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MagnaHR eNews ? November 2006


While we were planning to wait until January 2007 to publish the FIRST HR eNewsletter, the recent elections have caused us to accelerate our plans since Ohio State Issues 2 and 5 will impact just about every company either headquartered in Ohio or with employees working in Ohio.

Table of Contents

The goal of the HR eNewsletter is to provide practical "hands-on" explanations rather than just simply informing you about recent legislative changes. We plan to use the HR eNewsletter to share some case studies (both good and bad) and allow for an interactive exchange of ideas. As a member of the Solon Chamber of Commerce, we've seen the informational emails getting used more and more to exchange information and ideas (electronically) so we thought we'd expand on this idea and provide a centralized HR Forum for gathering infomation and exchanging ideas.

We hope that you'll find the HR eNewsletter refreshing and informative. If you wish to add someone to our distribution list, complete the form located on the homepage of our website located at

Minimum Wage Increase - Ohio State Issue 2

As the folks at the Council of Smaller Enterprises (COSE) noted, it's not the increase in the minimum wage from $5.15 to $6.85 an hour that had opponents objecting to Issue 2, "but rather that the initiative took the form of a constitutional amendment, an automatic inflation factor and infriged upon privacy rights of employees and business owners" that has everyone up in arms.

With the passage of Issue 2, nearly ALL companies will have to accurately track time for ALL employees and keep the records for the duration of an employee's employment plus 3 years following separation from service. The records must show the employee's name, address, occupation, pay rate, hours worked each day and amounts paid to the employee. And, this doesn't just apply to the hourly or non-exempt workforce but to EVERYONE including hourly, salaried, non-exempt and exempt employees.

With respect to tracking time for exempt salaried employees, we wondered if a company could simply record the standard work week (e.g. 40 hours) or if they would need to track and record actual hours for EVERYONE. According to Nicole Gray at McDonald Hopkins, "everyone will have to keep track of their hours worked. In reading the plain language of the new minimum wage law, it appears that all employees (both hourly and now salaried, including exempt salaried employees) will be required to keep track of the amount of hours for each day worked. Thus, the recordkeeping requirements for salaried employees will now mimic those associated with hourly employees. Further, it would appear that simply using 40 hours as a default number for salaried employees will not satisfy the new recordkeeping requirement."

Additionally, Issue 2 imposes a Disclosure Obligation that requires employers to provide the wage and hours records to any employee who requests them FREE OF CHARGE and there currently aren't any limits as to the number of times these records may be requested.

Finally, Issue 2 also contains a requirement to provide all employee's with the employers contact information including company name, address, telephone number and other contact information when employees are hired and to update this information when it changes.

If you're interested in learing more about MagnaHR's 100% web-based HRIS (which includes a Time & Attendance module) or our various HR/Payroll Outsourcing & Administration solutions, please visit our website at or send an email to

To read about all the election results, click on the link below.

Greater Cleveland Partnership Election Results

Smoke-Free Ohio - Ohio State Issue 5

With the passage of State Issue 5, "Ohio voters Tuesday passed a sweeping anti-smoking issue that prohibits smoking in virutually every public place" according to the Election Report published by the Greater Cleveland Partnership/COSE.

What does this mean for employers? It means that you'll need to review and possibly amend your current policies and procedures to comply with the new rules. For most companies, the most relevant section of the proposed text is Section 3794.02--Smoking Prohibitions which says...

(A) No proprietor of a public place or place of employment, except as permitted in section 3794.03 of this chapter, shall permit smoking in the public place or place of employment or in the areas directly or indirectly under the control of the proprietor immediately adjacent to locations of ingress or egress to the public place or place of employment.

(B) A proprietor of a public place or place of employment shall ensure that tobacco smoke does not enter any area in which smoking is prohibited under this chapter through entrances, windows, ventilation systems, or other means.

(C) No person or employer shall discharge, refuse to hire, or in any manner retaliate against an individual for exercising any right, including reporting a violation, or performing any obligation under this chapter.

(D) No person shall refuse to immediately discontinue smoking in a public place, place of employment, or establishment, facility or outdoor area declared nonsmoking under section 3794.05 of this chapter when requested to do so by the proprietor or any employee of an employer of the public place, place of employment or establishment, facility or outdoor area.

(E) Lack of intent to violate a provision of this chapter shall not be a defense to a violation.

For most companies, this will mean that you'll need to review your formal or informal "smoking areas" since many of them may be located immediately adjacent to an entrance/exit (e.g. ingress/egress) which would violate the new law.

For a copy of the full proposed text, please send an email to

Pension Protection Act of 2006

According to publication Securing Retirement: An Overview of the Pension Protection Act of 2006 written by Deloitte, "the Act will simplify and transform rules governing the funding of defined benefit plans, accelerate funding obligations of employers, prospectively clarify the rules for cash balance plans, make permanent the provision enacted in 2001 that were set to expire in 2010, strengthen diversification rights and investment education provisions for plan participants, and encourage automatic enrollment in defined contribution 401(k) plans."

For the majority of small- to mid-sized companies who don't operate a defined benefit pension plan, the most relevant portion of the new law is the 401(k) section which deals with Automatic Enrollment in 401(k) plans (pg. 21), Diversification Requirements (pg. 22) and Investment Advice to Participants (pg. 23).

To download the entire text, click on the link below.

An Overview of the Pension Protection Act of 2006

Case Study - The 95% Rule

As HR professionals, we're constantly asked to draft or revise policies and procedures for our clients based on a specific incident pe

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