Ask the Experts: Taxability of Reimbursements for Mileage | Fort Worth Benefits Agency

Question: Are amounts an employer reimburses employees for mileage taxable?

Answer: They may be; the type of reimbursement plan will dictate whether reimbursement for business travel is or is not taxable. Both accountable plans and non-accountable plans allow an employer to reimburse employees for their business expenses.

With an accountable plan, the reimbursement is not taxable to your employee. Amounts paid under an accountable plan are not wages and are not subject to income tax withholding and payment of Social Security, Medicare, and Federal Unemployment Tax Act (FUTA) taxes. Your reimbursement or allowance arrangement must meet all of the following conditions in order to quality as an accountable plan:

  • There must be a business connection to the expenditure. This means that the expense must be a deductible business expense incurred in connection with services performed as an employee of the employer. If not reimbursed by the employer, the expense may be deductible by the employee from their taxable income.
  • There must be adequate accounting by the employee. This means that the employee must give their employer a statement of expense, an account book, a diary, or a similar record in which they entered each use at or near the time it occurred, along with date, mileage, and the business purpose of the use.
  • Excess reimbursements or advances must be returned within a reasonable period of time.

A non-accountable plan does not meet the three requirements for accountable plans and is subject to all employment taxes and withholding. Payments under a non-accountable plan occur if: (1) the employee is not required to substantiate expenses with receipts or other documentation in a timely manner; and (2) the employer advances an amount to the employee for business expenses and the employee is not required to, and does not, return any amount he or she does not use for business expenses in a timely manner.

Employers should also check with their state department of taxation to understand any state tax rules applicable to them.

For more detailed information on federal mileage reimbursement, see the IRS page containing Publication 463, Travel, Entertainment, Gift, and Car Expenses, and updates to this publication since its publication date.

 

Originally posted on ThinkHR.com


IRS Announces HSA Limits for 2020 | Fort Worth Employee Benefits Agency

On May 28, 2019, the Internal Revenue Service (IRS) released Revenue Procedure 2019-25 announcing the annual inflation-adjusted limits for health savings accounts (HSAs) for calendar year 2020. An HSA is a tax-exempt savings account that employees can use to pay for qualified health expenses.

To be eligible for an HSA, an employee:

  • Must be covered by a qualified high deductible health plan (HDHP);
  • Must not have any disqualifying health coverage (called “impermissible non-HDHP coverage”);
  • Must not be enrolled in Medicare; and
  • May not be claimed as a dependent on someone else’s tax return.

The limits vary based on whether an individual has self-only or family coverage under an HDHP. The limits are as follows:

  • 2020 HSA contribution limit:
    • Single: $3,550 (an increase of $50 from 2019)
    • Family: $7,100 (an increase of $100 from 2019)
    • Catch-up contributions for those age 55 and older remains at $1,000
  • 2020 HDHP minimum deductible (not applicable to preventive services):
    • Single: $1,400 (an increase of $50 from 2019)
    • Family: $2,800 (an increase of $100 from 2019)
  • 2020 HDHP maximum out-of-pocket limit:
    • Single: $6,900 (an increase of $150 from 2019)
    • Family: $13,800* (an increase of $300 from 2019)

*If the HDHP is a nongrandfathered plan, a per-person limit of $8,150 also will apply due to the Affordable Care Act’s cost-sharing provision for essential health benefits.

 

Originally posted on ThinkHR.com


Spring Clean Your Life | Texas Benefits Advisors

The winter doldrums have left most of the country and we are witnessing the arrival of spring. Just like the budding trees and baby animals signify a new start, so does a fresh cleaning of your home. But don’t let the spring cleaning stop with the physical place where you live—extend it to all corners of your life. Give your life a good spring cleaning by organizing, decluttering, and setting goals.

ORGANIZE

By now everyone knows who Marie Kondo is—the master of “The Life-Changing Magic of Tidying Up.”  What began a worldwide phenomenon of “sparking joy” in your home can be applied to your work life as well. Start by organizing your thoughts. Write down the tasks you want to accomplish whether it be daily, monthly, or yearly. Calendar the tasks so you know when you want them completed and prioritize them so you know what importance you assign to each item. Prioritizing tasks helps you accept a request or confidently say “no” when someone asks you to do something knowing it doesn’t fit in with your priorities.  Organizing tasks works for both your personal and work life.

DECLUTTER

A good decluttering session is good for the soul! Step back and look at your workspace—are there piles of paper stacked on your desk? What about that mound of things you keep saying you’ll take upstairs in your house? Do you have relationships that are cluttering up your life? Take an hour each week to sort through your workspace piles. Choose to save only the papers/magazines/notes that you need to complete your job or that you want to save for sentimental reasons. Toss the rest of those papers in the recycle bin! After you are able to pare down the piles, begin asking yourself if the next paper that comes across your desk needs to be saved, trashed, or recycled so that those mounds don’t grow into mountains again. The same goes for stuff around your house. Start that garage sale box, begin a keepsake box, and trash the rest. Finally, kick those toxic relationships to the curb. You know the ones—the relationships that suck the life out of you. If you have someone whose values and priorities don’t align with yours, choose to keep them at arm’s length so you can spend more time with the people who hold priority in your life.

SET GOALS     

Goals are unlike resolutions.  Resolutions are a firm decision to do or not to do something. “I resolve not to eat dessert after every meal.” Goals give direction to follow to achieve a desired outcome. For instance, a career goal may be to finish your college degree or obtain a special certification. A relationship goal could be to have weekly date night or to start a family. Financial goals may include paying down debt, setting aside money from each check for a summer vacation, or to begin regularly giving to a non-profit dear to your heart. Set goals as you spring clean your life to give yourself direction in how you spend your time and effort this year.

As you begin spring cleaning your life, you will be surprised what good things are able to flow into those corners that were previously inhabited by disorganization, clutter, or lack of focus. By giving yourself a chance to have a fresh start in your life, you are encouraging new growth. And new growth is always exciting!


Insuring the Times of Your Life | Texas Benefits Agency

Preston Newby was a youth minister. He and his wife, Tara, were driving with their son to visit family—excited to announce a new baby on the way. In the keeping with the kind of person Preston was, he stopped to help at the scene of an accident. That’s when he was struck by another car and killed. He was only 24.

Fortunately, this young couple had done their planning and had bought life insurance. So despite the emotional upheaval that Preston’s death caused, Tara, a stay-at-home mom, and her two sons were able to carry on financially as they had before. You can watch their story here.

How many other people have prepared like this for the unexpected? Unfortunately, not enough: 43% of adult Americans don’t have life insurance, according to the 2019 Insurance Barometer Study, by Life Happens and LIMRA.

Many people think, “I’m young. That won’t happen to me.” Statistically they may be right. However, they could be up being one of the statistics. You just don’t know—and that’s the problem. The solution is life insurance.

If you have people you love and who depend on you, or you have financial obligations to meet, you need life insurance to protect against the “what ifs”—at every stage in life. Here are just a few reasons you may need life insurance, or more of it, throughout your life.

Single with no children: You may think you don’t need life insurance, since you have no dependents, but if you owe money, you need it. It ensures that your debts, including student loans and funeral expenses, won’t be passed on to your family. Additionally, if you are taking care of aging parents or a special-needs sibling, or know you will in the future, life insurance is a smart way to make sure that care can continue uninterrupted.

Married or partnered: As you begin your lives together, you’ll likely incur joint financial obligations like buying a home, in addition to monthly bills. It makes sense to protect your spouse or partner with adequate life insurance. It’s also a smart move to get coverage in place now if you plan on having a family in the future.

Parents with children: If you’re in the midst of this stage, financial obligations abound. Many couples rely on two incomes to make ends meet and single parents may be their children’s one-and-only. Life insurance is critical at this point. When figuring out how much you need, remember that the economic impact you have on your family can be measured not just by how much you earn now, but by how much you’ll earn over the course of your working life. Life Happens’ Human Life Value Calculator can help you figure out what that will be.

Empty-nesters/retirees: Your kids are on their own and your mortgage is paid off, so you may think you don’t need life insurance. However, if you are still building your retirement nest egg, life insurance ensures that if something happens to you that your spouse or partner can still live comfortably in retirement, despite any shortfalls.

Keep in mind, life insurance is a simple answer to an important question: Would anyone suffer financially if I were to die. If the answer is yes, it’s time to sit down with an insurance professional.

By Maggie Reyes

Originally posted on lifehappens.org


Millennials are HR's biggest challenge in the multi-gen workplace | Texas Benefit Advisors Agency

Dive Brief:

  • Almost half of HR professionals (48%) reported millennials as their largest non-desk work group, but 32% said they are the hardest generation among Gen Z, Gen X and baby boomers to engage, according to research from Speakap. The corporate social platform surveyed 250 HR professionals in the U.S. and U.K. on their use of technology to retain and engage employees and their biggest workforce challenges.
  • The survey uncovered that millennials value products less than meaningful experiences; are idealistic rather than pragmatic; are continuously searching for personal fulfillment, rather than just a job; and don't tolerate subpar experiences — from brands delivering a customer experience to employers delivering an employee experience.
  • Almost three-fourths of the survey respondents said their organizations currently use technology-driven HR initiatives, and 75% said they have turnover rates averaging up to 30% a year. Socially engaging experiences, real-time feedback and mobile access positively impact engagement with millennial and Gen Z workers, according to the feedback, and reducing turnover and improving employee-manager relationships are bigger HR priorities with Gen Z workers than with boomer and millennial workers.

Dive Insight:

Attracting and hiring talent is only the start of establishing a positive employee experience. Employers must first make employee engagement a priority, especially among millennials, who are apt to job hop when they feel underutilized. Because millennials were born into the tech age, between 1981 and 1996, employers that keep up with technological advancements and provide the latest digital tools may engage them better at work. Employers that don't will have a harder time competing for talent in general, according to a Harvard Business Review Analytic Services report.

"First and foremost, companies should tap into millennials' intrinsic desire for personal fulfillment and a sense of purpose," Erwin Van Der Vlist, Speakap​'s co-founder and CEO, said in a statement.

Personalization reportedly has high appeal among millennials, especially when the concept is applied to benefits. Emily Bailey, managing principal at OneDigital, told HR Dive in a 2018 interview that there are major differences in how millennials select benefits. She said younger workers are more likely to pass on voluntary benefits and opt for those that meet a more immediate need, such as tuition reimbursement or remote-work options.

Employers might consider myriad options to engage millennials, such as connecting their organization to a cause through corporate social responsibility initiatives, prioritizing career development and providing meaningful work experiences.

By Valerie Bolden-Barrett

Originally posted on hrdive.com


Why it might be time to say goodbye to exit interviews

Many companies, large and small, are ending the practice of exit interviews. While the concept seems sound, many HR professionals report that most people who are willing to talk are the ones who complained while in the company's employment. Read on for more.


The exit interview is a long-time staple of HR departments. But an increasing number of companies large and small are ending the practice of asking departing workers to sit down for a final interview.

The concept seems sound. You can take the opportunity to hear unvarnished opinions about what your company or team does well and what it needs to improve on, and then take that back to management and implement changes that’ll help attract and retain great talent.

In practice, however, the process is often uncomfortable and many HR pros report that the folks who are interested in talking are often the ones who complained the most while on the payroll. The litany of gripes and rehashed personality clashes rarely adds much to the organization’s insight into building a better workplace.

If you can’t say anything nice…

Most of the rest, if they even will agree to an exit interview – and you can’t make them do that, of course – are going to be very careful to say only positive or neutral things about their experience at your organization. That helps to prevent bridge burning for them, in case they ever want to come back or they run into a colleague at a job interview later in their career. But for your team, the result is likely the same as with the complainer in the first example: A one-sided, probably inaccurate picture of what you are doing right and how you can improve in areas that need work.

Finally, much of the work your HR team does to schedule an interview as workers are packing up their personal stuff is likely to be wasted. Advice on employee-focused employment websites and other social media leans heavily towards “How to Avoid the Exit Interview.” Suggested tactics range from saying you can’t spare the time because you don’t want to leave your soon-to-be-ex colleagues hanging to asking to schedule after the leave date and then just ghosting the phone call altogether.

It’s still worthwhile to do a formal review to close out individual projects and to debrief contractors as they wrap up, but it’s probably time to say goodbye to the “tell us what you really think” sessions with employees who have decided to move on.

SOURCE: McElgunn, T. (27 December 2018) "Why it might be time to say goodbye to exit interviews" (Web Blog Post). Retrieved from http://www.hrmorning.com/why-it-might-be-time-to-say-goodbye-to-exit-interviews/


How employees really feel about asking for time off during the holidays

More than half of employees feel uneasy about asking employers for time off during the holidays, according to a new survey from management and technology consulting firm, West Monroe Partners. Read this blog post to learn more.


Are employers checking their PTO list? They may want to check it twice, according to new data, workers may be leaving vacation days on the table during the holidays because they feel uncomfortable asking for time off.

More than half of employees (51%) feel uneasy about asking to use their paid time off during the holidays, according to a new survey of more than 2,000 employees from management and technology consulting firm, West Monroe Partners. This discomfort was even more prevalent in smaller companies with smaller staffs, where employees work more closely with their managers and colleagues.

Michael Hughes, managing director at West Monroe Partners, says part of the reason employees are so nervous about asking for time off is the expectation that they have to be available 24/7. An employee may also be concerned they will appear to be slacking if aren’t in the office with many companies being short staffed to begin with, he says.

“With the war for talent, people are being asked to do more and more because either they’re shorthanded or can’t find people,” Hughes says.

Nearly two-thirds of employees working in the banking sector felt uncomfortable asking to use their PTO, according to the survey. Although Monroe Partners did not specifically review why this might be the case for banking, Hughes says he thinks that, like other service industries, bank employees often have to work during the holidays to attend to customers.

Banks were hit hard during the 2007 economic recession, he adds, and some have been cautious about beefing their workforce — forcing current employees to carry heavy workloads. But, he adds, this is fairly common across many industries.

“I think it’s something that impacts industries across the board,” he says. “[But] just based on the study banking is one that sticks out.”

West Monroe Partners recommends companies close the office on days other than just federal holidays and accommodate for remote working or flexible scheduling.

Training managers to fairly process PTO requests may also be necessary, the report notes. Managers can do a better job of having open conversations with employees around PTO and job satisfaction.

Despite worker’s anxieties, employers should communicate the importance of taking time off during the holidays, Hughes says. It’s good for workers to get time to rest, he adds. If employees are unhappy in the office, it will likely trickle down to the customer experience.

“A lot of it is just personal health,” he says. “If you give people the opportunity to recharge, they’re going to be more productive when they’re happy.”

SOURCE: Hroncich, C. (7 December 2018) "How employees really feel about asking for time off during the holidays" (Web Blog Post). Retrieved from https://www.benefitnews.com/news/how-employees-really-feel-about-asking-for-time-off-during-the-holidays?brief=00000152-14a7-d1cc-a5fa-7cffccf00000


E-Verify Is Down. What Do Employers Do Now?

What are employers to do now that E-Verify, the federal government's electronic employment verification system, has expired? The system compares employee information with the DHS and Social Security Administration (SSA) records to confirm employment eligibility. Continue reading to learn more.


What are employers supposed to do now that E-Verify—the federal government's electronic employment verification system—has expired?

Funding and congressional authorization for the program ran out Dec. 22, 2018, as the government went into a partial shutdown after Congress and the White House could not agree on how to fund some agencies, including the U.S. Department of Homeland Security (DHS), which administers the system, for fiscal year 2019.

E-Verify compares information from an employee's Form I-9 to DHS and Social Security Administration (SSA) records to confirm employment eligibility. Employers enrolled in the program are required to use the system to run checks on new workers within three days of hiring them.

During the government shutdown, employers will not be able to enroll in E-Verify, initiate queries, access cases or resolve tentative non-confirmations (TNCs) with affected workers.

All employers remain subject to Form I-9 obligations, however. "Remember that the government shutdown has nothing to do with an employer's responsibilities to complete the Form I-9 [in a timely manner]," said Dawn Lurie, senior counsel in the Washington, D.C., office of Seyfarth Shaw. "Specifically, employees are required to complete Section 1 of the I-9 on or before the first day of employment, and employers must complete Section 2 of the I-9 no later than the third business day after an employee begins work for pay."

No Cause for Alarm

Lurie advised employers not to panic while E-Verify is down. "Employers will not be penalized as a result of the E-Verify operations shutdown," she said. "Employers will not be penalized for any delays in creating E-Verify cases. However, employers are reminded that they must continue to complete I-9s in compliance with the law, and when E-Verify becomes available, create cases in the system."

To minimize the burden on both employers and employees, DHS announced that:

  • The three-day rule for creating E-Verify cases is suspended for cases affected by the unavailability of the service. "Normally, the employer enters information from the I-9 into E-Verify within three days of hire, but that won't be possible while the system is unavailable," said Montserrat Miller, a partner in the Atlanta office of Arnall Golden Gregory. "DHS will provide a window of time to submit those held cases once service resumes."
  • The time period during which employees may resolve TNCs will be extended. The number of days E-Verify is unavailable will not count toward the days the employee has to begin the process of resolving a TNC. "Employers can't take any adverse action against a worker with a pending TNC regardless, shutdown or not," Miller said. Currently, an employee who chooses to contest a TNC must visit an SSA field office or call DHS within eight federal government working days to begin resolving it. This period will have to be extended because of the shutdown, she added.
  • Additional guidance regarding the three-day rule and time period to resolve TNC deadlines will be provided once operations resume.

Amy Peck, an immigration attorney with Jackson Lewis in Omaha, Neb., advised employers to keep track of all new hires with completed I-9s for whom there are no E-Verify queries due to the shutdown. She also recommended attaching a memo in a master E-Verify file tracking the days that the program was unavailable. "I've seen the discrepancy come up years later during an audit," she said.

"Once the system is back up, work with counsel on how much time employees have to resolve their TNCs," Peck said. "Someone receiving a TNC the day before the shutdown is a different case than somebody who had 10 days to resolve their TNC when the shutdown occurred. Those circumstances should be considered on a case-by-case basis."

Federal contractors with a federal acquisition regulation E-Verify clause should contact their government contracting officers to extend deadlines. "Federal contractors have a particular concern because nobody is supposed to be working who has not been verified through the system," Peck said. "People can be hired, but whether they are allowed to work on the contract before being run through E-Verify is a critical consideration that should be discussed with counsel."

Prepare for the Resumption of Service

Miller said employers should monitor the shutdown. "When it is over, log in to the system and see what instructions there are for creating and submitting queries," she advised. "There is an obligation to create those queries if you are enrolled in the program, even if enrolled voluntarily."

The backlog created as a result of the shutdown might have a significant impact on employers that process many E-Verify cases and specifically on the HR staff and other team members in charge of the process.

"Not all employers will be able to push all their cases through at once when the shutdown ends," Miller said. "If everyone did that, the system would crash. DHS will provide instructions on how to submit queries. Employers will be asked why the query is being submitted after the required three days. In the past, 'Government Shutdown' was one of the options in the drop-down menu."

Peck reminded employers that the loss of E-Verify does not mean there is a prohibition against hiring. "Companies should continue to hire as they need," she said.

SOURCE: Maurer, R. (3 January 2019) "E-Verify Is Down. What Do Employers Do Now?" (Web Blog Post). Retrieved from https://www.shrm.org/ResourcesAndTools/hr-topics/talent-acquisition/Pages/EVerify-Outage-What-Do-Employers-HR-Do.aspx


Compliance Recap - December 2018

December was a relatively quiet month in the employee benefits world.

A U.S. District Court issued an order declaring that the Patient Protection and Affordable Care Act (ACA) is unconstitutional. The Equal Employment Opportunity Commission (EEOC) issued two final rules to remove certain wellness program incentives. The Department of Labor (DOL) updated its Form M-1 filing guidance for association health plans.

UBA Updates

UBA updated or revised existing guidance:

U.S. District Court Declares ACA Unconstitutional

On December 14, 2018, the U.S. District Court for the Northern District of Texas (Court) issued a declaratory order in ongoing litigation regarding the individual mandate and the Patient Protection and Affordable Care Act (ACA). The Court declared that the individual mandate is unconstitutional and declared that the rest of the ACA – including its guaranteed issue and community rating provisions – is unconstitutional.

The Court did not grant the plaintiffs’ request for a nationwide injunction to prohibit the ACA’s continued implementation and enforcement. The Court’s declaratory judgment simply defined the parties’ legal relationship and rights under the case at this relatively early stage in the case.

On December 16, 2018, the Court issued an order that requires the parties to meet and discuss the case by December 21, 2018, and to jointly submit a proposed schedule for resolving the plaintiffs’ remaining claims.

On December 30, 2018, the Court issued two orders. The first order grants a stay of its December 14 order. This means that the court’s order regarding the ACA’s unconstitutionality will not take effect while it is being appealed. The second order enters the December 14 order as a final judgment so the parties may immediately appeal the order.

On December 31, 2018, the Court issued an order that stays the remainder of the case. This means that the Court will not be proceeding with the remaining claims in the case while its December 14 order is being appealed. After the appeal process is complete, the parties are to alert the Court and submit additional court documents if they want to continue with any remaining claims in the case.

At this time, the case’s status does not impact employers’ group health plans. However, employers should stay informed for the final decision in this case.

Read more about the court case.

EEOC Issue Final Rules to Remove Wellness Program Incentive Limits Vacated by Court

On December 20, 2018, the Equal Employment Opportunity Commission (EEOC) issued two final rules to remove wellness program incentives.

As background, in August 2017, the United States District Court for the District of Columbia held that the U.S. Equal Employment Opportunity Commission (EEOC) failed to provide a reasoned explanation for its decision to allow an incentive for spousal medical history under the Genetic Information Nondiscrimination Act (GINA) rules and adopt 30 percent incentive levels for employer-sponsored wellness programs under both the Americans with Disabilities Act (ADA) rules and GINA rules.

In December 2017, the court vacated the EEOC rules under the ADA and GINA effective January 1, 2019. The EEOC issued the following two final rules in response to the court’s order.

The first rule removes the section of the wellness regulations that provided incentive limits for wellness programs regulated by the ADA. Specifically, the rule removes guidance on the extent to which employers may use incentives to encourage employees to participate in wellness programs that ask them to respond to disability-related inquiries or undergo medical examinations.

The second rule removes the section of the wellness regulations that provided incentive limits for wellness programs regulated by GINA. Specifically, the rule removes guidance that addressed the extent to which an employer may offer an inducement to an employee for the employee’s spouse to provide current health status information as part of a health risk assessment (HRA) administered in connection with an employee-sponsored wellness program.

Both rules will be effective on January 1, 2019.

Read more about the EEOC’s final rules.

DOL Updates Form M-1 Filing Guidance for Association Health Plans

On December 3, 2018, the Department of Labor (DOL) published its “10 Tips for Filing Form M-1 For Association Health Plans And Other MEWAs That Provide Medical Benefits” that provides plan administrators with information on when to file and how to complete portions of Form M-1.

The DOL emphasizes that all multiple employer welfare arrangements (MEWAs) that provide medical benefits, including association health plans (AHPs) that intend to begin operating under the DOL’s new AHP rule, are required to file an initial registration Form M-1 at least 30 days before any activity including, but not limited to, marketing, soliciting, providing, or offering to provide medical care benefits to employers or employees who may participate in an AHP.

Read more about the DOL guidance.

Question of the Month

Q: If an employee must increase the hours of childcare needed because the employee changes work schedules, may the employee increase the DCAP amount that the employee elects?

A: Yes, increasing the hours of childcare is a permitted election change event that would allow an employee to increase the employee’s DCAP election amount consistent with the change in childcare cost.

1/1/2019


4 mistakes to avoid at the intersection of FMLA and PTO

Do you offer leave entitlements such as FMLA and PTO to your employees? Administration of these benefits can become extremely complex. Continue reading this blog post for the four mistakes employers should avoid when it comes to FMLA and PTO.


By now, many employers can recite the basic requirements of the federal Family and Medical Leave Act (FMLA) in their sleep. The law provides eligible employees (those who have at least one year of service and 1,250 hours under their belt) with up to 12 weeks of unpaid, job-protected leave over a 12-month period for qualifying family-related or medical reasons. FMLA covers companies with 50 or more employees located within 75 miles of each other.

While the law itself is conceptually straightforward, administration can become incredibly complex — especially when you throw other types of leave entitlements into the mix such as workers' comp, disability leave, and paid time off (PTO).

HR Dive recently spoke with three employment law attorneys about the most common — and costly — leave administration errors employers make when it comes to the intersection of FMLA and paid leave.

Mistake #1: Not running leaves concurrently

"I would say that the biggest issue that we see is a lot of employers do not have policies that provide for the use of paid time off concurrently with the FMLA," said attorney Molly Batsch, an officer at the St. Louis office of Greensfelder, Hemker & Gale, P.C. "[Because] the FMLA regulations allow employers to require employees to use any paid time off concurrently with unpaid FMLA leave, we really encourage employers to put that specifically in their policies."

Attorney Jeff Nowak, a partner at the Chicago office of Franczek Radelet P.C., concurred via email: "A decent number of employers don't realize that they can run FMLA leave concurrently with paid leave benefits such as worker's compensation benefits — or they forget to run both at the same time."

Failing to run leaves concurrently, when permitted, can be costly for employers. A series of consecutive leaves strung together can mean longer absences and increased workplace disruption.

Mistake #2: Policy confusion

A similar mistake employers make is that they don't explicitly outline the concurrent rule to employees. Your FMLA policy should make clear that any paid time off will run concurrently with unpaid FMLA time, advised Batsch: "I think that employers have a few misconceptions about that.

"The first misconception would be that the employee gets to pick," she said. "If the employee doesn't want to run the two concurrently, then they can go ahead and take 12 weeks of unpaid FMLA and then they can take their five weeks of vacation after that, and that is not the case. It is permissible for an employer to require that time to run concurrently. So that's the first mistake I see."

Make sure your policy is abundantly obvious about that so employees don't get upset about that requirement when it's being administered.

Mistake #3: Missing an important caveat about FMLA and paid leave

There is an important exception to the general rule that employers may require an employee to use paid leave during unpaid FMLA leave, one that many employers miss, according to all three attorneys HR Dive spoke with.

"If an employee is on FMLA leave and simultaneously in receipt of a paid benefit, in any amount, FMLA leave is considered paid. When it's paid FMLA, an employer may not require that the employee substitute PTO — but it can permit that," said attorney David Mohl, a principal at the Atlanta office of Jackson Lewis PC.

For example, he said, if short-term disability provides 70% income replacement, an employer cannot require that the employee use PTO (or other paid leave) to make up the difference. If, however, there is a waiting period before that paid benefit kicks in — say, seven days — an employer may require the use of paid leave during that seven days.

Batsch noted that even if the employee is receiving paid time off via a third-party disability plan rather than an employer disability plan, "that's still a situation where you can't require an employee to run their paid time off concurrently with their FMLA time." This was clarified by the Seventh Circuit in a 2007 case (Repa v. Roadway Express, Inc., 477 F.3d 938).

Mistake #4: Forgetting to consider the patchwork of local laws

"The growing number of state and local laws heap a load of additional compliance concerns onto employers," said Nowak. "Not only are there additional considerations for accrual, carryover, and reasons for leave, but these new leave laws tend to provide job-protected leave in situations where the medical condition is not covered by the FMLA. As a result, employers cannot discipline an employee for an absence when he or she is utilizing leave covered by one of these leave laws."

Of course, those laws only make the interactions with FMLA management more complex.

"Paid parental leave policies interact with FMLA and gender discrimination laws," said Mohl. "PPL policies are, of course, a type of paid leave; some operate as a disability benefit."

Paid leave will likely continue to expand in scope in the coming months as more states and cities consider mandating it. Currently, 10 states and about 30 localities guarantee some type of paid sick leave. A number of federal policies have also been proposed, but no movement has been seen at that level yet.

SOURCE: Carsen, J. (27 November 2018) "4 mistakes to avoid at the intersection of FMLA and PTO" (Web Blog Post). Retrieved from https://www.hrdive.com/news/4-mistakes-to-avoid-at-the-intersection-of-fmla-and-pto/542962/


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