Fair Labor Standards Act Section 18B Notice Q & A

Fair Labor Standards Act Section 18B Notice Q & A (Print Friendly)
 
The purpose of this Q & A is to provide the basic information regarding the Fair Labor Standards Act (FLSA) notice.  If you have additional questions, please feel free to contact me.
 
What employers are subject to the notice?
 
Any employer subject to the FLSA must provide the notice to its employees.  In general, the FLSA applies to all employers with $500,000 or more in annual revenue. 
 
To whom does the employer need to provide the notice?
 
The employer must provide the notice to all employees (including part-time employees).  The employer does not need to provide the notice to an employee’s dependents.
 
When does an employer have to provide an employee with the notice?
 
For all employees who are current employees before October 1, 2013, the employer must provide the notice no later than October 1, 2013.  For all new employees hired on or after October 1, 2013, the employer must provide the notice within 14 days of the employee’s start date.
 
What does the notice need to contain?
 
The notice must inform an employee of his/her coverage options in the new Marketplace.  The notice must include a description of the services provided by the Marketplace.  Additionally, the notice must inform the employee that he/she may be eligible for a premium tax credit if he/she purchases coverage through the Marketplace.  Furthermore, the notice must inform the employee that he/she will lose the employer contribution to any health plan offered by the employer if the employee purchases coverage through the Marketplace.  Finally, the notice must mention all or a portion of the employer’s contribution for an employee’s health coverage may be excludable for Federal income tax purposes.
 
The Department of Labor has released two model notices which employers may use.  One model notice is for employers that do not offer a health plan (http://www.dol.gov/ebsa/pdf/FLSAwithoutplans.pdf) and the other model notice is for employers that offer a health plan to some or all employees (http://www.dol.gov/ebsa/pdf/FLSAwithplans.pdf).
 
How can the employer provide notice to an employee?
 
The employer has several options for delivery of the notice including in-hand delivery, first-class mail, or, in certain limited situations, electronic delivery.  An attorney or benefits professional should be consulted if an employer plans to provide the notice electronically as nuanced rules have to be followed.
 
What is the penalty if an employer does not provide the notice?
 
Oddly, there does not appear to be a penalty associated with a failure to provide the proper notice.  An employer should still provide the notice in a timely fashion.  If the employer is offering coverage, the employer could be breaching its fiduciary responsibilities by not providing the notice to its employees.
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