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Monthly Archives

November 2009

Form of the Month:

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WHY I DESERVE A RAISE (PDF)

Many employers ask us how to deal with an employee who asks for a raise in. We tell them to make good use of this form! Before an employee requests a raise, they should be able to show how they have increased their value by filling out this form. If they can articulate how they have added, new value then they should get a raise. If not, a CPI increase is the most they deserve.

(HR That Works Users can access this form in Word format by logging on to the site).

PRESIDENT OBAMA IMPLEMENTS NEW FMLA MILITARY LEAVE AMENDMENTS

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On October 27, 2009, President Obama signed the 2010 National Defense Authorization Act, which contained new amendments to the Family and Medical Leave Act (FMLA). By way of background, the 2008 National Defense Authorization Act created a new leave right under the FMLA for families of service members. The new Act further expands FMLA coverage and available leave for military families in the following ways:

  • Leave For a “Qualifying Exigency.” Previously, leave for a qualifying exigency in connection with a deployment for a contingency operation was not available to members of the regular Armed Forces, but only members of Reserves and National Guard units. The new amendments permit families of regular armed forces personnel who are deployed to foreign countries to qualify for such leave.
  • Leave to Care For a Covered Service Member with a Serious Illness. So-called “military caregiver leave” provides up to 26 weeks of leave to employees caring for a current member of the armed forces, National Guard or Reserves. The new legislation permits leave to be taken for retired military service members as well, so long as it is within five years of the date on which the service member first receives treatment, recuperation, or therapy for the injury.
  • Leave For Aggravation of Existing or Preexisting Injuries. The 2008 regulations specified that a later aggravation or complication of the same injury would not constitute a “subsequent injury” triggering another 26 weeks of leave. The new legislation, however, provides that an aggravation or complication of a prior injury will trigger a right to another 26 week leave period, although it will remain the case that the 26 weeks of leave will have to be taken in a single 12-month period for a single injury (and any leave not taken in that year forfeited).

Lessons Learned: The new amendments direct the U.S. Department of Labor (DOL) to work with the Secretaries of Defense and the Veterans Administration to draft regulations implementing the amendments. The legislation does not make clear whether the law goes into effect immediately or whether it will become effective after the new regulations are issued. It would be prudent, however, to proceed as if the law were in effect if faced with a request by an employee seeking leave to care for an eligible service member under the expanded law.

DEFINING PRE-HIRE PHYSICALS VS PHYSICAL AGILITY EXAMS

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We recommend that employers conduct pre-hire and return to work “fit for duty” exams. To balance the employers’ need to know with the employee’s right to privacy and disability protection, the EEOC issues guidance in Enforcement Guidance on Disability-Related Inquiries and Medical Examinations. In the case of Indergard v. Georgia-Pacific Corp. the 9th circuit helped clarify the distinction with physical agility exams which are not subject to the guidelines.

Determining whether a test is a medical examination depends on these factors:

  • Whether the test is administered by a health care professional * Whether it is interpreted by a health care professional
  • Whether it is designed to reveal an impairment of physical or mental health
  • Whether it is invasive
  • Whether it measures an employee’s performance of a task or their physiological responses to performing the task
  • Whether it is normally given in a medical setting
  • Whether medical equipment is used

The EEOC Enforcement Guidance states that, although in some cases a combination of factors might be relevant in determining whether a test is a medical examination, in “other cases, one factor may be enough to determine that a test or procedure is medical.” It then provides a list of tests that are considered medical examinations, including “blood pressure screening and cholesterol testing” and “range-of-motion tests that measure muscle strength and motor function.”

The EEOC Enforcement Guidance states that certain employer-required tests are generally not medical examinations – including physical agility tests, which measure an employee’s ability to perform actual or simulated job tasks, and physical fitness tests, which measure an employee’s performance of physical tasks, such as running or lifting – as long as these tests do not include examinations that could be considered medical (e.g., measuring heart rate or blood pressure).

In the Indergard case, the court ruled that the employer did have to comply with Medical Examination guidelines. Click here to read the case.

WHAT YOU CAN AND CAN’T DO TO AVOID OVERTIME PAYMENTS

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In the recent case of Perth v. Pomona Valley Hospital, the Federal 9th Circuit gave an excellent summary of what employers can and can’t do to avoid overtime payments under the FLSA. In this case, a nurses union bargained for a 12-hour shift option at reduced pay. After knowingly accepting the arrangement, the claimant woke up to the fact two years later that employees who work eight-hour shifts are more likely to get paid overtime – so she filed a class-action suit. The court ruled on behalf of the employer, stating that: “Though our Circuit has never been asked to determine whether an employer subject to the FLSA may alter the ‘regular rate’ of pay in order to provide employees a schedule they desire, we conclude that such an arrangement does not contravene the FLSA’s purpose.”

Most important, the court shared these reminders about paying overtime:

  • There is no Supreme Court or Ninth Circuit case that says whether an employer can or cannot reduce an hourly rate, so that when paid overtime the employee earns as much as they did in a 40-hour week while subject to the FLSA. “Courts around the country have dealt with similar matters, with conflicting results. Compare, e.g., Conner v. Celanese, Ltd., 428 F. Supp. 2d 628, 637 (S.D. Tex. 2006) (holding that an employer can comply with the FLSA by reducing the ‘regular’ wage paid to its employees and pay overtime at one and one-half times the reduced regular rate such that the total pay to the employees remains the same’), with Rhodes v. Bedford County, Tenn., 734 F. Supp. 289, 292 (E.D. Tenn. 1990) (‘The court is of the opinion that defendant’s implementation of [a revised pay plan similar to the one in this case] constitutes a scheme intended to avoid the overtime requirements of § 7. [Even though it] result[ed] in the workers being paid the same amount for the same number of hours worked both before and after the changeover. This was accomplished by artificially altering plaintiffs’ ‘regular rate’).”
  • This opinion is limited to unique facts. In the case at hand, the reduced rate was agreed to, which is a significant factor in terms of “fairness.” In a sense, it was used as a way to prevent an overtime windfall to workers who asked for and received the flexibility of 12-hour days. For example, California allows the four day per week schedule with no payment of overtime so long as it is agreed to.
  • “Employers cannot lawfully avoid the FLSA’s overtime provisions ‘by setting an artificially low hourly rate upon which overtime pay is to be based and making up the additional compensation due to employees by other means.’29 C.F.R. § 778.500(a). The FLSA also prohibits employers from adopting ‘split-day’ plans, in which the employee’s hours are arbitrarily divided in such a way as to avoid overtime payments. Walling v. Helmerich & Payne, Inc., 323 U.S. 37, 40 (1944); 29 C.F.R. § 778.501. Both types of plans work in a manner so that employees do not earn overtime compensation, regardless of how many hours they worked.”
  • “The Department of Labor has provided regulations to guide employers who wish to ensure their regular rates are not deemed artificial or unrealistic. See 29 C.F.R. § 778.500(a) (‘[T]he overtime provisions of the act cannot be avoided by setting an artificially low hourly rate upon which overtime pay is to be based and making up the additional compensation due to employees by other means.’).”
  • The claimant also argued that the pay plan is unlawful, because nurses working both the 8-hour and 12-hour shifts perform the same work, but are paid at different rates. “We find no authority that suggests employees cannot be paid different rates for different shifts, and Parth fails to present any authority to the contrary. We do, however, find ample authority from other circuits that supports PVHMC’s argument that workers working different shifts may be paid different rates.”

WHEN LEAVE DOESN’T QUALIFY FOR FMLA, THINK ADA

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Employers generally understand that eligible employees are entitled to 12 weeks of job-protected leave for serious health conditions under the Family and Medical Leave Act. Too often, however, when this statutory leave right has been exhausted (or an employee is FMLA ineligible) employers believe that they have an absolute right to terminate the employee. However, if the Americans with Disabilities Act applies, summary termination might result in an expensive legal claim.

Under the FMLA, an eligible employee with a serious health condition is entitled to 12 weeks of leave. Employees who are ineligible (because they haven’t worked for the company for a year or lack 1,250 hours of service), or who have exhausted their 12 weeks, lose their right to job-protected leave under FMLA. Some serious health conditions might also be covered ADA-disabilities (indeed, this will be the case more often than before under recent amendments to the ADA).

If an employee’s condition is a disability and they don’t have the right to FMLA leave, consider these steps:

  • Provide additional leave as a reasonable accommodation without an undue hardship. If the doctor can’t identify any time period by which the employee can return, courts would usually not require additional leave. If the doctor identifies a time frame, consider whether additional leave will be workable from a financial, operational, and logistical perspective.
  • Consider offering an alternative open position or providing an accommodation to the employee’s own position that will permit a return to work Although return to work under FMLA contemplates an employee’s complete fitness for duty for their job if they have an ADA disability, you might want to provide an accommodation (such as elimination or redistribution of marginal functions, modifications to the workspace, scheduling accommodations, and the like). However, you’re not required to create a new job position or bump another employee from their job.
  • If return to work is not possible in the near term, retain the individual on the employee rolls without pay or benefits. The EEOC has ruled that this might be an appropriate accommodation if holding the job for the amount of leave still needed would be an undue hardship. Whether valid or not, the EEOC believes that it’s easier to qualify for future openings as an internal applicant rather than as a former or outside one.
  • Consult with counsel when in doubt. Recent EEOC press releases publicizing money paid by employers in settling EEOC lawsuits show that the agency is interested in pursuing these “follow-on” ADA claims.

Consulting with employees and considering options can help you avoid ADA claims or, at the very least, provide helpful evidence demonstrating your good faith in the event of a lawsuit. Be sure to document your efforts to make an accommodation.

Compliments of Worklaw® Network firm Shawe Rosenthal (www.shawe.com).

DO YOUR COMPANY’S LEAVE AND LIGHT DUTY POLICIES RUN AFOUL OF THE ADA?

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Many employers have had to decide when to terminate an employee on extended leave; some have adopted policies that mandate termination after an employee has been on leave for a certain lengthy period, such as a year.

Another typical policy is that light duty positions will be provided only to employees who are injured on the job. However, employers should be aware that the EEOC deems such policies to be a violation of the Americans with Disabilities Act.

The EEOC is suing Jewel-Osco, a unit of the major grocery chain Supervalu, Inc., for violating the ADA. The agency challenges company policies that refuse to allow qualified employees with disabilities to return to work from authorized disability leave if they have any work restrictions, and that automatically terminate employees after they have been on leave for one year.

The EEOC also challenges the company’s refusal to provide light duty for qualified employees with disabilities other than those injured on the job.

This case, in conjunction with the newly-released proposed ADA regulations, demonstrates the EEOC’s focus on disability issues.

Given this context, employers would be wise to review policies affecting employees with disabilities. Although you can certainly implement such policies as those described above, be careful not to apply them in a blanket fashion, particularly with regard to employees with disabilities.

Instead, carefully consider each case to determine if such policies should be suspended in a particular situation as a reasonable accommodation for the disabled employee.

Compliments of Worklaw® Network firm Shawe Rosenthal (www.shawe.com).

COMMON SENSE AND H1N1

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The HR That Works Hotline has been getting inquiries about managing H1N1, especially from health care providers. The answer to this question should help all employers:

Hi Don, I have a unique situation. I don’t want to implement a policy that requires flu shots for all employees. We have contracts with hospitals that are requiring all employees to have a flu shot and/or wear a mask. I’m looking for advice on writing a policy for those specific employees.

Answer: There are no hard and fast answers on this issue because it’s so new, with lawsuits being filed, legislation enacted, etc. especially in the health care field. For example, here’s a thread on a discussion board for nurses. The NIOSH discusses the issue here. In general, employers can order employees to obtain flu shots or reasonable alternatives if they are medical or health care providers (nursing homes, child care workers, home health care providers, and so forth). There might be exceptions if such procedures are contrary to a person’s religious or cultural beliefs or would present a unique risk to the individual’s health.

The CDC has published excellent information for employers. So has the World Health Organization. However, these two sites don’t see eye to eye – in general, the CDC is more pro-vaccine.

Many states have also issued H1N1 Guidelines. For California, go to H1N1 (Swine Flu) Guidance for Employers and Employees, Cal/OSHA Interim Enforcement Policy on H1N1, Section 5199 (Aerosol Transmissible Diseases), and Appendix A: Respiratory Supply Documentation. For New York, please click here.

Unions and employees have been filing lawsuits to both mandate and prevent flu shots – which means there are risks on both sides of the issue. Not requiring vaccination might also expose you to the risk of losing a contract. Requiring it may result in fighting an employment lawsuit for wrongful termination. Suppose an employee has a negative reaction to the vaccine and gets sick or dies. You can expect a work comp claim, request for ADA or FMLA leave or worse. In fact, even state legislatures aren’t sure what to do about the issue.

So what to do?

  • Educate yourself and your employees about the virus by referring them to the CDC and WHO sites. Take the disease seriously: Experience suggests that it might be even more deadly than originally predicted.
  • Get a comprehensive legal opinion if you’re concerned about how to manage employees who refuse the vaccine (remember in your situation they can still wear a mask as an alternative). There’s no “generic” policy I could suggest. Please contact the Worklaw.com firm in your area so they can help tailor a policy to your specific needs.
  • Refer to the NIOSH site and incorporate the best practices discussed there. Be sure to include provisions for any possible exceptions (religious, health, etc.).
  • Look for the least intrusive alternatives. If workers won’t take a shot or wear a mask for a legitimate reason, perhaps they can be reassigned to accommodate their concerns. Get employees involved in this thought process because it affects them.
  • Work with vendors and regulators to establish reasonable guidelines and commitments.
  • Follow common sense prevention strategies, such as washing hands frequently, or gargling with salt water or Listerine regularly. Stress a “hands-off-the-face” approach: Resist all temptations to touch any part of the face (unless you want to eat or bathe). Don’t come to work sick, etc.
  • Create a plan for managing employees concerned about being infected – for example, recommending that they contact a doctor.

EDITOR’S COLUMN: MANAGING CHANGE

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One of my favorite jokes: How many psychiatrists does it take to change a light bulb? Answer: Only one, but the light bulb has to really want to change!

Leaders constantly face the challenge of managing change in their organizations. After having helped facilitate change in hundreds of companies, I’ve found that there are three types of employees:

  • The Resisters – These folks are dead set against any change. Whether it’s because they’ve hit a comfort zone they don’t want to leave or because they don’t want to be “found out” as not being as valuable as everyone thinks they are, they’ll naturally try to sabotage or resist change. When dealing with these employees, the rule is simple: Either they get on board or they find someplace else to work. I can’t tell you how many times I’ve met employers who will allow one group of employees to go in a new direction and another group to stay put, thus creating an incredible division within the company. Either there will be change or there won’t — and these people are either going to get on the bus or they need to find another place to work.
  • The Sheep – You can hear them now, “Baaaaaah.” These folks will go along with anything. The only problem is that they go along with it with only one foot in. This is because they live in what I call “small worlds.” To motivate these employees, you have to make their world bigger. For example, I worked with one company that focused on the internal aspects of change – never allowing the employees to fully understand the impact of this change on its clients. To paint a bigger picture for the staff, we brought in clients to share their stories, which had triggered the need for the change. Now the change has a purpose that motivates these employees to get both feet in.
  • The Champions – These people have been awaiting change for some time, in fact, they might have even prompted it. The challenge with these folks is to keep them focused, remembering that they still have a job to do even though you’re implementing change. Be inclusive with them, but don’t let them get overwhelmed by spending too much time addressing change protocols.

Those are your three basic personality types, and the best ways to deal with each one of them. If you’ve learned any tricks of the change trade, please e-mail them to me at don@hrthatworks.com.

GENDER MATTERS WHEN IT COMES TO LIFE INSURANCE PREMIUMS

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Everybody knows it’s a man’s world, right? That might be true in a lot of areas, but not if you’re talking about Life insurance premiums. Women are the rulers in this arena because insurance companies charge them lower rates than men of the same age.

So why do insurers consider men a bigger risk? The answer to that question lies in a key element of their genetic makeup: Testosterone. A surge of this hormone during the adolescent years is linked with a rise in violent and risky behaviors. Testosterone has also been linked with higher blood pressure, which increases the risk of heart disease, and a weakening of the immune system’s ability to fight off infection.

The other adverse effect of this adolescent testosterone boost is a lowering of the male’s levels of the female hormone oxytocin. A UCLA study titled On Friendship Among Women: An alternative to fight or flight, published in 2002, found that women are generally better at handling stress because high levels of oxytocin give them a natural advantage.

Scientists always thought that fear and anxiety triggered the adrenaline hormone as part of the fight-or-flight response. It was believed to be an ancient survival mechanism left over from the caveman days when survival meant knowing which of the two actions was the more appropriate response.

However, the researchers at UCLA discovered that women have a larger behavioral repertoire than just fight-or-flight. In fact, when the hormone oxytocin is released as part of the stress responses in a woman, it decreases the urge to choose between fight-or-flight and encourages the female to choose a third alternative, finding other women with whom she can share her anxiety. This action counters the stress and produces a calming effect.

This calming response does not occur in men, because testosterone, which men produce in high levels when they’re under stress, only presents them with the two alternatives of fight-or-flight. Their low level of oxytocin eliminates the third alternative of finding other men with whom to commiserate. In addition to biology, there’s also a sociological component in the explanation for men’s shorter life spans. Society has traditionally put pressure on young men to compete, causing them to take part in many risky behaviors to gain dominance.

Death in older men generally can be linked to diseases that resulted from the behaviors begun in youth, from smoking to heavy drinking to overeating. That’s why men usually have a higher rate of dying from cancer, diabetes mellitus, heart disease, strokes, and pulmonary disease.

In spite of both the biological and sociological factors, men aren’t necessarily destined to remain high insurance risks. Assessing risky behaviors early on, and taking action to correct them, will extend a man’s life expectancy. The healthier a man is, the easier it will be to find good Life insurance coverage at an affordable price.

TERM LIFE INSURANCE RATES DROP DUE TO LONGER LIFE EXPECTANCIES

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With the price of just about everything from gas to milk heading into the stratosphere, here’s a piece of good news for consumers: According to the Insurance Information Institute, the average cost of Term Life insurance has dropped. A big reason for the decline in premium rates is that life expectancies have increased because of improvements in health care.

Why does how long you live affect how much you pay for insurance? The answer to that question lies in the way insurance companies fund the death benefit they ultimately pay.

Insurers charge premiums, which they invest to create the money they need to pay benefits. The longer you live, the more time the money has to earn interest. This means insurers don’t need to charge as much to pay the same benefit. However, insurers can’t predict life expectancy for each individual policy owner. Instead, they use what is known as “the law of large numbers,” which accurately predicts how many deaths will occur within a group of policy owners. This mathematical principle says that the larger the group, the more predictable the future losses in the group will be for a given period of time.

Insurance companies employ mathematicians, called actuaries, who study this statistical data. The data is the basis for mortality tables, which show, for a person at each age, the probability that they will die before their next birthday. Mortality tables also show:

  • The probability of surviving at any age
  • The number of years people at different ages can still be expected to live
  • The percentage of people in a particular age group who are still alive
  • An age group’s longevity characteristics

Separate mortality tables are used for men and women because of their substantially different life expectancies. Other characteristics also can influence life expectancy, such as a person’s smoker status, occupation and socio-economic class.

The mortality tables insurers had been using were last updated in 1980 when the maximum life expectancy was set at 100 years. However, in 2001, the Society of Actuaries and the American Academy of Actuaries updated the mortality tables and changed life expectancy to 120 years.

How much insurance rates will continue to drop as a result of these changes is anyone’s guess. As mentioned above, Term Life insurance, which provides coverage for a specific period of time but doesn’t build any cash value, has been the most significantly impacted by these new mortality tables. Although Term Life might not have an investment feature, the death benefit it provides can be used to secure the financial future of the policy owner’s loved ones.

On the other hand, there are some industry experts who think that Whole-Life insurance will experience a substantial drop in rates. Unlike Term insurance, Whole Life provides a death benefit while building up cash value through the life of the policy.

A periodic review of your insurance coverage with one of our representatives is always a good idea. With changes in Life insurance premiums, pay particular attention to this at your next coverage review.