MMC, INC. E-Newsletter Volume V, Issue No. 3

March 2009 

As you “March” forward with meeting organizational goals and objectives, consider some of the helpful managing tips below to wind down an earnest first quarter.  We at MMC look forward to Spring 2009 fulfilling its magical promise of renewal, fruitful rewards, and evolving strength to all.  We encourage business leaders to consider all that MMC can do for you and your staff and look forward to delighting you with our business partnering options and your choice to make MMC central to innovatively managing your workplace.

We are always here to lend guidance to all whether an existing, valued member of our MMC client-family or a curious prospective client. We stand by our advice and offer only constructive workplace consultations from the most experienced and nicest human resources, payroll and benefit professionals, as well as risk management experts around. On behalf of everyone at MMC, we wish all an industrious March. 

In this issue

• Is Gossip Feeding Your Employees with Anxiety?
• New COBRA Requirements for Employers
• How To Avoid Wrongful Termination Claims
• Despite Fiscal Challenges Giving Remains On Corporate Agendas
• Labor & Employment Law Updates

Is Gossip Feeding Your Employees with Anxiety?

Written by: Michele O'Donnell, M.S. Human Resources Management

Office gossip and rumors have long been a thorn in the side of employers. A recent study by the Society of Human Resources Management (SHRM) reported an increase in the level of inter-office rumors, gossip, and eavesdropping as a result of the current state of economy and increased employee anxiety about job cuts. The survey participants reported that more than half experienced an increase in the gossip and rumors surrounding downsizing and layoffs within their organizations.

According to Eyren Esen, SHRM Survey Manager, "Everyone is on guard, and they have their ears perked up for any information that may give them a sense of clarity about what's going on at their organization. Because people feel threatened and scared, they're more likely to do things they wouldn't normally do." This includes snooping activities such as listening in on closed-door meetings, peeking at confidential e-mails or sharing second-hand information with co-workers.

In addition to making for an unhappy workplace rumors and gossip can have a profoundly negative effect on morale and productivity. HR professionals surveyed by SHRM reported a 23% increase in the amounted of eavesdropping activities, such as lingering outside of a conference room, and a 54% increase in gossip/rumors about downsizing and layoffs. The same HR professionals provided the feedback below on how they have addressed these issues in their workplaces (multiple response options were allowed);

• 64% Held a special staff meeting
• 38%  A letter from the CEO/top management to staff
• 20% An e-mail newsletter was sent to staff
• 10% A video address from the CEO/top management
• 3% A special letter mailed to staff homes

One of the main causes of gossip and rumors in the workplace is communication or more specifically the lack of communication in many organizations.  Unusual and unexplained events can spark rumors among employees. If the organization and/or the management team do not quickly and effectively manage the rumors/gossip they can take on a like of their own which can damage both productivity and morale.

Legal Worplace.com suggests that organizations should start by addressing some of the most common causes of widespread gossip, which are outlined below;

• Lack of communication. Foster an environment of open and honest communication. Keep employees informed about good and bad news to decrease their need to speculate and contribute to or rely on the office grapevine.
• Ignorance. Make sure employees are fully aware that starting and spreading rumors and gossip is unacceptable.
• Lack of respect. Managers must enforce workplace rules so employees understand the boundaries of bad behavior. This helps send the message that troublemakers (including rumormongers) will not be tolerated.
• Cliques. Managers should physically separate members of cliques by moving them to different workspaces in order to cut down gossip time.
  

Some additional ideas for managing gossip are;

• Periodically distribute a companywide memo that reiterates that starting and spreading rumors is inappropriate. Remind employees that persistent gossipers will be subject to discipline.
• Performance appraisals can be a deterrent to gossiping. The spreading of rumors should be taken into consideration when rating employees on teamwork, cooperation, integrity, productivity, etc.
• Assign more work. If employees have time to stand around gossiping, obviously they have the time to take on additional tasks and projects.

Unfortunately rumors and gossip are a part of life and can not be completely eliminated from any workplace, steps can be taken to control and minimize its effects. Organizations should use solid communication channels, provide training, and implement and/or enforce workplace policies to make the workplace a positive environment. Click here to read the interesting poem about the gossip.

New COBRA Requirements for Employers

Written by: Michele O'Donnell, M.S. Human Resources Management

On February 17, 2009, President Obama signed into law the American Recovery and Reinvestment Act of 2009 (“ARRA”).  The ARRA has two key measures which immediately impact displaced workers.  One, unemployment insurance benefits are extended and states are encouraged to modernize their existing unemployment insurance benefits administration. Two, the ARRA provides a subsidy for post-employment medical insurance coverage under COBRA.

COBRA or the Consolidated Omnibus Reconciliation Act, allows qualified workers to continue their health insurance coverage when employment ends. The passage of the ARRA creates a 9-month, 65% premium subsidy, for displaced workers who elect to continue insurance benefits through COBRA. The subsidy is available to individuals who are involuntarily terminated from employment between September 1, 2008 and December 31, 2009. The subsidy will extend to the premiums that must be paid by displaced workers to cover spouses and dependants as well.

Beginning March, 2009 individuals who elect COBRA benefits will be required to pay 35% of their healthcare benefit premiums.  The remaining 65% must be assumed by the healthcare plan or the employer, depending on how the plan is funded.  Nonetheless, under COBRA, healthcare benefits can continue for up to 18 months (or longer in some circumstances).  It is important to note that the ARRA does not extend the 18-month COBRA continuation period. Eligibility for the subsidy provided by the ARRA, however, ends when either an individual becomes eligible for either another health plan (including Medicare) or when the 9-month subsidy period ends, whichever occurs first.

To comply with the ARRA, the onus is on individual employers who are required to contact displaced workers in writing who declined COBRA coverage and to inform those eligible individuals that they can elect subsidized COBRA coverage.  Displaced workers will then have sixty (60) days from the date of receiving a written notice of the subsidy to decide whether they wish to use subsidized COBRA coverage.

How will the 65% subsidy be paid?  Well it will be assumed through either a reimbursement to the payer by a tax credit taken against quarterly payroll for current employees. The IRS has released a new version of the 941 Employer Quarterly Federal Tax Return for 2009 which will allow for the reporting of COBRA premium assistance payments credit.  If the credit is not sufficient to cover the payer’s COBRA expenses, the remainder will be reimbursed directly from the U.S. Treasury Department.

More guidance on how to apply the ARRA is expected to come from the U.S. Department of Labor and IRS soon, so employers keep posted.  To learn more about what employers can expect under the ARRA, feel free to contact Michele O’Donnell, Human Resources Department Manager at MMC, (800) 899-MMCI (6624). 

How To Avoid Wrongful Termination Claims

Written by: Crystal M. O'Brien, Esq. 

A termination spurred by conduct that is unlawfully motivated by sex, ethnicity or age discrimination, in furtherance of unlawful retaliation, or which breaches a contract, or violates a well-established public policy is “wrongful.”  Such that courts in this country will generally award an employee suffering job loss as the result of a wrongful termination with civil damages. So what must an employer do when poor performance or a lack of business resources legitimately forces an adverse employment decision, or perhaps more curious when an employee simply quits because he or she believed their job was in jeopardy?  In a single word: document.

Documenting poor performance in a manner that a reasonable person standing in the shoes of a manager would reach the same business decision is key.  This means that if an employee is consistently reporting to work late, for example, despite verbal and formal warnings, the employer’s documentation of those warnings coupled with the details of the infractions will likely withstand the preliminary investigation of a diligent plaintiff’s attorney aimed at supporting a wrongful termination suit. 

Equally important to fending off wrongful termination suits is the application of fair and consistent workplace practices which demonstrate that all poor performance is addressed in a like manner that affords opportunities to correct.  In other words, it will not help your organization if you arbitrarily choose one employee to enforce the workplace rules against and document what may appear to be a singled-out effort.

Along the same lines, lay-off decisions should also be well supported with documentation.  Documentation that shows a clear, logical plan for eliminating certain jobs, for example, which are obsolete or can be performed by others with more job skills will undermine a wrongful termination claim.

As for what to do to avoid “constructive discharge” claims (where an employee seeks damages after voluntarily quitting because he or she was allegedly forced out of the workplace), documenting is again key.  Documenting progressive discipline efforts, ongoing efforts to educate employees as to their obligations to report unethical/unlawful conduct, and steps taken by the employer to assure all employee complaints are timely and efficiently addressed will clarify that the employee had viable options and did not have to voluntarily quit their job to avoid the alleged “evils” in a work environment.

At the risk of sounding cliché, “today’s economy” demands that employers assure more than ever that they are strictly complying with laws protecting workers’ rights and that absolutely means avoiding conduct which can be construed as unfair.  Whether faced with performance issues, lay-offs, or fear out of check in the workplace, MMC, Inc. is your source for helpful workplace guidance.  To learn more, do not hesitate to visit our website at http://www.mmchr.com/ for more help with managing your workplace amidst unprecedented challenges.

Despite Fiscal Challenges Giving Remains On Corporate Agendas

Written by: Crystal M. O'Brien, Esq. 

It was John F. Kennedy who said, “Ask not what your country can do for you; ask what can you do for your country.”  For many social commentators, service to the community is considered to be a cornerstone of American society and service no doubt includes philanthropy.  Historically, the financial and auto industries have been corporate leaders for providing financial support to numerous grassroots, charitable, and educational organizations which rely primarily on corporate sponsorship.  While philanthropy can go far with promoting goodwill (and tax breaks), it can also constitute a business venture in that it spotlights a business and enhances its marketing appeal.

Not surprisingly, many small businesses (those with less than 100 employees) fail to harness the strength that charitable giving can behold and statistics show that the majority of small businesses give--- even in today’s challenging economy.  

Considering that each year, over 1 million small businesses are started each year, and that small businesses represent 99.7 percent of all employer firms, and 50 percent of all private sector workers in America are employed by small businesses, the backbone of charitable giving is defined by small businesses.  Therefore touting the philanthropic horn is an undertaking that most small businesses overlook.

According to a study conducted in August 2008 by American Express, three-quarters of small-business owners surveyed reported donating a percentage of their profits to nonprofit organizations.  On average, small companies contribute 6 percent of their profits to charity.  Interestingly, companies with the highest revenues were the least generous.  Only 69 percent of companies earning more than $1 million contributed anything to charity.  Compare that number to a finding that 80 percent of businesses earning profits between $250,000 and $1 million gave to nonprofit groups, with 77 percent of companies earning less than $250,000 giving to charity.  Some believe that the phenomenon of giving may be closely tied to the idea that many new businesses begin with the goal to fulfill a community need.  Thus small businesses are giving even when faced with the adversity of dwindling financial resources.

What constitutes charitable giving?  Small businesses that give can be quite creative.  Giving can take the form of a donating: community and professional services, products, time, sponsoring community initiatives, local sports teams, providing job opportunities to the unskilled, matching employee cash donations, loaning business space, and promoting employee volunteerism --- aside from setting aside monetary donations.  The opportunities to give are vast. 

To learn more about how your organization can give, to partner with other corporate efforts, or to spotlight ways your organization is giving, please contact Crystal O’Brien at (800) 899-MMCI (6624).  

Labor & Employment Law Updates

Written by: Crystal M. O'Brien, Esq.  

Do the 2008 ADA Amendments Apply Retroactively? 

In Rohr v. Salt River Project Agric. Improvement & Power Dist., a Feb. 13, 2009 decision, the Ninth Circuit Court of Appeal reviewed the new 2008 ADA amendments to determine whether an insulin-dependent employee was (1) “disabled” and (2) if so, was the employer obligated to extend a reasonable accommodation in light of insulin enabling the employee to mitigate his work limitations.  The Court concluded that Congress failed to clarify whether the ADA was to apply retroactively and so the amendments could apply to this matter.  However, the facts presented in Rohr did not turn on a determination of any facts which called for the Court to decide whether Rohr had greater or lesser rights under the new ADA.  Therefore the Court declined to engage in a comparison analysis of pre and post amendments. 

What the Court did engage in was a discussion which suggested that the lower court’s decision to grant Rohr’s employer a summary judgment should be reversed.  This is because Rohr was “disabled” because his diabetic condition (with or without insulin) required him to strictly adhere to a diet which substantially limited his ability to eat, thereby making him “disabled” under the ADA [and new ADA].  Rohr also demonstrated that he was capable of performing the essential functions of his job.  Moreover, his requested accommodation of not being required to travel and to perform work which did not require a respiratory (due to not being able to meet OSHA physical requirements due to his diabetic condition), were reasonable.  To read the full decision, click here.

Out Of State Employers: What To Watch For In Changes Impacting Wage & Hour Law?

On February 17, 2009, the Ninth Circuit withdrew its opinion in Sullivan v. Oracle which potentially opened the door to out-of-state residents bringing overtime and other wage and hour claims if those residents had cause to work, even for a day, in California.  The Ninth Circuit, instead, has certified three questions for the California Supreme Court to decide which will clarify (1) if California-based employers must assure out-of-state resident/employees must be paid pursuant to California’s overtime laws, and (2) if the failure to apply California’s overtime laws to work performed in California by non-residents constitutes an act of unfair competition.

We at MMC will keep interested court watchers posted with the outcome of this much sought after clarification.