When was the Last Time You Reviewed Your Workers Compensation Policies?

The State of South Carolina requires most employers to carry workers’ compensation insurance. You should read over your policy periodically to make sure you have the coverage that fits your current number of employees and that you are not paying too much for your premiums. If the number of your employees has dropped enough, you might not have to buy workers compensation insurance. The laws may have changed since you last read your policy. Now is a good time to talk with your South Carolina labor and employment lawyer about all of your company policies.

Employers Required to Provide Workers’ Compensation Insurance

The general rule is that every employer who regularly has four or more employees, whether part-time or full-time, must carry workers’ compensation insurance. Like most rules, there are exceptions to this rule. These employers are exempt from the requirement to maintain workers’ compensation insurance:

  • Employers with a total annual payroll of less than $3,000 in the previous year, no matter how many people they employed
  • Railroads
  • Railway express companies and their employees
  • Agricultural employees
  • Textile hall corporations
  • Some real estate agents paid by commission

 Your Rights to Opt In or Opt Out

Although you have the right in South Carolina to purchase workers’ compensation insurance even if the law does not require you to, you are not allowed to opt out of coverage if you fall within a category of employers who are required to provide the coverage. Sole proprietors and partners can elect coverage under their workers’ compensation, but they must be active in the business and notify their insurance carriers. They are not automatically covered unless they take those steps.

You Might Be Paying Too Much for Your Premiums

If anything has changed over time at your company, your workers’ compensation premiums might be due for a reduction. These are situations that can affect the amount of your premiums:

  • The number of employees – if you now employ fewer people than before, your premiums should go down.
  • The total wages – if higher-paid employees have retired or left and you replaced them with lower-paid employees, your premiums should be lower.
  • The type of jobs your employees perform – if you have stopped performing some higher-risk jobs, this can affect your premiums.
  • The employer’s history of accidents and claims – with the passage of time, the increased premiums you may have paid after an accident or claims should decrease.
  • The insurance company – the state of South Carolina does not set the rate for workers’ compensation premiums. It might be worth your while to shop around to see if you can get a better rate from a different company.

Self-Insuring for Workers’ Compensation Might Be Less Expensive

South Carolina allows employers to self-insure, and hundreds of employers choose this option. You can self-insure as an individual company or as part of a group pool or fund. You must meet the financial and other state requirements, and get approval from the South Carolina Workers’ Compensation Commission. You will have to carry reinsurance and a surety bond or letter of credit. Although you will have to jump through a few hoops, you might save money by self-insuring.
If you do not have expertise in workers’ compensation issues, you could make a costly mistake. For guidance, contact Willcox, Buyck & Williams, P.A. today for a consultation.

Are Your Benefits Plans Putting You at Risk?

If you’re an employer, just the word “ERISA” might give you chills.  While the Employee Retirement Income Security Act, or ERISA, serves an important function, for employers it can represent the worst of the federal government: a vast and complicated set of requirements that can come with civil or even criminal penalties for violations. Now is the time of year when it makes sense to have an employment law lawyer review your benefits packages to make sure you are in compliance. In the meantime review your benefits plans to ensure they comply with ERISA by looking at these four critical areas:

  1. Disclosures
  2. ERISA’s first major requirement for benefits plans concerns making sure employees have access to complete, accurate information about the products that are being offered.  ERISA specifically requires employees be given a “summary plan description” that contains the basic information about the plan and is explicitly required to be “written in a manner calculated to be understood by the average plan participant.”  The summary plan description must contain information such as the requirements for eligibility, circumstances that could lead to ineligibility or denial of benefits, procedures for filing claims or challenging denials, and other pertinent details.

  3. Reporting
  4. ERISA also requires reports to be filed with the federal government providing information about the benefits plans being offered and provided.  Perhaps chief among them is the “Form 5500,” which is an annual report filed primarily for tax purposes; however, plans with fewer than 100 participants are generally exempt from this requirement.  On the other hand, noncompliance with reporting requirements can come with steep penalties, in some cases as much as $1,100 per day.

  5. Conduct and Fiduciary Duties
  6. Like all federal programs, ERISA prohibits discrimination on ground such as race, sex, or nationality in the provision and administration of benefits plans.  ERISA also places fiduciary duties on plan administrators, obligating them to manage plan funds and generally administer the plan in the best interests of the participants.  In addition, ERISA goes beyond assigning administrators a general fiduciary duty to provide a list of prohibited transactions as well as other conduct requirements, and establishes substantial penalties for violating these duties.

  7. Procedural Safeguards
  8. As noted above, ERISA’s required disclosures include claims processes and processes for challenging denials of benefits.  These disclosures must be backed by a written policy that thoroughly details every aspect of how claims are treated.  In addition, ERISA requires that claims and appeals be conducted in a fair and timely manner.

If thinking about ERISA gives you anxiety, the solution lies in the old adage “knowledge is power.”  The federal regulations it creates are undeniably complex, but taking the time to understand their requirements will reduce your business’ risk of liability and potentially improve your sleep.  Our firm has helped hundreds of businesses navigate the benefits plan maze, and our ERISA specialists are available to help you understand your obligations under the law.  If you have questions about ERISA and would like to speak with an attorney, contact Willcox, Buyck & Williams, P.A. today for a consultation.

 

Justice Department Says Rights Law Doesn’t Protect Gays

What Does This Mean For Our Company Employment Policies?

Recently it seems like the legal landscape surrounding issues of “gay rights” is changing every day.  For example, the New York Times recently reported on a brief filed by the Department of Justice that argues federal civil rights laws do not provide any protection against discrimination based upon sexual orientation.  With so many moving parts, it can be easy to get confused about what the law requires of you and your business, and how to make sure you are protected against any claims of illegal discrimination.  When creating and amending policies, it is a good idea to keep your employment law lawyer in the loop.

State vs. Federal Discrimination Laws

When making company policies related to discrimination, it’s important to remember that there are two systems involved—the state and federal governments.  Generally, state governments are free to make any laws they want as long as those laws don’t conflict with the federal government’s laws.  In terms of sexual orientation discrimination, the federal law is currently a bit of a grey area, but so far neither Congress nor the Supreme Court has decided that federal law makes it illegal to discriminate against someone based on his or her sexual orientation.  That leaves each state free to do pretty much whatever they want.  

For example, South Carolina currently has no laws addressing discrimination against someone based on his or her sexual orientation.  North Carolina doesn’t prohibit discrimination by private employers, but does have laws requiring the state government not to discriminate based on sexual orientation when hiring.  And a bit farther north, Maryland has passed laws prohibiting discrimination based on sexual orientation in areas like employment, housing, public accommodations, and credit and lending operations.  

What did the Justice Department actually do?

As noted in the New York Times article, by filing its brief the Justice Department has stepped into the current grey area of federal policy on this issue.  With no clear guidance from Congress or the Supreme Court, federal courts across the country have been coming to different and contradictory conclusions.  For instance, the Seventh Circuit (serving Illinois, Indiana, and Wisconsin) has ruled that discrimination based on sexual orientation is illegal, but the Second Circuit (serving Connecticut, Vermont, and New York) ruled exactly the opposite.  

Now the Justice Department has decided to add its voice to the mix.  In a slightly unusual move, the Justice Department intervened in a private case in a New York federal court.  In that case, the plaintiff is appealing a ruling against him that federal law did not prevent his employer from firing him because he was gay.  The Justice Department filed a brief with the appellate court stating that the official position of the Department of Justice is that the original court was correct, and that federal law does not prevent discrimination based on sexual orientation.

To be clear, the brief does not change the law in any way; it is simply information for the appellate court to consider.  And even with the Justice Department telling the court it doesn’t believe federal law prohibits this discrimination, the court can still decide otherwise…but even if it does, it will only affect the Second Circuit.

Planning for the future

Although right now decisions about sexual orientation discrimination are being left to individual states, there are indications that will change.  Federal law has changed dramatically in recent years.  Although in 1986 the Supreme Court had upheld anti-sodomy laws, it reversed itself in 2003.  In 2015, the Supreme Court ruled that “gay marriage” was to be legal across America.  That same year, the federal Equal Employment Opportunity Commission decided that discrimination based on sexual orientation was illegal in the workplace.

Against that backdrop, the current Department of Justice policy as stated in their brief seems to be going against the tide of history.  Even if the current administration’s policies offer no protection against discrimination to homosexuals, it seems clear that the federal government is on a course to prohibit discrimination based on sexual orientation sometime in the near future, especially with a disagreement among the federal appellate courts.  With that in mind, employers would be wise to begin planning now for any changes that might be required in company policies if federal law changes. 

Our attorneys specialize in helping business owners write strong policies to protect their businesses, so if you have concerns about this issue, contact Willcox, Buyck & Williams, P.A. today for a consultation.

Federal Overtime Laws Have Changed: Is Your Company In Compliance?

In May 2016, the U.S. Department of Labor (DOL) announced final provisions updating the Fair Labor Standards Act (FLSA) rules regarding overtime. The rule has been the subject of a great deal of controversy for its ambitious changes to the thresholds for overtime exempt employees and its automatic readjustment of those thresholds every three years. Your local labor and employment lawyer has the details here.

Key Provisions in the New Overtime Rule

The new overtime rule contains the following specific provisions that affect thousands of employers nationwide:

  • Sets the prevailing salary threshold at the fortieth percentile of earnings for full-time salaried employees. In 2016, this number was $47,476 per year, or $913 per week.

  • Sets the complete annual payment requirement for “highly compensated employees” (HCE) at the ninetieth percentile of full-time salaried employees, or $134,004 in 2016.

  • Creates a mechanism by which these thresholds can be updated automatically every three years.

  • Allows employers to use nondiscretionary bonuses and commissions to meet up to 10 percent of the new standard salary levels.

When implemented, the new rule will require employers to pay overtime to workers who make $47,476 per year or less. Overtime must continue to be paid at a rate of one and a half times the worker’s hourly salary, per DOL guidelines. Workers who make more than this $47,476 threshold may be “exempt” from overtime.

When it was announced, the new rule raised a number of concerns from business owners. Since the previous exemption threshold was much lower, many white-collar workers have long been exempt from overtime rules. The new DOL overtime rules would require companies to pay these workers overtime, to increase their overall pay in order to keep them above the new exemption threshold, or to hire additional staff in order to ensure that all work could be completed during a 40-hour workweek.

How Does This Rule Apply to My Business?

In November 2016, a federal judge in Texas halted the implementation of the new overtime rule after 21 states filed an emergency motion for a preliminary injunction. The states argued that the rule exceeded the authority of the Department of Labor with its ambitious increase in the salary threshold and its automatic adjustments every three years.

Currently, the stay is still in place as the courts hear arguments from the states and from other groups, including the U.S. Chamber of Commerce, against the rule. Until a final decision is reached, businesses are allowed to continue following the old overtime rules. It is wise, however, to plan for a situation in which the new rule goes into effect, so you can ensure your business complies quickly and efficiently with the new rule if it passes the courts.

If you have a wage and hour question that involves federal or state law, it’s wise to speak to an experienced South Carolina employment law attorney. Your lawyer can help you understand how the law applies to your situation and take steps to protect your legal rights or to right a wrong. If you are in need of sound employment law advice, contact Willcox, Buyck & Williams, P.A. today for a consultation.

Should Your Company Be Asking For Wage History Information During The Hiring Process?

Asking a job applicant about their salary history is about as common as asking for their social security number. You want to be able to assess their worth to your company while trying to keep business expenses low. It’s completely understandable. However, this practice has led some to question whether it is perpetuating pay disparities between majority and minority groups throughout the country. The past two years have revealed that states are starting to get serious about equalizing pay amongst men, women, and minorities.

Legislators in many states have taken note and according to South Carolina labor and employment attorneys, it may soon be illegal for employers in all states to ask potential employees about their salary history. Before you hire another employee, talk to a labor and employment lawyer about your hiring policies first.

State Prohibitions on Salary History Information

In 2016, Massachusetts became the first state to pass a law prohibiting employers from asking job applicants about their salary and benefits histories. Early this year, New York joined Massachusetts with a similar law while California amended an existing fair pay law to prohibit employers from inquiring about applicants’ salary histories.

Other states considering similar laws include Illinois, Maryland, Maine, New Jersey, Pennsylvania, Vermont and Rhode Island.

The Big Debate on Salary History – Why States Are Saying No

Proponents of the law prohibiting inquiries into salary history argue that it will reduce the gender-based pay gap in the United States. According to the Institute of Women’s Policy Research, women are paid 80 cents for every dollar earned by men. Contrary to what many believe, it’s not that women do not negotiate for higher pay. They do, almost as often as men.

Sadly, women tend to ask for less and are more likely to be perceived negatively when they negotiate salaries. These contribute to the disparity in gender workforce salaries.

In addition, negotiating salaries doesn’t always lead to equal pay, not when a rift was already existent. Take two people in the same profession with the same level of experience but one is earning 20 percent higher, even if both negotiated their salaries by 10 percent, one will still be earning higher.

For many women and minorities, the rift starts as soon as they land their first job.

A 2013 study by the American Association of University Women revealed that women were paid 6.6 percent less than men in their very first jobs. When employers base future pay of previous salaries, the wage gap widens, following women throughout their careers.

What This Means for South Carolina Employers

Laws prohibiting employers from inquiring about salary histories have not been passed in the state, meaning an employer can still ask for an applicant’s salary history. Applicants, however, are not required to give information on their salary history. An alternative to inquiring about an applicant’s pay history is to include a salary range in the job posting.

With regard to pay, it is generally better for companies to price positions rather than persons. Gender-based pay gaps can be costly. In 2004, plane-manufacturer Boeing was ordered to pay $72.5 million in a pay-discrimination suit to women who were paid less than their male colleagues.

If your hiring policies include asking candidates about their salary history, consult a South Carolina labor and employment attorney to make sure you are operating within the current legal landscape. If you are in need of sound employment law advice, contact Willcox, Buyck & Williams, P.A. today for a consultation.

Preventing Employment Discrimination Claims

Employees can be a company’s most valuable assets, but sometimes, they can be a great liability.  Failing to proactively manage employee issues can cost your company its reputation and its’ operating capital. The best way to proactively address potential employee issues is to talk with an experienced labor and employment lawyer.

What is Employment Discrimination?

According to the laws enforced by the United States Equal Opportunity Commission (EEOC) it is illegal to discriminate against any applicant or employee because of that person’s race, color, religion, sex (including gender identity, sexual orientation, and pregnancy), national origin, age (40+), disability or genetic information. It is also illegal to retaliate against a person because he or she complained about discrimination, filed a charge of discrimination, or participated in an employment discrimination investigation or lawsuit.

Employer Best Practices

The best way to safeguard your business from discrimination claims is to have written procedures in place regarding:

  • Job Advertising and Recruiting
  • Applications and Hiring
  • Pay and Benefits
  • Disciplinary Action, Employee Termination
  • Disability & Religious Practices accommodation
  • Harassment / Constructive Discharge
  • Dress Code

Each one of these areas has the possibility for an allegation of discriminatory practices.  It is recommended that every workplace take a look at their current protocols and practices to ensure that the emphasis of the protocol is on the applicant’s qualifications or performance and not extraneous factors.  Having a system of checks and balances can add to the effectiveness of these protocols.  For instance, if your business does not have a dedicated HR department you may consider training each department head on the protocols in place for your operation or having a committee that handles the above functions based on the established practices set forth.  

Beyond Employee Handbooks

While having written policies and procedures in effect is one part of the equation, it is not enough.  Establishing a culture of inclusion in the workplace can go a long way in avoiding discrimination claims. Additionally, providing open communication channels regarding employee issues and monitoring actual practices will help alert you to any potential issues with employment discrimination.

Ongoing Training

Part of developing a culture of inclusion involves initial and ongoing training and mentoring of employees, including supervisors and managers. This helps to ensure everyone is on the same page and provided with the best opportunities to succeed on the job, regardless of who they are.

Avoiding Harassment

Ensuring that you have a strong anti-harassment policy is another important factor in the culture of inclusion. Make sure that all employees are aware of the zero-tolerance policy. Allow for confidential reporting, neutral investigation and consistent corrective action for all harassment issues.

If you have questions about avoiding employee discrimination claims, contact the labor and employment attorneys at Willcox, Buyck & Williams in Florence at (843)536-8050 or Myrtle Beach at (843)461-3020.

 

A Primer on Employee Handbooks

Does my small business need to have an employee handbook?

Regardless of the size of your business, it is crucial to clearly define your expectations and policies to employees. To achieve this objective, it is essential to have formal rules established in an employee handbook. With a written handbook in place, you can clarify the relationship with your employees so that there is a mutual understanding what you can expect from each other. Moreover, if a dispute arises with an employee, or a claim is made with a government agency, a well designed handbook can also protect you legally.

Let’s take a look at what should be included in an employee handbook.

1. Compensation

First, an employee handbook should specify how employees are paid, whether based on an annual salary, and hourly wage, or commissions. Moreover, employees should be informed when they will be paid – on a weekly or biweekly basis, or in the case of many sales workers, monthly. Your compensation policy should also state how hours worked are recorded (today many employees are required to clock in electronically), how taxes are computed and deducted, and under what circumstances overtime will be paid. It is important to note that employee compensation policies must also adhere to state and federal wage and hour laws.

2. Benefits

It is equally important to provide your employees with information about what benefits are offered, including employer sponsored health insurance, 401(k) retirement plans, bonuses, profit sharing plans, stock options and the like. Your handbook  should also specify how employees can qualify for these benefits.

3. Work Schedules

Information about daily work schedules, such as the company’s hours of operation, attendance, lateness, hours required each day, rest and lunch breaks, whether employees are entitled to paid personal, sick and vacation days, and how that time accrues, whether employees can work flexible schedules or are allowed to telecommute, should also be summarized in your handbook.

4. Employee Conduct and Disciplinary Matters

It is crucial that your guidelines inform your employees on how they are expected to conduct themselves at work. In particular, your handbook should address issues such as employment discrimination and sexual harassment in the workplace. Your must clearly state that there is zero tolerance for discrimination and harassment and that such behavior is grounds for termination. As for other workplace violations, such as excessive tardiness, absenteeism, misuse of company phones, email and other company equipment, your handbook should explain what disciplinary actions will be taken.

5. Safety Concerns

Lastly, a comprehensive employee handbook will also discuss potential safety concerns as they relate to work conditions, employee health issues that may arise, employee disputes, workplace violence, and even inclement weather.

The Bottom Line

Ultimately, how extensive your handbook should be depends on a number of factors, such as the size and structure of your business as well as the industry in which you operate. By engaging the services of an experienced business and employment law attorney, you can design and implement an employee handbook that can create a positive culture and also protect your business.