All posts by stu

Bonuses, Compensation, Department of Labor, Holidays, IRS

It’s Holiday Bonus time! 4 compliance tips for Employers

Many companies provide a holiday/Christmas bonus or year-end bonus to some or all employees in December.  There are several important rules about bonuses that every employer needs to know.  When planning your bonus plan, and calculating a budget, consider the following important reminders:

  • Bonuses that are discretionary (meaning, the company decided the amount and timing without making previous promises to employees about the specifics), are excludable from non-exempt/hourly employee’s calculation of overtime rate.  Written bonuses programs that provide a roadmap for employees to know exactly how to earn the bonus are not considered discretionary.  The Department of Labor rule about non-discretionary bonuses (and how to properly calculate OT if a bonus is paid) can be reviewed here.  DOL also states that gifts and payments in the nature of gifts on special occasions may be excluded from overtime calculation.
  • If the company is paying different bonuses amounts to employees, the company should have non-discriminatory reasons for the decision.  The bonus may be based on performance, employee classification, length of service, location or department – or other non-discriminatory bases.  If someone complains, you have your support.
  • Are your company’s bonus or gift excluded from federal and state taxes? In most cases, the answer from the IRS is “no.”  IRS publication 5137 states that de minimis gifts may be excluded from taxation, including holiday gifts. An essential element of a de minimis benefit is that it is occasional (or unusual) in frequency and the value is not too large.  It cannot be disguised compensation.  If a holiday bonus is too large to be considered de minimis, the entire value of the benefit is taxable to the employee, not just the excess over a designated de minimis amount. The IRS has ruled previously that items with a value exceeding $100 could not be considered de minimis, even under unusual circumstances.
  • What about gift certificates? The IRS says that cash or cash equivalent items provided by an employer are never excludable from income. An exception applies for occasional meal money or transportation fare to allow an employee to work beyond normal hours. Gift certificates that are redeemable for general merchandise or have a cash equivalent value are not de minimis benefits and are taxable.  A certificate that allows an employee to receive a specific item of personal property that is minimal in value, provided infrequently, and is administratively impractical to account for, may be excludable as a de minimis benefit, depending on facts and circumstances.

Check out the DOL and IRS rules to make sure your holiday good tidings do not become a headache.

Consultstu LLC provides fractional HR services to small/mid businesses to lower operational costs, improve business processes and comply with workplace regulations.  We deliver customized HR and risk management solutions that provide protection from expensive mistakes and strategies to improve workplace results. Call us at 727-350-0370 or visit http://www.consultstu.com

Christmas party, Drug and Alcohol, Employee Policies, Safety

HR reminders for the company Christmas party

With Thanksgiving over, Florida businesses are turning attention to the Christmas and holiday party or luncheon in December. This annual event is just around the corner and you (Office Manager or HR Coordinator) are probably reviewing last year’s email reminder to employees that communicate the event details, proper attire and general behavior expectations since the event will occur during non-working hours and offsite location. While everyone is looking forward to a good time, HR is thinking ahead and working to make sure the event is safe and enjoyable for all – so here are some important reminders.

  1. Alcohol consumption creates known risk. Employers can be held liable for employee conduct at company events if the event is considered part of their employment. All parties should be voluntary, not mandatory. Always designate several key employees to keep eyes open at the event, and be prepared to take action is needed.
  2. Having the event at an eating and drinking establishment is wise because the professionals are now controlling the distribution of alcohol – and not Andy, the good time Shipping Manager. Serve food if alcohol is being served, Employees should avoid serving alcohol at the event.
  3. If overnight accommodations are not available, make sure the company shares options for Uber. Lyft or taxis for employees that have too much to drink. Often companies include the cost of safe travel as a company perk at this event.
  4. The company invitation email or memo reminders employees about proper conduct and attire so that in case Randy from Accounting gets a little crazy, the company can show it took reasonable action to protect attendees. This is even more important if the company also invites key customers or vendors to the event.
  5. If someone does not celebrate Christmas, for personal or religious reasons, there should be no penalty for not attending the party.
  6. Check with your general liability insurance carrier for other recommendations for your Christmas or holiday party. To minimize liability arising out of the event provider’s negligence, check that the event provider carries General Liability insurance. Check out some additional tips from Hartford Insurance.

With some pre-planning, your event will be successful, enjoyable and without incident. Cheers!

Affordable Care Act, IRS, Pay or Play

“Pay or Play” Tax Penalty Letters are coming by year end

Yes, Obamacare is still the law of the land (at least until the Congress changes the rules) and employers that did not come into immediate compliance will soon be receiving letters from the Internal Revenue Service (IRS).  The agency recently announced a plan to notify employers about potential liability for a “pay or play” penalty for the 2015 calendar year in late 2017.  Yes, you heard right – the calculation of penalties from over 2 years ago.  The only good news (if any) is that the IRS will provide employers with an opportunity to respond to the assessed taxes before any penalty is assessed – and the notice and demand for payment is made.

The IRS plans to issue Letter 226J to covered employers (Applicable Large Employers “ALE”) — those with at least 50 full-time employees, on average during the prior year —if it determines that, for at least one month in 2014, one or more of the company’s full-time employees was enrolled in a qualified health plan for which a premium tax credit was allowed, and no safe harbor was available.  The Letter 226J will include: (1) the assessed penalty (itemized by month), (2) the list of full time employees that were given premium tax credits  (if ALE did not have safe harbor), and (3) instructions on how to disagree with the assessment and the Form 14764 response form.  Employers will be given 30 days to respond.

What if your company owes a penalty?  The IRS will provide instructions on how to pay any assessed penalty.  Companies will not be required to include the payment on any tax return, or make the payment before it has been given the opportunity to receive the notice and demand for payment.  Read more from the IRS by clicking here.  If you want a second opinion about your penalty, give us a call.

 

Compensation, Employee Recognition, Rewards

10 fresh (but affordable) ways to Recognize Employees

Let’s face it – continuing to do the same thing, at the same time, in the same way, is boring. This is totally true for employee recognition. Classics include: employee of the month, gift certificate raffle, great parking spot, monthly lunch were all great ideas – but companies need to keep things fresh and trendy to keep employees interested. As we approach 2018, take a pledge to revisit your employee recognition and reward techniques and implement some new ideas. Here are 10 new ideas to consider:

  1. Spot awards – not unique, but instead of awarding a gift card, consider giving an unexpected afternoon off, or half PTO day or donation to the employee’s charitable cause (in his/her name).
  2. Consider more office events involving fun teamwork. For instance, bring in or make pancakes on national pancake day. Think of ways to connect employees with each other, with a common theme.
  3. Peer recognition is wildly popular right now. Give co-workers a chance to recognize each other’s good work and performance. You can find an app for that or come up with an internal message board (old school) to accomplish the same thing (depending on your budget).
  4. Recognize employee work anniversaries – bring a “treat” and publicize the reason for celebration. Use a trendy new restaurant, or food fad (aka mini doughnuts, fruit pops).
  5. Create a “turnover chain” (google Miami Hurricanes football if you do not know) for a key performance indicator or sales goal. Pick something that resonates with your employee base, and see them jump to win it.
  6. Design (or re-design) the employee news so employee recognition awards are highlighted and are linked to your company values and mission. Add more photos of employees.
  7. Spent time to develop key performance indicators (“KPIs”) for each position – then design specific rewards or compensation incentives. Use color levels or cool names to label the achievement steps. People like to know their goals and track their success.
  8. Put a new twist on your perfect attendance award by partnering with a local charity and “lend” your winner to the charity for a day. The winning employee can spend the day building a Habitat for Humanity or care for working dogs at Southeastern Guide Dogs or whatever. They feel good, and you can profile their day in your employee news.
  9. Employees that bring great suggestions or ideas that save money, lower costs or improve customer satisfaction can be recognized with their choice of rewards – house cleaning for the month, a month of yard mowing services, car washes for the month or fill up their gas tank for a month. Post the challenge – and post the recognition options.
  10. Create wall space for recognizing important business successes and publically recognize and link employee contributions.  Involve employees in the wall design.  Then, publically post any customer “shout outs” for great service, above and beyond courtesy or creative problem-solving. Give your wall a name that properly reflects your company culture and team.

In 2018, try something new and see what happens.  I bet you get your employee’s attention.

Consultstu LLC provides fractional HR services to small/mid businesses to lower operational costs, improve business processes and comply with workplace regulations.  We deliver customized HR and risk management solutions that provide protection from expensive mistakes and strategies to improve workplace results. Call us at 727-350-0370 or visit http://www.consultstu.com

Americans with Disabilities Act, Employee Injury, Fitness for Duty, Medical Exams, Reasonable Accomodation

What is a Fitness for Duty form?

Recently, a client called to ask about an employee who had complained about a back and shoulder injury.  The employee told his foreman that he did not feel that he was physically capable of performing his normal work duties as a construction laborer due to pain.  He asserted that it was a workers’ compensation case – so the company alerted the carrier about the potential claim.  The employee was out of work for about two weeks and then asked human resources if he could come back to work in a light duty position, or in a different position that was not as physically demanding.  If the injury is determined not to be work related, how is the company able to know what the employee can do, and not do?  Answer – request that the employee have his medical provider complete a fitness for duty form to be sure he is ok to continue his normal work duties.

An employer has the right to request a fitness-for-duty exam of a current employee when it has a reasonable belief (based on objective evidence) that: (1) the employee’s ability to perform his/her essential job duties is impaired by a medical condition, or (2) the employee poses a direct threat to themselves or co-workers due to a medical condition.  In my client’s case, the employee had actually told his foreman that he could not perform his job because of his neck and shoulder injury.  The foreman could also use observed performance problems that are reasonably attributable to a medical condition.

In our case, the laborer worked on a pipe crew, and the employee was expected to work in and out of trenches, move material, climb ladders, dig and assist with related tasks.  He stated that his shoulder and neck injury did not allow him to lift, twist, climb or maneuver on the job site (as needed).  The employer also believed that the employee poses a direct risk of injury to himself.  As a result, the company is allowed to send him to a qualified medical provider to determine if he is fit to perform his job.  The medical provider can be provided with a fitness for duty form and a job description to help ensure an accurate determination.  The use of a Fitness for Duty form is permissible because the inquiry is job-related and consistent with a business necessity.  The company can assign the medical provider or allow the employee to use a doctor of his own choosing.

Another permissible use of a Fitness for Duty form is to substantiate the medical necessity of an accommodation request.  In our case, the employee asked to be placed in another job (as an accommodation to his neck/shoulder injury), so the company is entitled to ask the employee to take the Fitness for duty form to their personal medical provider (along with a job description) for completion.  If the employee’s information (and answers on the form) is inadequate, incomplete or insufficient to establish the employee’s need for an accommodation, the company can direct an employee to visit a medical provider of its choice.

Lastly, under Family and Medical Leave, an employer may request that an employee returning from a medical-related leave of absence bring back a medical certificate establishing that he/she is able to return to perform the essential job functions.

Click Here to download a sample Fitness for Duty form.

Consultstu LLC provides fractional HR services to small/mid businesses to lower operational costs, improve business processes and comply with workplace regulations.  We deliver customized HR and risk management solutions that provide protection from expensive mistakes and strategies to improve workplace results. Call us at 727-350-0370 or visit http://www.consultstu.com

Background screening, Fair Credit Reporting Act, Hiring

5 tips for conducting New Hire Background Checks

More small businesses are looking to verify information submitted by applicants and conducting a criminal background check is standard practice for many companies. I hear about many small businesses that try and conduct DIY background checks by looking at local county jail websites and using free online websites, like Spokeo. This is not a best practice, is not reliable and likely does not comply with the requirements of the Fair Credit Reporting Act (FCRA). So, what does a small business need to know about criminal background checks?  Here are 5 tips for conducting effective background screening.

First, it is best practice to select an experienced third party background checking company to ensure that they can help your company follow all the applicable legal requirements. If you hire employees from other states, be aware that many states have additional legal protections for applicants – and your background screening company can help you comply.  For instance, some states ban the ability to ask about criminal convictions on the employment application (in Florida, an employer can ask an applicant about criminal convictions).

Second, obtain an up to date disclosure and consent form that is signed by the applicant. Your document needs to meet the requirements of the FCRA. Check annually to make sure your form is still the most current version.

Third, make sure your offer letter tells the candidate that the offer is contingent upon the successful result of the criminal background check. The company has the right to rescind its offer if the results are unsatisfactory.

Fourth, only the most recent criminal convictions that relate to the specific job can be used to disqualify an applicant. The FCRA mentions using a 7 year period of time for looking at convictions. So, not any conviction, but relevant convictions can be used. The older the conviction and lower the severity, the least relevant.  Generally, minor offenses that were committed years ago should not be used to deny employment.

Fifth, if your check shows a conviction, your company must use the process outlined in the FCRA to give the candidate a chance to dispute the results (if they believe there is a mistake on the report). There is a process and time frame for sending Adverse Action letters to the affected candidate, allowing the person time to communicate directly with the background screening company about any alleged errors. Your company must give the candidate a reasonable amount of time to dispute the incorrect information before you pursue another candidate.

Consultstu LLC uses Sarma to conduct its small business background screening.  For questions about your background screening needs and situations, give us a call.

Discrimination, EEOC, Harassment, Investigations

How to Investigate a Sexual Harassment Complaint

With the ever-expanding news of sexual harassment complaints against Harvey Weinstein, Kevin Spacey and other Hollywood “A” listers, there is a national spotlight on harassment. If an allegation of harassment occurs at your organization, are you prepared to respond quickly and competently? First, almost every company should have a written policy that prohibits sexual harassment and other forms of harassment based on characteristics protected under federal and state law. Often, this policy is contained in the Employee Handbook or Office Manual.  Businesses with 15 or more employees are covered by state and federal discrimination/harassment laws, and smaller businesses (down to 5 employees) are often covered by local county or city ordinances on discrimination.

Second, understand what constitutes sexual harassment. The Equal Employment Opportunity Commission (EEOC) provides a three-prong definition for sexual harassment. Unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature when: (1) Submission to such conduct is a condition of employment or advancement; (2) Submission to or rejection of such conduct is used as the basis for an employment related decision affecting an individual; or (3) conduct that has the purpose or effect of interfering unreasonably with the individual’s work or performance or creates an offensive, hostile, or intimidating working environment. The company’s written policy should outline a procedure for handling harassment complaints, including the person designated to receive an employee’s concern.

Now, here are the six steps to conducting your sexual harassment investigation:

Step 1: Receive the Complaint. When receiving a complaint, the company must take each instance seriously, listen with empathy (not judgmental) and not unnecessarily delay the response. Document the complaint – preferably having the Complainant put his/her complaint in their own words, and ask for details on all alleged incidents. Depending on the severity of the complaint, legal counsel may be conducted for assistance. Ask the Complainant for what type of outcome he/she prefers. Explain that the Company will protect the complainant from retaliation for participating in the investigation and that confidentiality will be maintained to the fullest extent possible, but the alleged harasser must have sufficient information to have the opportunity to respond to the allegations. Ask open ended questions, remain neutral, and do not make promises or guarantee a specific result. Ask for the names of any witnesses and if there are any documents or physical evidence that corroborates the complaint.

Step 2: Review the Complaint. Review the facts and any evidence that supports the allegations of harassment. Take immediate steps to stop any active harassment and determine if the parties need to be separated during your investigation. The alleged harasser may be asked to take some time off from work, while the investigation is conducted; or the complainant may be offered (voluntarily) some paid time off while the investigation occurs. Determine how and when to schedule an interview with the alleged harasser.

Step 3: Interview the accused Harasser. Stay objective and do not assume that the alleged harassment happened. Take notes and preferably, have the accused employee write up their statement responding to the alleged incidents brought forward by the complainant. Ask the accused to identify any other evidence or documents that support their version of events. Interview any other witnesses identified by the accused harasser or the complainant. Ask all witnesses to keep the investigation confidential, and not to speak to other employees about the subject of the investigation.

Step 4: Weigh the evidence. Consider the credibility of each party and the reputation for honesty of the employee and the alleged harasser. Could there be another reason for the complaint – such as the employee is trying to make up for a poor performance review or a disciplinary action?  Have there been previous complaints?  Does the evidence support the complaint? Look for inconsistencies, or consistencies, between the accused version of events and the complainant’s. What evidence supports each sides version of events (especially if the case boils down to a “he said, she said” case).  Use common sense and your own knowledge of events to help fill in any gaps.

Step 5: Document your Investigation and Take Action. Keep a detailed written record of your entire investigation. If a discrimination or harassment charge is later filed, your detailed notes of your investigation are critical to your defense. Make your notes sufficiently clear and detailed so that you (and anyone else) can understand and use them in the future. Once you have the facts, make a decision about what you think happened and whether sexual harassment occurred.  If you determine that harassment occurred, then take prompt action to address it. Company action may involve discipline, an apology, reprimand, reassignment or discharge, depending on severity. The action should match the facts, and be geared to preventing future misconduct. Additionally, the company may decide to re-train employees, revise policies and/or make other workplace changes that make sense.  It is not the company’s purvue to determine illegality but only if a violation of company policy occurred.

Step 6: Close the Loop with the Complainant. Inform the Complainant about the results of your formal investigation and your decision. In addition, you may decide to discuss the means and methods for the complainant to confront concerns about harassment in the future. The victim can be instructed about how to talk to the harasser directly in order to state that their conduct is unwelcome and must stop.  You will continue to monitor the situation and make sure objectionable behavior does not re-occur.  Obviously, there will need to be some time for stress, feelings and emotions to decrease. Place emphasis on the professionalism and that each party has a vested interest in maintaining an efficient and harmonious workplace.  Take action against the accused, if needed.

Consultstu LLC provides fractional HR services to small/mid businesses that lower operational costs, improve business processes and maintain compliance. We deliver customized HR and safety solutions that provide protection from expensive mistakes and strategies to improve workplace results. Call us at 727-350-0370 or visit http://www.consultstu.com

Employee Injury, HR Costs, Insurance, Workers Compensation

Florida Work Comp rates dropping in 2018

It’s final.  This week, the Florida Insurance Commissioner issued a directive for workers’ compensation rates to be decreased by 9.8% beginning in 2018.  His final order increased the rate reductions recommended by the National Council on Compensation Insurance (NCCI).  In addition, State Insurance Commissioner David Almaier asked NCCI to analyze the impact of eliminating the attorney fee caps in future work comp rate recommendations.  Last year (2017), Florida businesses paid huge increases in work comp base rates (an average 14.5% increase) due to several Florida Supreme Court decisions in 2016 that removed the caps on attorney fees in workers’ compensation claim cases.

Despite the rate rollback, Florida businesses still have strong incentives to actively manage the risks of employee injury, maintain a safety focus and OSHA compliance culture and actively control the cost of claims, should they occur. Take steps today to protect your business and control your experience mod from rising claim costs and take action to keep employees focused on job site safety and not taking unnecessary risks.  Call us to learn more.

Employment Poster, Minimum Wage, Posters, Wage and Hour

2018 Florida Minimum Wage Poster released

On October 13, 2017, the Florida Department of Economic Opportunity announced that the 2018 Florida minimum wage will be increased to $8.25 per hour, effective January 1, 2018. The agency is mandated to calculate a minimum wage rate each year based on the percentage increase in the federal Consumer Price Index in the South Region for the 12-month period prior to September 1, 2017. Update your poster for free from the Florida DEO website, or click here and download the 2018 minimum wage poster. All Florida employers are required to display the state-mandated minimum wage poster in a conspicuous manner for employees.

Want to know more about what workplace posters need to be displayed (federal and state) and how your company can save money by downloading all your mandated posters for free?  Our next blog will show you how to locate these resources for Florida employers.

1095C form, Affordable Care Act, IRS

Increasing Penalties for Non-compliance with Obamacare in 2018

Today, President Trump signed an Executive Order that ended the Affordable Care Act’s (ACA) cost-sharing reduction payments to insurance companies.  The payments were added by President Obama to entice the insurance companies to add policies to the federal and state exchanges.  Since Congress did not appropriate funds for the CSR payments (estimated at $7 billion annually), the White House stated that it cannot lawfully make the CSR payments any longer.   This does not affect the tax credits individuals receive through the Healthcare Exchange, but will affect the profitability of the insurance carriers offering Exchange policies.  The ACA may be falling apart, but it is still the law of the land for employers.

In mid-September Congress came back into session, and was unsuccessful in attempts to repeal and replace Obamacare.  President Trump then issued an Executive Order directing agencies to minimize the ACA regulatory burden, but only Congress can repeal the ACA.  So, businesses are left with a continued obligation to comply with the Affordable Care Act, or face escalating penalties.  Each year, the penalties for failing to comply with the ACA’s employer shared responsibility provision (“pay or play”) keep escalating.

An applicable large employer (ALE) is an employer that has at least 50 full-time employees, including full-time equivalents (FTEs).  An ALE will owe penalties to the IRS for the calendar year 2017 if it fails to offer group health insurance to employees, or offers group health insurance that does not meet the ACA requirements of affordability or minimum value.  Read the IRS Q & A Section on Shared Responsibility.

Penalty Option 1 – An ALE does not offer group health insurance to at least 95% of full-time employees (and their dependents) and at least 1 employee receives a premium tax credit to purchase an individual policy on the federal Health Insurance Marketplace.  The employer pays a penalty of $2,260 per full-time employee, minus any credits available to the employer.

Penalty Option 2 – An ALE offers coverage to at least 95% of its full-time employees (and their dependents), but employees are not offered coverage that is affordable or does not meet the minimum value requirements, and at least one full-time employee receives a premium tax credit to purchase individual coverage through the federal Health Insurance Marketplace.  The employer pays a penalty of $3,390 for each full-time employee that received a premium tax credit.

In addition, ALE’s have mandatory reporting requirements.  Applicable large employers (ALEs) will be required to file Forms 1094-C and 1095-C with the IRS no later than February 28, 2018 (or April 2, 2018 if filing electronically) and ALEs will be required to furnish a Form 1095-C to all full-time employee by January 31, 2018.

Consultstu LLC provides fractional HR services to small/mid businesses that lower operational costs, improve business processes and maintain compliance. We deliver customized HR and safety solutions that provide protection from expensive mistakes and strategies to improve workplace results. Call us at 727-350-0370 or visit http://www.consultstu.com

 

Need on-going HR support?
We have affordable HR retainers that offer a unique alternative to full HR outsourcing or the hiring of a full time HR employee. We design unique solutions to match your business strategy and budget. We have a proven track record of helping companies from many industries. We listen and probe to understand your needs and goals, before we offer recommendations and realistic solutions.
Contact Us Now