Americans with Disabilities Act (ADA) Revisions

The Department of Justice has issued final rules on the ADA Titles II and III, effective September 15, 2010.

The revised standards, called the Standards for Accessible Design, must be met by March 15, 2012, although they are permitted to be used as of September 15, 2010. These standards are to be applied to any new construction, alterations and, where required for public accommodations, barrier removal.

The 2010 standards provide specifications for a wide range of architectural features, including public stairwells, elevators, restrooms, parking spaces, signage, and assembly areas. The Title II and Title III final rules also amended existing Title II and Title III regulations, effective March 15, 2011. The amended Title III provides guidance on the definition of “service animal,” among other topics. The Title II guidance for state and local entities includes similar guidance on the definition of “service animal.”

Below are links to the adoption of the Standards for Accessible Design fact sheet, the Title II fact sheet and the Title III fact sheet that identify major changes in the rules:

http://www.ada.gov/regs2010/factsheets/2010_Standards_factsheet.html

http://www.ada.gov/regs2010/factsheets/title2_factsheet.html

http://www.ada.gov/regs2010/factsheets/title3_factsheet.html

What is a Professional Employer Organization (PEO)?

In today's competitive economy, businesses are looking at ways to gain a competitive edge. Outsourcing non-revenue activities is something that most businesses are taking a close look at. Human Resource Administration and Payroll hold the "honor" of being non-revenue producing and a risky element of the business.

A PEO serves as an extension of your business, assisting in HR administration, compliance, payroll and risk management. The PEO will partner with clients to manage the risks, compliance issues and costs associated with human resources activities so that the client organization can avoid unnecessary risks and focus their attention on their core business activities.

Many people think that a PEO is an employee leasing company, temp firm or staffing agency. PEO's are NOT any of these types of agencies. The arrangement with a PEO is based on mutually beneficial Co-Employer Agreement. The client maintains the day-to-day management of their employees while the PEO handles compliance, payroll, HR administration and risk management.

In a co-employment contract, the PEO becomes the employer of record for tax and insurance purposes, filing paperwork under its own identification numbers. The client company continues to direct the employees’ day-to-day activities. The value proposition to client companies is that the use of a PEO saves time and staff that would be used to prepare payroll and administer benefits plans, and may reduce legal liabilities or obligations to employees that it would otherwise have.

As of 2010, there are over 700 PEO organizations covering between 2 and 3 million employees(1).


(1) Industrial News, NAPEO, www.napeo.org

EMPLOYEE RECORD RETENTION

Legal requirements for record keeping and retention can be confusing for employers. Many requirements depend on the federal agency, if you have a government contract or on the number of employees at the worksite. Below is a summary of record keeping requirements for basic personnel information under the federal laws.

1 yr and 15+ employees
Employment records: applications, resumes, hire, rehire, layoff terminations, promotions, name, address, social security number, compensation records, tax forms, records of hours, benefit payments, etc.

3 yrs and 20+ employees
Employment records: applications, resumes, hire, rehire, layoff terminations, promotions, name, address, social security number, compensation records, tax forms, records of hours, benefit payments, etc.

6 yrs and 20+ employees
COBRA records, payments, correspondence

3 yrs and 50+ employees, 75 mile radius
FMLA documentation including employee information, notices, record of leaves, benefit payment information

3 yrs* and 4+ employees
I-9 signed by employee and employer
*3 years from date of hire OR one year after termination, whichever is longer.

3 yrs and 11+ employees

OSHA safety and health training records

5 yrs and 11+ employees

OSHA illness and injury logs, supplemental injury and illness records

These are general guidelines for employment records. Some records are often required under more than one federal law or state law may differ than federal law and the period of retention may vary. In that case, the best practice is to retain the information for the longer period of time.

I-9 FILE COMPLIANCE

Announcements have been made from the current administration on enforcing existing and new regulations and higher penalties for non-compliance of these regulations. One of the areas of focus will be on the I-9 compliance.

I-9 forms establish a worker's identity and eligibility to work. I9s should be filed separately from employee personnel files. All employees must fill out and sign the form before beginning work and the employer must retain the documents for a certain amount of time depending on the length of employment. All I-9 forms must be retained either three years after date of hire or one year after termination, whichever is later.

The following steps are a guideline to I-9 filing and retention requirements.

1. Maintain separately from personnel records


2. Develop an administrative section to track record expirations, etc.


3. File active employee I-9s alphabetically


4. Set up a separate section for terminated employees and organize by retention date


5. Shred terminated I9s past retention date

For further information on I-9 instructions, please go to the following link for the USCIS Employers Guide:
http://www.uscis.gov/files/nativedocuments/m-274.pdf.

As the saying goes, "the best defense is a good offense". Following these guidelines and making sure there is an employee with the knowledge and experience to process the I-9s will help in preparation for an inspection.

DO YOU MEET REQUIREMENTS FOR DISABILITY NONDISCRIMINATION LAWS?

The U.S. DOL has released a new online feature to help employers ensure that their employment policies do not discriminate against qualified individuals with disabilities.

The online tool helps employers determine, quickly and easily, which federal disability nondiscrimination laws apply to their business or organization and their responsibilities under those laws.

Users answer a few questions about the nature of their organization such as the size of its staff and whether the business or organization receives federal financial assistance. Based on the responses provided, the advisor generates a customized list of federal disability nondiscrimination laws that are likely to apply, along with easy-to-understand information about employers' responsibilities under each relevant law.

Included with this online tool is a “Guide on Employing People with Disabilities” that outlines resources available to help employers comply with disability nondiscrimination laws.

The link to this tool is :http://www.dol.gov/elaws/odep.htm

IRS RELEASES GUIDANCE ON DEPENDENT COVERAGE

The IRS has issued the first of what will be many guidelines on the new health care reform law. The guidance confirms that an employer-sponsored health plan may provide coverage free from federal income tax to an employee’s children up to age 27.

This exclusion applies regardless of whether the child is married and regardless of whether the child is regarded as a “dependent” under the Internal Revenue Code. However, there are certain exclusions:

• The exclusion is effective for health coverage provided on or after March 30, 2010. Before March 30, coverage for the child will be excludable only if the child qualifies as a tax-code dependent.
• The exclusion ceases to apply in the year in which the child turns 27. This means if a child will turn 27 on Dec. 15, 2011, the exclusion applies to health coverage provided from March 30, 2010, through Dec. 31, 2010.

On Jan. 1, 2011, most calendar-year health plans will need to comply with the new health care reform mandate to extend coverage to adult children up to age 26. Although various questions still need to be answered about the new requirement to cover adult children, the change in tax rules does lead to an early and timely implementation of the tax law.

Health Care Time Line

Please follow the excellent link below from SHRM for a timeline of the health care reform:

http://www2.shrm.org/HC_Timeline/scroller3.html?marquee=MP2_042810

Mandatory Changes to Arizona Withholding



Effective After June 30, 2010

The State of Arizona is changing withholding amounts effective July 1, 2010. For amounts withheld on or after July 1, 2010, the amount required to be withheld will no longer be a percentage of federal withholding. Amounts withheld on or after July 1, 2010, must be based on a table prescribed by the Arizona Department of Revenue. This is a substantial change to the current percentage of federal income tax and the department has offered a calculation table along with the form to help employees compute what taxes they should be withholding (link below).

Employees subject to Arizona income tax withholding must fill out a new form that will go into effect on July 1, 2010, and give the completed form to their employer. NPS will be attaching the new forms for the DarwiNet online access employees, attaching to payroll, and providing the link below to clients and employees.

Please follow the following link to the complete the new form and submit to us. This link includes a table to help determine your withholding amounts: http://www.azdor.gov/LinkClick.aspx?fileticket=9_U8ufG2wH8%3d&tabid=265&mid=884

COBRA Benefits and Unemployment Compensation Extended Again

On April 15, 2010, Congress approved another short-term extension for unemployment insurance benefits and a COBRA health insurance premium subsidy for jobless Americans.

The new law will provide relief to jobless workers whose unemployment benefits expired on April 5, 2010. According to the law, these workers must reapply for long-term unemployment benefits to receive their payments retroactively. This extension extends the unemployment benefits until June 2, 2010, and the COBRA premium subsidy until May 31, 2010.

In March 2010, the Senate passed an amended version of legislation (H.R. 4213) that would extend popular tax breaks for individuals and businesses. If enacted, the legislation would continue long-term unemployment benefits and the COBRA premium subsidy until Dec. 31, 2010.

More regulatory changes are likely to occur and we will keep you updated of those changes.

Please note that this information should not be used as legal advice.

TAX INFO FOR EMPLOYEES

Tax time is here and as you prepare your return or plan for your tax whithholdings for 2010, we've provided a couple of resources that would be a great benefit for those that qualify.

IRS FREE TAX FILING

If possible, take advantage of the IRS free tax filing. The IRS and its private-sector partners are again making Free File available for the 2010 tax season (for 2009 income). Eligible taxpayers receive free use of helpful tax preparation software and free electronic filing of their federal tax returns. Free File can make it easier for employees to find all the credits and deductions they are due. Taxpayers go through www.IRS.gov/freefile to access the free options.

EARNED INCOME TAX CREDIT


Some taxpayers are overlooking a valuable tax credit that could make their lives a little easier. The IRS estimates that up to one in four taxpayers who qualify for the Earned Income Tax Credit – or EITC – fail to claim the credit.

You may qualify if your income was under $41,646 last year and you, or your spouse, had income from wages, self-employment, farming, or, if under the minimum retirement age, from disability retirement benefits paid under an employer plan. The amount of your EITC could be as much as $4,824 or as little as $1 and depends on several factors, such as how much you earned, your filing status, whether you have children, etc.

To get the EITC you earned, you must 1) file a federal income tax return and 2) claim the EITC.

You may prefer to get some of next year’s EITC throughout the year, rather than wait and get EITC after you file your tax return. To get EITC, complete Form W-5 and give the lower part of the form to us. Keep the top part for your records. For more information, see Advance EITC Questions and Answers.

Many communities have volunteer income tax assistance sites or local IRS Taxpayer Assistance Centers, which will compute your EITC and prepare your return without charge. To locate a volunteer site, call your community’s 211 or 311 number for local services or call the IRS at 1-800-906-9887. Locate an IRS Taxpayer Assistance Center in the blue pages of your telephone directory.

Find more information at www.irs.gov/EITC . The online EITC Assistant can help you determine your eligibility and the amount of your credit.

HEALTH CARE REFORM

There is still much to be decided or that may change, but at this point, below is a summary of some changes to expect if the Senate passes the House's changes and President Barack Obama signs the entire package into law:

Within the first year:

• Insurers will be barred from excluding children for coverage because of pre-existing conditions.
  Young adults will be able to stay on their parents' health plans until the age of 26. Many health plans currently drop dependents from coverage when they turn 19 or finish college.
  


• Uninsured adults with pre-existing conditions will be able to obtain health coverage through a new program that will expire once new insurance exchanges begin operating in 2014.
  


• A temporary reinsurance program is created to help companies maintain health coverage for early retirees between the ages of 55 and 64. This also expires in 2014.
  


• Medicare drug beneficiaries who fall into the "doughnut hole" coverage gap will get a $250 rebate. The bill eventually closes that gap which currently begins after $2,700 is spent on drugs. Coverage starts again after $6,154 is spent.
  


• A tax credit becomes available for some small businesses to help provide coverage for workers.

In 2011:

• New health plans will be required to cover preventive services with little or no cost to patients.
  


• Employers are required to disclose the value of health benefits on employees' W-2 IRS forms.

In 2014:

• State health insurance exchanges for small businesses and individuals open.
  


• Most people will be required to obtain health insurance coverage or pay a fine if they don't.


• Healthcare tax credits become available to help people with incomes up to 400 per cent of poverty purchase coverage on the exchange.
  


• Health plans no longer can exclude people from coverage due to pre-existing conditions.
  Employers with 50 or more workers who do not offer coverage face a fine of $2,000 for each employee if any worker receives subsidized insurance on the exchange. The first 30 employees aren't counted for the fine.
  


• Health insurance companies begin paying a fee based on their market share.

In 2018:

• An excise tax on high cost employer-provided plans is imposed. The first $27,500 of a family plan and $10,200 for individual coverage is exempt from the tax. Higher levels are set for plans covering retirees and people in high risk professions.

Exempt Status Pay Reductions

As a follow-up to our blog on exempt versus non-exempt employees, there are conditions in which exempt employees can have pay reductions. If your employee position has been determined to meet the criteria for exemption, and the employer chooses to make the position exempt, deductions from pay for sickness/disability or personal reasons may only be made as follows:

Employers With Bona Fide Leave Plan:

Status: Exempt
Absence: Sickness or Disability
Absence Period: Partial Day
Can be forced to use leave time. If leave is exhausted or has not become effective yet, no reduction in pay is allowed; however the leave balance may be reduced to the negative.

Status: Exempt
Absence: Sickness or Disability
Absence Period: Full Day
Can be forced to use leave time. If leave is exhausted or has not become effective yet, a full day reduction in pay is allowed (an employer may pay leave time where the balance is zero thereby reducing the leave balance to the negative).

Status: Exempt
Absence: Personal
Absence Period: Partial Day
Can be forced to use leave time. If leave is exhausted or has not become effective yet, no reduction in pay is allowed; however the leave balance may be reduced to the negative.

Status: Exempt
Absence: Personal
Absence Period: Full Day
Can be forced to use leave time. If leave is exhausted or has not become effective yet, a full day reduction in pay is allowed (an employer may pay leave time where the balance is zero thereby reducing the leave balance to the negative).

Employers Without Bona Fide Leave Plan:

Status: Exempt
Absence: Sickness or Disability
Absence Period: Partial Day
No reduction in pay is allowed.

Status: Exempt
Absence: Sickness or Disability
Absence Period: Full Day
No reduction in pay is allowed unless the full workweek is not worked.

Status: Exempt
Absence: Personal
Absence Period: Partial Day
No reduction in pay is allowed.

Status: Exempt
Absence: Personal
Absence Period: Full Day
Reduction in pay is allowed.

If you would like to learn more information on salary basis requirements, please visit the Wage and Hour Division of the U.S. Department of Labor website: http://www.dol.gov/whd.

Exempt Vs. Non-Exempt

EMPLOYEE CLASSIFICATION



The decision to have an employee classed as exempt or non-exempt is one of our most frequently asked questions. An employee classified as exempt means they are exempt from over-time pay and minimum wage. While this classification is tempting to companies to avoid costly over-time pay, the incorrect classification could result in a serious wage and hour violation.



The Federal Labor Standards Act (FLSA) is a federal law that sets minimum wage and overtime pay. As a federal law, it preempts state wage and hour requirements unless the state guidelines are more beneficial to the employee. The FLSA specifies that non-exempt employees must be paid at least the current federal minimum wage rate for the first 40 hours worked in a workweek (seven consecutive 24-hour periods) and must receive an overtime rate of at least time and one-half their regular rate of pay for all hours worked over 40 in a workweek.



Classifying employees as exempt or non-exempt is not easy. The determination should be made not on the job title or the way the employee is paid, but be based on the job duties associated with the position. Three tests are generally used to determine if an employee meets one of the white collar exemptions: salary level, salary basis and job duties. Note: The salary level and salary basis tests do not apply to doctors, lawyers, teachers, certain computer-related occupations or outside sales employees.



Executive Exemption: Paid on a salary basis at a rate not less than $455 per week; primary duties are managing the enterprise, or managing customarily recognized department or subdivision; employee must customarily and regularly direct the work of at least two ore more other full-time employees or their equivalent; and employee must have authority to hire or fire other employees, or the employees suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees must be given particular weight.



Administrative Exemption: Paid on a salary basis at a rate not less than $455 per week; performance of office or non-manual work directly related to management or general business operations; and primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.



Professional Exemption: Paid on a salary basis at a rate not less than $455 per week; primary duty must be performance of work requiring advanced knowledge, defined as work which is predominantly intellectual in character and includes work requiring the consistent exercise in discretion and judgment; the advanced knowledge must be in a field of science or learning; and the advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction. As a creative professional, the employee must be paid on a salary basis at a rate not less than $455 per week; primary duty must be the performance of work requiring invention, imagination, originality or talent in a recognized field of artistic or creative endeavor.



Computer Employee Exemption: Paid either on a salary basis at a rate not less than $455 per week or, if compensated on an hourly basis, at a rate of not less than $27.43/hour; the employee must be employed as a computer systems analyst, computer programmer, software engineer or similarly skilled worker in the computer field; primary duties must consist of application of systems analysis techniques and procedures, design, development, analysis, creation, testing or modification of computer systems and programs related to machine operating systems or any combination of the aforementioned duties.



Outside Sales Exemption: Employee's primary duty must be making sales (as defined in the FLSA), or obtaining orders or contracts for services or for the use of facilities for which consideration will be paid by client or customer; and the employee must be customarily and regularly engaged away from the employer's place or places of business.



These exemptions apply only to "white collar" employees who meet the salary and duty tests. It does not apply to manual laborers or other "blue collar" workers who perform work involving their hands, physical skill and energy. The exemptions also do not apply to police, fire fighters, paramedics and other first responders.



This publication is for general information and is not to be considered in the same light as official statments of position contained in the regulalations from the Department of Labor.



Please watch for our next post:

Exempt Status Pay Reductions...what are the circumstances in which the employer can make a deduction from pay for exempt level employees?