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February 19, 2010

HR Fact Friday: Fraud by Employees Common

Occupational fraud might be more common than many HR professionals suspect, and some experts argue that the economic downturn might be leading more people to commit fraud because they are facing mounting financial pressure on the home front.

U.S. organizations lose an estimated 7% of revenues to fraud each year, according to the Association of Certified Fraud Examiners’ (ACFE) 2008 Report to the Nation on Occupational Fraud & Abuse. The largest cases occurred in manufacturing, banking and insurance, respectively. The median loss was $175,000, researchers found.

Embezzlement takes many forms, such as stealing cash or diverting resources to pay personal expenses and then trying to hide them as legitimate vendor payments, noted Hubert Klein, a partner at Amper, Politziner & Mattia in Hackensack, NJ.

People in every industry have the capacity to commit fraud, but, according to the ACFE, those in accounting and upper management are most likely to do so. Most are first-time offenders: Only 7% of those caught had prior convictions, and just 12% had been terminated previously by an employer for fraud-related conduct, the researchers found.

Adopt internal controls, a monitoring program and a formal process for investigating anomalies to reduce the risk of fraud. Other recommendations include consulting with an attorney(s) and accountants to set up best practices internal audits and review the organizational structure and controls to make sure employees “aren’t using their expense accounts to pilfer.” Also watch for jobs with troublesome overlapping responsibilities, such as where one person is responsible for paying bills and reconciling bank statements.

Source: HR Magazine, Pamela Babcock, 2/2010, pg 14


February 17, 2010

Around the States

Filed under: Employment Law2:50 pm

Colorado’s minimum wage will drop slightly ($.03/hour) in 2010— the first decrease in any state’s minimum wage since the federal minimum was adopted in 1938.  Colorado is one of 10 states that base minimum wage on inflation.

Washington’s “Everything But Marriage Law” has taken effect after a November referendum  approved it.  The law seeks to provide registered domestic partnerships (same sex and some opposite sex partners)  the same rights and benefits under state law as accorded traditional marriages. Washington employers should review their benefits programs, policies and practices to ensure compliance with the new law.

A new Cleveland ordinance prohibits businesses from denying employment or housing on the basis of gender identity or gender expression.

The California Division of Labor Standards Enforcement (“DLSE”) has issued an opinion letter (DLSE Op. Letter 2009.11.23) stating that while employers can’t deduct an exempt employee’s salary for partial day absences, they can charge employee leave balances. Previously exempt employees’ leave could only be charged in 4 or more hour increments. The federal Department of Labor has permitted this practice for some time.  This is a great development for California employers.

Effective January 1, 2010, an Oregon law became effective which prohibits employers from requiring employees to attend meetings to learn about the company’s union views. The law also requires that all Oregon employers post a related notice advising employees of their rights.

Oregon now requires certain employers to have automated defibrillators on site.


2010 HR Educational Webinar – Employee Opinion Surveys

HRN’s 2010 HR Educational Webinar series continues with a unique and informative discussion being presented on Tuesday, March 16 2010 at 2pm Eastern Time by HRN Consultant, Gene Mandarino.

The topic is:
Employee Opinion Surveys – Improving the Workplace

To register go to:

An employee opinion survey is a dynamic process that generates valuable feedback. It can measure employee attitudes about important matters that affect productivity, turnover and their level of engagement. Done correctly, the survey will yield some very clear actions management and employees can take to enhance what is working well and address areas that need improvement. Done poorly, a survey will erode employee trust and leave staff feeling frustrated and demoralized.

In this 60-minute FREE HR educational webinar you will learn:
- Best practices and common mistakes made when administering an employee opinion survey
- Common areas of dissatisfaction
- Real strategies organizations have used to positively impact areas of dissatisfaction

We look forward to your participation.


Paul Hendrycks
Vice President, Sales & Marketing
HRN Management Group


February 12, 2010

HR Fact Friday: U.S. Salary Increase Budgets Hit 25-Year Low

Filed under: Compensation,Salaries & Pay — Tags: , , , 6:00 am

U.S. companies’ budgets for salary increases in 2010 fell to their lowest level in more than two decades, The Conference Board reported Tuesday, February 9.

The 2010 median forecast of salary budgets for increases is 2.8 percent for all employee groups, the lowest level in the 25-year history of The Conference Board’s annual survey on salary-increase budgets.

In addition, changes to salary structures (changes to minimum, midpoints and maximums of pay scales) to account for changes in cost of living and other factors aren’t expected to top 2 percent, according to the survey. That’s below The Conference Board’s forecast of a 2.6 percent inflation rate.

In the statement released with highlights of the research, “Salary Increase Budgets for 2010—Winter Update,” Linda Barrington, the organization’s managing director for human capital, said: “U.S. workers will continue to face downward pressure on their salaries and wages. Without the purse strings loosening on financial rewards, employers are going to have to rely on other ways of engaging employees, especially top performers, in order to keep their companies competitive.”

The survey included 285 U.S. organizations.



February 10, 2010

IRS More Aggressive Regarding Employment Taxes

Filed under: Employment Law — Tags: 1:28 pm

State and federal tax agencies around the country are aggressively seeking more revenue to deal with burgeoning budget deficits.

The IRS is planning to institute its first Employment Tax initiative since 1984.  It intends to audit 6000 companies looking for:

    1. Misclassification of employees as independent contractors,
    2. Problems with reporting tips,
    3. Issues regarding underreporting of compensation of officers and owners in S corporations, and
    4. Problems with reporting fringe benefits such as car allowances, club memberships, payment for equipment and tools, and personal use of company owned vacation property.

All employers should closely review their pay and benefits practices.  The trend of government looking for more and more tax revenue will likely escalate.


Job Hunting? Now May Be a Good Time to Kick the Habit

Filed under: General HR Buzz,Hiring & Jobs1:01 pm

Given the economy and record unemployment rate, employers can afford to be choosy in their hiring practices. In addition to credit checks, drug testing and background investigations, some companies are now conducting nicotine tests on prospective candidates.

Federal law doesn’t protect smokers from discrimination, however 16 states have laws prohibiting employment decisions based on the tobacco habits of a candidate.

In 2008 Caterpillar Inc. banned smoking on its worksite and Whirlpool Corp. fired 39 workers who lied about not smoking to avoid paying an increase in health care premiums, according to Colleen Madden, a researcher at Challenger Gray. Memorial Hospital in Chattanooga, Tenn., doesn’t hire new employees who use any kind of tobacco products, on or off duty, according to Madden. Nicotine screenings are included with the usual drug screenings.

Sometimes the habit proves a stronger lure: In 2006, Weyco and Scotts Miracle Grow each stopped hiring smokers, and four Weyco workers quit rather than take the mandatory nicotine screening.

The best advice when applying for a job: Be truthful on the job application, even if you’re a smoker.



February 8, 2010

Discrimination Claims Based on Disability, Religion and National Origin Increase

Filed under: ADA & Disability9:29 am

The U.S. Equal Employment Opportunity Commission (EEOC) has announced that 93,277 workplace discrimination charges were filed in fiscal year 2009.  That’s the 2nd highest total ever.

Over $376 million dollars were collected for discrimination victims. Discrimination charges based on disability (up 10%), religion (1% increase) or national origin (up 5%) hit record highs.

Age claims reached the 2nd highest level ever.  A change last year in the ADA which, in effect, expanded the definition of disability may be driving some of the increase in ADA claims.

The most frequent types of charges continued to be those based on race (36%), retaliation (36%) and sex (30%).

Several types of discrimination can be included in a single claim. The high number of complaints may be due to a number of factors, including the economy, increased diversity, and demographic changes.


February 6, 2010

McDonald’s Continues Resurgence and Provides a Number of Valuable Leadership Lessons

Filed under: General HR Buzz9:15 am

McDonald’s continued resurgence offers credible support to the notion that the Oak Brook, Ill.-based company has performed arguably the most impressive business turnaround this decade. The resurgence of an American icon provides a number of valuable leadership lessons for corporate America.

Those lessons include: (more…)


February 5, 2010

HR Fact Friday: Business Ethics Improved During Recession

Filed under: General HR Buzz — Tags: , , , 8:45 am

Finally some good workplace news to come out of the recession.

In the January issue of HR Magazine it was reported that a devastated U.S. economy did not translate into an increase in unethical behavior at U.S. companies, according to a study from the Ethics Resource Center (ERC). Although the ERC’s 2009 National Business Ethics Survey report found that retaliation against employees who reported misconduct has increased slightly since a similar survey two years earlier, most other measures of ethical behavior improved. According to the report:

Overall misconduct at U.S. workplaces is down. Fewer emloyees said they had witnessed misconduct on the job. This measure fell from 56% in 2007 to 49% in 2009.

  • Whistle-blowing has increased. Most workers (63%) who observed misconduct said that they reported it, up from 58% two years earlier.
  • Ethical culture appears to be stronger. The ERC’s measures of the strength of the ethical culture in the workplace increased from 53% in 2007 to 62% in 2009.
  • Pressure to cut corners has decreased declining slightly from 10% in 2007 to 8% in 2009.
  • Perceived retaliation as a result of a report of misconduct rose, from 12% to 15% over the past two years.

However the ERC researchers sound a warning saying that when more settled, prosperous times return, misconduct is likely to creep upward as the economic crisis dissipates.

During hard times, when a company’s well being or even existence may be on the line and regulators, board members and senior management are watching, management talks more about the importance of high standards to see the organization through. The result is staff are less inclined to commit misconduct when management is on high alert.

Source: HR Magazine, SHRM, Steve Bates, January, 2010


February 3, 2010

IRS Mileage Rate Takes a Dip January 1st

Filed under: Employment Law — Tags: 10:51 am

Employers that reimburse employees for business use of a personal automobile should be aware that the IRS mileage rate will drop from 55 cents/mile to 50 cents/mile on January 1, 2010.

The mileage rate for 2010 reflects lower transportation costs compared to a year ago.   It’s important to note that if employers continue reimbursing employees at 2009’s 55 cents/mile, they will have to warn employees that they’re receiving five cents/mile in taxable income – this could mean they could end up owing more in taxes on April 15th the following year.

Whatever your company decides, it’s important to inform employees about the new rate and the company policy for mileage reimbursement.

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