As CFOs are well aware, employment laws seem to favor workers against their employers, and they often cost firms money. But that’s not always the case.
Some of the lesser-known laws and regs, if strictly applied, actually save money.
Go ahead, be a hero
To become a hero with execs, here are 10 of those opportunities, outlined by Michael Fox of Ogletree Deakins:
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.
Employers can offset pay for military or jury duty, as long as you don’t discourage them from doing their civic duty and serving on juries.
You can also suspend them 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 for damaging or losing property or cash shortages in retail, as long as you don’t deduct from OT or bring them 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 rate for those people with fluctuating work weeks whose hours vary from week to week and whose regular rate of pay varies. This is sometimes called “Chinese OT.”
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 send them a COBRA notice.
5. COBRA: Get the COBRA time period running as quickly as you can so it’ll end quicker. After a divorce or when children turn 26, be sure ex-spouses and older children are taken off your plan. Also be sure to charge 102% of cost of premiums to compensate for your administrative costs. Kick out people who fail to pay or become eligible for Medicare.
6. Wellness programs: You have to check your state law on what’s legal, 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).
Wellness programs do work to save money. For every dollar invested, Coors got $6.15 back, Citibank $4.56, General Mills $3.90, Motorola $3.15 and Pepsico $3.
7. Mandatory arbitration: It’s legal to require it (also stipulate that nothing can be turned into a class-wide arbitration) and 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 OK, but only if there’s a major educational component to the internship and work is mainly for the intern’s benefit.
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 case of a 43-year-old, with an $80,000 annual salary who sued for age bias, that cut damages from $2.6 million to just $230,000!
Info: Fox, 512-344-4711, spoke at the 2013 Labor & Employment-law Advanced Practices (LEAP) symposium in Las Vegas.
