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February 2009

Feb 01
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NLRB GUIDELINES ON WITHDRAWING RECOGNITION BASED ON LOSS OF MAJORITY SUPPORT

By Your Employee Matters

The General Counsel of the National Labor Relations Board (NLRB) has issued an updated guideline memorandum addressing when an employer may legally withdraw recognition from an incumbent union.

Background: In 2001, the NLRB issued its opinion in Levitz Furniture Co. of the Pacific, holding that an employer may withdraw recognition from a union where it can prove that the union has lost majority support from the employees in the bargaining unit. The NLRB General Counsel then issued a guidance memorandum on the processing of unfair labor practice (ULP) charges, alleging that the employer withdrew recognition unlawfully. After Levitz and the original General Counsel memorandum, other cases have explored the standard of proof that employers must meet in order to establish a loss of majority support. The newly issued General Counsel’s memorandum standardizes the approach set forth in these cases.

The General Counsel’s Guidelines: The General Counsel first confirmed its longstanding policy that ULP charges will be dismissed “when the General Counsel has sufficient objective evidence that the Union has lost majority support.” It went on to state that “objective evidence sufficient to demonstrate actual loss must be specific enough to show that a numerical majority of the unit no longer supports the union.” Examples of such objective evidence include a petition, a poll, or individual statements from unit employees; however, the General Counsel cautions that what constitutes sufficient evidence depends on the circumstances of the particular case. The General Counsel acknowledged that under certain circumstances, hearsay (i.e. not firsthand) evidence regarding the loss of support may be sufficient. Regional Offices are also directed to consider any allegations that the loss of support is tainted by improper employer conduct or whether there is countervailing evidence showing a continuation of majority support for the union.

The General Counsel noted that the wording of employee petitions is important. An employee petition entitled “showing of interest for decertification” was insufficient to establish actual loss of majority status, where evidence showed that many employees signed the petition in order to secure an election. On the other hand, a petition entitled “we, the undersigned, no longer wish to be represented by the union” was sufficient to establish loss of majority support.

Lessons Learned. To ensure that withdrawal of union recognition is deemed valid, employers should rely only on specific, numerically based evidence, such as petitions, polls, or individual written statements from employees. The employer should also confirm that the language contained or involved in such documents clearly sets forth the lack of support for the union.

Courtesy Worklaw® attorneys Shawe and Rosenthal

Feb 01
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PERSONAL USE OF EMPLOYER- PROVIDED VEHICLES

By Your Employee Matters

The use of a company owned or leased vehicle, like most employee fringe benefit, is generally taxable unless specifically excluded by law. Taxable fringe benefits are subject to employment taxes and must be included in the employee’s Form W-2, Wage and Tax Statement. There are special rules to withhold, deposit and report the employment taxes on these benefits.

If you provide a vehicle for an employee’s use, the amount excludable as a working condition fringe is the amount that would be allowable as a deductible business expense if the employee paid for its use. To qualify as an excludable working condition fringe, employees must substantiate their business use through adequate documentation

The general way to determine the value of a fringe benefit is to measure its fair market value: The price an employee would incur to buy or lease the benefit in an arm’s-length transaction. To determine the value of an employer-provided vehicle, you can use one of three valuation rules:

  1. The Vehicle Cents-Per-Miles Rule. Multiply the miles the employee drove for personal use by the standard rate.
  2. The Commuting Valuation Rule. Multiply the number of times the employee used the vehicle for commuting times $1.50 if the employer meets all the requirements for using this method.
  3. The Automobile Lease Value Rule. Use the annual lease value to determine the value of the employee’s personal use of the vehicle.

There are specific requirements that must be met to use these special valuation rules. For example, to use the commuting valuation rule, you must provide the employee with a vehicle for commuting for bona fide non-compensatory business reasons.

For information on the taxation of automobiles, the automobile valuation rules, and the treatment of fringe benefits, go to Publication 15-B, Employer’s
Tax Guide to Fringe Benefits.

Feb 01
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EMPLOYEE PERFORMANCE CHECKLIST

By Your Employee Matters
  1. Do you have well defined job descriptions? If not, please go to http://online.onetcenter. org.
  2. Do your employees know what you consider to be the most important parts of their job? Or, are you assuming they know?
  3. How would they know if they were performing these functions per requirement without having to ask you or having to be told?
  4. Will they be/are employees capable of accepting responsibility for their performance?
  5. Do they have enough self-confidence based on skills and desire?
  6. Are they team players?
  7. Do they have a 90-day plan with specific goals to accomplish?
  8. Do they have a daily checklist?
  9. How are they monitored and held accountable?
  10. Are there any obstacles that might hinder their performance?
  11. Do you, and they, deal with problems in a constructive way?
  12. Do you spend as much time praising their accomplishments as you do giving criticism?
Feb 01
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SHOULD YOU OUTSOURCE HR?

By Your Employee Matters

A Society for Human Resource Management (SHRM) survey on the HR outsourcing efforts of 891 organizations came up with these findings:

  1. Nearly half of respondents (49%) felt that HR saved money for their business, while 28% felt it cost them money, and only 3% said costs remained about the same.
  2. The vast majority (85%) were “satisfied” or “very satisfied” with their HR services.
  3. Only 10% reported dissatisfaction with their vendor relationships.

In a separate SHRM survey, the most commonly outsourced aspect of HR was employee assistance and counseling (62%), followed by flexible spending account administration (60%), background and criminal background checks (52%), COBRA (45%), pension benefits administration (33%), retirement benefits administration (31%), retirement planning (28%), health care benefits administration (27%), temporary staffing (25%), wellness programs (22%), and risk management and Workers Compensation (21%). Many companies outsourced these functions partially and very few of them did it completely in-house.

When you think about it, those HR functions peripheral to a company’s core competencies should be outsourced. Dr. Deming preached that administrative duties should either be delegated or outsourced. Of course, the two most significant areas involve people’s health or money — not a core competency of any company. When it comes to functions such as training, performance management, payroll administration, compensation, and so on, most companies keep these activities in house.

More than four in five (82%) of the companies that use the HR That Works program stated that they would use it more if they had more time. One way to get this time is to outsource low-common-denominator administrative duties such as those just mentioned. If you’re involved in HR and running payroll reports takes up a third of your time while you have no time for strategic activities, it would make sense to outsource the payroll function.

Feb 01
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EDITOR’S COLUMN: THE GREAT DIVIDE

By Your Employee Matters

One of the great struggles we face in a capitalist society is that between employees and owners. I am well aware of it even in my small business. Perhaps the greatest distinction is the level of responsibility that each is party willing to accept. Of course, when those responsibilities aren’t handled properly, they become risks. For the business owner, the greatest risk of all is not taking one.

Dan Kennedy says there’s only one reason to become an owner — and that’s to become rich. Otherwise you might as well be an employee. In all of the surveys I’ve seen about employees, their main concern is getting paid. The difference is their financial motivation diminishes considerably once they get paid a “fair day’s wage.” Therein lies the major distinction. Owners want a “fat” paycheck, while employees want a fair one. As a result, owners are willing to take on more risk and more responsibility than employees.

When it comes to many executives at public corporations, the story gets skewered a bit since the true owners are the shareholders. These business tycoons forgot the rule that you can’t get rich without adding value (a principle that every private entrepreneur knows firsthand). In a sense, those on Wall St. were allowed to get “rich” the wrong way. That’s not capitalism, that’s stealing.

Now that fear is back big time, we’ll see how different folks cope. Most owners will probably start tightening the belt of control. Any room for sloppiness or delay will be eliminated. They’ll look at every employee and ask a very simple question: Does this person make me money or not; and, is that money worth any drama they cause me? What employees need now is brutal honesty. A savvy owner will open up the books and let them know exactly what the story is. Good employees will find comfort in knowing that the poor ones are about to be shipped out —finally. At the same time, employees should be concerned. If they’re not working hard, helping to create a profit, they too can expect to find themselves unemployed.

The omnipresent “all employees are victims and all employers are villains” mentality subtly present in our workplace needs to be acknowledged and put to rest if we are to move forward and climb out of the hole we’ve dug. The fact is, most people on both sides share a common interest — financial security. Economic woes on this scale have a way of weeding out companies and people who can’t get their act together. Those driven by excellence, without destructive drama, enjoy a great opportunity to dominate their marketplace or workplace in a way that allows them to survive. Then, when the eventual turnaround does occur, you can watch your business or career explode.

Feb 01
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TAKE STEPS TO REIN IN THE COST OF PRESCRIPTIONS

By Life and Health

As prescription co-payments for health plans continue to increase, and plan formularies continue to limit what medicines are covered, more and more people are finding themselves with tough decisions about how to pay for prescriptions. Even though Medicare Part D has offered some help, many seniors constantly struggle to pay for medications, especially those that are necessary to treat a chronic illness.

If you are one of these people who are dealing with the high cost of prescription drugs, there are steps you can take to keep costs in check:

  • Look at your policy provisions: Your coverage might have lower co-pays for generic drugs. Your insurer might also offer a mail order option that lets you get a three-month supply of prescriptions used to treat chronic conditions either at a discount, or with a lower co-pay. Also check the terms of your policy to see if your insurer caps how much it will pay out annually for prescriptions, or if it only pays for drugs on its formulary, which is its approved list of medications.
  • Ask your doctor if there is another alternative: Your doctor might be able to prescribe an over-the-counter medication that will cost less and be just as effective as the high priced prescription in treating your symptoms.

If a prescription is necessary, find out first if there is a generic version. Many older drugs have generic equivalents. However, if your physician is prescribing a new brand name drug, there might not be a generic available.

In that case, ask your doctor if “pill splitting” is an option to keep costs down. Your physician might be able to prescribe a larger dosage pill that you can slice using an inexpensive splitter. This isn’t always possible; however, and only your doctor can determine if your medication will still work effectively if you pill split.

  • Ask for samples: Pharmaceutical companies provide doctors with free drug samples to encourage them to prescribe a particular drug. Your doctor might be able to give you enough of these samples to supplement your prescription, helping to reduce costs.
  • Check the price of your prescription at several pharmacies: Use the Internet and your phone to comparison shop how much your prescription will cost before you have it filled. Even the price of generic drugs can differ dramatically from pharmacy to pharmacy.
  • Visit drug manufacturers’ Web sites: Many of the large pharmaceutical companies post downloadable coupons for their most popular drugs.
  • Take advantage of your company’s flexible spending plan (FSA): These are employer-sponsored plans that allow you to save pretax money to pay for out-of-pocket medical expenses. In addition to prescription medications, FSAs also permit you to use the funds for some over-the-counter drugs.
  • Sign up for discount prescription cards: If you don’t have coverage, try applying for a drug discount card to get reduced prices on medicines. Some cards are free; others have small monthly or annual fees.
  • Sign up for prescription assistance programs sponsored by drug companies: Many pharmaceutical companies have started sponsoring assistance programs for people who can’t afford to buy the drugs that they need for chronic illnesses. Details can be found on their Web sites.
Feb 01
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KNOW THE FACTS REGARDING DISABILITY INSURANCE

By Life and Health

Everyone has their reasons for not buying Disability Income (DI) insurance. Below are five of the most common. But do you know the facts?

Reason 1: I can always get coverage in the future.

Fact: True, but people usually develop health problems as they grow older, and premiums increase with age.

Reason 2: My family and friends will support me. Or I will pay my bills with savings.

Fact: Although your family and friends would love to help you, are they in a financial position to do so? And do you really want to be a burden on someone else? And, unless you’re independently wealthy your savings probably will not last long. Just one year of disability could easily wipe out several years of hard-earned savings.

Reason 3: I have Group Disability coverage through my job.

Fact: Even if your employer is among the few that’s not cutting back on benefits, Group Disability insurance typically covers just 60% of gross income, and benefits are usually fully taxable. Can you afford more than a 40% pay cut? Also, what happens if you change jobs?

Reason 4: I cannot afford it. I’ll purchase a policy later when I have the money.

Fact: The average premium is typically only 1% to 3% of your gross earnings. Plus, the longer you wait, the higher your premiums will be. If you cannot afford 1% to 3% of earnings, how will you afford to pay your bills in the event of a disability?

Reason 5: It’ll never happen to me.

Fact: If you’re under age 35, chances are one in three that you will be disabled for at least six months during the course of your career.1 Also, consider that more and more people are living with disabilities today that would’ve killed them in years past.

Your ability to work and earn an income is by far your largest asset. Consider the benefits of a disability income policy to help protect your earned income should a sickness or injury force you out of work.

1 1985 Commissioners’ Individual Disability A Table, Society of Actuaries

Feb 01
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CONSIDER OBJECTIVES AND CHOICES WHEN CONSIDERING TERM LIFE

By Life and Health

If you’re shopping around for Life insurance, you might find the process to be confusing and frustrating. You’re not alone — Life insurance can be an extremely complex product, one that confounds consumers across the nation. However, many families discover that Term Life insurance is a relatively simple policy that fulfills all of their insurance needs.

Term Life provides protection for a specified number of years, ranging anywhere from one to 30 years. If the policy holder dies sometime within the term, their family receives a death benefit. These policies are less expensive because they are designed solely for protection. Many people choose Term insurance because they figure the need for Life insurance will decrease as they get older. Term insurance is also good option for those who want to protect their children until a certain age.

Although this might seem fairly simple, there’s a lot more to Term Life insurance. Here are five things you should keep in mind as you shop around for a Term Life policy:

    1. Figure out your objective
      Before you start shopping around for a Term Life policy, or any Life insurance for that matter, it’s important to ask yourself what you’re trying to accomplish. Depending on your goals, Term insurance might or might not be right for you. Most people who buy Term insurance outlive the policy’s term — which means they never receive the payout. However, if you’re just looking to protect your family and ensure your debts are paid off should you die within the next few years, a Term insurance might be the perfect solution.
    2. Understand Group vs. Individual
      There are two different types of Term Life insurance policies: Group and Individual. Group Term Life is offered by most companies as an employee benefit. Typically, all you have to do to apply is complete a short health history questionnaire. Unlike individual plans, most group plans don’t require a physical exam. If you qualify, the premiums are automatically deducted from your paycheck each month. With Individual Life policies, you apply for coverage on your own, and you are the owner of the policy. Typically, you have to undergo a medical exam and provide a detailed medical history to apply for an individual policy. You might also have to sign an agreement that gives the insurer permission to examine your medical records and perform a background check on you.

      Although the process of obtaining an Individual Life policy might seem more complicated and somewhat invasive, these policies offer a lot of advantages over group policies. For one, an individual policy is yours to keep. If you lose your job or decide to switch employers, you don’t have to worry about losing your Life insurance protection. Additionally, Individual policies usually offer what’s called “level premiums.” This means your premiums will not increase throughout the duration of your policy (which is usually 10, 20 or 30 years). Whereas, rates on Group policies usually increase every five years. Individual policies are also much more flexible than Group policies. For example, if you decide to upgrade your policy or switch to permanent policy, you’ll have more options available to you if you own an Individual policy.

    3. Devise an end-of-term plan
      As your policy nears the end of the term, you have a few different options, including the following:

      • Let the coverage expire: If you feel that Life insurance is no longer necessary — because your children are grown and/or your debts are paid off — then you might just want to let your policy expire.
      • Keep the policy: If you still want coverage, you might consider keeping your policy — but it’s important to realize that your premiums might jump significantly if you extend the term. However, this might be your only choice if you still want coverage but know you can’t qualify for a new policy due to health problems.
      • Get a new policy: If you are still healthy, you might decide to apply for a new policy to avoid an increase in premiums on your existing policy.
      • Upgrade: If your Term policy includes a “conversion privilege,” you can upgrade it to a permanent policy.

 

  1. Know how to upgrade
    If you choose to upgrade your Term Life policy to a permanent policy, you’ll have to read the fine print on your term contract. If your policy includes a conversion privilege, it might contain a time limitation. For example, once you reach age 70, some policies might not allow you to convert to a permanent policy. However, other plans allow you convert any time during the term of the policy.You should also find out what kind of policy to which you can convert. Although some Term policies allow you to convert to any kind of permanent policy (including Whole Life, Universal Life or Variable Universal Life) others might force you to convert to one specific type of policy. Finding the ideal Life insurance policy can be a daunting task. However, as long as you keep these tips in mind, and consult with one of our Life insurance specialists, you should be able to locate the best policy that will give you and your family peace of mind.
Feb 01
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PROTECT VALUABLE JEWELRY WITH THE PROPER INSURANCE

By Personal Perspective

From glittering bracelets and watches to sparkling rings and necklaces, jewelry can be found in almost every home. Unfortunately, these trinkets and charms are not always properly protected. If you own expensive or extremely valuable jewelry, it’s important to make sure you have the appropriate insurance.

Understanding the “sublimit”

You might assume your valuable jewelry is fully covered by your Homeowners insurance. Although most policies do cover jewelry, the payout is oftentimes much lower than the actual value of your bling.

Why wouldn’t your insurance pay the full value of your jewelry if it’s stolen from your home? It all comes down to what’s called the “sublimit” — this is the limit on the amount the insurance company will pay for specific types of personal property. Although your policy’s total personal property limit might be $75,000, the sublimit for jewelry might be as low as $1,500.

Read the fine print in your contract and find your policy’s sublimit for jewelry. If your jewels are worth more than the sublimit, you might want to purchase additional insurance.

Five steps to jewelry protection

If you decide to purchase additional insurance to fully protect your jewelry, follow these five simple steps:

  1. Get it appraised: If your jewelry has not been appraised within the last three years, take it to a jeweler for an appraisal. Be sure to choose a trustworthy jeweler who is a graduate of the Gemological Institute of America (GIA). (Most insurance companies require that higher-end jewelry is appraised by a graduate of the GIA.) Look for the designations G.G., G.J. or A.J.P. at the end of the jeweler’s name to ensure they are well-educated and reputable.
  2. Look for the four C’s: If you are getting a diamond appraised, the appraisal should include a description of the four C’s: Carat, cut, clarity and color. These four details allow the jeweler to make an accurate appraisal, which will be very important should you ever need to file a claim with your insurer.
  3. Consider Inland Marine coverage: You can either purchase this type of insurance coverage as a separate policy or you can have it added onto your Homeowners policy as Supplemental Jewelry coverage. Inland Marine coverage offers much more coverage for jewelry than just your Homeowners policy alone.
  4. Keep jewelry locked away: Be sure to keep your valuable jewelry protected in a lock box at home. If you own jewelry that you rarely wear (such as family heirlooms), you might consider locking it up in a safety deposit box.
  5. Review coverage regularly: Look over your jewelry coverage at least once every two years to make sure it is up to date. Also, if you sell any jewelry or purchase new high-value pieces, it’s important to update your policy as soon as possible.

Whether your jewelry box is spilling over with brand new jewels or you own one or two family heirlooms that are absolutely irreplaceable, it’s important to protect these valuables. To learn more about jewelry coverage options, talk with one of our insurance specialists.

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