December 2017 issue

Volume 7 : Issue 12

TM

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Trends in Compensation

HRCI Update on 2018

Certifications

Compensation and Performance Management Issue Benchmarking Compensation

Brad

Federman, COO

F&H Solutions Group

Competitive Pay: Paving the Way to Engagement

Generations at Work and Ageism

WEB EXCLUSIVES HTTP://HRProfessionalsMagazine.com /Exclusive

Bringing Human Resources & Management Expertise to You

Employee average merit budgets for 2018 will range from 3.2% to 3.6%. www.HRProfessionalsMagazine.com Editor

Cynthia Y. Thompson, MBA, SHRM-SCP, SPHR Publisher

The Thompson HR Firm, LLC HR Consulting and Employee Development Art Direction

Park Avenue Design

Contributing Writers

Austin Baker Jennifer Blake Doug Bonderud Barry Brown Bruce E. Buchanan William Carmichael Adam Cohen J. Bruce Cross Heather F. Crowe Frank Day Harvey Deutschendorf Adam Gates Robbin Hutton Jennnifer S. Kiesewetter Bruce and Blair Johanson Daveante Jones Sarah T. Laren LaToi D. Mayo Karen W. Roche Billy Sprague Janie Warner Board of Advisors

Austin Baker Jonathan C. Hancock Ross Harris Diane M. Heyman, SPHR Terri Murphy Susan Nieman Robert Pipkin Ed Rains Michael R. Ryan, PhD Contact HR Professionals Magazine: To submit a letter to the editor, suggest an idea for an article, notify us of a special event, promotion, announcement, new product or service, or obtain information on becoming a contributor, visit our website at www.hrprofessionalsmagazine. com. We do not accept unsolicited manuscripts or articles.

All manuscripts and photos must be submitted by email to Cynthia@hrprosmagazine.com. Editorial content does not necessarily reflect the opinions of the publisher, nor can the publisher be held responsible for errors.

HR Professionals Magazine is published every month, 12 times a year by the Thompson HR Firm, LLC. Reproduction of any photographs, articles, artwork or copy prepared by the magazine or the contributors is strictly prohibited without prior written permission of the Publisher. All information is deemed to be reliable, but not guaranteed to be accurate, and subject to change without notice. HR Professionals Magazine, its contributors or advertisers within are not responsible for misinformation, misprints, omissions or typographical errors. ©2017 The Thompson HR Firm, LLC | This publication is pledged to the spirit and letter of Equal Opportunity Law. The following is general educational information only. It is not legal advice. You need to consult with legal counsel regarding all employment law matters. This information is subject to change without notice.

Features

Employment Law

2 Employees’ Identities Mean the World to Us 4 note from the editor 5 Profile: Brad Federman, COO F&H Solutions Group 6 BLR Event – Igniting Engagement for Performance and Retention 20 Open Enrollment: Using Nobel Prize Winning Research to “Nudge” Working Americans Part II 28 Thinking of Keeping Seasonal Hires? Not Before you Read This!

29 Book Look – Beyond the Clothes: Image & Presence 46 Investing in Your People Pays Off!

10 How Ready Are You for a Cyber Attack?

16 Highlights from the 38th Wimberly and Lawson Annual Labor and Employment Law Update Conference in Knoxville November 2-3 18 Highlights from the Bass Berry Sims Labor and Employment Law Update in Memphis November 16 26 The Rise of State and Local Legislation Affecting Employee Compensation 30 Highlights from “Ripped from the Headlines” – An Employment Law Seminar presented

by Burch, Porter & Johnson in Memphis November 14 and 16 32 A Review of President Trump’s Executive Orders Impacting Labor & Employment Law 38 Workforce Development – New Efforts are Underway to Bring More Potential Candidates to Your Business 39 Ten Simple Steps to Avoid Employment Law Suits 41 Karen W. Roche Joins Burch, Porter & Johnson 42 Limits to Leave as a Reasonable Accommodation under the ADA 44 What is the Impact of Trump’s Hire American Executive Order?

Compensation and Performance Management 12 Benchmarking Compensation: Bringing in the Best with Big Data 14 Competitive Pay: Paving the Way to Engagement 22 Six Steps to Better Performance Appraisals 24 Generations at Work and Ageism – The Acceptable Discrimination 34 2017 Compensation and Benefits Highlights and Trends 40 To Review or Not to Review – Legal Considerations in Eliminating the Performance Review

Educational Opportunities for HR Professionals 9 Update on HRCI Certifications 11 Leadership & Organizational Performance Professional Graduate Program at Vanderbilt Peabody College 31 The Only AACSB-Accredited Academic Training in HR Management in the Memphis Metropolitan Area – The University of Memphis 43 Online HRCI Certification Exam Prep Class Begins February 19

Industry News 7 NEA SHRM 9th Annual Supervisor Seminar in Jonesboro November 14 8 WTSHRM 8th Annual Human Resources & Employment Law Fall Conference in Jackson November 1

January 2018 Issue features U. S. News Best Lawyers in Employment Law and Profiles of Top Employee Benefits Companies plus Employment Law and Employee Benefits Updates Deadline to reserve space December 10

Employee Benefits 33 The Greater Memphis Employee Benefits Council 2018 Board of Directors 36 Think Employee Benefits Aren’t Affected by the Proposed Tax Bills? Think Again! www.HRProfessionalsMagazine.com

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a note from the Editor The focus of our December issue is compensation and performance management. You are going to enjoy reading about Brad Federman, COO of F&H Solutions Group, a Leadership and HR consulting firm located in Memphis, Atlanta and the DC metro area. They serve the US and countries abroad. F&H’s Solutions Groups mission statement is “Strengthening Brands Through Culture, Leadership & People.” You will also enjoy the article by Jennifer Blake, Senior HR Consultant, on competitive pay. Her article is on Page 14.

Cynthia and the Regional Managing Members of Wimberly Lawson at their 38th Annual Labor & Employment Law Update in Knoxville, TN November 2-3. (L-R) Gerard Jabaley, Managing Member of the Knoxville office; Kelly Campbell, Managing Member of the Morristown office; Jeff Jones, Firm Managing Member located at the Cookeville office; and Fred Baker, Member of the Cookeville office.

Fred Bissinger, Managing Member of the Nashville office is not pictured.

We have quite a few articles in this issue to bring you up-to-date on the latest in the world of compensation and performance management. ADP has provided an excellent article on benchmarking compensation by Doug Bonderud on Page 12. Blair and Bruce Johansan provided another helpful article about 2017 compensation and benefits that you don’t want to miss. Plus we have articles on employment law and benefits that are must-reads.

It is the season of giving, so don’t forget to make your donation to the SHRM Foundation. Each year they provide over 200 scholarships to HR practitioners and students to help in their pursuit of HR certification and HR graduate and undergraduate degrees. They also provide much needed research for the HR community that you will not find anywhere else.

Next month our emphasis will be on top employee benefits companies. We will also feature the U.S. News best employment law attorneys. I hope you will join us for our monthly complimentary webinar sponsored by Data Facts. As always, you will receive SHRM and HRCI credit.

Best wishes for a beautiful holiday season with your loved ones.

Happy holidays!

cynthia@hrprosmagazine.com @cythomps on Twitter

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Brad FEDERMAN on the cover

BRAD FEDERMAN, COO of F&H Solutions Group Brad Federman serves as the Chief Operating Officer for F&H Solutions Group, a Leadership and HR consulting firm that delivers customized solutions aligned with clients’ organizational mission, structure, and vision. F & H Solutions Group has offices in Memphis, Atlanta and the DC metro area and serves the US and countries abroad. Starting out, Brad worked at Accenture in Washington, DC. Following that, he held Human Resource and leadership positions at Norrell Services, Humana, and the Novations Group. After years of corporate and field leadership experience, he was confident he had the expertise to deliver unique and powerful solutions through consulting and training. Brad’s overarching goal was to help organizations incite meaningful and lasting change.

In 2003, Brad founded PerformancePoint, LLC. where he was heavily involved in executive coaching and increasing employee and customer engagement while serving as president. PerformancePoint had clients from distinguished organizations such as Nordstrom, FedEx, Mayo Clinic, and St. Jude Children’s Research Hospital. In addition to the American market, Brad was able to expand his services globally to organizations in Asia, Europe, and the Middle East.

In 2013, Brad made the decision to merge PerformancePoint, LLC. with F&H Solutions Group in order to offer clients a stronger portfolio of services and products. With his leadership, the firm has been able to expand its capabilities by broadening its talent development offerings both on-line and train-the-trainer and adding one of the most robust survey systems available. While providing guidance and direction for the consultants in the firm, Federman remains active in developing and maintaining collaborative relationships with the organizations that F&H Solutions Group serves in order to deliver an effective and definitive product.

Brad has a strong vision for the culture he intends to cultivate at F&H Solutions Group—namely, one of openness and collaboration.

At F&H, he is building a sustainable environment that creates a healthy organization utilizing inclusion and fun with a focus on client service. The strength of the firm is its consultants, who specialize in a variety of human resources and leadership-related areas, including executive coaching, culture building, employee development, labor relations, compensation, and talent management. If a client has an issue, Federman asserts that his team can identify, strategize, and execute a first-rate solution to fit the client’s needs. F&H Solutions Group’s mission statement, “Strengthening Brands Through Culture, Leadership, & People,” is the culmination of Brad’s career experiences and what he endeavors to do for his clients. According to Federman, his ideal clients are organizations that believe their people are real assets and see them as part of their strategy for success. They want to offer better service, quality, and consistency and desire to be more efficient, not just reduce costs.

Federman earned his Bachelor of Arts degree in Communications from The University of Maryland, later obtaining a Master of Education degree in Human Resource Development from Vanderbilt University. In 2009, he authored Employee Engagement: A Roadmap for Creating Profits, Optimizing Performance, and Increasing Loyalty.

He also authored Jump Start: 50 Ways to Engage Your Team and is a contributing author to 101 Ways to Enhance Your Career. In 2017, he was selected to become a member of the Forbes Coaches Council, the foremost invitation-only community for business, leadership, executive, and career coaches. Brad has spoken at international conferences, including the American Society for Training and Development (ASTD), appeared on the television news show “Stossel – No Offense” and has been quoted in publications such as Fortune Small Business, Forbes, Inc., Success, HR Magazine, and the Los Angeles Times. Federman lives in Memphis, TN with his wife Hollie and two sons, Aris and Elijah.  www.HRProfessionalsMagazine.com

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MARCH 8-9, 2018

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November 14, 2017

Jonesboro, AR

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1 Donna Carter, President-Elect of NEA SHRM, welcomed attendees to the seminar. 2 SGT Royce Smith with the Jonesboro Police Department presented “Active Shooter.” 3 Clark Thomas, Arkansas DOL OSHA Consultation Project Manager, spoke on “When a Company Knows Their Safety Culture is in Trouble.” 4 Cynthia Thompson, MBA, SCP, SPHR, was the keynote speaker. Her topic was FMLA Process Guides and Updates.

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5 Leha Pemberton, PHR, SHRM-CP, Project Manager with Ritter Communications, discussed “Respectful Workplace.” 6 Young lady in blue dress. Young lady in blue dress. Young lady in blue dress. Young lady in blue dress. 7 (L-R) Misty Carr, 2017 President NEA SHRM, and Donna Carter, President-Elect NEA SHRM announcing door prizes.

8 8 2017 NEA SHRM Board of Directors. (L-R) Melinda West, Vice President for Legislation; Misty Carr, 2017 President; Donna Carter, President-Elect; Heather Parson, Past President; Leha Pemberton, Past President; Kinyata C. Gray, Vice President for Communications www.HRProfessionalsMagazine.com

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You’re invited to attend the WTSHRM

8th Annual

Human Resources & Employment Law Fall Conference See our Facebook Live interviews about the WTSHRM Conference at

Presented by: www.facebook.com/hrprofessionalsmagazine.

THE WEST TENNESSEE SOCIETY FOR HUMAN RESOURCE MANAGEMENT November 1, 2017 – Carl S.InGrant Eventwith: Center, Union University in Jackson,TN coordination THE LAW FIRM OF RAINEY, KIZER, REVIERE & BELL, P.L.C.

November 1, 2017 Wednesday

8 a.m. to 4:00 p.m.

Union University Carl Grant Event Center 1050 Union University Dr. 1 Jackson, TN 38305

Pitch your tent and pull up a log to join us for an informative day where we will explore solutions to HR challenges including: Adventures Await! - Training and Mentoring Employees – A panel of HR administrators and attorneys will discuss innovative approaches to developing employees through training and mentoring.

Happy Trails: Age in the Workplace - Learn how to effectively and 3 efficiently manage the generational2 issues and age-related employee challenges. welcomes attendees. 2 Matthew Courtner and John Burleson presented “Happy Trails: Age in the

1 John Carbonell, 2017 President of WTSHRM, Workplace.” 3 Latosha Dexter and Geoffrey Lindley discussed “Campfire Stories – Employment Law Case Studies.”

2017 Legal Update – A Field Guide - A survey of new laws and regulations, as well as recent changes to federal and state employment laws.

Campfire Stories - Employment Case Studies - An interactive discussion of recent employment law cases and the application of relevant concepts and HR strategies.

Joint Employment/Independent Contractors - Hear employment attorneys discuss guidelines for special employment relationships and traps that HR professionals should look to avoid.

Lunch is provided. Explore our impressive showcase of HR-related exhibitors. Door prizes and more.5 4 4 Dale Thomas and Jennifer Ivy discussed “2017 Legal Update – A Field Guide,” a survey of new laws and regulations and recent changes to federal and Registration WTSHRM $125 for non-WTSHRM Members state employment laws. 5 J.Fee: V. Thompson $100 and Robfor Binkley presented Members “Joint Employment/Independent Contractors.”

Join WTSHRM for only $25 at: wtshrm.shrm.org/join

Register Now!

wtshrm.shrm.org/events

The registration deadline is Thursday, October 26, 2017. Register early as tent sites are limited.

You may pay by check or credit card. Questions: eamicone@raineykizer.com This program has been submitted for 6 recertification credit hours through HRCI and SHRM. 6

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6 Cynthia interviewed John Carbonell on Facebook Live! See our Facebook page, HR Professionals Magazine, to see this video and other live interviews from the Conference. 7 WTSHRM Board members at the WT SHRM booth.

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Carl Grant Event Center 1050 Union University Dr. Jackson, TN 38305

Happy Trails: Age in the Workplace - Learn how to effectively and efficiently manage the generational issues and age-related employee challenges.

2017 Legal Update – A Field Guide - A survey of new laws and regulations, as well as recent changes to federal and state employment laws.

Campfire Stories - Employment Case Studies - An interactive discussion of recent employment law cases and the application of relevant concepts and HR strategies.

Joint Employment/Independent Contractors - Hear employment attorneys discuss guidelines for special employment relationships and traps that HR professionals should look to avoid.

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8 Attorneys with Rainey, Kizer, Reviere & Bell, PLC (Back Row R-L) J. V. Thompson, Geoffrey Lindley, Latosha Dexter (Deputy Counsel for the University of Memphis,) Jennifer Ivy,of Dale Thomas. (Front Row center) Rob Binkley Lunch is University provided.

Explore our impressive showcase HR-related exhibitors.

Door prizes and more.

Registration Fee:

$100 for WTSHRM Members $125 for non-WTSHRM Members Join WTSHRM for only $25 at: wtshrm.shrm.org/join

Register Now!

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The registration deadline is Thursday, October 26, 2017. Register early as tent sites are limited.

You may pay by check or credit card. Questions: eamicone@raineykizer.com This program has been submitted for 6 recertification credit hours through HRCI and SHRM.

Fast-track your HR career with a world-class certification from the only independent organization in the field.

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How Ready Are You For A Cyber

Attack?

By ROBBIN HUTTON and FRANK DAY

M

ost organizations are utterly unprepared for a cyberattack, but even those that prepare remain vulnerable.

It is not a question of whether your business will be attacked; indeed, it is a question of when the attack will occur. In June 2017, a logistics company in Europe had its communications and daily delivery service interrupted by a cyber-attack that swept around the world. Even though they had a robust approach to counting cyber threats, the attackers found a vulnerability within the system. The company estimated that the financial impact of the attack was three hundred million dollars.

This attack, however, did not result in any loss of any data.

The attack on Equifax took a different form. Equifax is in the business of collecting and aggregating credit history data for hundreds of millions of consumers. It is one of the three major credit-reporting agencies in the United States. From May through July 2017, hackers gained access to Equifax’s data files, stealing the personal data, including social security numbers, addresses, birth dates, and other sensitive data for roughly 150 million people in the United States. This attack represents the largest known data breach in history. Indeed, the Equifax breach affected more than 40% of the U.S. population.

...the Equifax breach affected more than 40% of the U.S. population.

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Avoiding malicious attacks and securing sensitive information becomes more and more difficult as technology continues to evolve. Attacks occur in many different ways, and the number of attacks directed at small to mid-sized businesses are on the rise. In fact, small to medium sized companies are now frequently targeted because they have fewer security measures in place and because they do not train their employees about how to avoid cyber-attacks.

One of the more popular means by which attacks are advanced is with ransomware, which is malicious software that prevents or limits users from accessing their system. The system remains locked until the company pays a ransom to the attackers, and, frequently, such companies are unable to regain access to their data even if they pay the ransom. These attacks are particularly devastating to smaller businesses that do not have a robust backup strategy. A ransomware attack is generally triggered when an employee clicks on a malicious link contained within a phishing email. When the e-mail attachment is opened, the malicious program encrypts all of the data on the computer and the network drives attached to the computer. Subsequently, the attacker demands a ransom.

As this threat continues to grow and threats continue to evolve, all businesses should have in place an incident response plan that will enable the business to recover all of its data so that business can continue even in the event that all data is lost. Furthermore, many states have responded to the wave of cyber attacks by adopting legislation that requires companies to take certain steps in the event of an attack.

In Tennessee, businesses are required to give notice of such an attack immediately, but no less than 45-days from the discovery that a breach has occurred that compromised the security, confidentiality or integrity of personal information maintained by the holder. For the purposes of Tennessee law, personal information is defined as follows: An individual’s first name or first initial and last name plus, one or more of the following data elements: (i) Social Security number, (ii) driver’s license number or state issued ID card number, (iii) account number, credit card number or debit card number combined with any security code, access code, PIN or password needed to access an account and generally applies to computerized data that includes personal information.

Organizations should have a Data Breach or Cyber Response Plan that will allow a prompt and effective response. When developing a cyber incident response plan, organizations must first account for all applicable laws. In short, businesses must ensure that their response plan includes each step that the organization is required to take. The plan should designate an information security coordinator and define the duties associated with that position. When an incident occurs, it is important to know who should take the lead in managing the response. Also, the plan should authorize information technology experts to develop proactive defensive counter measures to both prevent and identify intrusions/ attacks. A properly developed plan will include guidelines on preserving evidence, post-incident review procedures, address planning and training, and other related topics.

Personal information does not include: publicly available information that is lawfully made available to the general public from federal, state, or local government records.

Unlike many states, Tennessee does not require companies to notify the State Attorney General when a specific data breach occurs. Nonetheless, it is possible that such data breaches could lead to lawsuits brought under the Tennessee Consumer Protection Act, which establishes a private cause of action.

Robin Hutton, Partner FordHarrison – Memphis rhutton@fordharrison.com www.fordharrison.com

Frank L. Day Jr., Counsel FordHarrison fday@fordharrison.com www.fordharrison.com

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opportunity costs tied to workforce processes.

Fair compensation is the foundation for any of these advanced analytics — if current employees and future prospects feel they aren't paid fairly, it doesn't take an in-depth I/O study to see where they're headed.

Benchmarking Compensation:

BRINGING IN THE BEST WITH BIG DATA

By DOUG BONDERUD

M

oney matters. While other forms of compensation — promotions with more autonomy and responsibility, health-related perks and a solid work-life balance — make a difference in the decision of current employees to stay the course or new hires to sign on, salary often remains the go-to reason for dissatisfaction for both employees and employers. Employees want to know they're valued and HR doesn't want to overpay. But how do HR departments meet the challenge of benchmarking compensation? It can start with big data. Here's a look at what you need, how to use it and what the future holds for the future of compensation competition.

SETTING THE STAGE Before you roll out any big data solution, it's critical to address the issue of reasonable use. As noted by Entrepreneur, there's already concern over firms using health data to predict potential employee medical issues and theoretically use this data to terminate "at risk" workers before they cost big money in health premiums. While this may never come to pass, the perception of diabolical big data use is enough cause for concern. As a result, HR departments need to be transparent about any data collection effort — what data is being collected, how is it being used and how is it being anonymized to limit the chance of a privacy breach.

When it comes to sourcing compensation data, you'll need details about all in-house salaries and how they ramp up over time. Better to be upfront about this policy rather than waiting for staff to address the matter themselves.

MISSING DATA So what's the trouble for organizations that hope to benefit from benchmarking compensation?

Missing data can be the biggest problem, but according to Forbes, it isn't so much down to the numbers of who earns what and why, but rather the "deep data" that connects isolated information points. For example, Forbes notes that while standard big data analysis suggests that employees who use the bathroom more than four times a day are more likely to quit their job than similar, restroom-restrictive colleagues, deeper analysis using industrial-organizational (I/O) psychology suggests that stress is the root cause of both employee turnover and frequent bathroom trips.

How does this apply to the HR compensation scenario? It means numbers in isolation often aren't enough. What type of experience do particular compensation levels demand, how are they related to the overall culture of the corporation and how much room is left at the top-end?

Salary ranges on their own are useful but incomplete since you're not just hiring a number but an individual who may significantly outperform the basic value of their salary — deep data can help you single out these top performers and ensure they're given ideal compensation.

ACTIONABLE OFFERINGS As noted by the Society for Human Resource Management, it's no longer enough for HR managers to simply leverage metrics such as cost-per-hire or time-to-fill. Instead, HR leaders are tasked with analyzing meta-metrics such as return on workforce investment and specific 12

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The result? Benchmarking compensation demands the right data. Right now this could mean using existing company salaries as a baseline and then crawling the web for other offerings. This could take the form of competition job posts, discussions on social media or conversations with prospective hires who have been through multiple interview processes. But if HR can instead rely on a centralized data system from a vendor that can also provide data to benchmark across industries, they can track and compare this data in real-time to provide salary information on a per-job basis. They can then leave behind the guesswork and move forward with datadriven and actionable intelligence.

In the future, HR leaders should also begin to consider the role of social trends and sentiment analysis. For an example, take a look at the rapidly-growing need for InfoSec professionals. The market supply can't keep up with employer demands, making these IT experts a hot commodity. Companies ahead of the game will benchmark higher to bring in great talent, and then use trend and social data to help ensure new InfoSec pros are given the compensation they deserve. In other words, benchmarking compensation isn't always about hitting the right number but rather finding the right data and using it to inform salary policies that put your company on the leading edge of your industry.

To learn how to turn your people data into business objectives you can deliver on, check out The workforce analytics workbook.

As seen on Spark, powered by ADP (adp.com/spark) Sign up for Spark, powered by ADP, for news, stories, insights, and tips to help you ignite the power of your people. (adp.com/spark)

Doug Bonderud Doug Bonderud is an award-winning writer with expertise in technology and innovation.

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HR Solutions | Payroll | Evolving Together

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Year 2016 2017 2018*

Competitive Pay: Paving the Way to Engagement

By JENNIFER BLAKE

In case you haven’t noticed, we are no longer in a buyer’s market when it comes to attracting talent! The unemployment rate in the TN-MS-AR (MSA) as of September 2017 was 3.7%. Now is the time to make sure your pay plan is competitive; before “now” would have been even better.

It’s true, pay isn’t everything. But when it comes to attracting talent in a tight labor market, competitive compensation is an essential underpinning for any employer. To ensure your salaries are competitive in your local labor pool, you need local salary data. Fortunately, the “2017 Memphis Area Wage Survey” is now available through the Greater Memphis Chamber, providing current pay rates for a number of jobs in a variety of industries.

Memphis Area Wage Survey BACKGROUND

The Memphis Area Wage Survey has been a source of local wage data for businesses since the 1980s. What started as a survey for the Memphis Manufacturing Council, evolved into an industry-wide resource as the industry mix in the Memphis area became more diversified.

In 2011, participation dropped off substantially as companies experienced the impact of the Great Recession. Local companies didn’t have a need for the wage and salary data as salaries were flat and employee turnover was low.

The Greater Memphis Chamber, however, was still executing its economic development initiatives. According to Adrienne Johnson, Vice President of Research at the Greater Memphis Chamber, local wage data is key information prospective businesses request when contemplating moving their businesses to the Memphis area. The Economic Development team at the Chamber have depended on the Memphis Area Wage Survey for this purpose since 1998.

It is no surprise, therefore, that the Chamber took the lead in resurrecting the Survey in 2017.

Reaching out to other chambers of commerce and economic development groups in Shelby, DeSoto, and Crittendon counties, Adrienne 14

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and her team were able to attract 59 companies to participate in the 2017 Survey. In addition, the Chamber secured the funding to pay for the Survey’s production. Adrienne envisions repeating the Survey every two years, with the goal of increasing participation by 5-10% per year.

Graph 1: Salary Budget Increase Trends 4.0% 3.5%

The Chamber reached out to hundreds of companies in the greater Memphis region, inviting their voluntary participation. Participating companies provided wage and salary data for over 100 jobs and answered questions regarding pay practices and benefits. F&H Solutions Group collected participant data and produced Survey reports.

3.0%

Survey Results PARTICIPATION

Manufacturing and distribution were the industries represented most often, with 39% of participants in manufacturing and 18.6% in distribution. The remaining industries represented were healthcare, education, government, banking, service, hospitality, and construction.

The industries representing the largest numbers of employees were healthcare and government.

Among the 59 participating employers, 14% reported having some union representation, and of those companies, unions represented an average of 64% of their employees.

WAGES AND SALARIES

Participants reported actual and projected average merit increases for exempt and nonexempt jobs.

Table 1 Year

Exempt

Nonexempt

2016

3.1%

2.8%

2017

2.8%

2.8%

2.9%

2.9%

2018* *Projected

These increases have become very familiar to employers since the recession, not just in the Memphis area, but all over the country. The “WorldatWork 2017-2018 Salary Budget Survey” reports salary budget increase trends nationally and across all industries. In 2007 and 2008, before the full effect of the Great

Nonexempt 2.8% 2.8% 2.9%

Recession was felt by most companies, average salary budget increases were close to four percent. In 2009, average increases bottomed out at 2.1 percent and have continued to increase very slowly since. (See Graph 1.)

METHODOLOGY

In keeping with U.S. Department of Justice guidelines, all participant data were reported anonymously so that specific wage data could not be traced back to any participant. Salary data were reported for a job only if we received data from at least five different companies, and if any one participant’s data represented at least 25% of all reported data for a particular job, we did not use that company’s data. We were able to report data on 77 unique jobs.

Exempt 3.1% 2.8% 2.9%

2.5%

3.8% 3.8%

2.8%

2.9% 2.9%

3.0% 3.0%

2.9%

3.1%

3.0%

2.4% 2.1%

2.0% 1.5% 1.0%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Source: World@Work 2017-2018 Salary Budget Survey

World@Work’s data for 2017 and 2018 is projected. When scoping the projected data by region, state, industry, or revenue we find very little variation. In comparison to the national salary increase projections, the average projected increases by Memphis companies are only slightly lower.

BENEFITS

In addition to providing information about wages and salaries, Survey participants answered several benefits-related questions. When it comes to time off, 64% of participants said they have a traditional vacation and time off policy, while 36% offer paid time off (PTO). The average number of days off available to new hires was ten for nonexempt employees and 12 for exempt.

The average waiting period before using time off was 90 days. Other time off data is displayed in Table 3.

Table 3 Avg. # bereavement days (per incident)

3

Avg. # paid holidays per year

10

Avg. # sick days/year (non-PTO plans)

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The most popular retirement plan is still the 401(k) plan, as 94% of participants offer a plan to employees and, among those employers, 93% provide matching contributions.

All participants provide employee healthcare.

The average waiting period for new hires to enroll in coverage was 60 days. The average employee contribution toward monthly premiums ranged from 23% for individual coverage up to 28% for family coverage.

Comparing Jobs Internally and Externally Some organizations rely solely on outside market data to assign value to their jobs. However, what happens to those unique jobs, for which there are no matches among the salary survey data? Having a consistent system for valuing jobs against one another internally facilitates the slotting of those unique jobs into the organization’s structure.

A common method of comparing jobs internally is some type of job evaluation process, where jobs are compared by reviewing factors such as knowledge, skills, and abilities. This process results in a job worth hierarchy for the organization, which provides a logical way of comparing jobs that are not necessarily alike. For example, on the surface we might agree a staff accountant, website administrator, and outside salesperson are quite different from each other.

However, when evaluating jobs internally using a job evaluation plan, you might find these three jobs are valued about the same.

On the other hand, reliable survey data will help you understand the labor market from which you recruit employees and within which you hope to retain them. When you compare your company’s jobs to similar jobs in the outside market, you’re getting valuable information about current supply and demand. You might find the market value of your accountant is actually different from that of an outside salesperson, although internally you value you them the same. Therefore, employers need reliable salary data to ensure they have a true picture of what jobs are worth in the open market.

According to Christine Tande, of Tandehill Human Capital, using a hybrid approach (i.e., internal and external assessment) to valuing jobs is the most effective. Says Tande, “My approach is that both are tools and we need to put them

in their proper places. You can use them both to perform checks on each other.” Indeed, when we look at jobs through more than one lens, the complexity of the work becomes more apparent, giving us a more realistic picture.

Maintaining a fair and up-to-date pay plan is an essential building block for creating a great workplace. After all, if you can’t attract talent to your workplace because you’re out of step with the salary market, you’ll never get the opportunity to build a great workplace. But a discussion about employee compensation is not complete without acknowledging the fact that fair pay is only one, albeit important, satisfier that employees value when judging the workplace.

Employee Satisfaction How do you leverage your company’s sound compensation program to move beyond an “okay” workplace to one that is “great”?

Engagement, engagement, engagement!

Probably one reason we’ve heard so much about employee engagement in recent years is because it has been lacking in many workplaces. When employee disengagement becomes symptomatic, that is the time organizations scratch their heads and ask themselves, “What’s wrong”?

Generally, employees are happiest when they feel they’re using their hard-won skills to contribute

STRENGTHENING BRANDS

to the organization in some meaningful way.

One way employees know they’ve contributed something worthwhile is someone they respect actually thanks them. Great managers do this often. In fact, management can be the enabler of employee engagement. Great managers: • listen before doing • remove barriers • provide regular feedback • acknowledge employee contribution There is an old adage that people leave managers, not jobs. Taken a step further, people leave jobs, not careers. Top leadership empowers managers and provides the tools that enable them to foster an environment where employees can expand their careers while having a sense of purpose and passion.

Paradoxically, one of the most frequent reasons employees give for resigning is pay. So which is it – pay, the manager, the culture? When a company knows its labor market and maintains a competitive compensation plan, they can be fairly confident employees aren’t leaving because of pay!

Jennifer Blake, CCP Senior HR Consultant F&H Solutions Group

F&H Solutions Group works side by side with our clients, offering expertise, objective advice and solutions to their most pressing and complex people and human resources problems and opportunities.

THROUGH CULTURE, LEADERSHIP & PEOPLE Leadership and Coaching Career Development Customer Engagement Employee Engagement Diversity and Inclusion Recruiting and Onboarding Compensation Strategy Human Resources Labor Relations Absence Management

1715 Aaron Brenner Drive Suite 716 Memphis, TN 38120 | 901.291.1547 | fhsolutionsgroup.com

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Wimberly Lawson Attorneys

SaveSave the Date the Date – November - November 1st &3-5, 2nd,2016 2018, at at thethe Knoxville Downtown Marriott Marriott, Knoxville Knoxville

Highlights of the 38th Annual Labor and Employment Law Update Conference In Knoxville, Tennessee, on November 2 - 3, 2017

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1 Fredrick R. Baker, emcee for the Conference, welcomed the attendees. 2 Jeffrey G. Jones, Regional Managing Member of the Cookeville office, was the “man behind the mic,” at the Conference announcing general session speakers. 3 James W. Wimberly, Jr., a founding principal of the Wimberly Lawson network, presented “What a Difference a Year Makes!” 4 Frederick R. Bissinger’s topic was “EEOC Update.” Fred is Regional Managing Member of the Nashville office.

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5 Carol R. Merchant spoke on “Wage and Hour Developments.” 6 M. Lee Daniels, Jr. presented “Looking Forward to a More Conservative NLRB.” 7 Dr. Farris Jordan, Author of “Stress! Are You in Control?, was the keynote speaker. 8 Mary C. Moffatt presented, “EEOC Rules on Wellness Plans Take Effect, including GINA and Priviacy Issues.”

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Wimberly Lawson Attorneys

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9 J. Larry Stine’s topic was “OSHA Update.” 10 Andrew Hebar discussed “Legislative Updates on Workers’ Comp Reform.” 11 “Well, So What’s Really Changed in a Year?” was William R. Seale’s topic. 12 Mary Dee Allen presented “Video Recording in the Workplace.”

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13 Edward H. Trent spoke on “Cyber Security and Technology Issues.” 14 Edward D. Lanquist, Jr. discussed “Intellectual Property for Employers.” 15 Howard B. Jackson’s topic was “Hidden Anti-Trust Considerations for All HR Professionals.” 16 (L-R) Anne T. McKnight and Kelly A. Campbell presented “Workplace Accommodations and the ADA” in a breakout session.

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17 “OFCCP and Government Contractors” was Jerome D. Pinn’s topic. 18 G. Gerard Jabaley discussed “Records Retention.” 19 Over 500 HR professionals attended the Conference. 20 Wimberly Lawson Conference Committee 20 www.HRProfessionalsMagazine.com

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Bass Berry Sims’ Labor and Employment Law Update November 16, 2017

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1 (L-R) Mary Leigh Pirtle and Lymari Cromwell presented ADA/FMLA: Intermittent and Extended Leaves. David Thornton, Member, was the Emcee. Tracy Paden, Managing Director, Multi-Practice Groups. 2 (L-R) JD Thomas, Marketing and Business Development; and Lee Blankenship, Conferences Manager. 3 (L-R) Lymari Cromwell and Mary Leigh Pirtle discuss ADA/FMA Intermittent and Extended Leaves. See our Facebook Live interview with Lymari and Mary Leigh at www.facebook.com/hrprofessionalsmagazine. 4 (L-R) Attendees: Vickie Cortese and Christy Showalter.

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GO CONFIDENTLY. Bass, Berry & Sims listens and responds with creative yet practical counsel. We stay on pace with the complex and rapidly evolving employment landscape, connecting your dynamic human resources needs to proactive strategies.

Relationships, reliability, and respect – at the center of our Labor & Employment and Employee Benefits practices.

Stay up-to-date on the latest in HR Law. Visit our blog at bassberryhrlawtalk.com.

Centered to deliver. bassberry.com

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Open Enrollment: Using Nobel Prize Winning Research to “Nudge” Working Americans - Part II

By AUSTIN BAKER

W

elcome back to our discussion about behavioral economics and their implications on our open enrollment processes. For those just joining, we are profiling Richard Thaler’s book, “Nudge,” and specifically how his discoveries in behavioral economics can relate to open enrollment administration and decision-making architecture. In Part I, we talked about the challenges both administrators and employees face during open enrollment, as well as some of the biases and blunders that all of us encounter when making decisions, including anchoring, availability, optimism and overconfidence, fear of loss, and framing.

In Part II, we will go deeper and discuss how structuring open enrollment in the context of choice architecture can improve outcomes for all involved.

“Nudge” outlines many opportunities and strategies to help make better, more informed decisions. But before we go deeper, let’s look at what research says about how working Americans make decisions during open enrollment. According to research by Guardian, 40% of workers said that a majority of their benefits came from their workplace, and 70% of those reported that they rely on their current workplace for 50% or more of their financial preparedness.

While putting open enrollment on “auto drive” may be attractive administratively, research indicates many employees are still not making the best choices about benefits. This means that they in turn do not have the best protection for themselves and their families. Less that 10% of employees update their workplace benefits during open enrollment and more than half of workers upon reflection say that their lack of attention to benefits “cost them money.”

When surveyed, two-thirds of employees said that making sense out of their benefits is too complicated. Some 41 million Americans under age 65 are underinsured, with 56% of this population on employer-sponsored plans and the rest on ACA marketplaces or receiving Medicare disability benefits.

Considering more than 40% of American adults struggle financially according to Consumer Financial Protection Bureau, many times as the result of medical bills and treatment costs, it’s clear we have a large gap in helping meet the needs of working Americans through employer-sponsored benefits. Our experience shows that a combination of well-structured benefit offerings, smartly designed communications and value-based benefit counseling can help close the gap for many employees.

Let’s look more closely at some of the other areas in Thaler’s research including: • Resisting Temptations • Following the Herd • Saving for Tomorrow Resisting Mindless “Popcorn” Temptations Temptations in our decision-making include “mindless choosing.” Mindless choosing is best illustrated in a research study cited in “Nudge” that involved feeding stale popcorn to unknowing moviegoers. The research subjects attending a movie were offered a free bucket of popcorn, secretly popped and stored for 5 days before serving to ensure that it was like eating styrofoam. Half of the group was offered a large bucket of free popcorn and the other a medium bucket of free popcorn. The research team found that all subjects agreed that the popcorn was awful, but the large bucket holders ate 53% more popcorn.

This demonstrates an all too common “path of least resistance” mindset that open enrollment communications and strategy has to overcome. All of us are inundated with messages and emails on top of our social media addictions. Helping employees overcome the easy and less thoughtful choice of just letting their past decisions ride is an art. Even getting full partici-

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pation on a mandatory active enrollment is difficult.

This begs for a more artfully designed communications strategy, one that nudges employees to ask questions and pause before mindlessly moving forward with their current choices.

Resisting “Bad” Mental Accounting Temptations Everyone does math in their heads when making choices. Our benefits enrollment team has found that allocations are often misappropriated when enrollees weigh choices as complex as benefits and healthcare costs. The truth is that most people don’t know what questions to ask when making benefit choices, nor do they understand the cost and risk implications of decisions or indecisions. When more than 86% of employees struggle with defining a copay versus co-insurance, we have more work to do to close this gap. Research by Unum shows that more than half of employees are concerned about being able to pay their bills if they become disabled, but only about 26% of employees enroll in Long Term Disability.

Understanding the risks and financial implications of protecting your family for your particular stage of life is complicated. This problem begs for us to consider some nudge theories to create better models and communication strategies to reach our goal of building benefit packages that meet employees where they are.

Employers need to engage with partners that understand and empathize with their employees’ challenges around making these impactful, far-reaching decisions.

We also need to communicate the value that these benefits represent in a more meaningful way. Employees see their portion of the deductions every paycheck, for example, but over time they forget the employer’s often significant portion of contributions, not to mention the various underwriting and price benefits of accessing benefits on an employer-sponsored platform.

Following the Herd: The Spotlight and the Power of Conformity Humans are easily nudged by others in their peer group, because we like to conform. This is especially true when we believe that others are watching.

Time and time again, experiments show that people making anonymous choices act differently than when in groups. If people think that all eyes are on them, they will quickly fall into conformity with whatever consensus is framed in front of them most of the time.

Priming is an interesting phenomenon, as it relates to decision-making.

Asking people if they intend to vote the day before an election can increase turnout as much as 25%, for example. Choice architects need to carefully consider questions and messaging to foster beneficial outcomes. With a host of negative implications, employees often turn to the person next to them during open enrollment, asking “What did you do?” As employers, we also cannot ignore the influencers in our organization. We need to prep our formal and informal leaders with smart talking points so we can help nudge the herd in the right direction as opposed to leading them off a cliff.

Saving for Tomorrow Some 57% of Americans do not have enough cash to pay a $500 unexpected expense. How can employers help employees plan for retirement, increase their financial safety net, and purchase important employer-sponsored benefits that are right for them? It is a daunting task and one that we believe is very important to helping build a better workforce. But, we are seeing some promising practices including automatic enrollment, in which employees have to opt out rather than opt in. We also advocate for differentials in pay versus deduction frequency, where employers only take 24 deductions out of 26 paychecks and set up automatic saving sweep options for the other two pay periods.

Financial wellbeing is a foundational area that we need to address through smarter open enrollment practices. The question must be raised about internal versus external roles in achieving this goal and effectively nudging working American’s to help them make more informed decisions. Many HR executives will rightfully tell you that there is a line between informing versus counseling that should be respected so as to not create excess risk in the organization.

This is where the right partner that is licensed and available to employees can help bridge this gap and protect the organization and the employee.

To Nudge or not to Nudge…

Whether we accept our role as choice architects or simply as order takers and payroll deduction administrators is fundamental. If we as employers set up poor choices for employees who most likely do not have good decision-making tools, then we must also accept the consequences. Equipped with modern research such as behavioral economics and decision theory, we must embrace a value-based “nudge” approach or be faced with the alternative which is well-cited in the statistics of this article. We are nudging working Americans whether we want to embrace it or be smart about it, so let’s be smarter about our open enrollments this season so the cycle doesn’t just mindlessly roll forward.

Austin Baker About the Author- Austin Baker is the President of HRO Partners a Human Resources Consulting, Managed Services and Technology Firm with an emphasis in Benefit Administration and Enrollment. HRO Partners is a fast-growing provider of Benefit Enrollment Solution that works with many strategic vendor partners. In the past year HRO Partners has saved their clients over 220 Million with their innovative benefit strategies and managed services deployments. Their team boasts more than a 96% average satisfaction score with employees and their clients. For more information, call Baker at 1-866-822-0123, visit www.hro-partners.com or connect with the company at www.facebook.com/hropartners, http://www.linkedin. com/in/jaustinbaker or http://twitter.com/jaustinbaker

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Six Steps

to Better Performance Appraisals

By BARRY BROWN

As compensation consultants, we are often called to look at performance management systems that are failing. Our initial investigation typically finds the majority of employees rated above average, forms that are too complex for anyone to understand, ratings that make little sense to the employees, and metrics that have little to do with the actual job performance.

The following steps to better performance appraisals cost little, if anything, to implement. The challenge will be whether or not this change will be an HR initiative or an executive initiative. HR projects are prone to die a long, slow death - because it’s an HR project and the backing of senior management doesn’t go much beyond lip service. An executive initiative on the other hand, usually gets the attention it needs and has a much better chance of success.

So … ask the executive team to “own” this project and have HR as the administrator of the new performance appraisal system. The following steps will help get the issues resolved and the process moving in the right direction.

Step One. Realize that Performance Appraisals are a process, not an event. Good performance management systems involve lots of good one-on-one communications. In short … it’s NOT the form or something we do once a year. Don’t spend so much time worrying about the form.

Concentrate on the process. Brief one-on-one communications keep the employee aware of how they’re doing – and removes doubt about their performance rating when it’s time for the formal, written review.

The key here is to actually do the quick appraisals, then track them by whatever means works best for the individual supervisor or manager.

When it’s time to actually write the review, the evaluator can simply refer to their notes.

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Step Two. Consider separating the discussion about performance and pay. If you only have one discussion period, the only thing the employee is listening for is how much the increase will be. If they’re OK with the amount, no problem. If they’re not OK with the amount, the evaluator will usually spend the rest of the time defending their rating or pay increase. Consider having an in-depth discussion on performance and tell the employee up front, “We’re not going to talk about money.” If money is not the subject of discussion, then it will have to be performance. And, with good notes at hand, the evaluator can cite specific reasons for ratings.

A few days (or a couple weeks) following the performance review, schedule another meeting to talk about money. How much of an increase, if any, will there be? What can the employee do to improve their next performance review? What can the employee do to maximize their value to the company, e.g., additional training, certifications, formal education, etc.? More importantly, where does the employee want to be in the next 2-3 years? It’s often surprising to hear that the employee wants to be in a different department doing a completely different kind of work!

Yes, having two discussions with an employee really is worthwhile.

You’ll be amazed how much more effective both of these discussions will become.

Step Three.

No surprises! If the employee is surprised, shame on the evaluator!

Good communications throughout the performance appraisal period are critical. If there are surprises, then the evaluator has not done a good job communicating during the performance period!

And, keep in mind that communicating means more than just saying something to someone. There has to be acknowledgement to the communication and ACTION in the desired direction. Otherwise, it’s just a one-way message.

A performance appraisal can be as short as ten seconds or several minutes. The idea is to provide continuous feedback (both for good work and not-so-good work) followed immediately by making a note of the discussion. List the employee name, date, time, the topic, etc. and keep notes in a written log, drop file, or computer file – whatever works best for the evaluator. Good notes are valuable when it comes to writing the performance evaluation and extremely valuable as evidence if things go badly and progress to a legal challenge.

Step Four.

Realize that many criteria commonly found on performance appraisals should really be “pass-fail” rather than trying to use a multi-point rating scale. Attitude, attendance, teamwork, adaptability, customer service, cooperation, and similar criteria are behavioral factors and are good candidates for a simple pass-fail rating. Either the employee exhibits good teamwork most of the time or they don’t. Either they typically have a good attitude or they don’t. Either they get to work regularly or they don’t. Trying to distinguish between a “meets” and “exceeds” rating when it comes to behavioral factors is nearly impossible.

Don’t try to set up a four- or five-point evaluation scale on pass-fail items. In the first place, you won’t be able to do a credible job of defining the differences between the ratings. Ideally, all behavioral factors, if used at all, should be pass-fail. A good leader will be coaching the employee on the little things daily – including behavioral items. If you can reduce the number of behavioral factors and focus on specific, job-related factors, the performance appraisal process has a much better chance of success. Evaluators and employees alike will experience less stress and better results.

“How do you know when the employee is doing a good job?” This same question can be asked of the senior executive or the janitor.

Create a short bullet list of success factors that will be clear to both the employee and the evaluator.

Second question, “How can we measure it?” If you can’t measure a given factor, consider leaving it out or using a pass-fail rating. The measurement should be clear, objective, and specific to the factor. The fewer subjective issues the evaluator has to deal with, the better. Stick to clear, objective measures that the employee can see or the evaluator can share as often as needed.

Bonus Point. End nearly any discussion with an employee with the most powerful question a manager can ask, “What can I do to help you?” This question, when asked sincerely and acted upon timely, will result in a powerful transformation. This question removes excuses and clears the way for honest, straightforward communication. If asked regularly, the leader may be surprised at some of the responses. And, the employees may be surprised their manager is actually taking an interest!

Barry Brown, SPHR, CCP President, Effective Resources, Inc. askbarrybrown@gmail.com www.effectiveresources.com

Step Five.

Make sure your standards are current and reasonable. If a manager has rated an employee “exceeds” or “outstanding” on some particular criteria, ask the manager, “What could the employee have done less of or not as well and you would have still been happy with their performance?” If the manager says, “Gee, I’d be disappointed if they didn’t perform at that level all the time,” the manager has just described standard performance. (The fact that you may only have one or two employees in the work unit at this level simply means that the rest of the team is behind the curve and needs some help!)

If the standards have not changed in some time, consider updating them. When a majority of employees are receiving top ratings, it’s typically a good indication that performance standards are out-of-date.

This is especially true when performance of the work unit or profitability of the company doesn’t reflect the overall performance ratings.

Be sure to communicate the change to employees and prepare them for the change. Just because an employee has “always been rated a 5” or “outstanding” doesn’t mean they will always be the super performer.

This is the toughest part of actually implementing new standards, but standards need to change or the organization will stagnate.

Step Six. Develop better, more meaningful criteria. When developing performance standards, focus on the answer to these two questions. First,

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Generations at Work and Ageism The Acceptable Discrimination

By JANIE WARNER

For the past 20 years, organizations have been bombarded with information on how to deal with the number of generations in the workplace. Companies have attended seminars and workshops on tailoring the workplace to meet the needs of the up and coming generations. We’ve learned how to recruit them, how to train them and how to engage them so they want to stay in the workforce. While this has been met with much enthusiasm, the “training” has mostly been geared toward the younger generation. All this focus on the “under 40” crowd has had an unintended consequence for the work force – rising age discrimination claims.

The National Council on Aging (www.ncoa.org) conducted a study in 2014 that found: • More than 40% of Americans over the age of 55 will be employed by 2019 • They will make up more than one-fourth of the U.S. workforce • This is up from 22% in 2014

things, their children are grown so they aren’t so concerned about family time, and even presuming that they don’t like technology or change. These are all sweeping generalizations that would not be tolerated toward any other protected group, yet we freely foster these ideas within our workforce.

Even our benefit programs tend to be geared toward the “under 40” crowd. We still see “maternity leave” policies which are, on their face, discriminatory to older workers and those who cannot bear children (Tip: change it to a “leave” policy and make it available to all employees – not just women of child-bearing ability). When the company remains open on holidays, often the older workers get assigned those shifts, presuming that younger workers with children still at home have more of a “need” to be off on those days.

How can we move past this and become a more inclusive workplace for all generations? Here are a few ideas: • Hire older workers – Their diverse experiences make them excellent sources for new ideas.

• Create multi-directional mentor programs – Set the expectation that everyone can learn something from everyone.

• Do NOT stop setting expectations for employees as they age – Most employees still enjoy learning new things at every age of their career.

• Don’t dwell on differences – Move beyond labels and generalizations for all generations.

Additionally, according to the EEOC, the amount of age discrimination complaints filed has increased dramatically in recent years.

• Between 1997 and 2007, about 18,000 annual complaints were filed • Since 2008, between 20,000 and 25,000 filings have been filed annually, with the number increasing every year To what can we attribute this rise? What if it is directly tied to programs designed to engage the younger workforce?

First, look at the two main reasons for the age discrimination claims: • General harassment: Such as a general dismissive attitude toward workers who may not be, or are perceived to not be, as technologically savvy as the younger workers • Age-related name calling: By far the largest number of claims are due to this. Some of the common offenders including “old man/woman”, “grandma/grandpa”, “old timer”, “dinosaur” and even “over the hill”, just to name a few Quite often, employers do not get too concerned when they hear these types of names, presuming it is all in “good fun.” As with any type of harassment, however, the offense determination is made by the receiver. And when employers fail to act in defense of the victim of such name-calling, claims are filed and must be dealt with – costing both time and money.

Why would employees feel free to attribute age sensitive titles to older adults in the workforce? Most likely because employers have made such a point of catering to the younger worker but have failed to attribute the same value to the older worker.

We see this played out in many of the programs put in place to encourage Generations X, Y and Z to participate in the workforce. Employers have made a point of requiring older workers to respect the younger generations by telling them, “They are the future!” Yet, we fail to point out to the younger generations that those who came before – and have forged the way and created the company’s success up to this point – are the foundation upon which they can build their careers.

We make assumptions about older workers – they are “tired,” they don’t want to learn new 24

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• Build collaborative relationships – Age, race, ethnicity, religion, disability, gender identity and sexual orientation should not be allowed to interfere with the collaboration needed to achieve the MISSION of the organization.

• Know your employees – Who they are is more important than what generation they are. Don’t let stereotypes get in the way of treating them as individuals.

• Compensate fairly – Develop compensation and incentive plans around the goals and objectives of the employees at whatever stage of life they are in.

• Make inclusion of ALL generations part of your stated corporate values – Remind all employees that everyone matters and everyone is important.

The reality is, we have always had different generations in the workplace! This is NOT a new concept in the 21st century.

Just because someone decided to study it, we’ve unintentionally created a divide between groups of employees that was not so emphasized 50, or even 20, years ago.

Most likely, 50 years ago employers expected employees to work together to achieve the objectives and didn’t worry so much about differences based on age.

If employers want employees to respect each other, the company culture needs to be INCLUSIVE for all ages.

Older workers are not going away. Let’s value them and teach the generations to come to value them as well. After all, DIVERSITY isn’t a program – it’s a CULTURE – and it starts at the top of the organization.

Janie Warner Senior Consultant Regions Insurance, Inc. Janie.Warner@Regions.com

Do employee benefit laws remind you of alphabet soup?

Regions Insurance is here to provide meaningful solutions that best support your organization’s goals. Our employee benefit advisors and law-trained professionals can help develop the right plan of action and break down all the confusing laws and regulatory acronyms so you’re not left staring at a bowl of alphabet soup.

Tom Hayes Employee Benefits Practice Leader tom.hayes@regions.com 479-684-5259 www.regionsinsurance.com

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Workin’ for a Livin’: The Rise of State and Local Legislation Affecting Employee Compensation In recent years, states and cities have taken an increasingly active role in employees in the area above the state and federal minimum wage and provided for incremental adjustments in subsequent years. Employers filed suit regulating issues that directly affect employee compensation. While initiachallenging the constitutionality of the ordinance, arguing that it exceeded tives increasing the minimum wage continue to be the most popular area the authority of Louisville Metro. The Kentucky Supreme Court ultimately of legislation, measures prohibiting employers from asking prospective agreed. The Court observed that the Kentucky Constitution permits cities employees about their salary history are gaining traction across the country. to pass laws that are “in furtherance of a public purpose,” so long as they do Although such efforts have yielded mixed results, particularly when not conflict with a constitutional provision or statute. Because the ordinance initiated by local governments, mediocre success rates have not diminished imposed a higher minimum wage than the state statutory minimum, the both state and local activism in the arena of employee compensation. This Court concluded that the two were in conflict article will summarize the most recent develBy LATOI D. MAYO and SARAH T. LAREN and, thus, the ordinance was invalid under opments in federal, state and local legislation the Kentucky Constitution. In light of this impacting employee compensation, and also opinion, Kentucky employers can reasonably provide tips for employers navigating this assume that similar ordinances from any shifting landscape. municipality in the state will reach the same Federal Minimum Wage Initiatives: fate and any increase in the minimum wage to be paid to employees will have to be set at In 2014, President Obama issued Executive the state or federal level.

Order 13658, which established a minimum wage of $10.10 per hour for some categories of non-tipped federal contractors. This Order also provided the means and methodology for the Secretary of Labor to annually review and adjust the minimum wage for covered federal contractors. Consistent with the terms of that Order, current Secretary R. Alexander Acosta issued a Notice of Rate Change on September 15, 2017, raising the minimum wage for these covered contractors to $10.35 per hour in 2018.

Discussions about increasing the federal minimum wage for the private sector continue to take place on Capitol Hill.

Senator Lindsey Graham recently indicated that he would support an increase to the federal minimum wage in an effort to garner Democratic support for tax reform. However, the minimum wage remains set at $7.25. Perhaps it is this inertia within the federal government that has prompted states and localities to take advantage of the Fair Labor Standards Act provision enabling them to enact more stringent minimum wage provisions.

State and Local Minimum Wage Action: While the fate of the federal minimum wage in the private sector remains uncertain, 17 states, as well as the District of Columbia, will implement minimum wage increases in 2018. Existing minimum wage rates in Albuquerque and Bernalillo County, New Mexico, and Seattle and SeaTac, Washington are also scheduled to increase in 2018.

Some southeastern states, including Mississippi and Tennessee, have not implemented their own minimum wage rates, while others, such as Kentucky, mandate that the state minimum wage be equivalent to the federal minimum wage. Only Arkansas and Florida have set minimum wages that exceed the federal rate ($8.50 per hour and $8.10 per hour, respectively).

Beyond state action, municipalities in the southeastern region have also attempted to increase the minimum wage at the local level, but implementation has been difficult. In 2015, the Louisville/Jefferson County Metro Government enacted an ordinance raising the minimum wage for all 26

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Similar battles have been waged in Saint Louis, Missouri and Birmingham, Alabama.

In 2015, Saint Louis enacted a minimum wage ordinance, which employers promptly challenged in court, arguing that it conflicted with the state minimum wage statute.

The Missouri Supreme Court rejected this argument and upheld the ordinance, which took effect in May 2017. The Missouri General Assembly responded by passing a law that prohibited cities from enacting their own minimum wage provisions, thereby invalidating the local ordinance. The new state law took effect in August 2017.

In Alabama, the Legislature responded to the passage of the Birmingham ordinance in a similar fashion and enacted a law that mandated statewide adherence to the federal minimum wage just before the ordinance was scheduled to take effect. A group of employees filed suit in federal court to challenge the constitutionality of the new state law, arguing that it effectively discriminated against Birmingham residents on the basis of race, but the court dismissed the case. This decision is currently on appeal to the United States Court of Appeals for the Eleventh Circuit.

While these cases indicate that local minimum wage ordinances have yet to be embraced in the southeastern states, efforts to implement such provisions in this region are ongoing. In addition to the Eleventh Circuit appeal regarding the Birmingham ordinance, litigation has arisen in Florida as a result of Miami Beach’s attempts to implement a minimum wage ordinance.

Because states and cities are becoming more active in the minimum wage discussion, to the point of opposing each other’s efforts, it is important for employers to stay abreast of changes in the minimum wage at all levels of government and apply the wage rate that is most beneficial to the employee.

When employers have employees working in multiple jurisdictions, they must be aware of the applicable minimum wage rate for each location, so that they can properly compensate employees working in jurisdictions with higher minimum wage rates. However, a rudimentary understanding of the applicable rates is not enough. Employers must know when changes

in the minimum wage will take effect so they do not inadvertently find themselves in violation of the law. Legal challenges to state or local laws do not excuse non-compliance in the interim, as both the Louisville and Saint Louis cases illustrate. Employers in both cities were expected to compensate their employees at the increased minimum wage rate after it took effect. In Saint Louis, when it became clear that the ordinance would not survive due to state legislative intervention, Mayor Lyda Krewson publicly instructed employers to pay the higher rate until the state law took effect.

Equal Pay-Federal, State and Local Action: In the midst of these minimum wage battles, another compensation issue has been emerging for employers. While the Equal Pay Act and corresponding state statutes have long prohibited employers from compensating female employees at a lower rate than their male counterparts, recent studies and court cases indicate that these laws have failed to fully achieve wage equality. This realization has prompted some states and cities to attack the gender-based wage gap from a different angle, enacting laws that prohibit employers from asking prospective employees about their salary history or obtaining such information from their previous employers. Proponents argue that these laws will prevent low compensation rates from following women from one job to the next, thereby narrowing the gender-based wage gap. Oregon and Puerto Rico have already implemented such legislation, and similar laws are scheduled to soon take effect in California, Delaware, and Massachusetts. On the local level, San Francisco, Pittsburgh, and New York City have ordinances in place, while Albany, New York just passed a similar measure. Philadelphia, the first city to ban history inquiries, has a provision that may take effect depending on the outcome of federal litigation. Chicago’s second attempt at passing a salary history ban recently failed. Governor Bruce Rauner vetoed in the bill in August and proponents were unsuccessful in garnering enough votes override the veto.

Between the nationwide publicity that this issue has garnered and the recent spate of activity that has occurred on the minimum wage front, it seems likely that the southeast region will eventually see efforts to implement salary history prohibitions, likely originating at the local level. If these states react to salary history bans in the same manner that they have responded to local minimum wage ordinances, then enactment would be a long shot.

Nevertheless, employers must remain vigilant and monitor potential developments in this area of the law. Again, taking a proactive approach that goes beyond base compliance with pay equality measures may prove useful in the future. Conduct a routine self-audit of existing compensation policies, paying close attention to compensation rates for men and women who occupy the same positions and boast similar accomplishments. Employers should also review their hiring practices, omit questions regarding past compensation from applications and interviews, and train hiring managers to identify and address potential pay issues. These efforts, combined with increased wage transparency, may be the most effective means of ensuring that employees are compensated appropriately and that the organization is in compliance with all applicable laws. Time will tell whether the recent spate of salary history prohibitions will attain the same level of nationwide popularity as state and local minimum wage laws.

LaToi D. Mayo, Shareholder Littler lmayo@littler.com www.littler.com

Sarah T. Laren, Associate Littler slaren@littler.com www.littler.com www.HRProfessionalsMagazine.com

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Thinking of Keeping Seasonal Hires? Not Before You Read This!

BY BILLY SPRAGUE

Target is looking for 100,000. Macy’s is trying to snag 80,000. UPS needs 95,000.

It’s smart to choose the ones who are treating their seasonal gig like a permanent job.

We are talking about seasonal employees. The holiday season is a prime time for companies, especially retailers, to beef up with staff to handle the surge in business.

In addition to performance and fit, there are other aspects of bringing temporary employees on permanently.

Why is this year different? In the past several years, unemployment was higher, and the pool of seasonal applicants was plentiful and attractive. Businesses enjoyed a large number of choices and could pick and choose the specific candidates for their open seasonal positions.

This year, the economy has rebounded, and unemployment is hovering around 4%, which is a good thing! It does, however, make holiday hiring more challenging. Multiple companies will be competing for the top seasonal hires this year, making it more difficult to fill those open positions.

And, what happens when the holiday are over?

Employers are more likely this year to keep a larger number of seasonal hires on through the new year than in years past. While you probably don’t need to keep Santa or the reindeer year ‘round, dependable, honest, hard-working seasonal employees are always in demand, especially with the competitiveness of today’s market. Skilled workers such as drivers are even more of a commodity.

So, smart HR professionals who anticipate retaining some of their seasonal hires should think about what this means. Sometimes, the hiring process for what is normally temporary workers is different and not as stringent as the one for permanent employees.

How to choose the best ones to keep?

Trying to decide which of the seasonal hires to keep is tricky business. The good news is you have a clearer picture of what they offer than those candidates you interview from a resume or application. It’s important to measure how they perform. Do they show up on time? Are they quick learners? Do they have a good attitude and fit into the company culture?

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TOP CONSIDERATIONS Here are the top considerations hiring managers should ponder as they make plans for who should stay on their payroll as they ring in the new year.

Did the employees come from a staffing agency?  Companies who hire lots of seasonal help may lean on staffing companies to fill the slots in a timely manner. If a portion of those new hires end up doing well and are up for permanent placement, HR pros need to remember that staffing companies sometimes don’t screen thoroughly.

Post-employment screening: Unless you have written documentation that the staffing company screened the seasonal-turnedpermanent hires that same way your company would have, spend the few extra dollars and order a background check on them. It may seem unnecessary, but it’s a good best practice to make certain all your employees are screened in the same manner. It also minimizes the chances something was missed in the original screening process. Employ screening reports like criminal records searches, employment verification, and motor vehicle records, depending on the position. NOTE: Be sure to get a signed authorization from any and all people you order a background check on.

Drug testing: Drug abuse can cause serious workplace issues. If the seasonal employee has not already, require that they submit to the same drug screening process other new hires do.

It’s important to screen your seasonal-to-hires the same as you did the employees who were hired as permanent employees from the beginning.

Were the seasonal hires trained fully and properly?  If the onboarding process for seasonal employees moves in fast-forward, it’s essential to backtrack and cover the information that may have been left out. Company processes, benefits, organization goals, product knowledge, and anything else that is standard for employees to learn needs to be discussed.

Make sure the seasonal employees that are transitioning into permanent staff are up to par with the other members of the team.

Are you practicing fair and non-discriminatory hiring?  What is obvious discrimination during the hiring process may be more subtle when deciding on who to keep from holiday hiring.

For example, are the majority of the ones being asked to stay mainly men? Are they primarily young adults? Focusing too heavily on one segment of a population can set you up to be the target of unfair hiring litigation which is so prevalent today. Make certain that fairness to both sexes, and all races, religion, and ages is a top priority when deciding which of the seasonal employees to keep permanently.

The fact that the economy is strong and unemployment is low is great news, even if it poses obstacles for hiring good quality holiday staff. If, after the rush is over, there are certain seasonal employees that you decide would be valuable additions to your team permanently, it pays to keep them if you can. Just don’t get in too much of a hurry and forgo proper screening and training. Taking the time to do these properly helps ensure all company employees will be on an even playing field, and you can expect high performance all the way around.

Billy Sprague National Account Executive Data Facts, Inc. bsprague@datafacts.com www.datafacts.com

sets the tone for the topic and allows us to see where the point is going. This approach just works and readers will not be disappointed!

Beyond the Clothes: Image & Presence

By WILLIAM CARMICHAEL

See our Facebook Live interview with author Linda H. Yates at www.facebook.com/hrprofessionalsmagazine.

For many of our readers, the phrase I am about to use probably hits close to home. It certainly does for me. Someone, and in my case it was my mother, makes the instinctive comment, “Remember, you only have one opportunity to make a good first impression.” Growing up this statement always baffled me. For goodness sakes, I took a bath, my clothes were clean, shoes were shined, teeth were brushed, hair- well, somewhat combed. What could possibly go wrong? To quote our author Linda H. Yates in the introduction of her excellent book Beyond the Clothes: Image & Presence, “just ask a Director of Human Resources about the appearance and quality of job applicants coming to interview for positions, and the stories they could tell would fill volumes.” This wonderful book “focuses on the outside and inside of you” and is worth the short time it will take to read.

What Does Image and Presence Really Mean?

In Beyond the Clothes, Yates quickly establishes a firm groundwork for not just why presence is important but why our image, or perhaps more importantly, our self-image is so vital when interacting with others. Certainly her work as a sought after keynote speaker, executive coach and corporate trainer provides her with significant credibility but what our readers will quickly discover about her is she knows what she is talking about and how to apply it within any organizational setting. Her image advice also extends into personal interactions that are relevant and timely.

One example of the author’s command of image perception is demonstrated in Chapter Two where she provides a startling statistic. Only 7% of our communication is verbal opposed to 93% which is nonverbal. And of this, a large majority is body language which comprise the subtle physical and facial gestures we all use to get a point across. What signals are being sent out clearly influences how they will be received and Yates helps us master our intent of delivery. Another example of image communication is carefully constructed in Chapter Six. Here the author reminds us that regardless of our mastery of public speaking, the fundamentals of why we speak must first be mastered. What do we want to say as well as how do we want to say it? Even though I frequently speak in front of groups, Yates reminded me that something as simple as using a strategically placed pause can often be an incredibly persuasive tactic.

For our HR Professionals out there this will likely resonate. Early in my corporate life I remember being told that we are only as good as our last performance evaluation. Granted, that was some time ago and to an extent, some of this still holds true. Our author is quick to remind us however that in today’s competitive environment, we are only as good as how we are perceived- right now.

To quote the author in Chapter 8, “If I were to survey those you work with day-to-day, what would they tell me about you? What would they say about your behavior? What would they say about your work ethic or quality of work performed? What impressions have you given them?” Here, Yates is not talking about a 360 evaluation where multiple sources provide feedback. Rather, she emphasizes the relevance and immediacy of real-time personal impressions based upon the last image we left that person with.

Beyond the Clothes: Image & Presence was certainly not published with the intent of appealing to everyone one hundred percent of the time, however, there is something for anyone simply wanting to better fit in where they are or desiring to move up. Readers will recognize and identify with the personal wisdom shared by the author and this was refreshing. Without embellishment, Yates

A Quick, Effective Read!

At 229 pages, Beyond the Clothes: Image & Presence is actually a much shorter read. A weekend should do it for most. By that, each page is structured with only three to four paragraphs so readers will find themselves, just as I did, quickly absorbing the content and moving on to the next page. True enough, its twelve chapters build on one another but what I also found was an excellent, descriptive layout that allows chapters to stand on their own. A useable, effective field guide, if you will. For example, Chapters One through Three cover one’s self-image, how to communicate that image, and the intended as well as unintended consequences of one’s integrity and attitude. Not once will readers find the author preaching, which she is certainly qualified to do but instead, her approach is one as a coach and I found this extremely effective.

Chapters Four and Five provide us with the importance of appropriate dress and personal hygiene while Six through Nine focus on how others perceive our ability to communicate, our etiquette, and how each impacts our career.

Ten through Twelve then teaches us how to recover from previous image mistakes, how image, organizational morale, and leadership combine. And perhaps more significantly, the importance of capitalizing on the social capital we each have. Each chapter also summarizes key takeaways to consider and work on.

Beyond the Clothes: Image & Presence uses a simple schema and one that works. Its Table of Contents allows the reader to quickly peruse for topics of interest. My initial impression was that a complete reading from front to back would be needed but I was pleasantly surprised to discover this not to be the case. True enough, Chapter Three in its prose on integrity and attitude do rely upon one’s understanding of their own self-image covered in Chapter One but not entirely so. Nor, are the rules of dress in Chapter Four or one’s image on “the street” addressed in Chapter Nine totally reliant upon material covered earlier.

Each stands on its own.

I really liked this one and you will to!

William Carmichael, Ed.D Professor | Strayer University william.carmichael@strayer.edu www.strayer.edu www.HRProfessionalsMagazine.com

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There is no cost to attend the seminars. Please RSVP by Monday, November 13th for either the November 14th or November 16th seminar to kberry@bpjlaw.com or 901-524-5106.

This seminar is pre-approved for 1 HRCI/SHRM recertification credit.

The use of this seal is confirms that this activity has met the HR Certification Institute’s® (HRCI®) criteria for recertification credit pre-approval.

RIPPED FROM THE HEADLINES! Burch, Porter & Johnson, PLLC 130 North Court Avenue, Memphis, TN 38103 901-524-5000 │ www.bpjlaw.com Marketing Materials

An Employment Law Seminar Presented by Attorneys Jennifer Hagerman, Gary Peeples and Tannera Gibson of Burch, Porter & Johnson

y... m o on c E g Gi e dly... a B h g t in v a h e g B i D Execs

Free Speec h in the Internet Ag e...

These are hot topics in today’s headlines and you need to be prepared to address these issues. We will go over cases including contractor issues, recent situations concerning high-profile executives, public vs. private employers, speech in the workplace, and more.

There are two opportunities to attend:

Tuesday, November 14

Thursday, November 16

8:30-10:30 a.m.

4-6 p.m.

(Includes seminar and light breakfast)

(Includes seminar and social hour)

at Burch, Porter & Johnson 130 North Court Ave.

at The Grove Grill

1

4550 Poplar Ave.

2

Memphis, TN 38117

Memphis, TN 38103

There is no cost to attend the seminars. Please RSVP by Monday, November 13th for either the November 14th or November 16th seminar to kberry@bpjlaw.com or 901-524-5106.

This seminar is pre-approved for 1 HRCI/SHRM recertification credit.

The use of this seal is confirms that this activity has met the HR Certification Institute’s® (HRCI®) criteria for recertification credit pre-approval.

3

4

1 Jennifer Hagerman, Tannera Gibson and Gary Peeples presented “Ripped from the Headlines: Current Employment Law Issues.” 2 Jennifer Hagerman discussed “Executives Behaving Badly.” 3 Tannera Gibson presented “Free Speech in the Internet Age.” 4 Gary Peeples’ topic was “What is the Gig Economy?”

Burch, Porter & Johnson, PLLC

130 North Court Avenue, Memphis, TN 38103 901-524-5000 │ www.bpjlaw.com 30

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Marketing Materials

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A Review of President Trump’s Executive Orders Impacting Labor & Employment Law

By DAVEANTE JONES

Since President Trump has entered office, he has made sure that his agenda is pushed, with or without the help of Congress. In doing so, he has signed more than fifty executive orders in less than a year. With such a large number, it was only a matter of time before the labor and employment world was impacted.

Photo by NBC News

“Two-For-One” – Reducing Regulation and Controlling Regulatory Costs Wasting no time after entering office, President Trump signed an executive order on January 30, 2017, in an attempt to reduce regulation and control regulatory costs. The order directed executive agencies to identify two existing regulations to eliminate for every one new regulation issued, with the goal being a total incremental cost of “zero” for all new regulations. It didn’t take long for negative reactions to surface. One such example is a lawsuit in the United States District Court for the District of Columbia filed by three public interest legal groups, including the Communications Workers of America, alleging that the order is “irrational” and puts public safety at risk by not considering any beneficial effects of new rules.

The groups rely partly on the negative effect the order would have on the Occupational Safety and Health Administration (OSHA) in support of 32

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their public safety argument. They argued that the order would cause OSHA to violate its authorizing statute, the OSH Act. Specifically they stated, “In light of the OSH Act’s legal standard directing OSHA to set safety and health standards based on findings of significant risk of material impairment and technological and economic feasibility, OSHA may not use cost-benefit analysis as a basis for setting OSHA health standards.” The federal government moved to dismiss in May, with one of its arguments being that the groups did not have standing. Just a few days later, the groups moved for summary judgment, requesting that the order be overturned. A final decision has not been made, however.

It will be interesting to see how the court rules.

Agriculture and Apprenticeships – Workplace Impact Two executive orders that may impact labor and employment more on the practical side are President Trump’s orders promoting agriculture and rural prosperity in America (signed in April) and expanding apprenticeships in America (signed in June). President Trump’s order promoting agriculture and rural prosperity aims to “identify legislative, regulatory, and policy changes to promote in rural America agriculture, economic development, job growth, infrastructure improvements, technological innovation, energy security, and quality of life.” With Secretary of Agriculture Sonny Perdue leading, a Task Force—including the Secretary of Labor— has been directed to do things such as “ensure access to a reliable workforce and increase employment opportunities in agriculturerelated and rural-focused businesses.” While there are concerns, farmers and support groups are pleased that this administration is looking at deregulating federal rules related to agriculture.

President Trump’s order expanding apprenticeships in America roughly doubled taxpayer money spent on learn-to-earn programs to $200 million. Planning to make apprenticeships the core of his strategy to fight unemployment, President Trump’s order sets out to allow employers, unions and trade groups more flexibility to create apprenticeship programs outside of the Labor Department’s guidelines. President Trump commented, “[w]e have regulations on top of regulations . . . We’re empowering companies, unions, industry groups and federal agencies to go out and create new opportunities for millions of citizens.” Many critics, however, say this order is inconsistent with President Trump’s budget cuts.

National Council on Federal Labor-Management Relations Disbanded At the end of September, President Trump signed an executive order disbanding the National Council on Federal LaborManagement Relations, a council that had been created by former President Obama. The federal labor-management council was created to provide forums that allowed agencies to work together with federal employees and unions to improve the delivery of government services to the public. Supporters believed that the council provided a place for employees to discuss specific challenges, review organizational initiatives and solve workplace issues. Critics, however, said it allowed unions to influence federal

policy. Ultimately, President Trump disbanded the council because he thought it was a waste of time and tax dollars. Many agencies had decided to continue their own forums regardless of President Trump’s dealings with the national council, but some unions are still disappointed in the order.

ACA Roll Back Attempts With the changing of administrations, everyone knew the Affordable Care Act (ACA) was on the chopping block. Congress has failed in its attempts to roll back the ACA, however. Despite these failings, President Trump has signed two executive orders in his own attempt. The first one, coming in May, directed the Departments of the Treasury, Labor, and Health and Human Services to look into exempting religious employers from the ACA’s contraceptive mandate. The order promoting free speech and religious liberty urged the Departments to “consider issuing amended regulations . . . to address conscience-based objections to the preventive-care mandate.”

The order has already led to three federal agencies announcing rules allowing employers to claim religious or moral objections to the contraception mandate under the ACA. The American Civil Liberties Union is currently challenging the rules in a California federal court, arguing that the rules violate the First Amendment by “advancing a particular set of religious beliefs” and the Fifth Amendment by “allowing employers and schools to deny only preventive health benefits that women need.” The National Women’s Law Center, Americans United for Separation of Church and State, Massachusetts Attorney General and others plan to sue as well.

Democratic lawmakers have also introduced bills in the Senate and House of Representatives attempting to roll back the rules.

In October, President Trump signed an executive order directing federal agencies to loosen rules on association health plans and temporary insurance plans, by directing the Departments of the Treasury, Labor, and Health and Human Services to write new rules for association health plans, temporary insurance plans, health reimbursement accounts and other measures. The loosening of the rules would allow more widespread offerings of plans that do not adhere to all of the ACA’s mandates. President Trump believes that “[t]his order is the first step to allowing businesses to help their workers pay for health care with health reimbursement accounts.” While the health association changes drew praise from several business groups, including the National Restaurant Association, the order has received criticisms about the uncertainty of how the regulations will play out and President Trump’s utilization of executive orders to roll back the ACA. More than fifty executive orders and not even a year into President Trump’s term, it’s clear that President Trump is more than willing to push his agenda with or without help from Congress. Labor and employment seems to be an area that is to be impacted by it as well. So keep an eye out.

Daveante Jones Associate Attorney Wright Lindsey Jennings dljones@wlj.com www.WLJ.com

2018 GMEBC Board of Directors (Back Row L-R) Antoinette Wiseman, Co-Secretary, Lu Harvey, Chair - Membership, Ted Archdeacon Secretary, Preston Cox, Chair - Programs, Russell Henderson, Co-Chair - Programs, Don Lamb, Treasurer. (Front Row L-R): Donna Winfrey, Member-atLarge, Linda Yoakum, Member-at-Large, Linda Tripp, President, Absent Mark Schirmer, Immediate Past President.

(L-R) Collin J. Childress, JD, MBA-IM, President & CEO, Global MedChoices and Russell Henderson, GMEBC Program Director. Collin was the guest speaker at the November 9 meeting of GMEBC at the Crescent Club in Memphis. His topic was “Medical Travel: How Employer Plans Can Benefit from this Value-Based Solution.”

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BENEFITS

2017 COMPENSATION AND BENEFITS – HIGHLIGHTS AND TRENDS

By BRUCE and BLAIR JOHANSON

J

ohanson Group completes several local, regional and national compensation and benefits surveys each year.

As human resources and compensation professionals make employee total reward plans for 2018, we want to raise note-worthy highlights and trends based on the 2017 survey results. Instead of just offering competitive compensation and benefits plans, employers are beginning to utilize compensation and benefits strategically to attract and retain competent employees.

COMPENSATION • Employee pay adjustments for 2017 will average 3% and merit pay budgets will average between 3.1% to 3.4%.

• The average employee base pay adjustments for 2018 will increase slightly due to increasing employment demand.

• Employee average merit budgets in 2018 will range from 3.2% to 3.6% but employers are on the move with increasing variable pay and bonus pay options.

• National variable pay averages have increased to new historic levels as employers reward top performers. Variable pay plans tied to company performance are less risky and more flexible than increasing fixed base pay for employees through traditional merit pay plans.

• Compensation management considerations including: Philosophy to lead or lag the market; Pay determined by market mean by job title; Internal pay structure and ranges through job valuing and use of market data to validate structure for pay competitiveness; Starting pay placement; Average years to pay range midpoint or market mean; Average increase in base pay for position promotions; Annual base pay adjustments – General/ COLA/Merit; Annual or bi-annual pay range adjustment; Variable pay plans and types of plans and percentage increases of pay and non-compensation recognition and rewards.

• Baby-boomers who are paid in the upper salary range of their respective pay grades are leaving the workplace at an accelerated pace.

Employers will determine how to reallocate 3rd or 4th quartile pay range salary rates to existing and new employees who are working their way toward the top of the 2nd quartile and beyond.

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• Employers are beginning to utilize compensation and benefits strategically to attract and retain competent employees and reward higher productivity.

• Above average retirement plan matching contributions by employers and profit sharing distributions are effective employee retention tools. We have noticed employers that are making single digit percentage increases in retirement plan matching contributions that have double digit percentage increase outcomes on employee retirement fund growth and payouts.

We have a millennial aged family member that has worked nine years for a company since college graduation and his retirement/profit sharing fund is approaching $250,000. The level of retirement benefit funding has been a significant retention tool for this family member.

• Employers will help employees with student loan debt through creative compensation and benefit packages.

• Health insurance premium increases are partially mitigated by High Deductible Health Plan (HDHP) options with increasing deductibles and out of pocket maximums and increasing the cost-sharing percentages on monthly health insurance premium with employees.

• Employers are using HSA contributions to help new employees with minimal personal savings to be prepared for unexpected medical expenses.

• Increasing pharmaceutical expenses are being addressed with expanded funding tiers and maximum caps.

• Paid Time Off (PTO) plans are becoming more popular with employers and employees over traditional sick and vacation time off plans.

• On-site or off-site concierge services to help employees with personal planning so they can remain focused on work productivity.

• Honing-in on effective employee wellness initiatives that involve individual and company-wide efforts to improve employee health indicators and reduce preventable health-related medical expenses.

• Expanding employee assistance plans to include personal financial education and wellness.

PAY EQUITY • Under the new federal administration leadership, the OFCCP and EEOC are transitioning from a punitive focus to an employer friendly direction with educational and compliance assistance programs.

• State laws are specifying pay equity and job comparable work definitions and compliance to further address gender and race pay equity gaps. Over 15 states have approved or tried to introduce legislation that further defines equal pay as being something more than just equal dollars between genders and protected groups.

• The state of California passed a new law called the “California 2015 Fair Pay Act”. This law extends to definition of equal pay to comparable pay and requires employers to extend “comparable pay” for jobs that are substantially similar. There is a legal expectation that men and women should be paid comparable pay for work performed of the same value to the organization.

• This next level definition and interpretation for equal pay or “comparable pay” will require employers to re-evaluate their positions/jobs based on different criteria. Job valuing needs to be completed with a consistent job valuing factors system that can value all job classifications and provide a non-biased compensable factors process to determine which jobs are substantially similar based on proven factors and weighted points.

• With greater national and state level awareness of persistent pay equity gaps, employers are making more genuine efforts to identify and address systemic pay equity processes and decisions. An effective classification and compensation base pay structure is meant to attract and retain talented and competent employees. With increasing social and regulatory pressure to address the pay equity gaps between gender, race/ethnicity and age employee groups, employers are motivated to develop and maintain equitable, consistent and transparent compensation plans.

• Computer software solutions like DBSquared’s DBCompensation provide job valuing technology and market pay assessment to build and maintain equitable pay structures and pay equity analysis.

• Use of external market pay studies data only will perpetuate existing gender and race pay gaps. Employers will utilize internal job valuing and external pay analysis to generate more realistic job worth and employee pay equity evaluations.

PERFORMANCE REVIEWS/APPRAISALS • A significant migration from traditional performance reviews and appraisals with numerical analyses and painful performance evaluation form completion processes to more frequent supervisor and employee verbal feedback sessions. Check-ins and one on one’s for real-time feedback. Higher performance and productivity and less turnover through more frequent communications and interactions.

• Forward-looking performance perspective instead of discussing historical work reviews.

• Greater work and project related effort alignment with team, department, division and organizational goals. Focusing on goal or project accomplishment (end result) instead of time in office and methods/steps to complete the goal or project.

• Higher dollars and recognition/rewards for top performing teams and individuals.

• Creative employee recognition rewards and increasing number of employee recognition reward vendors at the 2017 WorldatWork conference in Washington, DC. • Automation of the performance work related activities and outcomes through software technology integration with personnel files and use of mobile phone apps to record and electronically file observed or noted employee performance while walking around. Flexible and intuitive compensation management software offered by companies like HRsoft.

• Establishment of top performance compensation pools (separate allocations of base pay and/or bonus dollars) that managers are able to allocate based on meeting or exceeding impactful organizational, team and individual goals.

• Improved company, team and individual integration and roles view to increase line of sight and process metrics for timely project/ goal interventions and support for successful outcomes.

for both short-term and long-term periods.

WORK-LIFE PROGRAMS

• Communications and social media presence to foster company branding and engagement.

• Performing business case studies for new work-life programs and their impact on the organization and its stakeholders.

• Benefits as solutions to enhance total rewards and improve alignment with employee needs.

• Build supporting structure around work-life program processes to foster greater participation and success.

• Work fit analysis so new hires are able to make work related contributions from day one.

• Increase productivity of working mothers, working parents and/or working single parents by providing work-life programs that support employees that must balance work and parenting requirements.

• More frequent feedback and encouragement check-ins to foster trust and successful outcomes.

Graceful Exit for Baby Boomers

• Greater workplace and work-time flexibility through mobile and/or home internet connectivity with the employer’s office.

• Succession planning and transfer of institutional and positional knowledge from exiting baby boomers to younger employees.

• Compressed work weeks and flexible work starting and ending times for improved alignment with personal/family needs.

• Strategic and progressive “exiting” plans that include full-time to part-time work schedules and less compensation.

WORKPLACE TRANSITIONS

• Contractual independent contractor consulting agreements with retiring baby boomers.

• Bridging benefit plans for early retirement employees and use of compensation actuarial budgeting for compensation management and budgeting.

Engaging Millennials in the Workforce • Expectations, needs and engagement factors for greater attraction and retention of new hires.

• Career development – visible paths for personal development and growth.

• Company commitment to mission and vision

• Mentoring programs and internal company focused career development days for new hires that are led by exiting baby boomers and staff development professionals.

DBSquared combines proven technology and seasoned expertise to help bring your total compensation management into perspective. We provide: DBCompensation® (built on the proven Job Evaluation and Salary Administration Program ­ JESAP™ methodology) is a state­of­the­art HR compensation management software application that efficiently combines internal knowledge and expertise with pertinent market information to streamline your compensation strategy and policies. Ultimately simple and elegant, DBCompensation is easily integrated into your business strategy and HRIS environment. Our proven methodology and process combined with thorough and intuitive software development ensure you'll never look back.

Helping clients envision new possibilities is a talented consultant's greatest asset. At Johanson Group, our combined 65 years of experience in all facets of business management enable us to offer the insight and direction that produce meaningful results.

DBDescriptions™ job descriptions software is the cornerstone of an efficient and aligned organizational design.

Whether you need one job description or two hundred our database of descriptions has exactly what you need to adapt or create tailored descriptions for your business; all easily accessed through an intuitive web­based application. Utterly simple and efficient.

www.dbsquared.com info@dbsquared.com

We've helped organizations face the management challenges that come with a rapidly expanding staff and customer base. We also assist new business ventures map out their company's future, both strategically and operationally.

Our signature approach is to listen and fully understand your company so that we can then partner with you to realize your own unique vision.

www.johansongroup.net info@johansongroup.net www.HRProfessionalsMagazine.com

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Think Employee Benefits Aren’t Affected by the Proposed Tax Bills?

Think Again.

By JENNIFER KIESEWETTER

On

November 2, 2017, the U.S. House of Representatives released its proposed tax reform, broadly affecting individual and corporate taxes. It’s been sound bite after sound bite since the beginning of November about what will happen if tax legislation is passed. Confusion abounds, however, because one week later, on November 9, the Senate unveiled its own version of a proposed tax bill, addressing some issues similar to those of the House, while throwing in a few more to boot.

On Thursday, November 16, 2017, the House voted on its proposed tax reform bill, passing it 227-205, along party lines. The Senate is planning a vote, as of the writing of this article, after the Thanksgiving holiday.

So what does all of this mean for employers? If these bills primarily affect individual and corporate taxes, do we need to worry about employee benefits?

Yes. With all legislation, the one thing that is guaranteed is change. We still have a long road ahead of us before we have a new tax code. However, it is prudent to understand what is being proposed and how it may affect our offering of benefits to employees and owners.

The Affordable Care Act The House bill does not address the Affordable Care Act, but the Senate bill does. The Senate’s proposed tax legislation plans to repeal the individual mandate. The mandate repeal would save approximately $338 billion over the next decade, with 13 million Americans losing health care within the same timeframe, as reported by the Congressional Budget Office. These savings would be used to expand middle class tax cuts, as suggested by Republicans.

As a result of this repeal, premiums in the individual market are expected to rise approximately 10 percent, which could discourage individuals from purchasing insurance. For those uninsured that find themselves in catastrophic situations, those medical costs are passed along to hospitals and other providers. At some point, the group benefit market will feel that financial pressure in its own plans.

Hardship Distributions Currently under the hardship distribution rules from qualified plans, participants are prohibited from making plan contributions for 6 months after taking a hardship distribution. Under the House bill, no later than one year from the enactment of this legislation, the Internal Revenue Service must amend its guidance to eliminate the 6-month suspension.

Further, the House bill allows for hardships to be taken from any type of plan contribution, including qualified nonelective contributions and qualified matching contributions, both of which are currently not eligible under the law for hardship distributions.

This provision would be applicable for plan years beginning after December 31, 2017.

Finally, before a participant may currently take a hardship distribution, he or she must exhaust all available nontaxable loans from his or her qualified plan. The House bill eliminates this exhaustion requirement.

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Plan Rollovers Under current law, a participant has 60 days to roll over a plan loan amount to another eligible retirement plan, if permitted by such plan. The House bill extends this 60-day period to the participant’s tax filing due date, including any applicable extensions. This new House rule only applies to loan amounts occurring at a participant’s termination of employment or the plan sponsor’s termination of the plan. This proposed provision would be effective for taxable plan years beginning after December 31, 2017.

Catch-Up Contributions Under current law, for individuals who are 50 years of age and older, they may make “catch-up” contributions to 401k, 403(b), SARSEP, and governmental 457(b) plans, with the only restrictions being age and the amount of the catch-up.

For example, for 2018, the catch-up limit is $6,000 in addition to the $18,500 deferral limit. The Senate bill, however, adds a salary restriction of $500,000, effective for tax years beginning after December 31, 2017. For any individual making at least this salary, catch-up contributions are prohibited for those individuals, even on an after-tax basis. Note: As of the writing of this article, there is discussion that the Senate may be backing away from this provision.

Special Catch-Up Rules Under current law, for long-service employees in both 403(b) plans and governmental 457 plans, those participants may be eligible to make additional catch-up contributions to the plan.

The Senate bill eliminates these special catch-up contributions, and eliminates the coordinating limits between 403(b), 401(k) and governmental 457 plans. This proposal is effective for plan and taxable years beginning after December 31, 2017.

In-Service Distributions Under current law, defined benefit plans may not allow for in-service distribution before retirement age or age 62, whereas governmental 457 plans may not allow for in-service distributions before retirement age or age 70 ½. The House bill will change both of these age requirements to 59 ½, effective for plan years beginning after 2017.

Early Withdrawal Penalties The Senate bill applies the 10 percent early withdrawal penalty to governmental 457 plans if distributions are made before age 59 1/2, effective for taxable years beginning after December 31, 2017. Note: As of the writing of this article, there is discussion that the Senate may be backing away from this provision.

Executive Compensation Compensation is generally included in an employee’s income when paid.

However, for nonqualified deferred compensation – sometimes referred to as executive compensation – the amount of the deferred compensation is typically includible in an employee’s compensation when it is no longer subject to a substantial risk of forfeiture, even if that payment of compensation does not occur until a following year. Section 409A of the Internal Revenue Code controls executive compensation and sets forth rules on elections, payments of compensation, and what is and what is not covered.

Legal Challenges are Coming at HR Professionals from Every Direction

Under initial House and Senate drafts, both Congressional houses upended executive compensation, with the House – for example – repealing Section 409A and creating Section 409B, which would impose tax on executive compensation arrangements no longer subject to substantial risk of forfeiture, and the Senate redefining when compensation is subject to “substantial risk of forfeiture.”

These proposed revisions extended to the tax treatment of stock options, causing uproar among start-ups and technology firms. Additionally, loopholes for public companies would be eliminated with respect to the deductibility of stock options and other performance-based pay.

However, in the few days leading up to this writing, the Senate deleted the stock option changes from its bill, and the House backed away from almost all of its executive compensation proposals, leaving executive compensation to be taxed as it currently is under the law.

That’s Why Rainey Kizer Makes Your Business Our Concern

Fringe Benefits The House bill would cause several fringe benefits, that are currently tax-free up to certain Internal Revenue Code limits, to be included in employees’ gross income, effective January 1, 2018. This could potentially affect employers’ definitions of “compensation” in certain benefit plan documents and in payroll systems.

• Tuition reimbursement provided through qualified educational assistance programs • Employer-provided adoption assistance programs • Qualified moving expense reimbursements paid by employers • Dependent-care assistance program amounts • Employer-provided housing • Employer contributions to Archer Medical Savings Accounts.

Existing Archer MSA balances could be rolled over into a Health Savings Account on a tax-free basis.

As the issues facing HR executives become more frequent, challenging, and complex each year, you need a law firm that provides advice individualized for your specific needs. This is why you should know the employment-law attorneys at Rainey, Kizer, Reviere & Bell PLC. For over 30 years, our AV-rated firm has advised businesses, nonprofit organizations, and government agencies on all aspects of employment law. To learn more, please call.

• Entertainment expenses (without regard to whether the expense was directly related to or associated with a substantial and bona fide business discussion)

Although we are far from the finish line, keeping up with what’s going on in Washington is – as it has been this entire year – crucial. We could be looking at amendments to plans, as well as changing our operating procedures. The effective dates for most of the provisions above are short, which leaves all of us with a quick compliance turn-around. Stay tuned after the holidays . . . the Senate takes the stage next.

Jennifer S. Kiesewetter, Esq. Kiesewetter Law Firm, PLLC jkiesewetter@kiesewetterfirm.com www.kiesewetterfirm.com

r a i n e y k i z e r . c o m

Memphis Jackson Nashville Memphis Jackson 901-333-8101 731-423-2414 901-333-8101 731-423-2414 615-651-7420 T e n n e s s e e d o e s n o t c e r t i f y s p e c i a l i s t s i n t h e a r e a o f e m p l o y m e n t l a w .

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Workforce Development

This leads into the next element: “secure[ing] high paying jobs”. Once one begins this process, the opportunities are limitless. Whether individuals start as high school graduates, veterans, “second chances” or through career changes, they can follow a pipeline that leads to c-suites or ultimately establishing their own businesses.

By J. BRUCE CROSS

Building your career though starts at the ground level. The Executive Order encourages the private sector to help make that happen. In many industries today, most of training and workforce development occurs outside the parameters of what the Department of Labor has established as “registered apprenticeship” programs. As businesses know, government regulation and rigid, single-craft focus has lead industry to “drive the bus” on training. Operating under principles that increase efficiency and promote innovation, many companies and their industry associations have developed programs to train workers to be able to deliver return on investment almost immediately.

New efforts are underway to bring more potential candidates to your business.

In the nation, including in Arkansas and the rest of the Mid-south, the need for a skilled workforce is already here and is growing exponentially as “baby boomers” begin to leave the workplace. State Industrial Development Commissions consistently talk about what foreign manufacturing companies want when they are looking for a home in the USA. One of the top items on the list is having a skilled workforce. In response to this demand, on June 15, 2017, President Trump signed Executive Order 13801, seeking to expand our nation’s workforce development programs and significantly increase the number of skilled workers. The President recognized what most states and businesses already know – there is a serious shortage of skilled American workers. Without new and innovative methods to develop the next generation, our economy cannot efficiently operate, let alone grow.

The Executive Order states that it shall be the policy of the federal government, “to provide more affordable pathways to secure, high paying jobs by promoting apprenticeships and effective workforce development programs, while easing the regulatory burden on such programs…” This one sentence, alone clearly “hits the nail on the head”.

Let’s start with “provide more affordable pathways”. Student debt is a problem facing millions of American families. According to Forbes and the Institute for College Access and Success, total 2016 student loan debt was $1,310,000,000,000, making it the second highest debt category behind mortgages.

Moreover, the concept that a college degree is the “be all and end all”, no longer makes sense today. Apprenticeships, both industry-recognized and government-defined, are affordable ways to “earn while you learn”. For many high school students, veterans and others, this is a way to establish a “career”, not just “find a job”. When you combine class room training that covers topics such as safety procedures, computer operations, and mathematics, with real world on the job training, trainees can clearly see that career development goals are attainable. In many circumstances, apprentices graduate from programs with in-demand skills, beginning at $50,000 per year plus benefits.

You or someone close to you is likely saddled with this burden. Adding to this problem, college dropout rates have increased over the last decade, which leaves some facing a mountain of debt without a college degree.

The need for a skilled workforce is a serious problem: according to a 2017 report by the National Federation of Independent Business, 48% of a surveyed audience attempting to hire during the surveyed month “said they could find few or even no qualified applicants for the jobs they were trying to fill.” Right now, there are 500,000 skilled construction jobs that need to be filled. Should Congress pass a large-scale infrastructure package like President Trump wants, that number could grow to 1.5 million by 2022. If our country does not develop the next skilled generation, the retiring “baby boomers” will cause a dearth of supply of skilled workers. That, in turn, will result in fewer projects being built, higher costs, and an America that will struggle to be the global leader in innovation. This conclusion is based on an analysis of economic forecasting data conducted by Markstein Advisors using the Bureau of Labor Statistics Current Population Survey, Federal Reserve Bank of St. Louis Economic Research Total Construction Spending Activity and IMPLAN’s input/output modeling.

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Instead of teaching to a single craft, and requiring up to four years of instruction, private industry has the flexibility to offer programs that fit all levels of skills. Under this model, one trainee can learn multiple crafts or skills, thereby becoming an attractive hire on the job market. Furthermore, trainees will also gain on the job experience, while helping their companies run more efficiently. The days of the education system dissing the “blue collar worker” as someone “less worthy” than a college graduate, are over.

In the Executive Order, successful programs that graduate-skilled workers would be able to obtain DOL certification by an industry recognized organization. This means that graduates of private sector programs could add DOL recognition to their list of accomplishments.

Not only does this new initiative help to create paths towards successful and rewarding careers, but it gives many businesses the opportunity to work on projects they are currently not able to do. Due to unfair federal laws, many small companies are shut out of working on government contracts because their training programs are not defined by the federal government. If small businesses were able to obtain government certification while continuing to produce top talent, they would face one less barrier to job creation and business expansion. This would benefit trainees, their employers, and taxpayers.

Public input will be critical to the success of the establishment of new industry recognized credentials. Through the government’s rulemaking process, every American will be able to see what this new program will look like and how they can benefit from increased training opportunities. The success of any new industry recognized program will rely on safety, as well as the federal government allowing business to continue to be the leader in new and innovative training methods.

In November, 2017, a wide variety of business, education, labor and government interests are convening for the first meeting of the DOL task force. It will be responsible for making recommendations to President Trump on the best ways to build industry recognized apprenticeship programs. The task force includes leaders of construction associations, union heads, governors, education experts and advocacy leaders who all share the goal of expanding apprenticeship opportunities for all Americans.

Even industries without established programs are helped by this effort.

Thus, if manufacturing, information technology, healthcare and hospitality follow the apprenticeship model set forth by the construction industry, we could see an enormous boom to our economy. Not only would these industries foster and retain top talent, but they would help create millions of new pathways to successful careers. Now that would be making America great again.

J. Bruce Cross, Director Cross, Gunter, Witherspoon & Galchus, P.C. bcross@cgwg.com www.cgwg.com

Simple Steps to Avoid Employment Lawsuits

By ADAM GATES

You’re striving to operate as efficiently as possible to increase your company’s competitive advantage and, ultimately, its profit margin. But then someone in the company steps on a legal land mine and you spend $50,000 to win a lawsuit. If you settle or lose, you could spend $150,000 or more. And all of the margin you worked so hard to gain is gone. You can take steps to prevent this scenario.

Here are 10 of them we’ve gleaned from defending manufacturers and other employers in employment disputes:

 Make Reporting Complaints Easier. The earlier you learn of an employee’s complaint, the better. You can’t fix a problem you don’t know about. Providing more than one option for employees to complain ensures that they can bring legitimate issues to management’s attention and that a supervisor cannot hide issues from Human Resources and upper management. Using the chain of command is often best, but employees sometimes need a direct line to their boss’s boss. It promotes accountability and transparency. It may also provide a defense to a lawsuit. If an employee has available to her various ways to complain about harassment but does not take advantage of them so that the employer has an opportunity to fix the problem, she may be barred from recovery. So set up a complaint hotline and email address or make employees aware (in writing) that they can report issues directly to the Director of Human Resources if their supervisor is the problem or has ignored their complaints.

 Timeliness is Next to Godliness. Be proactive. This is simple to understand but difficult to do. Once you learn of a problem, you have to respond. The company’s response will obviously depend on the problem, but understand that the response—or lack thereof— will be scrutinized. Simply documenting the issue may be enough. Other times, an investigation that results in disciplinary action will be necessary. But the company must act. If management or HR becomes aware of a problem (whether its overheard in the breakroom or received as a written complaint), it must be addressed.

 Document Performance Deficiencies. As every HR pro knows, you document everything. But performance problems and conduct violations are more important than most. If you want to discourage a lawsuit, make sure the employee you just fired for performance issues has already been written up twice for poor performance. Under those circumstances, proving the actual reason for her termination was her performance and not her race, gender, or disability is easy. It may be awkward to call a team member out, but it’s best for the team.

 Don’t Make Exceptions. A big part of being perceived as a fair employer is consistent application of the rules. When you make an exception for one employee, you alienate the others. So, consistent application of policies regarding promotions, vacation, pay, assignments, awards, discipline, and termination is the only way to go. After all, the alleged unfair application of the rules is the basis of almost every employment lawsuit.

 Train Your Front Line. Training does not cost money, it saves money. As frustrating as it can be to pay for good training and interrupt your employees’ otherwise productive workday, good training usually pays for itself many times over. Who needs it the most?

Well, who interacts with employees more than any other level of management in your company? Front-line managers. They handle the day-to-day gripes that, if not handled properly, become lawsuits. So invest in your first level of management. Train them to spot issues, to be proactive, and to be consistent. Equip them to be good managers now so they don’t have to be good witnesses later.

 Create Specialists. Some employment laws have become extremely complex, and expecting one person to stay on top of all of the changes is unrealistic. Use the strength of your team and spread the load. Designate a member of your HR or management team as the FMLA specialist or the ADA specialist, and make sure that person gets additional, specific, and regular training in that area.

 Make Your Handbook a Tool, Not a Stumbling Block. An employee handbook is a tool that communicates a company’s expectations to its employees. It should include statements addressing at-will employment, equal employment and harassment issues, work hours, leave and accommodation under the FMLA and the ADA, workplace violence, trade secrets and confidentiality of company information, work rules and the consequences for violating them, and other important issues. But often handbooks include too many policies or complicated policies with unnecessary deadlines and commitments that trip companies up.

Simplify your handbook. Keep it up to date. And make sure employees sign acknowledgments that they received and read it.

 Terminate Slowly. You’re probably an employee.

Imagine losing your job; it would be a life-changing event that should not be taken lightly. The decision to terminate someone’s employment should therefore at least (1) be reviewed by more than one manager, (2) involve someone with Human Resources training, and (3) be well documented.

If you are unsure of important facts or someone is not available to review the decision, suspend the employee and wait. Get counsel. Sleep on it. A rush to judgment can be expensive.

 Consider Severance Agreements. Sometimes paying a small amount early is smart. A severance agreement usually results in the company paying an employee a few weeks (or even months) of salary in exchange for the employee releasing all claims against the company. If done correctly, this eliminates the chance of a lawsuit. If a mistake has been made, it often saves the company money.

 Operate by the Golden Rule. That’s right—when in doubt, treat employees as you would like to be treated. This might be a cliché, but it’s also the most important step. If your team can consistently pull this off, it will significantly reduce the company’s legal exposure and result in a more loyal and productive workforce.

Adam Gates, Shareholder Baker Donelson Jackson, MS office agates@bakerdonelson.com www.bakerdonelson.com Adam Gates is an employment litigation attorney in Baker Donelson's Jackson, Mississippi office. Mr. Gates represents a wide variety of clients and advises them on day-to-day personnel issues, helps them operate in a way that minimizes exposure, defends them against charges of discrimination filed with the EEOC, and handles various matters in litigation and arbitration. www.HRProfessionalsMagazine.com

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TO REVIEW OR NOT TO REVIEW – Legal Considerations In Eliminating The Performance Review

By KAREN ROCHE

Recently, there has been a growing trend of employers eliminating the annual performance review. Some companies have shifted to an informal frequent “check-in” while others have eliminated the performance review entirely. This article discusses the legal risks associated with both conducting and eliminating the performance review.

Why Are Companies Eliminating the Performance Review?

Other than for some government and union employees, there is no legal obligation to conduct performance reviews. Historically, however, employers have used the performance review as a method to document and communicate an employee’s strengths and weaknesses, make compensation decisions, and support termination decisions. More recently, commentators have begun advocating for the elimination of the performance review and employers have stopped conducting them. Those who advocate for their elimination argue that the annual review is an ineffective tool for evaluating employees for several reasons. First, annual reviews are often not conducted in a timely and consistent fashion and, even when they are, the review often focuses only on the last month or two months of work. Second, supervisors are not trained to effectively provide feedback and therefore often provide poor written comments without meaningful content. Third, and perhaps related to the lack of supervisor training, supervisors often provide less-than-honest feedback to their employees. The result is that, in many cases, performance reviews have become ineffective and unpopular for all parties involved. Thus, some argue companies are better off eliminating the review or moving to an informal review process.

Risks Associated with Performance Reviews From a legal standpoint, performance reviews are often crucial in employment disputes. The performance review can be an extremely effective tool in deterring or winning litigation, but 40

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it also has the potential to increase the likelihood of litigation and make it more difficult for an employer to be successful in litigation. The impact a performance review has on litigation depends on how it is conducted and documented.

When reviews are conducted consistently and employers provide thorough and objective written feedback, the reviews may provide evidence of poor performance, inappropriate behavior, or other bases for termination. Such documentation has the ability to increase the likelihood of early dismissal or deter litigation entirely. If, for example, an employer terminates an employee for poor performance and his performance reviews reflect the many ways in which the employee has continuously failed to meet the employer’s expectations, it becomes much more difficult for that employee to claim there was no lawful basis for his termination.

However, as discussed above, too often reviews are not conducted consistently and when they are conducted, evaluators do not honestly evaluate the employee or properly document the evaluation.

Supervisors may be reluctant to give an employee – especially an employee with whom the supervisor works on a daily basis or has supervised for many years – a negative review, even when warranted.

The result is that an employer may eventually terminate an underperforming employee who has mostly positive feedback in his or her reviews.

This discrepancy gives credence to wrongful termination claims and will make it more difficult for the employer to succeed in defending such claims.

Further, already busy supervisors may not take the time to document why an employee’s performance needs improvement. This leaves the employer without any written explanation for its decision, again making it more difficult to prove the termination wasn’t unlawful.

Case in Point In Johnson v. Ohio Casualty Insurance Co., the plaintiff worked for Ohio Casualty for 28 years.

Throughout her tenure, she was promoted twice.

No. 1:05-CV-742, 2008 WL 2387270, at *1 (S.D. Ohio June 11, 2008). Prior to 2004, the plaintiff had never received less than a “good” evaluation and, in the prior two years, had earned scores of “meets expectations, “effective,” or “extremely effective” in each category of evaluation. Id. at *1-2. In 2004, Ohio Casualty gave her a “marginal” performance evaluation and then placed her on probation. Id. at *1. Approximately three months later, Ohio Casualty terminated the plaintiff on the basis of “unsatisfactory performance.” Id. at *2. The plaintiff then brought a claim for age discrimination. Id. The court, in denying summary judgment, focused on the fact

that in the plaintiff’s 28-year tenure, the plaintiff was never disciplined, was promoted twice, and had nothing in her record that would support a termination until 6 months before she was fired.

Id. at *4. Ultimately, the court found that her record supported her argument that the poor performance review at the end of her tenure was not warranted and was a pretextual basis for termination. Id. at *5-6.

Likewise, in King v. Enterprise Leasing Co. of Detroit, plaintiff Sandra Bell sued Enterprise for failure to promote her based on racial discrimination. King v. Enter. Leasing Co. of Detroit, No. 03-71778, 2007 WL 1806208, at *18 (E.D. Mich. June 21, 2007). The court found unpersuasive the argument that she was passed over for promotion to due to weaknesses identified in a performance review, noting that “although Bell was found in her performance evaluation to be lacking in certain areas, she was rated over all as meeting requirements.” Id. at * 19 (internal quotations and alterations omitted).

Thus, in both these cases, the record of good or satisfactory reviews ultimately undermined the employer’s argument that the employee was terminated or passed over for promotion due to poor performance.

Given These Risks, Should Companies Continue to Eliminate the Annual Performance Review?

Not necessarily. As noted above, an honest and thorough evaluation can significantly decrease the risk of litigation. If companies commit to conducting reviews in a thoughtful manner, the reviews can remain a helpful tool to the employer. Employers who continue evaluating their employees should do so in a timely and consistent manner. This can be done yearly or more frequently. If yearly, supervisors should be encouraged to keep notes throughout the year to ensure the evaluation addresses the entire review period. Employers should also commit to training their supervisors to properly conduct these reviews and should encourage their supervisors to provide honest feedback, even when it is uncomfortable. As part of this training, supervisors should be instructed to provide examples and accurately document any discussions with the employees they evaluate. Doing so creates the kind of record most likely to assist employers in litigation.

However, to the extent an employer does not conduct its reviews in this fashion, it is riskier to continue generating problematic reviews than to halt them altogether. Informal evaluations tend to result in the type of problematic reviews discussed above.

Because of their information nature, it is easier for supervisors to slip into the habit of generating inaccurate or incomplete documentation and downplaying any problems to their employees. If employers do not wish to invest the time to consistently conduct evaluations, train supervisors in best practices, and review evaluations for potential problems, it would be best to eliminate the process altogether.

Karen W. Roche Joins Burch, Porter & Johnson

Burch, Porter & Johnson, PLLC is pleased to announce that Karen W. Roche has joined the firm as a litigation associate.

Ms. Roche’s practice focuses commercial and business litigation and labor and employment law. After graduating from Loyola Law School in Los Angeles, where she grew up, Ms. Roche served as a law clerk to the Honorable S. Thomas Anderson of the United States District Court for the Western District of Tennessee. She then worked as an associate in a global law firm in Los Angeles. Ms. Roche returned to Memphis and joined Burch, Porter & Johnson in 2017.

In her free time, Ms. Roche enjoys traveling, reading, and fostering animals that need a home.

Burch Porter & Johnson, PLLC, one of the oldest law firms in Tennessee, engages in a highly-respected litigation and business practice. Since its founding more than 100 years ago, the firm has maintained a tradition of involvement in the legal and community affairs of the region. Burch, Porter & Johnson's principal office is located in downtown Memphis in buildings named to the National Register of Historic Places.

Karen W. Roche Burch, Porter & Johnson, PLLC kroche@bpjlaw.com www.bpjlaw.com www.HRProfessionalsMagazine.com

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Limits to Leave as a Reasonable Accommodation under the ADA

By HEATHER F. CROWE

E

mployers know (or should know) that under the Americans with Disabilities Act (“ADA”) a qualified employee with a disability is entitled to a reasonable accommodation, as long as that accommodation does not cause an undue hardship. Because the Rehabilitation Act and the ADA standards are identical, this applies to both public and private employers. The Federal Regulations define a reasonable accommodation in part as “modifications or adjustments to the work environment, to the manner or circumstances under which the position held or desired is customarily performed, that enable an individual with a disability who is qualified to perform the essential functions of that position…” 29 U.S.C. §1630.2(0)(1)(ii).

The regulations list several examples including changes to the facilities used by the employee; job restructuring, such as a modified job schedule; reassignment to a vacant position; acquisition of equipment or devices; the provision of interpreters; and others. The standard is flexible and factually dependent on the situation. An accommodation is not reasonable, however, if it creates an undue hardship on the employer. An undue hardship means that it would result in significant difficulty or expense to the employer.

Although employee leave is not included in the regulations, it is often a go-to accommodation request by employees. This often occurs when an employee is not entitled to FMLA leave for whatever reason (such as not being employed for one year), or when the employee has exhausted his or her FMLA leave entitlement. At this point, the issue becomes tricky. Some employees and their medical providers are able to determine exactly how much more leave they will need and provide a return to work date. Some cannot.

One of the more difficult questions for an employer then becomes, how much leave do I have to provide? A month? Six months? A year? What is reasonable?

This question has plagued employers for years, while employees are seemingly being provided with longer and more frequent leave periods. While the answer will necessarily vary depending on the facts, recently, courts have begun to provide more guidance to employers.

For most jobs, it is a rare circumstance that regular attendance is not an essential function of the position. In other words (work-from-home scenarios aside), an employee cannot perform the duties of her job if she cannot come to work. That means she is not a qualified individual within the meaning of the ADA, and therefore not entitled to a reasonable accommodation. Depending on the job and the duration of leave requested, however, an employer may be able to reasonably accommodate an employee by providing an additional leave of absence or otherwise modifying the attendance policy. While a limited period of leave could enable an employee to heal or otherwise recover from a medical condition sufficiently to return to work, the employee and/or her medical provider must be able to determine when that might be. An employer simply cannot be expected to hold open a position with no end in sight. Thus, the courts have been clear that leave requests of an indefinite duration are not reasonable.

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One key factor in the analysis is that it is the employee’s burden to show that s/he was qualified under the ADA. The purpose of a reasonable accommodation is to enable an employee to perform the essential functions of his job. If s/he is requesting extended leave, the purpose of that leave should ultimately be so that s/he can return and perform the job. Perhaps that means time to recover after surgery, or to complete medical treatment. When an employee seeks openended leave, however, he is not demonstrating that a particular period of leave will enable him to perform his job duties; thus, it is not a reasonable accommodation. A recent Fifth Circuit case held that an employee who sought extended leave that would enable him to reach retirement eligibility was not a reasonable accommodation under the ADA because it would never enable him to return to work.

Moss v. Harris County Constable Precinct One, 851 F.3d 413, 418 (5th Circuit 2017).

These basic rules beg another series of questions for employers. What about those specific long-term requests? How long is reasonable? When an employee indicates that s/he needs several months of leave, how far must the employer go? While the short answer is—unsurprisingly—“it depends,” the courts have begun to provide some parameters that offer relief to employers who must consider whether to provide extended leave. They have done this in two particular ways.

Separating the FMLA and the ADA into separate inquiries.

While it is obvious that the Family and Medical Leave Act (“FMLA”) and the ADA are separate statutory schemes, confusion for employers arises when an employee needs FMLA. An FMLA leave request often—and should—alert the employer that the ADA may be implicated as well. But as courts are frequently pointing out, the FMLA and the ADA are distinct statutes with different requirements. For example, whether an employee is entitled to position restoration following FMLA leave and whether the employee is entitled to an accommodation under the ADA are two wholly separate inquiries, despite the factual overlap that often occurs. Moreover, there is no “reasonable accommodation” requirement under the FMLA. These distinctions matter for a number of reasons, including the analysis of the employer’s obligations under each statute, as well as the varying standards of proof and damages in the unfortunate event of a lawsuit.

Separating the employer’s obligations and applying each statutory standard separately can help an employer more precisely determine its responsibilities. As the Seventh Circuit recently observed, “[l] ong-term medical leave is the domain of the FMLA.” Severson v.

Heartland Woodcraft, Inc., 872 F.3d 476 (7th Cir. 2017).

“The ADA is an anti-discrimination statute, not a medical-leave entitlement.”

An employee may ask why short-term leave might be a reasonable accommodation, but extended leave is not? For years, lawsuits have explored this question, asking whether extended leave is a reasonable accommodation. That is only part of the analysis, however. As the Severson court explained, “Simply put, an extended leave of absence does not give a disabled individual the means to work; it excuses his not working.” Id. at 481. The court went on to explain that “the inability to work for a multi-month period removes a person from the class protected by the ADA.” Thus, not only is an extended leave not likely to be a reasonable accommodation, the employee is probably no longer considered a qualified individual.

In Severson, the Seventh Circuit explored the denial of long term leave. Severson suffered from a back condition that did not always hinder his ability to work, but caused occasional flare-ups that made it difficult or impossible to work. After wrenching his back at home, he was approved for FMLA leave for a series of steroid injection treatments. Around the time his 12-week FMLA leave would have been exhausted, his doctor recommended surgery, with a two-month recovery period. Severson requested an extension of his medical leave. The employer indicated that he had exhausted his FMLA entitlement and that if he could not return, his employment would end, although he was welcome to re-apply once he was cleared to work. Severson at 481. Severson had the surgery and a little over three months later, was cleared to return to work.

Instead of re-applying, Severson sued his employer, alleging that by denying him extended medical leave, his employer failed to offer a reasonable accommodation in violation of the ADA. The court, however, dismissed his claim, holding that “[t]he ADA is an antidiscrimination statute, not a medical-leave entitlement.”

Severson at 479. While acknowledging that intermittent or short term leave might enable a person to work or return work in some circumstances, and analogizing such a situation to a part-time or modified schedule, the court explained that “a medical leave spanning multiple months does not permit the employee to perform the essential functions of his job.” Id. at 481. Rather, such a leave simply removed the employee from the class of protected individuals. Id. The same court affirmed that holding in Golden v. Indianapolis Housing Agency, 2017 WL 4675734 (7th Cir. October 17, 2017), when it held that six months leave for cancer treatment removed an employee from the protected class under the ADA. These holdings do not, of course, give employers carte blanche to deny all leave requests that are longer than FMLA entitlement.

Rather, when an employee provides an end date, the employer must determine if the length is reasonable. What is “short” versus “long” term leave is debatable, and requires an analysis of the facts specific to the situation. In deciding the Severson case, however, the Seventh Circuit provided some helpful guidance for employers in determining what a reasonable accommodation is in terms of leave requests and has made clear that a “multi-month” leave of absence is not generally a reasonable accommodation.

Heather F. Crowe, Attorney The Kullman Firm hfc@kullmanlaw.com www.kullmanlaw.com

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43

What is the Impact of Trump’s Hire American Executive Order?

By BRUCE E. BUCHANAN and ADAM COHEN

O n A p r i l 1 8 , 2 0 1 7 , P re si den t Tru mp issu ed an Execu t ive Order ( E O) e nti tl ed “BU Y AMER ICAN AND HIR E AMER ICAN.” In this article, we will discuss the portion of the EO concerning “Hire American” and employment-based visa issues and their negative impact on employers.

HIRE AMERICAN EXECUTIVE ORDER

USCIS ACTIONS PURSUANT TO HIRE AMERICAN

The substantive portions of the EO are as follows: Secretaries of State, Labor, Department of Homeland Security (DHS), and Attorney General, “shall, as soon as practicable, and consistent with applicable law, propose new rules and issue new guidance, to supersede or revise previous rules and guidance if appropriate, to protect interests of U.S. workers in administration of our immigration system, including through prevention of fraud or abuse.” Furthermore, it states: “In order to promote the proper functioning of the H-1B visa program, the Secretary of State, the Attorney General, the Secretary of Labor, and the Secretary of Homeland Security shall, as soon as practicable, suggest reforms to help ensure that H-1B visas are awarded to the most-skilled or highest-paid petition beneficiaries.”

Initially, the operational changes expressed by USCIS included: setting up dedicated e-mail addresses for the public to report H-1B and H-2B abuses, enhancing information sharing between DHS, Department of State (DOS), Department of Justice (DOJ), and Department of Labor (DOL), and providing H-1B reports to provide transparency to U.S. workers. Additionally, USCIS also announced it was enhancing the current site visit program of H-1B dependent employers (15%+ H-1B visa holders) and employers petitioning for H-1B workers to work off-site at another location. The USCIS stated these actions were to further ensure the integrity of the immigration system.

“ I n order to promote the proper functioning of the H-1B visa program, the Secretar y of State, the Attorney General, the Secretar y of Labor, and the Secretar y of Homeland Security shal l, as soon as practicable, suggest reforms to help ensure that H-1B visas are awarded to the most-skilled or highest-paid petition beneficiaries.”

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On October 23, 2017, the USCIS issued “Policy Memorandum: Rescission of Guidance Regarding Deference to Prior Determinations of Eligibility in the Adjudication of Petitions for Extension of Nonimmigrant Status.”

By this memo, the USCIS rescinds a 2004 memo and a portion of the 2015 L-1B memo that called for deference in I-129 extensions where the parties and underlying facts were the same and there was no material error in the prior adjudication. The memo stated the prior memo had shifted the burden of proof to the USCIS and it should always remain with the Petitioner, not the USCIS. On March 31, 2017, the USCIS issued “Policy Memorandum: Rescission of the December 22, 2000 Guidance memo on H1B computer related positions”. Even though the memo was issued before the EO, its reasoning is similar to other USCIS memos and actions after the EO. The memo states an entry-level computer programmer position would not generally qualify as a specialty occupation position. In a footnote, the memo states USCIS officers must review the LCA to ensure the wage level is accurate.

On August 9, 2017, the USCIS issued another Memorandum concerning the definition of “Affiliate” or “Subsidiary” for purposes of determining the H-1B ACWIA Fee, where it said officers should count the petitioning employer’s other affiliates and subsidiaries in order to determine whether the $750 or $1500 ACWIA fee is appropriate.

Another change was never announced in a memo; rather, it was seen by hundreds of companies and immigration attorneys, starting in June 2017, when over 400 Requests for Evidence (RFE) were issued in cases where a Level 1 wage was indicated on the Labor Condition Application (LCA). The RFEs question whether a Level 1 wage is appropriate given the complexity of the job duties, or whether the position is still a specialty occupation because the Level 1 wage indicates that the position is entry-level. This trend came about without any direct policy statement or memorandum preceding it.

CONCLUSION What started out as just another Trump Executive Order, which looked like “window dressing” to Trumpites, has instituted several significant changes for H-1B visas and other non-immigrant visas. Only time will tell what other significant changes may be on the way from the USCIS, DOS, and DOL concerning H-1B visas and other non-immigrant visas.

What started out as just another Trump Executive Order, which looked like “window dressing” to Trumpites, has instituted several significant changes for H-1B visas and other non-immigrant visas.

DOL ACTIONS PURSUANT TO HIRE AMERICAN

Bruce E. Buchanan, Attorney

In a June 6, 2017 press release, Secretary of Labor Alexander Acosta directed agencies within the DOL to "aggressively confront visa program fraud and abuse," stating that "[e]ntities who engage in visa program fraud and abuse are breaking our laws and are harming American workers, negatively affecting Americans' ability to provide for themselves and their families."

Siskind Susser PC bbuchanan@visalaw.com www.visalaw.com

On August 3, 2017, DOL issued a Federal Register notice of intent to revise the LCA. Proposed changes to the LCA include: asking for the number of workers under the LCA who will perform work at the place of employment; asking whether the worker subject to the LCA is to be placed with a secondary employer; and more detailed descriptions of the employer’s LCA attestations & notice.

Adam Cohen, Attorney Siskind Susser PC acohen@visalaw.com www.visalaw.com

SISKIND SUSSER PC Tennessee’s Largest

DOS ACTIONS PURSUANT TO HIRE AMERICAN On August 9, 2017, the DOS issued additions to the Foreign Affairs Manual (FAM) based upon the Executive Order for visa categories – H-1B, L, O-1, E-1, E-2 and P. The new FAM language states in adjudicating these nonimmigrant visa categories, consular officers should keep the “spirit” of the EO in mind – remembering to protect American workers regarding wages and “prevention of fraud or abuse”.

Interestingly, except for H-1B visas, these nonimmigrant visa categories do not have a wage component on how much a worker must be paid.

Thus, it is unclear why the DOS issued the new FAM language for the non-H-1B visas.

Business & Employment Immigration Practice

IMMIGRATION LAWYERS green cards business visas

OTHER NEGATIVE ACTIONS TOWARD EMPLOYMENT-BASED VISAS The following other actions by the Trump administration have negatively impacted Employment-Based visas: postponement and probable withdrawal of the International Entrepreneur Rule, which was expected to go into effect on July 17, 2017; the new requirement for in-person interviews for all employment-based immigration cases, effective October 1, 2017; and denial of Form I-131 applications when an applicant travels abroad while the I-131 application is pending.

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Investing in Your People Pays Off! How investing in their people lead this trucking company down the road to success

By HARVEY DEUTSCHENDORF

Don Daseke was already a seasoned entrepreneur with several businesses that he had founded when he decided to get into the trucking business. He admitted that he barely knew the difference between a pickup and 18 wheeler when he started, but he was eager to learn and relied on the people around him. His first acquisition was Smokey Point Distributing in 2008. By 2014 the company had merged six trucking subsidiaries, focusing on specialized in flatbed and specialized cargo. In that year Daseke was named Entrepreneur of the Year for the Southwestern Region by Ernst& Young. The company continued to acquire new companies and expand. At present Daseke Inc. is the leading consolidator and largest owner of specialized transportation solutions in North America. In February of 2017 the company went public on NASDAQ. While the company’s phenomenal growth and success has received a great deal of attention, it is their culture and philosophy that Don Daseke attributes to their success. With 3800 tractors, over 8200 flatbed and specialized trailers more than a million square feet of industrial warehousing, Daseke still refers to new acquisitions as becoming part of the Daseke “family” I a recent conversation with Don Daseke we talked about his management style and how Daseke Inc. operates that sets them apart.

Merging with Not For Sale Companies that are a cultural fit Daseke Inc. looks for companies that are a cultural fit that are not for sale.

This is not the typical Wall Street approach in which companies that are for sale are purchased. The problem with this approach is that these companies have management or financial problems claims Daseke. What he looks for are companies that are well managed and share similar philosophies. He searches for companies that are people oriented and fit within the Daseke family culture.

Three hour dinners with CEO’s and owners of other companies are a common practice. They not only talk about business matters, but family, hobbies, passions and community.

have opportunities for growth and want to spend their entire careers there. It is a practice that is shared with another highly successful Texas based organization, Southwest Airlines.

Keeping staff at all levels One of the problems with companies that are for sale is there is often turnover of executive staff. Often 50% of CEO’s and other key people leave within a year that companies are bought out. This often results in staff at all levels leaving, causing disruption, turmoil and a lack of faith and trust within the organization. One of the things that Daseke Inc. is most proud of is that no employees are terminated as a result of mergers. CEO’S and other senior staff seldom leave the organization. This loyalty spreads throughout the organization and results in stable, loyal workforce, secure in knowing that they will always have a place in the organization.

Showing respect and appreciation to staff Truck drivers are not accorded a very high status as an occupation in North America. To counter that perception drivers at Daseke Inc. are given business cards. Not the type where you write in your name, but professional cards that signify that they are professional drivers. Moving huge industrial freight of all shapes and sizes involves a great deal of ability, specialized training and team work. Safety is always at the core of everything they do. Daseke looks for people who are intelligent and great team players. It is a tough job and everyone needs to pull together and contribute to be successful.

People skills are in, ego is out The one common thread that ties all Daseke Inc. companies together is their people focus. At all levels people skills are highly desired and sought after when hiring. If you want to work for this organization, park your ego, as it is not welcome. People skills are important not only for developing strong teamwork within the organization, but developing deep, long lasting relationships with customers. While Daseke Inc. is constantly expanding and looking for new clients it has developed a loyal customer base that it can count on. That base has been established through getting to know them on a personal level. Customers feel that they will not only receive excellent service, but they are cared about as people.

Contributing to the community Daseke is a strong believer in contributing to community and he looks for companies that share those values. In this he leads by example. In 2016 Don and his wife Barbara gifted 20 million dollars to DePauw University. It was in appreciation of what Don learned during his time at DePauw, where he earned an economics degree and became a Rector Scholar.

Give your people a share of the company The reason that the company was eager to go public was to give their people the option of owning a share in the company. Drivers have the opportunity for stock options. The organization wants drivers to feel part of the organization, 46

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Harvey Deutschendorf is an emotional intelligence expert, internationally published author and speaker. To take the EI Quiz go to theotherkindofsmart.com. His book THE OTHER KIND OF SMART, Simple Ways to Boost Your Emotional Intelligence for Greater Personal Effectiveness and Success has been published in 4 languages. Harvey writes for FAST COMPANY and has a monthly column with HRPROFESSIONALS MAGAZINE. You can follow him on Twitter @theeiguy.

INTERNATIONAL PRESENCE. LOCAL KNOWLEDGE. LABOR AND EMPLOYMENT LAW At Ogletree Deakins, we understand that our clients’ employment issues often are not isolated to one state, country, or region of the world. Ogletree Deakins is one of the largest labor and employment law firms representing management in all types of employmentrelated legal matters. The firm has more than 850 lawyers located in 52 offices across the United States and in Europe, Canada, and Mexico.

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