This is the first in a series of e-Weekly articles on the Fair Labor Standards Act (FLSA). In Massachusetts, FLSA – a federal law – was recently expanded upon to require mandatory triple damages for any violations of FLSA regardless of the employer’s good faith to comply. In Massachusetts, that certainly incents credit unions to ensure their pay practices all comply with FLSA. Credit unions in Rhode Island and New Hampshire may not be exposed to the mandatory triple damages rule that exists in Massachusetts, but those credit unions would have penalties and damages for non-compliance also. So these articles over the next few weeks are intended as reminders of the importance of FLSA and those areas to review for compliance.
The FLSA, also known as the federal Wage and Hour Law, regulates minimum wage, overtime, equal pay, recordkeeping, and child labor for specified enterprises, language which covers all credit unions. Although the FLSA applies to all states, it permits states to afford workers greater protections, and employers must follow the provision that is more favorable to the employee.
As an example, the current federal minimum wage is $6.55; but it is $8.00 in Massachusetts; $7.40 in Rhode Island; and $7.25 in New Hampshire. Each state must provide the “greater protection,” thus the higher minimum wage for its employees.
In addition, FLSA covers exempt/non-exempt status, hours worked, meal breaks, overtime, termination pay, and vacation pay with minimum requirements that protect employees. Specific state regulations and even your customized personnel policies may provide even greater benefits. But at a minimum, a credit union must comply with the federal requirements and then any greater protections offered per state. The penalties for failure are significant.
While a FLSA audit can be random, it is often sparked by an unhappy employee or former employee, or by a competitor. In today’s economy, unhappy employees and/or former employees and discontented competitors exist in greater numbers than in the past. This is the time to ensure your records and practices are in order. If you have any specific questions, contact Beverly Purtell, vice president of human resource management at bpurtell@cucenter.org.
New Legislation Requires Immediate Employer Attention
The American Recovery and Reinvestment Act of 2009 (ARRA) and the Children’s Health Insurance Program Reauthorization Act of 2009 (CHIP) require employers to modify their Summary Plan Descriptions (SPDs) and add the new special enrollment rights to their existing notices.
The Employee Retirement Income Security Act (ERISA) requires all employers that offer an Employee Welfare Benefit Plan(s) to its employees to maintain a Plan Document and Summary Plan Descriptions for all the plans offered.
These documents must contain specific information that describes these benefits in a manner that is easily understood by employees and follows ERISA guidelines. ERISA mandates that copies of the SPD are provided to employees at specific times, in certain formats and are regularly updated.
Even "small employers" are NOT exempt from this requirement. This is important to note because so many employers erroneously think that the information in a booklet or certificate provided by their Group Health Plan meets the SPD requirements. This is simply not the case.
Group employee benefit plan documents and notices need to be amended to reflect changes relating to Employee Benefit Plans in including:
The ARRA Special Cobra Election Opportunity
Special 60 Day Enrollment Period for eligible employees and dependents to enroll in the plan if they (1) lose eligibility for Medicaid or CHIP coverage or (2) become eligible to participate in a premium assistance program under Medicaid or CHIP.
If these notices are not provided in a timely manner, the Department of Labor (DOL) may assess a civil penalty against an employer of up to $100 per day from the date of the employer’s failure to provide a notice of availability of premium assistance. No business today can afford the large penalties that are associated with ERISA noncompliance. Now is the time to outsource all of the necessary ERISA communications, forms, and recordkeeping.
The Association's Members Insurance Agency can help you outsource these important ERISA requirements. If you would like to learn more, contact Pam Nolan at pnolan@cucenter.org or 1-888-746-2476 ext 7.
RI Credit Unions Show Growth in 2008
Rhode Island’s 25 credit unions, which hold some $4.2 billion in assets, have seen growth in assets, deposits, loans, and membership, according to data compiled from year end reports released recently by the National Credit Union Administration.
Over the year, the state’s credit unions had aggregate growth in assets of 9.17% growing to $4.2 billion from $3.85 billion at the first of the year. This figure exceeds the national growth rate of 7.23%.
Savings in Rhode Island credit unions are up by 6.77% since the beginning of the year mirroring the national savings growth figure for credit unions of 6.95%.
