Posts Tagged ‘Hiring Incentives to Restore Employment Act’

Seven Things About FMLA and Other Leave Rights that N.C. Employers Need to Know

Thursday, November 25th, 2010

One of the more challenging compliance issues for employers is managing family and medical leave and other leaves of absence, and knowing when to safely terminate employment. Kimberly Korando with Smith Anderson law firm guided CAI members who participated in the recent members-only “Ask the Experts” sessions on the interplay of company leave policies, the Family and Medical Leave Act (FMLA), the Americans with Disabilities Act of 1990 (ADA), the ADA Amendments Act of 2008 (ADAA), and North Carolina’s Retaliatory Employment Discrimination Act (REDA).

Following are some of the practical takeaways from this session:

1. REDA and ADAA have different requirements.

North Carolina’s REDA law allows employers to have a consistent termination policy that applies across the board regarding workers’ compensation leave.  The ADAA requires a case-by-case evaluation when an employee needs extended leave to determine if a reasonable accommodation can be made (consistency is not applicable).

2. Review policy language on FMLA eligibility.

Be sure that your employee-eligibility statement for FMLA includes all of these requirements:  employed for at least 12 months; worked 1,250 hours over the previous 12 months; and works at a worksite with at least 50 employees within 75 miles.  According to Ms. Korando, if the policy leaves out any of the criteria, you may be required by the courts to grant FMLA even if the employee is not eligible.

3. Consider the different requirements of FMLA and ADA on return to work.

FMLA requires an employer to return the employee to the same or an equivalent position.  ADA requires the employee’s return to the original position.  This is extremely important to remember when the employee is covered by both the FMLA and ADA, and the employee returns before the end of the FMLA (unless he or she is unable to perform the original position with or without reasonable accommodation).

4. Document the interactive process.

Court cases provide employers with tips on the court’s expectations of how they should handle the ADA process.  One “nugget” Ms. Korando gleaned was that the courts expect employers to document the interactive process and what was considered and discussed with the employee regarding reasonable accommodation and/or undue hardship.

5.   Check third party vendor letters.

If you have agreements with vendors that stipulate automatic termination of temporary employees if they are unable to work, include the statement unless other action is required by applicable federal or state law. There are joint employment responsibilities under FMLA and ADA.

6.   Indefinite leave is not a reasonable accommodation in North Carolina.
The 4th circuit court has said that it is unreasonable to expect an employer to hold a job or consider other jobs or extended leave when the employee’s doctor states the employee will be on leave indefinitely.  The employee can be terminated if this is the case (after completion of eligible FMLA leave).

7.   End of leave communications.

Communicate with the employee by documenting in writing a summary of the leave dates, type, etc.  Include the last day worked, the dates of FMLA and the date job reinstatement responsibilities ended, extended leave or other reasonable accommodations made, and the date of termination.

If you have questions about FMLA or other leave rights, please call a member of CAI’s Advice and Counsel team at 919-878-9222 or 336-668-7746.

Photo Source: Michael

Measuring the Impact of the HIRE Act

Monday, July 26th, 2010

It has been four months since President Obama signed the Hiring Incentives to Restore Employment (HIRE) Act, aimed at presenting hiring incentives to re-establish jobs lost throughout the recent recession. The HIRE Act focuses on two main incentives – the payroll tax relief and the worker retention tax credit – that reward your company for hiring workers quickly and keeping these employees for a long time, while offering you a chance to avoid the 6.2 percent Social Security tax. But is it really meeting its goals? So far, it’s hard to judge.

North Carolina businessman Andy Warlick, president and chief executive of Parkdale Mills in Gastonia, claims he recently hired 30 workers eligible for the HIRE Act tax exemptions, but he acknowledged he could not say the benefit was actually responsible for his decision to expand his staff, according to a New York Times blog.  He said he does appreciate claiming the credit because it lowers his operating costs and encourages him to keep his operations in America.

The Treasury department has credited 4.5 million workers hired due to the act and estimated savings to employers so far to be at $8 billion. However, Treasury officials are having a challenging time determining whether the tax credit actually induces hiring, rather than just being claimed for people who would have gotten jobs anyway. It also believes the program is not widely known to businesses eligible to participate in it.

If you are interested in finding out if and how your company is eligible to use this credit, read our previous blog on “HIRE Act Can Save Employers Money This Year.”  The program may be extended into the next year, but that plan will have to be approved by Congress, and the results from this year could determine whether that will become a reality.

For more details, please call a member of CAI’s Advice and Counsel team at (919) 878-9222 or (336) 668-7746.

Photo Source: AMagill

HIRE Act Can Save Employers Money This Year

Friday, May 21st, 2010

On March 18, 2010, President Barack Obama signed into law the Hiring Incentives to Restore Employment (HIRE) Act, which includes new tax benefits directly related to hiring employees. This bill, aimed at providing hiring incentives to restore some jobs lost in the latest economic recession, offers business owners the following benefits:

  • Its payroll tax exemption provides employers with an exemption from the employer’s 6.2 percent share of Social Security tax on wages paid to qualifying employees (meaning previously unemployed workers), effective for wages paid from March 19, 2010 through Dec. 31, 2010.
  • For each qualified employee retained for at least 52 consecutive weeks, businesses will be eligible for a general business tax credit, referred to as the new hire retention credit, of 6.2 percent of wages paid to the qualified employee over the 52-week period, up to a maximum credit of $1,000.

New employees must be hired between Feb. 3, 2010 and Jan. 1, 2011 in order to qualify for the business tax credits. The newly-hired employee must have been unemployed 60 days prior to starting work or worked fewer than 40 hours for someone else during the 60-day period.

The IRS has released a new Form W-11 that will help employers claim the special payroll tax exemption. Employers must retain this form along with other payroll and income tax records. Most eligible employers then use Form 941, Employer’s Quarterly Federal Tax Return, to claim the payroll tax exemption for eligible new hires.

The new hire retention credit will be claimed on the employer’s 2011 income tax return.

Business owners will get the most out of the tax credits by hiring qualifying employees sooner rather than later, as the credits diminish over time and disappear completely by Jan. 1, 2011. The benefits do not apply to household employers or federal, state and local government employers, other than public colleges and universities.

More information on the HIRE ACT and its other business incentives, such as writing off investments in equipment, can be found at http://hireact.org/. For tax details, consult the IRS Q&A page.

Photo Source: alancleaver_2000