Overtime Pay

USA Today ran an article "More American workers sue employers for overtime pay." Did you happen to read the article?

We all know where this is going. .. Lawsuits continue to increase as employees demand compensation for overtime. The technology that exists in the business world today often allows work to infringe into the personal time of employees. Personal computers, Blackberry's, smartphones, all increase the accessibility of employees and increase the off-the-clock demand of their employers.

The DOL responded to this technology by the introduction, in May of last year, of the DOL-Timesheet App. Introduced as a new electronic timesheet that allows employees to track the hours they work (in addition to break time, calculating overtime, etc.) as well as assist employees in determining the wages they are owed. The intent of the app was to provide workers with a tool that they can use to obtain wages they feel they were owed. "This app will help empower workers to understand and stand up for their rights when employees are denied their hard-earned pay," explained Labor Secretary Hilda Solis.

In a survey by the HR Policy Association last year, a third of the 155 large member firms that responded said they've restricted telecommuting as a result of the lawsuits, and 56% said they've curbed the use of communications devices outside the office.

To quote the USA Today report; "Labor has added 300 wage and hour investigators that past two years, increasing its staff by 40% to 1,050." The department "has stepped up its efforts to protect workers," particularly "in high-risk industries that employ low-wage and vulnerable workers," such as hotels and restaurants, says Nancy Leppink, deputy administrator of the wage-and-hour division.

Misclassification of employees is often at the heart of such cases. In November, Oracle agreed to pay $35 million to settle claims by 1,666 software testers, technical analysts and project managers that they were denied overtime because they were misclassified as administrators or professionals. The company did not admit wrong-doing.

73% of Wage/Hour investigations result in findings. The norm is that those findings are to the benefit of the employee. And, depending on the state you reside in, in "unjust enrichment" states, common law may allow the courts to go back up to 6 years for calculating back wage payments.

Yes, the DOL is employee friendly. An an employer you need to take the steps to ensure you have your employees properly classified.

Thanks Keith for the heads up on this article!

Flexible Work Arrangements - Where Are They Now?

In 2010 President Obama said making workplace rules flexible “isn’t” only a women’s issue.  "We know that companies with flexible work arrangements can actually have lower turnover and absenteeism and higher productivity," Obama told guests at a dinner for Fortune magazine's Most Powerful Women conference in 2010.  "This is not just a women's issue, or just a work-family balance issue.  It's an economic competitiveness issue."  The Obama administration is clearly on record as promoting flexibility.

Where are we now?

On February 29, 2012 Rep. Carolyn Maloney (D-NY) and Sen. Bob Casey (D-PA) reintroduced the Working Families Flexibility Act (H.R. 4106, S. 2142), a bill that would provide employees with a statutory right to request flexible work terms and conditions.

This new legislation would authorize an employee to request from an employer a change in the terms or conditions of the employee’s employment.  To be eligible, the employee would have to work an average of at least 20 hours per week or a minimum of 1,000 hours per year.  This new bill would only apply to employers with more than 15 employees.

Under the proposed bill, a flexible work arrangement request from the employee must relate to: (1) the number of hours the employee is required to work; (2) the times when the employee is required to work or be on call for work; (3) where the employee is required to work; or (4) the amount of notification the employee receives of work schedule assignments.

Upon receiving a request, an employer would be required to hold a meeting with the employee to discuss his or her application and provide a written decision regarding the application “within a reasonable period” after the meeting. If the application is rejected, the employer would be required to provide a reason for the denial. The employer would be permitted to propose an alternative change to the employee’s hours, times, place, and amount of notification of schedule assignments. If the employee is dissatisfied with this proposal and has another supervisor, the employee would have the right to have the other supervisor reconsider the alternate schedule.

Do flexible work arrangements work?

In 2006 the city of Houston promoted flextime as a way to ease the notoriously congested highways.  The "Flex in the City" program was successful.  It slashed workers' stress, boosting their performance and saving money.   The August 2010 Analysis of Alternative Work Schedules issued by the Texas Comptroller of Public Accounts stated that "AWS benefits retention efforts more than budgets.  Survey responses indicate that while some entities have seen savings from AWS, employee retention and satisfaction are the most common benefits.  AWS should be considered primarily as a means to recruit and retain employees."

Yes, there are challenges to Flexible Work Arrangements.  They may not work in some industries/companies.  But there are benefits.

What Every CEO Needs To Know About HR

In case you missed it, there is a great article on Bloomberg Businessweek today; “What Every CEO Needs to Know About HR.” 

A lot of organizations don’t know WHY they need HR.  Only that they NEED to have HR.  It has been my experience that there is a cloud of confusion surrounding HR and its value to an organization.   Yes, HR is there for compliance and employee relations.  But HR is there for so much more.   HR handles the “intellectual” management of the organization – HR handles the people.

While managers and directors may have the expertise in the operations of the business, budgeting, etc., HR ensures that the business goals are achieved through people management.      

Back in 2006, a study (Kahnweiler) identified five key challenges faced by successful HR professionals:

1. Lack of power;
2. Walking a tightrope;
3. Dealing with skeptical customers who view HR negatively;
4. Vulnerability; and
5. Being overwhelmed.

This was supported by an earlier survey from SHRM that showed that over half (54.8%) of HR professionals say the most frequently encountered obstacle to career advancement is HR’s not being held in high esteem by the organization. Basically, HR has some challenges.

To be successful, Bloomberg provided a list of tasks that the HR “head” should be focusing on:

1. Collaborating with you and other leaders to design and communicate a vision for the company, using every communication vehicle you have.
2. Selling your company to the “talent population,” in person, online, and via print and broadcast media. An HR leader should articulate the organization’s culture and story, not only for recruiting purposes but to fuel all of your activities with clients, vendors, media, and the business community.
3. Teaching all employees to tell the truth at work, especially when sticky interpersonal or political wrangles crop up. (Note to CEO: This includes telling you when you sound like a crazy person.)
4. Reinforcing a culture that emphasizes ingenuity over irrelevant, one-size-fits-all metrics.
5. Building a pipeline of qualified, energized people to fuel the company’s growth—scrapping the requisition-by-requisition, transactional recruitment model.
6. Shifting the HR function away from a break/fix model (“Benefits question? Second door on the left.”) to an embedded function in your business units.
7. Installing just enough HR process to meet your company’s regulatory compliance needs but not so much that people are stymied or treated like children.
8. Building a culture of collaboration that fuels every important program at your company. If your HR chief isn’t the advocate for people and evangelist for your culture, that’s a bad sign.
9. Asking your team members every day for their input on your business, their own careers, and life in general—not via a sterile, once-a-year “employee engagement survey.”
10. Replacing fear with trust at every opportunity, in policies, training sessions, management practices,  and via every conversation in the place.

New OSHA Enforcement Memo

In March, OSHA released a new enforcement memo on “Employee Safety Incentive and Disincentive Policies and Practices.” This new memo addresses areas that OSHA considers the most commonly potential discriminatory policies.

For example:

1. Employees who are disciplined for reporting an illness or injury and the stated reason is that the employee has violated an employer rule about the time/manner for reporting the illness or injury.
2. Policies taking disciplinary action against employees who are injured on the job, regardless of the circumstances surrounding the injury.  Reporting an injury is always a protected activity.
3. Employers establish programs that intentionally or unintentionally provide employees with an incentive to not report injuries. For example, entering all employees who have been injury free in the previous year in a drawing to win a prize. Or, a team of employees may be awarded a bonus for being injury free.
4. Employees are disciplined for reporting an injury and such discipline is based on a vague safety rule such as a requirement that an employee “work safely.” OSHA encourages employers to maintain and enforce legitimate workplace safety rules in order to eliminate or reduce workplace hazards and prevent injuries from occurring in the first place. In some cases, however, an employer may attempt to use a work rule as a pretext for discrimination against a worker who reports an injury.

After you have read the above, please take a moment to review your Safety Incentive Program and ensure that it’s legal!

For more information, here's the link: http://www.osha.gov/as/opa/whistleblowermemo.html

Legislative Update: Affordable Care Act

Employers Responsible for W-2 Reporting

As part of the Affordable Care Act (ACA), employers are required to report the cost of health benefits coverage under an employer-sponsored group health plan. This applies to both self-funded (ASO) and fully insured employer groups.

Complying with the mandate is the responsibility of the employer. Therefore, employers are encouraged to consult with their tax and legal resources for assistance with meeting the reporting requirements.

Beginning in January, employers that were required to file at least 250 2011 W-2 forms were required to start tracking the total cost of health care coverage for tax year 2012. This information will be reported to the Internal Revenue Service on employee W-2 forms that will be issued in early 2013. This reporting is for informational purposes only and does not affect an employee’s tax liability.

However, for small groups (employers that were required to file fewer than 250 2011 W-2 forms), reporting will continue to be optional for the 2012 tax year.

“Applicable employer-sponsored coverage” generally means coverage under any group health plan made available to the employee by an employer, which is excludable from the employee's gross income under the Internal Revenue Code. The coverage is typically excludable from the employee’s gross income under the Internal Revenue Code, or non-taxable.

Caveat Emptor (Part 2)

Ethics comes from the Greek roots 'éthiké' meaning the ways and habits of a group of people and would translate into the actual customs and practices characterizing specific cultures. We are all familiar with the term “culture.” Ethics is a part of culture. Culture = identity.

With the above being said, let’s continue our discussion of that 62 page ethical report shall we? Overall, yes we have done well in some areas, but in others the report clearly indicates there is hard evidence that the expectation of workplace ethics to continue to decline is well founded.

The percentage of employees who say their business has a weak ethics culture increased to 42 percent in 2011, a seven percentage point surge and the highest level since 2000. As we all know, where cultures are weaker, misconduct is more prevalent.

One of the major drivers of ethics culture are the senior executives. Executives must set the standards for the organization and mirror them. Do you think that the executives at ENRON would have tolerated questionable practices if they knew how it would look as the subject of a story on the front page of The New York Times? Doubtful. Remember, unethical behavior doesn’t have to be illegal or even clearly unethical to have a negative impact on the organization.

Confidence in senior executives and supervisors fell 62% in 2011. This matches the historic low in 2000, and down 6 percentage points from 2009. Fewer employees believe their direct supervisors act as ethical leaders: One-third of employees (34%) say their managers do not display ethical behavior, up from 24% in 2009 and the highest percentage ever. This clearly supports the assumption that the decline in workplace ethics is under way. Of significant concern is that 56% of reports of misconduct reported by employees are received by supervisors, and 26% higher management! The survey additionally revealed that retaliation is linked to employees’ reporting of misconduct. “Where employees did not experience retaliation, they were less likely to consider reporting misconduct to an outside source.”

To quote ERC "The findings are clear: the reduction of ethics risk is the result of two primary drivers. The first driver is the presence of a well-implemented ethics and compliance program. The second driver is employees' perception that they work in a strong ethical culture."

To have an "ethical culture" here's the metrics:

1. Ethical leadership setting the tone at the top.
2. Supervisor reinforcement of ethical behavior.
3. Peer commitment by supporting one another in doing what is right.

In closing, I have a couple of questions to throw out there:

• Should ethics be rewarded?
• Or should they be expected?
• Do we punish those that cross the ethical line?
• Should we reward those that walk the ethical line?
  

There’s a universal paradox; “You are free to choose; you are not free from the consequence of your choice.”

Caveat Emptor (Part 1)

Caveat Emptor, let the buyer beware! Business ethics has been a societal concern going back a long ways and they continue to be of concern today.

On March 15th, Forbes featured an article entitled "The World's Most Ethical Companies." The Ethisphere Institute, a New York City think tank, announced its sixth annual list of the World's Most Ethical Companies. In 2011, 3,000 companies were nominated, or nominated themselves, and 110 made this list. For 2012, out of the 5,000 companies that threw their hats into the ring, 145 companies made the list. To check out the "winners" the link is listed here:

http://www.forbes.com/sites/jacquelynsmith/2012/03/15/the-worlds-most-ethical-companies/

It's rather interesting that the number of "ethical" companies continue to grow when you read publications such as the 2011 National Business Ethics Survey by ERC. HR Morning recently featured an article regarding the Ethics Resource Center biannual survey. Luckily ERC had sent me an email advising that the survey results were available for download. I’m sure you can guess my next step.

The “ethic” weather of the U.S. work environment, based on the survey, seems a bit stormy:

• Retaliation against employee whistle blowers rose sharply. More than one in five employees (22 percent) who reported misconduct say they experienced some form of retaliation in return. That compares to 12 percent who experienced retaliation in 2007 and 15 percent in 2009.

• The percentage of employees who perceived pressure to compromise standards in order to do their jobs climbed five points to 13 percent, just shy of the all-time high of 14 percent in 2000.

• The share of companies with weak ethics cultures also climbed to near record levels at 42 percent, up from 35 percent two years prior.

In closing this part of my Caveat Emptor blog, I want to leave you with:

The Top Five Most Frequently Observed
Types of Misconduct in 2011

I'll continue discussing the ERC survey in my next blog.

Keep communicating people!

Employee Negativity

Spring is officially here. Unfortunately over the past few weeks I have seen an increase in employee negativity. A fellow manager pointed out that, “Maybe it's Spring Fever." Well, maybe not.

Unfortunately this negativity is impacting person:person communication, which ultimately impacts our ability to function as a cohesive team. Employees have become preoccupied with their personal agendas, their set of complaints, etc.

From the senior manager at the top of the organization to the support staff at the bottom, negativity exists. Negativity can be seen in attitude, outlook or a chorus of voices responding to a workplace decision that adversely affected them. In the earlier stages, we begin to see errors/poor work quality, personality conflicts, poor morale, absence/lateness issues. When negativity becomes intolerable, people leave.

Whatever the cause in any environment – it needs to be addressed. And quickly!

How can you manage it? Let’s use my CIA approach.

First, Communicate. Talk to all the people you need to, get all the facts that you can so that you can Identify the problem. Sometimes allowing employees just to vent helps. *HR should always be a safe haven for employees to vent* Once you identify the problem – Act and address the issue. As an example, if there is a negative response to a recent change in the work environment – clearly communicate with employees. They may not be aware of the inner workings of the decision. With the information, a better understanding may occur.

The negativity in your workplace may be situational. Or, far worse, it may be chronic. Under any circumstances, it must immediately be addressed.

Intelligence and Impact on Sick Leave

The below blog is dedicated to Aaron. He never takes a sick day. Ever. At some point he can cash all those days in and buy a house in Rock Creek.

Okay, here's the blog.

A recently published study, from the UK, offers an interesting theory that the better people performed on childhood intelligence tests, the less likely they were to end up on long-term sick leave. The study involved over 23,000 people whose cognitive abilities were tested in 1946, 1958 and 1970. The ranking of cognitive ability was based on testing both the verbal and nonverbal intelligence. Okay. So now there is a clear link between low intellectual ability and long-term work absences?

• In the 1946 group, 47% of those who were on long-term sick leave had been in the bottom quarter of childhood ability, compared to 13% who were in the highest category.
• Approximately 41% of those off sick from the 1958 group were in the lowest quartile of ability, while 32% of the 1970 interviewees were also in this category.

The authors claimed that strategies to reduce long-term sick leave should involve education. "Our findings suggest that health is only one factor in understanding long-term sickness absence." The U.K. report, written by experts including Max Henderson of King's College London, concluded: "Long-term sick leave is a complex outcome with many risk factors beyond health."

Let's talk about the U.S. for a moment. In 2010 a report in The New York Times addressed the Wisconsin Longitudinal Study. This study tracked the 1957 graduates of the state's high schools, approximately 10,000 people, and noted that "those who finished in the top quartile were, overall, half as likely to experience the declines in health that their peers who graduated in the lowest quartile were experiencing." The study, started at UW-Madison in 1957 as a survey of high school seniors' post-graduation plans, evolved into a study of the entire life course. Education, career, family, aging and retirement.

My question to you, is there really a correlation between intelligence levels and the likelihood that someone will end up on long-term sick leave?

Will employers begin testing employees intelligence levels to determine the likelihood of potential long-term sick leave, and therefore the potential impact to benefits?

So, who is regularly sick where you work?