4 keys to picking the right benefits admin system
Original Post by HRMorning.com
By: Jared Bilski
With HR departments at small companies stretched so thin (many times one staffer handles all of HR), it’s no surprise many small companies are using benefits administration systems for their needs. But with new software vendors popping up every day, how do HR pros find the right system?
At the Dig|Benefits Conference in Austin, TX, Joshua N. Jeffries, a partner with Arkin Youngentob Associates, LLC, outlined the four most important steps small employers should take when selecting an “efficient, cost-effective” benefits administration system:
Selection checklist
Step 1: Define your needs. What are you looking for in a benefits administration system? This step needs to go beyond HR and incorporate all departments within the company. Jeffries reminded HR pros that Benefits has one of the top Profit/Loss (P/L) line items for most businesses. Any soft-dollar spending in this area needs to be justified in your compensation plans.
Step 2: Evaluate your vendor. With the sheer number of vendors out there, this step can seem a bit daunting. But the process is much less intimidating when HR pros break it down into small questions.
Examples: What type of back-end customer support do I need? Is it broker-friendly — in other words, will most brokers be able to use the system easily and effectively? Does the system account for all ACA and other federal and state regs? Does the system offer a mobile component? Does the data make it home? If the system is giving employees easy access to their benefits, it should offer a mobile component for spouses and dependents. After all, most families use smartphones for virtually everything.
Step 3: Understand the implementation process. Obviously, you’ll want the system to be as accurate as possible, so you’ll want to do your homework and find out any vendors with less-than-stellar track records in this area. You’ll also want to find out if the system updates automatically or if that’s a separate undertaking.
Step 4: Change your culture. For many employees, any type of change is difficult. If your benefits administration system alters the way people are used to doing things, which it most likely will, you have to account for that — and find ways to make sure the new system can positively impact your company’s culture. Here, Jeffries lauded the use of employee committees as a means to educate staffers on how everything works and all that workers can get from a new system.
Based on “Platform Power — Solving Ben Admin For Small Businesses,” by Joshua N. Jeffries, as presented at the Dig|Benefits Conference in Austin, TX.
9 Tips for Closing the Gender Pay Gap
Original Post from SHRM.org
By: Jonathan A. Segal
Everyone knows there is a gender gap in how employees are paid, though estimates vary as to how large it is. But compensation inequity of any size does more than expose an organization to litigation; it can cause disengagement and lower productivity, which can translate into lower profits.
It can also push talented employees out the door in search of greener pastures (and higher paychecks). In fact, often the smartest and most marketable employees are the first to leave. Bottom line: The gender gap is everyone’s problem.
So let’s begin with the assumption that your organization is smart and wants to eliminate this business inhibitor and legal wrong. What do you do?
1. Lawyer Up on Data Collection
Sometimes HR professionals will collect data to demonstrate that a problem exists. I understand why, but this can be dangerous.
The information likely will be discoverable, and your good-faith efforts could be used against you. If you need data to break through denial at your company, you may want to work with your employment lawyer to collect it under attorney-client privilege. Then have it delivered in the form of legal advice.
Even then, the underlying data may not be privileged if, for example, it is gathered from existing nonprivileged documents and information. However, data compilation and analysis done by—or at the direction of—counsel might still be protected from disclosure by the attorney-client privilege and/or the work product doctrine.
The bottom line is that the scope of the attorney-client privilege is deceptively complex, so give careful and thoughtful consideration to how you work with your employer’s lawyer to maximize the likelihood that the privilege will apply.
One thing is clear: Simply copying your employer’s attorney on an e-mail does not make the information within the e-mail privileged; it simply makes the attorney a witness to it.
2. Analyze Positions Qualitatively
Once you’ve documented pay gaps, don’t automatically assume they are all attributable to gender.
There may be totally legitimate business reasons for wage differences. For example, someone who took four years off to have and raise a child might earn less than someone who did not spend time away from work and who has received regular raises over that time span.
So, while quantitative data provides a starting point, a qualitative assessment of the relevant factors at play—one that ideally is also done under attorney-client privilege—is needed to determine if changes are in order.
3. Allow Negotiation …
Ellen Pao, former CEO of Reddit, tried to ban salary negotiations at her company based on the theory that allowing such bargaining inherently benefited men. Let me count the reasons I disagree with this tactic. Actually, I’ll stop at three:
First, it reinforces the stereotype that women aren’t capable negotiators.
Second, it takes away a woman’s (or a man’s) power to play a role in determining her (or his) own pay.
Third, whether and how someone negotiates may be relevant to whether you hire them. It is better than a behavioral question—it is a behavioral simulation.
4. … But Reconsider Asking About Salary History
When we ask about prior salary, we may be unwittingly perpetuating the gender gap created by prior employers. If someone was paid too little at her previous employer, the low part of your range may result in a material increase in compensation but still be less than the candidate deserves.
Consider eliminating the salary history question from your applications. After all, what does prior compensation really have to do with what someone should earn for a new opportunity? Ask only if it is truly relevant to the job—and document why you believe it is.
5. Create Pay Ranges But Recognize Exceptions
Establish pay ranges for positions to maximize consistency, and develop criteria for how you will place a new hire or promotion in the range.
But also realize that there will be times when exceptions are necessary. Develop a procedure to determine when and why you should depart from the norm, and conduct periodic audits to make sure that exceptions are not made only for men.
6. Consider Access Issues
Pay is often linked to performance. At certain levels, I think that works (at least to some degree). But I firmly believe that you cannot perform as well as your peers if you don’t have access to the same opportunities that they do. In my view, this is where many employers miss the mark, big time.
I hate unnecessary bureaucracy as much as anyone, but if there is no structure as to how work is distributed, the plum assignments too often may go to someone “just like” the manager. While slights like this are not intentional, they are often very real. Are the highly desired assignments typically meted out among the guys while playing golf or drinking at the neighborhood watering hole? If so, the boys’ club may be rearing its ugly head in a way that perpetuates the access gap and, with that, the gender gap.
Access to key assignments, customers, clients and information is essential to successful performance and the resulting link to higher pay. Of course, managers must have some discretion, but there should also be guardrails in place so that access issues don’t translate into unequal opportunity.
7. Appraise Performance Appraisals
Gender bias is often evident in performance appraisals, which are linked to pay. Two examples:
- A man is refreshingly assertive, while a woman engaging in the same behavior is labeled with the scarlet “B.”
- Or, a new twist on the double standard: A woman and a man are both involved in equally unacceptable behavior, but he is described as having engaged in “abrasive conduct,” while she is simply labeled “abrasive.” It’s a subtle but important difference—between a behavior that can be changed and a fixed character trait.
Train your leaders on these and other potential biases.
8. Be Aware of Persistent Biases and Their Effects
Yes, some of what an employee is paid is a result of his or her ability to negotiate. So workers have a major role to play, too: An employee should not complain with impunity about making less than others if he or she did not ask for more or apologizes for having done so.
Unfortunately, ambition is not always viewed as laudably in a woman as it is in a man. Sheryl Sandberg makes that point in Lean In: Women, Work, and the Will to Lead (Knopf, 2013) multiple times. Here is the sad but persistent reality: A woman may have to decide between conforming to the societally accepted stereotype of being nice (and making less money) or being liked less because she asks for what she has earned.
9. Train Your Leaders
Of course, a woman who leans in should not have to choose between being well-liked or well-paid, so educate your leaders about the unconscious biases that can come into play in cases where women negotiate no differently from men. Once people are made aware of their own prejudice, they are less likely to unconsciously engage in it.
Inevitably, some folks on the leadership team will deny that the bias exists at all because they have not personally experienced it. Let me conclude by saying this: I have never experienced labor pains. But I would be foolish to deny their existence based just on my life experience. You can take the analogy from there.
Jonathan A. Segal is a partner at Duane Morris in Philadelphia and New York City. Follow him on Twitter @Jonathan_HR_Law.
- See more at: https://shrm.org/publications/hrmagazine/editorialcontent/2016/0616/pages/0616-gender-pay-gap.aspx#sthash.U3Uaj98m.dpuf
Bridging the Gap: What HR Managers Wish Their Front Line Mangers Knew About Effective Leadership
Original Post from SHRM.org
By: Paul Falcone
John is a successful manager, but he’s concerned about potential staff turnover in light of today’s hot job market. He’s wondering what he could do to proactively avoid employee resignations and is taking an objective, introspective look at his leadership style. So John reaches out to the vice president of human resources at his company for advice, and learns a lot more than he bargained for.
As John soon realizes, retention of key employees comes from both leadership offense and defense practices. More importantly, it stems from exercising leadership wisdom that allows team members to motivate themselves, find new and creative ways of solving problems and finding solutions, and, when necessary, removing roadblocks that may impede team growth. Minimizing the effects of unwanted turnover and building a team with solid tenure comes from each leader’s ability to foster motivation in teams and instill a strong sense of accountability. Therefore, as unnerving as it sounds, John realizes that he needs to reassess his own strengths and shortcomings in order to reinvent his relationship with his team.
Leadership Offense
Getting all your company’s managers on the same page in terms of motivation, employee satisfaction and engagement is no easy feat.
“But first get one thing straight: Your job as a leader is not to motivate your employees; motivation is internal, and you can’t motivate them any more than they can motivate you,” said Jo-Anne Smith, outplacement executive, career coach and equity owner with Career Partners International in Southern California. “Your job as a successful leader, however, is to create an environment where your workers can motivate themselves.”
It may sound like a fine distinction, but it’s an important one. For example, try delegating what you enjoy most and are particularly good at as a means of professional development for the employee taking on the task (not of offloading work). Monitor what you’ve delegated by asking your employee how she’ll follow up with you and what the concrete and measurable outcomes will be throughout the delegation exercise. Then be sure to celebrate successes along the way.
Further, conduct “stay interviews” by asking your top performers what motivates them, what suggestions they have for improving the work flow and how you can help them prepare for their next career move.
“This is your chance to recognize and acknowledge their contributions, and employees will always feel engaged and excited when they’re making a positive difference at work while building their resumes,” Smith said. After all, top performers will always be resume builders, and learning is the glue that binds an individual to a company, despite offers from headhunters or competitor organizations. You’re always better off conducting proactive stay interviews rather than needing to make reactive counteroffers once a top performer has tendered notice.
While stay interviews are a smart longer-term strategy, you may have a turnover crisis that’s suddenly thrust upon you, and under certain circumstances, extending a counteroffer may make sense. Just make sure that if you’re going to make such an offer, you do it the right way.
According to Smith, “Counteroffers should always remain the exception, not the rule, because of their potential to backfire. After all, most employees [think], ’Why should it take my resigning to trigger a salary increase or promotion?’ ”
But if your strategy is to openly address what’s been plaguing the individual beyond money and identify ways where you can help the individual reconnect and regain a sense of value, the counteroffer may make sense.
Invite the individual to consider a counteroffer like this: “Even though I can’t promise anything at this point, I hope that you’ll allow us to explore some new avenues with you. If we can’t develop an overall career development strategy and growth trajectory that would motivate you to remain with us, then we’ll certainly support your transition to the new company. But we want to keep you, Sarah, and we appreciate your contributions every day. Would you be willing to engage in those kinds of discussions with us?”
Leadership Defense
One key reason for employee dissatisfaction that drives top performers to pursue greener pastures is a perception of unfairness or a leader’s inability to hold everyone accountable to the same performance standards.
John realizes he needs to develop some critical muscle around addressing subpar performance and certain poor behaviors that have calcified in his team over time. The wise vice president of HR counsels him, however, that suddenly addressing substandard performance and conduct issues can shock employees and potentially open up the organization and John personally to employment-related liability. Therefore, in a spirit of full transparency, John will announce to his team that he’s committed to reinventing himself as a leader in this critical area of accountability and setting high and consistent expectations for everyone.
Taking precautions to avoid litigation land mines protects the individual supervisor and the organization as a whole.
“While 1 in 4 managers will likely be involved in employment-related litigation at some point in his or her career, it’s important that leaders like John remain aware of potential pitfalls that might blindside an otherwise unsuspecting supervisor,” said Sharon Bauman, partner in the employment and labor practice group at Manatt, Phelps & Phillips LLP in San Francisco.
Employees are very sophisticated consumers and often realize that the best way to protect themselves from managers’ complaints about their individual performance is to strike first by filing complaints about their supervisors’ conduct. John learns from the vice president of HR why he should run, not walk, to HR when he needs a partner to address a subordinate’s subpar performance or inappropriate workplace conduct. Leadership is a team sport, and it’s shortsighted to think that he can do it all on his own.
After all, whoever gets to HR first triggers the investigation—either focusing on John’s subordinate’s performance problems (if John gets to HR first) or on allegations regarding his conduct as a supervisor (if the employee gets to HR first). That’s when terms like “hostile work environment,” “harassment” and “retaliation” come into play.
John’s lesson? Don’t allow employees to engage in the pre-emptive strike of “pretaliation” by lodging complaints about him before he has a chance to speak with HR about problems that certain staff members may be causing.
Next, John is advised to avoid the biggest problem facing corporate executives today: grade inflation on the annual performance review. Too many unsuspecting managers take staffers through the progressive discipline process all the way to the final written warning stage, only to issue a “meets expectations” overall score on the annual performance evaluation. John now understands that by doing this, he’ll end up creating a major roadblock if the company wants to terminate the employee in the future. After all, by giving a “meets expectations” rating, he’ll have validated an entire year’s performance despite the final written warning on file.
In short, it is John’s responsibility to demonstrate consistency between a subordinate’s corrective action history and overall performance review score. When these documents contradict one another, the company will likely have to continue with the documentation process in order to clarify the record. When both are in alignment, the company should have the discretion to terminate the employee upon a clean final incident.
John’s final lesson from the meeting with the vice president of HR: From a practical standpoint, you can’t just terminate, lay off or “give a package” to someone who’s not fitting in or otherwise contributing to your team’s overall success.
“The employment-at-will defense will not guarantee a summary judgment of a wrongful termination claim at the hearing stage, so you’ve always got to assume that a case will make it all the way to the trial stage, and that the jury will be looking for a really good reason to justify the termination decision,” Bauman said. Therefore, John recommits to engaging in those challenging but necessary conversations and to documenting his findings in the form of progressive discipline to reduce or eliminate the possibility of the claim coming back to bite him and his company in litigation. Bauman advises, “Remember, it’s not just the potential dollar cost of being sued; it’s the time and disruption of interrogatories, depositions, hearings, mediations and potentially trials that will zap your team’s energy for six months to a year—or more—after the termination that are the biggest challenges you face.”
As a leader, you can give your company no greater gift than a motivated, energized and engaged workforce. Spikes in turnover may happen from time to time, but what’s critical is your response, the counsel you seek and your willingness to reinvent yourself so that everyone benefits from the crisis. Follow these offensive and defensive leadership practices not only to cultivate your own leadership capabilities but also to foster an environment where motivation, engagement and satisfaction become the hallmarks of your shop. That’s the greatest workplace wisdom of all.
Paul Falcone (www.PaulFalconeHR.com) is an HR executive in San Diego and has held senior leadership roles with Paramount Pictures, Nickelodeon and Time Warner. A long-time contributor to HR Magazine, he’s also the author of a number of SHRM best-sellers, including 96 Great Interview Questions to Ask Before You Hire (Amacom, 2008), 101 Sample Write-Ups for Documenting Employee Performance Problems (Amacom, 2010), 101 Tough Conversations to Have with Employees, and 2600 Phrases for Effective Performance Reviews (Amacom, 2005). His newest book, 75 Ways for Managers to Hire, Develop, and Keep Great Employees (Amacom, 2016), will be released this month.
- See more at: https://shrm.org/hrdisciplines/orgempdev/articles/pages/effective-leadership-to-keep-and-inspire-valued-employees.aspx#sthash.10OS9KTt.dpuf
Are You Ready for the Marketplace Notices?
Original Post from ThinkHR.com
By: Laura Kerekes
Under the Affordable Care Act (ACA), each Health Insurance Exchange (Marketplace) must notify employers when they have an employee who has received a government subsidy to enroll in a health plan through the Marketplace. These notices will begin being sent to employers in the coming weeks and months, either individually or in batches. Because the notice procedure is being phased in, you may or may not receive notices, even if you have employees who received subsidies through a Marketplace. Here’s what you need to know.
Reason for Notice
These notices, also called 1411 Certifications in reference to the pertinent section of the ACA, will be sent to employers as part of the government’s verification efforts regarding persons who received Marketplace subsidies for individual health insurance. Marketplaces want to confirm whether the individual was eligible for, or enrolled in, an employer’s health plan since those facts can affect someone’s eligibility for subsidies.
You may receive a notice (similar to the sample found here) for each employee that received a subsidy to enroll in insurance through a Marketplace. The notice only informs you that the employee was granted a subsidy — it is not a notification that you have been assessed any penalty. Under the ACA’s play or pay rules, penalties may be assessed later by the Internal Revenue Service to applicable large employers for failing to offer full-time employees affordable minimum value coverage; however, play or pay penalties, and notice of them, are a separate process entirely.
What You Should Do
- Even if you do not believe that any of your employees obtained individual coverage through a Marketplace, be on the lookout for these notices because you have 90 days from the date of the notice to file an appeal, if necessary. Notices may go to a subsidiary instead of the parent company or to a particular worksite instead of the employer’s main office, depending on the information the employee provided to the Marketplace. Alert all departments and worksites to watch for mail in envelops from a government agency or insurance Marketplace.
- Important:Keep these notices confidential because employers are prohibited by law from discriminating or retaliating against employees who may receive subsidies. Consider segregating functions so staff involved in reviewing notices is separate from staff involved in employment or benefit plan decisions.
- Establish your audit process for reviewing any notices you may receive and for filing appeals when appropriate. Confirm that the information is correct based on your employment and payroll records. If you are an applicable large employer subject to the ACA’s play or pay rules, you also should check if the employee was a full-time employee and, if so, whether you had offered affordable minimum value coverage to the employee. Read more about the notice and appeal process here.
- File an appeal within 90 days of receipt of the notice if any of the information is incorrect. To do this, be sure to retain the notice and follow the directions for appeal. Remember that these notices will not advise you of any penalties on large employers, so appeals at this stage are to correct any mistakes in employment information. In addition:
- If you are a small employer and not subject to the ACA play or pay rules, you are not impacted directly but your appeal may alert the Marketplace that the individual was enrolled in your group health plan and not eligible for subsidies.
- If you are an applicable large employer who is subject to the ACA’s play or pay rules, you should be proactive in appealing the Marketplace’s subsidy determination if any information is incorrect. (An applicable large employer generally is one that employed an average of 50 or more full-time and full-time-equivalent employees in the prior calendar year. Related employers in a controlled group are counted together.) Although Marketplaces cannot access play or pay penalties, your appeal may help establish the facts and head off later penalty action by the IRS.
You may not receive Marketplace notices, but if you do, be prepared, review them thoroughly, and appeal incorrect information quickly.
DOL Overtime Rule Will Impact Hospitality Industry
Originally Posted by SHRM.org
By: Allen Smith
The hospitality industry will be hit hard by the Department of Labor’s updates to the overtime rule implementing the Fair Labor Standards Act (FLSA), experts say. With high overhead costs and a low-profit margin, hotels and restaurants typically don’t have enough money in reserve to give employees big raises to preserve their exempt status or to pay many hours of overtime if employees are eligible.
As a result, hospitality employers will need to explore alternative compensation models, schedules and staffing options to try to mitigate costs, according to Ryan Glasgow, an attorney with Hunton & Williams in Richmond, Va.
Some choices will be simple, he noted. For employees with relatively high salaries who work long hours, the logical choice is to increase their salaries, as the minimum increase in salary likely will be less than the employer would have to pay in substantial overtime hours. As for employees with low salaries who don’t work much overtime, it makes sense to convert them to nonexempt and pay overtime for the few overtime hours they might work.
“For all other employees, the decision will be much more difficult and will require a lot of strategic planning and analysis,” Glasgow said. “For example, in certain circumstances, it may be feasible for the employer to combine two exempt positions into one position so that the cost of increasing the salary for the remaining one employee is offset by the cost-savings from the elimination of the other employee’s position.”
He added that it may be better for the employer to convert a position to nonexempt and hire more employees to perform the work so that none of the employees work overtime. “Similarly, employers should evaluate each impacted position to determine whether there are unnecessary and/or inefficient tasks that can be eliminated or given to another employee so that the position requires fewer hours of work, thus lowering the impact of paying overtime,” he noted.
Domino Effect
Be aware of the potential domino effect when an employee’s salary is increased above the new salary level. The employee and the employee’s supervisor may suddenly be making similar salaries. Supervisors may ask for an increase as well, leading to salary increases up the organizational chart, Glasgow said.
Bonus and commission plans will have to be re-evaluated since there may be overtime pay consequences if employees who have been converted to nonexempt are paid bonuses or commissions, noted Robert Boonin, an attorney with Dykema in Detroit and Ann Arbor, Mich., and immediate past chair of the Wage and Hour Defense Institute, a network of wage and hour lawyers.
Rule’s Potential Winners
Salaried workers earning less than $913 a week or $47,476 annually and who regularly work more than 40 hours per week stand to gain from the overtime rule, said Wendy Stryker, an attorney with Frankfurt Kurnit Klein & Selz in New York City. These workers will have their salaries raised above the new threshold, be paid overtime or have their hours reduced to a 40-hour workweek, she said. These employees include entry and midlevel professionals, such as chefs, sommeliers, and hotel or restaurant managers and assistant managers, she added.
The hospitality industry has a lot of employees earning in this range, according to Stryker. She noted that the average U.S. wage for chefs, head cooks and pastry chefs is $45,920. For bakers, the average U.S. wage is lower, at $26,270, Stryker noted.
While workers may benefit from the overtime rule, Michael Layman, vice president, regulatory affairs for the International Franchise Association in Washington, D.C., said the overtime rule will hit the hospitality industry particularly hard. Its employers “disproportionately face unpredictable season- or weather-dependent schedules and variable labor demands, which makes tracking hours and managing overtime costs a significant challenge,” he said.
“Given the need for onsite guest services, employers in the hospitality industry may have less flexibility than other employers to automate or offshore operations,” said Nancy Vary, director of the compliance consulting center at Xerox HR Services in New York City.
However, Carolyn Richmond, an attorney with Fox Rothschild in New York City, said, “I think we will see the live reservationist all but disappear as reliance on [online booking apps] OpenTable, Resy and the others grows.” She added, “Owners are looking at more and more automation—programs that monitor and control labor costs and even how to replace certain employees.”
Other Significantly Affected Industries
Hospitality isn’t the only industry to feel the brunt of the new overtime rule.
“The construction and retail industries will be impacted significantly because, like the hospitality industry, they have unusually high concentrations of low-salaried managers,” Glasgow said. He also expected large research and educational hospitals to be uniquely impacted because they have many low-salaried professionals.
“Any industry that has traditionally offered low pay to its skilled workers is likely to be hard-hit by the new overtime rules,” Stryker said. “In New York City, this is likely to be the creative industries such as advertising and film/television production, where hours are traditionally long, and the work product cannot necessarily be created on a 40-hour-per-week schedule.”
The point of the rule isn’t to benefit employers, though. “The new overtime rules were created to benefit employees,” Stryker said. “As the president noted when he directed the Department of Labor to update the relevant regulations, the FLSA’s overtime protections “are a linchpin of the middle class, and the failure to keep the salary level requirement for the white-collar exemption up to date has left millions of low-paid salaried workers without this basic protection.”
That said, Richmond noted that “While the Department of Labor hopes and expects these changes will lead to increased wages through overtime, I don’t expect that to be the case in [the hospitality] industry. Payroll has already risen dramatically with minimum wage increases and resulting wage compression, and owners will spend more time looking at controlling overtime.”
Allen Smith, J.D., is the manager of workplace law content for SHRM. Follow him @SHRMlegaleditor.
- See more at: https://shrm.org/legalissues/federalresources/pages/hospitality-industry-weighs-options-in-wake-of-overtime-rule.aspx#sthash.D3BGAwvR.dpuf
The Supreme Court gives employee's more room to sue you
The Supreme Court’s latest ruling isn’t going to make a lot of employers happy.
The High Court just made it easier for employees to sue, claiming they were constructively discharged.
Constructive discharge occurs when an employer makes a person’s working conditions so intolerable — via some underhanded actions, like harassment or discrimination — that the person felt compelled to resign.
Federal law says private sector employees must file a charge of harassment, discrimination or constructive discharge with the EEOC within 180 days from the day the illegal act took place if they want to press charges in federal court. The deadline is extended to 300 calendar days if a state or local agency enforces a law that prohibits employment discrimination or harassment on the same basis.
Federal employees have just 45 days to contact an Equal Employment Opportunity (EEO) counselor to be able to file a charge.
The real issue
The question that was posed to the Supreme Court: In constructive discharge cases, what constitutes the last act of discrimination or harassment — i.e., when does the statute of limitations clock start running?
The High Court’s answer: The date the employee resigns (even if it’s not the person’s last day of work).
What happened?
The issue came up in a case in which former postal worker Marvin Green sued the U.S. Postal Service (USPS), claiming constructive discharge.
In late 2009, Green complained to USPS management that he’d been denied a promotion because he was African-American. From there, his relationship with the USPS entered a downward spiral that eventually led to his supervisors accusing him of deliberately delaying the mail (a federal offense).
Then, on Dec. 16, 2009, both parties signed an agreement in which the USPS agreed not to pursue criminal charges in exchange for Green either retiring or accepting a position in a remote location for far less pay. Green elected to retire and submitted his resignation on Feb. 9, 2010 (effective March 31).
On March 22, Green contacted an EEO counselor and alleged that he was constructively discharged. He then filed suit in federal district court, which dismissed his charges on the basis that it was untimely because he failed to contact an EEO counselor within 45 days of Dec. 16, the date he signed the agreement.
Green appealed, and the case made it all the way to the Supreme Court, which ruled in Green’s favor when it came to the start of the 45-day limitations period.
It said the period begins on the date an employee resigns.
The reasoning
The court said in cases in which an employee claims to have been fired for discriminatory reasons, the matter alleged to be discriminatory includes the discharge itself. Therefore, the 45-day limitations period begins when the employee is discharged.
The justices applied that same line of thinking to constructive discharge cases — saying that the matter alleged to be discriminatory includes the employee’s resignation.
Two reasons it did this:
- It said a resignation is part of the elements of a constructive discharge claim. So without a resignation, the claim can’t even exist, and
- It said requiring that a complaint be filed before resignation occurs would ignore that an employee may not be in a position to leave his job immediately.
Far-reaching effect
While this case dealt with a federal employee’s obligation to report to an EEO counselor within 45 days, it indicated that lower courts could apply the same reasoning to the 180/300-day periods imposed upon private sector employees.
One could even surmise that the ruling could also apply to state anti-discrimination and anti-harassment laws as well.
Cite: Green v. Brennan (Postmaster General)
Originally Posted by HRMorning.com
5 Things Employers Need to Know About Overtime Rules
Original post benefitsnews.com
With compensation taking up the biggest slice of the benefits pie, employers are paying close attention to the Department of Labor’s proposed changes to the overtime rules – expected to be released as early as this month – under the Fair Labor Standards Act.
The proposed rules bump the salary threshold for overtime from $23,600/year to $50,440/year. If the final rules stay the same as the proposed rules, employees currently working in salaried positions who make less than $50,440 will now be entitled to overtime pay. That’s a 113% increase, which is “incredibly dramatic,” says Lisa Horn, spokesperson for the Partnership to Protect Workplace Opportunity.
“Not only does it raise it that high, but what many have failed to hone in on is the fact that this is an annual increase,” she adds. “That’s quite impactful on top of that huge initial jump in the salary increase.”
Horn says some research predicts that because of that annual increase, which is tied to the 40th percentile of all full-time salaried workers in the country, the minimum salary threshold for overtime could rise as high as $90,000 within five to seven years.
It’s possible the final rules could include a lower salary threshold – Horn says she’s heard it could be $47,000/year instead of $50,440 – but even if that’s the case, it will still mean a big jump. Employers will have to decide whether to increase workers’ salaries to make them exempt from overtime or reclassify them as non-exempt.
And since many employers have different benefit structures for hourly and salaried workers, if some employees need to be reclassified as non-exempt they could see their benefits affected.
Moreover, in the eyes of employees, being reclassified as non-exempt is “seen as a demotion,” says Horn, who also works as SHRM’s director of Congressional affairs. “Because you’re continually trying to climb most employees from that non-exempt hourly status to the more professional exempt status.”
Here are five things employers need to know about the proposed rules from the PPWO, a group of more than 70 employer organizations and companies created to respond to the overtime rule changes:
1. This proposal represents a 113% immediate increase plus an annual increase. The proposed overtime rule would initially raise the salary threshold defining which employees must be paid overtime by 113%, from $23,600 to $50,440. In addition, the DOL has proposed increasing this minimum salary on an annual basis.
2. The proposal will impact millions of workers and cost billions to businesses.According to the DOL, the rule will affect over 10 million workers – workers who may see their workplace flexibility diminished or a loss in other benefits they rely on, says the PPWO. The National Retail Federation estimates retail and restaurant businesses will see an increase of more than $8.4 billion per year in costs.
3. The implementation window is very short. As proposed, the implementation timeline for this rule is only 60 days, which will place a massive burden on HR departments and organizations scrambling to comply, according to the PPWO. “That 60 days is just completely unworkable from an organization’s standpoint and having to implement these changes in such a short time frame,” says Horn. “These are, for some organizations, really massive changes.”
4. Many employees will need to be demoted. This change could force employers to reclassify professional employees from salaried to hourly – including many managers and those with advanced degrees – resulting in a loss in benefits, bonuses, and flexibility, and a reduction in professional opportunities.
5. This is a blanket increase that disproportionally impacts lower cost areas. A one-size-fits-all approach is inappropriate for the different industries and various regions of the country. While the threshold of $50,440 may be reasonable in New York City, a comparable cost of living in Birmingham, Alabama, for example, is only about $21,000 – making the threshold unattainable and unrealistic for many small businesses in lower cost of living areas, according to the PPWO.
5 Crucial Wellness Strategies for Self-Funded Companies
Originally posted on CareATC.com
Instead of paying pricy premiums to insurers, self-insured companies pay claims filed by employees and health care providers directly and assume most of the financial risk of providing health benefits to employees. To mitigate significant losses, self-funded companies often sign up for a special “stop loss” insurance, hedging against very large or unexpected claims. The result? A stronger position to stabilize health care costs in the long-term. No wonder self-funded plans are on the rise with nearly 81% of employees at large companies covered.
Despite the rise in self-insured companies, employers are uncertain as to whether they’ll even be able to afford coverage in the long-term given ACA regulations. Now more than ever, employers (self-insured or not) must understand that wellness is a business strategy. High-performing companies are able to manage costs by implementing the most effective tactics for improving workforce health.
Here are five wellness strategies for self-insured companies:
Strategy 1: Focus on Disease Management Programs
Corporate wellness offerings generally consist of two types of programs: lifestyle management and disease management. The first focuses on employees with health risks, like smoking or obesity, and supports them in reducing those risks to ultimately prevent the development of chronic conditions. Disease management programs, on the other hand, are designed to help employees who already have chronic disease, encouraging them to take better care of themselves through increased access to low-cost generic prescriptions or closing communication gaps in care through periodic visits to providers who leverage electronic medical records.
According to a 2012 Rand Corporation study, both program types collectively reduced the employer’s average health care costs by about $30 per member per month (PMPM) with disease management responsible for 87% of those savings. You read that right – 87%! Looking deeper into the study, employees participating in the disease management program generated savings of $136 PMPM, driven in large part by a nearly 30% reduction in hospital admissions. Additionally, only 13% of employees participated in the disease management program, compared with 87% for the lifestyle management program. In other words, higher participation in lifestyle management programs marginally contributes to overall short-term savings; ROI was $3.80 for disease management but only $0.50 for lifestyle management for every dollar invested.
This isn’t to say that lifestyle management isn’t a worthy cause – employers still benefit from its long-term savings, reduced absenteeism, and improved retention rates – but it cannot be ignored that short-term ROI is markedly achieved through a robust disease management program.
Strategy 2: Beef Up Value-Based Benefits
Value-Based Benefit Design (VBD) strategies focus on key facets of the health care continuum, including prevention and chronic disease management. Often paired with wellness programs, VBD strategies aim to maximize opportunities for employees make positive changes. The result? Improved employee health and curbed health care costs for both employee and employer. Types of value-based benefits outlined by the National Business Coalition on Health include:
Individual health competency where incentives are presented most often through cash equivalent or premium differential:
- Health Risk Assessment
- Biometric testing
- Wellness programs
Condition management where incentives are presented most often through co-pay/coinsurance differential or cash equivalent:
- Adherence to evidence-based guidelines
- Adherence to chronic medications
- Participation in a disease management program
Provider Guidance
- Utilization of a retail clinic versus an emergency room
- Care through a “center of excellence”
- Tier one high quality physician
There is no silver bullet when it comes to VBD strategies. The first step is to assess your company’s health care utilization and compare it with other benchmarks in your industry or region. The ultimate goal is to provide benefits that meet employee needs and coincide with your company culture.
Strategy 3: Adopt Comprehensive Biometric Screenings
Think Health Risk Assessments (HRAs) and Biometric Screenings are one and the same? Think again. While HRAs include self-reported questions about medical history, health status, and lifestyle, biometric screenings measure objective risk factors, such as body weight, cholesterol, blood pressure, stress, and nutrition. This means that by adopting a comprehensive annual biometric screening, employees can review results with their physician, create an action plan, and see their personal progress year after year. For employers, being able to determine potentially catastrophic claims and quantitatively assess employee health on an aggregate level is gold. With such valuable metrics, its no surprise that nearly 51% of large companies offer biometric screenings to their employees.
Strategy 4: Open or Join an Employer-Sponsored Clinic
Despite a moderate health care cost trend of 4.1% after ACA changes in 2013, costs continue to rise above the rate of inflation, amplifying concerns about the long-term ability for employers to provide health care benefits. In spite of this climate, there are still high-performing companies managing costs by implementing the most effective tactics for improving health. One key tactic? Offer at least one onsite health service to your population.
I know what you’re thinking: employer-sponsored clinics are expensive and only make sense for large companies, right? Not anymore. There are a few innovative models out there tailored to small and mid-size businesses that are self-funded, including multi-employer, multi-site sponsored clinics. Typically a large company anchors the clinic and smaller employers can join or a group of small employers can launch their very own clinic. There are a number of advantages to employer-sponsored clinics and it is worthwhile to explore if this strategy is right for your company.
Strategy 5: Leverage Mobile Technology
With thousands health and wellness apps currently available through iOS and Android, consumers are presented with an array of digital tools to achieve personal goals. So how can self-insured companies possibly leverage this range of mobile technology? From health gamification and digital health coaching, to wearables and apps, employers are inundated with a wealth of digital means that delivering a variation of virtually the same thing: measurable data. A few start-ups, including JIFF and SocialWellth, have entered the field to help employers evaluate and streamline digital wellness offerings.
These companies curate available consumer health and wellness technology to empower employers by simplifying the process of selecting and managing various app and device partners, and even connecting with tools employees are already be using.
Conclusion:
Self-insured companies have a vested interest in improving employee health and understand that wellness is indeed a business strategy. High-performing companies are able to manage costs by implementing the most effective tactics for improving workforce health including an increased focus on Chronic Disease Management programs; strengthening value-based benefit design; adopting comprehensive biometric screening; exploring the option of opening or joining an employer-sponsored clinic; and leveraging mobile technology.
Which strategies or tactics are you considering to implement in 2017?
Employers Advised to Re-Evaluate Retirement Plan Costs
Original post benefitnews.com
Even with fee disclosure rules in place, it is hard for plan sponsors to discern the fairness of the fee structures in their retirement plans.
The TIAA Institute has taken issue with the fairness of per capita administrative service fees. In a recent report, the Institute says that plan sponsors need to look harder at the fee structures of their plans because what may seem fair might actually be penalizing the lowest paid or shortest term workers.
“When people started charging per head fees, people claimed it was fair. It doesn’t meet an economic standard of fairness. It is simple and transparent but definitely not fair,” says David Richardson, senior economist with the TIAA Institute and author of a recent research paper on assessing fee fairness.
It is up to plan sponsors to “do that classical weighing of efficiency vs. fairness and what it means. A per head fee is transparent but it is not a fair thing to do. … These per head fees are a clever way to charge expensive fees to younger, shorter tenure workers. I find it worrisome,” he says.
This has always been an issue but all of the fees were wrapped up in an all-inclusive fee that paid for investment, administrative and other services. Once the government began requiring an unbundling of fees, “we started seeing all of these things,” he says.
Historically, fees were charged on a percentage of assets basis, which was fair, he says.
He uses Social Security as an example of why a per-head fee is not equitable. Currently, Social Security charges administrative costs as a percentage of income taken in. If it decided to charge all 325 million people in the Social Security Administration system a flat $50 fee, “every man, woman and child, firm or disabled, would be charged the same because we are providing that service,” Richardson says. “I don’t think anybody would consider that to be fair but that is what flat fee advocates are claiming in a retirement plan.”
He doesn’t believe fee issues will go away anytime soon, saying that he believes the overwhelming majority of vendors in the market are honest but many of the regulations are geared to those who may not be.
“So, the government has to be proactive, not reactive on this. The tendency is to say if people have more information, they are better informed. That is not necessarily true,” he says. “A lot of people have a hard time understanding that information. It is tough. When they are saying we need more and more disclosure, more and more information is not just helpful. Sometimes it is just noise to people.”
So when deciding how to assess the effectiveness of a plan administrative fee structure, TIAA Institute says plan sponsors must follow four standards: adequacy, meaning that total fees collected must cover the cost of features and services provided to plan participants; transparency, meaning that everyone can easily find information about the fee structure and how the fees are used to cover the cost of plan features and services; administrative ease, meaning the fee structure is not too complicated or costly for either the plan sponsors or plan vendors; and fairness, which ensures that administrative fee structures must provide horizontal and vertical equity.
Horizontal equity means that “participants with similar levels of assets pay similar levels of fees”; and vertical equity means that “participants with higher levels of assets pay at least the same proportion in fees as those with lower asset balances,” according to TIAA Institute.
The Institute says that an administrative fee structure charging a flat pro rata fee can meet all four standards.
“This fee structure will be transparent, can easily satisfy adequacy, and is simple to administer. The pro rata fee will be fair because similar participants pay the same level of fees and higher asset participants pay the same proportion of fees as low asset participants,” TIAA Institute finds.
“Our goal is to help plan sponsors make the best decision for their plan and their plan participants,” Richardson says.
He also cautions ERISA plans to keep these four standards in mind because not doing so could violate the “spirit of non-discrimination rules,” he adds. “It tilts benefits in favor of key and highly paid employees.”
Many Patients Don't Get Much Out of EHRs
Original post benefitspro.com
Most Americans appear to view electronic health records (EHR) as a welcome convenience, but not as a game-changing medical advance. That’s what one can glean from a recent survey of patients conducted by HealthMine.
The poll of 500 insured adults found that 60 percent have access to an electronic health record, but only 22 percent of those with an EHR say they use it to guide their medical decisions. The great majority of patients say they rely on the technology as a way to “stay informed.”
Other results:
- 71 percent of those with EHRs say they access the records when needed
- 15 percent say it’s hard to understand the information presented
- 14 percent never access their EHR
Of course, not all EHRs are created equal. Some patients report only having access to a limited amount of information, and others say they are not able to see that same information as their doctor:
- 69 percent can see lab work/blood tests
- 60 percent see their prescriptions
- 55 percent view their billing information
- 47 percent see notes from their physician
Bryce Williams, CEO of HealthMine, suggested that many patients have not yet fully grasped the value of EHRs. Educating people on how to benefit from them could be an important part of wellness programs, he said.
"Electronic health records are still in the early phases of consumer adoption. They have the potential to engage consumers more directly in managing their health," he said. "Wellness programs can help bridge the gap between EHR adoption and understanding by making the information both meaningful and actionable for patients."