labor lawAdivision of labor law center

California employers should be aware of a special enforcement action targeting carwashes and other illegal operations in “the underground economy.” During a three-day August enforcement sweep, investigators visited 97 carwashes in Northern California. Fifty-four of them were issued citations resulting in fines totaling more than $521,000.

Thirty of the car wash businesses were shut down until they comply with labor laws, including: (more…)

The US Department of Labor recently announced a free workshop on VFCP, to be held in Santa Clarita, California.

Who should attend? According to the US DOL, any HR professional, owner or employer who would like to learn more about bringing their employee retirement accounts into compliance through VFCP.

This free event will be held in Suite 100 of the Small Business Development Center at the Santa Clarita Valley Chamber of Commerce, 28460 Avenue Stanford in Santa Clarita.

The half-day workshop will be held on Thursday June 19, 200 from 8:30 am to 10:30 am, with registration beginning at 8:00 am.

Employers can use this online form to register, or register by phone with Wendy Morgan at (626) 229-1032.

In 2002, the Voluntary Fiduciary Correction Program (VFCP) was established. In 2006, the VFCP was simplified and expanded.

The VFCP allows companies to comply with the ERISA (Employee Retirement Income Security Act) by voluntarily correcting certain law violations.

Workshop attendees will learn how to apply and be approved for this important program, potentially saving thousands of dollars in penalties and fines.

Using VFCP is beneficial to employers, because it allow them to correct past errors in employee retirement plan transactions and avoid prosecution. Employers have nineteen categories under VFCP they are allowed to correct. Among these nineteen types are:

• Below Market Interest Rate Loans With Parties in Interest

• Benefit Payments Based on Improper Valuation of Plan Assets

• Below Market Interest Rate Loans With Non-Parties in Interest

• Defaulted Participant Loans

• Delinquent Participant Contributions and Participant Loan Repayments to Pension Plans

• Fair Market Interest Rate Loans With Parties in Interest

• Holding of an Illiquid Asset Previously Purchased by Plan

• Improper Payment of Expenses by Planof Duplicate, Excessive, or Unnecessary Compensation

• Purchase of Assets by Plans from Parties in Interest

• Purchase of Assets from Non-Parties in Interest at More Than Fair Market Value

• Sale of Assets by Plans to Parties in Interest

Companies eligible to utilize VFCP are those that may be responsible for violations related to employee benefit plans. Officials and sponsors of these plans are seeking exemption from policy enforcement by completing all VFCP procedures.

This exemption provided by the VFCP involves excise taxes, and in some cases, IRS penalties.

It may seem as though VFCP gives companies a “get out of jail free” card for financial defaults regarding employee benefit accounts, but that is not the case. Employers are required to correct all violations, completely and accurately, and provide documented proof that the violations have indeed been corrected. Companies that fail to meet these conditions can face legal action, including civil penalties, under Sections 502 (I) and 502 (i) of the ERISA.

The Employee Retirement Income Security Act (ERISA) sets the rules on how employers manage their employee retirement and benefit plans. Companies who violate these rules are subject to fines and penalties, unless they utilize the VFCP.

Participating in VFCP can save employers in California thousands of dollars in taxes, fees and penalties. Now employers can learn more about this exciting program at a free seminar sponsored by the U.S. Department of Labor.

On Monday June 9, 2008 the US DOL will host a VFCP workshop for employers at the Courtyard Foothill Ranch Irvine Spectrum, on Portola Parkway. The event runs from 8:30 am to 10:30 am, with registration at 8:00 am.

The event is limited to 100 participants, on a first-come first-served basis, so register early using this online form. For more information, or to register by phone, call Wendy Morgan at (626) 229-1032.

The VFCP (Voluntary Fiduciary Correction Program) was established in 2002. In 2006, the VFCP was expanded and streamlined, and allows businesses to avoid prosecution for ERISA violations by voluntarily correcting those violations. Nearly twenty separate categories of transactions can be corrected under the VFCP, including:

• Participant Loans Failing to Comply with Plan Provisions for Amount, Duration, or Level Amortization

• Defaulted Participant Loans

• Purchase of Assets by Plans from Parties in Interest

• Sale of Assets by Plans to Parties in Interest

• Sale and Leaseback of Property to Sponsoring Employers

• Purchase of Assets from Non-Parties in Interest at More Than Fair Market Value

• Sale of Assets to Non-Parties in Interest at Less Than Fair Market Value

• Holding of an Illiquid Asset Previously Purchased by Plan

• Benefit Payments Based on Improper Valuation of Plan Assets

• Payment of Duplicate, Excessive, or Unnecessary Compensation

• Improper Payment of Expenses by Plan

• Payment of Dual Compensation to Plan Fiduciaries

The VFCP is not a pass, however, for employers to get out of accepting responsibility for their ERISA violations. The VFCP has certain criteria and procedures that must be followed. To exempt themselves from enforcement actions resulting from these violations, the companies must completely and accurately correct all violations. In addition, the employers must provide proof that the violations were all rectified.

Employers using the can be granted relief from excise taxes, and in some cases, relief from penalties by the IRS. The VFCP covers the employers, the sponsors of the employee benefit plan, the parties in interest and the officials. Failure to comply with the VFCP protocols and rules can result in sanctions against the employer, including civil penalties, as stated in ERISA Sections 502 (I) and 502 (i).

The Occupational Safety and Health Administration (OSHA) is concerned with the dancers of workplace violence and the threat of violence against employees. Homicide remains a major cause of workplace death in California and nationwide.

More than 2 million people every year face some workplace violence. Professionals and blue-collar workers alike may be victims. In 2006, according to the Bureau of Labor Statistics, 94 people were murdered in the workplace. Although that is down from the more than 200 yearly in the early 1990s, it remains a significant problem.

Violence may range across the spectrum, from verbal abuse, to threats, to assaults, to homicide. Employers should set up zero-tolerance policies against workplace violence, according to OSHA, and employees should be familiar with the policies. Manuals and handbooks should have information on violence prevention. It is best if employers make it clear that all reported incidents will be looked into and corrected.

Workers at risk include those who:

• Work in high crime areas.
• Deliver goods, services, or packages.
• Exchange money with the public.
• Work alone or in small groups on late night or early morning shifts.

Those who work in the community setting or in homes face hazards. Social services providers such as psychiatric evaluators, visiting nurses, other healthcare professionals, and probation officers are at risk. Others are retail workers, taxi drivers, mail carriers, phone and cable TV installers, and gas and water utility workers.

OSHA urges companies to install video surveillance cameras as well as alarms and added lighting. Drop safes should be provided to limit on-hand cash. Access should be controlled through the use of guards, electronic keys, and I.D. badges. It is best if staff is provided with cell phones and hand held alarms.

Employees who must work outside the office building should keep employers informed about their location, for their own safety. It is recommended that escorts be provided for those workers who are uncomfortable leaving the building at night.

Streaming videos and downloads on preventing workplace violence are available through the National Institute for Occupational Safety and Health (NIOSH).

OSHA California Worker Safety

Violence in the workplace is an ever-present danger. The federal Occupational Safety and Health Administration (OSHA) has come up with a set of measures that can be taken by employers and employees to stem the hazards of violent workplace incidents.

Employers should develop a standard procedure for dealing with workplace violence, and this procedure should be practiced the way a fire drill is practiced. Employees should take safety-training programs to learn how to recognize, ease, or avoid violent situations. They should let a supervisor know of any safety or security problems, whether it is suspicious activity by a customer or coworker or just a malfunctioning door.

Employees should also report all incidents in writing, and promptly. There are warning signs of workplace violence like property destruction, minor assaults, threats, verbal abuse, and rage. Employers, for their part, should consider each report and every threat as a serious incident and should investigate them, even if they seem minor. A worker who hits someone in the shoulder one day could be the one who shoots and kills a coworker the next. Employers should also keep detailed and accurate records of incidents, by type. They should take corrective measures wherever possible.

Despite precautions, violent episodes may occur in the workplace. If they do, there are steps that can be taken. Employers should offer counseling or stress debriefings to all workers. They should provide first aid and other medical attention right away. The incident should be reported to the police without delay. All victims should be told of their right to take legal action against the perpetrators of the violence. Finally, the incident should be discussed with staff. They should be encouraged to develop and share ideas about prevention.

No employer is capable of guaranteeing the safety of every employee. Nevertheless, OSHA’s General Duty Clause obligates employers to provide what is called a “safe and healthful workplace.” Needless to say, that includes measures to prevent or limit workplace violence and its dangers. OSHA levies stringent penalties against employers who fail to do so.

A new law permits spouses, parents, sons and daughters to take FMLA leave to care for an injured soldier. “Next of kin” are also covered by the new law, which means in some cases aunts, uncles and cousins may also be able to take FMLA leave.

The National Defense Authorization Act of 2008 (NDAA), expanded the parameters of the FMLA (Family and Medical Leave Act).

The soldier may be active military, or a deployed member of the Reserve or National Guard.

In addition to extending leave to families of soldiers, NDAA expands the amount of leave as well. Traditional FMLA allows up to 12 weeks of unpaid leave per year, while the new NDAA permits up to 26 weeks.

California FMLA Expansion

This was not the first attempt to pass the NDAA. On December 28, 2007 President George W. Bush vetoed a bill that would have extended Family and Medical Leave to employees whose child, parent or spouse is called to active military duty.

The veto of bill HR 1585, however wasn’t due to the extended FMLA, but because it was included in the National Defense Authorization Act. According to the White House approving the bill would “risk imposing financially devastating hardship on Iraq that will unacceptably interfere with the political and economic progress everyone agrees is critically important to bringing our troops home.”

Some criticize President Bush, claiming the veto will place an undue burden on families of the National Guard and Reserve who are serving in Iraq.

Others applaud President Bush, declaring that an extended FMLA will place undue burden on employers.

It is still likely, however, that 2008 will see a law to extend FMLA to families of the military, expanding FMLA coverage in California and throughout the country.

Currently, FMLA provides up to 12 weeks of unpaid, job-protected leave for employees to care for a sick family member, or themselves. The bill that was vetoed would have provided up to 26 weeks, or 6 months, of this type of leave for spouses and other relatives of military called to active duty.

The point of the expanded FMLA is to allow family to step in for the National Guard or Reserve member in order to take charge of his or her children, or to care for an ill parent. The leave would be available once per 12 month period.

The current FMLA doesn’t allow for an employee to care for healthy children, except for newborns, newly adopted or newly fostered children. For example, a stay at home mom succumbs to cancer. Her husband can take FMLA to care for her, but not to watch over their healthy children.

Since the veto of bill HR 1585 didn’t relate to the expanded FMLA, the door is open for this leave to be added to another bill later in 2008.

Prior to passage of the NDAA, FMLA leave could only be used to care for a child, parent or spouse when he or she was ill. Caring for healthy children was permitted only upon birth of a child, the adoption of a child, or newly fostering a child into the home. To illustrate, a stay-at-home mom is diagnosed with a long-term illness. Her husband can take FMLA to care for her, but not take care of their healthy children.

In addition to caring for an injured soldier, the NDAA permits spouses, sons, daughters and parents to take unpaid FMLA when a family member is called to active duty. That family member then may stand in for that soldier while he or she is on deployment. This could include taking care of a sick child, or caring for healthy children.

The law went into effect immediately, allowing families to take leave as of January 28, 2008. The U. S. Department of Labor is working to finalize the regulations and hopes that until the information is published, employers will make their best effort to comply.

President Bush previously vetoed an NDAA bill with this extended FMLA law, but explained that veto wasn’t due to the leave portion of the bill. This statement opened the door for the expanded FMLA to be attached to another bill and gain its recent passage.