How to Make A Donation Following the Earthquake and Tsunami in Japan

The earthquake and tsunami that struck Japan on March 11th killed thousands of people and left many more injured, homeless and facing a difficult and uncertain future. Many families here in the U.S. are dealing with shock, grief and uncertainty as they receive sad news or wait to hear news of family and loved ones.

If you’re wondering how to support friends, co-workers or members of your community who were directly affected by this tragedy or wondering what you can do to help survivors, please click here to learn how you can safely make a financial contribution online or by telephone or mail. Alcott HR Group’s thoughts and prayers are with the people of Japan.

INTERNS: To Pay or Not to Pay

As we move into the spring and summer months, many employers begin the process of hiring summer interns. Internships benefit the employer as well as the intern and therefore it is an attractive option. However, if the employer does not exercise caution in the way the internship is structured, potential wage and hour and other employee liability may exist.

It is important to note that simply labeling someone an “intern” will not make it “ok” to allow them to work for no pay. There are well-established criteria on the federal and state levels to determine if an intern can provide services to an employer for no pay. The United States Department of Labor (“USDOL”) has issued fact sheets to assist employers in making sure that interns are treated properly with regard to minimum wage and overtime if they do, in fact, qualify as employees under the Fair Labor Standards Act (“FLSA”). The USDOL has opined that in “for-profit” companies, internships will most likely be considered employment and therefore require that the intern be paid in accordance with the FLSA (i.e., minimum wage and overtime). This is because in order to be a “volunteer” under the FLSA and work for no pay, the individual must be providing services to a public agency for civic, charitable or humanitarian reasons without the promise or expectation of compensation. There is, however, a narrow exception to this if the intern is considered a “trainee.” There are six criteria identified by the USDOL to determine if an intern qualifies as a trainee. They are:

1. The internship/training is similar training that would be given in an educational environment/vocational school even though it includes working in the actual environment (i.e., the internship is structured around an academic experience where the student receives educational credits);
2. The internship is for the benefit of the intern and not to the employer;
3. The intern does not displace regular employees of the employer, and works under close supervision;
4. The employer derives no immediate advantage from the activities of the intern, and on occasion the employer’s operations may actually be impeded;
5. The interns are not necessarily entitled to a job at the end of the internship; and
6. The employer and the intern each understand that the intern is not entitled to wages for the time spent interning (but may receive a nominal stipend)

It is necessary for employers to be aware that if the intern is actually producing work for the employer that an employee would be producing, the USDOL is more likely to find an employment relationship rather than the trainee exception because the employer is the one benefitting most from the relationship. The more it is truly an overall educational experience where the intern is gaining skills usable in any employment situation, the more likely it will be that no “employment” relationship exists for purposes of wage and hour laws.

State laws vary on the wage and hour treatment of interns. Employers in New York also have to take into consideration the views of the New York State Department of Labor (“NYSDOL”) which are much more restrictive on non-paid internships than those of the USDOL. In New York, if interns are not receiving academic credit for the time spent interning for the employer, then they must be paid at least minimum wage. As such, if the intern is receiving two academic credits for working eight hours per week, then the intern must be paid at least minimum wage for all hours over eight worked in a workweek.

Federal and New York state laws also require paid interns to be paid overtime for hours worked over forty (without credit in New York) in a workweek.

Additionally, both federal and state child labor laws must be considered by the employer when employing interns under the age of eighteen. These young people are prohibited altogether from working in certain hazardous industries. In New York, sixteen and seventeen year olds are restricted in the number of hours they may work per day and per week, and in the times of day they are permitted to work which vary and depend on whether school is or is not in session.

Besides wage and hour issues, employing interns has other implications for employers. Workers compensation coverage, I-9 forms, employment taxes, benefits, unemployment insurance and discrimination laws are all implicated if an intern is actually an employee so misclassification can be particularly risky. And, even if an intern is not an employee but rather correctly classified as an intern, her internship with the employer must be reported to the workers’ compensation carrier to insure coverage if a workplace injury were to occur.

If you are contemplating employing interns, whether during the summer or any other time of the year, you should first consult with your trusted advisor(s) prior to their hire so that they may assist in determining whether the intern should be classified as an employee. When working with Alcott HR Group, our clients can relax knowing that our dedicated HR staff is trained and up-to-date in dealing with newly enacted federal and state legislation.

6 Ways HR Outsourcing Responds to Small and Middle Market Business Needs

Small and middle market businesses across diverse industries are turning to Human Resources (HR) outsourcing to help address their challenges. Here is our list of the top 6 benefits businesses receive by outsourcing their HR.

1. The ability to offer a wider selection of employee benefits (i.e., medical insurance, dental and vision coverage, flexible spending accounts, health reimbursement accounts, health savings accounts, and various other insurance plans) which enable employees to select the benefits that best meet their needs.
2. The ability to benefit from their HR outsourcing resources’ greater economies of scale when it comes to their employee benefits.
3. The ability to better recruit and retain employees as a result of their improved benefit packages.
4. The ability to improve employer-employee relations through the provision of other valuable employee services and “perks” such as: Employee Assistance Programs (EAPs), college tuition savings and scholarships, adoption assistance, wellness programs, and shopping, travel and entertainment discounts.
5. The implementation of sound risk management and regulatory compliance.
6. Peace of mind in knowing that the complex area of employee services from payroll preparation and reporting to tax filings, to benefits administration and employment law compliance are all being properly handled by experienced HR professionals.

As more businesses across diverse industries gravitate toward an HR outsourcing relationship, the Professional Employer Organization (PEO) industry of which Alcott HR Group is a member continues to grow. There are currently an estimated 700 PEOs in the United States, serving approximately three million American workers and generate approximately $51 billion in annual gross revenues.

The Science Behind Employment Drug Testing

Today, employment drug testing is considered to be a “best practice” and should be a “condition of employment” which businesses of all sizes and industries should employ. Drug testing falls into many categories, however, the basic drug test utilized within most corporate drug testing programs looks to detect the following five categories of substances:

• Cannabinoids, which include marijuana and hashish

• Cocaine, including crack and benzoylecognine

• Opiates such as heroin, opium, codeine and morphine

• Amphetamines, including methamphetamines and speed

• Phencyclidine, including PCP and Angel Dust

More sophisticated or “10 Drug” testing programs will also test for:

• Barbituates

• Methaqualone (qualuudes)

• Benzodiazepines (i.e., various tranquilizers)

• Methadone

• Propoxyphene (i.e., Darvon compounds)

There are also employers who test for alcohol, LSD, hallucinogens and inhalants.

What is particularly important for organizations using drug testing is to understand the potential for false positive readings based on an applicant’s use of legally prescribed medications and/or over-the-counter drugs such as Ibuprofen, Midol, Nuprin, Sudafed, Vicks Nasal Spray, Vicks 44, Neosynephren and Ephedra diet products. With this in mind, one of the most important questions to ask applicants when drug testing is, What medications you are presently taking or have taken in the last 30 days?, as many drugs to remain in the system beyond the day they were taken. How long any drug remains in the system is a function of the drug, as well as the individual’s size, metabolism and body chemistry. For example, amphetamines typically remain 2-3 days, barbiturates remain 1 day to 3 weeks, anabolic steroids remain for 14-30 days and valium may stay in the system for as long as 30 days.

Drug tests come in two forms: urine sample tests or oral fluid tests. By and large, most small- to medium-sized employers and a good majority of large employers elect to outsource drug testing to a third-party administrator or their Professional Employer Organization (PEO). These organizations have relationships with recognized laboratories and have in place pre-employment drug testing programs, which also encompass policies and procedures for handling applicants with positive or abnormal test results. Further, because of the large volume of testing they manage, they can pass on scales of economy to their clients who, handling drug testing on their own, would incur higher costs. In these instances, the results will be subject to further evaluation by a Medical Review Officer who will provide the final results and analysis.

It should be noted that there are do-it-yourself drug testing kits on the market and while they may seem like a good idea for the average scenario, they can present challenges when false positive results emerge. Then, the employer must still seek out a laboratory to analyze and confirm the actual outcome prior to making any judgment or hiring decision regarding the prospective employee.

Business Warning of Heightened Government Focus on Misclassification of Independent Contractors

Alcott HR Group, a leading Professional Employer Organization and provider of Human Resources (HR) solutions, is advising businesses to take note of the increased attention misclassification of workers is receiving from both the federal and state governments. According to Alcott Executive Vice President Barry Shorten, on June 17, 2010, the Senate Committee on Health, Education, Labor and Pensions recently conducted a hearing on the “Employee Misclassification Prevention Act,” introduced in the U.S. Senate (S.3242) and the House of Representatives (H.R. 5107) on April 22, 2010.“If passed, the Act would amend the Fair Labor Standards Act to increase record keeping requirements and penalties for employers for misclassifying employees,” said Shorten. “The proposed legislation would require that employers maintain records of the hours worked by non-employee workers and the wages paid to them. Clearly, the message from the government is that it is taking the problem of worker misclassification very seriously.”

In addition to the recordkeeping, the proposed law would also require employers to provide workers with a “notice” which identifies a worker’s classification and states “Your rights to wage, hour, and other labor protections depend upon your proper classification as an employee or non-employee. If you have any questions or concerns about how you have been classified or suspect that you may have been misclassified, contact the U.S. Department of Labor.” Along with these statements, the notice would be required to include: 1) a Department of Labor website, which has not yet been developed and which would contain a link for online complaints; 2) a Department of Labor contact; and 3) and other pertinent information for workers.

The legislation also directs the DOL to perform targeted audits focusing on employers in industries that frequently misclassify employees and increases penalties on employers for failure to pay minimum wage and overtime ranging from $1,100 per employee for first time violators up to $5,000 per employee for repeat or willful violators. It further allows for double liquidated damages for employers that fail to accurately classify an individual as an employee and violate the minimum wage or overtime provisions of FLSA. According to estimates, the U.S. Treasury Department is expected to lose over $7 billion in payroll tax revenues over the next decade because of employers’ misclassification of employees as independent contractors. Working jointly, the Department of Labor and the Treasury Department developed a $25 million initiative giving each department greater abilities to penalize employers who misclassify workers. Under this initiative, 100 new enforcement personnel would be hired by the United States Department of Labor “DOL”) to target worker misclassification and information on violations would be shared by the DOL’s Wage and Hour Division with other DOL divisions, as well as the IRS.

The states would benefit from grants intended to help them address the problem and increase penalties at the state level. Under the legislation the states would also be required to report quarterly to the DOL the results of state auditing and investigative procedures with respect to identifying employers that may have excluded employees from unemployment compensation coverage.