Employers Must Use New Form I-9 Starting May 7, 2013

The U.S. Citizenship and Immigration Services (USCIS) released a new Form I-9 for verifying employment eligibility. All employers are required to complete a Form I-9 to verify the employee’s identity and eligibility to work in the United States.

After an initial grace period during which employers could use either the new or old Form I-9, use of the new form will be mandatory as of May 7, 2013. It is important that employers use the new Form I-9 because it contains a number of important changes from the previous form.

Continued use of the old form could subject employers to fines of $110 to $935 per instance depending on the non-compliance rate.

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IRS standard mileage reimbursement rate increases to 56.5 cents on January 1, 2013

The Internal Revenue Service has announced the standard mileage reimbursement rate for business travel for 2013. Effective January 1, 2013, the standard mileage rate will be 56.5 cents per mile (up from 55.5 cents per mile in 2012).

Although employers are not required to reimburse employee travel at the IRS mileage rate, it is advisable to do so because other methods for providing adequate reimbursement are more difficult to prove.

Recent Update: California’s New Wage Disclosure Notice and the Wage Theft Prevention Act of 2011

On January 3, 2012, the Labor Commissioner changed the FAQs on this notice requirement to clarify that the notice does not need to be given to current employees except under certain circumstances. The Labor Commissioner did so by simply deleting the following sentence formerly in the answer to FAQ: “The notice should be given to all current employees and then to all new employees at the time of hire.”

California’s Wage Theft Prevention Act of 2011 (“WTPA” or “Act”)takes effect on January 1, 2012. The WTPA is one of half a dozen new laws that affect an employer’s wage payment obligations. The WTPA amended five existing statutes within the California Labor Code, and created five new statutes in the same code.

Labor Code Section 2810.5 – Wage Notice for Certain Non-exempt Employees

The most important of the Act’s new statutes is Labor Code section 2810.5, which requires employers to give new employees and, in other circumstances, current employees a particularized notice about their wages and other employment-related information. The wage notice requirement, which will take effect on January 1, 2012, will affect most of the more than eight million California employees who are entitled to receive overtime.

Which Employees Must Receive A Wage Notice?

The new statute specifically requires that all employees hired on or after January 1, 2012, receive the notice except:

  • An employee directly employed by the state or any political subdivision thereof, including any city, county, or special district.
  • An employee who is exempt from the payment of overtime wages by statute or the Wage Orders of the Industrial Welfare Commission.

    This exception covers employees properly classified under the wage laws as professional, executive, or administrative, outside salespersons, and some members of an employee’s family, and can cover some employees such as those in particular occupations who receive more than half their compensation in commissions, truck and other drivers (including taxi cab drivers), broadcasting industry employees, irrigators, and motion picture projectionists.

An employee who is covered by a valid collective bargaining agreement (CBA) ifthe CBA “expressly provides for:”

    • wages;
    • hours of work;
    • working conditions of the employee;
    • premium wage rates for all overtime hours worked; and
    • a regular hourly rate of pay for those employees of not less than 30 percent more than the state’s minimum wage.

The Labor Commissioner has taken the osition in its “Frequently Asked Questions” (FAQs) that the wage notice must be provided to all current employees on January 1, 2012, as well as new employees. 

What Information Must the Wage Notice Contain?

According to the statute, a wage notice must contain at least eight categories of information5:

  • The rate or rates of pay and basis thereof, whether paid by the hour, shift, day, week, salary, piece, commission, or otherwise, including any rates for overtime, as applicable.
  • Allowances, if any, claimed as part of the minimum wage, including meal or lodging allowances.
  • The regular payday designated by the employer in accordance with the requirements of the Labor Code.
  • The name of the employer, including any “doing business as” (“dba”) names used by the employer.
  • The physical address of the employer’s main office or principal place of business, and a mailing address, if different.
  • The telephone number of the employer.
  • The name, address, and telephone number of the employer’s workers’ compensation insurance carrier.
  • Any other information the Labor Commissioner deems material and necessary.

What Additional Information Must Be Included in the Wage Notice?

The Labor Commissioner has issued a template wage notice form that employers may use and has issued 15 frequently asked questions (FAQs) about the required notice. The posted version of the Labor Commissioner’s template form includes many additional items of information not specified in section 2810.5. However, the statute provides the Labor Commissioner with authority to include in the template form “[a]ny other information the Labor Commissioner deems material and necessary.” Accordingly, employers should assume until further notice that all of the information on the Labor Commissioner’s template form should be included and completed on any version of the form which is used. The information included on the Labor Commissioner’s form that is not set out in the statute includes:

  • Hire date and position.
  • Business form of employer – corporation, partnership and the like.
  • The identity of any other entities used to hire employees or administer wages or benefits, excluding recruiting services or payroll services.
  • Whether the employment agreement is oral or written.
  • The workers’ compensation policy number or certificate number for permissible self-insurance.
  • The name and signature of the employee and the date the notice was received and signed.
  • The name and signature of the employer representative providing the notice and the date notice is provided.
  • An introductory paragraph and several concluding paragraphs which describe the terms on which Wage Notices must be provided.
 

The full text of the WTPA, Assembly Bill 459, is available at: www.leginfo.ca.gov/pub/11-12/bill/asm/ab_0451-0500/ab_469_bill_20111009_chaptered.html.

Published in: on January 5, 2012 at 9:59 pm  Comments (2)  
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2011-2012 Salary Increase/ Merit Budget Survey Results

For the next few weeks, I will review salary increase/ merit budget survey results for 2011 – 2012. The 2012 salary increase budgets are projected by the survey participants. WorldatWork (www.worldatwork.org) is a not-for-profit organization providing education and research focused on global human resources issues including compensation, benefits, work-life and integrated total rewards to attract, motivate and retain a talented workforce.

According to results from the annual 2011 – 2012 WorldatWork Salary Budget Survey, the overall total salary budget increase figures up by 10% to 2.8% for 2011. The salary budget for all employee groups (Executives, Exempt, and Non-exempt Hourly) is exactly the same for 2012. The projected mean is 2.9% and the mean is 3.0%.

Here are the salary increase budget figures by Type of Increase for 2012:

Type of Increase Projected 2012
Mean Median
General Increase/COLA 1.7% 2.0%
Merit Increase 2.8% 3.0%
Other Increase 0.9% 0.5%
Total Increase 2.9% 3.0%

Note: Various categories do not add to “Total Increase” because not every organization provides all three types of Increase

Published in: on July 11, 2011 at 2:34 am  Leave a Comment  

IRS Increases Mileage Rate to 55.5 Cents per Mile

The IRS increased their mileage rate to $0.555 per mile.  This is the rate that most employers use to reimburse their employees for their business miles.  In light of rising gas prices, this is good news for those employees who log many business miles.  For additional information, please refer to www.IRS.gov.  Here is the IRS press release:

IRS Increases Mileage Rate to 55.5 Cents per Mile

IR-2011-69, June 23, 2011

WASHINGTON — The Internal Revenue Service today announced an increase in the optional standard mileage rates for the final six months of 2011. Taxpayers may use the optional standard rates to calculate the deductible costs of operating an automobile for business and other purposes.

The rate will increase to 55.5 cents a mile for all business miles driven from July 1, 2011, through Dec. 31, 2011. This is an increase of 4.5 cents from the 51 cent rate in effect for the first six months of 2011, as set forth in Revenue Procedure 2010-51.

In recognition of recent gasoline price increases, the IRS made this special adjustment for the final months of 2011. The IRS normally updates the mileage rates once a year in the fall for the next calendar year.

“This year’s increased gas prices are having a major impact on individual Americans. The IRS is adjusting the standard mileage rates to better reflect the recent increase in gas prices,” said IRS Commissioner Doug Shulman. “We are taking this step so the reimbursement rate will be fair to taxpayers.”

While gasoline is a significant factor in the mileage figure, other items enter into the calculation of mileage rates, such as depreciation and insurance and other fixed and variable costs.

The optional business standard mileage rate is used to compute the deductible costs of operating an automobile for business use in lieu of tracking actual costs. This rate is also used as a benchmark by the federal government and many businesses to reimburse their employees for mileage.

The new six-month rate for computing deductible medical or moving expenses will also increase by 4.5 cents to 23.5 cents a mile, up from 19 cents for the first six months of 2011. The rate for providing services for charitable organizations is set by statute, not the IRS, and remains at 14 cents a mile.

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

Mileage Rate Changes (in Cents)

Purpose Rates 1/1 through 6/30/11    Rates 7/1 through 12/31/11 
Business

51

55.5

 Medical/Moving    

19

23.5

Charitable

14

14

Published in: on June 29, 2011 at 12:20 pm  Comments (3)  

2010 Benefits for Part-Time Employees Survey Results

Nearly all (98%) employers report that their organization offers part-time work, and over one-third of these companies report that more than 10% of their workforce are part-time employees, according to a recent survey of Benefits for Part-Time Employees by BLR. The current survey, which garnered 1,100 responses, was conducted by BLR’s HR Daily Advisor in November 2010.

Some of the other survey findings:

  • About 85% of companies provide prorated holidays and vacation to their part-time workforce

 

  • Categories of prorated benefits provided to eligible part-time employees:
    • 85% of companies offer Vacation
    • 84% of companies offer Holidays
    • 60% of companies offer Paid Sick Leave
    • 52% of companies offer Health Insurance
    • 39% of companies offer Life Insurance
    • 84% of companies offer Other Benefits (Paid Time Off, Dental, and 401(k)

 

  • Minimum hours worked per week to be eligible for prorated benefits:
    • 35% of organizations require employees to work at least 30 hours per week
    • 40% of organizations require employees to work at least 20 hours per week
    • 4% of organizations require employees to work at least 10 hours per week
    • 3% of organizations’ employees work less than 10 hours per week
    • 18% do not offer benefits to part-time employees

 

  •  59% of companies offer a 401(k) Plan to part-time employees

 

  • 43% of companies offer an Incentive/Bonus Plan to part-time employees

 

Source:  Benefits for Part-Time Employees, BLR HR Daily Advisor November 2010.

Published in: on January 16, 2011 at 11:29 pm  Leave a Comment  

Minimum Wage Increases for 2011

There are 10 states (AZ, CO, FL, MO, MT, NV, OH, OR, VT, and WA) that have minimum wages that are linked to a consumer price index. As a result of this linkage, the minimum wages in these states are normally increased each year, generally around January 1st.   On January 1, 2011, there were seven states that increased their respective minimum wages.    Arizona, Colorado, Montana, Ohio, Oregon, Vermont and Washington are the seven states planning to raise minimum wage rates on January 1, 2011.    The three exceptions were Florida, Missouri and Nevada.

The new 2011 rates are:

Arizona = $7.35

Colorado = $7.36

Montana = $7.35

Ohio = $7.40

Oregon = $8.50

Vermont = $8.15

Washington = $8.67

Here is some additional information about minimum wage rates in the United States:

  • The state minimum wage rate requirements, or lack thereof, are controlled by legislative activities within the individual states.
  • Federal minimum wage law supersedes state minimum wage laws where the federal minimum wage is greater than the state minimum wage.  
  • In those states where the state minimum wage is greater than the federal minimum wage, the state minimum wage prevails.
  • There are 4 states than have a minimum wage set lower than the federal minimum wage.
  • There are 17 states (plus DC) with minimum wage rates set higher than the federal minimum wage.
  • There are 24 of the states that have a minimum wage requirement that is the same as the federal minimum wage requirement.
  • The remaining 5 states do not have an established minimum wage requirement.
  • The State of Washington has the highest minimum wage at $8.67/hour.
  • The states of Georgia and Wyoming have the lowest minimum wage ($5.15) of the 45 states that have a minimum wage requirement.
Published in: on January 9, 2011 at 7:05 pm  Leave a Comment  
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Clarifying California Overtime Pay Rules

I continue to get a question on how to pay overtime.  There are five overtime zones that every employer should understand.
 
Nonexempt employee are entitled to time and one-half for:
  • Over 8 hours of work in a work day
  • Over 40 hours of work in a work week
  • The first 8 hours of work on the seventh consecutive day of work in a work week
  • 

In addition, nonexempt employee are entitled to double-time for:
  • Over 12 hours of work in a work day
  • Over 8 hours of work on the seventh consecutive day of work in a work week
Published in: on October 28, 2010 at 10:01 pm  Leave a Comment  
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World at Work Total Rewards 2010 Conference – May 16, 2010 to May 19, 2010

I will be speaking at this year’s World at Work Total Rewards 2010 Conference:

Hottest Topics & Top Contributors on the New Online Community
Workshop Code: T01W1

May 19, 2010, 7:30 am to 8:45 am

In this innovative, unprecedented session, the leading posters in the WorldatWork Online Community will have a highly interactive discussion with the audience on the most popular discussion topics in the Online Community. While the content will be driven by audience preference, the panel will be prepared to cover lessons learned from the community in the first year, the strengths and weaknesses of the format, how it can enhance your effectiveness, the “competitive” communities and more. Learn how to use the Online Community for critical research on total rewards issues and tips to shape your question to produce the most useful results for your application.

Focus Level: Strategic/Tactical—50/50

E James Brennan, III, Senior Associate, ERI Economic Research Institute

Christopher Dobyns, CCP, Deputy Manager, Office of HR Strategies, Dept of Defense (DOD)

Alison Avalos, WorldatWork

Paul Weatherhead, Program Manager, United States Postal Service

Claudia C Elmore, President/Principal Consultant, Elmore Consulting Group, Inc.

FOR MORE INFORMATION: http://www.worldatwork.org/waw/texas2010

Lilly Ledbetter Fair Pay Act – Has your company taken proactive action to ensure Equal Pay?

It has been over a year since President Obama signed into law the Lilly Ledbetter Fair Pay Act.  The bill amends the Civil Rights Act of 1964 stating that the 180-day statute of limitations for filing an equal-pay lawsuit regarding pay discrimination resets with each new discriminatory paycheck.  The law was a direct answer to the Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618 (2007), a U.S. Supreme Court decision holding that the statute of limitations for presenting an equal-pay lawsuit begins at the date the pay was agreed upon, not at the date of the most recent paycheck, as a lower court had ruled.

Most employers are aware of the Lilly Ledbetter Fair Pay Act; however, many have not taken proactive measures to protect themselves from potential litigation related to Equal Pay.  The first step is conduct an audit of your compensation system including the job evaluation process, pay structure, performance management program, and compensation guidelines.  The second step is to conduct an internal salary equity analysis including standard cohort analysis and regression analysis.   The final step is to create a system to maintain pay equity.

Action items for Clients:

Audit your compensation system 

1.       Job Evaluation Process

  • Determine if the compensable factors accurately reflect how positions are valued within the organization
  • Review of job descriptions to ensure they accurately reflect the current job duties and requirements

2.         Pay Structure

  • Determine if employees are compensated based on the philosophy of the organization
  • Determine if the salary grades or bands are competitive with the external market
  • Determine if jobs of similar relative internal worth are being compensated equitably

3.         The Performance Management Program (PMP)

  • Is PMP appropriately aligned with the company’s compensation strategy
  • Are performance based compensation are properly tied to individual and/or company factors ?

4.         Compensation Guidelines

  • Determine if the company treats all employees fairly and equitably with regards to personnel actions that may trigger changes in an employee’s pay (e.g. new hires, merit increases, promotions, etc.)

 

Conduct an internal salary equity analysis

1.         Conduct statistical analysis of your company’s pay practices to proactively identify pay disparities that exist

  • Preliminary Analysis: conduct a preliminary analysis to compare mean and median salaries of the protected and non-protected groups to determine if differences in pay are statistically significant
  • Standard Cohort Analysis: for groups (e.g. pay grades) that have fewer than 30 employees, you can conduct a non-statistical line item review of each employee within the group to identify those whose pay appears to be out of line with similarly situated employees in terms of variables such as seniority, time in grade, years of prior experience, etc.
  • Regression Analysis: for groups that have at least 30 employees and 5 in each comparator group (i.e. protected and non-protected), you should conduct a multiple regression analysis which determines if a statistically significant portion of the pay disparity is explainable based on legitimate, non-discriminatory factors such as education level, field of expertise, etc., and/or if the protected class status itself is creating the disparity

2.         Document a legitimate business reason for the pay disparity or make adjustments for unexplainable salaries

Create a system to maintain pay equity

1.         Set up a compensation model that equitably compensates individuals based on the compensable factors that support the company’s objectives

2.         Review the compensation model on an annual basis to ensure proper application and compliance

Elmore Consulting Group, Inc. can assist you with some or all of the steps listed above.  Please contact us at:  (949) 679-2350 or Info@ElmoreConsultingGroup.com

Published in: on February 26, 2010 at 11:39 pm  Leave a Comment