HR News and Information
 December 2, 2004

HR IN THE NEWS

HR ON THE WEB

COURT CASES OF INTEREST

 

HR IN THE NEWS

Tax Credit Extended
The Work Opportunity Tax Credit was extended through Dec. 31, 2005, when President Bush signed the Working Families Tax Relief Act of 2004 (Pub. Law 108-311) Oct. 4. The extension of the Work Opportunity Tax Credit, which expired at the end of last year, applies to eligible workers hired this year. Employers may claim up to $2,400 for each newly hired employee, including some workers with disabilities, eligible under the credit

EEOC Approves National Contact Center
Unsolicited calls for general information about equal employment opportunity will be outsourced to a national contact center during a two-year pilot approved by the EEOC Sept. 17. The contact center will provide a centralized point of access and help EEOC staff focus more on charge intake, investigations, mediation, litigation and outreach, according to the commission. The center, which had been opposed by the American Federation of Government Employees, AFL-CIO (see the August 2004 newsletter, "EEOC Investigates Cost-Cutting Options"), is scheduled to start mid-2005.

Overtime Issue Resurfaces
The Department of Labor, Wage and Hour Division is investigating the St. Louis Police Department's classification of sergeants as non-exempt. The investigation began after Senator Talent wrote a letter to the Wage and Hour Division. A copy of the Wage and Hour Division's response to Senator Talent is available here: www.ipma-hr.org/pdf/government/Robinson.pdf

American Jobs Creation Act Changes Non Qualified Deferred Compensation (NQDC)
The American Jobs Creation Act of 2004 (AJCA), signed late last month by President Bush as P. L. 108-357, contains many tax relief and incentive benefits for American businesses. It also permits taxpayers to elect to deduct either state income taxes or sales taxes on their 2004 and 2005 federal income tax returns, which is good news for taxpayers residing in states without a state income tax. The legislation curtails abusive tax shelters, closes several corporate tax loopholes and limits the tax benefits from certain leasing transactions involving tax-exempt and government entities (known as "sale-in/lease out" or SILO transactions) for leases entered into after March 12, 2004.

The greatest impact of AJCA, however, may be the more stringent rules that will govern non-qualified deferred compensation (NQDC) under a newly created IRS Code section, 409A. Prior to AJCA, the tax treatment of NQDC depended on the funding status of the arrangement. If the arrangements were unfunded, compensation was included in gross income when it was actually or constructively received. If the arrangements were funded, compensation was included in income in the year the individual's rights were transferable or deferred compensation was no longer subject to a substantial risk of forfeiture.

Effective January 1, 2005, the rules governing the timing of NQDC deferral elections, distributions, funding and taxation will change substantially. Executives, directors, employees and others participating in certain types of stock option, long term incentive pay, severance, and supplemental executive retirement plans (SERPS) of taxable organizations as well as 457(f) plans of tax exempt and governmental entities will be affected. Sponsors offering these plans will need to quickly formulate their strategy for complying with these new rules and communicating them to affected participants. Web sites for more information and resources http://waysandmeans.house.gov/media/pdf/fsc/4520conf/confsummary.pdf

 

HR ON THE WEB

CBO: Immigrant Population Description [24 November 2004]

Congress Of The United States
Congressional Budget Office (CBO)

A Description of the Immigrant Population [24 November 2004] http://www.cbo.gov/ftpdocs/60xx/doc6019/11-23-Immigrant.pdf [full-text, 37 pages]

[Excerpt] The number of foreign-born people in the United States now constitutes 12 percent of the population ­ the highest share since about 1930. The rise in the number of recently arrived residents-nearly half of the immigrants in the United States have arrived since 1990-has raised broad questions about the potential effects of immigration on labor markets and economic performance in general. Immigration increases the pressures for federal, state, and local government spending. Immigrants also contribute to the economy and pay taxes. A major question is whether immigration has the potential to lessen the strain on the federal budget as the baby-boom generation retires.

This paper is the first of several reports by the Congressional Budget Office (CBO) intended to present the facts and research on immigration to help inform the agency's projections of the federal budget and the economy. The paper focuses on the characteristics of immigrants, including where they come from, where they reside, and how those patterns have changed over time, as well as immigrants' level of education, the industries and occupations in which they work, and their earnings. In keeping with CBO's mandate to provide objective, nonpartisan analysis, this paper makes no recommendations.

EMPLOYEES & HEALTH CARE RESPONSIBILITY [17 November 2004]

Hewitt Study Shows Employees Willing to Take on Greater Health Care Responsibility

Employees Need Support to Move Toward Greater Consumerism

http://was4.hewitt.com/hewitt/resource/newsroom/pressrel/2004/11-17-04.htm

LINCOLNSHIRE, Ill. -- Employees are willing to assume greater responsibility for health care than employers might think, according to a new study from global human resources services firm Hewitt Associates (NYSE: HEW). However, few are actively engaging in informed health care decision-making and are looking to employers for guidance.

Hewitt's national survey of more than 39,000 employees found that while 93 percent of employees indicate that they are comfortable taking on more responsibility for health care decisions, most struggle with how to do so. More than 80 percent don't estimate their health care expenses each year, and 79 percent do not believe that they can personally take action to help control these costs. More than half (57 percent) have never researched provider costs or quality, and nearly a quarter (24 percent) have never asked about their prescription drug options. Further, less than half say they do a great job of taking preventative medicines, screening tests or immunizations recommended by their doctor, and those in the poorest health are least likely to do so.

It's no wonder that health care costs are increasing at such a dramatic pace when you look at how few people are actively involved in managing their personal health, noted Jennifer Murphy, health care communication leader, Hewitt Associates. While it's great to hear that employees are willing to move toward a more consumer-oriented system, this is a wake-up call that we need to help employees move to a place where they are researching and understanding their health care choices, giving these important decisions as much attention as they deserve.

The survey indicates that employees need more help from their companies about what kinds of support are available to them and how their actions can have an impact. More than 50 percent do not know if they have access through their employers to prescription, hospital or physician cost/quality data. Another 60 percent are uncertain as to whether they have online access to condition/disease-management tools, medical expense estimators or general and company-specific information on rising health care costs.

The Job Openings and Labor Turnover Survey: what initial data show
Kelly A. Clark

Early results from these new data series show trends that are in line with other surveys, both private industry and government, and allow for a more complete picture of the labor market.

http://www.bls.gov/opub/mlr/2004/11/art2full.pdf [full-text, 10 pages]

Federal statistics on healthcare benefits and cost trends
John E. Buckley and Robert W. Van Giezen

Federal Government statistical agencies provide a variety of healthcare information on diverse aspects of the Nation's healthcare picture.

http://www.bls.gov/opub/mlr/2004/11/art5full.pdf [full-text, 14 pages]

Metropolitan Area Employment and Unemployment (Monthly) News Release
In October, 261 metropolitan areas recorded lower unemployment rates than a year earlier, 59 areas had higher rates, and 11 areas had rates that were unchanged, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Twenty-five metropolitan areas registered jobless rates below 3.0 percent, with 12 of these located in the South, 7 in the Midwest, and 5 in the Northeast. Six of the seven areas with unemployment rates of at least 10.0 percent were located in California. The national unemployment rate was 5.1 percent, not seasonally adjusted, in October.

A PDF version is at http://www.bls.gov/news.release/pdf/metro.pdf

13 States Have Minimum Wage Levels Above Fed Level
Even though the president and the Congress have failed to raise the hourly minimum wage of $5.15 since 1997, now 13 states have enacted wage minimums higher than the federal level. Last month, voters in Florida and Nevada overwhelmingly approved ballot initiatives to raise their states' minimum wages. Other states including Wisconsin and New York are poised to follow suit.

Jeff Chapman, an economist with the Economic Policy Institute, and Amy Chasanov, EPI's deputy policy director, trace the value of the minimum wage since 1979 and look at the history of how states have consistently acted in response to federal inaction. The Economic Policy Institute is an independent, nonprofit, nonpartisan research institute - or "think tank" - that researches the impact of economic trends and policies on working people in the United States and around the world. To read this week's EPI Snapshot, click here http://www.epinet.org/content.cfm/webfeatures_snapshots_12012004.

 

COURT CASES OF INTEREST

Random drug testing was proper as to employee arrested for possession of drug paraphernalia:
County employee, arrested and jailed for possession of drug paraphernalia, makes up story about being away due to illness, but officials learn of the arrest and enroll him in rehab program that entails random drug testing. Having tested positive for drugs, he is suspended, resigns and sues under sec. l983 after state court overturns his suspension. District court's finding that an arrest for possession of drug paraphernalia constitutes reasonable grounds for randomly drug testing a government employee is affirmed. Constructive discharge theory fails as well. (11/24/04) KY 1 1a 7 7b N D__ F3d __ 47 04 Relford v. Lexington-Fayette Urban County Government (6th) http://pacer.ca6.uscourts.gov/index.php and look for 03-5600 or at http://caselaw.lp.findlaw.com/data2/circs/6th/035600p.pdf.

Teacher was entitled not to transfer his child to public school:
Part-time teacher alleges he was denied a full-time position in public school because he refused to shift his child from Catholic school into the city's system. Administrator lacks qualified immunity because "the right to direct the education of one's child was clearly established." "The government cannot deny someone employment simply because that person is exercising his fundamentally protected right." For qualified immunity purposes, "(i)n an extraordinary case, decisions of other circuits may be used to clearly establish a principle of law[.]" (11/15/04) OH 4 7 12 12qu 60c__ F3d __ 47 04 Barrett v. Steubenville City Schools (6th) http://pacer.ca6.uscourts.gov/index.php and look for 03-4373

City officials didn't unconstitutionally retaliate against their critic:
Vocal critic of city officials issues flyers, protected by First Amendment, accusing them of official misconduct; and he follows up with flyers, not constitutionally protected, accusing them of drug abuse, adultery, or pedophilia, for which he is unsuccessfully prosecuted. He sues under sec. l983 for alleged retaliation, but the various alleged acts (patrols, interviews with his professors, mentioning of him in speech) weren't such as to stifle his expression. A patdown search as he entered city hall wasn't shown to have been motivated by his speech. (10/28/04) KY 12 12fi 13 __ F3d __ 43 04 Tucker v. City of Richmond (6th) http://pacer.ca6.uscourts.gov/index.php and look for 03-6336

 

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