California Human Resource Blog

Archive for the ‘employee benefits’ Category

The Only Constant is Change

Friday, January 21st, 2011

When it comes to being an employer in California, one thing is certain; things will always be changing.  In the key areas of Payroll, Human Resources, Employee Benefits, and Workers’ Compensation and Safety, the rules for you as a business owner are truly a moving target.

Isaac Asimov’s famous quote begins with the iconic statement that “the only constant is change” and goes on to say that “no sensible decision can be made any longer without taking into account not only the world as it is, but the world as it will be”.

Two significant challenges confront business owners in keeping up.  First, you have to be aware of what’s changed in the four key areas of employment: payroll, HR, benefits and workers’ comp.  That could be a full time job in-and-of itself.  And, let’s be honest, you are an expert in your business, not in payroll taxes, employment law, benefits administration, and insurance.  So, even if you can stay abreast of all of the changes that might affect your business, you may not know what they really mean to your bottom line or your company’s future.  Second, with some changes required and others optional, you have to decide how, when, or even if you should implement a change.

Take the Brinker case regarding meal and rest periods that is before the California Supreme Court.  A final ruling has not been issued, so each employer must assess the potential impact and make a business decision which balances the risk of the ruling going one way or the other with your needs, your customer’s needs, and your bottom line in this tough economy.

Or take, for example, the recent reduction of the Social Security payroll tax.  This change didn’t happen until early December but it appeared to be a fairly straight forward, mandated change.  But wait – for self-employed workers, who pay both the employee (worker) portion AND the employer portion, it was unclear what the reduction would be; i.e. would it only apply to the employee portion or to both the employee and employer portion?

You wouldn’t decide if your company should be a partnership or a corporation without professional advice from your attorney or your CPA.   Likewise, don’t try to stay current with, nor interpret changes in, the areas of Payroll, Human Resources, Employee Benefits, and Workers’ Compensation and Safety without also seeking the advice of a professional in the area Employer Services.

Whether it is a small, one time consulting project to review a certain area of your employment relationship with your employees, or a desire to completely offload all of the administrative burdens of being a California Employer and focus on the business of your business, YPP can help.


Health Care Reform – The Devil is in the Details

Wednesday, November 10th, 2010

By now, everyone is aware that Health Care Reform has a variety of key provisions that are phased in over time.  Everywhere you look, someone has published a calendar or a timeline of when the key provisions kick in.  Every business owner has pretty much memorized this list.  So, is that all there is to it and as long as you or your broker stays on top of that list, you are good to go?  The answer is a resounding, “NO!”  In this case, no truer words were ever spoken than “the devil is in the details”.

First, many of the procedures and regulations have not been written.  There is much lobbying and debate that will go into these final implementation instructions that could contain nuances which may directly affect you, your employees and your business.  For example, are your plans eligible for “grandfathering” and even if so, does that make sense for your business?  Are the contributions and eligibility rules of your plans discriminatory? The list is seemingly endless and the penalties can be extreme.  Therefore, you need to ensure that you or someone you trust is taking a strategic look at your plans in light of compliance, cost containment, and providing competitive benefits to attract, take care of, and retain the best employees.

So, what’s a business owner to do?  Well, what you can’t do is neither hide your head in the sand nor assume that your broker is taking care of all of this for you.  You could get yourself educated and stay on top of the details for yourself, but that takes your focus off of your number one goal of running and growing your business.  So, we don’t recommend that approach.  Or, you could assume that your benefits broker is doing that for you.  We don’t recommend this approach either since many brokers are focused on the cost reduction piece but have no interest or expertise in the compliance arena.  Therefore, what we do recommend is that you ask your broker directly to ensure that someone is tracking and analyzing the ever-updating world of Heath Care Reform and using that knowledge to ensure that your plans are in compliance, containing costs, and providing the level of benefits you need to take care of your staff, as well as attract and retain the best.

At YPP, we are doing this work on behalf of our clients and are making changes to our plans and plan offerings accordingly. And, we’ve even hired outside counsel with a specialty in the Heath Care Reform legislation and regulations to ensure we are on top of everything for our clients. So, if you aren’t sure if you are “good to go” with Health Care Reform – don’t forget that the penalties for missing a detail can be stiff – feel free to give us a call.


FMLA: New Categories; More Time Off Work; More to Comply With

Thursday, February 7th, 2008

On 1/28/08, the President signed a new law that expands the Family and Medical Leave Act (FMLA), providing leave rights for military families that is causing a new look at companies’ FMLA policies. The law went into effect as of that date, so it’s a mad scramble now as employers struggle to understand the policies they must now comply with.

As these new laws are not backed up by detailed regulation yet, the advice of a qualified HR or legal professional is essential ensuring compliance with the complex requirements of leave administration.

First, some employers are confused about the intersection of USERRA with these new FMLA leaves. USERRA is for actual deployed military members. The new FMLA leaves are for the people who stay back home, such as family members.

There are two new types of leave under the FMLA: “Qualifying Exigencies” and “Service member Family Leave.” An employer is still required to cover health insurance, follow the notification requirements, and all the other current FMLA rules. The best way for an employer to think about this is that these are two new categories of leave under the current FMLA; in other words, these are amendments, not entirely new types of leave.

“Qualifying Exigency Leave” is for an employee whose spouse, son, daughter, or parent is on active duty or is called for active duty in support of a contingency operation. The Department of Labor has not issued regulations on the exact definition of “qualified exigency” leave yet, so until then the DOL is encouraging employers to provide this type of leave to employees even though they won’t be enforcing it until the regulations are promulgated. Probable examples of this type of leave would be a spouse taking leave to arrange for child care, to see a child off or welcome a child home, to attend pre-deployment briefings, to attend family support meetings, or to attend reintegration briefings. This is clearly intended to be a broad category of leave, so it’s essential employers act in good faith and stay on top of the regulations as they are issued. In the meantime, make every attempt to accommodate this type of leave if it does arise before official guidance from the DOL is issued.

It’s important to note that the definition of “son” or “daughter” in Qualifying Exigency leave conflicts with the existing definition of those terms in the current FMLA regulations. It’s anticipated that the DOL regulations will address this discrepancy and provide guidance. The definition of parent is a biological parent or one who stood in-loco-parentis for the employee.

Active duty covers a broad array of potential military assignments during a war or national emergency, and this definition is governed by US code 101(a)(13)(B) of Title X. It covers assignments besides those which involve direct combat.

Qualifying Exigency leave is 12 weeks during a 12-month period, and is calculated the same way that any other FMLA leave is calculated by the employer: using the calendar year, roll-forward, or roll-back methods. Qualifying Exigency leave is integrated with all other FMLA reasons, so if an employee has taken 8 weeks of leave for a personal medical issue, and then requests Qualifying Exigency leave under the FMLA, they would have 4 weeks available.

Next of kin means the nearest blood relative of the Servicemember. This is likely to affect employees who are outside the traditional FMLA categories, such as brothers, sisters, aunts, uncles, and grandparents. Keep in mind that someone who qualifies under “in-loco-parentis” might qualify that employee under the “parent” category rather than “next-of-kin.” The DOL may issue some further guidance on next-of-kin, as there is nothing in the regulations making a determination of that term. For instance, what if there are two brothers of a servicemember?

One way for employers to prevent potential abuse of the next-of-kin provision is to ask what brothers, sisters, aunts, uncles, grandparents are service personnel in advance of any requested leave, or to list servicemembers they are potentially next-of-kin of.

The definition of “serious injury or illness” is different under Servicemember leave than under the other types of FMLA, as it requires that the injury or illness must have occurred in the line of active duty.

Employers should remember that providing “psychological comfort” also qualifies as a reason for leave under FMLA, including Servicemember leave. For this type of leave, an employer can ask the employee to specify the type of care they will be providing for the injured Servicemember.

For intermittent leave, it’s very important to get certification of the nature and schedule of the care to be provided, as the regulations seem to indicate that employees can take Servicemember leave on an intermittent basis as well.

Employers should immediately amend or supplement their FMLA policies. An employer is still required to give employees general notice of their rights under FMLA, so employers can post an updated policy on the employee bulletin board while we’re waiting for official postings from the DOL. Handbooks should also reflect the revised policy.

Employers also need to determine if they will comply with the general provisions of the Qualified Exigency leave while the specific regulations are pending. Supervisors and managers will need to be trained on these new requirements, and employers will need to update their forms to reflect the new leaves, such as revising the questionnaire regarding covered family relations.

Until the regulations are finalized for the Qualifying Exigency leave, some very broad situations may fall under that type of leave, such as staying home to care for children after a spouse has been deployed.

Because of the new length of these leaves, it’s possible that employers will face long-term employee absences, so cross-training employees in anticipation of such circumstances may benefit employers. There is no hardship or unreasonable provision of the FMLA that would allow a covered employee to deny the leave to a covered employee.

People on Servicemember leave in California may qualify for the Paid Family Leave program, which provides up to 6 weeks of salary replacement. But because few people can afford to take 20 weeks of unpaid leave, employers may want to consider adding a leave donation program as a way to support the family members of injured Servicemembers. Such programs can demonstrate the company’s solid support of our Servicemembers, and build morale and team identify by setting up a structure for employees to help each other.

Another wrinkle for California employers is the recent passage of a bill establishing leave rights for Military Spouses. This new leave will need to be integrated with CFRA and FMLA as well as PFL. So far 2008 has dramatically increased the complexity of leaves that California employers must contend with, and the advice of a qualified HR or legal professional is highly recommended in dealing with these complex situations.


EAP: Not as Boring as You Think!

Tuesday, November 6th, 2007

For most people, the acronym “EAP” is like valium for the ears: part of the 401(k), HSA, ADA, FMLA alphabet soup that seems to come with HR. Probably even reading that sentence made you a little bit drowsy, right?

But it’s worth your while as a business owner or manager to prop your eyelids open and spend some time considering an Employee Assistance Program (EAP) for your business. You might find that the potential for cost savings, rising employee morale and retention, and a strengthened employment brand are enough to perk you right up.

What is an EAP? It’s a program offered by employers to their employees as a confidential resource for employees with all different types of problems, whether with family, work, personal, relationship, financial, legal, childcare, adult-care, or others. The basic theory behind EAP’s is that what you invest in providing these services will be returned to you (and more, hopefully) in the form of lower insurance premiums, lower workers’ compensation claims, less absenteeism, less presenteeism (showing up for work but underperforming, a growing concern for many employers,) and less abuse of sick and PTO leaves.

According to Helen Darling, president of the nonprofit National Business Group on Health, about 217 million workdays are lost annually because of a lack of productivity stemming from mental health and substance abuse disorders, and those lost days cost U.S. employers $17 billion annually.

And EAP’s are not just for the employee with a serious mental illness or drug addiction problem. How many employees are not at their best at work because they’re distracted by childcare issues, marital problems, trying to find care for aging parents, financial concerns (including mortgage woes), or legal issues? By assisting your employees with these problems by providing an EAP (and a strong communication program to roll it out and continue ongoing education,) you may be strengthening your bottom line.

You can even gain national recognition as an employer of choice, as five firms recently did during the National Business Group on Health 2007 Joint Forum. Aetna, Cisco Systems, Delta Air Lines, GlaxoSmithKline, and Pitney Bowes all were recognized for their outstanding programs in wellness and employee assistance. In the era of a tight labor market, supercompetitors like Google, and the retirement of a generation, employers need to do everything they can to distinguish themselves as an enticing, strong, stable employment brand. An EAP, especially as part of a well-considered benefits package tailored to your demographics, can be a valuable tool in cementing your employment brand.

Because the return on investment for an EAP can be so significant, YPP recently added one for its employees. By adding a strong EAP to our established wellness program, and rolling it out with well-planned communication and education, we anticipate seeing a reduction in costs in many areas, and improved morale, retention, and productivity at our clients.
To learn more about the award-winning employer programs listed above, visit http://www.businessgrouphealth.org/.