Archive for December, 2013

Wage and Hour Compliance: Look Out, Here Comes 2014!

Thursday, December 19th, 2013

This is a guest post from Diane Aull. Diane is the Website Manager for Acroprint Time Recorder Company and editor of their Time for Business blog.

2014 wage and hour“Forewarned is forearmed,” goes the old saying. And it’s definitely true where wage and hour law is concerned. To minimize our wage and hour liability, what issues should we be focusing on for 2014?

Worker Classification

For several years now, various agencies have been on alert for employees who have been misclassified as “independent contractors.” All indications are this will continue to be a big issue in 2014.

There are powerful incentives for employers to classify workers as contractors, including savings on taxes, paperwork reduction and more. But strict criteria must be met for that classification to be valid. A significant number of so-called “contractor” positions don’t meet the standard.

Since 2011, the IRS and 15 states have signed on to the Department of Labor’s Misclassification Initiative, agreeing to share information, leads and referrals with each other to help catch employers who misclassify their workers. New York was the most recent addition, signing on to the Initiative in November 2013. The DOL continues to promote the initiative, and more states are expected to sign up in the future.

Action item: If you have any workers you currently classify as contractors, carefully review their situation to make sure that classification is correct.


Several lawsuits were filed in 2013 on behalf of unpaid interns, claiming they were actually performing compensable labor and should have been paid. In most cases, the courts ruled the interns were right — they were actually serving as unpaid employees and should have been compensated.

Because of the publicity these cases received, we can expect more such cases to emerge in 2014.

Just as with worker classification, there are strict criteria that must be met in order for someone to be classified as an unpaid intern. If the “internship” doesn’t meet those criteria, the workers must be paid at least minimum wage.

Action item: Don’t count on unpaid interns as a source of free labor. Your best bet to avoid potential liability is to pay interns at least minimum wage.

Off the Clock Work

Mobile devices — such as smartphones and tablets — are incredibly convenient but open employers to potential liability. If employees use their mobile device to check email or do a bit of work outside the office, they must report their hours and you must pay them for that time.

Whether employees neglect to report time because they mistakenly believe they’re doing the business a “favor,” or they fail to report time because it’s simply too inconvenient — either way they’re opening your business up to potential liability. All it takes is one disgruntled worker complaining to the state or federal labor department, and you could find yourself on the hook for thousands of dollars in unpaid overtime.

Expect this to become a bigger issue in 2014, as mobile devices become less expensive and their usage more widespread.

Action items: Prohibit off the clock work. If you allow employees to work outside the office, provide an easy method for them to record their hours. Be sure to pay them for all their work time.

Class Actions

We’ve heard a lot of good news (and a bit of bad news) in the area of class actions over the past few years.

Good news: it’s become harder to certify large class action lawsuits. One quarter of these suits now involve classes of fewer than 1,000 plaintiffs.

More good news: according to a study compiled by NERA Economic Consulting, the total dollar amounts of class action settlements have declined from their high in 2007, actually stabilizing over the past several years.

Bad news: the average settlement amount is still nearly $5 million each.

Action items: About 39% of class action suits involve overtime, while missed lunch breaks, misclassification and off-the-clock work comprise 16% to 18% each. Focus on these areas to get the biggest bang for your buck.

You may also wish to include an arbitration clause in your employee handbook or employee agreements. Properly worded, an arbitration agreement can forestall most class action cases. Don’t try to “do it yourself” here. Consult your employment law attorney to ensure the clause is valid and enforceable.


When in doubt, consult your employment law attorney to ensure your policies and procedures are up to date with the latest developments.

Class action suits continue to pose a threat to businesses in 2014 and beyond. Unpaid overtime represents a huge risk. Having an accurate and reliable time tracking system has become imperative to protect your business against overtime claims. Make it as convenient as possible for workers to report their time, no matter where the work is performed.

Finally, make sure your employees understand the importance of reporting all the time they work, and pay them properly for all reported time. With vigilance, strong procedures and effective enforcement, you can minimize your risk.

Acroprint offers a full range of workforce management products including the timeQplus Product Suite, Pendulum workforce management software and AcroTime, their flexible and powerful cloud-based solution.

Workplace Insights is taking a break during the holidays. Check out a new post on Thursday, January 2, 2014. Enjoy the holidays and have a Happy New Year!

Photo Source: danielmoyle

Be Prepared: Healthcare Spending Projected to Escalate for Next 10 Years

Tuesday, December 17th, 2013

The post below is a guest blog from Dax Hill who serves as Principal, Health & Welfare Consultant  for CAI’s employee benefits partner Hill, Chesson & Woody. Over the past several years, we have seen medical inflation increasing at a lower rate than in the past. In fact, healthcare spending increases are at the lowest levels since the government started tracking this data in 1960.  hcw graph This may provide a false sense of security for some employers regarding healthcare costs and their future trajectory. Employers might conclude that medical expenditures are finally coming under control due to the Affordable Care Act (ACA), requiring less time and effort spent monitoring their effects on the bottom line. However, actuaries from The Centers for Medicare and Medicaid Services (CMS) recently forecasted that the nation’s healthcare spending will jump by 6.1 percent next year. They claim some of this expected rise will actually come from implementation the Affordable Care Act, but more will be the result of an improving economy and an aging population in the United States. The reason behind this forecast includes the assumption that when individuals possess more buying power, they tend to visit their providers more and pursue treatments they previously delayed during the recession. These visits and hospitalizations will contribute to overall healthcare costs substantially. There are no major solutions for cost containment planned to go into effect in the next few years, apart from projections by the CMS incorporating some modest savings regarding delivery system reforms from the Affordable Care Act. Based on these dynamics, medical expenditures are projected to increase 5.8 percent per year over the next 10 years. This means that total U.S. spending on healthcare is expected to hit $5 trillion in 2022, accounting for almost 20 percent of the economy, up from 18 percent this year. That leap is going to have a huge impact on everyone, including both employers and employees. Employers failing to act in adjusting employee healthcare benefits may find themselves substantially affected by growing costs. Employers should resist any temptation to think that the healthcare crisis has been solved with the implementation of the ACA. Healthcare cost control is an ongoing dilemma that appears to have no simple answer over the next decade. With that in mind, employers must be diligent and continue to evaluate ways to improve the health of their members and control the cost of healthcare through plan design and disease management programs. Employers will want to make sure that they are providing coverage to their employees in the most efficient way possible. This can include, but are not limited to:

  • Selecting an insurance carrier that provides deepest provider discounts, lower administrative fees and effective disease and case management;
  • Outsourcing to a benefits administrator or other business to oversee case management of employees enrolled in a plan; and
  • Considering whether self-funding or other funding options are the best option for long-term savings and plan optimization.

Other significant approaches that can be considered are launching and/or redefining company wellness initiatives, including changes in diet and exercise for participants, as well as discussing healthcare expenses with employees and how to address them. It will be important for employees to be engaged and an active participant in their own healthcare. Employees need to understand that their lifestyle decisions do impact future insurance premiums and more importantly their own health. Hill, Chesson & Woody can provide further assistance for employers who want specific advice on strategies to address the anticipated rise in healthcare costs.

5 Tips to Keep Productivity High During the Holidays

Thursday, December 12th, 2013

holiday breakMany people use their vacation days to take extra time off from work in December in order to spend quality time celebrating the season with their family and friends. Because of the excitement that is generated during the holidays, employee productivity can temporarily decrease. However, putting off work before your vacation means you’ll have more work to complete when you make your way back to the office.

Incorporate these five tips in your work routine for the next several days so you can enjoy your time away, instead of worrying about all the assignments you need to do when you return:

Prioritize Your To-Do List

Create a list of all of the tasks and projects you’d like to complete before you leave for your holiday vacation. Work hard to complete as many items on your list as you can. The more items you cross off, the less work you’ll have waiting for you when your vacation is over.

Review Calendars

Ensure that your coworkers are aware of your holiday schedule, and also make sure that you are aware of their schedules. This is especially helpful if you’re working on projects with other people. Eliminate confusion or the potential to drop the ball by tying up loose ends and coordinating due dates before you leave.

Focus on Work at Work

When getting bombarded with the exciting sights, sounds and festivities related to this time of the year, it is easy to get distracted from your work. So you don’t have to spend time on the weekend or the evening catching up on your work because you were making gift lists or looking up a holiday recipe online, focus on your work obligations when you are in the office.

Help Your Body Help You

December isn’t always the greatest month for your health. Coworkers bring goodies into the break room, people spend several hours in a day shopping, and holiday parties make nights longer than usual. To make up for all of these things, exercise and sleep more to help your brain and body stay alert and function properly.

Leave Work at Work

If you follow all of the tips above, you will likely not have to work on any of your company projects during your holiday break. Your time away from the office should really be spent focusing on your loved ones, friends and yourself. Use this time away to relax and recharge your brain so you’ll be ready to work when your break is over.

For additional ideas on how to keep productivity high at your workplace, please call a member of CAI’s Advice and Resolution Team at 919-878-9222 or 336-668-7746.

Photo Source: Reno Tahoe Window Cleaning & Christmas Lights

Affirmative Action: Changes to Self-Identification of Applicants

Tuesday, December 10th, 2013

CAI’s Manager for Affirmative Action Services, Kaleigh Ferraro, shares the latest updates from the OFCCP. Make sure you are compliant.

Kaleigh Ferraro, Manager, Affirmative Action Services

Kaleigh Ferraro, Manager, Affirmative Action Services

New regulations regarding affirmative action efforts for protected veterans and individuals with disabilities become effective March 24, 2014. The regulation changes for Section 503 of the Rehabilitation Act and the Vietnam Era Veterans’ Readjustment Assistance Act will require federal contractors and subcontractors to make significant changes to recruiting and outreach efforts for veterans and individuals with disabilities.

One of the new and most controversial mandates will require federal contractors to solicit voluntary self-identification of veteran and disability status for applicants. This is a major shift for employers as the Americans with Disabilities Act (ADA) previously prohibited such inquiries until after a job offer. The new rules require a voluntary self-identification opportunity be provided both before a job offer and after a job offer.

If you are a federal contractor or subcontractor, what does this mean for you and when will you have to make changes to your recruiting process? Until March 24, 2014, you can continue the same process that you have been following. You should continue to provide the opportunity for applicants to self-identify as protected veterans and individuals with disabilities after you have made a job offer.

When you implement the new self-identification requirements will depend on your Affirmative Action Plan year. If your Affirmative Action Plan is in effect prior to March 24, 2014, you can delay the pre-job offer solicitation of veteran and disabled status until the start of your next plan year. Contractors with AAPs starting after March 2014, must begin pre-job offer solicitation at the beginning of their 2014 AAP.

The Office of Federal Contract Compliance Programs (OFCCP) has provided sample self-identification forms that contractors may use. There are two forms available for solicitation of veteran status. The pre-job offer form requests applicants only identify as “protected veteran.” The post-job offer form provides the ability to identify for the specific veteran categories.

The OFCCP will also provide a standardized form for self-identification as an individual with a disability. Contractors will be required to use the language provided by the OFCCP. However, this form has not been released yet. You should note that if an applicant identifies that he or she has a disability, the organization should inquire if an accommodation is necessary.

CAI will continue to provide information about the new Affirmative Action requirements and help you understand the impact on your organization. For more information on these new rules, join CAI for a webinar presenting these changes on December 18, 2013. Register at If you have additional questions or would like to discuss these new rules, please contact Kaleigh Ferraro at 919‑713‑5241 or


Revoking an Offer of Employment

Thursday, December 5th, 2013

In today’s post Pat Rountree, an HR Advisor on CAI’s Advice and Resolution Team, shares important information to keep your company protected when revoking an offer of employment.

Pat Rountree 5x7 300dpi

Pat Rountree, HR Advisor

When making an offer of employment, be sure to advise the applicant of any contingencies that must be satisfied before the offer is final. These may include satisfactory drug test results, background and reference checks, or post offer medical exams. These contingencies in the offer may help protect you later if the offer is revoked based on unsatisfactory results.

There may be occasions (hopefully rare) when an employer has made the offer, received satisfactory results from contingencies, and then needs to revoke an offer. It may be for any number of reasons: a lost contract that eliminates the need for the position, a change in the direction of the company, etc. In this case, failure to fulfill your commitment to employ may result in a lawsuit based on the individual’s reliance on your offer.

There is also the potential for discrimination charges in connection with information acquired after the offer (for example, a prior disability or prior convictions that are not job related). For charges of discrimination, you would need to be able to show the business reasons for the revocation to challenge that there was a discriminatory purpose.

If you would like more information regarding offers of employment, please contact a member of CAI’s Advice and Resolution Team at 919‑878‑9222 or 336‑668‑7746.

Necessity is the Mother of Invention

Tuesday, December 3rd, 2013

The post below is a guest blog from Todd Yates who serves as Managing Partner for CAI’s employee benefits partner Hill, Chesson & Woody.

Todd Yates, Managing Partner at HCW

Todd Yates, Managing Partner at HCW

The old English proverb, “Necessity is the Mother of Invention,” means that difficult or impossible scenarios prompt inventions that are aimed at reducing the difficulty.

We have seen inventions from necessities throughout history, but I was recently reading an article in Business Week that reminded me how true this statement can be. The article that highlighted inventions derived during the Great Depression. There were certainly some extenuating needs during this period. Yet creative, hard-working people elected not to succumb to the turmoil of the day, but instead they rose to the challenge and worked to make life better. Just take a look at how the electric razor was developed, as well as Xerox copies.

At Hill, Chesson & Woody, (HCW) we focus on innovation. We work to embed it into our daily work processes.  We actually celebrate it with a monthly award of our “Thinking Cap” which goes to our team member that identifies and implements the most innovative idea that month.  We work to apply this type of mindset to all of our business relationships.

One of the best “innovations of necessity” came from a relationship that HC2013-14 N.C. Healthcare Benefits & Cost SurveyW enjoys with CAI (Capital Associated Industries). Nine years ago we recognized that there was no widely accepted benchmark for health plans in the Triad, Triangle and Eastern NC.  Most employers were simply guessing at the marketplace normative levels or they were taking national surveys and trying to extrapolate to their local NC market. Neither method yielded very reliable results.  So together we built and deployed a survey that measures the major cost drivers associated with a medical plan, as well as the cost sharing between employees and employers to cover the premium associated with the plan. Each year the North Carolina Healthcare Benefits & Cost Survey has grown in participation. This year we are anticipating over 800 local employers to contribute their plan information to the survey. This is a great example of innovation spawning from necessity as there was certainly a gap in the marketplace resources.

This valuable survey opened November 13th and remains open for one month. If you would like to receive the aggregate report results free of charge, I would encourage you to take the survey today.