Electronic Forms W-2
Question: We have employees in several states and would like to require that all employees (current and future) have an accessible email account so we can electronically provide all Form W-2s and paystubs. Can we do this?
Answer: A best practice would be for your company to establish a secure, company-wide email system for all employees to access and/or receive all company communications, Form W-2s, paystubs and more. Federal Form W-2 compliance requirements are complex and require attention to detail, so consider working with a payroll vendor to implement an electronic system for wage statements and W-2s.
Note that if you allow employees to use a personal email address for business purposes, they must give you consent to use that personal email address. Consider also that this usage triggers the issue of whether an employee must be paid for the time he or she spends reading emails from work on a personal account (as compensable hours).
Employers may set up a system to furnish Forms W-2 electronically. Each employee participating must consent (either electronically or by paper document) to receive his or her Form W-2 electronically, and you must notify the employee of all hardware and software requirements to receive the form. You may not send a Form W-2 electronically to any employee who does not consent or who has revoked previously-provided consent.
To furnish Forms W-2 electronically, you must meet the following disclosure requirements and provide a clear and conspicuous statement of each requirement to your employees:
The employee must be informed that he or she will receive a paper Form W-2 if consent is not given to receive it electronically.
The employee must be informed of the scope and duration of the consent.
The employee must be informed of any procedure for obtaining a paper copy of his or her Form W-2 and whether or not the request for a paper statement is treated as a withdrawal of his or her consent to receiving the Form W-2 electronically.
The employee must be notified about how to withdraw a consent and the effective date and manner by which the employer will confirm the withdrawn consent.
The employee must also be notified that the withdrawn consent does not apply to the previously issued Forms W-2.
The employee must be informed about any conditions under which electronic Forms W-2 will no longer be furnished (for example, termination of employment).
The employee must be informed of any procedures for updating his or her contact information that enables the employer to provide electronic Forms W-2.
The employer must notify the employee of any changes to the employer’s contact information.
You must furnish electronic Forms W-2 by the same due date as the paper Forms W-2. You will also need to review any state laws that may be applicable.
Question: We are revising our employee handbook and it was recommended that we include an NLRA “savings clause.” What do you recommend?
Answer: A blanket “savings clause” in relation to the National Labor Relations Act (NLRA) is a clause added to the beginning of an employee handbook in an effort to shield employer liability from unlawfully overbroad policies that violate § 7 of the NLRA. For instance, Macy’s Inc. used the following disclaimer as an introductory page to its handbook:
Nothing in the Code or the policies it incorporates, is intended or will be applied, to prohibit employees from exercising their rights protected under federal labor law, including concerted discussion of wages, hours or other terms and conditions of employment. This Code is intended to comply with all federal, state, and local laws, including but not limited to the Federal Trade Commission, Endorsement Guidelines and the National Labor Relations Act, and will not be applied or enforced in a manner that violates such laws.
However, an administrative law judge (ALJ) in a lawsuit against Macy’s, Inc. decided in 2015 that the savings clause did not neutralize the employer’s unlawful policies. According to the ALJ and the National Labor Relations Board (NLRB), the NLRB has strict policies for employers attempting to reject unlawful rules. The NLRB has stated (in DirecTV, 359 NLRB No. 5), in order for a savings clause to serve as a defense to an unfair labor practice finding, it must be timely, unambiguous, specific in nature to the coercive conduct, and untainted by other unlawful conduct. There must be adequate publication of the clause to the employees involved, and the language must assure employees that, going forward, the employer will not interfere with the exercise of their § 7 rights.
According to the NLRB, a savings clause must be specific in nature to the coercive conduct and expressly reference an employee’s rights protected by the NLRA. Savings clauses cannot be written in a generic manner, especially when unlawful restrictions are very specific (as in First Transit, Inc., 360 NLRB No. 72).
If you are considering including a savings clause in your employee handbook, be sure to work with legal counsel specializing in employment law to ensure that your policy is targeted and specific to your company’s needs.
AEDs in the Workplace
Question: What risk issues should we consider if our employees use an automated external defibrillator (AED) while on the job if they are not trained? And what are the implications of them not using it?
Answer: From a general HR standpoint, if an employer has an AED in the workplace, but has not provided the appropriate employee training, the employer may incur risk where an untrained person attempts to use the device but does so incorrectly and causes harm (Good Samaritan laws may or may not protect the individual who uses the device).
According to the Occupational Safety and Health Administration (OSHA), AEDs are an important lifesaving technology and may have a role to play in treating workplace cardiac arrest. Workers can be trained to:
Recognize sudden cardiac arrest and notify EMS personnel.
Perform cardiopulmonary resuscitation (CPR).
Provide early defibrillation with an AED.
Care for the victim until emergency medical personnel arrive.
OSHA also provides a helpful first aid program best practices guide.
It is unclear what the risk is if the device is onsite but the employer fails to use it. Some states have enacted laws related to AEDs in the workplace, and there may be other usage and training laws that a safety expert could outline for installation (including registering the AEDs with local emergency response agencies, as well as Good Samaritan laws).
We recommend reviewing this question with your risk, liability, and workers’ compensation insurance broker and legal counsel, as they likely have better insight into this topic and its risks.
Multistate Employee Considerations
Question: We are going to hire remote employees in several different states. What must we consider from a tax and employment law perspective?
Answer: Generally, employers must comply with the labor law of the state in which the employee will be regularly performing services and where wages are paid to that employee. There is a common rule of thumb called “boots on the ground,” which implies the regulations would apply to the state where the employee is physically working, including wage and labor regulations for hours worked and overtime, as well as general fair employment practices, termination/final pay rules, and recordkeeping. From an employee perspective, income tax for the state where the employee works (as well as lives) falls under each individual state as well. Note too, that the state where the employee works is generally where the employer should be paying unemployment insurance tax and workers’ compensation coverage.
We recommend additional research with tax and legal experts when expanding into a new state, even with remote workers. The following information offers more details about unemployment taxes and new hire reporting.
Unemployment Taxes (UI)
In many cases, employers should apply the standards of the state where the employee works and resides (where their “boots” rest). However, an employer could also choose to select the requirements of the most generous state in which the business operates or follow the requirements of a more generous internal policy, and apply those rules consistently across all company locations.
Most states will allow a multistate company to pay UI taxes from one location, though this does still require registering with each state and getting approval.
In most states, UI taxes can be paid for all employees under a Reciprocal Coverage Agreement (RCA) in which UI is paid to only one state (i.e. the company’s headquarters) when an employer has employees in multiple states. It appears approval must be sought by each state for each employee for this to occur; however, it can at least provide the company the avenue of paying the unemployment taxes only from one state for all employees working from home in other states.
New Hire Reporting
An employer with employees in more than one state has two options in fulfilling new-hire reporting requirements. Multistate employers may choose either of the following:
Abide by the new-hire reporting program of each state and report newly hired employees to the various states in which employees are working.
Select one state where employees are working and report all new hires to that state’s designated new-hire reporting office.
Multistate employers who opt to report to only one state must submit new-hire reports electronically or magnetically. These employers must also notify the federal Department of Health and Human Services as to which state they have designated to receive all their new-hire information. The National Directory of New Hires then maintains a list of multistate employers who have elected to use single-state notification.
When notifying the department, the multistate employer must include all generally required reporting information along with the following:
The specific state selected for reporting purposes.
Other states in which the company has employees.
A corporate contact person.
A list of the names, Employer Identification Numbers (EINs), and the states where the employees are located if the company is reporting new hires on behalf of subsidiaries operating under different names and EINs.