hr consulting training hanDBooKs auDits surVEYs coMPEnsation laBor nEgotiations

JANUARY 2010

>Michigan Beer Distributors Pay Out $41 Million For Bad Faith Bargaining

>IRS Announces 2010 Standard Mileage Rate

>Obama Signs COBRA Subsidy Extension

>SDEA Unveils New Website

>Plus: HR Training Preferred Provider & More... 888.625.SDEA888.625.SDEA

COLUMNISTS

Jennifer Jacobus, PHR, CA Jessica Zaldivar, PHR

SDEA BOARD OF DIRECTORS

Rufino AutusAutus Financial Group

Terry Elrod

Juli JacobsonSan Diego Blood Bank

Stacey McKibbenActionCOACH

Melanie PotterWalter Anderson Nursery

Melinda RosasUSA Federal Credit Union

Mike ScaccoALSCO, Inc.

Andy SilvermanCRES Insurance

Diana TwadellBarney and Barney

Darby VorcePacific Safety Council

SDEA Counsel

Mike DalyDaly Law Firm

Honorary Life MemberTom Murch

DESIGNDenialle M. Chabot

ADVERTISING AND ARTICLE SUBMISSION INFO

This newsletter is published monthly by the San Diego Employers Association.

We welcome the submission of articles by our members on topics of interest related to HR. Date for submission of materials and advertising is the 15th of the month prior to publication.

If you are interested in submitting an article please email it to: jjacobus@sdea.com.

If you are interested in advertising rates please send an email to: dchabot@sdea.com.

SDEA is a not-for-profit employer’s association that pro-vides HR advice and consulting to its members in an ef-fort to promote and maintain employer/employee rela-tionships. We are not attorneys and do not render legal advice. Please contact your company’s legal counsel if you need legal advice on any issue. If you do not have an attorney with employment and/or labor relations ex-perience, we would be happy to provide you with refer-rals.

888.625.733212255 PARkWAY CENTRE DR. POWAY, CA 92064

www.sdea.com • 888.625.7332 • San Diego Employers Association 1

IN THIS MONTH01.2010

>FEATURES

3 When Must You Pay For Pre- and Post-shift activities?

4 irs announces 2010 standard Mileage rate

4 it’s tax time

5 could she have Been accomodated?

6 obama signs coBra subsidy Extension 6 sDEa unveils new Website January 4th

>DEPARTMENTS

4 sDEa training

6 hr strange But true

7 Preferred Provider spotlight

8 Place Your Worker’s comp. insurance With Marrs Maddox and save $250!

MICHIGAN BEER DISTRIBUTORS PAY OUT $41 MILLION FOR BADFAITH BARGAININGpg. 2

2 San Diego Employers Association • 888.625.7332 • www.sdea.com

>LABOR LAW UPDATE NLRB PRESS RELEASEMICHIGAN BEER DISTRIBUTORS PAY OUT$41 MILLION FOR BAD FAITH BARGAININGSource: NLRB Press Release

An illegal arrangement by five Southeastern Mich-igan beer distributors in bargaining with the Inter-national Brotherhood of Teamsters on behalf of about 2,000 employees has resulted in total back pay of $41 million, one of the largest on record for the NLRB.

Individual employee back pay varied widely, de-pending on the job performed and the amount of time worked during the back pay period, from April 1991 through June 1998. The largest single pay-ment to an individual employee was $282,000. All five distributors are still in business.

The five employers entered into an illegal “mutu-al aid pact” for negotiations with Teamsters Local 1038. Each employer declared impasse after a period of fruit-less bargaining and imposed a new contract, which resulted in substantially lower income and reduced benefits for employ-ees, particularly the drivers.

Teamsters Local 1038 filed charges of bad faith bargaining, and the illegal arrangement surfaced during the subsequent investigation and hearing. After the NLRB Regional Director issued a consolidated complaint based on his finding that there was reasonable cause to believe that the beer distributors com-mitted unfair labor practices, an administrative law judge found that such violations had occurred, as did the Board and the Sixth Circuit Court of Appeals. The employers appealed to the Supreme Court, which declined to hear the matter in 1999.

During the ensuing years, thorough investigations were con-ducted to determine what the workers would have earned if not for the unfair labor practices which stemmed from the illegal arrangement. Four employers – Don Lee Distributor, Inc., Pow-ers Distributing Co., Inc., Eastown Distributors Co., and Oak Distributing Co. – agreed to the settlement terms by 2003. However, Hubert Distributors, Inc. continued to litigate, and unsuccessfully appealed the methodology and amount of the

compliance determination to the Sixth Circuit. When the ap-peal failed in August 2006, the NLRB conducted an exhaustive search for the remaining 300 affected workers (and their heirs, where appropriate), which recently concluded this fall.

“We hope this sends a message that the NLRB takes violations of the National Labor Relations Act seriously, and we will pur-sue justice no matter how long it takes,” said Stephen Glasser, Regional Director of the NLRB Detroit office.

The National Labor Relations Board is an independent fed-eral agency created by Congress in 1935 to administer the National Labor Relations Act, the primary law governing re-lations between unions and employers in the private sector. The statute guarantees the right of employees to organize and to bargain collectively with their employers, and to engage in other protected concerted activity with or without a union, or to refrain from all such activity.

For any questions or comments regarding this Labor Law Up-date please contact attorney Michael Daly of the Daly Law Firm at 619-525-7000 or daly@mdalylaw.com.

www.sdea.com • 888.625.7332 • San Diego Employers Association 3

The 9th Circuit Court of Appeals has ruled that an employer may be liable for paying its technicians for unpaid post-shift activities. The ruling explains the criteria for determining whether employees must be paid for minimal pre-and post-shift activities.

“Ricci” was a security system technician who in-stalled and repaired vehicle security systems for Lo-jack Corp. in Orange County. Ricci did not work out of a Lojack office. Instead, he and other technicians worked from their homes or on-site at customer lo-cations.

Ricci brought a class-action lawsuit against Lojack, claiming that the company didn’t pay him and other technicians for time spent:

In the mornings, receiving assignments and map-ping routes to customer locations; Logging onto a company-provided handheld com-puter device; Commuting in company vehicles from their homes to the first worksite of the day; and Transmitting data from the handheld device to company serv-ers after they returned home at the end of the day. A federal district court dismissed all of Ricci’s claims, and Ricci appealed to the 9th Circuit Court of Appeals, which covers California.

Mixed Ruling for EmployersThe 9th Circuit upheld the district court’s finding that under both federal and California law, Ricci and the other technicians were not entitled to pay for their initial commute or for the time they spent preparing to depart for the first worksite.

With respect to the initial commute, the court affirmed that under both state and federal law, employees do not need to be compensated for time spent traveling from the employee’s home to the first worksite that the employee reports to. The court also ruled that the time the technicians spent getting ready to depart their homes in the morning was minimal. Therefore, no compensation was due to them for this time.

However, the 9th Circuit disagreed with the lower court regard-ing the post-shift activities. The court reasoned that because Lojack required technicians to transmit data from the handheld device to the company’s servers each day, and because this activity was both a regular duty and primarily for the com-pany’s benefit, that time may be compensable work time if employees must spend more than a minimal amount of time doing so. Evidence before the court indicated that because of technological difficulties, it could sometimes take as much as an hour to successfully upload the data.

>WHEN MUST YOU PAY FOR PRE- AND POST-SHIFT ACTIVITIES?By: HR.BLR.com

The court noted that although there is no precise legal defini-tion of “minimal” pre- or post-shift work, courts have held that if a task only requires a few minutes and is not related to the employee’s regular job duties, that time is likely to be consid-ered minimal and need not be paid time. On the other hand, if an employee is required to spend 10 or more minutes on a task related to the employee’s job duties, that time is not likely to be deemed minimal and must be paid.

The case was returned to the district court for a determination of how much time Lojack’s California employees usually spent uploading data at the end of the day. Rutti v. Lojack Corp., U.S. Court of Appeals for the 9th Circuit, No. 06-00350 (2009).

Practice TipTo avoid disputes and lawsuits, the best practice is to require employees to record all time spent on work-related tasks and to pay employees for that time.

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4 San Diego Employers Association • 888.625.7332 • www.sdea.com

>IRS ANNOUNCES 2010 STANDARD MILEAGE RATEThe Internal Revenue Service issued the 2010 standard mile-age rates used to calculate the deductible costs of operating automobiles for company business, charitable, medical or moving purposes.

Beginning January 1, 2010, the standard mileage rates for the use of a car (including vans, pickups, or panel trucks) will be:

50 cents per mile for business miles driven;

16.5 cents per mile driven for medical or moving purposes; and 14 cents per mile driven in service of charitable organiza-tions.

The new rate for business miles compares to a rate of 55 cents per mile for 2000. The new rate for medical and moving pur-poses compares to 19 cents in 2009. The rate for miles driven in service of charitable organizations has remained the same.

The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automo-bile; the standard rate for medical and moving purposes is based on the variable costs as determined by the same study. Runzheimer International, an independent contractor, conduct-ed the study for the IRS.

>ITS TAX TIMEBy: Jessica Zaldivar, PHR

As an employer, you are required to prepare a Federal Wage and Tax Statement (W-2 Form) for each of your employees that worked in 2009. You must provide a W-2 Form to all your employees by January 31, 2010.

If an employer fails to provide a W-2 form to each employee, or furnishes a false or fraudulent statement, the employer is subject to a penalty of fifty dollars for each such failure. For more information regarding the W-2 Form, refer to the IRS publications Employer’s Tax Guide and 2009 Instruction for Forms W-2 and W-3.

Also if you are an organization who had an independent con-tractor you are required to provide a 1099 Form for their trade by January 31, 2010.

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LOOKING INTO THE LABOR LAW CRYSTAL BALLPresented by: Attorney Panel

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www.sdea.com • 888.625.7332 • San Diego Employers Association 5

Source: HR.BLR.COM

An employee of a Connecticut manufacturer

developed a respiratory illness as a result of

inhaling chemical fumes in the plant. She took

a year’s medical leave and then was cleared

to return to work—as long as she worked away

from such fumes. Several jobs were available,

but she wasn’t qualified for any except on the

factory floor. She refused to wear a respirator,

was fired, and sued.

What happened. “Brianna” joined BIC, which

makes pens, lighters, and shavers, in 1974. As

an operator in the ink systems department in

mid-2001, she became ill, both with respirato-

ry distress and panic/anxiety attacks. She went

out on medical leave, with her doctor sending

periodic reports to BIC on her condition.

In May 2002 she asked to return to work. BIC explored open-

ings, finding several that required a college degree and/or

several years’ experience; Brianna was not qualified for any

of them. Offered a respirator to work in the plant, she refused.

Judges noted that neither she nor the company discussed oth-

er possible accommodations, and she was fired when the 12

months of her allowed leave expired.

Brianna sued for BIC’s failure to engage in the interactive dia-

log on possible accommodations that is required under the

Americans with Disabilities Act (ADA). A federal district court

judge ruled in favor of the employer, concluding that there did

not appear to be any accommodation that would have allowed

Brianna to work at BIC. She appealed to the 2nd Circuit, which

covers Connecticut, New York, and Vermont.

What the court said.

Technically, appellate judges agreed, every employee with a

disability should have the opportunity to participate in an inter-

active dialog with the employer about possible accommoda-

tions. But Brianna and BIC both appeared to conclude that no

accommodation was possible, so the dialog wasn’t necessary.

>COULD SHE HAVE BEEN ACCOMMODATED?

Some of the openings available at BIC when Brianna was able

to return to work were far away from chemical fumes—in the

corporate offices. But all of them would have been promotions,

which the employer knew it didn’t owe her, and all required

prior experience, including secretarial positions, that Brianna

lacked. So BIC was not obligated to give her any of those jobs.

Therefore, Brianna’s suit was dismissed again. McBride v. BIC

Consumer Products, U.S. Court of Appeals for the 2nd Circuit,

No. 07-5689-cv (10/5/09).

Point to remember: Judges cited rulings by the 1st (ME, MA,

NH, RI), 7th (IL, IN, WI), and 8th (AR, IA, MN, MO, NE, ND, SD)

Circuits to the effect that a failure to engage in dialog is not, by

itself, grounds for an ADA lawsuit against an employer.

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6 San Diego Employers Association • 888.625.7332 • www.sdea.com

Source: OSHA’s Crowd Control Safety Tips For Retailers

Everybody loves a sale, but one sale in particular has become so hazardous to retail workers that OSHA has released some guide-lines to help keep them safe.

The day after Thanksgiving has become known as Black Friday, a day when holiday shopping sea-sons gets into full swing. Since some retailers’ profitability for the year depends on holiday shop-ping, they have created big sales events for the day in a hope of finishing the year in the black. Many retailers themselves refer to it as Black Friday. However, huge crowds hungry for a deal can also pose a hazard to retail workers at those stores, according to OSHA.

Last year, a worker was trampled to death while a mob of shoppers rushed through the doors of a large store to take advantage of an after Thanksgiving Day sales event. Citing last year’s death and the rise in injuries related to the sales events, OSHA has published crowd control guidelines for retailers to protect workers during major sales events.

OSHA says retailers’ plans should include:

Having trained security or crowd management personnel or police officers on site.

Creating a detailed staffing plan that designates a location for each employee. Based on the size of the crowd expect-ed, determine the number of employees that are needed in various locations to ensure the safety of the event (e.g. near the door entrance and throughout the store).

Ensuring that employees are properly trained to manage the event.

Providing legible and visible signs that describe entrance locations, store opening times, and other important infor-mation such as the location of major sale items.

Preparing an emergency plan that addresses potential dangers facing employees, including overcrowding, crowd crushing, being struck by the crowd, violent acts and fire. Share emergency plan with all local public safety agen-cies.

Training employees in crowd control procedures and the emergency plan. Provide them with an opportunity to prac-tice the special event plan. Include local public safety agencies if appropriate.

OSHA also recommends that retailers prevent additional customers from entering the store when it reaches its maxi-mum occupancy level and refrain from blocking or locking exit doors.

“Crowd-related injuries during special retail sales and promotional events have increased during recent years,” says Jordan Barab, acting OSHA chief. “Many of these incidents could be prevented, and this fact sheet provides retail employers with guidelines for avoiding injuries dur-ing the holiday shopping season.”

>HR STRANGE BUT TRUE! ‘BLACk FRIDAY’ TAkES ON NEW MEANING FOR RETAIL WORkERS

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Source: HR.BLR.com

President Barack Obama has signed legislation that extends the amount of time involuntarily terminated workers will receive subsidies for COBRA continua-tion coverage.

The COBRA subsidy program was created in early 2009 by the American Recovery and Reinvestment Act of 2009 (ARRA). The program provides for a 65 percent subsidy for COBRA continuation premiums for workers who have been involuntarily terminated. ARRA provided for 9 months of subsidies. Under the new legislation, involuntarily terminated workers will receive subsidies for a total of 15 months.

Before the extension was approved, some workers saw their COBRA subsidies end this month. How-ever, the Department of Defense Appropriations Act includes a provision that allows those workers to continue their COBRA coverage.

“Individuals who had reached the end of the re-duced premium period before the legislation extended it to 15 months will have additional time to pay the reduced premiums related to the extension,” says Phyllis C. Borzi of the Depart-ment of Labor. “To continue their coverage they must pay the 35% of premium costs by (60 days after date of enactment) or, if later, 30 days after notice of the extension is provided by their plan administrator.”

The legislation also extends the deadline for workers to qualify for the COBRA subsidy program. When ARRA became law ear-lier this year, the COBRA subsidy program applied to workers who were involuntarily terminated from September 1, 2008 to December 31, 2009. With the extension, workers who are involuntarily terminated between September 1, 2008 and Feb-ruary 28, 2010 will be eligible for the subsidies.

The legislation, which Obama signed into law December 21, also includes new notification requirements for plan adminis-trators.

In the case of an individual who was an assistance eligible individual at any time on or after October 31, 2009, or experi-ences a qualifying event (consisting of termination of employ-ment) relating to COBRA continuation coverage on or after such date, the administrator of the group health plan must provide an additional notification with information regarding the extension, within 60 days after the date of the enactment, in the case of a qualifying event occurring after such date of enactment, consistent with the timing of other COBRA subsidy notifications required by ARRA.

>SDEA UNVEILS NEW WEBSITE JANUARY 4THThat’s right! On January 4th, 2010 we are proud to present our new and improved website. Our new site is packed full of valuable services such as LIVE CHAT for members and a brand new HR Marketplace! We are also thrilled to launch our very own HR BLOG. Log on today to see what all the buzz is about www.sdea.com.

For individuals who lost their subsidy because they reached the 9-month limit and failed to make timely payments of CO-BRA premiums, the administrator of the group health plan must provide to such individual, within the first 60 days of such in-dividual’s “transition period,” an additional notification with information regarding the extension, including information on the ability to make retroactive premium payments with respect to the transition period of the individual in order to maintain COBRA continuation coverage.

>OBAMA SIGNS COBRA SUBSIDY EXTENSION