HR News and Information
 December 16, 2004

NEWS IN THE COURTS

NEWS FROM THE BUSINESS AND LEGAL REVIEW

HR IN THE NEWS

FROM IPMA-HR HR Bulletin

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NEWS IN THE COURTS

Court Rules Four-year Statute of Limitations Applies in Certain Civil Rights Cases: Ruling Affects Records Retention Schedules for Personnel
Dennis Huffer,
MTAS Legal Consultant

The U.S. Supreme Court ruled that a federal four-year statute of limitations applies to civil rights actions brought under 42 U.S.C. § 1981 as amended by the Civil Rights Act of 1991, Jones v. R. R. Donnelley & Sons Company (May 3, 2004). Prior to this ruling, federal courts generally applied the applicable state statute of limitations in these civil rights actions (claims of job discrimination based upon race). The Tennessee statute of limitations for civil rights actions is one year (Tennessee Code Annotated § 28-3-104), but this statute will not now apply to actions brought under § 1981 and the Civil Rights Act of 1991. The Court's ruling thus makes the time for bringing these suits four years from the date the cause of action accrues. City officials should consider the effects of this time period on personnel records retention policies of the city and act accordingly.

Facts
The plaintiffs are black former employees of a Chicago manufacturer. In 1994 they brought a class action under § 1981 claiming they were subjected to a racially hostile work environment, given inferior employment status, and wrongfully terminated or denied transfers. The defendant sought summary judgment because the complaint was filed more than two years (the applicable Illinois limitation) after the alleged discriminatory acts were done. Plaintiffs responded that the federal statute, adopted in 1990 to provide a uniform statute of limitations for these federal claims, applied. The federal statute (28 U.S.C. § 1658) reads:

Except as otherwise provided by law, a civil action arising under an Act of Congress enacted after the date of enactment of this section may not be commenced later than four years after the cause of action accrues.

The district court agreed with the plaintiffs, but the Court of Appeals reversed, holding that this statute of limitations did not apply because the Civil Rights Act of 1991 did not create a wholly new cause of action but depended on previous enactments adopted before 1990. For example, § 1981 was first enacted in 1866. It provided in pertinent part that "all persons shall have the same right in every State and Territory to make and enforce contracts ... as is enjoyed by white citizens." The Supreme Court ruled in 1989 that the right "to make and enforce contracts" did not protect against discriminatory conduct occurring after the formation of the contract. Congress responded in 1991 by amending § 1981 to define "make and enforce contracts" to include the "termination of contracts and the enjoyment of all benefits, privileges, terms, and conditions of the contractual relationship."

Issue
The issue was whether the plaintiffs' case was barred by the two-year Illinois statute of limitations or whether the four-year federal statute of limitations applied to keep the suit alive.

Holding and Reasoning The Supreme Court held that the federal four-year statute of limitations applied rather than the Illinois two-year statute. Plaintiffs' case was therefore not barred. The Court noted that the plaintiffs' cause of action was made possible by the 1991 amendment to § 1981. If the federal statute applied only to a new cause of action created without reference to existing law, "§ 1658 would apply to only a small fraction of post-1990 enactments."(Slip opinion, p. 11). The Court reasoned:

An amendment to an existing statute is no less an "Act of Congress" than a new, stand-alone statute. What matters is the substantive effect of an enactment - the creation of new rights of action and corresponding liabilities - not the format in which it appears in the Code. (Slip opinion, p. 12).

Significance
The Supreme Court's ruling is consistent with a Sixth Circuit case decided last year (Anthony v. BTR Automotive Sealing System, Inc., 339 F.3d 506). Most city officials are unaware of that ruling, however, and that the federal statute and the courts' rulings have in effect lengthened the statute of limitations for discrimination claims under § 1981 and the Civil Rights Act of 1991 from one to four years. Since this case involved both § 1981, which prohibits racial bias, and the Civil Rights Act of 1991, which also creates rights to damages for sex, disability, and religious discrimination, it is unclear how the federal statute will apply to claims made under other discrimination laws such as Title VII and the Civil Rights Act of 1991.

In addition to creating more exposure to liability from job discrimination claims, the federal statute and the court rulings mean that cities will have to keep personnel records longer than otherwise required by federal law or previously recommended. Some federal laws require certain personnel records to be kept for one or two years. To respond to the Court's ruling, city officials should retain personnel records relative to hiring, firing, promotions, demotions, suspensions, and other actions that could become the subject of a discrimination suit for five years to make sure the city has appropriate documentation in a suit.

State government employee, not subject to the civil service laws, is not an 'employee' for Title VII
Magistrate sues judge under Title VII and Equal Pay Act, arguing that she is paid less than male magistrates; but "(a) state government employee, not subject to the civil service laws, is not an 'employee' for Title VII [or EPA] purposes if she works on an elected official's 'personal staff [,]'" as plaintiff does. The policymaking employee exemption applies as well. This, however, doesn't preclude a sec. l983 claim for retaliation, though the claim fails on the merits. Plaintiff has, in any event, stated a wage discrimination claim under state's civil rights statute. (12/1/04) http://pacer.ca6.uscourts.gov/index.php and look for 03-3228 OH 7 8 9 10 13 G__ F3d __ 48 04 Birch v. Cuyahoga County Probate Court (6th)

Police Officer Terminated for Sexually Explicit video tape not a 1st or 4th Amendment Violation
The city of San Diego (City), a petitioner here, terminated a police officer, respondent, for selling videotapes he made and for related activity. The tapes showed the respondent engaging in sexually explicit acts. Respondent brought suit alleging, among other things, that the termination violated his First and Fourteenth Amendment rights to freedom of speech. The United States District Court for the Southern District of California granted summary judgment to the City. The Court of Appeals for the Ninth Circuit reversed. The termination of defendant's employment as a police officer, for selling videotapes of himself engaging in sexually explicit acts, does not violate his First and Fourteenth Amendment rights to freedom of speech. CITY OF SAN DIEGO v. ROE, No. 03-1669 (U.S.S.C. December 06, 2004) To read the full text of this opinion, go to:

http://laws.lp.findlaw.com/us/000/031669.html

Employees must state claims for FMLA Retaliation, Gender Discrimination, Public Policy Retaliation and Intentional Infliction of Emotional Distress
In an employment discrimination dispute, the district court properly concluded that plaintiff had not stated viable claims for Family and Medical Leave Act retaliation, gender discrimination, public policy retaliation, and intentional infliction of emotional distress. JOSEPH M. HOOD, District Judge. Plaintiff-Appellant brought this action against Defendants- Appellees alleging employment discrimination arising from violations of federal and state law. The district court below granted summary judgment in favor of Defendants-Appellees and dismissed all of Plaintiff's claims. Appellant argues that the district court erred in concluding that Appellant had not stated viable claims for FMLA retaliation, gender discrimination, public policy retaliation, and intentional infliction of emotional distress. HUMENNY v. GENEX CORP. (12/08/04 - No. 03-1953) To read the full text of this opinion, go to: http://caselaw.findlaw.com/data2/circs/6th/031953p.pdf

You Can Be Liable For Failure To Provide Medical Attention
Despite inmate's complaints of sharp, extreme abdominal pain, two days pass before jail nurse discovers his appendicitis and sends him to hospital for successful appendectomy. He states sec. l983 claim for the delay. "(W)e hold today that where a plaintiff's claims arise from an injury or illness 'so obvious that even a layperson would easily recognize the necessity for a doctor's attention, [] the plaintiff need not present verifying medical evidence to show that, even after receiving the delayed necessary treatment, his medical condition worsened or deteriorated. Instead, it is sufficient to show that he actually experienced the need for medical treatment, and that the need was not addressed within a reasonable time frame." Given the "total lack of any County policies, practices, and adequate training for this type of constitutional claim," county may be liable. (12/7/04) Blackmore v. Kalamazoo County (6th) http://pacer.ca6.uscourts.gov/index.php and look for 03-2222

Hospital Can Proceed With Counterclaim Against Employee Who Concealed Subpoena
A recent case from the Northern District of Illinois poses a stark conflict between protections for whistleblowers and employer rights to the confidentiality of documents. Given the importance of the issues, the district judge's decision is not likely to be the final word.

Briefly, the employee filed a False Claims Act Qui Tam suit against the corporation of which her employer, a hospital, is a subsidiary. The suit was in relation to information that came to her as the hospital's quality assurance coordinator. The defendant counterclaimed against the employee, alleging that she had breached her fiduciary duty to the employer, breached her confidentiality agreement, and converted property not hers.

The employer's claims grew out of the employee's secretly responding to a subpoena from the Department of Justice addressed to her as QA Coordinator. The subpoena requested production of documents connected to an investigation of health care offenses, including records of improper billing. The employee was the custodian of the employer's confidential billing documents. She had also signed a confidentiality agreement not to disclose proprietary or confidential information. In addition, the employee did not tell the hospital about the subpoena nor her response to it.

The issues discussed in the court's decision include whether allowing the employer's counterclaim would chill whistleblower disclosures; whether the confidentiality agreement was enforceable; whether dismissing the counterclaim would effectively give the employee immunity; whether protections under 18 USC § 3486(d) for people who respond to subpoenas apply; and what damages, if any, had the employer suffered from the employee's failure to tell it about the subpoena.

Among other things, the district court held that the confidentiality agreement was unenforceable in this situation. Otherwise, it would trump the policy of protecting whistleblowers who report fraud against the government. United States ex rel. Grandeau v. Cancer Treatment Centers of America, Case No.99 C 8287 (N.D. Ill. Nov.12, 2004).

Privately Created Statute of Limitations
The Sixth Circuit Court of Appeals recently found valid a private "statute of limitations" DaimlerChrysler had placed in its job application. The "statute of limitations" required applicants to bring any future employment-related claim against the company within six months of the time the claim arose. The court noted that Michigan courts have upheld similar terms in an employment application as long as the shortened statute of limitations is reasonable. It found this period gave the employee enough time to investigate the claim and file a case. Thurman v. DaimlerChrysler Inc., Case No.02-2474 (6th Cir. Nov.19, 2004).

Sex-based Wage Discrimination
Dismissal of plaintiff's sex-based wage discrimination claim under the Ohio Civil Rights Act is reversed where there is sufficient evidence to create a genuine issue of material fact as to whether plaintiff's salary was set lower than it would have been had she been a man. BIRCH v. CUYAHOGA COUNTY PROBATE COURT (12/01/04 - No. 03-3228) To read the full text of this opinion, go to: http://caselaw.findlaw.com/data2/circs/6th/033228p.pdf

BFOQ - Bona Fide Occupational Qualification
Defendant's designation of certain employment positions, in housing units at female prisons, as "female only" is valid where gender is a bona fide occupational qualification for the positions in question. EVERSON v. MICHIGAN DEP'T OF CORR. (12/03/04 - No. 02-2028, 02-2033, 02-2084) To read the full text of this opinion, go to: http://caselaw.findlaw.com/data2/circs/6th/022028p.pdf

Is it Intentional Discrimination?
In this civil rights case, the plaintiff, Marcus A. Noble, alleges that the defendant, Brinker International, Inc., acting by and through its agent, Anthony Ficorilli, terminated Noble's employment because of his race. After a jury found in favor of the plaintiff, the defendant filed a motion for judgment as a matter of law or, in the alternative, for a new trial. This motion was denied, and the defendant now appeals from the district court's denial of its motion.

The legal issue presented-whether the district court erred in denying the defendants' request for judgment as a matter of law-is relatively simple, but the answer is obtained, for reasons we shall explain, only by conducting a close examination of the facts of the case in order to determine whether they are legally sufficient to support the jury's finding of intentional race discrimination. Therefore, we must burden our opinion with an extensive discussion of those facts, which, as will be explained, do not support the jury's verdict and should have resulted in a judgment for the defendant, as a matter of law. Therefore, we must reverse.

In an action alleging employment discrimination, a jury verdict in favor of plaintiff is reversed where the evidence is insufficient to permit a rational jury to conclude that the true reason for the discharge was racial discrimination. NOBLE v. BRINKER INT'L INC. (12/03/04 - No. 02-4190) To read the full text of this opinion, go to: http://caselaw.findlaw.com/data2/circs/6th/024190p.pdf

 

NEWS FROM THE BUSINESS AND LEGAL REVIEW

Most Employees Surprisingly Happy With Benefits
While health care and benefit costs have risen sharply over the past decade, most workers have remained surprisingly satisfied with their employer-sponsored health benefits, according to survey results released by Watson Wyatt Worldwide, an HR consulting firm results released by Watson Wyatt Worldwide, an HR consulting firm.

Watson Wyatt's 2004 WorkUSA® survey of nearly 13,000 employees found that 61 percent of workers are satisfied with their health plan-virtually the same percentage as in 1994 and 1999.

Only 17 percent are dissatisfied, while the remaining 23 percent have mixed feelings.

Two years ago, the percentage of employees satisfied with their health benefits was slightly higher, at 64 percent.

"It appears that rising health care costs haven't diminished the high value that workers place on the health benefit coverage they receive from their employers," said Ted Chien, global director of group and health care consulting at Watson Wyatt. "This demonstrates that employers are doing a good job educating employees about the increasingly difficult burden they face in providing benefits. But employers should remain cautious. If costs continue to rise sharply and consume more of an employee's total compensation, satisfaction could suffer."

According to the survey, employees' understanding of the value of their total reward package has increased by nearly 10 percentage points over the last two years. This year, 67 percent of employees feel they are well informed about their reward package, up from 58 percent in 2002 and 60 percent in 1999. A total reward package includes benefits, pay, incentives, profit sharing and stock-based programs.

The survey also found that a growing number of workers believe their benefits and total reward packages are better than those offered at other companies. This year, 44 percent of workers said their employee benefits compare favorably with others, versus 32 percent in 1999. Additionally, the number of workers who said their total reward package compares favorably with those offered at other companies increased from 30 percent in 1999 to 36 percent this year.

"The results of the survey highlight the importance of communication and employee education," adds Chien. "As more companies embrace health plans that place more responsibility on employees for making health care decisions, employees will need to become prudent health care purchasers. The good news is that employees' understanding of health care cost-control challenges is already strong."

The survey also found the following:

  • Paid-time-off programs: Nearly three out of four workers (73 percent) are satisfied with these programs, compared with 71 percent in 2002 and 69 percent in 1994.
  • 401(k) plans: More than three out of four workers (76 percent) are satisfied with their company-provided 401(k) plan, versus 67 percent two years ago and 65 percent in 1994.
  • Pension plans: Sixty-three percent are satisfied with their pension plan, a slight increase from 61 percent in 2002 and 58 percent in 1994.

http://hr.blr.com/Articlerss.cfm/Nav/5.0.0.0.31567

Payroll Growth Slows
Payroll employment increased by 112,000 in November, down from the downwardly revised increase of 303,000 in October, according to the Bureau of Labor Statistics of the U.S. Department of Labor. The unemployment rate dipped slightly to 5.4 percent. The jobless rate has been either 5.4 or 5.5 percent in each month since July. This is slightly below the rates that prevailed in the first half of 2004.

Over the year, the number of persons who held more than one job increased by 346,000 to 7.6 million. These multiple jobholders represented 5.4 percent of total employment in November. Employment in health care and social assistance grew by 28,000 in November. Over the year, this industry has added 316,000 jobs. In November, employment increased most notably in hospitals (8,000), nursing and residential care facilities (7,000), and offices of physicians (6,000).

Leisure and hospitality employment increased by 34,000 over the month and has risen by 220,000 over the year.

Professional and technical services added 16,000 jobs over the month. Within this industry, employment rose in computer systems design and related services (10,000) and in architectural and engineering services (8,000). Within administrative and support services, employment in the temporary help industry continued to trend upward. http://hr.blr.com/Articlerss.cfm/Nav/5.0.0.0.31562

Foreign-Born Labor Force Sees Gains and Losses
In 2003, nearly a million more foreign-born workers joined the U.S. labor force, but a larger portion of foreign-born workers also found themselves unemployed, according to the Bureau of Labor Statistics of the U.S. Department of Labor.

Last year, foreign-born workers made up about 14 percent of the U.S. civilian labor force age 16 and over. About 21.1 million foreign-born workers were in the labor force, up from 20.3 million in 2002. The unemployment rates for the foreign born and native born in 2003 were 6.6 and 5.9 percent, respectively, both slightly higher than in 2002.

About 48 percent of the foreign-born labor force was Hispanic or Latino, and 22 percent was Asian, compared with only about 7 and 1 percent, respectively, of the native-born labor force, according to the Bureau of Labor Statistics of the U.S. Department of Labor. Men made up a larger proportion of the foreign-born labor force (60 percent) in 2003 than they did of the native-born labor force (52 percent). Also, the proportion of the foreign-born labor force made up of those of prime working age (25- to 54-year olds) is higher than for their native-born counterparts (76 and 69 percent, respectively).

A much higher proportion of the foreign-born than the native-born labor force resided in the West region--37 and 20 percent, respectively, in 2003. About 36 percent of the native-born labor force lived in the South and 26 percent resided in the Midwest, compared with 30 and 11 percent, respectively, of the foreign born.

In terms of educational attainment, nearly 30 percent of the foreign-born labor force 25 years old and over had not completed high school, compared with only about 7 percent of the native-born labor force. About equal proportions of both the foreign and native born had a college degree.

Foreign-born workers were concentrated in service occupations (23 percent) and in production, transportation, and material moving occupations (18 percent) in 2003. By way of comparison, the proportions of native-born workers employed in these occupations were 15 and 12 percent, respectively.

In 2003, 17 and 10 percent, respectively, of foreign-born workers were employed in professional and related occupations and in management, business, and financial operations occupations, compared with proportions of 21 and 15 percent for the native born. In 2003, the median usual weekly earnings of foreign-born full-time wage and salary workers were $489 compared with $643 for the native born.

http://hr.blr.com/Articlerss.cfm/Nav/5.0.0.0.31554

IRS Changes Tax Deposit Rules for Small businesses
The Internal Revenue Service is increasing the minimum threshold for Federal Unemployment Tax Act (FUTA) deposits, a move the agency says will reduce burden for more than 4 million small businesses.

Under the new rules effective January 1, 2005; employers are required to make a quarterly deposit for unemployment taxes if the accumulated tax exceeds $500. The current threshold is $100.

The maximum amount the IRS collects from employers per employee is $56 per year, if the employer timely made state unemployment tax payments. The current $100 threshold requires most employers with two or more employees to make at least one federal tax deposit per year. Raising the requirement to $500 will reduce burden for employers with eight employees or less by eliminating their requirement to make up to four FUTA tax deposits yearly. http://hr.blr.com/Articlerss.cfm/Nav/5.0.0.0.31547

The $100 minimum deposit threshold was established in 1970.

Labor Department Collects Nearly $197M for Workers
The U.S. Department of Labor's Wage and Hour Division is reporting that investigators collected a total of $196.7 million in back wages for 288,296 workers in fiscal year 2004, down from the $212.5 million it collected in fiscal year 2003. In 2002, the department collected $175 million for workers. This year, the department collected $43 million for nearly 85,000 employees in industries such as garment, restaurant, and health care. In 2004, the number of minors found employed in hazardous occupations declined by 25 percent.

"Our attention to protecting the rights and wages of workers in low-wage industries has paid off for the most vulnerable workers in our country," says Assistant Secretary for Employment Standards Victoria A. Lipnic. The Wage and Hour Division administers and enforces the minimum wage, overtime, and child labor provisions of the Fair Labor Standards Act (FLSA); the Family and Medical Leave Act (FMLA); the Migrant and Seasonal Agricultural Worker Protection Act (MSPA); worker protections provided in several temporary visa programs; and the prevailing wage requirements of the Davis-Bacon Act (DBA) and the Service Contract Act (SCA). http://hr.blr.com/Articlerss.cfm/Nav/5.0.0.0.31536

H-2B Visas Could Hit Cap Early Again
The federal agency that oversees work visas foresees that it will reach the cap for the H-2B visa program before the end of the 2005 fiscal year, meaning it would have to stop accepting applications as it did in 2004. The H-2B program covers low-skilled workers coming to the United States to perform work in seasonal jobs for which employers cannot fill with U.S. citizens. Through November 1, U.S. Citizenship and Immigration Services (USCIS) received H-2B petitions for 33,153 beneficiaries counting against the statutory visa cap for fiscal year 2005 (October 1, 2004 through September 30, 2005). The fiscal year 2005 statutory visa cap is 66,000. Based on past experience, USCIS says it needs to approve approximately 100,000 beneficiaries to fully utilize the 66,000 H-2B visa caps during a fiscal year. As the 100,000-beneficiary target is approached, USCIS says it will use more exacting counts to determine if it needs to stop accepting H-2B petitions during fiscal year 2005.

On March 9, 2004, USCIS stopped accepting H-2B petitions that counted against the fiscal year 2004 statutory cap. USCIS anticipates imposing a similar cut-off during fiscal year 2005. http://hr.blr.com/Articlerss.cfm/Nav/5.0.0.0.31537

 

HR IN THE NEWS

Labor Secretary Chao, Attorney General Ashcroft Sign Agreement Improving Job Protection for Returning Guardsmen, Reservists
U.S. Labor Secretary Elaine L. Chao and Attorney General John Ashcroft have signed a Memorandum of Understanding (MOU) to ensure that the employment rights of men and women returning from military service are vigorously protected. Specifically, the MOU streamlines and strengthens enforcement of the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA). Congress passed USERRA to safeguard the employment rights and benefits of service members upon their return to civilian life.

"Our military men and women have been there for us, so now it's our turn to step up our efforts for them," U.S. Labor Secretary Elaine L. Chao said. "This agreement will strengthen enforcement of USERRA by ensuring faster resolution of USERRA cases and quicker enforcement action by the government when it is necessary."

"The brave men and women protected by USERRA voluntarily set aside the comforts of civilian life and stepped in harm's way," said Attorney General Ashcroft. "We owe it to them to make sure that their employment rights and protections are fully and vigorously protected upon their return from military service. USERRA and today's agreement reflect the highest virtues of civic responsibility."

The MOU deals exclusively with each Department's roles and responsibilities in the enforcement of USERRA by delegating the Department of Labor's USERRA responsibilities to the Veterans' Employment and Training Service (VETS) and Office of the Solicitor and by delegating the Attorney General's USERRA responsibilities to the Civil Rights Division of the Department of Justice and the U.S. Attorneys office. The Civil Rights Division along with other employment-related civil rights statutes will now enforce USERRA.

To date, more than 420,000 citizen-soldiers have been mobilized since 9/11, generally serving for longer tours of duty than occurred during the last comparable conflict, Operation Desert Storm. Despite these longer tours, the rate of complaints has decreased by almost 30 percent from 1 for every 54 demobilized service members after Desert Storm to one in 76 in the War on Terrorism.

DOL last week also issued new regulations strengthening USERRA protections. In addition to the new regulations, Secretary Chao and the DOL's Veterans' Employment and Training Service have taken other steps to reduce the rate of USERRA complaints, including:

Providing:

  • Briefings to more than 158,000 service members and others on USERRA;
  • Responding to almost 26,000 requests for technical assistance;
  • Distributing more than 240 televised Public Service Announcements, with a second announcement to be released shortly; and
  • Addressing most of the major human resource and employer organizations.

Reprinted by permission. © CCH INCORPORATED

President's National Hire Veterans Committee Expands Nationwide Communications Campaign
The President's National Hire Veterans Committee has expanded its national campaign to raise employer awareness of the value of hiring men and women who have served in the armed forces. The latest element of the "Hire Vets First" campaign, a comprehensive Web site that enables employers to find veteran job seekers, is now available online.

"This campaign will heighten employer awareness of the diverse capabilities, broad range of skills, excellent training and proven character of America's veterans," said Frederico Juarbe Jr., assistant secretary of Labor for Veterans' Employment and Training. "I am confident the committee will do a great job of meeting President Bush's goal of increasing public appreciation of the skills and values that veterans bring to the 21st Century Workforce."

The new Web site, www.HireVetsFirst.gov, includes a guide for employers, a translator that provides the civilian application of military skills and links to job sites with veteran resumes, such as America's Job Bank (www.ajb.org) and USA Jobs (www.usajobs.opm.gov). The site will also feature resources for veteran job seekers, including an online resume writer developed exclusively for people with military experience. "The "Hire Vets First" campaign will also include advertising in national business and human resource publications, banners on career Web sites, direct marketing and magazine inserts and cover wraps.

"America's veterans represent a unique national resource and employers can benefit from this recognized resource for driving economic growth," said Juarbe. "The President's National Hire Veterans Committee is the culmination of the Administration's strategy for the promotion of that resource and a shared vision to address employment barriers military service members face as they transition into civilian life."

Labor Secretary Elaine L. Chao established the committee under the Jobs for Veterans Act signed by President Bush. The committee has 15 members from business, organized labor and state agencies as well as six ex officio members.

Reprinted by permission. © CCH INCORPORATED

CCH Survey: Unscheduled Absenteeism Rises to Five-year High
The rate of unscheduled absenteeism has climbed to a five-year high of 2.4 percent, up from 1.9 percent in 2003, according to the findings of the 14th annual CCH Unscheduled Absence Survey. The average annual per-employee cost of absenteeism declined slightly to $610, from $645 in 2003.

The survey also found that low morale continues to take a toll on higher costs and unscheduled absence rates. In addition, four generations now are in the work force and may require employers to take a fresh look at their work force demographics if they want to retain their top talent in the long term.

Most employees who fail to show up for work, however, aren't physically ill, according to the survey. In fact, only 38 percent of unscheduled absences are due to personal illness, while 62 percent are for other reasons, including family issues (23 percent), personal needs (18 percent), stress (11 percent) and entitlement mentality (10 percent).

Each year, CCH asks HR professionals to share information about absenteeism at their organizations. Key findings from this year's survey include the following:

  • The unscheduled absenteeism rate has risen to a five-year high of 2.4 percent, up from 1.9 percent from in 2003.
  • The average per-employee cost of absenteeism dropped to $610 in 2004, down from $645 in 2003.
  • Personal illness and family issues continue to be the leading reasons for unscheduled absences.
  • Employers now use an average of 8 work-life programs, up from 7 in 2003.
  • Alternative work arrangements are used by 58 percent of survey respondents and rated as most effective in helping to reduce unscheduled absences, along with disciplinary action.
  • Paid leave banks, also called paid time off (PTO), continue to be rated as the most effective method for controlling unscheduled absenteeism.
  • Employers with higher morale in the workplace continue to benefit from fewer unplanned absences and lower costs.
  • The number of employers allowing workers to carry over sick time from one year to the next has decreased from 51 percent in 2000 to 37 percent in 2004.
  • Employers set aside an average of 4.7 percent of their budgets for absenteeism.
  • The annual cost of employee no-shows can range from an estimated $60,000 for small employers to over a million dollars annually for large companies.

Reprinted by permission. © CCH INCORPORATED

Survey: HR Pros Want to Link Compensation with Performance
Findings of a study measuring prevalence for linking pay with performance and the strategic potential of performance management reveal that, although employers usually manage compensation as a separate process, most of the respondents see the ability of the performance management system to connect with and drive the organization's reward practices as a fundamental requirement.

The study, conducted by Workscape, Inc., also support recent industry analyst research that indicates significantly increased market demand for more holistic, performance-driven compensation systems. With optimal resource utilization being a major concern in a fluctuating economy, the survey suggests that organizations will look to realize increased return on their people-related spending with the implementation of solutions that successfully link compensation with employee performance.

The research findings show that 55 percent of participants report that their senior managers believe performance management is strategic to the business, while only 8 percent consider it an administrative nuisance. This is a dramatic turnaround from just a year-and-a-half ago when a comparable survey found that only 18 percent of senior managers saw the performance management process as strategic and 36 percent considered it an administrative headache.

The study also reveals that while HR professionals understand the positive impact that a performance management solution can have on an organization and are currently working to strengthen their companies' performance management systems, they do not possess all the elements that are needed to maximize its potential. They see alignment of goals and ongoing management of performance as the elements of performance management most in need of improvement.

Although almost all organizations have a performance management system in place, 25 percent of respondents feel that their systems are not working well. Another 60 percent rate their system as only adequate, strongly suggesting a desire to improve their system.

Reprinted by permission. © CCH INCORPORATED

Good News: HR Pay Rates on the Rise
As the economy improved and employers began to focus on growing business and investing in employees, many human resource (HR) positions commanded strong increases in pay levels this year. Salaries for HR roles in areas of rising importance -- specifically, compensation experts, recruiters, and trainers -- advanced significantly. These are the findings of a new survey conducted by Mercer Human Resource Consulting in conjunction with the Society for Human Resource Management (SHRM).

Leading the way, median total cash compensation (base pay and annual incentive) for the position of top compensation and benefits executive escalated 16.0% to $176,200. Other positions showing sizeable pay increases over the past year include:

  • Human resource specialist (up 15.1% to $51,800)
  • Top organization development executive (up 13.1% to $174,100)
  • Top HR management executive (based in a parent organization) with industrial relations responsibilities (up 12.1% to $240,000)
  • Compensation and benefit analyst (up 9.3% to $55,700); and
  • Trainer (up 9.0% to $51,100).

Overall, salaries for HR professionals are progressively improving along with annual bonuses and eligibility for incentive pay, including stock options. Among 10 of the most highly populated positions in the survey, representing some of the most common positions in HR, five showed pay increases greater than 5.0% and only two had increases of less than 3.0%. The two largest increases for this group were 9.0% for the position of trainer and 7.5% for top HR management executive.

These pay gains compare favorably to overall pay trends. According to Mercer, employers plan to grant average pay increases of 3.3% this year, the same as they gave in 2003.

Increases in HR salaries are in alignment with top HR challenges of managing benefit costs, attracting and retaining employees, and ensuring competitive reward programs. Solid increases in pay for positions in the areas of compensation, training, and recruiting reflect these top HR concerns. Some of the jobs within these functions showing large percentage increases in median cash compensation include compensation and benefits manager (up 5.8% to $90,500), training manager (up 6.1% to $83,000), and managerial/professional recruiter (up 10.4% to $65,900).

Fourth Annual Allstate Retirement Reality Check Survey
[8 December 2004]
Mini Executive Summary (Year-to-Year) [Full-text, 5 pages]

Allstate's Retirement Reality Check survey is an annual review of Americans attitudes toward, and savings for, retirement. The 2004 survey shows that, while Americans generally are optimistic about retirement, they recognize specific areas in which they are falling short financially. In the Allstate survey, the generations were defined as: Silent Generation, born before 1946; Baby Boomers, born 1946-1964; and Generation X, born 1965-1978.

The following key findings are included in the Year-to-Year press release:

  • Baby Boomers are more likely to say that they expect travel or leisure activities to be the largest expense in retirement (28 percent in 2004, up from 18 percent in 2003).
  • Despite minor decreases over the past four years, roughly six in ten Baby Boomers continue to believe that the best years of their lives will come after they retire (57 percent in 2004).
  • The proportion of Baby Boomers who say they plan to use Social Security as a large portion of their retirement income has increased over the past four years (from 32 percent in 2001 to 38 percent in 2004).

http://www.allstate.com/Media/NewsHeadlines/pr_2004/images/2004_12_08_rrc_exec.pdf

Optimism Surges Among Boomers Eyeing Retirement but Allstate survey shows continued worries about health-care costs http://www.allstate.com/media/newsheadlines/
pr_2004/PageRender.asp?page=pr_2004_12_08_rrc_exec.htm

US Education, Government, And Nonprofit Sectors Make Up In Benefits What They May Lack In Pay
Accommodation, food service, retail, and wholesale industries rank lowest on benefits while jobs in education, government, and the nonprofit arena typically pay less than similar jobs in other industries, they come out on top when it comes to benefits, according to a new study from Mercer Human Resource Consulting.

The 2004 Spotlight on Benefits Report, an analysis of the benefit programs of more than 1,000 large US employers, indicates that large nonprofit organizations (including civic and professional associations, religious organizations, national charitable organizations, and major foundations) offer the highest level of total benefits at 128% of the market median, followed by government employers at 127% of the market median and education employers at 121% of the market median. In other words, the benefit levels of these employers are 28%, 27%, and 21% higher, respectively, than the median benefit levels of all employers combined.

The highest benefit levels provided by for-profit employers can be found in the utilities (117% of market median), mining (114%), and insurance (109%) industries. At the other end of the spectrum, the industries providing the lowest overall benefit levels are accommodation and food services (64%), retail (75%), and wholesale (75%).

http://www.mercerhr.com/pressrelease/details.jhtml/dynamic/idContent/
1164395;jsessionid=00KWHO2NGSGVUCTGOUGCIIQKMZ0QYI2C

Pay Deductions for Money Owed QÀ (HR Matters E-Tips)
Q: We recently discovered that an employee owes the organization several hundred dollars in personal credit card and cellular phone expenses. May we deduct this amount from his pay?

A: Both federal and state laws limit the deductions you can take from employee pay. Under the federal Fair Labor Standards Act (FLSA), deductions from pay are prohibited if they would reduce the employee's pay below the required minimum wage. In addition, deductions may not affect the employee's overtime pay. Accordingly, in a week when overtime is worked, deductions are limited to the same amount you may deduct if the employee had worked only 40 hours or less. Therefore, depending on the pay rate and total amount owed, you may not be able to make the deductions you want without going below the minimum wage.

The FLSA, however, does specifically allow deductions for board, lodging, and "other facilities" (i.e., items similar to board or lodging), even if they bring the employee's compensation below the minimum wage. "Other facilities" include meals furnished at company restaurants, dormitory rooms furnished to student employees, merchandise furnished at company stores, fuel, and electricity.

States are even more protective of employee wages than the federal government. Virtually all limit deductions to those required by federal or state law, court order, or those authorized in writing by the employee. However, with respect to employee-authorized deductions, many state statutes (such as Michigan's) are broadly worded and do not limit or describe specifically the deductions that can be made.

Other states (such as New York) specify which deductions are allowed (generally, those which benefit the employee, such as insurance premiums, retirement plan contributions, and savings plans) and stipulate that any other form of deduction violates the law. Illinois specifies that deductions for inventory shortages, financial loss, cash advances, equipment, improper credit card transactions, and property damage may only be made if there is a written authorization "freely given" at the time of the deduction.

Since there are so many variations in state laws, you should consult your state's wage and hour statute before making any wage deductions. These laws may restrict your ability to make deductions, but they do not otherwise diminish your legal right to recoup the money.

As a result, some employers use private collection agencies, or even the small claims courts, to get their money. Others enter into special agreements with their employees specifying a repayment plan. Although none of these alternatives are as easy as making a pay deduction, they may be your only legal means for recovering the money, if your state restricts deductions.

Lawsuit Propels City To Upgrade Disabled Access
By Jamie Page
The Jackson Sun
12-08-04

Jackson officials agreed Tuesday to a partial settlement in a lawsuit concerning disabled access filed nearly a year and a half ago. And while there's no immediate monetary penalty for the city, fully complying with the Americans with Disabilities Act will cost millions in the long run, said Jackson Mayor Charles Farmer.

The City Council unanimously approved a consent decree and partial settlement at Tuesday's council meeting. By agreeing to the settlement, the city is admitting to violating ADA requirements in numerous areas throughout the city, said Mike Harris, city engineer. Examples include the sidewalks off Airways Boulevard, where there's broken and uneven pavement that's not wheelchair friendly, and the intersection of Airways and Fairgrounds Street, where curbs are out of compliance.

''I personally went and looked at every one of the locations they mentioned and I couldn't argue with them,'' Harris said. ''We are in the process of fixing those now.''

Randy Oliver and James Futrell, both physically disabled men from Jackson, alleged violations of the Americans with Disabilities Act against the city on Aug. 8, 2003, in U.S. District Court. It was one of several similar suits filed by their attorneys in other cities throughout the country. In the lawsuit, they complained that a list of areas throughout the city are out of ADA compliance.

To meet settlement requirements, the city will hire a consultant, at $20,000, to help point out ADA law deficiencies and to suggest a plan for compliance, said Jackson Mayor Charles Farmer. The city's insurance will cover the consultant's salary and payment to the Tennessee Municipal League, who defended the city in the suit.

In recent years, the city's intent has been to comply on new construction and alteration projects, like Jackson City Hall and the widening of a section of Campbell Street, but there are still likely aspects of those projects that may not meet ADA requirements, Harris said. Private design firms are hired to design city projects, and the city has relied on them in the past to make sure the design complied.

''I don't know that anybody has done the level of scrutiny and inspection that they probably should have,'' Harris said. ''Now we will do an assessment of all projects, and we will create a list of projects and certify that we have inspected them and that they meet ADA standards. Now it's a written agreement as opposed to leaving it up to us.''

J. Mark Finnegan, based in Ann Arbor, Mich., is one of the attorneys for the plaintiffs. He said in most of the suits he's been involved with in other cities, it has taken a similar amount of time to settle. And most other cities settle out of court, like Jackson did.

A Rehabilitation Act was passed in 1974, stating that cities receiving federal money must meet accessibility requirements when using the money on city projects. Since the Act wasn't heavily enforced, ADA laws went into effect for municipalities in 1992, requiring them to meet accessibility requirements on all city projects.

''Now, it's 14 years later, and Jackson is still not in compliance. Come on now, what has Jackson been waiting for,'' Finnegan said. In Jackson, it started out as a class action suit with three plaintiffs, but when it went to court the judge said it couldn't be a class action suit since one of the plaintiffs didn't live in Jackson. So that plaintiff's suit was filed in a court in the city he lived in.

Settlement provisions
In the city's partial settlement and consent decree of an August 2003 lawsuit, it requires them to comply with the following:

The city must submit an annual report of compliance by Jan. 30, showing that the city is prepared to comply with ADA standards on any sidewalks or streets scheduled to be resurfaced or altered.

Within the next 180 days, the city must submit a list of resurfacing projects and city facility construction projects done between Jan. 26, 1992, and July 2004 to identify those that fail to meet ADA standards, and state what actions the city plans to take to remedy those.

Important Changes Affecting the I-9 Form
T.S. Huang

While the I-9 regulations do not experience constant modifications such as other immigration-related regulations (e.g., H-1B visa regulations), employers should note the following important changes.

Change in Acceptable Documents The I-9 form allows the new hire to produce certain documents or combinations of documents as proof of valid work authorization. The document(s) establish the right to work as well as the individual's identity. On September 30, 1997, an interim rule eliminated documents that were formerly considered acceptable. These eliminated documents are as follows:

  1. Certificate of U.S. Citizenship,
  2. Certificate of Naturalization,
  3. Alien Registration Receipt Card Form I-151,
  4. Unexpired Reentry Permit, and
  5. Unexpired Refugee Travel Document.

Unfortunately, the back of the current I-9 form, which lists the acceptable document(s), has not been updated to reflect these changes. Therefore, HR departments relying on the current I-9 form may be improperly accepting documents that are no longer valid! It is vital that HR managers educate HR staff member(s) charged with completing Section 2 of the form of these changes. Continual acceptance of these documents as proof of valid work authorization is incorrect and will expose an employer to liability. For the benefit of HR Executive readers, an I-9 form with the back page correctly reflecting the documents which are no longer accepted has been included with this article.

To compound the problem, the rule also permitted a new document, Form I-766 (Employment Authorization Document), to be used as a proof of valid work authorization. However, this addition is also not noted on the back of the current I-9 form. Again, company representatives completing Section 2 of the form must be made aware of this additional document. Failure to accept this document when presented by a new hire may lead to a claim of discrimination.

In view of these modifications, it is imperative that HR executives and managers ensure that their staff receives proper regular training regarding documents that may be presented to demonstrate the right to work in the U.S.

H.R. 4306
During the fall of 2004, H.R. 4306 received substantial congressional support from both the House of Representatives and the Senate. Introduced by Reps. Chris Cannon (R-UT) and Rob Andrews (D-NJ), H.R. 4306 allowed for electronic signing of the I-9 form as well as electronic storage of completed forms. On October 30, 2004, President Bush signed the bill. The bill allows companies to begin accepting electronically signed I-9 forms 180 days after signature. With the signing of the bill into law, dramatic changes are underway which will significantly streamline the I-9 form completion process.

Electronic signatures
Perhaps the most significant result of H.R. 4306 is the allowance of electronic signatures on the I-9 forms. Companies will be permitted to accept electronic signatures allowing the I-9 forms to be prepared and completed entirely electronically.

The benefits of this new development are clear. Now, companies can computerize their I-9 form processes and use software applications to ameliorate many of the problems associated with manual completion of the I-9 form. Common problems of manual completion include the following:

  • Negligent or purposeful data omission
  • Data entered into wrong fields
  • Wrong combination of documents accepted
  • Form not signed or dated
  • Social security numbers mismatched
  • Form completed in an untimely manner

a. Thorough completion
By now being permitted to automate the I-9 completion process, companies can avoid common paperwork errors. Users can be required to thoroughly complete all necessary fields on the I-9 form. The software can limit where document information is placed, thereby ensuring correct data input. Social security numbers entered into Section 1 and Section 2 can be matched as well as checked for validity.

b. Uniform completion
A key benefit to utilizing a web-based I-9 solution is its everywhere access. Nationwide companies with numerous branch offices face the difficult challenge of training their staff on the proper completion of the I-9 form. Results usually varied and were especially complicated for companies experiencing high rates of turnover among HR staff responsible for preparing Section 2 of the form. Using a web-based I-9 application dramatically mitigates this problem. By accessing the application over the World Wide Web, any new hire and HR staff member can be guided through the process, resulting in a properly completed form.

c. Effective tracking of work expiration dates
In the past, tracking work authorization expiration dates required manually entering the dates into a tickler system and sending out notices to foreign employees of the need to obtain renewed work authorization. These arrangements required constant monitoring and follow up-a tedious task that usually resulted in late Re-verification processes. Some foreign workers slipped through the cracks. By automating this process, HR departments can effectively track these expiration dates and have reminders of the need to provide proof of renewed authorization regularly emailed to the affected employee(s).

d. Informative reporting
I-9 software provides customized reports so HR managers can obtain important information about the new hires. Reports can detail how many U.S. citizens, permanent residents, or foreign workers on temporary work authorization are employed in any given month. Reports can provide information concerning hiring rates at different worksites or clusters of worksites across the country. They can also provide a glimpse into the number of ex-employees or seasonal employees rehired.

Electronic Storage
H.R. 4306 also permits the electronic storage of I-9 forms. Under the old regulations, I-9 records were permitted to be transferred onto microfilm or microfiche format, an antiquated format primarily used at libraries and research institutions. Most companies do not have the equipment to transfer hard copy I-9 forms into microform or microfiche. Those that do discover that while it significantly reduced space requirements, the medium makes searching for a particular I-9 form difficult and laborious.

I-9 forms may now be stored as pdf files, a universal format most computer users are familiar with. The pdf format is useful because it effectively maintains the integrity and appearance of regular paper forms. In addition to relieving companies from having to dedicate floor space for file cabinets, electronic storage allows for effortless searching, re-verifying, modifying, and running of reports. Companies who rehire seasonal workers at certain times during the year will benefit by being able to easily call up and utilize previously completed I-9 forms. Re-verifying an employee's eligibility to work is expedited, and changing a person's name after a life event can be easily accomplished.

Electronic storage will also effectively maintain I-9 records in the event of disasters. Creating backup copies is simple and quick and can be done on a daily basis along with other computerized personnel records. Reproduction of lost or destroyed files can be accomplished easily compared to traditional paper-based storage. This ability to quickly produce I-9 forms is also useful in the course of an audit. During a CIS or DOL audit, I-9 regulations allow a company three days to produce its I-9 forms, a difficult task for a large company whose I-9 forms are widely spread among numerous branch offices. With electronic I-9 forms, producing these forms in timely manner is possible.

Storage of I-9 forms as pdf files allows for the easy and expedient movement of thousands of records from one location to another. For some companies, all completed I-9 forms are routed to a central HR department, usually located at company headquarters. There, I-9 forms are reviewed, managed, and expiration dates monitored. With the advent of this new development, HR departments can immediately receive I-9 forms after completion. This will facilitate the review of these documents, minimize the possibility of losing them, and expedite the processing of the forms.

Conclusion
The passage of H.R. 4306 offers exciting opportunities for companies to get a grip on properly managing their I-9 forms. Automating the process promotes uniform and accurate completion of the I-9 forms among a company's offices. It can train inexperienced HR staff without requiring the supervision of H.R. managers. It can significantly assist with complying with the I-9 regulations thereby decreasing liability and minimizing discriminatory conduct. A once tedious but necessary task can now be cost-effectively managed. By alleviating HR staff from these labor-intensive responsibilities, an HR department can focus on more long-term mission oriented tasks.

More Companies Offering Wellness Programs for Employees
[WorldatWork]
Dec. 3, 2004

U.S. corporations are doing more to promote wellness among employees, according to American Management Association's (AMA) 2004 Survey on Corporate Health and Wellness Programs. The number of companies offering educational programs on self-care topics is up in all 7 categories surveyed, including smoking cessation, exercise and fitness, and cholesterol management.

In October, AMA surveyed its members and customers at 211 companies about the wellness programs they offer to their employees. According to the results, 80% of executives feel that corporate America has a responsibility to promote wellness, up from 71% last year. And companies are taking action. 27% of those surveyed say they are offering more programs this year than in 2003:

2004
2003
55%
Exercise and fitness
47%
49%
Smoking cessation
41%
49%
Blood pressure management
36%
47%
Weight management
34%
46%
Stress management
33%
43%
Cholesterol managementv
27%
39%
Nutrition
25%

Nearly three out of four (72%) respondents say they attend the wellness programs when their company sponsors them, up from 63% in 2003. But only 35% of those companies that offer the programs extend some incentive for employees to participate.

45% of the companies surveyed offer discounts or corporate memberships to health clubs for their employees, and 22% have exercise facilities available on the company's premises. Another 56% of respondents said their organizations participate in community- or corporate-sponsored athletic activities, such as softball leagues, bowling teams or fundraiser walks/runs.

30% of respondents say their companies have cafeterias that provide or sell meals for employees, and 69% say that the selections offered are healthy, including fruits, vegetables and low-fat entrees.

36% of companies offer corporate-sponsored, comprehensive annual physicals: 18% say they are extended to executives only and 18% indicate they are for all staff members. Nearly three out of four (74%) companies that responded provide flu shots, but 79% of those companies had cancelled or postponed the program due to the current shortage of the vaccine.

Economic Cost of Fatal Occupational Injuries in the United States
Researchers are enhancing a previously developed NIOSH computerized costing model for calculating the societal costs of fatal occupational injuries using the cost-of-illness method. Using the model, researchers have shown that between 1992 and 2001 the cost of fatal occupational injuries in the U.S. was $48.7 billion. The model takes into account medical costs, the present value of future earnings summed from the year of death until the worker would have reached age 67 and the value of home production lost. Costs can be separated by gender, age, race, occupational, industry, or event. Current efforts to improve the model include expansion to calculate the cost of fatal occupational injuries using Census of Fatal Occupational Injury (CFOI) data, improving model specificity by estimating indirect costs using state-specific wage and benefit data, and improving the operational utility of the model. The calculated costs from this study can be used in evaluation tools to more efficiently allocate resources for research and prevention efforts. For more information on this study, contact Elyce Biddle at EBiddle@cdc.gov.

The Employment Situation: November 2004
Employment rose in November, and the unemployment rate, at 5.4 percent, was essentially unchanged, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Nonfarm payroll employment increased by 112,000 over the month, with job gains in several service-providing industries.

Unemployment (Household Survey Data)
The number of unemployed persons, 8.0 million, and the unemployment rate, 5.4 percent, was about unchanged in November. The jobless rate has been either 5.4 or 5.5 percent in each month since July. This is slightly below the rates that prevailed in the first half of 2004.

In November, the unemployment rates for the major worker groups--adult men (4.9 percent), adult women (4.8 percent), teenagers (16.6 percent), whites (4.7 percent), blacks (10.8 percent), and Hispanics or Latinos (6.7 percent)-showed little or no change over the month. The unemployment rate for Asians was 4.2 percent in November, not seasonally adjusted. (See tables A-1, A-2, and A-3.)

Total Employment and the Labor Force (Household Survey Data)
Total employment in November grew by 483,000 to 140.3 million, and the employment-population ratio--the proportion of the population age 16 and over with jobs--edged up to 62.5 percent. The civilian labor force rose by 439,000 in November to 148.3 million; the labor force participation rate was 66.1 percent. (See table A-1.)

Over the year, the number of persons who held more than one job increased by 346,000 to 7.6 million, not seasonally adjusted. These multiple jobholders represented 5.4 percent of total employment in November. (See table A-13.)

 

FROM IPMA-HR HR Bulletin

IRS Raises Business Mileage Rate
The Internal Revenue Service (IRS) has issued the standard mileage rate for businesses to use in deducting automobile costs in 2005. Beginning January 1, 2005, the new rate is 40.5 cents per mile, up from 37.5 cents per mile in 2004. The rate for deductible medical or moving expenses is 15 cents per mile in 2005, up from 14 cents in 2004. Finally, the rate when giving services to a charitable organization is 14 cents per mile in 2005. The IRS maintains a Web site at: http://www.irs.gov regarding tax information.

Effect of the Working Families Tax Relief Act of 2004 on Employer-Provided Accident or Health Plans
The Working Families Tax Relief Act (WFTRA), which generally provides extensions of certain expiring tax provisions and technical corrections, goes into effect on January 1, 2005. Among other things, the new law includes a new definition of dependent under Section 152 that may have some consequences for employee benefit plans.

Definition of Dependent
WFTRA essentially rewrites Section 152 of the Internal Revenue Code to create a uniform definition of "qualifying child" for purposes of the federal dependency exemption, the child tax credit, the earned income credit, head of household filing status and the dependent care tax credit. Section 152, as amended, also includes a new definition of "qualifying relative."

The new definition of qualifying child generally replaces the requirement that the taxpayer provide more than one-half of the dependent's support with a residency requirement - i.e., the child must now have the same abode as the taxpayer for more than one-half of the year. It also now includes an age limitation for a child who is not disabled - i.e., the child may not have attained age 19 by the end of the calendar year or, if a fulltime student, may not have attained age 24 by the end of the calendar year. Previously, this age limitation applied only in the context of the dependent exemption under Section 151.

The new definition of qualifying relative generally imposes an income limitation - i.e., the dependent cannot have income that exceeds the exemption amount for the year (projected to be $3,200 for 2005) - that previously only applied for purposes of the dependency exemption for an individual other than a child.

The IRS said in its November 17 notice that it intends to revise the regulations for the exclusion from an employee's gross income of employer-provided coverage under an accident or health plan. The revised regulations will be effective for taxable years beginning after December 31, 2004.

Until the new regulations come out, the IRS says, taxpayers may rely on the intent of the notice, meaning that "an employee may exclude from gross income the value of employer-provided coverage for an individual who meets the definition of a qualifying relative except that the individual's gross income equals or exceeds the exemption amount." To review the IRS Notice, link to http://www.irs.gov/pub/irs-drop/n-04-79.pdf

Labor Department Investigating St. Louis Police Department for Overtime Violations
The U.S. Department of Labor is investigating the St. Louis, Missouri Police Department for violations of the overtime law. The two Senators from Missouri, Jim Talent (R-MO) and Chris Bond (R-MO), wrote to the Acting Administrator for the Wage and Hour Division, Alfred B. Robinson, asking him to look into the matter.

The City of St. Louis classifies its police sergeants as exempt executives. Sergeants were classified as exempt under the prior regulations and the City decided to maintain their status after the new regulations took effect on August 23, 2004.

In a letter dated September 20, Mr. Robinson made it clear that the Labor Department considers police sergeants to be non-exempt employees. "Police sergeants, for example, are entitled to overtime pay even if they direct the work of other police officers because their primary duty is not management or directly related to management or general business operations; neither do they work in a field of science or learning where a specialized academic degree is a standard prerequisite for employment" quotes Robinson from the regulations - 69 Fed. Reg. at 22129.

The City of St. Louis Police Department is very familiar with overtime issues. In 1997, the U.S. Supreme Court issued an important decision clarifying the salary basis test after police sergeants for the City of St. Louis sued for overtime. That case is Auer v. Robinson.
http://caselaw.lp.findlaw.com/scripts/getcase.pl?
navby=search&court=US&case=/us/519/452.html

Employer Costs For Employee Compensation-September 2004
[15 December 2004]

Employer costs for employee compensation averaged $25.36 per hour worked in September 2004, the U.S. Department of Labor's Bureau of Labor Statistics reported today. Wages and salaries, which averaged $17.96, accounted for 70.8 percent of these costs, while benefits, which averaged $7.40, accounted for the remaining 29.2 percent. (See table 1.) Employer Costs for Employee Compensation, based on the National Compensation Survey, measures employer costs for wages, salaries, and employee benefits for nonfarm private and State and local government workers.

Costs for legally required benefits, including Social Security, Medicare, unemployment insurance, and workers' compensation, averaged $2.06 per hour (8.1 percent of total compensation), representing the largest non- wage employer cost. Employer costs for life, health, and disability insurance benefits averaged $1.96 (7.7 percent); paid leave benefits (vacations, holidays, sick leave, and other leave) averaged $1.68 (6.6 percent); and retirement and savings benefits averaged $1.05 (4.1 percent) per hour worked.

http://www.bls.gov/news.release/ecec.nr0.htm or
http://www.bls.gov/news.release/pdf/ecec.pdf [full-text, 26 pages]

Workplace Injuries And Illnesses In 2003
[14 December 2004]

A total of 4.4 million nonfatal injuries and illnesses were reported in private industry workplaces during 2003, resulting in a rate of 5.0 cases per 100 equivalent full-time workers, according to the Survey of Occupational Injuries and Illnesses by the Bureau of Labor Statistics (BLS), U.S. Department of Labor. The rate of injuries and illnesses declined from 5.3 cases per 100 equivalent full-time workers in 2002. The decline is a result of a 7.1 percent decrease in the number of cases reported and a 0.7 percent decrease in the number of hours worked.

This release is the second in a series of three releases from the BLS covering occupational safety and health statistics in 2003. The first release, in September 2004, covered work-related fatalities from the 2003 National Census of Fatal Occupational Injuries. In March 2005, a third release will provide details on the more seriously injured and ill workers (occupation, age, gender, race, and length of service) and on the circumstances of their injuries and illnesses (nature of the disabling condition, part of body affected, event or exposure, primary source producing the disability, the time of day of occurrence, and the number of hours into the workshift before the occurrence). "More seriously" is defined in this survey as cases involving days away from work.

http://www.bls.gov/news.release/osh.nr0.htm

http://www.bls.gov/news.release/pdf/osh.pdf [full-text, 23 pages]

Time Of Lost-Workday Injuries And Illnesses, 2002 ­ First Results Announced
BY BLS
[2 December 2004]

The Bureau of Labor Statistics of the U.S. Department of Labor reported today that in 2002:

  • Of the 1.1 million lost worktime injuries and illnesses reported in 2002 that included data on the time of the incident, about half occurred during the first 4 hours on the job (see table A).
  • Another large cluster of injuries and illnesses ­ more than one-third of the total ­ occurred between 4 and 8 hours on the job. The remainder ­ about 7 percent ­ were distributed across longer shifts.
  • While the majority of injuries and illnesses occurred during day shift hours (8 a.m. to 4 p.m.), timing patterns often reflected the unique nature of each occupation (see table B). Data are available for 10 occupations with the greatest number of injuries and illnesses involving days away from work. For cooks, nearly half of their incidents occurred from Friday through Sunday (see table 3). Among nursing aides, orderlies, and attendants, 21 percent of injuries and illnesses occurred between midnight and 8 a.m., a reflection of the 24-hour nature of their work (see table 2).
  • Cases were fairly evenly distributed from Monday through Friday, with nearly 13 percent of lost worktime cases occurring on the weekend (see table C). Among high incident occupations, truck drivers (includes heavy, tractor-trailer, and light or delivery truck drivers), janitors and cleaners, and carpenters had a greater proportion of injuries and illnesses on Mondays. Cooks and sales workers had a greater proportion of their injuries and illnesses on Thursdays and Fridays (see table 3).
  • For all workers, the median days away from work for recuperation following an injury or illness was 7 days. While the median varied little despite the time of day or day of week of the incident, there was a noticeable increase in the median days when an employee had been on the job more than 14 hours when the event occurred (see table 5).

With the recent changes in the Occupational Safety and Health Administration's recordkeeping rules, new data elements on time of event, day of week, and number of hours worked before an incident occurred are now available through the BLS Survey of Occupational Injuries and Illnesses. These data supplement the information on the characteristics of the workers involved in, and circumstances surrounding, occupational injuries and illnesses requiring days away from work, reported by BLS in March 2004. this release provides selected results from this new data series, with emphasis on data by occupation. BLS continues to analyze these data and intends to make additional outputs available in the future, potentially including, for example, data on industry and on case characteristics, such as the nature of the injury or illness.

http://www.bls.gov/iif/oshwc/osh/os/osnr0020.pdf [full-text, 12 pages]

Current Trends and Future Outlook for Retiree Health Benefits: Findings from the Kaiser/Hewitt 2004 Survey on Retiree Health Benefits
[14 December 2004]

This survey documents the increasing costs of retiree benefits for both large private-sector employers and their retirees. It also provides an early look at the response of large employers to the Medicare prescription drug law and the subsidies it provides for maintaining retiree drug coverage. The survey found that firms providing retiree health benefits experienced cost increases averaging 12.7 percent in 2004, with employers and retirees sharing these cost increases at most firms.

The survey also found that a typical worker under age 65 who retired in 2004 would pay $2,244 annually in premiums ($4,644 with spousal coverage) 24 percent more than a similar worker who retired in 2003. A typical Medicare-eligible worker who retired in 2004 would pay $1,212 annually in premiums ($2,508 with spousal coverage) 27 percent more than in 2004.

http://www.kff.org/medicare/7194/index.cfm orhttp://www.kff.org/medicare/7194/loader.cfm?url=/commonspot/
security/getfile.cfm&PageID=49752

Press Release
[14 December 2004]
http://www.kff.org/medicare/med121404nr.cfm [full-text, 79 pages]

Job Growth Lower Than Expected
Analysis by the Economic Policy Institute of today's jobs report indicates November's payroll job growth of 112,000 fell below the 150,000 needed to keep up with growth in the working age population. The latest wage gain -- just $0.01 -- also fell far short of recent increases in inflation.

"With faltering job and wage growth, the labor market looks weak, which will constrain consumption growth in the future," said EPI president, Lawrence Mishel.

The Economic Policy Institute's web site, JobWatch.org, compares actual job growth to the jobs the Bush administration said would be created if the tax cuts were passed. (See http://www.jobwatch.org after Noon, Eastern Time for the latest update.)

IPMA-HR Legislative Update

Congress adjourned this week after passing legislation overhauling the intelligence community. In addition, the appropriations legislation was finalized after language allowing taxpayer returns to be reviewed by members of Congress was removed. The appropriations bill included nine of the thirteen spending bills and does not include language passed by both the House and Senate to repeal the Labor Department's overtime regulations.

Federal Employees will Have Access to Dental/Vision Insurance
The House of Representatives and Senate passed legislation, the "Federal Employee Dental and Vision Benefits Enhancement Act," prior to adjourning that will allow federal employees to purchase separate dental and vision insurance. The employees will pay the entire cost of the premium but those costs will be lower than if the employee went in search of such coverage alone. The program is modeled on the current long-term care insurance program and is seen by many as a step closer to providing some paid dental/vision benefits.

Minimum Wage
States are jumping into the void left by Congress, and are increasing the minimum wage on their own. New York's legislature took the unusual step of overriding a veto by Governor Pataki and increased the state's minimum wage in three increments: to $6 per hour on January 1, 2005, $6.75 per hour on January 1, 2006 and to $7.15 per hour on January 1, 2007. Washington D.C. also increased the minimum wage to $6.60 per hour in January 2005 and to $7 per hour in January 2006.

 

SITES OF INTEREST ON THE WEB

Work Disability Status Disability
http://www.census.gov/hhes/www/disability/disability.html

2004 Work Disability Status by:
http://www.census.gov/hhes/www/disability/disabcps.html

  • Table 1: Selected Characteristics of Persons 16 to 64
  • Table 2: Labor Force Status of Persons 16 to 74
  • Table 3: Mean Earnings of Persons 16 to 74
  • Table 4: Selected Characteristics of Persons 65 to 74

Disability Tables
http://www.census.gov/hhes/www/disability/disabtables.html

Study on workplace violence research "Workplace Violence: Wakefield Responds" http://www.dohertypartners.com/FINALREPORTWPV.pdf

National Workrights Institute, On Your Tracks: GPS Tracking in the Workplace
http://www.workrights.org/issue_electronic/NWI_GPS_Report.pdf

 
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