Taking on a management role can be demanding; it brings new responsibilities, additional workload and more. It can be even more challenging when an employee has been promoted into the role of manager and is now responsible for supervising former co-workers. In order to succeed, these managers will need to find a way to transition a peer relationship into a successful manager-employee relationship.

Here are some tips for making a successful transition:

• Separate the personal relationship from the professional one. You can remain friendly with former co-workers but should make it clear that personal relationships cannot and will not influence your decisions and actions at work. Creating this separation may involve limiting or eliminating after-work socializing to avoid potential conflicts. This doesn’t mean a manager and his or her employees can’t be social or have lunch together, but if they do, conversation should be limited to general topics such as hobbies and interests.
• Let former peers know that you take your new responsibilities seriously. Some new managers will use jokes or humor to ease into difficult conversations with their employees, but doing so can undermine the seriousness of a counseling session or disciplinary action. Being gentle but firm can go a long way in helping employees improve and can help the manager gain and maintain employees’ respect.
• Treat all employees equally. Playing favorites can create tension and interfere with a manager’s ability to effectively lead the team. It could also invite claims of discrimination in some circumstances. Managers should consistently provide both positive feedback and suggestions for improvement to all of their subordinates. Doing so can promote successful employee development while ensuring fair treatment.
• Ask for help. Many managers have, at some point in their careers, found themselves in the position of managing former co-workers and peers. Talking with others in leadership roles can be a great source of guidance when making this transition.

By separating the personal relationship from the professional one and managing former peers or co-workers with consistency, fairness and respect, an employee can successfully make the transition to manager.

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President Obama on Thursday signed into law a measure that repeals the unpopular 1099 tax-reporting provision of the national health-care law.

The move marked the first successful effort by Congress to repeal a portion of Obama’s signature health-care legislation.

The Senate earlier this month voted 87-to-12 to repeal the 1099 provision. The House passed the measure in March on a bipartisan 314-to-112 vote.

The White House released a statement announcing the Obama had signed the measure, which it said “repeals the expansion in the Affordable Care Act of requirements for businesses to report information to the Internal Revenue Service on payments for goods of $600 or more annually to other businesses and increases the amount of overpayment subject to repayment of premium assistance tax credits for health insurance coverage purchases through the Exchanges established under the Affordable Care Act.”

Obama’s signing of the legislation into law marks the end of a nearly eight-month-long effort by lawmakers to do away with the 1099 tax-reporting provision. Sen. Mike Johanns (R-Neb.) had led the effort in the Senate, but each time repeal seemed close, the parties reached an impasse over how to pay for the repeal, which would result in the loss of an estimated $22 billion over the next decade.

The law signed by Obama on Thursday would pay for repeal by forcing greater repayment of health insurance subsidies for families whose income unexpectedly exceeds certain thresholds.

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Thirty-three states (including the Virgin Islands) have borrowed more than $48 billion from the Federal Unemployment Account, according to U.S. Department of Labor data released this week. In states with loan balances on January 1 of two consecutive years that have not repaid them by November 10 of the second year, employers are at risk of losing a portion of their state FUTA tax credits for that year. The credit is reduced by 0.30 percent for each year the loan remains outstanding beyond the second year of the loan. Twenty-four states will experience a FUTA tax credit reduction, assuming each has a loan balance on November 10, 2011.

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Speaking before a session of the Society for Human Resource Management’s Employment Law & Legislative Conference March 14, 2011, an unemployment insurance (UI) expert presented a bleak picture of UI costs across the country. The following sobering facts were revealed by Douglas Holmes, the president of UWC, a nationwide association that represents the interests of the business community on national unemployment insurance and workers’ compensation public policy issues:

1. State unemployment taxes increased as a percent of total wages on average by 34 percent from 2009 to 2010 and are expected to increase even more for 2011 and 2012.
2. Thirty-two states have outstanding federal loans of $43.6 billion. The U.S. Department of Labor (DOL) projects a peak in 2013 of up to 40 states and $65.2 billion.
3. Interest on loans is charged at the rate of just over 4 percent for 2011. Under federal law, the interest may not be repaid from the state UI taxes, so approximately $1.7 billion will have to be paid from other sources. Employers in 19 states will pay a special assessment to cover this cost (Alabama, Arkansas, Arizona, Colorado, Connecticut, Delaware, Florida, Hawaii, Indiana, Kansas, Michigan, Minnesota, Missouri, New Jersey, New York, Pennsylvania, Rhode Island, South Carolina, and Wisconsin).
4. The first interest payment from states is due Sept. 30, 2011. Interest continues as long as loans are outstanding.
5. Federal Unemployment Tax Act (FUTA) increases in borrowing states have begun in Michigan, Indiana and South Carolina, and are projected in 24 states for 2011, costing more than $2 billion in additional FUTA taxes.
6. Spending on unemployment compensation is at an all-time high, jumping from approximately $31 billion in 2008 to $120 billion in 2009 and $160 billion in 2010.

Impact on HR

Going beyond the numbers, what does this mean for HR? “Congress will focus on this only when they have to,” Holmes said, noting that state and federal UI taxes will continue to rise, which will increase the cost of hiring. In addition, the increased duration of unemployment compensation will continue to be a disincentive to individuals deciding whether to actively seek and accept work available in the labor market, he noted.

Ronald Adler, the president of Laurdan Associates, a consulting firm in Potomac, Md., stressed that HR professionals “need to understand how much UI is costing their individual companies.” In addition to an increase in the cost of hiring, UI-related risks include increased administrative costs and reduced profitability, he said. In addition, UI activity may trigger an audit by the state UI agency as well as by federal agencies, including the Department of Labor, Internal Revenue Service or Immigration and Customs Enforcement.

So what can HR do?

Adler noted that the first step for HR should be to review and verify tax rate notices. Next, ensure that your classifications of employees and independent contractors are correct and ensure that you have properly reported wages—the correct amounts to the correct states, he added.

Next, Adler recommended that HR take steps to protect the company’s experience rating, which impacts the state taxes it must pay. In order to do this, HR professionals should make sure that all UI claims forms are timely and correctly completed. All incorrect determinations and decisions should be appealed. He further recommended that HR attend UI hearings. In addition, he said, HR should notify the state UI agency of rehires and of refusals of job offers.
HR professionals should also look at the broader picture, Adler suggested, and assess hiring procedures and performance management appraisals. Increased effectiveness in performing these tasks may reduce UI claims, he noted. In addition, HR should ensure proper and effective documentation of employment actions and review disciplinary and termination procedures.

And of utmost importance is the training of supervisors and managers, Adler emphasized.
Holmes made the following additional suggestions for HR professionals concerned with the rising costs of providing UI benefits:

• Work with SHRM and business advocacy groups to explain the impact of increasing payroll taxes on decisions to hire.
• Explain the practical impact of individuals staying on unemployment compensation for long periods—loss of job skills; disincentive to accept jobs that are open while claiming unemployment compensation.
• Manage UI claims costs by paying attention to benefit charges, refusals of work, overpayment and fraud.
• Work with state workforce agencies to identify opportunities for unemployed workers for on-the-job training, internships and customized training that may serve some of your needs while reducing unemployment claims.
• State and federal unemployment taxes will continue to increase over the next three years and remain at higher rates for at least 10 years on average, Holmes predicted, so this is not a problem that is going to ease anytime soon.

For more information, visit www.shrm.org

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While an employer’s first reaction may be to try and limit March Madness related activities in the workplace, there are definitely a few things to consider before taking any action against tournament involvement. First, denial of participation could be seen by employees as overbearing and in opposition to a fun work environment. Employee morale is crucial for productivity, and would therefore seem counter intuitive for employers hoping to retain a high level of productivity to discourage participation in an activity considered somewhat of a sports holiday. Instead of discouraging involvement and risking a discontented office, consider using March Madness to your advantage. There are many different ways an employer or manager could use the NCAA tournament as a way to improve employee morale and create a stronger sense of camaraderie throughout the workplace:

1. Create an online, office-wide bracket.
Creating a bracket on a website such as ESPN.com or Yahoo! Sports would eliminate the need to create, hand out and fill in paper brackets. Encourage people to participate only if they would like, and if the employees would like to have a buy-in for competitive purposes, we suggest the money go towards a charity or non-profit organization of the winner’s choice.

2. Offer small, fun and/or personalized prizes for top placers.
An already stated prize would not only encourage friendly competition and participation, it would also help to discourage against illegal gambling in the workplace. Some example of appropriate prizes may include gift certificates, a favorite team souvenir, or perhaps a meal on a supervisor’s tab.

3. Offer flexible hours and dress code allowances when appropriate.
A possible solution to the distraction of an early evening game could be a flexible work week. Also, since Fridays are often considered a more causal day in the workplace, employees could be encouraged to wear a tie, jersey or even socks to show where their hopes and loyalties lay within the tournament.

4. Encourage watching the tournament as a group.
Many workplaces allot for short breaks throughout the day. Encourage employees to gather to the TV in the break room (or at single designated computer as to not take up too much bandwidth) during those times. One could even promote a potluck lunch, catering or group gatherings after work to watch the game together.

5. Designate times to stay involved and keep the competition alive.
A bi-weekly e-mail or short announcement at the end of an informal meeting discussing up-to-date results would help to discourage employees from constantly tracking brackets while at work and would also help the manager or supervisor to stay involved.

While this list is not at all exhaustive, these are a few simple ways to take what is consistently seen as a drag on productivity and turn it into a way to promote a healthier and more enjoyable work environment. For more information or any questions, contact Staff One at 1-800-771-7823 or visit www.staffone.com.

Founded in 1988, Staff One is a leading Human Resources Outsourcing firm with an ESAC accredited and bonded PEO service offering. Staff One operates as a full-service human resources department and delivers a comprehensive range of solutions that provides our clients with a level of support and value previously only available at much larger companies. By aggregating the buying power of hundreds of firms, we provide premium benefits, risk management, compliance management, payroll outsourcing, tax administration and strategic HR services to our customers, so they can focus on growing their core business.

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Some of us struggle with getting to work on time, and this can cause a problem in the workplace.

If you are habitually late for work, this could result in disciplinary action, possibly including termination of your employment.  Here are 5 tips that can help you make it to work on time:

1.     Lay out your clothes the night before work. This will reduce decision making in the morning and shave off 5 to 10 minutes of prep time.

2.     Organize your morning routine. See if you can pare down the time it takes to get ready in the morning.  Shorter showers,  cutting out TV watching, and perhaps brewing your coffee at home rather than stopping for the first cup of joe can help you get an earlier start.

3.     Leave early.  If at all possible, leave for work early to help keep you from feeling rushed or speeding in traffic.  In some cases, leaving your house even five or 10 minutes earlier could cut your drive by 10-20 minutes.

4.     Listen to traffic reports.  Know where the trouble spots are and take advantage of alternate routes to avoid sitting in traffic.

5.     Carpool. This will helps in two ways.  Someone else is counting on you to be on time and in larger cities, it may enable you to utilize the HOV (High Occupancy Vehicle) Lane, which will speed up your drive time.

Remember, it all comes down to disciplining yourself to getting to work on time.  Sometimes, being late is unavoidable, so be sure you know whom to contact when coming in late.  Always refer to your company handbook for specifics on workplace attendance policies.

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Employee retention matters. Organizational issues such as training time and costs, lost knowledge, mourning, insecure coworkers and a costly candidate search aside, failing to retain a key employee is costly. Various estimates suggest that losing a middle manager costs an organization up to 100 percent of their salary. The loss of a senior executive is even more costly.

Employee retention is critically important for societal reasons as well. Over the next few years while Baby Boomers retire, the upcoming Generation X population numbers 44 million compared to 76 million Baby Boomers available for work. Simply stated, there are a lot fewer people available to work.

One of the primary measures of the health of your organization is employee retention. If you are losing critical staff members, you can safely bet that other people in their departments are looking as well. Exit interviews with departing employees provide valuable information you can use to retain remaining staff. Pay attention to what they say. You’ll never have a more significant source of data about the health of your organization.

Here are 4 tips to help you in your employee retention efforts:

A satisfied employee knows clearly what is expected from her/him every day at work. Changing expectations keeps employees on edge and creates unhealthy stress. They rob the employee of internal security and make the employee feel unsuccessful. Provide employees the specific framework within which they clearly know what is expected from them.

The quality of supervision an employee receives is critical to employee retention. People leave managers and supervisors far more often than they leave companies or jobs. It is not enough that the supervisor is well liked or a nice person; starting with clear expectations of the employee, the supervisor has a critical role to play in retention. Anything a supervisor does to make an employee feel unvalued will contribute to turnover.

Many employee complaints center on these areas:

- Lack of clarity about expectations
- Lack of clarity about earning potential
- Lack of feedback about performance
- Failure to hold scheduled meetings
- Failure to provide an environment in which the employee believes they can succeed

The ability of the employee to speak his or her mind freely within the organization is another key factor in employee retention. Does your organization solicit ideas and provide an environment in which employees are comfortable giving feedback? If so, your employees will offer ideas, give constructive criticism and commit to continuous improvement. If not, employees will bite their tongues or find themselves constantly ‘in trouble’, until they leave.

Talent and skills utilization is another factor key employees seek in the workplace. A motivated employee wants to contribute to work areas outside of his or her specific job description. How many people could contribute far more than they currently do? You just need to know their skills, talent and experience, and take time to utilize them.

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Most of us have heard about David Letterman’s alleged affairs with his female subordinates, and this is a useful reminder for employers: create a systematic plan for dealing with workplace harassment and romantic relationships. And then follow it.

As the Letterman case shows, the line between inappropriate behavior, romantic relationships, and harassment can blur. Consensual relationships sometimes sour. Other times, employees enter relationships because they feel compelled to, believing that doing so is a prerequisite to success or advancement. And in the worst cases, employees are explicitly told or threatened that the relationship is a job requirement.

To protect themselves and their employees, employers must walk the difficult line between preventing and correcting harassment, without stifling all consensual, non-workplace conduct.

Here are 10 ways to help manage this sensitive subject:

1) Start with a Harassment Prevention Policy.

A solid harassment prevention policy is the first line of defense. But the existence of a policy on its own is not enough. To be effective, a policy must clearly identify who is protected, explain conduct that is prohibited, and tell employees where to report problems and get help. Additionally, supervisors and managers need to know what to do with information or complaints they receive from their employees. And to make sure everyone knows the rules, employers must be sure each employee has a copy of the current policy and know who to ask when they have questions.

2) Training Requirements

Although federal law does not require harassment training, it is highly recommended and may provide an affirmative defense for the employer when challenged. Also, some states such as California do require harassment training, so insure you check your state requirements.

3) Train Everyone

Training lets employees know company standards, and it tangibly demonstrates the company’s commitment. It is also a good opportunity to share information about the company and management. Taking steps to prevent unlawful harassment and discrimination can help the company avoid or reduce potential damages in litigation. It also reinforces to employees that the company takes the issue seriously.

4) Adopt a Conflict of Interest Policy

Employers can restrict relationships that can create an actual or potential conflict of interest, such as a relationship between a superior and a subordinate. In these situations, employers legitimately worry about the potential for the personal relationship to interfere with business judgment. For this reason, many employers’ policies discourage or prohibit relationships that can cause this conflict. Such policies may also specify that employees are expected to disclose relationships that may create a conflict, so the employer can take appropriate action to address any potential conflict. Be aware of state laws that might prohibit strict non-fraternization policies.

5) Distinguish Harassment from Relationships

Not every romantic relationship is ‘harassment’. Relationships can change though. When consensual relationships end, for example, employers must take seriously later complaints of mistreatment. In one case, an employee claimed a co-worker, with whom she had an on-again, off-again romantic relationship, created a hostile work environment. When the relationship ended, the employee complained to the company about her co-worker’s behavior, and the company responded by disciplining the co-worker. When the employee later sued, the company won because it had acted quickly to resolve the employee’s complaints.

6) Do Not Create Temptation

While employers have little control over how employees spend time away from work, they can do things to control conduct that can affect the workplace. For instance, employers should make clear that harassment prevention policies apply to all work-related events. Management should avoid holding company-sponsored events at venues that may encourage behavior that violates conduct policies. One obvious example is the high incident rate between alcohol and unwanted conduct. Employers also can reinforce that its technology, such as email and telephones, are for business use and not for conducting workplace romance.

7) Consider Love Contracts

Some employers ask romantically involved employees to sign a ‘consensual relationship agreement’ or a ‘love contract’. This document generally acknowledges a relationship, confirms that it is consensual and will not interfere with job performance, and reinforces the principles of the employer’s harassment prevention policy. The agreement usually states the employee’s obligation to notify the employer of conduct that violates the policy.

8) Stay out of Employee Private Time

As hard as it may be to accept, employers must recognize there is little they can do about consensual relationships between employees that do not affect their workplace performance or conduct.

9) See it From the Eyes of Others

Employees engaged in relationships are not the only ones who may be subject to a hostile work environment. In one case, the court established that a manager’s favoritism for multiple paramours can create a hostile work environment for other employees. In this case, a supervisor engaged in romantic relationships with several women who reported to him, and they were promoted and treated favorably. While a single act of preferential treatment is not unlawful harassment, the court held “severe or pervasive” sexual favoritism can be actionable conduct. And, the person suing need not be the victim of the conduct.

10) Act on Violations or Complaints

An employer’s most important duty is to act on complaints or anytime it becomes aware of potential violations of its harassment prevention policy. An investigation need not be error-free or conducted with sophisticated methods. But it must be prompt, conducted in good faith, and sufficiently thorough under the circumstances. Employers should take all complaints seriously because employees find it very difficult to bring forth these complaints. A complaint may involve a relatively trivial incident; however, an investigation may reveal a larger problem.

This information should not be construed as legal advice.

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WASHINGTON ― The Internal Revenue Service today released instructions to help employers implement the 2011 cut in payroll taxes, along with new income-tax withholding tables that employers will use during 2011.

Millions of workers will see their take-home pay rise during 2011 because the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 provides a two percentage point payroll tax cut for employees, reducing their Social Security tax withholding rate from 6.2 percent to 4.2 percent of wages paid. This reduced Social Security withholding will have no effect on the employee’s future Social Security benefits.

The new law also maintains the income-tax rates that have been in effect in recent years.

Employers should start using the new withholding tables and reducing the amount of Social Security tax withheld as soon as possible in 2011 but not later than Jan. 31, 2011. Notice 1036, released today, contains the percentage method income tax withholding tables, the lower Social Security withholding rate, and related information that most employers need to implement these changes. Publication 15, (Circular E), Employer’s Tax Guide, containing the extensive wage bracket tables that some employers use, will be available on IRS.gov in a few days.

The IRS recognizes that the late enactment of these changes makes it difficult for many employers to quickly update their withholding systems. For that reason, the agency asks employers to adjust their payroll systems as soon as possible, but not later than Jan. 31, 2011.

For any Social Security tax over withheld during January, employers should make an offsetting adjustment in workers’ pay as soon as possible but not later than March 31, 2011.

Employers and payroll companies will handle the withholding changes, so workers typically won’t need to take any additional action, such as filling out a new W-4 withholding form.

As always, however, the IRS urges workers to review their withholding every year and, if necessary, fill out a new W-4 and give it to their employer. For example, individuals and couples with multiple jobs, people who are having children, getting married, getting divorced or buying a home, and those who typically wind up with a balance due or large refund at the end of the year may want to consider submitting revised W-4 forms. Publication 919, How Do I Adjust My Tax Withholding?, provides more information to workers on making changes to their tax withholding.

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Employer-paid premiums in 2010. Only premiums paid by the employer under an arrangement meeting certain requirements (a “qualifying arrangement”) are counted in calculating the credit. Under a qualifying arrangement, the employer pays premiums for each employee enrolled in health care coverage offered by the employer in an amount equal to a uniform percentage (not less than 50 percent) of the premium cost of the coverage.

For years prior to 2014, only premiums paid to a health insurance issuer, such as an insurance company or HMO, for health care coverage are counted for purposes of the credit. Premiums for health care coverage that covers a wide variety of conditions, such as a major medical plan, are counted and premiums for certain coverage that is more limited in scope, such as limited scope dental or vision coverage, are also counted.

The FAQs clarify that premiums, as described above, that were paid by the employer in 2010, but before the new health reform legislation was enacted, can be counted in calculating the credit.

Transition relief for tax years beginning in 2010. For tax years beginning in 2010, the following transition relief applies with respect to the requirements for a qualifying arrangement:

An employer that pays at least 50% of the premium for each employee enrolled in coverage offered to employees by the employer is deemed to satisfy the qualifying arrangement requirement even though the employer does not pay a uniform percentage of the premium for each such employee. Accordingly, if the employer otherwise satisfies the requirements for the credit described above, it will qualify for the credit even though the percentage of the premium it pays is not uniform for all such employees.

The requirement that the employer pay at least 50% of the premium for an employee applies to the premium for single (employee-only) coverage for the employee. Therefore, if the employee is receiving single coverage, the employer satisfies the 50% requirement with respect to the employee if it pays at least 50% of the premium for that coverage for each employee receiving single coverage.

If the employee is receiving coverage that is more expensive than single coverage, such as family or self plus- one coverage, the employer satisfies the 50% requirement with respect to the employee if the employer pays an amount of the premium for such coverage that is no less than 50% of the premium for single coverage for that employee, even if it is less than 50% of the premium for the coverage the employee is actually receiving.

For more information, visit www.irs.gov/newsroom

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The Bush-era tax cuts are set to expire at the close of 2010. While Congress could pass a partial or full extension before year-end 2010, U.S. employers must adjust their payroll deduction systems for 2011 well before the end of 2010. That could mean setting their payroll systems to anticipate no extension; then if Congress acts, they would need to readjust these systems again in 2011.

Setting payroll systems to reflect the higher tax rates that were in effect a decade ago will mean more money being withheld from workers’ paychecks, according to CCH, a provider of employment and payroll law information and software. And that will present a communications challenge for employers.

Change, and Change Again

“The tax cuts—now known as the ‘Bush tax cuts’—were signed on June 7, 2001,” noted John W. Strzelecki, senior payroll analyst at CCH, which is part of Wolters Kluwer Law & Business. “The IRS then issued new withholding tables, effective July 1, 2001, that incorporated the new tax cuts. In addition, the new tables took into account the fact that too much money was taken from paychecks that were issued in the first half of the year.”

Strzelecki foresees a similar pattern this time, with the Internal Revenue Service (IRS) issuing tax withholding tables for 2011 in November 2010 and subsequently issuing revised tables if Congress extends the Bush-era tax rates. “If the tax cuts are passed and signed, the IRS will revise the withholding tables with an effective date that allows just enough time for the payroll industry to implement the changes, just as in June 2001,” Strzelecki said. “The tables will take into account the fact that too much money was withheld from the paychecks that were issued prior to the tax cuts, also just like in 2001,” he explained.

“What it all boils down to is workers will see less take-home pay beginning in 2011 and more take-home pay later in the year, just as we saw in 2001,” said Strzelecki.

For employers, this highlights the importance of keeping employees informed of why their tax withholding will be higher, at least initially—even if Congress should act before the end of 2010.

More Information at shrm.org article

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Discrimination Claims
Under Title VII, employer practices – such as basing hiring and other employment decisions on credit history information – that weigh more heavily on individuals within protected categories could lead to discrimination claims. For instance, if an employer’s use of credit reports has the effect of excluding women or minorities from certain positions, that practice could lead to liability.

In addition, a number of states have enacted or are considering enacting laws that explicitly prohibit discrimination on the basis of credit histories. For instance, Illinois’ newly enacted Employee Credit Privacy Act, which goes into effect on January 1, 2011, prohibits employers from inquiring about an applicant’s or employee’s credit history and from ordering or otherwise obtaining an applicant’s or employee’s credit history or credit report from a consumer reporting agency. Despite the potentially broad reach of Illinois’ new Act, there are several exceptions including:

• Situations where an employer can show that a satisfactory credit history is a “bona fide occupational requirement” for a position, which is further defined in the statute;
• Employers who are banks, savings and loans, or certain other financial institutions; insurance or surety businesses; state law enforcement or investigative units; state or local government agencies that otherwise require use of the employee’s or applicant’s credit history or credit report; and entities that are defined as debt collectors under federal or state statute; and
• Background investigations that do not include a credit history or report as permitted under the Fair Credit Reporting Act.

Employers that violate the Illinois Act could face damages, injunctive relief, and liability for attorneys’ fees and costs and could also face liability for any retaliatory conduct under the Act.

Along the same lines, legislation has been introduced in, among other states, Michigan and Ohio as well. In Michigan, House Bill 4528, also known as the Job Applicant Credit Privacy Act, would prohibit an employer from failing or refusing either to hire or recruit an individual because of the individual’s credit history and from inquiring about a job applicant’s or potential job applicant’s credit history. As with the Illinois Act, certain exceptions would apply for individuals who hold positions with identified types of companies including, for instance, banks or other financial institutions.

In Ohio, House Bill 340, which was introduced on October 28, 2009, would make it an unlawful discriminatory practice for an employer to use a person’s credit rating or score or consumer credit history as a factor in making decisions regarding that person’s employment. House Bill 340would allow a person to file a charge with the Ohio Civil Rights Commission and would provide similar penalties for violations.

As these examples show, a blanket policy of requiring credit reports for all employees or applicants could lead to possible discrimination claims under state or federal law or both.

The Federal Fair Credit Reporting Act
Moreover, even when employers are permitted to obtain applicant or employee credit reports, liability can still attach if the detailed procedures set forth in the federal Fair Credit Reporting Act (FCRA) are not followed. Specifically, the FCRA requires employers to inform applicants that a credit check will be performed and to obtain the applicants’ written permission in a stand-alone document that is not part of the employment application.

In addition, if an employer decides to take an adverse employment action against an employee or applicant based on the credit check, the employer must first give that individual a “pre-adverse action disclosure” that consists of a copy of the credit report and a written summary of rights under the FCRA before taking the adverse action. Presumably, this requirement is intended to allow an employee or applicant an opportunity to attempt to correct any inaccuracies on the report. Once the adverse action has been taken, the employer must provide the applicant or employee with an “adverse action notice.” This notice must alert the recipient that the employer, not the credit reporting agency, made the adverse decision; inform the recipient that he or she has a right to a free copy of the report; and provide the name, address and phone number of the agency that provided the credit report so that the recipient can dispute any inaccurate information.

Employers that fail to comply with the FCRA may face liability for actual damages, attorneys’ fees, costs and punitive damages. Criminal penalties are also possible for any employer that obtains a credit report under false pretenses.

Minimizing The Risks
Some of the ways you can minimize the risks of obtaining employee or applicant credit reports are by:

• Determining whether state laws govern your use of applicant/employee credit reports;
• Evaluating whether the benefits of obtaining credit reports for various positions outweigh the risks of doing so;
• Developing appropriate policies and procedures to govern procurement of credit reports; and
• Ensuring compliance.

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The NLRB’s complaint claims that American Medical Response of Connecticut, Inc. fired one of its employees because she posted less-than-flattering comments about her supervisor on Facebook. In particular, the employee used expletives and implied that her supervisor suffered from psychiatric problems. Some of the employee’s co-workers expressed support for her in their comments in response to the posting. Although the employer contends that the employee was terminated because of complaints about her performance – rather than anything the employee posted on Facebook – the NLRB nonetheless issued a complaint and scheduled a hearing for early next year.

At the heart of the NLRB’s case is the well-settled principle that employees generally have a right to communicate with one another about the terms and conditions of their employment. Such so-called protected concerted activities cannot form the basis for any adverse employment actions without running afoul of federal labor law. According to the NLRB, the fact that the communications in this case took place on a social media site does not in any way lessen the protections afforded the employee. Indeed, Acting General Counsel for the NLRB, Luke Solomon, suggested Facebook is akin to a “water cooler.” As a result, the NLRB took into account the employer’s policy of prohibiting employees from making negative comments about supervisors or “in any way” depicting the company on the Internet without permission in reaching its decision to issue a complaint.

Although it remains to be seen whether the NLRB will prevail, its decision to issue the complaint serves as a timely reminder to all employers. Regardless of whether employees are represented by a labor union or not, the National Labor Relations Act applies to all employers, and employers may not interfere with employee-protected concerted activity. Policies that purport to prohibit employees from engaging in “all” or “any” communication regarding the employer can draw unwanted attention from the NLRB. It is no defense that the prohibition applies only to social media or was not intended to chill employee rights.

A well-drafted, comprehensive electronic communications policy is the key to avoiding similar problems. Such a policy allows employers to protect their legitimate interests without unlawfully interfering with protected concerted activities or other employee rights.

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At the first signs of a southbound economy, some companies rush into panic mode:; they slash the staff and hope for the best. Certainly, labor is the biggest expense for most businesses. That’s why many managers believe there is no faster, more efficient way to improve the bottom line than by cutting staff.

But when you add up some of the costs of layoffs, such as severance payments, continued healthcare costs for some former employees, and higher unemployment charges, you may realize you are defeating your purpose. And that’s only part of the picture. Since layoffs create uncertainty, they often prompt a drop in productivity, a decline in quality, a loss of talent as remaining staff members start looking for jobs elsewhere and increased costs to train remaining employees to take up the slack.

That’s just the short term. Once the economy picks up steam, you’ll have to spend money recruiting and training a new workforce. You might be understaffed and unable to keep up with new demand – another strain on profitability.

There are stories of companies during the Great Depression that had employees wash windows over and over again rather than lay them off. The end result: a fiercely loyal and trained staff ready to jump into action as the economy turned slowly up.

Take a clue from those companies and adopt a contrarian stance when possible. Here are eight strategies to help you adapt to changing economic circumstances with layoffs as a last result. In the end, your company will be more efficient and better prepared to tackle the competition when the economy re-engages.

Strategy #1: Get a playbook – Like a football team, you need a series of defensive plays as the game progresses quarter to quarter. Your company playbook – a combination of a business plan and strategic vision – helps you stay on track during hard times. And expect your employees to achieve the goals in the plan.

Strategy #2: Involve staff - Keep employees appraised of the challenges your company faces. Let them know layoffs are a last resort but you need their help to bring expenses into line. Set up cost-cutting teams and give them goals.

Strategy #3: Dump some perks - This can produce a host of cost cuts. Prime areas for trimming the fat are travel, executive seminars, rental cars, expense accounts and staff retreats.

Strategy #4: Opt for some rescheduling - Consider a four-day workweek, telecommuting, temporary furloughs, flextime and other means to cut payroll costs.

Strategy #5: Trim salaries - Reduce wages by, say, five percent across the board. Offer employees stock options that make up the difference and provide an incentive to work toward the company’s success. Ask senior executives to forgo annual bonuses. Review your sales commission policy for possible cuts.

Strategy #6: Streamline – Restructure your business to enhance performance. Get rid of any department, plan or operation that isn’t contributing to the company’s success. Look for duplicated efforts, obsolete production lines and non-core businesses that can be sold.

Strategy #7: Selectively downsize – Take advantage of attrition and early retirement possibilities. If layoffs are inevitable, consolidate back-office operations first and retain employees who have face-to-face contact with customers. Look to lay off employees who add little value or disrupt others’ performance.

Strategy #8: Beef up coaching – During a slowdown, your employees are likely to have more time for training than when your businesses is steaming full ahead. By adding training, you show employees that you’re committed and willing to invest in their careers. And they’ll be better prepared once the economy picks up steam.

Of course, there’s no way to know how long the economy will remain weak. But with some creative juggling, you can retain employees and give them a stronger determination to make the company succeed.

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• Extension of Successful SBA Recovery Loan Provisions: With funds provided in the bill, SBA will begin funding new Recovery loans within a few days of the President’s signature, starting with the more than 1,400 businesses that are waiting in the Recovery Loan Queue.  In total, the extension of these provisions provides the capacity to support $14 billion in loans to small businesses.
• A More Than Doubling of the Maximum Loan Size for The Largest SBA Programs:The bill also increases the maximum loan size for SBA loan programs, which in the coming weeks will allow more small businesses to access more credit to allow them to expand and create new jobs. The bill will permanently raise the maximum size for SBA’s two largest loan programs, increasing the maximum 7(a) and 504 loans from $2 million to $5 million, and the maximum 504 manufacturing related loan from $4 million to $5.5 million.  In addition, it will temporarily increase the maximum loan size for SBA Express loans from $350,000 to $1 million, providing greater access to working capital loans that small businesses use to purchase new inventory and take on their next order.
• A New $30 Billion Small Business Lending Fund:The bill would establish a new $30 billion Small Business Lending Fund which – by providing capital to small banks with incentives to increase small business lending – could support several multiples of that amount in new credit.
• An Initiative to Strengthen Innovative State Small Business Programs – Supporting Over $15 Billion in Lending:The bill will support at least $15 billion in small business lending through a new State Small Business Credit Initiative, strengthening state small business programs that leverage private-sector lenders to extend additional credit – many of which have been forced to cut back due to budget cuts.
• Eight New Small Business Tax Cuts – Effective Today, Providing Immediate Incentives to Invest:
  • Zero Taxes on Capital Gains from Key Small Business Investments:Under the Recovery Act, 75 percent of capital gains on key small business investments this year were excluded from taxes. The Small Business Jobs Act temporarily puts in place for the rest of 2010 a provision eliminating all capital gains taxes on these investments if held for five years. Over one million small businesses are eligible to receive investments this year that, if held for five years or longer, could be completely excluded from any capital gains taxation.
  • Extension and Expansion of Small Businesses’ Ability to Immediately Expense Capital Investments: The bill increases for 2010 and 2011 the amount of investments that businesses would be eligible to immediately write off to $500,000, while raising the level of investments at which the write-off phases out to $2 million. Prior to the passage of the bill, the expensing limit would have been $250,000 this year, and only $25,000 next year.
  • Extension of 50% Bonus Depreciation:The bill extends a Recovery Act provision for 50 percent “bonus depreciation” through 2010, providing 2 million businesses, large and small, with the ability to make new investments today by accelerating the rate at which they deduct capital expenditures.
  • A New Deduction of Health Insurance Costs for Self-Employed:The bill allows 2 million self-employed to get a deduction for the cost of health insurance for themselves and their family members in calculating their self-employment taxes. This provision is estimated to provide over $1.9 billion in tax cuts for these entrepreneurs.
  • Tax Relief and Simplification for Cell Phone Deductions:The bill changes rules so that the use of cell phones can be deducted without burdensome extra documentation for virtually every small business beginning on their taxes for this year.
  • An Increase in the Deduction for Entrepreneurs’ Start-Up Expenses:The bill temporarily increases the amount of start-up expenditures entrepreneurs can deduct from their taxes for this year from $5,000 to $10,000 (with a phase-out threshold of $60,000 in expenditures).
  • A Five-Year Carryback Of General Business Credits:The bill would allow certain small businesses to “carry back” their general business credits to offset five years of taxes, while also allowing these credits to offset the Alternative Minimum Tax.
  • Limitations on Penalties for Errors in Tax Reporting That Disproportionately Affect Small Business:The bill would change, beginning this year, the penalty for failing to report certain tax transactions from a fixed dollar amount to a percentage of the tax benefits from the transaction.

As described above, both businesses and individuals are affected by the Act.  More information on the Act can be found here

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A majority of large U.S. employers are planning to change their 2011 health care benefit programs in the wake of both health care reform and expected large health care cost increases, according to a new survey by the National Business Group on Health (NBGH).NBGH, Washington, found that 53% of employers taking part in its survey were still planning to make changes to their benefit plans despite uncertainty about how to comply with the Patient Protection and Affordable Care Act (PPACA).

Another 19% are going to scale back changes they had planned to make, while an equal number are making no changes. Remaining respondents were still undecided as they continued to review the final regulations.

Among employers that said they would be making specific changes to their health benefit plans to comply with the new law, 70% said they would remove lifetime dollar limits on overall benefits, while 37% said they would change to annual or lifetime limits on specific benefits.

Also, 26% would remove annual dollar limits on overall benefits, while 13% would remove pre-existing condition exclusions for children.

The survey, covering 72 of the nation’s largest corporations with more than 3.7 million employees, was conducted in May and June.

Health care reform has forced employers to assess their health care benefit strategies and decide whether to comply with the law or lose grandfathered status, said Helen Darling, president of NGBH. But they are still mindful that controlling rising costs is among their highest priorities.

“They have to foot the bill, not the government,” Darling commented.

Surveyed employers estimated their health care benefit costs would rise an average of 8.9% next year, compared with an average increase of 7% this year. To help control those increases, 63% plan to boost the percentage employees contribute to the premium, up from 57% who did so this year, while 46% plan to raise out-of-pocket maximums next year, compared with 36% this year.

Other survey findings:

—61% will offer a consumer-directed health plan (CDHP) in 2011.

—64% will offer is a high-deductible plan combined with a health savings account.

—Among employers offering a CDHP, 20% will move to a full replacement plan in 2011, from 10% this year.

—5% plan to drop retiree health coverage in 2011, while 60% are considering doing so.

—41% offer premium discounts for completing health assessments, while 22% offer premium discounts for participating in stop-smoking programs.

—25% plan to raise the copay or coinsurance for retail pharmacy prescription drug benefits, while 21% plan to do the same for mail-order pharmacy benefits.

A copy of the survey by NBGH can be found here

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Payroll legal obligations can put companies and managers at great risk in many ways. If you have anything to do with employee payroll and related matters, be aware of the following 11 mistakes and corresponding penalties.

Mistake #1: Failing to deposit withheld income taxes, Social Security and Medicare contributions, and employer matching amounts on time. The government wants its money by strict deadlines. Penalties accrue quickly if your business or organization misses deposit deadlines.

The penalty for not making deposits on time is:

• 1 to 5 days late, 2 percent of amounts due.
• 6 to 15 days late, 5 percent.
• 16 or more days, 10 percent.
• 15 percent if notice from the IRS is ignored, plus interest on the amount not deposited, plus 100 percent of the uncollected amounts if the failure to deposit is willful.

Note this grave, personal danger: These penalties can be levied personally against all responsible individuals in a business or organization. The corporate veil is no shield in these situations. Any individual with a responsibility for getting the money to the government on time faces possible exposure to penalties and fines.

Mistake #2: Under-withholding and failing to match required amounts.

The employer’s obligation is to withhold income tax, Social Security, and Medicare contributions from employees’ pay, as well as match the Social Security and Medicare contributions. Failure to do so subjects the employer to late deposit penalties of up to 15 percent of the under-withheld and under-deposited amounts. If the IRS deems the under-reporting or under-depositing willful, the penalties can be up to 100 percent of the uncollected amounts.

As with failing to make deposits in a timely manner, under-withholding and failing to match amounts creates a personal risk to individuals with a responsibility for getting the correct sums of money to the government on time.

Mistake #3: Failing to pay — or under-paying — state and federal unemployment taxes. The greatest portion of unemployment insurance (UI) taxes is levied by the state. And state-levied penalties vary. Since state UI funds are being exhausted in this period of high unemployment, states are aggressive in collection efforts.

Mistake #4: Failing to process wage garnishments correctly. Federal and state laws obligate employers to accurately withhold from employee pay, and remit, court-ordered garnishments, levies, and child support.

Violating these laws can result in penalties, depending on state laws. Also, federal law limits the amount of earnings that can be garnished, and protects employees from being terminated from their jobs because of a first-time garnishment. A violation can mean reinstatement of a discharged employee, payment of back wages, and restoration of improperly garnished amounts. Employers who willfully violate the discharge provisions of the law can be prosecuted criminally and fined up to $1,000, imprisoned for not more than one year – or both.

Mistake #5: Making unauthorized deductions from an employee’s pay. Employers can legally deduct from an employee’s pay only amounts authorized or required by law (such as tax withholding), by court order (such as garnishments), and amounts authorized by the employee (such as the employee’s share of health insurance).

What are unauthorized deductions? State laws vary and it can be tricky. In addition, federal wage and hour law requires payment of agreed upon and earned wages (with the allowed deductions listed above.)

Do you ever feel compelled to dock an employee’s pay if he or she breaks or damages company products or equipment? Check first with your attorney to see if this is permitted by your state law — even with the employee’s permission

Mistake #6: Treating some workers as independent contractors when they’re not. Misclassifying employees as independent contractors exposes employers to substantial legal costs and penalties.

In an effort to increase collections, the IRS and state agencies have ramped up investigations of misclassified employees. When a misclassification is discovered, the employer becomes obligated for unreported and undeposited withholding taxes, Social Security and Medicare contributions, penalties, and possible liability for employee benefits. When the IRS deems the misclassification to be negligent, the penalties can be up to 100 percent of the uncollected taxes.

And the payment of unreported taxes and contributions isn’t just for the past year. When the IRS and state agencies discover the misclassification of just one or two employees, this can trigger audits of the employer’s employment for prior years.

Mistake #7: Failing to include the value of awards, bonuses, and fringe benefits (when required) in employees’ taxable incomes. This action then results in the failure to withhold sufficient amounts from the total reportable income and not reporting the total reportable income to the IRS. The risk: The employer is subject to under-reporting penalties of up to 15 percent of the under-withheld and under-deposited taxes. If the failure is willful, the penalties can be up to 100 percent. And the employer could also be subject to information return penalties for incorrect W-2 forms (up to $50 penalty for each incorrect W-2).

Mistake #8: Using bogus or incorrect Social Security numbers for employees on their W-2 Forms and failing to accurately complete I-9 Forms. The risk: The employer can be subject to information return penalties for incorrect W-2 Forms, of up to $50 for each incorrect W-2. This mistake or failure by the employer also creates issues for the employees involved because they aren’t receiving proper earnings credits through the Social Security Administration.

Mistake #9: Failing to pay at least the higher of the federal or state minimum wage to non-exempt employees… as well as overtime in any seven-day workweek in which they work more than 40 hours. The risk: If this error is discovered, the employer is required to compensate the employee for back pay, plus fines and penalties. In addition to the fines and penalties imposed by the Department of Labor, the employer likely will be subject to federal and state wage and hour audits and owe additional amounts

Mistake #10: Not preparing and filing W-2 forms, and failing to send them to employees. The risk: The employer can be subject to information return penalties for incorrect W-2 forms, penalties of up to $100 for each incorrect or unreported W-2. For intentional failure, the penalties can go up to $200 for each incorrect statement.

Mistake #11: Failing to abide by state laws. It’s not just the federal wage and hour rules that employers must comply with. Employers need to be aware of, and comply with, the laws in the states where they have employees.

PEOs can help prevent these mistakes

To help avoid these costly blunders, more companies are turning to a professional employer organization (PEO), like Staff One.  A PEO serves as a human resources department for small and medium-sized businesses.  By entering into a co-employment relationship with a PEO, companies have access to experienced specialists who can help with many time-consuming activities in areas such as Human Resources Management, Payroll Management (including 940 and 941 filings), Employer Liability Management, Risk and Safety Management and Benefits Management.

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The American Recovery and Reinvestment Act (ARRA) provided a COBRA premium reduction for eligible individuals who were involuntarily terminated from employment through the end of May 2010. Due to the statutory sunset, the COBRA premium reduction under ARRA is not available for individuals who experience a qualifying event of involuntary termination of employment after May 31, 2010. However, individuals who qualified on or before May 31, 2010 may continue to pay reduced premiums for up to 15 months, as long as they are not eligible for another group health plan or Medicare.

On July 6, Assistant Secretary of Labor Phyllis C. Borzi issued a statement regarding the COBRA premium reduction under the American Recovery and Reinvestment Act (ARRA): For a copy of Assistant Secretary Phyllis Borzi’s statement, click on the following link:
http://www.dol.gov/ebsa/newsroom/2010/ebsa070610.html

The Unemployment Compensation Extension Act of 2010 signed by the President on July 22, 2010, did not include an extension of the COBRA premium reduction.

A model general notice and a model election notice for individuals with a qualifying event after May 31, 2010 can be obtained from the COBRA section on the DOL’s website at:
http://www.dol.gov/ebsa/COBRA.html

These notices are virtually unchanged from the pre-ARRA models provided by the DOL in 2004.

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Although the changes in the final rule are relatively minor, they provide clarification of some ambiguities contained in the initial rule. The primary changes implemented by this rule are as follows:

• employers must complete a Form I-9 by the third business (not calendar) day after an employee started work for pay;
• employers may use paper, electronic systems, or a combination of paper and electronic systems;
• employers may change electronic storage systems as long as the systems meet the performance requirements of the regulations;
• employers need not retain audit trails of each time a Form I-9 is electronically viewed, but only when the Form I-9 is created, completed, updated, modified, altered, or corrected; and
• employers may provide or transmit a confirmation of a Form I-9 transaction, but are not required to do so unless the employee requests a copy.

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Being an effective manager takes work. Also, if you are new to the role with little or no training, you will discover there is a difference between being a great employee and managing great employees.

Being a manager takes courage, drive and a little insanity. Many managers know what to do; they are just overwhelmed with the volume of what they need to do.

Here are 5 tips managers most likely know but tend to forget, so lets review what you already know so you can put that knowledge into practice immediately.

1. Determine Who’s Who. Know the personalities on your team, and who you are. The 4 different ‘playground personalities’ will help you do this. Ask, “What type of kid was I on the playground?”

• The one who made sure everyone got a turn at bat? This is the Peacemaker.
• The one who made everyone line up and count off? The Organizer.
• The one who changed the rules midway through the game? The Revolutionary.
• The one who wanted to play it my way? The Steamroller.

Once you figure out your playground personality, determine whos on your playground. Don’t miss the signs. People are very clear with their body language, word usage and intentions.

Peacemakers appreciate communication and collaboration. If a staff member’s eyes bulge when others argue, that’s a clue.

Organizers are structured and decisive. If an employee comes to a meeting with charts or color-coded paper, he’s an organizer.

Revolutionaries hate routine and prefer to adapt to the moment. You’ll know a revolutionary when you ask, “Where did that come from?”

Steamrollers are smart and opinionated and can solve complex problems. They take opposing views and keep ideas floating at 30,000 feet.

2. Show Respect. Respect starts with the manager. Saying “hello” or “thank you” goes a long way. To show respect:

• Brainstorm ideas with Peacemakers
• Provide meaningful work with deadlines to Organizers
• Assign emergency tasks to Revolutionaries
• Ask Steamrollers for their opinions

3. Face Facts. Not everyone collects facts the way you do, so ask questions, be open to learning and don’t shut down discussions too early. When you think you have the facts, ask again to make sure.

4. Find the Humor. Humor should never be personal, but try to find the absurdity that invades everyone’s workspace and lighten the mood. Humor helps employees relate to you and builds camaraderie for difficult tasks.

5. Put it all Together. Managers get paid to get work done. Just when you have a plan, something goes wrong. Don’t immediately go to Plan B. Leverage personalities and the way each approaches a problem.

Understanding employees and empowering them to tackle their work in a manner that suits them will help you blossom into a confident, seasoned professional.

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