Colorado Workers Compensation Act sets out certain criteria to that must be met to show that the employer does not have the right to control the person providing services.

The information below is information that Pinnacol Assurance will use in determining whether a independent contractor is an employee or a independent contractor:

The individual is not required to work exclusively for the employer.

The employer has not established a quality standard for the person providing services except for plans and specifications.

The employer does not pay the service provider on an hourly basis or provide a salary instead of a fixed or contract rate.

The employer cannot terminate the individual performing services during the contract period unless the service provider violates the terms of a contract or fails to produce a specified result.

The employer does not provide more that minimal training

The employer does not provide tools or benefits to the service provider except for material and equipment.

The employer does not dictate the time of performance except for a completion and to negotiate the mutual agreeable hours.

The employer does not pay the service provider personally but instead makes payment to a trade or business name.

The above defines a large portion of what Pinnacol or other work comp carries will look at when deciding on independent status. If you are uncertain on the status of your contractor contact StaffScapes for further review. The information given in this blog does not reflect what the Department of Labor and the IRS view as to whether or not the provider is an employee or a independent contractor.

Survey reports large percentage of employees go to work sick.

The Workforce Institute™ recently announced the findings of a new survey conducted by Harris Interactive®. According to the study "Sick at Work", an overwhelming 98 percent of employees working full time have gone to work when they were sick. The survey of more than 1,000 U.S. employed adults demonstrates that "presenteeism" (sick employees showing up for work) is an issue impacting both employers and employees.

The "Sick at Work" survey also delved into the causes behind presenteeism and how employers can address the problem. The most-cited responses when asked why they go to work sick were: I feel guilty for calling in; my workload is too heavy; I save my sick time for personal reasons like family emergencies, sick children, parent care issues and other unexpected events; and I try to have perfect attendance.

The survey also found that presenteeism can have a negative impact on all employees in the workplace. Some employees agreed that when employees come to work sick, it creates a work environment where they are afraid of getting sick, it makes them upset with their employer for not encouraging sick employees to stay home, and it sets a precedent where employees feel like they must go to work even if they are sick. As part of the survey, employees offered advice to employers on how to create a healthy work environment. Employees suggested that they not be penalized for calling in sick, and that employers offer paid time off (PTO) programs that give employees a bank of time to use at their discretion.

Even with “employment-at-will”? protections, problems can arise when terminating employees.

Employers that take the “employment-at-will” concept too literally can be looking at potential legal difficulties.  If a complaint is brought to court then a human factor from judges and juries come into play. The human factor can eliminate the “black and whiteness” of the employment-at-will concept and put you in danger of losing a large lawsuit.

Employment Law Attorney Jonathan Segal suggests employers follow these guidelines to protect themselves from the human factor of employee terminations:

            Use progressive discipline

            Use the same person who hired to fire

            Drop problem workers in the first 90 days

            When you document, cite specifics

            Avoid absolutes, but have absolute reasons for termination

            Do not list all of the little things

            Do not describe a problem worker in medical terms  

The U.S. Department of Labor (DOL) has released its latest Advisor to help employers and workers understand and calculate overtime pay.

One of Department’s most asked about employment laws is the Fair Labor Standards Act (FLSA). The FLSA Suite of elaws Advisors help users understand the minimum wage, overtime, and child labor provisions of the Act.  The Overtime Calculator Advisor is the latest addition to the FLSA Suite.  This new Advisor computes the amount of overtime pay due in a sample pay period based on information from the user.  The Overtime Calculator gathers input from users about certain factors used in determining overtime, including the primary method of paying workers, any additional compensation such as bonuses, commissions, and shift differentials, and information pertaining to hours worked.  The Calculator then totals up straight-time and overtime hours worked during a sample pay period and – based on the user’s inputs – calculates the overtime pay required.  A key feature demonstrates how the calculations were made.  (The Calculator does not attempt to calculate overtime in all situations and actual pay period earnings may differ from the results provided by the Overtime Calculator.)

The Department offers many other elaws Advisors covering a wide range of federal employment laws such as the Family and Medical Leave Act and the Uniformed Services Employment and Reemployment Rights Act. To view the Advisors, visit www.dol.gov/elaws.

How much can you disclose about a past employee?

Colorado law not only allows but immunes a former employer from civil liability and damages for the release of employment history and information to future employers.  This is a good thing to remember when you get reference checks concerning your past employees.  Not only does this help our state by allowing free exchange of information, it also helps avoid a new form of liability for not releasing pertinent past employment history.  Some lawsuits are now going through several courts where prior employers are being sued for not releasing employment information when employees have been terminated for embezzlement or violence.  StaffScapes advises employers to verify your responsibilities and rights with each state that you are working in. 

As for Colorado, the Colorado Revised Statutes 8-2-114 states “Any employer who provides information about a current or former employee’s job history or job performance to a prospective employer of the current or former employee upon request of the prospective employer or the current or former employee is immune from civil liability and is not liable in civil damages for the disclosure or any consequences of the disclosure. This immunity shall not apply when such employee shows by a preponderance of the evidence both of the following:

(a) The information disclosed by the current or former employer was false; and

(b) The employer providing the information knew or reasonably should have known that the information was false.”

For more information please visit the Colorado Department of Labor’s website at : www.coworkforce.com

New law gives injured workers a choice of medical provider.

House Bill 07-1176 will affect all Colorado employers as of January 1, 2008. The bill, enacted by the Colorado Legislature, changes the Colorado Workers Compensation Act, requiring all employers to provide a list of at least two medical providers that injured workers can choose from.  The listed providers must be at separate and distinct locations and have no common ownership.  Injured workers must also be allowed to make a one-time change of the treating physician within 90 days of injury as long as maximum medical improvement (MMI) has not been reached.  The injured worker must make a change to one of the other listed providers. If a provider list was not given to the injured worker at time of injury or within the first seven days after, then injured worker will have right to use any physician of their choosing.  A few exceptions apply to this new law for employers in rural areas, employer-owned medical providers, governmental entities, and on-site health care facilities.

For additional information regarding House Bill 07-1176 and its effects, please contact StaffScapes’ Risk Management department.

New study finds shifting costs does not always save money.

In order to control increasing costs of health insurance, many employers are shifting more monetary responsibility onto the employees.  A new study released by the nonprofit Integrated Benefits Institute (IBI) shows that shifting costs to employees doesn’t save employers money.

The three year study focused on the increased disability and absence-related lost productivity for 5,483 workers with rheumatoid arthritis (RA).  After reviewing the study, Dr. Thomas Parry, president of IBI, stated “employees appear to make medical decisions based on price and cost shifting, rather than evidence-based medicine”. The study found that employers lost money from increased disability and lost productivity.  Key findings of IBI’s study include:

·        higher out-of-pocket expenses reduce medical adherence

·        lower medication adherence is associated with higher short-term disability incidence and longer duration

·        higher short-term disability incidence and longer duration results in greater costs and lower productivity

·        to evaluate the true impact of management interventions, data must be integrated across all health-related benefits programs

IBI’s news release can be found at: http://www.ibiweb.org/news/articles/display/7025

The US DOL responds to the requested comments on the FMLA.

After a long and much anticipated wait, the US Department of Labor responded to the public comments that it requested concerning the Family and Medical Leave Act (FMLA). Included in the 161-page report was the DOL’s statement that the report does not signal any forthcoming regulatory changes.  So what does the report contain?  Apparently a very large amount of comments received from employers and HR practitioners concerning the problems and difficulties of managing the current version of the FMLA. 

For the time being, administration of FMLA should continue as is, with all of its pitfalls.  However, we suggest that everyone pay specific attention to their states. Just because the federal government is not taking steps to change does not mean that individual states won’t.

IRS ruling against FedEx puts independent contractor classification back in the news.

Late last year, the Internal Revenue Service ruled that FedEx had misclassified about 13,000 drivers as independent contractors resulting in a $319 million tax bill. This amount is only for penalties and back taxes for 2002. The IRS is still auditing FedEx for 2004 through 2006. Some groups believe the final cost to FedEx could be as high as $1 billion. The IRS ruled against FedEx’s assertion that drivers were contractors who operate their delivery routes as independent businesses. Some of the reasons behind the ruling stem from the drivers using FedEx equipment, wearing FedEx uniforms and working under explicit FedEx rules.

John Tuzynski, the IRS’ chief of employment-tax operations, made worker classification "a major focus" for fiscal 2008 due in large part because of money. The Government Accountability Office has estimated that misclassification of workers amounts to a tax revenue loss of $4.7 billion a year. For employers who are caught misclassifying, monetary pain is just the beginning. Not only are monetary penalties and fines applied, employers can also be criminally charged.  Criminal charges include evasion of payments, filing of false tax returns, conspiracy and tax code section 7202 makes it a felony to willfully fail to collect or pay tax to the government.

The IRS has entered partnerships with the Department of Labor, the National Association of State Workforce Agencies, the Federation of Tax Advisers and the agencies that administer state employment and unemployment taxes to coordinate enforcement.  

To help protect yourself and your business, StaffScapes recommends that all employers with independent contractors complete the IRS 20-factor test (Form SS-8) to determine whether they are really an employee. These tests can be downloaded at the IRS website.

On April 21, 2008, OSHA officially kicked off their “youth job safety�? campaign.

U.S. Secretary of Labor Elaine L. Chao launched the fourth year of OSHA’s youth public awareness campaign at Rockefeller Plaza in New York City recently. "The Teen Summer Job Safety Campaign educates teenagers on the importance of workplace safety and health habits that will help protect them and their coworkers at work," Secretary Chao said.

OSHA will host and participate in local events and activities around the country to help keep teenagers safe and healthy on the job. Activities include career fairs, youth programs, expos, career days and training seminars. OSHA and its regional partners are striving to reduce work-related injuries among teens by teaching them on-the-job safety and integration of principles into their work tasks from this early age.

The campaign is part of OSHA’s Young Worker Initiative, which provides information and resources to teenagers, parents, educators and employers to ensure safe and rewarding work experiences for these summer employees. More information about workplace safety for teens is available at www.osha.gov/teens.

On May 21, 2008, President Bush signed a bill protecting personal genetic information from misuse by employers and insurance companies.

The Genetic Information Nondiscrimination Act of 2008 (GINA) prohibits employers from using genetic information when making decisions concerning hiring, firing, job placement or promotion. GINA protects job-seekers and employees covered by Title VII and some federal government employees. The new law also makes it illegal for group health plans and health insurers to deny coverage or charge higher premiums based solely on a genetic predisposition to a disease.

The law also included provisions that alter civil penalties for child labor violations. Penalties for violations have increased to a potential $11,000 and a $50,000 penalty may now be assessed for each violation that causes death or serious injury to any employee under the age of 18 years. This penalty may be doubled where the violation is a repeated or willful violation.

Recent court decision finds employer still liable despite corrective actions.

In the recent lawsuit, Crawford v Carroll, the 11^th Circuit Court found that an employer can not avoid liability by retroactively giving a pay raise. In the case an employee was denied a merit pay increase suffering an adverse employment action. The court held that even though the employer corrected the action and raised the pay rate retroactively, the retroactive increase could not “erase all injury associated with it, specifically the lost value and use of the funds during the time she was not receiving them”. The court continued by stating that retroactive pay raises can not undo the harm caused by discriminatory or retaliatory acts. Based on this decision the employee was allowed to proceed with her retaliation and race bias claim.

DOL restates requirement to pay employees for all time worked, even if it was not approved by the employer.

In a recent Department of Labor Opinion Letter concerning break and meal policies, the Department restates that any work done by the employee, regardless of approval, must be compensated by the employer. The Code of Federal Regulations 29 CFR 785.13 states:

“In all such cases it is the duty of the management to exercise its control and see that the work is not performed if it does not want it to be performed. It cannot sit back and accept the benefits without compensating for them. The mere promulgation of a rule against such work is not enough. Management has the power to enforce the rule and must make every effort to do so.”

StaffScapes review of the devastating labor initiatives on the November Ballot.

Initiative #92 would “Require every private employer with 20 or more employees to provide health insurance for both employees and their dependents.” The initiative also requires employers to pay at least 80 percent of the employee only premiums and 70 percent of dependent premium coverage. Employers who do not comply with providing the insurance would have to then pay into a newly established state authority.

Listed below is the potential impact of initiative #92:

Ø      Current federal law generally prohibits mandating or requiring employers to provide health insurance coverage.

Ø      The majority of Colorado employers currently offer health insurance to their employees, mandating employer contributions will not improve the uninsured problems.

Ø      Initiative 92 will create a massive government run agency to implement the system and provide coverage for those whose employers do not comply.

Ø      Businesses will be hindered by additional financial burdens, resulting in higher costs to do business, lost jobs and increases in the price for goods and services.

Ø      Puts the responsibility of defining what a “major medical” plan is, and how to fund the new government agency in the hands of the legislature.

Ø      Initiative 92 creates reasons for employers to terminate full time employees and replace them with part-timers; also gives employers reason to discriminate against hiring employees with dependents.

Should state laws restrict business growth and mandate benefit offerings, removing the ability to balance needs of employees while meeting financial budgeting? Should employees be laid off and replaced with part-time employees? Do you want employers to focus on how many dependents and applicant has instead of experience and education? Do you want a new government super-agency deciding medical plan designs and funding? Has government run medical care ever been successful?

If the organized labor initiatives are successfully passed this November, our state’s economic growth will be dramatically stunted for years to come. Please check past and future editions of our blog to view the other initiatives that can have a devastating impact to Colorado.

Sources: Tomlinson & Associates; Economic Development Council of Colorado

StaffScapes review of the devastating labor initiatives on the November Ballot.

Initiative #93 would “allow an injured employee to bring an action in District Court for compensatory and punitive damages, if the employer fails to provide a safe and healthy workplace.” The term “safe and healthy workplace” is not defined in the initiative. This new action is available in addition to the rights that the employee has under the state’s Workers’ Compensation Act. This initiative would apply to every employer in the state with 10 of more employees.

Listed below is the potential impact of initiative #93:

Ø      Current state and federal laws exist to ensure safe and healthy working conditions for employees.

Ø      Colorado employers already have motivation to provide a safe workplace based on their workers compensation insurance costs being directly related to work injury severity and number of claims.

Ø      Initiative 93 will allow injured employees to “double-dip”, collecting benefits from the Workers’ Compensation Act and then filing a lawsuit against the employer for unlimited damages in district court.

Ø      Businesses will be hindered by additional financial burdens due to higher insurance costs, resulting in lost jobs and increases in the price for goods and services.

Ø      Puts the responsibility of defining what a “safe and healthy workplace” is in the hands of the district courts.

Ø      With the current backlog of court cases, Initiative 93 will result in trial lawyers looking for the “quick buck” through settlements.

Should trial lawyers be rewarded with an additional state law to allow them to threaten businesses who already have to meet state and federal safe workplace standards? Should Colorado business growth and employment be restricted in order to enact an unnecessary and superfluous law? Should employees be able to double-dip and receive full benefits from the Workers Compensation Act then sue the employer for unlimited damages? Do you want employers to pay more for insurance and defense against frivolous lawsuits or increase wages and employee benefits? Do you want individual district court judges deciding what is “safe” and “healthy” and what the “workplace” is?

If the organized labor initiatives are successfully passed this November, our state’s economic growth will be dramatically stunted for years to come. Please check past editions of our blog to view the other initiatives that can have a devastating impact to Colorado.

Sources: Tomlinson & Associates; Economic Development Council of Colorado

The Colorado Department of Labor just announced the new minimum wage rate for 2009

The minimum wage rule enacted in 2006 to the Colorado Constitution requires the state’s minimum wage rate to be adjusted each year for inflation. The inflation adjustment is based on the US Bureau of Labor Statistics’ Consumer Price Index for All Urban Consumers (CPI-U) for the Denver-Boulder-Greeley combined area. This adjustment is based on the difference between the CPI-U from the first half of the prior year and the first half of the current year. The CPI-U increased 3.7% from the first half of 2007 compared to the first half of 2008.  This adjustment will increase the 2009 minimum wage rate to $7.28 per hour, effective January 1, 2009.  The Tip credit for 2009 has not changed so the minimum wage rate for "Tipped Employees" will be $4.26 ($7.28 - $3.02).

For More information please go to the Colorado Department of Labor’s home page at: www.coworkforce.com.

Employers need to be more involved in injured workers’ rehabilitation.

A doctor that treats workers’ compensation injuries recently gave a seminar that I attended. In the beginning of this seminar he gave some interesting statistics regarding injured workers, included here:

- 50% of injured workers who have been off of work for between 6 months to 1 year never return to work

- 90% of injured workers who have been off of work more than 1 year never return to work

- 85% of costs of all workers’ compensation claims come from only 5% of claims

- 40% of the costs from all claims come from delayed recovery

- 10% of injured workers actually perform their prescribed physical therapy exercises at home

Not only do these claims have an impact on the employers who the worker was working for, but they also have social impacts to all of us when the worker can not or will not continue to work after the injury. These social impacts include a drain on disability insurance, medicaid / medicare, and other welfare programs offered by state and federal laws. Employers need to design and implement Return-to-Work programs and show concern for the injured worker. As employers do this work related injury costs should be reduced and the burden to the employer and society as a whole can be softened.

See Also

• Staffscapes
  workers compensation information

DHS recently issued Supplemental Final Rule concerning No-Match Rules

The Department of Homeland Security (DHS) issued a Supplemental Final Rule regarding the department’s No-Match Rule last week. "The additional information in this supplemental rule addresses the specific items raised by the Court, and we expect to be able to quickly implement it," said Homeland Security Secretary Michael Chertoff. 

The original DHS regulation issued in August 2007 as a Final Rule was stayed following a preliminary injunction issued by the U.S. District Court for the Northern District of California. DHS will request the District Court injunction be lifted so that implementation of the rule can proceed.

The No-Match Rule gives employers steps to take when they receive a "no match" letter from the Social Security Administration, which if followed show the employer acted reasonably and protects them from violations of the Immigration and Nationality Act.

For additional information concerning the DHS No-Match Rule please see our past blog entries:

See Also

• Aug 22, 2007 blog article
  How to Avoid Liability after Receiving a ?No-Match? Letter
• Sept 6, 2007 blog article
  Update on SSA/DHS No-Match Rule
• Dec 12, 2007 blog article
  Update on SSA/DHS No-Match Rule

Employers need to be aware of the changes to the ADA that the new ADA Amendments Act puts into place effective January 1, 2009.

The ADA Amendments Act of 2008, signed by President Bush on September 25, 2008, came about from members of Congress disagreeing with key Supreme Court rulings defining “disability”. The amendments will overturn these prior court cases broadening the definition of disability and increasing the number of employees to be covered. The amendment restricts the ability to determine disability based on ameliorative effects of mitigating measures. Impairments that are episodic or in remission will now also be seen as a disability if it limits a major life activity when active. Congress in addition ordered the EEOC to issue new regulations on when an individual is “substantially limited”. On the plus side Congress has outlawed reverse discrimination suits.

The changes to the ADA will now make many more employees qualified as disabled. Employers will need to spend more time on determining reasonable accommodations than on whether the employee is disabled.  HR policies and procedures will need to be updated and competent professional assistance should be procured.

See Also

• EEOC Notice Concerning the ADA Amendments Act of 2008
  ADA Amendments

The year 2009 or 2010 may bring an extra payday to employees.

Next year or the following, brings another possibility of an extra payday for many workers. Employees that are paid on a weekly basis and certain biweekly paid employees may have an extra payday depending if their employers chose to pay employees prior to or after the normal payday of January 1, 2010.  Since January 1^st is a federal holiday, employers will need to decide to pay their employees early (December 31, 2009) or after (January 4, 2010).  Based on this decision, the employees will have a 53^rd paycheck if they are paid weekly or a 27^th paycheck if they are paid biweekly. If the employer chooses to pay the employees early then 2009 will be the year with an extra payday. If the employees are paid after the holiday then 2010 will be the year affected.

Not all biweekly paid employees will have an extra pay.  Only those employees that have a normal payday of January 2, 2009 will have this extra pay scenario.  If the biweekly paid employee is normally paid on January 9, 2009, then there is not the extra payday possibility.

This extra payday does not mean that employees are being overpaid. Employees that are paid on a per hour basis still worked those hours so they are not being paid extra.  However, employees that are paid based on an annual salary will be paid an extra paycheck which would result in a higher salary for the year. Due to this possibility we suggest that every employer review their compensation plans for the 2009 and 2010 years.