The start of a new year represents an excellent time to contemplate a strategy for increasing employee morale within the organization. One success formula for an employer is to place and retain the right employees in the right jobs. Although monetary incentives are one way to help employees cope with economic downturns and challenges, the quality of work/life issues is a vital element that impacts the morale and the successful contributions of your employees.
The first step is to take time to assess how employees feel about their current roles and what the company can do to ensure they are positioning themselves as an attractive employer. Remember to recognize exceptional workers within the organization. Having employees who are valued, recognized and appreciated for their efforts will generally boost the overall morale of the organization. Such employees may also provide critical business and employee referrals to further contribute to the company’s success.
Management immediately can do a great deal to assist in increasing employee morale. Consider the following three tips:
- Analyze the Business Situation. Question where improvements need to be made or enhancements should take place for employees to effectively and efficiently carry out their work duties.
- Communicate with Your Employees. Inform employees about changes within staff, budgeting, etc. and take feedback into consideration.
- Increase Workplace Incentives. Provide an environment with growth opportunities, monetary and non-monetary rewards, and a positive business culture. One simple example that can be easily overlooked is to thank your employees periodically for their efforts in email communications or staff meetings.
In this new year, resolve to make employee morale a priority. A business can prosper with the right mind-set, tools, and the greatest asset – its employees. When employees feel respected, appreciated, and recognized, the increased success of a business will generally follow.
OSHA Annual Summary Posting Deadline.
By February 1, 2012, an employer subject to the Occupational Safety and Health Administration (OSHA) recordkeeping provisions for 300 logs regarding workplace injuries and illnesses must post its 2011 annual summary (Form 300A).
OFCCP Proposal to Improve Job Opportunities for Individuals with Disabilities.
The U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) is proposing a new rule that would require federal contractors and subcontractors to set specific hiring goals regarding employees with disabilities, including a goal for federal contractors to have at least 7% of their workforces comprised of individuals with disabilities. All comments must be received by February 7, 2012.
Social Security and Medicare Tax for 2012.
The employer tax rate for social security remains unchanged at 6.2%. On wages paid and tips received before March 1, 2012, the employee tax rate for social security is 4.2%. On wages paid and tips received after February 29, 2012, the employee tax rate for social security increases to 6.2%.
NEP on Recordkeeping.
As a reminder, the Occupational Safety and Health Administration (OSHA) launched its “National Emphasis Program (NEP) on Recordkeeping” last year after various studies revealed that many companies were underreporting or incorrectly reporting workplace-related injuries and illnesses. OSHA plans to increase enforcement of accurate reporting requirements through the NEP pilot program that continues through February 2012.
The exempt employees verses non-exempt employees classification issue continues as a common area of confusion among employers. Often, many employers who are unfamiliar with the nuances of the issue also face practical challenges, including when and how to track hours for exempt employees.
To be classified as exempt employees, the employee’s job generally must satisfy both a salary basis test and a duties basis test. Exempt employees generally must be paid on a salary basis, meaning they must be paid a fixed salary each week. The U.S. Department of Labor (DOL) enforces regulations that define the salary basis requirement to satisfy the exempt status tests. Exempt, Administrative, Executive, and Professional employees must be paid a predetermined amount each pay period that is at least the minimum weekly salary required by the regulations. The current federal minimum is $455 per week; however some states require a higher minimum weekly salary to satisfy this test. The amount paid may not be reduced because of a variation in the quality or quantity of the work performed.
Non-exempt employees are typically paid on an hourly basis and entitled to overtime compensation. According to the federal Fair Labor Standards Act (FLSA), employers have requirements for tracking work hours for both worked and meal periods for nonexempt employees. This requirement ensures that such employees earn at least minimum wage plus overtime compensation for any hours worked above 40 in a work week (and in some states, for any hours worked above eight in a workday).
However, nothing in the law prohibits an employer from keeping track of an exempt employee's hours. Some valid reasons for tracking exempt employee hours can still be compelling. For example, an employer may opt to track an exempt employee’s hours for purposes of client billing, Family Medical Leave Act (FMLA), 401(k), hours-based benefits calculations, attendance, paid time off (PTO) benefits, etc. Some employers opt to track exempt employees’ hours simply to ensure the equitable treatment of all employees regardless of classification in the company.
With a few exceptions, exempt employees must receive their full salary for any week in which they perform work without regard to the number of days or hours worked. Accordingly, if exempt employees clock in late to work or leave early at the end of the day, the employer may not dock their pay as they may for non-exempt employees. If an employer does dock an exempt employee’s wages, such a deduction may jeopardize the individual’s exempt status.
Should an employer opt to track the hours of exempt employees, the company will need to be very careful with respect to how it uses this information. As explained above, the exempt employee’s salary should not fluctuate based on the number of hours worked within the workweek. Prorating an exempt employee’s salary based on hours worked may result in the loss of the exemption, which may be very costly for the business. The company may only take a deduction from an exempt employee’s salary under limited circumstances without jeopardizing the exempt status. These circumstances are listed below:
- When an employee is absent from work for one or more full days for personal reasons other than sickness or disability;
- For absences of one or more full days due to sickness or disability if the deduction is made in accordance with a bona fide plan, policy or practice of providing compensation for salary lost due to illness;
- To offset amounts employees receive as jury or witness fees, or for temporary military duty pay;
- For penalties imposed in good faith for infractions of safety rules of major significance;
- For unpaid disciplinary suspensions of one or more full days imposed in good faith for workplace conduct rule infractions;
- In the employee's initial or terminal week of employment if the employee does not work the full week, or
- For unpaid leave taken by the employee under the federal FMLA.
While the company may opt to track the hours of exempt employees, the company must ensure that such information is not used to take deductions from their employees’ regular salaries, unless such deductions comply with the relevant guidelines.
With 2012 as the new presidential election year, employers could likely observe a surge in political activities among their employees. Political conversations around the water cooler can easily erupt into personal confrontations with water coolers being thrown around. Thus, employers need to be especially aware of federal and state laws regarding the ability to limit employee participation in political activities.
Addressing employment treatment with regards to political activities, the National Labor Relations Act (NLRA) provides employees with the right to engage in concerted activity. Whether or not the NLRA protects employee political activity depends partially on any identified employment concern the employee’s are supporting. For example, a political activity that directly supports a particular political issue, candidate, or party and a specific employment-related concern (i.e. Health Care Reform) may be considered protected. In general, while non-disruptive activities taking place during an employee’s own time and away from the workplace are considered protected, some activities (i.e. those conducted on workplace premises) may be subject to company policy restrictions.
Some guidelines employers may consider include:
- Political activities tied to specific employment-related matters are considered protected (i.e. “Vote for Candidate X, supporter of health care reform in the workplace.”).
- Completely political activities or support (i.e. campaign T-shirts supporting a specific candidate) is not considered protected and may be prohibited by company workplace policies.
- Campaign materials identifying a union’s name or logo generally cannot be prohibited. However, an employer may demonstrate reasonable exceptions (i.e. employee safety in terms of qualified personal protective equipment).
Thus, ensure that your company’s employee handbook policies comply with federal and state laws involving employee political activities (i.e. voting leave). Considering the wide range of interpretations on whether or not certain activities may be protected under the NLRA, look closely at the details of each situation before deciding to apply any disciplinary action against an employee.
IRS Mileage Rate. Beginning on January 1, 2012, the Internal Revenue Service (IRS) standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be 55.5 cents per mile for business miles, 23 cents per mile for medical or moving purposes miles, and 14 cents per mile for service of charitable organization miles.
HHS Final Rule on Medical Loss Ratio Requirements. Regarding the Affordable Care Act's Medical Loss Ratio (MLR) requirements, the Department of Health and Human Services (HHS) Centers for Medicare & Medicaid Services issued a final rule that is effective January 3, 2012. The new health care law mandates that health insurance companies in the small group markets spend at least 80% of premium dollars on medical care and health care quality improvement. In addition, employer-sponsored group health plans receiving rebates must ensure that the enrollee portion of the rebate is properly distributed for the benefit of enrollees.
Mobile Phone Use Restriction. Effective January 3, 2012, a new Department of Transportation (DOT) regulation restricts commercial motor vehicle (CMV) drivers from holding, reaching for, or pressing more than one button to operate mobile phone devices while operating their vehicles. CMV drivers may still use devices as long as usage is in compliance with the new rule (i.e. devices must be mounted or securely within reach of the driver’s control panel).
Required NLRA Labor Law Posting. As a reminder, do not forget that the National Labor Relations Board (NLRB) has issued a Final Rule that requires employers to notify employees of their rights under the National Labor Relations Act (NLRA). Private-sector employers, including labor organizations, are required to post the NLRA employee rights notice where other workplace notices are typically posted. Based on a recent NLRB announcement, this notice must be posted no later thanApril 30, 2012; the previous date was January 31, 2012.
Form W-2. Employers must complete Form W-2, Wage and Tax Statement, to report wages, tips and other compensation paid to an employee. A copy of this form must be given to the employee by January 31st.
New Required NLRA Labor Law Posting Date -- Correction: Based on a recent National Labor Relations Board (NLRB) announcement, the required posting date has been extended. While the previous date was January 31, 2012, the notice currently must be posted no later than April 30, 2012. As previously communicated, the NLRB has issued a Final Rule that requires employers to notify employees of their rights under the National Labor Relations Act (NLRA). Private-sector employers, including labor organizations, are required to post the NLRA employee rights notice where other workplace notices are posted.
The U.S. Department of Labor (DOL) has developed an online resource called Enforcement Data 2.0. The online database represents a significant new employer threat as it provides public access to workplace-related information about certain companies. By leveraging database information (i.e. wage and hour, workplace injuries, etc.), the DOL and other enforcement agencies can more easily target specific businesses or industries.
Employers face several implications about this online tool. Multiple agencies can more quickly report employers deemed as non-complaint with its workplace obligations and make the same employers more easily discoverable. For example, if the DOL’s Wage and Hour Division enters information about an employer’s non-compliant minimum wage practices, the Equal Employment Opportunity Commission (EEOC) could potentially use the information as a basis to explore unlawful discrimination issues in terms of the company’s equal pay treatment among its employees. In essence, the company’s exposure of designated non-compliance in one area increases the likelihood of inquiry or investigation into other areas of an employer’s policies, procedures, and practices.
For the time being, this online resource remains still fairly new and has not caught much media attention yet. However, with a new year already starting, the DOL and other agencies are clearly continuing to ramp up their compliance enforcement efforts against employers. In fact, the DOL has communicated that it will develop more features to its Enforcement Data 2.0 and will also rigorously educate the public about employee workplace rights and employers who demonstrate failure of employment law compliance.
In pursuit of employers who misclassify their workers, the U.S. Department of Labor (DOL) has been aggressively ramping up the number of investigations and its employment law enforcement efforts. In alignment, the Internal Revenue Service (IRS) announced last September its Voluntary Classification Settlement Program (VCSP), which may offer relief for employers from unpaid employment taxes, penalties, and interest resulting from worker misclassifications. To determine whether or not joining the VCSP would be a smart move, an employer needs to consider some key factors.
Under the VCSP, an employer may voluntarily reclassify their workers as employees for future tax periods for employment tax purposes. To participate in the program, the employer must meet specific eligibility requirements, apply for the VCSP, and enter an agreement with the IRS. An employer may be considered eligible for the program if it:
- Is not subject to a worker misclassification audit currently engaged by a federal or state agency,
- Has consistently treated the workers in question not as employees (i.e. as independent contractors), and
- Has filed for the past three years the required Form 1099s regarding the workers.
If the IRS approves the employer’s eligibility and participation into the VCSP, then the employer must establish a “closing agreement” with the IRS. The agreement’s provisions include but are not limited to:
- A three-year extension of the statute of limitations for collection of employer back taxes during the first three years upon participating in the program;
- A limit of 10 percent of the employer’s employment tax liability that may have been owed on compensation paid to the workers for the most recent tax year, without interest and penalties;
- No audit for employment tax purposes for prior years with respect to the classification of the workers in question; and
- Treatment the identified workers as employees moving forward.
While the VCSP appears attractive at face value, other factors require employers like you to recognize potential risks and, if deciding to participate in the program, to proceed with caution:
- First of all, the IRS is not obligated to accept an employer’s application (IRS Form 8952) to the program. So, if an application is rejected, the employer may have in essence admitted to worker misclassification fault, thus creating a potential case for wage and hour lawsuit claims.
- The IRS relief does not apply to other federal or state agencies (i.e. the DOL) which have similar responsibilities for worker classification compliance enforcement. As established through recent “memorandums of understanding” with participating agencies, IRS information-sharing would likely increase exposure of an employer’s liabilities related to worker misclassifications.
- The employer must account for and remedy any previously avoided employee expenses (i.e. due to failure of complying with minimum wage and overtime laws, of providing company-sponsored employee benefits, of offering workers’ compensation and unemployment insurance, etc.).
As the more details from the IRS regarding this newly-develop VCSP emerge, employers are encouraged to conduct preliminary research and internal assessment focused on the nature and degree of any worker misclassification issues. Review applicable state and federal classification standards, conduct a company-wide worker classification audit, and stay on top of relevant IRS notifications and employment law updates.
Social Security Benefit Increase. On October 19, 2011, the Social Security Administration (SSA) announced the monthly Social Security and Supplemental Security Income (SSI) benefits will increase in 2012. The 3.6 percent cost-of-living adjustment (COLA) will begin with the January 2012 benefit payments. Increased payments to SSI beneficiaries will begin on December 30, 2011.
OSHA Whistle-Blower Claims. Published in the Federal Register on November 3, 2011, the U.S. Occupational Safety and Health Administration (OSHA) announced Sarbanes-Oxley Act whistle-blower claims may now be filed orally. The final rules revise existing regulations and public comments must be received by January 3, 2012.
IRS Mileage Rate. The Internal Revenue Service (IRS) optional standard mileage rate of 55.5 cents/mile for business miles expires on December 31, 2011. The IRS has not yet announced if the rate will be different in 2012.
OCR Privacy and Security Compliance Audits. The U.S. Department of Health and Human Services (HHS) Office for Civil Rights (OCR) is responsible for privacy and security enforcement under the Health Insurance Portability and Accountability Act (HIPAA) and the Health Information Technology for Economic and Clinical Health (HITECH) Act. The OCR is piloting a program to perform up to 150 audits of covered entities to assess privacy and security compliance. Audits are to conclude by December 2012.
Seasonal changes are in the air and for some businesses that also requires an increase in seasonal hiring. The hiring steps involve several key components, one of which is the interview phase. Interview bias can result unintentionally. Even the most seasoned of interviewers may fall victim to some common interviewing bias. Managers need proper training to conduct interviews that are non-discriminatory in nature, and to avoid exposure to discrimination claims. In addition, awareness of these biases can make interviewers more effective in selecting the right candidate. Some forms of bias are described below.
- Stereotyping. Stereotyping involves making generalized opinions about how people from a protected class such as sex, religion, age, race, etc. appear, think, act, feel or respond. For example, assuming a male would prefer being employed in a construction job over a teaching job.
- Inconsistency. Some managers utilize different sets of questions to interview for the same job position amongst different individuals. For example, asking Hispanic candidates about their bilingual skills versus Caucasian applicants is not a recommended practice.
- First Impression. First impressions can leave a lasting impression. Sometimes during the interview process, the interviewer takes the first thing he or she notices about the candidate and forms his/her opinion regarding the applicant on the first impression. This bias may benefit or harm the candidate’s chances of selection.
- Halo/Horn Effect. If the interviewer finds one good trait, he or she will favor the candidate (halo). When the interviewer finds one negative trait, he or she will see that to be a disqualifier for the position (horn).
- Contrast Effect. Contrast bias is present when candidates are compared against each other rather than evaluated based on the job requirements. The tendency is to base a candidate’s individual ranking on one's position relative to others in the group. If the interview pool consists of a number of outstanding candidates, an average candidate will not be selected. But in a substandard pool, the average candidate may appear to be highly qualified.
- “Similar to Me”. The “similar to me” effect occurs when the interviewer identifies with the candidate on a personal level, rather than evaluates the candidate on job-related criteria. For Example: The candidate attended the same university as the interviewer.
- Cultural Noise. This occurs when the candidate’s responses are not factually based, but are socially acceptable answers. Basically, the applicant tells the interviewer what he/she thinks the interviewer would like to hear or will help secure the job.
Interview bias may occur intentionally or unintentionally. It is important to be aware how biases may affect your decision-making when interviewing candidates. Keep biases at bay to ensure equality and effectiveness in the interview process.