| EVENTS: | IN THIS ISSUE:
|
|||
HR Compliance and Regulatory Update
The HR Compliance Update is provided by KPA partner, Ford & Harrison LLC, a labor and employment law firms with a national practice in all aspects of labor and employment law, providing HR advice to HotlinkHR™ clients. http://www.fordharrison.com/ DHS Issues Final Rule on Electronic Signature and Storage of I-9sGeetha NadimintiEmployers must complete Form I-9 to verify the ability of their employees to legally work in the U.S. Traditionally, the Form I-9 was in a hardcopy paper format. In June 2006, however, the Department of Homeland Security (DHS) issued an interim rule permitting electronic completion, signatures, and storage of I-9s as a way of modernizing and improving the accuracy and cost-effectiveness of employers' employment verification programs. This 2006 "Electronic I-9 Rule" provisionally set forth standards for a compliant I-9 electronic system. These standards were largely based on long-standing IRS electronic recordkeeping guidelines and cover criteria such as accessibility, reproducibility of I-9s, accuracy, security, and quality of data being captured and systems being used for electronic signature and storage. For the last four years, however, this Electronic I-9 Rule remained in an "interim" status and contained a number of ambiguities leading to confusion about how to satisfy the many electronic I-9 parameters. At long last, on July 22, 2010, the DHS finally issued its final rule on electronic signatures and storage of Form I-9. Although the changes in the final rule are relatively minor, they provide clarification of some ambiguities contained in the initial rule. The primary changes implemented by this rule are as follows:
Employer's Bottom Line:Ultimately, the final Electronic I-9 Rule does not result in any critical changes to the electronic I-9 standards that were established, albeit provisionally, back in 2006. As before, the final rule "permits employers to complete, sign, scan, and store the Form I-9 electronically, as long as certain performance standards… are met." The final rule also does not include any substantive changes to I-9 form content or the list of acceptable verification documents that are currently in effect. If you are considering converting to an electronic I-9 compliance program (whether created by an in-house IT department or provided by a third party vendor), you must take utmost care to vet the system and ensure that it is fully compliant with the numerous exacting regulatory electronic I-9 standards governing accessibility, reproducibility of I-9s, accuracy, security, quality of data being captured and electronic signatures and storage systems. If you have questions regarding electronic I-9 standards and requirements, please contact the author of this Legal Alert, Geetha Nadiminti, gnadiminti@fordharrison.com, or Jim Hendricks, jhendricks@fordharrison.com New Illinois Law Prohibits Use of Credit History in Hiring and Employment DecisionsSteve BrennemanEffective January 1, 2011, a new law will prohibit many Illinois employers from basing hiring, promotion, and other employment decisions on an employee or job applicant's credit history. The Employee Credit Privacy Act (HB 4658), which was signed into law by Governor Pat Quinn on August 10, 2010, also forbids employers from inquiring about or obtaining a copy of an applicant or employee's credit history or credit report. Employers will still be permitted to conduct background checks on applicants and employees, so long as that check does not include a credit history or report. Illinois joins Washington, Hawaii, Oregon, and Louisiana in prohibiting the use of credit histories in employment decisions. There are limited exceptions to the law. For example, covered employers may still use credit history for employment decisions for managerial positions that involve setting the direction or control of the business and for positions that involve unsupervised access to more than $2,500; signatory power over business assets of $100 or more per transaction; or access to personal, financial, confidential, trade secret, or state/national security information. Employer's Bottom Line:Although the new Illinois law does not apply to banks, insurance companies, law enforcement, and many public sector jobs, it will apply to a broad swath of private employers in Illinois. Supporters of the new provision say the measure will stop employers from denying a job or promotion based on information that does not relate to a person's ability to perform a job, while opponents contend the law is yet another batch of red tape that will impede job creation in the state. EEO-1 Reports Due by September 30thKathryn CarlsonEmployers required to file EEO-1 reports may now do so at http://www.eeoc.gov/employers/reporting.cfm. Reports must be filed on-line on or before September 30, 2010. Employers who wish to file a paper report should contact the EEOC immediately to ask for an accommodation. HotlinkHR clients can prepare the necessary data files by accessing the Administration link at the top of the HotlinkHR home page and then selecting Equal Employment Opportunity on the menu. If you have any questions regarding filing EEO-1 reports using HotlinkHR please contact the author of this alert, Kathryn Carlson, kcarlson@kpaonline.com or your assigned HotlinkHR attorney. Dealing with Long Term Care Insurance Under Healthcare ReformJeffrey AshendorfAs most people know by now, many of the rules governing health plans have been changed – in some cases drastically – by The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act (the "Act"). However, not everyone has considered that for this purpose long-term care ("LTC") benefits are considered "health benefits" and in some cases may also need to be addressed. Employers increasingly use LTC policies as a cost-effective benefit for their executives who are approaching retirement age. Such benefits are usually tax-free to the executive, while the employer is entitled to deduct the cost of the policy. One of the changes made by the Act is to apply nondiscrimination requirements to insured health plans. Accordingly, a fully insured LTC policy for only one (or for a few) senior executive will be a discriminatory health plan and the employer will be subject to an excise tax of $100 per day per covered executive, unless either the benefit qualifies as "excepted" (see below), or the policy is "grandfathered." (See our Legal Alert dated June 23, 2010 regarding "grandfathered" plans, which can be found at http://www.fordharrison.com/shownews.aspx?Show=6300.) Long-term care benefits are "excepted" from the application of most of the Act's provisions, including the nondiscrimination requirement, if either (i) the benefits are provided under a separate policy or contract, or (ii) the benefits are not an "integral part" of a covered health plan. Most LTC benefits are in fact provided under separate insurance policies, and so will be "excepted." But if you have a policy that combines LTC benefits with other health benefits, so that the LTC is an "integral part" of the plan, the nondiscrimination requirements will apply. In those cases, the existence of the excise tax will change the economics of the benefit. For example, an LTC policy will often be structured to require payment of premiums over a 5- or a 10-year period; if the benefit is subject to discrimination requirements, and is discriminatory, the excise tax would be applied based upon the number of days the policy is maintained by the employer. This could result in quite a significant excise tax liability; for example, 10 years, @$100/day would total $365,000. Employers would be well-advised to familiarize themselves with the health care reform legislation, including specific issues that potentially affect them, such as the extension of nondiscrimination requirements to insured plans and which plans may be excepted, in order to be better able to make necessary decisions about their benefit programs. Ford & Harrison's Employee Benefits group can help you do this. If you wish to discuss how healthcare reform affects you, please contact the author of this Alert, Jeffrey Ashendorf, jashendorf@fordharrison.com, any member of Ford & Harrison's Employee Benefits group, or Jim Hendricks, jhendricks@fordharrison.com You may also visit the health care reform tab of the Ford & Harrison website, http://www.fordharrison.com/HealthcareReform.aspx, for more helpful resources and tools on health care reform. If you have any questions regarding HR Regulatory and Compliance Update, please contact Jim Hendricks at Ford & Harrison LLC, 55 East Monroe Street, Suite 2900, Chicago, IL 60603 Employment Law Resources for HotlinkHR Clients Don’t forget that HotlinkHR clients have access to experienced labor and employment attorneys included with the monthly subscription. Clients may email or call their assigned attorney with either Fine, Boggs and Perkins LLC (California clients) or Ford & Harrison LLC (all other states) for assistance with wage and hour questions, policy clarification, development of handbooks, and best practice guidance on HR compliance issues and workforce management. Access is provided through the HR Advice link within HotlinkHR. |
||||
