Effectively Using Employees’ Opinions to Shape HR Strategy

Without a prompt and visible response, even the best designed employee opinion survey or exit interview process will fall prey to employee cynicism. If employees feel that management is ignoring their feedback, an effort to involve their opinions will likely cause a drop in morale.

Utilizing employee opinion and exit interview data well is a challenge. In this Astronology®, we share methods for strategic analysis that can help you turn your opinion-based data into concrete strategic objectives.

STRATEGIC OBJECTIVES IN HR
Strategic objectives in human resources are set to reinforce employee efforts and behaviors in support of an organization’s critical success factors – factors that will determine the future success or failure of an organization.

Many successful human resource functions have taken a page from the book of Drs. Kaplan and Norton and adapted the Balanced Scorecard approach to their strategies. In terms of HR, this approach involves viewing the organization through five strategic lenses:

• Learning and growth
• Customer
• Financial
• Quality
• Human Resources

This approach involves developing metrics (criteria for measurement), collecting data, and analyzing it as it relates to each of these perspectives.

In the quest to link the needs of the organization and the needs of its employees, conflicts often arise. Whether they arise from miscommunication, lack of acceptance, or a discord between organizational and employee values, HR is at a disadvantage when it does not strive to understand these conflicts and their foundations.

DATA ANALYSIS
Two powerful tools for collecting the data needed for this effort are employee opinion surveys and exit interviews.

Successful strategic planning in human resources begins with linking the information from opinion surveys and exit interviews. Trend analysis will become easier with time, but using both sources in tandem will reveal a clearer picture of working conditions. The following questions may be of use in this analysis:

• What do both sources identify as common sources of dissatisfaction?
• What do both sources identify as common motivators?
• What perceptions of the organization and its leadership are common?
• Are particular supervisors singled out as strong or weak leaders?
• How is human resources perceived in both sources?
• What are employee perceptions regarding the organization’s mission, vision, values, and objectives in both sources?

SWOT ANALYSIS
Once these sources of data are analyzed, it is the responsibility of human resources to conduct an internal analysis of its programs as they relate to communicating and reinforcing the strategic values of the organization. To this end, SWOT Analysis (Strengths, Weaknesses, Opportunities, and Threats) is an excellent strategic tool.

SWOT Analysis is a flexible line of questioning that can be used for organizational, individual, or competitive ends. In this context, the data analysis described above will be further organized:

• What are the current strengths of the organization?
• What are the obvious weaknesses to be modified?
• What opportunities exist to modify systems and / or programs that will better reinforce those employee activities and behaviors needed by the organization?
• What threats could interfere with successful implementation of necessary changes?

HR has an obligation to provide the organization’s leadership with insights regarding employee perceptions, as well as with concrete recommendations for reinforcing what is working and what needs to be changed. Employee opinion survey and exit analysis data are prime sources of information in this endeavor, but their collection could result in a backlash if results are not both shared and acted upon. After analysis is complete, share some version of the results with your employees, and tell them what will be done about the problems they have identified.

For instance, if an employee opinion survey communicates a lack of understanding about the organization’s mission, vision, values, and objectives, a training program could be instituted to address the problem. As this information can be distributed via e-mail, a technically savvy organization can raise employee awareness with no greater cost than a few hours of writing time.

Effective use of employee opinion and exit interview data provides the backing and justification the organization’s senior leadership team needs to support HR’s recommendations. Linking this supportive data to concrete proposals and programs that demonstrate ROI, return on investment, is key. The lack of response to employee concerns raised in the collected data can lead to increased turnover, inability to recruit effectively, and, potentially, lower productivity and efficiency due to lower morale.

The Onboarding & Retention Relationship

         O.C. Tanner reports that 69% of employees are more likely to stay with their places of employment for at least three years after a great onboarding experience. Back in 2009, an Aberdeen Group survey reported that 86% of senior executives and HR professionals believe that a new hire’s decision to stay with an organization long-term is made within the first six months of employment. Is the process of onboarding really that critical to retention?

         Research suggests that perhaps the first 90 days of employment are more critical than we think in terms of retention. The Wynhurst Group found that 22% of employee turnover happens in the first 45 days of employment. BambooHR found that one-third of 1,000 individuals surveyed quit a job within six months of hire. A study from Kronos Incorporated earlier this year also indicates that many feel the onboarding process can affect employee retention, as it should include more than orientation paperwork. Also of note is that

• 60% of survey respondents felt the main purpose of onboarding is to integrate employees into the organization’s culture.
• 36% blame insufficient technology for their inability to automate and better organize onboarding programs…resulting in the inability to properly train managers in proper onboarding techniques.

        Sharlyn Lauby, the HR Bartender & president of ITM Group, Inc. explains, “We all know turnover is expensive, both in terms of direct costs and intellectual capital. Organizations can increase retention by focusing on those activities that get employees engaged from the start. One way to do that is by taking care of administrative paperwork before day one so employees can focus on their role and other things that matter to them most. Onboarding processes set new hires up for success by building positive work relationships, making good on promises made during interviews, and providing a career roadmap.”

        What should an organization consider when creating an onboarding program geared to retain an employee? In an article on the Society for Human Resource Management (SHRM) site, Roy Maurer quoted Amber Hyatt from SilkRoad, suggesting these reflective, brainstorming questions:

• When will onboarding start?
• How long will it last?
• What impression do you want new employees to walk away with at the end of the first day?
• What do new employees need to know about the culture and work environment?
• What role will HR play in the onboarding process? What about direct managers? Co-workers?
• What kind of goals do you want to set for new employees?
• How will you gather feedback on the program and measure its success?

          Another aspect to consider is technology. Although nothing will replace one-on-one conversation and experience within an organization’s culture, some organizations have taken the step to use technology to make the onboarding experience more robust:

• Ashoka: the non-profit organization has an onboarding management system that allows new staff to complete tasks and set their own goals. It is said to empower new hires to “own their development.”
• ADP: the software developers at ADP have software that give text and video introductions to new hires before they even enter the workplace.
• Yoi: the onboarding platform Yoi is based on the concept of “experiential learning.” Through a range of assignments and assessments, managers are able to customize the onboarding experience for all new employees.

         Have you given thought to updating the onboarding process at your organization? What are some changes you are considering? Will you be adding some technological upgrades? Share your thoughts in the comment section below!

Good Office Politics in 2018

In a recent national survey conducted by Bridge by Instructure Inc., 53% of employees believe that “engaging in workplace politics was a moderately important factor in being promoted.” Naturally, we all want to succeed. We expect that success is achieved based on our undeniable hard work and skill. The above quote, however, raises a concern over the role office politics may play in advancement.

A mindtools.com article equated “good” office politics to networking and / or stakeholder management. “Office politics often have a negative connotation because of the negative influential behaviors associated with a person trying [to] achieve goals of getting to the top. There’s a thin line between persuasion and manipulation, and the negative connotation exists because of the few bad eggs that use unethical tactics in their pursuits,” explains E.M. Raws in a Chron online article. If all office politics isn’t bad, what exactly is “good” office politics? How do you conduct positive office politics?

Kathleen Kelley Reardon, in a Harvard Business Review article, explains that the degree to which an employee may have to engage in office politics largely depends upon the work environment. She lists four levels of politics in organizations:

• Minimally political organizations: in this environment, expectations for leadership, management, and promotions are made clear. Camaraderie exists, and although rules occasionally are bent and favors are granted, they are not done underhandedly.
• Moderately political organizations: in this environment, rules are widely understood and formally sanctioned. Political behavior could be denied since it is exists in a low current state.
• Highly political organizations: in this environment, who you know is more important than what you know. Rules are invoked when convenient to those in power. In-groups and out-groups are clearly identified.
• Pathologically political organizations: in this dangerous environment nearly every goal is achieved by going around people or formal procedures. Distrust permeates everything.

Reardon encourages identifying the type of political arena you work in and if you are a good match currently. If not, she notes “…it never hurts to learn about politics and to stretch your style to accommodate a variety of levels.” How so? She lists the following tips:

• Read about workplace politics and observe those who are skilled
• Try tweaking how and when you say things
• Consider to whom you’re giving power and alter that if it’s getting you nowhere
• Break out of dysfunctional patterns
• Be less predictable

In addition, Monster.com shares some positive strategies to use in environments with higher levels of work politics:

• Be alert
• Ask respected higher-ups for counsel periodically
• Perform deliberate acts of kindness
• Do visible important tasks

How do you feel about workplace politics? Do you work at an organization that displays high levels of politics? How do you handle that environment successfully? Feel free to share your thoughts in our comments section below.

Pay Equity in the Workplace: Do Gender Based Disparities Still Exist?

The American Association of University Women released its Fall 2017 Gender Pay Gap report/guide with statistics regarding the pay disparity between women and men. In this issue of Astronology®, we look into how broad these pay disparities truly are and how this situation impacts Human Resources.

According to the American Association of University Women (AAUW), women earned 80% of what men earned. The smallest pay gap was found in New York, where women earned 89% of what men earned. California came in second at close to 88%, with Florida third at 87%. The largest pay gaps were Utah and Louisiana at 70%. Some writers highlight that the AAUW’s findings do not take into account personal choices with respect to careers. These choices or factors include college major, occupation, industry, hours worked, workplace flexibility, and experiences.

Yet in AAUW’s recent research findings, unexplained pay gaps still exist even when men and women have the same level of education. For instance, women with a Bachelor’s degree make 74% of what their male counterparts with the same education earn. Women with a high school graduation level education made 78% of what their male counterparts earned.

In regards to industry, there is research that notes a few fields were women make more than their male counterparts. These fields tend to be historically male-dominated fields such as riggers, small engine mechanics, and non-oil & no-gas drillers. For many industries, however, a gender pay gap exists, with male counterparts making more. In some cases, the gaps are closer than others. These findings, plus additional research & speculation, lead many to believe that personal choices can’t fully account for the gender pay gap. Adding to the importance of the discussion, a Pew Research Center report finds that 40% of all households with children under the age of 18 include mothers who are either the sole or primary source of income for the family.

What can HR departments do to prevent gender-based pay disparity? Keeping accurate records is an important step. The AAUW urges employers to “conduct salary audits to proactively monitor and address gender-based pay differences.” Astron Solutions offers an array of packages to support organizations in the quest for fair and equitable compensation programs. We encourage you to learn more about how we can be your trusted partner in this critical and sensitive matter! If you do not use an outside consultant, however, closely watching your organization’s internal salary increases, salaries for new hires, and salary changes associated with promotions is critical in eliminating gender-based pay gaps in your organization. An ounce of prevention today is worth a pound of cure tomorrow.

Unpaid Internships: The Return

2014 saw an explosion in lawsuits surrounding the proper identification and payment of interns. In January 2014, Elite Model Management settled with former unpaid interns. Months later in October, NBC Universal closed a $6.4 million settlement with its unpaid interns. Then in November, Condé Nast settled with its former unpaid interns for $5.8 million. This lawsuit also resulted in Condé Nast terminating its unpaid internship program.

For some time, it was anticipated that the existence of unpaid internships would decline. Most of the lawsuits mentioned here revealed each employer’s inability to meet the U.S. Department of Labor’s (DOL) six factor test for unpaid internships.

On January 8, 2018, however, the DOL announced adjustments, thereby updating the guidelines for “The Test for Unpaid Interns and Students.” The updated fact sheet explains that “Courts have used the ‘primary beneficiary test’ to determine whether an intern or student is, in fact an employee under the FLSA (Fair Labor Standards Act). In short, this test allows courts to examine the ‘economic reality’ of the intern-employer relationship to determine which party is the ‘primary beneficiary’ of the relationship.” A concern for many courts with the original test was determining whether “the employer doesn’t gain an immediate advantage from the intern’s activities.”

What are the new seven factors for determining a lawful unpaid internship? Do these adjustments make it easier for organizations to provide meaningful unpaid internships?

The Seven New Factors

1. The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee—and vice versa.
2. The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions.
3. The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.
4.  The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar.
5. The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.
6. The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.
7. The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.

With the inclusion of the possible academic credit / formal education tie in, the new test is more flexible than the previous one. Determination on whether an employee should be paid is now based on an overall view of the circumstances. This makes it possible for organizations to meet the standard. It is still suggested, however, that employers ensure the intent and design of their internship programs are primarily beneficial to the interns.

Reactions, of course, vary. For example, Eric Glatt was a plaintiff from a lawsuit involving his unpaid internship with Fox Searchlight. In a comment to Bloomberg Business online, Glatt mentioned that “I don’t like the legal implications of this new test…but the practical implications may make the kinds of internships I did [entry-level jobs disguised as educational opportunities] go away.” Some labor advocates worry that these new guidelines may permit an organization to justify any program as benefitting an intern. On the other hand, due to the wave of lawsuits in previous years the on-going trend has been for employers to be safe and pay minimum wage. We look forward to seeing how organizations and future interns utilize these new adjustments.

What about your organization? Have you hosted an unpaid internship program? Have such programs been discontinued in recent years? Share your thoughts in our comments section below!

Translating Military Experience into Civilian Organizational Needs: A How-To (Guest Article)

Contributed by: Rich Virgilio

Congratulations, HR Professional! You made it into 2018 and now you get to take on the challenge of achieving the goals your executive leadership set forth in the strategic plan for the year. Most of the goals are straightforward, but a new wrinkle has appeared. Your organization’s execs have made it a specific goal to bring in more talented, former military people as a way to add another dimension of experience that can be shared among the workforce. This is intended to improve teamwork, generate some fresh views on finding solutions to problems, and increase productivity by promoting a “selfless service” culture found in the uniformed services.

Certainly, your recruiting has always included sourcing from the veterans’ community, but expressly targeting military experience is a step beyond, and certainly challenging. You find yourself asking, “How do I know that the skills I need specifically fit what a veteran has to offer?” Maybe you feel hamstrung since you don’t have first-hand military experience, or that you’re unfamiliar with what the military actually does behind those walls and gates, or that certain knowledge that there’s a whole lot more that goes into daily operations besides “killing people and breaking things (as some wags occasionally express it).” Certainly your organization doesn’t do those things!

Well, OK, as a methodology, let’s think generically about what the services have to do to function as the organizations that they are. Yes, they are huge, but they are made up of many, many smaller and subordinate units. Subordination implies a degree of both responsibility (to a next higher supervisor, let us say) and specialized function (which is a necessary portion of a bigger one). Organizational relationships and communications exist in your organization as well as in these units where they wear uniforms.

Are you following my line of thinking so far? See how we’re getting away from thinking that being in the military is isolated from the skills your organization’s needs?

“But we need people who can sell, and military people don’t sell anything.”

So as a start and as an illustration of this approach, let’s break this idea of selling into the component parts of the selling process. Fundamentally, selling is recognizing a prospect’s shortfall that can be fulfilled by a product or service offered by the seller. The skill is in characterizing the shortfall, communicating the identified need to the prospect, communicating the beneficial characteristics of the product or service, and then obtaining a commitment to utilize the offering. Here’s the piece that’s missing from most people’s understanding of the military: it’s not static. Things change. Old ways of doing things, or applying old solutions, don’t improve matters. Corporals bring up new ideas to sergeants, lieutenants present new options to captains, commanders present new tactics to admirals. All of these communications are sales. Yes, sales. So your position description or requisition doesn’t just say “Sales experience a plus;” it says “Sales or military decision briefing experience a plus.”

Or, you need an operations manager at one of your warehouses. Instead of “Warehouse operations experience desired,” you open up the aperture a bit and add “military supply and logistics fulfillment experience a plus,” because you know that somehow those soldiers overseas need to get food at their deployed site and they aren’t going to shop at the local grocery –somebody is in charge of moving that food from warehouses stateside, across interstate highways, across oceans, across local roads, and into the hands of cooks. If someone has successfully done that for a couple of years, they could surely manage your warehouse. But making that connection requires both you and the candidate to be speaking the same language, otherwise you won’t realize that although one is talking blintzes and the other crêpes, you’re both talking pancakes.

An out-of-the-box (somewhat) suggestion for you to consider. This takes some time, but if your organization is serious about taking some proactive steps to increase your veteran “inventory,” the investment in effort and time could pay off. Don’t take it all on yourself! Communication is a two-way street, so think about reaching out to someone in the candidate pool whose résumé has at least a hint of what you’re looking for. Phrase it as a “request for more information.” Maybe like this: “Dear John, your résumé has some characteristics of what we’re looking for in our new widget production manager, but I need some better description in civilian terms of your experience at the Navy’s Widget Command so we can better understand if you’re a close enough fit to see if we should further invest time together.” Let the candidate take on the responsibility of presenting himself in your language. He will have been forewarned by his career change advisors to do it, and will do his best to better break out of any military-ese still remaining. And that will benefit you.

Give yourself a chance to effect this wrinkle in your recruiting. It’s not hard, but does take some focus and a bit of adjustment. And it’s a good way to assure yourself you haven’t missed some great talent because you weren’t thinking about how to connect with the veterans who are out there looking for you.

Rich Virgilio is a retired HR Professional and an occasional contributor to Astronology®. He currently resides just outside San Antonio, Texas.

Leaving 2017…Embracing 2018

We are here again, the end of another year! 2017 came and flew by! As in previous issues of Astronology®, we would like to take our last issue of 2017 to look at HR trends and topics that could possibly be impactful for the coming new year.

Workplace Culture and Human Resources Policy
With the recent increasing reports of sexual harassment in a variety of workplace sectors, 2017’s fourth quarter has been filled with talks about workplace culture and Human Resources policy. A pressing concern in this area is some organizations’ negligence in reinforcing HR policies surrounding this issue of workplace harassment. We expect continued talk into 2018, as well as actions to promote workplace environments where employees feel comfortable reporting alleged harassment incidents, with the confidence that the organizations they work for will support and follow through with proper procedure. Other areas for expected HR policy adjustment include equality in the workplace, in areas such as gender, race, and sexuality.


Talent Management and the Multigenerational Workforce
This past May, we released an article on alternatives means to measure performance. This was largely due to continued growth in organizations breaking away from traditional performance reviews. Why the movement? There are many factors, including the nature of work changing due to technology and the impact of new generations in the workplace. For the last few years, we’ve studied and prepared for the wave of Millennial (born 1981 to 1995) generation workers. This meant understanding what this age group values and structuring organizations to appeal to these values, in order to gain and retain talent. A noted value of this age group has been continuous feedback. As a result, many organizations have sought ways to meet this need, resulting in a new wave of measuring performance.

There are also early notes that a new wave of generational employees already is moving into the workforce. The earliest born iGen, or Generation Z (born in 1996 and later), have started to hit the workforce. This means now, more than ever, organizations have to learn to strike balance within a multigenerational workforce. This means designing retention tools and a work environment to fit the ever evolving employee collective. A recent Forbes online article even suggests that such a dynamic environment leads to a competitive advantage. We expect this to be a continuing trend well beyond 2018.

Federal Policy
As mentioned in a previous Astronology® there are some anticipated policy changes or adjustments expected in 2018. To recap:

• Fair Labor Standards Act (FLSA): In October 2017, the Department of Justice filed a notice of appeal on an August 31, 2017 summary judgement against the FLSA’s Overtime Final Rule. Although it isn’t completely clear on what the US Department of Labor’s practical arguments will be, it is suggested that the DOL will
• Not defend the Obama selected $913 a week figure, and
• Argue that a salary test is legally permissible under the white-collar exemptions.
• National Labor Relations Board (NLRB): By September 2017 the NLRB became a Republican majority five member Board. It is anticipated that this newly adjusted board may reverse some recent rulings such as a 2015 Joint-Employer ruling and even a few 2014 rulings. On December 17, Phillip Miscimarra’s term on the NLRB will expire. He already has vocalized that he will not seek a second term, vacating a seat and position in 2018. We look forward to seeing who eventually takes the vacated seat and what decisions will be made with this new board in 2018.
• Occupational Safety & Health Administration (OSHA): In July 2017 an updated agenda was released indicating that 469 proposed federal regulations were being removed, and another 391 regulations deemed “long-term” or “inactive” for further review. There are a few regulations in the “pre-rule” stage that we are anticipating to appear in 2018:
• Communication Tower Safety,
• Mechanical Power Presses Updated,
• Powered Industrial Trucks,
• Lock-Out / Tag-Out Update, and
• Blood Lead Level for Medical Removal.
• Affordable Care Act (ACA): 2017 found four different appeals (the American Health Care Act, Better Care Reconciliation Act, Skinny Repeal, and the Graham-Cassidy Plan) either being dismissed or vetoed from even being brought to a vote. This means for now, we should follow the currently mandated Affordable Care Act in order to avoid penalties. We do anticipate more talk on health care reform in 2018, however.

HR Technology
We also expect to see continual advancement of HR Technology in a variety of ways. Cloud-based HR software has been becoming the norm for many organizations, small to large. It allows for mobility, “on the go” around the clock access, and has become increasingly affordable. As remote work continues to be a possible work option, such access has becoming increasingly appealing. Gamification also has shown growth in HR, as it can be used to encourage performance, employee engagement, and training. Also expecting to make an appearance in 2018 is the use of big data to make HR decisions on hiring staff and increasing retention rates. It also is suggested that organizations can use data analysis to predict performance.

Closing Out 2017
As 2017 comes to a close, we eagerly look forward to 2018 for some answers to questions in regards to HR policy, and undoubtedly some surprises in Human Resources overall. Are there other topics that you think may make some impact in 2018? Why not share your thoughts with Astronology®! We’d love to hear your opinions!

Reflecting on 2017 Federal Policy Changes

The time certainly has flown by as we close the first year of the current political administration. In June, Astronology® reflected on the first six months on Capitol Hill in 2017. In this issue of Astronology®, we review current and potential future policy changes in four areas that affect Human Resources: the Fair Labor Standards Act exemption rules, NLRB seat changes, OSHA regulation rollbacks, and the Affordable Care Act.

Fair Labor Standards Act (FLSA) Exemption Rules Update
Around this time last year, many were preparing for possible changes to the FLSA to determine exempt and non-exempt roles moving forward. However, by the end of November 2016, an injunction was made on the Final Rule, halting its December 1st start date.

On August 31, 2017, U.S. District Court Judge Amos Mazzant granted summary judgement against the Overtime Final Rule. The US Department of Labor’s (DOL) website explains that “The court held that the Final Rule’s salary level exceeded the Department’s authority, and concluded that the Final Rule is invalid.”

What happens next? On October 31, 2017, on behalf of the DOL, the Department of Justice filed a notice to appeal the decision. The notice does not indicate what the US DOL’s motivations are or what practical arguments will be used. It is suggested that the DOL will

• Not defend the Obama selected $913 a week figure, and
• Argue that a salary test is legally permissible under the white-collar exemptions.

It’s likely we won’t hear much else until sometime in 2018. Stay tuned for future updates!

National Labor Relations Board (NLRB)
Many have kept their eyes peeled regarding nominations for and appointments to the National Labor Relations Board, which had a few seats left vacant in 2017. In January, the Trump administration appointed Philip Miscimarra as Chairman. In August, former GOP House staffer Marvin Kaplan was approved by the Senate to an open seat on the Board. The following month, William Emanuel was confirmed to the NLRB with a 49-47 Senate vote. Emanuel’s confirmation currently gives the Republicans a majority on the five member Board.

It is anticipated that with the newly adjusted Board there may be some reverse rulings in the future, namely the Joint-Employer ruling that gave franchisors responsibility for labor law violations committed by their franchisees. Other possible rollback rulings could include 2014 rulings that sped up union elections.

Phillip Miscimarra’s term expires on December 17, at which time he will not seek a second term. We look forward to learn what becomes of the vacated seat and position in 2018.

Occupational Safety & Health Administration (OSHA)
On July 20th the Department of Labor released an updated agenda indicating many OSHA regulatory actions would be cut. 469 proposed federal regulations are being removed. Another 391 regulations have been reclassified as “long-term” or “inactive” for further review. Some of the regulations being removed include efforts to regulate worker exposure to construction, noise, and combustible dust. Two regulations that are listed in the “long-term” category are regulations regarding emergency response & preparedness, and regulations regarding infectious diseases in the health care industry. There are also a few regulations in the “pre-rule” stage:

• Communication Tower Safety,
• Mechanical Power Presses Updated,
• Powered Industrial Trucks,
• Lock-Out/Tag-Out Update, and
• Blood Lead Level for Medical Removal.

We look forward to seeing what will happen with these proposed regulations.

Affordable Care Act (ACA)
In our June 27th Astronology® we described the then newly presented Better Care Reconciliation Act (BCRA). It was the Senate’s amendment to the House of Representatives’ American Health Care Act of 2017 (AHCA). The BCRA did not gain the needed votes to pass. In July, a third attempt, the “Skinny Repeal,” also failed to pass the Senate. Late September another attempt was dismissed. Republicans decided to not bring the Graham-Cassidy Plan to vote, as they believed they would not secure the needed votes.

What does this mean for us now? We should follow the currently mandated Affordable Care Act in order to avoid penalties. Nothing else has changed.

We eagerly wait for what 2018 brings the Human Resources sector! In addition, are there other federal or local regulations that have made an impact on you and your Human Resources role? Please let us know in the comment section below.

The Challenge of Misclassification in the Gig Economy

According to a 2016 Pew Research survey, some 24% of American adults have used some sort of digital commerce platform to earn money. This approach to earning a living is considered part of the gig employment phenomenon. In a 2016 study conducted by Harvard’s Lawrence Katz and Princeton’s Alan Krueger, 16% of American workers work for a temporary help agency, contract as independent contractors, or hold an on-call position. Current trends anticipate the gig economy to comprise more of the workforce in the future. In this issue of Astronology®, we look into the recent trend of gig employment and a critical challenge surrounding it.

In 2015, the Economic Policy Institute (EPI) reported that workers misclassified as independent contractors had grown considerably. Also stated in the report was that “New ‘sharing economy’ [also known as gig economy] businesses create cause for concern about misclassification because it is unclear how ‘autonomous’ these workers really are.” The report further expresses, “Employers who misclassify avoid paying payroll taxes and workers’ compensation insurance, are not responsible for providing health insurance, and are able to bypass requirements of the Fair Labor Standards Act, as well as the 1986 Immigration Reform and Control Act.”

A direct result of this misclassification is gig workers being forced to pay the full ACA tax or purchase their own health insurance. However, these costs may not be within their gig incomes. These conditions have given rise to lawsuits alongside the rise of gig-like jobs. For instance, Lyft recently settled a $27 million class-action lawsuit brought by drivers seeking to be classified as employees. Currently, Uber is in court for a similar class-action lawsuit. In light of this, the next question to consider is if labor laws will ever catch up to the rise of the gig industry.

Some employers have lobbied state legislatures to assist in legal coverage. In response, 28 states have legalized ride-hailing services, such as Uber and Lyft, labeling their workers as independent contractors. In Arizona, all workers using online labor platforms for work are considered independent contractors. This means that, while workers will find it hard to file successful claims for state-run benefit programs, gig workers still retain the right to sue over benefits and protections owed to employees under federal law. In New York and Washington, portable benefits, an encompassing benefit program designed for independent workers, are being considered.

As the workforce continues to change and more independent workers comprise our labor force, it will be important to see how legislatures continue to react. Do you work for an organization that supports or has some form of independent workers? How large a part of your organization are gig workers? How does your organization support gig workers? Please share your thoughts in our comments section below!

Freelance isn't Free Act

New York City Mayor Bill De Blasio signed the Freelance Isn’t Free Act (FIFA) back in November 2016. The law goes into effect May 15th, 2017. With an estimated four million freelancers in the New York City Metro area, the new law looks to rectify the payment challenges freelancers sometimes encounter. For instance, in 2014, the Freelancers Union discovered that 50% of reported freelancers had trouble collecting payments owed for their work. 81% of these freelancers experienced being paid late for their services, and 34% were not paid at all for some projects. Perhaps your organization currently employs freelance workers for various functions. If so, organizations that hire freelancers from the New York area, as well as organizations that function in the New York area, should take special note of this new law.

Temporary workers, contract workers, independent contractors, and freelance workers all fall into the growing category considered the “gig economy.” FIFA is considered one of the first attempts to deal with this segment of work, employment that covered just 10% of early 2005’s workforce. Ten years later, in late 2015, the gig economy encompassed 16% of the workforce. It is anticipated that this field will continue to grow and have a significant impact on employment in the coming years. To protect these freelance workers, FIFA creates a formal means for enforcement of freelancers’ labor rights. Highlighted features of the non-retroactive law include the following:

• A contract must be written if a business hires a freelancer for $800 or more worth of labor over a period of 120 days. The contract must include:
• The name and address of both parties
• Itemized list of all services provided with the value of each service
• Freelancer’s rate and method of compensation
• Specific date when the freelancer must be paid
• An understanding that the freelancer must be paid no later than 30 days from the completion of the work if no date is provided on the contract

• The hiring party is prohibited from “threatening, intimidating, disciplining, harassing, denying a work opportunity to, or discriminating against a freelance worker, or taking any other action that penalizes a freelance worker for, or is reasonably likely to deter a freelancer worker from, exercising or attempting to exercise any right guaranteed under the new law, or from obtaining future work opportunity because the freelance worker has done so.”

• If a freelancer succeeds in court with a claim, it is possible for the freelancer to recover
• Contracted value of the services,
• Double damages,
• Reasonable Attorney’s fees and costs,
• Injunctive relief,
• Statutory damages, and
• Other “such remedies as may be appropriate.”

• The city can take additional civil action against a hiring party that demonstrates “a pattern or practice of violations of the new law and seek up to $25,000 in civil penalties.”

An Entrepreneur online article written by Carol Roth suggests that organizations review current contracts and practices with respect to hiring independent contractors / freelancers, and to consult a lawyer with any concerns. The New York City Office of Labor Standards website also should be referenced for more details on FIFA and sample contracts for both freelancer workers & hiring organizations. Roth also noted that even if FIFA currently does not cover your organization, pay close attention that local, state, and / or federal definitions, such as in the Fair Labor Standards Act, do not define a hire you consider to be a freelance worker as an employee.

What has your organization done to prepare for the newly enacted Freelance Isn’t Free Act? If you’re not in the New York City area, what actions might you take in advance of potential future state or local legislation? We’d love to hear your thoughts in our comments section below!