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January 12, 2015

The New FLSA Rule is Coming. Are you Ready?

Filed under: FLSA,General HR Buzz,Salaries & Pay3:22 am

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By Joyce Marsh, SPHR, Senior HR Consultant

According to the U.S. Department of Labor’s (DOL) Wage and Hour Division, the Fair Labor Standards Act (FLSA) proposed rule should hit somewhere in the first quarter of 2015. This release is somewhat later than the original forecast of November 2014 for the final rule.

The final rule shouldn’t differ too much from the proposed one, so now is the time to start looking at classifications. While no one knows for sure what the changes will be to the white-collar exemptions, here are some educated guesses from some employment law experts:

  • An increase in the minimum salary threshold
    There’s speculation that the current threshold of $455 per week/$23,660 per year could more than double to $970 per week/$50,440 per year.
  • Exempt duty standards will change
    Following California’s current requirements, standards could change to employees needing to engage in exempt duties at least 50 percent of the time.
  • Executive exemption standards will change
    In an effort by the DOL to change or eliminate the primary duty standard, executive exemption could be lessened.

As we said, these are just highly educated guesses. So whatever happens with the FLSA proposed rule, the main lesson here is to be prepared.

 

 

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December 22, 2014

Seeing Both Sides of the Compensation Story

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by Megan Mohr, CCP

As they say, there’s two sides to every coin – especially when it comes to compensation and pay perception. Employees usually feel underpaid and undervalued while the organization as a whole is trying its best to be fair and equitable. How can these two sides meet in the middle? By improving pay perception.

Improving pay perception may seem like an insurmountable task, but it’s not if your organization focuses on three things: communication, resources and management.

  • Communication
    Instead of sending out various emails or intranet articles about compensation, build a comprehensive plan with consistent and strategic messaging for your staff. Make a connection on how their individual performance affects the overall success of your organization. Plus, use instructive communications that inform staff how to think about the information they read.
  • Resources
    Instead of overloading your employees with compensation information and resources, remember that each employee probably needs different information – and delivered in different ways. Give them a library of information to choose from in different formats such as articles, videos, podcasts, charts, etc.
  • Management
    The majority of pay messages employees receive is through their managers. Take an active part in directing what that information is and how it should be delivered. The Pay Communication Benchmarking Study from the member-based advisory company CEB shows that less than a quarter of employees feel their manager is effective at communicating pay. More telling, only 41% of the managers surveyed say they’re effective at these communications.

The Whole Story

Research from the Kenexa High Performance Institute shows that employees who believe their pay is fair are more engaged, are less likely to quit, are less stressed at work, feel more physically and mentally fit, and are more satisfied with their personal life. CEB’s study also discovered that improving employees’ pay perception translates into a revenue gain of $27 million and $5 million in profit gains for the average Fortune 500 company.

So, obviously it pays to improve pay perceptions in more ways than one. The messaging needed to accomplish this is fairly straightforward. Your staff needs to understand three basic factors to believe they’re being paid fairly:

  • How pay is determined
  • How to maximize pay
  • The correlation between performance and pay

Just keep in mind that even if your organization’s pay is fair and equitable, what really matters is if your staff sees it that way. Focusing on pay perception not only leads to happier employees, it can add to your company’s bottom line. It pays to see both sides of the compensation coin.

If your organization needs a little help with compensation, contact HR Performance Solutions. Compease, our dynamic compensation administration and salary planning program, is a powerful tool. Plus, our HR Consultants are always here to lend a hand. 

 

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October 31, 2014

6 Easy Ways to Violate the FLSA – Mistakes 4-6

Filed under: Compease,Compensation,FLSA9:44 am

In yesterday’s blog, we discussed the first three mistakes that lead to Fair Labor Standards Act (FLSA) violations.  Today, we will take a look at the last three, featured that is; there are many more!

Mistake #4:  Asking Nonexempt Employees to “Work Off the Clock”

More recently, asking an hourly employee to “work off the clock” is considered wage theft.  The FLSA requires employers to keep accurate time records.  Tight budgets often prompt managers to request that employees “work off the clock” by asking them to come in early or stay late and not compensating them.  Such a practice can create huge liabilities for an organization.

Mistake #5:  Prohibiting Employees from Discussing Compensation Issues

Although many employers prefer that compensation rates and other pay issues remain private and even write policies to that effect, forbidding such discussion by employees may be in violation of the law.  The National Labor Relations Act (NLRA) prohibits employers from banning wage discussions as it is interpreted as interfering with employees’ right to engage in protected concerted activity.  The National Labor Relations Board, the government agency that enforces the NLRA, has been watching these actions closely, especially with the more prevalent use of social media.

Mistake #6:  Failing to Properly Pay Nonexempt Employees for Meetings and Training

This is a puzzling one for many employers – knowing whether or not they are required to pay for meetings and training sessions.  Attendance at meetings and training is not counted as “hours worked” if all four of the following criteria are true:

  • Attendance is outside of the employee’s regular work hours;
  • Attendance is truly voluntary;
  • The course, lecture, or meeting is not directly related to the employee’s job; and
  • The employee does not perform any productive work while attending. 

Attendance is not considered voluntary, however, if the employee believes that his working conditions or employment opportunities would be adversely affected if he did not attend.

Even the most experienced HR professionals have difficulty navigating the FLSA.  However, failure to do so can be costly in terms of dollars, time spent fixing problems, bad publicity, and lower employee morale.  Focusing on a few of the most common FLSA mistakes and steering your organization away from them is definitely time well spent.

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October 30, 2014

6 Easy Ways to Violate the FLSA – Mistakes 1-3

Filed under: Compease,Compensation,FLSA4:32 pm

No doubt, most employers have a battle with the Fair Labor Standards Act (FLSA), which establishes the standards for how to pay their employees.  The FLSA governs overtime pay, the minimum wage, and child labor.  Many are simply unaware of the maze of requirements, some try in good faith to act in accordance with the law but fall short, and a few simply ignore the Act, hoping that nothing comes back to bite them.  But ignorance of the law is not bliss…or an excuse.

FLSA enforcement by the Department of Labor’s Wage and Hour Division recovered just shy of $250 million in back wages for 2013, with 269,250 employees receiving back wages. Another interesting fact is that the average days to resolve a complaint is 110.  This means the Wage and Hour people are very interested in the way you pay your employees and even enjoy perusing your records.

Here are six ways (and believe me, there are many more) in which you could find the DOL knocking on your door:

Mistake #1:  Misclassifying Employees

Nearly every employer must decide which positions are considered nonexempt under the law and must be paid overtime (for hours worked beyond 40 in a workweek), and which positions are exempt from overtime. The FLSA establishes overtime pay requirements by outlining a series of tests that qualify employees as exempt from overtime and minimum wage requirements in these categories:  executive, administrative, professional, outside sales, and certain high-level computer positions.

Mistake #2:  Thinking, “If I make everyone ‘Salaried,’ I won’t have to pay overtime!”

Genius, not.  Be careful.  “Salaried” is not equivalent to “exempt.”  An employer must satisfy an FLSA job duties test mentioned in number 1.  Remember too, that job positions should be reviewed regularly to ensure they still meet the requirements of nonexempt or exempt as the position requirements may change.

Mistake #3:  Failing to Pay Nonexempt Employees for Unauthorized Work

If a company “allows” employees to work, they must pay for this time and include it as “hours worked” for overtime purposes. When an employee who begins work early, stays late, takes work home, or works through the lunch break without authorization to do so, must be paid for unauthorized work (even if the company has a policy prohibiting it).  The employee, though, may be subjected to disciplinary action for violating the policy.

Watch for Mistakes 4-6 in tomorrow’s blog!

 

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September 25, 2014

Executive Orders Mean New Rules for Federal Contractors

Filed under: Discrimination,Legal Issues — Tags: 10:20 am

A series of new executive orders from President Obama present some new HR law compliance challenges for federal contractors.

The President recently signed an order requiring that federal contractors not discriminate based on sexual orientation or gender identity. About half the states already prohibit such discrimination in one form or another. Another order mandates such contractors pay a minimum wage of $10.10 per hour. Both rules will take effect after implementing regulations are adopted and finalized later in 2014.

Yet another order requires that certain contractors (those with contracts over $500,000) disclose state and federal labor law violations from the past three years and also gather similar information from their subcontractors. Such violations include problems under the Fair Labor Standards Act, the National Labor Relations Act, the Family and Medical Leave Act, and the anti-discrimination laws. Repeat offenders may not receive federal contracts. The latest executive order also will prohibit companies holding new contracts of more than $1 million from requiring that their employees arbitrate alleged discrimination and harassment claims. The most recent executive order will be implemented on new contracts beginning in 2016.

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September 11, 2014

Think Before Documenting That!

Filed under: Discrimination,Legal Issues,Title VII — Tags: 8:20 pm

I was relatively new to the human resources scene in the early/mid 90s, and I watched as my manager could have shrieked in horror, (Does an audible gasp count?), at the note a hiring manager wrote on an employment application.  The applicant’s first name was Ebony.  Noted.  But, that manager in her efforts (giving her the benefit of the doubt) to remember the applicant wrote quite simply, “black girl.” Those two words, just screamed “discrimination” at my manager and she immediately took control of the situation.

Most HR professionals realize the implications of making descriptive notes on applications can be a double-edged sword.  Nearly everything is fair game to a plaintiff’s attorney, even the notes we make to ourselves about who was who in our candidate pool.  However, I learned that very day, in those very tense moments, that it is much better to write, “navy blue suit” as opposed to describing someone’s skin color.  Better yet, write nothing at all!

Such was true for a manager involved in a recent case out of Texas in which two newly hired workers complained their wages were lower than other workers with the same or very similar jobs.   After about three weeks of work for the company they were terminated on a trumped up reason.

The manager documented their personnel files after receiving a notice from the Equal Employment Opportunity Commission granting the two terminated employees the right to sue.  He wrote:

“Please note he is not eligible for rehire ever.  Tried to sue us.  Simply tell him, ‘sorry but we have nothing for you at this time.  Please try again.  Have a nice day.’  Not for rehire.  Per Ben G.”

Those words were enough to cause the Texas Court of Appeals to find for the two workers on the charges of retaliation and malice.  They were awarded damages as well.  (You can read the case here.)

So in every situation from hiring to firing – be careful and think before you document that!

 

Source:  Meyer, Eric B.  “The Problem With Putting ‘Do Not Hire’ Notes in Personnel Files.”  Article available here and here.

 

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September 4, 2014

Interesting News Briefs from the World of HR Law

Filed under: FLSA,Hiring & Jobs,Legal Issues4:36 pm

In an interesting test of the Fair Labor Standards Act (FLSA) exemption regulations, a well-known national retailer has been sued in California by employees alleging that the company improperly classified its store assistant managers as exempt employees.  This lawsuit is a good reminder of how important it is to have updated job descriptions to determine the exempt or nonexempt status of all positions within an organization.  The Department of Labor website provides general information to determine exempt status.  Click here.

A national retail provider of rent-to-own merchandise (appliances, furniture, etc.) has been sued under the federal Fair Credit Reporting Act with the plaintiffs in the case alleging that the company used a third party to run background checks but did not provide copies of the same before taking adverse action against applicants and employees (e.g. denying or terminating employment) based on the background check results. The lawsuit is pending in Georgia.  This is a great example of the importance of knowing the law!  The Equal Employment Opportunity Commission provides excellent guidance to employers and employees on background checks from each perspective.  You can check those out for employers here, and for employees here.

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August 14, 2014

If It Looks Like Retaliation – It Probably Is!

Filed under: Discrimination,Legal Issues,Title VII — Tags: 7:39 am

An interesting case from Salt Lake County, Utah, recently caught my attention.  The county was facing a sexual harassment claim.  The complainant’s coworker, Michael Barrett, helped her successfully win her case.  Barrett is a hero, right?  Wrong.  Shortly after assisting his coworker, Barrett was demoted.  Now, if that wasn’t enough to scream, “Retaliation!” the county hired a replacement for his previously held position.

Barrett, now knowing his way around the justice system, filed suit against the county alleging his demotion was a retaliatory action and violated Title VII of the Civil Rights Act of 1964.  The county argued that he was poor worker.  However, Barrett successfully presented evidence of his 14 years with the county having received multiple promotions and positive performance reviews – until that fateful moment when he began helping his distressed coworker.  The court ordered that Barrett be paid the same amount of pay in his new, demoted position that he had received in the old job, and that the newly hired, innocent employee not be removed from Barrett’s old position.  The county, of course, appealed.

The 10th Circuit Court of Appeals, whose rulings govern Utah employers, upheld the previous court’s decision.  They agreed that Barrett had presented sufficient evidence to demonstrate that he had been retaliated against by the county.  The 10th Circuit also agreed that the trial court had ordered an appropriate remedy to Barrett and the new hire.

Notable in this case was the supervisor’s actions.  HRLaws.com reported that, “The disciplinary proceedings that resulted in his demotion began almost immediately after his ‘supervisor learned of his involvement in the sexual harassment complaint.’”  Interestingly enough, other witnesses that were involved in the case were disciplined and the supervisor who administered some of the disciplinary actions lost the records for them.  Convenient.

Employers should be aware that employees have the right to complain about illegal treatment in the workplace.  They have the right to assist other employees, as witnesses, in a claim.  Any adverse employment actions against a complainant or a witness should be taken with extreme caution (and experienced legal counsel) so the action doesn’t even appear to be retaliatory.

 

Source:  www.hrlaws.comUtah – Employment Law Letter

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August 7, 2014

Retailers Increasing Minimum Wages

Filed under: Compensation,General HR Buzz2:01 pm

Home furnishings retailer, Ikea, recently announced an overhaul to their wage structure that will increase their average minimum wage to $10.76 per hour by January 1, 2015, which is a 17 percent increase, and is well above the federal minimum wage of $7.25 per hour.  The increase will not be adjusted across the board, but will be a market-based adjustment from $8.69 per hour to $13.22 per hour depending on the cost of living in the city in which the store is located.  Ikea estimates that about half of its United States workforce will benefit by the increase which will be based on the MIT Living Wage Calculator.

Rob Olson, Ikea’s acting president for the United States and its chief financial officer was quoted as saying, “We are of course investing in our co-workers.  We believe they will invest in our customers, and they will invest in Ikea’s stores.  We believe that it will be a win-win-win for our co-workers, our customers and our stores.”  Ikea’s goal is to promote a “better everyday life” for their people.

Gap is another retailer that will be increasing its minimum wage to $10 per hour January 1.  This specialty retailer had set its minimum wage at $9 per hour in February.  Their new wage policy will benefit more than two-thirds of its 90,000 U.S. employees.  Gap reported more than a 10 percent increase in their applications for employment after they announced the increases.

Both retailers have a great desire to help their workers, and even though the minimum wage increases are a large investment, it is one they feel will help them reach their organizational goals and have a positive impact on the bottom line.

 

Source:  Greenhouse, Steven.  The New York Times.  “Ikea to increase Minimum Hourly Pay.”  Available here.

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July 2, 2014

Employers Score a Win in PPACA Contraception Mandate

Filed under: Benefits,Insurance,Legal Issues — Tags: 10:19 am

Monday, June 30, 2014, the United States Supreme Court in a 5-4 ruling sided with Hobby Lobby when they decided that closely held private corporations do not have to include four of the twenty mandated contraceptive methods in their group health plans due to the sincerely held religious beliefs of the owners.  These four exempted methods of contraception will have to be paid from the employees’ pocket, or possibly the federal government will seek a way to cover the costs in accordance with the Patient Protection Affordable Care Act.

 

 

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