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QUOTE
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Creating A Culture of Success
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EMPLOYER
COSTS FOR EMPLOYEE COMPENSATION—MARCH
2006
Employer
costs for employee compensation averaged $26.86 per hour
worked in March 2006, the U.S. Department of Labor’s
Bureau of Labor Statistics reported today. Wages and
salaries, which averaged $18.82, accounted for 70.1
percent of these costs, while benefits, which averaged
$8.04, accounted for the remaining 29.9 percent.
Costs for
legally required benefits, including Social Security,
Medicare, unemployment insurance, and workers’
compensation, averaged $2.16 per hour (8.0 percent of
total compensation). Employer costs for life, health,
and disability insurance benefits averaged $2.18 (8.1
percent); paid leave benefits (vacations, holidays, sick
leave, and other leave) averaged $1.88 (7.0 percent);
and retirement and savings benefits averaged $1.15 (4.3
percent) per hour worked.
Private
Industry
In March
2006, private industry employer compensation costs
averaged $25.09 per hour worked. Wages and salaries
averaged $17.73 per hour (70.7 percent), while benefits
averaged $7.36 (29.3 percent). Employer costs for paid
leave averaged $1.71 per hour worked (6.8 percent),
supplemental pay averaged 73 cents (2.9 percent),
insurance benefits averaged $1.85 (7.4 percent),
retirement and savings averaged 91 cents (3.6percent),
and legally required benefits $2.15 (8.6 percent) per
hour worked.
NOTE:
Collection
of severance pay and supplemental unemployment plans,
which comprised “other benefits” and was published in
all tables, was discontinued beginning with the March
2006 estimates to reduce the burden on survey
respondents. This change had minimal impact on most
series because the cost of these benefits averaged only
4 cents per hour worked in 2005. June 22, 2006
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In
This Issue:
June 26,
2006
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- Employer
Costs For Employee Compensation - March
2006
- UAW Says
Application For Buyouts Soar At GM
- Bankruptcy
Judge Approves Northwest Airlines Deals With Pilots,
Baggage Handlers
- Rising
Rates Ease Pressure On Pension Plans
- Department
Of Homeland Security Publishes Proposed Rule Outlining
Employer Responses To Social Security "No Match
Letters
- Supreme
Court Sides With Employees In Discrimination Case
- Verizon To
Pay $48.9 Million For Pregnancy Bias
- DOL Issues
Opinion Letter On Legality Of Employer's "Blended
Rate" Pay Plan
- Product
Manager In Administrative Role Not Entitled To
Overtime
- Burlington
N.&Santa Fe Railway V.
White
- Francis V.
Booz Allen & Hamilton, Inc.
- Cross V.
United Auto Workers
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U.A.W.
SAYS APPLICATIONS FOR BUYOUTS SOAR AT G.M.
With a week to go
before the deadline, it looks like at least 30,000 United
Automobile Workers union members at General Motors will opt
for incentives to leave or retire — equal to the number of
jobs G.M. plans to cut.
The union's
president, Ron Gettelfinger, said Thursday that 25,000 G.M.
workers — or roughly 22 percent of its work force represented
by the U.A.W. — had signed up thus far. Company and union
officials had always expected applications to accelerate as
the deadline approached and workers made final decisions about
the deals.
Another 8,500
workers at the parts supplier Delphi, or a little more than a third of
its U.A.W. membership, had accepted the plans, said Richard
Shoemaker, an outgoing union vice president. The comments came
as the U.A.W. wrapped up its leadership convention
here.
Next Friday marks
the deadline for workers to make up their minds about the
packages, which are available to all 113,000 U.A.W. members at
G.M. and all 23,000 union members at Delphi. The auto parts supplier was part
of G.M. until it was spun off in
1999.
Workers who have
30 years on the job and are eligible to retire would receive
$35,000 as well as full health care benefits and a pension.
Workers with less experience can receive up to $140,000 to
give up their jobs. They would keep their pension benefits but
forfeit retirement health care
coverage.
G.M. will pay for
buyouts for 13,000 of the Delphi workers who were offered the
deals when G.M. made them available to all its hourly workers
in March. It will share the cost with Delphi for another 10,000 packages,
which it offered last week. Micheline Maynard NY Times
BenefitsLink.com June 19, 2006
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BANKRUPTCY
JUDGE APPROVES NORTHWEST AIRLINES DEALS WITH PILOTS, BAGGAGE
HANDLERS
A bankruptcy court
on Tuesday approved concessionary contracts between Northwest
Airlines Corp. and two of its unions, which represent pilots,
baggage handlers and ground
workers.
The pilots union
concession deal calls for $358 million (€285 million) in
givebacks, while Northwest will save $190 million (€151
million) annually with its new pacts with 12,200 baggage and
ground workers.
Judge Allan
Gropper of the Southern District of New York accepted the
separate motions at a court hearing, leaving the Professional
Flight Attendants Association, which represents 9,300 flight
attendants, alone among the airline's unions without a
concession deal approved.
Northwest and the
flight attendants are to meet Wednesday to continue
negotiations.
"The motions
clearly represent settlements and agreements that are
reasonable and that should be approved by the court," Gropper
said. "The court also recognizes that the motions embody
concessions on the part of the unions and their members that
are extremely painful." AP FindLaw.com June 19, 2006
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RISING
RATES EASE PRESSURE ON PENSION PLANS
When the interest
rate used to calculate Boeing Co.'s pension obligations rises
by 25 basis points, its obligation to retired workers'
pensions falls by $1.37 billion.
A drop of 25
basis points adds $1.57 billion to Boeing's obligations to its
pensioners, according to the world's largest aerospace
company's 2005 10-K annual Securities and Exchange Commission
filing.
Rising interest
rates, the bane of the stock market, could be the cure for
what ails Corporate America's pension plans.
"It literally
could make them funded," said Howard Silverblatt, senior
equity index analyst at Standard & Poor's. "We could swing
the other way."
The steady
decline in rates to a 40-year low, and stock losses in 2000
and 2003, crushed the rate of return managers of pension funds
could coax out of the market. It also widened the gap between
how pension funds calculate the value of their assets in
relation to their liabilities.
The federal funds
rate is now set at 5% by U.S. central
bankers after 16 consecutive hikes, a huge jump from June 2004
when it was just 1%.
"When interest
rates are low, you have to put more into your plan because you
can't get much from your investment returns. This is way worse
than the 1970s," said Ron Gebhardtsbauer, former chief actuary
at the Pension Benefit Guaranty Corp. and a senior fellow at
the American Academy of Actuaries.
"This was a case when interest rates and stocks went down."
In just three
years, from when stock investors could do no wrong in 1999 to
the pessimism of 2002, pension funds held by the S&P 500
companies swung from a $280 billion surplus to a $219 billion
deficit. Last year, the S&P 500's defined-benefit pensions
had a $140 billion gap with funding at 90.4%.
June 22,
2006
August Cole,
MarketWatch.com
DEPARTMENT
OF HOMELAND SECURITY PUBLISHES PROPOSED RULE OUTLINING
EMPLOYER RESPONSES TO SOCIAL SECURITY
"NO-MATCH
LETTERS"
The Department of
Homeland Security (DHS), Bureau of Immigration and Customs
Enforcement (ICE), has published a proposed rule to amend the
regulations relating to the unlawful hiring or continued
employment of unauthorized aliens (8 CFR §274a). The amended
regulation describes the legal obligations of an employer that
receives a "No-Match Letter" from the Social Security
Administration (SSA) or the DHS.
There are suggested
methods for resolving "no-match" discrepancies. They include
such detailed procedures as checking the employer's records to
determine if the discrepancy was due to a typographical or
clerical error; if no discrepancy is found, requesting the
employee to confirm the employer's records are correct and, if
not correct, resolving the discrepancy with the appropriate
government agency. If the discrepancy is not resolved within
60 days of receipt of the "No-Match Letter" and after pursuing
the above, the employer may, within three additional days,
verify the employee's employment authorization and identity as
if the employee was newly hired. The employer may not accept
for verification any document that was called into question by
either the SSA or the DHS original letter (such as the
employee's Social Security card). June 21, 2006
SUPREME
COURT SIDES WITH EMPLOYEES IN DISCRIMINATION
CASE
The Supreme Court
ruled unanimously Thursday to give broad protection under
Title VII of the Civil Rights Act to employees who suffer
retaliation for complaining about discrimination. The decision
ends disarray among lower courts on the standard required to
assess retaliation claims, but employment lawyers say it will
trigger a new wave of litigation to determine what kind of
actions constitute illegal retaliation. Said one law firm
partner, "This decision is huge -- hugely bad for me as a
defense lawyer." Legal Times Law.com June 23, 2006
VERIZON
TO PAY 48.9 MILLION FOR PREGNANCY
BIAS
The
US Equal Employment Opportunity Commission (EEOC) announced
that pursuant to a court-filed consent decree,
telecommunications giant Verizon Communications, Inc will pay
approximately $48.9 million to 12,326 current and former
female employees in 13 states and the District of
Columbia. The payment is part of a
2002 settlement of a landmark class action lawsuit alleging
pregnancy discrimination against Verizon predecessor telephone
companies NTNEX and Bell Atlantic. June 19, 2006
DOL
ISSUES OPINION LETTER ON LEGALITY OF EMPLOYER'S "BLENDED RATE"
PAY PLAN
An
employer's "blended rate" pay plan does not comply with the
overtime provisions of the FLSA. The plan, designed for
12-hour shifts, includes a "base rate," "factored rate,"
"factored overtime rate" and an "adjusted rate." However,
overtime is not paid for normally scheduled eight hours that
exceed 40 hours in a four-shift week. The plan incorrectly
assumes that overtime pay has already been included in the
adjusted rate--the sum of the factored rate for eight hours
and the factored overtime rate for four hours, divided by
twelve hours per day. In reality, the blended rate plan pays
the same rate for all hours of work up to 48 hours, leaving
half-time owing for hours worked over 40. The Office of
Enforcement Policy advised that the employer might be able to
use the pay method provided in Section 7(e)(5) in which an
employee's regular rate does not include extra compensation
provided by a premium rate for certain hours worked just
because those hours are worked in excess of an employee's
normal working hours. The opinion letter is reproduced below.
June 19, 2006
PRODUCT
MANAGER IN ADMINISTRATIVE ROLE NOT ENTITLED TO
OVERTIME
A
product manager of a software company who, among her primary
duties, provided customer technical support, worked with
programmers to resolve software problems, managed the shipping
department, and supervised and assigned work to subordinates
was an exempt administrative employee, ruled a federal
district court in Pennsylvania. Thus, the
former employee was not entitled to overtime pay. The court
entered judgment in favor of the employer following a bench
trial and consideration of post-trial briefs.
(Gibbons v
Technical Services Associates, Inc,
MDPa, 152 LC ¶35,141) June 19, 2006
BURLINGTON
N. & SANTA FE RAILWAY CO. V. WHITE (06/22/06 - NO.
05–259)
The
anti-retaliation provision of Title VII of the Civil Rights
Act does not confine the actions and harms it forbids to those
that are related to employment or occur at the workplace. The
provision covers those, and only those, employer actions that
would have been materially adverse to a reasonable employee or
job applicant. FindLaw.com June 23,
2006
FRANCIS
V. BOOZ ALLEN & HAMILTON, INC. (06/22/06 - NO.
05-1523)
Summary judgment
in favor of defendant, in case alleging discrimination,
wrongful termination, and retaliation in violation of the
Uniformed Services Employment and Reemployment Rights Act of
1994, is affirmed as the undisputed evidence demonstrates that
defendant did not improperly deny plaintiff reemployment
rights or a benefit of employment, and defendant dismissed
plaintiff for cause, and did not retaliate against her in
violation of USERRA. FindLaw.com June 23,
2006
CROSS
V. UNITED AUTO WORKERS (06/20/06 - NO.
05-3813)
Summary
judgment to a former employer and a union on claims of
wrongful discharge and breach of the duty of fair
representation is affirmed where no genuine issues of material
fact existed as to a breach of the duty of fair
representation, and thus, the employer was entitled to
judgment as a matter of law on a claim for wrongful discharge
and breach of a collective bargaining agreement. FindLaw.com
June 23, 2006
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