Do you have a HR question? See below for common ones our members frequently ask. If you do not see your question, let us know at HRQuestions@printing.org.
My firm wants to have a sales presence 1,000 miles away. Do I have to hire a sales person as an employee who will live and work in the other state (which may create state tax implications – workers comp, unemployment, Medicare, etc.), or can I hire the sales person as an independent contractor? My health insurance does not normally cover people in the other state.
During last week's snow storm, our company remained open but some exempt personnel decided not to report to work for the full-day because of transportation issues. Can we charge them vacation time, or if they are out of vacation, deduct a day's pay?
Here is OSHA’s position on them as they have two interpretations for the general industry, which includes printing, under the noise protection standard and under the General Duty Clause:
1. A 1987 OSHA interpretation letter (http://www.osha.gov/pls/oshaweb/owadisp.show_document?p_table=INTERPRETATIONS&p_id=19542) states: "If Walkman[style] headsets are worn over otherwise effective ear protection, then the unit's volume control has to be adjusted to exceed the hearing protector's field attenuation. This obviates the effectiveness of the ear protection and is a violation of the noise standard 29 CFR 1910.95(i)(2)(i) or (ii).
Use of Walkmen in noise environments in excess of 29 CFR 1910.95, Tables G-16 and D-1 is a violation. Use of Walkmen over required ear protection is a violation. Use of Walkmen in occupational noise less than Tables G-16 or D-1 is at managerial discretion unless its use causes a serious safety hazard to warrant issuance of a general duty clause violation."
2. A 1985 interpretation letter (http://www.osha.gov/pls/oshaweb/owadisp.show_document?p_table=INTERPRETATIONS&p_id=19319) states: "According to the Occupational Safety and Health Act of 1970, the employer is responsible for employee safety and health. Therefore, a number of employers have simply resorted to the outright banning of stereo headsets at worksites, since it is impractical to control individual volume settings for such devices."
For a sample policy on headphones click here.
Answer: Generally, no. The 1986 amendments to the Age Discrimination in Employment Act removed the age 70 cap, mandatory retirement at any age was effectively prohibited. However, three exceptions were contained in the 1986 amendments: (1) bona fide executives and high policymakers with at least $44,000 of annual retirement income at age 65; (2) tenured employees and faculty at age 70; and (3) firefighters and law enforcement officers at the age specified by applicable state or local law.
The bona fide executive or high policymaker exception includes employees age 65 or older who have been employed in such a position for at least two years immediately prior to retirement, and who are entitled to an immediate nonforfeitable annual retirement income of at least $44,000.
The $44,000 amount is not indexed, so many middle-management employees easily will exceed that threshold. However, the Equal Employment Opportunity Commission's regulations make it clear that the exception does not apply to middle-management employees, no matter how great their retirement income, "but only to a very few top level employees who exercise substantial executive authority over a significant number of employees and a large volume of business."
Regulations first issued in 1988 (EEOC Reg. Sec. 1625.12) regarding the exception for bona fide executives reference Sec. 541.1 of the Fair Labor Standards Act that defines a bona fide executive as someone who:
• as a primary duty manages the enterprise or a department or subsidiary;
• customarily and regularly directs the work or two or more other employees;
• has the authority to hire and fire employees, or whose suggestions regarding hirings and firings are given particular weight;
• customarily and regularly exercises discretionary powers; and
• devotes 80% or more of his or her time to the above activities.
Sec. 4(f)(1) of the ADEA states that it is not unlawful for an employer to take any action otherwise prohibited by the ADEA where age is a bona fide occupational qualification (BFOQ) reasonably necessary to the normal operation of the particular business. Successful use of the BFOQ defense can result in a mandatory retirement system being allowed under the ADEA. Court cases interpreting the BFOQ exception have construed it very narrowly (e.g., airline pilots). In Western Airlines v. Criswell, the Supreme Court said: "Unless an employer can establish a substantial basis for believing that all or nearly all employees above an age lack the qualifications required for the position, the age selected for mandatory retirement must be an age at which it is highly impractical for the employer to insure by individual testing that its employees will have the necessary qualifications for the job." (emphasis added)
The Court added that even in cases involving public safety, the ADEA does not permit complete deference to an employer's decision that retirement should be mandated at a particular age. The employer still must meet the two-pronged BFOQ test.
(1) the qualification is reasonably necessary to the essence of the business; and
(2) age is a legitimate proxy for the qualification because—
(a) there is a substantial basis for believing that all or nearly all employees older than that age lack the qualification; or (b) it is impossible or highly impractical to ensure by individual testing that each employee has the qualification at issue.
Answer: Until recently, the IRS has taken the position that if employees received work-related articles of clothing and accessories, most with the taxpayer's logo, including tee shirts, polo shirts, sweaters, jackets, swimsuits, fanny packs, etc., which they were required to wear while performing services were excluded from gross income as de minimis fringe benefit. Now, under a new interpretation letter (September 2011) the IRS says that it can "no longer conclude, 'on a categorical basis, that the items were de minimis fringe benefits.'" The IRS letter is does not provide clear guidance on if and when are these items taxable to employees, however a high frequency appears to be a negative factor. The IRS also says their ruling will not be applied retroactively.
Answer: In general, the federal OSHA standard on medical and first aid issues (1910.151) allows companies to provide first aid supplies according to the specific needs of the workplace. In order to determine the appropriate supplies the company should perform an assessment of hazards, employee exposures, risk levels, liability issues, and of course the availability and capabilities of outside emergency services.
Appendix A of this OSHA standard is non-mandatory guidance that companies can reference and use to establish the appropriate first aid supplies. See below:
First aid supplies are required to be readily available under paragraph § 1910.151(b). An example of the minimal contents of a generic first aid kit is described in American National Standard (ANSI) Z308.1-1998 "Minimum Requirements for Workplace First-aid Kits." The contents of the kit listed in the ANSI standard should be adequate for small worksites. When larger operations or multiple operations are being conducted at the same location, employers should determine the need for additional first aid kits at the worksite, additional types of first aid equipment and supplies and additional quantities and types of supplies and equipment in the first aid kits.
In a similar fashion, employers who have unique or changing first-aid needs in their workplace may need to enhance their first-aid kits. The employer can use the OSHA 200 log, OSHA 101's or other reports to identify these unique problems. Consultation from the local fire/rescue department, appropriate medical professional, or local emergency room may be helpful to employers in these circumstances. By assessing the specific needs of their workplace, employers can ensure that reasonably anticipated supplies are available. Employers should assess the specific needs of their worksite periodically and augment the first aid kit appropriately.
If it is reasonably anticipated that employees will be exposed to blood or other potentially infectious materials while using first aid supplies, employers are required to provide appropriate personal protective equipment (PPE) in compliance with the provisions of the Occupational Exposure to Blood borne Pathogens standard, § 1910.1030(d)(3) (56 FR 64175). This standard lists appropriate PPE for this type of exposure, such as gloves, gowns, face shields, masks, and eye protection.
Clarification: In regards to what should not be in a first aid kit, employers should avoid any over the counter drugs like aspirin, pain relievers, cold medicines, eye drops, antacids, etc. The liability risks can include employees experiencing adverse reactions because of cross contamination, unknown medical conditions, expired drugs, and items taken by mistake. These issues occur as a result of poorly managing and monitoring first aid kits. While the chance of an incident may be small, the liability can be significant.
Need information specific OSHA regulations for your state?
Answer: Yes. According to a Department of Labor Opinion Letter, "[s]ince employers are not required under the FLSA to provide any vacation time to employees, there is no prohibition on an employer giving vacation time and later requiring that such vacation time be taken on a specific day(s). Therefore, a private employer may direct exempt staff to take vacation or debit their leave bank account . . . , whether for a full or partial day's absence, provided the employees receive in payment an amount equal to their guaranteed salary." See FLSA2009-2, www.dol.gov/esa/whd/opinion/FLSA/2009/2009_01_14_02_FLSA.htm Further, ("[E]mployers, without affecting their employees' exempt status, may take deductions from accrued leave accounts."). Therefore, it is our opinion that the employer may require exempt employees to use accrued vacation time for any absence, including one resulting from a plant shutdown, without affecting their exempt status, provided that employees receive a payment in an amount equal to their guaranteed salary. "[A]n exempt employee who has no accrued [vacation] benefits . . . or has a negative balance . . . still must receive the employee's guaranteed salary for any absence(s) occasioned by the employer or the operating requirements of the business." See FLSA2005-41. www.dol.gov/esa/whd/opinion/FLSA/2005/2005_10_24_41_FLSA.pdf
Answer: Short-Term: No. According to the Department of Labor, a '"salary deductions due to a reduction of hours worked for short-term business needs do not comply with § 541.602(a) because they result from "the operating requirements of the business." 29 C.F.R. § 541.602(a). Thus, "[i]f the employee is ready, willing and able to work, deductions may not be made for time when work is not available." Id . Deductions from the fixed salary based on short-term business needs are different from a reduction in salary corresponding to a reduction in hours in the normal scheduled work week, which is permissible if it is a bona fide reduction not designed to circumvent the salary basis requirement, and does not bring the salary below the applicable minimum salary.' See FSA 2009-14, http://www.dol.gov/esa/whd/opinion/FLSA/2009/2009_01_15_14_FLSA.htm Long-Term: Yes. According to the Department of Labor, a reduction in the workweek on an exempt from (say from 40 hours to 32) "with a commensurate reduction in pay… will not defeat an otherwise valid exemption." DOL Wage/Hour Opinion Letter, March 4, 1997, "Can employer reduce exempt employee's work hours and salary?" The Wage/Hour Division of the U.S. Department of Labor has published a Fact Sheet on furloughs, exempt status, vacation accrual, etc. (Note, some state laws may be stricter, e.g., California.) See http://www.dol.gov/whd/regs/compliance/whdfs70.pdf
Answer: Yes, if the bonus is nondiscretionary, overtime for the time period must be recalculated. According to a January 2009 Department of Labor Opinion Letter, "When the amount of the bonus can be ascertained, it must be apportioned back over the workweeks of the period during which it may be said to have been earned. The employee must then receive an additional amount of compensation for each workweek that he worked overtime during the period equal to one-half of the hourly rate of pay allocable to the bonus for that week multiplied by the number of statutory overtime hours worked during the week." See FLSA2009-21, www.dol.gov/esa/whd/opinion/FLSA/2009/2009_01_16_21_FLSA.htm
Answer: Yes, according to IRS, gift cards, "no matter how little, are never excludable as a de minimis benefit, except for occasional meal money or transportation fare," thus they are taxable benefits to the employee. See IRS's Publication 15-B, under De Minimis (Minimal) Benefits, www.irs.gov/publications/p15b/ar02.html#en_US_publink1000101773
Answer: It depends on your state. ADP has published a great guide on maximum fees allowed by states. https://www.adp.com/pdf/03-172-058.pdf
Answer: Most federal, state and local laws require that required employment posters be displayed in areas that employees and applicants can readily see them. Depending on your facility's layout this may require two areas, such as a break room (for employees) and a waiting area or interview room where applicants normally reside. Note that some smaller employers are not covered under certain laws, such as the Family and Medical Leave Act. For more information see State Employment Posters.
Answer: You must look at both federal and state law for the answer.
For federal law, the U.S. Department of Labor's web site says:
Federal law does not require lunch or coffee breaks. However, when employers do offer short breaks (usually lasting about 5 to 20 minutes), federal law considers the breaks as compensable work hours that would be included in the sum of hours worked during the work week and considered in determining if overtime was worked. Unauthorized extensions of authorized work breaks need not be counted as hours worked when the employer has expressly and unambiguously communicated to the employee that the authorized break may only last for a specific length of time, that any extension of the break is contrary to the employer's rules, and any extension of the break will be punished.
Bona fide meal periods (typically lasting at least 30 minutes), serve a different purpose than coffee or snack breaks and, thus, are not work time and are not compensable.
Rest periods of short duration, running from 5 minutes to about 20 minutes, are common in industry. They promote the efficiency of the employee and are customarily paid for as working time. They must be counted as hours worked. Compensable time of rest periods may not be offset against other working time such as compensable waiting time or on-call time. (Mitchell v. Greinetz, 235 F. 2d 621, 13 W.H. Cases 3 (C.A. 10, 1956); Ballard v. Consolidated Steel Corp., Ltd., 61 F. Supp. 996 (S.D. Cal. 1945))
For state laws on meal breaks see http://www.dol.gov/whd/state/meal.htm
For state laws on rest breaks see http://www.dol.gov/whd/state/rest.htm
Question: My firm wants to have a sales presence 1,000 miles away. Do I have to hire a sales person as an employee who will live and work in the other state (which may create state tax implications – workers comp, unemployment, Medicare, etc.), or can I hire the sales person as an independent contractor? My health insurance does not normally cover people in the other state.
Answer: You can do both. However, if you hire the sales person as an employee on your payroll and they live and work in the other state, there will be state tax implications that you'll have to setup and run. If your firm has not done this before, you should seek out advice and determine what is involved before making a hire. An alternative is to use an employment agency in the state in question and create an "employee leasing" arrangement. The leasing firm will pay the taxes and often will offer health and retirement plans to the sales person in their home state. Your firm would pay the salary/commission, taxes, benefits, and an administrative fee to the employment agency.
If you use the independent contractor route, you should have an agreement in place and know the federal and state rules regarding independent contractors. Federal and state governments like to challenge the independent contractor status (typically after they receive a complaint) in order to collect tax revenue. For more information on the subject, sample agreements, and state-by-state law review see our article on Determining Independent Contractor Status.
Answer: Deductions from a guaranteed salary are allowed only in limited circumstances.
Deductions from pay are permissible: when an exempt employee is absent from work for one or more full days for personal reasons other than sickness or disability, or is absent for one or more full days due to sickness or disability if the deduction is made in accordance with a bona fide plan, policy or practice of providing compensation for salary lost due to illness; to offset amounts employees receive as jury or witness fees, or for military pay; for penalties imposed in good faith for infractions of safety rules of major significance; or for unpaid disciplinary suspensions of one or more full days imposed in good faith for workplace conduct rule infractions. Also, an employer is not required to pay the full salary in the initial or terminal week of employment, or for weeks in which an exempt employee takes unpaid leave under the Family and Medical Leave Act. § 541.602(b).
Follow-up Question: If an exempt-employee (who is without accrued benefit time) is absent (full days) from work for part of a week due to their own sickness/disability do they get paid for the whole week?
Answer: Yes, they get paid the full week's salary.
Follow-up Question: If employee without benefit time is absent (full days) from work for a whole week due to their own sickness /disability do they get paid for the whole week?
Answer: Employers may take partial day deductions from an employee's leave bank, even if the deduction results in a negative leave balance; however, an employer may not dock an exempt employee's salary for a partial day absence. Under the final rules, employers may take deductions from employees' leave accounts for partial day absences, the same as under the old regulations. The preamble specifically states that "employers, without affecting their employees' exempt status, may take deductions from accrued leave accounts...." 69 Fed. Reg. at 22178. The preamble also cites approvingly to a number of Wage and Hour Division opinion letters allowing deductions from accrued leave accounts. Additional opinion letters, dated December 4, 1998, May 27, 1999, and February 16, 2001, similarly provide that employers may reduce the amount of accrued paid leave in an employee's Paid Time Off plan, even if the employee is absent only for a partial day. The employer may reduce the leave so that the employee has a negative leave balance. However, the employee must receive the full guaranteed salary, even if there is no leave in the account or there is a negative balance, if the employee has only a partial day absence." (see #15 at www.dol.gov/whd/regs/compliance/fairpay/faq_PF.htm)
Also, in order for executive, administrative, or professional employees to be considered exempt under the FLSA, such employees must be paid on a salary basis. Employees are considered to be paid on a salary basis within the meaning of the Act if under their employment agreements they regularly receive in each pay period a predetermined amount which is not subject to reduction because of variations in the quality or quantity of the work they perform. The only exceptions under which an employer may make deductions from an employee's salary without disturbing that employee's "salaried" status are when:
- the employee is absent from for one or more full days for personal reasons other than sickness or disability;
- the employee is absent for one or more full days due to sickness or disability if the deduction is made in accordance with a bona fide plan, policy or practice of providing compensation for salary lost due to illness;
- the deduction is used to offset amounts the employee receives as jury or witness fees, or for military pay;
- the deduction is a penalty imposed in good faith for infractions of safety rules of major significance; or
- the deduction is for an unpaid disciplinary suspension of one or more full days imposed in good faith for workplace conduct rule infractions, such as for sexual harassment or workplace violence.
Thus, because employees must receive their full salaries for any week in which they perform work without regard to the number of days or hours worked in order to be considered exempt from the minimum wage and overtime provisions of the FLSA, the effect of subjecting an exempt employee's pay to unpermitted deductions for being late or absent is that the exemption is inapplicable to that employee during the entire period when such deductions were made.
Indeed, such deductions are antithetical to the concept of a salaried employee, because a salaried employee is compensated not for the amount of time spent on the job, but rather for the general value of services performed. It is precisely because executives are thought not to punch a time clock that the "salary test" for such employees requires that their predetermined pay not be subject to reduction because of variations in the quantity of work performed, especially when hourly increments are at issue. (source: Commerce Clearing House)
Follow-up Question: For an exempt-employee where an absence is for one or more full days due to sickness or disability and a the deduction is made in accordance with a bona fide plan, policy, or practice of providing compensation for salary lost due to illness;
does this mean deductions from pay are permissible if made in accordance with bona fide plan, policy? And …….what is considered a bona fide plan, policy?
Answer: Yes, deductions from a bona fide policy/plan are permissible for sickness/disability (however keep in mind that this means that the employee is still getting their normal paycheck).
A "bona fide plan, policy" has been defined by the Department of Labor as a "…benefits that have been communicated to eligible employees, and that operates as described in the plan, will in general qualify as bona fide. In addition, to be bona fide, the plan must be administered impartially, and its design should not reflect an effort to evade the requirement that exempt employees be paid on a salary basis…. It is also our position that a reasonable number of absences on account of sickness ordinarily must be allowed without loss in pay to exempt employees…. The Wage and Hour Division, however, previously has approved leave plans that allow for at least 5 days of sick leave per year as bona fide under the regulations…. Moreover, with respect to a qualifying period, the Wage and Hour Division previously deemed a leave plan that required one year of service prior to payment of sick pay benefits to be bona fide." See www.dol.gov/whd/opinion/flsa.htm#2006, September 14, 2006, FLSA2006-32 letter.
Answer: In November 2007, the Occupational Safety and Health Administration (OSHA) issued a final regulation (www.osha.gov/pls/oshaweb/owadisp.show_document?p_table=FEDERAL_REGISTER&p_id=20094) regarding payment of Personal Protective Equipment, which mostly takes effect in May 2008. The final rule states that employers must pay for most all Personal Protective Equipment that employees are required to use on the job, but there are a few exceptions, such as for "ordinary safety-toed footwear, ordinary prescription safety eyewear, logging boots, and ordinary clothing and weather-related gear." With regards to steel-toe shoes or boots, 1915.152 (f) says: "(2) The employer is not required to pay for non-specialty safety-toe protective footwear (including steel-toe shoes or steel-toe boots) and non-specialty prescription safety eyewear, provided that the employer permits such items to be worn off the job-site. (emphasis added) (3) When the employer provides metatarsal guards and allows the employee, at his or her request, to use shoes or boots with built-in metatarsal protection, the employer is not required to reimburse the employee for the shoes or boots."
Answer:According to Printing Industries of America's 2013 national Wage and Benefit Survey, the average employee turnover in the printing industry was: 8.6%.
Answer: It depends on which document the employee initially uses to verify employment authorization and identity. If the employee checks the third box in Section 1 of the I-9 form ("alien authorized to work until..."), indicating that he/she only has temporary work authorization, the employee must list the expiration date in Section 1 next to that third box. That's a deadline by which the employer must re-verify continued work authorization, if the employer wishes to continue the employment beyond that deadline. If the employee presented an "Employment Authorization Card" for I-9 purposes as a List A document, that card also has an expiration date (usually one or two years, sometimes a little longer), which means that the employment authorization will end on that date. This needs to be re-verified by the deadline also, if the employer wishes to continue the employment beyond that date. If the employer had sponsored the employee for an employment visa (e.g. H-1B visa, or L-1 visa, or TN visa, etc.), those visas also expire on a given day and need to be re-verified (usually, the employer requests an extension of the visa before the expiration date).
Green cards, on the other hand, which are called Permanent Resident Cards (the new gold-looking ones) or Resident Alien Cards (the previous pink & blue ones) or Alien Registration Receipt Cards (the very old white ones) DO NOT have to be re-verified, even though they may have an expiration date. These cards are evidence that the individual is a permanent resident in the U.S., who has permanent work authorization (just like US citizens). The only caveat is that when an employee is first hired and completes an I-9 form, he/she cannot present such a green card as a List A document, if at that time the green card is already expired (employer cannot accept an expired green card for I-9 purposes). (Source: Bernhard W. Mueller, Ogletree, Deakins, Nash, Smoak & Stewart, P.C.)
Question: During last week's snow storm, our company remained open but some exempt personnel decided not to report to work for the full-day because of transportation issues. Can we charge them vacation time, or if they are out of vacation, deduct a day's pay?
Answer: Federal Wage/Hour law allows employers to deduct a full day's pay (but not partial) if an exempt employee does not report due to "personal reasons" (but exclusive of "sickness or disability"). Weather related issues are included in the definition of "personal reasons." The employee could decide to charge the time off to their vacation or PTO balance.
Clarification: If the employer decides to close for the day or more (but less than a full work week), then the exempt employees should still be paid for the week. The Department of Labor has a good letter of interpretation on the subject. See www.dol.gov/whd/opinion/FLSA/2005/2005_10_28_46_FLSA.htm
Answer: No. Under §1.125-3, Effect of the Family and Medical Leave Act (FMLA) on the operation of cafeteria plans, contributions under the pay-as-you-go option are generally made by the employee on an after-tax basis. However, contributions may be made on a pre-tax basis to the extent that the contributions are made from taxable compensation (e.g., from unused sick days or vacation days) that is due the employee during the leave period. See http://www.irs.gov/pub/irs-regs/ee2095.txt, question and answer 3
Answer: Yes, if that employee had submitted the proper health care enrollment paperwork when eligible and before the notice of quit. (We are aware of this happening a few times in our industry where the employee was moonlighting and his/her real motivation was to obtain better/cheaper health care coverage. We suggest firms have a moonlighting policy and verify all prior work history.)