Friday, 28 July 2017
In the continuing saga around overtime eligibility for US workers, the Department of Labor this week issued a request for information (RFI) regarding changes to the 2016 rule, which was blocked before it went into effect.
Potential alternatives include having multiple salary levels for white-collar exemptions from overtime, to account for varying costs of living across the United States. Such an option would resolve one of the biggest areas of dissatisfaction with the prior rule, which was the salary level was not consistently applicable in areas with widely different costs of living, such as between California and Georgia.
Unsurprisingly, the DoL is expected to push back on this option, on the basis of complexity both in compliance with the rule and enforcement by the DoL. However, critics of the prior rule were vocal in their arguments that doubling the threshold from $23,660 to $46,476 was an undue burden on employers.
The RFI lays out ten questions around changes to be made to the earlier ruling, which cover, in addition to the multiple salary levels for exemption:
To read the full text, including background of the FLSA and the 2016 ruling, visit the DoL site here:
Friday, 07 July 2017
Last time we talked about whether you, as an employer, should ask about salary history with candidates. Today, we’re looking at some trends around demographics in the marketplace.
Many people consider their salary history to be private information. Miss Manners would agree, as would Emily Post. The National Labor Relations Board holds a slightly different viewpoint on the question, although they’re more concerned with employees sharing current salaries with each other.
Data shows that disclosing a past salary history with low earnings may suppress salary for an individual throughout their career. And truthfully, past salary really has no direct relation to market value of an individual for your job. Market for your open job is based on what similar workers are making, given the same conditions – metro area, company size, industry, etc.
Just as with any professional service, you get what you pay for. Looking for a bargain when hiring an employee will likely result in bargain basement performance.
Recent survey data (payscale.com) shows that men who are asked about, and decline to disclose salary history get paid more than those who do share. BUT, the reverse is true for women, and by a wider margin. This trend could be a result of unconscious and ingrained gender bias – are women who decline to disclose their salary viewed as uncooperative? And are men who do so seen as confident? We can only speculate as to the reason, but it does exist.
As far as other factors, such as generation, industry, & job title, check here for some interesting infographics around the salary history query.
Friday, 30 June 2017
Do you ask about salary history when interviewing candidates? If so, you’re not alone. A recent Payscale.com survey found that 43 of respondents were asked about salary history during the interview process. Of those, 25% declined to answer the question.
Now, managers have many reasons for asking about salary history. Some believe it’s a good gauge of career progression and success. Which has some merit since people don’t typically earn better incomes if they aren’t performing well. But economic factors can muddy the waters on that one. What if you are trying to woo a candidate whose company instituted a temporary pay cut or failed to pay bonuses?
Others like to ask as a check on what the competition is doing, and to make sure they aren’t falling behind market in their practices. And of course, some interviewers ask in order to week out candidates who are already out of their range for the position.
But that question may soon be taboo, and already is banned in some locations. Right now, six states or cities have banned employers from asking about salary history – Delaware, Massachusetts, New York City, Oregon, Philadelphia (delayed pending litigation), and Puerto Rico. Not surprisingly, California is considering similar legislation.
Currently, there is discussion around a federal ban on salary history questions in interviews. Until then, assuming you are not in an affected area, should you ask? For the time being, there’s no legal reason not to, and it may be helpful to you as you benchmark your compensation for various jobs. So long as you don’t let bias creep into your negotiation and offer, you should be fine.
Next week – unconscious bias, salary history, and demographics.
Friday, 05 May 2017
Our House of Representatives has been busy these past two weeks on employment matters. They have passed both the Working Families Flexibility Act (H.R. 1180) and the American Health Care Act (H.R. 1628). Interestingly, the two pieces of legislation share a common principle of moving public employers and private employers closer to the same regulatory guidelines. While that’s not the intent of either one, it’s a result I fully support, as I think our elected officials should be subject to similar rules as private business people. Since this isn’t a political blog, let’s move on to the potential changes.
The Working Families Flexibility Act allows private employers to offer compensable time, or comp time, to employees in lieu of overtime pay. This is a practice that has been in place for government employees for decades, but was not available to employees working in the private sector. Essentially, an employer can choose to offer comp time in place of overtime hours worked, and – importantly – an employee can then choose that comp time or the overtime pay. The bill includes language to ensure the choice is left up to the employee once the employer establishes this practice. It also includes language that is favorable to the employee regarding the wage at which the accrued time is paid out if not used within a specified time frame.
Read the full text of H.R. 1180 here: https://www.congress.gov/bill/115th-congress/house-bill/1180/text
The American Health Care Act was narrowly passed in the House yesterday, with a vote of 217-213. Much of this bill is aimed at repealing provisions of PPACA, known as Obamacare. Some of the changes include: 1) states can opt out of the current requirement to charge participants the same for coverage regardless of pre-existing conditions, 2) eliminates the system of subsidies and replaces it with a system of tax credits, 3) cut Medicaid, which was expanded under PPACA, 4) eliminates the individual mandate.
As with any legislative change, there will be people who benefit and people who do not under the new bill. It's still unclear exactly how these changes will impact companies, particularly as there will likely be changes as it passes through the rest of the process and because any changes to existing requirements will take time to be implemented.
You’re certain to see many opinions on the benefits and harm of the proposed changes over the coming days. If you want to read the text of the bill, be forewarned that it’s lengthy and convoluted. If you don’t know the details of current PPACA provisions, then parts of it won’t make a lot of sense.
Find the full text here: https://www.congress.gov/bill/115th-congress/house-bill/1628/text
Friday, 24 February 2017
Last fall I had the opportunity to support an Eagle Scout project in my home community. The son of a fellow church youth group member (so long ago!) was holding a dinner as part of the fundraising for the project.
For those who don't know, the Eagle Scout rank is a pretty big deal. No, make that a very big deal. It's the culmination of years of study, preparation, learning, and leadership. Taking on this project requires a Scout to demonstrate leadership while performing a service to the community.
The Scout must plan the project, including obtaining permission from the receiving organization, and submit a written plan to BSA leadership. Then he must raise funds for the project, purchase the materials, schedule the work group of Scouts, execute on the project, and finalize a written report on the outcome and any changes that had to be made during the process.
Sounds a lot like leadership in business, doesn't it.
BTW, the project was a fire pit at Panola Mountain State Park. If you're in the area, enjoy it on one of the not quite warmer nights we're having. And be sure to think of Jeremy Bailey - well done!
Friday, 17 February 2017
I was reading a query from an HR professional this week, about what kind of efforts are meaningful for employees when there is a death in the family. In this instance, the death was an employee’s spouse, in a small community.
There were many good suggestions about how to coordinate all the expressions of love and sympathy the colleagues wanted to share. But one response struck me as particularly helpful for the individual, potentially a big impact, and something that is easy for a business owner to put into place.
One person commented that she thought it would be helpful to have a couple of sessions with a financial planner to help navigate the transition to a single income, and to organize life insurance payouts, other dual accounts, etc. A second person chimed in with the information that this was a service provided through their life insurance carrier. For any death claim, the employee or family member had the option of using the services of a financial advisor.
When an employee – or family member – is working through significant financial decisions, having a qualified individual to discuss long-term impact is quite a gift. They can help with decisions around banking funds for future needs, paying off or refinancing a house, setting up an annuity to replace wages, etc.
Business owners – why not call your life insurance carrier today to ask if this is an option with your group life plans?
Friday, 10 February 2017
Recently, I had the opportunity to participate in a discussion and planning exercise with the SouthWest Gwinnett Chamber of Commerce, regarding the direction of their Center for Leadership. The Center for Leadership currently offers the Leadership Challenge Workshop, a seven-week course introduction to the Five practices of Exemplary Leadership.
This popular course is based on the principle that leadership is measurable, learnable, and teachable at all levels of an organization.
As we worked through questions of what leadership looks like, and how we might influence leadership development in the community, I thought about how a simple vision can turn into a powerful movement with the right kind of thinking. To do that, you not only have to have talented people on the team, but you need to have the right combination of skills and characteristics.
If you bring together a group of results-driven individuals, you risk losing sight of potential obstacles and fail to plan for that contingency. If you have a highly creative team, you run the risk of not having the right process in place to execute.
Having the right talent on board is one of the most critical issues facing employers today, which, if you are a business owner, means I’m preaching to the choir. The difficult piece of this puzzle however, isn’t finding talent; it’s figuring out which characteristics and drivers are missing from your team. Then you find them.
I look forward to continued work with the SWGC, and contributing in a meaningful way to their leadership efforts.
Friday, 27 January 2017
Pay Equity Laws – More states are expected to follow the lead of California, Maryland, and New York in establishing regulations around pay equity in their employment actions. These actions vary by state, but common themes are: prohibiting salary history questions, informing employees about promotion opportunities for their career tracks, and eliminating geographical limitations when performing pay analyses for similar positions.
Parental Leave – State and local jurisdictions passed new laws (on top of the federal FMLA requirement) in 2016, which will begin phasing in during 2017. Currently, California, New Jersey, and Rhode Island offer paid family leave. The trend to establish leave laws in other states is expected continue, with New York’s law going into effect in 2018 and a new law approved in D.C. for private sector employers.
Predictable Scheduling – Speculation is that states and cities will look to pass laws limiting just-in-time and/or on-call scheduling requirements. These could have a financial impact on employers in addition to the operational ones. These laws are particularly applicable to retail and restaurant industries, and may follow the example of San Francisco (2014) and Seattle (2016) in establishing new rules for business owners. These laws could have a – dare I say yuuuge – effect on small businesses that already operate on slim profit margins by requiring compensation for employees who are subject to being called in when another employee calls out from work.
Friday, 20 January 2017
It’s fitting that we address these two topics on Inauguration Day, given the campaigning of our incoming president. CEO Pay Ratio rules will require disclosure of the top executive’s pay in relation to workers’ pay. ACA – who knows what the year will bring.
The CEO Pay Ratio rule is set to go into effect this year, with public companies being required to report how their CEOs’ compensation compares with their workers’ median pay. This information is to be disclosed in proxy statements reporting on fiscal year 2017. This rule is linked with a section of the Dodd-Frank Act.
However, the appointment of the secretary of labor is still unclear at this point, with Andrew Puzder’s confirmation hearing pushed back to a later time, perhaps as late as February. If the new labor secretary (whoever it may be) is aggressively pro-business, we could see some requirements going away. There is speculation Dodd-Frank could be repealed.
The Affordable Care Act, or ACA, is under intense scrutiny during this transition as well. Trump’s choice for the Health and Human Services spot has previously introduced proposals for replacement of the ACA. Most in the legal and health insurance industries anticipate a partial appeal or new legislation to happen in 2017; what form that will take, and how extensive it may be are unknown.
What is more predictable is that any resulting changes will have a lengthy wait for implementation, since insurance companies have a long runway for making significant changes in the market.
For today, we’ll watch as or 45th President is inaugurated, and anticipate what may happen in the coming weeks.
Friday, 13 January 2017
2016 was the year of changes, at least regarding the FLSA updates – more commonly referred to as the Overtime Rule.
First, the updates to salary level were announced in early 2016, more than doubling the threshold for overtime exemption to a new level of $47,476 (annually). This is double the current level, and caused many employers to begin working toward a revamp of their pay practices.
In November, the new rule was blocked by a federal district court, in the Eastern District of Texas, after a suit by the US Chamber of Commerce more than 50 additional business groups, was consolidated with individual suits by 21 states. This action happened just 10 days before the December 1 effective date.
That injunction was subsequently appealed to the 5th U.S. Circuit Court of Appeals. With briefs in that appeal due after January 20th, the incoming Trump administration will have an opportunity to reverse course and withdraw that appeal. That would result in the initial injunction becoming permanent.
Many of my HR colleagues report they are moving ahead with their changes based on the original ruling. Some are holding off, waiting for the dust to settle on this one. I think we will see an adjustment to the salary threshold happen, but it will be lower than the original ruling. This would be good news for small businesses and non-profits, where small pay changes can have a significant impact on a lean budget. Stay tuned!
The Fiduciary Rule is a done deal, however, and companies with 401(k) and similar retirement plans need to be aware of this rule, which goes into effect April of this year, with a transition period to January 1, 2018. While a new administration can also freeze these regulations, that won’t necessarily protect employers; since the remedy for violations is through private enforcement, class action lawsuits could still go forward.
Under this rule, the US Department of Labor will apply the fiduciary standard to those who provide investment advice to sponsors (companies) and participants (current and former employees) in the plans. A short explanation is that those who provide investment advice to retirement plan sponsors and participants will have to act in the “best interests” of plan participants and beneficiaries – meaning they must provide advice without regard to commissions and fees – and must also disclose any potential conflicts of interest.
Employers will need to get up to speed on understanding what their vendors are doing to address their responsibilities, what new programs they are implementing, and what protections they are putting into place. Employers will need to review their contracts and agreements, and update their documents, forms or contracts.
This is a highly complex subject, and one each employer or plan sponsor should review in detail. Some helpful links:
Find the White House Fact Sheet here: https://www.whitehouse.gov/the-press-office/2016/04/06/fact-sheet-middle-class-economics-strengthening-retirement-security
Find the US Department of Labor Fact Sheet on key changes here: https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/fact-sheets/dol-final-rule-to-address-conflicts-of-interest