Legal Briefs for HR

Welcome to Legal Briefs for HR, an update on employment issues sent to over 4500 HR professionals, in-house counsel and business owners all over the U.S. to help them stay in the know about employment issues.  Anyone is welcome to join the email group . . . just let me know you’d like to be added to the list and you’re in!  Back issues are posted on my firm’s website at www.munckcarter.com under E-Newsletter.  Welcome to new readers with the Central Texas Human Resource Management Association (with special thanks to Karin Wilson) and the Corpus Christi Human Resource Management Association (with special thanks to Angelina Olivares), who sought and received permission to redistribute Legal Briefs for HR via their associations’ print and web media!

Here’s what’s up springing up:

1. Want to Ax the Tax?– Congress is hoping that employers will be lured into creating more jobs via a proposal to waive payment of Social Security taxes through the end of 2010, on any unemployed person who is hired.  The pot is further sweetened by offering a $1000 tax credit on any new hire who remains on the job for one year.  These ideas are featured in Jobs for Main Street Act (H.R. 2847) which has been rolled into a Dep’t of Commerce appropriations bill.  Sticking point?  The estimated $15 billion bill is at odds with “pay as you go” budget rules, where Congress agreed not to OK any new programs that add to the already bloated federal deficit.
2. Marching Orders– As of March 2, extensions to COBRA premium subsidies and federal emergency unemployment compensation (EUC) benefits took effect, via the Temporary Extension Act of 2010 (H.R. 4691).  EUC is extended through April 5 and the involuntary termination period which triggers 15 months of a 65% subsidy on COBRA premiums has been extended through March 31, 2010.  H.R. 4691 also beefs up the penalties for employers who get it wrong, so go to http://thomas.loc.gov for full text of the enactment.  Stay tuned for additional bills in Congress and more extensions of both benefits for displaced workers.
3. HEARTfelt Advice -   The Heroes Earnings Assistance and Relief Tax Act of 2008 (HEART Act) requires employers to provide certain benefits for returning U.S. military service personnel.  Until recently, employers lacked helpful guidance to interpret the requirements.  On January 20, 2010, the IRS released guidance in a helpful Q&A format, to address survivor benefits, benefit accruals, wage differential payments and distributions from retirement plans.  For example, prior to the HEART Act, generous employers who offered wage continuation or the difference between an employee’s regular and military pay (aka “gap pay”) to their citizen soldiers could not treat the payments as wages.  With no tax withholding allowed, a soldier could incur an unexpected tax bite.  Since January 1, 2009, the HEART Act allows employers to treat such payments as wages if [1] made by the employer to an individual with respect to any period in which the individual is performing service in the U.S. uniformed services while on active duty for more than 30 days; and [2] represents all or a portion of the wages the individual would have received from the employer.  The guidance explains that such payments are not required to be treated as pay for purposes of determining contributions and benefits under employer’s plans.  For a copy of the 27-page guidance, go to www.irs.gov/pub/irs-drop/n-10-15.pdf.
4. Ha Ha Very Funny-  Do you think it would be a hoot to post a bogus help-wanted ad on a social networking site and watch your unsuspecting former employer be inundated with emails and calls from eager applicants?  Well, don’t try it in Texas or any other state that prosecutes for “online harassment.”  Since Sept. 1, 2009, the Lone Star state has a statute which creates a third degree felony offense if a person uses the name or persona of another person to create  web page on or to post one or more messages on a commercial social networking site: (1) without obtaining the other person’s consent; and (2) with the intent to harm, defraud, intimidate, or threaten any person. An unhappy former employee in Houston who tried the aforementioned stunt is out on $5000 bond and is in a heap of trouble.
5. CHIP Shot – The Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA) requires that employers with group health plans notify employees who may be eligible to receive State-provided premium assistance via Medicaid and the Children’s Health Insurance Program (CHIP).  A link to the new model notice (issued Feb. 4) to satisfy this requirement can be found at www.dol.gov/ebsa under “New and Noteworthy.”  The notice must be provided to any employee, regardless of plan enrollee status, if he or she resides in one of the 40 states which offer premium assistance (even if the employer is HQ’d in state that does not).  The model notice includes the list of all 40 states.  How quickly must you do this?  You’ve got until the later of (1) first day of first plan year after Feb. 4, 2010; or (2) May 10, 2010.  If your plan is on a calendar year, do it by Jan. 1, 2011.  If your next plan year starts on May 10, 2010, you have until May 10, 2011.
6. Bone up on Bonus Rules– If your organization was fortunate enough to have a good year that triggered year-end bonuses, hooray!  Typical bonus plans or policies state that the employee must be employed through the end of the bonus year to be eligible.  Some go farther, and say the employee must be employed at the time the bonuses are paid, which is often during Q1 of the ensuing calendar year.  Under the IRS’ deduction rules, it’s OK to deduct in 2009 for a bonus earned in 2009 but paid in 2010, so long as the bonus is paid within 2.5 months of the close of the year.  But a recent IRS internal memorandum explains that the deduction will have to wait (in my example) until 2010 where the employee must be employed when the bonus is paid in 2010, because all events had not occurred by December 31, 2009 to allow accrual of the bonus in 2009. For a copy of the memorandum, go to www.irs.gov/pub/irs-wd/0949040.pdf.
7. Pray Your Pay is OK – Here are just a few wage and hour issues that are making headlines and serve to show that your time and money is well spent in self-auditing and correcting boo-boos stemming from incorrect employment practices, before someone comes and does it for you:
   1. Office supply store, Staples, has agreed to pay $42 million in order to settle allegations that assistant store managers were misclassified as exempt and failed to receive overtime pay.
   2. Electronics retailer, Best Buy, has agreed to pay $900,000 to settle claims it did not pay store employees for time spent going through a security check at the end of each workday.
   3. Miami-Dade County has a new “wage theft” ordinance that authorizes three times the amount of back pay owed to aggrieved employees.
   4. New Jersey has a new law that allows the state to suspend and revoke employers’ licenses based on repeat violation of state wage, benefits and tax laws.
   5. Exempt employees in NY must be notified in writing at the time of hire which exemption the employer is relying upon under either state or federal wage and hour law.
   6. Helicopter pilots for Port Authority of NY and NJ are “highly trained technicians” not professionals entitled to that exemption from the FLSA’s minimum wage and overtime requirements.
8. March Badness – It is hoops fans’ favorite time of year, and watching the game no longer requires calling in sick or taking a long lunch at the nearest sports bar.  Live feeds can be found on websites (e.g., ncaa.com, cbssports.com), to be watched from desktop computers to handheld smartphones.  As an employer, if you’ve got productivity and/or bandwidth concerns you might try to clamp down on excessive eyeballing of the tourneys.  Gambling can be a concern, too.  Increasingly, though, some are looking for ways to use the games as a team-building exercise and to elicit a spark of enthusiasm that carries over into the workday.   Ideas range from casual days (sporting of one’s team logo and/or colors), catered lunch to watch the game in a conference room, pools with no money exchanged, or the proceeds going to a favorite charity and crazy contests (e.g., match NCAA teams with their logo, sing your alma mater, free throw prowess, imitate your favorite sports announcer, Bay-Bee J).  Here’s my mini-celebration . . . Go K-State Wildcats!  Woo Hoo!
9. Need an Update?  - If you’re interested in a luncheon with featured speakers (including yours truly) who will discuss the latest and greatest in employment legislative and legal trends, join me for the Texas Association of Business Dallas chapter meeting on March 11, co-hosted by the North Texas Compensation Association!  We will meet at the Crowne Plaza on Midway Road at 11:30 a.m. and you can register at www.txbiz.org (click on link to the March 11 meeting from the TAB homepage).  Time will be set aside to answer your questions!
10. For the Birds– If you like being “tweeted” and want breaking news on employment law changes, follow me on Twitter.  I’m at @amross.

Until next time,

Audrey E. Mross
Labor & Employment Attorney
Munck Carter LLP
600 Banner Place
12770 Coit Road
Dallas, TX  75251

972.628.3661 (direct)
972.628.3616 (fax)
214.868.3033 (iPhone)
amross@munckcarter.com
www.munckcarter.com

Legal Briefs for HR (“LB4HR”) is provided to alert recipients to new developments in the law and with the understanding that it is guidance and not a legal or professional opinion on specific facts or matters.  For answers to your specific questions, please consult with counsel.  If you wish to be removed from the group, reply and put “Remove” in the subject line.  You may also reply to notify the author of an additional or changed email address.

If you wish to post, reprint or send LB4HR for the benefit of your organization, please contact the author for permission.  Upon approval, nonprofit entities may post, reprint or send LB4HR to their members for no fee.  For-profit entities may be charged a nominal fee. LB4HR is copyrighted work product and may not be posted, reprinted or sent without permission, however, individual subscribers are welcome to forward LB4HR to individuals or within their place of employment without seeking permission, so long as the author’s complete contact information is included.

Subscribers are encouraged to notify their Internet Service Provider (ISP) that amross@munckcarter.com is a trusted source, in order to receive an uninterrupted subscription to LB4HR.  Due to the size of the email group and occasional use of sensitive words, LB4HR can be perceived as spam or inappropriate email and deleted or diverted by your ISP’s filter.