Not Every Workplace Wrong Is Remediable Under Title VII

By:  Carrie S. Bryant

 

 

In Watts v. Lyon County Ambulance Service, et al., No. 14-5761 (6th Cir. Jan. 20, 2015) (unpublished), the Sixth Circuit dismissed the Plaintiff’s discrimination and tortious interference claims, and affirmed that a plaintiff must do more than simply allege a workplace harm.  In order to sustain a claim, the harm must be actionable under the law.

Plaintiff, Kenneth Watts, was employed as Executive Director of the Lyon County Ambulance Service.  He was terminated in 2011.  The Ambulance Service argued that Watts was terminated due to a history of performance issues and for failing to follow
directives.  Watts alleged that an Ambulance Service board member, Rod Murphy, solicited two former employees to make false sexual harassment claims against Watts in an effort to get him terminated.  According to Watts, Murphy was friends with an employee of the company the Ambulance Service used for it billing services, and Murphy was upset with Watts for pointing out billing inefficiencies by the billing company.
Watts believed that Murphy attempted to solicit the false complaints in order to protect the relationship between the Ambulance Service and the billing company.

Watts filed suit in the district court against the Ambulance Service and its board members.  Watts alleged that the Defendants violated Title VII’s prohibition against sex discrimination.  According to Watts, the Ambulance Service terminated him based on his gender, and the discrimination created a hostile work environment.  In addition, Murphy
tortiously interfered with Watts’s contract with the Ambulance Service.  Defendants moved for summary judgment, and the district court granted their motion.  Watts appealed to the Sixth Circuit.

The Sixth Circuit found that Watts could not simply recover under Title VII because the statute prohibits discrimination on the basis of sex, and he “happens to have a gender.”  Watts still needed to establish that the Defendants took an adverse action against him because of his sex.  He failed to do so.  Based on Watts’s own theory of the case, he was fired because Murphy wanted to protect the relationship he had with his friend at the billing company.  In other words, based on Watts’s own argument, he was not terminated because of his sex.  Further, to the extent that Watts was attempting to argue that he would not have been subjected to false sexual harassment claims but for his gender, that claim also failed.  Watts did not establish that Murphy specifically chose to solicit false sexual harassment claims against Watts because of his sex, as opposed to soliciting the false claims for the purpose of getting him removed from his director position.

The Sixth Circuit also ruled that the district court properly entered summary judgment on Watts’s state law tortious interference claim, which required a showing that Murphy’s actions caused a breach of contract.  Watts was not only unable to identify a contract between him and the Ambulance Service, but he also presented no evidence to establish that anyone complained to the board of directors about any sexual harassment by Watts.  Therefore, even if Murphy had tried to solicit the false statements in order to get Watts
fired, there was no evidence in the record that Murphy was successful in this regard.

This case serves as a good reminder that not every perceived act of mistreatment rises to the level of illegality.  In addition, Plaintiffs must do more than make conclusory allegations without support for their discrimination claims.  Nonetheless, employers must remain mindful that employment actions, including terminations, should be reviewed to ensure that they are legitimate, non-discriminatory actions, and consistent with the employer’s employment practices.

This article was written by Carrie S. Bryant who is a member of the Legal Affairs Committee and an Attorney of the law firm of Dykema Gossett PLLC, located in its Bloomfield Hills, MI office.  She can be reached at (248) 203-0728 or cbryant@dykema.com. January 2015.

Employer Which Defeated Age Discrimination Claim Now Faces Retaliation Claim


By Karen L. Piper

 

 

Dealing with former employees after they have sued their employers for discrimination can be challenging. A Kentucky employer, which successfully defeated an
age-discrimination lawsuit, now faces a trial over whether its rejection of the former employee’s application for rehire was retaliatory. The Sixth Circuit Court of Appeals (covering Michigan) just reinstated the former employee’s retaliation claim. Sharp v. Aker Plant Services Group Inc., Case No. 14-5415 (unpublished, 1/14/2015).

Tommy Sharp worked as an electrical and instrumentation designer at Aker Plant Services
Group Inc.  (APSG). In 2009, Sharp was permanently laid off in a reduction-in-force. Sharp asked his supervisor why APSG selected him for termination, rather than less experienced, less senior co-workers. Using an MP3 player, Sharp secretly tape-recorded his supervisor’s response that the reason was that the supervisor, Sharp’s team leader, and
Sharp, all were around the same age and all would retire around the same time. APSG
decided to retain and groom a younger coworker to ensure continuity in team operations.

Two months after his termination, Sharp sent a demand letter to APSG seeking reinstatement. He enclosed a copy of the tape-recording of his supervisor’s statements. APSG did not change its decision, so Sharp sued, claiming age discrimination.

The district court dismissed Sharp’s age-discrimination case. It agreed with the employer
that the supervisor’s statements were merely an inartful way of expressing a legitimate, nondiscriminatory business reason, namely, succession planning. Sharp appealed and the Sixth Circuit reversed. It ruled the supervisor’s statements were direct evidence that Sharp’s age was a factor in his termination. Sharp v. Aker Plant Services Group Inc., 726
F3d 789 (CA 6 2013).

The age-discrimination case proceeded to trial and the jury agreed with APSG – Sharp’s age was not a determining factor in the decision to lay him off.

Fifteen months after Sharp had sent the initial demand letter seeking reinstatement, a
temporary staffing agency sought to place Sharp back with APSG. APSG rejected the application because of Sharp’s use of the MP3 player to tape record his supervisor violated a plant rule. Electronic recording devices were not permitted in the plant because of the presence of combustible materials which potentially could be ignited by use of such devices.

Sharp brought a second lawsuit, claiming his rejection for rehire was in retaliation for his
age-discrimination lawsuit. The district court dismissed Sharp’s retaliation lawsuit. It ruled there was no causal connection between Sharp’s age-discrimination claim and the rejection of his application for rehire, in part, because too much time – 15 months – had elapsed after his demand letter and before his rejection for rehire.

Sharp appealed and the Sixth Circuit reversed again. The Court of Appeals ruled that 15 months was not too long a time period for there to be no connection between the two events. There is no fixed time period (e.g., 6 months, following protected activity), after which there no longer is a connection to subsequent adverse employment action. Rather, the courts must look at all the circumstances, especially “in the context of a reinstatement case, in which the time lapse between the protected activity and the denial of reinstatement is likely to be lengthier than in a typical employment-discrimination case.”

The Sixth Circuit also found error in the district court’s rejection of Sharp’s attempt to compare his circumstances to those of a current APSG employee who used a smart phone to take photos at work and was not even disciplined. The district court found the two individuals’ circumstances were not comparable because the current employee had not filed a discrimination lawsuit against APSG, as Sharp had. The Sixth Circuit said the proper basis for comparison was each individual’s misconduct, not whether both had filed an age-discrimination lawsuit. The Sixth Circuit also rejected the district court’s determination that the two individuals were not comparable because the other individual was a current employee, not a former employee seeking rehire, as was Sharp.

The Sixth Circuit also noted that: 1) Sharp’s application for rehire was rejected on the same day it was received; 2) the employee who rejected the application had become personally
involved in defending the litigation only two months before Sharp’s application; and 3) the fact that APSG had never disciplined any employee who brought, or used, an electronic recording device to work. In short, Sharp presented sufficient evidence of retaliation to preclude dismissal of his retaliation case before trial.

Employers defending a lawsuit by a former employee must respond cautiously to the employee’s application for rehire or any other overture. A retaliation claim often is easier to establish than a discrimination claim. Had this employer uniformly enforced its rule
concerning electronic recording devices in the workplace, it would have had a better chance of defending the retaliation claim. In these circumstances, it is always wise to consult with an experienced employment attorney, such as the author.

This article was written by Karen L. Piper who is Secretary of the Board of Detroit SHRM, a member of the Legal Affairs Committee, and a Member of the law firm of Bodman PLC, located in its Troy MI office.  She can be reached at (248) 743-6025 or
kpiper@bodmanlaw.com.

Detroit SHRM encourages members to share these articles within their organizations; however, members should refrain from forwarding them outside their organizations or printing for mass distribution without written permission of the Detroit SHRM Executive Committee. January 2015.

Handling Requests for Plan Documents

By: Victor H. Hicks II, CFP®, AIF®
Owner, Managing Principal
Lumin Financial, LLC
An Independent Registered Investment Adviser
vhicks@luminfinancial.com

When a plan participant asks for copies of plan documents, what should be done?
Since plans are required by law to provide certain requested plan documents in a timely manner, it’s important to have procedures in place for responding to document requests.  Lumin Financial offers a primer on document request procedures: 

Required Documents

A retirement plan participant is entitled to receive certain plan documents at stated times and intervals without charge and without having requested them.  These include the plan’s summary plan description (SPD), summary of material modifications (SMM), and summary annual report (SAR).

Requested Documents

A plan participant or beneficiary also can request copies of various plan documents. The U.S. Department of Labor specifies that participants must be provided any document on request that “specifies procedures, formulas, methodologies, or schedules to be applied in determining or calculating a participant’s or beneficiary’s benefit.” These include the latest SPD, the latest SAR, trust agreements, contracts, any bargaining agreements, and “other
instruments” under which the plan is established or operated.

Reasonable Fees

A plan administrator can charge a reasonable fee to cover the costs of providing requested information. Note that plans cannot charge a fee for providing plan information they are required to distribute. A fee is considered reasonable if it is equal to the actual cost per page to the plan for the least expensive means of acceptable reproduction and not more than 25¢ per page.

Failure To Provide Requested Documents

Penalties for failing or refusing to provide requested plan information within 30 days
can be steep. Under pension law, the penalty may be as high as $110 per day.

If your plan doesn’t have a document request plan in place, please contact Lumin Financial to get started implementing this important and legally required duty.

ABOUT LUMIN FINANCIAL

Lumin Financial is a fee-only independent Registered Investment Adviser, specializing in 401(k) plans for small- to mid-sized employers. Lumin Financial advisors serve plan sponsors throughout the Midwest with a disciplined approach to managing plan investments, counseling on fiduciary risk matters, and reducing excessive plan fees. In addition to managing investments and risk, Lumin delivers personalized financial education to plan participants.  Let them help you plan a clear direction for a bright future.  www.luminfinancial.com

Lumin Financial, LLC is a Registered Investment Adviser.  Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies.  Investments involve risk and unless otherwise stated, are not guaranteed.  Opinions provided are those of Newkirk and Lumin Financial, LLC.  This information is from sources we believe to be reliable, but we cannot guarantee or represent that it is either accurate or complete. Please note, changes in tax laws may occur at any time and could have a substantial impact upon each person’s situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors we are not qualified to render advice on tax or legal matters.  You should discuss any tax or legal matters with the appropriate professional.

Sixth Circuit Holds That Security Guards’ Meal Periods Were Not Compensable, Despite Requirement That Guards Remain on Company Premises and Perform Work Duties

By:  Carrie S. Bryant

 

On January 7, 2015, the Sixth Circuit issued its opinion in Ruffin, et al. v. MotorCity Casino, No. 14-1444 (6th Cir. Jan. 7, 2015), addressing the issue whether
MotorCity Casino’s security guards, who were required to remain on company
property during meal periods, monitor two-way radios, and respond to emergencies,
spent their meal time predominantly for their own benefit or that of the casino.  If the Court determined that the security guards spent their meal time predominately for the benefit of MotorCity, the time would be compensable under the Fair Labor Standards Act
(“FLSA”).  The Sixth Circuit concluded that the meal periods did not predominantly benefit the casino.  Therefore, the meal periods were not compensable.

In Ruffin, current and former security guards sued MotorCity Casino in district court, alleging that they were entitled to overtime payments under the FLSA because they worked over 40 hours per week, including their half hour meal periods.  The guards were free to eat, socialize with co-workers, use their cell phones, and play cards during their breaks.  However, MotorCity required the guards to stay on the casino’s premises, listen to their radios, and respond to dispatcher emergency calls during their meal time.

The district court determined that the radio monitoring activity was not a substantial job duty, and did not regularly disrupt the guards’ meal periods.  Therefore, the court held that the meal periods were non-compensable.  The guards appealed to the Sixth Circuit.

The Sixth Circuit analyzed three factors to determine whether the security guards’ meal times were in fact compensable: 1) whether the employees were “engaged in the performance of any substantial duties” during the meal periods, 2) whether MotorCity’s business regularly interrupted the employees’ meal periods, and 3) the employees’ inability to leave MotorCity’s property during meal breaks.

First, the Sixth Circuit determined that the security guards were not asked to perform substantial job duties during their meal periods.  Monitoring a radio did not qualify as a substantial job duty where the employees were also allowed to eat, read, socialize and conduct personal business during their meal times.  The security guards offered no  evidence that they were prevented from engaging in any of these activities, or that
monitoring two-way radios interfered with their enjoyment of these activities.

Second, the security guards did not produce evidence showing that their meal periods were regularly interrupted for emergency calls.  To the contrary, the evidence showed that
interruptions rarely ever occurred.  In fact, one employee recalled missing only one meal period in more than 10 years’ employment.

Lastly, a meal period is not compensable merely because an employee is required to remain on company premises for the entire meal period.  The question is whether employers require employees to stay on company property as a way of getting the employees to perform unpaid work.  Here, despite being required to stay on MotorCity’s grounds, the security guards were allowed to spend their meal periods the way that any off-duty employee would be allowed to spend a meal period, including surfing the Internet, socializing and eating.

The Ruffin case provides just one example of a circumstance in which it would be acceptable to require an employee to perform work duties during an uncompensated meal
period.  In this case, the Sixth Circuit evaluated the totality of the circumstances, and found that the security guards did not meet their burden of proving that they spent their meal periods primarily for the employer’s benefit.  Had MotorCity imposed greater duties and more restrictions on the security guards during meal periods, the case may have been decided differently.

As a result of this case, employers may want to evaluate which job duties they require employees to perform during meal periods to determine whether they should be compensated.  Employers are encouraged to consult with an experienced labor and
employment attorney, such as the author, to assess their meal and break policies.

This article was written by Carrie S. Bryant who is a member of the Legal Affairs Committee and an Attorney of the law firm of Dykema Gossett PLLC, located in its Bloomfield Hills, MI office.  She can be reached at (248) 203-0728 or cbryant@dykema.com.

Detroit SHRM encourages members to share these articles within their organizations; however, members should refrain from forwarding them outside their organizations or
printing for mass distribution without written permission of the Detroit SHRM
Executive Committee. January 2015.

Michigan Wellness Council Educational Workplace Wellness Event – January 14th

Michigan Wellness Council Educational Workplace Wellness Event: “Integrative Approach to Employee and Organizational Wellness”

This program is approved for 1 (General) recertification credit hour
toward PHR, SPHR and GPHR recertification through the HR Certification Institute. 

Date: Wednesday, January 14, 2015

Schedule:
8:00 am- Registration, continental breakfast and networking.
8:30 am – Meeting, featuring a presentation by Maureen Anderson MD, Medical Director
Integrative
Medicine, Beaumont Health System
10:00 am – Program adjourn

Registration
$25 advance registration; $30 registration on the day of the event
Register now and learn more by following this link

Program Details
Integrative approach to employee and organizational wellness
Participants will:

1. Identify the differences between integrative medicine, holistic medicine, alternative
medicine, and functional medicine.

2. Understand the background of integrative medicine and rational for expansion from a business perspective.

3. Evaluate the rationale and outcomes for employee health and wellness programming of selected integrative medicine services for employees and their families.

4. Understand holistic health related to finance, manufacturing and legal realms.

5. Discover holistic and medical goals around improving credentialing, education, access to various modalities, and deeper integration of traditional allopathic approaches with
other evidence-based modalities.

Speaker Biography
Maureen Anderson, MD is the Medical Director of Beaumont Integrative Medicine. After attending the University of Notre Dame for undergraduate education, and the University of Michigan Medical School, Dr. Anderson completed a combined residency in Emergency Medicine and Pediatrics. She is also board certified in Integrative and Holistic Medicine. In addition to her leadership role, Dr. Anderson provides MD consultations in the
Integrative Medicine Clinic, using the Functional Medicine approach. This approach looks for the root cause of symptoms/illness, and then leverages the patient’s unique strengths to optimize health. Dr. Anderson is also currently the president of the Michigan chapter of the American Holistic Medical Association, and is part of the leadership team for the Oakland County Holistic Chamber of Commerce.

Location:
PNC Center (formerly National City Center)
Beaumont Training Center, University Classroom 1, 2nd Floor
755 W. Big Beaver Road
Troy, MI 48084

Certification

This program is approved for 1 (General) recertification credit hour toward PHR, SPHR and GPHR recertification through the HR Certification Institute. For more information
about certification or recertification, please visit the HR Certification Institute website at http://www.hrci.org; Questions may be emailed to: info@michiganwellnesscouncil.org

Michigan Wellness Council (MWC) is a not-for-profit whose mission is to be the pioneer of wellness innovation for employers and State with the vision to inspire successful integration of wellness best practices in the workplace through access to quality resources and forums. The organization has been in operation for nine years primarily in the Southeast Michigan region and was originally started through a need expressed by the members of the Troy Chamber of Commerce. Since then, it has grown to address the needs of employers and worksite wellness practitioners statewide as changes in health care reform and the wellness industry as whole evolve.  Michigan Wellness Council has developed relationships with employers and within the health care and wellness community in order to provide valued services. Michigan Wellness Council offers regular public group meetings, on-site speaker series, and strategic consulting to mid/small employers on developing, implementing, and revising worksite wellness programs.

BE EXTRA METICULOUS IN FMLA DOCUMENTATION

By:  Karen L. Piper

The Sixth Circuit Court of Appeals reinstated an employee’s FMLA claim, in part, because deficiencies in his employer’s FMLA paperwork created factual disputes over important events. Pearson v Cuyahoga County, Case No. 14-3197 (unpublished, 12/30/2014).

Pearson worked as a custodial employee for the Cuyahoga County from June 2006 to June 2012.  Pearson had multiple medical conditions, including osteoarthritis of the hip.  Pearson’s conditions resulted in him missing a lot of work.  In June 2008, Pearson was
issued a warning under the County’s Attendance Control Plan for excessive unapproved
leaves of absence.

In January 2009, Pearson was approved for intermittent FMLA leave, based on his primary care physician’s certification that he suffered from “severe degenerative joint disease of the hip.”  Pearson had hip surgery in April 2009.  A year later, in June 2010, Pearson had accrued several more unapproved leaves of absence and was suspended, as provided in the Attendance Plan.  Pearson then applied for intermittent FMLA leave due to “advanced osteoarthritis of the right hip.”  His surgeon certified his condition and he was approved for intermittent leave for a year.

In December 2011, Pearson was approved for intermittent FMLA leave for one year for multiple conditions.  The conditions included bilateral hip pain which Pearson’s primary care physician estimated could cause flare-ups as often as once per month for up to 3-4 days each.

Pearson missed 9 days’ work, from January 30 through February 9, 2012.  Pearson called in every day, as required for use of intermittent FMLA leave.  However, because Pearson was off for 9 days and his December 2011 medical certification estimated only 3-4 days per
flare-up, the County sent Pearson a letter 1) requiring him to provide a doctor’s note when he returned to work, and 2) asking him to recertify his need for intermittent leave.  The County’s letter did not state when the recertification was due.  The same day, the County sent Pearson an FMLA Notice of Rights and Responsibilities.  The Notice stated that Pearson was required to provide information to the County by February 24, but the County did not check any boxes to identify what information Pearson was required to provide.
Pearson’s primary care physician submitted the requested recertification on April 24.  The County approved Pearson’s 9-day absence as FMLA leave.

Pearson called in sick on February 21, 22, 23, and 24, 2012.  Pearson claimed he gave as the reason for his absence: “hip pain.”  The County claimed Pearson said he had “chest pain,” which was not one of the conditions for which Pearson had been approved for intermittent leave.  On Friday, February 24, the County designated this absence as an unapproved, non-FMLA absence.  Because Pearson had already been suspended for excessive unapproved leaves of absence, and this absence, if not approved, would warrant his termination, the County scheduled Pearson for a pre-disciplinary conference on April 26.

At the pre-disciplinary conference, Pearson insisted that he had claimed hip pain as the reason for this absence; he did not experience chest pain until February 24.  When he did, he called a cardiologist and made an appointment for Monday, February 27.  He also asked the County to send him an FMLA medical certification form for the cardiologist.

Pearson saw the cardiologist on February 27, as scheduled.  He was released to return to work that day and provided the County with a note from his cardiologist.  Also on February 27, the County sent Pearson a new medical certification form, along with another Notice of Rights and Responsibilities.  The Notice did not have any boxes checked.  The County claimed it did not receive the cardiologist’s medical certification until April 26, though the certification was dated February 29.

Following the pre-disciplinary conference, Pearson was discharged because his February 21–24 absence was unapproved and this absence put him over the number of unapproved leaves of absence permitted under the County’s Attendance Plan.  At the time of his
termination, Pearson had 376 hours of unused intermittent FMLA leave available.

Pearson sued the County, claiming his discharge interfered with his FMLA rights.  The district court dismissed the claim.  The Sixth Circuit reversed because there were several factual disputes over key events, which precluded dismissal, including:

  • Whether the County’s February 9 request for recertification invalidated the December 2011 medical certification, as the County claimed, so that even if the February 21–24 absence was due to hip pain, Pearson did not have a valid medical certification in effect at the time of this absence (this issue was not clear, in part, because the County had approved Pearson’s absence due to hip pain in March 2012, based on the December 2011 medical certification).
  • Whether Pearson had claimed chest pain when he called in sick from February 21–24, as the County claimed, so that this absence required a new FMLA medical certification.
  • Assuming the County was correct that Pearson had claimed this absence was due to chest pain, whether the lateness of the cardiologist’s certification was excusable because the County had failed to:
  1. Check
    the applicable boxes on the Notice of Rights and Responsibilities,
  2. Advise
    Pearson of the consequences of not timely submitting the cardiologist’s
    certification, as required by the FMLA, and
  3. Follow
    up with, or notify, Pearson when the County did not receive the cardiologist’s
    certification.

All of these factual disputes were material to the issue whether Pearson was entitled to FMLA leave for the February 21-24 absence, or this absence was properly classified as unapproved, in which case he exceeded the number of unapproved leaves of absence allowed under the County’s Attendance Plan, and his termination was warranted.
As a result, Sixth Circuit reinstated Pearson’s FMLA claim.

There are several lessons for employers here: 1) check and double-check that required FMLA notices are properly filled out, 2) follow-up with employees when required responses are late, and 3) before terminating an employee with a complex employment history, review the history with experienced employment counsel, such as the author.

This article was written by Karen L. Piper who is Secretary of the Board of Detroit SHRM, a member of the Legal Affairs Committee, and a Member of the law firm of Bodman PLC, located in its Troy MI office.  She can be reached at (248) 743-6025 or kpiper@bodmanlaw.com.

Detroit SHRM encourages members to share these articles within their organizations; however, members should refrain from forwarding them outside their organizations or
printing for mass distribution without written permission of the Detroit SHRM
Executive Committee. January 2015.

McGRAW WENTWORTH AND CAMBRIDGE PROPERTY & CASUALTY COMBINE UNDER ONE BRAND, FORMING MARSH & MCLENNAN AGENCY MICHIGAN

McGraw Wentworth and Cambridge Property & Casualty, both Marsh & McLennan Agency LLC companies, announced that they are now operating under one name:
Marsh & McLennan Agency Michigan. The two insurance consulting firms maintained separate identities for a time after being acquired by Marsh & McLennan Agency (MMA). The two offices will now operate under the single brand to reflect the collaborative relationship that has developed, as well as the resulting growth in expertise and resources available in Michigan and nationally.

MMA established its presence in Michigan with the acquisition of employee group benefits firm McGraw Wentworth in December 2012. Troy-based Great Lakes Employee Benefit Services joined MMA in February 2014, combining resources with and becoming a part of McGraw Wentworth shortly after. MMA acquired Cambridge Property & Casualty in November 2013.

Marsh & McLennan Agency Michigan now has 132 employees and serves more than 250 mid-size organizations headquartered in Michigan and nationwide. MMA Michigan continues to operate out of two locations: the Health & Benefits team is based in Troy and the Property & Casualty team in Livonia. All leadership remains in place but some executives’ titles have changed to reflect broader organizational responsibilities.

“Changing our name to Marsh & McLennan Agency Michigan is the natural next step for our respective agencies. We are taking the same path forward in providing new resources and expertise for our clients, while building on our history of and continued commitment to providing thoughtful, thorough and proactive service,” said Thomas P. McGraw, CEO, Marsh & McLennan Agency | Michigan, formerly president of McGraw Wentworth.

To learn more about the name change, visit www.mma-mi.com.

About Marsh & McLennan Agency– Marsh & McLennan Agency LLC, a subsidiary of Marsh, was established in 2008 to meet the needs of midsize businesses in the United States. MMA operates autonomously from Marsh to offer employee benefits, executive benefits, retirement, commercial property & casualty, and personal lines to clients across the United States.

About MarshMarsh is a global leader in insurance broking and risk management. Marsh helps clients succeed by defining, designing, and delivering innovative industry-specific solutions that help them effectively manage risk. Marsh’s approximately 26,000 colleagues work together to serve clients in more than 130 countries. Marsh is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), a global
professional services firm offering clients advice and solutions in the areas of risk, strategy, and human capital. With 55,000 employees worldwide and annual revenue exceeding $12 billion, Marsh & McLennan Companies is also the parent company of Guy
Carpenter,
a global leader in providing risk and reinsurance intermediary services; Mercer, a global leader in talent, health, retirement, and investment consulting; and
Oliver Wyman, a global leader in management consulting. Follow Marsh on Twitter @MarshGlobal, or on LinkedIn, Facebook, and YouTube.

Zero Tolerance Policies May Expose Employers to Reverse Discrimination Claims

Zero Tolerance Policies expose employers to liability, including reverse discrimination claims, when they are not consistently enforced.On October 28, 2014, the Michigan Court of Appeals (in Hecht v. National Heritage Academies, Inc.) affirmed a $535,120.00 jury verdict in favor of a teacher (Caucasian) that was terminated for making racial comments/jokes (such as expressing a preference for a white table over a brown table and stating that the brown needed to go).

According to the evidence presented at trial, several African American employees were not disciplined for engaging in racial “banter”. The evidence revealed that the following actions did not result in any discipline:
  • African American employees used the “N” word;
  • One African American employee referred to a Dora the Explorer mural as “Laquisha” since her skin was so dark; and
  • Another African American employee asked why a white person would be eating pork chops for dinner.

Since it was undisputed that no African American employee had ever been disciplined for engaging in racial “bantering”, the jury found that reverse discrimination occurred.

The foregoing is a lesson that a Zero Tolerance Policy violation should always result in disciplinary action up to and including discharge. Even if the parties involved are not offended, it is a good practice to at least issue a warning so the employer has a defense to a disparate treatment claim if the policy is enforced in the future.

This article was written by JAMES M. REID, a member of the Legal Affairs Committee of Detroit SHRM, a Resource Partner of Detroit SHRM, and a shareholder of the law firm of Maddin, Hauser, Roth & Heller, P.C. located in Southfield, Michigan. He can be reached at (248) 351-7060 or jreid@maddinhauser.com.

Is your 401(k) ready for an IRS audit?

By: Victor H. Hicks II, CFP®, AIF®
Owner, Managing Principal
Lumin Financial, LLC

An Independent Registered Investment Adviser
vhicks@luminfinancial.com

 

As a plan sponsor or trustee, complying with ERISA regulations is likely at the top of your list of 401(k) plan administration concerns.  Not surprisingly, the IRS is similarly concerned about whether plans are in compliance with the Internal Revenue Code.  During the annual review process, plans should proceed with caution when determining if an independent audit is required.  A misstep in this area can be very costly.

The annual Form 5500 filing for a qualified retirement plan generally must include audited financial statements for the plan. However, the U.S. Department of Labor (DOL) exempts small retirement plans from the general audit requirement under certain conditions.

Definition of a Small Plan:  Plans with fewer than 100 participants at the beginning of the plan year are eligible for the audit waiver if they meet specific requirements. In addition, a plan that has between 80 and 120 covered participants at the beginning of the plan year that filed a small plan annual report for the previous year may elect to continue to file as a small plan.

Covered participants generally include active plan participants and beneficiaries; employees who were eligible to participate in the plan as of the beginning of the plan year, even if they don’t contribute to the plan; and terminated participants who have plan account balances.

Other Waiver Requirements:  In addition, a plan has to meet three other basic requirements to be eligible for the audit waiver:

  • As of the last day of the preceding plan year, at least      95% of the plan’s assets must be “qualifying plan assets.” If less than      95% are qualifying plan assets, any person who handles nonqualifying      assets must be bonded in an amount at least equal to their value.
  • The plan must include certain information in the      Summary Annual Report (SAR) furnished to participants and beneficiaries in      addition to the usual required information.
  • The plan administrator must furnish, without charge,      copies of statements the plan receives from financial institutions holding      or issuing the plan’s qualifying plan assets to any participant or      beneficiary who requests the information. In addition, the administrator      must provide participants evidence of any required fidelity bond, upon      request.

During the annual review, we suggest that plan sponsors exercise due care when determining whether an independent audit is required.  If you are unsure whether your plan requires an audit, or you’re if you would like assistance finding a qualified 401(k) plan auditor, please call a Lumin Financial adviser.

ABOUT LUMIN FINANCIAL

Lumin Financial is a fee-only independent Registered Investment Adviser, specializing in 401(k) plans for small- to mid-sized employers. Lumin Financial advisors serve plan sponsors throughout the Midwest with a disciplined approach to managing plan investments, counseling on fiduciary risk matters, and reducing excessive plan fees. In addition to managing investments and risk, Lumin delivers personalized financial education to plan participants. Let them help you plan a clear direction for a bright future.  www.luminfinancial.com

Lumin Financial, LLC is a Registered Investment Adviser.  Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies.  Investments involve risk and unless otherwise stated, are not guaranteed.  Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein.  Please note, changes in tax laws may occur at any time and could have a substantial impact upon each person’s situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors we are not qualified to render advice on tax or legal matters.  You should discuss any tax or legal matters with the appropriate professional.

 

How to know which Retirement Plan is right for your small business

By: Victor H. Hicks II, CFP®, AIF®
Owner, Managing Principal
Lumin Financial, LLC
An Independent Registered Investment Adviser
vhicks@luminfinancial.com

 

As a small business owner, you should consider the advantages of establishing an employer-sponsored retirement plan. Generally, you are entitled to a tax deduction for plan contributions. You are required, however, to include certain employees in the plan and to give a portion of the contributions your business makes to participating employees. Nevertheless, a plan can provide you with a tax-advantaged method to save for your own retirement, while providing your employees with a powerful benefit. Here’s a look at several retirement programs appropriate for a small business:


Payroll Deduction IRA

This is a simple way for you and your employees to save for retirement without having to formally adopt a plan. Each participant can make contributions of up to $5,500 for 2014, while participants age 50 and older can make an additional $1,000 of catch-up contributions. There are no annual reporting requirements. Withdrawals can be made at any time, subject to income taxes. (Early withdrawals generally are subject to an additional 10% penalty.)


SEP

Also set up with IRAs, a Simplified Employee Pension (SEP) can accept much larger contributions — all made by the employer. A SEP must be offered to all employees who (1) are at least 21 years old, (2) have been employed by you for three of the last five years, and (3) earn compensation of at least $550 (in 2014). A uniform percentage of pay must be contributed for each employee in any given year, although you can vary the percentage — across the board — and even choose not to contribute in a given year.

Annual contributions per participant are capped at $52,000 or 25% of compensation for 2014. This plan has modest start-up and operating costs. Contributions are 100% vested, and withdrawals are permitted at any time, subject to taxation and a potential early withdrawal penalty.


SIMPLE IRA Plan

Available to employers with 100 or fewer employees, a SIMPLE IRA allows employees to contribute through payroll deductions and requires employer contributions. The maximum amount an employee can defer is generally $12,000 for 2014. Employers must either match employee contributions dollar for dollar — up to 3% of compensation — or make a fixed contribution of 2% of compensation for all eligible employees. Eligible employees can make catch-up contributions of up to $2,500 (in 2014).

A SIMPLE IRA must be offered to all employees who have earned $5,000 in any prior two years and are reasonably expected to earn $5,000 in the current year. Plan set-up is relatively easy.

 

401(k) Plans

401(k) plans allow employees to contribute salary on a pretax basis and, if desired, can also allow after-tax Roth contributions. You can choose a traditional, safe harbor, or automatic enrollment safe harbor plan design.

 

The safe harbor design eliminates the discrimination testing required in traditional 401(k)s and encourages participation by requiring employer contributions of 3% of pay or based on a specified matching schedule. The plan must be offered to all employees at least age 21 who worked at least 1,000 hours in a previous year. Some employer matching funds may vest over time, per plan terms.

 

Automatic enrollment safe harbor 401(k)s are also available. Like the basic safe harbor design, the automatic enrollment variety generally eliminates the need for discrimination testing. Employees can opt out after receiving notice from the plan.

 

If your small business is ready to implement a retirement plan, contact a Lumin Financial adviser for help deciding which type is right for your organization and its employees.

ABOUT LUMIN FINANCIAL

Lumin Financial is a fee-only independent Registered Investment Adviser, specializing in 401(k) plans for small- to mid-sized employers. Lumin Financial advisors serve plan sponsors throughout the Midwest with a disciplined approach to managing plan investments, counseling on fiduciary risk matters, and reducing excessive plan fees. In addition to managing investments and risk, Lumin delivers personalized financial education to plan participants. Let them help you plan a clear direction for a bright future.

www.luminfinancial.com

Lumin Financial, LLC is a registered investment adviser.  Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies.  Investments involve risk and unless otherwise stated, are not guaranteed.  Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein.  Please note, changes in tax laws may occur at any time and could have a substantial impact upon each person’s situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors we are not qualified to render advice on tax or legal matters.  You should discuss any tax or legal matters with the appropriate professional.