News from Benefits, Inc.
June 2016
Welcome to the Benefits, Inc. Newsletter!


 

 

 

 

I hope everyone is enjoying the start of the summer season.  For many employees this means family vacations, fun at the lake, little league baseball, and a variety of other activities that keep us busy while kids are out of school.  Whatever those activities are we hope you'll be safe and enjoy the time spent with family and friends.
 
This month's newsletter includes a very important article from Kyle Sanders concerning the New Overtime Rules issued by the Department of Labor on May 18, 2016.  These new rules take effect on December 1st of this year.  If these rules affect how you pay your employees I would encourage you to begin working with your accountant or other professionals now to address this change.  Kyle Sanders and Taylor Luther, our Human Resource Consultants, are also available to answer additional questions that you may have.
 
Once again, we hope you enjoy your summer.  We thank you for your business and consider it a privilege to have the opportunity to work with each of you. 
  
Kevin Smith and Tim White
 
New Overtime Rules Issued

On May 18, 2016, the U.S. Department of Labor released a final rule regarding salary and compensation levels required for Fair Labor Standards Act "White Collar" exemption. The new rules will take effect on December 1, 2016.
This article will outline the state of the current law, important provisions in the new law, and address several issues related to compliance.

Current Law
  • The minimum salary level for the executive, administrative and professional exempt employees is $23,660 per year and the minimum salary for the highly compensated employees is $100,000 per year ("the Salaried Basis Test").
  • In order to be exempt, employees must perform certain types of duties ("the Duties Test") in addition to being paid a set salary above the current minimum threshold.
  • If an employee doesn't meet both the Salaried Basis Test and the Duties Test, the employee can't be exempt under the white collar exemptions rules.
New Law
  • The minimum salary level for the executive, administrative, and professional exempt employees increases to $47,476.00 per year.
  • The minimum salary level for the highly compensated exempt employees increases to $134,004.00 per year.
  • Establishes a method for automatically updating the salary and compensation levels every three years, beginning on January 1, 2020.
What You Should Know
  • Salaried employees that earn less than $47,476.00 will be affected by this rule change, regardless of the employees' job title or job description.
  • No changes were made to the Department of Labor's current job duties tests.
  • Your exempt employees who are currently earning less than $47,476.00 are the employees you need to focus on as you make plans for how you will comply with the new overtime rule. It is this group of exempt employees who will either have to receive a raise or be reclassified as non-exempt.
 
What You Should Do
  • Identify your exempt employees who earn less than $47,476.00 per year.
  • Implement a time tracking system and figure out how many hours those employees are actually working each week.
Next, identify the employees who are working overtime hours. This is where you have a lot of work to do. Under the new rules, there are some options for handling these employees' compensation.

1.      Increase salaries for these employees above the new threshold so they still remain exempt from overtime (assuming that the Duties Test is met).


 

2.      Reclassify these employees as non-exempt and pay them on an hourly (or salary) basis, keeping in mind you must pay overtime when worked, even if the employee works the overtime hours without your permission.

o    You can set hourly rates so that, if overtime is worked, employees will earn the same total amount as they now earn.

o    You can set hourly rates to approximate employees' current pay, if they only worked 40 hours per week, eliminate overtime hours, and spread the hours among other existing lower paid workers or new part-time workers.


 

3.      Implement a policy of no unauthorized overtime. This may not work for all employers and, as outlined above, employees who violate this policy must still receive overtime pay.


 

Additional information can be found on the Department of Labor's website where employers will find comprehensive resources including fact sheets, a comparison of the current/final rules, and questions and answers.

 

 

 
Employers Should Continue to Use Current Version of Form I-9 Until Further Notice
As a reminder, U.S. Citizenship and Immigration Services has advised that employers should continue using the
current version of Form I-9, even though the March 31, 2016 expiration date on the form has passed. The agency recently proposed several revisions to Form I-9 and stated that it will provide updated information about the new version of the form as it becomes available.

Federal law requires employers to hire only individuals who may legally work in the United States--either U.S. citizens or foreign citizens who have the necessary authorization. To comply with the law, employers must verify the identity and employment authorization of each person they hire by completing and retaining Form I-9.  
 
For more information on complying with the employment eligibility verification requirements, please visit our section on Form I-9.

Source:  HR360.com
 
Certain Employers May Receive Marketplace Notices

The Affordable Care Act (ACA) and its accompanying rules require Health Insurance Marketplaces to notify any employer whose employee has enrolled in a Marketplace plan and has been determined eligible for advance premium tax credits and cost-sharing reductions. A sample employer notice that will be used by the federally-facilitated and certain state-based Marketplaces is now available for review. Because these events may trigger employer penalties under the ACA's "pay or play" provisions, an  employer appeal request formhas also been provided by the federal government.
 
Receipt of Notices
Marketplaces must notify employers within a reasonable timeframe following any month of the employee's eligibility determination and enrollment. Previously released FAQs indicated that the Marketplaces would begin sending out employer notices in spring 2016, with additional notices to follow throughout the year.
 
Employer Appeals Process
Appeal of an employer notice generally must be made within 90 days. In the appeal, the employer may assert that it provides its employee access to affordable, minimum value employer-sponsored coverage or that its employee is enrolled in employer coverage, and therefore that the employee is ineligible for advance payments of the premium tax credit.

Our Pay or Play section includes step-by-step guidance, worksheets, and calculators that can help employers understand if they will be subject to a penalty and how to calculate it. 

Source:  HR360.com
 

6 Factors for Deciding Whether to Pay Interns

Are you planning to hire interns this summer? While it can be tempting to allow such individuals to volunteer at your place of business or pay less than the minimum wage, the fact is that internships are most often considered "employment" subject to the federal minimum wage and overtime rules. 
 
The Fair Labor Standards Act
Under the federal Fair Labor Standards Act (FLSA), interns in the for-profit private sector who qualify as employees typically must be paid at least $7.25 per hour, and not less than one and one-half times the regular rate of pay after 40 hours of work in a workweek.
 
Note: When both the FLSA and a state law apply, the employee is entitled to the most favorable provisions of each law. Be sure to check your state wage and hour laws for applicable requirements. 
 
The Test for Unpaid Interns
There are some circumstances under which individuals who participate in for-profit private sector internships or training programs may do so without compensation. The determination of whether an internship or training program meets this exclusion depends upon all of the facts and circumstances. The U.S. Department of Labor uses the following six criteria which must be applied when making this determination:
  1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment; 
  2. The internship experience is for the benefit of the intern; 
  3. The intern does not displace regular employees, but works under close supervision of existing staff; 
  4. The employer that provides the training derives no immediate advantage from the activities of the intern, and on occasion its operations may actually be impeded; 
  5. The intern is not necessarily entitled to a job at the conclusion of the internship; and  
  6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.  
If all of the factors listed above are met, an employment relationship likely does not exist under federal law, and the FLSA's minimum wage and overtime provisions do not apply to the intern. (This exclusion is narrow, because the FLSA's definition of "employ" is very broad.) 

Visit our Employee Pay section for information on other common federal wage issues.


Source:  HR360.com
 
New Rules Apply to Wellness Programs Beginning in 2017

New rules issued by the U.S. Equal Employment Opportunity Commission describe how the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA) apply to wellness programs offered by employers that request health information from employees and their spouses. The new rules, which apply beginning in 2017, affect all workplace wellness programs (including those in which employees or their family members may participate without also enrolling in a particular health plan).

Background
The ADA and GINA, which apply to employers with 15 or more employees, generally prohibit employers from obtaining and using information about employees' own health conditions or about the health conditions of their family members. Both laws, however, generally allow employers to ask health-related questions and conduct medical examinations if the employer is providing health or genetic services as part of a voluntary wellness program.
 
New Rules
Subject to certain conditions, the new rules generally allow employers to:
  • Provide limited incentives as part of wellness programs that make disability-related inquiries or require medical examinations; and
  • Offer limited inducements to an employee whose spouse receives health or genetic services offered by the employer--including as part of a wellness program--and provides information about his or her manifestation of disease or disorder as part of a health risk assessment.
In general, the maximum incentive or inducement may not exceed 30% of the total cost of self-only coverage under the applicable health plan. Among other things, the new rules also detail several requirements that must be met in order for participation in a wellness program to be considered voluntary, and require employers to provide employees with a notice clearly explaining what medical information will be obtained, who will receive it, how it will be used, and how it will be kept confidential.
 
Additional Information
In addition to complying with the ADA and GINA, certain wellness programs must meet specific requirements to satisfy nondiscrimination rules under the federal Health Insurance Portability and Accountability Act (HIPAA). Due to the changing law and the complexity of the requirements that apply to employment-based wellness programs, employers are advised to check with a knowledgeable employment law attorney to ensure that any program complies with all applicable federal and state laws.
 
Our section on Wellness Programs provides additional details.
  
Source:  HR360.com
 
Issue: 6


In This Issue
New Overtime Rules Issued
Employers Should Continue to Use Current Version of Form I-9 Until Further Notice
Certain Employers May Receive Marketplace Notices
6 Factors for Deciding Whether to Pay Interns
New Rules Apply to Wellness Programs Beginning in 2017
About Benefits, Inc.

Benefits, Inc. is a full service employee benefits agency.  However we also offer Business Insurance, Work Comp, and Risk Analysis. 
  
Contact us
 today at 615-446-3303 for more information.
  
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