Working Families Flexibility Act (H.R.1406)

(Not to be confused with the Flexibility For Working Families Act)

Over heavy opposition by the Democrats, a hotly debated bill was passed May 8th by House Republicans that will potentially loosen federal overtime laws.  The bill would amend long-standing labor laws (the 75 year old FLSA) by allowing private-sector employers to offer compensatory time off in lieu of time-and-a-half pay for overtime.  (The protections under FLSA were put in place to prevent employers from abusing the system and avoiding paying overtime to workers who put in more than 40 hours per week.)

The supporters of the bill have pitched it as an update to federal law, with the obligatory fluff that "it's about helping working moms and dads, providing the ability to commit time at home," per Rep. Martha Roby (R-Ala). 

Under the bill, employees may use their comp time only at the employer's convenience.     If a business is necessarily inflexible when it comes to scheduling time off as the business may relay on a small number of employees for an entire function, then comp time may not be a viable alternative.  For the small employer, the concern may be the potential lost productivity and the additional paperwork for tracking comp time accrued and used.

Yes, the bill has put in provisions to protect against abuse, and only offers the workers a chance to opt for the extra time off if that's what they want.  But I side with the Democrats that such an option is ripe for abuse by unscrupulous employers.  The bill is a potential way for extra work to be imposed on workers with no additional cost to the employer. 

Vicki Shabo is the Director of Work and Family Programs of the non-partisan National Partnership for Women and Families.  Her organization is staunchly opposed to H.R. 1406 and sees it as a wolf dressed in sheep's clothing.  "This is a dangerous proposal that pretends to be something that will help working families.  It will take money out of worker's pockets for overtime pay that they otherwise would have received in wages and instead replace it with possibly an empty promise or a mirage of time that's out in front of them that they may never be able to take."

"For the record, there are many ways for Congress to improve both worker pay and work life balance, including raising the minimum wage, instituting paid sick leave, ending discriminatory pay practices, easing the formation of unions and promoting advance notice for worker scheduling,  The House bill ignores what is helpful and embraces what is harmful."  The New York Times, May 10, 2013.

I highly doubt that this bill will go much further. The White House stated in early May that the president would be advised to veto such legislation on the grounds that it would weaken protections in the Fair Labor Standards Act.

Happy Birthday to the Equal Pay Act

50 years ago today the Equal Pay Act was signed by President John F. Kennedy.  While equal pay is the law, the nation still faces gender wage disparities.  In 2012, women generally earned 77 percent of men's wages.  For African-American and Latina women, the number is even lower.    We have made progress, but it's not enough.

The Equal Pay Act requires that men and women in the same workplace be given equal pay for equal work.  The jobs need not be identical, but they must be substantially equal.  Remember that job descriptions and titles are irrelevant. 

On the front line of this battle is the EEOC who has made enforcing equal pay laws one of its six priorities as outlined in the Strategic Enforcement Plan.

Concerted Activity

When you think of the term "concerted activity" there is often an automatic assumption that a union, or union activity, is involved.  But that's not always the case.  Section 7 of the NLRA states "Employees shall have the right to self-organize, to form, join, or assist labor organizations, to bargain collectively through representatives of their choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, and shall also have the right to refrain from any or all such activities. . . " 

 

Protected concerted activity sometimes has nothing to do with unions at all.   Employees who get together and complain to management about their pay or benefits is engaged in concerted activity.   Concerted activity can include internal complaints of discrimination, discriminatory harassment complaints, etc., all of which is protected by Section 7 of the NLRA.  

Is Gender Bias Alive And Well?

Gender Bias n. unequal treatment in employment opportunity (such as promotion, pay, benefits and privileges), and the expectations due to attitudes based on the sex of an employee or group of employees.  Gender bias can be a legitimate basis for a lawsuit under anti-discrimination statutes.

 

Gender bias begins at an early age.  From the pink or blue outfits children receive at infancy, the influence of toy selections, to how teachers respond to a child in school, or the books we read them at bedtime. (An April, 2011 study of gender bias in literature examined nearly 6,000 children's books published from 1900 to 2000.  Of those, 57% had a central male character compared with only 31% female protagonists.  Presumably animals of an indeterminate gender led the rest.)  So how do we respond to gender bias in the workplace?

 

First let's understand that gender bias is more subtle than sex discrimination.    Bias occurs because of personal values, perceptions and outdated, traditional views about men and women.  We may encounter gender bias in many forms and degrees.   For example, both men and women tend to view women who express anger more negatively than they view men who express anger.  Even when the members of both sexes use the same words and body language to express that anger.  Gender bias exists where men or women are evaluated or perceived differently depending on whether their actions violate expectations of how they should act or expectations of what behaviors are required for a role they have assumed.  Whether the subject of bias is male or female, the effects of gender bias can be devastating.

 

Beginning in as early as 1982,  state judiciaries began to address gender bias by creating a variety of research committees and task forces.  Since that time, attention around gender bias in the workplace has continued to grow in every industry.

 

Then:

"Gender bias exists in many forms throughout the Massachusetts court system.  Sexist language and behavior are still common, despite an increased understanding that these practices are wrong."  New England Law Review.  Volume 24, Spring 1990.

"The New Mexico Supreme Court is greatly concerned over manifestations of gender bias in the court environment within the State of New Mexico."  "In 1987, the State Bar of New Mexico established The Task Force on Women and the Legal Profession and requested that the Task Force examine the needs of women lawyers, their acceptance by the Bench and Bar in general. . . . . The Final Report, issued November 2, 1990, documented gender bias not only directed toward women lawyers, but affecting female litigants, witnesses, and court employees."

The State of Florida, Gender Bias Study Commission:  Executive Summary, found that "during it's two years of hearing and study, that gender bias -- discrimination based solely on one's sex -- is a reality for far too many people involved in the legal system.  (1990)

In 2011, a team at Yale University asked 127 professors at six U.S. research universities to judge the merits of college graduates.  The graduates were applying for a position as a lab manager before heading to graduate school.  While using identical resumes, of which half were obviously female applicants, the participates were significantly more likely to hire the man, and at a higher salary.  Interestingly enough, the bias was equally strong among both the female and male scientists and did not vary by age, race or discipline. (www.sciencemag.com)

 

Now:

"The Supreme Court's decision on the Walmart case - in which five justices, all male, sided with the company in denying 1.5 million female employees the right to pursue a class-action sex-discrimination lawsuit - showed a truly stunning obliviousness to the way gender bias actually plays out in the workplace."  The Daily Beast.  "The Supreme Court's Cluelessness on Gender Bias."  June 22, 2012.

 

MSLGroup currently has a class action lawsuit pending alleging gender pay discrimination.  The $100 million class action lawsuit was filed in February 2011 and represents women who worked at the agency from 2008 until the date of judgement.  Of the 33 total plaintiffs, two are current MSL employees.  One, Sheila McLean, is currently a SVP and a 12-year veteran of the firm.  The lawsuit alleges that MSL paid female professionals less; did not promote women at the same rate as male counterparts; and conducted discriminatory demotions, terminations and reassignments for female staffers during the agency's 2009 reorganization.

 

After all the steps we have taken, all the studies, polls, research papers, etc., gender bias is still alive and well in the workplace.  As an employer, you need to be aware if gender bias exists in your workforce.  Train your employees to identify it, and to acknowledge it.  Secondly, call attention to the bias.  Make a commitment to eliminating it in your workforce.

 

 Title VII prohibits discrimination "because of" an employee's sex. As an employer we may not take adverse action against an employee because of their sex. Sex can not play a role in any aspect of their employment including hiring, transfers, promotions, pay, disciplinary action, suspensions, and discharges. It's also important to understand that while Title VII was originally understood to apply only to women, that is no longer the case. It also prohibits discrimination against men. For example, when a male employee is denied a promotion in favor of a female employee, and the male can prove that the reason was "because of his sex," there may be claim for sex discrimination.

Fiscal Cliff: Payroll Department Take Note!

With Congress averting the plunge off the fiscal cliff, here's a couple of items for payroll professionals to take note of.

H.R. 8, The American Taxpayer Relief Act of 2012, made permanent Bush-era tax rates for all but the highest earners.  This means no tax increase in income tax rates for employees taxed at the 10%, 15%, 25%, 28% and 33% rates.  It is anticipated that President Obama will sign the bill this week.  H.R. 8 also includes a few other payroll provisions including; the employer wage credit for employees who are on military leave is extended retroactive to January 1, 2012 and will expire on December 31, 2013; and, employer-provided educational assistance under tax code Section 127 is permanently extended.

Effective January 1, employers must resume withholding at the 6.2% Social Security payroll tax.  Congress declined to extend the payroll tax economic stimulus that took place in 2011 and 2012 in which the employee's share of payroll tax was lowered to 4.2%.  Underwithholding should be corrected as soon as possible, but not later than March 31, 2013.  Consider notifying employees this week of changes that will impact their take-home pay! The increase to 6.2% for employees means that an employee with an income of $50,000 to $75,000 will pay an average of $985 more in taxes. 

On January 1 the IRS released the 2013 Percentage Method Tables indicating that employers should implement the 2013 tables ASAP, but not later than February 15th.  Unfortunately these tables do not reflect the H.R. 8's tax brackets.  Keep an eye out for updated tables.  In addition to reissuing the 2013 withholding tables, we're waiting on the release of the 2013 Form W-4.

Happy New Year!

 

Sorry, I'm Not Going To Tell You What You Want To Hear

I upset an executive the other day when I advised him that a tactic he wanted to take with an employee really wasn't the best approach.  When I explained why a different approach was needed, the response from the executive was anything but supportive. 

 

To quote Dilbert, "Do you want a realistic. .. that will ruin your day, or a lie that will allow your ignorance and your happiness to lock arms and square dance to the next cubicle?"

 

It's human psychology. Most times we hear what we want to hear. We want things to align with our vision of how the world works. However, Mr. Executive, if someone is brave enough to give you honest input, take a moment to recognize it. Don't shoot (or shun) the messenger.   Don't just turn to confidants who will tell you what you want to hear. My recommendation is that you turn to several sources for information and obtain several points of data.

 

For just a moment please understand that HR isn't here to offend you.  We all know that in the business world, unintentional violations do not excuse wrongful behavior.   No, I'm not here to provide you with legal advice. But, I am here to advise you where you may face potential liability.  So,  I'll question tactics, suggestions or orders that may appear to be unlawful.   I will ask questions and seek clarification.  I will then tell you what works best based on my knowledge and experience.  I'm going to follow my instincts.

  
In May, Forbes published the "10 Commandments for Delivering Bad News."  In brief (and the link has been provided) the commandments are:

1. Thou shalt always treat people with respect and dignity.
2. Thou shalt always follow up and follow through
3. Thou shalt always remember your multiple audiences
4. Thou shalt always bring solutions
5. Thou shalt always look for the silver lining
6. Thou shalt always justify
7. Thou shalt always put in writing
8. Thou shalt never hide the facts
9. Thou shalt never delay
10. Thou shalt never surprise

Any successful employee strives to anticipate the boss's needs and then deliver them.  Telling people what they don't want to hear is risky.  I can sit here, nodding, and maintain the status quo.   But that's not what you hired me to do.   I'm not going to hide the facts and I am going to provide you with solutions.

http://www.forbes.com/sites/forbesleadershipforum/2012/05/30/10-commandments-for-delivering-bad-news/

The 10 Most Common Legal Mistakes HR Makes

Business Management Daily recently ran this great article outlining common legal mistakes that "HR makes."  Well, those mistakes can be made by any employer, supervisor, and/or business leader out there.  Not just "HR."  While a lot of this is just plain common sense, we all get busy from time to time and make a mistake. 

 #1: Advertisements, Interviews, and Offer Letters

Mistake: improper language in job advertisements. Too many employers still use inappropriate terms — such as "girl," "boy," or "young" — in their job advertisements. This is particularly true when managers, rather than HR, write the ads.

Mistake: unlawful interview inquiries. Too many hiring managers ask about personal and/or protected characteristics during job interviews, which sets the employer up for a discrimination lawsuit if the applicant is not hired.

Mistake: inaccurate description of the job. Some hiring managers work so hard to get top-notch recruits in the door that they fail to be realistic with their description of the job. The unhappy employee will leave, and it will have been a shameful waste of the employer's time and money.

Mistake: inadvertent creation of contractual promises. Too many employers include language in their job offer letters that inadvertently creates an employment contract. For instance, mentioning a yearly salary implies a yearly contract.

#2: Wage and Hour Issues

Mistake: misclassification of workers. Exempt vs. non-exempt status: Finding and correcting these mistakes are an Obama administration priority. While there are many factors to consider, you're basically basing your determination on the employee's level of responsibility and/or training, and a salary test.

Mistake: mandating confidentiality of wage information. Prohibiting employees from discussing their wages is a violation of the National Labor Relations Act.

#3: Privacy Assumptions and Violations

Mistake: permitting an expectation of electronic privacy. Too many employers fail to advise employees to expect no privacy on their computers. If you asked employees, "Do you think the stuff you put into that computer is private?" you might get some interesting answers.

Mistake: improper electronic monitoring. Some states have statutes that require employers to give employees notice if they are being monitored electronically.

Mistake: inadvertently revealing private employee information. HR possesses a great deal of sensitive information about individual employees. It is your duty to keep that information confidential.

#4: Training and Performance

Mistake: failure to train supervisors. When supervisors are not trained, they're the ones who get you into trouble. They may say rude, racist, or sexist things, or be unintentionally discriminatory, and because they are in a supervisory position, the entire company is on the hook.

Mistake: misleading performance evaluations. If you try to discipline an employee for a performance/behavior problem that was never noted on their evaluation, your hands may be tied.

#5: Rough Beginnings and Sharp Endings

Mistake: sloppy start. Among HR's common errors in this area are: failing to submit the state notice of a new hire; failing to tell the employee the key terms and conditions of employment; and providing the employee with a misleading description of working conditions.

Mistake: sloppy finish. Regardless of whether a termination is voluntary or involuntary, always allow the employee to leave with dignity.

#6: Investigations

Mistake: failure to oversee supervisory investigations. As an HR professional, you know that timeliness and thoroughness are important in an investigation. But what about when a supervisor is the one investigating, not HR? It's still HR's responsibility to provide oversight.

#7: Record-Keeping/I-9 Issues

Mistake: failure to document past practices. Courts love to know not only whether the treatment of an employee was against the law or company policy, but whether it was in line with past practices.

Mistake: failure to comply with Form I-9 requirements. Failure to complete the I-9 form properly and failure to keep the form in a separate file are common mistakes employers make.

#8: Breakdowns In Communication

Mistake: failure to keep employees in the loop. Forgetting to notify employees about policy/procedure changes, outcomes of investigations/discipline issues, or unsatisfactory behavior or work quality can be a costly slip-up.

#9: Accommodations

Mistake: failure to explore accommodations. "Accommodation" can be defined as "a determination in favor of the employee." Employers should explore accommodation options when an employee: has a disability, is pregnant, is called to active military duty or has a family member called to active military duty, or wants to engage in a religious observance/practice.

#10: Non-Compete Agreements

Mistake: unreasonable scope. Obviously, an agreement prohibiting an employee from working at any position in the same general industry forever and ever isn't going to hold water.

Mistake: lack of consideration. Legally, contracts are valid only if both sides give something. If the employee gives up their right to compete, the employer must also give something. Too often, the employer gives nothing, making the non-compete agreement invalid in a court of law.

Paycheck Fairness Act Fails In Senate

Senate Republicans blocked the Paycheck Fairness Act which would have ensured that women are paid the same amount as their male counterparts.  The final vote was 52-47, effectively killing the bill for the time being.  Senate Republicans voted against the measure in the belief that it would adversely affect businesses if employees attempted to file pay-related lawsuits.

The bill would have required employers to prove that any discrepancies between male and female pay are job-related and not based on discrimination, and was pushed in part by a census report which concluded that women typically earn 77 cents for every dollar their male counterparts earn for the same position.

Senate Majority Leader Harry Reid (D-Nev.) used a procedural maneuver that gives him the ability to reintroduce the bill at a later date.

Paycheck Fairness Act 2012

Headline “Republicans voted no to equal pay for women: Act goes to Senate June 5^th.” And that's a recent May, 2012 headline. And if you don’t believe me, follow the link to the actual article: www.allvoices.com/contributed-news/12275353-the-paycheck-fairness-act-up-for-vote-next-tuesdaytell-your-senator-its-time-women-receive-equal-pay

This isn’t a new topic, or a new bill. Remember, a Paycheck Fairness Act was previously pitched in 2010. It failed 58– 41.

Let’s talk about Gov. Romney for a moment. Teamsters General President Jim Hoffa called on GOP presidential nominee Mitt Romney and the Republican Party to prove they haven't declared war on women and workers by supporting the Paycheck Fairness Act. Romney has refused to take a stand, or respond. Even the Washington Times has been unable to get a response to the five messages they’ve left him. He’s rather silent on the issue, which I feel says it all.

 

 

Gender bias in action? Yes? No? Who knows? All I know is that I agree in paycheck fairness no matter your sex, race, religion, etc. Data suggests that women make .77 on every dollar that men do. Claycord Congressman George Miller stated that women in California earn 84 cents for every dollar a man earns. That means California women have been paid $8,151 less than men by the end of that year. Same experience, skill, education,title, etc. And yet the pay differs.

Since I’m blogging from the great State of Texas, let’s look at Texas statistics.

• In 2010, the typical woman in Texas working full time, year round, was paid only 80 cents to every dollar paid to a man working full time, year round. That's 3 cents narrower than the nationwide wage gap of 77 cents.
• The wage gap persists at all levels of education. In 2010, women in Texas with a high school diploma were paid only 67 cents to every dollar paid to men with a high school diploma. Comparing women and men in Texas with a bachelor's degree, the figure was 69 cents. In fact, the typical Texas woman who has received an associate's degree or completes some college still isn't paid as much as the typical Texas man who only graduated from high school.
• The wage gap exists across occupations. For example, Texas women working full time, year round in 2010 in management, business, and financial occupations were paid only 71 cents to every dollar paid to men in the same occupations, and Texas women working full time, year round in sales and related occupations were paid only 57 cents to every dollar paid to men in the same occupations.

The above statistics provided by National Women’s Law Center. The Importance of Fair Pay for Texas Women. April 2012. www.nwlc.org

The Equal Pay Act was passed in 1963, almost 50 year sago. And yet, unfair pay practices still exist. The new Act will hold employers accountable for pay discrepancies between male and female employees while strengthening incentives to prevent pay discrimination. The employer will have to provide a valid explanation as to why a male employee, with the same qualifications/experience, is making more than his female counterpart. The employer must be able to show that wage differences are job-related, not sex-based, and are driven by business necessity.

Everywhere on the Internet, people are chiming in on this sensitive issue. Petitions are being circulated for signature. www.momsrising.org/member_stories/topic/pay-discrimination-stories/?action_id=10534741&akid=.2017705.N-Qc-v&form_name=act&rd=1

Let’s wait and see how this all unfolds. I’ll have an update for you after June 5^th.

Pay Compression and Senior Employees

As a follow up to my earlier blog on pay compression, let’s talk about its impact on longer-tenured employees.

One major challenge that many organizations face is attracting new, desired talent. We all know that compensation for new hires is determined by the external job market. Pay compression occurs when new employees entering the organization are paid at similar or higher levels to existing employees. Because current employees have their wages set by an “internal” job market, typically their salaries are not keeping pace with the “external” market.

As new employees are bought in, the question arises: Why aren’t we increasing the compensation of the older employees in line with those of the new employees? The older employees are quite often tasked with providing on-the-job training/mentoring of the new employees. Is a workplace conducive to the spirit of teamwork and harmony when the new employees are taking home more than the old?

Of concern are those employees whose salaries are significantly below the external job market wages (for their skills and experience), and who may begin to seek other job alternatives outside the organization. Sometimes a market starting salary increases so much that the existing employee is punished by not moving. The question then becomes “to get a good raise, do I need to quit?” Employees will be more likely to see opportunities for increasing their salaries outside their present organization.

As an employer, a possible solution is to adjust your “internal job market” salaries based solely on job values and performance (and always ensure that you audit for non-discrimination). Change your terminology from “merit increases” to “adjustments.” If the pay compression is simply one of timing due to changes within the organization, communicate with the employee! Let the employee know that the inequity is only temporary and will disappear shortly.

While we won’t be able to win them all, we may be able to reduce the damage if we take the proper steps.

Pay Compression

Pay compression occurs when you have small differences in pay regarding experience, skills, level or seniority. Most often employers are unaware that pay compression exists until a problem arises.

Some examples of pay compression are:

- Newly hired “green employees” are paid more than existing employee in same position;
- A subordinate is paid more than or equal to his/her boss;
- The salary of an employee in a lower graded job is paid more than employee in higher.

Employees are concerned with how their compensation levels relate to that received by others in an organization. And further, that their pay is a reflection of their performance and abilities. If an employee believes this his/her contribution to an organization is undervalued, this can lead to emotional issues such as resentment, depression or disengagement. Another factor to consider is a subordinate earning more than his/her supervisor may not respect their supervisor if s/he is aware of the salary compression.

While there are other issues such as tenure-based pay, general increases, etc., that create pay compression, oftentimes pay compression is the result of a poorly maintained salary structure. Is there a solution? Yes. Establish a salary structure. Ensure it is updated regularly and use it as a guide when setting compensation levels. Take steps to benchmark your salaries regularly to keep pace with market rates. If your salary program is not in sync with your market, my bet is that your employee salary levels are as well.

In closing, a word of caution. There are potential legal issues associated with pay compression. These may arise when a protected class is at the wrong end of a pay compression issue.