Unemployment benefits, established in 1935 as part of the Social Security Act, provide a temporary source of income to unemployed individuals. Unemployment benefit is administered by each state and is funded through employer’s taxes. States set the requirements on who is eligible to receive benefit, how long an individual must wait to receive benefits and how much of a benefit is received. They also determine which circumstances disqualify an individual for benefits. When a former employee is disqualified for benefits, the employer is not charged.

 The Fair Labor Standards Act (FLSA) was passed in 1938. The Act establishes standards for minimum wage and overtime pay. For nonagricultural operations, the Act restricts the hours that children under age 16 can work and forbids the employment of children under age 18 in certain jobs deemed too dangerous. For agricultural operations, it prohibits the employment of children under age 16 during school hours and in certain jobs deemed too dangerous. The FLSA affects more than 100 million workers, both full-time and part-time, in the private and public sectors. It applies to enterprises with employees who engage in interstate commerce, produce goods for interstate commerce, or handle, sell, or work on goods or materials that have been moved in or produced for interstate commerce. For most firms, a test of not less than $500,000 in annual dollar volume of business applies (i.e., the Act does not cover enterprises with less than this amount of business).However, the Act does cover the following regardless of their dollar volume of business: hospitals; institutions primarily engaged in the care of the sick, aged, mentally ill, or disabled who reside on the premises; schools for children who are mentally, or physically disabled or gifted; preschools, elementary, and secondary schools and institutions of higher education; and federal, state, and local government agencies. Employees of firms that do not meet the $500,000 annual dollar volume test may be covered in any workweek when they are individually engaged in interstate commerce, the production of goods for interstate commerce, or an activity that is closely related and directly essential to the production of such goods.The Act covers domestic service workers, such as day workers, housekeepers, chauffeurs, cooks, or full-time babysitters, if they receive at least $1,300 (2001) in cash wages from one employer in a calendar year, or if they work a total of more than eight hours a week for one or more employers.An enterprise that was covered by the Act on March 31, 1990, and that ceased to be covered because of the increase in the annual dollar volume test to $500,000, as required under the 1989 amendments to the Act, continues to be subject to the overtime pay, child labor, and recordkeeping requirements of the Act.The Act exempts some employees from its overtime pay and minimum wage provisions, and it also exempts certain employees from the overtime pay provisions alone.

Employer practices vary widely in the leaves of absences plans the employer offers to its employees and such leave practices diverge greatly due to employer size, each employer’s place on the maturity curve, its own internal culture and workforce composition, the competitive pressures from others in the industry in which they operate, and their own past practices and precedents. However, in spite of these dissimilarities, each organization needs to provide leaves of absence for a multitude of reasons. Thus, there is merit in developing a leave of absence mindset to guide the organization in developing a coherent pathway for handling and processing leave transactions which is both effective, efficient and serves the organizations interests. In doing so, the organization is illustrating its strategic thinking and can marry its leave philosophies and plans of action to its business plan. The primary purpose of this toolkit is to provide a brief overview and resources for developing a comprehensive approach to categorizing leaves of absence to assist an organization in developing its own decision trees.Briefly, leaves can be divided into two classes. First are involuntary leaves which occur when an employer is subject to leave requirements due to federal or state law. The second class involve voluntary leaves, governed by organizational policies and which reflect the organization’s philosophies in terms of leave allowances. These class distinctions can become confusing due to the fact that many employers permit various types of leaves to run concurrently, i.e., an individual may be on Family and Medical Leave Act (FMLA) leave, workers’ compensation leave and an approved voluntary leave simultaneously. In classifying leaves, they can further be differentiated into those that are paid, unpaid or a combination of paid, partially paid and unpaid leaves. Pay status is important while on leave since benefits plan continuation (where required or offered) require that additional steps be taken to ensure that employee contributions for such benefits are adequately communicated and administered.

For the purpose of this discussion, following is the list of the potential leaves an employer may encounter:Involuntary leaves:

• Jury duty leave.

• Military leave. • Workers’ compensation/state disability income plans.• State parental school leave.

• FMLA and related state laws.

Voluntary leaves:

• Medical/disability.• Personal time/sabbaticals/educational leave.• Bereavement/funeral leave.

• Vacation/paid time off plans.• Business conditions (layoffs/furloughs/disaster response).

• Short and long term disability leaves.Each employer is free to develop leave policies that are far more expansive than those noted. Also, an employer is not required to provide the voluntary leaves cited above and may not be subject to some of the involuntary leave plans specified if the employer has not crossed the threshold where such leaves are required (i.e., 50 employee for FMLA). With respect to workers compensation and state disability leave requirements, both be will driven by state and case law; thus, we recommend that an employer follow the advice of legal counsel as to whether such a leave is required, the duration of a leave, and whether any benefits continuation or job restoration is required since these will vary on a state by state basis. Posted August 19, 2008 by Kevin Gramian at Optimum Outsourcing, LLC.

PURPOSE
The Immigration Reform and Control Act made all U.S. employers responsible to verify the employment eligibility and identity of all employees hired to work in the United States after November 6, 1986. To implement the law, employers are required to complete Employment Eligibility Verification forms (Form I-9) for all employees, including U.S. citizens.

FOR WHO MUST EMPLOYERS COMPLETE FORM I-9?
Every U.S. employer must have a Form I-9 in its files for each new employee, unless:

• the employee was hired before November 7, 1986, and has been continuously employed by the same employer.
• Form I-9 need not be completed for those individuals:
• providing domestic services in a private household that are sporadic, irregular, or intermittent;
• providing services for the employer as an independent contractor (i.e. carry on independent business, contract to do a piece of work according to their own means and methods and are subject to control only as to results for whom the employer does not set work hours or provide necessary tools to do the job, or whom the employer does not have authority to hire and fire); and
• providing services for the employer, under a contract, subcontract, or exchange entered into after November 6, 1986. (In such cases, the contractor is the employer for I-9 purposes; for example, a temporary employment agency.)

WHAT SHOULD BE DONE WITH FORMS I-9 AFTER THEY ARE COMPLETED?
Unlike tax forms, for example, I-9 forms are not filed with the U.S. government. The requirement is for employers to maintain I-9 records in its own files for 3 years after the date of hire or 1 year after the date the employee’s employment is terminated, whichever is later. This means that Form I-9 need to be retained for all current employees, as well as terminated employees whose records remain within the retention period. Form I-9 records may be stored at the worksite to which they relate or at a company headquarters (or other) location, but the storage choice must make it possible for the documents to be transmitted to the worksite within 3 days of an official request for production of the documents for inspection. Note: U.S. immigration law does not prescribe or proscribe storage of a private employer’s I-9 records in employee personnel files. As a practical matter, however, particularly if a large number of employees are involved, it may be difficult to extract records from individual personnel files in time to meet a 3-day deadline for production of I-9 records for official inspection.

DISCRIMINATION
The law protects certain individuals from unfair immigration-related employment practices of a U.S. employer, including refusal to employ based on a future expiration date of a current employment authorization document. The U.S. government entity charged with oversight of the laws protecting against unfair immigration-related employment practices is the Office of Special Counsel for Immigration Related Unfair Employment Practices, which is part of the Civil Rights Division of the U.S. Department of Justice.

AVAILABILITY OF FORMS I-9 IN FOREIGN LANGUAGES
The Form I-9 and most other USCIS forms are published in English only.

EMPLOYEE’S RESPONSIBILITY REGARDING FORM I-9
A new employee must complete Section 1 of a Form I-9 no later than close of business on his/her first day of work. The employee’s signature holds him/her responsible for the accuracy of the information provided. The employer is responsible for ensuring that the employee completes Section 1 in full. No documentation from the employee is required to substantiate Section 1 information provided by the employee.

EMPLOYER’S RESPONSIBILITY REGARDING FORM I-9
The employer is responsible ensuring completion of the entire form. No later than close of business on the employee’s third day of employment services, the employer must complete section 2 of the Form I-9. The employer must review documentation presented by the employee and record document information of the form. Proper documentation establishes both that the employee is authorized to work in the U.S. and that the employee who presents the employment authorization document is the person to whom it was issued. The employer should supply to the employee the official list of acceptable documents for establishing identity and work eligibility. The employer may accept any List A document, establishing both identity and work eligibility, or combination of a List B document (establishing identity) and List C document (establishing work eligibility), that the employee chooses from the list to present (the documentation presented is not required to substantiate information provided in Section 1). The employer must examine the document(s) and accept them if they reasonably appear to be genuine and to relate to the employee who presents them. Requesting more or different documentation than the minimum necessary to meet this requirement may constitute an unfair immigration-related employment practice. If the documentation presented by an employee does not reasonably appear to be genuine or relate to the employee who presents them, employers must refuse acceptance and ask for other documentation from the list of acceptable documents that meets the requirements. An employer should not continue to employ an employee who cannot present documentation that meets the requirements.

QUESTIONS ABOUT GENUINENESS OF DOCUMENTS
Employers are not required to be document experts. In reviewing the genuineness of the documents presented by employees, employers are held to a reasonableness standard. Since no employer which is not participating in one of the employment verification pilots has access to receive confirmation of information contained in a document presented by an employee to demonstrate employment eligibility, it may happen that an employer will accept a document that is not in fact genuine – or is genuine but does not belong to the person who presented it. Such an employer will not be held responsible if the document reasonably appeared to be genuine or to relate to the person presenting it. An employer who receives a document that appears not to be genuine may request assistance from the nearest Immigration field office or contact the Office of Business Liaison.

DISCOVERING UNAUTHORIZED EMPLOYEES
It occasionally happens that an employer learns that an employee whose documentation appeared to be in order for Form I-9 purposes is not actually authorized to work. In such case, the employer should question the employee and provide another opportunity for review of proper Form I-9 documentation. If the employee is unable under such circumstances to provide satisfactory documentation, employment should be discontinued (alien employees who question the employer’s determination may be referred to an Immigration field office for assistance).

DISCOVERING FALSE DOCUMENTATION
False documentation includes documents that are counterfeit or those that belong to someone other than the employee who presented them. It occasionally happens that an employee who initially presented false documentation to gain employment subsequently obtains proper work authorization and presents documentation of this work authorization. In such a case, U.S. immigration law does not require the employer to terminate the employee’s services. However, an employer’s personnel policies regarding provision of false information to the employer may apply. The employer should correct the relevant information on the Form I-9.

PHOTOCOPIES OF DOCUMENTS
There are two separate and unrelated photocopy issues in the employment eligibility verification process. First is whether an employer may accept photocopies of identity or employment eligibility documents to fulfill I-9 requirements. The answer is that only original documents (not necessarily the first document of its kind ever issued to the employee, but an actual document issued by the issuing authority) are satisfactory, with the single exception of a certified photocopy of a birth certificate. Second is whether the employer may or must attach photocopies of documentation submitted to satisfy Form I-9 requirements to the employee’s Form I-9. The answer is that this is permissible, but not required. Where this practice is undertaken by an employer, it must be consistently applied to every employee, without regard to citizenship or national origin.

“GREEN CARDS”
The terms Resident Alien Card, Permanent Resident Card, Alien Registration Receipt Card, and Form I-551 all refer to documentation issued to an alien who has been granted permanent residence in the U.S.. Once granted, this status is permanent. However, the document that an alien carries as proof of this status may expire. Starting with the “pink” version of the Resident Alien Card (the “white” version does not bear an expiration date), and including the new technology Permanent Resident Cards, these documents are valid for either two years (conditional residents) or ten years (permanent residents). When these cards expire, the alien cardholders must obtain new cards. An expired card cannot be used to satisfy Form I-9 requirements for new employment. Expiration dates do not affect current employment, since employers are neither required nor permitted to re-verify the employment authorization of aliens who have presented one of these cards to satisfy I-9 requirements (this is true for conditional residents as well as permanent residents). Note: Even if unexpired, “green cards” must appear genuine and establish identity of the cardholder.

SOCIAL SECURITY CARD ISSUES
The Social Security Administration (SSA) currently issues SSA numbers and cards to aliens only if they can present documentation of current employment authorization in the U.S. Aliens such as lawful permanent residents, refugees, and asylees are issued unrestricted SSA cards that are undistinguishable from those issued to U.S. citizens.

Note on restricted SSA and other cards:

SSA “Valid only with INS (or DHS) Authorization” card – issued to aliens who present proof of temporary work authorization; these cards do not satisfy the Form I-9 requirements.

SSA “Not Valid for Employment” card – issued to aliens who have a valid non-work reason for needing a social security number (e.g., federal benefits, State public assistance benefits), but are not authorized to work in the U.S.

Internal Revenue Service (IRS) Individual Taxpayer Identification Numbers (ITINs) – issued to aliens dealing with tax issues (e.g., reporting unearned income such as savings account interest, investment income, royalties, scholarships, etc.). An Individual Taxpayer Identification Number card is NOT employment eligibility verification.

Aliens who satisfy I-9 requirements have been known to present a restricted SSA card for payroll administration purposes (consistent with advice from SSA and IRS). In cases like this, the employer needs to encourage the individual to report the change in status to SSA immediately.

RETENTION OF FORMS I-9
All of an employer’s current employees (unless exempt) must have Forms I-9 on file. A retention date can only be determined at the time an employee is terminated. It is determined by calculating and comparing two dates. To calculate date A, the employer should add three years to the hire date. To calculate date B, the employer should add one year to the termination date. Whichever of the two dates is later in time is the date until which that employee’s form I-9 must remain in the employer’s employment eligibility verification files.

OFFICIAL INSPECTION OF I-9 RECORDS
Upon request, all Forms I-9 subject to the retention requirement must be made available in their original form or on microfilm or microfiche to an authorized official of the Bureau of Immigration and Customs Enforcement, Department of Labor, and/or the Justice Department’s Office of Special Counsel for Unfair Immigration-Related Employment Practices. The official will give employers at least 3 days advance notice before the inspection. Original documents (as opposed to photocopies) may be requested.

FORM I-9 REQUIREMENTS OF NEW OWNERS OF EXISTING BUSINESSES
In a case where a new owner of a business is a successor in interest, having acquired an existing business, the new employer may keep the acquired employer’s I-9 records rather than complete new Forms I-9 on employees who were also employees of the acquired employer. However, since the new employer would be responsible for any errors, omissions or deficiencies in the acquired records, it may choose to protect itself by having a new Form I-9 completed for each acquired non-exempt employee and attached to that employee’s original Form I-9.

REMOTE HIRES
It is not unusual for a U.S. employer to hire a new employee who doesn’t physically come to that employer’s offices to complete paperwork. In such cases, employers may designate agents to carry out their I-9 responsibilities. Agents may include notaries public, accountant, attorneys, personnel officers, foremen, etc. An employer should choose an agent cautiously, since it will be held responsible for the actions of that agent. Note: Employers should not carry out I-9 responsibilities by means of documents faxed by a new employee or through identifying numbers appearing on acceptable documents. The employer must review original documents. Likewise, Forms I-9 should not be mailed to a new employee to complete Section 2 himself or herself.

SERVICE PROVIDERS
Some business entities contract with professional employer organizations (PEOs) to handle the personnel and benefits aspects of the business. This may include completion and retention of Forms I-9. Where the business entity and the PEO are “co employers,” one Form I-9 need be completed between the co-employers for each employee who was simultaneously hired by the co-employers. A business entity and PEO will be deemed a “co-employer” if, among other things, an employer/employee relationship is said to exist between the business entity and PEO on the one hand, and the individual on the other, even though the employee is only performing one set of services for both co-employers. Therefore, the authority to hire or terminate employment would have to be in the hands of both the business entity and the PEO. Since both entities are employing the individual, however, both entities remain equally responsible for meeting the Form I-9 requirements and equally liable for any failures to meet those requirements. Accordingly, the employer is fully responsible for errors, omissions, and deficiencies in the PEO’s processing. Posted on August 18, 2008 by Kevin Gramian at Optimum Outsourcing, LLC.

 The Americans with Disabilities Act (ADA) is a federal anti-discrimination law which prohibits private employers, state and local governments, employment agencies and labor unions from discriminating against qualified individuals with disabilities in job application procedures, hiring, firing, advancement, compensation, job training and other terms, conditions and privileges of employment. This law (covering employers with 15 or more employees) is designed to remove barriers which prevent qualified individuals with disabilities from enjoying the same employment opportunities that are available to persons without disabilities. When an individual’s disability creates a barrier to employment opportunities, the ADA requires employers to consider whether a reasonable accommodation could remove the barrier. [Editor’s Note: The Supreme Court recently upheld the EEOC’s ADA regulation for the direct threat defense (situation where employee is a direct threat to himself/herself).] An individual has a disability under ADA when he/she:

• Has a physical or mental impairment that substantially limits one or more major life activities; • Has a record of such an impairment; or• Is regarded as having such an impairment.

A qualified individual is one who, with or without a reasonable accommodation, can perform the essential functions of a job.A reasonable accommodation is a modification to a job which will allow an individual with a disability to perform the job’s essential functions. An employer is required to make a reasonable accommodation to a known disability of a qualified applicant or employee. A reasonable accommodation may include but is not limited to:

• making facilities used by employees readily accessible and usable by persons with disabilities• job restructuring• modifying work schedules• reassignment to a vacant position• acquiring or modifying equipment or devices• adjusting or modifying examinations, training materials or policies• providing qualified sign language interpreters

A reasonable accommodation does not include lower production and quality standards. Also the employer need not provide an accommodation that would impose an “undue hardship” on the business. Posted August 5, 2008 by Kevin Gramian at Optimum Outsourcing, LLC.

The Internal Revenue Service uses these common-law factors to determine whether a worker is an independent contractor or a regular employee:

1. Instructions. An employer should not tell an independent contractor how to do a job.
2. Training. An employer should not provide substantial training for an independent contractor.
3. Integration. An independent contractor should not be hired to provide a service that is an essential part of an employer’s business.
4. Personal Services. An employer should not insist that the work be performed by the contractor rather than someone that the contractor might hire.
5. Assistants. Independent contractors control and pay their assistants.
6. Length of Relationship. Independent contractors should not have a continuing relationship with an employer unless there are multiple contracts.
7. Work Hours. An independent contractor usually determines the hours worked to complete a job.
8. Amount of Work. An independent contractor should not be told to work full time for an employer if that would prevent the contractor from doing other work.
9. Location. Unless the services can be performed only in one location, an independent contractor chooses where to do the work.
10. Sequence of Work. Independent contractors determine the order in which they accomplish their tasks.
11. Reports. Independent contractors should not be required to produce interim reports.
12. Payment. Independent contractors are paid for the results of their work, not for the time worked.
13. Expenses. Independent contractors are responsible for their business expenses.
14. Tools. Independent contractors typically provide their equipment and tools.
15. Investment. An independent contractor has a significant investment in his business, such as a home office.
16. Profit. Independent contractors can realize profits and incur losses.
17. Multiple jobs. Independent contractors can work for more than one employer at a time.
18. Availability. Independent contractors make their services available to the general public.
19. Termination. Independent contractors cannot be fired at will, as can employees.
20. Liability. Independent contractors are liable for failure to complete a job.

Posted July 2, 2008 by Kevin Gramian at Optimum Outsourcing.

In accordance with the Fair Labor Standards Act regulations, exempt employees who are required to be paid on a salary basis may not have their pay reduced for variations in the quantity or quality of work performed. Employees who feel their pay has been improperly reduced should report this immediately following the procedures specified below. Provisions Mandated by the Salary Basis Rules 1. Exempt employees normally must receive their full salary for any week in which they perform any work, without regard to the number of days or hours worked. However, exempt employees need not be paid for any workweek in which they perform NO work at all for the organization. 2. Deductions from pay cannot be made as a result of absences due to the circumstances listed below. Such improper pay deductions are therefore specifically prohibited by [Company Name], regardless of the circumstances. Managers or supervisors violating this policy will be subject to investigation of their pay practices and appropriate corrective action in accordance with normal procedures. a. Jury duty. b. Attendance as a witness. c. Temporary military leave. d. Absences caused by the ployer. e. Absences caused by the operating requirements of the business. f. Partial day amounts other than those specifically discussed below. 3. The few exceptions to the requirement to pay exempt employees on a salary basis are listed below. In these cases deductions may be permissible as long as they are consistent with other company policies and practices. a. Absences of one or more full days for personal reasons other than sickness or disability (partial days must be paid). [Note: Be sure your vacation or PTO policy is clear on when such a deduction would occur, such as when an employee has exhausted all vacation or PTO leave.] b. Absences of one or more full days due to sickness or disability. [Note: This would be an option only if company policy provides compensation for loss of pay due to sickness or disability. This exception can apply when the employee is not yet eligible for the sickness/disability policy or has exhausted the paid leave benefits it provides.] c. Fees received by the employee for jury or witness duty or military leave may be applied to offset the pay otherwise due to the employee for the week. No deductions can be made for failure to work for these reasons, however. d. Penalties imposed by infractions of safety rules of major significance. [Note: Company policy on safety should be very clear regarding major versus minor safety violations and the consequences of such violations. A deduction from pay as a penalty for violations of major safety rules can be made in any amount.] e. Unpaid disciplinary suspensions of one or more full days in accordance with [Name of Company]’s disciplinary policy. [Note: Companies must establish a written policy, applicable to all employees, specifying workplace conduct rules and the consequences for violating such rules in order to make a deduction under this section. The preamble to the final rule suggests that “workplace conduct” violations should be of a serious nature, and does not apply to discipline for performance or attendance issues. Legal advice is therefore encouraged before updating any workplace conduct policies to include partial week suspension as a disciplinary option for exempt employees.] f. Deductions for the first and last week of employment, when only part of the week is worked by the employee, as long as this practice is consistently applied to all exempt employees in the same circumstances. g. Deductions for unpaid leave taken in accordance with a legitimate absence under the Family and Medical Leave Act. Posted May 28, 2008 by Kevin Gramian at Optimum Outsourcing.

Who is Covered

Title III of the Consumer Credit Protection Act (CCPA) protects employees from discharge by their employers because their wages have been garnished for any one debt, and it limits the amount of an employee’s earnings that may be garnished in any one week. Title III applies to all employers and individuals who receive earnings for personal services (including wages, salaries, commissions, bonuses and income from a pension or retirement program, but ordinarily not including tips).

Basic Provisions/Requirements

Wage garnishment occurs when an employer withholds the earnings of an individual for the payment of a debt as the result of a court order or other equitable procedure. Title III prohibits an employer from discharging an employee because his or her earnings have been subject to garnishment for any one debt, regardless of the number of levies made or proceedings brought to collect it. Title III does not, however, protect an employee from discharge if the employee’s earnings have been subject to garnishment for a second or subsequent debt.

Title III also protects employees by limiting the amount of earnings that may be garnished in any workweek or pay period to the lesser of 25 percent of disposable earnings or the amount by which disposable earnings are greater than 30 times the federal minimum hourly wage prescribed by Section 6(a)(1) of the Fair Labor Standards Act of 1938. This limit applies regardless of how many garnishment orders an employer receives. As of September 1, 1997, the federal minimum wage is $5.15 per hour.

In court orders for child support or alimony, Title III allows up to 50 percent of an employee’s disposable earnings to be garnished if the employee is supporting a current spouse or child, and up to 60 percent if the employee is not doing so. An additional five percent may be garnished for support payments over 12 weeks in arrears. The restrictions noted in the preceding paragraph do not apply to such garnishments.

“Disposable earnings” is the amount of earnings left after legally required deductions (e.g., federal, state and local taxes, Social Security, unemployment insurance and state employee retirement systems) have been made. Deductions not required by law (e.g., union dues, health and life insurance, and charitable contributions) are not subtracted from gross earnings when the amount of disposable earnings for garnishment purposes is calculated.

Title III specifies that garnishment restrictions do not apply to bankruptcy court orders and debts due for federal and state taxes. Nor do they affect voluntary wage assignments, i.e., situations where workers voluntarily agree that their employers may turn over a specified amount of their earnings to a creditor or creditors.

Employee Rights

In most cases, Title III gives wage earners the right to receive at least partial compensation for the personal services they provide despite wage garnishment. This law also prohibits an employer from discharging an employee because of garnishment of wages for any one indebtedness. The Wage and Hour Division of the Employment Standards Administration accepts complaints of alleged Title III violations. Posted May 26, 2008 by Kevin Gramian at Optimum Outsourcing.