Rhodes - Warden Insurance News

Pregnancy and Maternity: Avoid Costly Discrimination Claims

Mon, 14 May 2012 17:15:00 GMT

Women comprised 46.8 percent of the total U.S. labor force in 2010, according to the U.S. Department of Labor. Many of these working women will become pregnant at least once during their careers. Improper handling of pregnancy, pregnancy-related disability and maternity leave can lead to discrimination lawsuits. Do you know the laws that apply?

The Pregnancy Discrimination Act prohibits employment discrimination on the basis of pregnancy, childbirth or related medical conditions. The law affects employers with 15 or more employees, including state and local governments, as well as employment agencies, labor organizations and the federal government.

The law requires employers to treat women who are pregnant or affected by pregnancy-related conditions in the same manner as other applicants or employees with similar abilities or limitations. An employer cannot refuse to hire a pregnant woman because of pregnancy, a pregnancy-related condition, or the prejudices of co-workers, clients or customers. Pregnant employees must be permitted to work as long as they are able to perform their jobs. An employer also cannot have a rule prohibiting an employee from returning to work for a predetermined length of time after childbirth.

Handling Pregnancy-Related Disabilities

If an employee is temporarily unable to perform her job because of her pregnancy, the employer must treat her same as any other temporarily disabled employee. For example, if the employer allows temporarily disabled employees to modify tasks, perform alternative assignments or take disability leave or leave without pay, the employer also must allow an employee who is temporarily disabled because of pregnancy to do the same.

If an employee has been absent from work as a result of a pregnancy-related condition and recovers, her employer may not require her to remain on leave until the baby’s birth. However, if an employer requires employees to submit a doctor’s statement concerning their inability to work before granting leave or paying sick benefits, the employer may require employees affected by pregnancy-related conditions to submit such statements.

Employers must hold open a job for a pregnancy-related absence the same length of time jobs are held open for employees on sick or disability leave.

Maternity Leave

No federal law requires employers to provide paid maternity leave. The Family and Medical Leave Act (FMLA) covers employees at companies with 50 or more workers and applies to employees who have been with the employer for at least one year and have worked for at least 1,250 hours over the course of that previous year. The FMLA allows eligible employees to take up to 12 weeks of unpaid leave for the birth and care of their child, or for their (or a close family member’s) serious health conditions. It also guarantees that the employee’s job, or an equivalent job, will be available if she returns to work immediately after her leave is up.

Some states have their own maternity leave laws. Generally, where a state provides maternity leave, employees can “leave stack,” or combine leave under different programs. Eight states (California, Connecticut, Louisiana, New Jersey, Oregon, Rhode Island, Tennessee and Washington) and the District of Columbia require employers to offer maternity leave.

No state or federal law requires paid maternity leave; however, Connecticut, Hawaii, Washington and Wisconsin allow employees to use accrued sick leave to care for a healthy new baby. Several other states, including California, Hawaii, New Jersey, New York and Rhode Island provide paid leave for women temporarily disabled due to pregnancy or childbirth through short-term disability programs. California’s law also allows women with normal childbirths to collect partial payment. Most states require employers to continue benefits during leave; not every state requires employers to guarantee an employee’s job will be available upon her return.

Health Insurance and Other Benefits

Employer-provided health insurance plans must cover expenses for pregnancy-related conditions on the same basis as costs for other medical conditions. Your plan must pay pregnancy-related expenses exactly as those incurred for other medical conditions, whether payment is on a fixed basis or a percentage of reasonable and customary charges. Health plans cannot impose additional, increased or larger deductibles on pregnancy-related expenses.

The FMLA requires employers to continue health insurance and other benefits for employees as if they were still actively working; employees on leave still accrue seniority. Although the FMLA guarantees your employees’ right to coverage while they are out on leave, once they exhaust FMLA leave, your group health, life or disability plan might not consider them active employees for the purposes of coverage. If your organization offers maternity or disability leave that is longer than required by the FMLA, check with your carrier to see whether it will consider covered employees still active after they exhaust FMLA leave. If the carrier does not, your employee may be able to continue health coverage through COBRA. If your organization’s group life policy includes a waiver of premium provision, an employee on leave may be able to continue coverage if her leave was caused by a disability related to pregnancy (or any other cause).

Employment-related laws are complex and constantly changing. We can review your benefit plans and human resource policies to check for any possible compliance gaps. For information, please contact us.

Saver’s Credit Makes Saving for Retirement More Attractive

Sun, 06 May 2012 17:13:00 GMT

Looking to boost employee participation in your retirement plans? Remind them of the retirement savings contributions credit (saver’s credit), which allows qualifying individuals to take a tax credit of up to $1,000 ($2,000 if filing jointly) for making eligible contributions to an IRA or employer-sponsored retirement plan.

Who is eligible for the credit?

Age 18 or older;
Not a full-time student;
Not claimed as a dependent on another person’s return; and
With a 2011 adjusted gross income not more than:
$56,500 for married filing jointly ($57,500 for 2012),
$42,375 for heads of household ($43,125 for 2012), or
$28,250 for singles, married filing separately, or qualifying widow(er)s ($28,750 for 2012).

Eligible contributions include:

Contributions to a traditional or Roth IRA,
Elective deferrals (including after-tax Roth contributions, if available) to a:
401(k) plan (including a SIMPLE 401(k) and the federal Thrift Savings Plan),
SIMPLE IRA plan
SARSEP
403(b) annuity
governmental 457(b) plan
Contributions to a §501(c)(18) plan, and
Voluntary after-tax employee contributions to a qualified retirement plan or 403(b) annuity. For purposes of the credit, employee contributions will be voluntary as long as they aren’t required as a condition of employment.

Rollover contributions aren’t eligible for credit. Also, eligible contributions may be reduced by any recent distributions received from a retirement plan or IRA.

Amount of the credit

The amount of the credit depends on contributions made and your credit rate, which depends on income and filing status. The credit rate ranges from 10 percent to 50 percent. See IRS Form 8880 to determine the credit rate.

Example: Jill, who works at a retail store, is married and earned $30,000 in 2011. Jill’s husband was unemployed in 2011 and did not have any earnings. Jill contributed $1,000 to her IRA in 2011. After deducting her IRA contribution, the adjusted gross income shown on her joint return is $29,000. Jill may claim a 50% credit, $500, for her $1,000 IRA contribution.

COBRA Benefits: What You Need to Know

Tue, 01 May 2012 17:09:00 GMT

COBRA, the Consolidated Omnibus Budget Reconciliation Act of 1985, allows workers and family members who would otherwise lose their benefits to temporarily continue health coverage at group rates. If you had 20 or more employees in the prior year and offer a group health plan, COBRA applies to your company. Here’s what you need to know about COBRA’s requirements.

Employee count. Your employee count must include part-time employees; add part-timers’ hours together to determine the number of full-time equivalents.

Qualified beneficiaries. Eligibility is limited to those covered by a group health plan on the day before a qualifying event (see below).

Qualifying events. Certain events will trigger the right to coverage under COBRA, including termination of employment (voluntary or involuntary), unless it is for gross misconduct, and reduction in hours worked (e.g., from full-time to part-time). An employee’s death, divorce, legal separation or eligibility for Medicare are all considered qualifying events, as is a change in status of a covered dependent or spouse. Being called up for active military duty also triggers COBRA eligibility when an employer doesn’t voluntarily maintain a reservist’s health coverage.

Types of coverage. Employers must offer COBRA beneficiaries the same coverage as they do to non-COBRA beneficiaries — usually the same plan that was in place immediately before the qualifying event. Any benefit changes for active employees will also apply to COBRA beneficiaries, who are entitled to the same coverage choices as all other employees, such as during periods of open enrollment.

Length of coverage. COBRA provides for up to 18 months’ coverage for qualifying events such as job termination or a reduced work schedule. Certain qualifying events, or a second qualifying event during the initial coverage period, may extend coverage to a maximum of 36 months. Employers may also provide coverage beyond COBRA maximums. Coverage begins on the date that benefits would otherwise have been lost because of a qualifying event. It may end earlier than the maximum period if the beneficiary does not pay premiums on time or if the employer stops offering any group health plan.

Notification and election. Group health plans must notify covered employees and their spouses of their COBRA rights when they first join the plan. Be sure to keep track of the various COBRA deadlines: Employers must inform plan administrators of a qualifying event within 30 days after an employee’s death, termination, reduction in hours or entitlement to Medicare.

In the case of divorce, legal separation or a dependent’s change of status, a qualified beneficiary has 60 days to notify the plan’s administrator. The administrator then has two weeks to notify the person entitled to COBRA benefits, who has 60 days to decide whether to elect coverage. Keep in mind that though an employee may choose coverage on behalf of all other qualified beneficiaries, each beneficiary has the right to independently elect COBRA coverage. For example, if an employee has a family member with an illness at the time he is terminated, that person alone can elect coverage, should he choose.

Cost of coverage. Some companies subsidize COBRA coverage, but in most cases, the employee pays the full premiums. In fact, employers may charge up to 102 percent of the premium and keep the additional two percent to cover administrative costs. COBRA premiums may increase if costs to the plan increase but generally must be fixed before each yearly premium cycle. The beneficiary must make the initial premium payment within 45 days after the election date, and employers can terminate

COBRA coverage if payments are late. The fact that employers usually must pay their group medical insurance premiums in advance gives COBRA insureds a 30-day grace period from the time the employer’s payment is due.

Special rules apply to reservists called up for military service. If military service is for 30 or fewer days, the employee and dependents can continue coverage at the same cost as before their short service. If military service is longer, you can require the employee and dependents to pay as much as 102 percent of the full premium for coverage. However, military health benefits should cover these employees and their dependents.

State law. Most states have laws concerning the continuation of benefits. Some cover all employers, including small employers, so a state law might apply even if your company is exempt under the federal COBRA law. We can help you determine your COBRA obligations and assist with compliance. For more information, please contact Rhodes-Warden Insurance Agency, Lebanon (541) 258-2131, Albany (541) 967-8062, Stayton (503) 769-7105.

Safety Tips for Your Boat Trailer

Tue, 01 May 2012 15:00:37 GMT

When purchasing a trailer in Oregon or elsewhere, stay within recommended capacity guidelines. When determining capacity, remember to include the weight of fuel and accessories in addition to the weight of the craft.

Trailers come with closed or open frames. Closed frames help protect the wiring, but problems can be more difficult to locate and repair. Open frames leave the wiring exposed, but make it easier to spot and repair potential problems. Open frames also drain water more easily and efficiently, so keep in mind that when you dip that trailer into lakes, or elsewhere.

Consider the method of personal watercraft (PWC) support, the frame strength and construction, whether lights and wiring are approved for marine use, whether rollers and bunks are properly positioned and attached to the main frame for proper suspension, and the durability of the finish. (Powder-coated or galvanized finishes are more durable than baked-on enamel.)

Purchase good quality tie-downs with the right hooks to attach to your trailer. Before each use of your trailer, check:

Tires for wear and inflation
Hitch and safety chain for signs of wear or stress
Braking system to make sure you can stop with a load
Electrical system for improper connections, corroded terminals, damaged wires, burned out bulbs, etc.
Wheel bearings are properly packed with a good bearing grease
Lug nuts and main nuts are tight
Stops, rollers and bunks for wear or cracks
Coupler and ball are compatible in size and are properly secured. Check for wear or stress
Both bow and stern of your PWC are secured to the trailer. Use extra tie-downs in case one should fail
Emergency supplies; carry basic tools, spare bulbs, bearings, grease, mounted tire and highway flares

Drive carefully. Give other drivers plenty of warning for any maneuvers. Allow for the extra length of the car and trailer when turning and passing, and allow extra time for stopping.

Pull off the road periodically to check the rig. Examine the tires and wheel bearings for signs of overheating, check the lights and test the tie-downs.

Before Leaving Shore

At the Launch Ramp:

It helps to have someone in the car, and someone at the water.
Prepare your PWC as much as possible before taking your turn in line. Remove the craft cover. Remove the seat for a few minutes to allow gas fumes to vent. Undo the stern (not bow) tie-downs. Unplug the trailer lights. Make sure the PWC drain plugs are in place. Visually inspect your PWC from bow to stern.
Be courteous. Wait your turn at the ramp. Don’t rush, but don’t linger longer than necessary.
Make sure the way is clear before launching. Look for other boats, debris, etc.
Be prepared to ride clear of the launch area immediately and to secure the PWC out of the way of others.
Never leave the trailer unattended on the ramp with only the parking brake set.

Contact Us!

Retirement Account Limits for 2012

Wed, 25 Apr 2012 17:07:00 GMT

The Internal Revenue Service has announced dollar limitations for pension plans and other retirement accounts for Tax Year 2012. In general, many of the pension plan limitations will change because the increase in the cost-of-living index met the statutory thresholds that trigger their adjustment. However, other limitations will remain unchanged. Highlights include:

The elective deferral (contribution) limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan increases from $16,500 to $17,000.
The catch-up contribution limit for those aged 50 and over remains unchanged at $5,500.
The deduction for taxpayers making contributions to a traditional IRA is phased out for singles and heads of household who are covered by a workplace retirement plan and have modified adjusted gross incomes (AGI) between $58,000 and $68,000, up from $56,000 and $66,000 in 2011. For married couples filing jointly, in which the spouse who makes the IRA contribution is covered by a workplace retirement plan, the income phase-out range is $92,000 to $112,000, up from $90,000 to $110,000. For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the deduction is phased out if the couple’s income is between $173,000 and $183,000, up from $169,000 and $179,000.
The AGI phase-out range for taxpayers making contributions to a Roth IRA is $173,000 to $183,000 for married couples filing jointly, up from $169,000 to $179,000 in 2011. For singles and heads of household, the income phase-out range is $110,000 to $125,000, up from $107,000 to $122,000. For a married individual filing a separate return who is covered by a retirement plan at work, the phase-out range remains $0 to $10,000.
The AGI limit for the saver’s credit (the retirement savings contributions credit) for low- and moderate-income workers is $57,500 for married couples filing jointly, up from $56,500 in 2011; $43,125 for heads of household, up from $42,375; and $28,750 for married individuals filing separately and for singles, up from $28,250.

Wellness Programs: Why, What, Who and How

Wed, 18 Apr 2012 16:52:00 GMT

As healthcare costs continue to rise faster than inflation, wellness programs have gotten a lot of attention lately. What exactly is a wellness program, and how do you start one? Why wellness? First off, lifestyle choices contribute to many of the most common—and costly—chronic conditions:

Tobacco use remains the leading cause of preventable death in the United States, causing 443,000 deaths each year. Each day 1,200 current and former smokers die prematurely due to tobacco-related diseases.

Diabetes—linked to excess weight and inactivity—affects 8.3 percent of the U.S. population. People diagnosed with diabetes have average medical expenditures 2.3 times higher than comparable individuals without diabetes. The American Diabetes Association estimates 7 million people are living with undiagnosed diabetes.

Cardiovascular diseases, including heart disease and stroke, account for more than one-third of all U.S. deaths. Leading a healthy lifestyle — not using tobacco, being physically active, maintaining a healthy weight, and making healthy food choices — greatly reduces risk of heart disease or stroke.

High blood pressure and high cholesterol also play a significant role in cardiovascular health. For example, a 12–13 point reduction in average systolic blood pressure over four years can reduce heart disease risk by 21%, stroke risk by 37%, and risk of cardiovascular death by 25%.

Employees want wellness programs. Nearly half (48.2%) of employees enroll in wellness programs when their employers offer them, found the 2011/2012 Benefits USA survey.

What exactly is a wellness program?

Sponsored by an employer, a wellness program aims to improve employee health by encouraging or rewarding healthier behaviors, creating disincentives for unhealthy behaviors or by helping individuals better manage existing health conditions. In the past, most wellness programs focused on physical fitness. Today, the focus has broadened to include topics such as nutrition, mental health and chronic disease prevention, as well as the workplace environment.

Depending on your employee population, needs, budget and goals, your program can be as simple as an employee weight loss contest run by employees, to a professionally designed program involving employee health assessments, individually tailored programs and regular follow-up by nurses or other health professionals. Regardless of the scope of your program, it needs to have concrete, achievable goals.

Who should be involved?

Getting employee buy-in from the outset can help ensure your wellness efforts meet employee needs and interests — otherwise you risk wasting money and time. Many companies establish an employee wellness committee to provide guidance on all phases of a wellness program and provide ongoing support for program managers.

Consider recruiting people who have responsibility for some aspect of employee health or well-being already (e.g., human resources, employee benefits, occupational health and safety, the employee cafeteria, employee unions), as well as people responsible for environmental and policy changes (e.g., facilities and operations, legal department).

Wellness committees also enable you to gain direct employee input on your program. Include a diverse group of employees from all levels of the organization, cultural and ethnic backgrounds, ages and genders. If your organization is small, consider linking with other small businesses, government agencies or local nonprofit organizations to form a health promotion council.

How do we start?

Conducting a needs assessment can ensure your organization ends up with a wellness program that reflects employee needs and aligns with company objectives. You can conduct the assessment in-house or hire a health benefit or health promotion consultant. Needs assessments can measure and identify:

Baseline data necessary for evaluation purposes
Management and program goals and objectives
The feasibility of implementing a wellness program
Support for wellness at various levels of the organization
Employee needs and interests
How company policies support or present obstacles to healthy lifestyles
Features of the workplace environment that support or present obstacles to healthy lifestyles
Cultural aspects of the organization that could affect program strategies
Internal and external resources available for program planning and implementation
Current employee lifestyle behaviors
Medical care costs
Productivity costs
Priorities for financial and other resources
Needs for practices that address specific diseases and conditions
Needs for practices that enable persons with disabilities or special needs to participate in health promotion programs.

If you need assistance in setting up a wellness program for your organization, please contact Rhodes-Warden Insurance Agency, Lebanon (541) 258-2131, Albany (541) 967-8062 or Stayton (503) 769-7105.

Housekeeping for Retirement Plans

Fri, 13 Apr 2012 18:53:00 GMT

As with nearly everything else, retirement plans require periodic maintenance to keep running smoothly. Here are some suggestions to ensure your plan complies with all laws and regulations and meets the goals of your benefits program.

Keep your plan up-to-date with the law. On a regular basis, ask your benefits professional “when and what” to change in your plan. Those who specialize in retirement programs may provide auditing and plan review services.

Avoid the following common mistakes:

not following the terms of the plan document
not covering the proper employees
not giving employees required information
not depositing employee deferrals or employer contributions in a timely manner, and
not limiting employee deferrals and employer contributions to the proper limits.
Periodically review your plan. Errors in a plan brought on by changes in your workforce and its salary deferral patterns are easier and cheaper to fix when they are small and have not been allowed to continue over a long period of time. If you have a SIMPLE IRA, SEP or similar plan, consider a check-up now. Tools include checklists for operating these plans — see IRS Publications 4284, 4285 and 4286 at www.irs.gov.
Get an independent reviewer to check your plan. An independent reviewer may see something that others have overlooked. This could save you and your employees money, and may improve benefits.
Monitor the people who work with your plan. Make sure that those who operate your plan are getting the correct data. Monitor the plan investments. Make sure any fees are appropriate. Make sure plan contributions and distributions are occurring properly and in a timely manner.
Report to the government. Pension and welfare benefit plans must generally file the Form 5500, Annual Return/Report of Employee Benefit Plan, every year to report their financial condition, investments and operations. Plans must generally file the return on the last day of the seventh month after their plan year ends. (If that due date falls on a Saturday, Sunday or federal holiday, then it may be filed on the next business day.) Plans that must file a Form 5500 or Form 5500 EZ include (but are not limited to) profit-sharing plans, stock bonus plans, money purchase plans, 401(k) plans, annuity arrangements under Code section 403(b)(1), custodial accounts established under Code section 403(b)(7) for regulated investment company stock, and individual retirement accounts (IRAs) established by an employer under Code section 408(c).
Correct mistakes now. The Internal Revenue Service’s Self Correction Program (SCP) gives plan sponsors financial incentives for finding and correcting mistakes earlier rather than later. In fact, many mistakes can be corrected easily, without penalty and without notifying the IRS; the plan and its participants keep tax benefits.

You can also ask for IRS assurance about correcting mistakes through the VCP (Voluntary Compliance Program), which works for errors not eligible for self-correction. Errors are corrected and the tax benefits of the plan are preserved for plan participants and the plan sponsor with IRS help. Errors corrected under SCP or VCP are not treated as errors if the IRS audits your plan.
Ask employees for their opinions. Benefits should enhance recruitment, retention and job satisfaction. If the plan isn’t working for your employees, it’s not working for your organization. To get input, you can conduct regular, formal surveys along with making a point of asking individual employees what they think whenever they make a plan change or ask a question about their benefits. The most effective surveys are brief, simply worded and seek specific information. When designing your survey, ask for the information that will be most valuable to you. For example, you could ask employees if their plan offers enough, too many or too few investment options. Or ask non-participants why they opted not to participate, and what would make them consider participating.
Keep your communications up to date. In addition to providing current information on fund options, deferral limits, etc., consider the tone of your publications as well. Do they reflect current realities? Some plan materials promote a 401(k) or other defined contribution plan as a supplement to a defined benefit plan. However, for most employees, a defined contribution plan is the only employer- sponsored option they have. Even for those who make maximum deferrals, the typical 401(k) will likely not be enough to fund a comfortable retirement.
Keep informed on the latest retirement plan news. Free and reliable sources of retirement benefit news and information include Retirement News for Employers, a periodic newsletter from IRS Employee Plans; the 401(k) Help Center www.401khelpcenter.com

Healthcare Reform Update

Tue, 10 Apr 2012 17:38:44 GMT

In late March, the U.S. Supreme Court heard arguments on several provisions of the Affordable Care Act (ACA) essentially determining its fate. Most attention centered on the minimum coverage provision, the so-called “individual mandate.” This provision requires most people to have health coverage for themselves and their dependents starting in January 2014. Employer-sponsored plans will count, as will Medicare and Medicaid. Subsidies will be available for the needy, but those who do not buy coverage will face financial penalties. Although other courts have found the individual mandate constitutional, the 11th Circuit Court said, “Congress cannot...mandate that individuals enter into contracts with private insurance companies for the purchase of an expensive product from the time they are born until the time they die.”

The Court also heard arguments on the ACA’s expansion of Medicaid. The ACA will require Medicaid to cover nearly every needy American under age 65 starting in 2014. Although the federal government will pay 100 percent of states’ increased costs between 2014 and 2019, and 90 percent starting in 2020, 26 states have brought suit against the U.S. Departments of Health and Human Services, Labor and Treasury and their secretaries over the Medicaid expansion and individual mandate. Finally, the court listened to arguments on severability, or whether other portions of the ACA will stand if the individual mandate is deemed unconstitutional.

According to the U.S. Department of Justice, “Every insured family pays an average of $1,000 more a year in premiums to cover the care of those who have no insurance,” since healthcare providers pass along the costs of treating the uninsured. However, ACA opponents argue that other reforms would do more toward improving health insurance accessibility and affordability than mandated coverage and government-run exchanges. These include extending tax benefits to individually purchased health insurance, making it fully portable and eliminating laws that require policies issued in a state to cover certain procedures, making coverage more expensive. We will keep you informed of important developments; please contact us if you have any questions in the meantime.

Telecommuting as a Benefit

Sat, 07 Apr 2012 18:45:00 GMT

With employees working harder than ever before, many say it’s becoming more difficult to find a balance between work and home life. If you want a low-cost way to improve job satisfaction and increase productivity, consider developing a telecommuting program.

Telecommuting: Meanings Vary

“Telecommuting” (also called “telework”) means any arrangement where an employee works at home or another location removed from the employer’s site. It can take a variety of forms, depending on the organization and employee’s position. Some arrangements allow employees flexibility of schedule as well as location. Some employees work full-time from home, while others work at home part-time and in the office part-time. Some employers have formal arrangements with telecommuting contracts or agreements, while others have ad hoc arrangements.

Benefits of Telecommuting

However your organization structures it, telecommuting offers advantages for employees and employers alike. In a survey of telecommuters conducted in May 2011 by Staples Advantage, the business-to-business division of the office supply superstore, the overwhelming majority — 86 percent — said they were more productive in their home office. Telecommuters also reported being:

Happier and healthier — When asked to draw comparisons, telecommuters say their stress levels dropped 25 percent on average since working from home. Seventy-three percent even say they eat healthier when working from home.
More loyal — Without the trek to the office — on average, a 75-mile round-trip for respondents — 76 percent of telecommuters are more willing to put in extra time on work and say they are more loyal to their company since telecommuting.
Better balanced — More than 80 percent say they now maintain a better work/home life balance.

Other studies support these findings. In 2007, researchers at Pennsylvania State University reviewed nearly 50 studies on flexible scheduling, which spanned 20 years and involved nearly 13,000 employees. Dr. Ravi Gajendra, one of the co-authors, said, “Our results show that telecommuting has an overall beneficial effect because the arrangement provides employees with more control over how they do their work.”

Employers not only enjoy additional productivity and happier employees, they can also reduce costs with a well-planned telecommuting program. With more employees off-site, they can reduce their real estate needs and energy consumption. It has environmental benefits, too — when employees eliminate their commute they save gas and reduce pollutants.

As with nearly any benefit, telecommuting can be abused. In a survey by CareerBuilder, 17 percent of teleworkers admitted (anonymously, of course) to doing an hour or less of work during work hours. They admitted to allowing the following distractions to take their time:

Household chores (31%)
TV (26%)
Pets (23%)
Errands (19%)
Internet (18%)
Children (15%)

Other studies have found that employees who work away from the office for three or more days of the week reported their relationships with co-workers worsened. However, their managers reported that their performance did not suffer. Telecommuters can feel disconnected when they don’t have face time with their co-workers. Scheduling regular meetings to check-in—whether in-person, Skype or video conferencing—can help telecommuters stay in the loop.

The following pointers can help make telecommuting positive for both your organization and your employees:

Keep your expectations clear. Telecommuters should have detailed job descriptions and specific work goals.
Evaluate performance regularly.
Don’t show favoritism when allowing employees to telecommute. Use objective criteria, such as job duties, to determine who can or cannot telecommute and when.
Consider overtime liability. If job duties cause an employee to be classified as non-exempt under the Fair Labor Standards Act (FLSA), you must pay him/her for all hours worked, including overtime for any hours over 40 in a single workweek. To avoid liability for back pay and fines, establish a mechanism to track their actual work hours.
Consider safety. Employers are liable for employees’ work-related injuries, even if they occur in the employee’s own home. You will want to ensure that employees have a safe work set-up. If your employee works in another state, make sure you have the necessary workers’ compensation coverage. Many employers also opt to carry employers liability insurance in addition to workers’ compensation insurance to provide additional coverage for lawsuits filed by employees or their families for injuries.
Discuss potential state/municipal tax issues with your accountant. An employee who works out of state might have to pay state income taxes to the employer’s state, his/her state of residence or both, depending on state laws and the individual situation.

For information on other life/work benefits, please contact us.

FMLA Administration

Thu, 05 Apr 2012 23:35:00 GMT

The good news is employers are doing a better job of complying with the Family and Medical Leave Act (FMLA). Between 2001 and 2008, the number of complaints the U.S. Department of Labor received dropped by one-third, as did the number of violations found. And back wages paid by employers dropped by nearly half. Still, many employers find FMLA compliance confusing. To help your organization avoid the common pitfalls of FMLA compliance, a review of the basic provisions of the law and strategies for effective leave management follow.

FMLA Fast Facts

Which employers must comply? The FMLA applies to any employer that employs 50 or more workers in a 75-mile radius each working day during each of 20 or more calendar workweeks in the current or preceding calendar year.

Which employees are eligible? Employees can take FMLA leave if they have worked for an FMLA-qualified employer for at least 12 months and have worked at least 1,250 hours over the previous 12 months.

How much leave can workers take? Eligible workers can take up to 12 weeks of leave per year for serious health conditions; to care for a family member (spouse, child or parent) with a serious health condition; or for childbirth, adoption or foster care. Workers can take leave consecutively or intermittently. Leave may run concurrently with workers’ compensation, short-term disability and salary continuation.

What is “a serious health condition”? The FMLA defines this as incapacity or treatment that involves inpatient care (an overnight stay) in a medical care facility, as well as subsequent treatment related to inpatient care. It also includes any period of incapacity due to pregnancy, a chronic serious health condition or a health condition lasting more than three days that requires treatment by a health care provider. The FMLA also applies to absences to receive multiple treatments to address serious conditions.

What other responsibilities do employers have? The FMLA requires employers that provide health benefits to continue them during an employee’s leave. Following the 12 weeks of unpaid leave, employers must reinstate the employee in the same job or an equivalent one. Employers that deny or restrict an employee’s rights under FMLA may be liable for lost wages and benefits, as well as damages and legal fees. Keep in mind that medical privacy rules apply to FMLA, and safeguard any medical information.

The employer has the ultimate responsibility of designating FMLA-eligible leave as FMLA leave based upon information furnished by the employee. You may not wait to designate FMLA leave after the leave has been completed and the employee has returned to work, unless you are: (1) awaiting medical certification to confirm a serious health condition, (2) unaware that leave was for an FMLA reason, and later receive employee requests for additional leave or (3) unaware of the situation and the employee notifies the company of the FMLA leave within two days after returning to work.

Many states have their own family or medical leave laws. Check to make sure that your leave policies comply with state law, which may be more generous in certain areas, including: (1) employee hours requirement (1,000 vs. 1,250 hours), (2) the minimum number of employees required for the law to apply (15 vs. 50 workers) and (3) the definition of family member (to include in-laws).

What are employees’ obligations? To qualify for FMLA leave, an employee must provide sufficient information to substantiate the need for leave. For medical leave, they do not have to have their health care provider supply a specific diagnosis, but merely certify the need for medical leave. Once an employee qualifies for FMLA leave, he or she does not have to provide advance notice if the leave is not foreseeable — for example, a migraine sufferer could leave work every time he gets a headache.

Should we outsource FMLA administration? Some employers use outside companies to manage their leave programs. Their reasons include avoiding potential litigation and fines, adding a layer of privacy regarding personal health information and reducing administrative burdens and the need for additional training.

Carefully evaluate an administrator’s experience and qualifications. Outsourcing FMLA administration might not completely insulate your company from liability if there is a violation. However, you can require indemnification from vendors for negligence related to their administration of your company’s FMLA program.

Whether you choose to outsource your FMLA administration or handle it in-house, you’ll want a tracking process to ensure consistency and integration of FMLA with other benefits, including appropriate documentation and state-leave requirements. For more information on FMLA compliance, go to www.dol.gov/dol/topic/benefits-leave/fmla.htm