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On April 5, 2011, the US Department of Labor (DOL) issued a final rule that affects employers who have tipped employees. The rule amended a Fair Labor Standards Act (FLSA) regulation. All employers are required to provide certain required information to all tipped employees in either oral or written form.

Signed Written Notice Would Document That Requirements Were Met

The DOL commented although a written notice is not required, “employers may wish to do so, since a physical document would, if the notice is adequate, permit employers to document that they have met the requirements in section 3(m) and the Department’s regulations to ‘inform’ tipped employees of the tip provision.”

NRA, CSRA, and NFIB Have Filed Suit over Tip Credit Regulation

The National Restaurant Association (NRA), Council of State Restaurant Associations (CSRA), and National Federation of Independent Business (NFIB) have filed suit over the new final rule. According to the NRA:

The Final Rule followed a notice of proposed rulemaking (NPRM) that the DOL published in 2008 that would have made only technical and non-substantive changes to the tip credit notice regulation. Nothing in the 2008 NPRM put the public on notice that the DOL was contemplating significant changes to the tip-credit notice requirements.

Vision Payroll Recommends Restaurants Implement a Written Notice Policy

The NRA has provided sample documents that restaurants and other who have hired tipped employees may download. Vision Payroll recommends that employers review the documents with legal counsel and implement a written notice policy as soon as practicable.

According to statistics released by the US Bureau of Labor Statistics (BLS), in June 2011, the percentage of people with disabilities in the labor force was 21.3, up from 21.1 in May. By comparison, the percentage of persons with no disability in the labor force was 70.2, up from 69.7 in May.

Unemployment Rate at 16.9%

The unemployment rate for those with disabilities was 16.9%, compared with 9.0% for persons with no disability, not seasonally adjusted. These rates are up from the May rates of 15.6% and 8.5%, respectively.

Table A-6 Provides Further Details on Employment Levels by Disability Status

Table A-6 shows further details on employment status of the civilian population by sex, age, and disability status, not seasonally adjusted.

Definition of a Person with a Disability

In compiling the data, the BLS defines a person with a disability as a person having at least one of the following conditions: is deaf or has serious difficulty hearing; is blind or has serious difficulty seeing even when wearing glasses; has serious difficulty concentrating, remembering, or making decisions because of a physical, mental, or emotional condition; has serious difficulty walking or climbing stairs; has difficulty dressing or bathing; or has difficulty doing errands alone such as visiting a doctor’s office or shopping because of a physical, mental, or emotional condition.

Visit VisionPayroll.com Monthly for Updated Disability Employment Statistics

Each month, Vision Payroll will provide updates disability employment statistics as they become available.

The US Department of Labor’s Wage and Hour Division has obtained an agreement for Maryland’s Prince George’s County Public Schools system (PGCPS) to pay $4,222,146 in back wages due 1,044 workers to resolve violations of the H-1B temporary foreign worker program. Investigators from the department found that PGCPS illegally reduced the wages of the H-1B workers by requiring them to pay fees that the school system was required to pay.

H-1B Visas Are for Temporary Hiring in Certain Specialty Occupations

The H-1B program allows employers to hire foreign professionals in certain specialty occupations to work temporarily in the US. Workers hired under the H-1B program must be paid at least the same wage rates and benefits as those paid to US workers doing the same job in the same area, so that the wages of similarly employed US workers are not adversely affected.

Foreign Workers Have Been Paid Back Wages

“The Labor Department has the responsibility for ensuring that employers who use the H-1B program follow the law and do not place US workers at a disadvantage to H-1B workers,” said Secretary of Labor Hilda L. Solis. “We are pleased this investigation has been resolved with workers paid all the back wages to which they are entitled.”

Civil Money Penalties Will Also Be Paid

Due to the willful nature of some of the violations, PGCPS also has agreed to pay $100,000 in civil money penalties and to be debarred for two years from filing new petitions, requests for extensions or requests for permanent residency for foreign workers under any employment-based visa program. Under the statute governing the H-1B program, willful wage violations are subject to a debarment period of at least two years. Violations are willful when an employer knew or acted in reckless disregard for whether its actions were impermissible.

Certain Fees Reduced Workers’ Wages Below Legal Limits

The H-1B visa program requires that employers pay certain fees, including an anti-fraud fee and a filing fee, when they utilize the program. Instead of paying these fees and other costs associated with recruiting H-1B workers and filing their visa petitions, PGCPS required the foreign workers to pay them. As a result, the workers’ earnings were reduced below the amount legally required to be paid. The Wage and Hour Division’s investigation covered fees associated with the H-1B application process from May 2005 to January 2011.

Agreement Subject To Approval

The agreement is subject to approval by an administrative law judge.

Los Angeles-based Farmers Insurance Inc. (Farmers) has agreed to pay $1,520,705 in overtime back wages to 3,459 employees following an investigation by the US Department of Labor’s Wage and Hour Division that disclosed significant and systemic violations of the federal Fair Labor Standards Act’s (FLSA) overtime and record-keeping provisions. Violations occurred at 11 customer service call centers located in Florida, Kansas, Michigan, Oklahoma, Oregon and Texas.

Pre-Shift and Post-Shift Work Must Be Compensated

“Failing to properly compensate employees for pre- or post-shift work is a violation of federal law,” said Secretary of Labor Hilda L. Solis. “The Labor Department is committed to ensuring that employers abide by the law so that workers are protected against exploitation, and law-abiding employers are not placed at a competitive disadvantage.”

Farmers Did Not Pay for Pre-Shift Work

Through interviews with employees and a review of the company’s timekeeping and payroll systems, investigators found that the company did not account for time employees spent performing pre-shift work activities. Employees routinely performed an average of thirty minutes of unrecorded and uncompensated work — such as turning on work stations, logging into the company phone system and initiating certain software applications necessary to begin their call center duties — per week.

Farmers Agrees to Maintain Future Compliance with FLSA

Because employees’ pre-shift work times were excluded from official time and payroll records, they were not paid for all hours and are owed compensation at time and one-half their regular rates for hours that exceeded forty per week. Farmers Insurance has agreed to pay back wages, as well as to maintain future compliance with the FLSA by properly recording and compensating all hours worked by its employees.

Call Center Employees Across the Country Are Affected

The agreement affects call center employees who worked between Jan. 1, 2009, and May 10, 2010, at Farmers’ HelpPoint facilities in Olathe, Kansas; Oklahoma City, Oklahoma; Lake Mary, Florida; and Grand Rapids, Michigan. It also affects workers employed at a former location in Overland Park, Kansas, between Jan. 1, 2009, and Jan. 10, 2010. Additionally, it affects employees who worked between Jan. 1, 2009, and Feb. 1, 2010, at Farmers’ ServicePoint and commercial facilities in Austin, Texas; a ServicePoint facility in Grand Rapids, Michigan; a ServicePoint facility in Olathe, Kansas; and ServicePoint and commercial facilities in Hillsboro, Oregon.

FLSA Also Requires Overtime for Hours Worked in Excess of 40

The FLSA requires that covered employees be paid for pre-shift and post-shift job duties, and for attending required meetings. Employees must be paid time and one-half their regular rates, including commissions, bonuses and incentive pay, for hours worked beyond forty per week. Employers must pay at least the federal minimum wage of $7.25 for all hours worked, and maintain accurate time and payroll records.

Nonfarm payroll employment was essentially unchanged in June (+18,000), and the unemployment rate was little changed at 9.2%, the US Bureau of Labor Statistics reported recently. Employment in most major private-sector industries changed little over the month. Government employment continued to trend down.

Household Survey Data

The number of unemployed persons (14.1 million) and the unemployment rate (9.2%) were essentially unchanged over the month. Since March, the number of unemployed persons has increased by 545,000, and the unemployment rate has risen by 0.4 percentage points. The labor force, at 153.4 million, changed little over the month.

Among the major worker groups, the unemployment rates for adult men (9.1%), adult women (8.0%), teenagers (24.5%), whites (8.1%), blacks (16.2%), and Hispanics (11.6 percent) showed little or no change in June. The jobless rate for Asians was 6.8%, not seasonally adjusted.

The number of persons unemployed for less than 5 weeks increased by 412,000 in June. The number of long-term unemployed (those jobless for 27 weeks and over) was essentially unchanged over the month, at 6.3 million, and accounted for 44.4% of the unemployed.

The civilian labor force participation rate was little changed in June at 64.1%. The employment-population ratio decreased by 0.2 percentage point to 58.2%.

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was essentially unchanged in June at 8.6 million. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job.

In June, 2.7 million persons were marginally attached to the labor force, about the same as a year earlier. (These data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.

Among the marginally attached, there were 982,000 discouraged workers in June, down by 225,000 from a year earlier. (These data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.7 million persons marginally attached to the labor force in June had not searched for work in the 4 weeks preceding the survey for reasons such as school attendance or family responsibilities.

Establishment Survey Data

Total nonfarm payroll employment was essentially unchanged in June (+18,000). Following gains averaging 215,000 per month from February through April, employment has been essentially flat for the past 2 months. Employment in most major private-sector industries changed little in June, while government employment continued to trend down.

Within professional and business services, employment in professional and technical services increased in June (+24,000). This industry has added 245,000 jobs since a recent low in March 2010. Employment in temporary help services changed little over the month and has shown little movement on net so far this year.

Health care employment continued to trend up in June (+14,000), with the largest gain in ambulatory health care services. Over the prior 12 months, health care had added an average of 24,000 jobs per month.

In June, employment in mining rose by 8,000, with most of the gain occurring in support activities for mining. Employment in mining has increased by 128,000 since a recent low in October 2009.

Employment in leisure and hospitality edged up (+34,000) in June and has grown by 279,000 since a recent low in January 2010.

Employment in government continued to trend down over the month (-39,000). Federal employment declined by 14,000 in June. Employment in both state government and local government continued to trend down over the month and has been falling since the second half of 2008.

Manufacturing employment changed little in June. Following gains totaling 164,000 between November 2010 and April 2011, employment in this industry has been flat for the past 2 months. In June, job gains in fabricated metal products (+8,000) were partially offset by a loss in wood products (-5,000).

Construction employment was essentially unchanged in June. After having fallen sharply during the 2007-09 period, employment in construction has shown little movement on net since early 2010.

The average workweek for all employees on private nonfarm payrolls decreased by 0.1 hour to 34.3 hours in June. The manufacturing workweek for all employees decreased by 0.3 hour to 40.3 hours over the month; factory overtime edged down by 0.1 hour to 3.1 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls remained at 33.6 hours in June.

In June, average hourly earnings for all employees on private nonfarm payrolls decreased by 1 cent to $22.99. Over the past 12 months, average hourly earnings have increased by 1.9%. In June, average hourly earnings of private-sector production and nonsupervisory employees declined by 1 cent to $19.41.

The change in total nonfarm payroll employment for April was revised from +232,000 to +217,000, and the change for May was revised from +54,000 to +25,000.

This week’s question comes from Casey, an HR director. We have a dependent care flexible spending arrangement (FSA) and one of our employees has asked to be reimbursed for camp costs paid for her son. Can camp costs be reimbursed under a dependent care FSA? Answer: Camp costs can be reimbursed under a dependent care FSA in some circumstances.

FSAs Use Pre-Tax Dollars to Pay Qualified Expenses

Employers may set up FSAs (sometimes called flexible spending accounts) that allow employees to elect to contribute a portion of their pay to their FSA account. The amount paid into the FSA can be used to pay qualifying expenses of the employee. Most plans are set up to pay medical or dependent care expenses. The main advantage is that money is contributed to the plan on a pre-tax basis and is not taxed upon withdrawal if used to pay qualifying expenses.

Summer Camp Costs May Qualify for Reimbursement

While the cost of attending overnight camp does not qualify as an allowable expense, the cost of day camp may qualify as an allowable expense. The day camp costs must meet all the other requirements of §129 of the Internal Revenue Code of 1986 to qualify.

Contact Vision Payroll for Further Information

Contact Vision Payroll today for further information on setting up or maintaining a dependent care FSA.

According to the US Department of Labor, in the week ending July 2, the advance figure for seasonally adjusted initial claims was 418,000, a decrease of 14,000 from the previous week’s revised figure of 432,000. The 4-week moving average was 424,750, a decrease of 3,000 from the previous week’s revised average of 427,750.

Advance Seasonally Adjusted Insured Unemployment Rate Decreases

The advance seasonally adjusted insured unemployment rate was 2.9% for the week ending June 25, a decrease of 0.1 percentage points from the prior week’s revised rate of 3.0%.

Advance Seasonally Adjusted Insured Unemployment Decreases

The advance number for seasonally adjusted insured unemployment during the week ending June 25 was 3,681,000, a decrease of 43,000 from the preceding week’s revised level of 3,724,000. The 4-week moving average was 3,705,250, a decrease of 3,750 from the preceding week’s revised average of 3,709,000.

The Employee Retirement Income Security Act (ERISA) is a federal law establishing minimum standards for employee health benefit and retirement plans. While an employer is not required to establish a plan, ERISA does require those who establish and administer plans to meet certain standards. For example, plan administrators must provide participants written disclosures, such as a summary plan description (SPD) in a clear and easy to understand format about the company’s employee benefit plans.

Supreme Court Rules SPD Statements not Subject To ERISA

In a recent court ruling, the US Supreme Court unanimously ruled that inaccurate or misleading SPD statements were not subject to ERISA enforcement penalties or remedies. Regardless, employers should consider these five areas regarding benefit plan communications:

1. Summary Plan Descriptions
2. Communications Officer
3. Regular Reviews
4. Transparency in Changes
5. Non-Summary Plan Descriptions

Learn More About the Five Top Tips for Benefit Plan Communications

To find get more details about each of the five top tips for benefit plan communications, be sure to read the featured article by the HR pros at MyHRSupportCenter, Five Top Tips for Benefit Plan Communications. If you’re not yet signed up or would like a free trial of MyHRSupportCenter, contact Vision Payroll today.

The US Department of Labor (DOL) recently announced a $3 million National Emergency Grant to create temporary jobs for eligible dislocated workers to assist with cleanup and recovery efforts after severe storms and tornadoes struck the central and western areas of Massachusetts on June 1, 2011.

Grant to Help Repair Public Buildings and Schools

“By creating jobs, today’s grant will help repair the many public buildings and schools that sustained damage as a result of the severe weather,” said Secretary of Labor Hilda L. Solis. “I am pleased that the Labor Department can assist Massachusetts residents as they recover from the storms and rebuild their communities.”

Grant Awarded To State Agency

The grant was awarded to the Massachusetts Department of Workforce Development.

Hampden County Is Eligible for Public Assistance

On June 15, the Federal Emergency Management Agency (FEMA) declared Hampden County eligible for FEMA’s Public Assistance Program. Worcester County has been declared eligible for Individual Assistance, but not for Public Assistance at this time. Additional counties may be included under the grant if FEMA determines such inclusion is warranted.

National Emergency Grants Are Part of Discretionary Fund

National Emergency Grants are part of the secretary of labor’s discretionary fund and are awarded based on a state or commonwealth’s ability to meet specific guidelines.

The New Hampshire General Court voted to override the veto of Governor John Lynch and to enact HB 133, AN ACT relative to the minimum wage. The law will require the New Hampshire minimum wage to be linked to the federal minimum wage and is effective August 21, 2011.

No Change in Current New Hampshire Minimum Wage

Since the New Hampshire state minimum wage is $7.25 per hour, the same as the federal minimum wage, there will be no immediate impact to minimum wage employees in New Hampshire.

Find Out the Minimum Wage for All States by Visiting the Vision Payroll Minimum Wage Chart Page

Contact Vision Payroll if you have any questions on the New Hampshire minimum wage increase or visit our Minimum Wage Chart.