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Overtime Expansion

U.S. Department of Labor Moves to Finalize Overtime Expansion

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On March 14, 2016 the U.S. Department of Labor submitted its overtime rule to the White House Office of Management and Budget (OMB) for review. Once finalized, the rule is expected to expand overtime protections to millions of American workers in 2016.

The final rule could be made public as early as April, based on the OMB’s typical review process, and would take effect within 60 days of publication in the Federal Register. This potential time frame would give employers little time to comply with the new wage-and-hour standards.

Time Is Ticking for Employers

Overtime expansion is expected to have a major operational, administrative and cultural impact on many businesses and could cost employers more than $5.2 billion. Service industries like restaurants, retail and hospitality may be hit especially hard.

It’s important for companies to start evaluating their workforce now to determine the best options for controlling costs and managing the administrative burden under the new rule.

Count the Cost

A good way to get started is with Paycom’s FREE, overtime expansion calculator which allows you to quickly calculate your potential overtime costs. We even help you find the point where it may make more fiscal sense to actually raise salaries, based on the new, proposed-income threshold for exempt employees.

Stay tuned for more important information about managing overtime expansion right here on the Paycom Blog.


Brie Hobbs

by Brie Hobbs


Author Bio: For more than eight years, Brie has been writing to both job seekers and business leaders about human resources and the challenges facing today’s workforce. Her articles have appeared on award-winning career and HR blogs, as well as on the International Franchise Association’s SmartBrief and other notable publications. With a background in franchising, Brie focuses on helping franchise organizations understand how Paycom’s human capital management technology can benefit their business.

Political Conversations

Knowing the Limits of Political Conversations at Work

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Having political conversations in the office can be difficult, especially in the wake of a divisive post-election season. When employees from various walks of life work in the same space, there’s more opportunity for political disagreements and potentially toxic office conversations.

Determining how your organization will handle political activity in your organization remains a blind spot for many organizations. A 2016 SHRM survey reported that 72% of HR professionals said their companies discourage political activities in the workplace, but only 24% of organizations have a written policy. To further muddy the waters, 8% reported having an unwritten policy that was not communicated explicitly.

 For more tips on how to manage political conversations at work, check out our  HR Break Room podcast episode, Political Conversations at Work: Should HR Pass It or Veto It

These heated conversations make way for an important question for employees and HR to consider: What are your organization’s rules and limits in participating in politics?

Private institutions are king.

It’s important to note that not all organizations operate under the same rules and regulations when it comes to engaging in political discourse or being active in political campaigns. For instance, because of the U.S. Supreme Court’s Citizens United ruling in 2010, private employers have the right to make their opinions and preferences known to both employees and the public.

This ruling also gives private organizations a great deal of leeway in handling political discourse and policy on their own terms. They are not prohibited from restricting employees’ speech and even can have employees participate in political campaigns on the clock.

What’s even more surprising? The Bill of Rights doesn’t protect workers in the private sector from being fired over speech in or outside the workplace – it only prevents the government from infringing upon citizen’s speech.

What can nonprofits do?

The rights of private organizations differ quite a bit from the rights of nonprofits. Organizations that want to maintain the highly sought-after 501(c)(3) tax-exempt status are forbidden from participating in partisan “political campaigns” or else risk having that status revoked by the IRS.

However, the definition of “political campaign” can be ambiguous, especially when nonprofits are allowed to participate in such nonpartisan activities as voter registration drives and legislative advocacy programs.

Here’s a quick breakdown of nonprofit advocacy groups and what they can/can’t do in the political arena:

  • 501(c)(3) groups – are religious, charitable, scientific or educational organizations and are not supposed to engage in any political activities, though some voter registration activities are permitted.
  • 501(c)(4) groups – are social welfare groups and organizations that may engage in political activities, as long as these activities do not become their primary purpose.
  • 501(c)(5)groups – are labor and agricultural organizations that may engage in political activities, as long as these activities do not become their primary purpose.
  • 501(c)(6)groups – are business leagues, chambers of commerce, real estate boards and boards of trade may engage in political activities, as long as these activities do not become their primary purpose.

 

The next three nonprofit groups exist FOR political purposes:

  • 527groups – are tax-exempt groups organized under section 527 of the Internal Revenue Code to raise money for political activities. These groups are typically parties, candidates, committees or associations organized for the purpose of influencing an issue, policy, appointment or election, be it federal, state or local.
  • Hybrid PACs (Carey Committees) – these nonprofit committee groups are not affiliated with a candidate and has the ability to contributing funds to a candidate’s committee and to make independent expenditures, as long as they have separate bank accounts for each purpose.
  • Political Action Committee (PAC)– these nonprofit committees raise and spend limited money contributions for the purpose of electing or defeating political candidates.

 

To know how to make the best company policy at a nonprofit, it is important to understand how the IRS determines these terms. The IRS uses what it calls “facts and circumstances” to determine whether nonprofit organizations are engaging in partisan political activity. This means certain activities not normally considered political in a non-election year could be considered political two months before or after an election.

When determining how your 501(c)(3) organization gets involved in political activities, it’s crucial to consider the nature and goals of the activity before deciding whether it is worth the potential risk.

Few organizations have policy.

Whether a Fortune 500 company or a local nonprofit, knowing exactly what your organization’s limits are in participating in politics helps employees understand expectations and act accordingly. These allowances and their boundaries also can help you determine how to handle these political conversations when they inevitably arise at work.

If you’re interested in learning more about how to manage these sensitive political topics, please subscribe to Paycom’s HR Break Room podcast and listen to our latest episode with special guest Robin Schooling.

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Posted in Blog, Compliance, Employment Law, Featured, Leadership, Nonprofits

Caleb Masters

by Caleb Masters


Author Bio: Caleb is the host of The HR Break Room and a Webinar and Podcast Producer at Paycom. With more than 5 years of experience as a published online writer and content producer, Caleb has produced dozens of podcasts and videos for multiple industries both local and online. Caleb continues to assist organizations creatively communicate their ideas and messages through researched talks, blog posts and new media. Outside of work, Caleb enjoys running, discussing movies and trying new local restaurants.

Addressing Employer Confusion With Pregnancy Related Laws: What to Expect When Your Employees Are Expecting

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The best way to prevent pregnancy discrimination is to understand the laws which can be implicated.  Such laws include the Family and Medical Leave Act, Pregnancy Discrimination Act, the Americans with Disabilities Act Amendments Act and the Affordable Care Act. Unfortunately, understanding the intricacies of each of these laws can be difficult and confusing, so let’s review each in an effort to provide clarity.

1. Family and Medical Leave Act (FMLA)

Not all employers are required to provide FMLA benefits, and not all employees will be entitled to such benefits.

  • Only “covered employers” must provide FMLA benefits. A “covered employer” may be private-sector employers with 50 or more employees, public agencies and public or private elementary or secondary schools.
  • Eligible employees are those who have worked for the employer, for at least 12 months and for at least 1,250 hours in the past 12 months.

Employees are entitled to FMLA leave for the birth of a son or daughter and also for serious health conditions that make the employee unable to perform the essential functions of his or her job.

  • This includes leave for the birth of a child, prenatal care, incapacity related to pregnancy (such as morning sickness) and any serious health conditions that the mother might have following childbirth.

When an employee takes FMLA leave, the employer must maintain the employee’s health benefits.

When an employee returns from FMLA leave, the employer generally is required to restore the employee to the same job that was held when the leave began, or to an equivalent job.

FMLA regulations allow employers to run paid leave concurrently with FMLA leave.

  • This means that employers can require employees to substitute accrued paid leave for unpaid FMLA leave. This, however, will not increase the total amount of leave allowed.
  • This also applies to short-term disability benefits.

The amount of leave allowed under FMLA does not have to be used all at once and can be used during pregnancy, after birth or spread across both time periods.

  • An employee may take leave by reducing normal daily or weekly hours.

Employers must provide notice of FMLA eligibility either orally or in writing within five days of the employee’s request for leave or when the employer becomes aware that the employee’s leave may be for FMLA-qualifying reasons.

Some states may have broader maternity-leave laws that override the FMLA. These state laws will be discussed in a later post.

2. Pregnancy Discrimination Act (PDA)

The PDA states that discrimination based on pregnancy, childbirth or related medical conditions will constitute unlawful sex discrimination under Title VII of the Civil Rights Act.

The PDA does not require employers to provide any leave to pregnant workers, except to the extent the employer provides leave to other individuals suffering from temporary disabilities.

Lactation is a pregnancy-related condition protected under the PDA and denial of an appropriate location to express breast milk could amount to pregnancy discrimination.

The PDA has been interpreted as not requiring reasonable accommodations to pregnant women, unless the employer also provides such accommodation to nonpregnant employees with temporary conditions (accommodations may, however, be required under the American’s with Disabilities Act Amendments Act.

3. American’s with Disabilities Act Amendments Act (ADAAA)

The ADAAA applies to employers with 15 or more employees, and does not set any minimum service requirements for employees to qualify and the ADAAA is implicated only when a person is discriminated against because he or she is disabled.

  • A “disability” is a physical or mental impairment which substantially limits a major life activity. This can include short-term impairments, which are substantially limiting.

A normal pregnancy will not constitute a disability, but pregnancy-related medical conditions may rise to the level of a disability under the ADAAA. (See our previous post, “EEOC Cracks Down on Pregnancy Discrimination,” for examples of pregnancy-related medical conditions that have been considered a disability.)

A pregnant employee may be entitled to an accommodation under the ADAAA for pregnancy-related medical conditions. This may include things such as altered break and work schedules, or elimination of marginal job functions.

  • Employers may not reduce the employee’s pay because she needs an accommodation to do her regular job.

There is no specific time limit on the amount of leave that may be taken by the employee or the length of accommodations if no undue hardship exists for the employer. The length of an accommodation or the period of time off must only be reasonable.

  • Courts have held that anywhere from six months to a year can be considered a reasonable period of time off from work.

Employers will not be required to hold the employee’s job open while the disabled employee is on leave, if doing so would create a hardship for the employer.

4. Affordable Care Act (ACA)

Generally, the ACA requires employers with at least 50 full-time employees to offer employees minimum essential health coverage that is affordable, or to make an employer shared-responsibility payment to the IRS. Please note that employers will face hefty fines for not providing coverage that meets the minimum requirements.

Employees cannot be denied health coverage or charged more because they are pregnant. This applies whether employees get their insurance through their employer or if they buy it on their own.

The ACA explicitly identifies pregnancy, maternity and newborn care as part of the essential benefits package that must be offered by plans.

  • Most plans must cover preventative services for pregnant women or women who may become pregnant, without charging a copayment or coinsurance.
    • This includes things such as anemia screening, gestational diabetes screening or folic acid supplements.
  • Employers’ health insurance plans also must provide breastfeeding support and counseling, and equipment for the duration of breastfeeding.

The ACA also requires that employers provide time and space for new mothers to express breast milk until the child turns 1 year old.

  • This provision overlaps with the PDA, which requires employees to be compensated for time that is used to pump or breastfeed if other employees are compensated for their break times.

 

Conclusion

Many laws are implicated when it comes to pregnant employees and most charges of pregnancy discrimination today result from seemingly neutral policies that adversely impact pregnant workers. It is important to understand that:

  • pregnancy discrimination can happen in all aspects of employment
  • some pregnant employees may be entitled to certain accommodations or specified leave
  • an employer’s policies pertaining to nonpregnant employees can impact how pregnant employees are treated
  • all pregnant employees may not be treated in the same manner

 

These laws, while all very different, overlap in many areas, and understanding the various parts of each is vital for employers.

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Posted in ACA, Blog, Compliance, Employment Law, Featured

Kristin Fisher

by Kristin Fisher


Author Bio: As a compliance attorney for Paycom, Kristin Fisher monitors legal and regulatory changes at the state and federal level, with a focus on labor and employment laws, to ensure the Paycom system is updated accordingly. Previously, she served as an attorney at the Oklahoma City law firm Derryberry & Naifeh LLP. Fisher earned a bachelor’s degree and MBA from the University of Central Missouri, and her Juris Doctor from the Oklahoma City University School of Law. Outside of work, she enjoys cooking, hiking, going to the movies and spending time with her fiancé.

COBRA Case

Solid Recordkeeping Charms Court in COBRA Case

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Picture this: You terminated an employee, and mailed him or her a COBRA election notice, but the notice apparently got lost in the mail. Now your ex-employee is suing you for failing to inform him or her of their COBRA continuation rights. Is there anything you can do to prove a COBRA notice was sent to them?

According to a recent court case, the answer is yes – provided you’re diligent about recordkeeping.

Solid Evidence

In DeBene v. BayCare Health System, Inc. (11th Cir. May 31, 2017), Paul DeBene alleged that his former employer, BayCare, had not provided him with the necessary COBRA election notice after his employment terminated. He even called BayCare to inquire about his COBRA continuation rights and mistakenly was told he was not eligible because the benefits specialist he spoke to misread a code in the computer system.

Nevertheless, BayCare prevailed in the lower court and on appeal because it was able to produce solid evidence of its practices in sending out COBRA notices, and how they were followed with respect to DeBene. Specifically, they were able to show that DeBene was coded into BayCare’s database as COBRA-eligible, that this information was transferred to BayCare’s COBRA administrator in a timely manner, and that a COBRA election notice was generated for DeBene. They also were able to produce a copy of the actual notice that was sent to him. Additionally, they provided evidence that other recipients of notices mailed the same day as DeBene’s were able to elect coverage successfully and that none of them had reported not receiving their respective notices.

These pieces of evidence were enough to show that the employer had fulfilled its obligation to send a notice to DeBene in a manner “reasonably calculated” to ensure actual receipt. That the plaintiff did not receive the paper notification was immaterial as to whether BayCare had satisfied its obligations to send a COBRA notice.

Is your company COBRA compliant? Do your COBRA administration processes include sending all 25 written notices and tracking all 29 possible dates for each employee? Does your employer have proof, including copies, that Initial Notices and Election Notices were mailed? 

In Good Faith

The court contrasted BayCare’s actions with those of an employer in an earlier case, where the employer had provided its third party administrator (TPA) with the necessary information to send a COBRA election notice to a former employee, and instructed the TPA to send the COBRA notice. However, the employer produced no evidence showing the TPA actually had done so.

The court held that an employer can comply with the statute if they sent a COBRA notice “in a good faith manner reasonably calculated to reach” the former employee. On the other hand, the employer could not be found to be acting in good faith by simply hiring an agent and then instructing the agent to send notice, “where there is no evidence that the agent sent out a notice” to the former employee. By contrast, BayCare was able to show not only that it notified its TPA, but also was able to provide evidence that a notice was actually sent to DeBene, fulfilling BayCare’s obligations under the statute.

Proof and Procedures

The comment from the benefits specialist who mistakenly told DeBene he was not eligible for COBRA was irrelevant, the court ruled, as her mistaken belief had no bearing on whether or not the COBRA election notice actually was sent. Here, the proof of the COBRA notice generation and mailing procedures – and evidence that they procedures were followed with regard to DeBene specifically – were enough for BayCare to prevail against the claim that it had not provided notice of COBRA continuation coverage rights.

Paycom’s COBRA Administration Services can aid compliance by handling some of the daily COBRA administrative and recordkeeping burdens. Once a qualifying event occurs and is entered into our system, just click “Generate COBRA Notice” and we take it from there! Paycom’s COBRA team maintains diligent records of each notice sent by providing:

  • a copy of the COBRA notice
  • a record of the date it was generated
  • a record of the date it was mailed
  • a copy of the post-office stamped certificate of mailing

Together, these documents and records detail the complete history of each COBRA notice sent, Paycom can help provide evidence that a COBRA notice was sent, should you ever face a situation like the employer in this case.

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Posted in Blog, Employment Law, Featured

Erin Maxwell

by Erin Maxwell


Author Bio: As a compliance attorney for Paycom, Erin Maxwell monitors legal and regulatory changes at the state and federal level, focusing on health and employee benefits laws, to ensure the Paycom system is updated accordingly. She previously served as assistant general counsel at Asset Servicing Group in Oklahoma City. She holds a bachelor’s degree from the University of Central Oklahoma and a J.D. from the University of Oklahoma. Outside of work, Maxwell enjoys politics, historical mysteries and spending time with her family.

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