In this week’s edition of the HR Base Camp roundup, we discuss health benefit options for open enrollment, who gets paid for what if you host an office holiday party during work hours, and what your options are if an employee is accidentally overpaid. Read on to find out more!
- Since open enrollment season is coming up, I’ve been thinking more about the kind of health benefits I want to offer my staff. What options do I have?
- Do I need to pay for employees to attend our holiday party if it’s during our usual work hours??
- What do I do if an employee was overpaid? How can I make sure I get the money back?
Since open enrollment season is coming up, I’ve been thinking more about the kind of health benefits I want to offer my staff. What options do I have?
When it comes to health benefits, we know that a standard group health insurance plan doesn’t work for everyone, and it can be especially hard on small businesses. But these days, offering health benefits is almost a requirement if you want to draw in applicants. Job hunters are focused on benefits now more than ever. That leads us back to your question. What options do you have?
Before you write off group plans, you may want to look into whether your business is eligible for a small business tax credit by purchasing through the marketplace. Talk to your CPA if you’re interested in exploring this option.
Another option is a Health Reimbursement Arrangement. This option offers a tax-free reimbursement to your employees for healthcare expenses they pay for up front. These plans are flexible and can be designed by the employer.
If you find that your employees are concerned about having coverage for specific situations, a supplemental insurance plan might be what you’re looking for. Think short-term disability or cancer or critical illness insurance. You can find these plans through large companies like AFLAC or through an insurance broker.
The last thing we’ll mention is healthcare stipends. We get questions about these on a regular basis in the Solution Center. At a glance, they seem like a straightforward option that’s easy to administer. Unfortunately, there’s several drawbacks that make this option less than ideal. It can be hard to keep this as a “health benefit” when employees start seeing it as part of their regular pay. Likewise, this can make it much harder to revoke if you end up offering a formal plan in the future because employees feel like they’re getting a pay cut. Plus, there’s tax and payroll consequences.
Do I need to pay for employees to attend our holiday party if it’s during our usual work hours??
As long as the party is completely voluntary, you’re typically not required to pay for the hours spent in attendance. That being said, we’ve talked to some employers that use their holiday party as more of a team building event meant to increase efficiency, help everyone work better together, etc. If your party includes any activities that could be seen as productive or designed to help your team be better at their jobs, then the safest option is to pay for attendance, even if it’s voluntary.
Another reason you might consider paying for this time is to encourage employees to attend the party. Some employees might prefer getting to leave a few hours early on a workday to spending those hours at a work event unpaid. You can offer to pay for time spent at the party to incentivize attendance and so the employee doesn’t feel like they’re missing out on pay because the office closed early to accommodate the party.
I know what you’re thinking, employees shouldn’t be worried about losing a few hours of pay when you’re spending money on a fun celebration for them. But a party doesn’t pay the bills, and you can’t pay people in chicken.
For additional guidance on what to consider when planning your holiday party, check out our blog.
What do I do if an employee was overpaid? How can I make sure I get the money back?
Ah, the dreaded overpayment. Unfortunately, it’s more common than you may think. There’s a variety of reasons why an employee might be overpaid: they forgot to clock out, they were paid for PTO they didn’t earn, or a plain old payroll mistake threw in some extra money. Whatever the case may be, employers want to be reimbursed.
On a federal level, overpayments are treated like wage advances and employers can make deductions from an employee’s paycheck to cover the cost. Remember that any adjustment to an employee paycheck should be well documented in advance.
The ease of getting your overpayment back changes once state laws come into play. Many states have regulations that require employers to get authorization in writing from the employee before a deduction can be made. And many states have limits on how much can be deducted from each paycheck, making it a lengthy process to get the full overpayment back from the employee.
Sometimes this is easy. The employee acknowledges the overpayment and they sign the form agreeing to deductions from their paycheck until the amount is repaid. That’s the ideal solution. So what happens when the employee argues that no overpayment occurred, or they agree that it happened but they say they aren’t going to pay you back?
If you find yourself in this situation (we hope you don’t), your first step should be to sit down with the employee to go over the overpayment and how deductions work. It’s possible they’re worried about the impact of significantly lower checks and you may be able to come to an agreement on the deduction amount that eases the blow. If the employee still refuses to agree to the deduction, you can invoice them for the money they owe. We would also advise you to reach out to your payroll company and see if they’ll assume responsibility if you’re unable to get the money back from the employee – assuming this was an error on their part.
Even if you don’t think there’s a law about this in your state, we’d advise that you double check before making any deductions so that you don’t fall out of compliance. CEDR members can reach out to the Solution Center to confirm which laws apply and get the necessary paperwork.
At CEDR, we help employers protect their businesses and build stronger teams. Because stronger teams build better workplaces, and better workplaces make better lives.
Have an HR question you need to talk through with an HR expert? Reach out to the Solution Center for expert guidance, or get your questions answered in our private, professional Facebook Group, HR Base Camp.