Summer is approaching fast and you may be planning to take on a seasonal intern this year, such as a college student on summer break. According to a recent study conducted by the National Association of Colleges and Employers, employers expect to hire 8.5% more college students for summer internships this year than last year--and nearly all expect to pay their interns.
But does federal law require that interns be paid? You may be surprised to learn that internships in the for-profit private sector are most often considered 'employment' subject to the federal minimum wage and overtime rules.
The Fair Labor Standards Act
Under the federal Fair Labor Standards Act (FLSA), non-exempt individuals who are 'suffered or permitted' to work must be compensated for the services they perform for an employer. Interns who qualify as employees typically must be paid at least the federal minimum wage of $7.25 per hour, as well as overtime compensation at a rate of not less than one and one-half times the regular rate of pay after 40 hours of work in a workweek. (Note that you may also be required to follow state laws which are more favorable to employees.)
Complying with the law is important; employers who fail to compensate their interns may be liable for back wages, penalties and sanctions.
The Test for Unpaid Interns
According to the U.S. Department of Labor (DOL), there are some circumstances under which individuals who participate in for-profit private sector internships or training programs may do so without compensation. This may apply to interns who receive training for their own educational benefit if the training meets certain criteria.
Whether interns must be paid depends upon all of the facts and circumstances of the internship program. The DOL uses the following 6 criteria which must be applied when making this determination:
- The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
- The internship experience is for the benefit of the intern;
- The intern does not displace regular employees, but works under close supervision of existing staff;
- The employer that provides the training derives no immediate advantage from the activities of the intern, and on occasion its operations may actually be impeded;
- The intern is not necessarily entitled to a job at the conclusion of the internship; and
- The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.
If all of the factors listed above are met, an employment relationship likely does not exist under federal law, and the FLSA's minimum wage and overtime provisions do not apply to the intern. This exclusion from the definition of employment is necessarily quite narrow because the FLSA's definition of 'employ' is very broad.
For More Information
The DOL's Internship Programs Fact Sheet provides additional information to help determine whether interns must be paid the minimum wage and overtime under the FLSA. Our section on the Fair Labor Standards Act provides important information about this and other federal compensation issues. And you can download our Federal Labor Laws by Company Size chart for free to help you review other federal employment laws that may apply to your company.
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Keeping track of so many different notices and reporting requirements for employee benefit plans can be challenging for any sized company. With the 2012 edition of our 'Employee Benefit Plan Compliance Calendar,' companies can stay ahead of the curve with bottom line information on required notices, including who must receive them, who must provide them and when notices are due. Simply click on the link below to download your free copy.
>> Download the '2012 Employee Benefit Plan Compliance Calendar'<<
What's New for Employee Benefit Plans in 2012?
The 2012 edition of the 'Employee Benefit Plan Compliance Calendar' features a number of important updates as a result of new requirements for group health plans under Health Care Reform, including the new summary of benefits and coverage (SBC) notice requirements.
Due to popular demand, we've also added key non-ERISA notice requirements for group health plans featuring information regarding Medicare Part D Creditable Coverage Disclosures.
All-in-One Benefits Compliance Calendar and Downloadable Model Notices
The all-in-one calendar features the major federal notice and reporting requirements for employee benefit plans in a simple chart format and you can download model notices and forms right from the calendar, including:
- Health Care Reform Notices (including the new SBC model notice)
- COBRA Notices
- HIPAA Notices
- Form 5500
- Special Health Care Notices (Women's Health and Cancer Rights Act, Mental Health Parity and Addiction Act, CHIP)
You can also download our companion to the calendar, the '2012 Required Benefits Notices Checklist.' The checklist features a convenient summary of key requirements, along with links to downloadable model notices and agency guidelines—and, we've even included a heads-up as to who must comply. Download your free tools today to stay on track with compliance.
If you sponsor a group health plan subject to the federal Consolidated Omnibus Budget Reconciliation Act (COBRA), now may be a good time to review your compliance. The Internal Revenue Service (IRS) recently issued updated COBRA Audit Guidelines intended to provide IRS examiners with a procedural guide to conduct COBRA compliance checks.
The Internal Revenue Code imposes a tax penalty for failure to comply with COBRA requirements. The tax amount is $100 per day, per qualified beneficiary (those individuals entitled to COBRA continuation coverage), for each day of the noncompliance period, subject to a statutory limit of up to $500,000 for unintentional failures that are due to reasonable cause and not to willful neglect.
COBRA Continuation Coverage
COBRA generally requires that group health plans sponsored by employers with 20 or more employees on more than 50% of typical business days in the prior year offer employees and eligible spouses and dependent children the opportunity for a temporary extension of health insurance where coverage under the group plan would otherwise end due to certain qualifying events. Group health plans must provide covered employees and dependents with specific notices explaining their COBRA rights.
New Audit Guidelines for COBRA Compliance
The updated COBRA Audit Guidelines direct IRS examiners to probe specific areas for noncompliance by asking questions regarding:
- The number of qualifying events occurring in the year under examination through the current date;
- How qualified beneficiaries are notified of their COBRA rights;
- How the plan administrator is notified when a qualifying event occurs;
- The COBRA election made by qualified beneficiaries; and
- The premium paid by qualified beneficiaries for COBRA.
Additionally, IRS examiners are instructed to determine what continuation coverage procedures are in place by obtaining certain information related to the plan, including:
- A copy of the continuation coverage procedures manual;
- Copies of standard form letters sent to qualified beneficiaries;
- A copy of internal audit procedures for continuation coverage;
- Copies of all group health care plans; and
- Details pertaining to any past or pending lawsuits for failing to provide appropriate continuation coverage.
Personnel records will also be reviewed to confirm whether or not qualified beneficiaries were properly notified of their rights to continuing health coverage. According to the guidelines, personnel records should include documents to support the following items of information:
- Name and address of each beneficiary (for purposes of third party confirmation if necessary);
- Date the qualifying event took place;
- Copies of the notification letters sent to qualified beneficiaries (to determine the period they were eligible to elect coverage, and in fact were offered coverage, and also to confirm they received their notice of rights under COBRA);
- Type of coverage received under COBRA (to determine if the qualified beneficiary received the proper coverage);
- Premium payments required under COBRA (review of health plan documents previously requested may indicate whether the premium charged was excessive);
- Copy of employer's letter to the insurance company/plan administrator notifying them of a qualifying event;
- Reasons for termination of COBRA coverage properly elected by the beneficiary; and
- Reasons for employment termination.
Employers required to comply with COBRA should review the Audit Guidelines in detail. If you have questions regarding your responsibilities with respect to COBRA compliance or the type of documentation you should maintain, please consult with your plan administrator or a knowledgeable employment law attorney.
For step-by-step guidance on compliance, be sure to check out our COBRA Steps to Success ebook, available free for download.
As an employer, you are responsible for understanding the anti-discrimination laws that apply to your company so that you can protect your employees from unfair treatment and harassment on the job. In addition, you may be required to keep records, comply with poster requirements, and respond to charges of unlawful treatment. Taking steps to prevent discrimination may not only be required by law, but it may also avoid costly litigation in the future.
If you're unsure about which federal laws against discrimination apply to your business and whether you're in compliance with those laws, the U.S. Equal Employment Opportunity Commission (EEOC) can help!
What You Need to Know
Visit www.eeoc.gov to find a number of resources from the EEOC aimed specifically at laws against discrimination for employers, including:
Compliance Guidance
- EEOC regulations generally require employers to keep all personnel or employment records for one year. If an employee is involuntarily terminated, his or her personnel records must be retained for one year from the date of termination.
- The law requires an employer to post notices describing the federal laws prohibiting job discrimination based on race, color, sex, national origin, religion, age, equal pay, disability and genetic information.
- Private employers with over 100 employees are required to provide certain workforce data to the EEOC, even if no charge has been filed against the company.
- When an employee files a charge of discrimination with the EEOC, employers have certain obligations in connection with the EEOC’s investigation of the charge and may also have additional recordkeeping obligations.
Straight from the Source: Assistance and Training Directly from the EEOC
- Do you have questions about whether a particular employment practice is discriminatory? You can contact an EEOC small business liaison for information about the laws enforced by the EEOC and compliance with those laws in specific workplace situations.
- Are you planning a conference or seminar? The EEOC offers free outreach programs on a limited basis to employer groups, professional associations, students, non-profit entities, community organizations and other members of the general public. An EEOC representative may be available to provide a general overview of the laws it enforces and EEOC charge processing procedures, including mediation.
- Are you interested in more in-depth training? For a fee, the EEOC Training Institute offers a wide variety of training programs to help employers understand, prevent and correct discrimination in the workplace.
For More Information
The EEOC provides a host of free downloadable publications, fact sheets and other guidance materials on its website. You can also check out our section on Discrimination for important information about federal anti-discrimination laws. And don't miss our free tool for employers, the Personnel Recordkeeping Guide, for an overview of key recordkeeping requirements under federal law, including records related to equal opportunity in employment.
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April 25th marks the 60th anniversary of Administrative Professionals Day. While it is important to acknowledge and reward your employees' achievements on a regular basis, Administrative Professionals Day calls special attention to the support of your administrative professionals in contributing to the success of your company.
Expanding Roles of Administrative Professionals
Administrative Professionals Day was originally founded as National Secretaries Day. The name change was intended to reflect the evolving job titles and expanding responsibilities of the administrative workforce.
According to the U.S. Department of Labor, there are more than 4.1 million secretaries and administrative assistants working in the United States and the International Association of Administrative Professionals counts an additional 8.9 million people working in various administrative support roles.
In addition to more traditional support roles, such as filing, answering phone calls and scheduling appointments, it is common for administrative professionals to assume a much wider range of responsibilities, from conducting research and writing reports, to purchasing office supplies, coordinating meetings and special events, and so much more.
Tokens of Employee Appreciation
There are countless ways to show your employees you appreciate their hard work. Recognizing that administrative responsibilities continue to expand, providing additional opportunities for training to enhance skill development, education, and career growth is one way to support and reward your employees. The following are just a few options you may wish to consider:
- Providing tuition reimbursement for completing college courses
- Sponsoring membership and participation in professional organizations, conferences, seminars, and continuing education workshops
- Offering in-house professional development training and employee education programs
Of course, more traditional tokens of appreciation for the day include:
- Personalized and/or ergonomically correct business accessories
- Gift certificates
- An employee appreciation luncheon
- Cards, flowers, and gift baskets
However you choose to celebrate Administrative Professionals Day, be sure to take the time to simply say "thank you" to the administrative professionals on your staff. For more information on employee appreciation, you can visit our section on Retaining Employees.
Have you had a chance to download our free 2012 Benefits Model Notices & Checklist? It's a great all-in-one tool featuring a convenient summary of key requirements and downloadable model notices for employee benefit plans.
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Employers can hold off on making room for the new NLRA poster informing employees of their rights under the National Labor Relations Act.
The D.C. Circuit Court of Appeals has temporarily blocked the National Labor Relations Board (NLRB) rule requiring most private employers to post the notice, which had been scheduled to take effect on April 30, 2012. The court's decision to block the rule was prompted by two recent l
ower court decisions that reached conflicting conclusions about whether the NLRB had the authority to issue the notice-posting rule.
According to the NLRB, in view of the court's order, and in light of the strong interest in the uniform implementation and administration of agency rules, regional offices will not implement the NLRA poster rule pending the resolution of the issues before the court.
For further information about the NLRA poster requirement, including a detailed discussion of which employers are covered by the NLRA, please see the NLRB's Frequently Asked Questions, which will be updated regularly as new questions arise. To learn about other federal notices required to be displayed in the workplace, please visit our section on Federal Poster Requirements.
Complying with COBRA can be a difficult and time-consuming requirement for businesses (not to mention expensive if you make a mistake!). HR360's 'COBRA Steps to Success' eBook, now updated for 2012, breaks down the process from start to finish to help even the busiest employer stay compliant -- all in terms that are easy to understand. Simply click on the link below to download your free copy.
>> Click Here to Download 'COBRA Steps to Success'<<
Step-by-Step COBRA Compliance Guide
Our convenient 20-page eBook is designed to serve as a step-by-step guide to help employers with COBRA compliance by providing key information and model notices, including:
- Special updates as a result of new requirements under Health Care Reform
- Qualifying events
- Paying for COBRA
- Events that extend COBRA
- What to do when COBRA ends
- Required notices, including General Notice of COBRA Rights, Notice of Qualifying Event, COBRA Election Notice, Notice of Unavailability of COBRA and Notice of Early Termination of COBRA
COBRA is a requirement, but it should not get in the way of a company's success. Our step-by-step guide can help you avoid costly penalties by highlighting key areas of COBRA every business needs to know. Get your company on the road to COBRA compliance today by downloading the 'COBRA Steps to Success.'
For more help complying with COBRA, be sure to download our other great COBRA compliance tools, the 'Top 5 COBRA Notices' and 'Quick-Start Guide to COBRA Qualifying Events'.
Conducting effective interviews helps to ensure you are hiring the best-qualified candidate for the job. An interview should provide as much information as possible about an applicant's potential to perform the duties of a particular position.
As an employer, it is also important to understand the types of questions and topics that should be avoided in an interview to prevent potential claims of discrimination. The most valuable interview is objective and permits the interviewer to determine the knowledge, skills, and all other qualifications of a prospective employee relevant to the position.
Do's and Don'ts for Interviewing Applicants
The following interview guidelines can help you make the most of your interviews and stay in compliance with the law:
- DO create a comfortable environment for interviewing. Whether you conduct the interview in an office or conference room, make sure the area is neat and quiet. When the interview begins, be sure not to take any calls or respond to emails. Offering the candidate something to drink - water or coffee - is a small courtesy that demonstrates consideration and thoughtfulness.
- DON'T ask personal questions. Be especially careful of this at the beginning of the interview. Although it is important to have a friendly demeanor when you meet the candidate to help put him or her at ease, engaging in too much small talk may lead you to inadvertently ask a question that can border on areas that may potentially be considered discriminatory (such as questions relating to the applicant's marital status, political beliefs, etc.).
- DON'T ask discriminatory questions. Any questions regarding race, religion, age, ethnic group, national origin or ancestry, political affiliations, military service, disability or other sensitive topics may be discriminatory and should be avoided. Also be careful not to ask any questions that could elicit such information (for example, questioning an applicant about the origin of an unusual surname). If an applicant volunteers irrelevant or inappropriate information during an interview, disregard the information and do not write it down.
- DO keep the conversation focused on job-related information. In reviewing your interview questions, ask yourself if the information you are seeking is really needed to evaluate the candidate's qualifications, skills, and ability to meet the challenges of the job. Ask only for information you intend to use in making a hiring decision and know how you will use the information to make that decision. You should also be prepared to discuss the responsibilities and functions of the job opening and your company. Avoid asking questions that are not relevant to the performance of the essential functions and responsibilities of the position.
- DO provide the candidate with information regarding next steps. After you have finished asking all of your questions, be sure to give the candidate an opportunity to ask any final questions. To close the interview, provide a general timeframe for getting back in touch with the candidate regarding any next steps and decisions. Be sure to also thank the candidate for his or her interest in the job and your company.
If you have specific questions regarding illegal interview questions or how to conduct a lawful interview, it is best to consult with a knowledgeable employment law attorney. Additional interview guidelines can be found in our section on How to Interview. Note that employers may be required to keep certain records relating to the interviewing process. For an overview of key federal recordkeeping requirements, check out our Personnel Recordkeeping Guide.
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2012 has brought new benefits notice requirements for employers that sponsor group health plans, such as the Summary of Benefits and Coverage (SBC), piled on top of all the many existing requirements under COBRA...HIPAA...and Health Care Reform (just to name a few!). So how can your company stay ahead with benefits compliance?
Our team at HR360 created the '2012 Required Benefits Notices Checklist' to provide an easy way for companies to review key benefits notice requirements, along with links to downloadable model notices and agency guidelines. And, we've even included a heads-up as to which companies must comply. Simply click on the link below to download your free checklist.
>> Click Here to Download the 2012 Required Benefits Notices Checklist <<
The '2012 Required Benefits Notices Checklist' is only 2 pages long, but it packs a big punch! Your free checklist is a great benefits compliance tool and includes:
- Summary of Benefits and Coverage (SBC)
- Notice of Modification (required for material changes to health care plans)
- SPDs and General Notices
- COBRA Notices
- HIPAA Notices
- Special Health Care Notices
- Health Care Reform (PPACA) Notices
- Form 5500
- Retirement Plan Notices
For additional easy-to-understand guidance on required notices for group health plans, check out two of our other free tools available for download, the Top 5 COBRA Notices and Top 5 Health Care Reform Notices!
An employee who itemizes deductions may be able to deduct certain work-related expenses. The IRS provides information that can help an employee determine which expenses may be deducted as employee business expenses.
Qualifying Expenses for Itemized Deductions
Expenses that may qualify for an itemized deduction for employees include:
- Business travel away from home
- Business use of the employee's car
- Business meals and entertainment
- Travel
- Use of the employee's home
- Education
- Supplies and tools
- Miscellaneous expenses
Employees must keep records to prove the business expenses deducted.
Reimbursement of Expenses
If an employer reimburses an employee under an accountable plan, the employee does not include the payments in his or her gross income, and may not deduct any of the reimbursed amounts. In an accountable plan, an employee must meet the following three requirements:
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The employee must have paid or incurred expenses that are deductible while performing services as an employee,
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The employee must adequately account to the employer for these expenses within a reasonable time period, and
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The employee must return any excess reimbursement or allowance within a reasonable time period.
If the plan under which the employee is reimbursed by an employer is non-accountable, the payments received should be included in the wages shown on Form W-2. The employee must report the income and itemize deductions to deduct these expenses.
Only employee business expenses that are in excess of 2% of the employee's adjusted gross income can be deducted.
For more information, please see IRS Publication 529, Miscellaneous Deductions. Tax Topic 514 also discusses employee business expenses. Information for employers can be found in our section on Employer Tax Laws. Also be sure to check out our free tool for employers, the Personnel Recordkeeping Guide, for an overview of key recordkeeping requirements under federal law, including payroll and employment tax records.
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