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HR Challenges In 2011
 

HR Challenges In 2011

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    HR Challenges In 2011 HR Challenges In 2011 Presentation Transcript

    • New Challenges for HR in 2011 presented by Stinson Morrison Hecker LLP St. Louis, Missouri | January 27, 2011 © 2011, Stinson Morrison Hecker LLP www.stinson.com
    • WELCOMEObjectives• Recent Changes• Emerging Issues and Trends• Practical Impact and Action Needed• Outlook for 2011 © 2011, Stinson Morrison Hecker LLP www.stinson.com
    • PRESENTER PROFILELaura KipnisPartner, St. Louis office314.719.3022lkipnis@stinson.com © 2011, Stinson Morrison Hecker LLP www.stinson.com
    • AFFIRMATIVE ACTION• OFCCP Initiatives and Enforcement Priorities• Compensation Guidelines Rescinded• OFCCP Discontinues I-9 Inspections © 2011, Stinson Morrison Hecker LLP www.stinson.com
    • FEDERAL CONTRACTORS• New Executive Compensation and Subcontractor Reporting Rules – Applies to contracts in excess of $25,000 issued after July 8, 2010 – Contractor must obtain information from first-tier subcontractors (phased-in reporting) – Executive compensation reporting of five most highly compensated executives if: • More than 80% annual gross revenues from government contracts and that revenue is greater than $25 million; AND • the public does not have access to information through SEC filings.• Don’t Forget New Poster © 2011, Stinson Morrison Hecker LLP www.stinson.com
    • AMERICANS WITH DISABILITIES ACT• EEOC Approves Final Draft of ADAAA Regulations – Final regulations expected in March 2011• EEOC Scrutinizes Leave of Absence Policies – Carefully review leave of absence policies – Allow for flexibility, case-by-case determinations – Additional leave as a reasonable accommodation?• Obesity Discrimination and the ADA – Not directly addressed by ADAAA proposed regulations – Expect more “actual” and “regarded as” cases• Duty to Accommodate Not Limited Just to Problems Once at Work – Colwell v. Rite Aid Corporation © 2011, Stinson Morrison Hecker LLP www.stinson.com
    • GENETIC INFORMATION NON-DISCLOSURE ACT• Final Rule Issued – Effective January 10, 2011 – Employers must notify health care providers not to provide genetic information, including family medical histories – Safe harbor provision if receive information contrary to notice – Verify all forms, policies to ensure compliance but employers do not need to purge files that already contain information © 2011, Stinson Morrison Hecker LLP www.stinson.com
    • EEOC• Highest Level of Changes in History 2010 – 99,922 2007 – 82,792 2009 – 93,277 2006 – 75,768 2008 – 95,402• Highest Monetary Recovery $319.3 million through private sector administrative enforcement• Increased Scrutiny of Credit Checks In Employment Decisions © 2011, Stinson Morrison Hecker LLP www.stinson.com
    • LITIGATION TRENDS• Litigation Trends – Upward trend expected to continue for third year – Wage and hour, discrimination and whistleblower/retaliation claims on the rise – Arbitration more prevalent in non-union employment disputes• Legal Duty to Preserve Documents and Electronic Information – Employment cases routinely have earlier notice, prior to lawsuit – Plaintiff’s attorneys becoming more sophisticated – Put protocols in place; train key personnel © 2011, Stinson Morrison Hecker LLP www.stinson.com
    • U.S. SUPREME COURT - DECIDED• 3rd Party Retaliation Claim Under Title VII – Thompson v. North American Stainless – Closely associated third party is protected• Arbitration – Stolt-Nielsen S.A. v. Animal Feeds International Corp. – Class action claim not subject to arbitration unless arbitration clause specifically includes class claims © 2011, Stinson Morrison Hecker LLP www.stinson.com
    • U.S. SUPREME COURT – PENDING• Cat’s Paw Theory – Staub v. Proctor Hospital – Liability for discrimination by non-decisionmaker who influenced decision?• Arbitration – AT&T Mobility v. Concepcion – Does FAA prohibit states from mandating that class arbitration be available as part of every arbitration agreement?• Retaliation under FLSA – Kasten v. Sant-Gobain Performance Plastics Corp. – Oral complaint sufficient to support claim for retaliatory discharge?• Class Action – Dukes v. Wal-Mart Stores, Inc. © 2011, Stinson Morrison Hecker LLP www.stinson.com
    • INCREASED FOCUS ON MISCLASSIFICATION OF EMPLOYEES AS INDEPENDENT CONTRACTORS• IRS and U.S. Dept. of Labor Joint Initiative• Missouri Dept. of Labor and Industrial Relations Audit Changes• What is at Stake: – Income tax withholding – Social Security – Unemployment taxes – Minimum wage and overtime pay – Workers’ compensation coverage and premiums – Qualified status of ERISA plans – Number of employees for purposes of coverage under COBRA, FMLA, etc.• Pro-active Steps – Self-audit – IRS 20 factor analysis of 1099s © 2011, Stinson Morrison Hecker LLP www.stinson.com
    • DEPARTMENT OF LABOR• Attorney Referral Assistance for FMLA & FLSA Claims• “Reasonable Break Time” for Nursing Mothers – Applies to non-exempt employees – Place other than bathroom must be provided – Breaks need not be paid – Exempts small employers if it would impose undue hardship – Does not preempt state law• DOL Administrative Interpretations Instead of Opinion Letters• New Initiative Regarding Exempt Employees – Expect April 2011 release date © 2011, Stinson Morrison Hecker LLP www.stinson.com
    • MISSOURI SUPREME COURT• Fleshner v. Pepose Vision Institute – – First Missouri Supreme Court recognition of public policy exception to employment at-will – Whistleblower activities need not be the “exclusive causation” for termination• Keveney vs. Missouri Military Academy – wrongful discharge based on public policy also applies to contract employees• Margiotta v. Christian Hospital Northeast – clarified narrow scope of public policy wrongful discharge claim © 2011, Stinson Morrison Hecker LLP www.stinson.com
    • PRESENTER PROFILEMike GibbonsOf Counsel, St. Louis office314.259.4598mgibbons@stinson.com © 2011, Stinson Morrison Hecker LLP www.stinson.com
    • MISSOURI BUSINESS LEGISLATIVE AGENDAEmployment Law ReformMissouri employers want to:1) Eliminate the ability of plaintiffs to sue supervisors and employees in their individual capacity;2) Confirm that the federal standard of proof in discrimination cases is followed in Missouri so that discrimination must be a motivating factor in the dismissal;3) Ensure the law protects legitimate whistle blowers who alert authorities to illegal activity performed by their employer or who refuse to engage in illegal activity at the request of their employer; and4) Impose damage caps on claims to mirror the caps imposed on similar claims in federal cases. (HB 205) Source: Fix The 6 To Promote Missouri Jobs © 2011, Stinson Morrison Hecker LLP www.stinson.com
    • MISSOURI BUSINESS LEGISLATIVE AGENDAWorkers’ CompensationMissouri employers want to:1) Ensure that the claims of employees that contract occupational diseases continue to be covered under Workers’ Compensation. Recently, some courts have decided that most of these claims are not covered under the Workers’ Compensation system; (HB162, SB8) and2) Protect fellow employees from liability when acting in the regular course of their employment and accidentally injuring a co-worker. A recent court decision has allowed a claimant that received a Workers’ Compensation settlement to sue his fellow employee for damages. (HB91, HB160, HB221, SB8) Source: Fix The 6 To Promote Missouri Jobs © 2011, Stinson Morrison Hecker LLP www.stinson.com
    • MISSOURI BUSINESS LEGISLATIVE AGENDATort ReformMissouri employers want to eliminate theconcept of joint and several liability. Currentlaw allows judgments to be collected fromany party that is at least 51% at fault, ratherthan a party’s liability for payment of ajudgment being directly related to thepercentage of fault. Source: Fix The 6 To Promote Missouri Jobs © 2011, Stinson Morrison Hecker LLP www.stinson.com
    • MISSOURI BUSINESS LEGISLATIVE AGENDAUnemployment InsuranceMissouri employers collectively have borrowed more than $722 millionfrom the federal government to pay unemployment claims. The abilityto issue bonds to repay these loans to the federal government alreadyexists in the law, but the term of the bonds must be lengthened.Missouri employers will pay off the bonds through a surtax establishedin current state law.The State of Missouri will not be obligated to repay the bonds, nor willthe bonds hurt the state’s ability to incur other bonded indebtedness. Ifthis effort is not successful, EVERY Missouri employer can expect a taxincrease of about $21 per employee as they will lose FederalUnemployment Tax credits. That amount doubles the following yearand triples the next year. (HB135, HB170) Source: Fix The 6 To Promote Missouri Jobs © 2011, Stinson Morrison Hecker LLP www.stinson.com
    • MISSOURI BUSINESS LEGISLATIVE AGENDAFranchise Tax LimitMissouri employers want to place a limit on theamount of Missouri Franchise Tax that anyMissouri corporation must pay. Missouri is oneof a few states that imposes both a corporationincome tax and a franchise tax levied on assets,regardless of profitability. This first step willprotect Missouri companies that want to expandor bring additional assets into Missouri.(HB76, HB77, SB18, SB19) Source: Fix The 6 To Promote Missouri Jobs © 2011, Stinson Morrison Hecker LLP www.stinson.com
    • MISSOURI BUSINESS LEGISLATIVE AGENDAMinimum WageMissouri employers want to ensure the minimumwage in Missouri does not exceed the federalminimum wage. Missouri’s minimum wage lawallows an automatic inflation adjustment thatcould result in a higher minimum wage in Missourithan the federal minimum wage.It is believed that as the minimum wageincreases, the ability of employers to continue toemploy workers is damaged, particularly affectingentry level workers. (HB61, SB110) Source: Fix The 6 To Promote Missouri Jobs © 2011, Stinson Morrison Hecker LLP www.stinson.com
    • PRESENTER PROFILETed MitchellAssociate, Kansas City office816.691.2462tmitchell@stinson.com © 2011, Stinson Morrison Hecker LLP www.stinson.com
    • EMPLOYEE BENEFITS• Health Care Reform Updates• Flex Spending: Over-the-Counter Medicines and Drugs Implementation• 401(k) Fee Disclosure Regulations• IRS’s New Audit Program• Top 5 Plan Mistakes © 2011, Stinson Morrison Hecker LLP www.stinson.com
    • HEALTH CARE REFORM-NONDISCRIMINATION• The Patient Protection and Affordable Care Act (PPACA) prohibits fully-insured plans that are not grandfathered from discriminating in favor of highly compensated individuals (HCIs) in benefits or eligibility. © 2011, Stinson Morrison Hecker LLP www.stinson.com
    • HEALTH CARE REFORM- NONDISCRIMINATION• Failing to comply with the nondiscrimination rules can lead to excise taxes, civil money penalties, or a civil action.• However, the IRS, Treasury Department, and the Departments of Labor and Health and Human services recently stated that compliance with the nondiscrimination provisions is not required until there is further guidance published on the issue. © 2011, Stinson Morrison Hecker LLP www.stinson.com
    • HEALTH CARE REFORM: IMPLEMENTATION • The U.S. Department of Labor, Employee Benefits Security Administration has issued a series of “FAQs About Affordable Care Act Implementation.” Parts I-V can be found via http://www.dol.gov/ebsa/healthreform/ © 2011, Stinson Morrison Hecker LLP www.stinson.com
    • HEALTH CARE REFORM IMPLEMENTATION: FAQs• The most recent DOL/EBSA “FAQ About Affordable Care Act Implementation” (Part V, issued December 22, 2010) gives information about automatic enrollment in health plans (among other things).• Employers with more than 200 employees are not required to automatically enroll new full-time employees in the health benefits plans until further regulations are issued. © 2011, Stinson Morrison Hecker LLP www.stinson.com
    • FORM W-2: REPORTING HEALTH CARE COSTS OF COVERAGE• IRS Notice 2010-69 provided interim relief for reporting the cost of coverage under an employer-sponsored group health plan on Form W-2; reporting this cost on Form W-2 is not required for 2011. © 2011, Stinson Morrison Hecker LLP www.stinson.com
    • FSA OVER-THE-COUNTERMEDICINES AND DRUGS• After December 31, 2010, health FSAs and HRAs are no longer able to reimburse for over- the-counter medicines and drugs unless purchased with a prescription.• Does not apply to insulin, medical equipment, medical supplies, or diagnostic devices.• If over-the-counter medicines or drugs are purchased, the participant must substantiate with a prescription! – Acceptable substantiation: the actual prescription, a copy of the prescription, or substantiation from an independent third party (for example, a pharmacy receipt with a prescription number on it). © 2011, Stinson Morrison Hecker LLP www.stinson.com
    • FSA OVER-THE-COUNTER MEDICINES AND DRUGS: USE OF DEBIT CARDS• Health FSA and HRA debit card systems have not historically been able to substantiate compliance with the new over-the- counter purchase rules.• The IRS in Notice 2011-5 allows that health care debit cards may continue to be used to purchase OTC prescribed medicines or drugs if: – a prescription for the OTC medicine or drug is presented to a pharmacist; – the over-the-counter medicine or drug is dispensed by the pharmacist in accordance with applicable law and regulations pertaining to the practice of pharmacy – A prescription number is assigned, (the health debit card system does not work unless an Rx number is assigned); – the pharmacy retains records for the transaction; – the pharmacy records are accessible by the employers plan or its agent (requirement applies for all health debit card transactions); and – all the requirements of the guidance are met. © 2011, Stinson Morrison Hecker LLP www.stinson.com
    • 401(K) FEE DISCLOSURE REGULATIONS• Purpose is to improve the transparency of fees and expenses to participants and beneficiaries.• Give participants more easy-to-understand information about choosing investments.• Applies to plan years beginning on or after November 1, 2011. © 2011, Stinson Morrison Hecker LLP www.stinson.com
    • 401(K) FEE DISCLOSURE REGULATIONS: REQUIREMENTS• Plan-related information must be given at start of participation and annually.• Plan fees and expenses information given initially and quarterly.• Use standard methodologies to calculate and disclose information.• Must present in an easily understood format.• Must include glossary of terms and have an accessible website. Those responsible for administering the employer’s 401(k) plan should know about the new rules. We recommend that the employer check with the administrators to assure there will be compliance. © 2011, Stinson Morrison Hecker LLP www.stinson.com
    • IRS’S NEW AUDIT PROGRAM• “Employment Tax National Research Program” – Began February 2010. – Allow IRS to gauge whether businesses are properly complying with employment tax law and reporting requirements. – 2,000 employers chosen at random during each of 2010, 2011, and 2012. – “Comprehensive Examinations”—must have all employment tax returns and records available for auditors. © 2011, Stinson Morrison Hecker LLP www.stinson.com
    • PREVENTING THE TOP FIVE PLAN MISTAKES(Or, what your benefits attorneys want you to know)1) Always sign and date documents, then keep copies of all signed documents2) Plan Definition of “Compensation”3) Employee Eligibility4) Plan Loan Administration5) Timing of Plan Contributions © 2011, Stinson Morrison Hecker LLP www.stinson.com
    • PRESENTER PROFILEBrad SandlerPartner, St. Louis office314.719.3006bsandler@stinson.com © 2011, Stinson Morrison Hecker LLP www.stinson.com
    • E-VERIFY• GAO Report 12/17/2010 – Fiscal year 2009 – immediate confirmation 97.4% of 8.4 million – Fiscal year 2006 – immediate confirmation 92.0%• Vulnerable to Identify Theft/Fraud – DHS Estimated 32,800 workers were erroneously terminated in 2009 due to E-Verify• Arizona – First state to make E-Verify mandatory for all workers – Approximately 50% new hires were not put into E-Verify © 2011, Stinson Morrison Hecker LLP www.stinson.com
    • I-9 COMPLIANCE• Year ending 9/30/2010 ICE conducted audits, 2740 employers - more than double previous year; fines increased from $1.0 million to $7.0 million – Chipotle – Abercrombie & Fitch – Dunkin Donuts – Missouri – Hua Huang – Manager, China Buffet/Mongolian Grill in Poplar Bluff – provided housing, transportation, false ID, fraudulent marriage scheme © 2011, Stinson Morrison Hecker LLP www.stinson.com
    • I-9 ELECTRONIC STORAGE• Final Ruling – Electronic Storage – Retrieval system with indexing – Retention of audit trail for I-9 forms – Government access – Access record creation – Provide printed copy of electronic I-9 if requested by employee © 2011, Stinson Morrison Hecker LLP www.stinson.com
    • NEW FORM I-129H-1B, L-1A, L-1B, O-1: New Form I-129requirements:1. Certify under penalty of perjury reviewed Export Administration Regulations (EAR) and International Traffic in Arms Regulations (ITAR) and determine either: a) License is not required b) A license is required from Department of Commerce or U.S. Department of State to release technology or technical data to beneficiary (employee and employer) will prevent access until and unless employer gets the required license or authorization.2. Indicate whether employee will work at off-site location, paid higher prevailing wage or actual wage at all locations, including off-site. © 2011, Stinson Morrison Hecker LLP www.stinson.com
    • H-1B CAP-EXEMPTION• New AAO Decision at USCIS-California Service Center impact “cap-exempt” H-1B petitions – definition of “Affiliation”. – Had to be “owned” or “controlled” by an institution of higher education; no longer sufficient to be affiliated based on contractual affiliation between institution of higher education and other organization claiming affiliation. © 2011, Stinson Morrison Hecker LLP www.stinson.com
    • SSN – NO MATCH LETTERS• New SSN No Match Guidance – can’t use basis of letter alone as a basis to suspend, terminate, take adverse action; how long to resolve discrepancy?• FAQ’s – not defined• E-Verify – tentative confirmation for up to 120 days• DO NOT IGNORE, TAKE STEPS TO RESOLVE © 2011, Stinson Morrison Hecker LLP www.stinson.com
    • FAMILY AND MEDICAL LEAVE ACT• Loco Parentis Definition Clarified – Labor Secretary Solis: the DOL’s actions “send a clear message to workers and employees alike: All families including LGBT families are protected by the FMLA.” – Make sure to understand relationship with the “son or daughter”• Still No Revised Certification Forms For Qualifying Exigency or Covered Servicemember Leave © 2011, Stinson Morrison Hecker LLP www.stinson.com
    • OSHA 2010: THE YEAR OF THEINSPECTION• 41,000 inspections conducted – 15 year high – 5% increase over FY 2009• 94,000 Citations issued – Largest number in two decades – 7% increase over FY 2009• Greater Penalties – Average Fine for Serious Violations increased 6% over FY 2009 © 2011, Stinson Morrison Hecker LLP www.stinson.com
    • UNION MEMBERSHIP• 2010 – Membership in Private & Public Sector Declines – 11.9% in 2010: lowest rate in 70+ years – 6.9% of private sector workers are unionized – 36.2% of public sector workers are unionized• 1650 NLRB Elections Nov. 1, 2009-October 31, 2010 – Unions won 68% © 2011, Stinson Morrison Hecker LLP www.stinson.com
    • NLRB INITIATIVES• Employee Free Choice Act Likely Dead So Expect, Via NLRB Decisions & Rulemaking: – Faster elections – “Electronic” elections – Increased scrutiny over conduct during election campaigns – Increased penalties for unfair labor practices• Proposed poster of rights under the National Labor Relations Act• Pending case involving “concerted activity” and social media © 2011, Stinson Morrison Hecker LLP www.stinson.com
    • RETALIATION / WHISTLEBLOWING• OSHA Issues New Whistleblowing Regulations – Three interim rules published August 31, 2010 – Covers employees in railroad/public transit, commercial motor carrier, and consumer product industries• Whistleblower Protections for Financial Services Employees – Dodd-Frank Wall Street Reform and Consumer Protection Act signed on July 21, 2010 – SEIU targeting bank employees © 2011, Stinson Morrison Hecker LLP www.stinson.com