Author Archive

Private Exchanges Are Here – Now What?

Tuesday, September 16th, 2014

The post below is a guest blog from Jay Lowe who serves as Principal, Health & Welfare Consultant for CAI’s employee benefits partnerHill, Chesson & Woody.

hcw 9 12 14By now you have probably heard the term “Private Exchange.” Private exchanges are the hot new topic in the benefits world and something that employers should become familiar with as it may be an option to consider in the future. Private exchanges are nothing new. In fact, they have been around for about 20 years but without the fancy title.

The creation of the federal and state-based exchanges, where individuals can buy their own insurance, has brought new life back to the private exchange idea. Under this model, an employer is able to offer an à la carte selection of benefits for their employees to choose from. All of this is managed through a Human Resources Information System (HRIS) during annual open enrollment, or at the time of hire, and streamlines the administration process for the employer.

With the re-emergence of the private exchanges we will begin to see the shift to a true defined benefit strategy from employers who implement this. Heath Insurance Underwriter indicates that in order for private exchanges to be successful, they must find ways to continue to be competitive. This is especially good news for small employers (under 50 employees) as options are reduced and premiums begin to rise. In a recent New York Times article, Accenture predicts that by 2018 enrollment through private exchanges will surpass that of the state and federal exchanges. However, this will come at a cost. Benefits in the private exchanges are expected to become leaner as companies try to stay within budgets.

What’s important to understand is that this is not a new concept, just a re-branding of an old idea. Private exchanges are risk pools that should be considered just like any other risk pool: weighing out the pros and cons for your organization. As we move forward into the post-Reform world, we will continue to see new players enter the marketplace with their own versions of private exchanges. There is good news, though. The market is evolving under Reform to meet the needs of employers.

 

Is the EEOC Way off with this new “wellness” lawsuit? Not Really.

Thursday, September 11th, 2014

The post below is a guest blog from Robin Shea who serves as Partner for Constangy, Brooks & Smith, LLP, CAI’s Partner for the 2014 Triad Employment Law Update. This post originally appeared on her blog Employment and Labor Insider.

Robin Shea, Partner at Constangy, Brooks & Smith

Robin Shea, Partner at Constangy, Brooks & Smith

The Equal Employment Opportunity Commission filed suit against Wisconsin-based Orion Energy Systems, Inc., over its wellness program and its treatment of ex-employee Wendy Schobert, who was not a fan of the program. The lawsuit contends that the program’s health risk assessment is an unlawful “medical examination” and that the company retaliated against Ms. Schobert for failing to have a positive attitude about it. Both the medical examination and the retaliation, says the EEOC, violate the Americans with Disabilities Act.

If you’ve been keeping an eye on this wellness/ADA issue — as I have here, here, here, and here — you know that the EEOC has not been as forthcoming with guidance as we’d ideally like, although in May it promised that we’d be getting something soon. That having been said, if the EEOC’s allegations in this lawsuit are correct,* then Orion may have a problem.

*All we have now is the lawsuit and the EEOC’s press release. We have not heard Orion’s side of the story.

According to the lawsuit, participants in Orion’s wellness program had to use a range-of-motion machine, provide their medical histories, and have blood work done. As we discussed last week, the ADA says that this kind of information can be requested of current employees only if it is “job-related and consistent with business necessity” or if the information is requested in connection with a voluntary wellness program.

Because Orion obtained the information for “preventive” reasons, it was not JRACWBN (Job-Related and Consistent With Business Necessity) in the least. But it was clearly obtained in connection with a wellness program.

And Orion’s wellness program was “voluntary” . . . technically speaking. Employees didn’t really have to participate — as long as they were willing to pay 100 percent of their health insurance premiums out of pocket. If an employee participated in the program, the company paid 100 percent of the premiums. If an employee did not participate, the company paid zero percent of the premiums. The EEOC says that the cost of health insurance premiums at the times relevant to the lawsuit was $413.43 a month for individual coverage and a whopping $744.16 a month for family coverage. And on top of that, Orion assessed a $50 a month penalty to non-participating employees.

So, yeah, you could decline to participate if you were Donald Trump. But most people presumably went with the program because they couldn’t afford not to. And that is why the EEOC says Orion violated the ADA’s “medical examination” provisions — it was asking for medical information that was not JRACWBN, and even though the information was obtained in connection with a wellness program, the program wasn’t truly “voluntary” because of these draconian penalties.

The “retaliation” part of the lawsuit is more routine. Ms. Schobert didn’t like the wellness program, and she not only refused to participate, but she also allegedly tried to get other employees to resist, I’m guessing like the Penn State wellness debacle that got so much publicity last year. According to the EEOC’s lawsuit, HR called her in and asked her to adjust her attitude. When she didn’t, they fired her.

This Orion suit will be one to watch, and employers should be looking forward to getting some concrete preventive guidance from the EEOC about wellness programs and the ADA — particularly the “voluntariness” issue. My ultra-conservative view has been that rewards are probably all right, but that penalties are dangerous. And an employee can always argue that an employer’s refusal to give a non-participant a “reward” is, in effect, a “penalty” for non-participation. Especially when we’re talking about monthly health insurance premiums of $400-700 a month.

It appears that I am not the only one on the employers’ side who is wary about aggressive wellness programs and the ADA.

Finally, it’s worth keeping in mind that Ms. Schobert was terminated in 2009, and so the Affordable Care Act was not at issue. The ACA wellness provisions do not address the issue of voluntariness. But they do specifically authorize employers to grant significant economic “rewards” to employees who achieve results (for example, by reducing their Body Mass Index) in so-called “health-contingent” wellness plans.

All the more reason that employers need help from the EEOC in knowing the agency’s position on the interplay of the ADA wellness restrictions (as well as those that apply under the Genetic Information Nondiscrimination Act) and the ACA.

Robin Shea is presenting at the 2014 Triad Employment Law Update on November14th at the Grandover Resort in Greensboro. In addition to receiving information on new decisions from the EEOC and DOL, attorneys from Constangy, Brooks and Smith, LLP will provide you with the most recent updates in state and federal employment law. Register today at www.capital.org/triadlaw.

Advantages of a Virtual Job Fair

Thursday, September 4th, 2014

In today’s post, Advice and Resolution team member Renee’ Watkins shares the many benefits of hosting a virtual job fair.  

Renee' Watkins, HR Advisor

Renee’ Watkins, HR Advisor

Hosting a physical job fair can be an expensive undertaking for any company. Unless you already have your own well-equipped facility, there are fees for facility rental, equipment, furnishings, insurance and even security. Depending on the overall success of the event, the cost of a single recruit can be very large indeed.

In fact, Recruiting Scope, an online resource for professional recruiters, determined in a recent study the average cost per recruit at a successful, in-person job fair can be as high as $121. Compare this with the average cost per recruit of $19 by hosting a “virtual” job fair.

Virtual job fairs provide an online environment using a variety of mediums like teleconferences, online chats and webcasts to join recruiters and candidates in an interactive experience. Information like resumes and online applications can be exchanged digitally and reviewed in real-time.

In addition to the dramatic reduction in cost per recruit, a virtual job fair also allows you to reach a larger group of potential candidates far outside the restrictions of your own geography. Imagine having a global audience attend your next job fair! A well-known global professional services firm presided over a virtual career fair that spanned 40 countries and more than 10,000 candidates in a two-day period.

A virtual job fair can also speed up the recruiting process, creating opportunities to conduct video interviews with viable candidates without the typical expenses of travel, etc. by either side.

Other reasons to explore a virtual job fair include:

  • A physical job fair presents a limitation on time spent with each candidate, as there are many candidates to see in a short amount of time. To fully qualify a recruit, you want to maximize the level of engagement before bringing them in for a face-to-face interview to ensure a good fit for the position and the corporate culture. Virtual interviews can provide that level of engagement.
  • Interviewing across a virtual channel can be a more comfortable and secure setting for both the candidate and the recruiter. A virtual interview process also enables for the candidate to speak with multiple persons within your organization at the same time or in succession. This is a process not often possible during a physical job fair due to time and scheduling constraints. Depending on the skillset and background presented, a recruiter can pass a candidate along down multiple paths within the organization, virtually, to gain a greater amount of feedback.
  • Another excellent use of a virtual recruiting center is the delivery of a consistent corporate message. With a physical job fair, there is a finite amount of information you can make available to candidates. Different information may be applicable to different candidates. With a virtual recruiting center, information can be built over time and divided along career paths for ease of navigation. Tips on resume presentation and interview skills can be made available. Online surveys and quizzes to help candidates determine their desired career paths are also a popular feature. Updates can be made as well, without the expense of reprinting materials.
  • While physical job fairs have a static beginning and ending date, virtual job fairs can be continuous, providing a constant stream of new applicants from which to actively recruit.

It is important to note, having a career page on your corporate website is not the same as a virtual job fair. Virtual job fairs are advertised through a number of online channels and media. They are specifically designed to emulate a physical job fair and to provide a similar experience to candidates. Career pages are typically very passive in nature with regard to recruiting, whereas virtual job fairs are both active and interactive with respect to the candidate’s experience.

Similar to a physical job fair, a virtual job fair can be the first impression of your organization a candidate receives, and therefore the experience can be extremely important in the recruiting process.

Favoritism in the Workplace Isn’t Always Bad

Tuesday, September 2nd, 2014

The following post is by Bruce Clarke, CAI’s CEO and President. The article originally appeared in Bruce’s News and Observer Column, The View from HR.

Bruce Clarke, President and CEO

Bruce Clarke, President and CEO

Most view favoritism as undeserved special treatment of an employee by a manager.

“My manager has favorites” is a common concern. It is demoralizing to watch a co-employee be showered with special treatment when you know the individual spends more time on Facebook than on workbook.

Favoritism has a bad reputation. Every workplace would be better off if managers had more favorites. Here’s why.

Too much of the time, managers spend their day dealing with the 5 percent or 10 percent of their staff that cause problems, have problems or are problems. Performance issues, abuse of time off, interpersonal conflicts, time wasting, repeated instructions, petty complaints and so on make for a hard day and waste a lot of time. In a way, these are really a manager’s set of favorites if you judge favoritism by time spent.

Why not look at favoritism as building, rewarding and mentoring the top 25 percent of the workforce? Yes, I mean the people who show each day that they are there for the right reasons and, given a moderate amount of help to understand their role and how to grow, they learn and perform.

I am suggesting that managers make a list of their favorites and develop individual plans to reward and grow these favorites. Special employees should be treated in special ways. These are the ones that deserve your flexibility and advocacy for pay raises. Most important, they are the ones that truly deserve your TIME.

There is nothing more important you can give rising stars or high performers than your time. Do you know their career goals? Do they know what options are open internally? Do both of you have a plan to get them there? Do you even know why they stay with the organization and how to keep that glue sticky? Ask. Set aside time just for these conversations.

A good way to start is the one question meeting. “Tell me how I can help you get to where you want to be in this role and in future roles here at MegaCompany.” Let the conversation go where it needs to go. This is the employee’s meeting. Some will quickly tell you a specific plan or maybe they have considered leaving to reach that plan elsewhere. You will obtain a wealth of good information for your plan to make them the right kind of favorite.

Employees: if your manager is too busy on the wrong favorites, set up a time to meet for the purpose of discussing your role and your growth in the workplace. Make it very positive and focused on both better results for your team and better results for you. Develop a regular conversation with your manager around proactive problem prevention, efficiency and results.

I have to bring up this last point. Somebody is thinking, “But I have to treat everyone the same, right?” Wrong. You must avoid discrimination for unlawful reasons, but you are a malpracticing manager if you treat every employee the same regardless of his or her contribution and effort. Your best employees deserve your best, and that means special treatment in pay, smart policy exceptions and your TIME.

What’s the worst that can happen? Maybe other employees will see how to become your favorite and deserve the same special status!

Q&A: 6 Things You Should Know About Affirmative Action Plans

Thursday, August 28th, 2014

CAI’s Manager for Affirmative Action Services, Kaleigh Ferraro, shares information on affirmative action plans from the OFCCP. Make sure you are compliant.

Kaleigh Ferraro, Manager, Affirmative Action Services

Kaleigh Ferraro, Manager, Affirmative Action Services

If your organization provides goods or services to the federal government either directly or indirectly, you may be subject to affirmative action regulations.  Just in 2014, regulation changes regarding affirmative action programs for protected veterans and individuals with disabilities became effective.  President Obama has also signed several Executive Orders affecting federal contractors.  Is your organization in compliance with these recent and proposed changes?

Q: Are you covered as an affirmative action employer?

A: If you have federal contractors or subcontracts of at least $10,000, you are covered under the affirmative action regulations.

 

Q: What are the affirmative action requirements?

A: One of the main requirements is to annually develop written affirmative action plans if you have federal contracts/subcontracts of $50,000 or more and 50 or more employees. There are a number of other requirements as well.

 

Q: What is the impact of the changes to organizations regarding protected veterans and individuals with disabilities?

A: Some of the major changes that became effective in 2014 require setting hiring benchmarks for veterans and utilization goals for individuals with disabilities.  They also require federal contractors to solicit self-identification of applicants for veteran and disability statuses prior to job offer.

 

Q: What type of data is needed to develop an affirmative action plan?

A: In order to develop an annual affirmative action plan, you will need a current listing of employees.  This employee listing will be used to determine if Placement Goals must be established for women and minorities.  This listing will also be used to determine if utilization goals for individuals with disabilities are met.  Contractors must also review employment decisions for hires, promotions and terminations for the 12 months prior to the employee listing.

 

Q: What is required of affirmative action employers other than the written affirmative action plan?

A: There are a number of additional requirements beyond an affirmative action plan.  These requirements include the following: record keeping requirements, tracking applicant data, annually filing EEO-1/VETS-100A reports, notifying subcontractors & vendors of obligations, specific language in covered purchase orders & subcontracts, listing jobs with state employment service delivery systems, outreach and recruitment efforts, etc.  CAI can provide additional information regarding these and other requirements.

 

Q: What are the recently signed Executive Orders and proposed regulation changes?

A: President Obama has signed several Executive Orders in 2014 that may lead to changes for federal contractors and subcontractors.  They include, establishing higher minimum wages for federal contractors, expanding affirmative action requirements to include gender identity and sexual orientation as protected groups, protect workers from retaliation when discussing pay with other employees.  The OFCCP also issued proposed regulations that would require contractors to submit compensation information annually in an expanded Employer Information Report EEO-1

CAI has a team dedicated to affirmative action and can assist with affirmative action questions.  Please contact Kaleigh Ferraro, Manager of Affirmative Action Services directly at 919-713-5241 or kaleigh.ferraro@capital.org  for additional information or other affirmative action questions.

 

FMLA: Are You A Covered Employer?

Tuesday, August 26th, 2014

In today’s video blog, John Gupton, CAI’s General Counsel and HR Advisor on CAI’s Advice and Resolution team, discusses provisions in the Family and Medical Leave Act (FMLA) and whether an employer is covered.

John starts by explaining that FMLA allows eligible employees to take up to 12 weeks of unpaid leave in a 12-month period for certain family or medical reasons. He lists several protections the law grants employees, such as continuation of a group health plan.

He addresses employer coverage in the last portion of the video. John says public employers are covered without regard to the number of employees employed. Private employers must have 50 or more employees during 20 or more workweeks during the current or preceding calendar year. John also explains which employees you should count when figuring out FMLA coverage.

If you have additional questions regarding FMLA employer coverage, please give CAI’s Advice and Resolution team a call at 919-878-9222 or 336-667-7746.

In An Environment Of Uncertainty, Prepare To Comply With The ACA

Thursday, August 14th, 2014

The post below is a guest blog from Mike Beck who serves as Principal, Health & Welfare Consultant for CAI’s employee benefits partner Hill, Chesson & Woody.

hcw 8 14In the last few weeks, there’s been multiple Affordable Care Act (ACA) developments, ultimately impacting large employers with 50 or more employees. How and when will they occur is another story, and it is easy to see why some employers are perplexed. Predicating what the ACA will look like a year from now is very difficult with some saying the employer mandate may be delayed again. Let’s review the recent events and how they are contradictory in many ways.

On July 22, the United States Court of Appeals for the District of Columbia Circuit concluded that PPACA’s subsidies should only be available to individuals purchasing health insurance in exchanges operated by a state – calling into question all the subsidies that have been obtained to date through the Federal exchange. Hours later in Richmond, Va., the United States Court of Appeals for the Fourth Circuit decided that legislative intent was to make tax subsidies available to individuals purchasing health insurance through a federally funded exchange or a state-based exchange if the state failed to create one. These two conflicting rulings are likely to go to the Supreme Court. For now, subsidies/tax credits will continue to be granted on the Federal Exchange. If the D.C. Circuit’s decision is upheld, it could strike a serious blow to the employer mandate since receiving a subsidy is a primary trigger of the employer mandate.

On July 24, the IRS published draft forms for the Code 6056 employer Minimum Essential Coverage reporting and disclosure requirement to the IRS and to individuals. This reporting requirement has multiple purposes as it allows the IRS to enforce the employer mandate, enforce the individual mandate, and confirm eligibility for premium tax credits for coverage purchased through an Exchange. This reporting along with the associated forms take effect in 2015 and are due in January 2016.

So in the same week, we witnessed a decision by an appeals court that called into question the viability of the Employer Mandate and suggested a possible delay, and then actions by the IRS which seem to indicate the Employer Mandate is moving forward as scheduled.

Regardless, large employers need to be prepared to comply with the employer mandate in 2015 and the associated reporting requirements. This should include a review of current payroll and HRIS systems to ensure they will be able to meet the new reporting requirements. The safe play is to assume that the employer mandate will go into effect without another delay, and if a delay occurs, organizations will have more breathing room to implement.

Evaluating the Softer Skills of a Top Candidate

Tuesday, August 12th, 2014

In today’s post, Advice and Resolution team member Renee’ Watkins shares the importance of analyzing a job candidate’s soft skills to uncover ways he or she can help your organization succeed if hired.

Renee' Watkins, HR Advisor

Renee’ Watkins, HR Advisor

When seeking top talent for a current job opening, the first criteria we most often use to identify the right candidates is a combination of education, experience and skill. These factors can be used, in part, to predict whether or not a candidate has the ability to be successful in the role for which they are being considered.

While these factors are very important, the long-term success of a candidate within your organization can depend more heavily on their softer skills, which tend to come across during the interview process.

With limited resources, stiff competition for talent and smaller amounts of time for assessing candidates, HR has to use their opportunities wisely to drill very quickly down to these softer skills.

The following interview questions can be used to provide you with a deeper insight into exactly what this candidate can bring to the company in addition to their education and experience:

  • What can you tell me about our company? Give me your analysis of our business. Look for the candidate’s initiative, ability, values and confidence.
  • Tell me about the first five things you would do if hired. Look for the candidate’s thought process, prioritization and execution.
  • Name five things you need to be successful in this role. Name three things you consider obstacles to that success. Look for the candidate’s expectations from the company and their ability to overcome obstacles.
  • Discuss a time you took a risk and failed versus a time you took a risk and succeeded. Look for the candidate’s willingness to take risks and ability to accept failure.
  • What was one of your proudest moments at work? Look for the candidate’s preferred work style (team player, solo contributor).
  • Where do you see yourself in two more career moves? How will this position help you get there? Look for the candidate’s long-term thinking, motivation and expectations.

To be a successful hire, candidates need to be a great corporate fit for your organization. You also want individuals who are thinking long-term with confidence in their own abilities to succeed within your company. For additional guidance, please call a member of CAI’s Advice and Resolution team at 919-878-9222 or 336-668-7746.

 

Wage and Hour Issues: Allowed Deductions From an Exempt Employee’s Salary

Thursday, August 7th, 2014

In today’s video blog, CAI’s Senior Executive of Government Relations and member of the Advice and Resolution team, George Ports, discusses allowed deductions from an exempt employee’s salary. George starts with a reminder: exempt employees are paid on a salary basis. Deductions are allowed but are limited. George shares an example in the video.

Another question that George explores is whether an employer is allowed to suspend an exempt employee without pay for violating a major work rule. He says the answer is yes, but the work rule must be major. He gives suggestions of what counts and what doesn’t.  George points out several scenarios that illustrate why you would have to pay an employee based on when he or she was suspended.

George offers additional deductions that can be made to an exempt employee’s salary in the video. One of the deductions he explains is the entire week concept. If there is not work completed by the employee in an entire week, the employer does not have to pay the employee for that week. Highlighting today’s technology, George emphasizes that if an employee is responding to emails or voicemails during this week, the entire work week exception is invalid.

Improper deductions from an exempt employee’s salary can destroy the exemption status for that employee and the exemption status of employees in that same classification, George says in the video. He also lists deductions that an employer is not allowed to take from an exempt employee’s salary.

If you have any questions about wage and hour regulations, please call CAI’s Advice and Resolution team at 919-878-9222 or 336-668-7746.

Your Employees Won’t Work Hard for a Robot

Tuesday, August 5th, 2014

The following post is by Bruce Clarke, CAI’s CEO and President. The article originally appeared in Bruce’s News and Observer Column, The View from HR.

Bruce Clarke, President and CEO

Bruce Clarke, President and CEO

Think about your best manager ever.

The one that you trusted, learned from, worked hard for, took problems to and even enjoyed. The one that managed you with both clarity and humanity. The one that knew you as an individual and took a genuine interest in your development. Do you have this person in mind?

Many managers are good communicators and handle workplace issues well. They might even be good teachers and technical geniuses. They may have regular meetings with you to be sure you are on the “same page.” But the human element that makes them truly impactful and inspirational is too often missing.

Somewhere along the way, managers (and some in HR) have lost sight of this important fact: nobody works hard for a robot or simply to earn revenue. They work hard for people who know them as individuals.

The great workplace leaders understand this human element. It builds bonds that allow your organization to solve big problems, face great challenges and obtain extraordinary results from all types of people.

Think again of your best manager ever. Would you work twice the hours for two weeks to get a big project done for that individual? Would you bring him or her your bestideas and best work every day? Would you accept and understand when you received an answer you did not like? Would that manager make your view of the company much more positive, making you much more likely to stay?

I bet your best manager even knew quite a bit about you as a person and showed it in appropriate ways. Maybe you both enjoyed discussing your family, your hobbies, common schools/teams, your dog or even political topics. Maybe you shared your feelings about free time, what you hope for or what you are concerned about.

What about the time your manager attended that awards ceremony on your behalf or that soccer game you played? How did you feel when a manager did something nice for your child? The point is, your manager knew what you cared most about in this world and showed that s/he cared, too.

It is not a great deal more complex than that, but managers tend to avoid the right kind of personal topics with employees, while a few spend too much time on the wrong personal topics. I’ve seen lawyers scare good managers away from positive personal conversations and relationships (with fears of lawsuits) while failing to sufficiently scare the harasser away from negative personal interactions.

The human element is key to maximizing both work performance and enjoyment. One of my favorite workplace authors is Patrick Lencioni (“The Three Signs of a Miserable Job”). He says this human element means taking a Genuine Personal Interest in employees and each other. Each of those three words was chosen carefully. The opposite might be called an Insincere Prying Irritation.

Other non-genuine interactions: asking the same question each day to the same people (“How ’bout them Heels?”), forcing the interaction, focusing on things you care about, doing the same thing for everyone or treating interaction as a one-way street. Employees, your manager would appreciate a Genuine Personal Interest from you as well.

Maybe this is natural to you. Keep it up! If it is unnatural or stressful to you, find ways to bring the human element into your workplace interactions. Observe what employees display in their workspace. Chances are they care deeply about those things and people.

Think about the power of a Genuine Personal Interest in improving conversations, building trust and creating a common language . . . and boosting performance.

The only person who wants to work hard for a robot is the technician who changes its oil.