10 employment regs that actually save you money
Most employment laws cost you money — but that doesn’t have to be the case.
Some of the lesser-known laws and regulations, if strictly applied, can actually save you money.
Go ahead, be a hero
To help HR become a hero with the Finance people, here are 10 of those opportunities, outlined by Michael Fox (512-344-4711) of Ogletree Deakins, who spoke at the 2013 Labor & Employment-law Advanced Practices (LEAP) symposium in Las Vegas.
1. You can dock exempt employees
You’re entitled to deduct a full day’s pay for absences due to personal reasons or illness or disability — as long as you have a bona-fide sick pay plan.
You can also offset pay for military or jury duty, as long as you don’t discourage employees from doing their civic duty and serving on juries.
Finally, you can suspend workers for rule infractions for up to three full days — and you only have to pay for time actually worked.
2. Docking non-exempt employees
Check state law, but in most places you can deduct pay for damaging or losing company property or cash shortages in retail — so long as you don’t deduct from overtime or bring workers below minimum wage.
3. Saving on overtime
Under an unusual exception to wage and hour laws, you can pay hours worked over 40 at half time for those people with fluctuating work weeks whose hours vary from week to week and whose regular rate of pay varies.
4. Insurance premiums
Recover employees’ shares of health insurance and other benefits like life and disability insurance while they’re out on FMLA.
Cut them off immediately if you have unequivocal notice the employee will not return to work — but do make sure you send them a COBRA notice.
5. COBRA
Get COBRA time period running as quickly as you can so it’ll end quicker.
After a divorce or when an employee’s children turn 27, be sure ex-spouses and older children get kicked off your plan – and enforce it.
Also be sure to charge 102% of cost of premiums to compensate for your admin costs. Kick out people who fail to pay or who become eligible for Medicare.
6. Wellness programs
You have to check state law on what’s legal in certain states, but under federal law you have safe-harbor protection against any possible violations of the Americans with Disabilities Act (ADA) if you offer financial incentives for employees who achieve certain health goals.
Such a wellness plan should be a term of a bona fide benefit plan, and you can only use aggregate data from the program to analyze and develop future plans (not individual data to exclude or take adverse action against any one individual).
Finally, wellness programs do actually save money. For every dollar invested, Coors got $6.15 back, Citibank $4.56, General Mills $3.90, Motorola $3.15 and Pepsico $3.00.
7. Mandatory arbitration
It’s legal to require mandatory arbitration (and stipulate that nothing can be turned into a class-wide arbitration.).
It saves money in speed of proceedings, limiting appeals, privacy and publicity, frequency of claims and favorable results.
8. Workers’ comp discounts
Testing for a drug-free workplace can earn you premium discounts in most states.
9. Unpaid interns
They’re still okay, but only if there’s a major educational component to the internship and work is mainly for the intern’s benefit.
Remember that the DOL issued a fact sheet outlining six scenarios under which it’s OK to use unpaid interns. Here’s the list, verbatim:
- 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 intern 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.
It’s pretty clear the DOL’s going to be skeptical of any unpaid internship program — check out this language in the fact sheet:
Internships in the “for-profit” sector will most often be viewed as employment … Interns … who qualify as employees rather than trainees typically must be paid at least the minimum wage and overtime compensation for hours worked over 40 in a workweek.
10. Reduced damages
If you discover misconduct by an employee after he’s sued, damages are cut off at the point of the offense; there’ll be no future pay.
In the recent case of a 43-year-old, $80,000-per-year man suing for age bias, that reduced damages from $2.6 million to just $230,000!
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