The Vita Blog February 2018

Question: An employee confided to our HR department about an incident that made her uncomfortable, where her supervisor made a comment about her skirt. How should we handle this?

Answer: A company has an affirmative duty to conduct a thorough investigation every time it is made aware that harassment may be taking place in the organization. Inappropriate sexual comments, discrimination based upon gender and/or sexual orientation, and inappropriate behavior all fall under the definition of illegal sexual harassment. The Equal Employment Opportunity Commission (EEOC) and state agencies take harassment complaints seriously, and failing to conduct an investigation could leave a company subject to liability for a sexual harassment discrimination claim as well as owing damages if the company does not act immediately.

Although not every inappropriate comment will be viewed as harassment, every report of such should be treated with respect and followed up in accordance with company policy. Typically, the nature of the complaint will determine how you should begin the investigation. In the case of your employee, consider taking the following steps:

• Listen to your employee’s concern with consideration and advise the employee that the company takes reports of wrongdoing seriously and will investigate thoroughly, and that confidentiality will be observed to the extent practical to protect everyone’s privacy.
• Ask if the employee had responded to her supervisor and let the supervisor know that the comments made her uncomfortable.
• Ask if there were any other witnesses to the comments and if this was a one-time remark or if comments on the employee’s appearance have occurred previously with the employee or others.
• Determine what the employee wants or expects will be done as a result of bringing this concern to you (either simply wanting the remark(s) to stop or more aggressive action).
• Tell the employee that you will be investigating this issue and addressing it with the involved party to make him or her aware that the comments caused discomfort so that the company can ensure that this no longer occurs.
• Let the employee know that retaliation for making a report of misconduct or harassment is forbidden by the company and that she should immediately advise you of any perceived retaliation or of further incidents of misconduct or harassment.
• Be sure that during the initial interview with the employee, you obtain:
• The description of each incident, including date, time, place, and nature of conduct.
• A description of her responses to the individual with each incident.
• The names of any witnesses to the alleged incident.
  
  

Although this type of situation can be difficult when the accused party holds a supervisory position in the company, the law still holds the company accountable for following up on complaints of inappropriate behavior, conducting a prompt and impartial investigation, and taking appropriate action if the claim is substantiated.

If the investigation does not result in a violation of company policy or harassment, the matter should still be addressed with the supervisor and others in management to ensure future issues do not arise.

Question: Are there any requirements for a company to provide legal notices in languages other than English for employees who do not speak English?

Answer: The Department of Labor provides many legal notices and posters in multiple languages, but some posters are available only in English. In most cases there is no requirement for a company to provide legal notices to employees in a language other than English. However, there are exceptions for notices for the Family and Medical Leave Act (FMLA), Migrant and Seasonal Agricultural Worker Protection Act (MSPA), Executive Order 13496 (Notification of Employee Rights Under Federal Labor Laws), Occupational Safety and Health Administration (OSHA), and in some state statutes. 

For FMLA, you are required to provide the notice for workers in another language if your workforce includes a significant portion of workers who are not literate in English. MSPA requires you provide the notice in Spanish or another language common to migrant or seasonal agricultural workers who are not fluent or literate in English. Finally, for Executive Order 13496, federal contractors and subcontractors are required to post translations of both the physical and electronic postings if a significant portion of a contractor’s workforce is not proficient in English. The required notices should be in the languages the employees speak. Lastly, OSHA regulations require employers to provide employees with information and training on hazardous chemicals in the workplace. If the employees do not understand English, the employer must inform and train the employees in the language that they understand. 

Some final thoughts around posting notices: Even though you are not legally required to provide most legal notices in a language other than English, it’s important to consider the needs of your employees. Ultimately, you want your employees to understand their rights and responsibilities for their own well being and the for the best interests of the company. As a best practice, if you have employees whose first language is not English, make a concerted effort to accommodate them and provide legal notices in languages they can understand.

This applies to all employers offering medical plan coverage. The online disclosure must be completed by March 1, 2018 (assuming a calendar year ERISA plan).

Overview

Federal law requires that employers provide annual notification of the Medicare Part D Prescription Benefit "creditability" to employees prior to October 15th.  However, that same law also requires plan sponsors to report creditability information directly to the Centers for Medicare and Medicaid Services (CMS) within 60 days of the first day of the ERISA plan year.  Many employers have a January 1 ERISA plan year (which may – or may not – coincide with your renewal or policy year); so for many employers, the deadline is in a couple of weeks!

 Mandatory Online Creditable Coverage Disclosure 

Virtually all employers are required to complete the online questionnaire at the CMS website, with the only exception being employers who have been approved for the Retiree Drug Subsidy (RDS).  This disclosure requirement also applies to individual health insurance, government assistance programs, military coverage, and Medicare supplement plans.  There is no alternative method to comply with this requirement!  Please remember that you must provide this disclosure annually.

The required Disclosure Notice is made through completion of the disclosure form on the CMS Creditable Coverage Disclosure web page.  Click on the following link: CMS Disclosure Form.

Employers must also update their questionnaire if there has been a change to the creditability status of their prescription drug plan, or if they terminate prescription drug benefits altogether.

 Detailed Instructions and Screenshots Available

If you would like additional information on completing the online disclosure, a detailed instruction guide is available online.  The instructions also include helpful screenshots so that you will know what data to have handy.  Click on the following link:  CMS Notification Instruction Guide.

 Helpful Tip for Vita Benefits Group Clients

The Medicare Part D creditability status of your medical plans is outlined in the Welfare Summary Plan Description that we provide to all clients.  Please refer to this document as you will need this information to complete the online disclosure. 

This article has been published in partnership with ThinkHR.

Question: Our company is considering adopting a paid family leave program for employees. I think I read something indicating paid family leave was addressed in the tax bill that passed late last year. Is that true?

Answer: First of all, kudos to you. Paid family and medical leave policies are a great benefit for employers to adopt to stay competitive in the current market and have become a necessity in the several states that have adopted paid family leave laws or regulations.

To answer your question, you are correct. The federal Tax Cuts and Jobs Act enacted in late 2017 creates § 45S of the IRS Code to provide certain employers a tax credit for offering paid family and medical leave to employees. To be eligible for the credit, the employer’s paid family and medical leave policy must:

• Be voluntarily implemented by the employer (i.e., the employer cannot be in a state or locality that requires employers to provide paid family and medical leave). Additionally, leave paid by a state or local government does not count.
• Be adopted in writing.
• Provide pay for at least two weeks of a full-time employee’s family and medical leave. Part-time employees must also be offered a commensurate amount of paid leave on a pro rata basis, taking into account the number of hours a part-time employee is expected to work each week compared to an equivalent full-time employee. The credit maxes out at 12 weeks of paid family and medical leave.
• Provide that employees will be paid at least 50 percent of their normal pay while on leave.

The amount of the credit an eligible employer receives depends on the level of pay provided to employees. Employers who choose to pay employees at the 50 percent threshold will receive a 12.5 percent tax credit; the credit increases by 0.25 percent (capping at 25 percent overall) for each percentage point above 50 percent of normal pay the employer pays employees on leave. For example, if an eligible employer chooses to pay employees on paid family and medical leave 60 percent of their normal pay, then an eligible employer’s tax credit would be 15 percent.

The tax law defines qualifying employees as those who meet the definition of employee under the Fair Labor Standards Act of 1938 (29 USC § 203(e)), who have worked for the employer for at least one year and, for the preceding year, had compensation of 60 percent or less of the compensation threshold for highly compensated employees. Paid family and medical leave is leave that is protected under the Family and Medical Leave Act (FMLA). If the employee’s leave is paid vacation leave, personal leave, or other medical or sick leave, then that is not eligible family and medical leave for purposes of the tax credit.

Employers that are not subject to the FMLA may also receive tax credits for paid family and medical leave if they otherwise provide employees the same protections under the FMLA and meet the other requirements discussed above, such as having a written policy. The policy must ensure that the employer will not interfere with, restrain, or deny an employee the ability to take leave pursuant to the policy or retaliate against any employee for exercising their rights under the policy.

This tax credit is not currently a long-term benefit for employers. Instead, it is in effect for two years and sunsets on December 31, 2019 unless re-enacted by Congress.

If you choose to voluntarily implement a paid family and medical leave policy, we recommend you consult with counsel to ensure your written policy meets all technical requirements of the new tax law.

This article has been published in partnership with ThinkHR.

Question: Any recommendations on how to conduct an internal wage and hour audit?

Answer: Yes, we do! First, kudos to you and your organization for considering this practice. Some organizations don’t conduct wage and hour audits because they can be costly and time consuming. However, choosing to conduct them shows that you are being proactive and trying to protect your organization from legal and financial liability due to non-compliance with federal Fair Labor Standards Act (FLSA) and state wage and hour laws. You should conduct these audits periodically, such as at the beginning of your fiscal year, when your organization undergoes restructuring, or when there are significant changes to FLSA regulations and state wage and hour laws.

As general guidelines, when you conduct an internal wage and hour audit, consider the following:

• Determine the nature and scope of the audit. 
  Which employees, positions, and issues do you want to review? Which records will you review? For example, job descriptions, payroll records, performance documents? What changes in the law may be driving the audit?
• Determine who in your organization should lead the audit.
  Typically, these audits are led by a senior human resources leader or a senior company manager, though employers may choose to conduct them under the direction or guidance of inside or outside legal counsel for compliance or other legal strategy purposes. If the audit is not conducted under the direction of legal counsel, it’s always a good idea to consult your employment law counsel or tax advisor (depending on the issue) about any legal or compliance questions that may arise during the process.
• Identify what you want to document about the audit.
  At the very least, document the scope, purpose, and results of the audit. As a best practice, you should also document who is conducting the audit, any issues discovered, and the plan for how you will address these issues.
• Consider some of the common issues that may drive Department of Labor (DOL) audits and include them in your audit. 
  DOL audits are usually done in response to complaints received about an organization. Some of the common complaints revolve around whether:
  • Workers are properly classified as either: (1) exempt or nonexempt from overtime, or (2) independent contractors or W-2 employees.
  • Overtime pay is properly calculated
  • Compensable time is accurately captured and recorded.
  • Employees are given adequate opportunities to take meal and rest breaks.
  • Employers are complying with scheduling regulations and child labor laws.
  • Payroll practices meet various requirements.

Keep in mind the DOL can conduct a wage and hour audit at any time and is not required to provide you with notice. Additionally, many factors — internal and external — could cause your organization to suddenly be out of compliance with wage and hour laws. Incorporating periodic internal wage and hour audits into your annual business practice as a precautionary measure may help minimize risks to your organization. 

Finally, while conducting an internal audit is important, be aware of other legal implications that could arise from the auditing process. If you discover federal or state wage and hour law violations during the audit, you could expose your company to a willful violation of wage and hour laws in subsequent litigation if you do not correct the issues immediately. Consulting with outside legal counsel during your audit process can help mitigate your risks in the event that your wage and hour practices are challenged.