Business Essentials
A Monthly Update on Day-to-Day Management Issues for Optical ECPs and Retailers July 2008
Made possible by an unrestricted grant from Santinelli and OfficeMate
It's Your Business


IRS Optional Standard Mileage Rate on the Rise

Hedley Lawson

Business expenses, including vehicle use by employees in your practice, has become another area of growing concern given the escalating cost of fuel. No doubt if you have a sales team, drivers, or you simply have employees that may travel between offices during business offices, the cost of operating their personal vehicle is on the rise.

In response to rising gas costs, the Internal Revenue Service (IRS) recently announced an eight cent increase to its optional standard mileage rate for the final six months of 2008. The optional standard mileage rate represents the deductible costs of operating an automobile for business use if companies do not track actual costs. This rate is also used by many businesses to reimburse employees for mileage. If your practice has a policy of business mileage reimbursement, you should consider making this adjustment to your policy.

The new rate is 58.5 cents per mile for all business miles driven between July 1 and
Dec. 31, 2008. For the first six months of 2008, the allowable rate for business reimbursed mileage was 50.5 cents per mile.

"Rising gas prices are having a major impact on individual Americans. Given the increase in prices, the IRS is adjusting the standard mileage rates to better reflect the real cost of operating an automobile," said IRS Commissioner Doug Shulman.

Our continuing objective at Business Essentials is to be a primary source of information to assist you in the ownership and management of your practice. To do so, we will continue to provide you with timely and relevant information. If we are achieving our objective, please take a moment and let us know. Likewise, if there are topics or there is information of relevance that would be of benefit to you, please include your suggestions.

Hedley Lawson brings over 25 years of optical industry experience to Jobson Medical LLC. For over 10 years, he has been a contributing editor to VM, most recently as writer of the monthly column "Business Essentials." He is the Contributing Editor of VM's
E-Newsletter Business Essentials. Contact Business Essentials with questions or comments.

 
Ask the Experts

Employers May Deduct Exempt Employees' Sick Time in Increments

Q: Can we deduct from the exempt employee's salary when he/she has no paid time off accrued and takes off a partial day for the employee's own illness or for vacation?

A: No, you are not permitted to deduct from the salary of an exempt employee for a partial day of absence. Exempt employees must be paid for any day in which they perform any work. Deductions may be made for absences in increments of full working days.

If an employee is out ill for a partial day, and you offer a bona fide sick plan in which the employee has time off available, you may deduct from the sick leave benefit for a partial day of absence, whether the time off is minutes or hours. The use of the paid sick leave plus the time the employee worked will equal a full day's salary for the exempt employee.

Remember that deductions from the exempt employee's vacation or paid time off plan always must be in an increment of four hours or more. If an exempt employee works four hours or more, you cannot deduct from his/her paid vacation or paid time off benefits, as the deduction would be for less than the required four hours.

Keep in mind that these rules do not apply to non-exempt (hourly or piece-rate) employees. Non-exempt employees are paid for the actual time that they work, and deductions from any accrued benefit may be made in the amount specified in your company's policy.




Employers May Not Restrict Healthcare Eligibility

Q: May we condition eligibility for healthcare benefits based on health status?

A: No. ERISA prohibits a group healthcare plan from basing an employee's eligibility to begin or continue participation, or the contribution required from an employee to participate in the plan, on health status-related factors. So you can't charge smokers or those with high blood pressure, for example, more for their health insurance.

If you have a question or issue for one of our experts, contact Business Essentials.

—Hedley Lawson, Jr.

From the Top

Monster Publishes Hiring Secrets in Finding Keepers Guide

With 40 million jobseekers and thousands of employers using Monster.com, it's hard to ignore the Web site's impact on today's hiring processes. So who better to dish out some hiring hints? Monster's newly published hiring guide, Finding Keepers, proposes a new comprehensive approach, some of which you may be able to apply to your practice when it comes to finding and holding onto talented employees.

Monster Finding Keepers

Finding Keepers doesn't talk about "hiring" but about the "engagement cycle." That means finding and retaining the best employees—the "keepers"—through a continuous cycle that goes like this:

  • Build a great workplace with a unique culture; use that culture to attract the right people;

  • Use those people to strengthen the culture, and then use the culture to hold onto the people.

Monster identifies and defines three parts of the engagement process: attract, acquire, and advance.

1. Attract. This involves building and promoting the employer's brand. You build a brand around the key attributes of your company as an employer and then reach out to skilled workers. (Meanwhile, candidates are researching companies and deciding where they'll apply.)

2. Acquire. You create a great candidate experience by leveraging your brand during the hiring process and setting up a working relationship. (Meanwhile, the candidate is evaluating you and comparing you to other companies.)

3. Advance. You retain top talent with rewards and growth. (Meanwhile, employees are continuously evaluating what they get from you and what their value is in the marketplace.)

Employers tend to think that only about 20 percent of employees at other companies are "available" to recruit. But Monster says the truth is nearly the opposite. Finding Keepers breaks out three types of candidates:

  • Settled Loyalists (about 30 percent of workers) are happy where they are and hard to displace.

  • Poised Loyalists (about 11 percent of workers) are happy but could be enticed to move.

  • Poised Opportunists (about 59 percent of workers) are actively looking. They've posted their resumes, will apply for your job, and are amenable to job offers.

When managers are skeptical about how large the hiring potential pool is, Monster shows them how many of their own employees are registered. They are surprised, but they quickly realize it means that many good employees are in the marketplace.

Most interviews involve sitting in reception, filling out an application in a room with EEOC and OSHA posters, then being interviewed by HR, and then listening to hiring managers talk about the company.

In contrast, Monster recommends treating candidates like customers. Show them to a comfortable room with fresh coffee and bottled water, and a video playing about the organization. Offer help in filling out the application. Then follow with a professional interview and a meaningful interaction with the hiring manager.

Monster has the Monster Den, an informal gathering area to which all customers and applicants are taken. It's a comfortable place where happy employees are relaxing. It sends a powerful message.

And in the end, don't just send a letter with start date and salary details, according to Finding Keepers. Write a letter that recaps everything you offer:

"We think you're the best person for the job, not only because of your skills and experience but also because of the deep understanding you showed, your can-do attitude, and your desire to step up to management."

Then, have other managers give the candidate a call. "Say, I heard that we made you an offer. Any questions? I think you'd do well here. There is lots of opportunity, etc."

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People Management

Top 10 Signs of a Dysfunctional Workplace

Scarlett Pruitt, blogging on HRWorld.com, collects real-world evidence of dysfunction in workplace settings. Business Essentials thought that the following 10 signs of a dysfunctional workplace bear repeating.

workplace conflict

1. Nothing can get done without the boss's approval.
"Empower your organization by delegating," said Pruitt. There's not much CEO work going on if the boss has to sign off on every little thing. And there's a corollary. To get things done, you have to hide them from the boss. Now you know you have a situation that is going to end badly.

2. Who is the boss?
The structure may be clear on paper, but no one knows who really makes the decisions. Everybody benefits from clarifying decision-making responsibilities.

3. Do-nothing meetings.
If a meeting has no agenda or just rehashes previous discussions, drop it. And again, a corollary: IMing during meetings. Meetings are for brainstorming and discussing, not "IM conversations," said Pruitt. And "Pull the plug" on cell phones.

4. Cubicle co-workers IM instead of talking.
Some topics require face-to-face discussion. Arrange some meetings (but don't forget rule number 3.)

5. There's more than one "secret couple" around.
They usually don't stay secret for long, and tension and drama (and lawsuits) result if there is perceived favoritism. Write a policy and enforce it.

6. IT rules are so tight that you're not told your own password.
Tech security is important, but there are limits. Find a reasonable middle ground.

7. There's a "wall of shame" where employee mess-ups are posted and highlighted for the entire world to see.
"Rewards should be public, but chastisement should be private," Pruitt said.

8. The boss screams at staffers, for example, when there's skim milk instead of half-and-half for the coffee.
Authority should never be used to bully or intimidate. Counsel or call in the consultants.

9. Everyone has 10 weeks of accumulated vacation because no one can take a day off.
"People are not machines," said Pruitt. "Encourage them to take vacations, or they are likely to walk out one day and never come back."

10. What matters is not what you get done, but how many hours you are seen "working."
Don't be impressed by the person who arrives early and leaves late just for show. "Reward productivity, not hours," said Pruitt.




Reasons to Stay on the Job

Percentage of employers reporting top five reasons employees stay on the job, and employees reporting reasons they stay, 2008.


Employers

Employees

Relationships with co-workers

31%

25%

Relationship with manager(s)

22%

25%

Desirable working hours

17%

22%

Attractive compensation

23%

20%

Attractive benefits

18%

20%

Note: Survey of 245 human resources representatives and 7,101 employees.

Source: Salary.com, April 29, 2008

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Santinelli International

EEOC Rules and Regulations
Two Pending Lawsuits Test Disabilities Act
 

Two lawsuits are pending that could open the door to many more claims. The "association discrimination" provision of the Americans with Disabilities Act prevents employers from discriminating against workers based on "unfounded stereotypes and assumptions about" people who care for or work with the disabled. In other words, the provision protects the jobs of relatives of disabled people.

One lawsuit is pending in Wyoming and it involved a company called PacifiCorp. The lawsuit alleges the company fired a couple to avoid paying the cost of treating their son's brain tumor. The second lawsuit, which is more prominent, was filed by Phillis Dewitt against Proctor Hospital in Peoria, Ill. Dewitt was fired because of her husband's extensive cancer treatment medical bills. The Seventh U.S. Circuit Court of Appeals has cleared the Dewitt case for trial and it is scheduled for August 2009.

Dewitt's case began in 2005. Her husband was battling prostate cancer. His bills were mounting and the prognosis was not good. The hospital was self-insured. A supervisor asked Dewitt if the couple would be switching to less-expensive hospice care. The hospital "could not continue to sustain the substantial medical bills incurred." A few months later, Dewitt was fired with no reason given.

In clearing the lawsuit for trial, the appeals court hinted the hospital could prevail if it could prove Dewitt was fired strictly to cut costs. However, that does not appear to be a viable defense for Proctor. At the time it fired Dewitt, it kept other employees on the payroll that had even higher medical expenses. Even with the facts stated above, Dewitt may have a difficult time. She still will have to establish that her husband's disability was covered under the ADA and show a direct link between that and her employer's actions.

According to the Equal Employment Opportunity Commission, the number of association discrimination filings reached a record of 253 last year, up from 194 the year before. So, it seems the word is getting out.




HSA Contribution Caps, Deductibles to Rise in 2009

HSA Contribution Caps

The maximum contributions that can be made to health savings accounts will increase next year, according to the Internal Revenue Service.

In addition, the minimum deductible imposed on health insurance plans linked to HSAs and the maximum out-of-pocket expenses that employees can be required to pay also will rise, the IRS said.

In 2009, the maximum contribution that can be made to an HSA for employees with single coverage will be $3,000—up from $2,900 in 2008—while the maximum contribution for those with family coverage will rise to $5,950 from $5,800.

In addition, the maximum out-of-pocket expense—including deductibles—that employees with single coverage can be required to pay will rise to $5,800, up from $5,600 in 2008. For those with family coverage, the maximum will rise to $11,600 from $11,200.

The minimum deductible of the health plan to which HSAs must be linked will increase to $1,150 next year for employees with single coverage, up from $1,100; the minimum deductible for those with family coverage will increase to $2,300 from $2,200.

The new limits reflect increases in the cost of living, according to the IRS.




Workplace Poster Requirements

Every employer must have the most up-to-date minimum wage and other posters showing. And when the government officials audit your office to ensure you are complying with the law, they usually head straight for your posters. It's a quick and easy way for them to size up your compliance (and often, to levy a quick and easy fine).

Job Safety

Posting compliance bulletins is also necessary to defend lawsuits. Being able to show that appropriate posters were displayed is essential to defending lawsuits. (Opposing lawyer: "You didn't even care enough about EEO to put up the poster?")

Here's a rundown of the most important federal requirements. Note that many states have their own poster mandates, so always check state law, too:

Fair Labor Standards Act (FLSA)
Employers must display a notice with information for employees on the minimum wage (that's the change that kicks in soon), overtime pay, child labor laws, enforcement of the FLSA, and contact information for the U.S. Department of Labor (DOL). It needs to be up to date, too, especially now that the minimum is going up automatically every 6 months.

Job Safety and Health
Employers engaged in interstate commerce and subject to the requirements of OSHA (and that's pretty nearly everyone) must display a copy of the poster "Job Safety and Health—It's the Law." This poster notifies employees that they are entitled to a workplace free from recognized hazards and explains how to report workplace hazards.

Family and Medical Leave Act (FMLA)
Employers with 50 or more workers must display a notice explaining an employee's rights and responsibilities under the FMLA, including eligibility for leave, notice requirements, job protection, health benefit continuation, and contact information for DOL.

Consolidated Equal Employment Opportunity
All employers covered by the federal nondiscrimination and equal employment opportunity (EEO) laws, including Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Americans with Disabilities Act, the Equal Pay Act, and laws protecting veterans from discrimination, must display this poster.

Employee Polygraph Protection Act
All employers engaged in interstate commerce (which is defined broadly to include virtually all private employers) must display this poster.

Uniformed Services Employment and Reemployment Rights Act (USERRA)
Employers must display the revised USERRA poster titled "Your Rights Under USERRA" that explains the rights, benefits, and obligations of employees covered under USERRA. (There are separate posters for federal and nonfederal employers). With two wars on and veterans returning, this one's especially important these days.

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In This Edition...

Article It's Your Business
IRS Optional
Standard Mileage
Rate on the Rise

Article From the Top
Monster Publishes
Hiring Secrets in Finding Keepers
Guide

Article Ask the Experts
Employers May
Deduct Exempt Employees'
Sick Time in Increments

Article Employers May
Not Restrict Healthcare
Eligibility

ArticlePeople Management
Top 10 Signs of a Dysfunctional Workplace

Article Reasons to Stay
on the Job

ArticleOffice Space
Employers and Employees See
the Same Health
Care Road
Differently

ArticleRules and Regulations
Two Pending
Lawsuits Test Disabilities Act

Article HSA Contribution
Caps, Deductibles
to Rise in 2009

Article Workplace Poster Requirements

ArticleResource Corner
Links to Important
Resources

 

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Office Space

Employers and Employees See the Same Health Care Road Differently

One in 10 middle-age or older Americans borrow money for everyday living expenses, according to an AARP survey of 1,000 adults age 45 and older. Nearly 4 in 10 adults said they had helped a child pay bills. Among retirees, one-third said they had helped a child pay bills. One-third of those polled said they had stopped putting into their retirement accounts to meet current expenses.

Source: AARP

 
Resource Corner

Easy-reference to Web resources about human resource policies and rules

Business Essentials

ERISA

Monster.com

HRWorld.com

Salary.com

Americans with
Disabilities Act

Equal Employment Opportunity Commission

Health Savings Accounts

Internal Revenue Service

FLSA

U.S. Department of Labor (DOL)

OSHA

FMLA

Equal Employment Opportunity Laws

USERRA Poster

AARP