E-Alert: The Affordable Care Act amended the Fair Labor Standards Act (FLSA) to require businesses subject to the FLSA (those with at least one employee and $500,000 in annual dollar volume) to provide notice to each existing employee and all new employees from and after October 1, 2013. This means that even employers with fewer than 50 employees must provide the notice. The employer mandate delay announced in July of this year does not stall this requirement for employers.

The notice must notify employees of the existence of state insurance exchanges and (for employers who offer insurance coverage) that choosing to obtain insurance may mean the employee loses the employer’s contribution to his/her health insurance premiums. The Department of Labor has two sample forms available for employers’ use available here. One model notice may be used by employers that offer a health insurance plan to some or all employees. The other model form may be used by employers who do not offer a health plan. The Department of Labor also has Spanish versions. The notice must be provided to full- and part-time employees, whether or not the employer has a health plan, and whether or not the respective employee is eligible for an employer plan. Employers should issue their notice on October 1 to all current employees. After October 1, employers should provide the notice to each new hire (or returning employee) at the date of hire. Generally, the notice should be provided in written form. In certain instances, the form may be provided electronically. However, a firm planning to send it notices by e-mail should first ensure it meets the requirements of the Department of Labor’s electronic disclosure safe harbor (29 CFR 2520.104b-1(c)).

The regulations do not specify a fine for noncompliance. The Department of Labor has stated that, although employers are required to provide the notice, no fine would be assessed for failure to comply. However, it is possible the Treasury Department could use the general fine provisions (up to $100 per day) for employers who fail to correct the noncompliance within thirty days of discovery.

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