Workplace Wise - Iowa Employment Law Attorneys

Friday, December 13, 2013

E-Verify Participation and Right to Work Posters and Revised MOUs

By Elizabeth A. Coonan
United States Citizenship and Immigration Services (USCIS) recently announced that it has issued revised Notice of E-Verify Participation and Office of Special Counsel Right to Work posters.  The posters are now available to be downloaded in English and Spanish and include clarified language and corrected formatting. Most notably, the new poster now indicates that E-Verify checks data from driver's licenses and identification cards issued by some states. Prior versions of the poster remain acceptable.
USCIS also recently released revised E-Verify Memorandums of Understanding (MOUs). New E-verify users will be required to sign one of the two the revised MOUs based upon whether the employer uses web services or browser access. Existing E-Verify users will not be required to execute a revised MOU but effective January 8, 2014, existing users will be required to adhere to the terms of the new MOU applicable to their method of access.
Should you have questions about employment eligibility verification or the E-Verify process, please do not hesitate to contact me or the BrownWinick attorney with whom you work. 

Paid FMLA Leave?

By  Elizabeth A. Coonan

On December 12, 2013, democratic lawmakers introduced legislation in both the House  and the Senate proposing a national paid family and medical leave insurance program.  The proposal would establish an insurance program that would be funded by employers and employees and would provide payment to individuals off of work on FMLA leave.  The legislation is structured similar to laws in New Jersey and California. The legislation is expected to fail but is evidence of a growing effort to provide financial relief to injured workers. Stay tuned...  

Wednesday, November 20, 2013

IRS Issues Final Regulations on Reducing or Suspending 401(k) Safe Harbor Contributions: Employers May Want to Consider Revising Safe Harbor Notices

By Cynthia Boyle Lande

On November 15, 2013, the IRS issued final Regulations covering the reduction or suspension of 401(k) safe harbor contributions. These Regulations build on other final Regulations issued in 2004 and proposed Regulations issued in 2009.

The new Regulations describe the steps that employers must follow to amend a 401(k) to eliminate employer safe harbor contributions mid-year. Employer safe harbor contributions may take the form of non-elective contributions paid entirely by the employer (“non-elective contributions”) or employer contributions which match employee contributions (“matching contributions”). Treasury Regulations typically require that a safe harbor 401(k) plan (whether employer contributions are matching or non-elective contributions) have a 12-month plan year. As a result, employers cannot typically eliminate the safe harbor element from a plan mid-year.
  • Provides employees a supplemental notice explaining the suspension at least 30 days prior to the effective date of the suspension and allows employees a reasonable opportunity after receiving the notice to change their deferral elections;
  • Continues to make safe harbor matching contributions until the effective date of the amendment; and
  • Amends the plan to satisfy ADP and ACP testing (as applicable) and actually satisfies those tests for the entire plan year.
The 2004 Regulations did not, however, allow a similar suspension of safe harbor non-elective contributions.

The new Regulations allow employers to amend 401(k) plans to suspend safe harbor non-elective contributions as well so long as the requirements listed above are satisfied and either of the following is true:
  • The employer is operating at an economic loss for the plan year, or
  • The employer includes with its safe harbor notice distributed to employees prior to the beginning of the plan year a statement that the employer may amend the plan during the plan year to reduce or suspend safe harbor non-elective contributions so long as the reduction or suspension does not apply until at least 30 days after all eligible employees receive a subsequent notice of the reduction or suspension.
These new Regulations are retroactively effective as of May 18, 2009.

To ensure consistency among various safe harbor 401(k) plans, these new requirements also will apply to safe harbor plans with matching contributions beginning January 1, 2015.

The 2004 Regulations allow employers to amend 401(k) plans to suspend safe harbor matching contributions if the employer does all of the following:

What Employers Should Do:

This Year: Employers with safe harbor 401(k) plans providing for employer non-elective contributions should consider modifying the notice that they will provide to employees prior to the beginning of the next plan year. If an employer making non-elective contributions to a safe harbor 401(k) plan does not include the statement described above in its safe harbor notice for the upcoming plan year, the employer will not be able to reduce or suspend non-elective contributions during the year unless the employer is operating at an economic loss.

Next Year: Employers with safe harbor 401(k) plans providing for matching contributions should consider modifying the notice that they will provide to employees prior to the beginning of their first plan year beginning after December 31, 2014. Beginning January 1, 2015, failure to include the statement described above in safe harbor notices for the upcoming year will prevent employers from reducing or suspending matching contributions during the year unless they are operating at an economic loss.

If you have any questions regarding the new IRS rules on reducing or suspending safe harbor contributions or on 401(k) compliance generally, you should contact your BrownWinick employee benefits attorney. 

Tuesday, November 19, 2013

E-Verify and Social Security Number Lockout

By Elizabeth A. Coonan
U.S. Citizenship and Immigration Services (USCIS) Director Alejandro Mayorkas announced yesterday that the Federal E-Verify* program has been enhanced to deter fraud by capturing and locking out fraudulently used Social Security numbers.

The new lockout feature prevents potential fraudulent use of SSNs to gain work authorization during the I-9 process. In accordance with normal E-Verify process, an employer will enter an employee’s information into the E-Verify system. If the SSN offered is one that has been locked, E-Verify will issue a Tentative Nonconfirmation (TNC).  The employee receiving the TNC will then need to contact their local Social Security Administration field office to resolve the issue.  The SSN lockout enhancement provides additional protection to employers…but will it end up causing more headaches? Only time will tell.

*E-Verify is a free, voluntary web-based service provided by the Department of Homeland Security that permits employers to verify the employment eligibility of new employees. The use of E-Verify is mandatory for many federal contractors and in several states. E-Verify is not mandatory in Iowa.

If you have any questions about immigration compliance, please contact your BrownWinick Employment Attorney.

Undocumented Workers are entitled to Workers' Compensation in Iowa

By Elizabeth A Coonan

On November 15, 2013, the Supreme Court of Iowa in Staff Management and New Hampshire Insurance v. Jimenez ruled that the Iowa Workers’ Compensation Commissioner can award an undocumented worker healing period benefits under the Iowa Workers’ Compensation Act.  Using the doctrine of “expression unis est exlusio alterius” (don’t worry, we had to look it up too) as standing for the proposition that legislative intent is expressed by omission as well as by inclusion, the Court determined that the definition of “employee” under section 85.61(11) of the Iowa Workers’ Compensation Act is to be read in a broad manner. The court reasoned, “If the legislature intended the definition of a worker or employee to exclude undocumented workers, it would have done so by adding undocumented workers to the list of excluded workers or employees.”

It should be noted that this case dealt only with the issue of entitlement to workers’ compensation benefits, not whether the employer had a legitimate non-discriminatory reason for terminating the undocumented employee. The employee advanced an argument indicating that the employer was aware that she was undocumented when the employee was initially hired. Legally and strategically, this left the employer with no choice but to argue that it was not aware of her lack of work authorization as the knowing employment of an individual not authorized to work in the United States comes with significant risk of fines and penalties.  The moral of this story: Once you have knowledge that a workers is undocumented, you may not continue to employ that individual but he or she may still be entitled to receive workers’ compensation benefits in the State of Iowa.  

If you have questions about workers’ compensation or immigration compliance, contact your BrownWinick employment law attorney.

Friday, November 8, 2013

Anti-Discrimination Law ENDA Passes Senate

By Ann Holden Kendell

On November 17, 2013, the U.S. Senate passed the Employee Non-Discrimination Act (ENDA) – a bill that prohibits businesses with 15 or more workers from making employment decisions based on sexual orientation or gender identity.  Ten Republicans joined with the entire Democrat caucus to pass the proposal 64-32.  A religious exception was provided as an amendment to the bill to "prevent federal, state and local governments from retaliating against religious groups that are exempt from the law."

Citing concerns of frivolous litigation, Speaker Boehner and other House Republicans have already said that they intend to oppose ENDA.  A report from the Government AccountabilityOffice released this summer indicated that in the 22 states where there is some form of anti-discrimination law regarding sexual orientation and gender identity, "the administrative complaint data reported by states at that time showed relatively few employment discrimination complaints based on sexual orientation and gender identity." 

What this means for Iowa employers – the Iowa Civil Rights Act already includes sexual orientation and gender identity as protected classes for purposes of employment discrimination for businesses with four employees or more.  But, with the proposed federal legislation, the heightened awareness and potential federal protections further underscore the need for Iowa employers to review written and unwritten employment policies and practices and include these protected classes in discrimination and harassment training for employees. 

Another practical concern for Iowa employers is to balance the protections for gay and transgender employees with the religious views of other employees.  Religion is also protected under the Iowa Civil Rights Act and Title VII.  Therefore, regardless of the protected class status, managers and employees should not be using any protected class status for purposes of employment decisions or to engage in harassing behaviors. 

If you have questions about employment policies and practices regarding discrimination and harassment, you should contact your BrownWinick employment law attorney.

Monday, November 4, 2013

Unclaimed Property Audits on the Rise

By Katheryn Thorson

With many states in dire need of revenue, unclaimed property audits are on the rise.  Under most states’ unclaimed property laws, a business must remit certain types of property to the state for safekeeping after the business is unable to contact the property’s owner for a specified period.  Additionally, in order to ensure compliance, the laws grant the state the authority to audit businesses, regardless of whether the business has a presence in the state.  If an audit exposes unreported unclaimed property, penalties, interest, and the cost of the audit may be imposed against the business.  With these audits on the rise, businesses should review its procedures and be proactive in reporting unclaimed property.
Generally speaking, unclaimed property is property that is owed to a person, but has not been paid because the owner cannot be contacted.  Common examples of unclaimed property are accounts payable, unused rebates, unclaimed insurance proceeds, unused balances on gift certificates or gift cards, and uncashed payroll, benefit, or dividend checks. 
While most states’ laws are based on a uniform law, each state’s law may vary as to the types of property that is subject to remittance, the dormancy period for each type of property, and the reporting rules.  Additionally, a business may be subject to several states’ laws as a business generally may be audited in any state.  In order to make reporting easier, rules have been established that determine which state a business must report unclaimed property to.    
Typically, an audit begins when the state sends an initial document request to a business.  Audits are usually conducted by third-party auditors that are typically paid on a contingency fee basis, which creates an incentive for the auditors to uncover as much unclaimed property as possible.  Audits can be extremely time-consuming and may last for a period of several months.  If an audit discloses reportable unclaimed property, the state will issue a liability assessment, which may impose penalties, interest, and the cost of the audit against the business. 
In Iowa, Iowa Code Chapter 556 regulates the disposition of unclaimed property, and the Treasurer of the State of Iowa handles all unclaimed property matters.  Under Iowa’s law, businesses with unclaimed property must send written notice to the owners and must turn the property over to the state after a designated time period.  The time period varies depending on the type of property unclaimed, but is usually three years after the property becomes payable.  Additionally, businesses with unclaimed property must file an annual report of all unclaimed property with the Treasurer of the State of Iowa.
In order to minimize liability if an audit is conducted, your businesses should follow these best practice tips:
  • Evaluate the types of unclaimed property that the business may have and what states’ laws the business may be subject to;
  • File unclaimed property reports regularly in all applicable jurisdictions;
  • Establish written unclaimed property policies and procedures;
  • Address unclaimed property in transaction documents;
  • Maintain documentation on owners and unclaimed property;
  • Take advantage of automatic payment options such as direct deposit; and
  • Perform early outreach to owners as soon as payment is available 
Further, if your business receives an audit notice or is concerned about unclaimed property exposure, an experienced unclaimed property attorney and consultants should be engaged.  These professionals can assist in protecting information gathered in connection with the audit and can also assist in identifying defenses.   

Lastly, this posting is intended to provide a broad overview of unclaimed property laws and is by no means comprehensive.  In order to obtain guidance on how the unclaimed property laws are applicable to your business, you should contact your BrownWinick employment attorney. 

Wednesday, October 2, 2013

DOL to Extend Minimum Wage & Overtime to More Home Health Care Workers

By Megan Erickson Moritz

The U.S. Department of Labor announced a final rule on September 17, 2013 that extends the minimum wage and overtime requirements of the federal Fair Labor Standards Act (FLSA) to most home health care workers.  Effective January 1, 2015, the “companionship” exemption of the FLSA will be narrowed, extending minimum wage and overtime protections to millions more certified nursing assistants, home health aides, personal care aides, and other workers offering similar in-home, direct care services to the elderly, injured, or disabled. 
Although the FLSA covers other domestic service workers, it has long-provided an exemption for those who perform certain in-home companionship services.  “Companionship services” are services for the care, fellowship, and protection of those who cannot care for themselves due to advanced age or infirmity.  This has included, for example, meal prep, washing clothes, and general household work.  The amendment narrows this exemption.  Beginning January 1, 2015, many workers offering these in-home care services will be subject to federal minimum wage and overtime requirements.  
Under the new rule, where a home health aide is employed only by the person receiving the services (or that person's family or household) and the worker is engaged in primarily fellowship and protection (i.e., engaging the person in social, physical or mental activities, providing company, etc.), he or she will remain exempt. Third-party employers of home care workers, however, will likely be significantly impacted.

Tuesday, October 1, 2013

New Employer Wellness Program Regulations Take Effect January 1, 2014

By Cindy Boyle Lande 

The Affordable Care Act (“ACA”) prohibits employers from discriminating between employees based on health status for purposes of eligibility, benefits, or premiums. In June, the Department of Treasury, Department of Labor, and Department of Health and Human Services issued final regulations regarding workplace wellness programs. The new regulations allow an employer to implement a workplace wellness program, notwithstanding the fact that the employer will provide certain benefits to employees who do participate in the wellness program but not to employees who do not participate -- so long as the program meets certain conditions.

The requirements that will apply to a wellness program depend on the type of the wellness program. The new regulations divide wellness programs in to three categories:
  1. Participatory Wellness Programs: These programs reward participants for participating in a health-promoting activity such as joining a gym, completing a diagnostic testing or health coaching program, or scheduling regular preventative care appointments, without consideration of whether the participant meets any specific health-related standard.
  2. Activity-Only Wellness Programs: These programs reward participants for engaging in activities related to a specific health standard, such as walking or exercising a certain number of times per month. Rewards under activity-only wellness programs are not based on the specific health outcome of such activities.
  3. Outcome-Based Wellness Programs: These programs reward participants for achieving a specific health standard or outcome, such as losing thirty pounds or testing at a “normal” level on biometric tests such as blood pressure or BMI.
Employers offering only participatory wellness programs must offer participation to all similarly situated individuals, regardless of their health status. Employers offering activity-only or outcome-based programs must meet additional requirements because the risk of discrimination between employees based on health status is greater under those programs. Those requirements are, generally:
  1. Frequency of Opportunity to Qualify: The wellness program must allow participants to qualify for the program reward at least once each year.
  2. Size of Reward: The total reward resulting from satisfying health-contingent standards under the program may not exceed 30% of the total insurance premium for the person(s) covered under the program. This percentage is increased to 50% to the extent that the increase in the reward is the result of a program related to smoking cessation.
  3. Reasonable Design: The program must be reasonably designed to promote health or prevent disease. This requirement considers a variety of program-specific facts, including the burden to participants, the likelihood of program success, and whether the program is a cover for discriminating between employees based on health status.
  4. Reasonable Alternative Standard: The program must provide a reasonable alternative standard for any individual who cannot meet a required standard or has been advised by a doctor that it would be dangerous to try to meet the standard.
  5. Notice of Availability of Reasonable Alternative Standard: In addition to offering a reasonable alternative, the program must notify participants, in all materials describing the terms of the wellness program, that reasonable alternatives are available and the program will respect the recommendations of a participant’s primary physician.
These new requirements take effect beginning January 1, 2014. Unlike other provisions under the ACA, the employer wellness program requirements apply to both grandfathered and non-grandfathered plans. As a result, all employers currently offering a wellness program or considering implementing a wellness program should review their wellness program to make sure it complies with the new regulations.

This posting is intended to provide a general overview of the requirements under the new wellness program regulations, and is by no means exhaustive. You should contact an experienced benefits attorney for guidance on how the new requirements apply to you. 

Friday, September 27, 2013

Paid Maternity Leave Federal Legislation Proposed

By  Megan Erickson Moritz

Senator Kirsten Gillibrand of New York and Representative Rosa DeLauro of Connecticut will be introducing legislation that would offer American workers paid leave to care for a new child. 

Currently, the Family Medical Leave Act entitles qualified employees to twelve weeks of unpaid, job-protected leave.  FMLA leave, however, is generally available only to workers who have been employed for at least 12 months by a company that has 50 or more employees.  That means about 40-50% of US workers don’t qualify.  The U.S. remains the only industrialized country that has no paid maternity leave program.  In fact, the U.S. is one of only a handful of countries in the world not to offer paid leave (among Papua New Guinea, Liberia, and Suriname).  Most of Europe and Central Asia offer paid maternity leave; 31 countries provide a year or more of paid leave.

California and New Jersey have implemented statewide programs establishing paid family leave benefits.  A few other states have some level of income replacement available for new mothers.  Under Iowa law, most employees have up to eight weeks of leave for pregnancy-related disabilities.  While the Iowa law covers more employers, the required leave is also unpaid.

Although programs allowing paid leave often result in saved money for companies (in terms of lower turnover and better long-term productivity), American business owners have strongly opposed such initiatives in the past.  This isn’t the first time lawmakers have unsuccessfully proposed federal legislation for paid parental leave.  Particularly in light of the proposed amount of annual leave Gillibrand and DeLauro seek in their bill (12 weeks, which is twice as long as the 6 weeks offered by the two state programs), together with its proposed funding mechanism, it’s  unlikely this current proposal would pass, either.  It will be interesting, however, to see if this bill spurs further dialogue on the topic

Wednesday, September 25, 2013

Iowa Employers Required to Provide Notice of Exchanges by October 1, 2013

By Cindy Boyle Lande

Beginning in 2014, individuals and employees of small businesses will be able to purchase health insurance through health insurance markets commonly known as the “exchanges.” Open enrollment for health insurance sold on the exchanges begins October 1, 2013.

The Affordable Care Act (“ACA”) requires certain employers to provide their employees notices describing the exchanges, the open enrollment period, and potential tax credits available for employees who purchase insurance on the exchanges. The notice requirement applies to all employers who are subject to the Fair Labor Standards Act (“FLSA”). Unlike other requirements under the ACA, the exchange notice requirement applies to all employees, regardless of the employee’s enrollment status under the employer’s health plan or status as a full-time or part-time employee. 

Employers must provide the notice to current employees by October 1, 2013. Following October 1, 2013, employers must continue providing notice of the exchanges to all new employees at the time of hiring.

While the ACA requires employers to begin distributing the notices by October 1, 2013, the Department of Labor has indicated that it will not seek penalties for violations of this requirement at this time. 

However, employers should still attempt to comply with the ACA requirement by providing the notices by the October 1 deadline to the greatest extent possible. If an employer discovers that it has missed the October 1 deadline, it should distribute the notice to all employees as soon as possible and distribute the notice to new employees going forward. Although a penalty will not apply for failure to timely distribute the exchange notice, there may be other negative consequences under ERISA for failing to satisfy the requirement.

If you have questions regarding whether the exchange notice requirements apply to you, or if you require assistance drafting an exchange notice which complies with the ACA requirements, you should contact your BrownWinick employment law attorney. 

Tuesday, September 24, 2013

2013 Iowa Law Change on Unemployment Insurance

By Ann Holden Kendell

Effective July 1, 2013, there was an amendment to Iowa Code Section 96.3(7), "Recovery of overpayment of benefits."  The amendment marks a significant change regarding unemployment insurance.  Formerly, if an employer missed the fact-finding interview and later successfully challenged an award of unemployment benefits, the employer's account was credited for the overpayment.  With the amendment, if the employer does not participate in the fact-finding interview and challenges an award of benefits and wins, the business is still responsible for the overpayment to the former employee - the employer's account is no longer credited.  Further, the amendment also indicates that if an employer fails to "adequately" respond to the department's request for information, this can also result in the employer's responsibility for an overpayment.  Therefore, if the employer participates in the fact-finding interview and loses, but ultimately prevails on a challenge to the award of benefits, there is still a possiblity that the overpayment will not be credited back to the employer's account. 

The underlined language below shows the new language to the statute:

Section 1. Section 96.3, subsection 7, paragraph b, subparagraph (1), Code 2013, is amended to read as follows: (1) (a) If the department determines that an overpayment has been made, the charge for the overpayment against the employer’s account shall be removed and the account shall be credited with an amount equal to the overpayment from the unemployment compensation trust fund and this credit shall include both contributory and reimbursable employers, notwithstanding section 96.8, subsection 5. The employer shall not be relieved of charges if benefits are paid because the employer or an agent of the employer failed to respond timely or adequately to the department’s request for information relating to the payment of benefits. This prohibition against relief of charges shall apply to both contributory and reimbursable employers.

To make sure that there is an “adequate” response, Iowa employers should not only participate, but provide all documents to support the termination to Iowa Workforce Development in advance of the fact-finding interview and have those documents available during the fact-finding interview.  The employer should also have the appropriate witnesses participate in the fact-finding interview.

If you have questions regarding unemployment claims, you should contact your BrownWinick employment law attorney.

Thursday, August 29, 2013

Welcome to Our Blog!

Welcome to the BrownWinick Employment & Labor Law Practice Group blog!  We look forward to using this forum to discuss the latest news, trends, cases, and legislative updates.