and intended mean the same thing. Some courts have ruled that the two words have the same meaning within the insurance policy’s context. If the plumber expected the carpenter to get hurt, he must have intended it, and vice versa.
  • What did the insured think was more likely to occur? A Texas court ruled that a result, such as an injury, is expected if the insured considered its occurrence to be more likely to happen than not to happen. The same court said that a finding that the insured intended an injury requires more proof than does a finding that an injury was expected.
  • If the insured committed a reckless act, does that automatically mean he expected an injury? Another Texas court did not believe so. It raised the possibility that someone, while aware of the risks of a particular action, might believe that the chances of something going wrong are low. An Indiana court also said that recklessness alone is not enough to prove that an insured expected an injury. However, an Illinois court said that some actions are so inherently dangerous (such as firing a gun) that the only possible conclusion is that the insured expected the injury.
  • Two-part tests. Some courts have used a two-part test to determine expectation. A Michigan court used a test that asked, first, did the insured foresee the injury that occurred? If not, was the likelihood of the injury so overwhelming and obvious as to make unbelievable the insured’s claim that he didn’t foresee it? A Delaware court said that, where the insured clearly did not intend to injure the other person and where he should not necessarily have known that an injury would occur, the policy would cover him.

Construction sites are dangerous places; injuries can occur either through horseplay or in the normal course of work. Contractors cannot emphasize too strongly to their employees the necessity of common sense and care on the job site. If an employee injures someone else on the site, his financial well-being could depend on a court deciding whether he should have expected the injury. That’s a chance no one should want to take.

Jul 01
Love0

FORM OF THE MONTH:

By Your Employee Matters

EDUCATION REIMBURSEMENT AGREEMENT
(PDF)

Training is the lifeblood of many companies today; everything from extensive on-boarding to paying for expensive MBA programs. To protect from an employee getting educated and then immediately leaving, many companies use a Reimbursement Agreement such as this one. One caveat: Make sure that your state law and contract allows you to offset any monies owed from a final paycheck. Some states, such as California, do not allow a “self-help” remedy. You would have to go to court to enforce the terms of the contract.

Jul 01
Love0

FMLA CLARIFICATION ENSURES ALL CAREGIVERS THE RIGHT TO FAMILY LEAVE

By Your Employee Matters

All families, no matter what they look like, are protected by the Family and Medical Leave Act (FMLA). “Workplaces have changed over the last ten years and how we view families has evolved as well,” said DOL Secretary Solis. That message was solidified when the department announced this week that an employee who assumes the role of caregiving for a child is entitled family leave regardless of their legal or biological relationship to the child. This clarification of the law is a victory for many non-traditional families, including families in the lesbian, gay, bisexual, and transgender community, who have often been denied family leave. The FMLA allows workers to take up to 12 weeks of unpaid leave during any 12-month period to care for loved ones or themselves.
Read the News Release here.

Read the Administrator’s Interpretation here.

Jul 01
Love0

CLAMPING DOWN ON CREDIT HISTORIES

By Your Employee Matters

For many years, we’ve recommended that employers conduct credit histories on all job applicants and post-hire in specific categories. The fact is, someone with a poor credit history is a greater risk than someone who has a good record. However, to protect workers impacted by the recession, Oregon, Washington, and other states have begun passing laws that narrow the scope of these inquiries. The EEOC is also raising numerous concerns in this area. The Oregon statute limits the inquiry to cases in which a person’s credit is “substantially job-related,” which is defined as:

  • An essential function of the position at issue requires access to financial information
    not customarily provided in a retail transaction that is not a loan or extension of credit. Financial information customarily provided in a retail transaction includes information related to the exchange of cash, checks, and credit or debit card numbers.
  • The position at issue is one for which an employer is required to obtain credit history
    as a condition of obtaining insurance or a surety or fidelity bond.

Click here to see the Oregon statute.

Here’s what the EEOC says:

“Pre-Employment Inquiries and Credit Rating or Economic Status
“Inquiry into an applicant’s current or past assets, liabilities, or credit rating, including bankruptcy or garnishment, refusal or cancellation of bonding, car ownership, rental or ownership of a house, length of residence at an address, charge accounts, furniture ownership, or bank accounts generally should be avoided because they tend to impact more adversely on minorities and females. Exceptions exist if the employer can show that such information is essential to the particular job in question.”

Here’s some data gathered in an effort to encourage these regulations.
Here’s a suit filed by the EEOC. Since at least 2001, the EEOC said, Freeman has rejected job applicants based on their credit history and if they have had one or more of various types of criminal charges or convictions. The EEOC lawsuit charged that this practice has an unlawful discriminatory impact because of race, national origin, and sex, and is neither job-related nor justified by business necessity.
Click here to see the FTC site on credit rating.

The Bottom Line: Asking for credit backgrounds poses risks for employee and employer alike. Make sure that you work with a company such as www.globalhrresearch.com that helps keep you abreast of the rapidly changing legal requirements in this area.

Jul 01
Love0

FAILURE TO INVESTIGATE DOES NOT GIVE RISE TO STAND-ALONE RETALIATION CLAIM

By Your Employee Matters

The U.S. Court of Appeals for the Second Circuit (covering Connecticut, New York, and Vermont) has ruled that an employer’s deliberate failure to investigate a complaint of discrimination does not constitute a stand-alone act of retaliation. In Fincher v. Depository Trust and Cleaning Corp., the plaintiff alleged that she complained to a human resources manager about what she believed was racially biased treatment toward black employees in her department. The plaintiff claimed that the human resources manager told her that he was not going to open up an investigation of her claim of race discrimination. The plaintiff resigned and filed claims under federal, state, and local laws for retaliation.

The Court of Appeals affirmed summary judgment in favor of the employer, finding that the employer’s alleged failure to investigate discrimination was not in itself a “materially adverse action” which could subject the employer to retaliation liability. The court noted that under the seminal case Burlington N. & Santa Fe Ry. Co. v. White, “a plaintiff must show that a reasonable employee would have found the challenged action materially adverse, which in this context means it well might have dissuaded a reasonable worker from making or supporting a charge of discrimination.” The court held that an employee’s knowledge that her employer has declined to investigate her complaint does not ordinarily constitute a threat of further harm.

Above articles courtesy of Worklaw® Network firm Shawe Rosenthal.

Close Menu