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Employers Have a Free Hand on Health Plan Payments

October 24, 1994

Question: What is the limit a company can increase its employees' contribution to a health plan? Recently, my company raised the contribution from 25% to 50% of the total costs; in addition it instituted a pay cut. What rights do we have?

Answer: There is really no limit on the amount a company can increase its employees' contribution to its health plan. In the absence of a collective bargaining agreement, maintenance of an employee health plan is completely voluntary on the part of an employer.

An employer does not have to provide coverage at all, and if it does it can set whatever level of shared premiums it wants for employees.

Unless the health plan's summary plan description or the company's employee handbook expressly states that premiums will not increase at all, or not go up during some set period, your company would have the right to increase your premium.

--James J. McDonald Jr., Attorney, Fisher & Phillips; Labor and employment law instructor, UC Irvine

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Question: I am a small-business owner with one part-time, hourly employee. Am I required to provide her with a specified of days of sick leave time at full compensation?

--J.E., Orange

Answer: No. There is no law that requires that employers provide employees with paid sick leave. Sick leave is purely a matter of contract between an employer and its employees. Therefore, unless you have promised in writing or orally to provide sick leave benefits to your employee, no law forces you to do so.

--Michael A. Hood, Employment law attorney, Paul, Hastings, Janofsky & Walker

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Question: What rights, if any, do CPAs and accountants have regarding working hours? They often have to work 16 or more hours a day to meet deadlines, which results in stress headaches and stomach problems. And because they're on salary, they do not receive any overtime compensation.

As one of many people who live with and care about an accountant, I would very much appreciate a professional explanation of why accountants must work such long, exhausting hours. I would like to know what their rights are, and if it is possible for the rules or law in this field to be challenged or changed?

--F.O.

Answer: Accountants, along with doctors, attorneys and other professionals, voluntarily take on the amount of work that they feel they can handle comfortably. As professionals, such people are generally exempt from the wage and hour laws that establish rights to overtime compensation for most employees.

A professional's hours will vary greatly, depending on the individual's drive and stamina, depending on the amount of work available. As such a professional, I recognize that the extra hours and added stress are offset by the rewards of more challenging and enjoyable work, and pride in being a member of a learned profession.

If the particular professional that you care about has been overwhelmed by the demands of his or her particular situation, perhaps a switch to another firm should be considered. Your accountant might also be helped by counseling or other professional medical assistance.

--Calvin House, attorney, Fulbright & Jaworski L.L.P., Adjunct professor, Western State University College of Law

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Question: I work in the payroll department of a company that operates several day care centers and would like to know if Gov. Pete Wilson's executive order W-75-94 is still in effect? That was the change in overtime regulations made after the Northridge earthquake to allow employers in the state to calculate overtime on a flexible, weekly basis--meaning an employee would have to work more than 40 hours in a week before being eligible for overtime pay, rather than just working more than eight hours in a single day.

--A.A., Fountain Valley

Answer: Wilson has since signed Executive Order W-109-94, which lifted the daily earthquake overtime exception for the remaining two counties, Los Angeles and Ventura. After Oct. 15, 1994, all hours worked beyond eight hours in a day reverted to the daily overtime pay structure as before the earthquake. An exception to the rule will continue for employers that have implemented an alternative workweek program voted on by their employees. After the extensive damage to our freeway system caused by the Jan. 17 Northridge earthquake, five counties were allowed to ignore daily overtime requirements. On May 15, 1994, the overtime waiver for Orange, San Bernardino and Riverside counties was rescinded and effective Oct. 15, 1994, Los Angeles and Ventura counties are also rescinded.

The suspension of daily overtime requirements for work over eight hours in one day was a great advantage to California businesses. There currently are 46 states that do not have such daily overtime requirements. If California were one of them, it would allow businesses to enhance their economic competitiveness and flexibility.

--Elizabeth Winfree-Lydon, Senior staff consultant, The Employers Group

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