5 tips to make retirement education meaningful
Originally posted on https://eba.benefitnews.com.
Through the use of education and communication, employers and benefit advisers can have a huge impact on their employees’ retirement readiness. Making that education meaningful, however, is key to employee engagement and understanding. Here are five tips from Grinkmeyer Leonard Financial and investment advisers with Commonwealth Financial Network on how to make retirement education meaningful.
1. Paint a picture of their "future self"
Employees who can envision their future selves are more likely to understand their financial needs during retirement. The advisers with Commonwealth Financial Network suggest one strategy for embracing your future self is to have employees envision not only their financial retirement goals, but also lifestyle retirement goals. By forcing today’s self to recognize how he or she will look in the future, employees are more likely to save for that future, they say.
2. Help them plan for an achievable number
For too long the financial services industry has focused on the daunting pot of money people should accumulate in order to retire, the advisers say, adding that breaking the number down to monthly saving increments is less scary and seems more achievable to employees.
3. Account for health care
A 2013 study conducted by Fidelity's Benefits Consulting Group estimated that out-of-pocket health care costs for a 65-year-old couple with no employer-provided retiree health care will be $220,000, assuming a life expectancy of 17 years for the man and 20 years for the woman. As part of a comprehensive financial education plan, the Commonwealth Financial Network advisers say it is imperative that medical and insurance costs be incorporated into the retirement planning discussion.
4. Start 'em young
The power of compounding interest is evident in retirement plan balances, the advisers say, adding that evidence has shown the benefits of starting to save at a young age. Interest adds up over time, so even starting to save at 30 instead of 40 can save exponentially more money.
5. Keep the message relatable
Paramount to the success of any education strategy is using simple terms and relatable examples to illustrate potentially complex issues, the advisers say. For example, telling a group of participants that inflation will erode the buying power of their dollar over the entirety of their retirement may be lost in translation, they say. But telling that same group of participants that the $5 sandwich they enjoy today will cost $22.93 in 30 years will likely keep their eyes from glazing over.
7 tips to prepare your workforce for flu season
Since seasonal flu activity can begin as early as October, the time to prepare is now. While the vaccine is one of the most efficient ways you can protect your employees, there are other actions you can take to brace your workplace for the upcoming flu season. Alan Kohll, founder and CEO of wellness vendor, TotalWellness, offers these tips:
1. Educate employees
Educate employees about flu symptoms and how the influenza virus is spread.
2. Step up hygiene
Step up your office’s hygiene practices. According to a 2012 study, the dirtiest places in the office include break room sink faucet handles, microwave door handles, keyboards and refrigerator door handles.
3. Review policies
Review your policies for PTO/sick leave and telecommuting.
4. Create a communications plan
Create a communications plan for flu season, from the signs and symptoms to flu shot myths, sick time policies, wellness reminders and flu shot clinic dates and times.
5. Develop a contingency plan
Have a contingency plan in place to help maintain normal business operations in the event that key employees are out sick or other disruptions occur.
6. Communicate health plan details
Ensure that employees are aware of health insurance plan details and that they know who to call with questions.
7. Host an on-site clinic
Host an on-site flu shot clinic or participate in a voucher program so that staff can easily get vaccinated at a local pharmacy.
IRS releases draft instructions for ACA reporting forms
Forms 1094-B and 1095-B are used by organizations that are not reporting to the IRS as large employers – insurers and sponsors of multiemployer plans, for example. Forms 1094-C and 1095-C, meanwhile, are used by organizations that are subject to the employer mandate.
“The instructions are voluminous and reflect the complexity behind the information, particularly that employers are going to have to provide,” says Amy Bergner, managing director, human resource solutions at PricewaterhouseCoopers in Washington, DC.
The IRS released the draft forms a few weeks ago but without draft instructions, “it was difficult to tell exactly what employers and insurers were going to have to do,” she notes. “Now we have these draft instructions that really walk through what’s behind all of the reporting.
Bergner says employers should review the draft instructions as soon as possible with all third-party providers who help them with tax reporting. “Even though these reports are not filed with the IRS or sent to employees until early in 2016, employers have to be capturing the information on a monthly basis starting in January 2015,” she says.
The purpose of the forms is three-fold:
1. When individuals file their individual tax returns, they’re going to have to report whether or not they have health insurance as required by the ACA’s individual mandate. The IRS can compare what the individual is reporting with what the employer is reporting.
2. The IRS can double check whether people who have received federal government subsidies to buy insurance on the exchanges were actually entitled to it. People who are offered employer-sponsored coverage are not entitled to the subsidy.
3. The IRS can enforce the employer mandate, which requires employers with 50 or more full-time employees to offer health insurance.
“The instructions include many of the complicated and detailed rules about the employer mandate, details usually reserved for regulations or other technical guidance,” says Bergner. “We expect that many employers and insurers will need assistance decoding the instructions and the underlying rules to be able to ultimately provide timely and accurate reports.”
Employers partner with academic institutions to create specialized programs
Originally posted August 27, 2014 by Nick Otto on https://ebn.benefitnews.com
It’s a new spin on an older system, as benefit managers are trying to evaluate the long-term benefits of helping to pay for their workers’ education — and more cost-effective and results-oriented methods of doing so. The big question: do these programs indeed serve to attract more candidates, and does the training necessarily produce workers who are better skilled and interested in staying with their current jobs?
In the past, tuition reimbursement programs were a more unstructured offering — occasionally the classes needed to be work-related in order to qualify for employer reimbursement, depending on an employer’s needs — resulting in a pleasant but not entirely critical employee benefit, with workers paid back for their studies as long as they maintained an acceptable
grade level.
Under a new model emerging at a variety of employers, direct partnerships with the online-specific satellites of accredited post-secondary institutions are helping to create more specialized and self-directed educational offerings, catered to the skill sets employers have found lacking in their workers. The participating college offers a discounted tuition rate and in exchange, the employer works to promote that particular program. Employees have less range of choice in educational offerings as a result, but may find the classes more individually suited to their needs and ultimately more important to their professional development.
“Corporate America is always trying to attract and retain the best talent, that’s certainly a very key HR strategy for most employers,” says Carol Sladek, partner and work-life consulting lead at Aon Hewitt. “So what we’re seeing is an increased interest on the part of employers to try to find the types of benefits and programs and policies that will help employees not only join their team, but stay on their teams and also help better employees along the way.”
Anthem Blue Cross and Blue Shield of New Hampshire partnered last year with College for America, a nonprofit college launched specifically for working adults and their employers, to create a competency-based program with no credit hours or courses. Students learn through projects targeted toward specific, employer-focused skills — communication, teamwork, ethics and others — resulting in either Associate- or Bachelor-level degrees. One of the biggest perks is the price tag: At $2,500 annually, the all-inclusive program is self-directed and online, providing an approach that allows students to progress through the program at their own pace.
Chris Dugan, director of public relations for Anthem’s New Hampshire operations, says it was one of the first companies to partner with the university last year, and since then, the insurer has had 56 employees participate in the program.
“Not only are employees going through this program stronger at their day job, but it could open up other opportunities in our company — so we promote this vigorously to our employees, and they seem to have strong interest [so far],” Dugan says. The convenience factor, plus Anthem’s arrangement to pay employees’ tuition, has also added to the new program’s success.
To date, College for America has enrolled nearly 1,000 students since its pilot launch in January 2013, adding more than 100 new students per month in recent months. Currently, it has about 60 employer partners — including corporate, government and nonprofit groups — offering the College for America program to their employees.
“We’re currently in program development discussions with several national employers and associations who see a specific labor market need where a competency-based, workforce-applicable degree would help with their talent development pipeline,” says Colin Van Ostern, a member of the college’s leadership team. “We’re seeing significant demand.”
Another example of corporate-academic partnerships can be seen with Starbucks, which recently created a program allowing any employee working 20 hours a week or more to be eligible for a full reimbursement if they enroll in Arizona State University’s online program as juniors or seniors. Freshmen and sophomores receive a partial scholarship and needs-based financial aid toward the foundational work of completing their degree.
According to data from EdAssist, an administrator of tuition assistance programs, spending on — and utilization of — tuition assistance varies by industry. Among health care companies in its database, for example, the average annual spending per employee on tuition assistance is $2,332, yet the industry boasts the highest utilization rate at 8%.
Anthem and Starbucks’ examples come in contrast to other employers’ internalized education programs — fast-food retailer McDonald’s and its well-known Hamburger University in Oak Brook, Ill., a corporate managerial training program that has offered skills-based training to thousands of company employees since being founded in 1961.
Whatever the venue, Karen Hutcheson a partner in the rewards and talent management practice at Mercer, says that employees are keen in keeping up with current skills.
“I’m finding employers also want to make sure their employees have those opportunities; it’s a win-win,” she says. “On the employer side, if you can educate your workforce in an affordable and manageable fashion, you can feed into stronger engagement.”
Higher education needs to be more nimble and responsive to student needs, she adds. And people in the workforce want strong skills, but the cost of traditional higher education is so high. “This is a nice way to marry the two together,” Hutcheson says.
Limiting options
On the flip side, overly focused programs do limit some employees’ options, and might lead to lower benefit participation.
“With the lack of choice, high potential employees may discount the value of obtaining a degree or graduate degree,” Hutcheson says. And although it’s still too early to tell, another potential downside would be the perceived value of an online degree versus the historical degree. “Not all Bachelors [degrees] are created the same,” she adds.
Bruce Elliott, manager of compensation and benefits at the Society for Human Resource Management, says the College for America model is part of a growing trend of employers working with community colleges, vocational schools and traditional universities to create structured programs.
Part of that growth, he says, seeks to offset a continued imbalance in the labor pool.
“During the height of the recession, there were employers desperate for skilled tradesmen and couldn’t find them to save their lives,” he says.
In the future, Elliott says he expects to see more corporate partnerships as a way of helping to drive down the cost of continuing education for employees — particularly in the Starbucks’ example.
“The reality is, these kids will be graduating with maybe $10,000 in debt,” compared to the much higher numbers in average student loan debt as the result of traditional, self-funded college programs. “You do the math.”
Aon Hewitt’s Sladek says that business costs and overall return on investment continue to be the biggest questions facing benefit managers as they consider the wider range of educational options.
“A lot of employers are sitting back waiting to see what will happen,” she says. “The Starbucks thing was really interesting and there was a lot of interest. I think a lot of other employers are standing on the edge watching.”
Hutcheson calls it a “wave of the future.”
“What we’re seeing in the workforce are people being more focused on building and maintaining skills,” she says. “We see employers wanting to see their employees be more prepared and in charge.”
Reducing benefit costs while still valuing employees
Originally posted August 26, 2014 by Steve Grossi on https://ebn.benefitnews.com.
As part of valuing our employees, benefits are viewed as a direct extension of pay and considered to be a vital part of an employee’s total compensation package. Benefits represent a sizeable investment for BOK Financial as well as for each employee. It’s our corporate culture to place a great deal of attention on benefits, and helping employees understand all of the value of their benefits package is a key focus for our HR team.
People who work for us are independent thinkers. It’s important to make our own decisions, and that’s especially true when it comes to health benefits. This is the reason our company is committed to a program that offers employees the flexibility to choose their coverage in most major benefit areas. Each employee can put together a personal package to suit their needs, and I believe that this flexibility shows the company’s commitment to each and every member of our staff as well as their families.
But this level of commitment to our employees – although vital – is expensive. After payroll, benefits costs were our No. 1 company expense, and as a result we found ourselves coming to terms with the impending Cadillac Tax, a penalty against companies over a particular threshold in terms of premiums resulting from the Affordable Care Act.
We added a consumer-directed health plan to our benefits offering, along with a health savings account, hoping to bring overall benefits costs down and reduce our exposure to the Cadillac Tax. Our belief was that the CDHP would suit the needs of many employees, and premiums would be lower for both the company and the employee. But explaining the benefit of a CDHP to employees is challenging – people are confused by the options, and most simply choose to do nothing and remain in their current plan. Others assume that the most expensive plan is the best, and default to that choice.
After one year with the CDHP, adoption was well short of our company goal, at only 5%. We went looking for help, and ended up with a solution from Tango, a company that helps organizations save money by optimizing health benefits, while keeping employees happy.
The first step was to educate our employees, and Tango explained the differences between each plan in simple, relevant terms. A plan optimizer tool allowed employees to walk through a series of questions and decide which plan was the best based on their individual needs. Since the tool is online, employees can log in from home and walk through the steps with their spouse, and discuss their options. Our CEO and his wife went online at home to use the plan optimizer, and they ended up choosing the CDHP. In all, over a thousand of our employees logged on to the online tool, with most spending at least 20 minutes reviewing and comparing their options.
For even more employee awareness, Tango put a communication plan in place that included email-based updates and information. Weekly and monthly communications continue to go out to the employees explaining how to open and use their HSA, and other helpful tips on topics like reimbursements and tax filing. The emails were very specific and targeted, so employees were more likely to open and read them. Tango also provided videos and webinars specifically created for our employees with a direct comparison between the CDHP and the traditional PPO plan – helping to demystify the choice between the plans. Normally this kind of information would come from the HR team, but Tango’s level of service meant that our HR team could focus on other critical employee needs.
Reviewing our results at the end of the first enrollment period with Tango, we saw adoption of the CDHP and HSA go from 5% of the employee base up to 30%. Our employees were pleased with the plan changes and with the amount of information they were getting about the growth of their HSAs. And it was a huge win for the company: BOK Financial saved over $880,000 in premiums and avoided an additional $190,000 in taxes.
BOK Financial continues to work with Tango to boost further adoption of the CDHP, and to retain existing plan members and ensure that employees are getting the maximum benefit out of their HSAs. As a chief human resource officer, the ability to increase adoption of the CDHP while maintaining our relationships with employees was very important to me. I’m thrilled that we’re able to retain our commitment to value our employees, even as we make changes that benefit the company’s bottom line.
Voluntary benefits help small businesses think big
Originally posted August 18, 2014 by Rich Williams on https://ebn.benefitnews.com
On a typical Saturday, you may drop off your car with your trusted mechanic, stop by the hardware store for a few supplies, grab lunch at a local sandwich shop and pick up some groceries on the way home. Every day, we enjoy the products and services delivered by small businesses.
Small business is the engine that powers our economy. Of the nation’s private enterprises, only 2% employ 100 or more workers, and 90% employ no more than 20. Behind each small business is an owner who wears many hats and relies on employees to deliver their best work every day — there aren’t a lot of extra employees to pick up the slack if someone is sick, injured or leaving the company for good.
Recent economic times magnified bottom-line concerns of small business owners. Many who weathered the downturn did so with lean staffs willing to work harder and longer to keep the job. But as the economy improves, those hard-working employees are apt to look for opportunities with larger firms that offer richer benefits and better life balance. Benefits play an important role in this consideration; half of employees recently surveyed say benefits are an important reason they remain with their employer. Small business owners who don’t pay attention to benefits risk losing their best workers.
Smaller, but with similar concerns
Small companies experience all the employee retention and recruitment headaches that big employers do, but often without reserve resources and staff to help shoulder benefits responsibilities. Few have dedicated staff to assess current benefits and consider changes or additions employees desire; many don’t offer benefits beyond compensation. According to LIMRA, small firms that do offer benefits tend to give fewer choices than their larger counterparts. The benefits offered most often are coverage for medical (44%) and prescription drugs (40%). Only one in four small businesses surveyed offered dental or life insurance coverage.
But employees at small firms have the same life needs and concerns as big-firm workers. A survey of more than 1,000 small business employees conducted by Harris Poll on behalf of Colonial Life found that many more employees are concerned about retirement savings (50%) and financially surviving a temporary work disability (39%) than losing their jobs (33%).
Voluntary benefits: More choices, not higher costs
Without realizing the human resource cost, too many small businesses fail to offer employees access to the very choices that could nurture employee loyalty and tenure.Experts say that doesn’t have to be the case: With voluntary benefits, small business can — and many do — offer a wide range of benefits geared toward the unique company culture.
The key is keeping up with what employees want and need. Younger workers might not invest in a 401(k) retirement option, but they’re probably interested in a cafeteria plan that gives them flexibility to save for unexpected, big-ticket needs. Older workers are typically more keen to invest in disability and retirement savings opportunities. You can help your clients understand their employee demographics and make connections to the right benefit options.
Many small employers would like to offer or enhance existing benefits, but cite cost as a deterrent. The good news is the same employees who would like better benefits are also willing to pay for them. A 2014 Colonial Life-Harris Poll found employees at small firms are quite interested in additional, reasonably priced insurance benefits such as life, short-term disability, critical illness, accident and cancer coverage.
Voluntary benefits — personal insurance coverage workers can buy through employers at a lower rate than they could get on their own — are a great way for your clients to offer a range of competitive benefits without damaging the bottom line. The value for employees starts with group rates, and they gain extra points in the employee loyalty ledger for convenience with payroll deduction options. And that can translate into enhanced employee retention: Small business workers who are satisfied with their benefits are more likely to feel loyal to their company.
Expanded benefit choices, low cost, and convenience are three very big reasons for small employers to dive into voluntary benefits. If keeping top talent motivated and productive is important to your clients, then find out today how easy it is to offer the benefits those highly valued employees crave most.
Why do companies bother with wellness programs?
Originally posted August 6, 2014 by Dan Cook on https://www.benefitspro.com
Communicating about the company wellness program is directly correlated to significant cost savings associated with those programs, a survey from Buck Consultants of Xerox found.
Another striking finding: U.S. employers said their primary motivation for offering wellness plans was to cut health care costs; respondents from outside the U.S. said their No. 1 reason was to improve employee morale and to reduce sick days and presenteeism – the phenomenon described as workers being on the job but not able to perform at the expected level.
The survey “shows an evolution in employer thinking to a much more holistic and measurable approach,” said Dave Ratcliffe, principal, Buck Consultants at Xerox. “Workers' wellness is now viewed as a state of well-being across the spectrum of health, wealth and career. Wellness is part of the employee value proposition. Social media, gamification, mobile technology, automated coaching and personalized communication are all part of the mix."
The big-picture results offered yet more evidence that wellness programs are becoming a standard component of benefits package design around the globe. More than three-quarters of respondents said they “are strongly committed to creating a workplace culture of health, to boost individual engagement and organizational performance.” More than two-thirds of these employers told Buck wellness plans “are extremely or very important to attract and retain workers.”
Employers are taking wellness investments seriously, the survey showed. While in 2012, 36 percent said they measured wellness outcomes, in the latest survey, 52 percent were measuring the outcomes. To encourage participation, 52 percent of employers said they rely on a very simple tactic: offer reduced insurance premiums to those who participate.
And, as wellness programs continue to gain advocates, employers are committing marketing dollars to them, developing brands for their programs and communicating regularly with employees about their programs.
Buck said the finding about communicating regularly with employees about aspects of a wellness plan was a common theme among every U.S. company that reported “a lower health care cost trend of 6 or more percentage points.” These employers send out targeted email messages and often mail wellness news to their homes to underscore the company commitment to wellness. The number branding their wellness programs is rising: 43 percent of respondents internationally said they created a brand identity for their plans.
But employers still have work to do to achieve the participation numbers they'd like to see.
“Participation rates indicate that employers are still struggling to find effective approaches to motivate workers. And there is a significant gap between employers' stated desire to create a culture of health and their current progress in achieving this goal,” Buck said. Buck's sixth global wellness survey analyzed responses from more than 1,000 organizations in 37 countries.
The surprising big winner when men take paternity leave
Originally posted August 7, 2014 by Bruce Jacobs on https://www.benefitspro.com
The U.S. Chamber of Commerce warns that paid paternity leave will be a job killer, cost businesses too much, increase administrative burdens, and lower wages for workers who have to foot the bill for a perk that not every employee can access equally.
Yet, if paid paternity leave ever becomes a benefit as commonplace as two-weeks’ vacation or a 401(k), the big winner, suggest researchers and scholars in the field, will be business itself.
Though the 1993 Family and Medical Leave Act entitles employees of either gender to take up to 12 weeks of unpaid parental leave to care for a newborn, and the Equal Employment Opportunity Commission recently issued “time for care” guidelines calling for equal parental leave for both genders, new dads are still expected to bring home the bacon, not cook it.
Josh Levs, a CNN journalist, notes that numerous studies have shown that men who return to work after paternity leave are often treated dismissively by their colleagues and bosses, and all too frequently suffer damage to their reputations, reduced job responsibilities, and even demotions.
Levs, who also writes the blog ‘levsnews,” and is working on a book about the male role in parenting, isn’t just venting. When CNN parent Time-Warner denied his request for paid paternal leave, he filed a complaint with the EEOC alleging discrimination against fathers, one of the first suits brought under the new guidelines.
A scant 16 percent of U.S. companies offer paid paternity leave, according to statistics from the Society for Human Resource Management, but loss of income isn’t the main reason why most men don’t take paternity leave. Ridicule from peers, fear of career suicide, and the cultural expectations of a man’s role in society concoct a brew far more potent than money in keeping men wing-tipped and in the conference room.
“There’s still a powerful stereotype that real men work; real men earn wages,” says Brad Harrington, director of Boston College’s Center for Work and Family, and one of the authors of the 2011 study, The New Dad: Caring, Committed and Conflicted. The report found that only “one in 20 fathers took more than two weeks off after their most recent child was born. Only one in a 100 took more than four weeks off.”
That’s beginning to change, particularly among millennials, those born between 1982 and the early 2000s, a cohort of workers larger and potentially more influential on the future of the American workplace than even the huge wave of soon-to-be retiring baby boomers.
Surveys by PricewaterhouseCoopers reveal that 70 percent of millennials place great importance on flexible work environments, as do 60 percent of baby boomers. But unlike boomers, millennials are willing to quit — or sue — if an employer fails to accommodate a balance between work and personal life.
A few cited examples:
- With no paid paternity leave offered by his company, 34-year-old newspaper reporter Aaron Gouveia stitched together vacation and sick time to be home with his first child. Before his second kid was born, he quit and joined a company that offered paid paternal leave.
- When Jim Lin, 41, a public relations specialist and publisher of the Busy Dad blog, wanted to take a couple days off to help care of his ailing son, his boss dismissed the request as something Lin’s wife should handle. Lin eventually quit. “I just didn’t want to be in that kind of environment,” he says.
- Though he didn’t quit his job, New York Mets second baseman Daniel Murphy had to endure withering heat from media big mouths when he missed the first two games of opening season to be with his wife during the birth of his first child.
The increasingly willingness of at least some male employees to take paternity leave will inevitably lead to a necessary cultural shift regarding paternity leave, industry insiders say.
Already, California, Rhode Island and New Jersey have been leaders of this trend by mandating paid parental leave in their states for mothers and fathers alike.
Governors of these three states may be paying heed to some surprising results of a report issued late last year by the World Economic Forum, which conducted extensive research on the global gender gap. Countries that found ways to keep women in the workforce after they became mothers, the study revealed, tend to have the strongest and most resilient economies worldwide.
But that’s not the big surprise: It’s the role paid paternity leave played in strengthening those economies. By offering it, encouraging it, and normalizing it, those countries enjoyed increased commercial vitality.
But why? With more women in the workplace, more women holding advanced degrees, and more women often earning salaries greater than their husbands, women employees are increasingly key to the success of many businesses. Yet, according to a 2007 study, 60 percent of professional women who left their careers after their baby was born said they stopped working because their husbands were not available to share childcare and household responsibilities.
Paternity leave “shapes domestic and parenting habits as they are forming,” writes Liza Mundy, author of "The Richer Sex: How the New Majority of Female Breadwinners Is Transforming Sex, Love and Family." Because men who take paternity leave are developing lifelong habits of shouldering more of the childcare and household responsibilities, she argues, working women can return to their careers confident that they aren’t the only ones responsible — and able — to raise children and maintain a household.
A recent report evaluating a paid paternity leave program in Iceland, in which 90 percent of all father take part, found that three years after the start of the program, 70 percent of parents who live together continue to share childcare and household duties. That’s an increase of 40 percent from the start of the program.
Though research indicates that women, men and children all win in that scenario, the biggest winner is business. Half the workforce — highly educated women — return to their desks, contributing skill, energy and acumen to the economy.
Enforcing employer policies outside the workplace
Originally posted August 7, 2014 by Tracy Moon and John Stapleton on https://ebn.benefitnews.com
All employers adopt and enforce policies regulating conduct at the workplace. Many employers expect that employees will follow their employment polices at all times regardless of whether the employee is working or at work. Many employers expect that employees will follow their employment polices at all times regardless of whether the employee is working or at work.
Today, in the age of social media and smartphones, employers and employees have much greater visibility when they leave work – giving employers the ability (and desire) to monitor their workers after hours, and resulting in greater exposure and potential for harm to an employer’s reputation. But can you monitor or discipline employees for policy violations that occur when an employee is off-duty and off-premises?
First, regardingillegal off-duty conduct, employers are generally entitled to take action after learning of an employee’s conviction, although they may have to demonstrate that the decision or policy is job-related and consistent with business necessity. For instance, an employer would have a valid interest in an employee-driver’s recent conviction for drunk driving. In fact, failing to take remedial action could lead to a claim for negligent hiring or retention against the employer down the road.
The answer is slightly more complicated when an employer attempts to regulatelawful off-duty conduct, such as social-media postings or tobacco use. There are several competing interests at play. On one hand is the employees’ right to be free from the employer’s control while they are away from work, and to engage in conduct which may have no impact on their work performance. On the other hand is the employer’s desire to enforce its policies in order to minimize liability, protect its reputation, and maintain employee productivity.
In an at-will employment relationship, both the employer and the employee can end the employment relationship at any time without notice or reason. In other words, the employer has the right to terminate an employee at any time, for any reason, for no reason at all, or even for a “bad” reason, as long as it is not an unlawful reason. In order to determine what reasons are unlawful, one must look to federal, state, and local laws.
Federal law
Federal law clearly outlines many factors which would be unlawful reasons for making employment decisions. These include: race; color; religion; genetic information; national origin; sex (including same-sex harassment); pregnancy, childbirth, or related medical conditions; age; disability or handicap; citizenship status; and service member status.
Likewise, federal law prohibits making employment decisions based on whether employees have taken time off under the Family and Medical Leave Act, made a safety complaint to the Occupational Safety and Health Administration, questioned the overtime practices of their employer, or filed a charge of discrimination or harassment.
Off-duty social media use may also be protected under federal law. As many employers have learned the hard way, the National Labor Relations Act applies to the private sector and may restrict an employer’s ability to terminate an employee for posting disparaging comments on social media. An employer may also violate the NLRA by maintaining an overbroad social-media policy if it could be construed by employees to prevent them from discussing their wages or other conditions of employment.
State and local laws
Next, consider state and local laws. Most states have laws that are similar to or mimic federal law. But many have laws that are much more expansive and protective of employees’ rights. For example, many states have laws protecting smoking, elections and voting, certain types of court-related leaves of absence, victims of crimes or abuse, medical marijuana, or the possession of firearms, among others.
In addition to laws that protect specific types of off-duty conduct, some states have enacted laws which protect broad categories of off-duty conduct, or require an employer to demonstrate some nexus between the employee’s engagement in an activity and the employer’s business before allowing the employer to take adverse action against the employee for engaging in the conduct. (This is also a typical standard under collective bargaining agreements in unionized workforces).
In Colorado, for example, it is illegal for an employer to terminate an employee because that employee engaged in any lawful activity off the employer’s premises during nonworking hours unless the restriction 1) relates to a bona fide occupational requirement or is reasonably and rationally related to the employee’s employment activities and responsibilities; or 2) is necessary to avoid, a conflict of interest, or the appearance of a conflict, with any of the employee’s responsibilities to the employer.
In Montana, an employer is prohibited from refusing to hire a job applicant or disciplining or discharging an employee for using “lawful consumable products” (such as tobacco or alcohol) if the products are used off the employer’s premises outside of work hours, with certain exceptions for a bona fide occupational requirement or a conflict of interest, similar to Colorado’s law.
In addition to the examples set forth above, here are additional instances of off-duty conduct which may be grounds for discipline or termination, depending on the state and the circumstances:
- 20 states have enacted medical marijuana laws, and 13 states have similar legislation pending (Arizona and Delaware even restrict an employer’s ability to terminate an employee in response to a failed drug test);
- while most employers may prefer that employees not bring firearms onto company property, some states have laws which protect an employee’s right to do so, including Arizona, Georgia, Idaho, Indiana, Kentucky, Louisiana, Maine, Minnesota, Mississippi, North Dakota, Oklahoma, Utah, and Wisconsin; and
- 29 states and the District of Columbia have statutes protecting the rights of employees who smoke.
As the above examples illustrate, you must carefully analyze each situation before refusing to hire a candidate, or disciplining or terminating an employee for having engaged in lawful off-duty conduct, even if such conduct violates your established policy.
Even with all of the possible restrictions in some states, employers may have more leeway than they think to consider off-duty conduct when making employment decisions. A wise employer seeks wise counsel to help the employer avoid possible legal pitfalls while exercising the full extent of its rights.