Employment Law Update

Michael Patrick O’Brien
November 9, 2010 | COMMENTS

The Internal Revenue Service (IRS) has delayed for one year a requirement of the health reform law that employers report the value of an employee's health plan on tax forms. The IRS issued a notice indicating that the W-2 reporting requirement will not become mandatory until an employer issues W-2 forms for employee income earned in 2012. The IRS also has issued a draft (remember, this is only a draft) W-2 form for reporting 2011 income. Regarding employer-sponsored health care benefits, the draft form states, “Cost of employer-sponsored health coverage (if provided by the employer). The reporting in Box 12, using Code DD, of the cost of employer-sponsored health coverage is for information only. The amount reported with Code DD is not taxable.” The bottom line on all this appears to be that you can-but need not-report the value of health benefits on W-2 forms until you issue them in January of 2013, reporting employee income earned in the year 2012. Click here for more information. The United States Treasury Department and the IRS anticipate issuing guidance on this reporting requirement before the end of this year, so stay tuned for updates!

DOL Strategic Plan for Misclassified Workers

The national five year strategic plan for the United States Department of Labor (DOL) includes plans for an increased crackdown on employer who misclassify workers as independent contractors instead of as employees. DOL plans to work jointly with the United States Department of Treasury (i.e. the IRS) to “detect and deter” such misclassifications, which DOL says occur in as many as 30% of US employer and deprives the federal treasury of “billions” of dollars. Another interesting note, according to the strategic plan: “the FLSA recordkeeping regulations under development will require that covered employers notify each of their workers of their rights under the FLSA, and provide employees with information regarding their hours worked and wage computations.” You can read the full plan (reader warning—it is over 100 pages long).

New Financial Institution Diversity Requirements

Banks, credit unions and various other financial institutions face new diversity requirements as a result of the passage of the federal financial reform law in July of 2010. The news law requires the federal agencies affected (Treasury, FDIC, Federal Reserve, National Credit Union Administration, etc.) to establish an office of minority and women inclusion to promote equal employment opportunity and diversity within the regulated financial institutions. Contractors working with such agencies will have to agree, in their contracts, to fairly include women and minorities in their workforces. Here are links to a couple of resource articles explaining these requirements in more detail: http://www.shrm.org/hrdisciplines/Diversity/articles/pages/federalagencydiversity.aspx and http://www.dcemploymentlawupdate.com/2010/07/articles/federal-contracts-1/financial-reform-bill-establishes-diversity-requirements/.

Some New California Employment Laws

National SHRM has a helpful article on its website about some new employment laws taking effect in California, including a new paid leave requirement for organ donation. Here is a link to the article. Some headline highlights from the article include: (1) “California law previously entitled state employees who had exhausted available sick leave to take up to 30 days paid leave for donating organs to another person, and up to five days paid leave for donating bone marrow to another person. Known as the Michelle Maykin Memorial Donation Protection Act, SB 1304 adds a new Labor Code provision extending this public employee benefit to private employees. Private employers with 15 or more employees will be required to provide up to 30 days of paid leave per year for an organ donation in any one-year period, and up to five days of paid leave per year for a bone marrow donation. Leave may be taken in one or more periods.” (2) “California law provides unemployment insurance benefits to eligible employees who are unemployed through no fault of their own. Until passage of AB 2364, these provisions contained a 'good cause' exception allowing employees to retain their eligibility if they left employment to protect their 'children' from domestic violence abuse. AB 2364 amends this domestic violence 'good cause' exception to specify that an employee retains their eligibility if they voluntarily left employment to protect their 'family' (not simply 'children' as under prior law) from domestic violence abuse.” (3) “AB 569 amends California Labor Code § 512 to exempt the following categories of employees (as defined by the statute) from the meal period provisions otherwise applicable to nonexempt employees: construction occupation, commercial drivers, security officers, gas and electrical corporation employees and those of a publicly-owned local electric utility. The exemption applies only to such employees covered by a valid collective bargaining agreement that expressly provides for the wages, hours of work, and working conditions of employees, which expressly provides for meal periods for those employees, for final and binding arbitration of disputes concerning application of its meal period provisions, for premium wage rates for all overtime hours worked, and a regular rate of pay of not less than 30 percent more than the state minimum wage rate.”

The Employment Law Update is a legal and legislative update service sent out about twice a month to various members of the Utah League of Credit Unions HR Council. Michael Patrick O'Brien is also the Legal and Legislative Director for Utah SHRM (Society for Human Resource Management).Contact O’Brien at 801-534-7315 or mobrien@joneswaldo.com or visit www.joneswaldo.com. Reprinted with permission.