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Monthly Archives

February 2013

AGILE WORKING: HOW ONE COMPANY DOES IT

By Your Employee Matters | No Comments

Technology keeps reducing the need for employees to come into the workplace. An interesting article in Human Resource Executive magazine spotlights Unilever’s program for co-mingling home and work activities. Unilever has taken a number of steps that you might consider as part of your telecommuting program:

  1. Create “plug and play workstations” so that telecommuters can come in and work on a project with their team or find some quiet time to themselves. These work areas have a clean desk policy — employees are expected to clean them up when they leave.
  2. Understand the difficulty of monitoring time and attendance. Although this is not an issue with exempt employees, non-exempt employees can find themselves working all hours of the day. We did a Results Only Work Environment (ROWE) webinar which focused on results produced, rather than hours worked. However, this approach can create wage and hour headaches.
  3. Consider security issues. Remember that the telecommuter’s home office has become an extension of your company. You’ll need to make sure that data is secure, workplace safety and company ergonomic standards are in place, and that you have the proper insurance coverages.
  4. Provide employees with access to an environment that’s conducive to work.

The Unilever story has been a success, with about 95% support from workers. As one employee stated, “We work at home and the real reason we come to work is collaboration.”

For more information, HR That Works members should take a look at our Telecommuting report, checklist, and policy.

THE NATIONWIDE ABUSE OF UNEMPLOYMENT BENEFITS

By Your Employee Matters | No Comments

Fraudulent payment of unemployment insurance benefits is a nationwide problem, accounting for as much as 14% of total payments in some states. The chart shows that most states are paying anywhere from 8%-12% extra in claims. When you consider that the payment period for many claims has been extended during the Obama Administration, that’s a lot of wasted dollars!

Most employers give up on fighting unemployment claims because they find it very difficult to win them. Lawyers are too expensive to hire, and employers have too little expertise — that’s why unemployment benefits consultants have set up a niche practice of defending employers.

In general, unemployment insurance is available to employees who lose their jobs “through no fault of their own,” as determined by state law. Although federal law sets some guidelines, each state administers its own unemployment insurance program. All but three states fund their programs from a tax imposed solely on employers. Employees generally receive payments for maximum of 26 weeks in most states, unless the period is extended in times of high unemployment. Employees are required to look for other work and prohibited from receiving benefits once they obtain it (this is where much of the fraud comes in).

In most states, an employee fired for misconduct can be denied unemployment benefits. The question is, how do you define “misconduct”? Essentially, it has to be a willful act, such as insubordination, excessive absenteeism, insubordination, dishonesty, or drug or alcohol use that damages the company in some way. However, fired employees who simply don’t do their job properly or in a timely fashion will be eligible for unemployment benefits.

For example, the California Unemployment Code § 1256 states:

“An individual is disqualified from unemployment compensation benefits if … he or she has been discharged for misconduct connected with his or her most recent work.” Misconduct is limited to conduct evidencing such willful or wanton disregard of an employer’s interests as is found in deliberate violations or disregard of standards of behavior, which the employer has the right to expect of his employee, or in carelessness or negligence of such degree or recurrence as to manifest equal culpability wrongful intention or evil design, or to show an intentional and substantial disregard of the employer’s interest or the employee’s duties and obligations to his employer. On the other hand, mere inefficiency or unsatisfactory conduct, failure in good performance as the result of inability or incapacity, inadvertencies or ordinary negligence in isolated instances, or good faith errors in judgment or discretion are not deemed “misconduct” within the meaning of the statute.”

If you intend to contest an unemployment claim, make sure that you have documentary support (such as a statement under oath signed by the claimant’s manager or fellow employees, a photo, or a warning notice). Of course, fighting a claim will up the ante with the employee, who might respond by contacting an attorney and filing additional claims. Always something to consider!

Finally, many companies suffer from high unemployment claims because they have unnecessarily high turnover rates. If this is the case, ask what you can do to prevent unwanted turnover. You should also question why you hired the terminated employees in the first place.

FEDERAL COURT TO STARBUCKS: ‘THE LAW SAYS WHAT IT MEANS AND MEANS WHAT IT SAYS’

By Your Employee Matters | No Comments

Here’s a second case about an employer who skirted the law. One of the major questions involving tips is the degree to which management gets a piece of the action. A recent federal District Court decision in Massachusetts (Hernan Matamoras v. Starbucks) has followed the trend of the US Department of Labor and many other states by prohibiting an employer from pooling tips with management-level employees. The giant coffee shop chain ended up having to pay to its baristas a bonus because it had allowed shift supervisors, who acted as baristas roughly 90% of the time, to share in the tip pooling. The court stated, “Stripped of rhetorical flourishes, Starbucks’ position invites us to repudiate both the precise language and the clear intent of the 2004 amendments and to resurrect the primary duty test. We decline the invitation.” Even if the supervisors spent only 10% of their time managing, the fact that they were managers barred them completely from sharing any tips.

For more information on tipping, see the FLSA memo and position paper, as well as guidelines from the California Department of Industrial Relations

http://www.dol.gov/whd/regs/compliance/whdfs15.pdf

http://www.dol.gov/whd/FieldBulletins/fab2012_2.htm#.ULqQyYbNnsk 

http://www.dir.ca.gov/dlse/FAQ_tipsandgratuities.htm

Please refer to the BNA state law summary for your state on HR in the compensation area of HR That Works.

SIDE JOB DOESN’T PREVENT FMLA CLAIM

By Your Employee Matters | No Comments

In the California case, Richie v. AutoNation, an employee out on CFRA (FMLA) was fired by his employer when he was found to have been working at a restaurant he owned during his leave period. The company’s leave policy prohibited outside employment during leave. The court ruled in favor of the plaintiff, stating that FMLA/CFRA (the California equivalent) has a process to follow in shortening FMLA leave if you believe that an employee no longer qualifies for it. You cannot create your own rule or process and, in a sense, do an end run around FMLA protections. The court ruled that because job reinstatement is mandatory, the only way to stop leave properly is by following the CFRA process and questioning the medical opinion of the employee’s doctor.

This decision reminds us that ignorance of legal requirements is no excuse. In this case, the company argued that it had a good faith defense because it was not aware of this limitation on managing leave. The court essentially said “So what? It’s a mandatory statutory obligation, which you can’t avoid.” As a different court stated, “A showing that an employee is unable to work in the employee’s current job due to a serious health condition is enough to demonstrate incapacity. The fact that an employee is working for a second employer does not mean that he or she is not incapacitated from working in his or her current job.”

Some additional notes:

  1. The decision reminds us that an employer’s policy on secondary employment during FMLA leave must be the same as that for employees who are not on FMLA leave. Otherwise, the policy itself violates the law.
  2. Second, the court overturned an arbitration decision in this case which allowed the court’s good faith defense. Although review of arbitration is very limited, the court will step in if the arbitrator misapplied the law.
  3. Finally, whether it’s FMLA leave, ADA accommodation leave, use of PTO or sick pay, etc., if you doubt the veracity of any employee’s story (i.e. they were playing soccer or lifting pianos this weekend), you must follow the proper procedures so that you don’t find yourself trapped like AutoNation did in this case.

BIG SURPRISE: EFFECTIVE HR PRACTICES DRIVE PROFITS

By Your Employee Matters | No Comments

The report From Capability to Profitability: Realizing the Value of People Management by the Boston Consulting Group and World Federation of People Management Association found that the highest correlations between economic performance and HR practices were related to:

  • Employee retention
  • Employer branding
  • Leadership development
  • Onboarding
  • Performance management
  • Recruiting

For the life of me, I’m not sure why these companies spent so much money to convince themselves of the blindingly obvious: If you want to grow your business, hire trustworthy employees, get them to perform, and keep them on the bus when they do! HR That Works members are fortunate to have a great number of tools that help support these profit drivers.

WE CAN ALL USE A LITTLE HOPE

By Your Employee Matters | No Comments

Norman Vincent Peale often talked about the important role hope plays as part of his “positive thinking” process. Peale taught us that it’s far easier to be hopeful when you embody these characteristics:

  • Determination
  • Expectation
  • Renewal
  • Belief
  • Enthusiasm
  • Persistence
  • Vision
  • Faith

How would you apply each of those ideas to the hope you have for your career or company? Simply allowing yourself to consider each one of them provides confidence and hope by its very nature!

EDITOR’S COLUMN: TWELVE QUESTIONS FOR GROWING COMPANIES — AND HR CAREERS

By Your Employee Matters | No Comments

Good to Great author Jim Collins identifies 12 questions leaders must grapple with if they want to excel. These questions apply to anyone in HR management, as well. Here’s my spin on them:

  1. Do you want to build a great company (or HR function) and are you willing to do what it takes?
  2. Do you have the right people on the bus and in the key seats? HR must be 100% responsible for making sure that this happens.
  3. What are the brutal facts? Where is HR supporting you and where is HR hurting you? For example, has HR allowed you to keep poor players on the bus?
  4. What’s your “hedgehog’? The hedgehog is something that you can do best, make a buck, and be passionate about! How does HR support this?
  5. What’s the one thing you do that you’re great at? Are you known for hiring the best employees in your industry? For getting them to perform beyond their peers? For having the highest retention rates? For fostering creativity? Where does HR help you to do things better than your competition?
  6. What’s your 20-mile mark and are you hitting it? The point is to be goals oriented. Unfortunately, too many people in HR don’t have a plan — and thus, don’t have goals.
  7. Where should you place your big bets based on empirical validation? As Jim Collins and any good marketer would tell you, test, test, test — and when you find out what works, blow it up big time. To what degree do you test one way of hiring, hiring tool, or managing performance, etc. to find out what works best?
  8. What is your 15 to 20 year Big, Hairy, Audacious Goal? Of course, this means that you might not be there when the goal is met. The real question is, what type of legacy do you plan on leaving?
  9. What could kill you, and how can you protect your flanks? For example, could a new, well-funded competitor swipe away your top talent? What is HR doing to prevent this? As stated in recent blog posts, swiping confidential, trade secret, and other proprietary information can harm a company overnight.
  10. What should you stop doing to increase your discipline and focus? This is a theme that I preach in time management. Before you can pretend that you’ll do anything new, you must first stop doing something. Otherwise, the result will be burnout, and non-productivity.
  11. How can you increase your return on luck? By asking question! Where have you been lucky? Where have you made great hires? Where have you had superstar performers? What can you learn about these people that will help hire more like them?
  12. Last, but not least, are you becoming a Level 5 leader building a Level 5 culture? To a large degree, this is about humility. It means playing 40/40, as I discuss in the HRThatWorks Victims, Villains, and Heroes program. Being humble does not mean that you are weak; it’s an inner strength that empowers others to find their inner strength.

I’ve greatly enjoyed reading Jim Collins’ books over the years. To see my five-minute video summarizing his insights, click here. Collins recommends that we tackle each of these 12 questions every month. Likewise, I suggest that you focus on a single proactive objective in HR every month. See the Form of the Month, a 2013 HR Game Plan.

CATASTROPHIC HEALTH INSURANCE

By Life and Health | No Comments

Health insurance costs are rising and the economy is uncertain at best. In this climate, more and more consumers are considering High-Deductible Health Plans (HDHPs), often known as Catastrophic Health insurance.

What are the benefits of HDHPs?

Some of these plans feature lower-than-average premiums (but with higher deductibles for all medical expenses, except qualified preventive care) up to the annual deductible. After that, some HDHPs pay 100% of your covered medical expenses. Others initially pay a share of your medical bills (such as 80%) before providing full payment when you reach an out-of-pocket maximum. Your premiums don’t count toward your deductible or out-of-pocket maximum.

In addition, many of these plans cover a full range of health care services — not just hospital and emergency medical costs.

Before you buy an HDHP, ask yourself these questions:

  • How much can you afford to pay for Health insurance?
  • What coverage do you need?
  • What does the plan cover, and not cover?
  • How much is the deductible, and how much, if any, would you pay in coinsurance up to the out-of-pocket maximum?
  • Does the plan offer a strong, nationwide network of providers?

Our agency’s Health insurance professionals would be happy to help you determine whether an HDHP can benefit you and to find the plan that meets your needs most effectively. Just give us a call.

ONE DRINK COULD LAND YOU IN A HEALTH INSURANCE EMERGENCY

By Life and Health | No Comments

Let’s say you have a beer or one cocktail at a party, trip over the carpet, and wind up in the emergency room with a broken ankle. Now imagine the shock of finding out later that your Health insurer is denying your claim due to the presence of alcohol in your system.

Insurance claim denials for alcohol use are based on the 1947 National Association of Insurance Commissioners (NAIC) model law, which says that insurers should be allowed to deny claims for patients if they are injured while under the influence of alcohol. In 2001, the NAIC changed its recommendation and encouraged states and Health insurance companies to provide coverage for patients regardless of alcohol use. As a result, a number of states repealed or amended their laws. Today, any state can choose to either authorize or prohibit insurance exclusions for alcohol use, from one drink to actual intoxication.

Insurance companies follow their own policies, as well as state regulations, when making a determination about alcohol related claims. Some health carriers explicitly exclude paying claims that involve any use of alcohol. Many other insurance companies, however, will provide coverage regardless of alcohol consumption by the claimant.

To find out how your claim will be treated if you have a medical emergency after drinking, feel free to get in touch with us.

FOUR WAYS TO MAKE YOUR LIFE INSURANCE PAY

By Life and Health | No Comments

Most people buy Life insurance to provide an income source for their survivors. However you can also use a Life policy to save a host of other financial headaches. Consider these four examples:

  1. Funding a bequest. A couple has a beach house that constitutes half of their wealth. Their two sons don’t care about the place, but their daughter has made vacations there a centerpiece of her family’s life. Because the parents can’t give the house to their daughter and have an equivalent amount for their other kids, they buy Life coverage for the value of the beach house. When the surviving spouse dies, the children will have the house, the other half of the estate — and, the Life insurance benefit.
  2. Maximizing retirement income. Many people who expected to leave their children an inheritance before the 2008 downturn are using this resource to live on. Life insurance can cover a financial shortfall in retirement income. A couple who take out a reverse mortgage can use part of the monthly payment for a Life policy, which will preserve the value of the home for their heirs, while still keeping a roof over their heads. Knowing that your spouse will get an insurance payment on your death will free you up to maximize your benefit — however, the earlier you act, the better.
  3. Paying college costs. An older couple who want to contribute to their grandchildren’s college costs can take advantage of the annual tax-free gift of $13,500 to each child. If they are worried that they won’t live to complete their program, they can insure themselves for the total amount, and find peace, knowing that their wishes will be carried out whether they write the last check themselves or leave it to their children.
  4. Wealth replacement. The well-to-do can buy a Life policy that will cover the estate taxes on their holdings, so that their heirs will not need to sell investments while they’re grieving — or when prices are low — in order to satisfy the IRS. More complex strategies include combining Life insurance with an instrument such as a charitable remainder trust, which allows investors to donate an asset to charity while drawing the income that the asset provides.

For more information on getting the most out of your Life insurance coverage, feel free to get in touch with us.