Imagine……
Every February a senior manager buys expensive jewelry and gives each women in his office one—on Valentine’s Day. The manager, who makes a lot of money, doesn’t consider the gift extravagant. He also doesn’t single anyone out, gifting the jewelry to all the women he works with, no matter their age or marital status.
Is it an appropriate gesture? Or does is it an unwelcome romantic overture?
An attorney who looked into the gift giving (after one woman complained to HR) said the manager thought it was a nice present, and he didn’t have any romantic intentions toward any of these women. However, each individual woman only knew about the gift that she received and did not know that he gave it to other women as well. Some realized he was just an extravagant gift-giver, but it was clear that some were uncomfortable with his gesture.
No lawsuits resulted from this example, but the episode demonstrates that HR professionals need to communicate clear guidelines about employee behavior on Valentine’s Day.
Office-Romance Policies Stricter
The manager might have avoided complaints had his company spelled out what is and is not allowed—in terms of gifts, cards and romantic displays among co-workers.
A labor attorney recommends if the manager wanted to give gifts on Valentine’s Day that they should have been small gifts and he should have gave them to everyone, regardless of their gender. She added “When you give the gift to one specific gender, you risk not only women coming forward and saying they felt this was harassment, but you also risk a claim of gender discrimination. Men do file lawsuits saying they’re being discriminated against.”
Company policies about office romance are a lot stricter today than they were just a few years ago, according to a September 2013 survey of HR professionals by the Society for Human Resource Management (SHRM). The survey found that more than twice as many employers have written or verbal polices on office romances than did in 2005, even though the vast majority of respondents (67%) said the number of romances among employees has stayed the same over the past eight years.
Some employment experts discourage any Valentine’s Day card exchanges in the office. Another labor attorney recalled one instance of card-giving that led to a sexual harassment lawsuit: A manager gave a subordinate a card with a cartoon drawing of a person’s naked behind on the front.
“It wasn’t particularly romantic,” the attorney said, adding that the card might have been a thank-you gesture for the woman’s help on a project. “He thought it was cute, and he wanted to thank her, but it wasn’t the wisest move. The whole concept of gift-giving on Valentine’s Day has that romantic overlay. This is a romantic day, so you’re starting with the premise that any gift on this day may have broader meaning than, say, if it was given on the 4th of July.”
Couples in the Office
What about gift or card exchanges between married or dating couples in an office?
Although some employment experts discourage Valentine’s Day gifts delivered at work, gifts between office couples are appropriate as long as they’re in good taste. A bouquet of flowers delivered to the office is fine, however sexy lingerie probably is not.
Managers who date (or are married to) lower-level employees must be especially careful about Valentine’s Day demonstrations, even if they don’t directly supervise their significant other.
You can’t control what goes on outside the office, but, hopefully something in your company training informs employees that they need to be sensitive when they are in a personal relationship with a co-worker, because that may have an impact on the people around them. An extravagant gift that is given or delivered to work can result in an impression of favoritism in the workplace.
Forty percent of the SHRM survey respondents said employees complained about favoritism between co-workers in a romantic relationship. Such perceptions can damage workplace morale.
Plenty of companies forbid intimate relationships even when there are not supervisory concerns. About one-third of organizations prohibit romances between employees who report to the same supervisor or between an employee and a client or customer, according to a recent SHRM study. Almost one in 10 (11%) also don’t allow romances between their employees and those of competitor organizations. And more than one in 10 (12%) won’t even allow workers in different departments to pair up.
Respondents worry that office romances will lead to public displays of affection, inappropriate sharing of confidential company information between romantic partners, inappropriate gossiping among co-workers, less productivity from the couple and their colleagues, and damage to the organization’s image because the pairing may be seen as unprofessional.
What’s Appropriate
Managers who want to acknowledge the holiday could bring in a treat or gift cards to share with all employees in a department. Cookies, candy and cupcakes are easily shared and generally appreciated. Another idea would be to take the whole department out to lunch.
It’s important for HR managers to customize their office-romance policies based on what’s happened at the company in the past. You can customize the training to deal with facts that are prevalent in your workplace. If you have a lot of young single people who are dating or hooking up, your training will probably look different than a workplace with older married couples.
The Obama administration is giving certain employers extra time before they must offer health insurance to almost all of their full time workers.
Under new rules announced Monday by Treasury Department officials, employers with 50 to 99 workers will be given until 2016 (two years longer than originally envisioned under the Affordable Care Act) before they risk a federal penalty for not complying.
Companies with 100+ workers or more are getting a different kind of one-year grace period. Instead of being required in 2015 to offer coverage to 95% of full time workers, these bigger employers can now avoid a fine by offering insurance to at least 70% of workers next year.
Administration officials had already announced in July 2013 that the employer requirements would be postponed until 2015 and this recent announcement has caught officials by surprise.
Obama administration officials said the Treasury Department decided to allow medium-size businesses more latitude because “they need a little more time to adjust to providing coverage”.
The Affordable Care Act (ACA) states that anyone who works 30 hours or more is a full time employee, and it compels many employers to offer affordable insurance to those workers and their dependents. (Please note that Florida law currently defines a full time worker as anyone who works 25 or more hours). It also defines affordable as premiums of no more than 9.5% of an employee’s income, and employers must pay for the equivalent of 60% of the actuarial value of a worker’s coverage. Businesses that fail to do so will eventually face a fine of up to $2000 for each employee not offered coverage, though workers are not required to sign up for the benefits.
For questions on how these recent changes will affect your business or for help complying with the ever-changing ACA requirements, please contact our office.
On October 31, 2013, the US Treasury and the IRS issued Notice 2013-71, which modifies the “use it or lose it” rule for Healthcare Flexible Spending Accounts (FSAs).
A Healthcare FSA is a form of cafeteria plan benefit offered by employers to allow their employees to pay for eligible out of pocket healthcare expenses with pre-tax dollars. Healthcare FSAs are typically funded by salary reduction contributions. Effective for plan years beginning after December 31, 2012, and employee’s contributions to a Healthcare FSA are limited to $2500 per year (indexed for inflation beginning in 2014).
Historically, these contributions were also subject to a “use it or lose it” rule which provided that contribution to plan that are not used before the end of the plan’s fiscal year would be forfeited. This rule was modified several years ago to permit a plan to add a “grace period” of 2 ½ months following the end of the plan’s fiscal year to allow employees an extra amount of time to use their FSA funds before losing them.
The new rules issued by the IRS permit another option that employers may want to consider. An employer may amend its plan document to permit a carryover of up to $500 for any unused FSA funds at the end of the plan year. The carryover, if permitted in the plan, may be used to pay medical expenses incurred during the plan year to which it is carried over, and would be in addition to the $2500 employee contribution limit.
A plan adopting the new carryover option is not permitted to also provide a grace period. An employer must decide to either provide a grace period or the new carryover option, but not both. Of course, an employer may choose to provide for a carryover limit of less than $500, or not to permit the carryover or grace period at all, as these are both entirely optional. When deciding whether or not to eliminate a grace period in favor of the new carryover option, an employer may want to compare the potential administrative impact of each option.
As mentioned above, the new carryover rule is not available during a plan year in which the plan permits a grace period. Therefore, plans containing a grace period must first be amended to remove it if the employer wants to add a carryover provision. The amendment to remove the grace period must be adopted before the end of the plan year in which it becomes effective. For example, if an employers wants to permit employees to carryover up to $500 from the 2014 plan year to the 2015 plan year, the employer must amend the plan and provide participants with notice of the amendment before the end of the 2014 plan year.
Please contact our office for more information on how to implement an FSA into your workplace or amend your existing plan document.
The IRS has released the 2013 version of Form 8941, which eligible small employers will need to use to calculate their small business health care tax credit.
Employers may qualify for a tax credit of up to 35% (or up to 25% for eligible tax exempt organizations) of nonelective employer contributions under a qualifying health insurance arrangement, if they have fewer than 25 employees AND pay average annual wages of less than $50,000 per employee. A qualifying health insurance plan generally requires the employer to pay a uniform percentage of the premium (not less than 50%) for each enrolled employee’s health coverage. Once calculated, the tax credit is claimed as a general business credit on Form 3800 (or for tax exempt small employers as a refundable credit on Form 990-T).
There are important changes to the tax credit that become effective beginning with 2014 taxable years that are important to note:
1. the maximum credit amount increases from 35% to 50% of employer paid premiums
2. coverage under a qualifying arrangement must be offered through a SHOP Exchange
3. the credit can be claimed for only 2 consecutive years beginning in or after 2014, and
4. due to the cost-of-living adjustment, the tax credit will be reduced if an employer’s average annual wages exceed $25,400 and will be eliminated if average annual wages exceed $50,800
Employers who plan on claiming the small business tax credit for 2014 will need to make sure they are familiar with these new requirements.
The IRS has announced higher limits for 2014 contributions to health savings accounts (HSAs).The increased amounts reflect cost of living adjustments.
For 2014, the HSA contribution limit is $3300 for an individual and $6550 for a family. The HSA catch up contribution for those age 55 or older will remain at $1000. For an medical plan to be considered a qualified HDHP that can be paired with an HSA, it must have a minimum deductible of $1250 for an individual and $2500 for a family.
For those under age 65 (unless totally and permanently disabled) who use HSA funds for nonqualified medical expenses, they face a 20% penalty of 20% for nonqualified expenses. Funds spent for nonqualified purposes are also subject to income tax.
While the PPACA allows parents to add their adult children up to age 26 onto their medical plans, the IRS has not changed its definition of a dependent for HSAs. This means that an employee whose 24 year old child is covered on his HSA qualified high deductible health plan is not eligible to use HSA funds to pay for that child’s medical bills. If HSA account holders can’t claim a child as a dependent on their tax returns, then they can not spend HSA dollars on services provided to that child. According to the IRS definition, a dependent is a qualifying child (daughter, son, stepchild, sibling or stepsibling, or any descendent of these) who:
Please contact our office with questions on high deductible health plans (HDHPs) as well as Health Saving Accounts (HSAs).
All 2013 W2’s that will be distributed in January 2014 are required to report the aggregate cost of insurance coverage. Currently, if you filed lessthan 250 W2’s in 2012 you are exempt from this W2 reporting requirement this year.
The value of health care coverage will be reported in Box 12 of the W2 with code “DD” to identify the amount. You are required to report the total cost of both employer and employee contributions for major medical and any other nontaxable “group health plan” coverage for which COBRA is offered, except if dental or vision coverage is offered on a stand alone basis.
Please contact our office for a copy of the full chart from the IRS outlining the types of coverage that employers must report on the W2.
All OSHA 300A logs must be posted by February 1st in a visible location for employees to read. The logs need to remain posted through April 30th.
Please note the 300 logs must be completed for your records only as well. Be sure to not post the 300 log as it contains employee details. The 300A log is a summary of all workplace injuries and does not contain employee specific details. The 300A log is the only log that should be posted for employee viewing.
Please contact our office if you need a copy of either the OSHA 300 or 300A logs.
The topic this month focuses on identifying five of the stickiest Wage & Hour issues that employers face under the Fair Labor Standards Act (FLSA).
FLSA class actions are up approximately 70% since 2000 and more than half of all the FLSA lawsuites being filed in Federal courts nationwide are being filed in Florida.
Some of these issues covered include:
Please contact our office directly if you have any Wage & Hour or FLSA questions and how it could be impacting your business.
For a small business in a state with a Federally Funded SHOP marketplace, changes have recently been release to ensure employers can take advantage of SHOP coverage and tax credits as soon as possible in 2014.
Small employers in 2014 will now be able to enroll their employees in SHOP coverage with the assistance of an agent, broker, or insurance company that offers a certified SHOP plan and who has agreed to conduct enrollment according to HHS standards.
This process called “direct enrollment” is similar to how most small employers currently get insurance today. A group will not be required to apply for SHOP eligibility before enrolling, or use Healthcare.gov, unless they would like to see information on plan options, including what insurance companies offer SHOP Qualified Health Plans in their area.
It is anticipated that small employers will have online access to an online SHOP Marketplace by November 2014. Also, effective on or after January 1, 2015, small employers will be able to offer their employees a choice of plans on the SHOP Marketplace from multiple insurers while continuing to remit a single monthly payment.
Please contact our office if your group is interested in reviewing the FF-SHOP plans available to your company.
As 2014 nears, small employers should begin to prepare for more and more of the Affordable Care Act (ACA) requirements they will need to comply with.
One of the important changes that will affect groups on their first renewal date in 2014 is the change of waiting periods on their insurance contracts. Effective in 2014, no benefit eligibility waiting period can exceed 90 days. This means that the large majority of employers will need to revise their current insurance contracts at their 2014 renewal to ensure they are in compliance. Most insurance carriers will not automatically update the group’s waiting period so it is in compliance without guidance from the employer, so be sure to review any carrier requirements during your renewal process.
The longest waiting period that a group can implement for insurance benefits is either one where benefits will begin on the 91st day of full time employment or the 1st of the month following 60 days of employment. Each employer needs to evaluate the pros and cons of each type of waiting period as it will affect no only how the insurance carriers bill you for the premiums due, but also how the employee is added and removed from the policy at their termination.
Employers should also review their Section 125 Cafeteria Plan to ensure it all reflect the most accurate benefit information as well as the updated waiting period.
Please contact our office for further guidance on the ACA requirements that will affect your business and how you can ensure you are compliant.