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News Archives

    When to Retire

    SSA Resource Helps Workers Plan for Retirement

    The U.S. Social Security Administration (SSA) recently unveiled a new online retirement calculator designed to help people plan for retirement . Unlike other retirement estimators that require the user to insert yearly earnings information into a calculator, the SSA’s Retirement Estimator automatically pulls information from a person’s actual Social Security earnings record.

    The personalized Retirement Estimator allows the user to compare different retirement options based on differing retirement dates or earnings scenarios.  This fall, the agency plans to release a new online retirement application for Social Security benefits that will reduce the average filing time for individuals from about 45 minutes to 15 minutes.

    To access SSA’s new calculator, click HERE.


    COBRA Due to Spouse, Even When Dropped at Open Enrollment

    By Shari Lau

    Q: If an employee drops a spouse from their group health coverage at open enrollment in anticipation of a divorce, are we still required to offer COBRA coverage? When?

    A: Yes, you are still required to offer COBRA coverage to the spouse from the date of the divorce, not from the loss of coverage date due to the open enrollment drop. Section 4980B-4 of the Internal Revenue Code, under Q&A-1, paragraph c, states that if coverage is eliminated in anticipation of a qualifying event, such as a divorce or legal separation, the elimination is disregarded in determining a loss of coverage for COBRA purposes. As the intent of the law is to provide continuation coverage due to a divorce or legal separation, simply dropping coverage at open enrollment is not a way for an employee or an employer to circumvent COBRA coverage being offered to a spouse dropped for this reason. Rather, while the spouse may be dropped from the group plan at open enrollment, when the divorce does become final, the spouse or employee will have at least 60 days to inform the employer or plan administrator of the divorce, and COBRA continuation must be offered as of the date of the divorce. The Internal Revenue Service (IRS) made this clear in Revenue Ruling 2002-88.

    So how does the employer know when the divorce is final so that they may meet their obligations under the law? Remember that pesky requirement of having to send or add to your summary plan description a general COBRA notice to all new participants? Within that notice, the employer is required to explain both their own COBRA obligations and those of the participants, including guidance on the allowable time frames to notify the company or plan administrator of a qualifying event. Those notices are not just for the employee, but for all dependents on the plan, and an employer may hold all qualified beneficiaries to those time frames. COBRA states that employers must give participants at least 60 days to notify them of a divorce or legal separation, and that time frame must be communicated in the general COBRA notice. If the employer meets this notice obligation, and neither the spouse nor employee notifies the employer or plan administrator within 60 days of the date of divorce or legal separation, the employer’s COBRA obligations for that spouse will have been met.

    Professional Pointer: To ensure a good faith effort to comply with general COBRA notice obligations, an employer may wish to mail the notice to the employee and dependents by certificate of mailing (not certified mail) and keep a log of these mailings.

    Shari Lau, SPHR-CA, GPHR, is manager of SHRM’s HR Knowledge Center.

    Have an HR-related question? Take advantage of your exclusive benefit of membership (excluding student members) and tap into the knowledge of SHRM’s team of certified HR Knowledge Advisors by getting assistance with your specific HR-related questions via e-mail, telephone or live chat by visiting

    Please Note: This material is for personal use only and is protected by U.S. Copyright Law (Title 17 USC). It is provided as general information only and does not constitute and is not a substitute for legal or other professional advice. Reliance on this material is solely at your own risk. National members may reach the SHRM HR Knowledge Center by calling  (800) 283-7476  and choosing option #5 or by using the HR Knowledge Center’s Assistance Request Form found under HR Resources on SHRM Online.

    On June 16, 2008, the USCIS released a newly-dated I-9 form which employers may begin using immediately.

    What’s behind the change?

    Due to the Paperwork Reduction Act, the Office of Management and Budget (OMB) must have current expiration dates on all approved forms, including the I-9. While the content of the form has not changed from last year’s version, the date of the form and OMB expiration date have been adjusted.

    While the use of new forms is generally not required before 30 days after appearing in the Federal Register and guidance on this requirement has yet to be issued, we want to make sure that SHRM members have the most updated form, and recommend that you begin using this new form as soon as possible.

    Furthermore, the Department of Homeland Security (DHS) recently published higher civil fines against employers that violate federal immigration laws; as of March 27, 2008, monetary penalties increased approximately 25 percent. Penalties will be given on a per-alien basis—if an employer knowingly employed or continues to employ five unauthorized citizens, five separate fines may be charged.

    I-9 Inspections on the Rise
    The U.S. Immigration and Customs Enforcement (ICE) has launched a new I-9 inspection campaign across the country, targeting employers suspected of employing unauthorized workers. These “inspections” are announced by service of a subpoena calling for production of Forms I-9 for all current employees and for all employees terminated over the past year. To get more information on this topic, visit our Express Request service and select the key term Immigration Enforcement and Penalties

    7/11/08 7:26 AM

    Don’t Bypass Workers’ Compensation

    By Angela Stone

    Q: We have an employee who suffered a minor injury at work and missed a few days of work as a result. Could we just pay the person for time missed instead of filing a workers’ compensation claim?

    A: No. Employers are required by federal and state law to report injuries in the workplace and can face stiff penalties for noncompliance.

    Most employers are required by law to provide workers’ compensation coverage for their workers. Workers’ compensation insurance benefits both employees and employers. It provides employees with essential medical care, replacement wages and disability benefits. For employers, it is the exclusive remedy for work-related injuries, which prevents an employee from seeking further damages through a separate lawsuit and limits the amount of benefits the employee may recover. It also helps the employer by limiting its disability benefit planning to illnesses/injuries that do not occur on the job.

    Some employers are concerned that reporting too many injuries to their workers’ compensation carrier will affect their insurance/experience rating, which is why they sometimes consider not filing a claim and paying the employee’s expenses out-of-pocket. While some minor medical bills could potentially be paid out-of-pocket, employers are still required by federal and state law to report these injuries and failure to do so can lead to citations and civil penalties.

    When employers do not file a claim with their workers’ compensation carrier, they leave themselves open to the possibility of lawsuits by injured workers, which most likely would lead to larger expenses for the employer. Workers’ compensation carriers have extensive resources that help manage the care an employee receives and work for both the employer and the employee in ensuring that the workers receive the care they need.

    Filing injury reports can also help determine whether other factors were an issue and help employers remedy any safety concerns, as well as confirm whether the injury was work-related or whether the employee is making a fraudulent claim.

    Prompt and proper reporting of work-related injuries through the employer’s workers’ compensation carrier not only protects the employer from future liability but is also the best way to protect employees and provide the medical care and benefits needed to return an injured employee to good health and back to work.

    Angela Stone, SPHR, is an HR Knowledge Advisor in SHRM’s HR Knowledge Center

    DOL Regulations – On July 21, 2008, the Department of Labor (DOL) released a proposed regulation governing fiduciary disclosure requirements in participant-directed individual account plans. The regulations would be effective for plan years beginning on or after January 1, 2009. According to DOL, “The proposed regulation requires that uniform, basic disclosures be given to all participants and beneficiaries who direct the investment of assets in their individual accounts, and that investment-related information be presented in a format that makes comparisons easy.” The regulations would apply to all participant-directed plans. The DOL issued both a press release and fact sheet explaining the new proposed regulation.


    Texas: Dallas-Fort Worth Restaurant Pays for Sex Bias

      By Business and Legal Reports, Inc.

      Razzoo’s, a Cajun restaurant chain based in Dallas-Fort Worth, has agreed to pay $1 million to settle a claim of bias brought by male applicants and employees who were not considered for bartender positions. The U.S. Equal Employment Opportunity Commission, which sued the chain on behalf of the claimants, charged Razzoo’s management with having set up and communicated a plan for an 80-20 ratio of women to men behind the bar.

      If the case had gone to trial instead of being settled, male applicants and servers would have testified that managers told them Razzoo’s wanted mostly “girls” behind the bar and that men who worked as servers at the restaurants were generally denied promotion to bartender because of their gender. The few men who were promoted to bartender were allegedly not allowed to work lucrative “girls-only” bartending events.

      Of the settlement funds, $775,000 will be divided among a class of male applicants, servers, and bartenders who were discriminated against. Another $225,000, at a minimum, will go toward either retaining the services of a human resources consultant or developing an in-house human resources department. The decree required that Razzoo’s would spend no less than $225,000 for these HR services.

      Contributed by BLR, Inc. Read plain-English analysis on Sex Discrimination in Texas

      Satisfaction Findings for HR Outsourcing

        Surveys show mixed results when it comes to deal satisfaction in HR outsourcing (HRO). HRO Today looked at some findings from Towers Perrin and offered suggestions of how to keep everyone happy.

        According to the study, organizations outsourcing major HR functions view quality delivery as a priority—and in many cases they’re not getting it.
        Towers Perrin highlighted ways organizations can achieve the value they seek, such as:

        • Consistently focus on the role of the retained HR function and the skills and competencies of the people within it.

        • Complete either some or a significant amount of HR transformation work prior to outsourcing.

        • Before signing the contract, know your own situation in terms of current quality levels, volume, and the level of transaction quality fundamental to your organization.

        • Build quality into the contract through improvement clauses and metrics. Do not give quality a backseat to financial measures.

        • Develop and execute a quality plan in stages; tackle critical areas first and move forward incrementally.

        • Consider a quality council as part of governance to ensure the quality process is followed.

      Fashion Faux Pas Can Cause Workplace Slip-Up

      By Kathy Gurchiek

      Employees hoping to move up in their organizations may want to rethink their workplace fashion choices, especially as summer temperatures climb.

      Visible undergarments and tank tops rank overwhelmingly as the worst summer workplace fashion offenses, receiving 61 percent of 7,039 votes cast in a recent online survey at by its U.S. users. Making up the other top workplace fashion offenses: flip flops (29 percent), shorts (7 percent) and T-shirts (3 percent).

      While some organizations relax dress codes during the summer, there are choices such as Chino trousers; relaxed button-down shirts; and linen, polo or knitted shirts made out of breathable fabrics that can serve as workplace staples, Monster points out.

      And in a separate poll, found that 41 percent of 2,765 U.S. employers it surveyed said workers who dress well or professionally tend to be promoted more often than others at their organizations.

      “Even though we are seeing a trend of more relaxed dress codes in the office, especially in summer, it doesn’t mean that professionalism should go out the window,” said Rosemary Haefner, vice president of HR for, in a press release.

      More than one-third of employers have sent employees home for dressing inappropriately, and some organizations ban certain items of clothing and footwear, found in its survey, conducted in February and March 2008. On the “do not wear” list:

        • Flip flops, 64 percent.

        • Mini-skirts, 49 percent.

        • Jeans, 28 percent.

      “How you dress can play an important role in how others perceive you at work, and dressing professionally can help you project a motivated and dedicated image,” Haefner said.

      There might be generational issues that require some intervention. As HR Magazine reported in its January 2008 issue, millennials might be uneducated about such basics as what constitutes proper attire.

      Not dressing appropriately could have international repercussions for an organization, as some countries perceive casual dress in the workplace as a sign of disrespect, according to a SHRM Online report.

      The connection between workplace attire and promotion depends on the industry, points out.

      In the financial services industry, for example, 55 percent of employers in that sector said employees who dress professionally tend to be promoted more often than others. Information technology and manufacturing: Not so much. Only 37 percent and 34 percent, respectively, said employees in those sectors tend to be promoted more often because of their attire.

      Kathy Gurchiek is associate editor for HR News. She can be reached at

      Number of uninsured falls slightly

      Posted On: Aug. 26, 2008 2:43 PM CST

      The number of people without health insurance in the United States fell slightly even as employment-based coverage continued its long, steady decline, the Bureau of the Census reported Tuesday.

      Last year, the number of Americans without health insurance fell to 45.7 million, down slightly from 47 million in 2006, while the percentage of the population without coverage dropped to 15.3% from 15.8%.

      That drop in the number of uninsured is attributable to the growth in coverage provided through government programs such as Medicaid, which offset the decline in employment-based coverage.

      Last year, the percentage of the population covered through government health care programs increased to 27.8%, from 27% in 2006. The percentage of the population covered through employment-based plans, though, fell to 59.3% in 2007, down from 59.7% in 2006.

      At the state level, Massachusetts had the lowest rate of uninsured in the United States when averaged over 2006 and 2007, according to the survey. The state's uninsured rate for that two-year period averaged 7.9%, down from 10.3% averaged over 2004 and 2005.

      That decline coincided with the enactment of legislation in 2006 aimed at pushing Massachusetts to near-universal coverage within a few years. To accomplish that, Massachusetts subsidizes health insurance premiums for the low-income uninsured and imposes penalties on employers that do not offer coverage and on most state residents who do not enroll in a health care plan.

      On the other hand, from 2006 through 2007, an average of 24.8% of Texans lacked health insurance coverage, the highest uninsured rate of any state, and up from an average uninsured rate of 23.9% from 2004 through 2005.