As the 21st century workplace faces a tidal wave of retiring Baby Boomers, the growth in the number of Millennial employees characterizes the other end of the equation. When one worker retires, another needs to be hired. As a direct result of filling the vacuum along with the promotion of Generation X, Millennial employees have quickly become the biggest demographic in the American workforce.
After the Federal government hit your business with the Affordable Care Act, California has gone a step further with the Healthy Workplaces Healthy Families Act of 2014. The question is how does California’s Healthy Workplaces Healthy Families Act of 2014 affect your business. As a PEO, Total HR Management helps our clients stay in compliance with any new Federal or state regulations. The goal is to help you focus on the core money-making functions of your business and not the bureaucracy time-consuming management of running your business.
Healthy Workplaces Healthy Families Act of 2014
On Friday, August 29, 2014, California (CA) Governor, Jerry Brown, signed AB 1522 into law. Known as the Healthy Workplaces Healthy Families Act of 2014, AB 1522 requires employers to provide paid sick leave to any employee who has worked in California for 30 days or more during the year preceding the commencement of employment. For employers in California with employees in other states, the law only applies to employees who work inside of California.
Healthy Workplaces Healthy Families Act
From the Perspective of Employee Rights:
- A “qualified” employee is any employee who has worked in California for at least 30 days during preceding year
- All qualified employees will accrue paid sick leave from their date of hire at a rate no less than one hour for every 30 hours worked, however employers can restrict employees from using paid sick leave until after their 90th day of employment
- The law covers employees regardless of exempt, non-exempt, full-time, part-time, or temporary status
- Employees must provide reasonable notice for foreseeable time off or what is practicable
- Employees can use their accrued sick leave to care for themselves, their sick children, sick grandchildren, sibling, parent, spouse or domestic partner
- Pay will be based on the hourly wage, not overtime
- If an employee is re-hired within one year, employers must give back previously accrued sick time and allow its immediate use
From The Perspective of Employer Actions:
- May set a reasonable minimum usage increment of not more than 2 hours
- May not require, as a condition of using leave, that the employee search or find for a replacement worker
- Are not required to provide compensation to an employee for accrued, but unused sick leave at termination
- Cannot discriminate, retaliate or harass an employee based on their use of, or request to use, paid sick leave
- Can have different policies for different workers (e.g. temporary workers as opposed to full-time employees)
- May limit an employee’s use of paid sick days to 24 hours or three days in each year of employment, however accrued paid sick days must carry over to the following year of employment
- May not require medical documentation to use sick leave unless it falls under another law like the Federal Family and Medical Leave Act, the California Pregnancy Disability Leave, and the like.
In the next blog, Total HR Management will provide a timeline for employers and employees in relation to the implementation of California’s Healthy Workplaces Healthy Families Act of 2014.
For the first time in California labor law history, providing paid sick leave for employees is no longer an option, but a necessity. After the challenges of the Affordable Care Act, Total HR Management understands if employers find this new law to be the straw that broke the camel’s back. Such a sense of being overwhelmed by the bureaucracy of health-related laws and regulations, both Federal and state, can be avoided by working with a professional employer organization or PEO.
In the next blog, Total HR Management will provide a timeline for employers and employees in relation to the implementation of California’s Healthy Workplaces Healthy Families Act. To learn more about how Total HR Management can provide you with the HR outsourcing support that your company needs, please contact us by calling (800) 975-5128.
In the 21st century and in the wake of the recent recession, owning and running a business is more challenging than ever. While your core business remains your main priority, there seems to be so many other employment-related responsibilities that consume an employer’s focus. Employee benefits, healthcare reform, payroll processing and EPLI risk management are commonly referred to as administrative burdens for a reason. They are a time suck. Then again, hiring a full-time human resources director is expensive. What are the options and what are you supposed to do when it feels like you are caught between a rock and a hard place?
Total HR Management is proud to offer the modern PEO solution to the age-old problems of effective human resources management. The bonus of working with a professional employer organization is that it allows you to be hands off when it come to all of those annoying administrative burdens. When partnering with Total HR Management, you enter into a tailored co-employment relationship. Co-employment is when the PEO performs the functions of the administrative employer and takes on certain liability responsibilities of the employer, allowing the client to focus on the actual work of their business. Why is the Total HR co-employment model tailored? The reason simply is we give your company what it needs; nothing more and nothing less.
There is a bevy of administrative tasks we can handle. These administrative tasks range from payroll processing and employee benefits administration to liability insurance and regulatory paperwork. Keeping up with the times, we also have become experts at navigating the complexities of healthcare reform and PPACA. If you already have an employee benefits solution, but your payroll processing and EPLI situation leaves something to be desired, these are the PEO functions that Total HR will cover. By offering a tailored solution, we work with you to diagnose the needs of your company and provide a services package that makes sense.
If you want to know more about how Total HR Management can potentially help your company as a professional employer organization, please contact us today by calling (800) 975-5128 or emailing our human resources outsourcing experts at firstname.lastname@example.org.
This Regulatory Series has been informed by Robert J. Grossman’s article on Regulatory Relief in HR Magazine (February 2013)
Part 2 – Healthcare Reform, Labor Laws, Discrimination Regulatory Burdens
Although the Obamacare effect through healthcare reform on insurance regulations is a major issue for small to mid-sized businesses across the country, shifts in federal labor laws also present significant challenges. In this ongoing series on the huge federal regulatory burdens on American business owners and what to do to stay in compliance, Total HR Management hopes to inform and provide a possible solution as well. Rather than focusing on the macrocosm of the country, we can help you with the microcosm of your business. Since we can’t change the stormy seas or stop the crashing waves, we can help you batten down the hatches and secure the mast of your ship so your company can continue to thrive.
Healthcare reform provides so many new challenges for small to mid-sized business owners, and we have written about it extensively in the recent past in the following four blogs:
1) 5 Key Healthcare Reform Points To Keep In Mind For Employers With Over 50 Employees
2) Total HR Management Provides A Snapshot Of PPACA And The Challenges Of The New Healthcare Reform Laws
3) In Light of Healthcare Reform, Total HR Management Examines the Advantages of Outsourcing to a PEO (Professional Employer Organization)
4) Health Care Reform Update
As you can see, Total HR Management takes compliance with the healthcare reform regulations seriously when it comes to ensuring that our clients avoid being fined or getting into trouble. What is the biggest present challenge is that only 28% of companies that hire and employ low-income workers offer any form of health insurance whatsoever. Complying with upcoming healthcare reform challenges is going to be a major headache for thousands upon thousands of American companies.
Regulatory Burdens & Labor Laws
Although not quite as difficult as healthcare reform compliance, the National Labor Relations Board has thrown more than one wrench into the smooth operations of labor law regulatory burdens. The problem is the profound pro-union shift of the NLRB that has thrown off the traditional balance between union demands and employer options. The fact that employers now have to educate workers about their union rights by posting an explanation of their right to organize under the National Labor Relations Act (NLRA) just seems out of place. The NLRB now is also enforcing the provisions of Section 7 that does not allow an employer to fire a worker for discussing terms and conditions of employment. The vagueness of this law opens the door for lawsuits and a greater need for EPLI coverage.
Side by side with the NLRB, the U.S. Equal Employment Opportunity Commission is attacking “systemic’ discrimination in the workplace with a vigor that feels almost celebratory. By looking in depth for patterns and practices that affect the vast number of protected classes, the EEOC is quite literally creating problems where none existed in the past. In 2012, it secured $365.4 million in monetary damages from employers.
Do such regulatory burdens make sense when so many American small to mid-sized businesses are trying to regain their equilibrium after the recent nationwide recession? If we want America to be at the forefront of the world in terms of business opportunities and productivity, why are business owners have so many regulatory burdens? Yes, Total HR Management understands that many of these businesses are not perfect, but do they need to be punished to such an extent? The damage being done is why Total HR Management offers such regulatory support and compliance help when companies choose to outsource their human resources functions to us.
1) What exactly are the penalties for employers who do not offer healthcare coverage?
Beginning in 2014, an employer with 50 or more full-time equivalent employees during the preceding calendar year will be penalized if any of their full-time employees are not offered coverage. PPACA provides a formula to help employers calculate full-time equivalent, according to its definition. In 2014, the monthly penalty per employee will be equal to the number of full-time employees, minus 30, multiplied by $166.66 ($2,000 per year, divided by 12) for any applicable month. For example, an employer with 60 full-time equivalents will be subject to a penalty of $4999.80 per month (60-30 = 30 X $166.66). It is important to remember that the amount of the penalty will increase in subsequent years.
2) Could an employer who does offer coverage still be subject to penalties under the new healthcare reform laws?
In certain circumstances, employers with 50 or more full-time equivalent employees that offer insurance may still be subject to a penalty. This applies when the employer’s plan does not meet PPACA’s definition of “affordable”, or if the employer’s plan pays for less than 60% of the covered expenses. If an eligible employee then obtains a premium credit in an exchange plan, the employer is subject to a penalty.
3) How does PPACA calculate full-time equivalent employees? Are my part time employees included in the formula?
The new federal definition sets the standard of a full-time equivalent at 30 or more hours of actual time worked during a typical week, averaged over the month. Seasonal employees working less than 120 days during the prior year are excluded. However, the law takes the hours worked by part-time employees into the calculation when considering the number of full time equivalents. For example: a company employs 40 full-time workers (working on average of more than 30 hours per week) and 20 part-timers (working on average 24 hours per week, or 96 hours per month). These 20 PTE are the equivalent of 16 FTE. (20 x 96 / 120 = 16). So for calculation purposes, this employer has 40 + 16= 56 full-time equivalents. In this example, this employer would be required to provide health coverage or pay a penalty because they have more than 50 equivalent employees.
4) What is the meaning of “affordable insurance” with respect to an employer’s obligation to provide “affordable health insurance”?
Affordable coverage means the plan covers at least 60% of required health care expenses and the employee cost is less than 9.5% of W2 earnings. If the “affordable insurance” minimum is not met, there will be penalties.
5) How does Healthcare Reform affect COBRA elections and cost to the employee?
Although the exact ramifications remain unclear, COBRA (Consolidated Omnibus Budget Reconciliation Act) may no longer be needed if individuals have access to coverage through the state exchanges. However, if the state exchanges cost more, then the employee may elect COBRA. The integration of COBRA coverage remains one of the question marks.
Total HR Management continues to stay on the cutting edge of healthcare reform implementation shifts and the resulting implications on small to mid-sized business owners.