Archive for September, 2011

Cracker Barrel Agrees to Send All Discrimination Complaints to EEOC Mediation

Cracker Barrel became the latest company to enter into a national mediation agreement with the Equal Employment Opportunity Commission. Any charges filed pursuant to such agreements go directly to mediation, foregoing the EEOC’s usual complaint investigation processes.

They’re known as National Universal Agreements to Mediate, and some 200 national and regional private sector employers, including several Fortune 500 companies, have become signatories.

Here’s how the EEOC’s press release describes it:

“Under the terms of the NUAM, any eligible charges of discrimination filed with the EEOC in which Cracker Barrel is named as an employer/respondent will be referred to the EEOC’s mediation unit. The company will designate a corporate representative to handle all inquiries and other logistical matters related to potential charges in order to facilitate a prompt scheduling of the matter for EEOC mediation.”

Cracker Barrel Old Country Store, Inc. (Nasdaq: CBRL) was established in 1969 in Lebanon, Tenn., and operates 604 company-owned locations in 42 states. For more information, visit www.crackerbarrel.com.

Affordability “Safe Harbor” Proposed under Health Care Reform Law; Public Comments Welcome

Amid talk on the campaign trail of repealing “Obamacare,” the federal government proceeds with laying the groundwork to implement the law’s requirements. Under the law, if an employer cannot or won’t provide affordable coverage to its employees, it will have to pay into the federal coffers. It’s the flip side of the fine that an individual will have to pay for foregoing insurance.

In an effort to give employers an out, the IRS and Treasury Department recently proposed a “safe harbor” for employers from the law’s so-called “shared responsibility provisions.”

Under the safe harbor, employers that offer coverage to their employees would be allowed to measure the affordability of that coverage by using wages that the employer paid to an
employee, instead of the employee’s household income. This contemplated safe
harbor would only apply for purposes of the employer shared responsibility
provision, and would not affect employees’ eligibility for health insurance
premium tax credits.

The agencies have invited the public to comment on the proposal. The deadline for comments is Dec. 13, 2011.

In particular, comments are invited on the following issues:

Whether or how wages and employee contribution amounts would need to be determined for employees who are employed by an employer for less than a full year, employees who move between full-time and part-time status, situations in which the plan year is not a calendar year, and other similar special circumstances.

Whether there are other possible safe harbor methods for determining the affordability of coverage under an employer-sponsored plan for purposes of calculating an employer’s potential assessable payment under § 4980H(b).

How to coordinate any affordability safe harbor with the full-time employee look-back/stability safe harbor described in Notice 2011-36.

Read more about the proposal and the procedure for submitting comments here.

Health Care Costs Continue to Rise; More Employers Responding by Cost-Shifting, Survey Shows

Health care reform hasn’t change the fundamental reality that the costs of health care in this country continues to rise. But how employers are responding to this problem has undergone a subtle shift in the last 5 years.

That’s the gist of the annual survey on health care costs released yesterday by the Kaiser Family Foundation.

The numbers to remember from the study are:

  • in 2011, half of all workers at smaller firms with individual policies faced annual deductibles of $1,000 or more; the figure is 22 percent at larger firms;
  • premiums for family policies rose 9 percent in 2011;
  • fewer companies than before are dropping coverage altogether.

Between 2000 and 2005, the share of companies offering insurance shrank from 68 to 60 percent.  For small employers, the numbers went from 58 to 48 percent.That decline has levelled of in the last five years.

So it’s a good news-bad news situation.  Employers are buckling under the costs, but instead of dropping coverage they’re requiring employees to pay more.

The health care reform may offer a way out through the establishment of the state-run exchanges. These are supposed to be a competitive marketplace in which consumers will be able to find the best coverage at the lowest case.

It remains to be seen whether that will happen.

But I will at least give employers credit for hanging in there and at least feeling some responsibility toward providing their employees with health care coverage. The rub is whether they can afford to purchase it.

There’s an online version of the study at the KFF website.

New Study: 401(k) Returns Do Better With Help

If you want to help your employees maximize their returns from their 401(k) accounts, then you’d be wise to offer them help, according to a study released this week.

Employees who received some form of help experienced annual returns on average of 3 percent better than workers who handled their own accounts, according to a study by HR consultant Aon Hewitt and investment adviser Financial Engines.

Some of the help cited includes using target-date mutual funds, professionally managed accounts or accessing online advice.

Financial Engines issued a press release on the study that goes into more detail

DOL Issues Interim Policy on Disclosing 401(k) Fees Using Electronic Media

The U.S. Department of Labor recently issued interim guidance on how employers may disclose 401(k) plan fees to plan participants using electronic media.

The participant fee disclosure regulation requires employers to disclose more information about plan and investment costs to workers who direct their own investments in ERISA-covered 401(k) and other individual account retirement plans.  Under the final rule, plans generally have until at least May 31, 2012 to start giving better information on 401(k) and similar plan fees and expenses to an estimated 72 million participants.

“This technical release responds to requests by some plan sponsors and service providers to expand the ability of ERISA plans to use modern electronic disclosure technologies to communicate with plan participants while ensuring that all workers will benefit from the increased transparency provided by our fee disclosure rule,” said Assistant Secretary of Labor for the Employee Benefits Security Administration Phyllis C. Borzi.

The release allows plan administrators to furnish information required under the final participant disclosure rule electronically.  This includes the use of continuous access websites, if certain conditions and safeguards are met.  The interim policy states that the department will not take enforcement action based solely on a plan administrator’s use of electronic technologies to make the required disclosures under the participant fee disclosure regulation if the administrator complies with the conditions in the technical release.

The relief in the technical release is limited to the disclosures required under the final participant fee disclosure regulation at 29 CFR 2550.404a-5.  To view Technical Release 2011-03 visit www.dol.gov/ebsa/pdf/tr11-03.pdf

Maine’s New Take-Your-Gun-to-Work Law About to Take Effect

Starting on Wednesday, employees in Maine will be allowed to bring guns to work provided they keep them locked in their vehicles in the company parking lot. The employee must have a valid license to carry a weapon. Employers can still prohibit employees from carrying guns past the parking lot onto the premises.

The law does not contain a specific provision for violations. But it does give employers limited immunity from liability for any injuries resulting from complying with the law.

PierceAtwood LLP, one of Maine’s leading law firms, has an excellent synoposis of the law on its website.

Fired Teachers Ordered Rehired by D.C. Public Schools

The desire to do good can never come at the expense of employees’ rights. That’s the costly lesson the Washington, D.C. public school system learned this week.

An arbitrator ruled that in her zeal to rid the D.C. public schools of unqualified teachers, Chancellor Michelle Rhee went too far in firing 75 teachers who were in their probationary period.

The purge was part of Rhee’s aggressive reform to turn around failing schools, and while many applauded her actions, it seems she streamrolled over the rights of employees.

Chalres Feigenbaum, an arbitrator with the Public Employee Relations Board, which rules on dispute between city agencies and labor unions, said the dismissals were improper because the teachers were not told why they were let go.

Because of this “glaring and fatal flaw,” the teachers must be reinstated with back pay, which could total as much as $7.5 million, Feigenbaum ruled.

California Assembly Passes Ban on Using Credit Reports for Employment Purposes

California is one step closer to enacting a ban on the use of credit reports for employment purposes. A bill to expand current protections on use of credit checks recently passed the California Assembly.

The following description of the bill, which Gov. Jerry Brown is expected to sign, is taken from employmentscreeningresources.com

“The bill would prohibit an employer or prospective employer – with the exception of certain financial institutions – from obtaining a consumer credit report for employment purposes unless the position of the person for whom the report is sought is:

  • (1) position in the state Department of Justice,
  • (2) a managerial position,
  • (3) that of a sworn peace officer or other law enforcement position,
  • (4) a position for which the information contained in the report is required by law to be disclosed or obtained,
  • (5) a position that involves regular access to specified personal information for any purpose other than the routine solicitation and processing of credit card applications in a retail establishment,
  • (6) a position in which the person is or would be a named signatory on the employer’s bank or credit card account, or authorized to transfer money or enter into financial contracts on the employer’s behalf,
  • (7) a position that involves access to confidential or proprietary information, as specified, or
  • (8) a position that involves regular access to $10,000 or more of cash.

AB 22 would also require the written notice informing the person for whom a consumer credit report is sought for employment purposes to also inform the person of the specific reason for obtaining the report.”

If the bill becomes law, California would join Connecticut, Hawaii, Illinois, Maryland, Oregon, and Washington as the U.S. states that currently restrict the use of credit checks by most employers for employment decisions.

The federal counterpart to these laws, the Fair Credit Reporting Act, has a similar ban on the use of credit reports for employment-related purposes.

Tyson Foods to Pay $2.25 Million to Settle DOL Sex Discrimination Charges

The U.S. Department of Labor will spare no effort in ensuring that government contractors live up to their obligation to equal employment opportunity. This principle was reinforced again yesterday with the DOL’s announcement of a settlement of two sex discrimination cases against Tyson Foods, a major supplier of food to the federal government.

In these latest settlements, the DOL obtained consent decrees requiring the company to pay $2.25 million in back wages, interests and benefits to more than 1,650 qualified female job applicants who were rejected for jobs at facilities in Joslin, Ill., West Point, Neb., and Denison, Iowa.

The DOL uncovered the violations during scheduled compliance reviews.

Tyson has a history with DOL–not an entirely pleasant one. It’s been cited more than once in recent years for discrimination violations.

Read more here.

Labor Department Delays New Fiduciary Rule

A new definition of “fiduciary” for investment advisers will have to wait awhile. The U.S. Department of Labor said yesterday that it withdrew and is reconsidering a proposed rule to redefine the definition of fiduciary for investment professionals who advise investors on 401(k) plans, individual retirement accounts and other retirement plans.

“It was a very broad rule that lacked a great deal of definition and clarity that we believe had a number of unintended consequences,” said Ken Bentsen, executive vice president of public policy and advocacy at SIFMA, the Securities Industry and Financial Markets Association.

My blogging colleague Christine Roberts has written more about this development at her E for ERISA site.