According to Towers Watson’s 2010 Health Care Cost Survey of 552 employers, health costs (insurance and out-of-pocket expenses) are outpacing inflation at record-high levels. The average employee will pay $400 more for health insurance this year than in 2009, bringing the annual average total to $2,487. Employers are paying more to offer health benefits, too.

Employees can always sue if they haven’t been paid for their work—even if they’re in the country illegally and not eligible to work in the United States. Employers can’t use their undocumented status as an excuse for not paying minimum wage and overtime under the FLSA.

Unplanned absences can disrupt even the best-run workplaces. Of course, you don’t want truly sick employees to come to work if they have some contagious illness. Nor do you want to discourage employees from taking legitimate FMLA leave. Your challenge as an employer: Craft and enforce an attendance policy that allows or even encourages legitimate sick leave use while discouraging abuse.

Q. Last month we reinstated an employee who was on military leave for six months. It’s the same position, with the same pay he received before he went on military leave. Effective Jan. 1, 2010, all employees in his department received a 4% pay raise in recognition for their hard work in 2009. Does the law require us to pay him at this increased rate?

Q. We offer employees a set number of paid time off (PTO) days per year, which they may use for any reason, including vacation and sick days. Must we pay out all earned but unused PTO days upon termination?

If you grant time off to employees who aren’t yet eligible for FMLA leave, take note: If they’re on your payroll, their time off counts toward FMLA eligibility. That means that once they hit the one-year mark, they become entitled to those 12 unpaid FMLA weeks—and terminating them could launch an FMLA lawsuit. That wasn’t always the case ...

Q. We have an employee who will soon go on temporary military duty soon and be gone for several weeks. Do we have to pay him at all during his absence, or does he receive military pay?

Two Minnesota icons have been named to Fortune magazine’s “100 Best Companies to Work For” list. Employees claim the Mayo Clinic provides the best possible care for its patients and has the same attitude toward its employees. Food conglomerate General Mills just made the list at No. 99—the magazine cited the company’s expanding infant day care program.

When an employee believes it’s necessary to end-run a supervisor to complain about potentially illegal conduct, resist the temptation to ignore the complaint. And whatever you do, don’t tell the whistle-blower to take it up with the supervisor.

One of the best ways to guarantee an employee will get her FMLA case in front of a jury is for her boss to mention her use of FMLA leave while discussing termination. The best idea: Have someone neutral from HR deliver the news that the employee is being let go.

Employers are often confused about how much absenteeism they must allow for employees who haven’t worked long enough to be covered by the FMLA, and who aren’t otherwise entitled to miss work as a reasonable accommodation for a disability. The bottom line is that if you treat everyone equally, you can set high attendance expectations—and fire those who don’t meet them.

Alfonzo Harlin took a job with the New Hope Emergency Food Shelf Network in late 2008. He claimed his new employer told him his health insurance premiums would be about $285 per month. When he found out the premiums would actually be more than $700 per month, he quit. Then he filed for unemployment benefits.

In recent years, employees have begun filing more and more “caregiver” or “family responsibility” discrimination lawsuits. No federal or Minnesota law specifically addresses discrimination against caregivers. However, treating employees with caregiving responsibilities differently than other employees may violate various employment laws, including Title VII of the Civil Rights Act of 1964, the ADA, the FMLA and the Minnesota Human Rights Act.

Q. I am wondering about rules relating to overtime during weeks with holidays. We pay a higher rate than normal for employees who work on the day of a holiday. Do we need to include the additional pay rate in calculating any overtime owed during the same week? ...

Plenty of organizations offer flexible schedules, allow telework and let parents slip out early once in a while to catch a child’s soccer game. But in many workplaces, those benefits are perks that only managers and white-collar workers enjoy. Yet several studies show that when low-wage employees have some flexibility in their hours, teamwork improves and unscheduled absences abate. If your organization’s lower-wage employees are candidates for flex, consider these eight strategies.