Newly revised Federal Trade Commission (FTC) Guidelines, found at 16 C.F.R. § 255, that are intended to protect consumers from deceptive advertising or endorsements, could create new liability for employers whose employees use blogs, Facebook, Twitter or other social media to comment on company products or services. Liability could exist even if an employee is blogging on his own time, using his own equipment, as it’s presumed that the blogging benefits the company. Liability can be imposed where an employee fails to disclose his or her employment relationship. These Guidelines make it even more important for employers to develop Social Media policies that clarify expected employee conduct.
March 31, 2010
March 26, 2010
HR Fact Friday: 12 Questions to Measure Employee Engagement
There’s a reason some things are called “oldies but goodies”. It is because they stand the test of time. Such is the case with a Gallup Organization poll conducted back in the mid 1990′s designed to measure worker engagement.
The Gallup Organization began creating a feedback system for employers that would identify and measure elements of worker engagement most tied to the bottom line–things such as sales growth, productivity and customer loyalty.
March 25, 2010
Compensation: A Matter of Philosophy
Not surprisingly, employee compensation is typically an employer’s most significant cost. Frequently, organizations experience high employee turnover, which leads to increased training costs and a loss of continuity in implementing their strategic objectives. In fact, some experts estimate that the ultimate cost of training an employee and helping them develop the necessary skills is close to one year’s salary.
Given the considerable investment required to hire and retain top quality employees, it is vital that your compensation program support the company’s overall goals and objectives. Does your current compensation program do this? If not, it may be time to define or redefine your compensation philosophy.
The primary reason for developing a compensation philosophy is to establish and communicate the purpose of your organization’s pay system. This white paper purposely does not include a sample compensation philosophy, so as to eliminate the temptation to “cut and paste” your philosophy.
However, through years of consulting experience, we can share that the most common issues addressed in the compensation philosophy statement are:
- Goals of your compensation system
- Relevant market and competitive position, and
- How individual pay decisions are made
Generally, the goal of any compensation system is to attract and retain quality staff. But, do you also want your system to reward staff? Motivate staff? Encourage career growth? If so, your system must be designed to support these goals.
Secondly, defining your market position is not as easy as saying that you want to be competitive. In most organizations, the market for labor depends on the job. For example, clerks and other entry level jobs are usually recruited locally, within a 30 mile radius of the organization. Supervisors, technical staff and mid-management jobs are frequently recruited regionally. And the labor market for executive level jobs, especially in larger organizations, is often national in scope. So, before a decision can be made to be competitive, or perhaps be a pay leader in the labor market, you must first define the relevant market.
Finally, individual pay issues can also be influenced by many factors. For example, are employee pay rates based on performance? If so, what role do performance appraisals play? Is overall organization performance considered? What about position in range – are employees close to the minimum eligible for more aggressive increases?
For many organizations, these are tough issues to address. But ultimately, the answers to these questions help define your compensation philosophy and overall corporate culture.
A word of caution. Defining your compensation philosophy is not a “once and done” undertaking. Ideally, an organization’s compensation philosophy should be reviewed regularly to make sure it still supports the goals, objectives and direction of the company.
In closing, when you have defined your philosophy, and ensured that it supports the company objectives, communicate it to your staff. Some companies include their compensation philosophy statement in their employee handbook, others communicate it one-on-one during pay discussions. Either way, for employees, pay satisfaction begins with pay education.
March 24, 2010
Drug Use Among Employees Declining
There’s some good news in employee drug use data released by Quest Diagnostics. Employee drug use is declining and the use of hair and urine samples in the testing confirms that. Hair tests show that cocaine use has decreased 35% and methamphetamine use 55% since 2005. Interestingly, newer testing methods involving hair samples do find many more instances of drug use. In the first 6 months of 2009 cocaine was found in 3 of every 1000 urine tests on applicants and employees, while hair tests found it in 32 of 1000. Methamphetamine was found in 1 of every 1000 urine tests and 9 times in hair tests.
Hair tests, while more expensive, are more accurate because they can identify drug use going back 3 months. Urine tests can find drugs within 1-3 days of use and so can more easily be “beaten” by those tested. They’re most useful following workplace accidents or to follow up on suspicious employee behavior.
March 22, 2010
Sexual Stereotyping and Adverse Employment Decisions
An 8th Circuit Court of Appeals decision found that an employer, who fired an employee because she did not fit within sexual stereotypes (not feminine enough), violated Title VII.
The employee, a night desk employee at a motel, had received several merit pay increases and positive customer feedback. Consequently, her manager sought and received approval (over the phone) from a corporate director of operations to put her in a daytime front desk job.
All was fine until the director stopped by in person and found the employee wasn’t “pretty enough” lacked the “Midwestern girl look” that the motel chain desired. The employee, by her own admission, wore men’s shirts and pants, had a more masculine appearance, and had even been mistaken for a male.
The director ordered the manager to put the employee back on the night shift. When the manager refused she was asked to resign. The employee was later fired…and then sued. The court found for the employee, holding that the discrimination would not have occurred but for the individual’s sex, violating Title VII.
Note that federal law still does not prohibit discrimination based on sexual orientation (although many states do). Rather the court found discrimination “because of sex…,” a confusing distinction, I know. [Lewis v Heartland Inns of America].
The 8th Circuit covers North Dakota, South Dakota, Minnesota, Nebraska, Iowa, Missouri, and Arkansas.
March 19, 2010
State and Feds Move to Ban Credit Checks of Job Applicants
The slow economy has already led a bunch of states to look at banning employers from using credit checks to screen applicants. Now, the federal government is considering a ban, too.
Legislators’ reasoning goes like this: If someone’s out of work and consequently piling up debts, how is that person supposed to climb out of a hole when those very same debts make the person unemployable?
Following that reasoning, Congress is looking at a bill that would ban the use of credit checks as a hiring tool.
Already, 16 states have proposed such bills or have some sort of ban in place
States looking at legislation: Connecticut, Georgia, Illinois, Indiana, Maryland, Michigan, Missouri, New Jersey, New York, Ohio, Oklahoma, Pennsylvania, South Carolina, Vermont, Wisconsin.
States that have legislation in place: Hawaii and Washington; Oregon has passed legislation that will take effect July 1, 2010.
U.S. Rep. Steve Cohen, D-TN, has introduced a similar legislation in Congress.
Note: Just about any existing or proposed legislation doesn’t ban credit checks for jobs in financial fields or where potential employees might have access to company funds or financial records.
Source: HR Morning Jim Giuliano
HR Fact Friday: 2010 Salary Increase Budget Update
After the first two months of 2010, worldwide salary budgets for the year had declined slightly from projections reported in September 2009, according to results from the 2010 Culpepper Salary Increase Budget Update Survey. While many companies remained conservative with salary increases, an increasing number reported improved confidence about unfreezing salaries and rolling back salary cuts.
This survey drew on salary increase data collected in January and February 2010 from 765 participating organizations across 86 countries and 17 international geographic regions.
The survey findings reveal that:
- Projected salary increases for 2010 decline slightly. Since September 2009, projected base salary increases for 2010 across all jobs and locations decreased from 2.88 percent to 2.77 percent. Excluding salary freezes, projected base salary increases declined from 3.25 percent to 3.21 percent.
- Fewer companies freeze salaries. The number of companies planning to freeze salaries in 2010 increased slightly from 12 percent to 14 percent. However, this is a marked improvement from 2009, when 37 percent of companies froze salaries.
March 17, 2010
15 Compensation Mistakes That Can Provide You The Opportunity To Make Friends With The Federal Department Of Labor Or State Officials
Paying employees is not as simple as it appears. Complex federal and state laws and regulations govern compensation practices. Making even one of the following mistakes can cost you a lot in money, time and bad publicity. Go to www.dol.gov for good information regarding federal Fair Labor Standards Act (FLSA) requirements.
- What Do You Mean I Have To Pass A Test? Or, Tales From Exempt Employees Who Aren’t. Many organizations have some employees misclassified as exempt who are really nonexempt and must be paid overtime. Remember, the Department of Labor has very specific tests that must be met before an employee may be classified as exempt.
- We’ll Just Pay Her A Salary, That Way There’s No Overtime. Or, Return Of Exempt Employees Who Aren’t. The FLSA exemption tests include specific job duties and requirements. Simply paying someone on a salary basis vs. an hourly wage doesn’t make her exempt from overtime.
- That’s Not Really Work Time. Failing To Pay Nonexempt Employees For “Hours Worked.” Starting early, working late, working through lunch, or doing work at home would all be “hours worked” and considered paid time. Employees can’t “volunteer” to work a little extra or to work “off the clock.” Don’t forget about travel time and training which can also be compensable under certain circumstances.
- Oh, It’s Close Enough. Not Correctly Tracking Overtime. Do you have an accurate system in place? Is it reliable? Consistent? Do you “round” appropriately?
- Take Next Friday Off. Using “Comp Time” Improperly. Private sector employers need to be especially careful regarding “comp time.” Basically, in those settings, compensatory time only exists within the workweek. Comp time can’t be given instead of overtime. The public sector works under some different rules. (more…)
March 15, 2010
Texting Banned for Commercial Drivers
In a move toward improving safety on the road, the U.S. Department of Transportation (DOT) has announced guidance that prohibits texting by drivers of certain commercial vehicles such as large trucks, buses and vans.
The guidance is effective immediately and applies to interstate truck and commercial bus and van drivers with at least 9 passengers.
Affected employers should ensure that their policies are updated to reflect this change and that employees are informed. All employers should make sure that they are aware of state restrictions on texting and use of cell phones while driving. An increasing number of states are addressing this issue.
March 12, 2010
HR Fact Friday: Nearly 25% of Workers Put Retirement Plans on Hold
Almost one in four workers in an Employee Benefit Research Institute survey postponed plans to retire this year, with 29% of those citing the poor economy as the reason.
The key other reasons cited by the 24% who put off retirement plans included a change in employment status, 22%; inadequate finances, 16%; and the need to make up stock market losses, 12%, according to EBRI’s 2010 Retirement Confidence Survey, released Tuesday, March 9.
Also, only 69% of workers and their spouses this year reported having saved for retirement, down from 75% in last year’s survey.
Still, 16% of workers said they were very confident about having enough money for a comfortable retirement this year, up from 13% during the previous year. Twenty-seven percent this year said the total value of their savings and investments in general, excluding the value of their primary home and any defined-benefit plan, were less than $1,000, and 54% said the total value was less than $25,000. Annuities or other guaranteed-income product were purchased by 14% of retirees, and 11% of workers said they were very likely to do so.
“Americans’ attitudes toward retirement have clearly tracked the economy the last couple of years, and that seems to be the case in 2010,” said Jack VanDerhei, EBRI research director and a co-author of the survey, in a news release. “Unfortunately, while their attitudes are stabilizing, their preparation for retirement is not. A distressing number of people have no savings at all.”
The survey, based on telephone interviews in January with a total of 1,153 workers and retirees age 25 and older, was conducted by EBRI and research firm Mathew Greenwald & Associates.
Source: Workforce.com, Doug Halonen of Pensions & Investments, a sister publication of Workforce Management.
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