HR Watchdog

April 3 NEW I-9 For Real!

After much confusion earlier this year, we can actually say that there is a new Form I-9 that employers must begin using on Friday, April 3, 2009. The revision date is 2/2/09, and the expiration date is 6/30/09. Use this form for all new hires on or after April 3, 2009. Your current employees need not and should not complete a new I-9.

This form updates the List A documents and specifies that expired documents are no longer acceptable. The new form also includes the U.S. Passport Card as an acceptable List A document.

Note: The Spanish version of Form I-9 may be filled out by employers and employees in Puerto Rico ONLY. Spanish-speaking employers and employees in the 50 states and other U.S. territories may print the Spanish version of the form for their reference, but may only complete the form in English to meet employment eligibility verification requirements.

Arbitration Agreements - Shocking the Conscience of the Court

In one California appeals court decision, the court found that an arbitration agreement that includes a class arbitration waiver is contrary to public policy and an unconscionable arbitrator selection clause creates substantial disadvantages for an employee seeking to arbitrate a modest claim. As such, the court refused to mandate arbitration and allowed the employee's claim to be heard by a trial court.

In another California appeals court, the court found a class arbitration waiver to be unconscionable. In addition, the arbitration agreement prevents an employee from acting as a private attorney general in conflict with the Private Attorneys General Act of 2004. This court also refused to enforce the arbitration agreement.

These cases will be reported on in next week's HRCalifornia Extra newsletter. If you are not currently subscribed to this free newsletter, sign up now.

COBRA Stimulus Web cast and NO required Posting

The DOL has a web cast available, you can sign up online.

Also - a number of questions about the COBRA Stimulus information and posters that the DOL has posted. The COBRA subsidy does not require any new postings for employers. The only required notices that must be provided to assistance eligible employees are the notices we discussed in the March 19, 2009 blog.

COBRA Subsidy Model Notices Posted!

The much anticipated COBRA Subsidy Model Notices have been posted by the US Department of Labor. There are four forms:

1. The COBRA General Notice (full version), which includes both the subsidy language and the COBRA General Notice.
   
2. The COBRA General Notice (abbreviated version), which includes only the additional information relating to the subsidy that employers must send to eligible employees. CalChamber has a General Notice for its members to use, so we are recommending using the COBRA Continuation Coverage Election Notice for California Employees OR the COBRA Continuation Coverage Election Notice for Employees Outside California and this COBRA General Notice (abbreviated version) in conjunction with one another.
   
3. Alternative Notice. Insurance issuers that provide group health insurance coverage must send the Alternative Notice to persons who became eligible for continuation coverage under a State law - this applies to Cal-COBRA. Because continuation coverage requirements vary among States, the DOL is recommending that issuers modify this model notice as necessary to conform it to the applicable State law. Issuers may also find the model Alternative Notice or the abbreviated model General Notice appropriate for use in certain situations. Cal-COBRA employers should verify that their carriers have this notice and have updated it accordingly.
   
4. Notice in Connection with Extended Election Periods. Plans subject to the Federal COBRA provisions must send the Notice in Connection with Extended Election Periods to any assistance eligible individual (or any individual who would be an assistance eligible individual if a COBRA continuation election were in effect) who:

            1. Had a qualifying event at any time from September 1, 2008 through February 16, 2009; and
            2. Either did not elect COBRA continuation coverage, or who elected COBRA but subsequently discontinued it.

            This notice includes information on ARRA’s additional election opportunity, as well as premium reduction information. This notice must be provided by April 18, 2009.

IRS Issues new Form 990 for Tax Exempt Orgs

The Internal Revenue Service (IRS) has redesigned the Form 990 - the information return that many tax-exempt organizations file annually with the IRS. The IRS has asked us to spread the word to our nonprofit members. These changes have important implications for nonprofit organizations, as all are now required to file either a Form 990 or a related form. It’s important that your constituents fully understand the changes to the new Form 990 in order to maintain their tax-exempt status.

The IRS has prepared information that outlines the following key points:

•    Alerts tax-exempt organizations about the importance of filing the new Form 990
•    Helps organizations to understand which form they should file, depending on size
•    Provides online resources from the IRS to help navigate the new filing process

CalChamber will post this new form on its Web site.

Recession Proofing Language?

There has been some press about the increased anger and frustration felt by the public in general due to the poor economy. Some researchers are showing an increase in the use of "colorful" language. It is pretty standard that, when something irritating, annoying or something that makes one feel angry, one swears in reaction.

At work this may create discomfort among coworkers, hostility even. Refer to company policies about professionalism or employee conduct. Be sure employees feel comfortable either asking an increasing offender to stop or that they have someone to talk to about it.

Are others noticing an increase in swearing in the workplace? How are you dealing with it?

SF Healthcare Still in Play

On March 9, 2009, the 9th Circuit Court of Appeals denied a request by the Golden Gate Restaurant Association to have its case against the City of San Francisco heard by an entire panel of the court, known as an "en banc" hearing. The 9th Circuit ruled in September 2008 that the San Francisco Health Care Security Ordinance and the corresponding Health Access Plan were not preempted by the Employee Retirement Income Security Act (ERISA) and the denial of rehearing agreed with only one judge dissenting.

According to the opinion, "the question is whether the San Francisco Health Care Security Ordinance (“the Ordinance”) is preempted by ERISA. We describe the Ordinance in detail in our opinion. In brief, the Ordinance requires San Francisco employers to pay to the City of San Francisco what amounts to a tax. The tax is either $1.17 or $1.76 per hour per employee, depending on the profit or non-profit status of the employer and the number of employees. No employer is required by the Ordinance either
to establish a new ERISA health care plan or to modify an existing ERISA health care plan. An employer may fully satisfy its obligation under the Ordinance by paying the tax to the City."

The dissenters stated, "I dissent because I believe the San Francisco Ordinance is clearly preempted by ERISA Section 514(a). Contrary to the arguments made by Judge W. Fletcher in both the Concurrence and the original panel opinion, our decision here creates a circuit split with the Fourth Circuit, undercuts the Supreme Court’s ERISA preemption case law, and creates a roadmap for the enactment of numerous conflicting health care laws affecting national employers, the very situation Congress strove to avoid when it enacted ERISA."

We expect this case to be appealed to the U.S. Supreme Court. In the meantime, the Ordinance is still in effect and San Francisco employers must continue to comply with its requirements.

Bicycle Commuter Benefit

Pages 19-20 of the 2009 IRS publication 15-B - "Employers Tax Guide to Fringe Benefits" - cover the bicycle commuter benefit.

Employers are generally allowed to exclude the value of bicycle commuting benefits for up to $20 for every bicycle commuting month in 2009. For any employee, a qualified bicycle commuting month is any month the employee:

1. Regularly uses the bicycle for a substantial portion of the travel between the employee’s residence and place of employment and:

DOES NOT RECEIVE

a. Transporation in a commuter highway vehicle
b. Any transit pass, or tax deduction for such taxes
c. Qualified parking benefits

Are employers getting requests for this benefit? How is your company handling this?

Even More COBRA Subsidy Info - still no model notice, though

The House of Representatives Ways and Means Committee issued a frequently asked questions document about the COBRA subsidy. The federal Department of Labor has it posted on its Web site.

We are still waiting for the model notice - on or before March 17, 2009. Involuntarily terminated employees should be directed to your carrier for information about the subsidy. Also keep in mind that employees may pay only the 35 percent even if they have not received the notice. You or your carrier should be able to tell employees what 35 percent of their total payment (usually 102 percent of the cost) is. Another way to handle it is to reimburse employees later, once all required notices are available and provided.

Spring Forward!

This year, Daylight Saving Time (DST) is begins Sunday, March 8 at 2:00 a.m. DST is a good time for employers to review safety and other protocol.

Safety

Many experts recommend changing the battery in your home smoke detectors when you change your clocks. Employers should take this opportunity to review your Injury Illness Prevention Programs, Fire Prevention Plans, and Emergency Evacuation Plans.

• Check fire extinguishers and sprinkler systems to ensure they are in working order and have not expired.
• Review safety plans to verify the employees named as responsible parties are still employed or not on a leave of absence.
• Update evacuation plans if evacuation routes have changed or are no longer safe.
• Call the fire department to set up a fire drill for each of your offices.
• Communicate with supervisors to review these policies and make sure supervisors are aware of their responsibilities under the policies.

Technology

Employers must also be prepared to deal with the technological implications of this change. Computers have been programmed under the DST of years past, so your computer systems may not be prepared to automatically adjust the clocks this year. Communicate with your IT department or an IT professional to prepare your employees and computer systems for this change. In particular, computer-based calendaring systems should be adjusted in accordance with the time change so important events or appointments are not “lost.”

Proper Pay

Your company should have the workday, or any consecutive 24-hour period, defined as to when it begins and ends. The California Labor Commissioner presumes the workday begins at 12:01 a.m. and ends at midnight if company policy does not otherwise specify. Likewise, the Labor Commissioner will presume your workweek runs from Sunday to Saturday.

California employers are required to pay employees for all hours worked over 8 hours in one workday and all hours worked over 40 hours in one workweek. Overtime for non-exempt employees must be calculated based upon the workday and the workweek established by the employer.

Presuming an employer is on the traditional workday and workweek schedule, the following examples will help illustrate how to properly pay employees after we spring forward.

An employee works from 11:00 p.m. on March 7, 2009 until 9:00 a.m. on March 8, 2009.  The employee therefore worked 1 hour on March 7th and 8 hours on March 8th (because of the “lost” hour from moving the clocks forward.) Because March 8th began a new workweek and workday and the employee only worked 8 hours, he is not eligible for any overtime pay.

An employee worked 37 hours on Tuesday through Friday and was scheduled to work Saturday March 7th to Sunday March 8th, 11:00 p.m. until 3:00 a.m. The supervisor expected the employee to work a 4-hour shift, but because the clocks moved forward at 2:00 a.m. to 3:00 a.m. the employee left. The employee only earned 3 hours of wages. If the employer had been clear about the length of the shift and making employees aware that the time change will not impact the length of the shift, discipline may be in order.

The same employee works 37 hours over the following 5 workdays, without working more than 8 hours in any one workday. He only worked 3 hours on Sunday, for a total of 40 hours in the workweek. No overtime is owed.

What You Should Do:

• Review your Injury Illness Prevention Program and other safety programs to verify they are up to date. Use the Chamber’s Safety Wizard if you need assistance preparing these policies.
• Make sure your computers are ready to spring forward.
• Don’t forget to review time actually worked, as opposed to hours scheduled to work to take into account the “lost” hour from springing forward.
• Remind employees that daylight saving time ends at 2:00 a.m. on March 8, 2009.
• Ensure your workday and workweek are clearly defined if your company does not follow the Labor Commissioner’s guidelines.