September 1, 2011

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Utah Business Staff

September 1, 2011

JONES: In working with smaller employers that want to have a benefit plan to attract higher talent, when those costs go up, it’s a significant cost every year that is painful. And when the costs go up because of legislation and it’s not adding any value, they reevaluate their whole business strategy because it’s tough for them as a small employer. The economy is down, things are down for them, and then their costs go up with health insurance. Do they want to offer it at all? Do they want to reevaluate their whole employee structure? So it’s been difficult for them.

SUNDER: I heard an interesting statement: “We need to start managing health and stop managing healthcare.” So that is what we are trying to do at our company. We are really looking outside of the box.

We are working towards opening an onsite medical clinic at our company, a zero cost clinic for employees. It takes the barriers away from employees getting the care when they need it so that it doesn’t become a bigger deal. And it’s no copay, it’s no cost for medical tests, and it’s zero cost for prescriptions—and it’s paid for 100 percent by the company. But it’s the right thing to do for our people.

FENWICK: It’s not just the healthcare reform laws, it’s also regulations and mandates that were put into effect by the stimulus and other regulations that have come through. In my company, we work with the hospitals and healthcare networks, and some of the biggest things that are impacting them are the infrastructure mandates on hospitals and healthcare networks that they are required to hit by a certain time frame. We are watching some of our partner hospitals going out of business, or three or four hospitals consolidating and merging into one. Healthcare networks are buying each other out across the country because the impact is so great.

Healthcare costs will rise and it’s not just the healthcare reform laws. It’s all the other mandates requiring them to get up to speed on infrastructure. And, frankly, the worldwide standard on technology and billing, the United States is about seven years behind Europe and Canada and Japan. These mandates have good intentions, as with a lot of legislation, but it’s really putting a strain on healthcare.

The Department of Labor is now more frequently auditing companies. What impact is that having?
STONE: The mortgage industry is becoming a lot more regulated than it once was because of the meltdown. We are finding that not only is the federal government coming in to see what we are doing, but various states that we are in are auditing us as well. They are seeing that as a way to generate revenue because state revenue is down as well.

LEE: They’ve targeted specific industries, where they think there has been high abuse—overtime pay and so forth. Healthcare is one of the industries affected in Utah. And restaurants. They’ve specifically said the Department of Labor is going to audit at least 65 restaurants this year in Utah.

I’ve had people call me in huge panics saying, “I just got this letter from the Department of Labor,” or “I’m having an audit.” There is backpay in most cases because people are not clear on the law or they just choose to ignore it, and it is having an impact among smaller employers. I don’t know if the larger employers are affected as much, but definitely smaller employers are feeling it.

WHALEN: Increased enforcement of employment laws is a reality. Many different government agencies have initiatives in place right now to beef that up. They have hired hundreds of additional field operatives, investigators and auditors. It is hitting Utah employers, and it ranges from cracking down on misclassification of workers as independent contractors, to I-9 audits, to wage an hour audits.

We’re also seeing an increase in the number of equal employment opportunity complaints—your garden variety discrimination claims. Claims are up at the EEOC. Claims are up at the UALD. And for the first time, retaliation claims have emerged as the number one most frequently cited offense that employees feel employers are committing.

FAGERSGREN: I thought it was interesting that the Department of Labor put together that app for employees to be able to track their own hours from their phone. I think that creates a divide between employers and the government, which is enforcing those laws. Because an employer would say, “Why are you empowering my employees to build a case against me? I’m just trying to follow the rules and trying to pay them, and I’ve got a vindictive employee tracking their hours.”

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