This document discusses several key employment law and tax updates for California employers in 2012, including new laws addressing worker misclassification, discrimination, leave policies, and health insurance coverage. It also provides information on rising workers' compensation insurance costs and strategies for mitigating them. Additionally, it includes tax and benefit limits for 2012 at both the federal and California level as well as information on the IRS voluntary worker reclassification program and complimentary training webinars offered by CPEhr.
This document provides a summary of an employment law webinar that took place on September 15, 2016. It discusses updates on several topics, including the new overtime regulations which raise the salary threshold for exempt employees to $47,476 annually, requirements under the new Defend Trade Secrets Act, reasonable accommodation guidelines from the EEOC, joint employment standards, and wellness program regulations. The webinar also covered arbitration agreements and class waivers, litigation developments, and Affordable Care Act updates.
HR Managers Guide to Proper Worker ClassificationSage HRMS
The document provides guidance to HR managers on properly classifying workers as employees or independent contractors. It discusses the importance of proper classification and potential penalties for misclassification. The IRS examines behavioral control, financial control and the type of relationship to determine a worker's status. The summary advises routinely reviewing classifications and maintaining documentation to support decisions. Potential future legislation aims to further reduce misclassification issues.
This document summarizes the top 10 employment law mistakes made by businesses. It discusses issues like misclassifying employees, not providing meal and rest breaks, not reimbursing expenses, and having unenforceable non-compete agreements. It also mentions a proposed bill that would make it harder for employers to classify workers as independent contractors rather than employees if they fail to properly document the classification. Employers are advised to hire HR professionals knowledgeable about California employment law to avoid costly lawsuits.
This presentation explains the distinction between independent contractors and employees and advises employers how to avoid the costly errors of misclassifying employees as contractors.
The document is an employment law newsletter from the law firm Tharpe & Howell. It summarizes three legal cases related to mandatory arbitration clauses, safety programs impact on workers' compensation premiums, and penalties for misclassifying employees. It provides contacts for the firm's labor lawyers to discuss these issues.
White Paper: Complying With Regulations Regarding Temporary Workersss
The use of temporary workers is growing in the United States, now representing 22% of the total workforce. Temporary workers are referred to as freelancers, non-employees, indirect workers, agency contractors, consultants, interns, independent contractors, and many other terms.
This document provides a summary of an employment law webinar that took place on September 15, 2016. It discusses updates on several topics, including the new overtime regulations which raise the salary threshold for exempt employees to $47,476 annually, requirements under the new Defend Trade Secrets Act, reasonable accommodation guidelines from the EEOC, joint employment standards, and wellness program regulations. The webinar also covered arbitration agreements and class waivers, litigation developments, and Affordable Care Act updates.
HR Managers Guide to Proper Worker ClassificationSage HRMS
The document provides guidance to HR managers on properly classifying workers as employees or independent contractors. It discusses the importance of proper classification and potential penalties for misclassification. The IRS examines behavioral control, financial control and the type of relationship to determine a worker's status. The summary advises routinely reviewing classifications and maintaining documentation to support decisions. Potential future legislation aims to further reduce misclassification issues.
This document summarizes the top 10 employment law mistakes made by businesses. It discusses issues like misclassifying employees, not providing meal and rest breaks, not reimbursing expenses, and having unenforceable non-compete agreements. It also mentions a proposed bill that would make it harder for employers to classify workers as independent contractors rather than employees if they fail to properly document the classification. Employers are advised to hire HR professionals knowledgeable about California employment law to avoid costly lawsuits.
This presentation explains the distinction between independent contractors and employees and advises employers how to avoid the costly errors of misclassifying employees as contractors.
The document is an employment law newsletter from the law firm Tharpe & Howell. It summarizes three legal cases related to mandatory arbitration clauses, safety programs impact on workers' compensation premiums, and penalties for misclassifying employees. It provides contacts for the firm's labor lawyers to discuss these issues.
White Paper: Complying With Regulations Regarding Temporary Workersss
The use of temporary workers is growing in the United States, now representing 22% of the total workforce. Temporary workers are referred to as freelancers, non-employees, indirect workers, agency contractors, consultants, interns, independent contractors, and many other terms.
Independent Contractors and Employees: Understanding the DifferenceDeirdre Kamber Todd
This document provides an overview of the differences between classifying workers as employees versus independent contractors. It discusses the various tests used by the IRS, US Department of Labor, US Supreme Court and Pennsylvania Department of Labor to determine status. The document notes that no single factor determines classification and that the tests examine the degree of control over the worker and the economic realities of the relationship. It also summarizes the potential consequences of misclassification and an IRS program for voluntarily reclassifying workers.
HR Webianr: OSHA Reporting and Employee Record-KeepingAscentis
On January 24, 2019, during the longest partial shutdown of the U.S. federal government in history, US Labor Secretary Alexander Acosta issued a rollback of 2016 OSHA regulations which would have required electronic reporting of key information relating to workplace injuries on OSHA Forms 300 and 301, on the basis that such reporting would "violate the privacy of individual employees." With the annual OSHA 300A reporting deadline of March 2, 2019 fast approaching, which health and safety recordkeeping and reporting requirements remain for employers of various sizes, and how can we best comply with them?
This document provides an overview of 20 new California laws affecting employers that will take effect in 2012. Some of the major changes include prohibiting employers from obtaining credit reports on applicants or employees, requiring employers to continue health coverage for up to 4 months for employees on pregnancy disability leave, increasing penalties for misclassifying independent contractors, and expanding protections against discrimination to include genetic information and gender expression. The laws cover a wide range of employment areas such as leaves of absence, compensation, discrimination, and workers' compensation.
The issue of whether workers should be classified as employees or independent contractors for federal employment tax purposes has been a source of controversy for decades. The saga continues. This article summarizes a recent Tax Court decision on the classification of a manager in the home care industry.
BHW Solicitors Summer Employment Law NewsletterBHWSolicitors
The document is a newsletter from BHW Employment Law summarizing recent changes to UK employment law. Some key changes discussed include:
1) Introduction of fees for employment tribunal claims, with Type A claims costing £160 issue fee and £230 hearing fee, and Type B claims such as unfair dismissal costing £250 issue fee and £950 hearing fee.
2) "Protected conversations" can now be used when terminating employment to avoid legal proceedings, though employers must be careful not to engage in "improper behavior" which could allow employees to submit settlement offers as evidence.
3) A new "employee shareholder" employment status will exchange certain rights like unfair dismissal for company shares worth over £2000
The document summarizes several key HR and employment law changes in the UK. These include:
1) Changes to maternity and paternity leave provisions increasing additional paternity leave and statutory pay rates.
2) Upcoming changes to PAYE taxation on employee termination payments and for new employees who fail to provide a P45 form.
3) An extension of the right to request flexible working to parents of children under age 18.
4) A new government strategy on equality and proposals around positive action, flexible working, shared parental leave and LGBT workplace issues.
Independent contractor or common law employee 2013lukem
The document discusses the differences between independent contractors and common law employees and the issues around misclassifying workers. It notes that the IRS estimates that 80% of contractors are misclassified as independent when they are actually employees. Misclassification can trigger audits and penalties for businesses. The document outlines the IRS 20-factor test and states' ABC tests to determine proper worker classification. It also discusses Section 530 relief from penalties for past misclassifications if certain conditions are met.
This document summarizes a presentation on HR compliance and enforcement for 2011. It discusses upcoming changes to I-9 forms and handbooks, recent ICE enforcement actions against employers, and an overview of compliance topics like E-Verify, independent contractor classification, overtime exemptions, and ERISA requirements. Key updates from federal agencies like DOL and ICE were provided to help employers stay compliant in 2011.
The document provides an overview of a toolkit for hiring independent contractors in a legally compliant manner. It discusses the differences between employees and independent contractors, factors that determine compliance, best practices for finding, screening and onboarding independent contractors, and key elements to include in independent contractor agreements and scopes of work. The toolkit is intended to help businesses understand compliance requirements and successfully manage independent contractor relationships.
Hiring your children and paying them a reasonable wage can provide tax benefits. For children working in a family business, the first $5,350 paid annually is tax-free income for the child and a tax-deductible expense for the business. Paying children through a payroll system allows part of their wages to be saved in an account to pay for large personal expenses while staying tax deductible for the business. Hiring your spouse as an employee also allows the business to deduct medical expenses as an employee benefit, providing a way to deduct out-of-pocket healthcare costs.
On April 19, Tony Fiore presented to the Tuscora Chapter of the Society for Human Resource Management (SHRM) on the topic of the top issues affecting Ohio's HR professionals. He detailed 2016's lasting effects, advocacy/politics, employment and labor laws, unemployment compensation, federal appointments/issues + healthcare + workplace flexibility.
This document discusses the issue of worker misclassification and outlines tests used to determine whether a worker is an employee or independent contractor. It notes that misclassification can result in fines and penalties for employers and denial of benefits and protections for employees. The IRS 20-factor test and economic realities test are described as ways to assess control and economic dependence to determine worker status.
Employee vs. Independent Contractor - How to Differentiate and Avoid Penalties?benefitexpress
This presentation reviews: which factors the IRS uses to determine common law employee status | how does this affect compliance with ACA | what penalties may apply.
This document summarizes the history and role of the Equal Employment Opportunity Commission (EEOC) and provides an overview of key US employment discrimination laws. It discusses the EEOC's establishment in 1965 to enforce antidiscrimination laws and its responsibilities to coordinate regulations, interpret laws, and support local agencies. The document also outlines various discriminatory practices prohibited by laws covering race, color, religion, sex, national origin, age, disability status and more. Finally, it provides helpful hints for employers to promote diversity and inclusion in the workplace.
HR Webinar: The American Rescue Plan Act of 2021: New Employer Opportunities ...Ascentis
On March 11, 2021, President Biden signed into law H.R. 1319, the “American Rescue Plan Act of 2021” (APRA). The latest in an extended series of COVID-19 economic relief bills, with a price tag of $1.9 trillion and weighing in at an impressive 628 pages, ARPA will bring cumulative US federal pandemic relief spending to approximately $5.7 trillion. While the new law’s consumer provisions – like direct stimulus payments to about 89% of US taxpayers, extended unemployment benefits, and increased child tax credits – have gotten almost all the press coverage related to this law, as with prior laws (FFCRA, CARES Act, CAA) there are many employer-impacting provisions that have so far “flown under the radar.”
At Ascentis, we’ve hauled out our trusty “HCM radar detector” to hone in on just those provisions which may impact and delight (or maybe not?) employers, and the HR community, around the country.
HR Webinar: The New Consolidated Appropriations Act of 2021: What HR Pros Mus...Ascentis
The Paycheck Protection Program ("PPP") has been renewed and modified under the Consolidated Appropriations Act of 2021 ("CAA'21"). Key changes include extending the application period through March 31, 2021, allowing certain new borrowers to apply, providing targeted funding amounts to underserved communities, and permitting borrowers to receive both a PPP loan and Employee Retention Tax Credit for the same wages.
Many people believe that their employment status is very black and white. But what about this gray area where you aren’t sure if you are an employee or if you are an independent contractor? Don’t worry. Either way, you are still employed. The only difference is whether you are self employed or not.
According to the IRS, Doctors, “dentists, vets, lawyers, accountants, contractors, subcontractors, public stenographers, or auctioneers who are in an independent trade, business, or profession in which they offer their services to the general public are generally independent contractors.”
But what makes these people independent contractors? Aren’t there people with those professions that are considered to be employees? If you have been wondering or fretting about this, fret no more. For a better understanding of what makes someone employed vs. self employed, simply keep reading!
This document provides an overview of 20 new California laws affecting employers that will take effect in 2012. Some of the major changes include prohibiting employers from obtaining credit reports on applicants or employees, requiring employers to continue health coverage for up to 4 months for employees on pregnancy disability leave, increasing penalties for misclassifying independent contractors, and expanding protections against discrimination to include genetic information and gender expression. The laws cover a wide range of employment areas such as leaves of absence, compensation, discrimination, and workers' compensation.
New CA Laws and Regulations Compliance Overview AlphaStaff
As of January 1, 2013, the state of California has added and amended myriad of new laws that affect employers in a number of important and significant ways. Please join us as we review each of these changes and help employers better understand the impact and importance of these changes to their businesses and employees in California. Presented by Human Resources Account Manager, Rebecca McDonough, CA-SPHR
The document provides an overview of recently enacted federal and state legislation including the Lilly Ledbetter Fair Pay Act, the Paycheck Fairness Act, changes to COBRA and FMLA regulations, the Americans with Disabilities Act Amendments Act, New York's Mini-WARN act, and related issues employers should be aware of. It discusses the background and impact of these laws, highlighting requirements for employers including auditing pay practices, revising notice and documentation procedures, and expanding leave administration responsibilities.
Running Head BITCOIN WALLET1BITCOIN WALLET2.docxhealdkathaleen
Running Head: BITCOIN WALLET 1
BITCOIN WALLET 2
Bitcoin Wallet
Student’s Name: Sandeep Kumar Jannu
Professor’s Name: Micheal Soloman
Date: 08/09/2019
Question 1: Set up your own Bitcoin wallet and take a screen shot that includes
My Bitcoin URI and Address.
MHR 6401, Employment Law 1
Course Learning Outcomes for Unit V
Upon completion of this unit, students should be able to:
1. Discuss the legal significance of the employer-employee relationship.
1.1 Explain the regulation of wages and hours under the Fair Labor Standards Act (FLSA).
1.2 Assess the legal issues surrounding FLSA that employers face.
4. Characterize conduct that violates federal anti-discrimination laws in employment.
4.1 Determine the elements of a prima facie case of pay discrimination under the Equal Pay Act.
Course/Unit
Learning Outcomes
Learning Activity
1.1
Unit Lesson
Chapter 12
Unit V Case Study
1.2
Unit Lesson
Chapter 12
Unit V Case Study
4.1
Unit Lesson
Chapter 12
Unit V Case Study
Reading Assignment
Chapter 12: Wages, Hours, and Pay Equity, pp. 419–455
Unit Lesson
In a 2013 survey by the Society of Human Resource Management (SHRM as cited in Miller, 2014), 60
percent of employees rated pay as “very important” and 36 percent rated it as “important.” These ratings
made pay the top contributor to overall job satisfaction, surpassing job security.
While pay may not always take the top spot in survey results such as the SHRM survey, pay is usually much
higher among the leadership of an organization, and the significance and sometimes disparity of pay in the
employer-employee relationship cannot be refuted (Miller, 2014). Employees rely on compensation to support
themselves and their families. Employers have an interest in holding expenses down, including pay, but must
pay what the market requires for talent that drives the organization’s success. Employees want equitable pay
relative to their coworkers and commensurate with their skills. Employers must navigate complex legal
regulation of wages and hours, as individual states become more active in adding regulations and
requirements to existing federal law.
UNIT V STUDY GUIDE
Wages and Hours
MHR 6401, Employment Law 2
UNIT x STUDY GUIDE
Title
As pay and compensation is an issue that
affects every worker in an organization,
human resources must play a key role in
setting policy and insuring practices are
fair and compliant. At the federal level
alone, there are five laws that address
compensation and equal pay. Title VII of
the Civil Rights Act of 1964 prohibits
discrimination based on race, color,
national origin, gender, and religion in pay
and pay-related terms of employment,
including promotion and job placement.
The first bill signed into law by President
Obama was the Lilly Ledbetter Fair Pay
Act of 2009. It addressed the situation
where the discriminatory act that caused
an employee in a pro ...
Independent Contractors and Employees: Understanding the DifferenceDeirdre Kamber Todd
This document provides an overview of the differences between classifying workers as employees versus independent contractors. It discusses the various tests used by the IRS, US Department of Labor, US Supreme Court and Pennsylvania Department of Labor to determine status. The document notes that no single factor determines classification and that the tests examine the degree of control over the worker and the economic realities of the relationship. It also summarizes the potential consequences of misclassification and an IRS program for voluntarily reclassifying workers.
HR Webianr: OSHA Reporting and Employee Record-KeepingAscentis
On January 24, 2019, during the longest partial shutdown of the U.S. federal government in history, US Labor Secretary Alexander Acosta issued a rollback of 2016 OSHA regulations which would have required electronic reporting of key information relating to workplace injuries on OSHA Forms 300 and 301, on the basis that such reporting would "violate the privacy of individual employees." With the annual OSHA 300A reporting deadline of March 2, 2019 fast approaching, which health and safety recordkeeping and reporting requirements remain for employers of various sizes, and how can we best comply with them?
This document provides an overview of 20 new California laws affecting employers that will take effect in 2012. Some of the major changes include prohibiting employers from obtaining credit reports on applicants or employees, requiring employers to continue health coverage for up to 4 months for employees on pregnancy disability leave, increasing penalties for misclassifying independent contractors, and expanding protections against discrimination to include genetic information and gender expression. The laws cover a wide range of employment areas such as leaves of absence, compensation, discrimination, and workers' compensation.
The issue of whether workers should be classified as employees or independent contractors for federal employment tax purposes has been a source of controversy for decades. The saga continues. This article summarizes a recent Tax Court decision on the classification of a manager in the home care industry.
BHW Solicitors Summer Employment Law NewsletterBHWSolicitors
The document is a newsletter from BHW Employment Law summarizing recent changes to UK employment law. Some key changes discussed include:
1) Introduction of fees for employment tribunal claims, with Type A claims costing £160 issue fee and £230 hearing fee, and Type B claims such as unfair dismissal costing £250 issue fee and £950 hearing fee.
2) "Protected conversations" can now be used when terminating employment to avoid legal proceedings, though employers must be careful not to engage in "improper behavior" which could allow employees to submit settlement offers as evidence.
3) A new "employee shareholder" employment status will exchange certain rights like unfair dismissal for company shares worth over £2000
The document summarizes several key HR and employment law changes in the UK. These include:
1) Changes to maternity and paternity leave provisions increasing additional paternity leave and statutory pay rates.
2) Upcoming changes to PAYE taxation on employee termination payments and for new employees who fail to provide a P45 form.
3) An extension of the right to request flexible working to parents of children under age 18.
4) A new government strategy on equality and proposals around positive action, flexible working, shared parental leave and LGBT workplace issues.
Independent contractor or common law employee 2013lukem
The document discusses the differences between independent contractors and common law employees and the issues around misclassifying workers. It notes that the IRS estimates that 80% of contractors are misclassified as independent when they are actually employees. Misclassification can trigger audits and penalties for businesses. The document outlines the IRS 20-factor test and states' ABC tests to determine proper worker classification. It also discusses Section 530 relief from penalties for past misclassifications if certain conditions are met.
This document summarizes a presentation on HR compliance and enforcement for 2011. It discusses upcoming changes to I-9 forms and handbooks, recent ICE enforcement actions against employers, and an overview of compliance topics like E-Verify, independent contractor classification, overtime exemptions, and ERISA requirements. Key updates from federal agencies like DOL and ICE were provided to help employers stay compliant in 2011.
The document provides an overview of a toolkit for hiring independent contractors in a legally compliant manner. It discusses the differences between employees and independent contractors, factors that determine compliance, best practices for finding, screening and onboarding independent contractors, and key elements to include in independent contractor agreements and scopes of work. The toolkit is intended to help businesses understand compliance requirements and successfully manage independent contractor relationships.
Hiring your children and paying them a reasonable wage can provide tax benefits. For children working in a family business, the first $5,350 paid annually is tax-free income for the child and a tax-deductible expense for the business. Paying children through a payroll system allows part of their wages to be saved in an account to pay for large personal expenses while staying tax deductible for the business. Hiring your spouse as an employee also allows the business to deduct medical expenses as an employee benefit, providing a way to deduct out-of-pocket healthcare costs.
On April 19, Tony Fiore presented to the Tuscora Chapter of the Society for Human Resource Management (SHRM) on the topic of the top issues affecting Ohio's HR professionals. He detailed 2016's lasting effects, advocacy/politics, employment and labor laws, unemployment compensation, federal appointments/issues + healthcare + workplace flexibility.
This document discusses the issue of worker misclassification and outlines tests used to determine whether a worker is an employee or independent contractor. It notes that misclassification can result in fines and penalties for employers and denial of benefits and protections for employees. The IRS 20-factor test and economic realities test are described as ways to assess control and economic dependence to determine worker status.
Employee vs. Independent Contractor - How to Differentiate and Avoid Penalties?benefitexpress
This presentation reviews: which factors the IRS uses to determine common law employee status | how does this affect compliance with ACA | what penalties may apply.
This document summarizes the history and role of the Equal Employment Opportunity Commission (EEOC) and provides an overview of key US employment discrimination laws. It discusses the EEOC's establishment in 1965 to enforce antidiscrimination laws and its responsibilities to coordinate regulations, interpret laws, and support local agencies. The document also outlines various discriminatory practices prohibited by laws covering race, color, religion, sex, national origin, age, disability status and more. Finally, it provides helpful hints for employers to promote diversity and inclusion in the workplace.
HR Webinar: The American Rescue Plan Act of 2021: New Employer Opportunities ...Ascentis
On March 11, 2021, President Biden signed into law H.R. 1319, the “American Rescue Plan Act of 2021” (APRA). The latest in an extended series of COVID-19 economic relief bills, with a price tag of $1.9 trillion and weighing in at an impressive 628 pages, ARPA will bring cumulative US federal pandemic relief spending to approximately $5.7 trillion. While the new law’s consumer provisions – like direct stimulus payments to about 89% of US taxpayers, extended unemployment benefits, and increased child tax credits – have gotten almost all the press coverage related to this law, as with prior laws (FFCRA, CARES Act, CAA) there are many employer-impacting provisions that have so far “flown under the radar.”
At Ascentis, we’ve hauled out our trusty “HCM radar detector” to hone in on just those provisions which may impact and delight (or maybe not?) employers, and the HR community, around the country.
HR Webinar: The New Consolidated Appropriations Act of 2021: What HR Pros Mus...Ascentis
The Paycheck Protection Program ("PPP") has been renewed and modified under the Consolidated Appropriations Act of 2021 ("CAA'21"). Key changes include extending the application period through March 31, 2021, allowing certain new borrowers to apply, providing targeted funding amounts to underserved communities, and permitting borrowers to receive both a PPP loan and Employee Retention Tax Credit for the same wages.
Many people believe that their employment status is very black and white. But what about this gray area where you aren’t sure if you are an employee or if you are an independent contractor? Don’t worry. Either way, you are still employed. The only difference is whether you are self employed or not.
According to the IRS, Doctors, “dentists, vets, lawyers, accountants, contractors, subcontractors, public stenographers, or auctioneers who are in an independent trade, business, or profession in which they offer their services to the general public are generally independent contractors.”
But what makes these people independent contractors? Aren’t there people with those professions that are considered to be employees? If you have been wondering or fretting about this, fret no more. For a better understanding of what makes someone employed vs. self employed, simply keep reading!
This document provides an overview of 20 new California laws affecting employers that will take effect in 2012. Some of the major changes include prohibiting employers from obtaining credit reports on applicants or employees, requiring employers to continue health coverage for up to 4 months for employees on pregnancy disability leave, increasing penalties for misclassifying independent contractors, and expanding protections against discrimination to include genetic information and gender expression. The laws cover a wide range of employment areas such as leaves of absence, compensation, discrimination, and workers' compensation.
New CA Laws and Regulations Compliance Overview AlphaStaff
As of January 1, 2013, the state of California has added and amended myriad of new laws that affect employers in a number of important and significant ways. Please join us as we review each of these changes and help employers better understand the impact and importance of these changes to their businesses and employees in California. Presented by Human Resources Account Manager, Rebecca McDonough, CA-SPHR
The document provides an overview of recently enacted federal and state legislation including the Lilly Ledbetter Fair Pay Act, the Paycheck Fairness Act, changes to COBRA and FMLA regulations, the Americans with Disabilities Act Amendments Act, New York's Mini-WARN act, and related issues employers should be aware of. It discusses the background and impact of these laws, highlighting requirements for employers including auditing pay practices, revising notice and documentation procedures, and expanding leave administration responsibilities.
Running Head BITCOIN WALLET1BITCOIN WALLET2.docxhealdkathaleen
Running Head: BITCOIN WALLET 1
BITCOIN WALLET 2
Bitcoin Wallet
Student’s Name: Sandeep Kumar Jannu
Professor’s Name: Micheal Soloman
Date: 08/09/2019
Question 1: Set up your own Bitcoin wallet and take a screen shot that includes
My Bitcoin URI and Address.
MHR 6401, Employment Law 1
Course Learning Outcomes for Unit V
Upon completion of this unit, students should be able to:
1. Discuss the legal significance of the employer-employee relationship.
1.1 Explain the regulation of wages and hours under the Fair Labor Standards Act (FLSA).
1.2 Assess the legal issues surrounding FLSA that employers face.
4. Characterize conduct that violates federal anti-discrimination laws in employment.
4.1 Determine the elements of a prima facie case of pay discrimination under the Equal Pay Act.
Course/Unit
Learning Outcomes
Learning Activity
1.1
Unit Lesson
Chapter 12
Unit V Case Study
1.2
Unit Lesson
Chapter 12
Unit V Case Study
4.1
Unit Lesson
Chapter 12
Unit V Case Study
Reading Assignment
Chapter 12: Wages, Hours, and Pay Equity, pp. 419–455
Unit Lesson
In a 2013 survey by the Society of Human Resource Management (SHRM as cited in Miller, 2014), 60
percent of employees rated pay as “very important” and 36 percent rated it as “important.” These ratings
made pay the top contributor to overall job satisfaction, surpassing job security.
While pay may not always take the top spot in survey results such as the SHRM survey, pay is usually much
higher among the leadership of an organization, and the significance and sometimes disparity of pay in the
employer-employee relationship cannot be refuted (Miller, 2014). Employees rely on compensation to support
themselves and their families. Employers have an interest in holding expenses down, including pay, but must
pay what the market requires for talent that drives the organization’s success. Employees want equitable pay
relative to their coworkers and commensurate with their skills. Employers must navigate complex legal
regulation of wages and hours, as individual states become more active in adding regulations and
requirements to existing federal law.
UNIT V STUDY GUIDE
Wages and Hours
MHR 6401, Employment Law 2
UNIT x STUDY GUIDE
Title
As pay and compensation is an issue that
affects every worker in an organization,
human resources must play a key role in
setting policy and insuring practices are
fair and compliant. At the federal level
alone, there are five laws that address
compensation and equal pay. Title VII of
the Civil Rights Act of 1964 prohibits
discrimination based on race, color,
national origin, gender, and religion in pay
and pay-related terms of employment,
including promotion and job placement.
The first bill signed into law by President
Obama was the Lilly Ledbetter Fair Pay
Act of 2009. It addressed the situation
where the discriminatory act that caused
an employee in a pro ...
Small Business Efficiency Act: Good News for PEOs & Small EmployersCPEhr
On December 19, 2014, the Tax Increase Prevention Act of 2014 was signed into law. This included the enactment of the Small Business Efficiency Act (SBEA), which amended the Internal Revenue Code to establish a certification program for Professional Employer Organizations (PEOs).This certification program, once up and running, should eliminate concerns businesses may have about partnering with a PEO.
The IRS issued a notice confirming its delay of the employer pay-or-play excise tax until 2014 and provided additional clarification. With the delay, employers have time to focus on other Affordable Care Act compliance issues that were previously secondary to pay-or-play, such as updated HIPAA privacy policies and notices of exchange availability. Employers can also expect inquiries from employees and health insurance exchanges regarding their coverage to determine exchange subsidy eligibility. Willis will continue monitoring all provisions affecting employers and provide updates.
Dozens of new California labor laws and Human Resources-related bills were passed, to go into effect on January 1, 2013. Many other changes affecting employers nationwide go into effect on 1/1, such as payroll tax limits, workers’ compensation insurance, federal employment regulations, and most significantly, the Patient Protection and Affordable Care Act, otherwise known as Health Care Reform. This 2013 California HR Updates report covers them all.
The document provides an overview and analysis of the Code on Wages Act, 2019 in India. Some key points:
- The Act aims to consolidate and simplify existing labor laws related to wages, bonuses, and equal remuneration. It subsumes four existing labor laws.
- Key definitions include expanded definitions of "wages" and new definitions of "employee" and "worker." Minimum wages will be revised every five years maximum.
- Provisions address payment of wages, bonuses, and equal remuneration without discrimination. Timelines are provided for wage payments.
- The Code emphasizes compliance over penalties and introduces an Inspector-cum-Facilitator role to advise employers.
- Draft
Compensation Compliance for Federal Contractors: The Rules Have Changed!williamsjohnseoexperts
The document discusses changes to rules around compensation compliance for federal contractors. It notes that the Office of Federal Contract Compliance Programs (OFCCP) has expanded its audits to include compensation programs, analyzing factors like base salary and bonuses. Contractors must now provide W2 and 1099 compensation data and be prepared to justify any pay disparities over $2,000 between employees. To prepare, the document advises contractors to develop a compliant compensation program using market data to classify roles, rather than relying on government contract job titles.
This document discusses the differences between classifying workers as employees versus independent contractors. Classifying workers incorrectly can result in IRS penalties and fines. The IRS uses several factors to determine proper classification, focusing on behavioral control, financial control, and the relationship between the parties. Intentionally misclassifying workers as independent contractors when they are really employees carries greater risks of penalties than unintentional misclassification. It is safest to classify ambiguous workers as employees or seek professional advice.
Impact of amendments in Provident Fund regulationsChandan Goyal
The document discusses key recent amendments made to India's Provident Fund regulations that have significantly increased the wage ceiling and impacted employers and employees. Specifically:
1. The wage ceiling eligible for PF contributions has increased over 125% from Rs. 6,500 to Rs. 15,000 per month. This has increased employers' monthly PF contributions by around 125% for employees earning over Rs. 15,000 and reduced take-home pay for employees by around Rs. 2,000.
2. The PF department has started inspecting companies to ensure they are not splitting wages to avoid PF liability. The document analyzes the legal definition of "basic wages" and exceptions.
3. It provides solutions for employers
The document discusses various methods used to evaluate jobs and determine compensation. It describes job evaluation methods like ranking and point systems that evaluate jobs based on compensable factors like skills, effort, and responsibility to determine each job's relative worth. Employers then group similar jobs into pay grades with ranges of points or ranks. Salary surveys of other employers provide market data to establish pay rates for each grade or job based on wage curves. Laws also influence compensation and require aspects like minimum wage, overtime pay, and prohibiting discrimination.
Learn about how your SEC registered company can address key aspects of the Affordable Care Act and about upcoming deadlines for 2014 and beyond - Peterson Sullivan - Seattle CPA Firm.
Why Payroll Compliance is Critical for Manufacturing Companies.pdfpaysquare consultancy
Payroll compliance is essential for manufacturing companies due to their distinct operational structure and diverse workforce. It encompasses the adherence to legal and regulatory mandates governing employee compensation, tax obligations, benefits administration, and meticulous record-keeping...https://paysquare.com/why-payroll-compliance-is-critical-for-manufacturing-companies/
May 2014 IRS 20 factor test re Employee or ICChris Parfitt
This document discusses the differences between employees and independent contractors and provides guidance from the IRS on how to properly classify workers. It outlines 20 factors used to determine whether a worker is an employee or independent contractor. Misclassifying workers can result in back taxes, penalties, and litigation. Employers are advised to carefully review the IRS guidelines to ensure proper worker classification.
Classifying independent contractors vs. employees AMT Warranty
Both large and small businesses across the country utilize independent contractors or freelancers. As these workers fuel today’s gig economy, understanding the difference between a company employee and an independent contractor is important for an organization’s tax purposes. Insurance Journal recently shared that government agencies are auditing companies to see if they are classifying their workers as independent contractors instead of workers to avoid paying workers’ comp, unemployment taxes, social security and Medicare.
The document summarizes key aspects of healthcare reform legislation for employers. It outlines requirements employers must implement by 2011, including covering adult children up to age 26 and eliminating lifetime limits. It describes additional responsibilities in 2012, such as reporting healthcare costs on W-2s. The document also discusses a tax on high-cost "Cadillac" health plans beginning in 2018. Finally, it notes tax credits available to small businesses that offer employee health coverage.
HR compliance update is essential for keeping up with ever-changing laws and regulations. Start 2020 confident you can handle the questions from supervisors, employees, and corporate leaders about employment law changes.
Work in Progress - 10th Year Anniversary - Employment Law Update VisualBee.com
The document provides an employment law update covering several topics:
1) The abolition of the default retirement age means employers can no longer force retirement based on age unless objectively justified. This may impact performance management, succession planning, and employee benefits.
2) New maternity and paternity provisions allow fathers to take up to 26 weeks of additional paternity leave in the first year. Employers must update family friendly policies.
3) The Equality Act consolidates previous anti-discrimination laws into a single act. The Bribery Act strengthens anti-corruption laws and requires adequate procedures to prevent bribery.
4) Agency worker regulations provide equal treatment for benefits and opportunities after 12 weeks to
On May 18, 2016, the U.S. Department of Labor (DOL) announced a final rule regarding overtime wage payment qualifications for the “white collar exemptions” under the Fair Labor Standards Act (FLSA).
The final rule increases the salary an employee must be paid in order to qualify for a white collar exemption. The required salary level is increased to $47,476 per year and will be automatically updated every three years. The final rule does not modify the duties test employees must meet to qualify for a white collar exemption.
There were major forces at work this past year that have made the labor and employment landscape in 2015 more dynamic and unpredictable than in recent years. A volatile political climate, still-sluggish economy, historic swing in the mid-term elections and aggressive federal initiatives have left many employers wondering what 2015 holds in store. In this report, we cover some of the hottest employment and health care trends, plus new payroll, tax and benefits information.
Recordkeeping plays an essential role in the management of any company. An extensive range of information about employees must be preserved for numerous reasons. This includes the ability to facilitate the efficient and effective management of human resources, to defend employment decisions when the need arises, and to comply with numerous federal and state laws. The following is a detailed analysis of the various record categories requiring preservation.
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The concept of how outsourcing human resources works is often confusing. This infographic represents the myriad of services that comprise HR outsourcing in a simple to understand format.
Preparing for the Future: How Professional Employer Outsourcing Will Help Sma...CPEhr
In recent years, Human Resources Outsourcing has grown from merely an interesting idea, to a way of doing business. Despite the current economic woes, HR Outsourcing continues to grow as employers look to consolidate vendors, cut costs and improve efficiencies. When considering whether or not to outsource human resources, employers should review all aspects of their employee administration, compliance and strategic needs to determine which elements should be outsourced, and which can be maintained in-house. Some employers may be only looking to outsource a specific function or process, such as payroll administration, recruitment or benefits administration, while others may find it more productive to outsource the entire spectrum of their human resources function. For those looking for the broadest and most comprehensive solution possible, Professional Employer Outsourcing (PEO) is the answer.
The document discusses performance appraisals, including why they are conducted, how to prepare for them, how to measure and evaluate employee performance, how to conduct the actual performance review meeting, and common mistakes to avoid. Key points covered include setting clear goals, using objective facts, providing feedback to help employees improve, and maintaining honest and accurate evaluations.
Implementing an Effective Ergonomic Safety ProgramCPEhr
Musculoskeletal Disorders (MSD), such as carpal tunnel syndrome, can be disabling, painful and costly. Incorporating appropriate ergonomics practices in the workplace can help to reduce the likelihood of these disorders from occurring and can greatly improve employee wellbeing and productivity.
What exactly is ergonomics and how can an ergonomically sound workstation be instituted? We address these questions in this report.
Small business medical insurance costs continue to rise a midst the uncertainty of future reforms and regulations. This white paper reviews 2012 health care trends and 3 strategies to mitigate the rising costs of health insurance.
Reclaim Your Business: HR Outsourcing in 2012CPEhr
Reclaim Your Business:
How Human Resources Outsourcing Will
Enable Companies to Rebuild in 2012. After years of recession, stagnant economic growth, high unemployment
and continuing uncertainty fueled by a partisan Washington, most small
and mid‐sized employers are looking towards the future with reserved
optimism. However, while many economic factors remain in flux,
employers are able to take control of their business in 2012. Many are
proactively investigating how Human Resources (HR) Outsourcing can
assist them in trimming excess operating costs, reducing insurance
premiums and HR overhead, and improving employee productivity.
Seven new 2012 California employment laws are highlighted that directly impact employers in the state. The laws crack down on worker misclassification, expand protections for gender identity and expression, require additional details in pay notices, limit the use of credit reports in hiring decisions, prevent interference with family medical leave, forbid discrimination of domestic partners in health insurance, and expand pregnancy disability leave benefits. Employers are advised to familiarize themselves with the new laws or contact CPEhr for assistance with compliance.
Read seven success stories of businesses that
improved productivity, reduced
employment risks, and cut insurance and HR overhead outsourcing their human resource functions.
The document summarizes several new employment laws and regulations going into effect in 2011, including expanded Americans with Disabilities Act regulations, new heat illness regulations in California, and new organ donation leave requirements in California. It also provides an overview of provisions of the new health care reform law that took effect in 2010 and what can be expected in 2011-2012, including dependent coverage for adult children up to age 26 and elimination of lifetime coverage limits.
Thousands of employers are turning to human resources outsourcing firms and Professional Employer Organizations (PEOs) as a way to cut employment costs, reduce HR risks and improve efficiencies. This is according to a new white paper entitled “Preparing for the Rebound: How Human Resources Outsourcing Can Help Business Through Uncertain Economic Times.”
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The global retail industry has weathered numerous storms, with the financial crisis of 2008 serving as a poignant reminder of the sector's resilience and adaptability. However, as we navigate the complex landscape of 2024, retailers face a unique set of challenges that demand innovative strategies and a fundamental shift in mindset. This white paper contrasts the impact of the 2008 recession on the retail sector with the current headwinds retailers are grappling with, while offering a comprehensive roadmap for success in this new paradigm.
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2012 Human Resources Updates
1. Inside:
Snapshot: 2012 Tax and 401(k) Limits Rising Workers
New Employment Laws Compensation Costs
Complimentary Training
Correct Workers’ Webinars Mitigating Rising Health Care
Classification— Costs
A Top Priority in 2012
2. Snapshot—New Employment New IRS Voluntary Worker
Laws Effective in 2012 Reclassification Program
On October 9, 2011, California Governor Jerry Brown signed 22 new employment- The Internal Revenue Service (IRS) recently
related bills into law. Most were effective January 1, 2012. While a complete announced a new initiative—the Voluntary
list is beyond the scope of this article, we highlight seven of the most important Classification Settlement Program (VCSP) —through
ones below. These laws directly impact employers in the state of California and which employers can voluntarily report misclassified
we highly recommend you familiarize yourself with them, or contact CPEhr to workers and convert them from independent
assist you. contractors to employees. In exchange, employers
SB-459: Worker Misclassification Bill can reduce their tax liability from the previous year
SB-459 is designed to crack down on the misclassification of employees as for those workers to a flat 10 percent and be released
independent contractors. It also dramatically increases the penalties on from employment tax audits regarding that job
employers who have been found to have willfully misclassified employees. classification for all prior years.
The new law also extends to “non-lawyer advisers” who knowingly counseled In brief, the new program states:
employers to engage in the misclassification. (See complete article, Correct
• The business pays 10% of the amount of
Workers’ Classification—A Top Priority in 2012, on following page.)
employment taxes calculated under the rates
AB-887: The Gender Nondiscrimination Act of Internal Revenue Code (IRC) § 3509(a) for
This law amends California’s existing anti-discrimination laws as detailed in compensation paid for the most recently ended
the Fair Employment and Housing Act. It defines both “gender identity” and tax year to the workers being reclassified.
“gender expression” as their own protected classes. The current law only uses • The business has no liability for penalties and
the term “gender identity.” interest.
The Equal Opportunity Employment Commission (EEOC) • The IRS will not audit the business for
took in 99,947 charges of discrimination in 2011, the employment tax purposes for prior years with
highest number of charges in its 46-year history. respect to the classification of those workers
being reclassified.
AB-469: Notice of Pay Details • The business will extend the statute of
Labor Code Section 2810.5 requires California employers to provide all non-exempt limitations for assessment of employment taxes
hires with a written notice that contains additional employment information. This by three years for the first three calendar years
information includes rate of pay, paydays, name of employer, including address after the date the business has agreed to the
and phone number, and workers’ compensation insurance information. reclassification. Thus, the usual “three
AB-22: Prohibition on Use of Credit Reports in Employment year” statute is extended to six years.
This new legislation prohibits employers from using an employee’s credit
To be eligible, employers may reclassify workers
history in making most employment decisions. This also applies to applicants
under VCSP if they meet the following criteria:
interviewing for a job. Prior to the passing of the law, employers were permitted
to request a credit report for employment or business purposes. The new bill • Consistently treated the workers as
significantly limits the occasions for which an employer may use a credit report. nonemployees;
AB-592: Interference with California Family Rights Act Leave • Filed all required Forms 1099 for the workers
AB-592 makes it an unlawful employment practice for any employer to interfere for the previous three years; and
with or otherwise prevent or attempt to prevent an employee from exercising • Are not currently under audit by the IRS for
rights under the California Family Rights Act. This existing law makes it an any reason or by the Department of Labor or
unlawful employment practice to deny an employee’s request for parental, a state agency, with respect to the workers’
pregnancy or medical leave as well as leave to care for an ill family member. classification.
SB-757: Domestic Partner Discrimination in Health Insurance However, a word of caution: businesses should
SB-757 is federal legislation that forbids employers from willfully excluding carefully review all job descriptions before
from coverage eligibility discriminating in coverage between spouses or unnecessarily reclassifying workers as employees
domestic partners of a different sex and those in same-sex marriages or domestic if there is a reasonable basis for an independent
partnerships. Group coverage must be provided to spouses and domestic partners contractor classification. Additionally, even if
in same-sex relationships on the same basis as provided to those in different an employer was audited by the IRS for worker
sex relationships. classification issues, it might be able to avoid liability
SB-299: Pregnancy Disability Leave under an existing IRS program. Finally, the costs of
This new law, effective January 1, 2012, requires all employers with 5 or more processing tax withholdings and providing employee
employees to continue paying the employer portion of health premiums for benefits can make reclassification an expensive
eligible female employees who take Pregnancy Disability Leave, up to 4 months proposition.
in a 12-month period. The law specifically calls for benefits to be continued Businesses considering joining the VCSP should
at the same level as if the employee had continued working during the leave contact CPEhr or another competent employment
period. The current law only requires pregnancy leave benefits be provided at expert to review all the benefits and risks of the
the same level as they would for other temporary disability leaves. program.
2
3. Correct Workers’ Classification—
A Top Priority in 2012
As briefly outlined above, California Senate Bill 459, affectionately 3. Review the IRS guidelines. The IRS provides clear eligibility
known as the “The Job Killer Act,” was signed into law by Governor parameters for determining independent contractor status.
Jerry Brown on October 9, 2011. The new law imposes severe One must consider all information that helps determine the
penalties on employers who “willfully” misclassify workers as degree of control and independence maintained by the worker
independent contractors. The penalties range between $5,000 in relation to the company.
and $15,000 per violation for first time offenders, and $10,000 - Here are some additional questions an employer may want to answer
$25,000 if an employer is found to have engaged in a “pattern or for each worker in question:
practice” of willfully misclassifying its employees as independent
contractors. (Just to compare to penalties for other California Labor 1. Does the company control how the worker performs their work?
Code violations, they typically range between $50 and $200 per 2. How is the worker paid and who pays for expenses and
count, with maximum caps of $1,000 to $4,000). supplies?
3. What type of relationship exists between the employer and
To add insult to injury, employers found to have violated the statute worker?
must prominently display a notice of its offense on its business 4. Is there a written contract and are there employee benefits?
website for one full year! Further, licensed contractors could face 5. Is the work performed by the worker essential for the
even greater punishment as the new law requires violations to be business?
reported to the Contractors’ State Licensing Board, which then must 6. Is the worker employed on a short- or long-term basis?
initiate disciplinary action against the contractor.
The answers to questions of this sort will guide employers in their
Intensive Investigations determination of each worker’s classification. The IRS created a
On the Federal level, the misclassification of workers has been a concrete tool to assist employers with this task called the 20 Factor
focus of attention by the Department of Labor. Labor Secretary Test. Bear in mind that a worker does not require all 20 factors
Hilda Solis, recently stated, “The misclassification of employees in order to be considered either an employee or an independent
as independent contractors is an alarming trend. The practice is a contractor.
serious threat to both workers, who are entitled to good, safe jobs, In short, to prevent future aggravation and financial penalties, be
and to employers who obey the law and are undercut when others proactive, investigate complaints promptly, carefully check each
use illegal practices.” worker’s status and reclassify as necessary. Alternatively, contact
The Labor Department is now sharing information concerning CPEhr who can assist you in all aspects of employee job descriptions
businesses that misclassify workers with the IRS, as well as with and classifications.
a number of states that have agreed to work cooperatively with the
Labor Department. As part of their efforts, the Labor Department
has also hired approximately 300 investigators to explore wage theft
grievances.
The IRS has already collected almost $4 million of back wages in
2010, during the first of its three-year plan to audit some 6000
randomly selected, various sized companies. It is our understanding
that eventual goal of the plan is to create an employment taxes
scoring system.
Be Proactive to Protect Your Company
Employers who misclassify employees as independent contractors
may eventually find themselves paying significant penalties, in
addition to employment taxes and various benefits for which the
misclassified employee may be eligible such as pension, health
insurance, worker compensation, vacation and sick benefits,
unemployment and more. As such, it behooves all employers
to be proactive in reviewing their employee job descriptions and
reclassifying misclassified workers if necessary. A few tips:
1. Read through the Labor Department’s rules and examine
workers’ job descriptions to determine whether classifications
are correct.
2. Complaints should be investigated promptly. A worker
claiming that they are entitled to a particular status or
financial benefit should be heeded and employers should
be sure to examine the case.
3
4. 2012 Tax and 401(k) Limits
Once again, various tax and payroll limits will be changing in 2012.
Below is a summary of the important changes. Payroll/tax figures which
remain the same in 2012 are noted as such.
FEDERAL
FICA (Social Security)
Maximum Taxable Earnings $110,100
Employer 2012 Withholding Percent 6.2%
Employer 2012 Maximum Withholding $6,826.20
($4,485.20 in 2011 for EE)
($6,621.60 in 2011 for ER)
FICA (Medicare)
Maximum Taxable Earnings No Limit
Employer/Employee 2012 Withholding Percentage 1.45%
Employer/Employee 2012 Maximum Withholding No Limit
(No change from 2011)
SUPPLEMENTAL WAGES
Rate (flat rate withholding method) 25%
Over $1 million 35%
(No change from 2011)
WITHHoLDING
The 2012 withholding tables have not been finalized, as Congress has
not yet finalized their decision on whether to adjust the tax rates. Any
changes in the withholding tables will be communicated once they have
been announced.
401(k) PLAN DEFERRAL LIMITATIoNS
Elective Deferrals $17,000
($500 increase from 2011)
401(k) Catch-Up Contribution Deferrals $5,500
(No change from 2011)
HSA PLAN DEFERRAL LIMITATIoNS
Individual Maximum Contribution
(Includes Employer Contribution) $3,100
(up $50 from 2011)
Family Maximum Contribution
(Includes Employer Contribution) $6,250
(up $100 from 2011)
Catch Up Contributions (55+ years old) $1,000
(No change from 2011)
CALIFoRNIA oNLY
SUPPLEMENTAL WAGE WITHHoLDINGS
Bonuses & Earnings from Stock Options 10.23%
(No change from 2011)
Other Supplemental Earnings 6.60%
(No change from 2011)
DISABILITY INSURANCE (Employee Paid)
Maximum 2012 Wages Subject to Withholding $95,585
(up $2,269 from 2011)
Employee 2012 Withholding Percentage 1.0%
(down .2% from 2011)
Employee 2012 Maximum Deduction $955.85
(down $163.94 in 2011)
4
5. Partnership for Success:
Complimentary Training Webinars
The success of almost every business depends on the
skillset of the teams, and the individuals that form those
teams. The more successful businesses have specific
concepts that define the PFS (Partnership for Success)
and these concepts may be referred to as “culture,”
“professional behavior,” “job knowledge,” “hard skills,”
or “soft skills.” It is through Training and Development
of these teams that the concepts are introduced,
supported and routinely refreshed.
Opportunities for growth and development are
consistently listed in the top 5 motivating factors by
employees contributing to reduced turnover, fewer
workplace accidents, greater team cooperation, a more
powerful dedication and loyalty by employees and the
development of a stronger, more robust business.
CPEhr offers complimentary monthly training webinars
on a wide range of human resource topics. We encourage
you to join us! (topics subject to change)
January – Health Care Reform Updates
February – 2012 Employment Law Updates
March – Steps for Legal Investigations
April – Social Media in the Workplace
May – Team Dynamics
June – Understanding Diversity at Work
July – Ergonomic Basics
August – Workers’ Compensation
September – Understanding HR Policies
october – Performance Appraisals
November – Recognizing and Preventing Workplace
Violence
December – Payroll and Tax Updates
For more information or registration,
visit www.cpehr.com.
The U.S. employee training market is
expected to grow to $132 billion in
2012, almost half of the entire global
market ($292 billion).
[Source: TrainingIndustry.com]
5
6. Rising Workers Compensation Costs and
What Employers Can Do to Prevent It
After years of stable workers’ compensation insurance rates, Protecting Your Business Against Rising Premiums
California employers can expect to see a significant increase in their
The best way to offset increase in premiums is to maintain a safe
insurance premiums starting January 2012. On November 4, 2011,
work environment, which will reduce the occurrence of workplace
Insurance Commissioner Dave Jones approved an average increase
injuries, and ultimately lead to a reduction in the company’s
of 37% to the pure premium rates and a claims cost benchmark of
experience modification rate (Ex Mod). Employers with a favorable
$2.30 per $100.
Ex Mod (less than 1.0) will gain the benefit of having their Ex Mod
The claims cost benchmark reflects the expected average cost of applied to base rates resulting in lower premiums, as well as being
claims based on total California payroll, i.e. total claims cost/total eligible for additional credits or discounts offered by the insurance
payroll. The advisory pure premium rate measures the cost of workers’ carrier.
compensation claims and the expenses to adjust those claims over
Below we offer four fundamentals practices that will directly impact
the next policy year for workers’ compensation insurance.
your workplace safety:
Twice a year the WCIRB advises the insurance commissioner on how
1. Implement an Injury and Illness Prevention Program (IIPP)
costs are developing within the California’s workers’ compensation
system and in turn, the commissioner advises insurance companies Not only is an IIPP a necessity for regulatory compliance, but a
*
whether they should lower, raise or maintain their rates. well designed IIPP will also help to minimize injuries and related
costs. An IIPP should address key items including responsibility
Explaining the rate increases, Commissioner Jones held a
for overseeing the safety program, communication with employees,
public hearing at the end of September stating that the WCIRB
employee compliance with the program, hazard (risk) assessment
is restructuring how the state’s pure premium rate is calculated.
and correction, accident investigation, safety training and
Additionally, most carriers are experiencing increasing expenses and
recordkeeping.
reduced profits due to rising insurance claims costs and operating
expenses. Industry data for 2010 shows the combined loss ratio at *All California employers are required by Cal/OSHA to have an Injury and Illness
Prevention Program in place. Federal OSHA is currently considering a similar
128%. That means, for every dollar an insurance company collected requirement.
in premiums, it spent $1.28 in claims and expenses.
2. Make Safety Everyone’s Job
While it is necessary to designate specific individuals to administer
the IIPP, it is also important to emphasize the company-wide shared
responsibility for safety. In order for an IIPP to be effective, everyone
from top management to supervisors and employees must buy in to
and support the program. Make sure that managers and supervisors
are adequately trained regarding company safety policies so that
they can help to enforce these policies with their employees. Involve
employees in the safety program, encouraging them to make safety
suggestions, assist with hazard identification surveys and job hazard
analysis. This creates a sense of employee ownership of workplace
safety issues. Also consider incorporating safety into performance
evaluations and bonus programs.
3. Consider a Safety Incentive Program
When done right, an incentive program can be a valuable addition
to the company’s overall safety program. Be wary of programs that
discourage injury reporting; instead, try implementing a program that
While the 2012 increases are viewed as bad news for employers,
uses positive reinforcement, rewarding employees for contributing
Jerry Azevedo, a spokesman for the Workers’ Compensation Action
to workplace safety by making safety suggestions, following safe
Network, a group that represents the interests of employers, offered
work practices and assisting with hazard identification efforts.
the following perspective:
4. Consider outsourcing Safety Administration
“The [new] filing means rates are essentially where they need to be to
cover the cost of claims, which has been increasing substantially in Many organizations attempt to institute an effective, cost efficient
recent years. This is a methodology that we think adds transparency. Risk Management Program in an effort to reduce workplace
This is the first rate decision or advisory rate published by the injuries. These programs may be difficult to implement, often
insurance commission under the new methodology established by with unproductive and costly results. Consider contracting with a
the bureau and our organization believes the new methodology is Human Resources Outsourcing firm that employs safety specialists
good for employers because it adds transparency and it’s clearer to assist you in the creation and implementation of an effective
and more informative for employers to expect where rates should go safety plan. Contact CPEhr’s Risk Management Department for
heading into the next year.” more information.
6
7. Two Approaches to Mitigate
Rising Health Care Costs
As the Supreme Court prepares to rule on the constitutionality of the Health Care Reform
Act, some employers are taking a “wait and see” approach to their 2012 corporate
benefit plans. Confused by the pending legislation, employers are fearful of rising
insurance costs and are hesitant to make any significant changes to their current plans.
However, in contrast to this “status quo” attitude, other employers are taking proactive
steps to mitigate future premium increases. Two methods that have been growing in
popularity over the past several years are consumer directed health plans and employee
wellness programs.
Consumer Driven Plans. Employers continue
to explore consumer-directed health care plans
(CDHC). These plans are structured to give
employees greater control over their personal
health care costs, thereby promoting caution
before they utilize expensive procedures or request
unnecessary treatments. CDHC plans offer higher
deductible options, coupled with Health Savings
Accounts (HSAs) or Health Reimbursement
Accounts (HRAs) through which employees pay for
out-of-pocket medical costs with their self-funded
plans. According to recent reports, the consumer
driven plans are working—CDHC patients were
twice as likely as patients in traditional plans to
ask about cost, three times as likely to choose
a less expensive treatment option, and chronic
patients were 20 percent more likely to follow
treatment regimens carefully. [Source: “Consumer
Driven Health Care,” Networks Financial Institute Policy Brief,
Indiana State University]
Employee Wellness. As premiums continue to increase, employers are looking to promote
employee wellness programs to offset these costs. Wellness programs can include
educating employees to be more conscious health care consumers, promoting healthy
lifestyle habits, offering incentives for weight-loss or exercise activity, or offering free
or discounted memberships to gyms and health clubs. Alternatively, other employers
would penalize employees for engaging in an unhealthy lifestyle. Wal-Mart, for example,
recently imposed a $2000 per year surcharge for some smokers. While this type of
approach is somewhat controversial, it drives the message home that unhealthy lifestyle
choices out of the office impact employers’ costs and overall efficiency in the office.
Ultimately, a healthier workforce will reduce medical insurance costs and improve
employee productivity.
While the future of healthcare remains clouded with doubt and uncertainty, employers
have tools at their disposal to proactively address the certain increases in insurance
costs. Please contact a CPEhr benefits specialist to assess if a CDHC plan makes sense
for your company and to assist you in implementing an effective employee wellness
program.
Nearly half (47%) of respondents in a recent survey
said their organization offers, or plans to offer, domestic
partner benefits to at least some employees.
[source: BLR’s Spousal and Domestic Partner Benefits Survey, 2011]
7
8. About Us
CPEhr is one of the oldest privately held Human
Resources Outsourcing and PEO firms in California.
Our longevity, coupled with the flexibility afforded to a
privately held corporation, enables CPEhr to provide
customized services, with the back-end support of a large
corporation.
We are proud of our customer service and personalized
client relationships. We service a full range of industries
and client sizes from 2 to 20,000 employees. With a 90
percent retention rate, our corporate staff is dedicated
to our company and clients. CPEhr has a flat hierarchy
making our executive team always available to you.
Services include:
• HR Compliance
• Employment Administration
• Employee Benefits
• Risk Management
• Payroll and Tax
• Training
• Recruiting
9000 Sunset Blvd., #900
West Hollywood, CA 90069
www.cpehr.com
PH: 800.850.7133
FAX: 310.888.8420
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