Michigan seems poised to pass a smoking ban that would affect almost all employers, including restaurants and bars, in the next legislative session. Both the state house and senate passed bills protecting employees from second-hand smoke in the workplace in 2008. However, the two bills had significant differences and the legislature was unable to resolve those differences before they adjourned for the summer in late May.
Bills to ban smoking in restaurants and bars were introduced in 2007 in both the Michigan House and Senate. In each case, the bills generated a lot of debate and were sent into the 2008 legislative session.
In the spring of 2008, (more…)
In two successful judgments against Prime Care Services of Southfield, Michigan, the agency gained assets totaling $1,155,943 for the company’s 401k retirement account and pension plans. The funds recovered will be distributed among the plan participants.
“Workers and their families have been counting on these benefit plans to help fund their retirements,” said Secretary of Labor Elaine L. Chao. “Fortunately in this case the department was able to recover all of the money in the benefit plans, more than $1.1 million, and it will be distributed to the participants and beneficiaries.”
Prime Care offered in-home healthcare services for elderly and disabled individuals in Washtenaw County before going out of business.
Two lawsuits filed in Detroit by the U.S. Department of Labor alleged that Paterno Doreza, co-owner of Prime Care Services, failed to take steps to distribute the plan assets to workers, after the company went out of business. On November 30, 2006, the company’s 401k had 77 participants and $570,294.42 in assets. The pension plan had $585,648.75 in trust for 64 participants. Doreza has admitted no wrongdoing in the matter.
Default judgments in both suits appoint an independent fiduciary to manage the plans, liquidate the assets and distribute them to the participating workers. In an unusual move, the Dept. of Labor did not request that Doreza be enjoined from ever serving as a plan trustee again, perhaps because the business went under.
Most employees trust that their retirement, 401k and other benefit plans are secure. Tragically, this is often untrue. In 2006 alone, the U.S. Department of Labor recovered $2.6 Billion in misappropriated employee benefit funds. That number may be just a fraction of what was stolen by unscrupulous employers.
The ERISA, Employee Retirement Income Security Act of 1974, sets minimum standards that employers must abide by for employee retirement accounts. The law was later amended to include other types of employee benefit accounts, including healthcare and profit-sharing accounts.
Earlier this year, a Miami company raided $1.1 million from employee profit-sharing accounts to pad its operating fund.
In July, a New Britain, Connecticut firm was ordered to repay more than $2.1 million in funds that it had misappropriated from the employee retirement fund. According to sources at the Department of Labor, the company tried to solve its cash-flow problems by stealing from its employees.
That caper sparked unusually vitriolic words from the normally sedate Secretary of Labor, Elaine Chao. “Workers’ retirement plans are not piggy banks for company executives.” She added, “This legal action restores $2.1 million to these workers’ retirement plan and prohibits the company’s president from ever again serving as a fiduciary of an ERISA-covered employee benefits plan.”
While a number of companies have tried to raid retirement funds in recent years, the U.S. Department of Labor prevents such conduct, and punishes the wrongdoers. In 2006, the EBSA recovered more than $1.4 billion related to pension, 401k, health and other benefits for millions of American workers and their families. Most of those funds were retirement benefits that had been misappropriated by companies.
The Employee Benefits Security Administration (EBSA) is committed to educating and assisting the 150 million Americans covered by more than 700,000 private retirement plans. In addition, this busy agency also assists Americans covered by more than 2.5 million healthcare plans, and a similar numbers of other welfare benefit plans. The agency, originally founded as the PWBA also assists plan sponsors and answers questions from members of the employee benefits community. EBSA promotes voluntary compliance and facilitates self-regulation, working diligently to provide quality assistance to plan participants and beneficiaries.
The Michigan FMLA law is there to help when the stresses of family life – both the good and the bad, from birth to illness – make it necessary to turn away from work for a while. Between Mother’s Day and Father’s Day it’s not unusual to consider the needs of the family a little more than usual, and that makes it a useful time to consider the law.
The Michigan Family and Medical Leave Act is designed for those occasions when family circumstances become overwhelming. It may be because there’s been an accident or serious health problem in the immediate family. Perhaps there’s a birth, or an adoption. Maybe a foster child is coming into the home.
In either case, the program allows you up to 12 weeks of leave (unpaid) if you fall under the allowable circumstances. If you work for a private business, your employer is obliged to follow the Family and Medical Leave Act if the workplace employs 50 or more people. Pubic employees and teachers are eligible even if staff sizes are smaller than 50.
Workplace medical coverage premiums are paid by payroll deductions. What happen when a worker is on unpaid leave? The employer pays the premium and declares it an advance on the worker’s future paychecks. When returning to work, the payroll deductions during the unpaid leave are taken from the paycheck.
Under Michigan FMLA you and your employer must follow certain guidelines. For example, the employer must keep you informed. He or she must provide you with a notification in writing immediately, letting you know how to keep in touch to insure you maintain your good status with the workplace. You in turn must respond to those instructions promptly. The Michigan FMLA poster should be prominent at every jobsite.
Quietly and with little attention, a federal agency has passed a ruling applying to more than 150 million employees in the U.S. The ruling extends a law requiring that mental health coverage limits are equal to medical/surgical benefit limits in group insurance plans.
The law does not require that every health plan must cover mental health treatments as well. What it requires is that, if a health plan offers mental health coverage, the benefit caps must equal those of the coverage for medical and surgical procedures.
This new ruling has a deep impact on Michigan employee benefit plans. Nationwide, in excess of 150 million workers are affected.
The regulation is called the Mental Health Parity Act, or MHPA, and is now extended until December 21 of 2007. The ruling comes down from the EBSA, or the U.S. Employee Benefits Security Administration. The EBSA is the watchdog agency requiring adherence to the regulations on health insurance.
To be legal, a health plan that puts a $250,000 limit, for example, on medical and surgical treatment must put the same maximum lifetime benefit on mental health care. Before passage of the original MHPA in 1996, coverage could have a quarter of a million dollar limit on medical care but only $15,000 on mental health care. Annual cops are covered by the same regulation. The annual or lifetime caps must be equal for either kind of treatment.
Typical mental health treatments would be stays in mental hospitals or mental health sections of medical hospitals for illnesses ranging from depression to schizophrenia or post-traumatic stress disorder. Visits to psychiatrists, licensed therapists, or psychologists are also covered.
The ruling continues a process begun after the law was originally passed. At that time there was a “sunset clause” which essentially ended the bill on September 31 of 2001. The law was amended five times after that to lengthen the expiration date.
For new Michigan employers, the way to go to join up with the state’s unemployment insurance program could be digital. That is, the state of Michigan has taken important strides in making their unemployment system a 21st century system, complete with full online and electronic reporting and file keeping.
For instance, if you are a Michigan employer this could come in especially handy if you usually have mass layoffs at least once a year. Normally, such layoffs could mean huge swaths of paper files that need to be transferred timely and accurately between your human resource department and the state officials. The electronic record system could also come in handy if you typically have at least 100 former employees filing unemployment benefit request in any given year.
You may also want to look further into Michigan’s electronic system if you regularly use Internet to submit claims or to do other aspects of your human resource day to day business. Or here’s another reason—if you’ve had more than 1000 people laid off in the last three years, each year.
The system works in Michigan because it is the employer—not the former employee—filing the claims for unemployment benefits. That makes sense, because it cuts out the “middle man” in a lot of cases, and that middle man (the former employee) can typically cause an issue because you the employer is then required to verify whatever info that former employee provides the Michigan officials.
With Michigan’s system, on the other hand, you can really directly on your accurate personnel files, including all of the forms you have such as the exit interview form, the employee separation form, and any sort of absence reports or records of disciplinary actions you have to prove that a lay off was actually a firing.