Recreational Marijuana Legalized in Canada- Employers Need to be Ready

The federal government of Canada has announced that as of October 17, 2018, Canadians will be able to possess and consume recreational marijuana under the Cannabis Act.  Employers based in Canada or with workers in Canada should begin preparing for the impact recreational marijuana will have on their workplaces. 

Currently, medical marijuana is legal across Canada.  Employees are generally not allowed to work while impaired by marijuana.  But that rule is subject to reasonable accommodation requirements as with other prescription medications for an employee’s illness, injury, or disability.  There are also accommodation restrictions for employees who work in safety-sensitive positions. 

For recreational marijuana, workers who use cannabis for non-medical purposes will not be allowed to do so at their workplaces.  Employers can require employees to report to work unimpaired and remain sober while working.  Employees can also face legal penalties for violating the laws covering recreational marijuana. 

Ahead of the full legalization date, Canadian employers should begin looking into updating their policies to address both medical and recreational marijuana.




2019 is Closer Than You Think – Washington State Employers Should Begin Preparing for New Paid Family and Medical Leave Law

Last year, the State of Washington passed the new Paid Family Medical Leave law (PFML).  The law covers all private employers in Washington. 

During a year, eligible employees may be entitled to job-protected paid leave as follows:

·         12 weeks of family or medical leave

·         14 weeks of family or medical leave if the employee experiences a pregnancy-related serious health condition that results in incapacity

·         16 week of combined family and medical leave

·         18 weeks of combined family and medical leave if the employee experiences a pregnancy-related serious health condition that results in incapacity

The law will be funded by both employers and employees paying into the paid leave program through payroll deductions.  The total premium is 0.4% of an employee’s wages, to which both the employer and the employee must contribute.  (Small employers (less than 50 employees) are not required to pay the employer portion of the premiums.)  Employers will be responsible for reporting wages and hours to the state, and for remitting all premiums collected to the state. 

Payroll deductions will begin on January 1, 2019.  Employees will be able to begin using benefits on January 1, 2020.

Employers can also choose to provide a voluntary paid family medical leave plan instead of using the state plan.  The employer must submit an application for the voluntary plan to the state, and the state must give approval.  A voluntary plan must provide employees with at least the same amount of leave for the same reasons as a state PMFL plan, and must provide the same or better monetary benefits.  The employees’ share of the premium can’t be more than what it would be for the state PFML plan.   

With the deadline to begin payroll deductions on the horizon, employers should start preparing now.  Steps to consider include:

·         Checking with your payroll department or payroll provider to make sure they will begin making payroll deductions in January 2019

·         Before the end of 2018, determining how and when to communicate the upcoming new payroll deduction to employees

·         Revising employee handbooks in later 2019 to have updated leave policies available for January 2020

Contact if you have questions regarding Washington’s new Paid Family Medical Leave law. 



Schedule J to be Added to IRS Form 5500

The already complex IRS Form 5500 could be getting a much more complex. Under proposed regulations from the DOL and IRS, Schedule J will be added to the Form 5500 for group health plans covered by Title I of ERISA – and the amount of information requested is astonishing.

The Form 5500 was originally created in the 1970’s to enable the DOL to provide an annual report to Congress regarding self-insured health plans. At this point in time, group health plans covering less than 100 participants are not required to file the Form 5500. However, the new proposed Form 5500 will require those plans with less than 100 plan participants to file Form 5500 in order to satisfy all reporting requirements of the DOL to Congress.

As of right now, the proposed Schedule J, adds requirement for plans with less than 100 participants will affect all plan years beginning on or after January 1, 2019.

What does this mean for employers?

Under Schedule J, employers will have to report more, in cases, new information regarding:

·         Coverage to groups such as: employees, spouse, children, retirees, etc.

·         Plan benefits and it’s design characteristics

·         Confirmation that Summary Plan Descriptions (SPD’s) have been distributed to plan participants

·         Employer and Participant contributions

·         Benefits paid from general assets and their associated amounts

·         Options of the benefit package – high deductible, grandfathered status, etc.

·         Persons offered COBRA

·         Rebates received by the plan

·         Delinquent contributions

·         Service Provider information

·         Stop loss insurance information

·         Pre and Post-serviced claims submitted

·         Claims that were appealed

·         Compliance with GINA, ACA, Mental Health Parity, etc.

What should I do as an employer (i.e. Plan Sponsor)?

·         Implement proper HCM systems for Plan Data collection

·         Seek legal and tax counsel to prepare ERISA documents (SPD’s) and Form 5500

myHRcounsel offers a complete solution to your current and future ERISA compliance needs for just $140 per month/$220 per month including Form 5500.  Most companies are not in compliance, and the DOL knows it – they have not been staffed to enforce the regulations in the past.  Even under the new administration, the DOL has increased its staff and is showing signs of stronger enforcement (evidenced by adding its requirement of all plan sponsors filing Form 5500.  Protect your company from steep DOL fines and sign up for myHRcounsel’s ERISA offering, or to find out more about our unlimited access to employment and corporate lawyers, simply click below and submit your company information:


Are you ERISA Compliant?

Do you think that you are ERISA compliant?  The DOL has released the 2017 Form 5500, which is very similar to the 2016 Form 5500.  While similar, there is a big difference, where if the Plan Name changed from 2016 to 2017- you must note this on the second page of the 2017 Form 5500.  What this means is that something’s up with the DOL and health and welfare plans- are they ramping up enforcement?

As most employers know, group health plans with less than 100 participants at the beginning of the plan year are exempt from filing a Form 5500 if the plan is unfunded, fully insured or a combination of unfunded and fully insured. Currently, the Form 5500 for self-insured plans contains very little information.

As we have previously reported, barring a change in plans from the DOL, all employers, even those under 100 participants in the health and welfare plans will now have to file Form 5500 in 2019.  Are you ready?

Also of interest (or of note!) the DOL has been making changes to its 5500 – subtle as it may be.  Its latest change is for an employer/plan sponsor to report its Plan Name change – which was not required before 2017.

5500s have been around since reporting began back in the 1970s and yet this is the first time the Plan Name change is to be noted (The DOL has requested for changes in the Plan Sponsor name or its EIN/ Tax ID to be pointed out).

Many lawyers and ERISA experts are wondering if the DOL is starting to focus on the Plan Name changes as a segue way to also show more emphasis to be given to Plan Documents and Summary Plan Documents (SPDs). After all, the 5500 is a reflection of the Plan Documents/SPDs; however many Plan Sponsors don’t know of Plan Documents, the SPDs, their ERISA compliance requirements or the penalty fees for noncompliance.

The DOL has not really promoted Plan Documents in many aspects, except they do ask for the documents immediately when the audit is to be conducted.

Why the switch? Could it be that the DOL is going to be looking for more information and more details on Plan Documents and SPDs via the Form 5500. Will those proposed 2019 Form 5500 changes (making all plan sponsor/employers – even those with less than 100 participants) really come to light down the road?

The proposed changes to the 2019 Form 5500s (which have remained under the radar now for many months) included a new Schedule J. And on the Schedule J the Plan Administrator of the Plan is to vouch if the SPD has been distributed to the Plan Participants. If the Plan Sponsor has not, then they were to check off no. As a result though, they would be out of compliance and the DOL could choose to apply the penalty.  We are nervous if this is the development since we are very well aware of so many who are not in compliance on Plan Documents and SPDs

Luckily for our clients, myHRcounsel offers a complete solution to your ERISA compliance needs for just $140 per month.  Most companies are not in compliance, even the DOL knows it – but times could be changing.  You must have an ERISA-compliant SPD’s or Wrap document (even if your plan has one participant) and you must distribute these documents within a certain time period.  SMM’s and dozens of other notices are also required under ERISA.
To sign up for myHRcounsel’s employment law offering or ERISA Complete, simply click below and submit your company information:

OSHA Reporting Update—Minnesota Employers with 20 or More Employees Required to Submit Data to Federal OSHA by July 1, 2018

After several rounds of confusing back-and-forth information, the Minnesota Occupational Safety and Health Administration (MNOSHA) has now confirmed that all Minnesota employers with 20 or more employees must submit their 2017 workplace injury and illness data to the federal Occupational Safety and Health Administration (OSHA) by July 1, 2018.

Since last year, federal OSHA and MNOSHA have been providing and then changing the rules on which employers will be required to report their workplace injury and illness data.  But in late May of this year, MNOSHA adopted the federal reporting rule (  However, MNOSHA also added its own additional requirement: not only are Minnesota employers that would have been covered by the federal rule (employers with 250 or more employees, or employers with 20 to 249 employees in certain high-risk industries) required to file by July 1, 2018, but also any additional Minnesota employers with 20 or more employees that weren’t originally covered by the federal rule must file by July 1, 2018 as well.  In other words, Minnesota’s new requirement is broader than the federal rule and will now apply to a greatly expanded list of Minnesota businesses. 

For now, covered Minnesota employers will submit the information using federal OSHA Form 300A (   The form can be submitted to federal OSHA through their Injury Tracking Application (ITA) in three ways: manual entry of data into a web form; uploading a CSV file; or through an automated recordkeeping and reporting system ( 

It’s uncertain if enforcement of this rule will rank as a high priority for MNOSHA.  However, employers who wish to remain compliant should be deciding how and when they will file.  Contact myHRcounsel if you need assistance with this new rule. 

Stand and Deliver: New NFL Anthem Rule and Employee Speech

The new National Anthem rule put in place by NFL owners last week has brought the question of speech in the workplace back into focus.

The rule requires players to be on the field and standing during the National Anthem.  An opt-out provision allows players to stay in the locker room or other off-field location during the Anthem if they choose. 

The rule stems from pressure on the league to limit player protests.  Many of the players argue kneeling or other forms of protest during the National Anthem are political speech protected by the First Amendment. 

At first glance, this might seem like a straightforward workplace issue.  The players are employees of a private employer.  Their workplaces are governed by their employers’ rules of conduct.  A private employer can set workplace behavior rules, and employees agree to those rules when they work for the employer.  (Workplace rules in the NFL are also subject to the players’ collective bargaining agreement, their own individual contracts, and contract law in general.)  In contrast, the First Amendment, as mentioned in connection to this issue, generally applies to government interference with speech or to government employees.  Because the NFL teams are private employers, some might argue the First Amendment does not apply in this case.

Workplace speech, however, is a more complicated issue than simply private vs. public employer.  True, a private employer can limit some forms of speech in a job.  For example, employers have rules prohibiting speech that is harassing or discriminatory.  However, speech that’s political might be protected under federal or state law.  As an example, in California, employers are expressly prohibited from making, adopting, or enforcing any rules or policies that forbid employees from participating in political activities, or controlling or directing employees’ political activities or affiliations. 

Many of the NFL players have argued their National Anthem-related activities are political and therefore protected under state law.  Players have also argued comments by President Trump have brought government involvement into the dispute, thus triggering First Amendment protection.

While these issues play out on and off the field, non-NFL employers should also keep some employee speech issues in mind.  As previously noted, employers can have employee conduct rules that limit speech, including harassment and anti-discrimination policies.  Some political speech for private employees may also be limited at work, if the speech interferes with the performance of the employee’s job or significantly disrupts the employer’s business.

Another area for employers to consider is speech that’s considered concerted, protected activity under the National Labor Relations Act (NLRA).  The law allows employees to discuss wages, hours, working conditions, and union organizing.  A number of states also have rules allowing employees to disclose their compensation to others, including coworkers.

Policies addressing employee speech at work continue to be a hot topic.  The issue is complex and nuanced, with a number of rules coming into play under federal and state law.  Contact myHRcounsel for assistance in navigating this issue.

Individual Liability is Possible for Employers Facing Wage Claims in Colorado

Managers in Colorado could be personally liable for unpaid wage claims brought by current or former employees.  A recent ruling by the Colorado Court of Appeals held that the Colorado Wage Claim Act does not protect managers under all circumstances from individual liability for employees’ unpaid wages. 

In the case, Paradine v. Goei, the plaintiff, Robert Paradine, worked as CFO for Aspect Technologies, Inc.  He brought an action under the Colorado Wage Claim Act claiming Aspect owed him approximately $8,100 in back wages.  He also brought claims for fraud and breach of contract.  In addition to suing Aspect, Paradine also named Aspect’s CEO, Esmond Goei, as an individual defendant.  Specifically, Paradine claimed Goei had improperly diverted corporate funds for personal use instead of paying employees.  Paradine also claimed Goei had not followed the terms of an employment contract. 

The trial court dismissed the claims against Goei.  Paradine appealed.  On appeal, the Court of Appeals indicated a plaintiff seeking recovery from an individual corporate executive can in some cases “pierce the corporate veil” and hold an individual liable.  Generally speaking, officers and directors of corporations are not personally liable for the debts of the corporation.  However, and individual could pierce the corporate veil of the corporation to impose personal liability on management level employees under certain circumstances. 

In this case, the court noted three conditions needed to be met to pierce and hold an individual liable:

·         (1) the corporation is the “alter ego” of the officer;

·         (2) the officer used the corporation to perpetuate a fraud; and

·         (3) an equitable result will be achieved by disregarding the corporate form and holding the officer personally liable.

Paradine argued Goei had used corporate income for personal purposes such as housing and vehicle expenses, and that Goei had comingled business and personal accounts.  Paradine also claimed Goei had breached an employment agreement regarding payment of wages. 

Based on Paradine’s arguments, the court of appeals reversed the earlier ruling and sent the case back to the trial court for new proceedings.


While this case is venued in Colorado, it’s a good reminder overall for corporate officers and directors to keep company and personal business separate.  Management level personnel should be reminded to not mix company and personal funds and expenses.  Periodic audits for compliance with corporate ethics policies is recommended.  Companies must also be sure to follow wage and hour laws and any contract terms in payment of employees. 





New York City Earned Safe and Sick Time Act Effective: May 5, 2018

Effective on May 5, 2018 in New York City, employees who are eligible for paid sick time will also be able to use such time off for ‘safe time,’ due to the renamed Earned Safe and Sick Time Act.  While the act now includes ‘safe time,’ the employees do not receive more days off, the act simply expands the realm of situations an employee can use their earned time.

Under the Earned Safe and Sick Time Act, employees may now use ‘safe time’ to address health, safety, and financial repercussions that they or their families face due to: family offenses, sexual offenses, stalking, or human trafficking.

New York City Mayor Bill de Blasio signed this amendment into law on November 6, 2017.  Under the law, employers with five or more employees who work more than 80 hours in a calendar year must be provided with paid sick leave.  An employee accrues paid sick leave at a rate of one hour for every 30 hours worked, up to a maximum of 40 hours of sick leave per calendar year.  Employers with fewer than five employees must provide unpaid sick leave.

To learn more about the New York City Earned Safe and Sick Time Act, visit:

Salary History Laws and Regulations

States and local governments around the country are enacting new laws and regulations which prohibit employers from requesting the salary history of job applicants.  The laws and regulations are aimed at ending pay discrimination and some prohibit employers from using salary history to set the compensation for that applicant.  However, both Michigan and Wisconsin have enacted laws which ban local governments from banning salary history.  Currently, there are salary history ban laws in 7 states and 8 municipalities.

Salary History.jpg

Big Changes for New Jersey Employers

Following the lead of a number of other states and cities across the country, New Jersey is taking steps to implement two new laws that will have a significant impact on employers.

Pay Equity

The first law, which has already been signed by the governor, involves pay equity.  The new law bars New Jersey employers from paying employees in a protected class a rate of compensation (including benefits) that is less than the rate paid to other employees who are not in a protected class for substantially similar work considering skill, effort, and responsibility.  The new law goes into effect on July 1, 2018.

An exception to the law is available only if an employer can show all of the following:

·         The compensation differential is based on a legitimate factor or factors other than protected class, such as education, training, experience, or the quantity or quality of production;

·         The legitimate factor or factors aren’t based on or don’t perpetuate a difference in compensation based on protected class;

·         The legitimate factor(s) are applied reasonably;

·         The legitimate factor(s) account for the full compensation differential; and

·         The legitimate factor(s) relating to the position are based on business necessity.

The text of the law can be found here:

Penalties for non-compliance include back pay of up to six years, and triple damages against employers for discrimination and retaliation.  New Jersey employers should begin analyzing their compensation policies ahead of the new law taking effect.

Paid Sick Leave

The second law will provide paid sick leave to New Jersey employees.  The law has been passed by both houses of the state legislature, and the governor has indicated he will sign the bill on May 2, 2018.  The law is expected to go into effect on October 29, 2018. 

The law will apply to all private and public sector employees, except for those with a current collective bargaining agreement (CBA).  The law will apply to those current CBA employees once their active CBA expires.

Employees will accrue one hour of paid sick time for every 30 hours worked.  Employers with less than 10 employees would be required to allow accrual and carryover of up to 40 hours of paid sick leave per year.  Employers with 10 or more employees would be required to allow accrual and carryover of up to 72 hours per year. 

Paid sick time becomes available to use no later than the 90th day of employment.  Employees can take the time over a 12-month “benefit year” set by the employer. 

Employees can use paid sick leave for:

·         Diagnosis, care, treatment, or recovery from the employee’s or employee’s family member’s physical or mental illness, injury, or adverse health condition, or preventative care 

·         Circumstances surrounding the employee or family member being a victim of domestic or sexual violence, including medical attention, counseling, relocation, or legal or other services

“Family member” includes child, grandchild, sibling, spouse, civil union partner, domestic partner, parent, or grandparent of an employee, or a spouse, civil union partner, domestic partner, or a parent or grandparent of the employee, or a sibling of a spouse, civil union partner, or domestic partner of the employee.

Employers should begin preparing for implementation of paid sick time.  Employers will be able to continue to use their existing paid time off policies if the policies provide for at least as much paid time off as the new paid sick leave law, and allow for the same or more reasons for leave. 




Washington State’s New Pay Equity Law

Pay equity legislation is a trend that’s sweeping the country.  Washington State joined the ranks of other cities, counties, and states by passing The Equal Pay Opportunity Act (EPOA).  The law was recently signed by the governor and goes into effect on June 7, 2018. 

Washington State was one of the first jurisdictions to pass a pay equity law in 1943.  The EPOA significantly expands that existing law.  The intended purpose of the law is to narrow the pay gap between men and women.  However, the law focuses on “gender” instead of “sex,” so its application is not limited to discrimination against women.  For example, employees with nontraditional gender identities are also protected by the law. 

All employers employing any employees in Washington are subject to the law.  Here’s a summary of some of the law’s main points:

Compensation Obligations for Employers:

·         The EPOA prohibits discrimination in compensation between “similarly employed” employees.

o   Similarly employed employees are those who:

§  (1) Work for the same employer;

§  (2) Have the same job performance requirements for skill, effort, and responsibility; and

§  (3) Have jobs performed under similar working conditions


·         The EPOA prohibits discrimination in payment of discretionary and nondiscretionary wages and employment benefits.


·         “Discrimination” does not include wages based in good faith on bona fide job-related factors that:

o   (1) Are consistent with business necessity;

o   (2) Are not based on or derived from a gender-based differential; and

o   (3) Account for the entire differential.

·         Some examples of bona fide job-related factors include:

o   Experience

o   Training

o   Education

o   Merit system

o   Seniority system

o   Production-based earnings system

o   Regional differences in compensation levels (such as local minimum wage laws)


·         The EPOA prohibits employers from limiting or depriving employees of “career advancement opportunities” on the basis of gender.


·         Employers cannot prohibit their employees from disclosing their wages.

o   But employers can prohibit employees who have access to the employer’s compensation records through the essential functions of their jobs from disclosing the wages of other employees (unless compelled by law or investigation).


·         Employers cannot retaliate against employees for:

o   Discussing their wages;

o   Asking the employer to explain their wages;

o   Asking the employer about a lack of opportunity for advancement;

o   Filing a complaint under the EPOA;

o   Testifying in a proceeding under the EPOA; or

o   Aiding or encouraging other employees to exercise their rights.


Enforcement and Remedies

A violation of the EPOA occurs any time a discriminatory decision or practice is adopted, each time discriminatory compensation is paid, or any time a discriminatory practice is applied to an employee.

There are two different options for employees to enforce their rights under the EPOA.  First, an employee can file a complaint with the Washington Department of Labor & Industry.  If the claim can’t be resolved and is decided in the employees’ favor, the employer may be liable for actual damages, statutory damages, interest, civil penalties, and investigation and enforcement costs.

Second, an employee can file a lawsuit.  If the employee prevails, the employee could be liable for actual damages, statutory damages, interest, costs, and attorneys’ fees.  The court might also order reinstatement or other non-monetary relief. 



The EPOA is a new challenge for Washington State employers.  Prior to the law going into effect, employers should consider the following:

·         Review compensation structures, particularly for similarly employed employees.  Document the reasons for any differences. 

·         Review compensation policies for hiring and promotion. 

·         Institute formal pay scales.

·         Discontinue policies that prohibit employees from disclosing their wages.

·         Discontinue asking for an applicant’s salary history.

·         Be sure management and human resources staff are aware of the new law. 

·         Be watchful for additional new laws or ordinances.  Cities, counties, or other local governments in Washington may pass their own pay equity laws that are stricter than the EPOA.  If that occurs, the more employee-friendly law would control.   

Contact for questions regarding the new law. 







Salary History

Laws prohibiting employers from asking candidates about salary history information have been trending across the US.  Seven states and seven localities have some kind of salary history ban in place.  Some of these laws prohibit employers from asking employers about a candidate’s salary history before an offer has been made, while some prohibit employers from ever seeking or confirming salary information or using it as a factor in determining pay.  San Francisco’s salary history ban also prohibits employers from disclosing any salary information about current or former employees.  A federal appeals court in the Ninth Circuit recently held that using prior salary to determine current salary violates the Equal Pay Act, and other circuits may soon follow suit.

The benefits of a salary history ban to employees may seem obvious, but these laws may benefit employers as well.  Paying employees market rate based on role and experience without regard to other factors increases employees’ sense of being valued in the workplace, which results in higher employee morale, attracts better candidates, and leads to a faster hiring process.  Employers who are prevented from basing hiring decisions on salary history can avoid screening out qualified applicants, increase their hiring pool, and rely on more effective methods of determining an employee’s compensation such as interviews, reading letters of recommendation, and seeking input from current and former employers.

Let myHRcounsel’s expert attorneys help you navigate rapidly changing laws regarding salary history and develop processes for hiring candidates that will best benefit your business.

Hazed and Confused: Navigating Marijuana Laws in the Workplace

As many of you know, April 20th is commonly recognized by many people as the unofficial “national smoke marijuana day,” which provides us with the perfect opportunity to update you on the latest law changes, which can be quite hazy for employers.  Currently, 29 states and the District of Columbia have laws that legalize the use of marijuana in recreational or medical form, and in some cases both.  Alaska, California, Colorado, Maine, Massachusetts, Nevada, Oregon, Vermont and Washington, plus the District of Columbia have laws that allow marijuana to be used recreationally.  Vermont became the first state

At the federal level, marijuana is still considered to be a Schedule I drug, which is the highest classification- which also includes drugs like heroin and ecstasy.  Additionally at the federal level, Congress passed a spending bill in 2014 that included a provision that barred the Justice Department from using funds to go after state medical marijuana programs (This provision still remains). 

The first states to legalize recreational use happened in 2012, as Barack Obama was in office.  Obama’s administration essentially left the legalization as mostly a states’ rights issue.  After over a year as President, Donald Trump's administration's policy on the issue is a bit foggy, as we will roll into later.

The legalization movement is also picking up steam in other states.  A Gallup poll in 2017 showed that 64% of Americans favor legalization of recreational marijuana, including a number of Republicans.  Many see the benefits of a tax, where in Colorado, the tax brought in around $200 million, and in Washington about $256- where most of the money goes to the public school systems. 

However, with a new administration in January Attorney General Jeff Sessions revoked Justice Department guidance which was issued under the Obama administration.  This guidance discouraged enforcement of federal marijuana laws in states that had legalized it on their own.  This week (April 16, 2018), the White House has confirmed that President Donald Trump promised Colorado Senator Cory Gardner that he would support legislation that would protect states that have legalized marijuana from a federal crackdown by Attorney General Sessions.  While Trump may have promised the senator, the fact remains that Sessions revoked the guidance and nothing new is in place today to protect state’s rights.  Stay tuned!

For support in weeding through the issue, contact us at myHRcounsel!

Credit Cards and Surcharges

A number of businesses allow their business clients to pay their invoices using a credit card.  This is convenient for the business providing the goods or services, as it allows them to receive payment more quickly than a 30- or 60-day invoicing process.  The businesses receiving the goods or services like the system as well, as it allows for a convenient payment method.  Many of those businesses making payments also receive rewards for using their credit cards.

The downside for the businesses being paid is the often hefty service or processing fees charged by credit card companies to process the payments.  Because of those fees, many businesses look to pass along those charges to their business clients who want to pay by credit card. 

Many businesses that allow clients to pay by credit card often add a surcharge of 1.5 to 5 percent onto their bill to cover the credit card payment processing costs.  However, some states have specific rules that don’t allow adding of a surcharge.  Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, and Texas all prohibit surcharges.

Many of these laws are being challenged by business groups as an improper restriction on trade.  Interestingly, many of the states that prohibit surcharges do allow a business to charge a higher rate for clients that pay by credit card instead of cash or check.  With this mix of rules and requirements, business owners should consult with their business counsel when considering a credit card surcharge. 

New Oregon Transit Tax Effective July 1, 2018

Effective on July 1, 2018, employers in Oregon must start withholding a new transit tax at payroll.  Per the bill, employers must withhold one-tenth of 1 percent or .001 from the following:

·         Wages of Oregon residents (regardless of where the employee lives)

·         Wages of nonresidents who perform services in Oregon

This tax is withheld at the payroll level, so employers are responsible for implementing the tax by July 1, 2018.  Employers are responsible for: withholding the tax from employee wages each period, reporting taxes withheld on quarterly or annual returns, remit taxes quarterly or annually, and reconcile reports on annual reconciliation return.  The penalty for knowingly failing to deduct and withhold the tax is $250 per employee, up to $25,000 for each tax period. 

Additionally, if you are an employer that does not do business in Oregon, but employs employees who reside in Oregon, you are not required to comply with this law.

For further information, visit:

As Interest Rates Rise – Make sure your collection processes are working well!

Having been a CFO for more years than I can count, one of the most critical things I learned was the value of having a well-oiled collection machine.  Not the “boiler-room” heavy-handed collection callers badgering my important clients, but instead a tight process on sending out invoices, following up with Dunning letters, and having professionals working to collect overdue invoices promptly (as I found, after 60 days, memories fade, and unpaid invoices seem to get lost or forgotten).

Back before the recession in 2001, I remember talking with Mike DuPont, Partner at Wagner, Falconer and Judd about my accounts receivable.  I had millions in AR, which I thought was great.  The bank was giving us credit, and we were paying 7-8% interest to borrow from our line of credit.  Mike gave me a nudge to print out an aging report to see how old some of the AR was, and to my surprise, there were invoices 90, 120 and 180 days old, from big companies with ample money to pay.  Why was I paying interest to borrow money when I was owed millions from clients that we had delivered products and services to – in effect floating these large companies, saving them the 7-8% to borrow money!

My hesitation, as most CFO’s and owners have, was that I didn’t want to have my lawyer contact the client (especially on-going clients) and threaten to sue, nor did I want to pay 1/3 (33%) of the invoice to our lawyers to collect!  But Mike is a forward thinker and explained options to me, none of which constituted a 33% contingent fee.  Depending on scale, his firm charged a much lower fee, and offered different options.  A flat fee per month, an hourly fee or a contingent fee (typically less than 20%).  

What Mike’s firm also provided was a model whereby he provided professionals that would work seamlessly with our internal staff, and present themselves with professionalism with our clients, as he knew most of our clients would stay clients, that good collection practices shouldn’t lead to litigation and the risk of loss of a potentially great client.

So we instituted Mike’s firms’ processes, submitting 90 day old invoices on day 91 to Mike’s firm. We did stay with a contingent fee model (again lower than 20%), though in retrospect a flat fee per month with a small “kicker” or bonus to motivate and align the firm with ours may have been a better long term model. 

But for great advice from Mike at Wagner, and a firm collection process, workout with the bank in 2001 would have been the path forward.  Instead, the bank gave us one chance to pull out of our illiquidity, collect for work we had done, and move forward.  It worked, and despite the very tough recovery for the rest of 2001, we survived and later thrived.

Interest rates have stayed at historically (at artificially) low levels since the Great Recession of 2008.  They had to for purposes of a long difficult recovery.  The Fed has signaled they will ease into raising interest rates.  Don’t wait for rates to go higher to institute a good collection process!

A Reminder that All Are Equal-Opportunity Harassers

After a two-year hiatus, American Idol is back on the air…  Please try to contain your excitement!  It’s been in the news lately not so much for its hilarious outtakes of woefully awful singers or the high drama of killing burgeoning singers’ dreams in an instant, but for illustrating a key employment law take-away. 

I’ll set the stage for you.  A young hopeful Idol from Oklahoma is on the stage during his audition interview when Luke Bryan, one of this year’s judges, asks, “Have you kissed a girl and liked it?”  For anybody who is not “in-the-know”, this is a nod to fellow Idol judge Katy Perry’s song which discloses, “I kissed a girl and I liked it.”  As if the question was not inappropriate enough, Ms. Perry then goads the contestant into walking down to where she is seated and convinces him to kiss her on the cheek.  Apparently this was disappointing because then she quickly turned her head and kissed him on the lips.  After the kiss, the contestant remarked that he was uncomfortable with the situation and had wanted to save his first kiss for his first relationship when it would be special. 

So how does this high drama tale tie into employment law?  This unfortunate situation should be a reminder to all employees, managers, and human resources professionals that sexual harassment is gender blind.  Men can harass women, woman can harass men, men can harass men, and women can harass women.  All are equal-opportunity harassers and complaints of harassment should not fall on deaf ears if not seen as the stereotypical form of harassment.       

New Rules for Disability Claims Take Effect April 1, 2018

On April 1, 2018, new Department of Labor regulations regarding short-term and long-term disability plans covered by the Employee Retirement Income Security Act (ERISA) go into effect.  Employers must make sure that they and their plan administrators and third party administrators are ready to comply with the new regulations.

Affected Benefit Plans

ERISA generally covers all STD and LTD plans established and insured or funded by an employer.  Regular payroll practices (such as continuing to keep an employee on the books and pay his or her salary while he or she is absent due to a disability) are not covered by ERISA. 

The new regulations affect the administration of STD and LTD insurance plans, as well as 401Ks and pension plans, where receiving the benefit is conditioned on disability, and where the particular 401K or pension plan (not the Social Security Administration or a long-term disability plan) determines whether the employee is disabled.


On December 19, 2016, the DOL issued regulations, known as the Final Rule, regarding ERISA-covered STD and LTD plans.  The Final Rule was effective January 18, 2017, but its applicability was delayed until January 1, 2018 to allow employers, insurers, and third party administrators to come into compliance.

President Trump issued an executive order on February 24, 2017, creating a Regulatory Reform Task Force that would examine existing regulations.  In the summer of 2017, the DOL began revisiting the Final Rule and on October 12, 2017, the DOL issued a Notice of Proposed Rulemaking, delaying the applicability of the Final Rule by 90 days.  By giving notice and delaying the applicability date, the DOL allowed affected parties and the public to submit comments, opinions, and research regarding the potential impact of the Final Rule.

The DOL’s intention behind the Final Rule was to give employees more protection in the claims process of their STD and LTD plans.  But employers and members of Congress opposed the Final Rule, argued that the regulations would backfire by raising costs and increasing litigation, thereby reducing employees’ access to benefits.

The DOL has now confirmed that no further delay to applicability of the Final Rule will occur, and employers, plan administrators, and third party administrators are expected to comply with the new regulatory changes as of April 1, 2018.


The new regulations bring about three major changes in the administration of disability plans.  

1.      Establish criteria for conflict of interest.

2.      Expand benefit denial notice

3.      Change procedures for responding to the denial of an appeal

Conflict of Interest

Employers, plan administrators, and third party administrators should take steps to ensure that their vendor contracts and employment relationships do not connect financial incentives to claim outcomes.  Claims adjudicators, service providers, and vendors must be impartial.  The employment status and compensation of a claims adjudicator or a medical or vocational expert cannot be tied to the number or rate of denied claims, for example.

Benefit Denial Notice

·         Plan administrators must now include the following in all benefit denial notices:

·         A description of the limitation period for bringing a lawsuit and the calendar expiration date

·         An explanation as to why the plan disagreed with the physician/vocational specialist/Social Security Administration

·         A notice of the claimant’s right to access the file

·         The internal rules or guidelines used to make the denial

·         Notice that oral or written translation will be provided to non-English speakers upon request

Appeal Denial Procedures

Claimants must have notice of any new evidence or reasoning is used to deny the appeal of a denial of benefits, as well as an opportunity to respond to the new information.  If the plan does not follow its own claims procedure, the claimant is not barred from filing a lawsuit before exhausting all levels of the claims procedure.  A retroactive rescission of coverage is considered a denial that triggers the appeals process.  The plan should always follow its own claims procedures and avoid retroactively rescinding coverage.

What You Should Do

Employers should communicate with plan administrators and third party administrators to make sure their plans are in compliance with the new regulations.  Most importantly, having legal counsel is critical.  Employers always should consult with legal counsel for essential assistance in reviewing plan documents, revising notices, and understanding and successfully implementing up to date laws and regulations.