The new NDAA (National Defense Authorization Act) of 2008 went into effect immediately, permitting eligible persons to take leave as of January 28, 2008.
This law affects almost every employer in Hawaii.
Eligible persons are defined as sons, daughter, parents and spouses of an injured soldier. This soldier can be National Guard or Reserve who is on deployment, or active military. The expanded FMLA allows family members to take up to 26 weeks (6 months) of unpaid leave to care for the soldier. This act includes “next of kin” which may also permit aunts, uncles or cousins to take the expanded leave.
On December 28, 2007, President Bush vetoed a National Defense Authorization Act that carried an expansion of FMLA (Family and Medical Leave Act) leave that affects all Hawaii employers. The President stated, however, that the leave portion of the bill was in no way connected to the veto, but to a concern that the NDAA 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.”
This statement allowed the FMLA expansion to be attached to another bill and to be passed into law.
Traditionally, FMLA leave is capped at 12 weeks, and applies to caring for a newborn, a newly adopted child, a newly fostered child, or a sick family member (defined as parent, spouse or child).
This new NDAA increases the amount of leave to 26 weeks, but also permits parents, spouses, sons and daughters to take unpaid FMLA leave when a family member is called to active duty. This provision allows family member’s to take responsibility for whoever was in that soldier’s charge. A parent, spouse, son or daughter could take FMLA leave to care for someone who is ill, or to take over the care of healthy children.
The U. S. Department of Labor will publish the details of the new NDAA as soon as the regulations are finalized. Until that time, it expects employers to comply with the new leave law to the best of their ability.
Before the passage the FMLA (Family Medical and Leave Act) in 1993, workers who missed work due to serious health issues such as heart attack or major surgery risked losing their jobs. At that time, each employer handled leave for a worker’s ill health on a case by case basis. Often after a worker missed 2 or 3 weeks of work, the company fired him or her.
The FMLA, a federal law, truly broke new ground for all employers. Under this Act, companies had to provide employees with unpaid, job-protected leave for a serious health issue. When the worker returned from leave, he or she must still have a job. If the same position is no longer available, then the employer must provide a position with similar pay, benefits and working conditions.
Recently, the National Defense Authorization Act of 2008 was enacted. This law expands the FMLA and is the first major expansion since FMLA was passed. The parameters of the NDAA’s expanded FMLA are still unknown, as the U. S. Department of Labor has yet to publish the new regulations.
The current parameters allow a worker to take up to 12 weeks of unpaid, job-protected leave for their own ill health, and/or to care for an ill parent, spouse or child. FMLA leave can also be taken to care for a newborn. Adopting a child, or bringing a newly fostered child under the age of 18 into the home are also covered by FMLA
Some companies prefer to charge the employee’s paid time off (sick leave or vacation time) to the 12 weeks allowed under FMLA. These companies are permitted to do this only if the employee is informed in writing prior to taking FMLA leave.
Several states have enacted laws to expand FMLA coverage. Some, like Hawaii, amended the definition of family member to include grandparents and in-laws. Other states extend the number of weeks available or the amount of benefits.
Governor Linda Lingle recently signed a bill that will transform the state’s economy. According to the Governor, the STEM educational initiative will change the state’s economy from one based on land development to one based on innovation and highly skilled human capital.
At the same time, the Governor also approved a popular measure to reduce the unemployment insurance premiums paid by employers. With the state unemployment rate at about 2.5% for June, the Governor has opted to pass some of the savings on to businesses.
The Governor signed both bills in Lihu‘e at a Kaua‘i Chamber of Commerce luncheon meeting. Governor Lingle originally ran on a platform of transforming Hawaii into a business-friendly environment. Prior to her election, there were allegations that the previous Governor used state agencies to punish rival business owners and political enemies.
The new STEM education law supports the Lingle Administration’s Hawaii Innovation Initiative. According to the Governor, this includes providing Hawaii students with world-class analytical and problem-solving skills developed through science, technology, engineering and math (STEM) education.
“The programs established under this bill are part of a long-term effort to develop the innovation capacity of Hawaii’s workforce, particularly the younger generation, in order to successfully compete in the global economy,” said Governor Lingle.
“These initiatives, especially the STEM-related programs, focus on creating life-long learning and skill-building opportunities for students, teachers and our existing labor force.”
This measure establishes career and technical programs in a variety of fields, including engineering, computing, robotics and project EAST (or Environmental and Spatial Technology). Projects will be offered jointly with the University of Hawaii, community colleges, the Hawaii Department of Education (DOE) and private entities. The bill appropriates $5 million for these programs in each of two fiscal years, 2008 and 2009.
This includes the establishment of STEM academies on Kauai, through a Hawaii Excellence through Science and Technology (HiEST) Academy pilot program that will be administered by Kauai Community College at two public schools. The bill appropriates $522,040 and authorizes three positions at Kauai Community College to administer the program. It also provides $53,460 to the state Department of Energy for a position to collaborate with the community college on establishing the HiEST pilot program.
The bill also creates the Fostering Inspiration and Relevance through Science and Technology or FIRST program within the University of Hawaii College of Engineering to focus on setting up project-based learning programs. FIRST is aimed at students in grades 4 through 8. School participation in the FIRST program will be voluntary. The bill establishes a FIRST teacher training program at the University of Hawaii to support the development of middle school teacher skills and knowledge and the formation of a middle school STEM curriculum. The middle school program will have an emphasis on wireless communications. To implement the FIRST program, the measure appropriates $2.8 million and authorizes nine positions at the University of Hawaii.
The second bill culminates a three-year effort by Governor Lingle and her heir-apparent, Lt. Governor Aiona. The program will ease the unemployment insurance tax burden on Hawaii businesses. The new law is truly a win/win situation that lowers the taxable wage base for unemployment insurance payments, while also increasing benefits for unemployed individuals. It will result in a net savings of $151 million over the next three years.
It’s hard to believe, but in 1999, under the previous Governor, businesses cited the Hawaii Department of Labor and Industrial Relations as the major obstacle to business growth. It’s amazing how quickly things have changed in Governor Linda Lingle’s two terms in office. With all of these changes, Hawaii is certainly becoming a state that fosters strong relationships with business.
Many people have questions regarding Hawaii employee benefits. They especially want to know if any law, state or federal, requires their group health insurance to cover mental health treatments. They are also inquiring if the insurer can set a low limits on payment for mental health treatment. The answers are a little more complex than the questions suggest, as with many questions concerning labor laws.
Okay, I will start off with the easy part first. Your group health insurance is not required by law to cover any mental health treatments. A majority of employers do offer coverage for therapy and counseling, but there are still many that do not. It is not uncommon for mental health facility care, inpatient and outpatient, to be excluded from benefits.
There are some laws that govern mental health coverage, should an employer choose to offer it. For example, the Mental Health Parity Act, or MHPA, states that mental health treatment must be funded at the same amount other medical treatments are covered.
The MHPA bill was originally passed in 1996 has been amended 5 times, and was extended each time it was changes. The most recent extension was made this February, and it will be valid until New Year’s Eve at the end of this year. It wouldn’t be crazy to suggest that it will continue to be extended.
It used to be that many group health care plans had very low annual limits for mental health treatment. That was before the MHPA bill in 1996. It would be against the law today, for example, if a group health care plan paid up to $50,000 in surgery coverage, but only $10,000 for mental health. The Mental Health Parity Act requires services for mental health to be covered at the same level as other mental coverage.
The Hawaii Department of Labor & Industrial Relations recently conducted the first in a series of workshops on Hawaii unemployment insurance for new employers. The workshops are designed for owners and managers of newly created businesses, especially those who are operating a business for the first time. They cover a variety of important topics, including costs, proper filing and hearings.
The workshop was held at the Keelikolani Building, in the same building as the State Department of Labor and Tax Office. The sessions were lead by the staff of the Unemployment Insurance Division of the Dept. of Labor & Industrial Relations. A number of the most common filing errors were discussed, and there was ample time for questions and networking.
Many small business owners note that it is the administrative maters, not the business itself, that causes the most headaches. Unemployment insurance, workers’ comp, payroll taxes, worker safety training, OSHA and labor law poster requirements, etc. are often the biggest challenges that new business owners face.
A number of vital topics were covered. Many new employers had questions on general information about unemployment insurance, which were addressed. A speaker discussed how to complete the quarterly Unemployment Insurance Report (UC-B6), a concern to many experienced business owners, not just new ones!
The very informative, capable staff of the Hawaii Unemployment Insurance division provided information on claims and benefits, as well as complete instruction on internet filing. Other topics covered in the half-day seminar included filing deadlines, avoiding penalties and interest, and my personal favorite, Tax Savings.
If you missed this workshop, and you’d like more information on the Hawaii unemployment insurance laws, three more workshops are scheduled. They are slated for April 12, July 10 and October 9, in the same location. Contact the Hawaii Dept. of Labor & Industrial Relations for more information.
After talking about unemployment insurance and how employers have to pay a certain tax for it for every one of their employees, I know what the logical question is next. After all, anybody reading this blog must be a pretty astute employer, and you must all be thinking: Sure, I have to pay this unemployment insurance tax, and I will, but there’s got to be a way to make sure I don’t pay too much unemployment insurance tax—what is it?
Well, in the state of Hawaii at least, you can minimize your employer’s unemployment insurance tax because of the fact that part of your contribution to the system is determined by the ratio of your reserve account balance—how much taxes in your account are still leftover unspent from the last period—to your annual average taxable payroll for the last three years—how much taxes you usually have been paying.
In other words, if you’re reserve balance goes down, and or your average taxable payroll goes up, this ratio will go down, and you will have to pay more taxes for unemployment insurance going forward. That makes sense, because the state of Hawaii would like that you have higher reserves. That means that your former employees are claiming less unemployment benefits. And if your payroll goes up, that means you have more employees, or more higher paid employees. And that means that you have a greater risk of paying more unemployment benefits in the future.
Make sense? Either way, here are some simple practical tips that the Hawaii state authorities offer up. For instance, the state recommends that you file all of your quarterly reports (which we talked about earlier) on time and accurately. And the state also recommends that you keep accurate records, for old and current employees (something else we’ve talked a little about here).