Recognition of Same-Sex Marriages for Federal Tax Purposes

As a follow-up to the overruling of the Defense of Marriage Act (DOMA), the Internal Revenue Service recently released IR-2013-72 which announced the U.S. Department of Treasury and IRS will recognize same-sex marriages and treat the couples as married for federal tax purposes.  Revenue Ruling 2013-17 applied regardless of whether the couple lives where same-sex marriages may or may not be recognized.

According to the Treasury and the IRS, additional guidance for employers will be forthcoming.  Employers can expect guidance for filing refund claims for payroll taxes on previously taxed health insurance and fringe benefits provided to same-sex spouses.  Other agencies may release similar guidance affected by the Internal Revenue Code.

Key points on the ruling may be found at the IRS website.

DOMA Decision

Lower courts have begun to issue rulings based on the Supreme Court's June 26, 2013, Defense of Marriage Act (DOMA) decision, with two district courts recently extending the ruling's application.  In addition, the Department of Labor revised a fact sheet on qualifying reasons for leave under the Family and Medical Leave Act (FMLA), in response to the Supreme Court's historic decision this summer striking down Section 3 of DOMA.

DOMA (Defense of Marriage Act)

First the history lesson.  The Defense of Marriage Act was enacted September 21, 1996, allowing states to refuse to recognize same-sex marriages granted under the laws of other states. 

Section 3 of the Act was ruled unconstitutional in June, 2013 thereby allowing same-sex married couples to be recognized as "spouses" for purposes of federal laws, and allowing them to receive federal protections such as Social Security, health insurance and retirement savings.  Essentially, same-sex couples who are legally married deserve equal rights to the benefits under Federal law that go to all other married couples. 

If you have followed the DOMA case, you know by now that the ruling will have far-reaching implications.  The recent ruling which mandates that all officially recognized marriages be treated equally under the law, has immediate legal ramifications for the 12 states that already allow same-sex marriages.  Opponents of same-sex marriage are bracing themselves for a wave of legal challenges in the states that do not recognize marriages of gay and lesbian couples. 

What does all of this mean for Human Resources and Texas employers?  Well, here in Texas marriage is defined as the "relationship between a man and a woman."   While the Supreme Court removed the federal definition of marriage, it left it to the states to decide whether to honor other states' laws on the matter.  This does not mean that Texas is required to legalize same-sex marriage.  Texas Family Code 6.204 states same-sex marriages performed in other states are void in Texas.  For Texas, there isn't a huge impact immediately.  However, employers should revisit the definition of "spouse" in their benefit plans to ensure that the definition is consistent with the employer's intent, in light of the Windsor decision.  With regard to qualified pensions, plan language and procedures will need to be considered because same-sex spouses have additional rights to federally protected benefits. 

Working Families Flexibility Act (H.R.1406)

(Not to be confused with the Flexibility For Working Families Act)

Over heavy opposition by the Democrats, a hotly debated bill was passed May 8th by House Republicans that will potentially loosen federal overtime laws.  The bill would amend long-standing labor laws (the 75 year old FLSA) by allowing private-sector employers to offer compensatory time off in lieu of time-and-a-half pay for overtime.  (The protections under FLSA were put in place to prevent employers from abusing the system and avoiding paying overtime to workers who put in more than 40 hours per week.)

The supporters of the bill have pitched it as an update to federal law, with the obligatory fluff that "it's about helping working moms and dads, providing the ability to commit time at home," per Rep. Martha Roby (R-Ala). 

Under the bill, employees may use their comp time only at the employer's convenience.     If a business is necessarily inflexible when it comes to scheduling time off as the business may relay on a small number of employees for an entire function, then comp time may not be a viable alternative.  For the small employer, the concern may be the potential lost productivity and the additional paperwork for tracking comp time accrued and used.

Yes, the bill has put in provisions to protect against abuse, and only offers the workers a chance to opt for the extra time off if that's what they want.  But I side with the Democrats that such an option is ripe for abuse by unscrupulous employers.  The bill is a potential way for extra work to be imposed on workers with no additional cost to the employer. 

Vicki Shabo is the Director of Work and Family Programs of the non-partisan National Partnership for Women and Families.  Her organization is staunchly opposed to H.R. 1406 and sees it as a wolf dressed in sheep's clothing.  "This is a dangerous proposal that pretends to be something that will help working families.  It will take money out of worker's pockets for overtime pay that they otherwise would have received in wages and instead replace it with possibly an empty promise or a mirage of time that's out in front of them that they may never be able to take."

"For the record, there are many ways for Congress to improve both worker pay and work life balance, including raising the minimum wage, instituting paid sick leave, ending discriminatory pay practices, easing the formation of unions and promoting advance notice for worker scheduling,  The House bill ignores what is helpful and embraces what is harmful."  The New York Times, May 10, 2013.

I highly doubt that this bill will go much further. The White House stated in early May that the president would be advised to veto such legislation on the grounds that it would weaken protections in the Fair Labor Standards Act.

Legal Mistakes by HR (Part 4)

Here's my last, and no less important, potential area of litigation for you.  The performance appraisal conversation.  Managers dread it, employees fear it.  Sometimes the talk is effective, sometimes it isn't.  Unfortunately during the performance evaluation process supervisors may tell little white lies to protect an employees feelings or to avoid a confrontation.   Like our mother's taught us, honesty is always the best policy. 
 
4.  Misleading performance evaluations. Ensure you always document employee performance / behavior problems.   If under-performing employees are not properly rated, you won't have a legal leg to stand on if termination becomes a necessity. You'll be in a courtroom explaining why you gave a positive evaluation to an employee that you later terminated.

If you want to shape behavior, you have to give honest feedback.   If an employee doesn't know that something is wrong, the behavior becomes acceptable.

Healthcare Reform

The Affordable Health Care Act, a health care law, was passed in 2010.  By 2014 several health reform provisions will come into effect.  Unfortunately, with so many unanswered questions and loopholes, healthcare reform continues to confuse and bewilder employers.  Hopefully the below will provide some guidance.

For fully insured employers with 51+ employees, 2012-2013 health reform provisions include:

1. Limit employee contributions to FSAs.  Starting in 2013, employee salary reduction contributions to health FSA's will be limited to $2,500 per plan year, with indexed increases allowed in future years to adjust for inflation.
2. Employers who file 250 or more employee W-2 forms will be required to report the cost of employee's health benefit coverage on the employee's 2012 W-2 forms that are distributed in January 2013.   This requirement is informational only and does not mean that employees will be taxed on these dollars.
3. Provide written notice about Health Benefit Exchanges (Exchanges).  In late summer or fall (future guidance is expected on complying with this notice requirement), employers must provide written notice to current employees, and going forward, new employees, to inform them of the Exchanges and the circumstances under which they may be eligible for health insurance subsidies.
4. Assess health plan offerings.  Employers should begin assessing their health plan offerings to determine whether they meet the minimum value requirements that will become effective in 2014.  If plans do not meet the requirements, employers will need to explore alternative plan options/or the impact of paying assessments.
5. Requirements for providing the Summary of Benefits and Coverage (SBC) to your employees.  On or after September 23, 2012, group health plans and health insurance issuers offering group or individual health insurance coverage are required to provide an SBC that accurately describes the benefit and coverage under the applicable plan or coverage. The final regulations require that the SBC be provided in several instances (upon application, by the first day of coverage if there are any changes, special enrollees, upon renewal, upon request and off-renewal changes.)

2014 Health Reform Provisions.  Although the below provisions will not become effective until 2014, it is important for employers to know what is coming and what action is required!

1. Offer Minimum Essential Coverage (MEC).  Employers will want to consider whether they need to make changes to the cost and quality of the coverage offered to avoid penalties that will apply if that coverage is considered unaffordable or low in value.  Beginning in 2014, employers with 50-plus full-time employees may be subject to a penalty if an employee receives a premium credit or cost-sharing subsidy. The penalty is calculated as follows:
1. Employers not offering coverage.  If an employer does not offer MEC and one or more full-time employees receive a premium credit or cost-sharing subsidy through the Exchange, the penalty is $2,000 per year per full-time worker.  When calculating the penalty, the first 30 full-time workers are subtracted from the payment calculation.
2. Employers Offering Coverage:  If an employer offers MEC and one or more full-time employee receives a premium credit or cost-sharing subsidy through the Exchange, the penalty is $3,000 per employee who receives a premium credit or cost sharing subsidy.
2. An employer-sponsored plan that satisfies the ACA's reform requirements must:
1. Be affordable to the employee (premium must not exceed 9.5 percent of household income.  The IRS, however, has issued a safe-harbor allowing employers to substitute the employee's W-2 income for household income).
2. Provide minimum value, which is at least 60% of the total allowed cost of benefits.

Pending Legislation in Texas

Below is a small sampling of employment-related legislation filed in the Texas Legislature.   If passed and signed into law, these will have a tremendous impact on Texas employers.

HB238/SB237
Prohibition of employment discrimination on the basis of sexual orientation or gender identity or expression.

HB321
Deferred adjudication may not be used as a factor in employment decisions, housing or issuance of state licenses.

HB667
Puts leave for foster children on same basis as leave for biological or adopted children.

HB950
Incorporates federal law in the Lily Ledbetter Fair Pay Act of 2009.

HB1829
Relating to safe patient handling and movement practices at hospitals and nursing homes.  No retaliation or discrimination toward staff members who refuse to participate in unsafe handling of patients.

HB1188
Relating to limiting the liability of persons who employ persons with criminal convictions.  Tightens up on standards for proving negligent hiring and supervision of employees with prior convictions.

HB494/SB741
Extends to two years the time limit for filing a wage claim with Texas Workforce Commission.

SB340
If TWC finds bad faith on employer's part for failure to pay wages, it "shall" impose a penalty (instead of "may").

Insubordination

We have all heard the term "insubordination," an employee's willful disregard for a supervisor's direct orders.  But what does insubordination really mean?  How do you determine whether insubordination has occurred and what should you do about it?  Simply complaining about an assignment does not constitute insubordination. 

Insubordination can be active or passive.  Active insubordination may be the refusal to do something, challenging the directive, confrontational behavior, the use of abusive language or even physical violence.  Passive insubordination may be exhibited by the employee's willing failure to complete a task. 

To prove insubordination you must establish three important elements:

1. It has to be recognized as a direct order. 
2. The employee received and understood the order.
3. The employee refused to obey the order through an explicit statement of refusal or through nonperformance.  

A few words of caution.  Before any claims of insubordination are raised, take a moment to:

1. Assess how the order was issued.  It can't be a suggestion.  Whether verbal or written, did it clearly communicate the who, where, what and when? 
2. To establish insubordination, the order must relate to work being performed.  Always validate that the order was reasonable.
3. Could other factors influence the employee's actions?  Perhaps the employee did not willfully intend to disobey.  Does the employee have a pattern of unacceptable behavior?
4. An employee has the right to refuse an order if they are being asked to do something illegal or dangerous, or in violation of a published safety rule. 
5. The employee must be told that failure to perform the task/assignment is grounds for disciplinary action on the basis of insubordination.
6. Allow employee adequate time to comply with order before discipline is imposed.  You can't ask an employee to complete a 2 hour task in 30 minutes.

Abusive language by employees towards supervisors can also be considered insubordination.  However, you must always consider the context in which the incident occurred.  To confirm that an employee was engaged in insubordination, the abusive language:

1. Was not provoked by the manager.
2. Occurred in the presence of other employees or customers.
3. Was not an example of "shop talk" in the workplace.

While our first reaction to insubordination may be to fire the employee immediately, allow a cooling off period.  Take the time to review your disciplinary policy. Review the employee's past history. Carefully consider all the facts, all the actions, prior to punishing the employee.   On occasion employee insubordination can be attributed to a breakdown in communication.   While termination may still be the correct course of action, you'll have all your facts in place.   
 

Is Your Office Hazardous To Your Health?

The personal injury law firm of Brent & Adams Associates released a list of the most common worker's comp-worth maladies:

• Repetitive stress injuries, such as carpal tunnel syndrome
• Lifting injuries
• Slip and fall injuries
• Injuries resulting from tripping on stairs or loose carpeting.
• Deep-vein thrombosis, caused by prolonged sitting.
• Strains from bending or falling out of unstable desk chairs.

Who knew that working in an office environment could be so hazardous? 

When people think of occupational safety and health needs, they picture dangers around constructions sites or factories.  However, office workers face many unique challenges to their safety and health.  As an employer you should provide your employees with training and education to improve their workplace safety and health.  Need a resource?  Look to OSHA for guidance.

Employee Absenteeism

When I mention measuring employee absenteeism the first thing that comes to your mind is firing employees because they missed too many days at work.  Right?  Well, maybe it shouldn't.  You can measure absenteeism for many purposes including workforce planning, lost wages and reduced productivity.  But can you also use it to measure employee morale?

Employee absenteeism is a major concern for employers.  Yes, there is oftentimes a sense of entitlement in the workplace that it's okay to be absent.   And where there is an excessive pattern, or a trend in the days the employee is absent, then it is time to take action. But, we also need to acknowledge that people get sick.  In those situations where you perceive a pattern of excessive absenteeism is developing, I highly recommend a discussion with the employee in order to determine if there is a potential FMLA, ADA issue to be addressed.

Absenteeism can be due to a variety of reasons.  If an employee is stressed about their workload, this may manifest itself through absenteeism.  Stress with the job routine and/or job satisfaction, the environment (cold, hot, noise) even with management (style, personality traits).  If stress is a factor, you need to discuss strategies to resolve the stressor.  If one employee is experiencing stress, perhaps others are as well.  We all have more to do and less time to do it in today's business environment.

In those instances where there appears to be an unacceptable level of absenteeism:

1. Meet with the employee.
2. Express your concern.
3. Provide the employee with an opportunity to explain themselves.

Some random statistics for you:

According to a 2012 global workforce survey, "highly engaged employees have lower 'presenteeism' (lost productivity at work) and less absenteeism than disengaged employees. The former lose an average of 7.6 days per year to presenteeism, compared with an average 14.1 days for the disengaged employees....

According to a 2010 Metlife report, "employees with eldercare responsibilities were more likely to report missed days of work. This was driven by the much higher absenteeism among younger caregiving employees, ages 18 to 39. Overall, 9% of non-caregivers missed at least one day of work over the past...

According to a 2009 survey by the National Alliance for Caregiving, "over seven in ten caregivers were employed at some time when they were caregiving (73%). Among them, two-thirds (66%) have gone in late, left early, or taken time off during the day to deal with caregiving issues (66%). One in five...

Candidate References

Checking references is critical in the decision making process and oftentimes will assist the employer in cutting down on selection errors.  While applicants may distort their employment history and accomplishments, reference checking will allow you to assess the accuracy of their claims.   Most importantly, it will allow you to assess if the candidate can do what s/he claims to be able to do.  Be clear with candidates from the beginning that you will be checking references. (Bear in mind that some employers have internal policies restricting the amount of information provided, oftentimes limiting the information to dates of employment and role within the organization.) 

Create a standardized process for checking references.  Ask questions pertaining to the candidates previous position.  What responsibilities did s/he have?  Discuss the responsibilities of the new position and if the reference feels the candidate could effectively fill the role.  Were there attendance issues?  Is the candidate a team player?   Would the reference rehire the candidate?   In what capacity was the reference associated with the candidate?  Most importantly, should you hire the candidate?  Avoid any inappropriate questions relating to health problems, disabilities, children, child care arrangements, etc.  (For the professional level employee, refine your reference process to encompass topics such as leadership, employee relations, oral and written communication, managerial skills and decision making, just to name a few.)

 

Remember, a candidate's past performance can be used as a predictor of future performance.   Increase your success rate in the employment selection process by conducting thorough reference checks. 

 

To avoid any questions regarding your hiring methods, ensure you maintain detailed records of your reference checking activities.  These may be helpful should you run into a negligent hiring claim later.

Policies: Do the Employees Get It?

Earlier today I had a long-tenured employee ask “What are the procedures for documenting sick leave?”  “ .. . . I realize it is documented someplace but I’m not sure where and I thought you would know it off “the top of your head” saving me the trouble of finding it.”    I smiled.  This document in question is located in both the employee handbook as well as a standalone policy on the HR portal.

Companies devote substantial time and resources in developing policies.  Once policies are developed we roll them out in meetings, post them, put them on the company intranet, distribute them via email, and/or hard copy distribution.   We obtain the signed acknowledgement as proof that the employee received and is aware of the policy - thereby negating any future claims from the employee that s/he "didn't know."   But no matter how or how often policies are communicated, sometimes it seems the company falls short in the communication of the policy.  Are the policies then wasted?  No, but perhaps we need to better understand our audience.  How are our employees receiving the information we are communicating?  Words must always be carefully chosen; nuances must be considered. 

My recommendation, schedule assessments of your company policies at regular intervals. This will allow you to assess the employee understanding of the policies and to obtain feedback.

Yes, you will still have the rare employee who finds it easier to ask HR than look something up.  But, after all, that's why we're here!

Religious Accommodation

Good Friday is right around the corner.  That day will always serve as a reminder to me of the event forever referred to as The Employee Mutiny of 2011.  In 2011, I upset a few employees by converting the Good Friday Holiday to a floating holiday.  Yes, change is difficult, no matter how small the change.  But with proper communication the employees came to understand that they didn't lose the day, it was just handled a bit differently. 

 

Religious discrimination by employers is expressly prohibited by Title VII of the Civil Rights Act of 1964. Although employers don't have to satisfy an employee's every desire in accommodating his/her religious beliefs, employers are required to make "reasonable accommodations." The most common such accommodation is granting an employee time off to observe a religious holiday.

 

My goal in converting this to a floating holiday was to allow other employees, with different religious beliefs, to have a holiday for their use.  As any organization grows, you want to be able to recognize all religions.  (Another basic step is to modify the vacation/PTO policy to reflect the use of available vacation time for religious holidays not normally recognized by the company.)

 

We live in a beautiful and diverse world!  There's Christmas, Hanukkah, Kwanzaa, the feasts for Santeria.  We have Hindu holidays, Muslim holidays and even Pagan holidays.  Employers and HR professionals all struggle with how to celebrate them, how to recognize the diversity of these religious beliefs and practices.  With care, communication and understanding, the process is easy!

 

Exit Interviews

Exit interviews get a bad rap.  Some people think they have value to the organization, others don't.   I read an article once by a headhunter who stated that "exit interviews fascinate me like cockroaches do."  His explanation was that no one knows why they exist, can justify or eliminate them and are likely to continue to survive.

Cockroaches aside, exit interviews are intended to help the company understand the full scope of reasons behind a voluntary separation.    With this information, an organization can determine and implement strategies to increase retention and reduce turnover.   If effectively structured, an exit interview will provide information that will:

1. gauge the effectiveness of current employment and business practices;
2. identify problems that contribute to turnover;  
3. manage employee expectations; and,
4. allow for the proper incorporation of new employees into the organization.

 In structuring an exit interview program the employer must decide:

1. Who:  Voluntary resignations?  Involuntary Resignations?  Or all departing employees?  (Not all turnover is undesirable.  As an employer you should be strongly interested as to why a valued employee quit.)
2. When:  Before or after the employees scheduled departure date?
3. How:  Face to face?  Questionnaire?  Third party platform?
4. Participation:  Mandatory or Voluntary?

One final recommendation, if you have an exit interview program develop a list of standard and open ended questions for all employees.  Ensure that no privacy rights (health related issues) are violated.  And most important, listen rather than talk. 

Confidential Data at Risk

In May of last year I blogged about data leaving company networks through non-secure mobile devices  ("Data Breach").  A hot topic, companies are increasingly concerned about losing trade secrets and proprietary information to competitors and thereby loosing competitive advantage. 

 

Conducted by Ponemon Institute in October 2012 and just released is Symantec's survey What's Yours is Mine: How Employees are Putting Your Intellectual Property at Risk.    Survey results reflect that half of employees who left or lost jobs in the last 12 months kept confidential data, 40% planning to use that data in their new jobs.    Only 38% of employees surveyed said their manager views data protection as a business priority, and 51% think it is acceptable to take corporate data because their company does not strictly enforce policies.  More and more we see that employees' attitudes and beliefs about intellectual property (IP) theft are at odds with the vast majority of company policies.

Survey highlights: 

1. 62% respondents:  Feel it is acceptable to transfer work documents to personal computers, tablets, smartphones or online file sharing applications.  The majority never delete the data they've moved because they see no harm in retaining the information.
2. 44% respondents:  Feel that a software developer who develops source code for a company has some ownership in his or her work and inventions.  42% respondents do not feel it is a crime to reuse the source code, without permission, for other companies.

As technology continues to evolve, organizations face the growing challenge of protecting stored sensitive data from unauthorized exposure. Surprisingly, most companies do not address the danger of stealing electronic information through the use of smartphones such as iPhone, Android or Blackberry.  Symantec ". . . once mostly forbidden by IT, smartphones are now being used by hundreds of millions of employees throughout the world to access corporation information. . . ." 

 

To protect and prevent against the loss of proprietary information, companies may implement the following:

1. Well communicated and enforced Confidentiality and Non-Disclosure Agreements
2. Data Protection Policies that monitor access and use of confidential data
3. Separation Agreements
4. BYOD (Bring Your Own Device) Policy

Most importantly, educate your managers and employees!

The Importance of Training Managers

What is the cost to an employer when a manager doesn't recognize s/he is acting in a discriminatory manner?   Some managers don't seem to understand what discrimination means, or oftentimes how to recognize it.  Discrimination, and the cost of discrimination, is a problem that companies just can't ignore.

In an EEOC Press release of 1/23/2013 the Dallas-based Fries Restaurant Management will pay a former employee $25,000 to settle a religious discrimination lawsuit.  The employee, Ashanti McShan, is a member of the Christian Pentecostal Church which requires women to wear either skirts or dresses.  During the interview process with Burger King, Ashanti requested a religious accommodation to wear a black skirt versus the black uniform pants.  She was told by the interviewing manager that her accommodation would be granted.  However, during her orientation the store manager advised her she could not wear a skirt and had to leave the store.  McShan attempted to contact higher management, and was unable to speak with anyone.  She was later discharged as a result of the accommodation denial.   Title VII of the Civil Rights Act of 1964 prohibits religious discrimination.  It requires employers to make reasonable accommodation as long as such does not pose an undue hardship on the organization.   

Florida Courts:  In Hurley v. Kent of Naples, on or about 2005, Patrick Hurley was diagnosed with depression and related mental health symptoms.  The doctor who provided the diagnosis, and the therapist, both advised that he should take medical leave.   The employee advised the company senior officer that he had been diagnosed with depression and needed time off to deal with it.  Having accumulated several weeks of vacation, the employee requested to take most of the year off on vacation.   His request was denied and he was terminated.  Obviously an FMLA suit, alleging interference with FMLA rights and retaliation, followed and Hurley won.  (FMLA entitles eligible employees to take unpaid, job-protected leave for certain family and medical reasons.)    The estimated judgement:

• $200,000 for actual monetary losses
• $353,901.85 for front pay
• $200,000 liquidated damages
• $233,109.75 for attorneys' fees
• $21,329.36 for "costs."

Texas courts: In an EEOC press release of December 18, 2012, Dillard's will pay $2 million to settle a class action disability discrimination lawsuit. Dillard's Inc, enforced a maximum-leave policy limiting the amount of health-related leave an employee could take. Additionally, since 2005, Dillard's had a national policy and practice that required employees to disclose the exact nature of their medical conditions to be approved for sick leave. Further, Dillard's terminated a class of employees nationwide for taking sick leave beyond the maximum amount of time allowed. This policy violated the ADA which prohibits employers from making inquiries into the disabilities of employee's unless it is job-related and necessary for the conduct of business.  The second violation was that managers/supervisors (or even HR) did not regularly engage in an interactive process with employees to determine if more leave was allowed under the ADA as an accommodation.  (More information is available on the EEOC website.)  While you can't blame the managers for this company-wide form of discrimination, logically HR should have identified the violation and pushed for policy reform.  But, who's to say that they didn't?

When discharging an employee who just revealed the need to take time off for a medical condition, use caution. Make sure the discharge reason is unrelated to the request.  Remember, firing an employee who is pregnant has legal risk.  Firing an employee because she is pregnant is illegal.

Employers can take steps to prevent discrimination claims by ensuring that all managers are properly trained.  Please invest in training your managers. 

"The best way to begin is to begin." 
                        - Benjamin Franklin.

Concerted Activity

When you think of the term "concerted activity" there is often an automatic assumption that a union, or union activity, is involved.  But that's not always the case.  Section 7 of the NLRA states "Employees shall have the right to self-organize, to form, join, or assist labor organizations, to bargain collectively through representatives of their choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, and shall also have the right to refrain from any or all such activities. . . " 

 

Protected concerted activity sometimes has nothing to do with unions at all.   Employees who get together and complain to management about their pay or benefits is engaged in concerted activity.   Concerted activity can include internal complaints of discrimination, discriminatory harassment complaints, etc., all of which is protected by Section 7 of the NLRA.  

Fiscal Cliff: Payroll Department Take Note!

With Congress averting the plunge off the fiscal cliff, here's a couple of items for payroll professionals to take note of.

H.R. 8, The American Taxpayer Relief Act of 2012, made permanent Bush-era tax rates for all but the highest earners.  This means no tax increase in income tax rates for employees taxed at the 10%, 15%, 25%, 28% and 33% rates.  It is anticipated that President Obama will sign the bill this week.  H.R. 8 also includes a few other payroll provisions including; the employer wage credit for employees who are on military leave is extended retroactive to January 1, 2012 and will expire on December 31, 2013; and, employer-provided educational assistance under tax code Section 127 is permanently extended.

Effective January 1, employers must resume withholding at the 6.2% Social Security payroll tax.  Congress declined to extend the payroll tax economic stimulus that took place in 2011 and 2012 in which the employee's share of payroll tax was lowered to 4.2%.  Underwithholding should be corrected as soon as possible, but not later than March 31, 2013.  Consider notifying employees this week of changes that will impact their take-home pay! The increase to 6.2% for employees means that an employee with an income of $50,000 to $75,000 will pay an average of $985 more in taxes. 

On January 1 the IRS released the 2013 Percentage Method Tables indicating that employers should implement the 2013 tables ASAP, but not later than February 15th.  Unfortunately these tables do not reflect the H.R. 8's tax brackets.  Keep an eye out for updated tables.  In addition to reissuing the 2013 withholding tables, we're waiting on the release of the 2013 Form W-4.

Happy New Year!

 

A Real Thanksgiving Turkey

A parade-goer watching the Macy's Thanksgiving Day Parade on New York's Upper West Side noticed that the confetti that fell on him and some friends contained information including names, addresses, Social Security numbers, bank routing numbers, etc.    Additionally, one confetti strip appeared to provide information from an arrest record and others identified undercover detectives by name.   Upon inspection it appeared that all documents were from the Nassau County Police Department. 

"The Nassau County Police Department is very concerned about this situation," Nassau County Police Inspector Kenneth Lack said in a statement. "We will be conducting an investigation into this matter as well as reviewing our procedures for the disposing of sensitive documents."

Obviously there is more risk than ever that sensitive employee information may become pubic information.  Companies need to take the proper steps to ensure that sensitive employee information doesn't get into the wrong hands. 

And a word of advice to the Nassau County Police Department, skip the holiday drinks and buy a better shredder!

Sorry, I'm Not Going To Tell You What You Want To Hear

I upset an executive the other day when I advised him that a tactic he wanted to take with an employee really wasn't the best approach.  When I explained why a different approach was needed, the response from the executive was anything but supportive. 

 

To quote Dilbert, "Do you want a realistic. .. that will ruin your day, or a lie that will allow your ignorance and your happiness to lock arms and square dance to the next cubicle?"

 

It's human psychology. Most times we hear what we want to hear. We want things to align with our vision of how the world works. However, Mr. Executive, if someone is brave enough to give you honest input, take a moment to recognize it. Don't shoot (or shun) the messenger.   Don't just turn to confidants who will tell you what you want to hear. My recommendation is that you turn to several sources for information and obtain several points of data.

 

For just a moment please understand that HR isn't here to offend you.  We all know that in the business world, unintentional violations do not excuse wrongful behavior.   No, I'm not here to provide you with legal advice. But, I am here to advise you where you may face potential liability.  So,  I'll question tactics, suggestions or orders that may appear to be unlawful.   I will ask questions and seek clarification.  I will then tell you what works best based on my knowledge and experience.  I'm going to follow my instincts.

  
In May, Forbes published the "10 Commandments for Delivering Bad News."  In brief (and the link has been provided) the commandments are:

1. Thou shalt always treat people with respect and dignity.
2. Thou shalt always follow up and follow through
3. Thou shalt always remember your multiple audiences
4. Thou shalt always bring solutions
5. Thou shalt always look for the silver lining
6. Thou shalt always justify
7. Thou shalt always put in writing
8. Thou shalt never hide the facts
9. Thou shalt never delay
10. Thou shalt never surprise

Any successful employee strives to anticipate the boss's needs and then deliver them.  Telling people what they don't want to hear is risky.  I can sit here, nodding, and maintain the status quo.   But that's not what you hired me to do.   I'm not going to hide the facts and I am going to provide you with solutions.

http://www.forbes.com/sites/forbesleadershipforum/2012/05/30/10-commandments-for-delivering-bad-news/