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TRANSCRIPT
WFOA Conference 2017
Definition of Independent Contractor vs Employee
Updates Re: on-boarding a new employee
FLSA Defined Overtime
Calculating Appropriate OT
Federal Taxes – Payroll
DRS – Cash Outs and Retro Pay
Overview of Protected Leaves, FMLA, FLA, FCA, Pregnancy Disability Act, Spousal Military Leave, Domestic Violence Leave
IRS Common Law Rules
1. Behavioral: Does the company control or have the right to control what the worker does and how the worker does the job?
2. Financial: Are the business aspects of the worker’s job controlled by the payer? (how the worker is paid, whether expenses are reimbursed, does the worker use the employer’s tools and equipment and supplies)
1. Type of Relationship: Are there written contracts or employee type benefits (i.e. pension plan, vacation, insurance?)
2. Continued Relationship?: Will the relationship continue and is the work performed as a key aspect of the business?
Consider the entire relationship with the worker specific to the right of the employer to control the worker and the work being done by the worker.
No bright line to determine if the worker is a temporary or an independent contractor
Independent Worker – No distribution of usual or customary withholding – Federal, FICA, Unemployment
Temporary Worker – usual and customary withholding – Federal, FICA, Unemployment, and L & I
Caution: Verify insurance liability
o Employer is responsible for the determination of the employee’s eligibility for LEOFF or PERS
o Failure to do so may result in the EMPLOYER assuming the cost of any overpayment of retirement benefits distributed to the member
Retired PERS employee may return and work up to 867 hours per year without penalty depending on whether they agreed they would retired and not return for 5 years
LEOFF personnel are not able to resume a similar position from which they retired – if they would do so, their retirement would be suspended
An employee who worked for one month in a PERS eligible position before quitting would be entitled to PERS membership.
dshs.wa.gov/new hire
DSHS – Child Support – New Hiring Methods
All new hires must be reported to DSHS –RCW 26.23.040
Must report regardless of number of hours worked
Includes rehires – if separated > 60 days
Must report within 20 days of hire
Can file electronically – which is preferred
New Form – easier to use – lists all acceptable List C documents
New Form is labeled USCIS 07/17/17 N (bottom left corner)
Electronic version – www.uscis.gov/i-9-central/what’s-new
Verification – Now may use Form FS 240 –electronic verification of those individuals born abroad to American citizens
Effective September 18th – Must use Form
ssa.gov/employer/ssnv.htm
Submit verification to Social Security Administration (SSA)
Verification of up to 10 names/SSN at a time
Make sure the SSN being submitted states the name of the person as printed on the SS card
If rejected – the reason or rejection not stated
If rejected, recheck the information provided and submitted = must be exactly as printed on Social Security card
Notify the employee of the discrepancies and inability to verify
SSA provides a Sample Letter that may be used to notify the employee of the SSA rejection (no SSN identified)
FLSA rules require that most employees be paid minimum wages and overtime at time and one-half for all hours worked over 40 hours
Most jobs are covered by FLSA regulations –exceptions include farm workers and jobs with specific laws governing the industry, i.e. Railroad workers, some commercial truck drivers
How the worker is paid – salary or hourly
◦ Salary – has guaranteed minimum amount of money which can be counted on for any amount of work performed regardless of actual amount of hours worked
◦ Hourly – worker is paid for actual hours worked and thus paid overtime for hours worked over 40 hours
Employee is exempt or non-exempt, thus paid overtime for hours worked over 40 hours
Salary Threshold: Employee makes $455 or more per week is NOT eligible for overtime
Obama administration attempted to increase the threshold but it was stopped in late 2016
Receives predetermined salary w/o regard to quality/quantity of work
Primary duties must be include managing an enterprise, i.e., department/division, section
Must supervise more than two other employees
Must play a role employment decisions, i.e., hiring, firing, discipline (weight test)
Receives predetermined amount of salary w/o regard quality/quantity of work
Receives $455 or more per week
Primary duty consists of managing the general business of employer
Work includes exercise of discretion and independent judgment with respect to matters of significance
Receives a predetermined salary Generally any position that requires
“advanced degrees and advanced knowledge” in a field of science or learning
Can be a combination of academic and experience
Satisfy the wage test, i.e., >$455 or more per week
Examples: nurses, accountants, engineer, graphic design, computer
Salary range: over $455 per week for full-time employee NO Overtime
Highly compensated employee threshold is $100,000
FLSA defines overtime as hours worked (not hours compensated for) over 40 hours in a workweek (consistency is critical)
Caution: OT is not required if the employee works over 8 hours unless referenced in CBA
FLSA has no provisions about how you schedule and does not require prior notice to employee if you change the schedule (use caution re: CBA)
Caution: Firefighter and police officers have a different workweek schedule
Define workweek and apply consistently
Caution: CBA, employer policies, or employee contracts can be more generous but not less generous
Work period may be from 7 consecutive days to 28 consecutive days in length
Overtime is required when the hours worked exceeds the number of hours that bears the same relationship to 212 hours (fire) or 171 hours (police) as the number of days bears to 28 days
For example, fire receives overtime after 106 hours during a 14 day period – police is 86 hours in the same period
For example, fire receives overtime after 106 hours during a 14 day period – police is 86 hours in the same period
Caution – Refer to CBA which are often more generous
Government employers may give fire and police compensatory time (same rate time and one-half times)
Police and fire may accrue up to 480 hours comp time (by law)
CBA or employer may cap compensatory time due to business impact
Generally an employee can work more hours in one day and flex or use those hours later in the week (within the same work week) without overtime coming into consideration.
Worked 9 hours on Monday in exchange for 7 hours on Friday (Caution: pay attention to when workweek – begins/ends)
Generally not governed by CBA – use caution as many CBAs limit the hours to work per day before overtime
For most, yearly salary/2080 hours x 1.5
For Police and Fire, hours may be different
For example, District A has bargained that yearly hours are 2596.
Base OT rate would be yearly salary/2596 x 1.5 (e.g. $64,900/2596 = $25 x 1.5 = $37.50 OT rate)
Be sure to check with your collective bargaining agreements for the right calculation
Overtime calculations need to include all payments made to an employee unless specifically excluded by the FLSA in Section 7(e). These exclusions may also be found in 29 CFR 778.
Items to include are:longevity
differential pay
education incentives, etc.
Items to exclude are:
holiday pay cash outs
stand by pay (unless there was work doneduring the standby hours)
pay for idle time (vacation, sick, etc.)
reasonable travel expenses, etc.
Example: Firefighter A gets $50 per month for an IV tech differential and 1% for longevity.
$50 mo x 12 mo = $600
$64,900 yearly salary x 1% = $649
$64,900 + $600 + $649 = $66,149
$66,149/2596 = $25.48 x 1.5 = $38.22
Base rate OT was $37.50. Adjusted OT rate is $38.22, or $0.72 per hour higher.
Must pay the $38.22 rate for overtime for the period that includes the IV tech and longevity.
If you’re not sure if a payment is included, contact the Federal or State Wage and Hour Division offices
Federal: 1-866-4USWAGE
State (L&I): 360-902-5800
Supplemental Pay Runs (retro pay, accrual cash outs, etc.) – must withhold a flat 25% in federal income taxes if run as a separate payroll
Draws – must withhold appropriate payroll taxes (federal income tax, FICA, etc.)
Protected Leaves are those absences from work that an employee may be eligible to take under certain conditions according to the federal and state laws.
An employee who satisfies the eligibility criteria specific to the appropriate protected leave regulations cannot be denied the leave.
An employer may not make reference to the employee’s protected leave in the performance evaluation document;
An employer may not discipline an employee for being on protected leave
Both are considered a form of retaliation
Family Medical Leave Act (FMLA) 29 CFR 825
◦ FMLA - Military
Family Care Act – RCW 49.12.265
Family Leave Act – RCW 49.78
◦ Pregnancy Disability (combo FMLA/FLA)
Spouse of Military Personnel RCW 49.77
Domestic Violence Leave – RCW 49.76
➢ Employer with 50+ employees in a 75 mile radius
➢ Employer may volunteer to adopt policy
➢Employers with <50 not required to adopt –however:
➢The employer must post FMLA poster
➢Be prepared to explain why the disgruntled employee is not receiving any of the FMLA benefits
➢May result in complaints of discrimination, favoritism,
Verifying if the employer has 50+ employees?◦ In current or previous calendar year◦ Or, 50+ employees on the payroll during
each workday for 20+ weeks (minimum) Includes part-time Includes seasonal employees Includes employees on leave Includes temporary employees even if
from a temporary agency
Does Not Include Elected Officials Does Not Include Volunteer Firefighters
Who Receive a Stipend
Employee must have worked for the employer 1250 hours in the last 12 months
◦ Time off does not count, even if that time off is compensated time (vacation, sick leave)
Employees must have 49 colleagues within 75 miles radius of his/her location (unless policy exists)
FMLA is UNPAID LEAVE
An employee may substitute unpaid leave with accrued paid leave, i.e., sick leave, vacation, comp time
The employer may require the employee to use accrued leave concurrent with FMLA unless the employer doesn’t have a FMLA policy requiring such
If no policy – employer has to invite the employee to use accrued with unpaid
12 weeks or 90 Days (UNPAID)
Within 12 Month Period
Select Calculating Leave Period
Fixed Period – all employees on same FMLA year◦Calendar Year (Jan. thru Dec.)◦Fiscal Year (Oct. to Oct.)◦Fixed same 12 month period for everyone◦Anniversary date – unique FMLA for each eligible employee
12 Weeks Per Calendar Year
Jan. 1 Dec 31st
12 Weeks per Fiscal Year
Oct 1, 2015 Oct 1, 2016
12 Weeks Per Anniversary Year
June 15, 2015 June 15, 2016
Rolling Forward Period – all employees on all different FMLA years
12 month period starts on first day of first use of FMLA
Rolling Backward -12 month period, measured backward from the date the employee last used FMLA
Variable time period measured forward from the date the employee’s first FMLA leave begins
12 weeks with year beginning on first day of FMLA
First Use Second FMLA
4-1-2015 4-1-2016 7-15-2016 7-15-2017
First Use FMLA End of FMLA Year 2nd Use FMLA End of FMLA
Variable time period is measured backward immediately preceding the first day of FMLA
IF the employee has not used FMLA in the 12 months prior to that specific day – then they may be eligible
Employee can take advantage of whatever measurement is most beneficial to him/her
Complicated process is likely result in problems keeping accurate records, increased complaints and questions
Supervisors will manage the leaves differently which adds to the confusion
When selecting a leave period – give 60 days notice of the process for calculating or changing the calculation process
Will need to negotiate any changes with the unions if the decision is to change the calculating period
Birth of child (mother or father)
Placement of a child by foster care of adoption (mother or father)
Employee has serious health condition
Employee has parent, spouse, child with serious health condition
Any overnight stay in medical facility
Three (3) calendar or consecutive days of incapacity (too ill to attend work), plus
➢ Two visits to medical provider
Both visits must occur within 30 days of initial incapacity
➢One visit to medical provider, plus continued care or treatment
First visit must occur within 7 days of initial capacity
Prescription medication is continued treatment (for specific treatment – not all prescription medications)
Any days of incapacity due to a chronic or long-term medical condition, regardless of treatment
◦ Must have 2 visits to health care provider per year
◦ Any days of incapacity related to pregnancy or prenatal care
◦ Any days of absence to receive treatment or surgery
For example - chemotherapy
Licensed doctor or medicine or osteopathy
Dentists or Oral Surgeon Clinical Psychologist Optometrists Naturopath Chiropractors Clinical Social Worker Nurse Practitioners or Physician Assistant
After receiving certification or other information verifying a qualifying event
◦ Send employee designation notice WH 381
◦ Medical certification WH 380 (not required but recommended)
◦ Within 5 days
◦ Begin to continue to track use of Family Medical Leave
◦ Deduct leave from accrued leave bank if required under policy
FMLA Eligibility and Medical Certification
Notify of approved FMLA leave (WH 382)
Begin tracking and deducting FMLA leave
Begin deducting from accrued leave balance
◦ Caution – Verify the employer has a policy stating the employee must use accrued leave concurrent with FMLA
◦ IF no policy exists – it’s the employee’s choice
◦ The employee may choose to use FMLA and accrued leave consecutively
Employee responsible to arrange appointments/treatment so not to not disrupt the continuation of work
Maximum time charged is closest to the actual time taken
Minimum increment – whatever the employer typically uses in timekeeping/record keeping
In this situation – the employer may transfer the employee to a comparable position (same pay) that can better accommodate the scheduling limitation
Employer continues to pay the employer portion of the health care insurance for 12 weeks
The employee can use COBRA to continue receiving health insurance for unpaid leaves extending beyond 12 weeks (employee paid)
If the employee is able to return to work at the conclusion of 12 weeks because:
Chooses to not do so, OR
Employee returns for less than 30 days
At the conclusion of the 12 week period (FMLA) the employee is restored to former job or comparable job in pay, benefits, and responsibility
If employee doesn’t return – the employer may replace the employee
Job restoration is not required if
◦ Employee would have been laid-off or let go regardless of the leave issue
◦ Employee gives notice they don’t intend to return
◦ Employee is not able to return for reasons not related to employee’s own health (may need to consider an accommodation under disability)
An employer may remove an employee identified as “key employee”
◦Key employee status must be identified prior to the leave◦Must notify employee notice prior to replacing ◦Key employee absence must substantially injury the employer’s operations
Provide as much advanced notice as possible
Employee may give verbal notice (written notice is usually a better practice) – give to HR and supervisor
◦ Employee needs to state the need for leave – reason
◦An estimate of the time needed off and when it is to begin
Employee must give reasonable notice ◦Usually 30 days notice◦ Employer can require the employee to delay the leave if not sufficient notice ◦Unforeseeable/emergency leave As much notice as possible Either same day or next business day
Employer may ask for explanation for failure to give notice
Employee must cooperate if asked to provide certification from medical provider
◦Certification to be provided by medical provider
◦Must provide medical certification with 15 days
◦ If certification is not adequate – employer may require additional information
◦Employee has 7 days to comply
Management, HR, leave administrator (safety officer) may require addition information
NOT IMMEIDATE SUPERVISOR Must limit the request for additional information to the medical condition identified in original incident
Employer can request recertification
◦When original certification expires
◦ At six month intervals
◦When a new FMLA year begins for the employee
◦When there is a change in condition or circumstances but warrants recertification
◦ Reduced work schedule or intermittent leave
Employer may seek a second opinion from another medical provider if the employer disputes the existence of a serious medical condition
Employer must pay for the second opinion
If the first and second opinion are in dispute – a third opinion from another medical provider
Third opinion at employer’s expense
Third opinion is mutually agreed on
Third opinion is binding and the final determination
The employee’s health care provider has released the employee to return to duty, BUT the employer doesn’t feel the employee has is fit for duty.
◦Employer is responsible for returning the employee to work
HOWEVER – the employer may require an additional exam by a medical provider (employer expense) to determine if the employer can accommodate the on-going medical condition
If employer wants an employee to complete a fitness for duty before returning to work:
Employer needs to have a uniform policy, OR
Indicate on the FMLA designation form that a fit-for-duty must be passed before returning to duty (WH-382)
Provide the medical provider with a job description that includes the essential functions of the job
Employee’s health care provider completes the fit-for-duty assessment
This assessment is at the employee’s expense
No second or third opinion allowed
When safety concerns exist –employee may take reduced work schedule
Employer can require the employee to participate in a fit-for-duty every 30 days intervals to ensure the employee is safe in performing the essential functions
If employer wants an employee to complete a fitness for duty before returning to work:
Employer needs to have a uniform policy, OR
Indicate on the FMLA designation form that a fit-for-duty must be passed before returning to duty (WH-382)
Provide the medical provider with a job description that includes the essential functions of the job
Employee’s health care provider completes the fit-for-duty assessment
This assessment is at the employee’s expense
No second or third opinion allowed
Qualifying Relative◦ Spouse◦ Registered domestic partner NOT under FMLA, but yes under Washington FLA(state law)◦Minor child (step – foster) ◦ Adult child unable to care for one’s self◦ Parent (check policy as grandparent is sometimes included)◦ Employee is responsible for care of relative
FMLA – child, parent, spouse (Federal Law)
FLA – registered domestic partner, spouse, child, parent (RCW 49.78.010
Family Care Act – child, parent, spouse, registered domestic partner, parents-in-law, and grandparents
Paid Sick Leave (PSL) (Resolution 1433) all of the above PLUS grandchild and sibling
Employee must be responsible for providing care for relative
Requirements for notification, certification, designation, etc., is same as employee with serious medical conditions
If the employee is unable to get certification – then the FMLA may be denied
Employer may require employee to provide certification from medical provider that the serious medical condition of the relative requires the employee’s support and care
If employee is unable or unwilling –the FMLA may be denied
Employee cannot be placed on FMLA until after they have used all of their sick leave
False An employer can require an employee to use
their sick leave and FMLA concurrently if the reason for sick leave is a qualifying event
Verify the employer’s policy
If an employee is unable to return to work at the conclusion of the FMLA – the employer may replace the employee and the employee may be terminated
The exception is if the employee is on leave for a condition that qualifies as employee “disability”
FLA Adopted in 1989, RCW 49.12.033 (unpaid leave)
Employer must have 50+ employees
FLA superseded by FMLA
Exception: Pregnant/new mother may receive both FMLA and FLA up to 12 weeks
To qualify the employee must:◦have been employed with the employer for one year ◦worked 1250 hours in the last year◦need leave to care for an immediate family member or self with a serious medical condition
12 weeks in 12 month period
To care for a newborn of the employee or care for the child (not the pregnancy or recovery from)
To care for an adopted child just placed in the home
Leave to care for a family member with a serious medical condition
To care of their own serious medical condition
Employee is unpaid unless the employee uses accrued time, i.e., sick leave, vacation
The rights of the employee cannot be diminished by a collective bargaining agreement
The employee does not continue to accrue leave while on unpaid status
FLA, in most cases, does not cover maternity or pregnancy leave, but pregnancy leave is covered by FMLA
Once the employee is no longer disable due to pregnancy, they may ask for FLA (employer not required to notify of eligibility)
An employer may require the woman to provide a doctor’s certification that she is no longer disabled due to pregnancy
FLA and pregnancy do not run concurrent
Once the disability has ended, the women is eligible to take FLA up to 12 weeks
The father is only eligible for FLA
If medically certified as being needed, the women can take up to 12 weeks for FMLA for her own medical condition (complicated pregnancy)
Usual time for pregnancy is 6-8 weeks after delivery
After she is no longer disabled, she may take up to 12 weeks of FLA to care for, and bond with her new baby
A father may take FLA to care for his pregnant wife, her recovery from the delivery and bond with the new born, up to 12 weeks
An employee with and adult daughter may not take FLA to care for her daughter during pregnancy unless the daughter is unable to care for herself when she isn’t pregnant
Half-time employees
New hires
Employees of small businesses
Before and after period of sickness/temporary disability - FMLA
Police officers, firefighters, laborers that cannot perform the position due to the physical demands or threat of health of fetus
Employer must treat the employee as any other disabled employee by offering◦ Light duty
◦ Modified duty
◦ Unpaid leave of absence (FMLA)
Eligible to take 12 weeks of FLA (unless mother works for same employer)
Leave is unpaid – may use accrued paid leave
Employer pays health premiums to same extent as prior to leave
May take intermittent leave – with approval within one year of child’s arrival
Job restoration to same position
When both parents work for the same employer, they must split the 12 weeks of FLA when the baby arrives.
Each employee – both mother and father would take 6 weeks at that time
Each parent would have a remaining 6 weeks to take due to their own serious illness or that of a relative later on as long the 6 weeks is within the original 12 month period
The employer is required to allow a breast feeding mother time to express her milk or breast feed the child
Expressing the milks is to be done when needed
The employer is responsible for providing a sanitary place for her to express the milk and a place that allows for clean up
Employer with 8+ employees must return the employer to the same job
Employer with less than < 8 employee is not required to hold the job
Family Care Act (FCA) RCW 49.12.265 (Washington State Law)
Employee may use all earned or accrued leave to care for a sick family member
Family member is defined as child, spouse, registered domestic partner, parent, parent-in-law, or grandparent
No employer size Applies to all employers who provide a
paid leave benefit (sick leave, vacation time, PTO)
Caregiver Leave Up to 26 weeks of leave in single 12
month period Care of spouse, child, parent, or “next of
kin” (nearest blood relative) to care of a member of armed forces◦ Wounded on active duty◦ Physically or mentally◦ Unfit to perform military duties◦ Undergoing medical treatment,
recuperation, therapy◦ Inpatient or outpatient◦ Temporary disability retirement list
Caregiver Leave applied on per service member, per injury basis
Must use forward rolling period to determine FMLA year
Maximum of 26 weeks in a 12 month period regardless of the number of qualifying events
Applies to all employers
Eligible employee must work at a minimum 20 hours a week
Employee who has a spouse in the military may take up to 15 days leave per deployment prior to the deployment or when the spouse is on leave from deployment
Unpaid leave - employee may use accrued leave
Applies to all employees, regardless of the size of the employer
Employer is required to provide a “reasonable amount” of time from work (unpaid – may use accrued)
No specific amount of time “reasonable amount” start with the FMLA/FLA of 12 weeks guidelines
Health benefits are maintained by employer
Employee or relative of employee that is a victim of domestic violence, sexual assault, or stalking
Employee may use Domestic Violence Leave to care for a family member that is a victim of DV (as described above)
Family member is defined as: child, spouse, parent, parent-in-law, grandparent, or person the employee is dating
Applies to all employers – no size limit
Employee may take unpaid leave or work limited schedule as a DV, Sexual Assault, or Stalking victim or to assist family member who is a DV or Stalking victim
◦ Seek legal assistance/attend legal proceedings
◦ Seek medical or psychological treatment
◦ Seek services of DV shelter or rape clinic
◦Obtain counseling
◦ Participate in safety planning or relocation
An employer may require verification from an employee who is requesting leave. The types of verification that may be provided:
A police report identifying the victim and the incident of DV
A court order of providing protection to the victim
Documentation from a health care provider, advocate, clergy, or attorney
The employee may submit a written statement
Labor and Industries is administering the implementation of this Resolution (WAC and RCW)
Still waiting for procedures and guidelines to be published
Sign up for news update at L&I’s Employment Standards LISTSERV
Resolution may have very limited impact on public employers since PSL is usual practice
No change or impact through the duration of a current Collective Bargaining Agreement as long as sick leave accumulation and use is covered under the CBA
What we know:
Employee is paid one hour of sick leave (PSL) for every 40 hrs. worked at usual compensation
Employee is eligible to use PSL after 90 days of employment
Employee may carry over 40 hours of unused PSL to the next year
PSL may be used for an employee’s illness or the illness of family
Family is defined as child (adopted or other), spouse, registered domestic partner, grandparent, grandchild, sibling
This law covers the gaps in FMLA & FLA specific to what qualifies as family
PSL may be used if work or school shuts down due to a public health concern, i.e., disease outbreak
PSL may be used concurrent with Domestic Violence Leave
Absent a policy or CBA that states differently, an employer is not required to compensate or cash out the unused sick leave, HOWEVER
If the employee returns to employment within 12 months –regardless of the position – the employer must reinstate the full sick leave balance
If the current policy or CBA allows for cash-out, it will negate this new law
No retaliation
No reference to use of PSL in performance evaluation
No discipline for use of PSL
For now, it doesn’t look like anything in the new law prevents an employer from issuing discipline if employee is abusing sick or taking numerous unscheduled absences that reflects a pattern of use sick – consult an attorney
www.dol.gov/dol/benefits-leave/fmla.htm
FLSA/FMLA www.dol.gov 206.398.8039
FLA – Labor and Industries –◦ www.Lni.wa.gov/WorkplaceRights/Leave
◦ L & I phone number 360-902-4930
Pregnancy Leave – www.hum.wa.gov
www.irs.gov/publication Publication 15 –Circular E
Janice Corbin and Becky Hazart
Sound Employment Solutions, LLC
206.334.5003
Nothing in this instructional manual constitutes legal advice.