From Girl Scout cookie drives to workplace birthday clubs, non-work fundraisers have become a part of many company cultures. Should management be concerned?

There are no simple answers to this question. Most employers want to encourage a family-friendly company culture, but employee (and supervisor) solicitations often have a way of spinning out of control. 

Left unchecked, onsite “selling” can go from a harmless activity to an unwelcomed one that causes tension and can actually hurt morale.

No-soliciting policy?

In one recent survey, 22% percent of employers said they have a policy against soliciting. In most cases, the policy limits the times and places (e.g., break rooms only) where employees can engage in the activity.

Some employers have created bulletin boards where workers can post their fundraisers for interested co-workers.  According to the survey, about one employer in 10 has banned unapproved fundraisers entirely.

Another thorny issue: In some cases, the one doing the selling is a supervisor or an executive, even if the company bans rank-and-file employees from doing it. 

Unfortunately, this leaves HR/benefits in a real tough position. How can you be expected to enforce a policy that managers themselves ignore? It sets you up to be the bad guy, and also shows employees that the powers-that-be either don’t take the policy seriously or don’t think they need to follow the same rules.

Office sports pools: Harmless or harmful?

Odds are pretty high (pun intended) that your employees and/or supervisors have an office football pool going right about now and/or a March Madness pool during the college basketball tournament. If not, they’ve probably worked somewhere in the past where such activities have had the tacit — or open — approval of the top brass.

Is that a good or bad thing for your company culture?

Never mind the fact that the pools are rarely used for “entertainment purposes only.” Although wagering in office pools (and fantasy sports leagues) is technically an illegal activity in some states, the laws are rarely — if ever — enforced. In most states, the typical $5 to $20 office pool is legal.

A bigger, more practical concern: presenteeism.

Easy to spot, hard to stop

If you were to take a random walk around your office and glance at people’s computer screens, chances are you’d find more than a few folks who have game reports open in one Window and their work in another. Want to guess which screen the employee pays more attention to? Yup.

One estimate says March Madness costs employers nationwide $1.7 billion each year in lost productivity. During that time of year, many employees (and supervisors) are paid to do little more than check on how the teams in their office pool are doing in the NCAA basketball tournament.

Truth be told, even if your organization bans office pools, many employees will sneak glances at the scores, anyway. But people are more open about goofing off — and spend longer doing it — when they participate in a pool at work. Many supervisors simply look the other way.

Morale builder?

The typical reason given for allowing office fund-raising solicitation or sports pools is that the activity boosts morale and employee bonding. In reality, the morale-building advantages depend on your company culture and the demographics of your workforce.

One survey found that 30% of professional and business service employees eagerly look forward to participating in an annual March Madness pool at work. On the flip side, only 13% of employees in the hospitality industry expressed interest in the activity.

Gender also comes into play. Roughly 24% of male employees said they’re likely to participate in an office pool, while 11% of women do.

Bottom line: Some workplaces wouldn’t miss such activities if they disappeared. In others, the long-term morale boost cancels out the short-term productivity hit.

If you are in business long enough, chances are that you’ll eventually be involved in at least one benefits-related legal dispute with an ex-employee.

The good news: There are ways to avoid common mistakes that get in the way of resolving disputes quickly. Even if you are sued, taking these three steps can keep things from going from bad to worse:

1. Focus on a narrow time period

Companies open the door for trouble when a poor-performing employee is given a raise or bonus – and then fired shortly thereafter.  Huge red flag: Employees who are terminated shortly after a dispute over paid leave or disability.

In many cases, the employers can’t fall back on a history of poor performance reviews. The problems are often more recent in nature.

Best practice: In performance reviews, supervisors should focus the documentation only on the time period the review covers – and not anything earlier. If an issue’s taken to court it may look like the employer’s retaliating against the employee for taking leave or claiming a disability.

2. Follow up promptly

It’s dangerous to terminate someone shortly after he or she has filed a complaint.  If an employee’s made a written or verbal complaint shortly before being fired, the employer is vulnerable to retaliation lawsuits.

Timing’s of the essence when it comes to following up on complaints. An investigation that’s started within a day or two of a complaint shows that the firm took the issue seriously.

3. Abide by plan documents

Sometimes the first time you’ll hear about a benefits or pay-related complaint is after the employ files a claim with the DOL or EEOC.

Emotions usually run high when this happens. But it’s crucial to follow to the letter the investigation and dispute-resolution procedures spelled out in your plan documents.  Failure to do so almost always puts the company in legal jeopardy.

The result is almost always a court case or an expensive settlement – even if the company was in the right. Reason: Under ERISA, the only thing that’s worse than deviating from plan documents is not having written dispute-resolution procedures at all.

Benefits and HR managers are used to handling accommodation requests for an array of medical issues. But handling mental health issues are especially tricky — and filled with legal pitfalls.

As employees have become more aware that mental health issues like depression and anxiety are considered medical conditions, accommodation requests have shot up dramatically. How far does your organization need to go to honor such requests?

As long as the employee’s anxiety can be documented medically and unless honoring the request would create extreme economic hardship for your organization, you must honor the request. It’s also crucial to look at the employee’s job description. The key issue to look at is whether the employee can still perform essential job functions.

Also, the employee may not need a permanent accommodation. Example: He or she has started taking a new type of anti-anxiety medication.

Courts have ruled that ADA permits employers to obtain enough information from employees’ mental health provider (psychiatrist, psychologist, licenced clinical social worker, etc.) to determine whether an accommodation is needed and, if so, for how long.

Keep in mind: The purpose of ADA is to provide equal – not preferential – treatment to employees with physical or mental disabilities.

Reasonable vs. unreasonable requests

Legally speaking, mental health conditions are protected under the Americans with Disabilities Act (ADA). That means your organization must honor any reasonable accommodation request tied to a mental health issue. But what’s considered reasonable and unreasonable?

A reasonable request would be something like, “I have an anxiety disorder and my therapist says that I need to limit my work travel.”

An unreasonable accommodation request: “My therapist says my boss is the cause of my depression. I need a new supervisor.”

Even if the accommodation request is unreasonable, you may still have additional legal obligations. In the example above,  you may have a discrimination – rather than accommodation – case on your hands.

Key question to answer: Did the supervisor single the employee out for abuse or ridicule due to his or her mental-health condition? 

MHPA compliance

The Mental Health Parity Act (MHPA) also protects employees in most organizations. MHPA requires that your annual or lifetime dollar limits on mental health benefits (including through your EAP) be no lower than the limits for medical benefits offered through your firm’s health plan.

Even so, you still have discretion regarding the extent and scope of the mental health benefits you offer to employees and their families. This includes sharing the cost of premiums, limits on numbers of visits or days of coverage, and requirements related to proving medical necessity.

Supervisor training is crucial

In many cases, supervisors’ level of education and training in handling the challenges of mental health issues is your best defense – or biggest risk – in avoiding lawsuits. Experts recommend making it a top priority to train supervisors to follow three basic rules:

• Refer employees to the EAP program. Don’t play amateur psychologist if you suspect an employee has a problem.
• Direct employees’ accommodation requests and benefits-related problems (e.g., scheduled therapist appointments clash with work schedule) to HR/Benefits, and
• Avoid making – and don’t tolerate – inappropriate jokes or comments at the affected employee’s expense.

The last issue may be a sore spot with supervisors. But it’s critical. Employers have lost or been forced to settle multi-million dollar mental health discrimination lawsuits because of someone’s “innocent joke.”

An estimated 14.5% of all employees are likely to take FMLA-eligible leave this year.

Here are four ways to ease the administrative burden and stay compliant with the new laws that took effect earlier this year.

1. Integrate your leave policies

A lot of FMLA headaches can be prevented by integrating your FMLA policy with your disability, workers’ comp and/or maternity policies.

Example: Reword your disability policies to say the firm may terminate an employee who takes more than  X amount of short- or long-term disability, including FMLA time.

This eliminates the chance of employees double-dipping from their leave pool.  Many firms already require employees to use up paid-time off (PTO) before moving on to FMLA. You’re in the clear to do so as long as you notify employees of this policy.

As an administrative time saver,  you may also want to overlap FMLA evaluations with your ADA policy. Here’s why: ADA issues often trigger FMLA eligibility.

Without retracing your steps, you can often evaluate an FMLA request and determine whether an employee  is entitled to ADA accommodations, including intermittent leave or a reduced work schedule.

The key: FMLA allows you to obtain medical certification that a serious medical condition requires time off work.  Just remember that FMLA itself isn’t an ADA accommodation, and a legit FMLA denial doesn’t automatically mean ADA won’t apply.

2. Adopt preliminary designations

Want to reduce the headaches of intermittent leave that occurs without prior notice? You may want to adopt preliminary FMLA designations.

These can be made when the employee requests leave but you have been unable to confirm the employee is eligible or you’re waiting for medical certification.

Once you get the necessary info, you can finalize the designation. If the employee fails to provide certification shortly after his or her return, the leave can legally be changed to an unexcused absence.

You may also want to create  an FMLA spreadsheet to track certifications and approvals of intermittent leave.

3. Use decision trees

FMLA decision trees are a great tool for determining eligibility on a case-by-case basis. And you don’t have to reinvent the wheel to design one. In particular, decision trees are  a great teaching tool for walking supervisors and employees through  the certification process.

An interactive decision tree –  where users answer yes or no to a series of questions and get an eligibility decision – is available here.

4. Design paperwork checklist

Distributing  paperwork checklists to workers requesting leave helps you meet your obligations and give employees everything they’ll need for approval.  The items:

• a healthcare provider statement indicating which part of the “serious health condition” definition applies to the case
• medical facts supporting it, including the approximate date the condition started, its probable duration and the probable length of the current need for leave
• a notation of whether intermittent or reduced time leave is required and the probable frequency, and
• the paperwork due date.

Best part: You only have to take this step once. It’s on the employee if he or she misses the deadline for providing medical certification.

A hidden risk that exists in every workplace: the risk of benefits-related identity theft.

Last year, suspected ID thefts in our country hit a record 79 million. Half to 70% of them happened in the workplace, according to a report by the Alexander Hamilton Institute.

Here are three steps to minimize the risk:

1. Spot vulnerable areas

Every company with 401(k)s, paid time off, flexible spending accounts, health reimbursement accounts and similar benefits is at risk.

That’s because benefits paperwork (and employee files in general) contain just about all the info any thief needs to steal someone’s identity:

• names and addresses
• Social Security numbers
• dates of birth
• bank account numbers, and/or
• personal identifying information about spouses and dependents.

Benefits theft comes in many different forms, and can be inside jobs or ones perpetrated by non-employees. Here are two common scenarios that demonstrate just how easily a theft can happen.

No. #1: theft from a reimbursement account. The theft happens when your company cuts a check for a seemingly legit claim. The check gets cashed – but not by the employee entitled to the money. Instead, it’s channeled to a payroll temp who accessed an employee’s information and forged the claim.

The most vulnerable victims are employees who either don’t know they’re entitled to certain benefits (e.g., paid time off buy-backs), or are unaware of how much they’re owed. Recently terminated employees are also prime victims.

No. 2: 401(k) theft.  If an employee’s online statement gets hacked into or his enrollment paperwork falls into the wrong hands, it takes only a few mouse clicks to wipe out the victim’s retirement savings. The scariest part: Victims of benefits-related ID theft often make out worse than those who fall prey to credit card or check card theft.

With those types of theft, victims need only call their card issuer or bank, report the crime and refuse to pay for an item. But 401(k) theft is much, much harder to resolve. That’s because 401(k)s rarely – if ever – come with automatic identity theft protection from the vendor.

Even if the theft is successfully resolved, the situation becomes an ERISA nightmare for plan sponsors. Your company must calculate and reimburse the lack of market growth of the employee’s account during the time the money was missing.

2. Raise awareness

Benefits ID theft is a risk upper management often overlooks until it’s too late. Same goes for employees. Best practice: Create a privacy policy that includes procedures for the safe handling of benefits information.

For management: Stress the need to limit access to employee data, both paper and electronic.

For employees: Focus on how workers can help protect themselves (e.g., logging off computers when they leave their desks).

3. Take proven safety measures

The following best practices significantly cut the benefits theft risk:

• Lock all personnel files. Use combination locks, if possible, because they’re harder to pick.
• Keep employees’ and managers’ signatures on file. If there’s a suspicious reimbursement check, the handwriting may need to be audited.
• Run reports of recently terminated employees. Best practice: Audit canceled benefits reimbursement checks cut in their names.
•  Consider direct deposit for benefits reimbursements as well as regular compensation. This is often safer than paper checks.
• Create an anonymous reporting system for suspected fraud, and
• Work with IT to safeguard your benefits intranet and/or passwords.

It’s easy to feel like your PBM holds all the power over you. In most cases, it does.

A landmark 2004 study compared what pharmacy benefits managers (PBMs) charge employers’ plans to what they actually pay pharmacies. Researchers found staggering overcharges – especially for generic drugs. Unfortunately, four years later, the situation has scarcely changed. All too often, PBMs improve their own bottom line at the expense of the plan sponsor’s.

Chances are, it’s your health insurance vendor – not yourself – who contracts with the PBM to administer the prescription drug portion of your health benefits. So how can you feel confident your firm is getting the best value and service? Start by asking your health-plan broker these four questions about the current or prospective PBM.

1. How does the PBM calculate price?

Many PBMs gain hidden profits off your plan through a practice called “differential pricing,” says consultant Gerry Purcell. In other words, the PBM pays one price to drug retailers and then sets a lesser discount off the average wholesale price (AWP) for your company’s plan. Example:

• the PBM pays the drugstore the AWP minus 18%
• your plan and employees pay AWP minus 15% for meds, and
• the PBM pockets the difference.

Now for some good news. You do have some leverage in this area. If your drug plan is covered under the ERISA umbrella, the PBM must disclose this info. Ideally, you’ll find the rates are the same on both contracts. But if there’s differential pricing, insist your firm get the full discount.

2. What’s the PMPM?

One key cost figure PBMs can’t manipulate is the per-member-per-month (PMPM) cost of your plan. This number will show if your plan’s costs actually increased or decreased. The PMPM is calculated by dividing the total costs spent by the number of employees enrolled in the drug plan.

It’s also a great tool for comparing different PBMs to see which is the most cost-efficient for the size of your organization, says Peter Reed of Managed Benefits Strategies.

3. Can we get rebates, too?

Some PBMs receive money from drug companies that your brokers won’t tell you about – but may be able to leverage to your plan’s advantage. Example: Many PBMs get rebate checks from drug companies (typically 50 cents to $1.25 per claim) for helping increase the sales of their products.

If you push hard enough for it, your broker may able to work an arrangement where you either:

• split rebates from your plan evenly, or
• let the PBM keep the entire rebate in exchange for a price break on administrative fees.

Important: Ask to find out all the payment types the PBM gets from the drug firms. Rebates are often couched in the form of grants or classified as access fees or formulary fees.

4. How do changes in the formulary work?

In most states, PBMs can change your plan’s list of approved medications without prior notice.
The problem: PBMs often make mid-year switches that save them money, but may not save your organization or employees a dime.

Example: If the PBM adopts a mail-order-only coverage policy on a certain formulary drug, an employee who needs same-day access to the medication may be forced to pay full price for it at a pharmacy. Meanwhile, your plan is still charged the formulary price.To avoid such unpleasant surprises, insist the PBM give written notice of formulary changes, including the addition of new generics.

In tough economic times, how do you talk to employees honestly about the state of company benefits plans and finance?

More specifically, what is and isn’t appropriate to share? Here are four proven suggestions for breaking unpleasant news to employees.

1. Fill in the blanks before they do

If you’ve haven’t already done so, it’s worth your company’s while to schedule a state-of-benefits meeting to go over your plans with employees, says consultant Anita Campbell.

One of the biggest mistakes many employers make during lean times is to fail to explain the rationale for passing along additional benefits costs to workers or freeze salaries.

In the absence of information, employees will make up their own stories. The longer management stays silent, the more people believe things they hear in the rumor mill. In smaller organizations, employees are usually closer to what’s going on in the business.

That’s because there are fewer departments and layers of management. Even so, chances are that they don’t understand how the firm’s benefits and compensation expenses weigh into company finance.

Example: You know the additional few dollars a month employees pay toward their health premiums can help avert potential layoffs. But employees may not. Once people see the bigger picture, they can usually accept the need for benefits cuts or salary freezes.

2. Own up to uncertainty

What happens when you talk about a serious issue with family or friends?
They ask questions. You try to answer them, but you probably don’t have answers for every question.

The same thing goes for talking to employees about their benefits and compensation. You can’t possibly know what will happen in the next plan year. It’s OK to admit it.

It’s also important not to make promises you may not be able to keep, such as “The freeze in 401(k) matches will only be for this year.” Simply letting employees talk and ask questions helps them feel better.

In many cases ,you can shoot down false rumors (“We heard the next step the company is taking is to cut health coverage for our kids”). Just as importantly, hearing your employees’ questions lets you know which issues are important to them.

That goes a long way in helping upper management set budgeting priorities as the situation improves.

3. Show confidence

No company wants to make it  seem to employees like the sky is falling, which is why many firms  avoid telling employees bad news.

But there are proven ways to convey the information and admit you don’t have all the answers, yet still reassure folks the problems are being dealt with.

The best way to deal with your own emotions is to know what you plan to say in advance.  Your behavior in the meeting will go a long way toward how employees will feel when they leave.

4. Invite suggestions

Ultimately, you may want to invite employees to become part of
the solution to your company’s situation during tough times.

Example: Offer an incentive for suggesting useful ideas for cost savings or increased productivity.

A non-profit organization in Tennessee recently started a PTO-sharing program at the suggestion of employees concerned about cutbacks in leave benefits. The result has been a jump in morale and closer ties between management and employees.

Coordinating benefits: It’s one of the easiest areas to mess up, and one of the of costliest to correct after the fact.

If an employee or dependent is eligible to collect benefits from two or more plans (e.g., your disability plan and one from a spouse’s employer), which plan pays first?

Answer: It depends on what’s written in the plan document. Usually, if a plan contains no coordination-of-benefits provision, it’s expected to pay first.

Who goes first?

Most benefit plan documents contain some sort of coordination-of-benefits procedures. Even so, there are common loopholes to watch out for.

Three hot spots to check:

• Double-check to be sure that your benefit plan documents require any outside plans to attach the original Explanation of Benefits from the primary payer when your company’s plan is balanced billed for a claim
• Make sure there’s a statement that says only the amount actually paid by each plan will be charged against the maximum benefit, and
• Be sure there’s an order of benefits determination that spells out which plan pays first for an employee’s child if the worker is divorced from his or her spouse.

Likewise, if your firm offers domestic partner coverage, make sure there’s a coordination-of-benefits statement for dependent and non-dependent partners.

Heavy cost of mistakes

Coordination-of-benefits errors can easily run up your premiums if left unchecked.

In one extreme example, a Fortune 500 company’s health plan wound up paying a needless $5 million worth of claims that should’ve been paid in full or in part by other plans.

When you include indirect costs such as added administrative time, late payment interest and additional TPA contact call center expenses, the final cost was closer to $12 million.

Best practices

Even if you’re unaware of a coordination-of-benefits problem with any of your plans, it pays to do  a periodic self-audit. Three steps:

• Gather all payment schedule materials related to your plans into a binder, including renewal letters from vendors
• Check the plan document against the payment schedule used by Payroll or your TPA, and
• Update any outdated schedules or benefit descriptions.

Reminder: If you don’t have a formal plan document, your contract with the vendor legally serves as the “control document” for the plan.

It’s not enough to make sure your education and job-training benefits are available to employees of all ages, ethnic groups and pay levels.

Your company also has to make sure the training itself gives everyone the same chance for success upon its completion. If not, you can be held liable for discrimination.

In one recent case, a Texas-based restaurant industry employer was cited by the EEOC for disproportionately hiring and promoting women from its bartender training program.

Believing that women would sell more drinks than men, the bar’s policy was to hire eight women for every two males, even when male trainees outperformed some of their female counterparts in training.

The employer had to pay $1 million to resolve the discrimination case.

In another case (Cross v. New York Transit Authority), an employee who performed poorly in a cross-training program convinced a court the program was biased against older employees. 

After a few sessions, the training supervisor sent the woman back to her regular department. He said the trainee couldn’t keep up with the most basic of assignments, so there was no point moving on to tougher tasks.

Because the employee didn’t complete the training program, she wasn’t paid for the time away from her usual position. She sued for age discrimination.

In her suit, the employee admitted she had trouble with the work assigned in the training program. But she claimed the supervisor set her up to fail. As proof, she pointed out the fact the other, younger trainees got to work on better equipment. The others received training manuals – she didn’t.

Finally, she said the training supervisor was supportive of other trainees and allowed them to learn at their own pace. But she was ridiculed when she made the same mistakes.

The court agreed with the employee. In his decision, the judge said the training program was unfair to its older participants.

The judge said it was possible the older employee simply wasn’t cut out for the work. But the supervisor didn’t give her a fair chance to prove herself.

Two keys to staying protected

If your firm has similar programs, remind supervisors it’s crucial to:

• make it results-oriented but provide all trainees with the same training materials and review process, and
• offer people guidance if they find the work confusing at the beginning.

Does your company offer employees paid sick leave or a paid time off bank? If not, you may be forced to in the near future.

The House of Representatives recently discussed a bill known as the Healthy Families Act (HFA) that would require paid sick leave as a benefit.  It’s likely to come to a vote in the spring.

The act would cover any physical or mental illness, injury, or medical condition. The leave would be legally protected — meaning employees could sue if the company discriminated against people who take time off.

In its current form, HFA would make it mandatory for all employers with 15 or more employees to provide at least seven paid sick days a year to FTEs. Part-time employees would get a prorated amount based on the number of hours they work.

HFA would not apply only to employees’ illnesses. Much like FMLA, it would also allow employees to tend to a sick  family member. 

As currently written,  HFA  defines “family member”  to include any blood relative or anyone whose relationship with the employee is “the equivalent of a family relationship” (e.g., a domestic partner).

What if you already offer paid sick time?

If HFA passes, many employers won’t need to make any changes to their sick-time policies. That’s assuming the company already gives its employees paid sick leave at least equivalent to the HFA seven-day minimum.

It’s unknown at present what the passage of the bill would mean for companies with PTO banks. This will have to be clarified in the final version of the bill.  It’s possible that employers would be required to add seven provisional days to the existing bank to be used exclusively for sicknesses.

The bill would prohibit companies from reducing existing paid vacation or PTO time to offset the costs of complying with the mandatory sick days.  

Fierce lobbying is expected on both sides of the bill, and passage is far from a certainty.