VERMONT PAYROLL ISSUES

Vermont has stated, via the Department of Labor and Industry Wage, Wage and Hour Program, Frequently Asked Questions (FAQ), that an employer is prohibited from paying an employee's wages using a payroll debit card. The FAQ states that wages must be paid in cash or check and a payroll debit card does not meet the definition of either.  

The FAQ also states that an electronic wage statement is allowable for issue to employees if such statement is made accessible electronically to the employee at the time that wages are paid. Also the employee must be able to print the statement free of charge and the wage statement must be protected and kept confidential. Please find a link to the FAQ below:

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DEPARTMENT OF LABOR RELEASES FINAL OVERTIME REGULATIONS

In the April 23, 2004 Federal Register, the Department of Labor (DOL) published the final regulations regarding overtime pay. These new regulations substantially revised the rules governing overtime eligibility for “white-collar” workers under the Fair Labor Standards Act (FLSA). The DOL defines “white-collar” workers as being “executive, administrative, professional, outside sales and computer employees.”

The DOL estimates that approximately 1.3 million salaried “white-collar” workers will become eligible for overtime, whereas under the current rules they are not. It is estimated that these individuals will receive up to $375 million in overtime wages annually.

It is important to note that the exemption from overtime issued under the “Final Rule” does not apply to “blue collar” workers who “perform work involving repetitive operations with their hands, physical skill and energy.” Also, the new exemptions from overtime rules do not apply to police officers, fire fighters, paramedics, emergency medical technicians and nurses. Consequently, these individuals are entitled to overtime regardless of how highly they are paid and, further, the salary and duties tests do not apply.

Effective Date of New Overtime Regulations:

The effective date of the final regulations is August 23, 2004.

Highlights of Changes to Overtime Regulations:

• Workers classified as "white-collar" workers are automatically qualified for overtime pay when these individuals earn less than $23,600 or $455 weekly, regardless of job duties. Under the current FLSA rule, only a "white-collar" worker who makes less than $8,060 or $155 weekly is entitled to overtime pay.
  
  
• Employees who perform office or non-manual work and earn $100,000 or more per year (which must include at least $455 per week paid on salary or fee basis) are exempt from the FLSA overtime provisions if they customarily perform at least of one of the duties set out in the law related to an exempt executive, administrative or professional employee. Examples of duties include, for an executive employee "authority to hire and fire", for an administrative employee, work must be related to "management or general business operations", and for professional employees, "employee must perform work requiring advanced knowledge." Examples of the other duties can be found in the Federal Register at Sections 541.100 et seq., 541.200 et seq., and 541.300 et seq. respectively.
  
  Important Note: On May 4th, the United States Senate passed an amendment to the final overtime rules. This amendment prohibits the DOL from implementing any changes that would eliminate overtime protection from any workers who currently receive overtime. This legislation is now pending a House of Representatives vote.

Further Guidance:

The DOL has created an on-line seminar which addresses the new overtime rules. This site also includes fact sheets broken down by exemption type (e.g. outside sales employees, computer employees, etc). This DOL production is located at:

http://www.dol.gov/fairpay

The Federal Register containing the Final Rule in relation to overtime is available at:

http://a257.g.akamaitech.net/7/257/2422/14mar20010800/edocket.access.gpo.gov/2004/pdf/04-9016.pdf.

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FSA ROLLOVER PROVISION ONCE AGAIN UP FOR CONSIDERATION

As previously reported in the April and August 2001, February 2002 and December 2003 Tech Flex, there have been a number of attempts to eliminate or mitigate the “use-it-or-lose-it” rule related to health flexible spending accounts (FSAs). Whether a rollover provision will be adopted as a part of the cafeteria regulations is once again up for consideration. The bill, known as House of Representatives Bill 4279 (HR 4279) will substantially reduce the impact of the “use-it-or-lose-it” aspect of health FSA participation. This legislation, if it becomes law, would permit a health FSA participant to carry forward balances up to a maximum of $500, which are left over in a health FSA at the end of a plan year to the next plan year, or transfer these amounts to the employee ' s health savings account. HR 4279 proposes that the rollover would be effective for plan years beginning after December 31, 2003. It is important to note that HR 4279 only addresses the rollover of health FSA contributions. The bill does not propose a rollover in relation to remaining dependent care spending account balances. On May 12, this proposed legislation passed the first legislative hurdle with the passage of HR 4279 in the House of Representatives on a vote of 273 – 152 . This bill must now go before the Senate for consideration.

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UTAH TO INCREASE LIMITS ON USE OF SOCIAL SECURITY NUMBERS

The state of Utah has passed legislation that would further restrict the use of social security numbers of individuals covered under insured health plans. Currently, Utah Code Ann. § 31A-22-634 restricts insurers, health maintenance organizations (HMOs) and third-party administrators (TPAs) from publicly displaying or publicly posting individuals' social security numbers.

Effective July 1, 2004, insurers, HMOs, and TPAs are prohibited from printing an individual's social security number on any card required for the individual to access products or services provided or covered by the insurer, HMO, or TPA. If an explanation setting out why the law cannot be accommodated by the effective date is submitted, in writing, to the Utah Department of Insurance prior to July 1, 2004, an extension to March 1, 2005, may be granted.

It is important to note that Utah law does not prevent the collection, use or release of a social number as required by state or federal law, for internal verifications or administrative services, or for claims administration purposes such as verification, eligibility, or payment processes.

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WASHINGTON STATE TO RESTRICT USE OF PLAN PARTICIPANT'S SOCIAL SECURITY NUMBER

The Washington state legislature has enacted legislation, which prohibits health maintenance organizations (HMOs) and health insurance carriers from printing on an identification card used for filing claims any more than four digits of the plan participant's social security number. This bill was signed into law by Governor Locke on March 24, 2004 and pertains to identification cards issued after December 31, 2005. Substitute Senate Bill 6494 states:

"After December 31, 2005, a health carrier that issues a card identifying a person as an enrollee, and requires the person to present the card to providers for purposes of claims processing, may not display on the card an identification number that includes more than a four-digit portion of the person's complete social security number."

Please find below a link to the entire text of the final version of the bill.

http://www.leg.wa.gov/pub/billinfo/2003-04/Senate/6475-6499/6494-s_sl_03292004.txt

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Please contact ADP National Account Services, ProBusiness Division for further information at:
20000 North Creek Parkway, Suite 200, Bothell, WA 98011
Phone: (425) 415-4000 · Fax: (425) 417-4795 · e-mail: bsa@probusiness.com

(ADP National Account Services, ProBusiness Division does not make any representation or warranty that the information contained in this newsletter, when used in a specific and actual situation, meets applicable legal requirements. This newsletter should not be construed as legal advice. Your legal counsel should be consulted on all specific fact situations.)

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