Archive for the ‘Compliance’ Category

Joint Pain in the Workplace

Tuesday, June 7th, 2016

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

Can an employee work for two employers at the same time?

The Federal Court of Appeals in Richmond just decided how easy it is for someone to be a “joint employee” of two employers (Butler v. Drive

Bruce Clarke, President and CEO

Bruce Clarke, President and CEO

Automotive). The case involved whether a temporary service employee (Ms. Butler) was also employed by the manufacturer where she was assigned.  Could she sue that manufacturer for sexual harassment and termination under laws protecting only employees?  The court said yes.

Most courts say if both entities have enough control or economic connection to the individual, (s)he is employed by both.  This Appeals court fashioned a broad, hybrid test for joint employer status including whether each had some power to hire, fire, or supervise in a meaningful way, and where/how the work takes place compared to regular employees.  In my view, nearly all extended work placements through temporary services (involving hiring by the service and some training/supervision by the customer or both) create joint employers.

A similar issue arises with direct hired contract workers.  Some employers use an in house group of contract workers to handle fluctuations in volume or to serve as a pool for future full-time hires.  Whether temp or direct, a special group of workers is created who do not enjoy the same working terms of regular employees.

There are many good reasons to use long-term temporary and contract workers, but these challenges are often ignored:

Unintended Consequences

Lawsuits, injury claims and expensive benefits make full-time employee status costly.  Some employers manage “headcount”, risks and costs by restricting full-time hires, preferring either part-time employees or other solutions such as direct contractors. It is just not that easy.

By substituting significant, extended work from these temporary and contract workers, employers may avoid one set of costs and create a new, unbudgeted set of costs.  If we could reliably reduce the extra costs of employing people just by calling them non-employees, then none of us would work directly for an employer!

Employee Relations

If we expect the contractor/temp group to be happy with their non-employee status long term, we might be dreaming.  Too often, managers treat the contract group as expendable.  “Just let them go” some say, rather than address problems.  The same physical separation, different uniforms and procedural techniques used to prove these workers are NOT employees may in fact cause serious dissatisfaction . . . without establishing the desired legal separation!

Poor (or zero) onboarding, second-class status, ignoring complaints, little communication about next steps and limited performance feedback are common problems.  Remember, despite efforts to mechanically avoid employee status, the pressures of work and output usually confuse the worker’s status.

The costs of hiring regular employees can be managed and the risks contained.  When an employer is surprised to learn after a claim is filed that the law views it as an employer of temporary and contract workers, it is too late to prepare or insure.   Employers using these relationships as long term solutions should carefully assess the total costs.

18 Tips for NC Employers to Reduce Unemployment Costs

Tuesday, May 31st, 2016

Employees in North Carolina who lose their jobs through no fault of their own are eligible for unemployment insurance benefits if they worked and reduce_unemployment_costs had sufficient earnings in the base period, and are actively looking for work.  Employees who are terminated for misconduct are disqualified for the duration of the unemployment period.  While it may appear that employers have little control over unemployment decisions and costs, there are steps that you can take to manage the cost of your unemployment insurance and the outcomes of your hearings.

  1. Hire the right people.   Many unemployment problems stem from hiring the wrong people. Screen job applicants for skills, experience and training required for the job.  Present candidates with a realistic picture of the job and company culture.  Conduct assessments to assist in determining job fit. Do background checks.
  2. Provide onboarding, training, and a work “buddy” to help mentor the new employee for a successful start.
  3. Ensure that employees acknowledge in writing receipt of the Employee Handbook that outlines policies that will guide their employment.
  4. If you make a hiring mistake (everyone does at some time), you are an experience-rated employer, and the employee lacks the skills to perform the job, terminate within 100 days of hire and request non-charging.
  5. Request non-charging if the reason the employee left was because of domestic violence or military spouse relocations.
  6. Train managers on providing and documenting performance feedback to employees.
  7. Train managers on documenting policy violations and disciplinary actions in a timely manner when necessary, and how this can impact unemployment claims.  For the employer to prevail on a claim for discharge for failure to perform work duties, there must be at least three performance warnings in the 12 months prior to termination.
  8. Conduct employee opinion surveys to identify and resolve workplace issues, engage employees, and increase retention.
  9. Respond promptly (within 14 days of receipt of NCUI 500AB) to DES with detailed documentation to avoid penalties for failure to respond timely and/or providing inadequate information.
  10. If the employee was terminated for misconduct and/or failing to follow established company policies or procedures and the initial DES decision is for the employee, appeal. (See other reasons that disqualify the individual for misconduct).
  11. Review charges to your account.
  12. Advise the DES if a former employee refuses a job offer.  (Even if you are not the base period employer, some company is).
  13. Upon receipt, review the NCUI 551 form that is sent to each base period employer.  Verify that the employee worked for you (check name and social security number), and that dates of employment and earnings are correct.
  14. When work is slow, offer employees the opportunity to volunteer for unpaid personal time off, consider temporary pay reductions, and other measures to postpone or avoid a layoff.
  15. When permanent layoffs are unavoidable, consider what assistance you can afford to help employees with locating other jobs (resume writing, outplacement assistance, calling other employers regarding former employee availability and skills).  The sooner former employees find employment, the lower your unemployment costs.
  16. Report and pay unemployment taxes promptly to avoid penalties.
  17. Report unemployment fraud. NC Department of Commerce – Division of Employment Services
  18. Support the Employers Coalition of North Carolina (ECNC) in efforts toward unemployment reform.  http://www.ecnc.us

    If you have questions about reducing your company’s costs associated with unemployment, let us help.  Visit CAI to learn more about how we partner with NC employers to grow and manage their HR departments.

Transgender Bathrooms, Overtime Rules and Odor-free Workplaces, oh my!

Thursday, April 14th, 2016

yellow-brick-road-elton-john-mc3a1gico-de-ozFor North Carolina companies, trying to stay in the know about recent federal and state employment and labor laws can be a bit like navigating the yellow brick road.  You never know what perils lie ahead… And, with aggressive enforcement activities by government agencies, staying compliant is more important than ever.

New overtime regulations from the USDOL…expanded definition of protected concerted activity by the NLRB…broadened expectations on “reasonable” accommodations under the ADA… These are just a few reasons why it is more important than ever for employers to ensure that they understand recent employment and labor law and regulations changes.

We know that keeping your organization protected can be both time consuming and frustrating, but it doesn’t have to be.  Sure, you can sift through the vast amount of federal and local regulatory information on your own, with online searches or by visiting government agency websites, but how much is your time worth?  Take just two short days out of your busy schedule and we promise that the knowledge you gain from our industry experts and top labor law attorneys will help you make the best decisions for your company throughout the coming year.

Join us for our 2016 Employment and Labor Law Update on May 18 and 19 at the McKimmon Center in Raleigh.  Conference topics include:

New Overtime Regulations

Transgender Issues

Use of Independent Contractors

The Expansion of “Reasonable” Accommodations

Employee Theft, Embezzlement, and Other Criminal Conduct

Perils of the Digitally Integrated Employee

FMLA Intermittent Leave Abuse

Handbook Headaches

NC Legislative Update and more!

Will Employees Be Working for Free on Leap Day?

Thursday, February 25th, 2016

February-29While February is known for its famously short 28 days, every four years the month extends itself an extra day on the 29th of February. This year, this extra day will fall next Monday. While many employees may wish for a Leap Day Holiday off of work, most will still make their way to the office. But the question remains: Is Leap Day good or bad for employees? Well, that may depend on who you’re asking.

For hourly, non-exempt workers, coming into work on Leap Day may be a welcome occurrence: their employers will pay them for hours worked, and if they work an extra day this year, that’s roughly eight more hours of paid work on their paychecks this year than in a non-Leap Year.

Sounds like a win-win, right? Well, for salaried, exempt employees, the situation might be a little different.

If salaried workers earn a set amount each year irrespective of hours worked, yet there’s one extra day of work this year, does that mean they are working for free on Leap Day? The answer to this question can be puzzling, and it turns out even employment experts cannot come to a general consensus on the issue.

Daniel Schwartz, an employment attorney, believes employers could be getting a day’s worth of work for free from their employers.

“For the extra day, the employer really isn’t paying anything more for an exempt worker. The annual salary is just that, and the paychecks just reflect the portion of the year. Many employers thus get a ‘free’ day of work from exempt workers because they are not paying anything more than in non-Leap Years,” he wrote on the Connecticut Employment Law Blog.

Frank Heinz, a reporter from NBC, begs to differ.

“The short answer is no, you aren’t working for free on Leap Day … you’re just working for less than normal,” Heinz writes.

“Let’s assume you make $50,000 per year in a non-Leap Year.  If we take that salary and divide it by the 261 work days, that breaks down to $191.57 gross income, per day,” he goes on to explain. “During a Leap Year, with 262 work days, that breaks down to $190.84 gross income, per day.  That means during a Leap Year you will make .73 cents less per day in order to fund your salary on Feb. 29.”

But what the issue really may come down to is how your company’s pay schedule is set up.

A typical year will have 52 weeks plus one day, but a Leap Year has 52 weeks plus two days.  If your company’s designated payday falls on this extra day, it could mean an additional paycheck for your employees.

More than likely, employers will build this extra day into the yearly salary, and reduce a worker’s paycheck installment in order to make it all come out even at the end of the year.

However your business structures its payroll, whether it’s through weekly, bi-weekly, or monthly installments, it is imperative for HR professionals to take the time to examine whether their employees’ pay will be affected by the upcoming Leap Day.

If you find that it will alter your pay structure, be prepared to discuss the issue and how your business will respond with your employees. It is, after all, their right to know how their pay could be affected.

For any further questions on how Leap Day might affect your payroll, don’t hesitate to give our Advice & Resolution team a ring at 919-878-9222 or 336-668-7746. Have a Happy Leap Day everyone!

When Worksite Plans Work

Tuesday, February 23rd, 2016

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

Voluntary benefits or worksite plans refer to the insurance products that can be offered by employers on an individual or group basis to pay individuals for a variety of life events such as getting injured in an accident, being diagnosed with a serious health condition, or being admitted into the hospital. Examples of these plans include critical illness, cancer, accident, hospital indemnity, and permanent life insurance…to name a few of the most popular.

Enrollment in voluntary or worksite plans continues to increase rapidly as more and more employers are offering, and employees are asking, for these benefits.

The number of carriers offering these benefits has also increased drastically. While traditional players in this market space (such as Aflac, Allstate and Colonial) continue to offer quality products, many of the insurance carriers who have previously focused on “core” group benefits such as term life insurance and disability insurance have now started to offer a variety of worksite plans. The growth of new players in the market has created competition where plan premiums are going down while benefits go up. Even more importantly… these carriers are actually paying when a claim is submitted!

The value of these worksite plans and the hassle-free payment of claims was something I was skeptical of until I received a firsthand experience in their benefits. This past April, HCW offered a critical illness/cancer policy as well as an accident plan for employees to purchase. Who knew that taking ten minutes out of my day to meet with an individual enrollment specialist ended up being worth over $12,500 to my family this year?

Our enrollment specialist educated me that the critical illness and accident plans both offered an annual wellness screening benefit that if submitted each year would almost entirely cover the cost of my annual insurance premium. Since I was interested in experiencing first hand why so many employees throughout the country were purchasing these plans I decided to sign up, thinking I would have no use for the benefits but at least my premiums could be offset by the wellness reimbursement.

Unfortunately, just two months after purchasing these products I sustained an injury while playing basketball with my children which required surgery, a lengthy stint on crutches, and physical therapy. Then less than two months after my accident, my wife was diagnosed with a condition that also required surgery and treatment. The money received from our policies helped pay for childcare, out-of-pocket medical care, and even had a little left over to pay for a family trip to celebrate our recoveries.

While both my wife and I would prefer to go back in time, give the money back, and not have these events happen, having the financial payments from the accident and critical illness plans certainly helped ease the burden during this time. I am thankful that my employer decided to offer these benefits, and required that I spent a few minutes meeting with an individual enrollment specialist to better understand the benefits being offered.

If you have questions about worksite plans, and if they might be a good option for you, contact HCW’s Enrollment Services & Voluntary Benefit Solutions Team.

 

The Truth About Affirmative Action…

Tuesday, January 26th, 2016
Kaleigh Ferraro, Manager, Affirmative Action Services

Kaleigh Ferraro, Manager, Affirmative Action Services

In today’s post, CAI’s Manager for Affirmative Action Services, Kaleigh Ferraro, sheds lights on what exactly affirmative action is and what it means for your business.

I get asked all the time “What is affirmative action?”.  You’d think since I am the manager of affirmative action services at CAI that I wouldn’t have difficulty in answering that question.  You’d think that, right?

The truth is I do struggle to answer this question.  Not because I don’t know what it is but more because I’m not sure what answer the person asking really wants. Are they interested in a quick summary just highlighting a few main points?  Or do they want more detailed information including all requirements and analysis.  I can provide both.  I tend to provide more detail.  For those of you who have spoken to me – you’re welcome….or I’m sorry.   What I’d like to address here is high-level information.

What Affirmative Action IS:

Affirmative action is based and builds on the principles of equal opportunity laws.  It is intended to provide opportunities for defined protected groups and give them equal access as others in the population. Groups covered by affirmative action are: race, color, religion, gender, gender identity, sexual orientation, national origin, disability and veteran status.  Affirmation action laws are intended to:

  • Help eliminate discriminated members of groups who have been historically disadvantaged
  • Provide proactive action-oriented programs to include members of protected groups in employment
  • Assist in removing barriers for employment and level the playing field in the workplace

What Affirmative Action is NOT:

To me almost equally important as identifying what affirmative action is, is to educate people on what it is not. There is often a misunderstanding of what companies must do as affirmative action employers. Affirmative action is not:

  • Quotas/ Set aside programs
  • Preferential treatment and selection
  • Different standards
  • Selection of unqualified individuals

Affirmative Action Programs (AAPs)

If certain headcount/contract amounts are met, federal contractors and subcontractors are required to develop written affirmative action programs.  These programs are intended to be a management tool to ensure that equal employment opportunity is occurring in the workforce.  These programs should identify the extra steps contractors are implementing to include covered, protected groups. Written programs must be developed on an annual basis and include:

  • AAPs include analysis of the contractor’s workforce. Analysis includes comparing the demographics of the company in relation to the demographics of qualified individuals in the labor pool.  Where the company is underrepresented, placement goals are established (women, minorities, individuals with disabilities, protected veterans).
  • AAPs include a narrative which is a communication tool for what the contractor/subcontract has done or intends to do for the AAP year. This includes the company’s good faith efforts to address under-representation or impediments in employment practices.
  • Contractors must also annually review employment transactions (hires, promotions, terminations) that occurred in the prior twelve months,   often referred to as adverse impact analysis.  The analysis is used to determine if there are significant differences in selection rates between groups (females vs. males, minorities vs. non-minorities).
  • Contractors are also required to annually review compensation practices/systems to evaluate if there are gender, race or ethnicity based disparities.

While the AAPs could be viewed as a paperwork exercise, they really can be much more.  Use them as the tools they are intended to be to identify and address areas in which there are opportunities for good faith improvement.  Improvements to processes are definitely recommended where adverse impact exists in employment transactions or where unexplained disparities exist in compensation as monetary liability exists for companies in those areas in the event of a government audit.  Develop realistic and attainable goals for your organization by using your developed AAP as your guide.

If you need help understanding the requirements or how to implement your company’s program, please contact Kaleigh Ferraro, Manager of Affirmative Action Services, at kaleigh.ferraro@captial.org or 919.713.5241.  We also invite you to sign up for our free one hour webinar AAP: Preparing Data for Analysis on Feb. 9th.

Drug Testing Can Greatly Reduce Workers’ Compensation Costs

Thursday, October 8th, 2015
Pat Rountree, HR Advisor

Pat Rountree, HR Advisor

CAI’s Advice and Resolution team member Pat Rountree shares valuable information regarding the connection between drug testing and lower compensations costs for your business.

According to CAI’s most recent Policies and Benefits survey, 30% of employers are not conducting drug tests.  Besides the obvious benefits of having a drug-free workplace, another side benefit from drug testing is that it may reduce your workers’ compensation costs.  On the one hand, employees who are under the influence are more likely to experience injuries to themselves or others.  So the knowledge that you conduct post-accident drug and alcohol testing will dissuade most employees and therefore reduce accidents and costs.

Also, under the North Carolina Workers’ Compensation Act, no compensation will be paid for a workplace injury or death if it was proximately caused by, among other things, the employee’s intoxication, provided the intoxicant was not supplied by the employer (company social event) or being under the influence of a controlled substance listed in the North Carolina Controlled Substances Act (G.S. 90-86) unless it was prescribed by a doctor and the prescribed dosages were being followed.  Note, there isn’t an automatic denial of claims due to intoxication but odds are in the employer’s favor unless it can be proven the accident was in no way related to the “altered state” so to speak.

The best way to increase the odds that such claims will be denied is to incorporate a comprehensive drug and alcohol testing policy. Without such a policy, denial of workers’ compensation claims due to being under the influence may be harder to achieve.

North Carolina employers who drug test are required to comply with the NC Controlled Substances Examination Regulation Act which regulates notice requirements to examinees, requires approved laboratories and chain of custody safeguards, specifies conditions for applicant and employee testing, requires confirmation tests on positive samples, and entitles an employee who tests positive to have a retest, if requested, of the same sample at the employee’s expense.

Many states have a provision in their Workers’ Compensation law disqualifying an employee for compensation if the injury was caused by being under the influence of drugs or alcohol.  A number of states also give discounts on Workers’ Compensation premiums (generally 5-7%) for implementing a Drug-Free Workplace Program.  CCH, the Members-only resource, provides State Law Summaries on Workers’ Compensation laws.

CAI encourages drug-free workplaces.  The US Department of Labor has resources for developing a drug-free workplace program.  While this is a requirement for federal contractors, the resources are helpful to all employers.  Consult the state law for specific requirements in other states.  Our drug-testing partner, PDSS, is also a resource for policy development, testing, and in-depth expertise in this area.

For more information on how you can reduce your company’s cost of workers’ compensation through drug testing, please contact our Advice and Resolution team today at 919-878-9222 or 336-668-7746.

Don’t Underestimate the Power of Job Descriptions in ADA Legal Challenges

Thursday, September 3rd, 2015

CAI’s Advice and Resolution team member Pat Rountree shares valuable information regarding job descriptions and compliance with the ADA

Pat Rountree, HR Advisor

Pat Rountree, HR Advisor

The terminology essential functions of the job has been around since the Americans with Disabilities Act (ADA) became law in 1993.  However, the significance of making sure that you have current job descriptions for each position that lists the essential duties, physical, and mental requirements greatly increased with the recent amendments to the ADA.  Also, technology advances have resulted in a faster pace of job change over the last several years.

Employment law attorneys continue to stress that job descriptions that identify the essential functions of the job are the first line of defense when employers are trying to defend undue hardship decisions on inability to make accommodation, and terminations for inability of employees to do the job.

At the most recent CAI/Ogletree Employment and Labor Law Update, Attorney Gretchen Ewalt recommended that employers use the employee performance review time to go over the job description with the employee annually and determine if changes need to be made to accurately reflect the current job responsibilities.

Another recommendation in light of recent case law is to document in the job description if the job requires the employee to be present at the worksite and to document the reasons why.  It may sound ridiculous—of course attendance at work is required.  However, with requests for accommodation to work from home, it is important to document when actual presence at work is required as in the EEOC vs. Ford Motor Company.  The employee, a resale buyer, requested to work from home as an accommodation, but the employee’s lack of availability for impromptu meetings on important issues was an undue hardship for the employer.  The court sided with the employer and noted in their decision, in most jobs, especially those involving teamwork and a high level of interaction, the employer will require regular and predictable on-site attendance from all employees.  To read the full court decision, see http://www.ca6.uscourts.gov/opinions.pdf/15a0066p-06.pdf.

Obviously with the advance of technology, working from home may be a reasonable accommodation for some jobs.  However, for those jobs that require person-to-person contact on the job, it is important to document.

How long has it been since you actually reviewed job descriptions with incumbents to determine that they are still valid?

Considerations in determining essential functions include:

  • The importance of the function to the overall job
  • The number of employees available to perform it
  • The time spent on the function
  • The degree of skill required

Other kinds of evidence that EEOC will consider include:

  • The actual work experience of present or past employees in the job
  • The consequences of not requiring that an employee perform a function
  • The terms of a collective bargaining agreement.

For additional guidance on this topic, please reach out to CAI’s Advice and Resolution team at 919-878-9222 or 336-668-7746.

Sometimes I feel like I am selling fear…

Thursday, August 27th, 2015

The following post is from CAI’s Kevin von der Lippe. He serves as CAI’s private investigator and leads the company’s Background Checking department.

Kevin von der Lippe, Private Investigator

Kevin von der Lippe, Private Investigator

Often, clients hear me talking about the pitfalls of not staying compliant with the nitpicky rules of the federal Fair Credit Reporting Act (FCRA).  Or, they hear me cautioning against transgression of Title VII of the Civil Rights Act of 1964, and how the onerous Equal Employment Opportunity Commission (EEOC) is in their enforcement.  Sometimes I feel like I am selling fear, but the reality is, the litigation is real, the liability for your company is real, and the long term consequences for non-compliance can be devastating to your company.

The view from today’s perspective is that there is a sea of class action lawsuits over small, technical flaws with the paperwork required under the FCRA.  In particular, the two main points of contention are: proper release from your applicant or employee, and sending out the proper paperwork (or even any paperwork) before you make your adverse employment action based upon the background check.

The problem stems from an infamous $22 million settlement on the East Coast in 2008. This particular case showed that suing companies who fail to comply with the FCRA could be lucrative. In 2009, the Sixth Circuit ruled that a plaintiff did not have to show actual damages because the fact that the company failed to comply with the FCRA was in-of-itself an “injury” to the plaintiff, thus giving him justification in filing his suit. [1]

In February 2014, the U.S. Court of Appeals for the Ninth Circuit (in California) ruled that “a plaintiff can suffer a violation of the statutory right without suffering actual damages.” [2] Contrary to rulings from other circuits, this reignited a firestorm and on April 27, 2015, the argument made its way to the nation’s highest court. While the Supreme Court’s decision has not yet been made, the ruling could change Congress’ role in defining how these cases move forward, and perhaps even reduce the number of class action lawsuits that are based solely on technical flaws.

The good news is, you can reduce your exposure under the FCRA by keeping up with the necessary paperwork.  CAI provides samples of the necessary documents on our website, www.capital.org/vea.  We also provide the necessary FCRA paperwork with every report issued by our background checking department.

If you have questions about our background checking services, or how CAI can help you remain in compliance with the federal laws related to background screening, please do not hesitate to contact Kevin W. von der Lippe at (336) 899-1150 or by e-mail at kevin.vonderlippe@capital.org.

Capital Associated Industries Services Corporation is a licensed investigative agency, specializing in corporate pre-employment background screening. Our corporate agency license is BPN 001473P11.

[1] Beaudry v. TeleCheck Services, Inc., (6th Cir. 2009).

[2] Thomas Robins v. Spokeo, Inc. (9th Cir. 2010)

How the Department of Labor’s Overtime Changes Will Affect Your Company

Tuesday, August 18th, 2015

In today’s video blog, CAI’s Senior Executive and HR Advisor, George Ports, discusses the US Department of Labor’s (USDOL) recent proposed changes to overtime regulations and what employers must do in order to remain compliant. George begins by noting that under the new revisions to the Fair Labor Standard Act (FLSA), the USDOL will increase the minimum salary threshold for exemptions, opening up eligibility for overtime protections to nearly 5 million workers nationwide.

George believes it is important for employers to know how these changes will affect their company, and goes on to list the specific revisions to the FLSA. Some of these proposed changes include:

  • A vast increase in the minimum salary level exemption for the executive, administrative, and professional exemptions from $455 per week to no less than $921 per week
  • An increase in the minimum salary exemption for highly compensated employees from $100,000 to $122,148
  • A metrics system to automatically increase the minimum salary threshold test on an annual basis

In order to examine the impact these changes could have, George advises employers to make the necessary alterations to salary levels or re-classify positions. For those employers interested in making comments on these proposed changes, head to www.regulations.gov to make your voices heard. Just make sure to do so before the 60 day comment period ends on September 4, 2015.

Please call our Advice and Resolution team at 919-878-9222 or 336-668-7746 with any related questions.