HR Corner

New Guidance Regarding Joint Employment Under the FMLA 1

Upcoming Deadlines to Add to Your 2016 Calendar 3

Health Outcomes

Up your Communication Game! Designing an Effective Wellness Communication Strategy 4

Legal and Compliance

U.S. Supreme Court Limits ERISA Plan’s Subrogation Claims 7

Reminder: San Francisco’s HCSO Annual Reporting Form Due by April 30 8

Webcasts 9

Key Contacts 10

HR FocusApril 2016

Continued on page 2

HR CornerNew guidance regarding joint employment under the FMLABy: Marina A. Galatro, PHR-CA, SHRM-CP Sr. HR Consultant, HR Partner

On January 20, 2016, the Department of Labor (DOL) issued guidelines to employers on the subject of “joint employment.” The DOL issued a new Fact Sheet #28N explaining joint employment principles under the Family and Medical Leave Act (FMLA).

Why would you want to read this Fact Sheet? Per the DOL’s guidelines, a joint employment exists when an employee is employed by two or more employers and when both employers have responsibilities under the FMLA. Joint employment is important in determining employer coverage and employee eligibility under the FMLA. The analysis for determining joint employment under the FMLA is the same as under the Fair Labor and Standards Act (FLSA). More information can be found here.

Primary and secondary employers under the FMLA

When an individual is employed by two employers in a joint relationship under the FMLA, in most cases one employer will be the “primary employer” and the other is the “secondary” employer. And according to the DOL, “determining whether an employer is a primary or secondary employer depends on the facts of the situation.” Factors to consider include:

� Who has authority to hire and fire and to place or assign work to the employee

� Who decides how, when and the amount that the employee is paid

� Who provides the employee’s leave or other employment benefits

2 willistowerswatson.com

HR Corner – continued from page 1

Fact Sheet #28N includes a comparison chart to help employers identify their FMLA responsibilities in a joint employment situation.

Responsibilities of the primary employer

Both the primary and the secondary employer must count the jointly-employed employee in determining employer coverage and employee eligibility under the FMLA. The primary employer is responsible for providing the required notices, providing the FMLA leave, keep all records required by the FMLA, managing and maintaining the continuation of group health insurance and restoring the employee to his/her job at the end of the leave.

A primary employer must meet all of its obligations under the FMLA even when a secondary employer is not in compliance with the law or does not provide support to the primary employer in meeting these responsibilities.

In the case of a temporary placement or staffing agency, the agency is most commonly the primary employer. Even if your company uses a staffing company to supply you with employees on a temporary basis, it’s likely to be a joint relationship if any of the following occur:

� Your company handles payroll for workers, sets their hours and schedule, or is involved in hiring/supervising the employee

And/or

� The employee works on your premises and/or does work that is integral to your business

Basically, if temp workers are integral to your business or you’re setting their hours, you’re just as responsible for paying these workers as the staffing company they work for under the FLSA. The DOL considers this an example of vertical joint employment.

Responsibilities of the secondary employer

The secondary employer, whether an FMLA-covered employer or not, is prohibited from interfering with a jointly-employed employee’s exercise of or attempt to exercise his or her FMLA rights, or from firing or discriminating against an employee for opposing a practice that is unlawful under the FMLA.

The secondary employer is responsible in certain circumstances for restoring the employee to the same or equivalent job upon return from FMLA leave, such as when the secondary employer is a client of a placement agency and continues to use the services of the agency, and the agency places the employee with that client employer. Secondary employers must keep basic payroll and identifying employee data with respect to any jointly-employed employees.

A covered secondary employer is also responsible for compliance with all the provisions of the FMLA for its regular, permanent workforce.

Final Point

A final important point, although one that is not discussed in Fact Sheet #28N: It is not uncommon for companies to directly hire individuals who were previously assigned to them through a staffing agency.

Assuming a joint employment relationship existed during the staffing agency assignment, the company which is now the individual’s direct employer may be obligated to count the individual’s period of service (months and hours) through the staffing agency when determining the individual’s FMLA eligibility.

Continued on page 3

Upcoming deadlines to add to your 2016 calendarBy: Marina A. Galatro, PHR-CA, SHRM-CP Sr. HR Consultant, HR Partner

The following resources are meant to provide companies information on a variety of federal and state statutes regarding reporting requirements. This is not a complete list

and we suggest you work with your payroll provider and/or legal counsel concerning required reports that may apply to your organization.

�� OSHA Form 300A

�� Post in a conspicuous location (i.e., near your labor law posters, employee break room)

�� Ensure employee’s confidential information is maintained

�� Post February 1 – April 30 of each year

�� Remove form on April 30

�y Maintain records for at least five years

�� San Francisco Health Care Ordinance (HCSO)

�� Employers covered by the San Francisco Health Care Ordinance are required to submit an Annual Reporting Form to avoid penalties of $500 per quarter

�y Deadline is April 30

�� San Francisco and Bay Area Commuter Benefits Program

�� Employers who complete the initial registration will be notified when it is time to submit an annual registration update

�y Notice will be provided by means of an email addressed to the commuter benefits coordinator

�� Form 5500

�y File annually by the last day of the 7th month following the end of the plan year (July 31 for calendar year plans)

�� Summary Annual Report

�� Due to participants nine months after the close of the Plan Year or two months after the due date for Form 5500

HR Corner – continued from page 2

3 HR Focus 2016

4 willistowerswatson.com

Continued on page 5

Health outcomes Up your communication game! Designing an effective wellness communication strategyDuring your organization’s last open enrollment period, you likely communicated information on a carefully thought-out wellness program to your employees. There may have been some buzz and even a jump in participation. And well-meaning employees likely made New Year’s resolutions to eat better, exercise more and quit smoking. But what has happened since then? Have any program reminders or wellness education been sent since? Do you wish there were a way to keep your employees’ attention, motivate them to work towards sustained behavior change?

If you haven’t kept up with communication efforts, then you may be in jeopardy of falling short of your organization’s wellness program goals. The richest programs have little value if they are under communicated. While program structure and implementation, incentive strategy, creating a culture of health and other tactics certainly affect the success of your program, effective communication is essential because it keeps your employees informed and engaged.

Several approaches increase the effectiveness of your wellness communication, including:

�� Branding and presentation

�� Employee involvement

�� Program messaging

�� Establishing communication patterns

�� Media outlets

�� Tackling specific challenges

Branding and presentation

Staying in front of employees is not just about the quantity or quality of the content you provide, but also how quickly it is recognized and how it is perceived. Working to develop an image and tagline that sums up the program philosophy and goals, and also resonates with employees, is an important step in effective communication. Your wellness program will benefit from being easily recognizable and consistently

presented to employees.

Here are a few tips to keep your brand prominent while still employing the wealth and variety of materials available to your organization:

�� Ask vendors or carriers if they can include your brand on materials.

�� Add your logo to documents whenever possible.

�� Include a branded cover memo with any printed materials from other resources, or use a branded email template when sending attachments.

�� Hang a branded bulletin board in a common space with your wellness logo prominently displayed at the top to provide a sense of cohesion to any materials posted on the board.

�� Place a wellness branded pocket folder in common spaces (even in bathrooms as reading materials) which house a collection of the wellness materials you have distributed.

�� Create an online space with a branded welcome page or banner and an introduction to how all the provided materials, links and resources are important aspects of your program.

Employee involvement

Employee involvement, engagement, participation — call it what you will — you want it in your wellness program. Providing opportunities for employees to participate in your wellness communication is a great way to get them to participate in the entire program. Try these simple approaches to get employees communicating on behalf of your program.

�� From the beginning, involve employees in the naming and branding of your program.

�� Bring your employees into the branding process by asking them to submit names and logo suggestions for consideration.

�� Ask your employees to vote on a few options developed for

5 HR Focus 2016

Health Outcomes – continued from page 4

Continued on page 6

your program.

Program messaging

Possibilities abound for wellness topics and content. Two examples:

�� Why your organization has embarked on or is continuing a wellness program

�� What the goals are as an organization and for individuals

Start your messaging by endowing your program with meaning. Clearly articulate program goals. You want to be able to lay out for your employees what the program is aiming to accomplish.

Establishing communication patterns

Wellness communication should be a process, not an event. Communicating the program year-round is one of the most important factors in an effective communication strategy. Assign a project manager the responsibility for these ongoing communication efforts.

Tips to stay in front of your employees year-round:

�� Distribute monthly calendars. Think about how many times you glance at a calendar on your office wall every day. This is a great place to put a few facts about a monthly health topic. Also consider populating the calendar with key wellness events, walking group meeting times, etc.

�� Utilize the wealth of information available from centers of excellence to create posters, flyers, email blasts, tweets or blog posts.

�� Create an annual wellness communication calendar with topics, location of the materials and the release schedule to stay on task.

�� Communicate to homes to reach spouses and provide time to review the materials.

Media outlets

In the boom of new technologies, one communication option does not replace another; it is merely added to the list. The question facing employee communicators several years ago was simple: Should materials be printed, emailed or posted on an intranet site? Today we must choose among a

wider variety of communication mediums.

Below is a list that of media options for communicating your wellness program:

Media Description Role in Wellness Communication

Adobe Presenter

Balloons

Conference Calls

Email Blasts

In-Person Meetings

Napkins/Table Tents

Podcasts

Promotional Items

Sidewalk Chalk

Social Media

Text Messaging

Video

Voicemail

Webcasts

Websites/Intranet/Portals

As we move to more of a social media presence, below is “cheat sheet” for internal communications:

Platform Use

Facebook Announcements, accolades, tips, event sign-ups, links to other online content (including other social media)

Twitter Brief announcements, accolades or tips

YouTube Any length videos of employee events, training, presentations

Instagram Pictures or very short (3 – 15 seconds) videos of employee events/activities

Pinterest Repository for articles and information from your organization and others

Wordpress or Blogger

Original blog articles on employee issues, testimonials, etc.

SlideShare PowerPoint slides, infographics, videos

Periscope Live video streaming and replays of company meetings, events, trainings (available up to 24 hours, unless saved by user)

6 willistowerswatson.com

Health Outcomes – continued from page 5

Specific challenges

Wellness communication campaigns encounter many of the same challenges faced by any communication campaign. Below are just a few:

�� Multiple locations

�� Involve and educate managers and supervisors

�� Use one presentation that can be viewed from any location or home

�� Offer program webcasts or more simple Q&A webcasts to reach as many employees as possible

�y Use print/mailings to homes, posters at locations

�� Confidentiality and privacy concerns

�� It is best to tackle these concerns early on and repeat the messaging when employees are asked to share personal or health information

�y Explain WHY is it important to collect personal or health information, WHO will/will not have access, WHAT it is being used for and HOW they can access the information

�� Engaging spouses and family

�� Keep spouses in the loop by providing items such as calendars with key wellness program dates or health observances

�� Invite them to any meetings or wellness fairs on site

�y Provide online options for home viewing

�� Limited or no work computer access

�� Mailing to homes is often the best solution; use low-cost options such as postcards

�� Use text messaging and posters as reminders and to call to action

�� Consider less traditional options, such as sidewalk chalk, balloons and informational tables

Closing thoughts

Any communication campaign or new education initiative involves some learning through trial and error. However, by devoting sufficient time and planning and following these best practice guidelines, you will position your wellness program for maximum participation and success.

7 HR Focus 2016

Continued on page 8

Legal and complianceU.S. Supreme Court limits ERISA plan’s subrogation claimsThe U.S. Supreme Court recently ruled, in the case of Montanile v. Board of Trustees of the National Elevator Industry Health Benefit Plan, No. 14-723 (January 20, 2016), that employers pursuing subrogation claims can only recover third-party settlement funds if they have not yet been spent. The Court’s ruling can be found here.

Background

Robert Montanile was a participant in a health plan administered by the Board of Trustees of the National Elevator Industry Health Benefit Plan. Montanile was injured by a drunk driver and the health plan paid more than $121,000 in medical expenses. Montanile later sued the driver that caused the accident and obtained a $500,000 settlement.

The health plan contained a subrogation clause that required plan participants to reimburse the plan for medical expenses it paid if the participant later recovered money from a third party for his injuries. The plan administrator (the Board of Trustees of the National Elevator Industry Health Benefit Plan) requested reimbursement from the settlement. Montanile’s attorney refused that request and, following a breakdown in negotiations, informed the plan administrator that the fund would be transferred from a client trust account to Montanile unless the plan administrator objected. The plan administrator did not respond and Montanile received the settlement.

Six months later the plan administrator sued Montanile in Federal district court under Section 502(a)(3) of the Employee Retirement Income Security Act of 1974 (ERISA) which authorizes plan fiduciaries “to obtain … appropriate equitable relief … to enforce … the terms of the plan.” The plan administrator sought an equitable lien on any settlement funds or property in Montanile’s possession. However, Montanile argued that he had already spent almost all of the settlement so no identifiable fund existed against which to enforce the lien. The District Court rejected Montanile’s argument and the Eleventh Circuit affirmed, holding that “even if he had completely dissipated the fund, the plan was entitled to reimbursement from his general assets.”

Discussion

In an 8—1 decision, the Court held that when an ERISA-plan participant wholly dissipates a third-party settlement on non-traceable items (i.e., consumable goods or services), the plan fiduciary may not bring suit under Section 502(a)(3) to attach the participant’s separate assets because the suit is not for “appropriate equitable relief.” This ruling marks another attempt by the Court to further define appropriate equitable relief under Section 502(a)(3). The Court reversed the Eleventh Circuit Court’s decision and remanded the case so that the district court could determine whether Montanile had actually kept his settlement fund separate from his general assets or had dissipated the entire fund on non-traceable assets.

The Court found the basis for the plan administrator’s claim to be equitable because it had an equitable lien by agreement that attached to Montanile’s settlement fund when he obtained title to that fund. It also determined that the nature of the plan administrator’s underlying remedy would have been equitable had it sued immediately to enforce the lien against the fund in Montanile’s possession. However, the Court recognized that a defendant’s expenditure of an entire identifiable fund on non-traceable items destroys any equitable lien attached to that fund, leaving the plan administrator with only a legal remedy against the defendant’s general assets. This is not a permissible equitable remedy under ERISA.

The majority opinion noted the multiple delays of the plan administrator in pursuing its subrogation claim (i.e., suit was not commenced until six months after Montanile received the settlement proceeds), suggesting that the plan administrator was at fault for the plan’s failure to be made whole. While the decision puts pressure on plan sponsors to pursue subrogation claims as quickly as possible, the reality is that many of them will be unaware of settlement negotiations and agreements until well after the fact. As noted by Justice Ginsburg in her dissent, the decision could encourage participants to “escape that reimbursement obligation… by spending the settlement funds rapidly on non-traceable items.”

8 willistowerswatson.com

Plan sponsors should review plan documents to ensure they have reserved the right to recover from third-party settlements and that any existing subrogation provisions are appropriately drafted. The employer should have an administrative process in place for purposes of receiving notification of those situations in which a third party may be responsible, or investigating or tracking claims and for claiming reimbursements in a timely manner. They should review the summary plan descriptions (SPDs) distributed to plan participants to make sure that they clearly explain the plan’s reimbursement rights so as to put participants on notice of their obligations to repay the plan from any third-party recovery they receive. Plan sponsors, as plan fiduciaries, will need to protect the plan’s subrogation rights by enforcing the terms of the plan, closely monitoring those situations in which the plan pays expenses for personal injuries involving third parties and being prepared to respond immediately should there be a third-party settlement. Plan sponsors retaining the services of a third party to pursue subrogation cases on the plan’s behalf should take this opportunity to discuss this issue with the vendor to ensure the vendor is taking timely and appropriate steps to recover amounts owed to the plan.

Reminder: San Francisco’s HCSO annual reporting form due by April 30 San Francisco’s Health Care Security Ordinance (HCSO) requires that medium and large businesses make certain minimum contributions toward their San Francisco employees’ health care. Under this mandate, an employer may either contribute at least the minimum amount to a medical plan or other health benefits, or pay that amount into the public program established by the HCSO (additional information about the HCSO can be found here).

The HCSO requires covered employers to report on their health care expenditures by April 30 of each year. A copy of the 2015 Annual Reporting Form (ARF) is available on the Office of Labor Standards Enforcement’s (OLSE) website.

The 2015 HCSO ARF may require additional information from certain employers. Specifically, if an employer makes revocable contributions to an excepted benefits health reimbursement arrangement (an HRA that reimburses employees for services that qualify as excepted benefits such as dental and vision benefits) for more than an average of 20 hours per week for any of its covered employees, the OLSE will require that employer to provide aggregate information on allocations, reimbursements and “true-up” spending, if applicable.

Legal and Compliance – continued from page 7

9 HR Focus 2016

Webcasts

The programs listed above have been approved for 1 recertification credit through the HR Certification Institute. For more information about certification or recertification, please visit the HR Certification Institute homepage at www.hrci.org. The use of this seal is not an endorsement by HR Certification Institute of the quality of the program. It means that this program has met HR Certification Institute’s criteria to be pre-approved for recertification credit.

Willis is recognized by SHRM to offer Professional Development Credits (PDCs) for the SHRM-CPSM or SHRM-SCPSM. For more information about certification or recertification, please visit www.shrmcertification.org.

How to Navigate the Medical Leave of Absence Maze: Understanding Your FMLA and ADA Obligations Tuesday, April 19, 2016 2 p.m. ET

Marina Galatro, PHR-CA, SHRM-CP Senior Human Resources Consultant HR Partner Human Capital and Benefits

Dan Margolis, GPHR, PHR, SHRM-CP Senior Human Resources Consultant HR Partner Human Capital and Benefits

During this session, participants will:

� Learn the similarities and differences of FMLA and ADA

� Understand the interplay of FMLA and ADA

� Receive guidance on which law should be followed when they contradict each other

FMLA and ADA have similar legal requirements, yet they can contradict and confuse. Have you ever felt unsure about which law to comply with?

From leave requests, medical certifications, notice requirements, light duty obligations and more, getting the Family and Medical Leave Act (FMLA) and the American Disabilities Act (ADA) right can be challenging.

This session will discuss these complicated scenarios and highlight the similarities, differences and basic statutory obligations between the two laws — as well as offer guidance on which law takes precedence, or trumps, the other when one contradicts the other.

To RSVP, click here.

NOTE: An advance RSVP is required to participate in this call. Registration ends one hour prior to the call start time.

Expatriates and Your Global Workforce: How to Balance Compliance and Employee Needs Tuesday, May 17, 2016 2 p.m. ET

Erica Cordova Employee Benefits Attorney National Legal and Research Group Human Capital and Benefits

Thomas J. Dolan Senior Vice President Willis Global Solutions (Employee Benefits) Human Capital and Benefits

During this session, participants will learn:

� Strategies for successfully managing a global workforce

� Which U.S. regulations apply to global health plans

� Plan options available to meet the needs of a global workforce

For the past few decades, many companies have been adapting and transitioning to a workforce that represents our increasingly globalized economy. This has led to an increase in U.S. citizens working abroad, non-U.S. citizens working in the U.S., and non-U.S. citizens working abroad for U.S.-based companies. With the varying employee classifications, where do these individuals fit into the employee benefits regulatory scheme?

This webcast will include a detailed overview of legal compliance concerns for your global workforce, as well as a discussion of market trends and real-life examples of successfully managing a global workforce. Participants will gain an understanding of the different types of health plan offerings for your international employees, with which U.S. regulations these plans must comply and how to analyze compliance, and other unique issues that are presented by a global workforce that is often highly mobile and diverse.

To RSVP, click here.

NOTE: An advance RSVP is required to participate in this call. Registration ends one hour prior to the call start time.

10 willistowerswatson.com

New England

Auburn, ME 207 783 2211

Bangor, ME 207 942 4671

Boston, MA 617 437 6900

Burlington, VT 802 264 9536

Hartford, CT 860 756 7365

Manchester, NH 603 627 9583

Portland, ME 207 553 2131

Shelton, CT 203 924 2994

Northeast

Buffalo, NY 716 856 1100

Morristown, NJ 973 539 1923

Mt. Laurel, NJ 856 914 4600

New York, NY 212 915 8802

Stamford, CT 203 653 2430

Radnor, PA 610 254 7289

Wilmington, DE 302 397 0171

Atlantic

Baltimore, MD 410 584 7528

Knoxville, TN 865 588 8101

Memphis, TN 901 248 3103

Metro, DC 301 581 4262

Nashville, TN 615 872 3716

Norfolk, VA 757 628 2303

Reston, VA 703 435 7078

Richmond, VA 804 527 2343

Rockville, MD 301 692 3025

Southeast

Atlanta, GA 404 224 5000

Birmingham, AL 205 871 3300

Charlotte, NC 704 344 4856

Gainesville, FL 352 378 2511

Greenville, SC 864 232 9999

Jacksonville, FL 904 562 5552

Marietta, GA 770 425 6700

Miami, FL 305 421 6208

Mobile, AL 251 544 0212

Orlando, FL 407 562 2493

Raleigh, NC 704 344 4856

Savannah, GA 912 239 9047

Tallahassee, FL 850 385 3636

Tampa, FL 813 281 2095

Vero Beach, FL 772 469 2843

Midwest

Appleton, WI 800 236 3311

Chicago, IL 312 288 7700

Cleveland, OH 216 861 9100

Columbus, OH 614 326 4722

Detroit, MI 248 539 6600

Grand Rapids, MI 616 957 2020

Milwaukee, WI 262 780 3476

Minneapolis, MN 763 302 7131 763 302 7209

Moline, IL 309 764 9666

Overland Park, KS 913 339 0800

Pittsburgh, PA 412 645 8506

Schaumburg, IL 847 517 3469

South Central

Amarillo, TX 806 376 4761

Austin, TX 512 651 1660

Dallas, TX 972 715 2194 972 715 6272

Denver, CO 303 765 1564 303 773 1373

Houston, TX 713 625 1017 713 625 1082

McAllen, TX 956 682 9423

Mills, WY 307 266 6568

New Orleans, LA 504 581 6151

Oklahoma City, OK 405 232 0651

San Antonio, TX 210 979 7470

Wichita, KS 316 263 3211

Western

Fresno, CA 559 256 6212

Irvine, CA 949 885 1200

Las Vegas, NV 602 787 6235 602 787 6078

Los Angeles, CA 213 607 6300

Phoenix, AZ 602 787 6235 602 787 6078

Portland, OR 503 274 6224

Irvine, CA 949 885 1200

San Diego, CA 858 678 2000 858 678 2132

San Francisco, CA 415 291 1567

San Jose, CA 408 436 7000

Seattle, WA 800 456 1415

Key Contacts

11 willistowerswatson.com

About Willis Towers WatsonWillis Towers Watson (NASDAQ: WLTW) is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has 39,000 employees in more than 120 territories. We design and deliver solutions that manage risk, optimize benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals. Our unique perspective allows us to see the critical intersections between talent, assets and ideas — the dynamic formula that drives business performance. Together, we unlock potential. Learn more at willistowerswatson.com.

Copyright © 2016 Willis Towers Watson. All rights reserved.WTW-NA-2016-15472

willistowerswatson.com