Legislation to extend a two percentage point cut on the employee side of the payroll tax through the end of 2012 was signed by President Obama on February 22nd. The Middle Class Tax Relief and Job Creation Act of 2012, which was approved by the House and Senate on February 17th, also extends Federal unemployment insurance benefits and prevents a scheduled cut in payments to Medicare providers from occurring for the rest of 2012.
The administration estimates that for a worker earning $50,000 a year, the payroll tax holiday means an extra $80 a month in take-home pay. For employees with a higher annual income, the bonus could total $2,200 a year.
With the Middle Class Tax Relief and Job Creation Act of 2012 in place, employees will continue to receive larger paychecks for the rest of this year based on a lower Social Security tax withholding rate of 4.2 percent, which is two percentage points less than the 6.2 percent rate in effect prior to 2011. This reduced rate, originally in effect for all of 2011, was previously extended through February 2012.
A comparable rate reduction in the Social Security portion of the self-employment tax, from 12.4 percent to 10.4 percent, applies for self-employed individuals. For 2012, the Social Security tax applies to the first $110,100 of wages and net self-employment income received by an individual.
No action is required by employees to continue receiving the payroll tax cut. As before, the lower rate will have no effect on employees' future Social Security benefits. The reduction in revenues to the Social Security Trust Fund will be made up by transfers from the General Fund.
The new law also repeals the recapture provision included in the previous extension that effectively capped at $18,350 the amount of wages eligible for the payroll tax cut. As a result, the now repealed recapture provision does not apply.
In addition to the payroll tax cut, the Middle Class Tax Relief and Job Creation Act also extends unemployment benefits to between 40 and 73 weeks, down from 99 weeks and averts a big cut in the reimbursements doctors get for treating Medicare patients.
Revised Payroll Tax Form Available for Employers
On February 23rd, the Internal Revenue Service (IRS) released revised Form 941, Employer's Quarterly Federal Tax Return, enabling employers to properly report the newly-extended payroll tax cut benefiting nearly 160 million workers. If you currently work with a payroll provider and they handle the payment of your quarterly payroll taxes, they will complete and submit this form for you.
Photo Credit: Official White House Photo by Pete Souza
According to the Bureau of Labor Statistics, 4,547 people died in 2010 from workplace injuries and another 3.1 million workers suffered on-the-job injuries and illnesses. As a follow up to our recent blog posting… What’s Your Company’s Medical Emergency Plan?, we’ll provide business owners and HR professionals with seven tips for creating workplace emergency action plans. The need for advance planning for medical emergencies in the workplace is critical.
Large employers and those employers that work with hazardous substances or machinery are required by the Federal Occupational Safety and Health Administration (OSHA) to have formalized plans in place to deal with a variety of workplace injuries and illnesses. Many states also have state-mandated occupational safety and health laws. Learn about the state occupational safety and health plans that impact your business.
Planning Ahead is Critical for a Safe & Healthy Workplace
Interpreting and complying with OSHA First Aid Standards is critical both to your business operations and to the health and safety of your most valuable asset—your employees. Even in smaller organizations, proper emergency planning and employee training can make the difference and save lives. Regardless of a company’s size, employers have an affirmative duty to provide a safe and healthy work environment for all employees. Creating emergency action plans that spell out how employees should respond to emergencies, including evacuations and medical duties for designated employees are recommended.
Download OSHA Publication 3088: How to Plan for Workplace Emergencies and Evacuations
HR Expert Tips for Creating a Medical Emergency Action Plan
You can’t anticipate every potential medical emergency in your workplace. But you can plan ahead. HR experts recommend that businesses consider these seven tips when creating a medical emergency action plan:
- Designate a management point of contact (or contacts) to make decisions in the event of an emergency. Ensure that all staff members know who this person and/or people are, with emergency contact information readily available to everyone in the workplace.
- Investigate ways to provide medical and first-aid services. If medical facilities/clinics are available near your worksite, you can make arrangements for them to handle emergency cases.
- Provide your employees with a written emergency medical procedure to minimize confusion during an emergency. This would include a procedure to immediately call “911” if an employee is having serious medical distress without requesting permission from the employee in distress first. The goal is to provide timely medical care and to take all necessary precautions to mitigate the medical emergency, as well as the employer’s risk. The experts say that treatment of a serious medical issue should begin within 3 to 4 minutes of the issue.
- If an infirmary, clinic, or hospital is not close to your workplace, ask for volunteers and train them in first aid. The American Red Cross, some insurance providers, local safety councils, fire departments or other resources may be able to provide this training. OSHA and the American Red Cross share a common goal—keeping American workers safe. The two organizations, the Red Cross and OSHA, work together to provide information, guidance and access to training resources on safety and health topics including emergency preparedness, disease prevention and first aid in the workplace.
Download the American Red Cross Brochure: Is Your Company in Compliance with OSHA Standards for First Aid Training and Emergency Preparedness?
- Consult with a physician to help you order appropriate first-aid supplies for emergencies at work. Have a physician available on call for advice/consultation if a health problem occurs at work.
- The experts also recommend that employers establish a relationship with a local ambulance service so transportation is readily available for emergencies.
- Keep a copy of your emergency action plan in a convenient location where employees can get to it in an emergency. Overcommunicate your plan and also provide every employee with a copy and have a safety meeting. If your office is small (fewer than 10 employees) the single copy posted in a common area and a staff meeting on the emergency action plan may suffice.
No one likes to think that a medical emergency will happen at their workplace. But the fact is emergencies can happen anytime, anywhere and to anyone. Suppose there is a situation at your company where an employee is complaining of chest pains or shortness of breath or abdominal pain. What should you do first? Do you contact their manager or supervisor? Do you notify HR? Do you call 911? Do you try and get ahold of the employee’s emergency contact?
An employer is responsible for the health and safety of all employees in the workplace. The best way to prepare for a medical emergency is to plan ahead of time for how employees and the company should respond. For most people, it’s difficult to think clearly and logically during a crisis. So it’s important to be able to think about different, potential workplace emergencies before they actually happen and plan your course of action.
Who to Call First in a Medical Workplace Emergency
It’s hard to anticipate every possible medical emergency that could happen in your workplace and how those different situations would play out. Here are a few recommendations from certified HR experts on some general medical emergency procedures and guidelines:
- In a medical emergency, the immediate response should be to call 911, then the physician/clinic on call and the emergency first aid personnel.
- If when emergency personnel arrive, the employee decides they don’t want treatment, the employer should have the employee sign a waiver or affidavit that expressly states that the employer should be held harmless for that decision.
- Employees should not be driving other employees to the emergency room, unless it is more of a simple first aid situation. If the medical issue is really unknown, it places both of the employees at risk and the employer should not allow that to happen.
How Should Health & Safety Policies Be Communicated in the Workplace?
An employee handbook is one of the most essential communication tools between a company and its employees. Employee handbooks are critical not only for communicating health and safety policies, but also for letting employees know what is expected of them and what they can expect from the company. An HR policy manual or employee handbook includes information on general work policies, employee classification, orientation & training, workplace harassment, compensation & benefits, attendance, personal conduct, termination of employment and internet/email policies... plus much more.
Most customized employee handbooks do address health and safety policies, even if it is as simple as: “ABC Company is committed to providing a safe and healthy workplace for all employees. We have established safety procedures and have designated a safety committee [or point of contact]. Our response to medical emergencies is to immediately contact emergency medical professionals to assess the situation. Our procedures for medical emergencies as well as safety evacuations can be found [state the place where this is posted – online portal, break room, etc.] or you can talk with your manager or a member of the safety committee for more information.”
The risks of not having workers’ comp insurance can be immense. Whether an employer runs a small office or has a medium sized business, hires one employee or oversees many, they should be aware of the fact that if any employee is injured during work, they can face huge liabilities. A small firm can even go out of business.
Laws on workers’ comp vary from state to state. In some states a company may not have to carry workers’ comp insurance if there are less than three employees, while some states may require the insurance even if there is only one employee. In some states, having workers’ comp insurance is mandatory and the employer or company can face legal action or severe penalties for not carrying workers’ comp insurance.
What Does Workers’ Compensation Insurance Cover?
If any employee suffers from any injury during work, the insurance will cover his or her medical treatment, hospitalization, rehabilitation and also lost wages. If the worker suffers from temporary or permanent disability or fatal injury, the workers’ compensation insurance should be sufficient to take care of all the expenses. This is a safety net for the employer and the worker… as the insurance company will have to pay for any problems arising out of the injury, even if they do not come up for several years.
Under the Occupational Safety and Health Act of 1970, the employer is responsible for the safety and welfare of the workers. Both physical and mental injuries come under OSHA.
An employer should ideally get worker’s comp insurance even if he or she is a sole proprietor and does all the work themselves. This way they will not incur out of pocket expenses if they get injured on the job.
The kinds of injuries covered by workers’ comp insurance include:
- Repetitive stress injuries like carpal tunnel syndrome or exposure to any chemical and/or dangerous substances
- Injuries which may be caused by operating any kind of machinery
- Any object falling on and injuring a worker
- Slips or falls
- Physical or mental stress due to work
What About Other Types of Accident Insurance?
While a business may ‘get by’ with other insurance products like accident and limited benefit health policies, non-subscription agreements, employer indemnification products and the like, these simply do not offer the same benefits as a full-fledged workers’ comp insurance policy. Many of these products have limited liability and a ceiling to the compensation covered. If a compensation case goes to court, most likely these products will not cover the legal fees.
And courts can even award punitive damages running into millions of dollars. Can a company really afford to take the chance of having to file for bankruptcy or sell off the business because a worker got injured?
What’s the Cost of NOT Having Workers’ Comp Insurance?
Just think about these recently awarded claims:
- An Illinois man received $3.6 million as punitive damages when the jury found that he suffered back injuries at work as a result of which he was eventually fired.
- In Virginia a temporary worker, hauling trash, went into a coma after working for hours on an extremely hot day. After a long legal battle the man was awarded $3 million compensation with more to follow.
- When an under-construction floor fell on a worker and broke his leg, he received $350,000 as compensation.
If a company does not have workers’ comp insurance, they will have to pay the compensation, even if it means selling off the business.
Are you willing to take the chance and risk everything? Protecting your business is the affordable choice.
Many provisions of the Patient Protection and Affordable Care Act that become effective beginning in 2014 are designed to expand access to affordable health coverage. A new series of questions and answers have been released by the Department of Labor which address the requirements for employers relating to automatic enrollment, the 90-day limitation on waiting periods and employer shared responsibility under the Affordable Care Act.
The questions and answers provide information and identify various approaches the Federal agencies (Labor, Health and Human Services, and Treasury) are considering proposing in future regulations or other guidance. Guidance that employers may rely upon with respect to the issues addressed in the FAQs will be provided with sufficient lead time for employers to comply.
Under the Affordable Care Act, employers with more than 200 full-time employees will be required to automatically enroll new full-time employees in one of the employer's health benefits plans (subject to any waiting period authorized by law), and to continue the enrollment of current employees in a health benefits plan offered through the employer. The law also requires adequate notice and the opportunity for an employee to opt out of any coverage in which the employee was automatically enrolled.
According to the FAQs, the Department of Labor has concluded that its automatic enrollment guidance will not be ready to take effect by 2014 (as indicated in previous guidance). Employers are not required to comply with the automatic enrollment provisions until final regulations are issued and become applicable.
90-Day Limitation on Waiting Periods
In plan years beginning on or after January 1, 2014, the Affordable Care Act provides that a group health plan or group health insurance issuer may not apply any waiting period that exceeds 90 days. A waiting period is the period that must pass before coverage for an employee or dependent who is otherwise eligible to enroll under the terms of a group health plan can become effective.
The FAQs make clear that the limitation on waiting periods, once effective, will not require employers to offer coverage to any particular employee or class of employees, including part-time employees. The limitation merely prohibits requiring an otherwise eligible employee to wait more than 90 days before coverage is effective.
Employer Shared Responsibility
Beginning in 2014, employers with 50 or more full-time employees may be required to make a "shared responsibility payment" if any of the employer's full-time employees is certified to receive a premium tax credit or cost-sharing reduction payment. This may happen if the employer does not offer full-time employees (and their dependents) the opportunity to enroll in minimum essential coverage under an eligible employer-sponsored plan, or if the coverage offered does not provide minimum value or is unaffordable to the employee.
According to the FAQs, proposed regulations or other guidance is expected permitting employers to use an employee's Form W-2 wages as a safe harbor in determining the affordability of employer coverage.
The FAQs also address the coordination of the employer shared responsibility requirements with the 90-day limitation on waiting periods. Upcoming guidance is expected to provide that, at least for the first three months following an employee's date of hire, an employer that sponsors a group health plan will not, by reason of failing to offer coverage to the employee under its plan during that three-month period, be subject to the employer responsibility payment.
Additional anticipated guidance regarding the method for determining the full-time status of new employees, as well as for determining whether current employees (those who are not newly-hired or transferred) are full-time employees for purposes of the employer shared responsibility requirements, is also addressed in the FAQs.
Read the DOL Questions and Answers in Their Entirety in Technical Release 2012-01
Over the last two years, the government has focused its efforts on immigration compliance. This includes targeting businesses for I-9 audits, monitoring H-1B workers, resuming Social Security No-Match letters and launching new online resources for verifying a person’s eligibility to work in the United States. It’s important to keep your business in compliance to avoid monetary penalties and possible criminal charges.
We found an excellent article… 12 Steps to Immigration Compliance in 2012… by Shanon Stevenson, who is a partner in the Atlanta office of the law firm Fisher & Phillips and a member of the firm's Global Immigration Practice Group. We’ve pulled six of the 12 steps from her article and included links to resources we’ve written about on our Payroll & Business Experts blog.
1. Conduct an annual I-9 audit
The I-9 audit should be conducted by someone other than the person responsible for completing I-9s because the individual completing I-9s often repeats the same error.
Correctable errors on the I-9 should be fixed, the change should be initialed and dated, and the words “Per Self Audit” should be placed beside the correction.
Some I-9 errors cannot be corrected. For example, if the employer completed Section 2 of the I-9 later than three business days from the employee’s first date of work for pay, the date cannot now be changed to show a timely completion.
2. Incorporate immigration policies in handbooks
Ensure immigration policies are in place, up-to-date, and followed.
Develop and disseminate an immigration-related notification and response policy so all employees know how to handle unannounced government visits, including site visits from the H-1B Fraud Investigation Unit.
3. Audit H-1B public access files
H-1B employers are required to maintain a public access file for each H-1B worker and must make the file available for public examination within one working day after the Labor Condition Application (LCA) is filed with the U.S. Department of Labor (DOL). The public access files for most employers must contain:
- A copy of the certified LCA;
- Documentation of the wage rate to be paid to the H-1B worker;
- An explanation of how the actual wage was calculated (e.g. copy of the pay scale);
- Documentation used to established the prevailing wage for the position;
- A copy of the internal notice of posting given to the union/employees; and
- A summary of the benefits offered to U.S. workers in the same occupation as the H-1B worker and an explanation of any differentiation in benefits.
Employers must retain all records one year beyond the end date on the LCA or, if a complaint is filed, until the complaint is resolved.
4. Abide by E-Verify
Employers cannot terminate or take any other adverse action against an employee who contests a tentative non-confirmation (TNC) of an E-Verify query while the TNC is in process. The employee is allowed eight Federal government work days to contact the appropriate Federal agency to correct the data.
5. Do not ignore SSN No Match letters
There is no clear guidance from the government on how an employer should respond to No-Match Letters received in 2012. Employers should check their records and give the employee a reasonable amount of time to correct any discrepancy. If the employee indicates that she or he visited the U.S. Social Security Administration (SSA) or the USCIS and the situation is resolved, the employer should note the actions taken to resolve the discrepancy in the event of an audit.
6. Utilize contract employees properly
Although employers are not required to complete I-9s for independent contractors, the DOL and U.S. Department of Justice take the position that employers are obligated to do so if the contractors should be classified as employees. Similarly, if an employer uses H-1B contractors, USCIS will scrutinize the end-user to determine which employer truly exercises control over the contractor to determine which employer should be filing the H-1B work visa petition.
Read the Full Article Published on Fisher & Phillips Cross Border Employer Law Blog… 12 Steps to Immigration Compliance in 2012
As the perfect follow up to our blog article from last Friday… The Importance of Employee Attitude Surveys, CareerBuilder posted yesterday an article on the same topic… Employee Feedback: Are You Really Listening?. CareerBuilder discusses five benefits of listening to employee feedback. One of which is saving money on programs your employees don't really take advantage of. Here are some excerpts from their blog article…
While administering employee feedback surveys can feel like you’re putting both your company and your performance as a leader and manager in front of the firing squad, it also happens to be one of the most efficient and effective ways to understand the internal workings of your organization. Consider the following benefits to employee surveys…
Five Benefits of Employee Feedback
- Turning lemons into lemonade. Yes, the chances you’ll receive some negative feedback are about as good as the chances E! will soon create yet another Kardashian-focused reality show, but negative feedback provides the opportunity to change things at your organization for the better.
- Winning over new fans. If your organization were a television network, employee feedback time would be sweeps week for you. Just by virtue of taking an interest in your employees, you’re likely to see an increase in morale and productivity; however, those effects may only be short-term. If you want to retain those new fans (i.e. foster long-term employee morale), you must continue to meet the expectations you’ve now set forth.
- Reigniting that old feeling. Instead of just asking employees what they would change about the company or their jobs, ask them to vocalize what they love about these things, as well. Chances are they don’t often stop to think about these things, and it serves as a good reminder as to why they come to work each day, again boosting morale. Bonus: You can use this feedback to enhance your current employer brand message.
- Saving money. Employee feedback can also give you better insight into how to better allocate your resources and enhance your benefits package. Be sure to ask about the benefits or employee-focused programs they take advantage of, which ones they don’t (you might find you’re wasting money on programs employees don’t want) and which benefits you should consider implementing to make them happier and more productive (and more likely to recommend you to prospective candidates).
- Bring out the Steve Jobs in everyone. In addition to the above, employee surveys can build your bottom line by generating business ideas. Because they work closely with customers, your employees have a much closer pulse on customer needs. Thus, they’re likely to have suggestions for how to improve certain aspects of the business, services or products to meet these needs.
Read the Full CareerBuilder Article… Employee Feedback: Are You Really Listening?
Employees are the cornerstone of your business. Employee attitude surveys give your workforce the opportunity to provide confidential feedback on their opinions of your company. These surveys are an important way for businesses to measure job satisfaction, employee motivation, opinions and attitudes. The goal is to enhance employee morale and productivity as well as provide organizations with a picture of where improvements can be made.
To build integrity and trust among your employees, the results of your survey should be effectively communicated and acted upon by your company. There is nothing worse than taking the time to survey your employees and then never getting around to implementing any of the feedback you receive.
How to Conduct an Employee Attitude Survey
There are a number of different ways to conduct an employee attitude or opinion survey… from simply filling out a paper survey to taking an online survey or hiring a consulting firm to do all the surveying and analysis work for you. If you work with a consultant to administer an employee satisfaction survey, make sure you have access to the data. By personally reviewing the data and analysis, you’ll be able to make a better assessment of employee satisfaction. The survey results can provide you with key information on how to improve workplace processes, policies and morale to retain existing staff and attract new employees.
Topics to Cover in an Employee Opinion Survey
Employee opinion surveys are a valuable tool for identifying the root causes of employee turnover and job dissatisfaction. Some of the topics that can be covered in an employee attitude survey include:
- Job Satisfaction
- Management Style
- Employee Commitment
- Workplace Culture
- Compensation & Recognition
- Creativity & Innovation
- Customer Service
- Strategic Leadership
- Life Balance
- Training & Professional Development
Benefits of Employee Attitude Surveys
Employee attitude surveys provide companies with an overall picture of their specific strengths and weaknesses and can be a key catalyst for driving organizational change. Dramatic improvements can be made to enhance employee productivity, commitment and satisfaction once an organization can pinpoint the areas where employees are most frustrated.
Here are just a few of the many benefits that can stem from employee opinion surveys:
- Facilitate the company’s development and organizational change
- Focus on specific company needs or gaps in service, training and professional development
- Enhance communication between employees and management
- Provide employee feedback on company morale and the health of the organization
- Offer feedback on the impact of company policies and procedures
- Identify ways to motivate employees, increase job satisfaction and improve the bottom line