Client Login
toll free: 800-225-3242    office: 301-718-4637
 

Maryland Employment Law Update – January 2018 | Maryland Benefit Consultants

Unemployment Poster Updated

The Maryland Department of Labor, Licensing and Regulation, Office of Unemployment Insurance updated its Unemployment Insurance Law poster (revised 9-17). The notice must be posted in a conspicuous area in the workplace.

Download the poster

So Who Is a Paid Intern Now? | MD Benefit Advisors

On January 5, 2018, the U.S. Department of Labor’s Wage and Hour Division (WHD) created new guidance for determining whether a worker could be classified as an unpaid intern under the federal Fair Labor Standards Act (FLSA). The FLSA requires “for-profit” employers to pay employees for their work. Interns, however, may not be classified as “employees” under the FLSA and therefore are not entitled to compensation for their work. The new rules give employers more flexibility in establishing unpaid internships.

Under the previous six-factor test, an intern was considered an employee entitled to compensation unless all of the following factors were met:

  1. The internship, even though it included actual operation of the facilities of the employer, was similar to training that would be given in an educational environment;
  2. The internship experience was for the benefit of the intern;
  3. The intern did not displace regular employees, but worked under close supervision of existing staff;
  4. The employer that provided the training derived no immediate advantage from the activities of the intern, and on occasion its operations may actually have been impeded;
  5. The intern was not necessarily entitled to a job at the conclusion of the internship; and
  6. The employer and the intern understood that the intern was not entitled to wages for the time spent in the internship.

In its new guidance (Field Assistance Bulletin No. 2018-2), the WHD has adopted the “primary beneficiary test,” favored by several federal Circuit Courts, as the standard for determining whether interns at for-profit employers are employees under the FLSA. The primary beneficiary test examines the economic reality of the intern-employer relationship to determine which party is the primary beneficiary of the relationship. The following seven factors are used to make this determination:

  1. The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee — and vice versa.
  2. The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions.
  3. The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.
  4. The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar.
  5. The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.
  6. The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.
  7. The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job after the internship.

What is different now is that not ALL of the seven factors must be met in order to determine employee status. According to the WHD, no single factor is decisive and the determination must be made on the unique circumstances of each case.

If analysis of these facts reveals that an intern is actually an employee, then he or she is entitled to both minimum wage and overtime pay under the FLSA. Conversely, if the analysis confirms that the intern or student is not an employee, then he or she is not entitled to either minimum wage or overtime pay under the FLSA.

What This Means for Employers

As a result of the new guidance, employers should review the status of any person working for them that they consider an “intern” and update their current internship programs to consider the WHD’s new rules.

Originally posted by www.ThinkHR.com

New Year, New Penalties | Maryland Benefit Advisors

Department of Labor Publishes Updated Penalties for OSHA Violations

On January 2, 2018, the U.S. Department of Labor (DOL) published updated, inflation-adjusted penalties for violations of various laws regulated by the DOL and its internal components or divisions, including the Occupational Health and Safety Administration (OSHA). The DOL is required to adjust the level of civil monetary penalties for inflation by January 15 each year pursuant to the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (Inflation Adjustment Act).

Because of the Inflation Adjustment Act, rates for OSHA penalties have increased three times in the last 17 months (August 1, 2016, January 13, 2017, and January 2, 2018). Therefore, for violations occurring after November 2, 2015, the penalty amounts incurred by employers will depend on when the penalty is assessed, as follows:

  • If the penalty was assessed after August 1, 2016 but on or before January 13, 2017, then the August 1, 2016 penalty level applies.
  • If the penalty was assessed after January 13, 2017 but on or before January 2, 2018, then the January 13, 2017 penalty level applies.
  • If the penalty was assessed after January 2, 2018, then the current penalty level applies.

The applicable January 2, 2018 penalty levels for violations of the Occupational Safety and Health Act of 1970 (OSH Act) are as follows:

  • Willful violations: $9,239 – 129,936 (up from $9,054 – $126,749 after January 13, 2017 and $8,908 – $124,709 after August 1, 2016)
  • Repeated violations: $129,936 (up from $126,749 after January 13, 2017 and $124,709 after August 1, 2016)
  • Serious violations: $12,934 (up from $12,675 after January 13, 2017 and $12,471 after August 1, 2016)
  • Other-than-serious violations: $12,934 (up from $12,675 after January 13, 2017 and $12,471 after August 1, 2016)
  • Failure to correct violations: $12,934 (up from $12,675 after January 13, 2017 and $12,471 after August 1, 2016)
  • Posting requirement violations: $12,934 (up from $12,675 after January 13, 2017 and $12,471 after August 1, 2016)

These increases apply to states with federal OSHA programs and states with OSHA-approved state plans. Violations occurring on or before November 2, 2015 are assessed at pre-August 1, 2016 levels.

Employers are encouraged to familiarize themselves with these increased penalties and consult counsel if they have questions about the penalty level applicable to a potential violation.

By Nicole Quinn-Gato

Originally posted by www.ThinkHR.com

DOL Delays New Rules for Disability Benefit Claims | Maryland Benefit Advisors

On November 29, 2017, the U.S. Department of Labor (DOL) published a Final Rule that delays implementation of new claim rules for disability benefits through April 1, 2018. This 90-day delay is intended to give the DOL, insurers, employers, and other interested parties additional time to review the new rules. The DOL is collecting public comments through December 11, 2017.

Background

The new claim rules apply to disability benefits provided under plans covered by the Employee Retirement Income Security Act (ERISA); that is, plans sponsored by private sector employers. A disability benefit means the plan must make a determination of disability in order for the claimant to obtain the benefit. Group short- and long-term disability plans are the most common examples, although the rules also may apply to pension, 401(k), and deferred compensation plans if the benefit is conditioned on the plan determining that the claimant is disabled.

New Requirements

Assuming the DOL does not announce any further delays, the following new requirements will apply to disability claims filed after April 1, 2018:

  • Improvement to Basic Disclosure Requirements: Benefit denial notices must contain a more complete discussion of why the plan denied a claim and the standards used in making the decision. For example, the notices must include a discussion of the basis for disagreeing with a disability determination made by the Social Security Administration if presented by the claimant in support of his or her claim.
  • Right to Claim File and Internal Protocols: Benefit denial notices must include a statement that the claimant is entitled to receive, upon request, the entire claim file and other relevant documents. (Previously this statement was required only in notices denying benefits on appeal, not on initial claim denials.) The notice also must include the internal rules, guidelines, protocols, standards or other similar criteria of the plan that were used in denying a claim or a statement that none were used. (Previously it was optional to include a statement that such rules and protocols were used in denying the claim and that the claimant could request a copy.)
  • Right to Review and Respond to New Information Before Final Decision: Plans are prohibited from denying benefits on appeal based on new or additional evidence or rationales that were not included when the benefit was denied at the claims stage, unless the claimant is given notice and a fair opportunity to respond.
  • Avoiding Conflicts of Interest: Plans must ensure that disability benefit claims and appeals are adjudicated in a manner designed to ensure the independence and impartiality of the persons involved in making the decision. For example, a claims adjudicator or medical or vocational expert could not be hired, promoted, terminated or compensated based on the likelihood of the person denying benefit claims.
  • Deemed Exhaustion of Claims and Appeal Processes: If plans do not adhere to all claims processing rules, the claimant is deemed to have exhausted the administrative remedies available under the plan (unless exceptions for minor errors or other conditions apply). In that case, the claimant may immediately pursue his or her claim in court. Plans also must treat a claim as re-filed on appeal upon the plan’s receipt of a court’s decision rejecting the claimant’s request for review.
  • Certain Coverage Rescissions Are Adverse Benefit Determinations Subject to the Claims Procedure Protections: Rescissions of coverage, including retroactive terminations due to alleged misrepresentation of fact, such as errors in the application for coverage, must be treated as adverse benefit determinations. Adverse benefit determinations trigger the plan’s appeals procedures. Coverage terminations due to non-payment of premiums are not rescissions and not covered by this provision.
  • Notices Written in a Culturally and Linguistically Appropriate Manner: Benefit denial notices have to be provided in a culturally and linguistically appropriate manner in certain situations. This is consistent with the existing rule for group health benefit notices. Specifically, if a disability claimant’s address is in a county where 10 percent or more of the population is literate only in the same non-English language, benefit denial notices must include a prominent statement in the relevant non-English language about the availability of language services. The plan would also be required to provide a verbal customer assistance process in the non-English language and provide written notices in the non-English language upon request.

Next Steps

The DOL is in the process of reviewing the new claim rules, which originally had been issued by the prior Administration. While it is possible that the Department will make revisions or provide another delay before implementation, employers should take steps now to work with their carriers, third-party administrators, and advisors to review their current procedures and ensure they will be prepared to comply with the new requirements, if needed.

Originally posted by www.ThinkHR.com

DOL Guidance for Benefit Plans Impacted by Hurricane Harvey | Maryland Benefit Advisors

The U.S. Department of Labor has issued compliance guidance for benefit plans, employers and employees, and service providers who are impacted by Hurricane Harvey. The guidance generally provides relief from various ERISA requirements and time limits for entities in the disaster area. This follows the Internal Revenue Service (IRS) announcement extending certain filing dates, including Form 5500.

Key excerpts from the DOL guidance include:

“The Department recognizes that some employers and service providers acting on employers’ behalf, such as payroll processing services, located in identified covered disaster areas will not be able to forward participant payments and withholdings to employee pension benefit plans within the prescribed timeframe. In such instances, the Department will not–solely on the basis of a failure attributable to Hurricane Harvey–seek to enforce the provisions of Title I with respect to a temporary delay in the forwarding of such payments or contributions to an employee pension benefit plan to the extent that affected employers, and service providers, act reasonably, prudently and in the interest of employees to comply as soon as practical under the circumstances….

“With respect to blackout periods related to Hurricane Harvey, the Department will not allege a violation of the blackout notice requirements solely on the basis that a fiduciary did not make the required written determination….

“The Department recognizes that plan participants and beneficiaries may encounter an array of problems due to the hurricane, such as difficulties meeting certain deadlines for filing benefit claims and COBRA elections. The guiding principle for plans must be to act reasonably, prudently and in the interest of the workers and their families who rely on their health plans for their physical and economic well-being. Plan fiduciaries should make reasonable accommodations to prevent the loss of benefits in such cases and should take steps to minimize the possibility of individuals losing benefits because of a failure to comply with pre-established timeframes.”

The DOL also released FAQs for Participants and Beneficiaries Following Hurricane Harvey. The eight-page FAQ covers issues regarding health plan claims, COBRA continuation coverage, and collecting retirement plan benefits.

ThinkHR will continue to monitor issues affecting employers impacted by Hurricane Harvey.

 

Federal Employment Law Update – August 2017 | Maryland Benefit Advisors


OSHA Injury Tracking Application Electronic Portal

As of August 1, 2017, the Occupational and Safety Health Administration’s (OSHA) new electronic portal, the Injury Tracking Application (ITA), is available for employers to file web-based reports of workplace injuries or illnesses.

Under OSHA’s electronic recordkeeping rule, covered employers with at least 250 employees must submit the following forms electronically:

  • Log of Work-Related Injuries and Illnesses (Form 300).
  • Summary of Work-Related Injuries and Illnesses (Form 300A).
  • Injury and Illness Report (Form 301).

Access the ITA and read about electronic submission

2017 VETS-4212 Reporting Opened

The 2017 filing season for the VETS-4212 started on August 1, 2017 and ends on September 30, 2017. The Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA) requires federal contractors and subcontractors subject to the act’s affirmative action provisions who enter into or modify a contract or subcontract with the federal government, and whose contract meets the criteria set forth in the law, to annually report on their affirmative action efforts in employing veterans.

The U.S. Department of Labor’s Veterans’ Employment and Training Service has a legislative requirement to collect, and make available to the Office of Federal Contract Compliance Programs, reported data contained on the VETS-4212 report for compliance enforcement.

File the 2017 VETS-4212 Report

OSHA Revises Online Whistleblower Complaint Form

On July 28, 2017, the Occupational Safety and Health Administration (OSHA) revised its online whistleblower complaint form to help users file a complaint with the appropriate agency. OSHA administers more than twenty whistleblower protection laws, including Section 11(c) of the Occupational Safety and Health (OSH) Act, which prohibits retaliation against employees who complain about unsafe or unhealthful conditions or exercise other rights under the Act. Each law has a filing deadline, varying from 30 days to 180 days, that starts when the retaliatory action occurs.

The updated form guides users through the complaint process, providing essential questions at the start to assist users in understanding and exercising their rights under relevant laws. The new system also includes pop-up boxes with information about various agencies for individuals who indicate that they have engaged in protected activity that may be addressed by an agency other than OSHA.

In addition to the online form, workers may file complaints by fax, mail, or hand-delivery; contacting the agency at 800-321-6742; or calling an OSHA regional or area office.

View the new online form in English or Spanish

Prevailing Health and Welfare Fringe Benefits Rate Announced Under the McNamara-O’Hara Service Contract Act

On July 25, 2017, the U.S. Department of Labor (DOL) released an all agency memorandum (number 225) announcing that under the McNamara-O’Hara Service Contract Act (SCA) the employee-by-employee benefit will be $4.41 per hour, or $176.40 per week, or $760.40 per month. Additionally, the average cost fringe benefit rate will also be $4.41 per hour.

The McNamara-O’Hara Service Contract Act requires contractors and subcontractors performing services on prime contracts in excess of $2,500 to pay service employees in various classes no less than the wage rates and fringe benefits found prevailing in the locality, or the rates (including prospective increases) contained in a predecessor contractor’s collective bargaining agreement. The DOL issues wage determinations on a contract-by-contract basis in response to specific requests from contracting agencies. These determinations are incorporated into the contract.

The new rate became effective August 1, 2017.

Read Memorandum Number 225 and get more information on the SCA

Originally Posted By www.thinkhr.com

How Long do Employers Need to Keep Payroll Records? | Maryland Benefit Advisors

Under U.S. federal law, employers must keep the payroll records of their employees or former employees for a certain length of time. The amount of time, however, varies according to which statute you refer to, which can make knowing how long to keep employee records confusing. By keeping in mind the required time limits under each statute as well as what payroll-related records the statute wants you to retain and why, you can more easily develop a system that keeps payroll records as long as the law requires.

Identification

Payroll records are, generally, any records that relate to the hours an employee works and the wages paid to him or her, according to the U.S. Department of Labor. Under the Fair Labor Standards Act, payroll records include information on the hour and day each work week begins; the number of hours worked in each work day and each work week; the total amount the employee earned working non-overtime hours; the regular hourly pay for any week in which the employee worked overtime; total overtime pay for each work week; the amounts of any additions or deductions to the employee’s pay each week; the total amount paid for each pay period; and the dates covered by each pay period, according to the U.S. Department of Labor. This information should be marked with the employee’s personal information, including name, address, occupation and sex. If the employee is less than 19 years old, also include his date of birth.

Applicable Laws

As of 2010, only two federal statutes require employers to retain payroll records for any length of time, according to the U.S. Department of Labor and the U.S. Equal Employment Opportunity Commission, or EEOC. These two statutes are the Fair Labor Standards Act and the Age Discrimination in Employment Act. For the FLSA and the ADEA, most payroll records must be kept for three years, according to the U.S. Department of Labor and the EEOC. Although the FLSA allows employers to discard some supplementary payroll records, including wage tables, after two years, the ADEA requires that employers keep these records for three years.

Format

The ADEA does not require employers to keep payroll records in any particular format, as long as the records are available when the EEOC requests them, according to the EEOC. The FLSA does not require that time clocks be used to keep track of employee hours, according to the U.S. Department of Labor. Nor does the FLSA require that records be kept in a particular format. However, according to the U.S. Department of Labor, microfilm or punched tape should not be used unless the employer also has the equipment to make these formats easily readable.

Function

The purpose of maintaining employee payroll records under the Fair Labor Standards Act is to protect an employee’s rights to fair pay, according to the U.S. Department of Labor, including the right of covered, nonexempt workers to the minimum wage and to overtime pay. The records may also be used to ensure an employer is not employing children too young to work legally and is not employing children who may work legally for an illegal number of hours. Maintaining records under the Age Discrimination in Employment Act is intended to ensure an employee who discovers she may have been discriminated against due to his age is able to find the information necessary to prove or disprove her claim, according to the EEOC.

Considerations

Under the FLSA and the ADEA, payroll records are generally kept for three years following the date of an employee’s termination, according to the EEOC. The ADEA, FLSA, and other statutes may require an employer to keep different portions of an employee’s file for different lengths of time. For instance, while the ADEA requires payroll records to be kept for three years, it requires basic information about the employee to be kept only one year, according to the EEOC. To ensure your business meets all its recordkeeping retention requirements, consult a qualified employment law attorney.

Originally published by www.livestrong.com

Employer Exchange Notices–No Changes Needed | Maryland Benefit Advisors

Employers are required to give all new hires a Notice of Marketplace Coverage Options – often referred to as the Employer Exchange Notice. The U.S. Department of Labor (DOL) provides model notices that employers can download, customize, and distribute to workers. Although the model notices were scheduled to expire May 31, 2017, the DOL has now extended them without any changes through May 31, 2020.

Reminders:

Here are a few quick reminders for employers:

  • Distribute the notice to all employees within 14 days of hire:
    • Include all employees (i.e., full-time, part-time, seasonal, temporary, union, and others), regardless of whether eligible for health coverage at work.
    • Disregard dependents, retirees, former employees, or COBRA beneficiaries.
  • Model notices are posted on the DOL website (see below). There are two versions: one for employers that offer health coverage to some or all employees and the other for employers that do not have any group plans.
  • Notices are available in English and Spanish. Although non-English notices are not specifically required, general DOL guidance refers to providing notices “in a manner calculated to be understood by the average employee.”
  • Download the model notice, then fill in the blanks and variable items as needed. Links are provided below.
  • Distribute the completed notice by first-class mail to the employees’ homes. Alternatively, employers may use electronic delivery if the method meet all DOL guidelines:
  • The delivery method ensures actual receipt (such as via email directly to the employee instead of merely posting the material on the company intranet);
  • The employee regularly accesses the electronic media as an integral part of his or her regular job duties; and
  • The employer notifies the employee of the significance of the material and that a paper copy is available at no cost upon request.

Note: A small employer that is not covered by the Fair Labor Standards Act (FLSA) may be exempt from the notice requirement if it is not a hospital, care facility, school or governmental agency.

Model Notices:

The DOL model notices are available below. There are separate versions for employers that offer health coverage to some or all employees and employers that do not offer any health coverage. The model notices contain blank and variable items that must be completed by the employer before distributing to employees.

Model Notice for employers who offer a health plan to some or all employees

Model Notice for employers who do not offer a health plan

Spanish – Model Notice for employers who offer a health plan to some or all employees

Spanish – Model notice for employers that do not offer a health plan

The DOL also provides technical guidance on preparing and distributing the notice. Lastly, here is a copy of the DOL rule relating to the use of electronic delivery.

Originally published by www.thinkhr.com

DOL Fiduciary Rule Takes Effect June 9 | Maryland Benefit Advisors

In an editorial in the Wall Street Journal yesterday, Department of Labor Secretary Alexander Acosta stated that the DOL’s fiduciary rule will become effective June 9, 2017. “We have carefully considered the record in this case, and the requirements of the Administrative Procedure Act, and have found no principled legal basis to change the June 9 date while we seek public input,” he wrote and added, “Respect for the rule of law leads us to the conclusion that this date cannot be postponed.”

The rule was published in April 2016 (see our blog on the original ruling) and requires those who provide retirement investment advice to adhere to a fiduciary standard and put their clients’ best interest before their own profits. The rule also prohibits fiduciaries to plans, plan participants, and individual retirement account (IRA) owners from receiving payments creating conflicts of interest unless they comply with conditions designed to minimize the potential effects of a conflict. It was initially scheduled to take effect April 10, 2017.

Prior to the effective date, President Trump directed that the rule’s implementation be delayed for 60 days until June 9, 2017 so that the DOL could assess the regulation for changes or repeal.  At the same time as Secretary Acosta’s announcement, the DOL published a field assistance bulletin and frequently asked questions to assist fiduciaries with compliance beginning on June 9 while the agency continues its final review prior to the full implementation date of January 1, 2018.

During the time between June 9, 2017 and January 1, 2018, the DOL’s temporary enforcement policy states that “the Department will not pursue claims against fiduciaries who are working diligently and in good faith to comply with the fiduciary duty rule and exemptions, or treat those fiduciaries as being in violation of the fiduciary duty rule and exemptions.” That’s good news for fiduciaries.

Originally published by www.thinkhr.com

The DOL’s Final Overtime Rule Saga Continues | Maryland Benefit Consultants

The change in the regulations that would increase the salary threshold for overtime exemption that was all over the news for the last several months may now be decided by the end of June.

The Fifth Circuit Court of Appeals has granted the U.S. Department of Labor (DOL) another 60-day extension of time to file its final reply brief in the in the pending appeal of a nationwide injunction issued by a federal district court in Texas blocking implementation of the DOL’s final overtime rule. As we reported at the time, the final rule, which raised the salary threshold for the white collar overtime exemptions, was scheduled to go into effect on December 1, 2016. The final brief is now required to be filed by June 30, 2017. In its unopposed motion, the DOL stated that the extension was necessary “to allow incoming leadership personnel adequate time to consider the issues” and noted that the nominee for Secretary of Labor has not been confirmed.

As a result of the extension, it is not likely that employers will see any resolution of this issue until midsummer at the earliest. This also assumes that President Trump’s nominee for Secretary of Labor, Alexander Acosta, is confirmed within the next few weeks.

By Rick Montgomery, JD
Originally published by www.thinkhr.com