Category Archives: Legislation

by | November 1, 2010 · 12:04 pm

Hospitality Industry Employee Safety And Wage Issues: Hotel Management Should Expect 2011 OSHA Regulations To Require A Written “Injury And Illness Protection Progam” And Dept. Of Labor (DOL) Rule Requiring Full Disclosure On “Worker’s Pay Computation”

 

  • The Occupational Safety and Health Administration (OSHA) is developing a regulation mandating that employers have a written health and safety program, referred to as an Injury and Illness Protection Program or “I2P2.”
  • This rule would give an OSHA investigator the authority to find that an injury should have been avoided even if it was not regulated under a specific standard.
  • OSHA will also publish a regulation that will require employers to analyze every employee injury to determine if it is a work-related recordable musculoskeletal injury.
  • This regulation would set the stage for OSHA to revive its controversial ergonomics standard.

 

  • The Wage and Hour Division at DOL has a highly anticipated rule that would greatly expand recordkeeping requirements under the Fair Labor Standards Act (FLSA)
  • It would require employers to disclose how a worker’s pay is computed and complete a written “classification analysis” for each worker who is exempt or outside of the coverage of the FLSA.

For more:   http://www.worldtrademag.com/Articles/Column/BNP_GUID_9-5-2006_A_10000000000000932009

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by | September 22, 2010 · 2:52 pm

Hospitality Industry Employee Risk Management: IRS And State Agencies Are Set To Increase Scrutiny Of “Misclassification” Of Employees As “Independent Contractors”

As both Federal and State budgets become more strained, the IRS and state tax authorities sharpen their pencils further to extract as much in unpaid taxes possible.  The next target: misclassification of employees as independent contractors. 

Why all the fuss about misclassification?

When workers are classified as employees, employers must pay certain taxes and withhold certain taxes on behalf of taxing authorities from the workers’ pay.  These include:

  • Federal income taxes
  • State income taxes
  • Social Security taxes (both employer-paid and employee withholding)
  • Medicare taxes (both employer-paid and employee withholding);
  • Federal unemployment taxes
  • State unemployment taxes
  • State disability insurance taxes 
  • And more…

In the case of an independent contractor, none of these are due. The hiring company simply pays the agreed upon amount to the independent contractor and they are responsible for paying their own taxes.  It is generally believed that employers are more likely to withhold taxes than independent contractors are to voluntarily pay them.  So by misclassifying, the government is losing the difference between what the employer should have paid in taxes and withheld from the employee and the amount the independent contractor pays when it is due. 

I say “generally believed” because the last comprehensive study undertaken by the IRS to estimate the “misclassification” problem was conducted in 1984.  In 2009, the Treasury Inspector General for Tax Administration (“TIGTA”) issued a report asserting that misclassification is an important and growing problem, but failed to provide an actual estimate to how widespread the problem is currently.  The Joint Committee on Taxation, however, estimates that between 2010 and 2020 addressing the misclassification problem will generate an additional $6.9 billion in tax revenues.

Why does misclassification happen?

Misclassification can occur for a variety of reasons.  Many times it is ignorance of how to properly classify.  In some cases, employers may seek to avoid many of the costs and regulations associated with having employees which are not required with independent contractors. Other times the employee and employer work together and split the difference on the savings from intentional misclassification.  On the whole though, the employer benefits more than the employee, because the lost benefits of being classified as an employee are seldom made whole with any additional increase in pay.

Enforcement against misclassification

In order to address the problem of misclassification, the FY2011 Federal budget includes $25 million for the hiring of 100 new “enforcement personnel” focused on misclassification.  Part of the money will be used for grants to state governments to address the issue.  Earlier this year, the IRS began to conduct random audits of 6,000 businesses over the next three years to determine if they comply with five employment tax-related areas including misclassification. The businesses will be chosen at random.

New laws with stiff penalties in the works

In the Senate, the Employee Misclassification Prevention Act was introduced this year by Senator Sherrod Brown from Ohio and it currently has 8 cosponsors. The law amends the Fair Labor Standards Act (“FLSA”) by requiring every company to keep records of non-employees who perform labor or services and inform all new employees and non-employees of their classification and rights.  The proposed law would also make it unlawful to “fail to classify accurately an employee or non-employee”.  It also includes several punitive provisions, including fines of $1,100 for each violation going up to $5,000 per violation for repeat offenders. 

The law also uses the “stick approach” to coerce state governments to assist in dealing with misclassification by amending their respective state’s unemployment compensation law. The laws must establish auditing programs for companies that act in such a way as to undercount the employees that should be covered under state unemployment compensation coverage and establish penalties for companies that misclassify.  States that do not amend their laws will not be eligible for federal grants for state unemployment compensation funds.  With the current condition of state budgets, it is truly an offer they can’t refuse.

In the House of Representatives a proposed law by the same name was introduced by Representative Lynn Woolsey of California’s 6th district. The bill has 16 cosponsors and is identical to the Senate version.

There are several other bills that address misclassification so it is likely that at least one will become law in the near future.  If your business may be misclassifying it would be prudent to address the issue sooner rather than later.

For more:  http://www.openforum.com/idea-hub/topics/money/article/crackdown-on-misclassification-of-employees-as-independent-contractors-michael-periu

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by | August 28, 2010 · 9:07 am

Hospitality Industry Employment Risk: Management Must Insure Compliance With H-2B Visa Program Requirements And Fair Labor Standards Act

 “…the hospitality industry is “always on the radar” for potential violations because it employs large numbers of H-2B and younger workers…”

In June and July, employment law firms began issuing legislative alerts to hospitality industry clients, warning them of plans by Wage and Hour Division officials to launch investigations of the hotel and motel industry beginning Oct. 1.

These investigations will center on compliance with H-2B visa program requirements and the Fair Labor Standards Act. The H-2B visa program allows businesses needing one-time, seasonal, peak-load, or intermittent staffing to use foreign workers as temporary labor.

Dolores Quesenberry, a spokeswoman for the N.C. Department of Labor, told Carolina Journal that she was unaware of any increased complaints, but did say the hospitality industry is “always on the radar” for potential violations because it employs large numbers of H-2B and younger workers.

Paul Stone, president of North Carolina Restaurant and Lodging Association, told CJ that the lodging and restaurant industry is North Carolina’s second largest employer, with approximately 500,000 workers, accounting for 10 percent of the state’s total workforce. Of the 1,600 hotels in North Carolina, only a few employ H-2B workers, Stone said, mostly because the program is so restrictive. Before hiring an H-2B worker, for example, an employer must certify there are no domestic applicants qualified for the position.

Stone wonders why hospitality employers are being targeted with the economy mired in recession. Wage and hour audits and similar investigations disrupt operations and increase costs, especially if an employer has to engage outside counsel or auditors, said Stone.

For more:  http://www.lincolntribune.com/modules/news/article.php?storyid=20513

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by | July 23, 2010 · 5:53 am

Hospitality Industry Employees Risks: Hawaiian Hotels Violated State Law When Service Employees Not Given 100% Of Service Charges For Food And Beverage Service

“…The suit, filed by Turtle Bay employees in January 2009, claimed the resort violated a state law enacted in 2000 that requires hotels and restaurants to give 100% of service charges for food or beverage service entirely to employees – unless they tell customers that management’s keeping a portion, the Honolulu Star-Advertiser says…”

Employees of the Turtle Bay Resort on Oahu’s scenic North Shore won a $526,000 settlement  in a lawsuit over tips that had been split among workers and the company without customers knowing.

At least nine similar suits have been filed over the last two years against major Hawaii hotels, Brandee Faria – the Turtle Bay employees’ lawyer – tells the Star-Advertiser. And it’s not only the employees who are hiring lawyers.

Some of the suits were filed on behalf of hotel customers who thought they’d paid tips to staffers – not hotel management.

In a case against the Four Seasons hotels on Maui and the Big Island, the Star-Advertiser says that Hawaii Supreme Court in March ruled that hotel and restaurant employees may sue under the law.

The Turtle Bay settlement covers 130 employees who worked at the hotel between 2005 and 2009; the amount would mean $4,046 per employee if the settlement was shared equally, the story says. Settlement checks were mailed out recently.

For more: http://travel.usatoday.com/hotels/post/2010/07/hawaii-hotel-workers-win-526000-settlement-in-back-tips/100924/1

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by | June 7, 2010 · 7:14 am

Hospitality Industry Bodily Injury Liability: New Florida Law Will Help Limit “Slip And Fall” Cases And Forced Settlements

“…Maria Coppola says she slipped on pebbles and sand on the Naples Beach Hotel & Golf Club step..”

“…lawsuits, filed in the past six months in Collier Circuit Court, likely will result in settlements. That’s because defendants want to avoid costs of expensive litigation…”

In April, Gov. Charlie Crist signed House Bill 689, which requires that an injured person must prove a business, municipality or other defendant actually knew about a dangerous condition and should have done something to fix it _ or that the condition occurred often enough that the business should have expected it. These are legal standards known as actual notice, or constructive notice.

“This represents a significant shift and a major victory for business owners and their insurers in slip-and-fall cases,” said Kirkland Miller, an Ave Maria School of Law professor who specializes in premises liability. “More importantly, it could mean a reduction in the number of slip-and-fall cases being filed in Florida …”

For more:   http://www.naplesnews.com/news/2010/jun/06/south-florida-called-no-1-hellhole-slip-fall-lawsu/

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by | May 20, 2010 · 7:17 am

Hospitality Industry Health Insurance: Hotel Industry Must Comply With New Health Care Law Provisions For Automatic Enrollment, Waiting Periods And Coverage For Dependents

The hotel industry has some unique work-force characteristics that make the health-care reform law of particular interest, said Ron Kramer, partner with Seyfarth Shaw.

The abundance of part-time workers, seasonal workers and independent contractors, to name a few, will have a dramatic impact on how the hotel owners and managers accommodate the act’s many provisions, he said.

  • “There’s a provision that requires automatic enrollment for employers with 200 or more employees,” Kraft said. “That means they would have to automatically enroll employees.”
  • The waiting period for enrollment is being set at 90 days, which means many employers will have to shorten their current policies.
  • The act puts a prohibition on rescissions (cancellation of contracts) by insurance companies, except in cases of fraud. In the past, some insurance companies have been accused of scouring through a participant’s medical files upon huge claims to try to find some reason to rescind coverage.
  • By 2014, there will be no pre-existing conditions exclusions for any covered individuals.
  • While group health plans are not required to provide coverage for dependents under the act, they must extend that coverage to dependent children up to age 26 if such coverage already exists. Grandfathered plans must only extend that coverage if the dependent does not have any other employment-based coverage. By 2014, all plans will be required to provide coverage for dependent children.

For more:  http://www.hotelnewsnow.com/articles.aspx?ArticleId=3359&PageType=News&ArticleType=35

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by | April 30, 2010 · 6:18 am

Hotel Security And Legal Issues: Municipalities Are Considering Enacting Legislation Which Would Force Hotels To Obtain Photo ID From Guests Or Be Fined

A proposed law before Ocean City’s Town Council would force resort hotels and motels to obtain photo ID from guests, or else face a $1,000 fine.

The board of Ocean City’s Hotel-Motel-Restaurant Association unanimously opposes the idea, said HMRA executive director Susan Jones. She said having each and every guest show photo ID would be “cumbersome,” but that a majority of hotels already ask for it.

“We found it a little too intrusive,” she said. “What we were most against in that part of the ordinance was a fine, because how can you tell somebody how to run their business? That’s not a public safety issue.”

“Obviously, we want to work with the police, but in its current written form, we couldn’t support it,” she added.

The matter was on the Town Council’s agenda for this week’s meeting, but it was postponed without discussion.

Ocean City Police Chief Bernadette DiPino says it is a matter of public safety.

She asked resort leaders to consider the law as a proactive community policing idea –a tool, she said, meant to help identify any hotel guest suspected of committing a crime. It also would be a measure helping homeland security, she said.

http://www.delmarvanow.com/article/20100428/WCT01/4280429

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by | April 18, 2010 · 3:19 pm

OSHA Laws Protect Workers And Insure Medical Bills And Lost Time Are Covered

(From a 24-7PressRelease)  While most employers make worker safety a top priority, as mandated and regulated by the Occupational Safety and Health Administration (OSHA), on-the-job injuries do still happen. This is the reason for the government-mandated Workers’ Compensation program. Workers’ Compensation is designed to compensate victims of workplace injuries and illnesses.

In general, the purpose of Workers’ Compensations laws is to ensure that all the injured worker’s medical bills and lost time are covered in exchange for ceding the right to sue the employer for negligence. However, the system is not perfect and problems can arise that prevent employees from getting the compensation they deserve.

Denial of benefits

While many employers act in good faith in the best interests of injured employees, getting them their benefits promptly and completely, some work to undermine Worker’s Compensation claims. This happens for one simple reason–profits. Most large employers are required to carry Workers’ Compensation insurance to ensure that funds are available to provide benefits.

However, employers can save money on insurance premiums by reducing the amount of benefits they pay out, and their insurance company is happy to help them.

Injuries not caused by accidents

Many workers assume that Workers’ Compensation only applies in cases where the injury was caused by a specific accident. In fact, you may be eligible for compensation for a wide range of injuries and illnesses caused by repetitive motion, daily tasks, or the workplace environment.

For example, carpal-tunnel syndrome and asbestosis can be qualifying conditions.

If you are injured on the job or become ill from workplace conditions, be sure to follow all of your employer’s reporting procedures. Failing to comply with your employer’s policies may jeopardize your claim and give the employer legal grounds to deny your benefits.

http://www.24-7pressrelease.com/press-release/workers-compensation-in-palm-beach-146904.php

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by | February 24, 2010 · 6:35 am

Workers’ Compensation In California: Next California Governor Will Face Challenges To States Workers’ Compensation Reform

(From a Sacramenton Bee article) When Arnold Schwarzenegger deigns to catalog his accomplishments, reforming the state’s system of compensating workers for job-related injuries and illnesses ranks high on his list.

One of Schwarzenegger’s first acts six years ago was bulldozing the Legislature into a sweeping overhaul of workers’ compensation, reducing both eligibility for direct payments to disabled workers and medical care costs.

The system is so large that the legislation and the administration’s subsequent implementation rules cut employers’ costs by about $15 billion a year, or approaching $100 billion so far.

Workers’ comp politics being what they are, however, the changes generated fierce opposition from those on the other end of the pipeline, namely unions, disability attorneys and medical care providers.

http://www.sacbee.com/2010/02/22/2554129/dan-walters-workers-comp-battle.html

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by | February 23, 2010 · 8:32 am

Hospitality Industry Conferences: 2010 American Hotel & Lodging Association “Legislative Action Summit” To Be Held March 15-16 In Washington, D.C.

2010 AH&LA Legislative Action Summit
March 15-16, 2010
J.W. Marriott Hotel
Washington, D.C.

Join other AH&LA members from across the country in the U.S. lodging industry’s annual legislative summit. Come to the AH&LA Legislative Action Summit in Washington, D.C., during March 15-16, 2010, and make a difference through coordinated visits to Capitol Hill to share your perspective to lawmakers on key issues affecting your own workplace.

This is your chance to visit your Senators and Representative and let them know your opinion on pending legislation. There is no better opportunity for hoteliers to come make a big difference on the legislation that matter most to you in 2010: economic recovery, hotel taxes, healthcare reform, card check, and travel promotion.

At the 2010 LAS, you will gain insights from lawmakers and top industry executives on how impending legislation will impact your business decisions. LAS’s Industry CEO panel will feature an in-depth discussion on issues from these top industry leaders:

• Jim Abrahamson, President, The Americas, InterContinental Hotels Group
• Steve Joyce, President & CEO, Choice Hotels International
• David Kong, President & CEO, Best Western International Inc.
• Christopher Nassetta, President & CEO, Hilton Worldwide

With the economy, healthcare, and card check legislation on the table during the 2010 election year, Congress needs to hear your point of view.

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