How to Avoid Penalties Under the Affordable Care Act
Original Post from SHRM.org
By: Lisa Nagele-Piazza
2016 is expected to be the most expensive year for businesses complying with the Affordable Care Act (ACA), said David Lindgren, senior manager of compliance and public affairs for Flexible Benefit Service Corporation, a benefit administrator headquartered in Rosemont, Ill.
It’s the first year for dealing with ACA reporting, which many employers will have to complete by the end of June, Lindgren said during a concurrent session at the Society for Human Resource Management 2016 Annual Conference & Exposition.
There are more than 30,000 pages of guidance about the law, but Lindgren said the ACA is fairly easy to comprehend. “Of course, many people would disagree with me,” he noted.
“It’s not necessarily easy to comply with the ACA, and it’s not financially inexpensive, but most of the rules aren’t overly complicated,” he said.
The federal agencies that regulate the ACA have said they intend to monitor all businesses for compliance. This may not be realistic, but employers should keep in mind that more auditing can be expected.
Lindgren identified 30 penalties associated with noncompliance and provided insight on how to avoid them.
Employers can choose to pay the penalties for noncompliance, but steep fines are often attached, he said. For example, market reform violations carry a penalty of $100 per participant per day, up to $500,000 for each violation.
Employees Must Receive Notices
Some noteworthy penalties to avoid are those associated with the failure to provide required notices to plan participants, including a written notice of patient protections.
Lindgren said sometimes employers aren’t clear about who has been designated to provide this notice. “A lot of times the insurance company thinks the employer provided it and the employer thinks the insurance company did,” he said. “So it’s important to double check who is in fact giving the notice.”
Participants must also be provided with a summary of benefits and coverage in a standardized format. Lindgren likened this format to a nutrition label on a can of soup.
A participant should be able to easily compare the benefits to other plans, such as a spouse’s plan, just as the nutrition facts for two cans of soup can be easily compared.
There is a standardized template for the summary of benefits and coverage on the Department of Labor website.
The requirement to provide a summary of benefits and coverage applies to medical plans, but not to dental or vision plans.
The summary should be distributed at the time of open enrollment and special enrollments related to qualifying events, as well as at the request of participants and when a material modification has been made to the plan.
Although there is no penalty attached for noncompliance, employers must also provide written notice about the health insurance marketplace to new hires within 14 days of their start date.
This applies even for organizations that don’t offer benefits and even to those employees who aren’t eligible for benefits, Lindgren said.
There are some exceptions. For example, if an employer isn’t subject to the Fair Labor Standards Act, then it doesn’t have to provide the marketplace notice.
Exceptions for Grandfathered Plans
Grandfathered plans aren’t subject to some of the requirements under the ACA. This includes plans purchased on or before March 23, 2010, that haven’t made certain material changes.
Lindgren noted that employers with grandfathered plans must provide written notice to participants notifying them that it is a grandfathered plan and describing what that means for participants.
If participants aren’t provided this information, the plan will lose its grandfathered status, Lindgren said.
HR Takes the Lead
Benefits compliance isn’t just a human resources issue anymore, but HR often takes the lead in compliance efforts, according to Lindgren.
However, other departments, such as finance, legal and information technology, are increasingly getting more involved.
Overtime Exemptions Remain Widely Misunderstood
Original Post from SHRM.org
By: Allen Smith
Even if workers’ pay is higher than the newly raised exempt salary threshold, they still might not be exempt. That’s because the new overtime rule didn’t add any requirements to the duties tests but left the existing duties tests in place. And the tests are widely misunderstood, particularly those for the administrative exemption, according to Robert Boonin, an attorney with Dykema in Detroit and a speaker at the Society for Human Resource Management 2016 Annual Conference & Exposition.
“I’m afraid you may be OD’d on overtime,” Boonin said at his presentation’s outset. But he reminded attendees that the salary level for the white-collar exemption—$455 a week, or $23,660 per year, under the 2004 overtime rule—will be raised to $913 a week, or $47,476 per year, effective Dec. 1 and walked them through potential traps in classifying workers as exempt.
Who’s In, Who’s Out
Paralegals are almost never exempt under the administrative exemption, Boonin remarked, and the same is true for help desk employees and administrative assistants. Other positions that probably don’t fit within the exemption include mortgage loan originators, customer service representatives and insurance adjustors.
To fall under the administrative exemption, an employee must have the primary duty of performing office or nonmanual work related to the employer’s management or general business operations.
He noted that areas likely to be related to management and general operations include:
- Accounting.
- Advertising.
- Auditing.
- Employee benefits.
- Finance.
- Government relations.
- Human resource management.
- Insurance.
- Labor relations.
- Marketing.
- Procurement.
- Public relations.
- Purchasing.
- Quality control.
- Research.
- Safety and health.
- Tax.
- Training and development.
That’s a wide swath of operations.
But, most important, the employee must exercise “independent judgment and discretion” on “matters of significance” to fit within this exemption, he emphasized.
An employee who falls under the exemption should not merely follow marching orders. So, while an HR coordinator who processes applications wouldn’t fit within the exemption, an HR director who oversees an HR department probably would.
‘Independent Judgment and Discretion’
When determining whether someone has discretion and independent judgment, Boonin said, HR should consider whether the employee:
- Has the authority to formulate, affect, interpret, or implement management policies or operating practices.
- Carries out major assignments in conducting the operations of the enterprise.
- Performs work that affects business operations to a substantial degree, even if assignments are related to operation of a particular segment of the business.
- Has authority to commit the employer in matters that have significant financial impact.
- Has authority to waive or deviate from established policies and procedures without prior approval.
- Has authority to negotiate and bind the institution on significant matters.
- Provides consultation or expert advice to management.
- Plans long- or short-term business objectives.
- Investigates and resolves matters of significance on behalf of management.
- Represents the institution in handling complaints, arbitrating disputes or resolving grievances.
Professional Exemption
The professional employee exemption is more straightforward. The primary duties must be in an area requiring specialized higher education and the consistent exercise of discretion and judgment, he said. These areas include:
- Engineering.
- Law.
- Medicine.
- Psychology.
- Science.
- Social work.
- Teaching.
Positions that may not fit within this exemption include accountants, stockbrokers and entry-level engineers.
While the salary threshold in general must be satisfied for white-collar employees to be exempt, the threshold does not apply to:
- Doctors.
- Lawyers.
- Teachers.
*Employees in highly skilled computer-related occupations, such as programmers and network designers who earn at least $27.63 per hour.
Other Exemptions
In addition to the administrative and professional exemptions, the executive exemption is available to employees who supervise at least two full-time workers and have the authority to hire and fire, in addition to primarily managing the enterprise, a department or subdivision.
Boonin noted that the outside sales exemption is for those whose primary duty is to sell services to customers at their place of business. There are no salary or fee requirements for exempt outside sales employees.
Special rules apply to highly compensated employees, who don’t fit within the white-collar exemptions. They perform a combination of nonexempt work (what the Department of Labor now refers to as “overtime-eligible” work) and exempt work, plus are high earners.
Take a sales director. She might not fit within the administrative exemption if the vice president of sales calls all the shots. She also wouldn’t fall under the professional exemption. Nor would she fit within the executive exemption if she supervised two full-time employees but didn’t have the authority to hire or fire them; again, the vice president might reserve that function for herself.
The sales director still would be exempt if her salary is—as of Dec. 1—at least $134,004 because she performs at least one of the duties in the executive, administrative or professional employee exemptions: supervising two full-time employees.
3 Key Takeaways of Designing Employee Benefits Programs
Original Post from BenefitsPro.com
By: Nate Randall
Throughout my career, I’ve had the good fortune to work for a variety of industry leading organizations from stratospheric startup Tesla Motors to Fortune 100s Safeway and Washington Mutual.
I planted myself knee deep in managing, analyzing, and creating everything related to employee benefits and have learned more than a few finer points along the way.
The common thread across these three companies was a genuine desire and drive to apply innovative, forward-thinking approaches to change and improve the way employee benefits are delivered.
I’ve reflected on my experiences to give you three takeaways that helped these companies make the biggest impact possible with their benefits and employee experience programs.
Innovation isn’t easy
Much has been written about long work hours. Stories abound of people sleeping in their cars or under their desks and subsisting on Top Ramen and frozen vegetables. That might exist for you at some point along the path, but that’s not the type of innovative environment that I’m talking about here. I am talking about an atmosphere that applies a conscious drive for change which can lead to meaningful acceptance of new ideas.
Whether you’re rethinking the value of the way health insurance is delivered to families or trying to disrupt a 100-year-old automotive industry, mindfully striving for innovation isn’t a cakewalk.
That’s because humans are programmed not to like change, and for many, working through innovation doesn’t come naturally. It takes a laser-focused and cognizant decision to examine the way things are traditionally or typically done. To do that, you’ll need to gather data, build a team, prove a case, influence, iterate, fail, and to achieve success, you’ll need to do all of these things quickly with minimal errors and missteps.
In my experience, it all comes down to the team that you surround yourself with. When hiring or building your team, I always advise to think creatively about your problems and look for passion in those you recruit. More important than having “done it before” is an intense drive to solve problems and an underlying interest in the core subject.
Early in my career at Tesla, an HR manager said to me, “there are three reasons people come to Tesla. Either they are passionate about cars, passionate about the environment, or passionate about their chosen profession. And Tesla is the best place in the world to be for all three of those things.” Notice there is nothing about money, benefits, or perks. That brings me to the second lesson I’ve learned..
Top talent doesn’t care about perks (until you take them away)
Rarely do candidates and their families make the decision to change their lives — in some cases moving across the country or world — because of the benefits and perks you offer.
Attracting top talent is about storytelling. It’s about having a mission and purpose that a person (and his or her family) can identify with through hard work. I have literally witnessed thousands of people join a common mission early on with little more than unlimited cereal and coffee being offered as the perk. And this was in the geographic backyard of arguably the most intense company perk culture on the planet in Silicon Valley. At the end of the day, people want to feel like they are contributing to something bigger than themselves.
Don’t get me wrong, I don’t mean to imply employees don’t care about the benefits offered to them. They must be satisfied knowing that the basics — health, disability, life insurance, and retirement — are covered. But in my experience, top talent doesn’t make the decision to join a company because of free lunches and massages on Wednesdays.
Keeping that in mind, it is extremely important to construct benefits and perks with care and thought. Once implemented, any experienced HR manager will tell you his or her sad tale of trying to take something away that people are accustomed to.
It’s also imperative to align benefits with perks. Trust me, employees notice if either appears alien to the company culture and mission. I learned this lesson at Safeway during a program that linked the amount of premium a person paid for health insurance to their biometric measures like blood pressure and cholesterol. Employees scratched their heads wondering why the company cafeteria featured cheap burgers and sodas in comparison to the healthy (but pricey) salad bar if poor eating habits could potentially equate to higher health insurance premiums. To promote the healthy lunch options, we had to align its costs with the culture we were trying to foster.
Silicon Valley has become legendary for perks and what many of my colleagues across the country consider frivolous and extravagant benefits. While I agree that many of the Valley’s largest and most iconic brands along with many wannabe cool kids are foolishly wasting time, resources, and money on programs that really do not serve any identifiable goal, I will argue that offering smartly aligned, personalized benefits and perks are the wave of the future. And that brings me to my third and final take-away...
Let the people choose
We have a lot of choice in our lives. We choose the items, price points, and brands to put into our carts when shopping at Safeway. Every Tesla purchase is made to order, built to the specific requirements of the buyer. Google organizes information to make it individualized and useful. Amazon provides a personalized online shopping experience. Uber and Airbnb tap into excess individual capacity in existing systems to create value. We all have different needs, priorities, family situations, and interests, so is it so difficult to offer benefits that can be personalized, too?
The traditional way of offering limited choice employee benefits and perks for everyone (i.e., group benefits) is outdated and bloated with waste. Upwards of 30 percent of compensation costs are funneled to these traditional benefits and American companies spend over a trillion and a half dollars on these inefficient benefits per year.
And that doesn’t even include any so-called perks. In my own research, most employers are paying anywhere from $7,000 to $25,000 per year for a single traditional benefits package. That’s a huge chunk of change and much of those benefits will never be used by the individual if it doesn’t apply to their situation or they find no personal value in it.
Instead of these antiquated and engorged traditional benefits, smart people are creating systems and methods whereby employees can build personalized benefits packages that meet individual needs and circumstances. Giving people the choice and ability to craft what they need can and will make a real difference in people’s daily lives.
Adoption by forward-leaning employers along with regulatory cooperation will finally result in a system for employee benefits and perks that is modern, flexible, and valued. A system that looks like the rest of our world: personalized.
Report: Make Workforce Analytics Work for Business
Original Post from SHRM.org
By: Kathy Gurchiek
More businesses will be using workforce analytics over the next three years, especially to help with retention and recruitment, according to a new report published by the SHRM Foundation.
For HR practitioners, it will be increasingly important to understand analytics and to be able to present the findings to senior executives. In a data-driven world, organizations will establish specialist HR teams and recruit data-oriented personnel, according to Use of Workforce Analytics for Competitive Advantage, released June 21 at the Society for Human Resource Management 2016 Annual Conference & Exposition in Washington, D.C.
“Workforce analytics is transforming human capital strategy,” said Mark Schmit, Ph.D., SHRM-SCP, executive director of the SHRM Foundation, in a news release. In the foreword to the report, Schmit noted that a 2015 Economist Intelligence Unit survey found 82 percent of organizations recognize the importance of talent-related data in managing recruitment, retention, and turnover, and increasingly see workforce analytics “as a critical tool to shape future business strategy.”
“This new report can help HR and business leaders prepare for the future and leverage the power of analytics to generate valuable business insights. This new report can help HR and business leaders prepare for the future and leverage the power of analytics to generate valuable business insights.”
Organizations wanting to exploit “big data” to gain a competitive advantage are setting up small specialist teams of data analysts, training their existing staff in the use of big data and recruiting college graduates with skills in workforce analytics, according to the report.
“Executives and academics interviewed for this report consistently argue that a new-style HR professional should possess a combination of two skills—a head for analytics together with the ability to present findings in the manner and language convincing to senior executives,” the report authors noted.
The first step in getting data analysis into the HR decision-making process “is having the will to do it,” the authors said, but it’s also critical for the data to be presented in a way that is clear and accessible, if the analytics are to yield results.
Organizations seeking to effectively use workforce analytics likely will encounter some obstacles. The report offers the following recommendations for overcoming these obstacles:
- Improve the analytical skills of the HR function.
- Ensure data are clean, organized and ready for analysis.
- Keep projects focused on solving key business problems.
- Maintain rigor by not confusing correlation and causation. If data show that older sales representatives sell more than younger colleagues, for example, that doesn’t necessarily mean that age is the cause.
- Avoid the pursuit of perfectionism in data; it can lead to procrastination. Organizations don’t need complete assurance that measurements are totally accurate before beginning a project.
- Seek small wins initially, which can lead to bigger wins.
- Establish cross-functional cooperation for data gathering, storage and analysis.
- Reassure staff that analytics is an aid to human decision-making, not a replacement for it.
- Understand the legal and ethical complexities of employee monitoring.
The report includes case studies that demonstrate “the need for senior decision-makers to embrace workforce analytics as an essential aspect of strategic HR,” the report authors noted.
The report was sponsored by IBM Kenexa, researched and written by the Economist Intelligence Unit (EIU), and published by the SHRM Foundation. The EIU is a research and analysis division of The Economist Group, a British-based global organization that is a sister company to The Economist.
The report is the latest in a series from the Foundation and the EIU, which launched a partnership and strategic thought leadership initiative in 2013, resulting in this report and the following previous publications:
• Evolution of Work and the Worker, which focused on the globalization of business, changing demographics and changing patterns of mobility and how these affect the , which focused on the globalization of business, changing demographics and changing patterns of mobility and how these affect the , which focused on the globalization of business, changing demographics and changing patterns of mobility and how these affect the nature of work and the worker.
• Engaging and Integrating a Global Workforce, which focused on how “clashes/unrest will continue to grow globally at both a societal and a corporate level.”
“We believe these reports provide important insights to help forward-thinking HR and business leaders plan more effectively for the future,” Schmit wrote in the foreword.
This research, he added, also provides “excellent background information for students and researchers who wish to study the many questions raised.”
Some of those questions include cultural and practical obstacles such as the skills gap, as well as ethical and legal questions about the monitoring of employees and job candidates in the process of collecting workforce analytics, according to the report.
“Legal rulings on the monitoring of employee behavior vary from region to region and are still in a state of flux,” the report noted. “Some view such monitoring to be beyond the boundaries of acceptable ethical practice.”
Additionally, the report suggested that some executives might fear that analytics will contradict their personal judgment; however, as they see competitors benefitting from HR analytics, that barrier is likely to be overcome.
The Death of an Employee's Spouse
Original Post from BenefitsPro.com
By: Amy Florian
How often does it happen? An employee has returned to work after experiencing the death of a spouse. At first, she gets hugs and people tell her they are sorry for her loss. But after a few days, you notice that co-workers talk about everything and everyone except the person who died, even when it would be natural to include something about him in the conversation. They all tiptoe around it and avoid even mentioning his name. Why is everyone so afraid?
The truth is, they are well-meaning but uninformed. Most are afraid that if they say his name, they will make her sad or spoil her day. They think it is their job to cheer their co-worker up or take her mind off the reality.
They don’t realize it is not their job to “fix it.” They can’t take her grief away anyway. The loss is always on her mind, no matter how hard others try to avoid bringing it up. Nor do they realize how much she longs to hear his name, how badly she wants to know that someone besides herself remembers, or how hungry she is to share stories and memories.
Co-workers can be much more comforting if they can acknowledge and accept her sadness, continue to give her an understanding smile or a hug for weeks afterwards, or even cry with her. Grief that is shared is diminished, but grief that is repressed or denied festers inside until it finds a way to come out.
Besides, tears are healthy. Despite our fears to the contrary, no one in the history of the world has ever started crying and not been able to stop. Most people report feeling relieved or freed or even cleansed after a good cry, because tears contain physiological chemicals that relieve stress; we are supposed to cry when we are sad.
So what can you do when you notice that people are afraid to say the name? The easiest thing is to say the name yourself. Bring up a story or a memory that involves the spouse — maybe an interaction at a company event. That gives others permission to say the name, too.
Then you can coach your colleagues to do the same by addressing the issue explicitly, saying, “Sometimes people are afraid to mention the name of a deceased family member for fear of making the person sad. We always want to follow her lead, but most survivors love to hear their loved one’s name and share stories and memories of the person’s life. Please don’t be afraid.”
Continue on to talk about tears: “It’s true that she may cry, but that doesn’t mean you made her sad. The tears are there anyway, and every once in a while, they spill over. It’s better that her inevitable tears can be shared with people who care about her.”
In spite of your efforts, you will still find that some people are uncomfortable with grief and sadness. There will be others, though, who can learn to freely share whatever their grieving co-worker is experiencing. It is good for her, and it also builds the kind of camaraderie and bonding that help the business thrive. It’s the right thing to do, all the way around.
8 Common But Costly Benefits Communication Mistakes
Original Post from HRMorning.com
By: Tim Gould
Here are a few stats that really drive home just how critical benefits communication is for HR pros.
When employees that were offered rich employer benefits received poor communication, just 22% of those workers reported being satisfied with their benefits.
On the other hand, when employers with less-rich benefits communicated those benefits effectively, 76% of workers reported being satisfied with their employers’ benefit offerings.
These stats were part of a recent study by Towers Watson WorkUSA.
At the 2015 Mid-Sized Retirement & Healthcare Plan Management Conference in San Diego, Benefits Strategist Julie Adamik used those surprising stats as an opening to launch into a presentation about effective benefits communication.
What to avoid
During the presentation, Adamik covered some of the most common — and costly — benefits communication mistakes, which included:
1. Holding a boring benefits presentation. There’s a common misconception among workers that anything about benefits is going to be boring. But when HR pros don’t make the effort to make their benefits presentations interesting, the message is bound to be lost on employees.
2. Letting Legal draft all of your benefit communications. When employers let a legal department write all your benefits communications, there’s a very good chance the documents will be littered with legalese that confuses employees, bores them to the point of tuning out or both.
3. Not allotting enough of the budget to the benefits communications. Upper management often doesn’t have a handle on just how much solid benefits communications are going to cost — at least not in the same way HR does.
Benefits communication must be more detailed than standard inter-office communications, so it’s likely to take more time to prepare and produce.
4. Relying on workers will bring their benefits info home and discuss it with their family members.Effective benefits communication should always try to include spouses and family members.
5. Assuming employees will simply act on the messages in the benefit communications. It’s up to HR to specifically tell staffers what they should do with the benefits info as well as why.
6. Thinking workers will read their open enrollment materials cover to cover on their own time. The more HR can go over during the actual open enrollment meeting, the better. Of course, enrollment time shouldn’t be the only time benefits info should be addressed. Communication should be a year-long process.
7. Opting for “professional-sounding” language instead of simple “plain-speak” English. Sure, HR pros’ world is filled with jargon, buzzwords and benefits-related acronyms, but rank-and-file employees’ worlds are not. Keep the benefit communications as simple as possible.
8. Covering too much info. It’s only natural to try and cram everything possible into your open enrollment materials, but when there’s just too much being thrown at employees, they suffer from information overload — and retain little (if any) of what was covered.
Remember, continuous education is a proven way to improve employees’ decision-making regarding their benefits, which should be the goal of every communication effort..
Adapted from “Effective Benefit Communications” by Julie Adamik, CEBS, CCP, CBP, as presented at the 2015 Mid-Sized Retirement & Healthcare Plan Management Conference in San Diego.
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.