The requirement is very simple; it is that all employers (whether they provide health insurance benefits or not) must notify their employees about the provisions of the Act. This means simply providing a form to the employees. We’ve attached the two forms to this article (FLSA With Plans) (FLSA Without Plans). Please feel free to download and use these forms.
Technical requirements for providing notice are explained at the DOL (Department of Labor) website. (After reading the notice, we’re convinced that DOL is pronounced “dull.” See if you can stay awake reading this notice.
Guidance on the Notice to Employees of Coverage Options under Fair Labor Standards Act
But, even if you understand and follow this requirement, important questions still exist.
- How do you prove that you distributed the forms on a timely basis?
- Do you have employees sign acknowledgments of receiving the form? – In an abundance of caution, we think the answer is yes, you should!
- Who is going to enforce this on behalf of the government? – Probably the IRS
- Is the government presently prepared to enforce this provision? – Apparently not, as there is not even any acknowledgment as to WHO is going to enforce it.
- Has an enforcement structure been created? – No!
This situation keeps evolving. Last Wednesday, the Small Business Administration (SBA) could not respond to a question about whether or not a $100 per day penalty would be assessed. On Thursday, SBA posted a blog:
stating that no fines will be asserted. And, these are the people in charge.
The most important question seems to be, – "Can you ignore this deadline simply because the government isn’t ready? Or because it decided the penalties listed in the Act don’t really apply?" Only if you’re crazy. Imagine that a year from now the IRS comes knocking on your door and tells you that you owe the government a huge penalty because you can’t prove that you distributed the form (even if you did distribute it on a timely basis). Let’s see, that’s 365 days at $100 per day, or $36,500 - or some other really big number.
Let’s further imagine that you are an Association with only 20 members and a part-time maintenance employee. Our math is getting fuzzy here, but it looks like ($36,500 divided by 20 members, or) $1,825 per member. That probably isn’t going to go over too well with the members, particularly if you’re the manager and the members think you should have informed them and just taken care of this on their behalf.
As Nancy Pelosi so famously stated in 2011 regarding the 1,200 plus page Patient Protection and Affordable Care Act (ObamaCare), “We have to pass this bill so we can find out what’s in it.” Every member of Congress should be recalled for being so reckless as to vote on a bill that only two members of Congress had admitted to reading. (We say this irrespective of whether you approve or disapprove of the Act; it’s just plain irresponsible to vote on something very complex that you don’t understand.)
The PPACA has a general $100-a-day penalty for non-compliance. Since this requirement is in the FLSA, there are also penalties there. So the general consensus is that some penalty applies-probably the general provision.
The SBA says it has participated in more than 750 ACA-related events with more than 30,000 small business owners and community stakeholders since February 2013. The SBA published statistics stating that there are 27.9 million small businesses in the USA, so that means they reached approximately one tenth of one percent of the affected businesses. Great job guys!
