Archive for October, 2010

Effective Open Enrollment Communications

Thursday, October 21st, 2010

For the average HR professional the fall season means open enrollment for benefit plans.  Many benefit plans have major changes due to healthcare reform so it is more important then ever the employers provide effective communitions to their employees during open enrollment.  Frank Lutz, an expert on communications and polling offered the following insights during his keynote address at the 23rd Annual Benefit Forum and Expo on September 26, 2010 as reported by SHRM (Society for Human Resources Management).

Luntz recommended simplicity, brevity, credibility and consistency with a focus on visual images. “Employees don’t want to read long texts, and won’t… when you include a graphic on the page, employees are 60 percent more likely to read that page”.  Pictures of employees receiving services from a doctor or other health care practitioner are particularly effective images.

A recent poll showed that 51% of employees prefer to receive health care information through e-mail or online, and only 26% prefer receiving an easy-to-read handout or booklet. “Five years ago, receiving the booklet was the No. 1 response,” Luntz said.  Lutz also recommends a Q&A style format.  “Ask the questions that employees are most likely to ask, the way they are likely to ask them.”

For more great information on benefits and benefit communication be sure to check out this website, http://ebn.benefitnews.com/.

Caught between a rock and a hard place employers increase employees share of healthcare costs

Wednesday, October 20th, 2010

According to a recent survey by the National Business Group on Health, 63 % of employers are planning increases for employees’ share of healthcare costs in 2010. Not much of a surprise that employers are passing on a larger share of the costs given the ever increasing cost of healthcare, the same survey reported an average 8.9% increase in overall costs for 2011. What is a surprise is that 35% of employers are planning a significant enough increase that they will lose their “grandfathered” status under the new healthcare reform law. (Mercer) Given the ramifications of losing “grandfathered” status many company are caught between a rock and a hard place when it comes to determining if they should or should not pass on increased costs.  If you are not sure if any of your plan changes for 2011 will impact your “grandfathered” status make sure to discuss this with your insurance broker before you get too far into the open enrollment process. Loss of “grandfathered” status has a major impact on the communications you will need to provide employees.

Healthcare cost reporting not required on W-2 forms for 2011

Monday, October 18th, 2010

On October 12, 2010, the Internal Revenue Service (IRS) issued Notice 2010-69, which provides that the W-2 reporting of the cost of employees’ health coverage will be voluntary, rather than mandatory, for 2011.  The Patient Protection and Affordable Care Act originally would have required employers to report the total cost of health coverage on employees’ W-2 forms for 2011.

 The IRS  expects to issue additional guidance on the reporting requirements before the end of this year, however it recognizes that employers may need additional time to modify their payroll systems to comply with the new reporting requirement.   Based on Notice 2010-69 employers will not face a penalty if they do not report the cost of employer-provided health coverage on employees’ W-2s for 2011.

Key Lock/Out Programs – Common sense and regulatory requirements aligned

Thursday, October 14th, 2010

A Key Lockout Program should be in place at every heavy truck shop. The danger of a truck starting up when a technician is working in the engine compartment or under the vehicle should be obvious – but if you need an added incentive to get your program up to speed, KPA engineers and clients are reporting an uptick in OSHA enforcement. OSHA inspectors are looking for more than if the facility is locking out the keys to the vehicles, but if they also have a written lockout program. An effective key lockout/tag out (LOTO) program requires lockout equipment and a written program, and training – equipment and written documents will not do much good if employees don’t know how to use them.

According to OSHA, “’Lockout/Tagout (LOTO)’ refers to specific practices and procedures to safeguard employees from the unexpected energization or startup of machinery and equipment, or the release of hazardous energy during service or maintenance activities.”

OSHA reports that “3 million workers service equipment and face the greatest risk of injury if lockout/tagout is not properly implemented. Compliance with the lockout/tagout standard (29 CFR 1910.147) prevents an estimated 120 fatalities and 50,000 injuries each year”. Sometimes common sense and regulations aren’t always aligned – lockout/tag out programs are an area where they are.

Example elements of a lockout/tagout (LOTO) program are described in the OSHA standard 29 CFR 1910.147, along with these additional references:

  1. http://www.osha.gov/OshDoc/data_General_Facts/factsheet-lockout-tagout.pdf
  2. http://www.osha.gov/SLTC/controlhazardousenergy/index.html#program
  3. http://www.osha.gov/OshDoc/Directive_pdf/CPL_02-00-147.pdf

Supreme Court now hearing cases that will impact employer and employee relations and employment litigation

Wednesday, October 13th, 2010

The Supreme Court kicked off its 2010-2011 term last week and has already heard one important employment case and is planning on hearing a number of cases that could have major impact on employer and employee relationships and employment litigation. First up was NASA v. Nelson (no “I dream of Jeannie jokes” please), which considers if the National Aeronautics and Space Administration violated the constitutional right to privacy when it conducted background investigations of federal contractors. Of special issue was a question about the use of illegal drugs. Although the case is specific to federal contractors, private employers could be held to a similar standard based on the court’s decision. There is also a pair of retaliation cases before the court.  In Thompson v. North American Stainless LP the court reviews how broadly the definition of retaliation is and in Kasten v. Saint-Gobain Performance Plastics Corp. the court will review a 7th Circuit Court ruling that the anti-retaliation provision of the Fair Labor Standards Act does not extend to an employee who complained orally to his employer about the company’s timekeeping practices. Both  cases has the ability to impact pending retaliation cases in the lower courts and increase the number of retaliation claims filed. Other cases to watch are:

Staub v. Proctor Hospital considers the question of whether an employer can be held liable for the discriminatory acts of supervisors who do not make final employment decision but influences the decision maker.

CIGNA v. Amara determines whether plaintiffs are required to show “likely harm” rather than demonstrable injury. In addition, the court will review if a participant in an Employee Retirement Income Security Act-governed plan (ERISA) must make to recover benefits based on an inconsistency between the summary plan description and the plan itself. Employers might want to start double checking plan documents now.

The state of Arizona’s ongoing battle against illegal immigration takes a new twist with the Supreme Court agreeing to review a lower court decision that upheld an Arizona state law providing for the revocation of the business licenses of employers that knowingly hire illegal immigrants. The law also requires Arizona employers to use E-Verify (Chamber of Commerce of the U.S. of Am. v. Candelaria). Given the number of states that already require the use of E-Verify in certain circumstances it may be time to add E-Verify to your hiring process.

The court has also announced that it will decide whether the Treasury Department can exclude all medical residents from an exemption from Social Security taxes  (FICA) provided to university students (Mayo Foundation for Medical Education and Research v. United States of America).

Advocates and detractors of arbitration are very interested in AT&T Mobility v. Concepcion, where the court will examine whether the Federal Arbitration Act pre-empts California law.

Look for updates as the cases are heard and judgement rendered in the KPA newsletter and on this blog.

Acetone – More than Nail Polish Remover

Tuesday, October 12th, 2010

Acetone has a low toxicity and is a good solvent, making it as useful for removing nail polish as it is for degreasing and paint cleanup on the shop floor, but it also highly flammable. The acetone vapor (remember that vapor causes burns – not liquid) is heavier than air, can travel a considerable distance and can also accumulate in a confined space. Unfortunately, two workers cleaning a paint booth were not aware of the proper precautions to take when dealing with this highly flammable liquid, and were severely injured. The two Evansville, Tennessee companies involved in this incident are to be fined more than $100,000 by Indiana’s OSHA due to their negligence. The Agency alleges that two workers were mopping a large paint booth with acetone when one of the workers accidentally knocked over a halogen light. As it hit the floor, it ignited the acetone fumes into a flash fire. A flash fire is an unexpected, instant, intense fire that is instigated by the reaction.

The Evansville Courier & Press reports that Guardian Automotive is being fined $22,500 for a set of penalties the state categorized as serious. Team Industrial Services Inc., the agency that supplied the workers and instructed them to use the lamp and the cleaner, faces a steeper $84,150 fine. Of that amount, $63,000 is for a violation which state inspectors categorized as “knowing” — the most serious classification, and one used only several times per year, said Jeff Carter, the deputy state OSHA commissioner. “Knowing” violations are those violations where death or serious physical harm can result from a hazard an employer knew or should have known exists.

When dealing with flammable substance, you simply cannot be too careful. Take a few minutes to review the following tips:

1)   Know your chemicals, read all labels, and consult the MSDS (material safety data sheet)

2)   Remember that vapor burns, not liquid, so always work with adequate ventilation and avoid confined spaces

3)   Eliminate potential ignition sources, any heat source is potential ignition source

4)   Bond and ground when transferring flammable liquids, it only takes one spark

5)   Practice good housekeeping by segregating flammable substances and keeping them covered in closed containers

6)   Always use appropriate equipment to apply, transfer and store flammable liquids

Additional Resources

  1. OHSA www.osha.gov
  2. EPA www.epa.gov
  3. National Fire Protection Association www.nfpa.com
  4. International Code Council www.iccsafe.org

Handbooks – Make Them Matter

Friday, October 1st, 2010

With the best of intentions, employers create a company handbook, distribute it to all employees, and then are puzzled when the policies are not followed. To make your company handbooks matter, make sure it is EATEN – easily understood, acknowledged, trained, enforced, needed.

Easily understood. Be sure that the employee handbook is written in clear and simple language; no “legalese” please.

Acknowledged. Employee’s signature should indicate that they understand and agree to the handbook and have acknowledged the information they have reviewed.

Trained. Employees are trained on key policies to ensure understanding and create a “good faith” defense.

Enforced. All of the policies are enforced for everyone – “no exceptions” or “exceptions” become the rule.

Needed. Include the needed information only. Too much information and employees are overwhelmed, so only include the information which you plan to enforce.