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Thursday, January 3, 2013

New Labor and Employment Laws for 2013

As usual, the New Year brings with it new laws that impact employers and employees.  The following three new laws impact most employers and took effect on January 1, 2013:

1.   Social Media Passwords

In response to an issue that certainly received its 15 minutes of fame in mid-2012, legislation took effect on January 1, 2013 that prohibits an employer to request or require current or prospective employees to provide any account information, including passwords, that would allow the employer to gain access to the employee’s social networking or other personal websites to which it would otherwise not have the ability.  The new law does not prohibit employers from reviewing public information on social networking websites or other electronically accessed information, nor does it prohibit employers from having a strong social networking policy in their employee handbooks. As always, though, take precautionary measures when conducting electronic reference checks on candidates, such as ensuring that you do so uniformly; that you inform candidates beforehand that you will perform that type of investigation; and allow candidates the chance to explain any negative information you discover before you reject their application.

2.  Employer Health Plans

The IRS has made two changes that affect employee health plans. Initially, as of January 1, 2013, the maximum non-taxable contribution that an employee can make to a IRS § 125 plan (a flexible spending account or cafeteria plan) is $2,500 for health care costs. This limit does not apply to contributions made for child care costs. Accordingly, a cafeteria plan that fails to comply with this new limitation for plan years beginning after December 31, 2012 is not a § 125 cafeteria plan and the value of the taxable benefits that an employee could have elected to receive under the plan during the plan year is includible in the employee’s gross income, regardless of the benefit elected by the employee.

Additionally, the IRS changed its contribution limits for HSA accounts for 2013.  It has increased the contribution amounts as well as the minimum deductibles to qualify as high deductible plans and maximum out of pocket amounts as follows: 
Contribution and Out-of-Pocket Limits for Health Savings Accounts
and for High-Deductible Health Plans
For 2012
For 2013
HSA contribution limit (employer + employee)
Individual: $3,100
Family: $6,250
Individual: $3,250
Family: $6,450
Individual: +$150
Family: +200
HSA catch-up contributions (age 55 or older)*
No change**
HDHP minimum deductible amounts
Individual: $1,200
Family: $2,400
Individual: $1,250
Family: $2,500
Individual: +$50
Family: +$100
HDHP maximum out-of-pocket amounts (deductibles, co-payments and other amounts, but not premiums)
Individual: $6,050
Family: $12,100
Individual: $6,250
Family: $12,500
Individual: +$200
Family: +$400

3.   Release of Sealed Criminal Records

Finally, Illinois has enacted a new law regarding the dissemination of sealed criminal records.  Prior to January 1, 2013, sealed criminal records could be disseminated to certain agencies or entities, which included park districts, schools, fire and police departments.  The new law prohibits such dissemination of sealed records.  Employers who perform criminal background checks will still receive records that have not been sealed or expunged.  By enacting this law, the Illinois Legislature hopes to remove barriers to employment that may exist if an employer were to obtain the sealed records. This move is consistent with the EEOC guidance issued in 2012 addressing possible unlawfulness of rejecting employment applicants simply because of the fact of a criminal conviction of the applicant.  

If you have any question or concerns or if you believe that this may be a good time to have your personnel policies and procedures reviewed, please do not hesitate to contact us.
Post Authored by Margaret Kostopulos and Robert McCabe, Ancel Glink.


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