Hot Topics in Total Rewards

  • 04 Apr 2017 11:25 AM | Bill Brewer (Administrator)

    Pulling the Plug on Lifetime Benefits

    After a court ruled that Honeywell wrongly denied lifetime healthcare benefits to some retirees, experts say employers should think twice before attempting to end similar programs.

    By Maura C. Ciccarelli

    Thursday, March 30, 2017

    Last month, a federal judge ruled that approximately 500 Honeywell International retirees from a Greenville, Ohio, plant were entitled to lifetime healthcare benefits, rejecting an attempt by the company to discontinue the coverage.

    In the Fletcher v. Honeywell International decision, Judge Walter H. Rice of the U.S. District Court for the Southern District of Ohio wrote, "It is inconceivable that nearly half the union employees at the Greenville plant would agree to voluntarily retire based solely on a promise that they would continue to receive health care benefits until May 22, 2014, when the expired."

    The plaintiffs successfully argued that Honeywell had been paying retirees healthcare benefits based on prior CBAs since the early 2000s, a factor that lent credence to the lifetime benefit interpretation. It was only after the Supreme Court's 2015 decision in the M&G Polymers USA v. Tackett case that Honeywell reassessed its obligation to continue lifetime healthcare benefits, Rice wrote.

    In a written statement to Human Resource Executive magazine, a Honeywell spokesman said, "Honeywell disagrees with the court's decision and will be filing an appeal with the Sixth Circuit."

    In the Tackett case, the Supreme Court seemed to open the door to eliminating lifetime healthcare benefits by ruling that CBA language should be held to the same standards of interpretation as ordinary contract principles. This rejected longstanding CBA-language interpretation established by a 1983 Sixth Circuit ruling in International Union v. Yard-Man, Inc. The resulting "Yard-Man inferences" said that CBAs intend to vest retirees with a lifetime healthcare benefit, when there is no specific contract provision or other evidence to the contrary. rub in the 2015 Tackett ruling was noted in the concurring agreement written by Justice Ruth Bader Ginsburg: when faced with ambiguous CBA language, the courts should also consider all external evidence, including documents and testimony about what the parties intended, rather than just the contract language itself.

    "I think it was a correct ruling and stands for the proposition that Tackett does not mean that employers don't have to honor contract language in CBAs," says Bill Wertheimer, a private practice attorney based in Bingham Farms, Michigan, who represented some of the plaintiffs who were covered under United Auto Workers contracts with Honeywell dating back to 2003. The judge also found the language to be "ambiguous," Wertheimer says, because the lifetime benefit was promised to surviving spouses and children but didn't address retirees.

    "With Honeywell, we have a poorly drafted agreement, which led to a finding of lifetime vested benefit for retirees," says Amanda Wingfield Goldman, of counsel in the labor and employment and litigation sections of Coats Rose in New Orleans. "I wouldn't advise employers to be alarmed, but I would advise them to look at their CBA and talk with their labor lawyers before they freak out."

    Goldman says Tackett "won't always be a win for employers. The courts will no longer be able to infer an intent [based on Yard-Man] but they can still use the CBA language and relevant external evidence to find such benefits."

    "It's a reminder that courts are going to be looking at what the parties intended and that the [Tackett] Supreme Court decision is not a ticket to strategically discontinuing healthcare coverage to retirees," says Ruairi McDonnell, an attorney with Feinstein Doyle Payne & Kravec, based in Pittsburgh, whose firm represents retiree plaintiffs.

    In addition to the Greenville case, retirees from two other Honeywell plants -- one in Boyne City, Mich., and the other in Stratford, Conn. -- won their challenges to the plan to discontinue their healthcare benefits but retirees from a Fostoria, Ohio, did not win their case.

    Stewart Schwab, the Jonathan and Ruby Zhu Professor of Law at Cornell Law School, in Ithaca, N.Y., noted that when companies and unions find it difficult to reach a consensus on benefits for retirees, "sometimes the parties almost intentionally don't resolve it in an airtight way, which makes it especially difficult to figure out what the parties originally intended. Often they almost can't reach agreement on this particular issue and just leave it to be resolved by . . . the courts."

    Privacy Policy

    David Rosenfeld, lecturer at the University of California-Berkeley, and a partner at Weinberg, Roger & Rosenfeld in Alameda, Calif., says employers without CBAs should be aware that they may be vulnerable to lifetime benefit challenges based on language in their summary plan descriptions.

    If companies are considering eliminating lifetime benefit guarantees in future negotiations or employee benefit plans, there are other HR-related implications to consider beside costs, especially in light of recent changes proposed to Medicare and the former Affordable Care Act programs, says Terese Connolly, partner and employment specialist for Culhane Meadow based in the firm's Chicago office.

    "We all know it's not just about what the law says but also about how you manage your employee morale," she says.

    HR plays a role in talking to company leaders not just about cost impacts of retaining or eliminating lifetime healthcare benefits, but also in reminding leaders about the human side of the issue. Connelly recommends carefully designing CBA and benefit plan summary language to promote flexibility and affordability for both sides. That way, companies can change the programs if needed "in a way that doesn't completely destroy employee morale," she says.

    Finally, Connelly warns that companies need to watch what they do about retiree benefits and how they do it because millennial generation employees are watching.

    "As we know, millennials are more likely to jump ship if you start doing things that don't sound right to them," she adds. Developing a balanced employee retiree program is "really about trying to attract people who are going to stay with you for the long haul."

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    Source: Human Resource Executive® 

  • 31 Mar 2017 2:33 PM | Bill Brewer (Administrator)

    The New U.S. Pay Equity Laws: Answering the Biggest Questions Created by Seyfarth’s Pay Equity Group

    Download their PDF brochure at:


  • 30 Mar 2017 3:54 PM | Bill Brewer (Administrator)

    The U.S. Supreme Court settled the issue of same-sex marriages several years ago. The marriages are legal throughout the country and all spouses, regardless of gender, are treated the same under federal and state laws affecting benefit plans. Less clear, however, is the issue of domestic partners, civil unions, and other unmarried relationships. Employers often have questions about whether they are required to extend health coverage to unmarried partners and how to administer their plans if coverage is extended.

    Following are the top seven questions we receive from employers about domestic partner health coverage.

    1. What are domestic partnerships and civil unions?

    A domestic partnership or civil union generally refers to two adults, unrelated by blood and neither of whom is married, who are in a committed relationship and assume responsibility for each other’s financial and emotional needs. Although not recognized under federal law, some states have established definitions for “registered domestic partnerships,” “domestic partnerships,” and “civil unions” to extend specific rights and responsibilities under various state laws. There also are several municipalities and local jurisdictions that extend rights to unmarried couples that meet the criteria developed by the jurisdiction. Further, many employers have voluntarily adopted broad definitions of domestic partners to extend eligibility under their group health plans.

    2. Must employers that offer group health coverage to spouses also cover domestic partners?

    Employers may choose to extend eligibility to domestic partners, but it is not required unless mandated by a state’s insurance law. Most states have no requirements while others, such as New Jersey, merely require group health carriers to offer the employer the option of including domestic partners as dependents. California, on the other hand, has the strictest requirement: any group policy that covers spouses must extend eligibility to “registered domestic partners (RDPs).” The California Family Code defines RDPs and the California Secretary of State provides a registration system.

    Employers that purchase group health insurance receive specific information from the carrier about any applicable state insurance laws. Self-funded (uninsured) plans are not affected since they are exempt from state insurance mandates.

    Note: Public-sector employers, such as cities, counties, and public schools and universities, and private-sector employers that contract with public agencies, may be subject to additional requirements under local laws. Specific information typically is provided to the parties by the government agency.

    3. Is special tax reporting required for domestic partner health coverage?

    Yes, in most cases. Although group health coverage provided to the employee, spouse, and children under age 27 (and some older children) is tax-free, the value of any employer-paid coverage for a domestic partner is taxable. The employer must report the fair market value of the coverage, minus any after-tax contributions paid by the employee, as imputed income on the employee’s Form W-2 for federal and state/local tax purposes. There are two exceptions:

    • Federal: Coverage is tax-free if the domestic partner meets the following conditions under § 152 of the Internal Revenue Code:
      • Shares the same principal residence as the employee;
      • Receives more than half of his or her support from the employee;
      • Is a citizen, national, or legal resident of the United States, or resident of Canada or Mexico; and
      • Is not a qualifying child of a taxpayer.
    • State/Local: The majority of state and local tax laws conform to federal law, so taxes do not apply if the domestic partner is the employee’s tax dependent under § 152. (Non-conforming states, however, may impose state and/or local taxes.) Alternatively, several states specifically exempt certain categories of domestic partners from state or local taxes, even though federal taxes apply. For instance, California does not tax the value of employer-paid coverage for registered domestic partners (RDPs) as defined by state law.

    Employers that offer health coverage to domestic partners should refer to their payroll vendor for specific information about the state and local tax withholding and reporting rules in the locations where their employees live and work. 

    4. Can employees pay for domestic partner health coverage on a pretax basis?

    Cafeteria plans allow employees to make pretax contributions for group health coverage, but only for employees and their tax dependents (i.e., spouse, children, and § 152 dependents). Most domestic partners do not meet the financial dependency criteria to qualify under § 152, so contributions for their coverage would have to be made on an after-tax basis. IRS regulations permit an accommodation, however, for the employer’s convenience in administering payroll. That is, the cafeteria plan may allow pretax contributions for the domestic partner’s health coverage, provided that the full market value of the coverage is reported as the employee’s imputed income. For instance, assume the market value of the partner’s coverage is $200, the employee contributes $50 on a pretax basis, and the employer contributes the remaining $150. In that case, the employee’s taxable income is reduced by $50, but $200 of imputed income is reported on the employee’s W-2. 

    5. Can employees make midyear enrollment changes to add or drop their domestic partner?

    Special enrollment rules under the Health Insurance Portability and Accountability Act (HIPAA) allow employees to add coverage midyear for a new spouse, but not for a domestic partner (since no marriage has occurred). On the other hand, the HIPAA rule for a midyear enrollment in the event a dependent losing his or her coverage under another plan does apply to domestic partners (if eligible for the employer’s plan).

    Cafeteria plans may allow midyear changes in accordance with IRS regulations for permitted election changes. Although not required, employers that extend health plan eligibility to domestic partners also often provide for midyear enrollment changes under their cafeteria plans.

    Beware of discrepancies between the group health insurance policy and the cafeteria plan document. Carriers are required to include the mandatory HIPAA special enrollment rules in group policies, but they often omit the optional cafeteria plan provisions. Always check all documents and policies before allowing an employee to make a midyear change. Self-funded employers should ensure that any stop-loss insurance protection applies with respect to all persons who are eligible under the group plan.

    6. Are domestic partners eligible for other health-related benefits, such as FSAs, HRAs, or HSAs?

    In most cases, no. Reimbursements from health flexible spending accounts (FSAs), health reimbursement arrangements (HRAs), and health savings accounts (HSAs) are limited to eligible health care expenses for the employee and his or her tax dependents. Domestic partners are not tax dependents, unless the domestic partner qualifies under § 152, which usually is not the case.

    7. Are domestic partners eligible for COBRA?

    Federal law defines COBRA-qualified beneficiaries as the employee (or former employee), spouse, and children if covered under the group health plan at the time of the qualifying event. A domestic partner, therefore, is not a COBRA-qualified beneficiary in his or her own right. The employee, however, may elect COBRA for his or her domestic partner, if the group health plan extends eligibility to domestic partners, since COBRA beneficiaries have the same enrollment options as active employees.

    Separately, many states have enacted coverage continuation provisions under their state insurance laws. These often are referred to as “mini-COBRA” laws. Certain states that provide protections for domestic partnerships or civil unions may also extend their mini-COBRA provisions. California is one example; Cal-COBRA (the state’s mini-COBRA law) extends to registered domestic partners (RDPs) as defined by state law. Mini-COBRA provisions, if any, will be described in the carrier’s group policy.

    In summary, employers that choose to extend group health plan eligibility to domestic partners, or who purchase group policies that include state-mandated domestic partner provisions, are encouraged to work with carriers, benefit advisors, and payroll vendors to develop and administer appropriate procedures. All plan materials should contain consistent definitions of eligibility, communications should encourage employees to consult their tax advisors regarding federal and state tax laws, and payroll vendors should ensure accurate W-2 reporting.

    ***** ***** ***** **** **** 

    Source: National Human Resources Association (NHRA)

  • 30 Mar 2017 3:51 PM | Bill Brewer (Administrator)

    The U.S. Department of Homeland Security, U.S. Citizenship and Immigration Services (USCIS) implemented a new Form I-9, Employment Eligibility Verification, which employers are now required to use. The new form, dated November 14, 2016, was effective as of January 22, 2017 and will remain in effect until August 31, 2019.

    The revised Form I-9 is easier to complete on a computer. Enhancements include drop-down lists and calendars for filling in dates, on-screen instructions for each field, easy access to the full instructions, and an option to clear the form and start over. When the employer prints the completed form, a quick response (QR) code is automatically generated, which can be read by most QR readers. In addition, the new form:

    • Asks for “other last names used” rather than “other names used.”
    • Includes prompts to ensure information is entered correctly.
    • Includes a dedicated area for including additional information.
    • Allows users to enter information about multiple preparers and translators and includes a supplemental page for the preparer/translator.

    Below are some frequently asked questions about the Form I-9. 

    Frequently Asked Questions

    What is the Form I-9?

    Since November 7, 1986, U.S. employers have been required to verify the identity and work eligibility of every new hire, citizen and non-citizen. Form I-9 helps employers do this. The form is updated periodically and employers must ensure they provide new employees the complete and most up-to-date forms. 

    Who must complete Form I-9?

    Both employers and employees are responsible for completing their respective portions of Form I-9. New employees must complete the form with accurate information and provide supporting documentation to the employer establishing their identity and their ability to work in the United States. Employers must ensure the form is properly completed, corrected (as necessary), and supporting documentation is provided. However, pursuant to § 7 of the Privacy Act (8 U.S.C.A. § 552a), providing a Social Security number on the Form I-9 is voluntary for all employees unless the employer participates in the E-Verify Program, which requires an employee’s Social Security number for employment eligibility verification. Both parties must sign the completed form either by hand or electronically. 
    When must the Form I-9 be completed?

    Employees must complete Form I-9 any time between the time they accept an offer of employment and the end of the work day on their first day of work. An employer must complete its portion of the form no later than the close of business on the employee’s third day of work. If an employee is hired for less than three business days, then Sections 1 and 2 of the form must be fully completed at the time of the hire, when the employee begins work.

    What type of supporting documentation is required?

    Form I-9 provides very specific supporting documentation that may be used to establish identity and ability to work. Some documents alone satisfy both the identity and ability to work criteria. These are documents found in List A of the form. Documents in List B only establish an employee’s identity, while documents in List C only establish an employee’s eligibility for employment. Therefore, an employee must provide one document from each list (B and C) if he or she does not provide a document from List A. 
    Employers cannot specify which documents must be provided, except that employers who participate in the USCIS E-Verify program may only accept List B documents that have a photograph. 

    Employers must accept any unexpired document(s) (from the List of Acceptable Documents) presented by the individual, which reasonably appear on their face to be genuine and to relate to the person presenting them. Employers are not required to make copies of the documents; however, employers may attach photocopies of documentation to the employee’s Form I-9. Employers who make and attach photocopies must do so consistently for every employee without regard to citizenship or national origin.
    Employers must also comply with specified document retention requirements for completed Form I-9 and detailed reverification procedures for current employees.

    What if an employee fails to provide documentation?

    Employers should terminate an employee who fails to produce the required documents for employment within three business days of the date employment begins.

    An employee may present a receipt for a replacement document (in the case of lost, stolen, or destroyed documents) as a temporary solution. However, if an employee has presented a receipt for a replacement document, the employee must produce the actual document within 90 days of the start of employment. Employers must apply these practices uniformly to all employees.

    Are there penalties for failure to comply?

    Failure to comply with employment eligibility verification requirements can result in both civil and criminal penalties for an employer. For example:
    • Employers who fail to properly complete, retain and/or make Form I-9’s available for inspection may incur civil penalties between $216 and $2,156 for each employee for which the form was incorrect.
    • Employers who knowingly hire unauthorized aliens or continue to employ aliens who become unauthorized to work may be ordered to cease and desist and pay a penalty between $539 and $21,562 for each unauthorized alien, depending on the number of prior offenses.
    • Employers engaging in a pattern or practice of knowingly employing unauthorized workers may face criminal penalties of up to $3,000 in fines and imprisonment of up to six months.
    Civil and/or criminal penalties may also be imposed on employees in certain circumstances.

    While this article highlights key areas of compliance, there other necessary requirements employers must follow for verifying and employee’s identity and eligibility for employment to remain compliant. Failure to comply can result in significant penalties. Employers are encouraged to ensure they are using the most up-to-date 
    Form I-9 for all new hires and to review the form instructions and the U.S. Citizenship and Immigration Services Handbook for Employers. Employers should consistently review and audit their processes and work with counsel or other trusted advisors to ensure compliance.

    ***** ***** ***** ***** ***** 

    Source: National Human Resources Association (NHRA):

  • 27 Mar 2017 10:44 AM | Bill Brewer (Administrator)

    At the law firm of Fisher & Phillips in Irvine, Calif., Chris Boman enjoys a perk that sounds pretty awesome: He can take as many vacation days as he wants.

    So how much vacation did this labor attorney take in 2016?

    He estimates about two weeks.

    That doesn't sound like more time off than many employees get at companies that offer limited vacation. The difference? Should Boman ever leave his firm, he won't be compensated for any unused vacation days—because his firm's unlimited vacation policy means that it no longer accounts for vacation days on its financial books.

    While the concept of unlimited vacation sounds pretty generous, in practice, some argue that it benefits a company's bottom line more than it benefits the company's employees.

    "The upside of not having to pay out vested vacation days is undeniable," said Paula Brantner, senior advisor for Workplace Fairness, a nonprofit that provides legal information for workers and promotes pro-worker public policy. "I think some companies are genuine in that they want to foster a different kind of culture and some [employees] do take more vacation time than the norm, but it's hard to build that into the corporate culture."

    Unlimited Time Off Remains Rare

    Unlimited vacation first became popular at startups in Silicon Valley and then began to seep into other industries—typically those where employees work independently and can set their own hours. Companies that have embraced unlimited vacation include Netflix, Virgin America, The Motley Fool, Achievers, Jellyvision and General Electric, which offers the benefit to senior employees.

    Still, unlimited vacation policies remain rare in corporate America; just 1 percent to 2 percent of companies offer the benefit, according to the Society for Human Resource Management's (SHRM's) 2016 Employee Benefits report. Evren Esen, SHRM-SCP, SHRM's director of survey programs, said that statistic hasn't changed appreciably during the past five years.

    Leaders at companies that have adopted unlimited vacation laud the perk. They say there's no more pressure on workers to plan and save days. Meanwhile, they say, employers are freed from the administrative hassle of tracking time off and the financial burden of paying out unused vacation time.

    But not all employees view unlimited vacation as a perk. Tronc., which owns the Los Angeles Times, announced in November 2014 plans for a "discretionary time off" policy—in which employees would no longer have set vacation, holiday or sick days, but instead would consult with managers to determine their time off. Employees were suspicious and told media blogger Jim Romenesko that the policy "removed the monetary value of the vacation days that long-term staffers have accrued. Traditionally, staffers cashed those days out when they left the company." The company ended up rescinding the plan.

    So is a company's main motivation for introducing unlimited vacation to attract, keep and motivate talented workers? Or is it a way for companies to wash their books of unused vacation time that would have to be paid out when employees leave?

    "I think it's a little bit of both," said Michael Wahlander, an attorney in Seyfarth Shaw's San Francisco office.

    Unused and accrued vacation can be a liability on a company's balance sheet, he noted. And that liability can run into millions of dollars a year for some organizations. Research from the U.S. Travel Association's Project: Time Off initiative, conducted by the economic analysis firm Oxford Economics, looked at Securities and Exchange Commission filings for 114 public companies. It found that the average vacation liability per employee is $1,898, and that U.S. companies carried $65.6 billion in accrued paid-time-off costs forward on their books in 2014.

    Boman said he knows that "some employers are concerned about people not taking vacation and creating this giant liability of accrued vacation when they leave."

    But unlimited vacation, he said, is also about flexibility that can boost morale. He noted that he can take a spur-of-the-moment, four-day weekend, as long as his obligations are met.

    "Last week, I was skiing with my daughter; we skied for four days and I disconnected," he said.

    Said Brantner: "If it works like it's supposed to, then it can be a positive perk. If it's just a way to deprive employees of vacation and manipulate their behavior, then the workers are going to feel misled."

    Potential for Guilt and Resentment

    How employees view such a policy, she said, depends in large part on how senior leaders and HR enforce it, whether they take unlimited vacation themselves, and whether there's unspoken resentment for those who take advantage of unlimited time off.

    Wahlander notes that at many companies with unlimited vacation, managers encourage workers to take off "if their work is done."

    "But [work] is never really 'done' at these kinds of places," he said, noting that this can leave workers feeling guilty about taking days off.

    Some suspect the open-ended nature of unlimited vacation actually leads people to take less vacation, and to burn out faster. It was for that reason that Kickstarter, a crowdfunding startup based in New York City, decided to return to a traditional vacation policy after trying out unlimited vacation.

    A Kickstarter spokesperson told BuzzFeed in September 2015 that the company decided to cap vacation at 25 days a year. Kickstarter's HR team felt that with a cap, employees would have a better idea of how much leisure time they should take each year.

    Sahara Pynes, an attorney in Fox Rothschild's Century City, Calif., office, has clients for whom unlimited vacation has worked well, and others who toyed with the idea, then thought better of it.

    "I have a gaming company in Los Angeles that adopted it for their senior management team as those employees frequently worked weekends and after hours to get the job done," Pynes said. "It was also attractive from an administrative standpoint. There was no tracking and no carrying accrued but unused vacation over each year on the books as a payout liability."

    On the other hand, she said that a small, creative agency in Los Angeles that had planned to roll out an unlimited vacation policy "because it was trendy and sounded like a good idea" later changed its mind.

    "When they realized they would have a hard time denying time-off requests with an unlimited policy and a small, specialized staff, they ultimately determined it wasn't for their culture and workflow," she said.

    Brantner noted that such policies also won't work at companies "that tolerate gossip or poor evaluations for those who take the time the policy permits." Managers can't encourage unlimited time off, she said, and then allow resentment to fester when someone actually takes advantage of the perk.

    Wahlander noted that another downside to unlimited vacation is that very conscientious employees may not take a lot of time off, while less conscientious ones may abuse the privilege.

    "There are definitely people I know who work way too hard and don't take time off, and they should," he said. But in practice, he noted, "a lot of employers are going to encourage [conscientious] workers to take time off because it benefits them. The employee is refreshed."

    By Dana Wilkie   Mar 20, 2017

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    Source: The Society for Human Resource Management (SHRM):

  • 23 Mar 2017 5:57 PM | Bill Brewer (Administrator)

    Following one of the most contentious presidential elections in U.S. history, it is easy to overlook that Donald Trump and Hillary Clinton agreed on one important workplace issue: For the first time, both the Democratic and Republican candidates put forth proposals supporting national paid family leave. 

    Perhaps that’s a reflection of the fact that most Americans—regardless of where they fall on the political spectrum—favor a paid and universally mandated family-leave law, according to the National Partnership for Women and Families. Currently, the United States is the only developed country in the world that doesn’t guarantee time off for parents and other caregivers at the federal level. 

    Until recently, states and cities generally didn’t offer paid parental leave either, but that has been changing. New York passed the most generous state-backed family-leave policy to date in 2016. The law allows for up to 12 weeks of paid time off for new parents to bond with their child (including an adopted or foster child) and permits the same leave to anyone who needs to care for a family member with a serious medical condition or to handle responsibilities for a spouse, child or parent called to active military service.

    California, New Jersey, Rhode Island and Minnesota have paid-family-leave policies as well, as do San Francisco and Montgomery County, Md. In addition, legislators in Washington, D.C., passed a generous paid-leave law in December 2016.

    women27% of women have quit a job due to familial responsibilities. Source: Pew Research Center.

    At the same time, quite a few large companies, including American Express, Deloitte, EY (formerly Ernst & Young), Campbell’s and Etsy, among others, recently rolled out or expanded their paid-leave plans—by extending the time people are allowed to take off, increasing the number of eligible individuals or expanding the scenarios included in the coverage. 

    Given the recent momentum toward more-generous family-leave policies in both the public and private sectors, it’s reasonable to ask: Is the U.S. finally moving toward a workplace that is more supportive of caregiving? 

    Maybe—but change won’t happen overnight. After all, several family-leave bills introduced in Congress over recent years stalled due to the costs associated with them or because they were deemed unfriendly to employers. Most legal experts expect President Trump’s proposal to meet a similar fate. 

    And despite widespread public interest—particularly from younger workers in the 

    fathers7 in 10 fathers who used paternity leave availed themselves of only 10 days or less. Source: Department of Labor policy brief.millennial generation—in evolving leave models to support caregiving, only 17 percent of employers offered paid parental leave in 2016, according to 2016 Employee Benefits, a research report from the Society for Human Resource Management (SHRM). 

    “I think we are in the beginning stages of [a shift toward paid leave], but America still has a long way to go compared to countries in Europe,” saysAlionna Gardner, an HR generalist/consultant withKiwi Partners Inc., an HR consulting firm in New York City with 50 employees. “Employers are starting to realize the importance of the working family and the significance of accommodating their needs.”

    The President's Plan

    Trump campaigned on the promise to bring six weeks of paid maternity leave to working mothers. Under Trump’s policy, new moms would receive 46 percent of their salary during the time off, paid for by reducing waste and abuse, such as overpayments, from within the unemployment insurance system. The plan would apply only to women who have undergone childbirth. 

    While Trump’s proposal has been criticized for excluding adoptive parents and fathers, even its opponents concede that it is a step in the right direction. 

    “I’m happy that he’s talking about it because traditionally Republicans haven’t,” says Aparna Mathur, a resident scholar of economic policy studies at the American Enterprise Institute, a nonpartisan think tank based in Washington, D.C. 

    However, Trump’s suggested funding source—using monies freed up by reducing waste—is not sustainable, Mathur says, because there are likely only a limited number of areas where expenditures can be reduced in the unemployment insurance system. 

    ‘Employers are starting to realize the importance of the working family and the significance of accommodating their needs.’
    —Alionna Gardner, Kiwi Partners Inc.

    It’s important to structure any government-mandated benefit in a way that is not a burden on businesses, particularly small companies, according to Mathur. One possible funding mechanism could be via a minimum increase on employee payroll taxes, she says. Another might be to cut spending elsewhere or to reduce inefficiencies in other government programs. 

    Trump’s proposal will likely be discussed, negotiated and updated among lawmakers, yet chances are it will ultimately stall, just as the Democrats’ Family and Medical Insurance Leave Act did four years ago. That plan would have provided partial income to workers taking family leave.

    “I don’t think [Trump’s plan] is going to be approved as is,” Mathur says. “I don’t think he has thought through a lot of the policy. The real sticking point will be how he convinces Republicans to go along with it.”

    Most legal experts share that assessment. “There is practically no chance for bipartisan support of a paid-leave law coming out of Congress,” predicts Mark Kisicki, an attorney with Ogletree Deakins in Phoenix. “The only paid leave House Republicans might support would be an amendment to the FLSA [Fair Labor Standards Act] that would allow some type of compensatory time that employees could earn—at 1.5 times their regular hourly rate [for example]—by working overtime but electing to not be paid and, instead, banking those hours for future use as paid family leave.”

    Changing Family Dynamics

    Fathers may have something to say about Trump’s moms-only parental-leave plan. Recent Pew data indicate that roughly 2 million men in the United States are stay-at-home dads. 

    Yet leave options haven’t kept pace with shifting family dynamics. Seven in 10 fathers who used paternity leave availed themselves of only 10 days or less, typically for economic reasons, a gap in policy or an unsupportive work culture, according to a recent Department of Labor policy brief titled "Paternity Leave: Why Parental Leave for Fathers Is So Important for Working Families.”

    Moreover, at companies that provide paid leave to new parents, mothers still receive nearly twice as many days as fathers (41 versus 22, respectively), according to SHRM’s 2016 Employee Benefits report, indicating that paid leave remains built around the assumption that women will take on most of the child care duties in the first weeks of parenthood. 

    There’s a generational component shaping employees’ evolving expectations as well. “Millennials and Baby Boomers are our largest living generations. Millennials and Generation Z are said to value work/life balance and flexibility just as much as, if not more than, health care,” says Jennifer Thornton, director of human resources at Terakeet, a Syracuse, N.Y.-based company with 165 employees that focuses on engagement marketing technology. 

    buildingOnly 17% of employers offered paid parental leave in 2016. Source: SHRM 2016 Employee Benefits research report.

    At the same time, the aging of the massive Baby Boomer generation is also driving change—and redefining the scope of what family leave entails, as more workers look to take paid time off to provide elder care or to recover from their own illnesses.

    Indeed, when Deloitte announced its 16-week paid-family-leave plan in September 2016, it made headlines for its decision to cover a broad array of caregiving scenarios, ranging from bonding with an infant to caring for an infirm spouse, significant other or parent.

    “I think employers should place a greater importance on the things that are important to their people,” Thornton says. “That may vary based on demographics, culture, etc., but the need for leave to focus on caregiving seems to be a recurring theme among Americans.”

    Creating a Caregiving Culture

    At the state level, job protection isn’t written into existing family-leave laws. That means many low- and middle-income workers in easily replaceable positions worry that they will be let go if they take the full leave the government provides, Mathur says.

    “Some people feel that they have to get back to work sooner because their career depends on it,” says Laura Kerekes, chief knowledge officer at ThinkHR, a company with a staff of 100 that offers HR software platforms. Headquartered in Pleasanton, Calif., ThinkHR consults with organizations of all sizes, from those with fewer than five employees to those with thousands. 

    This may be where HR professionals can make a real difference. They not only can encourage their companies to consider offering paid leave but also can work to create cultures that embrace caregiving. After all, it ultimately makes no difference whether a company offers time off if employees are too scared to use it, experts say.

    “HR has to be the leader in the evolution of parental leave in America,” Gardner says. “We are the glue that holds businesses together and, more importantly, the catalyst that invokes change in policy and organizational development. Offering paid leave is a strategic move that allows businesses to become increasingly competitive.”

    briefcase48% of men working full time reported that job demands interfered with family life. Source: Pew Research Center.

    It’s that kind of thinking that led EY, which has more than 230,000 global employees, to boost its U.S. paid parental leave to cover 16 weeks for new moms and dads, including time off for birth, adoption, surrogacy or legal guardianship, according to Nancy Altobello, the consultancy’s global vice chair of talent.

    That coverage is up from 12 weeks for new birth mothers and six weeks for dads and adoptive parents. The London-based company also increased its benefits for fertility treatments, surrogacy and adoption to make it easier for employees to manage their family needs. “I think we were a trendsetter here. We were out in front. Our policy was bold,” Altobello says. “We are all looking for the same great talent.” 

    Leaders at EY decided to improve the organization’s family-leave offerings after conducting surveys among its mostly Millennial workforce, while also reviewing and sponsoring studies on the benefits of offering paid parental leave.

    “We did analysis, we built a business case, and we built support,” Altobello explains. “We did what we did based on what people want. Everyone needs to do what works for them.”

    Terakeet took a similar approach. As a result of studying what its employees value most, the company recently adopted a policy that covers any employee eligible for job-protected leave under the Family and Medical Leave Act (FMLA). The plan includes up to eight weeks at full salary and an additional four weeks at 50 percent pay, with the option to supplement the difference with traditional paid time off.

    The company’s leaders monitor workers’ needs continuously to create what Thornton calls a “culture of feedback,” enabling them to nimbly adjust offerings accordingly. “We send out surveys; we conduct ‘ask-me-anything’ sessions facilitated by all levels of leadership; we meet regularly with midlevel managers to solicit feedback; we ask what is working and what is not,” Thornton says. 

    “Of course, we hope that the dollar value of employee retention and engagement outweighs the cost of the benefit, but, more importantly, we want to demonstrate to our team, in tangible and relevant ways, that their values are our values,” she adds. 

    ‘[Small employers] have the ability to offer flexibility to their workforce in ways that perhaps some larger companies cannot.’ 
    —Gerri Burruel, McKesson Corp.

    Kronos, a Chelmsford, Mass.-based company that specializes in workforce management, recently rolled out a policy providing paid maternity leave for 12 weeks, paid paternity leave for up to four weeks, adoption leave for four weeks plus up to $3,000 per child in adoption assistance, and up to $750 for child care financial assistance for some employees. 

    “The American workplace is placing a greater importance on people,” says Dave Almeda, chief people officer at Kronos, which has over 5,000 employees. “One of the ways that is showing up is in the area of caregiving and other benefits. I don’t think this [allows for] a one-size-fits-all approach. The benefits that companies choose to add will be directly related to the personas that they are trying to attract, engage and retain.”

    Options for Small Businesses

    The changes across the large-business landscape are undeniable. What’s less certain is what all this means for small and midsize companies. They also need to attract and retain top talent, but most lack the resources to roll out comprehensive leave plans. For many, offering unpaid time off to new parents is challenging enough, let alone footing the bill for it. 

    Fortunately, leaders in these companies need not make an either/or choice between offering a robust leave plan or doing nothing. The key for small businesses, workplace experts agree, is to build balance into their cultures.

    “The smaller companies with lesser financial resources can find ways to be flexible and support their families in a way that works for them,” says Gerri Burruel, vice president of health and wellness for McKesson Corp., a health care services and information technology company headquartered in San Francisco. 

    While McKesson is not small—it has 70,000 employees worldwide—Burruel believes that modestly sized employers can take advantage of the adaptability that often comes with smaller staff sizes. “It may not be in a formalized family- or parental-leave policy,” she says, “but [small employers] have the ability to offer flexibility to their workforce in ways that perhaps some larger companies cannot.” 

    That might include novel approaches to telecommuting and other flexible schedules such as working longer but fewer days. “Some of our smaller clients are really getting more creative about allowing employees to flex their time and schedules to be supportive of their needs,” Kerekes says. 

    A good place for small-business owners to start is to conduct an analysis comparing the cost of various flexibility and leave options against that of turnover. The median cost to replace a worker is roughly 21 percent of his or her annual salary, according to a 2015 report from the Department of Labor titled "The Cost of Doing Nothing: The Price We All Pay Without Paid Leave Policies to Support America’s 21st Century Working Families." 

    Smart workforce planning is also key. “I explain to … my clients that paid leave only becomes an additional cost if we need to hire someone to replace the person while on leave,” Gardner says. “However, if the employee and the employer both take the proper steps and plan, the workload can be divided and projects can be scheduled according to someone’s leave of absence. Many small businesses [that] take the right steps can then absorb the effects of a few weeks of leave.”  

    Who’s Paying for What

    A sampling of companies offering generous paid leave to new parents:

    Dawn Onley is a freelance writer based in Washington, D.C.  Illustration by David Vogin for HR Magazine.

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    Source: The Society for Human Resource Management (SHRM): 

  • 17 Mar 2017 8:46 AM | Bill Brewer (Administrator)

    Employees Paid on Commission Entitled to Separate Rest-Period Pay

    Paying minimum hourly rate as advance on commissions not sufficient, California Court of Appeal rules

    By Joanne Deschenaux, J.D.Mar 15, 2017

    Workers paid on commission must get separate compensation for legally required rest periods, the California Court of Appeal ruled in February. Further, an employer violated this requirement by paying employees a guaranteed minimum hourly rate as an advance on commissions earned in later pay periods, the court said.

    Ricardo Bermudez Vaquero and Robert Schaefer worked as sales associates for Stoneledge Furniture, a retail furniture company. After they were fired, Vaquero and Schaefer filed a class-action complaint alleging that Stoneledge's commission pay plan did not comply with California law.

    Stoneledge paid sales associates on a commission basis. If a sales associate failed to earn minimum pay of at least $12 an hour in commissions in any pay period, the company paid the associate a "draw" against "future advanced commissions." The amount of the draw was deducted from future commissions, but an employee would always receive at least $12 an hour for every hour worked.

    Sales associates did not earn separate compensation for work not involving sales, such as time spent in meetings, on training and during rest periods. Sales associates recorded this time, however, using Stoneledge's electronic timekeeping system. The company allowed sales associates to take rest periods of at least 10 consecutive minutes for every four hours worked.

    Stoneledge claimed that under its compensation plan, all time during rest periods was recorded and paid as time worked. Therefore, sales associates were paid at least $12 an hour even if they made no sales. Although the company deducted from sales associates' paychecks any previously paid draw on commissions, the deduction was not taken if it meant an employee would earn less than $12 an hour for all time worked in any week.

    Vaquero and Schaefer claimed that Stoneledge failed to pay for rest periods. Stoneledge sought to dismiss the claims before trial, arguing that it paid its sales associates a guaranteed minimum wage for all hours worked, including rest periods.

    The trial court dismissed the claims, noting that under Stoneledge's payment system, "there was no possibility that the employees' rest period time would not be captured in the total amount paid each pay period."

    Vaquero and Schaefer appealed, and the appellate court reversed.

    Wage Order Requires Separate Compensation for Rest Periods

    Under the California Industrial Welfare Commission's wage orders, employers must provide nonexempt employees with a paid 10-minute rest period for every four hours of work. Rest periods must be counted as hours worked "for which there shall be no deduction from wages." The order applicable here, Wage Order 7, applies "to all persons employed in the mercantile industry whether paid on a time, piece rate, commission or other basis."

    In a 2013 case, the California Court of Appeal ruled that the wage order required employers to separately compensate workers for rest periods where the employer uses an "activity-based compensation system" that does not directly pay for rest periods (Bluford v. Safeway Stores Inc., 216 Cal.App.4th 864). Although Bluford involved employees paid by piece rate and not those earning commissions, the court in Stoneledge concluded that "Wage Order No. 7 applies equally to commissioned employees, employees paid by piece rate or any other compensation system that does not separately account for rest breaks and other nonproductive time."

    Plan Does Not Comply with Law

    Stoneledge claimed that its commission plan complied with California law because sales associates' rest breaks were counted as hours worked and that time was not deducted from wages. The court noted that the company did treat break time the same as work time but said that the company violated California law by failing to directly compensate sales associates for rest periods.

    "The advances or draws against future commissions were not compensation for rest periods because they were not compensation at all," the court said. "At best they were interest-free loans."

    Therefore, the court concluded, "when Stoneledge paid an employee only a commission, that commission did not account for rest periods. When Stoneledge compensated an employee on an hourly basis (including for rest periods), the company took back that compensation in later pay periods. In neither situation was the employee separately compensated for rest periods."

    Vaquero v. Stoneledge Furniture LLC, Calif. Ct. App., No. B269657 (Feb. 28, 2017).

    Professional Pointer: Employers should consider consulting with legal counsel to determine whether their commission payment plans adequately compensate salespeople for rest breaks and other nonselling time. Reviewing—and possibly making changes to—commission-pay agreements may help prevent future litigation.

    Joanne Deschenaux, J.D., is a freelance writer based in Annapolis, Md.

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    The above article is from the Society for Human Resource Management:

  • 15 Mar 2017 10:03 AM | Bill Brewer (Administrator)

    What’s Next for Employers Under the FLSA Overtime Rule?

    New regulations may not be issued before next year; employer action steps

    By Stephen Miller, CEBSMar 15, 2017

    Under the Trump administration, a revised overtime-pay rule could raise the salary threshold for exempt status, but not as much as the Obama administration wanted. It could also reduce some of the complexity around compliance that Obama's Department of Labor (DOL) included in its now-blocked rule, according to Tammy McCutchen, former administrator of the DOL's wage and hour division under President George W. Bush and a principal with Littler Mendelson PC in Washington, D.C.

    U.S. employers have been in legal limbo when it comes to compensating employees under the Fair Labor Standards Act (FLSA) overtime rule, which requires pay at a rate of time-and-a-half for nonexempt employees working more than 40 hours per week, said McCutchen, who served on Trump's transition team. Many employers either reclassified exempt employees (earning salaries) as nonexempt (paid hourly), or raised exempt employees' pay to avoid mandatory overtime. McCutchen shared some ideas on what these employers can do in light of future regulatory changes she expects to see.

    The DOL is, for the most part, "not doing anything right now," as the department awaits Senate action on Trump's nominee for Labor secretary, Alex Acosta, said McCutchen, speaking on March 14 at the Society for Human Resource Management's (SHRM's) Employment Law and Legislative Conference in Washington, D.C. Acosta's confirmation hearing before the Senate Health, Education, Labor and Pensions Committee is scheduled for March 22.

    Blocked but Not Repealed

    Before she gave her forecast for what's ahead, McCutchen reviewed some pertinent background of how we got to where we are. Most notably, a DOL final rule revising the FLSA overtime regulations was released by the Obama administration in May 2016. But on Nov. 22, a federal district court judge in Texas placed a temporary injunction, effective nationwide, on the revised rule, preventing it from taking effect on Dec 1.

    For now, the rule's implementation and enforcement are on hold. The matter has been appealed to the 5th Circuit Court of Appeals, and on Feb. 22, the DOL moved for an additional 60-day extension—until May 1—to file its brief, citing the absence of a confirmed Labor secretary.

    Under the blocked rule:

    • The annual salary threshold for exempt positions would have more than doubled from $23,660 to $47,476.

    • Employers would have been allowed to use nondiscretionary bonuses to satisfy up to 10 percent of the general salary threshold, provided the incentives were made on a quarterly or more frequent basis.

    • There would have been no change in the general duties test used to determine whether employees earning more than the salary threshold must be classified as nonexempt from overtime, including the exemptions for executive, administrative and professional positions, among others.

    • For highly compensated employees (HCEs), who may be classified as exempt if they meet the criteria of a less-stringent duties test, the final rule would have raised the annual HCE salary threshold from $100,000 to $134,004.

    The DOL could drop its appeal of the Texas district court ruling, but the AFL-CIO is seeking permission to defend the rule, should that happen, McCutchen explained. A better path forward, in her view, would be for Trump's DOL "to restart and redo the overtime regulation, setting the salary threshold at about $35,000, where I think it should be," she said.

    FLSA overtime rule resources

    FLSA Overtime Rule Compliance

    For more overtime compliance news, tips and tools, check out the SHRM resources provided below:

    · FLSA Overtime Rule Resources Guide
    · Overtime Rule Blocked: Now What?
    · Compliance Checklist · Infographic

    A "restart and redo" would require the DOL to propose an administrative delay of the rule as revised by the Obama administration, followed by a new notice of proposed rule-making and comment period, leading to a new final rule.

    Most employers believe that an increase in the salary threshold was needed, or at least inevitable, McCutchen said, but they saw the revised rule's threshold as far too high, "excluding people who obviously meet the FLSA's duties test" because of the discretion and independent decision-making required in their jobs. 

    The revision particularly hit hard establishments such as "retail restaurants in the lower South and Southwest," she noted, where the cost of living and average wages are lower than in other parts of the country. "In the 'flyover country' that voted for Donald Trump, there aren't so many people who make $50,000 a year," meaning that most positions would have become exempt, requiring mandatory overtime pay.

    Under the Trump administration, she looks forward to a salary threshold "that is workable not only in New York and San Francisco, but also in Mississippi and Arkansas."

    The timeframe for putting a new rule in place with a salary threshold in the range of $35,000 to $38,000 "could be a year or so down the road," so probably sometime next year, McCutchen said.

    [SHRM members-only toolkit: Calculating Overtime Pay in the United States]

    Employers in a Bind

    When McCutchen asked conference attendees how many had reclassified exempt employees as nonexempt at their organizations before the court injunction, about half of the audience raised their hands. Some employers who had told exempt employees being paid a salary between $23,660 and $47,476 that they would henceforth be reclassified as nonexempt and paid hourly, subsequently informed these workers that they'd stay exempt after all while regulatory matters are sorted out. While some of these workers would rather stay exempt, others had looked forward to earning overtime pay.

    "Here's a radical idea," McCutchen said. "Why don't you ask employees [in this situation] if they'd prefer the flexibility that goes with exempt status—which many also see as a symbol of achievement—of if they'd prefer the overtime pay," and then classifying them accordingly.

    If employees were made nonexempt and don't want to change back, new hires for a comparable position don't necessarily need to be nonexempt as well, she noted. But employers must be sure to accurately code these positions to distinguish exempt or nonexempt jobs. For instance, they might code Accountant #1 as a nonexempt position, but code Accountants #2, #3 and #4 as exempt spots.

    Another common situation involves employees whose salaries were raised to at least $47,476 to keep them nonexempt. One response would be to "slow down their salary increases over the next two to three years until they get back to where you think they should be" in terms of market pay, McCutchen suggested.

    As to the bonus provision in the Obama DOL's rule revision, allowing certain kinds of incentive pay to be included in the salary threshold calculation, McCutchen said if the threshold increase is set back to the $35,000 to $38,000 range, "there would be no need for that extra complexity, which is contrary to the concept of guaranteed salary." She called the allowance of incentive income in calculating the salary threshold "a gift to class action attorneys," since "it would have led to a tremendous number of lawsuits. It shouldn't be necessary at a salary level that is reasonable."

    As for the HCE salary threshold, McCutchen said that under a Trump DOL revised rule, it may also go up from the current level of $100,000 if the general salary threshold is raised, "but it also might stay where it is; we'll have to wait and see."

    [SHRM members-only toolkit: Determining Overtime Eligibility in the United States]

    Enforcement Activity

    Under the Trump administration, McCutchen expects there will be more opportunity for employers to work cooperatively with the DOL to achieve compliance. "Submit requests for opinion letters if you have questions," she advised.

    McCutchen is also hoping to see the DOL "bring back employer incentives for voluntary compliance," for instance to encourage employers to work with the DOL to correct classification errors, "and more use of carrots instead of the stick."

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    Source: The Society for Human Resource Management (SHRM)

  • 14 Mar 2017 8:42 AM | Bill Brewer (Administrator)

    The Best Perk At America's Best Employers Is The One You Don't See

    Carmine Gallo ,   CONTRIBUTOR

    America’s best employers don’t create jobs; they make meaning  and that’s why these companies have the happiest and most engaged employees in the country.

    Southwest Airlines CEO Gary Kelly (Photo by Justin Sullivan/Getty Images)

    At a recent dinner party a pilot for Southwest Airlines (#13 on the Forbes list of America's Best Employers 2016) turned to me and excitedly showed me an email from CEO Gary Kelly. Kelly addressed the email to the pilot and copied about five other people, including the pilot’s boss. The email contained a letter from a woman who shared an experience about her brother—recently paralyzed in an auto accident—and the wonderful treatment he had received from the pilot and the entire crew.

    Kelly’s email is part of the Southwest way of building and maintaining a customer-focused culture. The email is a key component of Southwest’s “Kick Tail” recognition and awards program. Being recognized for a job well done goes beyond the usual perks and benefits you expect to see in corporate America and yet, in many ways, it’s more valuable. Employees who see that their daily jobs have mission and purpose go the extra mile.  The evidence is clear: purpose fueled companies grow faster, have more engaged workplaces, enjoy higher profits and productivity, and have far less turnover.

    Free food, on-site gyms, and tuition reimbursements are all nice to have and employees cherish those perks, but America’s Best Employers offer something far more valuable—a life of meaning.

    “Ninety-five percent of my assets drive out the gate every evening. It’s my job to maintain a work environment that keeps those people coming back every morning,” according to Jim Goodnight, CEO of SAS Institute (#6 Best Employer 2016). Leaders at SAS have discovered that how employees feel about the company’s role in the world drives innovation and builds loyalty.

    According to the SAS careers website, “If you have to spend, on average, 54% of your waking hours at work, why not do something meaningful – that you can be proud of?” SAS leaders and HR teams cultivate a culture of purpose through sharing stories of how SAS software makes a difference in the lives of people around the world: “Our analytics software helps organizations make the kinds of important decisions that drive change each and every day – like how to capture the bad guys, keep kids safe, feed the hungry, and even ensure that people who struggle to learn are not lost.”

    SAS headquarters in Cary, North Carolina, is a self-contained city. It has a hair salon, fitness center, Olympic-size heated pool and much more. That’s what you can see, but when I’ve spoken to SAS employees it becomes clear that what you can’t see makes the difference in how employees view their employer. Goodnight said it best:  “SAS employees are driven and feel challenged to explore how they can make a difference in people’s lives.”

    Two weeks ago I sat down with a group of employees at Google, which ranks #2 on this year’s list of America’s Best Employers. We enjoyed a gourmet meal at one of the 30 cafeterias that serves free food at its Mountain View CA headquarters. The employees were almost all under thirty years old.

    “You must love the free food,” I said.

    “It’s great, but that’s not why I work here,” one young man responded. “To be a part of something that’s changing the world; that’s really cool!”

    Perks are nice, but purpose counts more.

    “We have a really caring culture that breeds a lot of collaboration,” says Rod Nichols, human resources director at Marathon Petroleum, the #1 Best Employer In America. Marathon maintains the caring culture by continually reinforcing the fact that for Marathon employees, their work has meaning. Marathon has some of the happiest employees in America because a majority of them can confidently say their jobs make the world a better place.

    The accounting firm KPMG (#16 in the professional services category) is one of the best examples I’ve come across recently of a workplace built on purpose. In this Harvard Business Review case study, human resources directors at KPMG concluded that “A workforce motivated by a strong sense of higher purpose is essential to engagement.” The firm launched an initiative to help leaders create that sense of purpose. The first step was to answer the simple question: What do we do at KPMG? The answer can be found in this videoWe shape history.

    The second step was to launch the 10,000 Stories Challenge, asking employees and partners to submit their stories of how KPMG makes a difference in people’s lives. “Most importantly, we recognized that just telling people from the top down about their higher purpose would not succeed. We encouraged everyone—from our interns to our Chairman—to share their own stories about how their work is making a difference,” according to Bruce Pfau, KPMG’s vice chair of Human Resources. The result? Employee engagement has risen to record levels at KPMG.

    There is no question that employees love great perks: free food, discounts, reimbursements, generous vacation and maternity leave policies. These perks are closely correlated with employee engagement because it shows that the company’s leaders care for an employee’s well-being. But as Southwest co-founder Herb Kelleher once expressed: “Competitors can buy tangible assets, but they can’t buy culture.”

    “When you’re surrounded by people who share a passionate commitment around a common purpose, anything is possible,” according to Howard Schultz, CEO of Starbucks (#2 best employer in the restaurant category). Schultz makes a powerful observation. Leaders, if you want to be considered one of the best employers in your industry, focus on building a culture of purpose. Perks bring people in the door, but purpose builds brand loyalty.

    Carmine Gallo is a keynote speaker, communication advisor and bestselling author of “Talk Like TED” and The Storyteller's Secret. Sign up for his newsletter at


    The above articleis from Forbes:

  • 13 Mar 2017 2:00 PM | Bill Brewer (Administrator)

    Parental, Caregiving Leave Benefits Unchanged Since 2012

    March 8, 2017 — While many well-known companies are promoting their expansion of paid-leave benefits, the average amount of parental and caregiving leave provided by U.S. employers hasn't changed significantly since 2012.

    "Whether high-profile companies offering paid leave are out of step with the majority of employers or leading the way remains to be seen," said Ellen Galinsky, president and co-founder of the Families and Work Institute (FWI) and author of the "National Study of Employers."

    FWI designed and conducted the study on how employers are responding to the changing workforce. Released by the Society for Human Resource Management (SHRM), Galinsky said that, while it appears a trend has started, the study found otherwise.

    "Given our findings that 78% of employers reported difficulty in recruiting employees for highly skilled jobs and 38% reported difficulty in recruiting entry-level, hourly jobs … high-profile companies could be leading the way," she said, referring to Netflix, Amazon, Microsoft, Johnson & Johnson and others that have expanded their parental leave.

    The maximum length of paid or unpaid parental and caregiving leave was recorded in 2005. Since then, maternity, paternity, adoption and caregiving leave have all declined. Today, the average number of weeks of maternity leave is four and a half, and a little more than 11 weeks is the average leave for a spouse/partner (paternity leave).

    In the past 11 years, the number of organizations offering at least some replacement pay for women on maternity leave has increased 12 percentage points, from 46% to 58%, Galinsky said. But the study also found that, among employers offering any replacement pay, the percentage offering full pay has continued to decline from 17% in 2005 to 10% in 2016.

    Telework also has been in the news in the past couple of years and, despite several big-name companies dropping their telework options, 40% of employers allow employees to work some of their paid hours at home on a regular basis. This is up from 33% in 2012, according to the study.

    Of the 18 forms of flexibility assessed, there were few changes between 2012 and 2016, representing a pause in the growth of flexibility. In addition to regular work at home two forms of flexibility have increased:

    • The percentage of employers allowing employees to return to work gradually after the birth of a child or adoption (from 73% in 2012 to 81% in 2016)
    • The percentage of employers allowing employees to receive special consideration after a career break for personal/family responsibilities (from 21% in 2012 to 28% in 2016).

    One form of flexibility decreased during this time, according to the study: the percentage of employers allowing employees to take time off during the workday to attend to important family or personal needs without loss of pay, which declined from 87% in 2012 to 81% in 2016.

    "While more employers are being supportive in how employees return from parental and caregiving leave, there is less support for flexibility during the workday," Galinsky said. "What people need most is time off during the day, and fewer are getting it."

    One finding that may have contributed to the pause in flexibility was a drop in management support for flexible work arrangements, a drop from 31% in 2005 to 14% in 2016.

    Lack of management support is a theme WorldatWork also found in its 2015 "Trends in Workplace Flexibility" report. Of the 3% of organizations without flexibility programs, resistance from management and lack of jobs conducive to flexible work arrangements were frequently cited by respondents. Top management tended to be a bigger barrier than middle management, often acting as an obstacle to telework programs, according to the WorldatWork report.

    "This is worrisome because having policies is not enough," Galinsky said. "Without management support, employees can't use policies. This suggests the need for more training for supervisors and others who manage employees."

    Rose Stanley, CBP, WLCP, WorldatWork senior practice leader, agreed with Galinsky about the need for additional training. "Flexibility training for managers and employees is a rarity in many organizations."

    Contents © 2017 WorldatWork. For more information, contact the Copyright Department at WorldatWork.

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