IRS Announces 2006 Cost of Living Adjustments

The Internal Revenue Service recently announced the 2006 annual cost-of-living adjustments for pension benefits and contributions to retirement plans:

1) The maximum deferral to 401(k) plans will increase from $14,000 in 2005 to $15,000 in 2006;
2) Catch-up contributions under EGTRRA for employees 50 and older will increase from $4,000 to $5,000;
3) The compensation limit under Code Section 401(a)(17) increases from $210,000 in 2005 to $220,000 in 2006;
4) The annual addition contribution limit under Code Section 415 for individuals in 401(k) plans increases from $42,000 in 2005 to $44,000 in 2006;
5) The highly compensated employee limit under Code Section 414(q) is increased from $95,000 in 2005 to $100,000 in 2006;
6) The limit used in determining key employees under Code Section 416 is increased from $135,000 in 2005 to $140,000 in 2006; and
7) The Social Security Wage Base (maximum earnings taxable) for 2006 is $94,200.

Telecommuter Gets Hit with Tax

Bad News for Out-of-State Telecommuters

Recently, a Tennessee man was ordered to pay taxes on his income by New York's highest court, even though he only works in New York 25% of his time. Thomas Huckaby, a computer specialist who spends the other 75% of his time in his home state, discovered that he will be taxed by both Tennessee and New York. As reported on HR.BLR.com:

"A New York State tax-department rule states that people who live out of state, work for a New York employer, and occasionally come to New York on business must pay taxes, even on work performed out of state, according to The Wall Street Journal. The only exception to the state's rule would be if the out-of-state work was done for the employer's "necessity". The New York Supreme Court ruled, in a 4-3 decision, that Huckaby had to pay taxes on all of his income."

As revealed in a recent Telework Advisory Group survey, there are approximately 9.9 telecommuters in the United States who now may face this additional tax. However, there is proposed legislaton, the Telecommuter Tax Fairness Act that would prohibit the practice of taxing telecommuters for work completed in another state.

According to The Wall Street Journal, Senator Dodd (D-CT) called Monday's decision "disappointing" and said it "underscores the need to take action on the legislation that I have introduced… Telecommuting reduces traffic congestion, reduces pollution, and helps businesses strengthen their bottom line. The current rules punish telecommuters rather than reward them and that needs to change."

How to Help Your Employees Avoid the Flu

canadian hr reporter - article display

Flu season is upon us, but there are ways to help ensure that your work environment stays happy and healthy. The Canadian HR Reporter offers the following tips from Trish Stenson, Director of Clinical Services at Ceridian Canada:

- Encourage employees to get a flu shot from their doctor or set up a program in conjunction with health professionals for employees to get their shots at the office

- Provide employees tips on how to prevent getting the flu

- Encourage employees to stay home if they are sick, especially if their symptoms are flu-like

- Provide handouts on how to wash hands properly

- Provide hand sanitizers in washrooms and other places.

- Promote work-life balance by encouraging employees to take their lunch breaks, step away from their desks periodically to de-stress, and pay attention to eating nutritious food and getting physical activity

- If snacks are a part of the office environment, make sure healthy snacks are available to counter the popular high-sugar content treats

- Discourage the sharing of keyboards, headsets, etc. by providing each employee with his/her own equipment

Stenson stresses that the most important tip is to encourage ill employees to stay home. "Not only does coming to work put co-workers at risk, but work productivity suffers and sick workers are often unable to focus on the tasks at hand," said Stenson.

Survey Reveals that More than 40% of American Workers Plan to Find New Employment Within Next 12 Months

A recent Yahoo! HotJobs online survey revealed that a large percentage of U.S. workers are planning on looking for new opportunities in the near future. The poll results show that more than 40% are planning on looking, while 21% are already looking for new positions.

The number one reason for seeking out a new job opportunity is the desire for a better compensation package (96%)

Additional reasons for wanting to leave include:
- Believing that there is no potential for career growth in current position (44%)
- The desire for a better commute (18%)
- Feeling that they are not being "valued" by current employer (25%)
- The desire to work in an environment with higher morale (29%)

Yahoo! HotJobs VP of marketing and career expert, Marc Karasu, was quoted in their press release as saying, "Employees are sensing more opportunities and better total compensation packages, and they're making plans to go after them. Current employers should take stock of their own talent acquisition and retention models as they prepare for their staffing needs for 2006."

Have you reviewed your own recruitment and retention programs? Now is the time!

"North Country" Displays Accurate Portayal of Real Life Sexual Harassment Case

The Capital Times

The recent, critically acclaimed film, "North Country," starring Academy Award winner, Charlize Theron, depicts the story of the first sexual harassment class action law suit in the United States. It serves as an excellent reminder that workplace harassment can easily occur, and we must be aware of potentially dangerous situations. As Judy Ettenhofer explained in the Capital Times...

"North Country" is based loosely on the first sexual harassment class action suit brought in the United States, by the women "rangers" working at the Eveleth iron ore mine in northern Minnesota's Mesabi Range.

In real life, Lois Jenson and her fellow female rangers endured nine years of abhorrent harassment from the mine's male employees before Jenson filed a complaint in 1984. A lawsuit grew out of that complaint, finally gaining class action status in 1991. The case dragged on until it was finally settled in 1998, but along the way it helped push employers to institute policies against workplace sexual harassment.

What is shocking is that throughout the 1980s and 1990s many corporations resisted the pressure of instituting anti-harassment policies. Today, there have been many improvements regarding sexual harassment in the workforce, but we must still keep our eyes open for inappropriate behavior.

Honor Veterans as Part of Your Diversity Efforts

As recently pointed out in SHRM's HR Week newsletter, our nation's veterans are often overlooked in organizations' diversity programs, even though one in every eight Americans (13%) has served long enough in the military to be considered a veteran.

SHRM suggests making an effort to recognize the veterans in your workforce making a special effort to honor them on Memorial Day and Veterans Day. In addition, you can incorporate a recognition campaign with your recuiting initiative. There are also a number of resources that can be extremely helpful in your endeavors:

Free Veterans Day Observance Posters (also Downloadable)
http://www1.va.gov/opa/vetsday/gallery.htm

Hiring Information:
HireVetsFirst
http://www.hirevetsfirst.gov/

Military Talent, Civilian Careers
http://www.taonline.com/

Veterans and Transitioning Military Personnel
http://www.rileyguide.com/vets.html

U.S. DOL's Hiring Veterans
http://www.dol.gov/dol/topic/hiring/veterans.htm

For more information on diversity:
SHRM's Diversity Toolkit
http://www.shrm.org/diversity/DiversityToolkit.asp

Be sure to visit the SHRM site for a wealth of additional information.

New Study Reveals the Best and Worst States for Employees

Press Release

The first study that evaluates employee climate rather than business climate was released recently by Political Economy Research Institute (PERI) at the University of Massachusetts. All 50 states were rated based on average pay, employment opportunties, employee benefits, percentage of low-income workers, fair treatment between genders and ability for employees to unionize.

Delaware, New Hampshire, Minnesota, Vermont, and Iowa, made it to the top of the list, while Louisiana, Texas, Arkansas, Utah, and South Carolina are ranked the lowest. Rankings were based on a scale of 1 – 100 in three categories – Job Opportunities, Job Quality and Workplace Fairness – which were then averaged out to determine the state's total score. First place Delaware received a total score of 89 while and Louisiana, in last place, received a total of 31.

To see how your state ranked, click here.

Are You Wearing a Costume to the Office This Halloween?

Thirty-One Percent of Workers May Show Up to Work in a Halloween Costume This Year, CareerBuilder.com Survey Reveals

Thirty-one percent of workers are planning on dressing up for the office this October 31st, according to the recent survey, "Halloween at the Office 2005," by CareerBuilder.com.

CareerBuilder also gave some tips on last minute office-themed costumes. Here are a few:

1. A Day Off - Using black lettering, write October 30, 2005 or November 1, 2005 on an orange shirt. When people ask what you are, say, "A day off!"
2. Running Late - Show up to the office with messy hair and disheveled clothes with your pajamas showing underneath.
3. Vending Machine - Dress in black and fasten snacks to yourself with the cost of each item displayed. To be really evil, place an "out of order" sign on the real vending machine and charge your coworkers for your snacks. When they pay, make sure you throw their snacks on the ground as the vending machine does.
4. Office Gossip - Make up fun stories about your coworkers. Fasten the stories to yourself and put the name of your favorite grocery store tabloid on a hat. Hang around the water cooler and invite people to read the latest news.

Be sure to click here to read the full list of costume ideas!

Panel Considers Taxing Health Benefits

Benefitnews.com - Information for HR and Benefit Directors and other Employee Benefit Plan Sponsors and Advisers

Will employees soon be taxed on the value of their employer-sponsored health coverage? The President's Advisory Panel, a bi-partisan group made up of academics, executives, former members of Congress and government officials, is considering doing just that as a way to finance a reduction in the alternative minimum tax. BenefitNews.com reports...

"It is hard to see how the advisory panel would make the American taxpayer better off by lowering their alternative minimum tax burden only to turn around and increase their tax burden for the health coverage they choose for themselves and their family," says American Benefits Council President James Klein.

To learn more and to share your thoughts about the proposed health benefits tax, visit the official website of the President's Advisory Panel on Federal Tax Reform. They have to submit their report to the Treasury Department by November 1st, so be sure to get your comments in soon.

Reader Feedback re: "Understanding Diversity" Astronology Article

Yesterday's Astronology Article, "Understanding Diversity - It's More than What You See on the Surface" stirred up some debate among readers. Richard L. Virgilio, SPHR, of First Principles Coaching & Intrepid HR Consulting, Batavia, IL, shared his view on the subject...

I think that it is wrong to "try to mirror the population of a community," as put forth by the BostonWorks article. That metric ("mirror") smacks of quotas, and inevitably is wrong. As an employer, I must--MUST--hire the best qualified people who want to work for me. To do anything else is to betray my stakeholders and be absolutely open to the criticism, "Why didn't you hire the best qualified?" Or worse, "Why did you pass over these people who expressed interest in the position, were well qualified, and instead went out and beat the bushes to find this person who wasn't particularly interested--how long will he last?" The true, underlying philosophy of diversity is both to (a) be sure you are not excluding any particular group from your candidate pool and (b) be sure to not take such immutable characteristics as any factor whatsoever as part of the hiring decision. Diversity for it's own sake is a wrong-headed goal, and when we try to "mirror the community" we are disregarding specific talent and experience.

As always we welcome reader feedback. Keep your comments coming!

Ruling Defines "Internet Job Applicant" for Contractors

Definition of 'Internet job applicant' clarified for contractors#P-11_0

Realizing that an increasing number of job applications come through the Internet rather than traditional methods, the Office of Federal Contract Compliance Programs (OFCCP) has issued a regulation that states that resumes received electronically or by "snail mail" be treated equally when it comes to determining equal employment opportunity.

The final rules, which go into effect in February 2006, require that covered federal contractors obtain data on gender, race, and ethnicity on applicants and supply to the OFCCP. The OFCCP in turn uses this data to determine which organizations may be practicing possible employment discrimination. SHRM Online reports...

“This new rule provides clear guidance to allow us to better enforce the law,” said Charles E. James, Jr., deputy assistant secretary for OFCCP, in a press release. “This final rule will enable OFCCP to effectively evaluate whether federal contractors are recruiting a diverse pool of qualified applicants and hiring new employees on a non-discriminatory basis. It also helps contractors by clarifying an ambiguity that, until now, left contractors guessing at what information they needed to collect from Internet applicants.”

Will this new ruling effect your organization? Check out the full article here.

Top 10 OSHA Violations

OSHA's Top 10 Violations

The Occupational Safety and Health Administration recently released the 10 most-violated OSHA standards of 2005. There have been 40,463 violations in 2005 thus far, which is currently 4,200 less than in 2004.

Scaffolding continues to be the most-violated standard (8,130 violations), followed by Hazard Communication (6,641 violations) and Fall Protection -- General Requirements 5,504 violations). To view the entire top ten, click here.

How Flexible is Your Disaster Plan?

The Best-laid Disaster Plans Are Merely Works in Progress | workforce.com

Prior to the Gulf Coast hurricanes, many employers had disaster plans in place. However, due to unpredictibility of nature, disaster plans, in most cases, are merely works in progress. Communication problems, administraive hurdles and housing issues, all created additional challenges to organizations effected by Katrina and Rita. Workforce Management takes a look at how three companies... Sodexho USA, McDonald's and Entergy... weathered the storm. It's an interesting read that may make you rethink your own disaster plan. Check it out here.

HRAs and HSAs Not Yet Popular

Benefitnews.com - Information for HR and Benefit Directors and other Employee Benefit Plan Sponsors and Advisers

According to a recent survey of 2,995 employers by the Kaiser Family Foudation and the Health Research and Educational Trust, only 4% of employers with health benefits offer an HRA or an HSA to their employees. From BenefitNews.com...

About 1.6 million workers are enrolled in HRAs, representing 2% of covered workers. Among workers with access to an HRA, 25% enrolled in it. The average annual employer contribution to HRAs is $3,872 for single coverage and $7,538 for family coverage.

Meanwhile, 800,000 workers are enrolled in HSA-qualified health plans, representing 1.8% of covered workers. Just 15% of workers with access to this type of plan enrolled in it. The average annual employer contribution to an HSA-qualified plan is $2,270 for single coverage and $6,245 for family coverage. Roughly 67% of employers offering an HSA-qualified plan contribute to workers' accounts.

It appears that part of the reason for the low enrollment may be due to a lack of incentive. According to Gary Claxton, VP at the foundation, "HRAs don't really offer much savings to employers yet. The HSA-qualified plans, when you consider the contributions that the employers make to the HSAs, are a little bit cheaper than traditional health insurance."

Bush Suspends Davis-Bacon Law in Katrina Damaged Areas

Bush Suspends Prevailing-Wage Law in Katrina Zone

In a controversial move, President Bush decided to suspend the Davis-Bacon Act, the law which requires federal contractors to pay the prevailing or average pay in the region, in the hurricane-damaged areas of Alabama, Florida, Lousiana, and Mississippi. Believing that the Davis-Bacon act actually increases construction costs, Bush said that suspending it "will result in greater assistance to these devastated communities and will permit the employment of thousands of additional individuals."

His ruling infuriated labor leaders, as well as others who believe that suspending the law is actually an opportunity to exploit workers and further depress the area's living standard. From HR.BLR.com...

House Democratic Leader Nancy Pelosi noted that the Davis-Bacon Act was signed into law at "a time when scurrilous employers were taking advantage of the desperation of American workers to care for their families. At that time, and for more than 70 years since then, the federal government has demanded that when taxpayer money is spent, workers should be paid a livable wage.

"But today," she continued, " the Bush Administration demonstrated the latest example of its anti-worker agenda, with an executive order rescinding the requirements of the Davis-Bacon Act for areas hit by Hurricane Katrina. That means that as workers return to their lives and livelihoods on the Gulf Coast, the Bush Administration wants to use federal money to exploit them by paying less than the prevailing wage."

Opinions abound on the subject. What's yours?

To read Bush's proclamation, click here.

To read the Washington Post article, "Bush Suspends Pay Act in Areas Hit by Storm," click here.

No Shortage of Jobs for Gulf Coast Healthcare Workers

Healthcare recruiters are wooing displaced Hurricane Katrina healthcare workers with perks such as signing bonuses and relocation assistance.

Gulf Coast healthcare firms are concerned that once life returns to normal in the hurricane ravaged areas, that there won't be enough people to fill the positions.

From HR.BLR.com...

Out-of-state recruiters tell USA Today that they are helping, not poaching, since the workers need jobs.

"Even if we didn't exist, these nurses and health professionals would go somewhere else because they have to," says Alan Braynin, CEO of Access Nurses, a San Diego-based staffing agency.

Only time will tell to see if the workers return to their former Gulf Coast employers.

Only One in Three Workers Would Consider Unionizing

According to a new Zogby/Public Service Research Foundation Poll, only 35% of non-union workers would consider voting to unionize their workplace, while the majority (56%) would not. These numbers seem to coincide with the recent decline in union memberships nationally.

The survey of 802 workers nationwide was conducted June 14 through 21, 2005, and has a margin of error of +/-3.6 percentage points. Polling was performed by Zogby International on behalf of the Public Service Research Foundation.

The poll found broad-based consensus among employees against unionizing, with 56% of all non-union workers in the survey saying they would vote against bringing a union into their workplace. One-in-three (35%) indicate they would consider voting for a union, but just half of that group (16%) say they would definitely vote to unionize, while two-in-three of all those who oppose unionizing (38%) would definitely vote against unionizing. These trends held for all age groups under 65, but was most noticeable among workers age 30 to 49, where three-in-five (60%) indicated they would not support unionizing.

This opposition to unionizing holds in every region of the country as well, with majorities in the Eastern U.S. (61%), South (50%), and Central/Great Lakes Region (60%) and a 49% plurality in the Western states all saying they would resist unionizing their workplace.

The survey also found men more likely to oppose unionizing their workplace, by a 61% to 50% margin versus women, and married people are more likely to oppose unionization than single people by a 61% to 51% margin.

Thanks to "World of HR" blog reader, Tom Minnick, SPHR, for calling our attention to the Zogby poll. If you would like to read more about the results, click here.

Best and Worst Companies for Gay and Transgender Employees

HRC | Best and Worst Companies for Gay and Transgender Employees Revealed

The Human Rights Campaign Foundation were pleased to reveal the results of their fourth annual report card on the treatment of gay, lesbian, bisexual and transgender employees in corporate America. According to the study, there are seven times as many corporations providing full protections since 2002 with a record-setting 101 companies scoring a perfect 100%.

As reported on the HBC website...

The Human Rights Campaign Foundation’s fourth annual report card — the Corporate Equality Index — rates Fortune 500 and other major companies on a scale from zero to 100 percent on seven key indicators of fair treatment for GLBT employees. Indicators include policies prohibiting discrimination based on sexual orientation and gender identity as well as equal health care benefits.

Among this year’s key findings:

A record 101 companies score 100 percent, which is attributed to a sharp increase in gender identity non-discrimination policies. In 2002, only 13 companies earned a perfect rating.
Today, 5.6 million people work at the 101 companies that score 100 percent. In 2002, approximately 690,000 people were employed by the 13 companies that scored 100 percent.
Eighty-one percent of scored companies offer health benefits to the domestic partners of employees, up from 70 percent in 2002.
“With 101 companies scoring one hundred percent, millions of Americans now have protections they would have only dreamed of a few years ago,” said Daryl Herrschaft, director of the Human Rights Campaign Foundation’s Workplace Project and lead author of the report.

Many of the companies that scored 100 percent will be attending this year’s Out & Equal Workplace Summit starting on Sept. 22 in Denver. They will be joining more than 850 GLBT employees, straight allies and human resources and diversity professionals who share the same vision of equality for all.

Mileage Rate Increases for the Remainder of '05

The IRS decided to break routine and update the mileage rate early, in order to address the rising cost of gas. The rate has increased 8 cents to 48.5 cents a mile for all business miles driven between September 1st and December 31st.

From BLR...

"This is about fairness for taxpayers," IRS Commissioner Mark W. Everson said. "People are entitled to deduct the real cost of operating a vehicle. We've responded to the recent gas price increases by making this special adjustment so taxpayers get the tax benefit they deserve."

Read the entire article here.

Katrina Evacuees Receiving Jobless Benefits

According to a recent article on SHRM Online, individuals who lost their jobs and their homes due to Hurricane Katrina are now starting to receive their Disaster Unemployment Assistance checks.

“We’re doing everything we can,” said Louisiana Department of Labor (DOL) spokesman Ed Pratt. “We’re going into the shelters, taking applications and giving out checks. So far we’ve processed 70,000 applications, and we expect that number to grow.” The Louisiana efforts are mirrored across the South for residents who find themselves far from their homes and the offices where they normally would seek such aid.

“We processed over 10,000 claims from Louisiana residents over the Labor Day weekend alone,” said Ann Hatchitt, a spokesperson for the Texas Workforce Commission, which is partnering with Louisiana officials to deliver benefits across state lines.

Basically, as long as the displaced individuals can be found, they will receive their payments. It is a step in the right direction on the long road to recovery.