With summer fast approaching many employers use volunteer workers for a host of reasons. While being proactive, we highly recommend employers review the Department of Labor guidelines to ensure that they are not violating the law.
As a reminder, the Department of Labor strictly prohibits for-profit and private-sector businesses from using volunteers. Other key areas the DOL looks at in determining noncompliance are benefits for work and employer-employee relationships. These three areas are often overlooked by employers.
The Fair Labor Standards Act defines an employee as an individual employed by an employer. The term ”employee” does not include volunteers who work without any compensation, implied or not. Workers who expect to receive a benefit are employees and are entitled to mandatory wages, regardless of whether they view themselves as volunteers.
The test to determine whether an individual is an employee under FLSA is one of “economic reality” not technical concepts. If audited, the DOL and the courts review what the person expected to receive as a benefit for their work, the services provided, and if they were integral to the business. We strongly recommend a review of the DOL guidelines for potential exposures and contacting our offices for any guidance needed.
Benefits
HIPAA and Health Plans You Never Knew Applied. Did you know that extra benefits your company offers its employees like Employee Assistance Programs and Wellness Plans are subject to HIPAA privacy and security rules? In both cases, employers must comply to the extent services are offered under a group health plan that provides medical care.
Examples of EAP medical care include providers that are staffed by healthcare professionals such as licensed counselors and therapists. Wellness programs are subject to HIPAA as it provides medical benefits at a reduced rate. Benefits like drawing blood, disease management, smoking cessation services, and flu shots all fall under HIPAA regulations.
Employers should review its compliance responsibility with its plan administrator or HR Consultant to develop and implement all the necessary documentation for compliance.
Payroll Compliance
The IRS has released an updated Backup Withholding Rate that has been reduced from 28% to 24% on payments made after December 31, 2017. The backup withholding requirements apply to information that is filed with a missing or incorrect taxpayer identification number. Filers may be required to withhold a specified percentage of certain reportable payments made to payees for whom the information return was filed. For more information visit www.irs.gov/pub/irs-pdf/p1281.pdf
For these and all other HR, Benefits, and Payroll related issues CorpStrat is here to help. Contact us today to learn more.