Posted by
Jeff Garr on Thu, Dec 29, 2011 @ 09:39 AM
Full Question:
We are entering our slow season and we need to lay people off (at least temporarily). We want to make sure that we do it properly. Can you tell us the proper process for layoffs, both temporary and permanent?
Response:
Barring any applicable collective bargaining agreements or other employment contracts that govern termination of employment, an employer is generally within its rights to make staffing decisions, including layoff and reorganizational decisions, as it sees fit to maximize effectiveness, productivity, and profitability. The justification for any layoff or reduced capacity decision and the selection criteria must be legitimate and not unlawfully discriminatory. When determining which employees to select to be impacted by such decisions, an employer would be within its rights to use criteria like seniority or tenure, classification (i.e., full/part time), past performance, skill set, value to the employer, flexibility for future roles in the organization, or some combination of these, but it is not required to use all or any particular one. Indeed it is a business decision to determine the criteria to use to make layoff decisions, so long as they are not unlawfully discriminatory or retaliatory. Note, however, that if an employer uses attendance and flexibility as selection criteria, to the extent any employee had unsatisfactory attendance or less flexibility due to things like disability or religious beliefs or other protected class status, it WOULD be unlawful to use these factors in making layoff selection decisions. The best practice relative to conveying a layoff decision is just to be candid with the affected employees about the layoff decision and why they were selected for impact.
Should business needs later justify increased headcount, or if a position becomes available because another employee has voluntarily vacated it, we are not aware of any legal requirement imposed upon an employer to rehire laid-off or terminated employees. Employers generally have the right to hire the best qualified person for a vacant position. Ideally, the employer should be candid at the time of a layoff about whether the impacted employees would be eligible for rehire or not (without making any promises or commitments). You can always give greater weight or consideration to former employees, which may impact them positively, if they were good performers, or negatively, if they were not, if you choose to make that part of the hiring criteria when there are job openings later on. If a former employee is passed over for rehire and seeks to challenge that decision as discriminatory, if you can articulate a legitimate, nondiscriminatory justification for the decision (i.e., you hired a better qualified candidate), you ought to be able to defend such a claim. However, if you advise any laid-off worker that he/she will be eligible for rehire, and then fail to even consider that person for re-employment without a legitimate justification for the turnaround, it would be more difficult to defend a challenge to the decision.
Ultimately, the best practice is to be very clear with impacted employees at the time of a layoff about whether or not they will be eligible for rehire. If you are, there should be no legal issues associated with not considering and/or not rehiring a laid off employee who was previously advised of his/her eligibility (or ineligibility) for reemployment (and assuming the reason the individual was not eligible for rehire was legitimate, as it should be).
HR Knowledge is a provider of integrated HR, payroll and benefits services. Our offices are located in the Boston, MA metro area and we service companies throughout the United States.
Payroll Alert: The Federal Government COLA Limits for 2012 Qualified Plans have been released.
| Compensation limit for allocating employer and employee contributions (and any reallocated forfeitures)(1) |
$245,000 |
$250,000 |
| Defined benefit maximum annual benefit |
$195,000 |
$200,000 |
| Defined contribution maximum annual addition(excluding 401(k) catch-up contributions) (2) |
$ 49,000 |
$50,000 |
| Key employee for a top-heavy plan |
$160,000 |
$165,000 |
| Maximum 401(k) deferral contribution limit (3) |
$ 16,500 |
$17,000 |
| Maximum 401(k) deferral catch-up contribution limit for participants older than 50 |
$ 5,500 |
$5,500 |
| Highly compensated employees |
$110,000 |
$115,000 |
| Social Security taxable wage base for allocation purposes (FICA) (1), (4) |
$106,800 |
$110,100 |
(1) This is the limit in effect for the plan year that begins in the applicable calendar year.
(2) This is the limit in effect for the limitation year that ends in the applicable calendar year.
(3) This limit is based on the calendar year.
(4) The FICA limit for purposes of withholding the old age survivor and disability insurance and hospital insurance amounts from the employee's compensation should be based on the calendar limit in effect on the pay date.
The retirement plan cost-of-living adjustments were announced in IR-2012-118, which contains other COLA adjustments, including changes to the AGI limits for IRA and ROTH IRA contributions.
IR-2012-118 may be accessed on the Internal Revenue Services web site at:
http://www.irs.gov/newsroom/article/0,,id=248482,00.html.
The Taxable Wage Base adjustment was announced on the Social Security Administration web site at: http://www.ssa.gov/OACT/COLA/cbb.html.
IRS Sets 2012 Parking & Transit Limits
Beginning January 1, 2012, the monthly pre-tax contribution limit for transit expenses is being decreased from $230/month to $125.00/month while the monthly pre-tax parking limit is being increased from $230.00/month to $240.00/month. The Federal Stimulus package, known as ARRA, which allowed a monthly pre-tax maximum of $230.00/month for the transit benefit will expire on December 31, 2011.
Lobbying efforts taking place for the transit limit and will let you know if there are any changes to the 2012 IRS limits.
This alert are intended for informational purposes only and should not be construed as legal advice or legal opinions, which can be rendered properly only when related to specific situations. You should consult your attorney or tax adviser if you have questions about your individual situation.
HR Knowledge is a provider of integrated HR, payroll and benefits services. Our offices are located in the Boston, MA metro area and we service companies throughout the United States.
Holiday pay or holiday bonuses - are they important to movitate employees or boost morale? It's not a surprise that most employees look forward to the holiday season for several reasons: they are delighted to have an extra day or two of paid time off without having to use their vacation or sick time, there's the company's holiday party and food, and there are potentially other "holiday perks" they may receive such as holiday cash bonuses, retail or restaurant gift cards, gift baskets, etc.
As an HR manager, you may wonder whether holiday incentives are cost effective investments. While the overall cost of these holiday extras is not insignificant, the return on your investment will be significant. Whether your organization chooses to hold a holiday party or give cash bonuses or other perks to all employees, you can be sure that it will not go unnoticed. Rewarding your employees with "extras" during the holidays is win-win. It underscores that they are valued by the company, which ultimately boosts employee morale.
With the economic turmoil of the past few years warranting strict cost-cutting measures, holiday parties had ground to a halt in many organizations. But, a poll conducted by the Society for Human Resource Management (SHRM) indicated that this year, holiday parties are definitely on the rise, with an increase over 2009 and 2010. Gift cards to Target, Starbucks and other chains have become increasingly popular as holiday perks for employees as well.
However your company decides to celebrate, rewarding all employees during the holiday season will help increase morale and engagement while spreading plenty of holiday cheer.
Happy Holidays from the HR Knowledge Team
HR Knowledge is a provider of integrated HR, payroll and benefits services. Our offices are located in the Boston, MA metro area and we service companies throughout the United States.
Posted by
Jeff Garr on Thu, Dec 15, 2011 @ 04:05 PM
We just can't stress it enough - No matter the size of your company, it's imperative to have a Social Media Policy in place.
We recently learned of a small business with a good reputation that was the target of Facebook sabotage. We're not talking about a rogue entity hacking into their Facebook business page. We're not even talking about a group of people. For a number of weeks, one employee of this company posted negative feedback, several times daily, about the company on their personal Facebook page while on company time. Unfortunately, it cannot be said that the company's reputation was left untarnished because at the very least, hundreds of the employee's Facebook friends (a.k.a. customers and potential customers) would have seen the negative posts.
Could this have been avoided? Yes, had the company incorporated a Social Media Policy.
Employees should be reminded that social media such as Facebook and Twitter are public forums and that there is no entitlement of privacy. As a result, employees have a duty to ALWAYS act in a way that will encourage public trust and confidence. This extends to both personal and professional activities.
It is the company's responsibility to make employees aware that posting any financial, confidential, sensitive, or proprietary information about the company on any social media site is prohibited and enforced. While on company time, employees are expected to work on company related business. Therefore, it should be made crystal clear to employees that if they are found blogging, tweeting or posting on social media sites on company time, they will be subject to disciplinary action up to and including termination.
Once your Social Media Policy is in place, ensure that your employees have read it by making it mandatory that they sign a copy of the Policy itself and then keep it in their personnel files. Be sure to make your employees aware that your company may even take steps to monitor social networking, as employees are not anonymous when engaged in it, and as such may potentially take action if violations of the Policy are identified.
HR Knowledge offers a complimentary copy of an HR Social Networking Policy.
HR Knowledge is a provider of integrated HR, payroll and benefits services. Our offices are located in the Boston, MA metro area and we service companies throughout the United States.
Posted by
Jeff Garr on Tue, Dec 13, 2011 @ 06:22 PM
2012 Changes To Social Security Rate:
The Social Security Administration announced the employee Social Security rate for 2012 will increase to 6.2% of taxable earnings.
In addition, the maximum amount of earnings subject to the Social Security tax will increase to $110,100.
Minimum Wage Changes:
The following states have announced hourly minimum wage increases effective January 1, 2012:
- Arizona, to $7.65 per hour for non-tipped employees and $4.65 per hour for tipped employees
- Florida, to $7.67 per hour for non-tipped employees and $4.65 per hour for tipped employees
- Montana, to $7.65 per hour for non-tipped and tipped employees (applies to employers with annual sales exceeding $110,000)
- Ohio, to $7.70 per hour for non-tipped employees and $3.85 for tipped employees (will apply to employers who gross more than $283,000 per year beginning in 2012)
- Oregon, to $8.80 per hour for non-tipped and tipped employees
- Vermont, to $8.46 per hour for non-tipped employees and $4.10 for tipped employees
- State of Washington, to $9.04 per hour for non-tipped and tipped employees.
For more information regarding minimum wages or tip percentages, be sure to visit each state’s website for the most up-to-date information.
HR Knowledge is a provider of integrated HR, payroll and benefits services. Our offices are located in the Boston, MA metro area and we service companies throughout the United States.
A few weeks ago, the HR Knowledge team participated in the 9th Annual MIT CFO Sloan Summit held at the Boston Marriott Newton.The Summit was attended by more than 600 CFOs and Financial Executives. (Perhaps we saw you there.)
The theme, "Where Finance Meets Innovation" was particularly germane; HR Knowledge just launched an innovative algorithm that accurately determines the appropriate pricing of group plans with carriers.
The algorithm can significantly lower the cost for company benefits. Using this tool can determine appropriate pricing of Health Insurance, Dental Insurance, Life & Disability insurance and other company sponsored plans.
The analysis helps with negotiating benefit group plan rates. Having the data that the carrier underwriters understand assures that pricing can be reflective of the situation and in 80% of the cases, yields substantial savings over the existing plan.
Would you like to know if you are overpaying? We can review your benefit costs and help your company save.
Contact us at Sales@hrknowledge.com or call at 508-339-1300.
HR Knowledge is a provider of integrated HR, payroll and benefits services. Our offices are located in the Boston, MA metro area and we service companies throughout the United States.
Health Coverage Tax Credit and Advance Payment has been Extended
President Obama recently signed the Trade Adjustment Assistance Extension Act of 2011 (HR 2832). This new law, HR 2832 extends HCTC (Health Coverage Tax Credit) through the end of 2013 and increases credit for "trade-displaced workers" from 65% to 72.5% for coverage months commencing before February 13, 2011.
Provisions of ARRA, the American Recovery and Reinvestment Act of 2009 included changes to Health Coverage Tax Credit (HCTC). ARRA includes increased tax credits, greater definition of what is an eligible individual and defines qualified health insurance and extends the length of coverage under COBRA for certain HCTC eligible individuals through 2010.
As of May 1, 2009, the HCTC premium subsidy to purchase qualified health insurance increased from 65% to 80% through most of 2010. Legislation in December of 2010 extended the 80% HCTC subsidy through February 12, 2011. The credit reverted down to 65% as of February 13, 2011.
In addition to an increased subsidy, HR 2832 reinstated eligibiliy for trade-displaced workers to elect COBRA continuation coverage if they failed to do so during the initial 60-day election period. Under the reinstated COBRA provisions, Trade Adjustment Assistance (TAA) eligible individuals may keep COBRA until TAA eligibility is lost, and Pension Benefits Guaranty Corporation (PBGC) eligible individuals may keep COBRA coverage for life.
The HR 2832 COBRA duration requirements may expire if not extended by future legislative action for 2013. If no extension is provided, TAA and PBGC eligible individuals will be subject to the normal limits on coverage periods as of January 1, 2014.
For a copy of HR 2832, please click on the link provided below.
The IRS HCTC website has updated information.
HR Knowledge is a provider of integrated HR, payroll and benefits services. Our offices are located in the Boston, MA metro area and we service companies throughout the United States.