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Two Ways to Revamp Traditional Incentives

Two Ways to Revamp Traditional Incentives

Many companies have approached employee incentives the exact same way for decades—sick leave, overtime pay and annual salary reviews. While these ideas are important and generous, companies must take cues from today’s market to broaden their perception of incentives.

Employee engagement is now a financial strategy for businesses and high engagement is commonly driven by recognition and reward. Two key factors have been identified in the creation of modern incentives that actually engage and produce real, bottom-line benefits:

1. Personalization

Consumer demand for personalization is up. Why would employee demand be any different?

Still, a recent Deloitte survey reported that only 8% of companies say their systems of incentives are very effective at creating a personalized, flexible solution.

Personal and frequent engagement with employees can lead to the discovery of unique incentives that work well for each individual. Incentives then become the tangible evidence that employees are truly known and cared for within their organization.

Personalization of incentives often looks like project or target-based bonuses. For some, the ability to create their own benefits packages may be most rewarding. For others, the freedom to do more independent or remote work can motivate and establish trust. Other ideas include creating company-wide recognition with company-wide games—meeting specific performance targets on a points-based system.

By personalizing incentives, employees feel known and uniquely valued within an organization. Oftentimes, being heard is a powerful incentive in and of itself.

2. Purpose-Oriented

An employee’s interpretation of the work he or she does for a company is a critical part of employee engagement. If the brightest minds feels their work is worthless, work ethic will inevitably decline.

This requires employers to give employees a well-defined and visible mission that can inspire and motivate even the most tedious work. Those from the lowest level to the top should be able to see their contributions and value in day-to-day operations.

Sometimes creating purpose-oriented incentives doesn’t even mean creating new ones—it may mean just presenting incentives in a more thoughtful way.

For example, let’s say a travel marketing agency traditionally gives an extended PTO incentive. That’s nice. But if the extended PTO is given with the intent that employees go out, travel, experience the world and bring fresh ideas back with them… that’s a purpose-oriented incentive.

A carefully developed reason for longer vacation time actually gives employees a sense of belonging, purpose and importance. Traditionally, people take vacations to escape from work. But how might organizational culture and engagement shift if even on vacation, employees felt purposeful and helpful?

Another purpose-oriented incentive could involve linking employee rewards to social causes or community issues that matter to them. This incentive is both purposeful and personalized, as it caters to an individual’s passion. Win-win.

Time to Reevaluate

Still not sure you need to revamp your traditional incentives? Try walking by some desks. Do your employees perk up at the sight of you, trying to look busy? Or are they already driven and motivated? Do you find yourself struggling to know what to say, or do you know your employees on a personal level?

Servant HR is a human resource service provider that gives business leaders freedom to focus on the parts they love about their business. Give us a call and see how a PEO can help you today! We take care of your business’s administrative tasks, so that you can take care of your employees—and we think that’s a pretty good incentive.

Five Ways to Prevent FMLA Abuse

Five Ways to Prevent FMLA Abuse

The sun is out, temperatures are up, and employee attendance is… down. There’s a reason cynics in the HR world nickname The Family and Medical Leave Act (FMLA), the “Friday Monday Leave Act.

FMLA allows up to twelve weeks of unpaid leave each year, as a means for employees to balance their work and family responsibilities. The specific intent as stated by the Department of Labor, is “to promote the stability and economic security of families, as well as the nation’s interest in preserving the integrity of families.”

FMLA is required of employers that have over fifty employees on twenty or more weeks in the prior or current year. To be eligible, employees must have worked at an organization for at least twelve months and logged at least 1,250 hours of service during that time. Qualified employees are permitted FMLA leave for any of the following reasons:

  1. To care for their child after birth, adoption or foster care.
  2. To care for the employee’s spouse, child or parent who has a “serious” health condition.
  3. The employee’s own “serious” health condition makes him or her unable to perform the job.

FMLA is over twenty years old, but surveys show the act still ranks as one of the most confusing and frustrating employment laws for companies to administer. Along with understanding the specifics of the act as it relates to each state and circumstance, employers must also be aware of FMLA abuse tactics.

FMLA expert Jeff Nowak suggests companies take the following measures to ensure fair leave and accountability to the intent of FMLA.

1. Require (and question) employee leave requests

This is an effective strategy for cutting down on all types of absences. An employer cannot deny FMLA leave to a worker who puts in a notice, but simply requiring a written request can deter employees from taking unnecessary leave. It is also helpful for employers to have a list of questions ready when an employee requests time off. Ask about the job functions they are unable to perform, if they will see a health care provider, and when they expect to return to work. Employers have the right to know why an employee can’t come to work and a little probing can help determine if the FMLA request is legitimate.

2. Enforce a daily call-in policy

Requiring employees to call in one hour before their shift to report an absence is another inconvenience that may prevent abuse altogether. An extended vacation may not sound as appealing if you know you have to call into work every single day. As long as a policy is in place and there are no unusual circumstances, it is okay to deny FMLA leave to an employee who fails to call in before their absence.

3. Certify, and then certify again

According to Novak, one of the best tools employers can use to fight FMLA abuse is the medical certification form. Upon the first absence in a new FMLA year, require medical certification to verify the serious health condition. If circumstances change and an employee needs an extra day or week of intermittent leave, require recertification at the earliest opportunity. Employees typically have fifteen days to get a certification returned to their employer.

4. Follow up on patterns

Noticing a lot of sunny Monday and Friday absences? Is holiday time off frequently extended? These are common patterns of FMLA abuse. If a series of weeks or back-to-back months indicates a regular pattern of absences, employers can follow FMLA regulations to consult the employee’s physician. This can simply confirm whether the pattern is consistent with the employee’s health condition and need for leave.

5. Conduct an audit

FMLA policy and forms must be up to date in order to ensure compliance and the best strategies to combat abuse. Be proactive with your employment counsel or PEO to ensure that loopholes are minimized and your FMLA administration is running smoothly.

By partnering with Servant HR as your PEO, you get a fully integrated human resources team working for your protection. Worried about legal compliance? Not sure if your FMLA policy is at it’s best? That’s where we come in. Contact us today!

A Word From Our Founder

Dear Servant HR partners & clients,

I want to update you on some exciting long term changes happening here at Servant HR. My desire for the long-term sustainability of Servant HR, along with encouragement from key advisors, has prompted the development of a succession plan for our future. While a typical PEO succession strategy often involves merging or selling to a competitor, it has always been my desire to find someone with the same entrepreneurial drive, passion, and genuine heart for service that grounds Servant HR’s mission and values.

After much consideration and prayer, it has been decided that Brad Schall, our recent VP of Strategic Initiatives, is the clear choice for our future succession needs.

Brad and I first connected ten years ago at Ronald Blue Trust, where Brad served as my financial advisor. Brad has also worked as a staff accountant at UBS Global Asset Management, a Certified Financial Planner, a CPA, and a teacher at Heritage Christian School.

Although the succession process is intentionally slow and will take approximately 7-8 years to fully complete, Brad’s commitment to stay the course with our clients and staff ensures Servant HR will stay true to whom we have always been, while continuing to grow in the knowledge and skills necessary to meet client needs.

Therefore, effective immediately, Brad will now serve as our new President and I have assumed the role of Founder and Chairman.

Our other leadership will not change. Mike Yoder will continue as our CEO, and Loren Elms as our Director of Operations. These three members of our Executive Leadership Team will provide significant oversight of day-to-day operations, while working alongside me in vision casting for our future.

In preparation for this succession transition, Brad became a minority owner on January 1st of this year and is scheduled to become the sole owner of Servant HR in 2026.

Thank you for taking the time to let me share with you this exciting news, and thank you for allowing us the continued privilege of serving you and your work site staff.

Sincerely,

Jeff Leffew

What the New Exempt Salary Threshold Could Mean for Your Business

What the New Exempt Salary Threshold Could Mean for Your Business

In December 2016, compliance with the Obama administration and the Department of Labor’s proposed wage minimum required extreme reclassification. (Read our 2016 blog on this proposal here.) The proposal would have raised minimum exemption wage to a jarring $47,476 from the previous $23,660. Push back from businesses combined with a late term lawsuit kept the proposal pending until Trump took office.

This Just In

As of last week, the Department of Labor has proposed an increase straight down the middle of the historic minimum and attempted Obama-era hike. The current proposed salary-level threshold for white-collar exemptions now sits at $35,308. According to the Society of Human Resource Management (SHRM), the proposal, if finalized, could result in the transition of more than one million currently exempt workers to non exempt, as well as many pay increases for employees below the new threshold.

Nonexempt employees (those who do not meet the salary base and do not match FLSA work requirements) must receive a “time and one half” pay rate for any hours worked over forty in a workweek. The FLSA “duties test” defines specific regulations for executive, administrative and professional work that make an employee exempt, in addition to the salary threshold.

Tricky Business

While compliance is mandatory if the proposal is finalized, the specific way of reaching compliance is left to employer decisions.

If exempt employees currently make salaries significantly lower than the threshold, reclassifying employees to non-exempt and overtime eligible might make sense.

But, employers can also avoid salary and overtime pay altogether. Hours for newly non-exempt employees may be reduced, part-time or contract workers may be hired to fill gaps, tasks may be re-assigned to other exempt employees, and perks may be dismissed since the exempt/non-exempt distinction is often used to provide benefits.

Employers must then weigh the cost of morale.

Overall, it makes more sense to reclassify to nonexempt if an employee does not work much beyond forty hours. But for employees who often work over 40, it may be less difficult and less expensive to increase salary to the new threshold, rather than paying consistent overtime.

What Now?

There is still a long way to go before reclassification. Proposals are always small first steps in a lengthy process before finalization.

However, employers do not have to wait for the final rule to review FLSA duty requirements. Jeffrey Ruzal, an attorney with Epstein Becker Green, recommends employers begin auditing their exempt workforces to determine how many might qualify under the criteria of executive, administrative and professional exemptions. Before raging re-classification, it is possible that employees currently or potentially exempt due to salary, may not pass the primary duties tests.

In general, this pending proposal offers valuable time for fixing current errors and planning for the future. We at Servant HR would love to help plan for yours. If you’re our client, we’re already on it. But if you have questions about the specifics of the proposal, or are wondering how a PEO can help manage these crucial details, please don’t hesitate. Contact us today!

Employee vs. Independent Contractor: The latest NLRB approach

Employee vs. Independent Contractor: The latest NLRB approach

A new National Labor Relations Board (NLRB) decision has drawn a blurrier line between employers and independent contractors. Returning to pre-Obama-era policies, the NLRB is now more likely to acknowledge independent contractor relationships.

A wide array of federal, state and local laws govern the relationship between employers and their employees. But often these laws do not apply to those classified as independent contractors.

The distinction between the two is critical, but hazy, as each law has a slightly different way of discerning independent contractors from employees. Courts and agencies add complication as well through differing interpretations of those laws, along with frequently changing standards according to appointed political party.

Back and Forth

Last year the California Supreme Court broadened the definition of “employee” for wage order claims. Obama-era guidance restricted an employer’s ability to classify workers as independent contractors. Now under President Trump, federal agencies are swinging back the other way.

According to Ryan Funk of Faegre Baker Daniels, the new NLRB decision returns to how it viewed independent contractors before Obama-era restrictions. Funk writes, “The main difference between the new test and the Obama-era one is how the agency looks at whether workers have ‘entrepreneurial opportunity.’”

Action vs. Opportunity

The Obama-era decision gave weight only to actual entrepreneurial activity (and even then, only when looking at just one part of a multi-factor test.) This narrow view makes the chance of meeting criteria significantly slim.

The new NLRB decision re-establishes the value of entrepreneurial activity. The principle of “opportunity for entrepreneurial activity” is used to evaluate the overall effect of each of the ten factors in a common-law analysis of an independent contractor relationship.

The decision is employer friendly, as it frees up employers to classify independent contractors and drop the host of governing laws.

Boiling It Down

While employers are freed up through the new decision, the line is still blurry. Those looking for a clear distinction between employee and independent contractor are in for a letdown. According to Funk, “Any legal test with ten factors is bound to boil down to a case-by-case approach.”

Even tests and their factors can vary case-by-case. Over the last thirty years the IRS has used an old revenue ruling twenty-point test, the tax court has used a seven-point test, and the IRS has espoused a three-pronged “control test.” Confusion is certainly understandable.

Therefore, independent contractor relationships should be re-analyzed in light of the new NLRB approach. Based on potential IRS involvement, it’s also important to note that the NLRB is just one voice in a crowd of agencies, so employers should stay up to date as independent contractor tests continue to evolve.

What is a PEO? Servant HR explains.

What is a PEO? Servant HR explains.

You are a business owner. You are passionate about what your business does. But, legal compliance of I-9 documents? Benefit renewals? Unemployment compensation defense? Maybe not so much.

And yet, attention to the details of HR is critical. Overlooked tax changes, missed reporting requirements or a tricky employee termination can cause serious legal and financial repercussions.

Fortunately, Servant HR is a full service HR department that enjoys serving clients through eliminating their administrative hassle. Our team of experts partners with you to manage and optimize all your human resource responsibilities, so you have the freedom to focus on what matters most — growing your business.

What is a PEO?

When a company signs on with Servant HR, a unique relationship is formed as Servant HR becomes the company’s PEO.

The acronym PEO stands for Professional Employer Organization. While the acronym is attached to a variety of business models, NAPEO (The National Association of Professional Employer Organizations) defines a PEO as a “provider of comprehensive HR solutions for small and midsize businesses.

A professional employer organization establishes a three-way relationship between a company, its employees and the PEO. Rather than the traditional employer/employee relationship, the company and the PEO become “co-employers.”

What is Co-Employment?

Servant HR is an administrative employer, managing payroll, workers compensation, benefits and unemployment compensation matters. Management and day-to-day oversight is still the responsibility of the worksite employer.

When a company engages Servant HR as its PEO, employees sign a Co-Employee Acknowledgement Agreement. This agreement confirms employee understanding that he/she is now an employee of both Servant HR and their worksite employer.

What exactly does Servant HR do?

We provide comprehensive HR management tasks across five main disciplines:

  • HR Coaching & Counseling
  • Payroll
  • Benefits Administration
  • Risk Management
  • Retirement Program Setup & Admin

As a PEO, we strategically partner with clients to manage and optimize all human resource responsibilities — for both the benefit and protection of the client.

Any other reasons to consider a PEO?

So glad you asked!

According to NAPEO, small businesses that work with a PEO:

  • Grow 7 to 9 percent faster
  • Have employee turnover that is 10 to 14 percent lower
  • Are 50% less likely to go out of business

Any other reasons to consider Servant HR specifically?

  • Relief from the burden of employment administration
  • Expanded human capital management through a team of professionals
  • Improved employment practices, compliance and risk management
  • Administration of comprehensive employee benefit packages
  • Improved productivity and profitability

Unlike single-task outsource companies, Servant HR values the total relationship. By maintaining close management of all HR functions, our team gains valuable insights, understands procedures and offers holistic service. Our mission to take care of you and your employees makes relationship our priority.

Have more questions? Considering a PEO for your business? Contact us today! We’re excited to show you the benefits of a relationship with Servant HR.

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