A recent report on executives’ priorities determined that developing leaders and succession planning were the greatest concerns related to employee talent. When evaluating their companies’ talent programs, executives who were spending more in this area were more likely to be satisfied with the results. The highest strategic priority for executives was locating new sources of growth in a slow economy. The full report, “Talent Edge 2020: Redrafting Talent Strategies for the Uneven Recovery,” by Deloitte Consulting LLP, as well as an executive summary, is available online.

Tips: Look at your key leadership positions. Are you giving employees opportunities to gain the skills and experience they will need to move into those roles in the future? Do you have a well-conceived plan for doing so? Have you broadened your pool of potential candidates by extending an open invitation to participate in leadership development activities, instead of relying on an individual “tap on the shoulder” approach? Vigilant can help in your efforts by identifying training programs that support your leadership development goals. We can also put you in touch with the internationally recognized firm, Lee Hecht Harrison, for executive coaching services at reduced rates for Vigilant members. Contact Nicole Forward (n.forward@vigilantcounsel.org or 800-733-8620), our training manager, for more information.

Things have been hopping at the National Labor Relations Board, the agency that enforces workers’ rights to collectively band together on issues related to their wages, hours, and working conditions. Here are some highlights of recent developments:

• The Board is now back up to a full complement of five members, due to President Obama appointing three new members while the Senate was in recess. The appointments are being challenged in court but for now the Board is up and running.
• The Board ruled that it is a violation of the National Labor Relations Act (NLRA) to require workers to sign arbitration agreements that would prevent them from joining other workers in class-action arbitration proceedings or lawsuits. This issue is significant for non-union employers that try to reduce their risks of employment litigation by requiring new hires to sign mandatory arbitration agreements (D.R. Horton, Inc., NLRB, Jan. 2012).
• The efforts of “field supervisors” to encourage workers to vote for a union (unbeknownst to the company) didn’t taint the union’s eventual election win because the supervisors didn’t really have enough authority to speak on management’s behalf, ruled the Board (DIRECTV US. DIRECTV Holdings LLC, NLRB, Dec. 2011).
• A union’s proposal to hold an election to represent a subset of technical workers at a shipyard for nuclear-powered aircraft carriers and submarines (223 out of approximately 2,400 technical workers) was given the green light. The Board, following its groundbreaking decision in Specialty Healthcare (Aug. 2011), found that the workers shared a common department and a common obligation to independently monitor radiation levels, and the employer wasn’t able to demonstrate that all 2,400 technical workers shared an overwhelming community of interest (Northrop Grumman Shipbuilding, Inc., NLRB, Dec. 2011).

We anticipate that the Board will continue to be very active this year. If you have any questions about how these developments may affect your organization, contact your Vigilant staff representative.

Establishing an anti-harassment policy and providing training for your employees is an important step to reducing your liability for harassment claims. But, as one employer recently discovered, having a policy and providing training isn’t something you can just check off your to-do list and forget about. In response to a hostile work environment lawsuit, the employer tried to defend itself by showing that they instituted measures to prevent harassment. However, upon further inspection, the court found that those measures consisted of showing a harassment video to newly hired employees, with no further training for managers, and having all employees sign off that they’d read the anti-harassment policy. The problem was that employees were not given continued access to the anti-harassment resources. In fact, the anti-harassment policy was actually placed in a locked cabinet that employees could not access. Altogether the court determined that it was reasonable for a jury to conclude that the company’s anti-harassment measures were ineffective and could not reduce their harassment liability (EEOC v. Management Hospitality of Racine, Inc., 7th Cir, Jan. 2012).

Tips: Effective anti-harassment measures should occur more often than once during the length of employment. All employees should be given access to the company’s anti-harassment policy and receive at least some training about their rights and responsibilities. Managers and supervisors should receive more in-depth periodic training to understand their ongoing obligations in preventing harassment (in California, training is required every two years). See our Model Policy, “Policy Against Harassment” (4004) and ask your Vigilant staff representative about our harassment training classes.

On February 1, 2012, you need to post your OSHA 300A summary in a conspicuous place in your workplace. Your 300A summary must list the total number of 2011 job-related injuries and illnesses that you logged on the OSHA Form 300 Log. Here’s a quick brush up on your OSHA injury and illness recordkeeping requirements:

• Injuries and illnesses must be recorded on the log within seven days;
• OSHA Form 300 and the log summary must be maintained for five years;
• Supporting documents must also be maintained for five years, including on-the-job injury reports (801) and other workers’ compensation documents;
• Only record injuries and illnesses if they meet the recording criteria;
• Post the OSHA Summary (Form 300A), which should be signed by the highest ranking official at the plant location, from February 1 through April 30 each year;
• Begin your 2012 log, even if you haven’t had any recordable injuries or illnesses, by completing the upper right corner of the form and have it ready for an inspector in case he or she asks to see it.

Questions about OSHA recordkeeping? Talk to your Vigilant safety professional for further assistance.

Do you have lingering questions about how to report the value of employees’ employer-provided health coverage on their 2012 Forms W-2? The IRS recently released IRS Notice 2012-9, offering clarification and additional guidance on how to report, including:

• Employers that are federally recognized Indian tribal governments are not subject to the reporting requirement, nor are tribally chartered corporations wholly-owned by a federally recognized Indian tribal government (Q/A-3).
• Clarifies the reporting requirement for related employers not using a common paymaster (Q/A-7).
• If an employee makes pre-tax contributions under a health flexible spending arrangement (FSA) and no employer contributions are made to the FSA, there is no reporting requirement for the FSA coverage (Q/A-19).
• Explains how to calculate the reportable amount for employers who charge a composite rate (Q/A-28).
• Employers are not required to report the cost of coverage under an employee assistance program (EAP), wellness program or on-site clinic if the employer does not charge a premium for those benefits (Q/A-32).
• Employers may voluntarily report the cost of coverage under plans that are not required to be reported, such as contributions to a health reimbursement arrangement (HRA) (Q/A-33).
• A Form W-2 provided by a third-party sick pay provider is not subject to reporting (Q/A-39).

The IRS also restated that the reporting requirement does not make the coverage taxable, and that employers who were required to file fewer than 250 Forms W-2 for 2011 are not required to report on 2012’s Form W-2. Have questions? Contact Kristine Bingman.

When winter weather forces your facility to close or employees to stay home, do you know your obligation to pay for that time? The rules depend on whether the employee is exempt from overtime. Under federal law, nonexempt employees do not have to be paid for any time they don’t work, unless you have a collective bargaining agreement or company policy that says otherwise. Exempt employees, however, are subject to strict rules on when you can reduce their weekly salary for time not worked. If an exempt employee works any part of a workday, he or she must be paid for the whole day, even if you close early due to weather. If your facility is open and the employee can’t make it to work, you may be able to deduct that time from their paycheck (assuming the employee also doesn’t perform any work from home). If you choose to close your facility, you must pay exempt employees their full salaries if they perform any work during that workweek. In any case, if nonexempt or exempt employees have any available accrued paid leave, you can require them to use that during weather-related absences or closures. 

Tips: When buying spare batteries and candles in preparation for winter weather, add development of an inclement weather policy to your to-do list. There are lots of scenarios involved with winter weather and office closures, so it pays to know the rules before the snow hits the fan. Have a policy, such as our “Inclement Weather Policy” (1519) in place to handle weather-related disruptions.

In an informal discussion letter, the U.S. Equal Employment Opportunity Commission (EEOC) recently advised that employers may need to make an exception to their minimum education requirements if an applicant was unable to obtain a degree due to a disability. The letter focused on employers who require a high school diploma, but the principles would extend to any minimum educational standard for applicants.

The EEOC pointed out that anytime a selection process screens someone out due to a disability, you need to be able to show that the standard is job-related and consistent with business necessity. If someone without the relevant degree could easily perform the essential functions of the job, then the standard isn’t valid.

Even if the standard is job-related and consistent with business necessity, the EEOC says you should consider whether the individual with a disability could nonetheless perform the essential functions of the job, with or without a reasonable accommodation. For example, you might allow the applicant to demonstrate how he or she would perform the functions in question. If an applicant claims that a disability prevents him or her from meeting one of your qualification standards and you aren’t sure how to proceed, contact your Vigilant staff representative for help.

Question: Can we avoid some of the upcoming health care reform compliance issues, such as the “play or pay” penalties, by carving our company up into smaller corporate entities?

Answer: No. Some of the mandates included in the federal Patient Protection and Affordable Care Act (PPACA), apply only to employers of a certain minimum size. The “play or pay” penalties, for example, (also known as the “shared responsibility” mandate) penalize employers of 50 or more full time equivalents (FTEs) if they do not provide minimum essential health benefit coverage to all full time employees and their dependents.  This has prompted many employers to look at how they might change their business structure or strategies so that they fall under this 50 FTE threshold by 2014, when the penalties go into effect. Unfortunately, however, there are a set of “controlled group” rules established by the IRS that treat related business entities as a single corporate entity for many purposes, including the mandates of PPACA. The rules define the extent of common ownership necessary to be considered a single entity in situations of parent-subsidiary ownership, as well as “brother-sister” controlled groups of corporations. These rules apply based on the degree of common ownership of the companies, regardless of whether the businesses are in related or unrelated industries. Contact your benefits advisor for more information on how these rules might impact your company.

After years of debate and legal challenges, the Federal Motor Carrier Safety Administration (FMCSA) has issued a final rule revising the limits on maximum hours of service for drivers of property-carrying commercial motor vehicles (CMVs). The FMCSA is an agency within the U.S. Department of Transportation (DOT). The agency decided to retain the 11-hour driving limit within a 14-hour window of on-duty time, as well as the weekly limits of 60 or 70 hours (depending on whether the motor carrier operates 7 days a week) but made some significant changes in other areas, including a new requirement for 30-minute rest breaks. The rules take effect in two stages. First, effective on February 27, 2012, “on-duty” time doesn’t include:

• Time spent resting in a parked vehicle (unless the driver is there to meet a requirement to be “in attendance” on a vehicle containing certain hazardous materials (explosives));
• Up to 2 hours riding in the passenger seat of a property-carrying vehicle moving on the highway immediately before or after a period of at least 8 consecutive hours in the sleeper berth; or
• Waiting time at a natural gas or oil well site for specially trained drivers of CMVs that are built to service oil wells. Also, these drivers can no longer take advantage of the 100 air-mile radius exception from keeping the record of duty status.

Second, the following provisions take effect on July 1, 2013, although you may implement them at any time on or after February 27, 2012:

• Mandatory 30-minute rest breaks: Drivers may drive only if 8 hours or less have passed since the end of the last off-duty break or sleeper-berth period of at least 30 minutes. The break counts against the 14-hour driving window. For drivers who are required by FMCSA rules to be in attendance on a CMV containing explosives, the time in attendance is still counted as on-duty time, but as long as the driver doesn’t perform any other work it will meet the requirements for the 30-minute rest break.
• Restrictions on the option to restart the maximum weekly hours by taking 34 consecutive hours off duty: Only one 34-hour restart is allowed per week (168 hours) and it must include two periods from 1:00 to 5:00 a.m. If a driver takes more than one off-duty period of 34 or more consecutive hours, the driver must note on the record of duty status which off-duty period is being used as the restart period.

In addition, if the driver exceeds the driving-time limits by more than 3 hours, the FMCSA will consider it to be an “egregious” violation of the rules, thus allowing the agency to impose the maximum penalties on the driver and motor carrier (76 Fed Reg 81134, Dec. 27, 2011).

Tips: A helpful Q&A and additional information is available on the FMCSA website. For more information about your employment-related obligations as a motor carrier, see our Legal Guide, “Motor Carrier Safety Requirements” (3146).

As expected, the National Labor Relations Board (NLRB) pressed ahead by a 2-1 vote with a final rule implementing some of its recently proposed changes to speed up the procedures for union elections. The NLRB Chair wanted to finalize the rule before the December 31, 2011, expiration date of Board Member Craig Becker’s term, which will leave the Board without a quorum (having only two members and three unfilled positions). The key changes are:

• The hearing officer will have authority to limit evidence to whether a question of representation exists (i.e., whether the union really has enough support to proceed with an election);
• The parties will be allowed to file post-hearing briefs only if permitted by the administrative law judge, who will have the power to specify the subjects to be addressed and the time for filing;
• The parties won’t be allowed to appeal pre-election rulings by the regional director (instead, they will have to wait until after the election, and then only do so if the issue isn’t moot);
• The standard 25-day waiting period between the regional director’s decision that an election should proceed, and the date of the election, will be eliminated; and
• The Board will have discretion whether to accept an appeal of a post-election decision by a regional director or administrative law judge.

The new procedures take effect on April 30, 2012 (76 Fed Reg 80138, Dec. 22, 2011).

Tips: This may not be the last you hear of the Board trying to speed up the union election process. The Board proposed more extensive revisions on June 22, 2011. For now, they have decided to proceed with what the Chair describes as the “less controversial” elements of that original proposal, with the hope of revisiting the complete proposal when the Board is back up to full strength.

At this point, it appears that the Board will be down to two people as of January 1, 2012. A two-person Board can’t rule on any cases, but that won’t stop regional NLRB offices from conducting elections, accepting complaints and investigating alleged violations of the National Labor Relations Act. President Obama recently nominated two individuals to serve on the Board: Sharon Block and Richard Griffin. There is speculation that if Congress goes into recess for the holidays, the President may make one or more recess appointments to the Board. Vigilant will keep members apprised of any new developments.