by Mike Yoder | Business Strategy, Legal Compliance, Payroll
Last night, a federal district court in Texas granted a preliminary injunction that temporarily blocks the U.S. Department of Labor from implementing and enforcing its recently revised regulations on the white collar exemptions to the Fair Labor Standards Act (FLSA).
As you know, the overtime rule was scheduled to take effect Dec. 1 and would have raised the salary threshold from $23,660 to $47,476.
Employers should note that this is only a temporary injunction, not a permanent one. The injunction simply prevents the regulations from going into effect on December 1. There will be a decision issued at a later date on the actual merits of the case, so changes in the FLSA salary threshold for exemption may be back. However, the judge wouldn’t have granted the preliminary injunction unless, among other things, he thought the states showed a substantial likelihood of succeeding on their claims.
What may be likely is the change will eventually go through – but maybe with a lower number or a small business limitation or exemption created by the Trump Administration and the new Congress.
As Servant HR has worked through the ramifications with many of you, some of you did make some decisions. If your decisions included salary increases to employees in order to maintain their exempt status and HAVE BEEN COMMUNICATED, you may wish to leave that in place as it would be difficult to take that back. We cannot assume that the overtime rule will be permanently barred.
However, if there are exempt employees who were going to be reclassified to nonexempt that have not been or wage increases had not been promised yet, you may want to postpone those decisions and give the litigation a chance to play out.
Servant HR will continue to advise you as implementation becomes more clear.
While we have already reached out to many of you, if you have specific questions about your situation or wish to undo something you already have communicated to us, please contact us directly.
And HAPPY THANKSGIVING a little early!!
by Mike Yoder | Business Resource, Culture
“A man does not live on bread alone. He needs buttering up once in a while” – Robert Henry
Well folks, the season of thanksgiving is upon us once again. The turkeys are gobbling, people are making traveling plans and thanks are being given. This is truly a season of gratitude and love for others and taking time to thank employees is no exception… also, gravy.
So how does the thankfulness of the season crossover into the work place? Can it? Many people view work as a means to an end. They work for the weekend, for a paycheck, and for time off. Of course they engage in holidays and seasons, but not at work. Work is a place for progress, profits, and pay-out. It’s a place of meetings, memos, and managers. Unfortunately, it’s thinking like this that keeps those who manage employees from engaging at all during the holiday seasons.
Don’t get me wrong, there should be a distinct balance between work and home. An employee should not have the expectation that Thanksgiving at home will be the same as Thanksgiving at work. My suggestion? Leave the turkey, keep the thanks.
Giving thanks early and often is appropriate at all times, but especially in November and December. This season gives you a wide open door to thank employees unabashedly, with passion and care. Good employees flourish at work when they know that what they do matters. Letting your employees know that their contributions are important to you, the organization, and to their other co-works, enables them to trend upwardly; both in their quality of work and their value added.
There are 3 steps you can take to ensure that you are thanking others well.
- KNOW – How can you plan on being a good giver of thanks if you don’t know the person you intend to thank? Take time to understand your employees. Small conversations, shared meals, and project collaboration are just a few ways to organically get to know an individual.
- PLAN – Unplanned thanks can come off as cheap and half-hearted. Plan well to thank well. If you don’t do your research, your thanks will miss the mark which could lead to the employee actually feeling less appreciated rather than more appreciated. Investigate unique ways to thank employee (my own list is just below). Poll your office as to what they would appreciate. Finally, don’t be afraid to specifically ask people what they find encouraging or appreciative.
- ACT – Just do it. You have your plan, now it’s time to execute. Below are a few creative ideas to show thanks to your employees.
- Park like the boss– offer up the best parking spot for a week.
- Free lunch– they always say there’s no such thing as a free lunch, but who doesn’t like being treated to a restaurant of their choosing?
- Training and Conferences– pay for them to attend events that will grow them personally and professionally. It’s an investment in them and the organization
- Extra PTO– people love time off. Give additional hours to employees as a way of saying thanks.
- Hand written notes– they add a personal touch. Go a step further by having mailed to the employees home address.
- Gift Cards– whether it’s a fuel card,for a restaurant, or for other entertainment purposes, this is a perfect way to enable your employee do enjoy something they love or to fulfill a need they may have.
- A Project Pass off– let your employ pass off one project to you and you complete it instead.
- Off campus outing– plan a whole or half day somewhere that gets people out of their normal routine. Incorporate team building.
- Office Awards– like the Oscars or the Emmys. They can be goofy, light-hearted, and personal to each person.
In this season of Thanksgiving, it’s a great opportunity to thank employees. If you do it well, you and your whole organization will benefit from it. Don’t be a turkey and miss this golden opportunity!
by Mike Yoder | Business Resource, Business Strategy, Employee Benefits
Medical insurance renewal season is usually considered a “necessary evil” in the grand scheme of medical insurance. We want the coverage, but we hate anxiously waiting for the renewal rates. I had the opportunity to sit down with Founder and President of Servant HR, Jeff Leffew, and talk about this topic. During our discussion, Jeff shared his perspective on three key areas’ the Servant HR team gets asked this time of year.
1.) What’s different this year?
Healthcare and medical insurance is ever evolving, which makes renewal seasons unique every year. And this year is no exception. According to Leffew, the biggest distinction is the length of time this renewal season covers. In fact, the renewal season for small groups that are not currently on an Affordable Care Act (ACA) qualified plan will extend until the end of 2017.
What does that mean?
As an example, a company has an Oct. 1st, 2016 renewal date. Instead of renewing Oct. 1st, 2017 (or 12 months from the last renewal) their plan would actually go to the end of 2017 (or a 15 month period). If their renewal date was Dec. 1st, 2016, it would go to the end of December 2017 (or 13 months).
Why is the renewal season length different this year?
When the ACA was established, there were serval provisions given that delayed the ACA from being fully implemented. Because these provisions will be gone by January 1st, 2018, it doesn’t make sense for companies who renew on October 1 to turn around and renew again for only three months.
Why is this important to you?
When you get your renewal percentages, they might be a tad higher than normal because they could be covering 13 or 15 months. It all depends on your renewal date.
2.) Options are dwindling
For small groups in Indiana, the options for medical insurance coverage are beginning to dwindle. According to Leffew, groups with fewer than 50 employees realistically have only three or four providers that will offer quotes.
The reason?
The environment for an insurance company is so complex that it’s difficult and costly for new companies to break into the market. As a result, they barely get off the starting line because looming regulations and complexities make profitability quite stingy for these companies.
3.) Judgement calls are gone
There was a time when the requirements to obtain medical insurance were less formal—less controlled. Those days are over. Now that companies are being held accountable by the federal government, the standards are black and white.
While the intentions may be good, Leffew believes it has taken away the ability for medical insurance companies to make judgement calls. He says, “Not all businesses look alike. There are unique situations, but the human element has been taken out.” With the reality that everyone has to look the “same”, judgement calls become less of a viable option for companies to make.
If you have questions about our top 3 list or need help this renewal season, we’d love to talk with you.
by Mike Yoder | Business Resource, Culture, General, Hiring
Did you know most hiring managers decide whether they are going to hire someone in the first 3 minutes of an interview? And that is not enough time to conduct an effective interview. In fact, ineffective job interviews often lead to bad hires and that is a costly proposition when you factor in training costs, wages, and lost productivity when you have to do it all over again.
In order to improve your odds, you need to be prepared. Conducting a structured interview requires time and forethought. Some studies suggest businesses spend at least one hour preparing for an hour-long interview. It’s well worth the investment.
Here are the Top Ten tips for conducting more effective job interviews – and hiring the right person.
1. Have a current, accurate and enticing job description.
Job descriptions should identify the specific knowledge, skills, and abilities that are critical for the candidate to succeed at the job. What critical need does the company have, and how will the candidate fulfill that need? Make sure to also identify the personality traits required for the specific job. Once you’ve performed the job analysis, develop the interview questions based upon the determined criteria.
2. Create a structured interview process.
Structured interviews help ensure all candidates are treated similarly, and research has indicated they are more effective than unstructured job interviews. To create a structured interview:
- Ask every candidate the same interview questions, and plan follow-up questions to likely responses.
- Evaluate candidates using an objective and thorough rating scale.
- Provide training to all interviewers to enable them to conduct interviews using a consistent method and tangible tools to evaluate candidates so they aren’t relying solely on instinct.
3. Ask behavioral questions.
Asking hypothetical or open-ended questions like “how would you deal with an angry coworker?” or “what are your strengths and weaknesses?” encourages candidates to frame their responses according to what they think the interviewer wants to hear. This is not the best method.
Behavioral interview questions are designed so candidates describe things they actually did in a previous situation and the outcome of their actions. Ask questions like “Tell me about a project you helped initiate. What was your role? What were the results?” and ”Tell me about a time you made an unpopular decision. What were the reactions? How did you respond?”
4. Contact references.
References are a valuable tool for attaining a more complete impression of a candidate. References can verify information, provide feedback on the candidates’ past job performance and accomplishments, and give insight into whether they’ll fit with your company’s culture. They can also verify the accuracy of the examples given in responses to the behavioral questions posed during the interview. When considering a candidate, it’s also prudent to examine their resume to find colleagues who are in your business network and contact them as well.
5. Use the interview to describe the job position.
Interviews are opportunities for managers to give candidates a realistic impression of the job position and the company culture. Some managers are tempted to oversell the company in job interviews, which can ultimately lead to employee dissatisfaction in the long run. Answer questions thoughtfully and candidly and let your natural enthusiasm for the company show, and you’ll help the candidate make an informed decision.
6. Hire for attitude.
At least one study found that 89% of the time new hires failed, it was for attitudinal reasons, not lack of skill. Hire for characteristics that align with the company’s values as well as technical skills. Be proactive about recruiting people who will be good for your team. High performers are a good source of referrals.
7. Don’t take chances.
Sometimes employees can hire candidates with obvious deficiencies, in hopes they will change. There will always be some compromises made, but if a candidate has a track record of burning bridges, missing deadlines, or quitting multiple jobs within a few weeks – their past behavior is the best indicator of future behavior.
8.Silence Can Be Golden.
Try pausing and counting to 5 after an answer to a question you want to know more about. Let them fill in the silence and reveal more.
9. One more interview.
If you have doubts, conduct one more interview. A bad hire is too costly to the company to forgo the additional interview. And if you find you’re deciding between a pool of average candidates, continue the process until you find someone who fits.
10. Look on social media.
Is the candidate on social media such as Twitter or Facebook? What do they comment on? What do they do with their free time? Who are they are linked to on LinkedIn? Social media channels can give a good look into whether someone will fit your culture.
By taking the time to sufficiently prepare for an interview and asking the right questions, companies can improve their chances of hiring the candidate who is best for the job. If you need help developing an effective interview process which produces consistently great results, don’t hesitate to reach out to us.
by Mike Yoder | Business Strategy, General
UPDATE 10/01/16: The House approved a six-month delay in overtime rule implementation, trying to defer legislation that would have gone into effect on Dec. 1. The Republican-backed Regulatory Relief for Small Businesses, Schools and Nonprofits Act, or HR 6094, would postpone the implementation of new Department of Labor rules that would shift the threshold for determining overtime pay until June 1, 2017.
The House approved the bill with a 246 to 177 vote. The bill has moved to the Senate, where it faces an uncertain future. President Obama has reportedly threatened to veto the bill. If you have questions,
please contact us.
Original Post:
As many of you have heard from us at Servant HR and other sources for months, the Obama Administration has finally come down with new regulations that establish a new wage minimum for your salaried/exempt employees. Employers must be in compliance by December 1, 2016 so if you haven’t already analyzed your situation, now is the time. The odds of this being overturned are virtually non-existent regardless of the 2016 election outcome.
Snapshot of the New Regulations
These regulations update the minimum salary level required for an employee to qualify under any of the common exemptions. Currently, that salary level stands at $23,660 per year ($455 per week). The new regulations raise the minimum salary level to $47,476 ($913 per week).
What This Means to Employers and Employees
As an employer, if you have employees who are classified as exempt under the current FLSA regulations “duties test” but who make less than the new wage base, you will need to make some changes. Employers essentially have three choices to be in compliance with the new regulations:
- Keep the employee’s exemption status intact by increasing the employee’s pay to at or above the new minimum threshold
- Change the employee’s exemption status to salary/nonexempt, and while still paying a salary, begin paying overtime for all hours worked over 40 hours in a given workweek
- Change the employee’s exemption status to hourly/nonexempt, and only pay for hours worked and begin paying overtime for all hours worked over 40 hours in a given workweek
How to Prepare for the Upcoming Changes
These changes require a lot of planning on the part of all affected employers. Here are some ways to get prepared for the coming regulations changes:
- Confirm employees currently treated as exempt truly meet the “duties test” to establish a list of affected employees
- Which FLSA Exemption applies?
- Is there a Department of Labor Fact Sheet that can support your decision?
- Analyze affected employees.
- Which employees currently are classified as exempt under the duties test, but have salaries below the new threshold?
- Gather all relevant data points, such as:
- How many hours per week do these employees currently work?
- How much overtime would need to be paid if the employee changed status to nonexempt? How much would that cost?
- How much would it cost to increase salary levels to meet the new thresholds?
- Will there be a need to hire additional staff (perhaps in lieu of paying overtime)?
- Are there systems in place now to accurately calculate hours worked (including all overtime) for all affected employees? If no, what would it cost to put such systems in place?
- If salaries are increased, what impact will this have on the overall organizational salary structure? Will salary bands need updating? Will upper levels in the organizational hierarchy also need pay increases to stay in alignment with their relative level within the organization?
- Put together a clear process for decision making.
- Reach agreement on what changes must be made.
- Establish consensus on timing of changes.
- Plan for the transition process
- Determine exactly what changes will be needed within the payroll system to either change these employees to nonexempt (and pay overtime) or change their salary levels. Create a plan to accomplish either task, depending on which is chosen for a given individual.
- If any employees will be moving to nonexempt status, create systems for time tracking and create training on how to use those systems and to keep them accurate.
- Consider whether updates will be needed to your overtime policy and start drafting these now.
- Start making assessments for individuals and groups to determine the best course of action.
- Consider to also take this opportunity to do a job analysis and update job descriptions accordingly to reflect the true duties of the job. This will allow a more accurate comparison against the guidelines in the future.
- Create a systemic process for review of employee exemption status to ensure that employees are always classified correctly going forward, especially since the salary basis will undoubtedly be changing periodically in the future—employee salaries will need to comply to keep the exemption in place.
- Communicate, communicate, communicate to minimize the disruption these changes may cause.
How prepared is your organization for these coming changes?
This article does not constitute legal advice. Always consult legal counsel with specific questions.
