May 31, 2016 or June 30, 2016:
Employers who were required to provide their employees with ACA forms 1095-B or 1095-C must transmit copies of each individual’s 1095-B or 1095-C along with the corresponding transmittal form (Form 1094-B or 1094-C) to the IRS by May 31, 2016 if filing by mail or by June 30, 2016 if filing electronically. (NOTE: Any employer with 250 or more forms must file electronically.)
Click here for 1094-B instructions or here for 1094-C instructions.
July 31, 2016 for Self-Insured Medical Plans:
The annual Patient Centered Outcomes Research Institute fee (“PCORI fee”), which applies only to organizations that offered self-insured medical plans and/or self-insured Flexible Spending Account plans in 2015, is due to the IRS July 31, 2016. If an organization’s plan is fully insured, the insurance carrier pays the fee on behalf of the policyholder.
The amount of the PCORI fee is equal to the average number of lives covered during the policy year or plan year multiplied by $2.17 per covered life. In the Form 720 instructions, the IRS provides three methods to determine the average number of lives covered: (1) the actual count method, (2) the snapshot method, (3) the Form 5500 method.
Download IRS form 720 (see Part II of the form) and page nine of the Form 720 instructions.
FEDERAL COMPLIANCE UPDATES
NEW EXEMPTION RULING TO TAKE EFFECT DECEMBER 1
The Department of Labor has issued the Final Rule on the new annual salary minimum for exemption from overtime, which will not go into effect until December 1, 2016. The new Final Rule establishes that most employees will have to earn at least $47,476 per year to be eligible to be paid on a salaried basis and exempt from overtime. This means that most employees must be paid overtime for working more than 40 hours in a week unless they earn a salary of at least $913 per week or $47,476 annually AND they perform certain defined exempt duties.
The annual limit can include up to 10% from nondiscretionary bonuses, incentive payments, and commissions, as long as these forms of compensation are paid at least quarterly.
It is important to note that certain professionals will NOT be affected by the new salary level. Specifically, the new higher salary minimum does not apply to teachers, academic administrative personnel (as defined), physicians, lawyers, judges, and outside sales workers.
The Final Rule also increases the salary limit for Highly Compensated Employees from an annual salary of $100,000 to $134,004.
The last update to the exemption salary minimum was made in 2004. Following the change to be effectiveDecember 1, 2016, the next update will be made January 1, 2020 and every three years thereafter. Any increases will be published 150 days prior to taking effect.
DOL ISSUES NEW FMLA EMPLOYERS’ GUIDE AND POSTER
The Department of Labor (“DOL”) recently issued Employer’s Guide to the Family and Medical Leave Act to provide employers essential information about the FMLA, including information about their obligations and the options available in administering FMLA leave.
The DOL also recently released a more reader friendly General FMLA Notice for employers to post in their workplaces. Note, however, that the February 2013 version of the FMLA poster is still valid. FMLA-covered employers who have 50 or more employees must post a copy of the General FMLA Notice in each location where it has any employees (even if there are no FMLA-eligible employees at that location). Click here to download the new poster.
EEOC CLARIFIES EMPLOYER-PROVIDED LEAVE AS ADA ACCOMMODATION
The U.S. Equal Employment Opportunity Commission (“EEOC”) recently issued Employer-Provided Leave and the Americans with Disabilities Act, a new resource document addressing the rights of employees with disabilities who seek leave as a reasonable accommodation under the Americans with Disabilities Act of 1990 (“ADA”).
The resource summarizes issues related to the interactive process and return to work policies and addresses undue hardship issues, the frequency of leave, flexibility regarding when leave is taken, the predictability of intermittent leave, the impact of the employee’s absence on coworkers, and the impact on the employer’s operations.
For more details, download Employer-Provided Leave and the Americans with Disabilities Act.
NEW FACT SHEET ON RIGHTS FOR TRANSGENDER EMPLOYEES
The EEOC also recently released a new fact sheet entitled Bathroom Access Rights for Transgender Employees under Title VII of the Civil Rights Act of 1964. The fact sheet underscores that discrimination based on a person’s transgender status constitutes sex discrimination under Title VII and that denying an employee equal access to a restroom corresponding to the employee’s gender identity is considered sex discrimination.
For more details, download the Fact Sheet.
DOL RELEASES FINAL RULE ON PERSUADER AGREEMENTS
The DOL has issued a final rule that revises the interpretation of the “advice” exemption in the Labor-Management Reporting and Disclosure Act (“LMRDA”).
Under the LMRDA, employers and labor relations consultants must file reports with the U.S. Department of Labor’s Office of Labor-Management Standards (OLMS) whenever they enter into an agreement or arrangement whereby the consultant undertakes activities to persuade employees about exercising their rights to organize and bargain collectively or to supply an employer with certain information concerning the activities of employees or a labor organization in connection with a labor dispute involving the employer.
Indirect communications with employees about unions — intended to sway workers against unionizing—now are activities that must be reported by the consultants to the federal government under the DOL’s “persuader rule.”
Previously, employers were only required to report after engaging third parties (consultants, attorneys) during an organizing campaign if the third parties directly communicated with employees. Agreements or payments to entities or individuals providing advice to employers on how to communicate with employees did not need to be reported. However, under the final rule, employers are required to report the use of consultants or attorneys even if there is no direct contact with employees, and the employer is free to accept or reject the consultant’s recommendations.
CLARIFICATION ON ACA EMPLOYER SHARED RESPONSIBILITY
The Wage and Hour Division of the DOL recently issued Memorandum 220 which provides guidance to governmental agencies on how the Affordable Care Act’s (“ACA’s”) provisions regarding employer shared responsibility interact with the benefit requirements of the McNamara-O’Hara Service Contract Act, the Davis-Bacon Act and the Davis-Bacon Related Acts.
In general, the ACA’s employer shared responsibility provisions require an employer with an average of at least 50 full-time employees or full-time equivalents (Applicable Large Employer, or “ALE”) to provide its full-time employees and their dependents affordable health care offering minimum value. If the ALE to whom this applies chooses not to offer such health care, then it may make a nondeductible payment in the form of an excise tax.
The Service Contract Act and Davis-Bacon Act/Related Acts require covered contractors to pay prevailing wages and benefits to covered employees based on wage determinations issued by the DOL. Memorandum 220 provides written guidance on the interplay between the ACA and these laws, including whether employers can take credit for ACA premiums and associated payment against required prevailing wage fringe benefits. Memorandum 220 states that the answer is “yes” for actual premium payments and “no” for excise tax payments made in lieu of offering and ACA compliant plan.
Under the Service Contract Act and the Davis-Bacon Act/Related Acts, an employer cannot take credit against the required prevailing wage benefits for those benefits required by federal, state or local law. Memorandum 220 confirms that, because an ALE may offer ACA-compliant health care or may simply pay an excise tax to the IRS, the ACA does not require an employer to provide health care. Therefore, the Wage and Hour Division permits ALEs to credit contributions to a health plan towards the Service Contract Act and Davis-Bacon Act/Related Acts benefit obligations.
If an ALE decides alternatively to forego providing health care by paying the excise tax to the IRS instead, the employer cannot credit the payment of such tax towards the Service Contract Act and the Davis-Bacon Act/Related Acts benefit obligations. Memorandum 220 notes that such a payment does not confer benefits specifically on the workers and, therefore, is not a bona fide fringe benefit as that term is defined and interpreted under the Service Contract Act and the Davis-Bacon Act/Related Acts.
NEW GUIDANCE ISSUED ON BACKGROUND SCREENING
The Federal Trade Commission recently issued new guidance to help background screening companies comply with the Fair Credit Reporting Act (“FCRA”) when conducting background checks on current or prospective employees. While the new guidance specifically targets background-screening companies, the guidance will also be of interest to any employer that uses a third party to conduct background checks on employees or applicants.
The publication provides general guidance on the following issues:
• Repeats the FCRA requirement that screening companies must “follow reasonable procedures to assure accuracy.”
• States that background screening companies must secure certifications from their clients that the employer notified the applicant and received the applicant’s written permission to obtain a background report, the employer will comply with the FRCA’s requirements, and the employer will not discriminate against the applicant or employee or otherwise misuse the information in violation of any state or federal law.
• States that background screening companies must educate their clients on the FCRA by providing them with certain publications issued by the CFPB and FTC.
• Confirms that the FCRA gives consumers rights that background screening companies must honor.
• Reminds background screening companies that, if they incorporate public data into the reports they provide, they must either notify the subject of the report that public information is being used or adhere to “strict procedures” to ensure that the public information is accurate and up to date.
For more details, view the FCRA guidance.
REVISED GUIDANCE ON HEAT AND HOT ENVIRONMENTS
The National Institute for Occupational Safety and Health of the Centers for Disease Control and Prevention recently revised its criteria document on workers’ exposure to heat and hot environments.
Included in the revisions was the removal of ceiling limit recommendations for acclimatized and un-acclimated workers. It also includes information about the physiological changes that result from heat stress; updated information from relevant studies, such as those on caffeine use; evidence to redefine heat stroke and associated symptoms; and updated information on physiological monitoring and personal protective equipment and clothing that can be used to control heat stress. The document also lists more resources than before on worker and employer training.
For more details, go to NIOSH Guidance.
OSHA ISSUES FINAL RULE FOR FOOD SAFETY WHISTLE-BLOWERS
The Occupational Safety and Health Administration (“OSHA”) recently issued a final rule regarding protecting food safety whistle-blowers from retaliation. In addition, it permits some complainants to bring their claims in federal court and before a jury, where compensatory damages and attorney’s fees may be possible.
The rule covers any employee raising safety concerns in the manufacture, processing, packing, transporting, distribution, reception, holding or importation of food.
For more details, go to OSHA Final Rule.
CALIFORNIA
New Regulations Under Fair Employment and Housing Act Amendments
Effective April 1, 2016, new regulations under the Fair Employment and Housing Act provide a number of new employer requirements.
Required Policies
The first of the new regulations required is for employers to have discrimination, harassment, retaliation, and prevention policies in place.
Sexual Harassment Training Requirements
The new regulations also set new benchmarks for mandatory sexual harassment training procedures for employers with at least 50 employees. Previous training regulations have referred to classroom, webinar, and e-learning trainings in conjunction with other forms of training such as audio, video, or computer technology. The new regulations clarify that these “other” methods are merely “supplemental” and, by themselves, cannot fulfill these training requirements.
In order to be considered a qualified trainer, the trainer must now – in addition to meeting previous requirements — have the ability to train supervisors on identifying behavior that may constitute unlawful harassment, discrimination, and retaliation under both California and federal law, as opposed to just defining these concepts. Additionally, trainers must be able to train on supervisors’ obligation to report harassing, discriminatory, or retaliatory behavior of which they become aware.
The new regulations also set forth more stringent tracking requirements.
• E-learning training requires trainers to maintain all written questions received and responses or guidance provided for a period of two years after the date of the response.
• Webinar training requires employers to keep a copy of the webinar, all written materials used by the trainer, and all written questions submitted during the webinar. Employers also must document all written responses or guidance the trainer provided during the webinar. These records must be kept for two years after the date of the webinar.
• In addition to previous recordkeeping requirements, employers now must keep documentation of the training provided, including the names of the supervisors trained, the date of the training, the sign-in sheet, a copy of all certificates of attendance or completion issued, and a copy of all written or recorded materials.
Additional content requirements under the new amended regulations expand the list of topics for discussion to include the following:
• Examples of methods trainers can use to engage participants, such as pre- or post-training quizzes or tests, small group discussion questions, discussion questions that accompany hypothetical fact scenarios, brief scenarios discussed in groups, any other learning activity geared towards ensuring interactive participation as well as the ability to apply what is learned to the supervisor’s work environment.
• Remedies available for victims in civil actions, and potential employer or individual exposure or liability.
• Supervisory obligations to report sexual harassment, discrimination, and retaliation of which they become aware.
• Discussion of strategies to prevent harassment and steps necessary to take appropriate remedial measures to correct harassing behavior.
• Review of abusive conduct in a “meaningful manner.”
Preventing and Correcting Wrongful Behavior
The new regulations require employers to take all reasonable steps to prevent and correct wrongful behavior in the workplace.
Transgender Employees
The new regulations provide requirements and guidance concerning an employer’s obligation regarding transgender employees.
Accommodation Requests
The regulation’s statement of purpose has been amended to clarify that employers should approach all requests for accommodation from a problem-solving point of view. California Code of Regulation section 11064(b) has also been revised to specify that the interactive process requires an individualized assessment of the requirements of the job at issue and the specific physical and mental limitations of the individual that are directly related to the need for reasonable accommodation.
The accommodations analysis should address three issues:
• Is the requested accommodation reasonable?
• Is the request effective? Will this requested accommodation effectively allow the employee to perform his or her job functions?
• Does the request pose an undue hardship?
“Assistive Animals” in the Workplace
The new regulations provide information specifically related to assistive and support animals. The definition of an “assistive animal” includes guide dogs for the visually impaired, signal dogs for the hearing impaired and individually trained service dogs. A support animal, sometimes called a “comfort” animal, is one that provides emotional, cognitive, or other similar support to a person with a disability as a possible accommodation. Although a guide, signal or service dog must be specifically trained to qualify as an assistive animal, support animals do not require any specific training.
Employers may impose some requirements on such animals in the workplace, such as that an animal be free from offensive odors, display habits appropriate for the workplace, and not endanger the health or safety of the disabled employee or others.
The Department of Fair Employment and Housing has taken the position that an Internet certification demonstrating a need for a support animal is not a sufficient “medical certification” for interactive process purposes. Therefore, an employee should be prepared to present a note from his or her medical provider which documents the employee’s restrictions and need for accommodation in the same way he or she would for any other accommodation requests. It is not necessary for the note to disclose details about the employee’s underlying medical issues, but should confirm the existence of a disability or medical condition and restrictions the employee has as a result of the condition.
The accommodations analysis should follow the same process as for any other accommodation request. With regard to an undue hardship analysis, consider potential allergies to or fear of the animal in question. If either situation was to present itself, an employer would want to carefully balance the rights of all employees to ensure compliance and cooperation.
Election Law Requirements for California Employers
In preparation for the June 7, 2016 primary election, California employers should be prepared to post a “Time Off to Vote” notice in a conspicuous place at least ten days before Election Day. Sample notices can be downloaded at no cost here.
Employees who do not have sufficient time to vote outside of their regular working hours must be given up to two hours of paid time off to vote at the beginning or end of their regular shift, depending upon whichever will permit the most time for voting and the least amount of time off the job. Polls will be open between the hours of 7:00 a.m. and 8:00 p.m. Employers and employees also are permitted to work out a mutually agreeable schedule for Election Day that better suits their needs. Employees who need to request time off to vote must provide their employer with notice no later than two working days before Election Day.
California employers must also allow employees to exercise their fundamental right to engage in political activity without interference. That means employers cannot restrict their employee’s political activities or affiliations, nor can they force employees to participate in any particular political activity. Private employers also cannot force their employees to donate funds to campaigns. They may, however, solicit campaign donations from managers, officers, or executives with policymaking authority if they have political action committees.
Guidance on the Use of Electronic Signatures
The California Court of Appeal for the Second Appellate District recently issued a ruling on the enforceability of electronic signatures in arbitration agreements. In the case Espejo v. Southern California Permanente Medical Group, the court provided clarification about what an employer must show in order to authenticate an electronic signature on an arbitration agreement.
The Espejo decision provides information about how employers can minimize risk by implementing the following safeguards:
• The procedures used in any online orientation platform should fully comply with all the statutory requirements of both California’s Uniform Electronic Transactions Act and the federal E-SIGN Act.
• Employers should ensure that employees affirmatively agree to complete the employment documents using an electronic signature.
• Each employee should have a unique username and password to access the HR system, which should require all users to create a private password before signing electronic documents. The employee-created password should be known only to the employee. This will allow the employer to show that the electronic signature on any particular agreement is the “act of” the employee.
• Employers should inform their employees of the need to review every document and provide them with sufficient time to do so before employees affix their electronic signature on a document.
• Employers should inform employees of their right to ask questions about the process and provide them the opportunity to do so before employees affix their electronic signatures on a document.
• Employers should ensure that each electronic signature is accompanied by an accurate date and time stamp, along with the IP address of the device the employee used to sign the document.
• Before implementing any system that provides for the use of electronic signatures, the employer should prepare a sample declaration—for use in the authentication of employee signatures in the future—that includes all the above safeguards. The sample declaration should also include a detailed description of the steps taken to ensure that the employee is the only individual who can affix his or her electronic signature on a document and verification from the online platform provider that the contents of the sample declaration are true and correct.
Los Angeles Minimum Wage Increase
On July 1, 2016, the minimum wage for employers in Los Angeles with more than 25 employees will increase to $10.50 per hour. For employers in Los Angeles with fewer than 25 employees, the minimum wage rate will not increase to $10.50 per hour until July 1, 2017.
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