October 2009

EEOC v. Sears - $6.2 million the largest single ADA settlement that links ADA with Workers Compensation Return to Work Programs - The New Frontier - are we ready?

The U.S. Equal Employment Opportunity Commission (EEOC) today announced the entry of a record-setting consent decree resolving a class lawsuit against Sears, Roebuck and Co. (Sears) under the Americans With Disabilities Act (ADA) for $6.2 million and significant remedial relief.

The consent decree, approved this morning by Federal District Judge Wayne Andersen, represents the largest ADA settlement in a single lawsuit in EEOC history. The EEOC's suit alleged that Sears maintained an inflexible workers' compensation leave exhaustion policy and terminated employees instead of providing them with reasonable accommodations for their disabilities, in violation of the ADA.

Read the full settlement documents at - http://www.eeoc.gov/press/9-29-09.html

Also, read an article on this topic by Sheila Lowden, President of Lowden & Associates here.

Social Security Wage Base Remains at $106,800 in 2010

The Social Security Administration Announced on Thursday, October 15, 2009, that the 2010 social security wage base will be unchanged at $106,800. The maximum social security tax employees and employers will each pay in 2010 is also unchanged at $6,621.60.

Flu Outbreak Survey Results

Does your business have a plan to reduce employee absences in the event of a flu outbreak?

Retaliation in the workplace reaches an all-time high

Retaliation is one of the hottest and most rapidly growing areas of employee litigation in the US.  In 2008, retaliation claims received by the EEOC alone jumped 22 percent to 32,690 claims, and that is only one area where retaliation can be raised. 

Businesses cannot ignore this growing trend, nor can they assume they will escape all liability.  In 2004, the EEOC obtained a $600,000 settlement from a temporary staffing company and its client. 

The staffing company was charged by the EEOC because "it did not protest or attempt to remedy the unlawful termination decisions." 

GINA Rules Issued

Federal agencies are required to implement the Genetic Information Nondiscrimination Act of 2008 (GINA).  The rules have been issued as interim final rules effective on December 7, 2009.  Comments on the rules are due January 5, 2010.

 On the same day (October 7, 2009), HHS issued a separate proposed rule to amend the HIPAA privacy rules to add GINA-related requirements with comments due by December 7, 2009.  NAPEO expects to publish a NAPEO Legal Review™ this fall devoted to GINA and its implications for PEOs. 

In general, GINA prohibits discrimination in health coverage based upon genetic information (health plans are both prohibited from basing eligibility, coverage, or other decisions upon genetic information and also from collecting this information).  Employers are prohibited from making employment decisions based on genetic information (and from collecting such information). 

The employer provisions are enforced by the EEOC.  All of the rules are available in the Federal Register (Search term: GINA. The recent rules are all identified as "fr07oc09R" and the EEOC rule as "fr02mr09P.")

No-Match Rule Rescinded

The Department of Homeland Security (DHS) has given up on the controversial no-match regulation that it initially proposed in 2007. This would have created a "safe-harbor" set of procedures for an employer to use upon receipt of a Social Security number no-match letter. 

The DHS filed its recession of the rule on October 7, 2009, with an effective date of November 6, 2009. DHS indicated that it has "determined to focus its enforcement efforts relating to the employment of aliens not authorized to work in the United States on increased compliance through improved verification, including participation in E-Verify, ICE Mutual Agreement Between Government and Employers (IMAGE), and other programs." 

This does NOT mean that PEOs can safely ignore no-match letters (see NAPEO Legal Review™ on Social Security and no-match).

Whether your applicants are submitting resumes touting freshly minted degrees or those awarded in years past, you can’t be too careful when considering their authenticity.

A recent audit of a corporate profile submitted to the Securities and Exchange Commission revealed that an executive with a publicly-traded Jacksonville, Florida, firm had inflated his educational experience. Much to the embarrassment of his employer, this 35-year veteran of the company claimed a B.A. from the University of Georgia when in fact he had only been awarded an A.B.

For positions where a degree or certification is not only warranted but required, it may spell disaster for your firm to find educational discrepancies after the fact.

The due diligence of an educational background check will allow you to confirm secondary school, university or college attended, dates of attendance and degrees or certifications earned and should be a part of every applicant process.

--Renee Elberts, MetsCheck, Inc., provider of professional background checks & drug screening

IRS Announces Limited Changes in 2010 Amounts for Standard Deduction, Transportation Fringes, and Earned Income Credit

The IRS has released inflation-adjusted tables for 2010 reflecting no changes in many of the items reported because the Consumer Price Index remained flat over the past year [Rev. Proc. 2009-50, 10-15-09].

Standard deduction and personal exemption
The standard deduction amounts for 2010 remain unchanged at $11,400 for married couples filing jointly or surviving spouses and $5,700 for single taxpayers and married taxpayers filing separately, while increasing to $8,400 for heads of households ($8,350 in 2009). The personal exemption amount for 2010 is $3,650, unchanged from 2009.

Qualified transportation fringes
The amounts that may be excluded from gross income for employer-provided "qualified transportation fringe benefits" for 2010 are as follows: $230 per month for "transportation in a commuter highway vehicle and any transit pass" (unchanged from 2009), and $230 per month for "qualified parking" (unchanged).

Earned income credit
For 2010, the Earned Income Credit for employees with one qualifying (dependent) child is 34% of the first $8,970 of earned income, for a maximum of $3,050 ($3,043 in 2009). For employees with two qualifying children, the EIC is 40% of the first $12,590 of earned income, for a maximum of $5,036 ($5,028 in 2009). For employees with three or more qualifying children, the EIC is 45% of the first $12,590 of earned income, for a maximum of $5,666 ($5,657 in 2009), and for employees with no qualifying children, the EIC is 7.65% of $5,980, for a maximum of $457 (unchanged from 2009). Married employees filing jointly who earn less than $40,545 in 2010 ($35,535 for single employees) and who have at least one qualifying child can receive advance payments of their EIC of up to $1,830 ($1,826 in 2009) spread out over their pay periods during the year.

Foreign earned income exclusion
For 2010, the maximum foreign earned income exclusion amount under IRC §911(b)(2)(D)(i) is $91,500 ($91,400 in 2009). The maximum foreign housing cost exclusion amount under IRC §911(c)(2) is $12,810 ($12,796 in 2009).

Pension Plan Limits Will Remain the Same in 2010
The IRS has announced the cost-of-living adjustments (COLAs) applicable to dollar limits on benefits and contributions under qualified retirement plans, as well as other items, for tax year 2010. While the cost-of-living index actually decreased from 9-30-08 to 9-30-09, the IRS said that the 2010 limits will be the same as those in effect for 2009 [IR-2009-094, 10-15-09].
     • The limitation on the exclusion for elective deferrals under §402(g)(1) (e.g., §401(k) and §403(b) plans) is unchanged at $16,500.
     • The limit on annual additions to defined contribution plans under §415(c)(1)(A) is unchanged at $49,000.
     • For limitation years ending after December 31, 2009, the limit on the annual benefit under a defined benefit plan contained in §415(b)(1)(A) is unchanged at $195,000.
     • The annual compensation limit under §401(a)(17) and §404(l) is unchanged at $245,000.
     • The compensation amount under §408(p)(2)(E) regarding elective deferrals to SIMPLE retirement accounts is unchanged at $11,500.
     • The limitation under §457(e)(15) concerning elective deferrals to deferred compensation plans of state and local governments and tax-exempt organizations (§457(b) plans) is unchanged at $16,500.
     • The limitation under §416(i)(1)(A)(i) concerning the definition of "key employee" in a top-heavy plan is unchanged at $160,000.
     • The limitation under §414(v)(2)(B)(i) for catch-up contributions to §§401(k), 403(b), and 457(b) plans for individuals age 50 or over is unchanged at $5,500; the limitation under §414(v)(2)(B)(ii) for catch-up contributions to an employer's SIMPLE plan for individuals age 50 or over remains unchanged at $2,500.
     • The limitation used in the definition of "highly compensated employee" under §414(q)(1)(B) is unchanged at $110,000.
     • The compensation amount under §408(k)(2)(C) regarding simplified employee pensions (SEPs) is unchanged at $550.
     • The compensation amount under federal regulation §1.61-21(f)(5)(i), concerning the definition of "control employee" for fringe benefit purposes, is unchanged at $95,000. The compensation amount under §1.61-21(f)(5)(iii) is unchanged at $195,000.

Valuable Partnerships to Help you Start Saving Today

We have experience with and have partnered with the below companies to pass along additional savings to you and your business. Call them and benefit today! Mention Lowden & Associates when you call.

1. Examine your spend rate and renegotiate

Don't take our word for it, ask our satisfied customers:

"If you are interested in a system where you only pay if the company saves you money, we have a Compnay you need to speak with. They are past GE Executives who started their practice over 11 years ago. I have personally worked with these people and can vouch for their professionalism and expertise. 

They will look at your overall spend rate and look for ways to help you reduce costs in areas you may not have thought of. Interested?  Email Robert Matthews at RSMatthews@PaladinAssociatesinc.com – you can't afford not to call.

2.  Outsource non-core functions

Have you considered outsourcing functions that do not directly impact your customers? Don't wait any longer. Act now.

We offer tailored solutions that provide HR talent at a fraction of the cost. As a special bonus, sign up by November 30 and receive the first month at half the cost. You can even start January 1!

Call our business development at 770.248.0401 today.

3.  Trade with vendors

Have you considered bartering your services with some of your vendors? Well, it doesn't hurt to ask. You never know what people may be willing to do if you open the door.