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  • 15 Nov 2021 11:38 AM | Bill Brewer (Administrator)

    Souped-up 401(k) leads KPMG's efforts to hire and keep workers | Fox Business

    KPMG replaces 401(k) match with a single, automatic firm-funded contribution

    By Suzanne O'Halloran 

    Accounting giant KPMG is aiming to stay one step ahead of the drum-tight job market by rewarding current employees and hopefully luring new ones with enhanced benefits including a modern-day 401(k) plan.

    In what is believed to be the first, the firm will replace the traditional match with an automatic funded contribution that is equal to as much as 8% of an employee’s salary.

    "You used to have to put a matching contribution into your own 401(k), and you can still contribute to your own 401(k) as you are permitted by law, but you no longer have to put a matching contribution. Instead we’re going to make an automatic contribution on your behalf that you will be able to enjoy in the future," KPMG CEO Paul Knopp told FOX Business. "We’re giving our employees more flexibility, more security for their financial future and a lot more ability to spend time with their families" for key life events.

    Other benefits recently upgraded include cutting employee health care premiums by 10% in 2022, while keeping benefits the same, and three weeks of additional paid caregiver leave, separate from paid time off, to name a few. 

    KPMG, like many other companies, is finding it challenging to hire workers with job openings at near-record levels. 

    On Friday, the U.S. economy reported it added 531,000 workers last month, up from 194,000 in September. While hiring is improving, there are still a near-record 10.4 million job openings. 

    "We are really trying to hire right now. We are hiring in record numbers" Knopp added, citing digital businesses, including cyber, audit and tax. 

    The firm, which has 35,000 U.S. employees, is aiming to hire 2,500 experienced professionals, 1,300 full-time campus hires and 1,200 interns domestically. 

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    Source: FOXBusiness

    https://www.foxbusiness.com/markets/401k-match-kpmg-taxes-benefits-jobs-hire-workers

  • 15 Nov 2021 11:33 AM | Bill Brewer (Administrator)

    picture of two envelopes saying &quot;good news&quot; and &quot;bad news&quot;

    Workers will be happy to know that they can contribute more to their 401(k) accounts next year, but IRA owners may be a little disappointed.

    by: Rocky Mengle  |  November 4, 2021 

    There's good news and bad news from the IRS for Americans saving for retirement with IRAs, 401(k)s, and other retirement accounts in 2022.

    Let's start with the bad news: IRA Contribution limits won't go up next year. For anyone saving for retirement with a traditional or Roth IRA, the 2022 limit on annual contributions to their account remains unchanged at $6,000. It's been stuck at this same amount since 2019. The additional IRA "catch-up" contribution for people 50 and over is not subject to an annual cost-of-living adjustment and stays at $1,000, too.

    And now the good news: Workers who are saving for retirement with 401(k), 403(b), most 457 plans, and the federal government's Thrift Savings Plan can contribute up to $20,500 to those plans in 2022. That's a $1,000 increase over the contribution limits in place for 2020 and 2021. The "catch-up" contribution limit for employees age 50 or older who participate in these plans holds steady in 2022 at $6,500, though.

    The contribution limit for a SIMPLE IRA, which is a retirement plan designed for small businesses with 100 or fewer employees, is also increased for 2022. It jumps from $13,500 to $14,000 next year. But, as with 401(k) plans, the catch-up contribution limit for workers at least 50 years old who participate in a SIMPLE plan stays put at $3,000.

    Income Ranges for 2022

    There's more good news! Increased income ranges for the traditional IRA deduction, Roth IRA contributions, and the Saver's Credit means more Americans will qualify for these tax breaks.

    If you're contributing to a traditional IRA, the deduction allowed for your contribution is gradually phased-out if your income is above a certain amount. For 2022, the phase-out ranges are:
    • $68,000 to $78,000 for a single person covered by a workplace retirement plan (up from $66,000 to $76,000 in 2021);
    • $109,000 to $129,000 for a married couple filing jointly if the spouse making the IRA contribution is covered by a workplace retirement plan (up from $105,000 to $125,000 in 2021);
    • $204,000 and $214,000 for a married couple if the spouse contributing to an IRA is not covered by a workplace retirement plan and the other spouse is covered (up from $198,000 and $208,000 in 2021); and
    • $0 to $10,000 for a married person filing a separate return who is covered by a workplace retirement plan (the same as 2021 because this range is not subject to an annual cost-of-living adjustment).

    For people saving for retirement with a Roth IRA, the actual amount that you can contribute to the account is based on your income. To be eligible to contribute the maximum for 2022, your modified adjusted gross income must be less than $129,000 if single or $204,000 if married and filing jointly (up from $125,000 and $198,000, respectively, for 2021). Contributions begin to be phased out above those amounts, and you won't be able to put any money into a Roth IRA in 2022 once your income reaches $144,000 if single or $214,000 if married and filing jointly ($140,000 and $208,000 for 2021). The phase-out range for a married person filing a separate return who contributes to a Roth IRA is not adjusted annual for inflation and remains $0 to $10,000 for 2022.

    Finally, the 2022 income limit for the Saver's Credit for low- and middle-income workers is $68,000 for joint filers ($66,000 in 2021), $51,000 for head-of-household filers ($49,500 in 2021), and $34,000 for singles filers and married people filing a separate tax return ($33,000 in 2021).

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    Source: Kiplinger 

    https://www.kiplinger.com/retirement/retirement-plans/603711/2022-ira-and-401k-contribution-limits 

  • 28 Oct 2021 12:21 PM | Bill Brewer (Administrator)

    Published Oct. 19, 2021 | Zachary Phillips

    Workers brought a class action suit against one of Pennsylvania's largest road builders after the contractor pleaded no contest to charges from the state attorney general.

    The legal battles continue for Glenn O. Hawbaker.

    For the second time in six months, the Pennsylvania road builder faces litigation, this time in a class action lawsuit.

    In addition, the state DOT is pushing for Hawbaker to be suspended from public work for three years, the AP reported. The case has been delayed after a court ruled to give Hawbaker more time to build a legal response, reported WJAC 6, a local NBC affiliate. Hawbaker received estimated payments worth $1.7 billion from the state as of 2021, making it one of the largest public works contractors in Pennsylvania. 

    In a lawsuit filed last week, three employees of the contractor accused Hawbaker of violating the Employee Retirement Income Security Act. Instead of placing the prevailing wage workers' retirement funds into the 401(k) account of those who earned it, Hawbaker used the funds to pay for all employee, executive and owner retirement savings, attorney Mike Donavan wrote in the lawsuit, according to the Centre Daily Times.

    This resulted in prevailing wage workers being short-changed in their profit-sharing and retirement saving accounts.

    The lawsuit follows on the heels of allegations made in April by Pennsylvania Attorney General Josh Shapiro, who charged Hawbaker with stealing $20 million from employees in the largest wage theft case on record. 

    After a three-year investigation, Hawbaker was charged with four counts of theft relating to violations of the Pennsylvania Prevailing Wage Act and the federal Davis-Bacon Act. Investigators reviewed Hawbaker's accounting records and found that, between 2015 and 2018, the contractor stole nearly $20.7 million of prevailing wage workers' fringe benefit money.

    As a contractor receiving large amounts of funding from the state and federal governments, Hawbaker must pay wage rates determined by government agencies — though a portion of those wages can be provided via fringe benefits.

    Same issue, new case

    Hawbaker stole wages, according to investigators, by using money marked for just prevailing wage workers' retirement funds and health and welfare benefits to contribute to all workers retirement funds — including owners and executives — and subsidize the cost of a self-funded health insurance plan to cover all employees. 

    In August, Hawbaker pleaded no contest — meaning the defendant does not plead guilty, but accepts conviction or sentencing as though it did — and agreed to pay more than $20 million to nearly 1,300 workers in restitution. Additionally, the company faces five years of probation, and must have a corporate monitor of their practices.

    While the attorney general's investigation determined that the contractor's scheme had lasted decades, it could only be charged for the last five years due to the statute of limitations.

    With this more recent case by previous employees, Hawbaker could be liable for practices as far back as September 2012. As with the no contest plea, Hawbaker has denied wrongdoing, claiming that state and federal regulators had reviewed its practices for years.

    "Throughout this process, Hawbaker has fully cooperated because we always believed we were following all laws," Hawbaker said in a statement shared with Construction Dive. "We will vigorously defend any of these allegations."

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    Source: HR Dive

    https://www.hrdive.com/news/glenn-hawbaker-faces-lawsuit-employee-wage-violations-theft-Pennsylvania/608825/

  • 22 Oct 2021 12:02 PM | Bill Brewer (Administrator)


    The Amazon headquarters sits virtually empty on March 10, 2020 in downtown Seattle, Washington. In response to the coronavirus outbreak, Amazon recommended all employees in its Seattle office to work from home, leaving much of downtown nearly void of people.

    PUBLISHED MON, OCT 11 2021 .... Annie Palmer

    Amazon is giving its employees more flexibility to work from home even after its offices begin to reopen next year.

    In a memo to employees Monday, Amazon CEO Andy Jassy said the company will leave it up to individual team directors to decide how often their employees work in the office.

    “We expect that there will be teams that continue working mostly remotely, others that will work some combination of remotely and in the office, and still others that will decide customers are best served having the team work mostly in the office,” Jassy wrote. “We’re intentionally not prescribing how many days or which days — this is for Directors to determine with their senior leaders and teams.”

    Amazon declined to say how many people it employs at the director level.

    The move marks a shift from Amazon’s earlier return-to-work plans, which said it expected most corporate employees to return to the office beginning Jan. 3, 2022. Amazon had set a baseline of three days a week in the office, leaving employees the option to work remotely up to two days a week.

    Jassy said Amazon found it couldn’t prescribe a “one-size-fits-all approach” to work at the company’s scale. Amazon now has 1.3 million employees worldwide, with hundreds of thousands of those in corporate roles.

    As part of the policy change, Amazon will also give corporate employees the option to work up to four weeks per year fully remotely from any location within the country they’re employed.

    While Amazon is giving employees greater leeway on reporting to the office, Jassy said most employees will be expected to remain close enough to their team “that they can easily travel to the office for a meeting within a day’s notice.”

    Other tech giants have also embraced remote work. Microsoft in September indefinitely postponed its return to the office, while Facebook and Google expect a portion of their employees to continue to work from home if their jobs can be done remotely.

    Twitter even told its employees last year they can work from home “forever” if they choose to.

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    Source: CNBC

    https://www.cnbc.com/2021/10/11/amazon-to-let-managers-decide-how-often-employees-come-into-the-office.html

  • 22 Oct 2021 11:54 AM | Bill Brewer (Administrator)

    McDonalds-unit-shot.jpg

    Adjustments in 2022 will result in comparable pay among all company employees

    Bret Thorn | Oct 19, 2021

    McDonald’s has essentially achieved equal pay for women and other historically underrepresented groups across company-owned restaurant and corporate employees in the United States, the company announced Tuesday.

    Chicago-based McDonald’s said it employs more than 180,000 people, that employees of all genders now receive equal pay for comparable work at all company-owned restaurants, and that women are paid 99.16% of men for comparable work among corporate staff in the United States. Globally that figure is 99.85%.

    A McDonald’s representative said the U.S. figure would reach 100% once adjustments are made during next year’s “compensation cycle.”

    That announcement came after working with pay analysis expert Mercer to conduct a study of corporate staff and company-owned restaurants globally.

    Around 7% of McDonald’s approximately 39,000 locations worldwide are company-owned, the representative said.

    The announcement was made in a letter to the global McDonald’s system from global chief people officer Heidi Capozzi.

    “Making McDonald’s an inclusive brand is a core value because it isn’t just the responsibility of one person or one team. It depends on all of us,” Capozzi said. “Over the past 18 months, we’ve worked together to create a future where equality, fairness and opportunity aren’t just goals, but the lived experience of every single person in our communities.”

    Earlier this year, McDonald’s said it was tying senior leader compensation in part to goals it set for developing a more diverse leadership team. Those goals include having 35% of positions of senior director and above filled by people of underrepresented groups, such as women and people of color, by 2025. It set a goal of having at least 45% of those roles filled by women by 2025 and 50% by 2030.

    McDonald’s said it would continue to conduct a global pay analysis annually.

    “We recognize that to realize our aspiration [of equal pay] we must also keep actively attacking the systemic biases that negatively impact women and people with other marginalized identities,” Capozzi said in the letter. “We’ll do this by continuing to hire, promote, and retain diverse, world-class talent; by offering the most competitive learning and development programming among our peers; and by creating formal mentoring and sponsorship programs to accelerate success in our workforce. McDonald’s has also joined the Catalyst Gender and Diversity KPI Alliance, a group of DEI advocates, corporations, academics, and trade organizations that support the adoption and use of a set of key performance indicators to measure gender and diversity in their organizations.”

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    Source: Nation's Restaurant News 

    https://www.nrn.com/quick-service/mcdonald-s-achieves-equal-pay-women-and-other-underrepresented-groups-corporate

  • 15 Sep 2021 8:23 AM | Bill Brewer (Administrator)

    Welcome to OFCCP! | Broadbean US

    On September 1, 2021, the Office of Federal Contract Compliance Programs (OFCCP), the Department of Labor sub-agency charged with enforcing affirmative action and non-discrimination requirements imposed on federal contractors by way of Executive Order 11246, announced that it was reversing its prior position regarding the use of EEO-1 compensation data collected by the Equal Employment Opportunity Commission for calendar years 2018 and 2019 (the so-called “Component 2”).1

    Specifically, OFCCP announced that effective immediately, it is rescinding its prior policy under which the agency would not “request, accept, or use EEO-1 Component 2 data.”  The prior policy was based on OFCCP’s belief that it would not find significant utility in the data, “given limited resources and [the data’s] aggregated nature.”  

    Reversing course, OFCCP now indicates that it has determined that the prior non-use policy was “premature and counter to the agency’s interests in ensuring pay equity.” The agency claims that its prior decision to not use Component 2 data was premature because, at that time, OFCCP had little information about the response rate of the collection, how the data was submitted and assembled, or the completeness of the data. Nor did the agency have the opportunity to review and analyze the data.

    OFCCP’s announcement states that it will use information gathered in the prior Component 2 data collection to assess its utility for providing insight into pay disparities across industries and occupations, with the stated purpose of “strengthening Federal efforts to combat pay discrimination.”  Specifically, the agency indicates that it will evaluate the data’s utility, “because the joint collection and analysis of compensation data could improve OFCCP’s ability to efficiently and effectively investigate potential pay discrimination.”  OFCCP’s position is that compensation data, in conjunction with other available information, such as labor market survey data, could help OFCCP identify neutral criteria to select contractors for compliance evaluations.

    Given the aggregated nature of the data, it is likely to be of limited use in proving pay discrimination, which usually involves a very close examination of the work and compensation of a specific individual vis-à-vis others.  That said, OFCCP’s 180-degree turn provides yet another example of the aggressive stance the Biden administration has taken (and is expected to continue to take) with respect to issues of pay equity, and its willingness to use the carrot of federal contracting to regulate private-sector employers that do business with the federal government.

    Possibly the most significant consequence of this decision is that it may have the potential to expose contractor pay data to public disclosure through FOIA requests.  While an individual employer’s Component 2 data that has been provided to the EEOC is clearly protected from further disclosure by the EEOC, the FOIA protections that apply to EEO-1 data that is in OFCCP’s possession has been a subject of prior litigation.  

    Littler’s WPI will apprise of relevant developments as they occur.

     

    Footnotes

    1 By way of background, in 2016 the EEOC published a final rule requiring employers to report certain compensation data of their workforce sorted by race, sex, ethnicity, salary range, and job category.  In 2017, the agency announced that it was suspending this effort and would not move forward with this collection.  Ultimately, a federal district court ruled that the agency’s suspension of the collection was unlawful, and required the EEOC to collect pay data for calendar years 2018 and 2019.  That collection was completed in early 2020.

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    Source: JD Supra

    https://www.jdsupra.com/legalnews/ofccp-reverses-course-will-use-eeo-1-8971089/

  • 14 Sep 2021 11:06 AM | Bill Brewer (Administrator)

    Published Sept. 14, 2021 by Ryan Golden 

    Dive Brief:

    • The U.S. Department of Labor's Office of Federal Contract Compliance Programs rescinded Sept. 2 a Trump administration notice that it did not intend to request, accept or utilize pay data collected under Component 2 of EEO-1 forms.
    • In November 2019, OFCCP announced that it would not request, accept or use Component 2 data collected as part of EEO-1 forms for the 2017 and 2018 calendar years. In its Sept. 2 update, however, OFCCP did note that it had "previously expressed interest" in collecting summary compensation data ultimately by collaborating with the U.S. Equal Employment Opportunity Commission as part of the EEO-1 filing process.
    • "Upon further consideration, OFCCP believes the position taken by the agency in the November 2019 notice was premature and counter to the agency's interests in ensuring pay equity," the agency said. OFCCP added it plans to examine Component 2 data because analyzing that data, in conjunction with other inputs, "could help OFCCP identify neutral criteria to select contractors for compliance evaluations."

    Dive Insight:

    The change is, in part, a reflection of the differing views of the OFCCP under the Trump and Biden administrations, respectively. In 2019, the agency disputed whether pay data collected via Component 2 would be useful; it said the data was collected in a "highly aggregated format" that "is not collected at a level of detail that would enable OFCCP to make comparisons among similarly situated employees as required by the Title VII standards that OFCCP applies in administering and enforcing Executive Order 11246."

    OFCCP's reversal also has to be understood within the context of EEO-1 Component 2, an initiative that has experienced its own share of see-saw activity during the past four years. After a lengthy series of court battles required EEOC to institute pay data collection for 2017 and 2018, the agency ultimately declined to renew Component 2 for future years. 

    Under recently appointed Chair Charlotte Burrows, however, EEOC has indicated it will continue to pursue methods for examining pay equity in U.S companies. The agency last year announced it was considering a rulemaking to include a new pay data reporting requirement to be published by October 2021. Per its filing with the Office of Information and Regulatory Affairs, that effort is still in the prerule stage.

    Both Burrows and the Biden administration at large have said they aim to address pay equity in the future. In 2019, while a commissioner at EEOC, Burrows told an audience during a conference session that she felt EEO-1 Component 2 was "very useful" to EEOC. But the Commission's majority-Republican composition may oppose efforts to reinstate the requirement. Former chair and current commissioner Janet Dhillon, a Trump administration appointee, previously expressed concerns about Component 2.

    EEOC's first pay data report, based on 2017 and 2018 Component 2 data, is scheduled to be published on Dec. 31, 2021, according to an agency announcement in July 2020.

    Meanwhile, employers also may need to pay attention to state and local developments on pay data collection. California instituted a pay data reporting requirement for all employers in the state that are required to file EEO-1 reports. California employers were required to report pay data to the state's Department of Fair Employment and Housing by March 31.

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    Source: HR Dive

    https://www.hrdive.com/news/ofccp-reopens-door-to-request-employers-reported-pay-data/606556/

  • 14 Sep 2021 11:02 AM | Bill Brewer (Administrator)

    As Eldercare Funding Debate Rages, Workers Tell Homethrive They Need Employer Support | Business Wire

    If not now when? The pressures on today’s workforce have never been greater. Healthcare, finances, work, children, aging loved ones; it is all a balancing act. If just one piece of that intricate puzzle falls out of place, things can go poorly.

    We've seen this; we know this.  We hear about it on the news. We hear our friends and colleagues tell stories. We see women, and men, leave the workforce much earlier than expected because the precarious juggling act is too much.

    What kind of impact does caring for an aging loved one have on working adults? Are employers supportive? Do employees get the help they need? We asked these questions in the Homethrive 2021 Employee Caregiving Survey to find the answers.

    Survey at a Glance

    The Homethrive 2021 Employee Caregiving Survey was conducted  via a third-party survey provider from June 28 - July 21, 2021. Two hundred adults in the U.S., who work outside the home while also providing support for an aging loved one, were surveyed about how those caregiving responsibilities impact their employment. Respondents were from a variety of companies and industries, make at least $50,000 per year, and currently support at least one aging loved one. The survey pool was 64% female and 36% male.

    • 43% of respondents are distracted, worried, or focused on caregiving — and not their jobs — 5 or more hours per week, while 20% are distracted at work more than 9 hours per week
    • More than half of respondents indicated their supervisors were not as supportive as they needed them to be about their outside-of-work caregiving responsibilities
    • One third of respondents said that because of their caregiving responsibilities outside of work, their supervisor had noticed a change in their work habits either because it was impacting their job performance or because they were noticeably under stress
    • Despite the growing need for employee benefits that support caregivers, 79% of employers are not yet offering them or are not communicating about such benefits
    • The vast majority (84%) of respondents were receptive to the idea of their employer offering a benefit that provided them with resources, guidance, or support for caregiving

    To continue reading, please go to: 

    https://info.homethrive.com/2021employeecaregivingsurveyreport 

  • 31 Aug 2021 8:20 AM | Bill Brewer (Administrator)


    By Joanna Kim-Brunetti | August 31, 2021

    The Canada Pay Equity Act goes into effect today, August 31, 2021, marking the official commencement of a major international move to advance workplace equality.

    The Act has been highly anticipated since its original passage in 2018. Now that the law is in full force, affected employers must develop and implement pay equity plans that address systemic gender-based discrimination in their workplaces.

    We’ve previously taken a deeper dive into examining the Act and its requirements. Below we’ve outlined a recap on the law and how it may signal potential legislative changes in the U.S..

    The Canada Pay Equity Act in a nutshell

    The Canada Pay Equity Act applies to federally regulated employers in public and private sectors with 10 or more employees.

    An integral piece of the Act requires that employers draft and post pay equity plans for the purpose of identifying and resolving gender wage gaps. The plans must follow a strict set of criteria, which obliges organizations to: identify job classes; determine if gender predominance exists in those job classes; evaluate work; calculate compensation; and compare compensation.

    Upon completion of the above tasks, employers must increase compensation for the predominantly female job classes that are comparatively underpaid within three to five years of the law’s effective date.

    As further means of accountability, employers must also provide employees an opportunity to comment on draft plans and take that feedback into consideration. They have three years to implement their plans.

    Employers with 100 or more employees (and employers with 10 to 99 employees if some or all employees are unionized)  must also establish a representative pay equity committee. The committee is responsible for developing the pay equity plan, as well as reviewing and updating it every five years.

    Employers that do not comply with the Act are subject to penalties. Violations could cost an organization between $30,000 to $50,000, as imposed by the Canada Pay Equity Commissioner.

    Pay equity trend picks up speed, at home and abroad

    Canada’s pay equity law may be a breakthrough in today’s world, but such legislation is shaping up to be standard in the world of tomorrow. As other recent efforts in the U.S. and abroad show, the workplace equality trend isn’t going away any time soon – in fact, it’s picking up speed. Rhode Island and Colorado are among the wave of states working to close the gender and racial pay gap. The issue has even made its way to Congress, which contemplated the idea of passing federal pay equity legislation last spring.

    The Canada Pay Equity Act’s continuous improvement model and a societal shift toward progress are examples that performative measures won’t be enough for organizations when it comes to confronting systemic discrimination. Change must be authentic and forward moving. Ongoing accountability and maintenance are critical factors in advancing effective diversity, equity, and inclusion (DEI) goals.

    Employers can get ahead of the curve by implementing a pay equity program within their organizations and conducting a pay equity audit. Ongoing pay equity analytics and DEI monitoring are key features of our PayParity solution, which provides DEI consulting services and pay equity software employers need to be proactive. PayParity addresses pay disparities at the intersection of race and gender, allowing employers to narrow in on the root-causes for perpetuating wage discrimination. 

    To learn more about how to meet your organization’s DEI goals, download our white paper Designing a Successful Pay Equity for Your Organization.

    Organizations looking to disclose pay equity, diversity, and inclusion data information should do so within an ESG reporting framework. Download our white paper, DEI in ESG Reporting to learn about the different standards you can leverage for sharing your progress.

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    Source: Trusaic

    https://trusaic.com/blog/canada-pay-equity-act-takes-effect-today/?utm_campaign=IW&utm_medium=email&_hsenc=p2ANqtz-87wm5S4p4aZXYAXbbivrf9-KzYE6k7D8b6CxmPLaHl8ryoHHCare3qKX2LsH4LlzWSX4LPA9w9f18Wpv_gnKrWpNGZRJYGrauHAwcsjioARnYDIig&_hsmi=154271496&utm_content=154271496&utm_source=hs_email&hsCtaTracking=9156a467-9829-4e4e-915c-e959096ba2d7%7C99b23ad3-f39c-42f4-8d15-d0b69eebfd08

  • 26 Aug 2021 12:16 PM | Bill Brewer (Administrator)

    Delta (DAL) to Impose $200 Monthly Surcharge on Unvaccinated Employees - Bloomberg

    By Mary Schlangenstein | August 25, 2021

    Delta Air Lines Inc. will impose a $200 monthly surcharge on employees who aren’t vaccinated against Covid-19, becoming the first major U.S. company to levy a penalty to encourage workers to get protected.

    The new policy was outlined in a memo from Chief Executive Officer Ed Bastian, who said 75% of the carrier’s workers already are vaccinated. Increasing cases of coronavirus linked to a “very aggressive” variant are driving the push for all employees to get the shots, he said in the note to employees Wednesday.

    The fee applies to employees in the airline’s health-care plan who haven’t received shots by Nov. 1. The company also will require weekly testing for employees who aren’t vaccinated by mid-September.

    Delta stopped short of a mandatory vaccine requirement like the one imposed earlier this month by United Airlines Holdings Inc. and other companies. Goldman Sachs Group Inc., Alphabet Inc.’s Google and Facebook Inc. also have announced vaccine requirements.

    Delta is confident that its approach will succeed in moving its worker vaccination rate beyond 75%, a spokesman said when asked why the company didn’t impose a mandate. The potential penalty is “well within” legal parameters, he said. 

    While vaccine requirements have increased since Pfizer Inc. and BioNTech SE’s vaccine received full Food and Drug Administration approval on Monday, employers are treading carefully for fear they’ll hurt morale and spur defections in a tight labor market. Some consultants doubt that surcharges will be as persuasive as demanding inoculation, though the size of Delta’s surcharge could change that calculus.

    “Vaccine hesitant employees are likely to see this as a mandate or a punitive measure, as it creates an additional annual cost of $2,400 for that employee,” said Brian Kropp, chief of human-resources research for the Gartner consulting firm. 

    The fee for unvaccinated employees is “to address the financial risk” from their decision, Bastian said. The average hospital stay for Covid-19 patients has cost Delta $50,000 each, he said.

    “With this week’s announcement that the FDA has granted full approval for the Pfizer vaccine, the time for you to get vaccinated is now,” Bastian said.

    American Airlines Group Inc. and Southwest Airlines Co. continue to encourage employees to be vaccinated but haven’t imposed mandates.

    Delta was the best performer on the S&P 500 Airlines Index, rising 1.9% to $41.30 at 2:09 p.m. in New York. 

    In May, Delta became the first major U.S. airline to require coronavirus shots for new employees. The airline had agreed not to mandate vaccinations for its pilots, the only major work group represented by a union, until at least Nov. 21. The pact also provided incentives for pilots to be vaccinated.

    Delta would have to negotiate a new agreement “over any employer-mandated vaccination for pilots,” the Air Line Pilots Association said in a statement. Union leadership “has consistently advocated to maintain the right of each individual pilot to consult with his or her medical provider regarding Covid-19 vaccinations or booster doses.”

    Under the policy announced Wednesday, any worker not fully vaccinated by Sept. 12 will be required to take a weekly coronavirus test “while community case rates are high,” Bastian’s memo said. 

    Employees who aren’t vaccinated must wear masks in all indoor settings, effective immediately. Delta also said that starting Sept. 30, the airline would preserve full pay for workers who have received both shots but who still get sick and may end up on short-term disability.

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    Source: Bloomberg

    https://www.bloomberg.com/news/articles/2021-08-25/delta-air-lines-to-impose-surcharge-on-unvaccinated-employees

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