Four “Landmines” and Best Business Practices to Avoid Them

By pmphrblog | Published October 6, 2014

Now that summer vacation is only a memory, “getting back to business” is the primary objective. As part of this, every owner, CEO, CFO, and HR professional should assess their organization’s compliance with workplace laws, in order to avoid “landmines” that can severely impact the positive bottom line you worked so hard to achieve. The best approach to reducing the exposure to expensive audits and lawsuits is to establish sound business policies and procedures and proactively address some critical areas. Now is the time to review these areas and put compliance self-audit into the budget!

1. Pay Practices and Pay Equity:  The number of organizations exposed to wage and hour audits by the Department of Labor (DOL) increases each year, and the results inevitably are expensive settlements or even more expensive litigation. Last year, the Wage & Hour Division of the DOL recovered nearly a quarter of a billion dollars in back wages. These cases included employees misclassified as “independent contractors” or employees who were improperly classified as “exempt” and not paid the overtime they were entitled to. Additionally, paying employees “off the clock,” or not designating all time worked as paid time (deducting for breaks not taken, allowing employees to work while not recording the time, designating certain activities as non-working time incorrectly) often results in substantial unpaid wages and overtime being awarded. A recent survey revealed that 18% of cases filed in local federal courts have been wage and hour cases.

Federal contractors and subcontractors have even greater obligations. Since the OFCCP heads up the Equal Pay Task Force for the White House, Director Shiu continues to aggressively investigate pay practices and pay equity during OFCCP audits. A recently signed Presidential Memorandum will continue to keep this in the forefront as, when finalized, it will require a report to be submitted annually to the OFCCP to include total W-2 Wage and Tax Statement earnings and total work hours for the previous calendar year for all employees included in the contractor’s most recently filed EEO-1 report, whether or not the employees were still employed on December 31.

Best Practice: Reviewing job descriptions, the classifications of your workforce, and your pay practices should be on the top of the “To Do” planning list this fall. Be aware that you must be prepared to allocate funds should adjustments need to be made as a result of this review.

2.  EEOC (and Human Rights) Charges and the Need for Training of Managers and Supervisors:  Last year, the U.S. Equal Employment Opportunity Commission (EEOC) obtained the highest monetary recovery in the agency’s history ($372.1 million). Few organizations realize that charges of “retaliation” are the most frequently cited category of discrimination. Race discrimination, sex discrimination (including sexual harassment), pregnancy discrimination, and disability discrimination made up the rest of the top five charges for which employers paid out large amounts in settlements. As most HR Professionals know, these charges are often a result of a manager or supervisor saying or doing the wrong thing due to his / her lack of knowledge of the labor laws or not following organizational policies and procedures.

Best Practice: In today’s diverse workplace, equipping management with the training and information needed to effectively deal with people from different backgrounds is critical. Providing training for managers and supervisors is one of the best investments an organization can make. At minimum, every organization should schedule Anti-Harassment / Discrimination / Retaliation training for their managers and supervisors on a regular basis.

3.  Updated Employee Handbook:  Employee lawsuits have risen 400% in the past 20 years, to 6.5 claims per 1,000 employees annually. Employers need to implement guidelines for the prevention of discrimination in the workplace. A well-written handbook and consistently applied policies & procedures are critical to maintaining good morale, ensuring that employees understand their responsibilities, and providing clear guidance to all levels of management. Workplace laws keep changing; organizations need to be aware of the changes, make modifications, and keep their policies & procedures current.

Every organization should be updating its policies to address vibrant topics such as tele-commuting, social media, use of organization issued equipment, and recent changes in FMLA.

Best Practice: Review your handbook, policies and procedures with a workplace specialist to ensure that you are addressing current federal and state regulations. Organizations should also be reviewing the need to translate policies in the native language of their workforce. Be sure that you have a signed receipt from every employee that acknowledges receipt of the organization’s handbook.

4.  Form I-9:  PMP has found that most employers are confused as to how and when to correctly complete Form I-9. Must the employee complete Section 1 on the first day of work? (YES!) Is the employer allowed to ask the employee for specific documents? (NO!) Should the I-9 be kept in the employee’s file? (NO!) It is the lack of knowledge of regulations that can cause organizations to receive fines of $1,100 per form and up to $16,000 per worker for incorrect or missing forms. The U.S. Immigration and Customs Enforcement (ICE) continues to escalate its worksite enforcement and has announced that it will implement another round of I-9 audits. Although organizations are allowed to do self-audits and correct errors, this should only be done by a person who is familiar with the current regulations.

Best Practice: Contact a knowledgeable HR Professional to schedule a review of your organization’s I-9 forms.

By being proactive, an organization can greatly diminish its exposure to expensive litigation. Budgeting time and money to address these four areas of concern now is the smartest way to avoid a large, negative impact on an organization’s bottom line.

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This article is intended for general information only and should not be construed as legal advice.

For more information on labor relations please visit us at:

http://www.pmphr.com/

About Portnoy, Messinger, Pearl and Associates:

Portnoy, Messinger, Pearl and Associates, Inc. (PMP),  the oldest labor relations consulting firm representing management on Long Island, was founded in 1964 by former union organizer and worker’s rights advocate, Murray W. Portnoy.  Initially, Murray offered human resource consulting and union contract negotiating services to a handful of clients. Today PMP has a full staff of experienced and talented human resources and labor relations consultants, labor and employment attorneys, and administrative personnel. Murray Portnoy's values and vision remain at the core of PMP's mission and principles.

Medicaid Enrollment: Almost a Free Lunch for Employers and Employees

Guest Author, Robert Trobe of Crystal & Company

Summary

The expansion of Medicaid eligibility under the Affordable Care Act (ACA) offers a huge opportunity for employers to significantly contain their employee benefits costs, as well as provide enhanced benefits to employees and their families through a Medicaid enrollment program. These costs are already escalating with many organizations as uninsured individuals, faced with increasing tax penalties due to the ACA individual mandate, opt to enroll in their employer’s benefit plans. In addition, in 2015, employers with 100 or more employees will be required to offer affordable health coverage to their full-time employees (30 hours per week or more), further increasing costs for organizations not currently providing such coverage.

Successful implementation of a Medicaid enrollment program does not just happen; it depends on active outreach by skilled individuals knowledgeable about Medicaid policies, compliance requirements, and enrollment processes in each of the 27 states plus the District of Columbia that have opted for Medicaid expansion (see list at bottom of this article). Crystal & Company, a large privately owned insurance broker and consultant, has partnered with an experienced Medicaid enrollment vendor to implement such a program.

This article outlines the key benefits and savings from a Medicaid enrollment program sponsored by an employer, how it can be effectively executed, and whether it would be of value to a particular organization.

Eligibility

Individuals and their families are generally eligible for Medicaid in the expansion states if the combined income of the members of their household (not the family, but those who live at the dwelling of the applicant) earn less than the following:

• Household of Four: $32,913
• Household of Three: $27,310
• Household of Two: $21,707
• Household of One: $16,104

Benefits to the Employer

Employers benefit from each successful enrollment in two ways:

         
Employees Currently Participating in the Employer Plan—The employer cost for providing health, prescription, and dental benefits to their eligible employees can amount to $5,000 per year for an individual and $15,000 or more per year for a family. This compares with a Medicaid implementation cost (through our partner vendor) of $20 per month for each employee who is eligible and has applied for Medicaid (with the help of the vendor) plus $40 for each employee screened but found not eligible.

Employees not Currently Participating in the Employer Plan—For employees who have not enrolled in the employer’s benefit plans because they work less than the required hours, or because they could not afford the employer’s plan, the intangible benefits of Medicaid enrollment can be substantial in terms of increased morale and reduced absenteeism.

In virtually all cases where there are sufficient numbers of Medicaid eligible employees, the employer saves substantial dollars from an effective Medicaid enrollment program.  The return on investment can be 5:1 or more.

Benefits to Enrollees

Eligible individuals and their family members receive coverage for health, prescription, dental, and vision at no or very low cost. The Medicaid benefit is provided with no deductibles or co-insurance, and limited co-pays. In addition, successful enrollment in Medicaid affords employees the opportunity, if they wish, to obtain Food Stamps, which can increase individual income from 15-30%. The end result is a substantial savings for those currently enrolled in the employer’s benefit plans, who otherwise would be contributing to the cost of that plan and paying significant dollars for services provided.

For uninsured or underinsured individuals, the Medicaid benefit can literally be life-saving and prevent bankruptcy from medical claims. A study based on 2007 sample data (http://www.pnhp.org/new_bankruptcy_study/Bankruptcy-2009.pdf ) found that 62% of bankruptcies were attributable to uncovered medical costs.  Three quarters of the sampled individuals had health insurance.

It is true that Medicaid provider networks are historically less developed than commercial networks, which is why this program is not a completely free lunch.  However, recent federal and state initiatives are aimed at reducing that disparity.

Successful Implementation

Applying for Medicaid can be very complex.  It requires several components—most importantly a competent vendor with the following system and human resource capabilities:

• Staff intimately knowledgeable in Medicaid policy and processes in the applicable state.
• A system that can help workers collect the data they need with a pre-enrollment questionnaire.
• A telephonic and Web-based enrollment process, including pop-ups that explain confusing questions.
• Outcomes that are tracked for reporting back to the employer.
• A multilingual call center with Medicaid experts to assist workers every step of the way.

Will this Benefit My Company and What should I do if Interested?

Companies that have at least 20 employees (including part-time employees) who are paid $32,900 per year or less should consider implementing a Medicaid enrollment program. For an initial assessment of the feasibility and value of such a program or for questions on this article, please contact Robert Trobe (robert.trobe@crystalco.com or 212.504-5960)

States with Expanded Medicaid Programs

Arizona, Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Hawaii, Illinois, Iowa, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, Vermont, Washington and West Virginia.

The Employee Lifecycle

By guest author Mandy Skinner of The Wedge Group

In today’s competitive and ironfisted market, businesses are only as good as their employees.  It is this simple truth that makes the employee lifecycle so influential in the success of an organization.  The employee lifecycle is a model that follows the stages of an employee’s career within an organization from start to finish.

The first stage of the lifecycle involves the hiring, orientation, and on-boarding of the employee.  A comprehensive background screening during the hiring process can save a lot of frustration later in preventing theft, violence, and fraud.  Safeguarding your product and your employees is always a good plan.  After the candidate passes the screening, they must then begin the orientation process.  As we all know, first impressions are everything, so having a comprehensive process to do this well is imperative.  It gives the employee the impression that the company is well organized and takes care of their own.  In addition to fulfilling the required paperwork, a solid on-boarding program can set the stage for employee engagement and retention.  A program that integrates the new employee into the workplace culture as well as builds professional relationships, such as those developed with mentoring programs, work well to develop this commitment.

The next stage of the employee lifecycle is based on development.  By encouraging development in the employee, we are improving their capabilities as well as enthusiasm.  There are several ways to do this.  Training and development in leadership, team work, and technical skills will help to improve an employee’s skill set.  Another way is to engage employees on a personal level through perks such as health and wellness programs.  Although programs like these are indirect in the development of an employee, the return on investment is excellent, not to mention the improvements in employee morale and engagement.  It is no wonder that many of the world’s top performing companies are offering them.

Management plays a key role during this phase of the employee lifecycle.  Effective performance coaching and support from a strong leadership team can truly change a person’s life.  It can mean the difference between moving up and moving out for an employee.  When done well, effective management can also largely contribute to the realization of a company’s vision and mission.

The third step in the employee lifecycle involves transition.  Some people work in the same place for their entire careers, but the truth is most do not.  As skills and experience are developed, talent within the organization grows and allows for more staff movement internally.  Promoting from within has many benefits including greater employee engagement, smoother transition, and deeper loyalty.  Unfortunately from time to time, an employee may not be a good fit for the organization or the process of restructuring demands that employees be let go.  Regardless of the reason for transition, a smooth transition into new positions, retirement, or outside of the company relies on having processes in place to accommodate this movement.  Clear communication, expectations, timelines, and planning are key to developing this process. 

Just like any cycle, this process goes back to the beginning.  Once an employee transitions out of their position, it must be filled again bringing us back to the first stage of the employee lifecycle.  It is important to understand the process and work within it as effectively as possible to create the best team for your organization.

The Wedge Group, Inc. offers support to companies without Human Resource teams or in partnership with existing HR staff.  Our programs develop and implement the best system for getting the most out of and retaining engaged, productive, and steadfast employees.  Our background checks and on-boarding programs work to help you find and retain the best talent.  We also offer Leadership and Team Development, and Performance Coaching training to ensure that your employees are engaged and productive.  Succession Planning is a proven way to have a plan in place for all sudden changes within the work force and to have a solid Business Continuity Plan.  If you are looking for external motivators, our Corporate Health and Wellness Program have a proven track record and outstanding return on investment.  Career Transition Coaching has been a staple of our services from the beginning; we pride ourselves on providing employee support while cutting costs for the organization making the process much more efficient and positive.  Our commitment to providing the best support and service is what has kept us in business for over 30 years. 

For more information on getting the best out of each and every employee, please visit us at:

www.TheWedgeGroup.com

You can also contact us at JIhnotic@TheWedgeGroup.com or (607)772-9359 for further questions and inquiries.

About the author:

Mandy Skinner is the Head of Client Services at The Wedge Group, Inc., where she has worked with organizations such as Cornell University and Prudential Securities.  Her service and support are individualized to meet the changing and diverse needs of all The Wedge Group’s clients.