The Department of Labor (DOL) has gone paperless this year, and all forms for the 2009 plan year must be filed electronically — no exceptions.

To help employers, the DOL has just launched its EFAST2 online filing system — and it’s ready to accept electronic submissions of Form 5500 and Form 5500-SF.

But there’s the rub: Using it requires an e-mail account, which according to recent reports, 20%-28% of small business owners (mostly older owners) still don’t have — leaving them vulnerable to steep fines.

The Department of Labor’s released new proposed regs on providing advice to participants in individual retirement plans.

The proposed investment advice rules are intended to make sure that workers receive unbiased advice about how to invest in 401(k)-type plans.

The DOL will be accepting comments on the regs until May 5, and the regs are expected to be effective 60 days after publication of the final rule.

Here’s a quick look at some of the key provisions.

According to the proposed rules, investment advice can be given under the Pension Protection Act’s statutory exemption from liability (which allows employers to hire outsiders to provide investment advice to plan participants), but only if the advice is provided in two ways:

• through a financial advisor who is compensated on a “level-fee” basis, or
• through the use of a computer model that is certified as unbiased.

Level fees

The financial services company has to charge a flat fee schedule — in other words, fees don’t change depending on what investment options participants choose.

Computer models

If the rules are adopted, computer models used to offer advice would have to be certified in advance as objective and unbiased by an independent expert.

To comment on the proposed rules, click here.

The deadline for eligibility for the 65% health insurance premium subsidy has now been extended to those who are laid off through March 31. Previously, eligibility only extended to those who lost their jobs through Feb. 28.

Those eligible can still receive the subsidy for 15 months.

Last week, the House passed the one-month extension, but the bill got held up in the Senate until Tuesday. Once it passed the Senate, Obama quickly signed it into law.

The bill also allows thousands of workers whose unemployment benefits expired on Feb. 28 to receive them for another 30 days. The Department of Labor estimated nearly 400,000 could’ve seen their aid cut if Congress didn’t act.

Congress will now consider a much larger bill that would extend the COBRA subsidy and unemployment benefits through the end of the year.

We’ll keep you posted.

The new 401(k) rules are now being reviewed by the Office of Management and Budget. And the DOL hopes they’ll be out by the end of the month, said Phyllis Borzi, assistant secretary of labor for the DOL’s Employee Benefits Security Administration, speaking at a conference sponsored by the National Institute on Retirement Security.

Borzi didn’t say exactly what the new rules would cover. But she did mention they’ll be more faithful to the statutory provision than the ones we saw issued in the final days of George W. Bush’s presidency that would’ve allowed advisers affiliated with mutual fund and brokerage firms to provide investment advice.

Borzi went on to say that the new rules will be much more direct and streamlined, and will underscore the fiduciary duty of plan sponsors to carefully elect and monitor service providers.

In addition, she hinted that the Obama administration isn’t likely to waive fiduciary rules required of employers under the Employee Retirement Income Security Act (ERISA).

Earlier we reported that the U.S. Department of Labor (DOL) was hiring 250 investigators to seek out wage-and-hour violators — and the owners of five Oriental Forest restaurants, Li Jin Yang and Dong Lin, are among the latest to get caught in the DOL’s crosshairs.

They were found guilty of violating the Fair Labor Standards Act for failing to pay their workers proper OT and for paying less than the federal minimum wage — which at the time (2004) was $5.15 per hour.

The penalty: pay at least 129 workers more than $2 million in minimum wage and overtime compensation.

What’s required

Under the FLSA, the federal minimum wage is $7.25 per hour — or $2.13 in direct wages, if tips are considered part of wages. However, if an employee’s tips combined with the employer’s wage of $2.13 do not equal the $7.25 per hour, the employer must make up the difference.

In two late-December rulings, federal judges rendered decisions against employers in lawsuits where workers claim they should be paid for getting ready for work.

A judge in Arkansas granted class certification to ex-Butterball employees who claim they weren’t paid for the time they spent putting on and taking off protective gear at a poultry plant.

Then nearly 1,500 Qwest Communications employees sued their employer, saying they should be paid for time spent booting up and shutting down their computers — and a judge denied Qwest’s request to dismiss the class-action suit.

Cases like these often result in settlements that end up costing companies more than if they’d originally granted workers the wages.

Unsure of the legal ins-and-outs of employee compensation? Check here for guidance from the Department of Labor.

The Employee Retirement Income Security Act (ERISA) imposes strict requirements on employers sponsoring 401(k), group life, medical, dental and disability plans to report financial information to the Department of Labor (DOL) on Form 5500.

U.S. Census Bureau reports show there are about 110,000 employers that employ 100 or more people — and public records show some 60,000 (55%) of these employers have not filed a Form 5500, according to a recent ERISA Pros’ study.

Could result in expensive penalties

An employer can be penalized by the DOL up to $1,100 for each day its Form 5500 is late. The penalty is cumulative and is applied separately to each benefit plan an employer offers.

That means fines can add up fast.

“An employer sponsoring life, medical, dental and disability insurance plans that flies its Form 5500s just 30 days late could be fined $132,000,” said Bernard Kearse of ERISA Pros. “If that employer earns 8% net after tax, it would have to generate $1,650,000 in sales revenue to pay for the government’s fine.”

New guidance has been issued by the Department of Labor to end the confusion surrounding COBRA subsidy eligibility.

While the feds are offering up a 65% nine-month COBRA premium subsidy to workers involuntarily terminated in the period between Sept. 1, 2008 and Dec. 31, 2009, some who lost their jobs during that time won’t be eligible.

What would keep a terminated employee from being eligible for COBRA? Being covered by their former employer’s health plan through Dec. 31, 2009.

As a result, the worker wouldn’t be eligible for COBRA until Jan 1, 2010 — just missing the cutoff for the subsidy.

On the other hand, if the person was terminated by Dec. 31 and was eligible for COBRA, he or she could receive the subsidy for a full nine months — even if that nine-month period extends well into 2010.

Two bills have been introduced to extend and even expand the COBRA subsidy, but the fate of the legislation remains unclear.

The DOL recently updated its Employment Law Guide, giving employers new information regarding the laws the agency enforces.

The new version includes info on recent legal developments, such as minimum wage increases and updates to the Family and Medical Leave Act (FMLA). Other topics covered include child labor laws, overtime payment and workplace safety regulations.

Access the Guide here.

The Department of Labor has issued final regs clarifying when time off does — and doesn’t — qualify under the Family Medical Leave Act (FMLA).

Tracking leave is especially important now as employees are bound to take time off for many reasons around the holidays — it could lead to trouble if they feel their time off wasn’t calculated properly and they were given less FMLA than they deserve.

Here are two areas of great concern and what’s allowed:

Leave around holidays

Whether you can count holidays toward someone’s FMLA entitlement depends on the type of leave the person takes.

Example: The hours the employee doesn’t work on the holiday will count against the leave entitlement — if he or she would normally be scheduled to work that day.

But the hours the employee didn’t work on the holiday can’t be counted against his or her leave requirement if the person wouldn’t have otherwise been required to work on that day.

Intermittent leave and OT

If an employee would’ve been required to work OT — if it weren’t for taking FMLA — then the hours the person would’ve worked (but didn’t) may be counted against his or her FMLA entitlement.

Example: Say an employee has a serious health condition that limits his normal 48-hour workweek to 40. He’d have to take 10 hours of FMLA-protected time off for the week.