Change is the New Normal

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Russell Senate Office Building-Photo credit Kelly Marinelli 2016

In HR, we’re used to rolling with the punches, adapting to changes every day in the needs of our organizations, the crises that arise among our workforce, and continuously learning how to navigate the workplace waters with new technology.

Recently, with a contentious election cycle completed, and an unexpected result (at least, unexpected by many), some of the HR compliance and policy issues that we all have been watching and working on for the past few years have been upended. What will the next four years bring? No one can predict that. But here are some of the areas I’ll be watching with a new administration in place and (presumably) shifting alliances in Congress and new leaders/administrators at the Department of Labor.

  • Overtime Rule Changes: Even before the surprising injunction was issued out of federal court in Texas, the winds were shifting on the overtime rule salary threshold changes. In th first week after the election handed the presidency and majorities of both houses of Congress to the Republicans, even some Democratic lawmakers were willing to take a look at advocating for a more gradual increase in the threshold instead of doubling it in the first year and adding automatic increases. Perhaps they were thinking that a reasonable solution might save the rule from being reversed outright. Now that the rule has been blocked, it’s anyone’s guess whether it will be implemented as written anytime soon. With many employers having already made changes in advance of the 12/1/2016 implementation date, it may not matter to anyone but the most hardened procrastinators.
  • Inclusion of Pay Data in the EEO-1: This requirement isn’t set to be rolled out until  March of 2018, but many have argued that the burden of this reporting and the privacy concerns that arise from this reporting requirement and the publication of aggregate data by the EEOC merit giving it another look. Employers with 100 or more employees and federal contractors with 50 or more employees make this a small business concern. President-Elect Trump has stated that he wants to make it easier for businesses to create jobs by cutting corporate taxes. Will he consider reducing regulatory burdens to be part of that picture?
  • Paid Maternity Leave: Mr. Trump has indicated that he is in favor of requiring six weeks of paid maternity leave. This is certainly a benefit that would allow many women to recover from birth and bond with their infants who would not otherwise have that opportunity if they are not currently eligible for short-term disability benefits through an employer. This policy (also championed by his daughter, Ivanka Trump) indicates that the new president may be willing to impose costly burdens on employers if he believes the outcome is worthwhile. This separates him from some other politicians in his party, who don’t support such an expansion of paid leave.

What labor policy will we see from an incoming Republican president whose base of support includes party-crossing union voters as well as business owners? The answer is likely the be fascinating and unpredictable. These are just three of the policy issues I’ll be following over the next year. Share your thoughts on issues important to HR in the comments below!

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10 Issues to Address Today to Comply With DOL’s Overtime Rule Change

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Unless you’ve been living under an HR rock for the past couple of months, you probably have heard about the more than doubling of the salary minimum for the white collar exemption from overtime, which will soon be increased to $47,476. I have a client who is fully engaged in the stages of grief over these new overtime rule changes just finalized by the Department of Labor (DOL). At first she was in shock (why haven’t I heard of this before?) denial (Congress will block it) and now she’s angry (where are we supposed to get the money to pay for this?!?).

She knows her organization is going to have to come up with a game plan, so I shared with her these 10 most critical issues HR managers need to consider in order to successfully implement the new rules. Some companies will easily get over this hump, and some will struggle, but we are all going to have to come to terms with these changes, because it looks like on December 1, 2016, they are going into effect. That doesn’t leave any of us much time to plan, so I recommend we all get started on addressing these 10 issues:

  1. Identifying who is actually over the new salary limit for the so-called “white-collar exemption” from overtime is not as clear-cut as it seems. Up to 10% of the salary amount can consist of non-discretionary bonuses. If a bonus is delivered based on predetermined factors like the company’s performance, then this amount can count for up to 10% of the annual salary amount for determining which employees fit the white-collar exemption. In contrast, if a bonus is not based on pre-announced parameters, but is paid by the employer spontaneously after the fact, then it wouldn’t meet this category.
  2. Dealing with the situation where a commissioned sales employee falls somewhat short of the limit due to natural fluctuations in earnings. The DOL gives employers the opportunity to make a “catch-up” payment of up to 10% of the base salary amount to the employee at the end of a calendar quarter in order to bring the employee within exempt status for that quarter. The employer has one pay period in which to make the catch-up payment, and if it is not made, then the employee is entitled to overtime pay for the quarter in which she didn’t meet the exemption.
  3. Deciding whether to raise pay of employees to enable them to qualify for the exemption or reclassify them as non-exempt. It’s relatively simple to do this when you’re looking at single employees, and you can consider their productivity, the type of work they do, and the value they bring to the organization. However, you won’t want to raise salary levels to make one person exempt, while designating another employee non-exempt in the same or a similar role. You also need to consider whether new hires into that role should be paid a higher rate and included in the exempt category. Making the right decision requires a review of not only how your organization looks today, but how it’s likely to grow, and the succession planning and talent acquisition strategies you have for the future. This, all before you even look at the budget you have in place (or not).
  4. Delivering the news to employees who are being reclassified. If you are raising the rate of pay for your employees, this one seems simple. But when communicating a pay increase, use it as an opportunity to set expectations, express appreciation and confidence, and capture the goodwill that it generates. If, on the other hand, you must tell your team members they are losing exempt status, some of them may be offended, especially if they view the change as a demotion. Carefully and completely explain the situation, including any benefits, such as recaptured time. Finally, if you must tell employees that not only are they being reclassified as non-exempt, but their hourly rate of pay will be reduced to reflect the actual hours they were working while exempt, get ready for some backlash. Be transparent; don’t sugar-coat the message, but do explain the “why” behind it. The company may not have any ability to pay additional compensation in the form of wages, but maybe there are other benefits or opportunities you can highlight to employees. Encourage them through the transition, and remain open to hearing their thoughts on how it’s going, if you’d like to retain your staff.
  5. Monitoring hours for newly classified non-exempt employees. Ask your soon-to-be reclassified employees to do a “dry run” of tracking their hours each week prior to the implementation date. Low-tech solutions like timecards or spreadsheets can be used for the testing period, but if your organization is of a certain size, you may find it’s more cost-effective to use technology to handle the increase in timekeeping duties. Either way, plan for the HR operations staff time needed to process payroll in an environment where additional hours must be tracked. Documentation is everything, so ensure that all non-exempt employees are accurately tracking, recording, and submitting their time.
  6. Troubleshooting use of smart phones and other devices by non-exempt employees. According to a 2013 Harvard Business Review article, “60% of those who carry smartphones for work are connected to their jobs 13.5 or more hours a day on weekdays and about five hours on weekends, for a total of about 72 hours.” Remember that whether non-exempt team members have permission to work or not, if they do work, they must be compensated for it under the Fair Labor Standards Act (FLSA). Newly non-exempt employees who have been used to receiving praise for going above and beyond as salaried exempt employees now must be coached not to work smart within the 40 hour workweeks they are allotted, unless overtime is approved. You will need to consider whether it makes sense to continue to allow smartphone use for work among your non-exempt team members.
  7. Communicating changes to workers that may remove flexibility. Although the DOL is correct that flexibility within a work day or a workweek for non-exempt workers is preserved, in that employees may take off two hours early for an appointment but later work from home for two hours, there will be impacts to some flexibly-scheduled employees, especially those who are working schedules that allow them to flex hours as long as they add up to 80 hours per pay period. The FLSA requires time and a half be paid for each hour in excess of 40 hours in a workweek.  So these arrangements suddenly become much more expensive for employers to allow. And don’t forget state law when considering flexibility, because California, for example, has its own rules.
  8. Swallowing the increased costs that come with paying for work the organization was previously getting within the lower salary level.  As mentioned above, it is possible to make this transition at no cost, by determining how many hours your currently exempt employees between today’s salary limit of $23,660 and the new limit of $47,476 are actually working, and divide their current salary by that number of hours to get their new hourly wage when they are converted to non-exempt status. As an example, if I am currently exempt, with a salary of $40,000 per year, and I divide that amount by 52 to get the weekly wage, and then divide again by the 40 hours in a workweek, I get an hourly wage of $19.23. But if I have actually been consistently working 54 hours per week, and my employer instead uses that as my workweek in the calculation, then that hourly wage goes down to $14.25. Caution: in today’s current tight labor market, this is a tough sell, and turnover is expensive (see this EREmedia.com piece for more specifics), so this “cost-free” option may end up costing you tens of thousands of dollars per employee.
  9. Supporting salaried workers making over the new limit, as extra work gets pushed on them in the effort to avoid additional labor costs. If you’re unable to convert newly non-exempt employees to an adjusted hourly wage, as descried above, you may instead decide to directly convert the salary to an hourly wage when you reclassify your employees, and simply shift the work to those who are currently being paid above the new salary limit for the white collar exemption. This shift in work will certainly affect the outlook of those employees, which could also hurt engagement and retention. The ideal solution will depend on your budget (if any), a thorough analysis of the work activities in the roles, and a candid discussion of the value of the work being performed and its impact on the organization’s bottom line.
  10. Finding systems and technology to help the organization track time in an efficient and compliant manner. Kronos, ADP and Insperity all have offerings, and if you outsource payroll, you should check with your vendor right away to initiate a review of your data feed and processes, so there are no surprises when suddenly a large group of employees are reclassified. If your organization does not currently have a timekeeping and attendance system in place, toptenreviews.com has a lot of information about several different options, features and cost of systems.

Address these 10 challenges head-on, and you will be more than ready when the rule change goes into effect.

Visit Solve HR, Inc.

Photo credit: mikecogh via Foter.com / CC BY-SA

My Employee is Trashing Us on Social Media

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Dear Kelly,

My employee in customer service is a decent performer but she definitely brings the drama. She got really mad about a schedule change the other day and let loose on her Facebook page. She’s friends with a lot of people at our office, including me, and now people are “liking” her post and there’s a ton of gossip around it. It’s totally distracting from our work.

The schedule change is unpopular (I don’t like it either) but the company had to do it so they could put together a way to cover expanded hours because our business is growing. My manager and other people are asking what I’m going to do about the Facebook post and I’m not sure what to tell them.

What do you think?

Jesse

Hi Jesse,

Change is the only constant in life. Your employees are reacting in an expected way to a change they don’t like, and it’s your job to help them through that process. You said yourself that you don’t like the change, but you recognize it’s needed for business reasons.

Have you gotten your team together to make sure they are all aware of why the change is necessary? Do they believe that you understand the many difficulties the change might present, like childcare challenges, personal adjustments, and other things that can affect them in significant ways? Do they know that you appreciate their willingness to work through this?

That’s the place to start, with real, transparent communication. You may find that if you are willing to listen, support and understand them, your team will adjust more quickly to these tough changes. None of you has a choice about the schedule changes-that’s true. But ignoring the fact that it’s a tough change isn’t going to solve this problem. It will only lead your employees to think they are not valued, and will hurt the level of trust, engagement and commitment of your team.

As far as the social media postings, tread carefully. Consult with your HR department and your company’s legal counsel. The National Labor Relations Board (NLRB) warns that social media policies “should not be so sweeping that they prohibit the kinds of activity protected by federal labor law, such as the discussion of wages or working conditions among employees.” Scheduling can be characterized as working conditions. So be sure to get advice before deciding whether to address the post, and how to communicate that.

You can coach your employees on finding proactive solutions to problems, and encouraging them to come up with ideas instead of complaining. By rewarding this positive behavior, and ignoring the drama, you may find that it dissipates more quickly. If you focus on the trust, transparency and communication, you may find that the social media issues and gossip won’t be a problem anymore.

Best wishes,

Kelly

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I Tried to Discipline My Employee and She Brought Me a Doctor’s Note

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Hey Kelly-I’m hoping you can help!

I’m a pretty new team leader, and I manage a team of call center employees in a facility of about 150 employees. One of my team members, Nancy, a two-year employee who in the past has been a mostly reliable performer, has logged in to the phones 10-15 minutes late on several occasions lately. When I asked her about it, she made an excuse that her car has been acting up, said she had to call the mechanic when she got to work. The next time, it was a daycare issue with her granddaughter.

I told her that she needed to log in on time, or I would need to begin the progressive discipline process with her, which at our company means if you don’t improve, you could eventually lose your job. The next time she logged in late, I sent her a meeting notice to come see me two days later, when she was scheduled to work again. When she got there, she handed me a doctor’s note written on a prescription pad that said this:

Due to medical reasons, frequent breaks are needed.

Everyone knows that Nancy is diabetic, but I’m not aware that she has problems from that, and the note doesn’t say it. I’m thinking of telling Nancy that since everyone on the schedule needs to be available to take calls, she already has scheduled breaks, and we can’t just give them to her whenever she wants. I’m pretty flexible with all of the team, and I’m better than most team leads at working with them on the scheduling.

And what about the fact that she already told me she was logging in late because of her car, and childcare? I don’t see what that has to do with this doctor’s note. Even though I feel bad for her, to me, it just looks like an excuse for not doing her job.

Can I go ahead and discipline Nancy for logging in late?  And what do I do about the doctor’s note? She is working today and I don’t know what to do if she asks for another unscheduled break.

Help!!

Traci

Dear Traci,

Running a call center is a tough job. I have consulted with many managers who work in this setting, and I know the challenges. You have lots of shifts to cover, and it’s tough when there aren’t enough people to staff the phones. It’s like one of those puzzles with 1,000 pieces. It takes a ton of work to put it together, and if even one piece is missing, the picture doesn’t look quite right. Add to that the stressful work environment and typically low pay, and it’s tough to keep your people engaged and working productively.

Although I’m not a big fan of progressive discipline, because it doesn’t promote trust or generate performance beyond the minimum required for the role, I understand it’s the way your company has chosen to manage its employees. The violations of company policy that have already happened, i.e., logging in to the phones late, don’t disappear because Nancy handed you a doctor’s note. That performance issue could still be addressed, but before you go there, I would encourage you to look deeper.

You said that you feared Nancy was just making excuses, because she had already told you her reasons for logging in late were due to car trouble and daycare woes. But consider her need for privacy, and you may realize that she was reluctant to tell you that her medical condition was why she didn’t log in right away. People have varying levels of comfort with sharing personal information, not to mention that some medical symptoms can be embarrassing in themselves. They also may fear discrimination or losing their jobs.

You mentioned that your work location has about 150 employees, and that Nancy has been working for the company for two years.  It may be that her doctor’s note is notice of her need for intermittent Family and Medical Leave Act (FMLA) leave. You should notify your human resources department of the situation so that Nancy can be advised of her eligibility for FMLA leave, and given the opportunity to apply for that leave. If approved, the FMLA leave designation will tell you, as her manager, how often and for how long Nancy is approved to be away from work due to her own serious health condition. There are also other reasons why FMLA leave can be approved, including caring for a close family member with a serious health condition. For more information about FMLA leave and employer obligations, take a look at the U.S. Department of Labor’s website.

Even if Nancy is not eligible for FMLA leave, or if what she is requesting is something different than time away from work, her doctor’s note also raises some questions that you will need to explore:

  • The note, along with your knowledge that she has diabetes, raises a question whether Nancy may be considered a qualified individual with a disability if this is what her doctor means by “medical reasons.” Diabetes will almost always be considered to impact the major life activity of endocrine function, meeting the definition of disability under the Americans with Disabilities Act (ADA). At the very least, clarification with Nancy’s doctor is needed to figure out more information about the “medical reasons” referenced in the note.
  • Nancy may be requesting a reasonable accommodation, by informing you she needs “breaks as needed.” It’s reasonable for you to clarify what that request might mean. How often is she likely to need breaks? How long should the breaks typically be? Are these requested breaks from the phones, or breaks from work altogether? More information from her doctor will be needed to clarify what impact her medical problems may be having on her ability to perform the essential functions of her job, and how these breaks will help.
  • If you confirm that the medical reasons rise to the level of disability, then engaging Nancy in exploring these questions, through the “interactive process,” is required. Don’t ignore Nancy’s doctor’s note or deny her request for breaks outright, without working with her to understand what she is requesting and how or whether you can help her. If you need help figuring out what an accommodation might look like, consult the Job Accommodation Network (JAN). The JAN website has hundreds of great accommodation ideas that can serve as a starting point for discussion, and their experts can help you one on one, if needed, at no cost.
  • If you find after gathering more information that the doctor is recommending regular breaks for snacks and blood sugar monitoring, you will probably find that this situation has been addressed at the call center before, so it’s worth checking with other managers and your HR department to see what has been done in the past. It’s best to find a good solution that allows employees to care for themselves and remain productive, and then implement it consistently.
  • Doctors often don’t know very much about their patients’ specific job duties, which is why these types of requests can be overly broad. Sometimes it helps to describe what information you need in a letter, and Nancy can either sign a release giving permission for you to contact her doctor, or she can take the letter to her doctor and request that he or she respond.
  • Give Nancy a reasonable deadline for when you need to receive the information, and until you get the clarification you need, it’s best to allow her to take breaks as needed.
  • If Nancy is a non-exempt, hourly employee, then these breaks can be considered unpaid if she is not working and not required to remain at her desk. You may allow her to work additional time at the end of her shifts so she can get in a full day’s work.
  • If something doesn’t go as planned, like you don’t receive the information you need by the deadline date, always err on the side of being flexible and allowing more time. Send an updated request indicating that no information was received and giving a final deadline. Offer to help Nancy obtain the information needed.
  • Document everything you are doing. Engaging in the interactive process is a legal obligation, and keeping copies of all of your written communication in a secure location that will guard your employee’s personal information is key.

For more information on diabetes at work and the Americans with Disabilities Act (ADA), see the EEOC’s question and answer page. The Disability Management Employer’s Coalition (DMEC) is also a very useful resource to help employers handle problems like this one. These are sticky issues, but by trusting and working with your employees, you can be compliant with legal requirements, keep your team members at work, and achieve great business results at the same time. I’ve just scratched the surface, so if you have more questions, be sure to consult with your HR department and attorneys.

Good luck!

Kelly    

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Look For These 4 HR Compliance Concerns in 2016

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Human resources compliance is one of those irritating things that some organizations think they have to contend with just once in a while. You know, when you hear about a new rule, or a reporting requirement comes up—you check the box and call it good. On the other hand, sometimes you get a letter from a government entity (Department of Labor’s Wage and Hour division or OFCCP, anyone?) and all of a sudden that box-checking starts to look like it wasn’t nearly enough to get you ready to respond within the deadline when the regulator comes knocking.
You can just call your law department (or outside counsel), right?  When you need them, your attorneys are a critical and very helpful resource, but their work comes at a cost, so it’s best to involve them in proactive planning you can use across your entire organization, not just in the heat of the moment when you are reacting to getting a specific audit scheduling letter. If you want to spend a lot of money for work you could have directed more carefully, out of a budget you didn’t allocate on the front end, you may be hard-pressed to justify that expense without any corresponding business success to celebrate.
On the other hand, proactively planning for the moment when you will be asked to justify your business practices and compliance with state and federal regulatory requirements is not only the most affordable way to go, but it’s also the best method for finding the intersection between compliance requirements and business success. Engaging in substantive review and planning for compliance means that YOU are the first one to spot any problems, and address them, before they get out of hand.  It also ensures that whenever questions or complaints come up, you are ready to respond immediately and without your hair on fire!
 In a really active year for regulatory changes, here are a few areas to watch out for:
1.  Federal contractor paid sick leave: This proposed rule, makes certain federal contractors subject to rules about how much sick leave employees are allowed to accumulate (and use). “We already have paid sick leave,” you say.  Well, these rules might be a little different; (see the FAQ here) how and when entitled employees are allowed to use the time is probably not the same as what you currently allow. The final rule is expected by September 30, 2016.
2.  Compensation information added to the EEO-1 form: Employers with more than 100 employees may have to provide information about pay ranges those employees fall into, if this proposed change is approved.  How much will this change what resources you need to complete this annual report on your workforce (and what will it reveal about your company’s pay practices, if anything) is yet to be seen, but now would be a good time to begin planning. If approved, the changes would be effective in the 2017 EEO-1 reporting cycle (you can review the EEOC’s take on this proposed change here).
3.  Changes to the maximum salary allowed for the “white-collar” exemption from overtime status:  This proposed change has received a lot of attention lately, and with good reason. There are several industries, non-profit and retail especially, that will need to make substantial changes in salary levels, staffing numbers, and/or budget for overtime work, in order to comply with the new salary maximum, which is proposed at $50,440 for 2016.  Check out the Department of Labor’s fact sheet.
4.  Affordable Care Act employer penalty provisions, a.k.a. “employer coverage mandate” go into effect for smaller companies in 2016:  Employers with more than 100 full-time or equivalent employees have already been subject to the requirements throughout 2015, but employers with 50-99 full-time or equivalent employees are now subject to penalty for failing to provide minimum coverage that is affordable and provides minimum value in 2016.  The Society for Human Resource Management (SHRM) has more information on penalties for non-compliance here.  All employers with 50 or more full-time or equivalent employees are subject to the reporting requirements.  Luckily, the IRS has delayed reporting deadlines, but not for long. The new deadlines are May 31st for those not filing electronically, and June 30th for those that are.  Psst-if you haven’t even thought of this requirement yet, you already missed the March 31st deadline for providing forms 1095-B and C to individual employees, so you may want to check it out as soon as possible!

Consider these compliance concerns, seek advice from your attorneys, and take the time to operationalize their advice to fit your HR department and your business, to maximize legal compliance AND success!

Find out more about Solve HR, Inc.