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Supreme Court unanimously supports employer’s right to search public employee’s “sext” messages

Most employees of private companies understand that they should not have an expectation of privacy on company-issued mobile devices or computers, and most companies have policies reminding employees of the company’s right to monitor communications on its systems. The U.S. Supreme Court has now made it clear in City of Ontario v. Quon, that regardless of the employee’s expectation of privacy, an employer’s search of an employee’s property at work is reasonable if the search is “justified at its inception” and “reasonable in scope.”  In Quon, a former SWAT team member for the City of Ontario, California sued the City for reviewing his unusually high number of personal communications on his work-issued pager, most of which were sexual in nature. Quon argued that his employer’s search violated his constitutional rights. In its first decision considering the privacy protections applied to text messages, the U.S. Supreme Court disagreed.

 What does this mean for employers?

  • Update your policies to specifically address text messaging, the use of company-issued electronic devices, and the use of social networking sites both during work hours and while off-duty. The policy should specifically state that employees’ messaging and communications on electronic devices issued by the company are subject to monitoring, and employees have no expectation of privacy in the use of such devices.
  • Make sure that your practices are consistent with the policy. One of the questions in the Quon case was whether a supervisor overrode the policy by promising not to monitor the pager use. Supervisors and employees must be trained not to make statements or promises that contradict the written policy.
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EEOC considers credit discrimination

Creditworthiness is not protected under the civil rights laws, but it may serve as a basis for a discrimination claim when used in making employment decisions. In an advisory opinion published in March 2010, the EEOC opined that if an employer’s use of credit information disproportionately excludes African-American and Hispanic candidates, the practice would be unlawful unless the employer could establish that the practice is needed for it to operate safely or efficiently. The EEOC relied on Title VII’s prohibition against employment practices that disproportionately screen out racial minorities, women, or another protected group, unless the practice is job related and consistent with business necessity.

Many employers routinely conduct credit checks as part of pre-employment screening. While the EEOC acknowledges that credit checks may be appropriate for certain positions, such as where an employee handles large amounts of cash, it cautions that the discrimination laws may be triggered in some instances.

State and federal legislatures are considering laws that may restrict the use of credit checks. Congress is currently considering H.R. 3149, titled the “Equal Employment for All Act,” which would amend the Fair Credit Reporting Act to prohibit employers from using a credit reports for either employment purposes or for taking an adverse action. For private employers, the only exception would be for employees in a in a supervisory, managerial, professional, or executive position at a financial institution. In the meantime, pprudent employers may want to develop a rationale for why credit checks are needed for particular positions.

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Medical marijuana – do employers need to accommodate?

So far, the courts have responded with a resounding no. Most recently, the Oregon Supreme Court held that an employer can fire a worker for using medical marijuana, even if he is legally authorized by the state to use. In Emerald Steel Fabricators v. Bureau of Labor and Industries, John Doe argued that he was disabled within the meaning of Oregon law and that Emerald Steel failed to accommodate his disability. Doe suffered from a debilitating medical condition for which marijuana was prescribed to relieve symptoms. Emerald hired Doe as a temporary worker and wanted to hire him full-time. Knowing that he would have to take a drug test for a full-time position, Doe explained his condition and medical marijuana use to his boss, and was fired shortly thereafter.

While fourteen states and the District of Columbia have passed laws legalizing the possession of marijuana for certain medical purposes, marijuana is still illegal under federal law, and courts have been hesitant to force employers to tolerate illegal behavior.  Even the most liberal states are coming down on the side of employers. But beware…California is considering a ballot initiative that would prohibit employers from firing a person who tests positive for marijuana if he has a medical marijuana card. In the meantime, employers need to be aware of the issue and keep an eye on legislation and litigation.

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HIV-Positive employees protected under the ADAAA

Last year’s Amendments to the American with Disabilities Act (“ADAAA”) were intended to expand the scope of the ADA, essentially making it easier for plaintiffs to establish that they have a disability. The Amendments provide a non-exhaustive list of “major life activities” (which, when substantially limited, give rise to a disability), including the operation of major bodily functions like the immune system, normal cell growth, digestive, bowel, bladder, neurological, brain, circulatory, respiratory, endocrine, reproductive functions, hemic, lymphatic, musculoskeletal, special sense organs and skin, genitourinary, and cardiovascular.

In one of the first reported cases applying the ADAAA, which took effect on Jan. 1, 2009, a federal district court in Illinois held in Horgan v. Simmons that an employee who was fired after disclosing his HIV-positive status to the president of his company could pursue claims for discrimination and impermissible medical inquiry. Citing the EEOC’s proposed regulations to implement the amendments, the court held that HIV substantially limits a major life activity—the function of the immune system—and therefore constitutes a disability under the ADA. The court also held that the employer’s inquiry into the plaintiff’s medical status despite plaintiff’s repeated assurances that nothing was affecting his ability to work was an “impermissible medical inquiry” under the ADAAA, which prohibits “inquiries of an employee as to whether the employee is an individual with a disability or as to the nature or severity of the disability, unless such examination or inquiry is shown to be job-related and consistent with business necessity.”  

The decision is a departure from earlier decisions, where courts had dismissed HIV discrimination claims by otherwise healthy men who could not show that their HIV infection had actually substantially limited one or more of their major life activities.  The amendments make clear that the immune system function is a “major life activity.” Managers and supervisors should be aware of the expanded scope of the ADAAA, and trained on best practices in handling employees with potential disabilities.  

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Is your “intern” entitled to minimum wage?

As we previously cautioned, unpaid internships can run afoul of the Fair Labor Standards Act, and the Department of Labor is stepping up enforcement efforts as more college grads are offereing their services for free in a tough job market.

The issue is whether the intern should be considered an “employee” under the FLSA and therefore subject to wage and hour laws like overtime and minimum wage. To aid employers in making this determination, the DOL recently issued Fact Sheet #71: Internship Programs Under the Fair Labor Standards Act, which sets forth 6 criteria employers must apply to determine whether an intern should in fact by paid as an employee:

  • The internship, even though it includes actual operation of the facilities of the employer, is similar to training that would be given in an educational environment;
  • The internship experience is for the benefit of the intern;
  • The intern does not displace regular employees, but works under close supervision of existing staff;
  • The employer derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
  • The intern is not necessarily entitled to a job at the conclusion of the internship; and
  • The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

If you are uncertain as to whether the criteria are met, keep in mind that the DOL defines the employment relationship “broadly.”  

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Employers don’t need to tolerate difficult employees

Employers can take adverse action against difficult employees even when they fall within a protected class, according to a recent decision by the U.S. Court of Appeals for the Sixth Circuit. In Viergutz v. Lucent Technologies, Inc., the court held that Lucent had a legitimate, non-discriminatory reason for refusing to re-hire Mr. Viergutz due to his “bad reputation” and his inability to get along with others. Dismissing Mr. Viergutz’s claims for age discrimination and harassment, the court relied on the Affidavit of the hiring manager stating that she did not interview Mr. Viergutz because she knew from other managers that he had a poor reputation and needed to be closely supervised.

Lucent could not have prevailed if it weren’t for its solid documentation of both Mr. Viergutz’s problems with co-workers and the fact he wasn’t interviewed because of these issues. Of course, documentation is especially important when taking adverse action against a member of a protected class. The point being that an employer’s hand is not tied when dealing with a protected employee so long as managers understand and adhere to best practices in the hiring and performance management processes.

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Employers must be prepared for GINA claims

The EEOC is seeing the first wave of claims under GINA. Title II of GINA, which went into effect in November, prohibits using genetic information in making employment decisions, restricts acquisition of genetic information by employers, and strictly limits its disclosure. Title I of GINA, which addresses the use of genetic information in health insurance, goes into full force at the end of May.

To date, the EEOC has received about 80 GINA-related claims. In one case, a Connecticut woman, Pamela Fink, has alleged that her employer violated the law when she was terminated after undergoing a preventive double mastectomy. The complaint states that Ms. Fink received consistently favorable performance reviews as a director of public relations and marketing communications at a Stamford, Connecticut-based employer. After learning she tested positive for BRCA2, the breast cancer Type 2 susceptibility protein, Ms. Fink took a medical leave to have a preventive double mastectomy last October. In January, the day before she was to have a second and final surgery related to her double mastectomy, she was given a midyear performance review that was “negative and scathing,” according to the complaint. In March, her employment was terminated and she was told her position had been eliminated. Ms. Fink claims the dramatic shift in her standing at work resulted from her revelation that she had tested positive for the BRCA2 gene. Ms. Fink said she told her employers about her genetic testing in August — shortly after her positive performance review and about two months before she had a double mastectomy as a preventative measure. When she returned from medical leave, that’s when her responsibilities began slipping away and the assessment of her work went from glowing to negative.

Employers need to make sure that their discrimination policies are updated to include genetic information. We also suggest reviewing all potential sources of genetic information, including hiring practices, employee screenings, wellness programs, and health insurance enrollment practices. A particular challenge for employers is what to do when genetic information is volunteered. One employment lawyer warns that employers have to be careful of being “set up” by employees volunteering genetic information and then alleging that was the cause of a subsequent adverse job action. While no one predicts that GINA will have the breadth or effect of other discrimination laws like Title VII of the Civil Rights Act, the ADA, or ADEA, employers must be primed for claims alleging GINA violations.

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Employers Beware of the Misclassified Employee

Following up on last week’s post about recent legislative efforts to prevent misclassification of employees as independent contractors, employers should be aware that the U.S. Department of Labor has stepped up efforts to enforce the issue in conjunction with the IRS’s plan to audit employment tax payments at 6,000 randomly selected companies over a three-year period. The initiative is designed to address a perceived tax shortfall in the collection of employment taxes due primarily to misclassification of employees as independent contractors.  The IRS provides some guidance on classifying independent contractors online at: http://www.irs.gov/businesses/small/article/0,,id=99921,00.html

Additionally, the Labor Department has added 250 new inspectors (a 1/3 staff increase) as part of a broader crackdown on companies that misclassify workers as “exempt” from FLSA wage and hour laws like overtime and minimum wage. At the same time, plaintiffs lawyers are targeting companies in class actions on a range of wage and hour issues including worker misclassification, overtime and minimum wage, rest periods, and off-the-clock (the blurring of work time and personal time).

We can’t overemphasize the importance of properly classifying employees!

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What baggage do you bring to work?

We counsel employers to leave their biases at the door when making employment decisions, be it recruiting, discipline, promotion or termination. But how reasonable is that instruction? Not very, according to a number of tests and surveys that show that each one of us carries biases and prejudices, many of which may be unnoticed, that inevitably play a role in our decisions.

For example, a 2003 study by sociologist Devah Pager measured the effect of a criminal record on a job search. Ms. Pager sent pairs of young, well-groomed, well-spoken college men with identical resumes to apply for 350 advertised entry-level jobs in Milwaukee. The only difference was that one said he had served an 18-month prison sentence for cocaine possession. Two teams were black, two white. A telephone survey of the same employers followed. For her black testers, the callback rate was 5 percent if they had a criminal record and 14 percent if they did not. For whites, it was 17 percent with a criminal record and 34 percent without. My guess is that most of the employers did not consider themselves racist.

Similarly, judgments based on a person’s appearance generally reveal prejudices about age, gender, and disability. This was precisely the case with Abercrombie & Fitch, which paid $50 million to settle the EEOC’s case resulting from Abercrombie’s “restrictive marketing image” (i.e. pretty young white people) and recruiting and hiring practices that excluded minorities and women. Also as part of the settlement, Abercrombie agreed to ensure that its marketing materials “reflect diversity.”

While it may be impossible to completely abolish our biases, being aware of the existence and extent of our own prejudices can weaken their influence on our decisions. Take a look at your own biases and prejudices by taking a test at Harvard University’s Project Implicit https://implicit.harvard.edu/implicit/demo/takeatest.html

You may be surprised by the results!

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Sexting at Work: What is an employer to do?

“Sexting,” the practice of taking sexually explicit pictures and sending them to others, is a rapidly emerging workplace problem.  Almost every employment lawyer has at least one case involving an employee sexting an inappropriate picture to a coworker. And since it rarely matters in the harassment context whether the PDA is personal or company-issued, it is a misconception for employees to think they can do whatever they want on their personal phones. We recently investigated a case where a male employee sexted a female coworker from his personal phone giving rise to a harassment claim. People drop their guard with texting because they think texting is a more casual form of communication than e-mail. Most employees realize now that e-mails don’t go away. They also should know texts can be pulled from a phone number for documentation in a harassment case.

What’s an employer to do? At the risk of sounding like a broken record – policy and training. Make sure your technology use and harassment policies address the issue, which should also be part of harassment training.

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PDA Use Creates Wage and Hour Issues

Do you require or expect your employees to check email after hours or on weekends? If so, you could be liable for violations of the Fair Labor Standards Act’s (FLSA) overtime provisions. While exempt (generally managerial) employees are not entitled to overtime pay, nonexempt employees are, and that includes time spent checking email and voicemail. For example, a nonexempt employee who works a 40-hour workweek and spends an additional eight hours a week reading and replying to work emails is entitled to overtime for those additional eight hours. More employers are requiring employees in nonexempt positions to carry PDAs with the expectation that the employee will respond to pages, emails or calls outside of normal working hours. As a result, the issue is gaining attention from employees, plaintiffs lawyers, and the federal and state agencies that enforce wage and hour laws.

In a recent dispute between ABC News and the Writer’s Guild, three new ABC writers refused to sign ABC’s standard waiver stating that they would not be paid for checking their company-issued Blackberrys while off duty. The issue was resolved when ABC agreed to clarify its waiver to make clear that writers would be paid for any significant work while off duty, but not for merely checking messages. There are other potential solutions available to employers to mitigate the risks, including:

  • Provide PDAs and remote computer access to exempt employees only
  • Require prior written approval for all overtime work
  • Restrict after hour use of PDAs

Importantly, employers should review classifications, especially with respect to those employees required to carry PDAs; and implement policies governing the use of PDAs. Of course, overtime pay is not the only issue created by PDA use. Employers are facing liability as a result of employee texting (and sexting), social media use, driving while texting, and unlawful activities such as online gambling.

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Simple strategies for avoiding employment claims

We have seen an unprecedented rise in EEOC (and related state agency) claims in the first few months of 2010, which will certainly result in a rise in employment-related litigation. In many cases, employers could have avoided the claims had they been more proactive in removing sources of conflict in the workplace, implementing and following progressive disciplinary programs, and resolving disputes at the onset.

In our experience, employers can head off claims and lawsuits by following some fairly simple (not necessarily easy) strategies:

  • Review and update your employee handbook – recent updates should include FMLA revisions, ADA amendments, Lily Ledbetter Fair Pay Act of 2009, FLSA safe harbor language, Genetic Information Nondiscrimination Act of 2009.
  • Provide honest and accurate reviews and evaluations – sugarcoating often leads to or exacerbates employment-related claims.
  • Have a clear complaint procedure – have a process in place that easily allows employees to make complaints (consider a hot-line), train employees on the process, and educate managers on how to handle complaints.
  • Audit HR functions – it is important to know what you don’t know.
  • Watch the clock – make sure that non-exempt employees are not working overtime by checking voice mail and email after hours and on weekends.
  • Follow a progressive disciplinary system – this is the best way to ensure consistency in discipline and discharge decisions.

While some of these strategies may seem like common sense, they are precisely the areas that are overlooked or ignored in times of belt tightening and cost cutting. Given the direct and indirect costs of defending employment claims, however, the cost of acting proactively is money well-spent.

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Absenteeism and Alcoholism – When can you fire?

Last week a New York federal appeals court determined that while alcoholism can be considered a disability under the Americans with Disabilities Act (“ADA”), the impairment cannot protect an employee from termination if it affects his ability to show up for work. Bruce VandenBroek sued his former employer, claiming he was terminated because of his alcoholism and for taking medical leave to treat his alcoholism. The court in VandenBroek v. PSEG Power CT LLC disagreed, holding that where regular attendance is an essential job function, the Americans with Disabilities Act and the Family and Medical Leave Act should not shield an employee from termination when s/he is chronically absent from work.

Although regular attendance is an essential job function for most positions, the court noted that it was particularly important to this employee’s job because “reliable employee attendance was . . . essential to ensuring against a power outage or even an explosion.”  Finding the employee failed to prove he was terminated for taking protected leave under the FMLA, the court further ruled he was terminated for violating the employer’s “no call/no show” policy. 

Nevertheless, employers must act with caution when disciplining or terminating a disabled employee for attendance reasons, and be prepared to demonstrate the specific reasons regular and reliable attendance are essential to job performance. The EEOC offers guidance on this specific issue in “The Americans with Disabilities Act: Applying Performance and Conduct Standards to Employees with Disabilities.”

This also serves as a reminder of the importance of accurate job descriptions. If regular attendance is an essential job function, it should be included in the job description.

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What is email really costing your company?

A significant loss in productivity. Some studies estimate that up to 50% of corporate email communications are non-business related, and are either spam or personal in nature. Frequently checking new email messages breaks concentration, changes focus, and elevates new email messages to the highest priority task regardless of what is, or should be, the actual highest priority task. The biggest problem appears to be the amount of time lost to reacting to new email messages. One study found that 70% of arriving emails were reacted to within 6 seconds. Once the email was addressed, it took an average employee 64 seconds to resume working at the same rate they were before the interruption. If an employee has set up the email application to check for email every 5 minutes then it is possible, if (s)he is a heavy user of email, that there could be 96 interruptions in a normal 8-hour working day, which is a substantial amount of time lost to business.

 So what is an employer to do? There are several ways to recover this loss. Consider the following:  

  1.  Have email applications set up to check for email every 45 minutes (rather then every 5), reducing the number of possible interruptions;
  2. Turn off the new email alert dialogue box and email sound alerts;
  3. Train staff on effective and efficient use of email, such as setting email priority, email housekeeping with message rules, effective use of user groups, folders and address books;
  4. Make sure your technology use policy adequately and accurately communicates the company’s rules regarding email use.

 A complete ban on using company email for personal reasons is typically unreasonable because it is difficult to monitor and virtually impossible to enforce; therefore efficient and effective use of email is critical.

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Congress extends COBRA subsidy

Yesterday the U.S. Senate passed H.R. 4691, which extends the ARRA COBRA subsidy through March 31, 2010. Compliance assistance for employers will be available at http://www.dol.gov/ebsa/COBRA.html once the President signs the bill. We recommend employers become familiar with the most recent notice requirements.

Currently there are efforts in Congress to extend the benefits through June 30, 2010. We will keep you posted.

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Are your nooks and crannies protectable trade secrets?

Thomas’s English Muffins (Bimbo Bakeries USA) has stopped a former V.P. from starting his job at competitor Hostess based on the V.P.’s knowledge of the invaluable trade secrets of Thomas’s English Muffins’ “nooks and crannies.” A Pennsylvania judge has ruled that V.P. Botticella cannot start his job until the legal issues are resolved, based on a confidentiality agreement Botticella signed. While some commentators have opined that the confidentiality agreement may not hold up under California law (where Botticella lives and works) if Botticella seeks a change in venue, his own actions do not help his case. Botticella advised senior management that he was retiring, so Thomas allowed him to continue to work for 2 weeks. During that time, he allegedly continued to have access to confidential trade secrets and attended several sensitive meetings. When rumors started to fly that Botticella was going to Hostess, Thomas’ confronted him and filed suit. In order to prevail, Thomas will have to show that it treated the nooks and crannies like trade secrets; e.g. the information was restricted to those who needed to know, it was protected as confidential, and not available for dissemination. But it is not looking good for Botticella. He was one of 10 people in the world that had access to the information, he signed a confidentiality agreement, and he was not honest about where he was going to work.

Even if your trade secrets are not as famous as Thomas’ nooks and crannies, you can prevent their disclosure by former employees with proper protections in place and a well-drafted confidentiality provision. In these circumstances, it is not necessary to have a non-compete agreement, which tend to be harder to enforce (and prohibited in some states like California).

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An Employee Need Not be Disabled to Pursue ADA Claim

The EEOC recently reminded us that the Americans with Disabilities Act extends to employees associated with a disabled person. In its recent suit against The Timken Company for gender and disability discrimination, the EEOC alleges that Timken refused to hire an employee for a full-time position as a process technician because of her  gender and because she is the mother of a disabled child. The employee had worked at another Timken facility on a part-time basis before applying for the full-time position. The EEOC charges that Timken’s refusal to hire the employee due to concerns about her ability to work full-time and care for a disabled child violated the ADA and  Title VII.

This case raises several points:

  • The EEOC is serious about protecting employees from discrimination based on their association with a disabled person (i.e. the employee need not be disabled to bring a claim);
  • Employers need to focus not only on potential new-hires, but also on current employees to avoid denying employment benefits or accommodations based on the employee’s association with a disabled person; and
  • Managers should be trained on their responsibility to avoid potential discrimination, to recognize the need for accommodations, and to avoid common stereotypes and assumptions (e.g. women with caregiving responsibilities can’t handle the fast-track).

In addition to a marked increase in EEOC claims, we are seeing evidence that the EEOC is devoting more time to investigations and stepping up enforcement efforts. It is critical that management and supervisor training include all possible forms of discrimination. A comprehensive training program is one of the most valuable defenses to a discrimination claim of any type.

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It’s Not Just for Teenagers – More Businesses are Using Facebook to Connect

We’ve written about the hazards of employees using Facebook, and the potential liability of employers who use social media to screen applicants; but what about businesses doing business on Facebook and other social media sites? Apparently social media sites are emerging as a way for businesses to connect. Salon magazine recently listed popular guides to helping businesses effectively use social media:  

All of these guides were published by WebWorkerDaily.com, an excellent technology resource for businesses.

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COBRA subsidy extension is official

The President signed the COBRA subsidy expansion as part of the Department of Defense Appropriations Act, 2010, extending the COBRA subsidy and requiring employers to notify certain eligible individuals. Highlights of the new law include:

  • Eligible individuals involuntarily terminated from employment on or before February 28, 2010 are eligible to receive the subsidy
  • The premium subsidy period is extended from 9 to 15 months, maximum
  • Employers must send a notice to eligible individuals who were on COBRA on or after November 1, 2009 and to those who became eligible due to termination on or after November 1, 2009

The law also allows for some retroactivity. The DOL has not yet issued requirements for the special notice. We will keep you updated.



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House passes COBRA extension

As anticipated, the House of Representatives voted last week to extend the COBRA/ARRA subsidy. 

Embedded in H.R. 3326, a measure appropriating funds for the Department of Defense, the nine-month, 65 percent premium subsidy would be extended by six months to a total of 15 months. It would apply to those who lose their jobs through February 28, 2010. Under current law, employees who lose their jobs after December 31 are ineligible for the subsidy. The measure, approved on 395-34 vote, also would provide an additional six months of subsidized coverage for beneficiaries whose nine-month COBRA premium subsidy has run out.

In addition, the legislation would give beneficiaries whose subsidy ran out and who didn’t pay the full premium a second chance to opt for coverage. For example, a beneficiary whose nine months of subsidized coverage ran out November 30 and who didn’t pay the regular unsubsidized December premium could pay the 35 percent premium share in January and receive coverage for December.

The matter is now before the Senate, which is expected to act quickly before the premium aid program expires at the end of the year. We will keep you updated.

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Sometimes it pays to hire an outside investigator

investigatorHow do you know when a workplace investigation needs an outside investigator? While we’d love to say “always,” many investigations can be handled internally by competent HR personnel or in-house counsel. There are, however, red-flags that indicate when an outside investigator is necessary:

  • The government is involved (EEOC, SEC, DOL)
  • There is a chance of a lawsuit or government investigation
  • More then one employee complains about the same serious problem (e.g. systemic racism)
  • The accused is a high-ranking employee
  • The complaint is subject to media attention
  • The complaining employee has hired a lawyer, filed a suit or a charge with a government agency (EEOC, OSHA, Wage and Hour Division)
  • The accusations are extreme (allegations of rape, assault, threats, theft)
  • There is a heightened need for objectivity and impartiality

In these situations, the benefits of an outside investigator are many: knowing how to prepare a report that will likely be evidence or a defense in litigation or a government investigation, less interruption to business, more effective interviews, and the perception that the company is taking the complaint seriously.  

When choosing an outside investigator, ask for credentials, references, whether he/she has served as a witness, and examples of prior investigations and the results.

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How valuable is your HR professional?

Very, according to The Wall Street Journal, calling HR professionals “suddenly hot.” Companies are recognizing the importance of experienced HR specialists on a range of hot button issues like executive pay, management succession, and integrating acquisitions. A good HR director with solid recruiting, hiring and performance management policies can shield a company from claims, as well as develop and nurture a productive workforce.

A competent HR professional is also a company’s front-line defense to claims of discrimination and harassment. Training programs and complaint procedures can offer legal defenses to discrimination and harassment claims. For all of these reasons, experienced HR executives are in high demand.

At least 65 current and former human resources managers serve as outside directors in 101 boards, a Wall Street Journal analysis found, up from probably a half dozen 10 years ago.  Starbucks recently plucked an HR expert/board member for an interim gig running HR while looking for a replacement.  When VR Corp. bought North Face, it was the outside director with HR experience who successfully melded the corporate cultures.

HR professionals are often undervalued and underpaid. We encourage employers to take a serious look at whether they have the appropriate HR support and make adjustments accordingly. An HR audit is a great way of gauging and evaluating the HR function and role in a company.

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IRS Gives Employers a Small Gift this Holiday Season

The IRS is adjusting the standard-mileage-reimbursement rate for 2010…DOWN to 50 cents per mile (presently 55 cents). The mileage rate for 2010 reflects lower transportation costs compared to a year ago. Employers who use an amount at or below the IRS rate eliminate the need to maintain extensive records in order to exclude the reimbursement from employees’ taxable income.  Of course, employers should always require employees to provide proof of adequate liability insurance.  IRS_logo

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Questions as COBRA Assistance Comes to an End

cobraThe COBRA assistance available under the American Recovery and Reinvestment Act of 2009 (ARRA) is scheduled to expire at the year-end. ARRA set up an assistance package to provide recently unemployed workers up to 65% of COBRA premiums to maintain health insurance. While popular with employees, the program has created an administrative headache and an unforeseen cost to employers seeking to survive by shedding payroll costs. The legislative subsidy will expire on January 1, 2010.

While there are reports of efforts to extend the assistance past December 31st, at present the date stands. This means employees laid off after January 1, will not receive the 65% premium subsidy. And, with a 9.8% unemployment rate, this translates into many laid off workers unable to maintain health insurance coverage without some assistance.

The U.S. Department of Labor has posted on its website some answers to common questions being raised as the year comes to an end:

Q: If an employee is involuntarily terminated prior to December 31st, but is not eligible for COBRA until after January 1st, is the employee eligible for ARRA premium assistance?

A:No. An individual who does not become eligible for COBRA until after December 31, 2009 does not meet the qualifications for assistance. The date of eligibility for COBRA coverage is determinative.

Q:What about employees who are currently receiving the subsidy or who become eligible no later than December 31st? Will they continue to benefit from the subsidy in 2010?

A: Yes. Eligible individuals are entitled to receive the full 9 months of premium assistance as long as they remain eligible. For example, if an assistance eligible individual started COBRA on November 1, 2009, they would be entitled to 9 months of ARRA premium assistance from November 1, 2009 through July 31, 2010 as long as they remained eligible.

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Business is best served by a combination of online and old school networking

handshakingWith all due respect to our FABULOUS technology/media guru, Jamie Ginsburg, I’m still a fan of old-fashioned face-to-face networking. The Wall Street Journal recently ran an article about the Wednesday 10, a social/business networking group started by William Safire in 1930 that still exists today. The members of the Wednesday 10 (all males, self-made, and primarily Jewish) described the advantages of old school networking: When member Mort Janklow made a career switch from corporate attorney to literary agent, fellow member columnist William Safire offered himself as a famous first client. When Robert Menschel, a senior director at Goldman Sachs, was considering deals involving large consumer companies, he would pick the brain of fellow club member Ed Meyer, the former chief executive of Grey Advertising.

“The Wednesday 10 comprised, at various points, more than 20 men; the goal was a number small enough to maintain intimacy yet large enough to ensure that at least 10 members would show up for each of the monthly Wednesday-night meetings. No more than two representatives of any one industry were permitted. The idea was to combat insularity, to keep the men connected to people and events outside their own professions.”

While criticized by some for the homogenous nature of the group, the lesson is not lost that networking is not only a way to keep socially connected, but it is a significant component in business/client development, marketing and keeping abreast of the quickly changing business environment.

I find this topic of interest because I struggle with mixing business and “friendship” online…do my Facebook “friends” really want to get my blog posts? Is it appropriate to “friend” a client, etc… While I tend to be somewhat old school in this area, I was recently reminded that there is a place for both old-fashioned and online networking when I was approached at a face-to-face networking event by an online friend who told me that he was a fan of the Warren & Hays Facebook page and would not have otherwise known what I did professionally. So while the etiquette is still somewhat murky, it appears that business is best served by a combination of online and good ole-fashioned networking.

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