March 2014 Newsletter
In this issue:
- National Walking Day: April 2, 2014
- New York City's Paid Sick Leave Law
- Preventing FMLA Abuses
- Navigating a 401(k) Hardship Withdrawal
National Walking Day: April 2, 2014
Mark your calendar for April 2, 2014 for the American Heart Association's National Walking Day. Adults are spending more time at work than ever before. An unfortunate side effect is that, as a nation, we are becoming more inactive. This is a problem when you consider the fact that physical inactivity doubles the risk of heart disease!
But take heart! It's a problem you can help fix by convincing your company to take part in the American Heart Association's National Walking Day. On April 2, employees are encouraged to wear sneakers to work and take at least 30 minutes out of their day to get up and walk. It's a great way to raise awareness of the importance of physical activity and to give your co-workers a friendly push towards a healthier life.
Easy Ways to Participate:
- Rally your family, friends, and neighbors to walk that day and every day
- Invite your co-workers to wear their sneakers to work
- Encourage employees to get in their 30 minutes of walking that day
- Change one of your meetings to a walking meeting, and let your colleagues know why
For more information, please visit the American Heart Association.
New York City's Paid Sick Leave Law
Effective April 1, 2014, New York City's Earned Sick Time Act (Paid Sick Leave Law) will require most private employers to give their employees sick leave, which they can use for the care and treatment of themselves or a family member.
Employers with five or more employees who work more than 80 hours a calendar year must provide 5 days paid sick leave. Employers with less than five employees must provide 5 days of unpaid sick leave.
Employers who have one or more domestic employees who have been employed at least one year and who work more than 80 hours a calendar year must provide also paid sick leave.
Preventing FMLA Abuses
The Family Medical Leave Act (FMLA) permits eligible employees to take fully paid leave for specific medical and family reasons. As an employer, it is your responsibility to ensure that employees do not abuse this facility to take paid days off.
Under the FMLA, employers have the right to question employees about their reasons for wanting to take time off. You can use this right to question exactly why an employee wants time off, how long that employee expects to be unable to return to work and when exactly the employee intends to return to work. If an employee claims illness or injury ask whether the employee will be seeing a doctor or seeking medical treatment.
Abuse of the FMLA happens more frequently than many employers might assume. About 32% of the respondents in a recent CareerBuilder survey said they called in sick in the past year even though they were not really sick when they took the day off. Somewhat surprisingly, an almost equal number of workers in the survey said they reported for work even though they were actually sick so they could save their sick days for later use.
One of the best ways to discourage this is to require all time off requests to be in writing. A written request makes the process more formal, establishes a paper trail, and will discourage workers from needlessly taking time off that they really do not need.
You can also remind your staff about your call-in policy (if applicable). If you have a call-in policy that requires employees to report an absence at least one hour in advance of their shift, you can deny leave if an employee fails to abide by that policy. If an employee requires extended leave, remind them about your policy of requiring medical certification in order for them to be able to return to work.
Navigating a 401(k) Hardship Withdrawal
Generally, employees must exhaust other resources, including plan loans, before requesting a hardship withdrawal. And, those employees who do "jump through the hoops" to receive a hardship withdrawal, will pay a big price – taxation on the withdrawal, plus a 10% tax penalty (for employees under the age of 59.5). However, that additional penalty is waived if the employee:
- Is completely disabled
- Has medical bills exceeding 7.5% of income
- Needs the funds to prevent being evicted or foreclosed upon for a primary residence
- Is leaving your employ
Hardship withdrawals are allowable under certain circumstances. However, as the plan sponsor, you can choose which ones you will approve or not approve, including none. These withdrawals can help pay for:
- A primary home
- Education tuition, room and board, and fees for the next 12 months for the employee, the employee's spouse or other dependents
- Unreimbursed medical expenses
- Funeral expenses for immediate family members
- "Severe financial hardship"
While you can rely on an employee's written statement attesting to the truth of the hardship circumstance, the IRS also expects you to look for any documentation which would back up those claims. For example, if an employee seeks a hardship withdrawal to finance college expenses, request a copy of the invoice.
Did You Know?
There are new Self-Service Portal options available to you. These new features can help you better manage your employees and reduce the amount of paperwork on your desk!
One of the new features is called H/R Action. Under this tab, you can:
- Add a New Hire
- Change Pay Rate (Hourly, Salary, etc.)
- Change the Status-Type (Full-Time, Part-Time, etc.)
- Change Job Title (New Job Title, Effective Date, etc.)
- Terminate an Employee (Reason for Termination, Effective Date, etc.)
- Rehire an Employee (Rehire Date, Reason for Rehire, etc.)
- Approve and Mainatin Leave of Absence Records
If you have any questions about this new H/R Action tab, please contact the Sales Department at 410-451-4202.