The Bottom LineADP TOTALSOURCE®

A Publication Dedicated to Employers’ Current HR Issues & Solutions Brought to You by ADP TotalSource Volume 11

Also in this issue

The Next Wave of Retirement Benefits

How to Keep Politics

Out of the Office

During Election 2012

Rising Above the Risks of

Social Media: Responsibilities

and Rights in the Workplace

Employee Assistance Programs:

The Unsung Hero of Benefits

Workers’ Compensation Insurance:

Why Every Small Business Should

Think About It

New Protection for Unemployed

Job Applicants

State Employment

Law Updates

What ADP TotalSource®

Clients Are Saying

17 Workers’ Compensation Insurance:Why Every Small Business Should Think About ItWhat’s covered, who decides, and a list of terms that won’t leave you in the dark.

21 New Protection forUnemployed Job Applicants People who are jobless and looking for work are facing discrimination solely because they’re unemployed. Increasingly, there are legal ramifications for this, and you need to know about them.

25 State Employment Law UpdatesHelping you stay on top of recent legislative changes at the state level.

26 What ADP TotalSource® Clients Are SayingHow ADP TotalSource helped one client understand and get ahead of HR compliance issues and challenges.

The Bottom Line Volume 11

09 Rising Above the Risks of Social Media: Responsibilities and Rights in the WorkplaceCan you decide not to hire a job applicant based on his tweets? What if your employees are complaining about your company in their status updates? Find out who has what rights in these and more social media situations.

13 Employee Assistance Programs:The Unsung Hero of BenefitsEAPs have been helping workers gain control of alcohol and substance abuse since the 1940s, but today’s programs offer much, much more.

03 The Next Wave ofRetirement Benefits Planning for retirement is especially challenging for small-business owners, who already have a lot on their plate. But it’s too important to put off, and changes are coming. Be prepared.

07 How to Keep Politics Outof the Office During Election 2012Passions are running high on both sides of the aisle, but they shouldn’t interfere with workplace productivity. We give you methods to make sure they don’t.

THE NExT WAvE OF RETIREMENT BENEfITS small-Business owners: Are You Prepared for Retirement?

The economy has been making slow and steady progress back to positive growth. The health of the economy mirrors many workers’ aspirations of plans to retire. For some, it means thinking again about retirement. For others, the recession brought about a stark realization that retirement is still years away.

If your retirement seems to be a distant dream, you’re in good company, both with other small-business owners and with the American public in general. According to the Employee Benefits Research Institute® (EBRI) 2012 Retirement Confidence Survey, retirees’ confidence in having enough money for a comfortable retirement, which plateaued in 2010, is statistically unchanged in 2012. Twenty-one percent say they are very confident, and 19 percent indicate they are not at all. Small-business owners seem to be particularly vulnerable—a significant number are not confident about their retirement.

Planning the Right Way A survey released in february 2012 by The American College, a nonprofit educational financial institution, found that many small-business owners are unprepared for retirement. According to the survey, as many as one-third of small-business owners say they have no idea how they will retire. Sixty-six percent of the women and 70 percent of the men surveyed said they had developed an estimate of their retirement needs, and half used a professional financial planner.

So if you’re a small-business owner and you’re busy operating your business, how can you get on track for a financially secure retirement?

1. Make your financial future a personal priority. Easy to say, harder to do. If you don’t offer a retirement plan at your company, it can be even more of a challenge. The American Society of Pension Professionals & Actuaries reports that only 5 percent of employees save for retirement on their own. So if saving for retirement isn’t on your radar today, it’s time to put it on your to-do list.

2. What’s your number? The next step is to determine the amount of money you’ll need in order to retire and maintain your current standard of living. Most retirement experts estimate that you’ll need approximately 80 percent of your pre-retirement income each year to achieve this. The amount you’ll need will depend on your individual situation. for example, do you plan to work part-time? Travel? Purchase a vacation home? Downsize your current residence?

A professional financial planner can help you with this calculation. You can find one at most of the major mutual-fund and investment-management companies. If you’re a member of a trade association or business group, you can ask other members for recommendations.

3. Develop a plan. Once you have an estimate of how much you’ll need, you can make a plan. How much do you need to save each week, month, and year? How will you accomplish this? Most banks are happy to help you set up a tax-advantaged individual retirement account (IRA), a Roth IRA, or another savings vehicle. They can also offer automatic deductions from your bank accounts for easy, convenient savings.

4. Making your money grow. You’ll also need to decide how you want to invest your savings. If you’re financially savvy, you can manage your own investments. Or you can get help from professionals. Your tolerance for risk and your time line to retirement will influence how you invest your money. The rule of thumb, however, is that the closer you are to retirement, the more conservative you should be with your investments.

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Even after you’ve gotten your retirement mapped out, you may be thinking about your employees’ futures. Will they be able to retire? What’s your responsibility to them and their retirement savings? And what does the future hold for employer-sponsored retirement benefits? Retirement plans are coming under intense scrutiny, and significant changes are in the air.

Many of the nation’s retirement experts met this February in Washington, D.C., to discuss the future of pensions and retirement plans. Included were representatives of unions, employers, financial-services providers, government agencies and consumer groups. While no conclusions were reached, it’s clear that retirement benefits are poised for another evolution.

“stream of Changes”

Many retirement experts are projecting that the recession will be the catalyst for a new direction and fundamental adjustments in retirement-saving policies. Dallas Salisbury, president and CEO of EBRI, summed it up this way: “There will be a stream of changes that increase the use of retirement-savings programs, the development of expanded financial education and advice programs and the development and use of programs that spread income efficiently over individuals’ full retirement span, with protections for longevity and inflation. Potentially, the result could be a greatly expanded (and possibly mandated at some point in the future) market for personal-finance products and services for business and improved economic security for workers.”

However retirement benefits change will reflect the many lessons learned since the 19th century, when pensions were introduced. As a small-business owner, your view of the retirement horizon should be with one eye toward your own retirement and the other on the effect this evolution could have on your workforce and your business.

HOW ADP TOTALSOURCE®

CAN HELP Because your focus is on running your business, it’s natural for retirement and retirement benefits to take a back seat to your operations. Clients of ADP TotalSource may choose to offer their employees retirement benefits through the ADP TotalSource Retirement Savings Plan. The Plan offers many unique and competitive features and provides access to various tools and resources you need to help prepare you and your workers for retirement, at no direct cost to you. Plus, ADP TotalSource handles all the administrative functions, leaving you free to manage your business, knowing that you and your employees have access to a professionally managed retirement plan that will keep pace with the next generation of retirement benefits.

THE RETIREMENT BENEfITSOF TOmORROW

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Political speech at work generally is not protected by the first Amendment. Even federal employees are prohibited by federal law (the Hatch Act) from wearing partisan buttons or displaying campaign posters or stickers where they work. Employers have the authority to control how employees express themselves on the job and may discipline or terminate those who act unprofessionally or create disturbances in the workplace (even if the expression at issue is political in nature). Employers should, however, restrict all political activity equally, and only to the extent necessary to maintain a productive work environment.

Many states have laws protecting employees from discipline, termination or other penalties at work based upon their political affiliation or activity outside working hours. A widely reported incident in 2004 detailed how an employee at an Alabama insulation plant was fired because she refused to remove a political bumper sticker from her car’s rear window. Alabama protects only public employees’ right to participate in political activities, but that company’s decision might have violated the law if it had taken place in California, Mississippi, Missouri, New York, or a number of other states.

Employers also may face restrictions on their speech. Companies that are politically active must be careful not to run afoul of state laws that prohibit political appeals to employees (such as Arizona’s law barring distribution of paychecks in envelopes bearing political messages, and Pennsylvania’s prohibition of employer warnings of job losses or plant closings if a certain candidate is elected).

The 2012 presidential election is attracting enormous public interest, and passions on both sides are intense. Americans probably won’t be able to avoid political conversation over the coming months, but like other sensitive issues, politics is a topic best discussed in private and kept out of the workplace. What do employers need to know to avoid disruptions and lost productivity (or violating the law) during a lively election season?

Employers should respond quickly to workplace disturbances and make sure their policies on non-solicitation, Internet usage, and employee decorations are up-to-date and broad enough to cover political content. Restrictions on employee political activity must not go too far and should be confined to the workplace, so employers do not violate employee rights under various federal and state laws.

“It’s a Free Country” ...But Not at Work

VOTINg-LEAVE LAWSMost states require employers to allow employees time to vote during the workday and, in some cases, to inform employees of their right to time off. for example, in Kentucky workers must be given at least four hours to vote, so long as the leave is requested at least one day in advance (employers have discretion as to whether this time is paid). Sharing information with employees about taking time off to vote can clarify whether they are entitled to paid time off or whether they may spend the time volunteering for a candidate rather than simply casting their ballots. Employees should also be informed of whether the law requires them to give advance notice of their intention to vote during the workday.

KEEP IT CLEAN: MAINTAININg A RESPECTfUL ENVIRONMENTEmployees must be made aware that they are expected to conduct themselves professionally and treat their coworkers with courtesy regardless of political affiliation or belief, even if not openly discussed. Harmony and success in the workplace depend upon respect for diversity of opinion as much as respect for racial, gender and religious diversity.

More than just a payroll processor, ADP TotalSource® provides its clients with the latest human-resources guidelines on a wide variety of issues, including politics in the workplace. ADP TotalSource can provide clients with tips to help them address this timely topic.

HOW TO KEEP POLITICS OUT Of THE OffICE DURINg ELECTION 2012

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CHECK COMPANY POLICIES AND PRACTICES ON POLITICAL ACTIVITYAlthough employees generally are free to engage in political activity outside the workplace, employers can handle inappropriate political displays or disruptions by taking a few simple steps:

• Ensure that the company’s non-solicitation policy is drafted to prohibit broad types of solicitations rather than those by or for a specific group (and that the policy is applied fairly and consistently).

• give all employees a copy of the company’s non-solicitation policies and make sure they understand them.

• Enforce equally, without regard to viewpoint, rules against political decorations, accessories or clothing, as well as any restrictions on the use of e-mail or the Internet.

• Respond promptly to complaints about managers or co-workers retaliating against or harassing employees based upon political affiliation or beliefs.

Rising Above the Risks of Social Media:RESPONSIBILITIES AND RIgHTS IN THE WORKPLACE

Facebook dominates social media traffic. It has more than 900 million monthly active users, and it is estimated to reach 1 billion users by August 2012—that’s approximately 14 percent of the world’s population. Twitter, which is also prevalent, has nearly 500 million registered users and is growing at an astounding rate.

This means there’s a lot of information about people available on social media. Can employers use it to make employment decisions? The answer is: maybe.

This spring, federal legislators introduced proposed legislation to bar current and prospective employers from requiring job candidates and employees to submit their usernames and passwords for social networking sites. Employers, schools and universities would be prohibited from requiring such information and, subsequently, denying employment or penalizing candidates, employees or students for refusing to provide such information.

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Potential employer Liability When employees are not properly mindful in their use of social media, problems arise. Employers should be aware of the following possible outcomes:

Hostile work environment and discrimination claims. Social networking sites and blogs provide employees with additional avenues for engaging in inappropriate conduct. Employees may vent workplace frustrations by posting unlawful discriminatory statements, racial slurs or sexual innuendos directed at co-workers, management, customers or vendors.

Defamation claims. Employers may face liability for defamation based on electronic communications disseminated by employees. Employee bloggers, for example, can create unrest in the workplace by posting rumors, gossip and offensive false statements about co-workers and supervisors.

Improper disclosure of confidential or other protected information. Employees may inadvertently reveal—or enable others to piece together—proprietary or confidential information on a blog or social networking site, instantly disseminating extremely sensitive company or client information with the simple click of a button.

States Take Action

Employers who ignore the National Labor Relations Act do so at their own peril. When it comes to social media in the workplace, the National Labor Relations Board is a powerful enforcer of rights for unionized and non-unionized employees alike. The Board has handled more than 100 cases over the past few years involving employees who claim an employer unlawfully used information obtained on social media.

The Board enforces the Act. When the Board says that an employee has engaged in “protected concerted activity” on social media or otherwise, the Board is referring an employee’s conduct that is protected by Section 7 of the Act. Section 7 protects employees who engage in “concerted activities for the purpose of collective bargaining or other mutual aid or protection.” But the Act does not just protect employees who engage in union activities or work in a unionized environment. It also protects other forms of employee conduct undertaken for their “mutual aid or protection.” Examples of this include non-union employees complaining to management about their wages or working conditions, participating in a strike or work stoppage, or attempting to enlist public support to improve their terms or conditions of employment.

Employers should use great caution when disciplining or terminating employees who have engaged in protected concerted activity.

On May 2, 2012, Maryland became the first state to make it illegal for employers to demand usernames, passwords or other means to access any personal account or service, such as social media sites facebook or LinkedIn, through an electronic communication device (computer, phone, PDA, etc.) belonging to employees or job applicants.

Other states are likely to follow suit. California, Illinois, New Jersey, New York, Michigan and Minnesota are also considering legislation that would make it illegal for employers to require applicants to disclose their passwords to social networking sites.

So far, none of these proposed laws would restrict an employer’s ability to find and use information that is publicly available on social media. Nonetheless, employers need to closely monitor these developments and ensure compliance with the laws that are passed in the upcoming months.

DISCIPLININg EMPLOYEESBefore deciding to take an adverse employment action against an employee based on his or her social media use, employers should consider the legal constraints preventing or limiting such action. In addition to the National Labor Relations Act, they include:

Legal off-duty activities. Some states have “lawful conduct” laws that may protect an employee or applicant’s legal off-duty activities. Thus, in some states, an employer may be prohibited from terminating an employee who, for example, posts pictures of himself intoxicated at a party (assuming the employee is over 21 years old). In contrast, the employer may have more leeway when the conduct is illegal.

Laws related to political activities and affiliations. Many states prohibit employers from regulating employee political activities and affiliations or influencing employees’ political activities. Taking action against an employee for objectionable political speech could violate these restrictions.

Whistleblower statutes. federal and state whistleblower laws may protect employees who complain about company conditions affecting public health and safety, as well as employees who report potential securities-fraud violations.

EMPLOYEE RIgHTS AND PROTECTION

Hiring Decisions Employers should balance the need to obtain information from social media against the risks associated with acting on such information if it reveals an applicant’s protected characteristics.

When using social media to vet job candidates, an employer may inadvertently become aware of an applicant’s protected characteristics, such as race, age, sexual orientation, marital status, disability and even genetic information protected under federal law. Some states also prohibit discrimination on account of sexual orientation, political affiliation and off-duty conduct. If the employer decides not to hire the applicant, the applicant could sue the employer, alleging that the decision was discriminatory.

Other issues include learning about an applicant’s arrest history, conviction or workers’ compensation claim. Similarly, federal law prohibits employers from

discriminating against an applicant based on the applicant’s current or prior filing for bankruptcy. Employers must be careful of state and federal laws that prohibit employment discrimination on account of such information.

One practical option is to have someone who is not a decision maker at the company conduct the search in order to filter out protected information. This

person can then provide the “scrubbed” information in document form to a decision maker for review.

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With frequent changes in the laws and regulations by the federal government, state governments and courts, it is difficult to keep up with all the new rules, determine how they affect you and stay in compliance. ADP TotalSource® is well versed in legal developments and stays on top of new rules that affect your business.

For more details, view the recorded webcast, Rising Above the Risks of Social Media: Responsibilities and Policies in the Workplace, and receive HRCI credit. www.adptotalsource.com

By the numbers

As EAPs expand the kinds of services they provide, more employers are offering them. The families and Work Institute’s 2008 National Study of Employers, which followed 10 years of trends related to U.S. workplace policies and benefits, showed that the EAP industry continued to grow, with 65 percent of employers providing EAPs in 2008, up from 56 percent in 1998.

And EAPs are not just for large employers. Here’s the breakdown of companies that offer EAPs, according to size:

• Small employers (with 1–99 workers): 52 percent• Midsize employers (with 100–499 workers): 76 percent• Large employers (with more than 500 workers): 89 percent

Source: Society for Human Resources Management (SHRM), 2008 Employee Benefits.

fEATURES Of A TYPICAL EAP• It’s confidential—no one at the company knows

that an employee has contacted the EAP.

• Trained counselors are available 24/7 to helpyour employees directly or guide them to the right resource.

• EAP resources can be reached via phone or online.

• It’s available to employees and the familymembers who live in their households.

• The company pays the cost for eligible employees and family members.

• There’s no enrollment needed, and benefits starton your employee’s date of hire.

• EAPs that offer medical benefits such as direct counseling and treatment, rather than just referrals for counseling and treatment, are regulated under ERISA and subject to COBRA.

Bob is worried because the performance of one of his best employees, Louisa, has been declining lately. Normally the first one in the office, she’s been coming in late, leaving early and taking more sick days. And when Louisa is in the office, she’s distracted and moody. Bob has been Louisa’s manager for nearly 10 years, and he considers her a valued employee. He knows that her mother recently suffered a stroke, which is causing Louisa a lot of stress. He remembers that the company’s Employee Assistance Program (EAP) helped a coworker with a similar personal challenge. Bob decides to mention the EAP to Louisa, hoping it can help her too.

EAPs don’t have the visibility of medical insurance or retirement benefits, but they’re one of the most valuable benefits employees have. for decades, these work-based intervention programs have helped employees deal with and resolve everyday life challenges. And in recent years, EAPs have evolved into multifaceted programs that provide a lot more than short-term behavioral health counseling. Many work hand in hand with medical insurance plans to provide an integrated approach to physical and emotional wellness.

A Quick Look BackEAPs began in the 1940s and were primarily focused on the impact of alcohol use and abuse on job performance. In the early 1970s, they experienced significant growth, and the services they offered expanded into other areas. It was during this time that EAPs began to proactively address problems that could lead to workplace violence, physical and mental health problems and morale problems among other workers.

With their purpose still wrapped around helping workers deal with concerns that could disrupt productivity, today’s EAPs have become a one-stop benefit for addressing a myriad of work-life problems, such as day care for children, elder care for parents, legal and financial assistance, relocation services, identity theft and more.

The Bottom Line Employee Assistance Programs 1413 The Bottom Line Employee Assistance Programs

employee Assistance Programs: THE UNSUNg HERO Of BENEfITS

The Modern eAPWhile some EAPs are more robust than others, generally an EAP will offer:

• Short-term psychological counseling. Accredited counselors provide guidance and referrals for mental and behavioral health problems, including depression, anxiety, addiction and substance abuse, relationship concerns, workplace issues and more.

• Legal services. Employees may receive assistance with simple legal concerns, such as will preparation and advance directives. Employees in need of more complex legal assistance often have access to network attorneys who offer discounts to EAP participants.

• Financial services. Employees have access to financial-planning professionals who can help with retirement planning, debt consolidation and other such concerns.

• Identity-theft services. Counselors can help employees with identity-theft resolution and recovery.

• Work-life referral services. Consultants can help employees locate resources to help in a variety of areas, such as child care, elder care, education resources, pet services, health and wellness and convenience services (e.g., lawn maintenance, housekeeping services, sporting event and entertainment tickets).

• Online resources. Employees are able to access and review online materials and interactive tools, such as: - Child- and elder-care resources - A savings-discount center - A relocation center - Monthly online seminars - 24/7 instant messaging to a work-life consultant

Multiple Concerns, one Resource

If you already offer an EAP to your employees, ADP TotalSource® can help ensure that you are getting the maximum benefit from your program—and present ideas for promoting it to your workforce. If you don’t offer an EAP and would like to, ADP TotalSource can help with the Life’s Solutions™ EAP. Part of a suite of benefits, this is a premier EAP that makes available a wide range of resources that can help your employees solve many of life’s challenges.

With all a small-business leader has to worry about, ADP TotalSource can help you make sure your employees are fully engaged and productive.

Louisa, the employee whose work suddenly diminished following her mother’s stroke, took Bob’s advice and called the company EAP. Some of her attendance problems were due to her needing to stop by her mother’s house every day to make sure she was okay. The EAP counselor was able to find home health care that took a lot of the burden off of Louisa. And just in the nick of time. With so much stress from dealing with her mother’s situation, Louisa’s health was starting to be affected. Her EAP counselor recommended a support group in Louisa’s community for people going through similar issues. In addition, Louisa was able to work with an EAP network attorney to create a power-of-attorney document on behalf of her mother. Since taking these steps with the help of the EAP, Louisa feels like the weight of the world has been lifted off her shoulders. And Bob is pleased too: He’s got his star employee back on the job—focused and committed.

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WORKERS’ COMPENSATION INSURANCE: Why Every Small Business

Should Think About It

True story: Wanda and James had a disagreement at work over a piece of cake. James grabbed Wanda’s arm and, according to her, injured it. She filed a workers’ compensation claim. The

company argued the claim should be dismissed because it was not really a work-related injury. In response, Wanda’s attorneys dismissed the workers’ compensation claim and filed a lawsuit in court. A jury gave Wanda more than $500,000. Wanda’s claim would have been resolved faster and cheaper had it remained a workers’ compensation claim—and the company would have avoided the uncertainties of the judicial system.

As this story demonstrates, workers’ compensation insurance is valuable, especially for small-business owners who do not need to be exposed to a “bet the company” court system. Under the workers’ compensation system, employers are required to purchase insurance that provides benefits to employees who suffer work-related injuries and illnesses. The system strikes a balance. Employees get benefits regardless of fault, and they get them quickly. In exchange, employers get protection from lawsuits by injured employees who want to be awarded damages for pain and suffering and punitive damages.

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TERMS TO KNOW There are some general terms that every small employer should know:

Average Daily Wage: a calculation of an employee’s earnings, which is used to determine entitlement to wage-loss benefits.

Permanent Partial Disability: benefits that are payable, in most jurisdictions, to an employee who has sustained a permanent but not complete disability.

Permanent Total Disability: benefits that are payable if an injured employee is permanently and totally disabled from work.

Social Security Disability Benefits: benefits that are payable to a disabled individual through the Social Security Administration. Many state laws say whether an injured employee may receive these benefits and workers’ compensation benefits at the same time.

Temporary Partial Disability: benefits payable when an injured employee is able to work despite the injury. The benefits are available for a limited period of time, in recognition of the fact that the employee will recover fully enough in the future to work.

Temporary Total Disability: benefits available to employees whose injuries leave them totally unable to work for a period of time. The benefits are no longer payable when the “temporary” disability clears and the employee is able to resume working.

Covered ClaimsNot all problems that occur in the workplace are covered. Coverage may be denied in situations involving injuries caused by intoxication or drugs, self-inflicted injuries, injuries from a fight started by the employee, injuries resulting from horseplay or violation of company policy, felony-related injuries, injuries an employee suffers off the job, injuries claimed after an employee is terminated or laid off, or injuries to an independent contractor.

Moreover, employers are not protected from all legal claims by insured employees. If an employee is injured because of an employer’s intentional actions or the employer did not have workers’ compensation insurance, the employee can bypass the workers’ compensation system to sue the employer in court for back pay, damages for pain and suffering and punitive damages.

Proactive workplace safety initiatives and risk management are essential to your company’s financial health. ADP TotalSource® delivers a comprehensive riskmanagement and safety program that includes workers’ compensation coverage and claims administration program that includes safety and loss prevention solutions, OSHA compliance assistance and a drug-free workplace program.

State Law Governs

Workers’ compensation is governed by state law,

not federal law. Each state has its own system and

rules. However, the structure and operation of

the overall workers’ compensation system is very

similar from state to state. The main differences

are the rates paid to injured employees and the

procedural rules employers, employees and

insurance companies must follow.

Most states require business owners to purchase

workers’ compensation through an insurance

agency of their choice. But in several states,

such as North Dakota, Ohio, and Washington,

employers are required to purchase workers’

compensation insurance through the state. Since

there is no uniform set of rules among states,

the National Council on Compensation Insurance

writes policy forms and rules for premium

information processing.

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NEW PROTECTION fOR UNEMPLOYED JOB APPLICANTS There are many people looking for work—who want

to work—with all the skills and experience necessary

to perform a job. Despite their interest and qualifications,

some are being told by employers not to apply just

because they are unemployed or have been searching

for a job for a long time. Since this practice makes it

harder for people who lost their jobs during the economic

downturn to get back on their feet, a number of states are

creating laws against it. Employers must be aware of them

as they make hiring decisions.

helping the unemployed Get Back to WorkSeveral states and the District of Columbia have passed legislation that prohibits job discrimination against the unemployed. The D.C. statute prohibits employers and employment agencies from discriminating against job applicants by banning consideration of their unemployment status in hiring decisions. Under the statute, no employer or employment agency may fail or refuse to consider for employment, or fail or refuse to hire, an individual because he or she is unemployed. And they may not publish an advertisement or announcement for any job opening that includes (a) any provision stating or indicating that an individual’s status as unemployed disqualifies the person for the job; or (b) any provision stating or indicating that an employment agency will not consider or hire an individual based on that person’s status as unemployed.

A New Jersey law prohibits employers from publishing job advertisements that exclude unemployed individuals from applying. The law subjects an employer to a $1,000 fine for the first violation, $5,000 for the second, and $10,000 for each subsequent violation. It’s important to note that unlike most laws addressing disparate treatment, the law excludes any private cause of action by an aggrieved individual.

Oregon has also banned references to unemployment status in job advertising; Chicago’s city council approved a similar ban. California, Connecticut, florida, Illinois, New York and Michigan are considering doing the same. Under the proposed California legislation, violators could face civil penalties up to $10,000 from the state labor commissioner for repeat offenses, and state contractors could forfeit their rights to do work for the state for up to three years after violating the law.

Several bills have also been introduced in Congress. Some would impose criminal penalties on violators. Others prohibit discriminatory advertising and recruiting and provide aggrieved individuals with a private right of action to file a lawsuit.

These actions by legislators, states and cities reflect a concern about the prevalence of hiring efforts that may exclude the unemployed at a time when the nation has been facing a difficult economy, as it has over the past several years.

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What should employers Do?To avoid potential liability, employers should consider deleting references to current employment status in job advertisements and review their hiring procedures—including those of their regularly used outside employment agencies and recruiters—to avoid the appearance of screening.

Interviewers should be reminded that they should not comment, orally or in a post-interview written review, about a candidate’s unemployment status as a rationale for any recommendations.

Of course, employers may consider an unemployed candidate’s work history, including reason for unemployment, so long as that information is relevant to job performance. Employers may also hire candidates with the most relevant or most recent appropriate work experience.

Earlier this year, the Equal Employment Opportunity Commission (EEOC) examined the treatment of unemployed job seekers. Witnesses and experts suggested a growing trend of discrimination against the jobless. The panelists raised concerns over the disparate impact that facially neutral job advertisements—meaning advertisements that do not indicate a preference for any particular ethnic or racial group—could have on African Americans, Hispanics and older workers—all of whom are federally protected groups whose jobless rates are well above the U.S. average. Accordingly, the EEOC is concerned that advertisements excluding the unemployed will result in harsher treatment of the unemployed members of these groups.

THE EEOC JOINS THE DISCUSSION

It is difficult to keep up with all of the legal developments around the country. ADP TotalSource® is well versed in legal developments, updates clients about significant new regulatory and legislative developments in a timely manner and offers clear action plans that help ensure their hiring practices are in compliance with local, state and federal laws.

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Studio gear CosmeticsIndustry: Wholesale cosmetics

Type of Business: Develops, formulates and markets a full line of cosmetics, skin-care products and professional-grade makeup brushes, both online and through specialty cosmetics retailers

Location: Headquarters in Middlesex, New Jersey, with employees throughout the U.S.

Number of Employees:18 full-time, plus 100-20 part-time makeup artists in locations around the country

ADP TotalSource Client: Since 2010

Why ADP TotalSource? “Of all our PEO options, ADP TotalSource offered the most complete solution for our HR needs.” —Maureen Rohr, co-owner, Studio gear Cosmetics

Cosmetics Company Manages Far-Flung Workforce with hR Best Practices—and help from ADP TotalsourceMost small to midsize companies that seek outside help in managing HR administration and compliance do so because they reach a point where their existing model no longer works. Whether the HR compliance burden is more than they can comfortably handle, they need a new approach to employee benefits, or they simply need to focus more time and energy on core operations, owners of these companies increasingly find that a PEO such as ADP TotalSource is their best option.

With New Jersey–based Studio gear Cosmetics, add the complicating factors of a highly dispersed workforce and a large contingent of part-time employees. In business since 1996, Studio gear markets its line of cosmetics, skin-care products and makeup brushes online as well as through specialty retailers. The company’s part-time employees are primarily makeup artists who perform makeovers on department-store sales floors and educate customers about the product line. Studio gear’s full-time workforce includes a small team in New Jersey and salespeople who are spread throughout the country. Prior to signing withADP TotalSource in July 2010, Studio gear handled most HR functions (apart from payroll) in-house. Maureen Rohr, a co-owner of the company, says managing HR in those years boiled down to “us trying to do the best we can with what we had.”

The trigger for Studio gear’s search for an alternative was an inability to secure an affordable health-insurance policy that covered all the employees. “Because our workforce is so scattered…it became clear that going with a PEO was our only viable option,” Rohr explains. “I started investigating, and ADP TotalSource was the clear choice, in part because their systems could handle our large part-time workforce.”

Having made the choice to partner with ADP TotalSource, Rohr and her team found themselves getting a valuable education in HR compliance issues and challenges. “After speaking with ADP TotalSource, we realized that there were enormous gaps in our knowledge of HR compliance—it was a real eye-opening experience for us. After learning about what I didn’t know about the many rules and regulations, I knew we needed ADP TotalSource to help us implement proper compliance procedures.”

The ADP TotalSource Human Resources Business Partner (HRBP) assigned to Studio gear is Rohr’s go-to person for any compliance or general HR question. “We touch base every couple of weeks, and I always check with her first before I do anything,” Rohr says. “for example, if I have a problem with an employee’s performance, I can go to her for great insight on how best to coach and motivate the employee. If there is any question about a specific issue, such as SUI, she always directs me to the right person.”

One aspect of the ADP TotalSource solution Rohr especially likes is that for all the different elements of the service—benefits administration, payroll processing, compliance management and the rest—she pays one bill to one company. That integrated approach also extends to day-to-day client services, which she singles out for praise. “Whatever my question is, I can pick up the phone and talk to someone at ADP TotalSource and get the question answered. They are really on top of everything.”

The Bottom Line | Testimonial 2625 The Bottom Line | Law Updates

STATE EMPLOYMENT LAW UPDATESADP TotalSource® offers clients relief from legal and regulatory burdens, including the legislation shown here. Timely communication, clear action plans and helpful resources allow ADP TotalSource clients to focus on their business objectives.

The following updates reflect sample developments from March to May 2012.

Jurisdiction Regulatory Development(s) ADP TotalSource Action(s)

On April 12, 2012, the California Supreme Court ruled in Brinker Restaurant Corporation v. Superior Court that employers must relieve workers of their duties during meal breaks but are not obligated to ensure that employees do not work during breaks. In addition, employers are no longer required to schedule breaks at five-hour intervals.

California’s Division of Labor Standards Enforcement (DLSE) has published a new Wage Theft Prevention Act notice template that must be provided to all non-exempt employees at the time of hire. The DLSE has also updated employer guidance under the Wage Theft Prevention Act.

Alerted clients to the update; provided guidance on complying with the law, particularly regarding the advisability of documenting rest periods and meal periods on time sheets.

Alerted clients to the update and provided interim notices for use until clarification, as well as online access to the new notice and updated guidance.

CALIfORNIA

In late 2011, the New Jersey Department of Labor and Workforce Development amended its wage and hour regulations to align them with federal regulations. In doing so, it inadvertently eliminated the overtime exemption for commissioned sales employees. The error has since been corrected. The “administrative” employee exemption now includes employees whose primary duty consists of sales activity and who receive at least 50 percent of their total compensation from commissions and a total compensation of not less than $400 per week.

Alerted clients to the update; provides online access to the revised state rules for overtime exemptions.

NEW JERSEY

Congress recently issued new rules enabling Medicare to determine when its beneficiaries have received payment or reimbursement for medical expenses that Medicare could recoup. These rules potentially affect employment-practices liability claims and carry complex reporting requirements.

Alerted clients to the current rules; provide HR guidance and best practices to help clients stay in compliance with the law.

following an injunction issued by the US Court of Appeals for the DC Circuit, the National Labor Relations Board’s (NLRB) Notification of Employee Rights notice posting rule compliance date of April 30, 2012 was no longer in effect. for the foreseeable future employers have no obligation to post the notice.

Alerted clients to the update; stands ready to provide further updates as needed.

The Equal Employment Opportunity Commission issued new enforcement guidance on the Consideration of Arrest and Conviction Records in Employment Decisions under Title VII of the Civil Rights Act of 1964. The revision reflects the EEOC’s long-held position that employers’ reliance on arrest and conviction records may have a disparate impact on individuals because of their race or national origin.

Alerted clients to the revision; excluded criminal-record inquiries from the model employment application, in keeping with EEOC best-practice guidelines; helped clients evaluate criminal history based on EEOC guidelines.

fEDERAL

What ADP TotalSource® Clients Are Saying

u Increase employee productivity, which leads to increased profitability

u Focus on core competencies

u Reduce administrative burdens

u Help mitigate risk/liability and protect assets

u Become an employer of choice

ADP TotalSource publishes The Bottom Line free of charge to its clients and prospects. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP® is not rendering legal advice or other professional services. ADP does not give legal advice as part of its ADP TotalSource Services. While every effort is made to provide current information, the law changes regularly and laws may vary depending on the state or municipality. The material is made available for informational purposes only and is not a substitute for legal advice or your professional judgment. You should review applicable law in your jurisdiction and consult experienced counsel for legal advice.

The ADP logo, ADP, and ADP TotalSource are registered trademarks of ADP, Inc. In the Business of Your Success is a service mark of ADP, Inc. All other trademarks and service marks are the property of their respective owners.MKT25-V11FY13 Printed in the USA ©2012 ADP, Inc.

ADP TotalSource®

SolutionWith ADP’s dedicated team of experts as your partner, you can:

Take the first step to more streamlined, cost-effective and productive HR management.

Call ADP TotalSource at 1-800-HIRE-ADP or visit us at www.adptotalsource.com

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