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HR Matters
HR Matters - Volume XII, Issue 134
June 26, 2008
Labor & Employment NewsNo Genes at Work. The Genetic Information Nondiscrimination Act (GINA), which prohibits employment discrimination on the basis of genetic testing, was signed into law May 21, 2008. Recognizing that genetic information may reveal an individual’s risk of developing and passing on certain diseases, GINA prohibits employers and insurance companies from using genetic testing to refuse to hire, deny promotions, deny health coverage or set premiums.
Union Wins on the Decline. For the first time in 10 years, the percentage of union victories in representation elections dropped in 2007. Likewise, the number of National Labor Relations Board-supervised elections also decreased. While this is encouraging news, employers should not let their guard down – unions still win 60% of the time that a matter goes to election. This underscores the importance of maintaining good relationships with employees and being aware of the warning signs of unionization. If you’d like more information on these warning signs, contact a Graydon Head labor & employment attorney.
Workplace Health & Safety News
Dot Your "I"s and Cross Your "T"s for PTD Claims. A successful permanent total disability ("PTD") claim entitles injured workers to benefits for the rest of their life. Because of the long-term expenses of PTD claims, employers should strictly comply with the deadlines for processing these claims to avoid losing a claim over a procedural error. For example, employers only have 14 days after the issuance of the Permanent Total Acknowledgement Letter to notify the Commission of their intent to submit medical evidence. Recently, failure to comply with this requirement was costly to an employer. Although the employer submitted medical evidence that the SHO relied upon to deny the PTD claim, the Court of Appeals vacated the SHO’s order because the employer had not complied with the notice requirements. State ex rel. Dummermuth v. Ohio Power Co.
Immigration News
Pilot Program E-verify. President Bush issued an Executive Order on June 9, 2008 mandating that all contractors entering into future federal contracts must use the E-verify system to confirm that new hires and current employees, who were hired since November 6, 1986, are legally authorized to work in the U.S. Regulations concerning the Executive Order are pending.
Employee Benefits & Executive Compensation News
Certain Severance Payments Are Exempt From FICA Taxation. A recent Appeals Court decision supports the IRS’ position that severance payments that are paid as supplemental unemployment benefits are exempt from FICA taxation. To qualify for the exemption, the supplemental unemployment benefit payment must be paid only for an involuntary termination, must supplement the receipt of state unemployment compensation and must be payable over time (i.e., not be paid as a lump sum). With the current FICA rate at 7.65%, a FICA tax exemption can save both employer and employee a significant amount.
New Military Law Impacts Wages and Benefits. On June 17, 2008, The Heroes Earnings Assistance and Relief Tax Act of 2008 (HEART) was signed into law. Under HEART, differential wage payments to an employee on military duty for a period over 30 days will be treated as wages for income tax purposes but not FICA tax purposes. HEART also allows employees to contribute from these wages to a retirement plan, requires qualified plans to count military service as service under the plan for vesting and benefit accrual purposes, and allows distribution on account of separation from service while the participant is on military leave. Plans will need to be amended for compliance with HEART by the end of the 2010 plan year.
This Newsletter is a periodic publication of Graydon Head & Ritchey LLP and should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general information purposes only, and you are urged to consult your own advisor concerning your situation and any specific legal question you may have.