Report Due



JUNE 1, 2018: EEO-1 Report Due [Extended from March 31, 2018]

Organizations with 100+ employees and organizations with federal government contracts of $50,000 or more and 50+ employees are now required to submit the 2017 EEO-1 report by June 1, 2018. The deadline was recently extended from March 31.


Click here for additional resources: EEO-1 reporting information  (https://www.eeoc.gov/employers/eeo1survey/) and How to File an EEO-1 Report https://www.eeoc.gov/employers/eeo1survey/upload/eeo-1-how-to-guide.pdf



JULY 1, 2018: OSHA Form 300 A Accident Summary Due

Employers with at least 250 employees (including part-time, seasonal, or temporary workers) in industries covered by the recordkeeping regulation must submit information from their 2017 Form 300A by July 1, 2018. Employers with at least 20 employees, but fewer than 250, in certain high-hazard industries must submit information from their 2018 Form 300A. Click here for OSHA instructions and forms  https://www.osha.gov/recordkeeping/RKforms.html.


Employers in state plans that have not adopted the Improve Tracking of Workplace Injuries and Illnesses requirements are required to submit their 300A Forms using the Injury Tracking Application on OSHA’s website by July 1, 2018. However, an agency official recently clarified that since OSHA does not have jurisdiction in those states with state plans, it is prohibited from enforcing the regulation and cannot issue citations to employers for failing to electronically submit the 2017 300A. Therefore, while OSHA is requiring employers in state plans that have not yet adopted the regulation to submit their 2017 300A, it has acknowledged that it has no enforcement authority for those employers who fail to do so.


JULY 31, 2018: PCORI Fee Due for Self-Insured Plans

Employers who sponsor self-funded plans are responsible for submitting the Patient Centered Outcomes Research Institute (“PCORI”) fee and accompanying paperwork to the IRS no later than July 31, 2018.


The amount of the PCORI fee is equal to the average number of lives covered during the policy year or plan year multiplied by the applicable dollar amount for the year. PCORI fee for plan years ending on or after October 1, 2017 and before December 31, 2017 is $2.39 per each person covered. For plan years ending on or after January 1, 2017 and before October 1, 2017, the PCORI fee is $2.26 per each person covered. Click here for IRS FORM 720.




The Internal Revenue Service has reversed its previous decision to lower the 2018 maximum family health savings account (“HSA”) contribution from $6,900 to $6,850. Therefore, the 2018 limit is $6,900 for 2018 for individuals with family coverage under a high-deductible health plan.


Revenue Procedure 2018-27 also details the options for individuals and employers where an excess contribution was already returned to the individual based on the previous lower limit.



Chicago-based attorney Larry Grudzien has created an updated Employer’s Guide to Health Savings Accounts to include the new 2019 contribution and coverage amounts. It explains every aspect of HSAs in 50 questions and answers. It also includes a chart that compares HSAs with Health FSAs and HRAs. Download here document here: Updated HSA Guide.



Effective May 25, 2018, American companies that do business in the European Union (“EU”) must be in compliance with the EU’s new General Data Protection Regulation (“GDPR”). GDPR applies to companies that offer goods and services to EU member countries even if they do not have operations in the EU.


The GDPR requires companies to offer enhanced data protection to EU citizens through numerous means, including undertaking increased security measures, appointing data privacy officers, and keeping records of data processing activities.


A business subject to the GDPR must be able to document its corporate compliance efforts and its commitment to data privacy and security. It also must be able to establish that in the event of a data breach, it can meet its obligations for notifying anyone whose data was affected.



A recent amendment to the Fair Labor Standards Act (“FLSA”) states that an employer may not keep any portion of tips received by its employees, whether or not the employer uses a tip credit in pay. The new law also reverses Department of Labor regulations that banned employers from requiring tip sharing. Thus, tipped and non-tipped employees now can share tips as long as the employer does not use the tip credit in wage calculation.






Emeryville Minimum Wage to Increase July 1

Effective July 1, 2018, the minimum wage for employers with more than 55 employees in Emeryville will increase to $15.69 per hour. For employers with 55 or fewer employees, the minimum wage will increase to $15 per hour.


Los Angeles Minimum Wage to Increase July 1

Effective July 1, 2018, the minimum wage for employers with more than 25 employees in Los Angeles City as well as in Los Angeles County (unincorporated) will increase to $13.25 per hour. For employers with 25 or fewer employees, the minimum wage will increase to $12 per hour.


Milpitas Minimum Wage to Increase July 1

Effective July 1, 2018, the minimum wage for employers in Milpitas will increase to $13.50 per hour.


Pasadena Minimum Wage to Increase July 1

Effective July 1, 2018, the minimum wage for employers with more than 25 employees in Pasadena will increase to $13.25 per hour. For employers with 25 or fewer employees, the minimum wage will increase to $12 per hour.


Exceptions to the Pasadena minimum wage include the following:

  • Employees who are 14 to 17 years of age may be paid 85 percent of the applicable minimum wage, rounded to the nearest nickel, during the first 160 hours of employment. After 160 hours of employment, these employees must be paid the applicable minimum wage.
  • The Chief Executive officer’s salary is capped at 5 times the wage of the lowest paid employee.
  • The employer is a transitional employer who helps long term unemployed individual get back into the workforce. Transitional employers have to be certified through the city.
  • The employer is a child care provider.
  • The employer is funded by City, County, State, or Federal Grants or reimbursements.


San Francisco Minimum Wage to Increase July 1

Effective July 1, 2018, the minimum wage for employers in San Francisco will increase to $15 per hour.


Santa Monica Minimum Wage to Increase July 1

Effective July 1, 2018, the minimum wage for employers with more than 25 employees in Santa Monica will increase to $13.25 per hour. For employers with 25 or fewer employees, the minimum wage will increase to $12 per hour.


San Francisco’s Salary History Ban

Effective July 1, 2018, San Francisco’s Pay in Parity Ordinance will prohibit employers within the city and county of San Francisco from asking applicants about their salary history, from disclosing an employee’s salary without permission, and from considering salary history in determining whether to offer employment to an applicant or what salary to offer.


Update on Cal/OSHA Hotel Housekeeping Injury Standard

Effective July 1, 2018, the Cal/OSHA Standards Board approved a standard on “Hotel Housekeeping Musculoskeletal Injury Prevention.”


Under the new rule, each covered employer is required to establish and maintain a written musculoskeletal injury prevention program (“MIPP”) that addresses hazards specific to housekeeping. The standard specifies that the MIPP may be incorporated into an existing injury and illness prevention program or maintained as a separate program and must be readily accessible each work shift to employees.


Required elements of the MIPP include:

  1. Worksite evaluations for identifying and evaluating housekeeping hazards.
  • The initial evaluation must be completed within three months of the effective date of the standard and shall be reviewed and updated annually (or earlier if needed). The MIPP must include an effective means of involving housekeepers and their union representative in designing and conducting the worksite evaluation.
  1. Specific risks identified.
  • The worksite evaluation must identify and address potential risks to housekeepers, including (1) slips, trips and falls; (2) prolonged or awkward static postures; (3) extreme reaches and repetitive reaches above shoulder height; (4) lifting or forceful whole body or hand exertions; (5) torso bending, twisting, kneeling and squatting; (6) pushing and pulling; (7) falling and striking objects; (8) pressure points where a part of the body presses against an object or surface; (9) excessive work-rate; and (10) inadequate recovery time between housekeeping tasks.
  1. Injury investigations.
  • Procedures to investigate musculoskeletal injuries to housekeepers including whether required tools or control measures were being used appropriately.
  1. Corrective measures.
  • Methods for correcting hazards identified in the worksite evaluation or injury investigation (including housekeepers and their union representative).
  1. Training.
  • Required when the MIPP is first established, to new hires, to all housekeepers given new job assignments, when new equipment or practices are introduced, and at least annually thereafter.
  1. Record-keeping, including the MIPP, worksite evaluations, and training records.


The new standard applies to “lodging establishments,” which it defines as establishments that contain sleeping room accommodations that are rented or otherwise provided to the public, such as hotels, motels, resorts, and bed and breakfast inns.


California Supreme Court Adopts Broad New Misclassification Test

In the case Dynamex Operations West, Inc. v. Superior Court, the California Supreme Court has adopted a new legal standard for determining whether a company is the employer for purposes of the California Wage Orders.


Under the new “ABC” test, a worker is considered an employee under the wage orders unless the hiring entity establishes all three of these prongs:

  • The worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of such work and in fact.
  • The worker performs work that is outside the usual course of the hiring entity’s business.
  • The worker is customarily engaged in an independently established trade, occupation or business of the same nature as the work performed for the hiring entity.



Worker’s Compensation Clarification on Mental Impairments

Effective July 1, 2018, a new bill adds definitions for “psychologically traumatic event” and “serious bodily injury” and revises the definition of “mental impairment” under the Colorado workers’ compensation statute. The purpose is to clarify when a worker is entitled to benefits for a mental impairment. The new definitions capture traumatic events such as being subject to the use of deadly force, or witnessing a death or serious bodily injury, or the immediate aftermath of the same.



District of Columbia Minimum Wage to Increase July 1

Effective July 1, 2018, the minimum wage for employers in Washington, D.C. will increase to $13.25 per hour. Tip credit for cash employees increases to $9.36, so the minimum cash rate increases to $3.89.



Chicago Minimum Wage to Increase July 1

Effective July 1, 2018, the minimum wage for employers in Chicago will increase to $12 per hour.


Cook County Minimum Wage to Increase July 1

Effective July 1, 2018, the minimum wage for employers in Cook County (other than in Chicago) will increase to $11 per hour. The new ordinance applies to any business or individual that employs at least one employee who performs at least two hours of work in any two-week period while physically present within the geographical boundaries of Cook County, with very few exceptions.



Iowa Amends Alcohol BAC Limits of Drug Testing Law

Effective July 1, 2018, Iowa Code Section 730.5 lowers Blood Alcohol Concentration (BAC) limits to .02 grams of alcohol per two hundred ten liters of breath for private employers to be able to take action based on an alcohol test result.



Maryland Minimum Wage to Increase July 1

Effective July 1, 2018, the minimum wage for employers in Maryland (other than in Montgomery County) will increase to $10.10 per hour.


Montgomery County Minimum Wage to Increase July 1

Effective July 1, 2018, the minimum wage for employers in Montgomery County with more than 50 employees will increase to $12.25 per hour. For employers with 50 or fewer employees, the minimum wage will increase to $12 per hour.


Exceptions to the legislation include home healthcare companies and nonprofits, which will be exempt from the compliance deadline, as well as employee under the age of 20 years, who may be paid a wage equal to 85 percent of the county minimum wage for the first 6 months of employment.



Amended Equal Pay Act Limits Salary History Questions

Effective July 1, 2018, the Massachusetts Equal Pay Act (“MEPA”) prohibits employers in Massachusetts from asking for salary history on job applications or in interviews prior to extending an offer.


Additionally, employers are prohibited from contacting an applicant’s former company to confirm past wage amounts unless they have written permission from the applicant.


The amended legislation also describes situations where variations in pay between men and women are acceptable, such as to reflect seniority or merit raises, education, and factors such as regional differences in pay. However, employers are prohibited from reducing a person’s seniority for the time spent on pregnancy leave or family or medical leave. Certain pay variations based on geography, education and training, and travel requirements are also permissible.


Massachusetts Equal Pay Act Calculation Tool

The Massachusetts Office of the Attorney General has issued a Guidance regarding the MEPA that includes explanations and examples for applying the new legal standards, frequently asked questions, tips for conducting a proactive self-evaluation, and a “Pay Calculation Tool” to assist employers with identifying and evaluating gender-based pay gaps under MEPA.


The Pay Calculation Tool is an Excel spreadsheet containing fields for employers to enter employee-specific pay information, assign pay groupings, and quickly see each employee’s base salary and total compensation in relation to others in the same grouping. The Tool also uses embedded formulas to automatically produce helpful metrics, such as the difference in average pay between sexes and each employee’s “gap” from the group average.


The Pay Calculation Tool is designed to help employers organize relevant data and be used to conduct basic self-evaluations but is not appropriate for larger pay groups or sophisticated pay systems.



Minneapolis Minimum Wage to Increase July 1

Effective July 1, 2018, the minimum wage for employers with more than 100 employees in Minneapolis will increase to $11.25 per hour. For employers with 100 or fewer employees, the minimum wage will increase to $10.25 per hour.


The ordinance does not include an exception for tipped workers in the hospitality industry. All workers will be subject to the minimum wage, regardless of tips.



Pay Equity Act Signed into Law

Effective July 1, 2018, the Diane B. Allen Equal Pay Act extends legal protections beyond gender and provides relief to all classes of employees protected under the state’s antidiscrimination law. The new law also prohibits discrimination with respect to compensation or financial terms of employment, extends the statute of limitations to six years, and allows up to triple damages for violators.


The Diane B. Allen Equal Pay Act prohibits employers to pay any employee “who is a member of a protected class at a rate of compensation, including benefits, which is less than the rate paid by the employer to employees who are not members of the protected class for substantially similar work, when viewed as a composite of skill, effort and responsibility.”


Other than a seniority or merit system, a different rate of compensation may only be permitted if the employer demonstrates:

  • The differential is based on one or more legitimate, bona fide factors other than the characteristics of members of the protected class (like training, education, experience, or the quantity or quality of production).
  • The factors are not based on, and do not perpetuate, a differential in compensation based on sex or any other characteristic of a protected class.
  • Each of the factors is applied reasonably.
  • One or more factors account for the entire wage differential.
  • The factors are job-related with respect to the position in question and based on a legitimate business necessity, where there is no alternative business practice that would serve the same business purpose without producing the wage differential.



Salary History Ban Enacted in Westchester County

Effective July 9, 2018, employers in Westchester County are prohibited from asking for salary history of a prospective employee. The law applies to employers with at least four employees, unless at least two-thirds of the employer’s staff is family.


Under the new law, an employer cannot inquire about prior salary history unless voluntarily disclosed by the prospective employee to support a higher wage than offered by the employer, nor rely upon wage history received from any current or former employer of the individual to determine the wages for such individual. In addition, employers are prohibited from requiring that a prospective employee disclose information about wages from any current or former employer, either orally or in writing, as a condition of being interviewed, as a condition of being considered for an offer of employment, or as a condition of employment. If the prospective employee had disclosed wage information to support a wage higher than offered by the employer, the employer may confirm prior wage information post-offer, provided the employer has the prospective employee’s prior written authorization to do so.


Lastly, employers are prohibited from retaliating against someone for exercising his or her rights under this law, including opposing any act or practice.


Legislation to Combat Opioid Crisis

The Governor and the Legislature have agreed to a package of legislation that requires opioid manufacturers and distributors to help fund treatment program and will limit the prescription of opioids to a patient for the treatment of pain to three months or the period of time it normally takes for tissue to heal, unless the patient’s medical records contain a treatment plan that meets generally accepted national, professional, or government guidelines.


Patients who are being treated for cancer and are not in remission, patients in hospice or other end-of-life care, and patients being treated as part of a palliative care practice are exempt from this provision.


The legislation also contains provisions that add Fentanyl analogs, synthetic cannabinoids, and cannabimimetic agents to the list of Schedule I controlled substances under New York’s Public Health Law. The schedules of controlled substances are used to combat the illegal use and trade of substances, or their analogs or derivatives, and to govern the use of those substances in health care.



Predictable Scheduling Law Enacted

Effective July 1, 2018, S.B. 828 requires Oregon employers with 500 or more employees worldwide who provide services relating to retail trade, hotels, motels or food services to provide predictable scheduling to non-exempt employees. Workers supplied to an employer by an employee leasing company and employees of businesses that provide services to or on behalf of an employer are exempt from the new legislation.


The law is intended to provide for predictability of work schedules for non-exempt employees and to ensure at least ten hours of rest between shifts. Covered employers will be required to give advance notice of work schedules and, once set, those schedules cannot be changed except as provided under the law.


Among the law’s requirements are the following:

  • Employers must provide new hires with a written, good faith estimate of the employee’s work schedule on or before the first day of employment. The estimate must state the median number of hours the employee can expect to work in an average one-month period and must explain whether the employee can be included on a voluntary standby list for additional hours.
  • Employees have a right to identify limitations or changes in their availability and request not to be scheduled for work shifts during certain times or at certain locations. Employers are prohibited from retaliating against employees for requesting a particular schedule or work location but are also under no obligation to grant any such request and may require the employee to provide reasonable verification of the need for a particular schedule.
  • Employers must provide employees with a work schedule in writing at least seven calendar days before the first day of the work schedule. Beginning July 1, 2020, the written work schedule must be provided at least 14 days in advance.
  • Employers must provide a rest period of at least 10 hours between shifts unless an employee consents to work during the rest period, in which case the employer must pay the employee one-and-a-half times the employee’s normal rate of pay.


Below are answers to some of the most frequently asked questions about the new law.


Does the law apply to employees subject to a collective bargaining agreement?

Yes. The law does not exempt employees subject to a collective bargaining agreement. However, the law states that it is not intended to create an additional remedy with respect to the right to rest between shifts and compensation for shift changes, if employees have an equal or better remedy under the terms of a collective bargaining agreement.


What procedures must an employer follow if it makes changes to the schedule after the advance notice date?

If the employer requests changes to the work schedule after the date on which advance notice is required under the law, the employer must:

  • Provide the employee with timely notice of the change, and the employee may decline any work shift not included in his or her written work schedule.
  • Pay the employee an additional hour of pay at his or her regular rate, in addition to wages earned, if the schedule change results in the addition of more than 30 minutes of work to the employee’s shift, changes the date or start or end time of the shift with no loss of hours, or schedules the employee for an additional work shift or on-call shift.
  • Pay the employee one-half times his or her regular rate for each scheduled hour that the employee does not work if the schedule change results in the subtraction of hours from the employee’s work shift, changes the date or start or end time of the shift resulting in a loss of work shift hours, cancels the work shift or does not ask the employee to perform work when the employee is scheduled for an on-call shift.


How can an employer deal with unexpected absences or changes in work needs outside the employer’s control?

There are several exceptions to the requirement that employees receive additional compensation for untimely changes to the schedule. In particular, employers have the option of maintaining a voluntary standby list of employees who have requested or agreed in writing to be available to cover unanticipated absences or business needs. Employees on a standby list must be free to decline offers of additional hours; however, if they accept additional hours, they are not eligible for additional compensation as a result of an untimely change in their normal schedule.


Other exceptions to the compensation requirement include the following:

  • The employer changes the start or end time of the employee’s work shift by 30 minutes or less.
  • Shift swaps mutually agreed to by employees.
  • A schedule change made at an employee’s written request.
  • A subtraction of hours from an employee’s work schedule for disciplinary reasons for just cause, provided that the employer documents the incident leading to discipline in writing.
  • The cancellation or cessation of a work shift due to threats to employees or property or due to the recommendation of a public official.
  • The cancellation or cessation of a work shift because of a public utility failure or a natural disaster or because a ticketed event is canceled, rescheduled or is changed in duration due to circumstances outside the employer’s control.


Does the law impose notice, recordkeeping, and anti-retaliation requirements? 

Covered employers will be required to display a poster in the workplace providing notice of employees’ rights under the new law and must maintain records of their compliance with the law for three years.


Employers are prohibited from interfering with, restraining, denying or attempting to deny the exercise of any right under the law or to retaliate or in any way discriminate against employees because they have inquired about their rights.


Oregon Minimum Wage to Increase July 1

Effective July 1, 2018, the minimum wage rates for employers in Oregon will increase according to their location within designated areas.


The Standard Minimum Wage rate of $10.75 applies to the following counties:


  • Benton
  • Clatsop
  • Deschutes
  • Columbia
  • Hoover River
  • Jackson
  • Josephine
  • Lane
  • Linn
  • Lincoln
  • Marion
  • Polk
  • Tillamook
  • Wasco
  • Yamhill



The Urban Minimum Wage rate of $12 per hour applies to the Portland Metro area, which includes parts of Multnomah, Clackamas, and Washington Counties. Employers in these counties who need to see if they must pay the Urban Minimum Wage can enter their address here.


The Non-urban Minimum Wage rate of $10.50 applies to employers in the following counties:


  • Baker
  • Coos
  • Crook
  • Curry
  • Douglas
  • Gilliam
  • Grant
  • Harney
  • Jefferson
  • Klamath
  • Lake
  • Malheur
  • Morrow
  • Sherman
  • Umatilla
  • Union
  • Wallowa
  • Wheeler



Oregon also does not allow for tip credit to tipped employees. Those employees must earn the regular minimum wage.


The law does not specifically explain how an employer should determine its location for purposes of paying minimum wage, or whether employees will be entitled to various wage rates if they travel through the state (or out of the state) as part of their jobs. Instead, the commissioner of the Bureau of Labor and Industries has been given the authority to issue rules that will describe how that determination is to be made.


Oregon Enacts Tougher Data Breach Notification Law

Effective June 2, 2018, Oregon’s data breach notification law now requires companies to notify affected consumers no later than 45 days following discovery of a breach. Additionally, if a company offers free credit monitoring or identity theft protection services to the affected consumers, the company may not require the consumers to provide a credit or debit card number in order to receive such services.

Other key changes in the 2018 amendment to the Oregon Consumer Identity Theft Protection Act include:

  • The law now applies to any person or organization that “owns, licenses or otherwise possesses personal information.”
  • The duty to report is now triggered if a company receives notice of a breach from a third-party contractor that maintains such information on behalf of the company.
  • The definition of personal information under the law is expanded to include any “information or combination of information that a person reasonably knows or should know would permit access to the consumer’s financial account.”


The amended requirements now apply to any person or organization that has control over or access to personal information, in addition to those that own, maintain or otherwise possess such information.


The safeguards that should be part of an organization’s information security program include:

  • Administrative safeguards, including identification of potential risks and training of key employees, must be performed with reasonable regularity.
  • Technical safeguards must now include assessment of vulnerabilities in addition to risks, and security updates or patches must be implemented when risks or vulnerabilities are identified.
  • Physical safeguards must be assessed “in light of current technology,” and intrusions must be monitored and isolated in addition to the previous requirement that they be detected, prevented, and responded to.



Philadelphia Puts Hold on Salary History Ban

A federal judge in Pennsylvania partially blocked Philadelphia’s ban on salary history inquiries, saying such a ban violates the First Amendment. However, the portion of the law that bars employers from relying on past salary is allowed to go forward.



Vermont Enacts Salary History Inquiry Law

Effective July 1, 2018, H. 294 prohibits employers from asking a prospective employee about or seeking information regarding his or her compensation history.


Under the new law, employers are also prohibited from requiring that a prospective employee’s current or past compensation satisfy minimum or maximum criteria for employment. If an employer discovers a prospective employee’s salary history, the employer may not determine whether to interview the prospective employee based on this information.


If a prospective employee voluntarily discloses his or her salary history, the employer may seek to confirm or request that the applicant confirm the disclosed salary after making an offer of employment. An employer may also ask a prospective employee about general salary expectations.



Sexual Harassment and Domestic Violence Victim Protections Enacted

Effective June 7, 2018, new laws provide protection for victims of domestic violence and bar employers from requiring employees to enter into nondisclosure agreements or other contracts that would limit certain rights. A commission to create Model anti-harassment policies by the Washington State Human Rights Commission were also mandated.


S.B. 5996 encourages “the disclosure and discussion of sexual harassment and sexual assault in the workplace”. The law prohibits employers from requiring employees to sign a nondisclosure agreement, waiver, or other document that prevents the employee from disclosing sexual harassment or sexual assault occurring in the workplace as a condition of employment. This law does not prohibit employees and employer from entering into a settlement agreement to resolve claims of sexual harassment, and such agreements may include confidentiality provisions.


S.B. 6313 preserves an employee’s right to file a complaint or cause of action for sexual harassment or sexual assault publicly. This law provides that an employment contract or agreement is against public policy and is void and unenforceable if it requires an employee to waive rights to:

  • Publicly pursue a cause of action under the Washington State Law Against Discrimination;
  • Pursue a cause of action under federal discrimination laws; or
  • Publicly file a complaint with the appropriate state or federal agencies.


S.B. 6471 directs the Washington State Human Rights Commission to create a work group to develop model policies and best practices for employers and employees to keep the workplace free from sexual harassment. The Commission must post the model policies and best practices prominently on its website for the public to access by January 1, 2019.



West Virginia Permits Certain Deductions from Final Pay

Effective May 15, 2018, West Virginia employers are allowed, under certain conditions, to deduct from an employee’s final paycheck the actual cash value of unreturned employer-provided property.


Under the new legislation, an employer is permitted to deduct the replacement cost of unreturned property when: (1) the property was provided while performing the employer’s business; (2) the value of the employer-provided property is more than $100; and (3) the employee signed a written agreement at the time the employer-owned property was provided to him or her.


Such an agreement requires the employee’s signature, a list of the employer-owned property and replacement cost, and a clear notification that the property must be returned upon separation. It must also clearly inform the employee that if he or she fails to return the specified item, the replacement cost of such item may be recovered from the employee’s final wages.





The Internal Revenue Service recently released the following answers to Frequently Asked Questions related to the employer credit for paid family and medical leave.

Q: What is the employer credit for paid family and medical leave?

A: This is a general business credit employers may claim, based on wages paid to qualifying employees while they are on family and medical leave, subject to certain conditions.

Q: Who may claim the employer credit for paid family and medical leave?

A: Employers must have a written policy in place that meets certain requirements, including providing:

1.      At least two weeks of paid family and medical leave (annually) to all qualifying employees who work full time (prorated for employees who work part time), and

2.      The paid leave is not less than 50 percent of the wages normally paid to the employee.

Q: Who is a qualifying employee?

A: A qualifying employee is any employee under the Fair Labor Standards Act who has been employed by the employer for one year or more and who, for the preceding year, had compensation of not more than a certain amount. For an employer claiming a credit for wages paid to an employee in 2018, the employee must not have earned more than $72,000 in 2017.

Q: What is “family and medical leave” for purposes of the paid family and medical leave credit?

A: This is leave for one or more of the following reasons:

1.      Birth of an employee’s child and to care for the child.

2.      Placement of a child with the employee for adoption or foster care.

3.      To care for the employee’s spouse, child, or parent who has a serious health condition.

4.      A serious health condition that makes the employee unable to perform the functions of his or her position.

5.      Any qualifying exigency due to an employee’s spouse, child, or parent being on covered active duty (or having been notified of an impending call or order to covered active duty) in the Armed Forces.

6.      To care for a service member who is the employee’s spouse, child, parent, or next of kin.

7.      If an employer provides paid vacation leave, personal leave, or medical or sick leave (other than leave specifically for one or more of the purposes stated above), that paid leave is not considered family and medical leave. In addition, any leave paid by a State or local government or required by State or local law will not be taken into account in determining the amount of employer-provided paid family and medical leave.

Q: How is the paid family and medical leave credit calculated?

A: The credit is a percentage of the amount of wages paid to a qualifying employee while on family and medical leave for up to 12 weeks per taxable year. The minimum percentage is 12.5% and is increased by 0.25% for each percentage point by which the amount paid to a qualifying employee exceeds 50% of the employee’s wages, with a maximum of 25%. In certain cases, an additional limit may apply.

Q: How does the credit impact an employer’s deduction for the wages paid to an employee while on family and medical leave or claim for any other general business credits?

A: An employer must reduce its deduction for wages or salaries paid or incurred by the amount determined as a credit. Also, any wages taken into account in determining any other general business credit may not be used in determining this credit.

Q: What is the effective date of the paid family and medical leave credit?

A: The credit is generally effective for wages paid in taxable years of the employer beginning after December 31, 2017, and it is not available for wages paid in taxable years beginning after December 31, 2019.

Q: Will the IRS provide additional information on the credit?

A: The IRS expects that additional information will be provided that will address, for example, when the written policy must be in place, how paid “family and medical leave” relates to an employer’s other paid leave, how to determine whether an employee has been employed for “one year or more,” the impact of State and local leave requirements, and whether members of a controlled group of corporations and businesses under common control are treated as a single taxpayer in determining the credit.



Data Breach Security Law Takes Effect June 1

Effective on June 1, 2018, Act No. 2018-396 becomes one of the most stringent data security laws in the country. The Alabama law can be categorized into four obligations:

·         All entities subject to the law (covered entities and third-party agents) must implement and maintain reasonable security measures to protect sensitive personally identifying information against a breach of security.

·         A covered entity shall conduct a good faith and prompt investigation into a breach of security that has or may have occurred in relation to sensitive personally identifying information.

·         A covered entity must notify each affected Alabama resident, and a third-party agent must notify the covered entity of a breach of security involving sensitive personally identifying information.

·         A covered entity must notify the Alabama Attorney General and credit reporting agencies of a breach involving more than 1,000 Alabama residents.

Aside from the obligation to maintain reasonable security measures noted above, the other requirements of the Alabama law are triggered by a covered entity’s determination that “a breach of security has or may have occurred in relation to sensitive personally identifying information that is accessed, acquired, maintained, stored, utilized, or communicated by, or on behalf of, the covered entity.” A breach of security is defined as the “unauthorized acquisition of data in electronic form containing sensitive personally identifying information.”

Sensitive personally identifying information (“SPII”) includes an Alabama resident’s first name/first initial and last name in combination with one or more of the following:

·         A non-truncated Social Security or tax-identification number.

·         A non-truncated driver’s license, passport, or other government identification number.

·         A financial account number combined with security/access code, password, PIN, or expiration date necessary to access or enter into a transaction that will credit or debit the account.

·         An individual’s medical history, mental/physical condition, medical treatment/diagnosis by a health care professional, health insurance policy/subscriber number, or other insurance identifier.

·         A user name or email address combined with a password or security question/answer permitting access to an online account affiliated with the covered entity that is reasonably likely to contain or is used to obtain SPII.


Limitations Period for Unpaid Wage Claims Clarified

In the recent ruling of the case Hernandez v. Domenico Farms, Inc., the Colorado Supreme Court held that a terminated employee’s right to seek unpaid wages or compensation at termination is subject to the two- or three-year statute of limitations under the Colorado Wage Claim Act (“CWCA”). The court also clarified that the statute of limitations begins to run when the wages or compensation first become due and payable.

The Supreme Court agreed with the plaintiff that Section 109 of CWCA allows employees to seek wages and compensation that (1) “only become due and payable” when an employee terminates his or her employment, and (2) “had previously become due and payable.” The court further held that the statute of limitations for those wages begins to run on the date that each set of wages first became due and payable — not on the date of separation.


Idaho Legislature Repeals 2016 Changes to Non-Compete Law

Recently-passed Senate Bill 1287 has repealed the provision in Idaho’s 2016 non-compete law that shifted the burden to key employees and independent contractors to prove that they have no ability to adversely affect the employer’s legitimate business interests as a result of their competitive employment.


New Harassment Training Requirements

Maine recently amended its sexual harassment training law to now require that employers use a checklist prepared by the Maine Department of Labor (“MDOL”) to develop their sexual harassment training programs. To download the MDOL training checklist, click here.

The MDOL’s document provides a summary of the training that employers with 15 or more employees must provide, including the requirement for additional training for supervisory and managerial employees within one year of being hired or promoted into a supervisory or managerial position. Employers are also now required to keep records of the sexual harassment training conducted and to maintain these training records for at least three years.


Pregnant Workers Fairness Act Guidance Issued

The Massachusetts Commission against Discrimination (“MCAD”) recently issued questions and answers to provide additional guidance about the Massachusetts Pregnant Workers Fairness Act (“PWFA”) that went into effect on April 1, 2018.

The PWFA requires that employers with 6 or more employees notify all employees of their rights under the Act by April 1, 2018, at hire thereafter, and within 10 days of an employee’s notice to the employer of pregnancy. The MCAD guidance document provides sample language to satisfy the employer’s notice requirement. For more information click here: MCAD Guidance


Preemption Law to Cover Job Interview Limitations Expanded

Effective June 24, 2018, Public Act 84 prohibits local governments from regulating the information employers can request from prospective employees during the interview process. The act also restricts a local government’s ability to implement “ban-the-box” ordinances that prohibit employers from inquiring about an applicant’s criminal conviction history.

The act is in response to municipalities passing ordinances that prohibit employers from seeking salary information from applicants.


Breach Notification Law Enacted

Under recently-enacted SB 62, businesses must disclose a breach of system security to any resident of South Dakota whose computerized personal or protected information was acquired by an unauthorized person.

Furthermore, if the breach exceeds 250 South Dakota residents, the state attorney general must also be informed. These notices must be provided within 60 days after the breach is discovered, unless a law enforcement agency determines that the notification will impede a criminal investigation.

A failure to comply with the notice requirement would be considered a “deceptive act” under South Dakota’s unfair trade practices law, which can trigger criminal as well as civil enforcement.


Personal Liability for Unpaid Wages Now Limited to Company Officers

The Utah Payment of Wages Act (“UPWA”) was recently amended under HB 364 to limit personal liability for unpaid wages only to officer-level employees. The UPWA previously applied personal liability for unpaid wages claims to an employer’s control group, including all those who have power to hire or fire, supervise work, determine the rate and method of pay, and maintain employment records.


Ban-the-Box Law Limits Criminal Background Inquiries

Effective June 6, 2018, Washington will be the next state to implement “ban the box” legislation restricting employers from inquiring about a job applicant’s criminal background during the initial stages of the application process.

The Washington Fair Chance Act (“WFCA”) prohibits inquiries regarding applicants’ conviction histories until the employer has determined the applicant is “otherwise qualified” for the position. Once the employer has initially determined that the applicant is otherwise qualified, the employer may make further inquiry.

All employers in Washington will be prohibited from:

·         Advertising openings in a way that excludes people with arrest or conviction records from applying, such as using advertisements that state “no felons,” “no criminal background,” or that otherwise convey similar messages;

·         Including any question in an employment application, inquiring orally or in writing, receiving information through a criminal history background check, or otherwise obtaining information about an applicant’s arrest or conviction record, until after the employer has initially determined that the applicant is otherwise qualified for the position;

·         Having automatic disqualifiers or categorically disqualifying an individual based a criminal record before initially determining the person is otherwise qualified for the position; or

·         Rejecting or disqualifying an applicant for failure to disclose a criminal record prior to initially determining the applicant is otherwise qualified for the position.

Exceptions to the law include:

·         Any employer hiring a person who will or may have unsupervised access to children under the age of 18 or a vulnerable adult or person, as defined by Washington law;

·         Any employer, including a financial institution, who is expressly permitted or required under any federal or state law to inquire into, consider, or rely on information about an applicant’s or employee’s criminal record for employment purposes;

·         Various law enforcement agencies or criminal justice agencies in Washington;

·         Any employer seeking a nonemployee volunteer; or

·         Any entity required to comply with the rules or regulations of a self-regulatory organization, as defined by the Securities Exchange Act.

The statewide WFCA does not preempt Washington municipalities from enforcing their own ban-the-box ordinances. Current related local ordinances in place include Seattle’s Fair Chance Employment Ordinance and Spokane’s Fair Chance Hiring Act.

Employment Discrimination Protections Expanded to Cover Victims of Domestic Violence

Effective June 7, 2018, House Bill 2661 provides job applicants and employees in Washington who are survivors of domestic violence, sexual assault, or stalking new protections against employment discrimination and adds a new section requiring reasonable safety accommodations.

Under the Act, all employers in Washington State will be prohibited from:

·         Refusing to hire a qualified individual because he or she is an actual or perceived victim of domestic violence, sexual assault, or stalking;

·         Discharging, threatening to discharge, demoting, suspending, or in any way discriminating or retaliating against an individual because he or she is an actual or perceived victim of domestic violence, sexual assault, or stalking; and

·         Refusing to make a reasonable safety accommodation requested by a victim of domestic violence, sexual assault, or stalking, unless such an accommodation would pose an undue hardship on the operation of the employer’s business.

The Act offers examples of a “reasonable safety accommodation”:

·         Transfer or reassignment;

·         Modified job schedule;

·         Change in work telephone number, email address, or workstation;

·         Installed locks;

·         Implementing safety procedures; or

·         Any other adjustment to a job structure, workplace facility, or work requirement in response to an actual or threatened domestic violence, sexual assault, or stalking.

An employer may require verification for an employee’s request for leave or a reasonable safety accommodation under the Act.

Equal Pay Opportunity Act Amends Equal Pay Act

Effective June 7, 2018, the Equal Pay Opportunity Act (“EPOA”) amends Washington’s 1943 Equal Pay Act.

The EPOA amends the existing private cause of action for pay equity complaints, prohibits wage secrecy policies, provides an administrative remedy, prohibits gender-based barriers to career development opportunities, and prohibits employer retaliation for complaints of unequal pay or other protected conduct. Further, the EPOA updates language from “sex” to “gender,” consistent with Washington’s other anti-discrimination laws.

While the original act allowed an employer to assert a “good faith” defense, the updated EPOA goes further and lists the factors a court may consider in an employer’s “good faith” defense. “Good faith” factors include, but are not limited to, business necessity education, training, experience, seniority, merit, and regional differences. An employee may recover reasonable attorneys’ fees in a successful private action.

The EPOA also prohibits an employer from using wage secrecy measures such as requiring nondisclosure of wages as a condition of employment or requiring employees to contractually agree to nondisclosure. Further, an employer may not discharge or retaliate against employees who discuss or compare wage information.


Employers Cannot Prohibit Guns in Vehicles

Effective June 8, 2018, the Business Liability and Protection Act (House Bill 4187) limits a West Virginia employer’s ability to prohibit the lawful possession of firearms locked in vehicles parked in company parking lots. Previously, employers and other property owners in West Virginia had the ability to prohibit the carrying or concealing of firearms on any property “under his or her domain,” including parking areas.

Under the new law, employers may not prohibit any customer, employee or other person lawfully on the premises from storing a lawfully possessed firearm inside of a privately-owned vehicle in a company parking lot, as long as the firearm is out of view and locked inside the vehicle.

Further, employers are prohibited from asking about the presence of a firearm locked inside a vehicle or performing an actual search for a firearm within a vehicle on a company parking lot and from conditioning employment on an employee’s agreement not to keep a firearm locked inside his or her vehicle or on whether an employee holds a concealed-carry license.

The act applies only to privately-owned vehicles and does not apply to vehicles owned, rented or leased by the employer.

Top 5 Reasons Why To Buy Employment Practices Liability Insurance:

Top 5 Reasons Why To Buy Employment Practices Liability Insurance:


  1. Over 40 percent of EPL claims are against firms with fewer than 100 employees.
  2. Three of five employers are sued by former employees every year.
  3. The financial ramifications of not having EPL insurance can be crippling, especially for small firms because they do not have the operating budgets to handle the defense costs, let alone settlements or judgments, of an uninsured claim.
  4. The median compensatory award to plaintiffs is $325,000.
  5. Employment Practices Liability (EPL) covers not only ACTUAL, but also ALLEGED acts of discrimination, harassment, retaliation, wrongful termination and other similar acts.

The following classes of business can be quoted:

  • Accounting Firms
  • Advertising Firms
  • Airport (Local/Regional)
  • Ambulance Service- Private
  • Architect
  • Assisted Living (other than nursing homes) Auto Dealership* Auto Repair/Garages
  • Bank- US-Owned*
  • Bowling Lanes
  • Camps
  • Car Washes
  • Catering Service- No Banquet Halls & Facilities Cemetery/Funeral Home Church Condominium/Homeowners Associations Consultants
  • Contractor- Artisan Contractors
  • Counseling Centers
  • Country Clubs*
  • Credit Operations*
  • Daycare Center- Commercial
  • Drug Rehabilitation Centers
  • Engineers
  • Executive Search Firms*
  • Fitness Centers
  • Grocery Stores
  • Hotel/Motel Management Company
  • Hotel/Motel Owner
  • Insurance Agents- Not USLI appointed
  • Insurance Companies*
  • Internet Company
  • Landscaper
  • Law Firm- Other than Entertainment Law (<50 employees) Maintenance/Janitorial
  • Manufacturer- All Other
  • Mortgage Companies
  • Nursing Home/Home Health Care Providers* Plumber Printer/Publisher Property Management Companies* Real Estate Agencies* Recreation/Membership Organization- All Other Rent to Own Furniture Store* Rental Car Agencies*
  • Restaurant- Fast Food
  • Retail Store- All Other
  • Sales/Distributors
  • Schools- All Other
  • Security Guard Services- All Other*
  • Supermarkets
  • Transportation/Trucking- All Other
  • Travel Agency
  • Veterinary Clinics


*Indicates class is not eligible for Third Party coverage. Other classes of business are eligible for quote consideration.  An application may be submitted. As always, we appreciate your business! Please let us know if you have any questions!




ERISA, which stands for the Employee Retirement Income Security Act, is a federal law regulating employer-sponsored group benefits. Nearly every employer, regardless of their size, is subject to ERISA if they offer even one employer-provided group benefit such as health, dental, vision, accidental death & dismemberment, disability, or group term life insurance; medical flexible spending account or health reimbursement account; wellness and employee assistance program; or any other benefit for which the employer contributes to the cost. The only exempt employers are churches and government entities. Besides requiring certain plan features, the law also mandates detailed reporting requirements, both to the Department of Labor and other government agencies and to employees and covered members under your policies. While ERISA was first enacted in 1974, recent changes under the Patient Protection and Affordable Care Act (PPACA) have added additional requirements and changed reporting deadlines. REQUIREMENTS UNDER ERISA & PPACA If you offer any of the above-mentioned health and welfare benefits, you must meet specific requirements, specifications, and deadlines for plan documents under ERISA as well as under PPACA. The key ERISA and PPACA provisions are listed here and details of each follow: · distribute a written plan document and Summary Plan Description (SPD) for every health and welfare benefit and any voluntary benefit pre-taxed under a 125 plan to all plan participants including spouses and COBRA enrollees, · distribute ERISA benefit notices to all eligible employees on enrollment and re-enrollment of your health plan, · notify participants of any change to a plan that materially affects the design or pricing, · file Form 5500 and all applicable schedules within 7 months after the plan year ends for each plan that has more than 100 participants (not just employees) on the first day of the plan year, · meet all fiduciary standards and plan terms, · establish a trust fund that holds the plan’s assets, if applicable, · establish a recordkeeping system to track contributions, benefit payments, maintain participant and beneficiary information, and to prepare reporting documents, · provide a summary of benefits and a coverage explanation (SBC) and documentation of how and when it was distributed each year, · verify fiduciary bonding needs for individuals handling funds and other property of employee benefit plans like a 401(k) plan, if applicable. The deadline for each requirement varies, depending on when your plan was enacted, whether it is grandfathered under PPACA, whether material changes have been made, and other exceptions. Copies of certain plan documents must be also available to participants and beneficiaries on written request. SPD and Wrap Requirements An employer must have a written Summary Plan Description (SPD) for each separate welfare benefit plan, informing participants of eligibility requirements, benefits, claims and appeals procedures, and rights under ERISA. Your insurers may provide some but not all information required for SPD compliance. It is a common mistake by employers to think the summary insurance information they receive from their insurance provider meets the SPD requirements. A common approach is to combine all SPDs into one overall SPD Wrap notice, tying in the required ERISA language and simplifying the SPD notice process. A customized SPD Wrap must include the name of the plan, plan sponsor, plan administrator, plan year, employer tax identification number, type of welfare plan, type of administration, summary of the benefits, detailed description of plan benefits for group health plans, provider network availability for group health plans, procedures for Qualified Medical Child Support Orders (QMCCOS), COBRA rights, plan contributions, and claims procedures. A Statement of ERISA Rights is also required. The SPD and Wrap must be distributed to newly-enrolled participants within 90 days of when coverage started, or within 120 days of a new plan being established. ERISA Benefit Notices All eligible employees must receive ERISA Benefit Notices upon enrollment and re-enrollment of your health plan. Depending on company size and other criteria, you may be required to provide employees with the following employee notifications: · Medicare Part D Notice · CHIP (if applicable in your state) · Wellness Program Disclosure · Women’s Health & Cancer Rights · Hospital Stay Rights for Childbirth · Mental Health & Parity Act · HIPAA Notice · Disclosure of Grandfathered Status · COBRA Rights – Initial Notice In the event of certain Qualifying Events, additional required notices may include: · COBRA Qualifying Event Letter · HIPAA Breach Notice · Medical Child Support Order Notice (MCSO) · National Medical Support Notice (NMS) Form 5500 and Summary Annual Report ERISA further requires employers with 100 or more participants to annually report certain information to the DOL on Form 5500. Form 5500 returns ask for information about the plan, including plan name, plan year, plan sponsor, plan number, participants, insurance costs, and financial data. Employers who set up an SPD Wrap can file one 5500 report for the SPD Wrap covering all health and welfare plans. Once a Form 5500 is completed and filed, you must prepare a Summary Annual Report (SAR) for each of your welfare benefit plans subject to ERISA reporting, or just one if done under an SPD Wrap. The SAR summarizes Form 5500 information and notifies participants Form 5500 has been filed and a copy is available to those who request a copy. SARs must be distributed to covered participants within nine months after the end of the plan year. A SAR is not required for plans that are not required to file a Form 5500. AUDITS AND ENFORCEMENTS The Department of Labor’s Employee Benefits Services Administration (EBSA) routinely conducts audits of group health benefit plans to investigate or audit the plan’s compliance. In addition, the Health Benefits Security Project (HBSP) was recently established under PPACA to add to EBSA’s compliance and enforcement initiatives. It has been reported that smaller groups of fewer than 100 are being particularly targeted since the DOL does not have the ability to monitor them through a Form 5500 filing. Audits are anticipated to increase significantly, given increased audit budgets and concerns over ERISA and PPACA violations. If your company is selected for a DOL audit, a letter will be sent to the Plan Sponsor containing the list of documents the DOL would like to review. The request for information typically goes back three to six years. AUDIT TRIGGERS AND PENALTIES Every audit is unique. However, reported trends show the following are typical areas of concern, in recent audits: · Summary Plan Descriptions · HIPAA compliance, particularly notices to employees about special enrollment rights · PPACA Grandfathered Plan notices and documentation of coverage for adult children · PPACA lifetime and annual limit requirements · inadvertently excluding people who may be eligible to participate in the plan, including dependents up to age 26 The DOL reports common audit triggers include: · the Department’s internal audit initiatives · employee complaints · press tips and public visibility of a company or its third-party vendors · the Department’s Memorandum of Understanding with the IRS · form 5500 filings inconsistencies or suspect information · an audit of a plan’s auditor (if 100+ group) · randomly selected In the future, DOL audits will also likely focus on: · employer communications and documentation · employer reporting requirements · coverage of essential health benefits, cost-sharing and out-of pocket limits for applicable plans · annual limits, on non-essential health benefits only · structure of group health benefit plans and offers of coverage · waiting period limitation of 90 days · exchange notice documents · adherence to PPACA requirements The employer is solely responsible for ERISA compliance. Penalties may be enforced for failure to comply with ERISA regulations, including DOL enforcement actions and penalties as well as employee lawsuits. Certain infractions can entail up to $100/day penalty for every employee that is affected by a violation until the violation is corrected. The penalty for late delivery of SPD or Wrap can be as much as $110/day per plan. Late filing of form 5500 can result in fines as high as $1,100 per day. The DOL estimate three out of four plans they audit have an ERISA violation, and about 70 percent of audits with violation have resulted in monetary fines to the employer. AUDIT PREPARATION Knowledge and familiarity of compliance requirements, complete documentation, and policies that show good faith efforts to comply are the best way to be prepared for an audit (as well as to avoid one in the first place). Below is a summary of the items you should have in place to ensure ERISA compliance. 1. ERISA & PPACA requirements mentioned above 2. Written ERISA plan document 3. SPDs or the combined SPD Wrap prepared and distributed to all plan participants within 90 days of first day of coverage 4. Summary of Material Modification (SMM) for any amendments such as carrier change, eligibility change, benefit structure change, etc. to your plans 5. Form 5500 and SAR filed annually (only if you have over 100 enrolled participants in any benefit) An organized employer with meticulous records who has a health insurance broker who helps review all of the company’s

HCSO Annual reporting Form (Deadline is May 1, 2017)

HCSO Annual reporting Form

Deadline is May 1, 2017

All employers covered by the Health Care Security Ordinance (HCSO) are required to submit the 2016 Annual Reporting Form by May 1, 2017. Covered employers who fail to submit the Annual Reporting Form will be subject to a $500 penalty for each quarter that the violation occurred. An employer is covered by the HCSO for any calendar quarter if it meets the following three conditions:

  • Employs one or more workers within the geographic boundaries of the City and County of San Francisco;
  • Is required to obtain a valid San Francisco business registration certificate pursuant to Article 12 of the Business and Tax Regulations Code, AND
  • Is a for-profit business with 20 or more persons performing work OR a nonprofit organization with 50 or more persons performing work. This includes all persons working for the entity, regardless of whether they are located in San Francisco or outside the city.

Resources for completing the 2016 Annual Reporting Form (due by May 1, 2017) or to learn more about HCSO, are provided below:

If you would like to notify your clients of the impending deadline, simply copy the details within this email to create your own message. If you have any questions about HCSO compliance or reporting for 2016, please contact the Office of Labor Standards Enforcement (OLSE) at hcso@sfgov.org or 415.554.7892.

Family Medical Leave Act Notice (FMLA)

Family Medical Leave Act entitles eligible employees of covered employers to take unpaid, job-protected leave for specific family and medical reasons if the employee has been with the company for one year, has worked at least 1250 hours during the prior 12 months and works in an area where there are at least 50 employees within 75 miles. For additional details, visit the Department of Labor FMLA page. Notify the organization when you have a qualifying leave such as birth or adoption of a child, a serious health condition, to care for a spouse, child or parent with a serious medical condition or for reservist or national guard provisions related to you or an immediate family member leaving for military duty or being injured in active duty.
Additional information and notices can be found at: http://www.dol.gov/whd/fmla/index.htm


1. Complying with breach notification laws costs time and money
2. Third party data is valuable and you can be held liable if you lose it
3. Data is one of your most important assets yet it is not covered by standard property insurance policies
4. Systems are critical to operating your day to day business but their downtime is not covered by standard business interruption insurance
5. Cyber-crime is the fastest growing crime in the world, but most attacks are not covered by standard property or crime insurance policies
6. Retailers face severe penalties if they lose credit card data
7. Your reputation is your number one asset, so why not insure it?
8. Social media usage is at an all-time high and claims are on the rise
9. Portable devices increases the risk of a loss or theft
10. It’s not just big businesses being targeted by hackers, but lots of small ones too


Beginning January 1, 2006, Medicare beneficiaries will have the opportunity to receive subsidized prescription drug coverage through the new Medicare Part D program. Beneficiaries who choose not to sign up at the first opportunity may have to pay more if they wait to enter the program later after the open enrollment period.
Beneficiaries who have other sources of drug coverage – through a current or former employer or union, for example – may stay in that plan and choose not to enroll in the Medicare drug plan. If their other coverage is at least as good as the new Medicare drug benefit (a
nd therefore considered “creditable coverage” ), then the beneficiary can continue to get the high quality care they have now as well as avoid higher payments if they sign up later for the Medicare drug benefit. Under §423.56(a) of the final regulation, coverage is creditable if the actuarial value of the coverage equals or exceeds the actuarial value of standard prescription drug coverage under Medicare Part D, as demonstrated through the use of generally accepted actuarial principles and in accordance with CMS actuarial guidelines. In general, the actuarial equivalence test measures whether the expected amount of
paid claims under the entity’s prescription drug coverage is at least as much as the expected amount of paid claims under the standard Part D benefit.
REQUIRED DISCLOSURES TO CMS Section 423.56(e) of the final regulation requires all entities described in § 423.56(b) to disclose to CMS
whether their prescription drug coverage is creditable or non-creditable. The disclosure must be made to CMS on an annual basis, or upon any change that affects whether the coverage is creditable. Rules for making disclosures to CMS will be provided in future guidance.
In general, entities listed in section 423.56(b) of the final regulation must provide, or arrange for providing, a notice of creditable prescription drug coverage to Medicare beneficiaries who are covered by, or who apply for, prescription drug coverage under the entity’s plan

Insurance Plan Renewal and Benefit Reminders

Insurance Plan Renewal and Benefit Reminders

Open Enrollment
• Renegotiate insurance contracts, coverage and rates with providers.
• Communicate insurance plan options, changes, rates and coverage options to employees.
• Obtain needed insurance applications and waivers from employees.
• Establish new Cafeteria 125 plan, flexible spending accounts (medical and child care), if applicable and obtain waiver agreements from all non-participants.

CMS Online Disclosure
• If employer offers prescription drug benefits to any Medicare Part D eligible individual on the beginning date of their plan year, they are to complete the disclosure to CMS form for that plan year. This disclosure of creditable coverage status must be provided within 60 days after the beginning date of the plan year and must be made to CMS on an annual basis and upon any change that affects whether the drug plan is creditable. Provide online disclosure to CMS of creditable coverage status of your prescription drug plan at the following link: https://www.cms.gov/CreditableCoverage/45_CCDisclosureForm.asp

ERISA Summary Plan Descriptions (SPD) or SPD Wraps
• Employers are to provide employees with a SPD communicating plan rights and obligations to participants and beneficiaries within 90 days after becoming covered under the employer’s plan. Plan administrators of a new plan must distribute an SPD within 120 days after the plan is established. An updated SPD must be furnished to all covered participants every 5 years, and every 10 years for plans with no changes. Summary of Material Modifications (SMM) must be furnished automatically to participants when a plan is amended or “materially” modified.

Summary of Benefits & Coverage (SBC)
• Insurers and group health plans must provide a summary of benefits and coverage (SBC) document to each full time employee, and to family members of those enrolled in coverage in a standardized, consumer-friendly format, making it easier for participants to compare with other plans. The health insurance carrier prepares this for fully insured plans, and employers are responsible to prepare the SBC for self-funded policies.

5500 Report Due
Groups with 100+ employees are to submit a 5500 report to the IRS for all health and welfare plans. For plan years commencing on or after January 1, 2009, employers must file electronically using the EFAST2 processing system. These employee benefit plan forms are due by the last day of the seventh month after the plan year ends.

Employee Notifications
Using your HR Service, Inc. Compliance Basic service, an employee notifications report is emailed to you for distribution to your employee’s when you complete or update your Company Profile. The notification report meets the below health & welfare ERISA notification requirements.

Annual Notices :
 Medicare Part D Notice (Certificate of Creditable (or Non-Creditable)) Drug Coverage
 CHIP or premium assistance (if applicable in your state)
 Wellness Program Disclosure (if providing wellness plan that is subject to HIPAA)
 Women’s Health & Cancer Rights –Hospital Stay Rights for Childbirth
 Notice of Non-Federal Governmental Plan Opt-Out (if applicable) – prior to first day of plan year.
 Mental Health & Parity Act Notice of Availability of HIPAA Privacy Notice (every three years)
 Grandfathered status notice (grandfathered plans only) – first day of plan year starting on or after 09/23/2010.

Other notices that maybe required include:
 § 125 Automatic/Evergreen Election Notice (applicable if automatic enrollment in place) For additional information go to: http://www.irs.gov/pub/irs-irbs/irb02-20.pdf
 Summary Annual Report (SAR) (only if required to file form 5500) – within 9 months of end of plan year. Additional information and model language available at: http://www.dol.gov/ebsa/faqs/faq_auditwaiver.html

Sample notices for many of the qualifying events listed below can be found in the compliance basic’s center.

Qualifying Event Notices:
 COBRA Election, Early Termination, Unavailability notice
 FMLA rights notice (50+ employees)
 HIPAA Notice of Breach or Unsecured PHI. – as soon as breach is determined and in no case later than 60 calendar days after discovery.
 HIPAA Certificate of Creditable Coverage – upon termination of coverage
 Qualified Medical Child Support Order Notice (QMCSO)
o Notification of receipt of order – promptly after receiving order
o Notification of determination – within a reasonable period
 National Medical Support Notice (NMS)
 Michelle’s Law – when plan is notifying participant of responsibility to certify student status.
 Individual Notice of Preexisting Condition Notice (if applicable) – within 5 days of determination.
 Summary of Material Modification (SMM) – within 210 days of end of plan year.
 Summary of Material Reduction (SMR) – within 60 days of adoption
 Wellness Program Disclosure (If subject to HIPAA) – any time plan materials are provided to participants.
 30-day Advanced Notice of Rescission – first day of the first plan year starting on or after 09/23/2010
 ERRP Notice – within reasonable time after the sponsor receives its first ERRP reimbursement (if employer receives reimbursement through Early Retirement Reimbursement Plan)
 Employer Medical Benefit Event Specific Notices:
Prior to Enrollment in Employer Plan (open enrollment)
• General Notice of Preexisting Condition Exclusion (if applicable)
• Notice of HIPAA Special Enrollment Rights (including CHIP events)
• Certificate of Creditable (or Non-Creditable) Drug Coverage
• Dependent coverage extension and special enrollment – one time only notice. On first day of first year enrolled on or after 9/23/2010 or eligible to enroll.
• Lifetime limit elimination and special enrollment – one time only notice. On first day of first year enrolled on or after 9/23/2010 or eligible to enroll.
Upon Initial Enrollment in Employer Plan
• COBRA general notice/initial notice (provide within 90 days of becoming covered under employer health plan)
• Section 125 Pre-tax salary reduction agreement (If applicable)
• SPD (Summary Plan Description) – within 90 days of first becoming covered. Should include:
o Newborns and Mother’s Health Protection Act Disclosure NMHPA.
o Mini-Med Waiver Notice (for each year plan receives a waiver)
o PCP and OB/GYN choice notice (Non-grandfathered plans only)
• HIPAA Privacy Notice (if applicable)
• Women’s Health and Cancer Rights Act Notification
• Non-Federal Governmental Plan Opt-Out Notice (If applicable)
• § 125 Automatic/Evergreen Election Notice (if applicable)



Am I an Applicable Large Employer (ALE)? What’s a look back period? What’s my measurement period? What’s my stability period? What’s an administrative period? Am I part of a controlled group? Which employees must be included in calculations? Do I have to report on sections 6055 and 6056 employer reporting?

There are so many different calculations governing the Affordable Care Act. If you get one of them wrong, you are in violation of the act and subject to fines and penalties. In this article, we are going to provide clear explanations to help you comply.

Applicable Large Employer (ALE)
The Affordable Act and its enforcers, the Internal Revenue Service (IRS), Department of Labor (DOL) and Health and Human Services Department, require all organizations who are an “ALE” to offer medical insurance to their employees that meets minimum essential value requirements at affordable rates. They further require ALEs to submit reports 1095-C/1094-C reporting on sections 6055 and 6065.

An organization is considered an applicable large employer if they average 50 or more full-time or full-time equivalent (FTE) employees during the prior year. The employer looks back over an entire 12 month period of time, adding all full-time employees who averaged 30 hours or more work per week, along with all work hours performed by part-time, temporary and seasonal employees. Work hours include time paid (including sick, jury, disability, severance, leaves of absence, vacation and holidays).

ALE Calculation
1) Determine the number of full-time employees for each month (anyone averaging 30+ hours per week or 130 hours per month).
2) Total the full-time equivalent (FTE) service hours for all variable hour employees (part-time, temporary and seasonal employees) and divide this by 120.
3) Add the FT employee to the FTE for each month and divide by 12 to find the average.

If you have 50 or more, you are an ALE. (See below example.) Note: if your business has a seasonal hiring pattern (i.e. summer or holiday hires), you may be able to exclude those employees if the period of hire is less than 120 days in a calendar year. See http://www.irs.gov/Affordable-Care-Act/Employers/Determining-if-an-Employer-is-an-Applicable-Large-Employer, seasonal workers.

Controlled Groups
If you are part of a controlled group, you must include total FT and FTE for all applicable controlled groups together to determine ALE status for all group members. There are three applicable control groups as defined by the IRS Code § 414 (b) and 414 (c).

A Parent-Subsidy Group is when one or more businesses are connected through stock with a common parent corporation and (a) 80% of the stock of each corporation (excluding the common parent corporation) is owned by one or more corporations in the group and (b) the Parent Corporation owns 80% of at least one other corporation.

A Brother-Sister Group is a group of two or more corporations, where five or less common owners (common owners included individuals, a trust, or an estate) own a controlling interest (direct or indirect) of each group and have effective control.

A Combined Group is a group consisting of three or more organizations where (a) each organization is a member of either a parent-subsidiary or brother – sister group and (b) at least one corporation is the common parent of a parent-subsidiary and is also a member of a brother-sister group.
(See: http://www.irs.gov/pub/irs-tege/epchd704.pdf.)

If you are attempting to classify employees as independent contractors in attempts to fall below the 50 ALE number, be careful. The IRS and DOL are cracking down on any misclassifications. Read the new DOL guidance memo on this topic at http://www.dol.gov/whd/workers/Misclassification/AI-2015_1.htm.

Measurement, Stability, and Admin Periods
Measurement periods are the defined period of time where an employer calculates average work hours for variable hour employees to determine if they are eligible to participate in their medical insurance plan or not. Any variable employee who averages 30 hours or more during the measurement period is eligible. Measurement periods can be between three and 12 months in length. You can also define different measurement periods for new hires and for regular employees. Make sure to define your selected measurement periods, stability periods and administrative periods in writing, and consistently follow and administer benefit eligibility accordingly.

A stability period is the time period that an eligible employee can remain on medical coverage regardless of their current average work hours. The stability period must be equivalent to the same time period as the measurement period, but not less than 6 months.

Employers are allowed an administrative period of up to 90 days to perform initial measurement period calculation of eligibility for coverage and enrollment into plans. However, the measurement period and stability period combined cannot be more than 13 months for new employees. As soon as one Measurement Period ends, the next one begins with the Administrative Period overlapping the end of the prior Stability Period and the beginning of the next Measurement Period.

Calculating the Play or Pay Penalty
For businesses with fewer than 50 FTE, there is no play or pay penalty. Penalties are based on two areas of compliance: minimum essential coverage (plan pays on average at least 60% of the total allowed benefits and participants don’t pay more than 40%) and affordable coverage (not more than 9.5% of employee’s monthly wage for self only coverage). Businesses with 50 or more employees that do not offer minimum essential coverage will be assessed a $2,000 per employee (minus the 30 employee allowance allowed for this category only) per year tax penalty if even one employee enrolls in a health insurance exchange plan and qualifies for a premium subsidy or federal tax credit. This penalty goes to $3,000 per employee if the coverage offered is not affordable.

Sections 6055 and 6056 employer reporting
If you are an ALE with 50 or more FT or FTE employees, you are required to complete forms 1095-C/1094-C to report who is offered minimum essential coverage at affordable rates. This allows the IRS to determine if you or employees are to be fined. All self-funded plans must report as well, either on forms 1095-B (if less than 50 employees) or 1095-C.

Make sure you use the right calculations when determining which parts of the Affordable Care Act apply to you and in setting up eligibility. There are many facts to consider in adhering to these laws and ensuring compliance.

by Ken Spencer,