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Tx nonprofit hr update august 2011
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From Padgett, Stratemann & Co., HR Essentials for 2011

From Padgett, Stratemann & Co., HR Essentials for 2011

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  • More than 1,000 restaurants in the US
  • Authorized – able to work Tentative Nonconfirmation DHS Verification in ProcessEmployee has 8 workdays to clear up discrepancy
  • Also verify those existing contracts where the period of performance extends at least 6 months after September 8, 2009
  • State Continuation applies for plans subject to Texas Insurance laws and rules; and must have been in plan for 3 consecutive months; generally coverage applies for 6 months
  • State Continuation applies for plans subject to Texas Insurance laws and rules; and must have been in plan for 3 consecutive months; generally coverage applies for 6 months


  • 1. 2011 Texas Nonprofit SummitHR Compliance and Enforcement for 2011
  • 2. Introductions
    Human Resources Consulting Group
    Padgett, Stratemann & Company, L.L.P.
    Address agency representation
  • 3. Agenda
    I-9s and E-Verify
    Department of Labor
    Employees, Interns, Volunteers
    Independent Contractors
    Exempt vs. Non-exempt
  • 4. ICE
    Immigration Customs Enforcement (ICE)
    Principal investigative arm of the U.S. Department of Homeland Security
    2nd largest investigative agency in the federal government
    More than 20,000 employees in offices in all 50 states and 47 foreign countries
    Annual budget of more than $5.7 billion dollars
  • 5. Headlines
    For the current fiscal year (October 2010), ICE has audited 2,338 employers
    On Wednesday, June 15, 2011, 1000 employers in US notified of I-9 inspection
    Enforcement strategy has shifted to employers
  • 6. Headlines – National
    WHO: Abercrombie & Fitch
    WHAT: Settlement for more than $1.04 million
    WHERE: Michigan
    WHEN: September 2010
    Things To Consider:
    Technology related deficiencies in electronic I-9 system
    No instances of knowingly hiring unauthorized individuals
    Employment verification process serious
    * Source: www.ice.gov/new/releases
  • 7. Headlines – Texas
    WHO: Lone Star Bakery
    WHAT: 200 of 500 employees laid off at 2 plants due to not having proper documentation
    WHERE: China Grove, TX
    WHEN: February 2011
    Things to Consider:
    Several employees had been with the company 15 years
    Social security numbers not matching to names
    Impact on company business
    * Source: Express News
  • 8. Recent Changes To The I-9
    New I-9 Form
    Revision date of 08/07/09
    Expiration date of 08/31/12
    Modification to I-9 Form (Final Rule Implemented 4.14.11)
    All documents must not be expired
    Documents containing no expiration are deemed to be expired
    Changes to list of acceptable documents
    Adds a 4th box to the form – Non-citizen nationals of the US
  • 9. Recent Changes To The Handbook
    Purpose of Handbook: Help employers understand the Form I-9 process
    Purpose of Handbook Revision to address the following:
    Regulations regarding electronic storage and retention of forms
    Questions regarding processing an employee with “complicated immigration status” (USCIS)
    Revised “Handbook for Employers” (M-274) as of 1/5/2011
    Last update occurred in July 2009
  • 10. Recent Changes To The Handbook
    What’s New:
    Visual aids for completing the Form I-9
    Examples of USCIS documents
    Expanded guidance on processing employees in H-1B status or H-2A status
    Expanded guidance on extensions of stay for employees with temporary employment authorization
    Additional Q&A
  • 11. Things to consider
    Every organization, regardless of status, has exposure
    It’s not just about hiring undocumented workers, it is also about completing the I-9 form timely and correctly
    Sometimes the attempts a correction make things worse
  • 12. E-Verify
    E-Verify is an Internet based system that compares information from an employee’s Form I-9, Employment Eligibility verification, to data from the U.S. Department of Homeland Security and Social Security Administration records to confirm employment eligibility.
    • Requirement for certain employers (and in certain states)
    Specifically designed to verify employment authorization
    Does not provide protection from worksite enforcement (ICE)
    Different than the SSNVS and the TNEV
    According to ICE – more than 225,000 employers use E-Verify, with about 1,000 new businesses signing up each week.
  • 13. E-Verify
  • 14. E-Verify
    Deters document and identity fraud
    Helps maintain a legal workforce
    Protects jobs for authorized workers
  • 15. E-Verify
    As of September 8, 2009, federal contractors with contracts containing E-Verify clause must use E-Verify
    Prime contracts contain FAR E-Verify Clause
    Value above $100,000
    Period of performance of 120 days or more
    At least some of the contract work performed in US
    Clause flows down to all tiers of subcontractors
    Prime is responsible for ensuring clause is included in qualifying subcontracts
    Value of more than $3,000
    Contract is for commercial or noncommercial services or construction
  • 16. E-Verify
    Timeframes of enrollment vary
    30 calendar days of Contract Award Date or Contract Modification Date
    Enrollment decisions
    Who will sign the MOU
    Which hiring sites, company locations
    Who will have access
    Who will be designated program administrator
  • 17. E-Verify
    Determining who to verify
    Existing employees – entire workforce
    All new hires and existing employees assigned to the contract
    When to verify
    Begin entering Form I-9 information within 90 calendar days of enrolling or updating organization designation
    If entire workforce within 180 calendar days of enrolling or updating organization designation
    Once beginning to enter Form I-9 information for new hires, enter no later than the 3rd business day after the employee’s start date
  • 18. E-Verify
    Unless you are a Federal Contractor with FAR E-Verify Clause only use E-Verify to verify new hires
    For a contract with the FAR E-Verify clause awarded on or after September 8, 2009
    Verify all existing employees working on the contract
    Verify all new employees hired after the date of enrollment in E-Verify
    Verify entire workforce
  • 19. E-Verify
    Important Take Aways
    Doesn’t cost to participate, but….
    Not based on number of employees but amount of contract
    Rules vary for those using E-Verify
    Documents accepted
    Example – If employee present a document from List B, a document is required with a photograph
    Poster requirement
    Should I participate if not required?
    Advantages vs. Disadvantages vs. Compliance
  • 20. E-Verify – Here and Coming Soon
    E-Verify website redesigned
    E-Verify Video – How to run a case, Understanding E-Verify, Know Your Rights
    Passport matching capability
    Legislation introduced by Representative Lamar Smith (R-Texas)- Legal Workforce Act (H.R. 2164)-would improve E-Verify System, make it mandatory for all employers and would repeal I-9 system
  • 21. DOL-Fair Labor Standards Act
    The Fair Labor Standards Act-about who is an employee and how you have to pay them
    Employment is defined as “to suffer or permit to work.”
    Minimum wage, overtime and child labor
  • 22. DOL-Fair Labor Standards Act
    Intern, Trainee, or Volunteer?
    DOL Fact Sheet #71 ONLY addresses “For Profit” (except for footnote). To be a trainee and exempt from minimum wage and overtime, ALL the following must be met:
    Internship, even if though it includes actual operation of the facilities of the employer, is similar to training that would be given in an education environment;
    The internship is for the benefit of the intern;
    The intern doesn’t displace a regular employee, but works under close supervision of existing staff;
    The employer that provides training derives no immediate advantage from the activities of the inter; and on occasion its operations may be impeded;
    The intern is not necessarily entitled to a job at the end of the internship; and
    The employer and the intern understand that the intern is not entitled to wages for the time spend during the internship.
  • 23. DOL-Fair Labor Standards Act
    Intern, Trainee, or Volunteer?
    DOL indicates : “Individuals who volunteer or donate their services, usually on a part-time basis, for public service, religious or humanitarian objectives, no as employees and without contemplation of pay, are not considered employees of the religious, charitable or similar non-profit organizations that receive their service.
    Examples-Presenting a job skills workshop at a shelter; parents assisting in the school library, driving and delivering food to the elderly; a camp counselor in a youth program
    Volunteers may receive nominal compensation-fee or other compensation cannot be greater than 20% of the amount that would otherwise be paid to a full-time employee
  • 24. DOL-Fair Labor Standards Act
    Intern, Trainee, or Volunteer?
    We still wait for additional guidance
    Evaluate the work the individual will be doing
    Document the terms of the agreement
    When in doubt, at least pay minimum wage
  • 25. Independent Contractor or Employee?
    Misclassification of independent contractors
    TWC selecting accounts for audit
    Insure proper reporting of wages and taxes for employment purposes
    Request to review 1099’s and time cards
    IRS has increased focus
    Unpaid taxes
    Missed overtime
    Minimum wage
  • 26. Independent Contractor or Employee?
    Check your independent contractor status
    Permanency of relationship
    Degree of control
    Degree of skill
    Investment in business
    Opportunity for profit/loss
  • 27. Exempt vs. Non-Exempt
    DOL Fair Labor Standards Act
    Employees and classifications -
    Salary test
    Duties test
    Primary duties
    Exercise discretion and independent judgment
    Administrative Exemption is most commonly litigated
    Bonus and Regular rate of pay for non-exempt employees
    Travel and training time
  • 28. DOL Agenda
    In 2010 regulatory agenda – proposed strategy to require employers to “find and fix” legal violations
    No longer – “catch me if you can”
    Plan – identify and resolve risks of legal violations
    Prevent – fully implement plan that prevents legal violations
    Protect - objectives to be met on a regular basis for actual prevention
  • 29. ERISA
    Federal law that sets standards for most pension and health plans in private industry (governmental entities, churches are exempt)
    Overarching principal is to provide protection for those in the plan
    Responsibilities include:
    Providing participants with plan information to include plan features and funding; (includes an Summary Plan Description and Summary Annual Report
    Fiduciary responsibilities for those who manage and control plan assets;
    Requires plans to establish a grievance and appeals process for participants to get benefits from their plans;
    Gives participants the right to sue for benefits and breach of fiduciary duties.
  • 30. ERISA
    Responsibilities include (cont’d):
    *COBRA-20 or more employees
    Newborns’ & Mothers’ Health Protection Act-requires insurance to cover a minimum 48 hour hospital stay following childbirth
    Mental Health Parity Act-mental health covered to be covered like medical surgical benefits with respect to lifetime and annual limits (doesn’t apply to substance abuse/chemical dependency; doesn’t apply to small employer w/2-50 employees; doesn’t apply if the application of parity increases the cost of the plan by at least 1%)
    Women’s Health and Cancer Rights Act-protections for individuals who elect breast reconstruction in connection with a mastectomy; and must cover certain post-mastectomy benefits
  • 31. ERISA
    Responsibilities include (cont’d):
    5500 Reporting
    Annual Informational report sent to DOL (who also provides it to the IRS)
    Required of pension plans, to include 403(b)
    Welfare benefit plans with 100 or more
    Self-funded; self insured welfare benefit plans of any size
    Due by the seventh month following end of the plan year; 2 ½ month extension permitted (but must apply)
    Must be filed electronically
  • 32. IRS
    National Review Program in 2 year
    Additional IRS agents to perform these “reviews”
    Reviews will target industry groups to include Non-Profits
    Reviews to include:
    Worker classification
    Fringe Benefits
    Officer compensation
    Reimbursed expenses
    Agents taking a HARD LINE approach in enforcement
  • 33. OFCCP
    Charged with enforcing the contractual promise of affirmative action and equal employment opportunity required of those who do business with the Federal Government
    General rule for affirmative action plans is 50 employees and $50,000 or more in contracts
  • 34. OFCCP
    Increased focus on Veteran’s Affirmative Action Plan
    Focus on recruitment of hiring of veterans
    Move towards statistical analysis for numerical targets
    Increased focus on Disabilities Plan
    Move towards accommodations for applicants – ex. online application system
    Disability outreach
    Increased review on pay equity
  • 35. Take-Aways: Doing More With Less
    Invest time in compliance-agencies have increased enforcement activities
    Do it right the first time; there is always a potential cost of mistakes
    Take advantage of what you are already paying for
    It may be better to pay now, than pay later
    Risk of audit could come from your employees
  • 36. Questions
  • 37. Contact Information
    Cyndi Mergele, SPHR, PI
    Padgett, Stratemann & Co., L.L.P.
    100 NE Loop 410, Suite 1100
    San Antonio, Texas 78216-4704
    811 Barton Springs, Suite 550
    Austin, Texas 78704-1149